EXHIBIT 10.1
CREDIT AGREEMENT
This Agreement, dated as of September 7, 2004, is among Covansys
Corporation, the Lenders and Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, as LC Issuer and as Agent. The
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company. For purposes of this Agreement, the Recapitalization
Transaction shall not be considered an "Acquisition".
"Advance" means a borrowing hereunder, (i) made by the Lenders on the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurocurrency
Loans, in the same Agreed Currency and for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person; provided,
that, FNF shall not be considered an "Affiliate" hereunder. A Person shall be
deemed to control another Person if the controlling Person owns 10% or more of
any class of voting securities (or other ownership interests) of the controlled
Person or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person, whether
through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Agreed Currencies" means (i) Dollars, (ii) so long as such currency
remains an Eligible Currency, the Euro, and (iii) any other Eligible Currency
which the Borrower requests the Agent to include as an Agreed Currency hereunder
and which is acceptable to all of the Lenders.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced or increased from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, (i) with respect to the
Commitment Fee, the percentage rate per annum at which Commitment Fees are
accruing on the unused portion of the Aggregate Commitment at such time as set
forth in the Pricing Schedule and (ii) with respect to Facility LCs, the
percentage rate per annum at which Facility LC Fees are accruing on the
aggregate amount of Facility LCs outstanding at such time as set forth in the
Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Approximate Equivalent Amount" of any currency with respect to any amount
of Dollars shall mean the Equivalent Amount of such currency with respect to
such amount of Dollars on or as of such date, rounded up to the nearest amount
of such currency as determined by the Agent from time to time.
"Arranger" means X.X. Xxxxxx Securities Inc., and its successors, in its
capacity as Lead Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Associated Costs Rate" is defined in Exhibit F.
"Authorized Officer" means either the President or the Chief Financial
Officer of the Borrower, acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Covansys Corporation, a Michigan corporation, and its
successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurocurrency Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Detroit and New York City for the
conduct of substantially all of their commercial lending
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activities, interbank wire transfers can be made on the Fedwire system and
dealings in Dollars and the other Agreed Currencies are carried on in the London
interbank market (and, if the Advances which are the subject of such borrowing,
payment or rate selection are denominated in Euro, a day upon which such
clearing system as is determined by the Agent to be suitable for clearing or
settlement of the Euro is open for business) and (ii) for all other purposes, a
day (other than a Saturday or Sunday) on which banks generally are open in
Chicago, Detroit and New York City for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on the
Fedwire system.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of the
Borrower; provided, however, the transfers of ownership in connection with
Recapitalization Transaction shall not be considered a "Change of Control".
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means any and all Property covered by the Collateral
Documents and any and all other Property of any Loan Party, now existing or
hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of Agent, on behalf of itself and the Lenders, to
secure the Secured Obligations.
"Collateral Documents" means, collectively, the Security Agreements and
any other documents granting a Lien upon the Collateral as security for the
payment of the Secured Obligations.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans to, and participate in Facility LCs issued upon the application of, the
Borrower in an aggregate amount not
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exceeding the amount set forth opposite its signature below, as it may be
modified as a result of any assignment that has become effective pursuant to
Section 12.3.2 or as otherwise modified from time to time pursuant to the terms
hereof.
"Computation Date" is defined in Section 2.2.
"Consolidated EBIT" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for income taxes paid or accrued, (iii) the
amount of any Inventory Adjustment Charge, and (iv) extraordinary losses
incurred other than in the ordinary course of business, minus, to the extent
included in Consolidated Net Income, extraordinary gains realized other than in
the ordinary course of business, all calculated for the Borrower and its
Subsidiaries on a consolidated basis.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for income taxes paid or accrued, (iii)
depreciation, (iv) amortization, (v) the amount of any Inventory Adjustment
Charge, and (vi) extraordinary losses incurred other than in the ordinary course
of business, minus, to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for the Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Funded Indebtedness" means at any time the aggregate dollar
amount of Consolidated Indebtedness (excluding Subordinated Indebtedness) which
has actually been funded and is outstanding at such time, whether or not such
amount is due or payable at such time.
"Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
"Consolidated Interest Expense" means, with reference to any period, the
interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated stockholders'
equity of the Borrower and its Subsidiaries calculated on a consolidated basis
as of such time.
"Consolidated Total Capitalization" means at any time the sum of
Consolidated Subordinated Indebtedness and Consolidated Net Worth, each
calculated at such time.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of corporations
or other business
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entities and all trades or businesses (whether or not incorporated) under common
control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Default" means an event described in Article VII.
"Dollar Amount" of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent in Dollars of
such amount if such currency is any currency other than Dollars, calculated on
the basis of the arithmetical mean of the buy and sell spot rates of exchange of
the Agent for such currency on the London market at 11:00 a.m., London time, on
or as of the most recent Computation Date provided for in Section 2.2.
"Dollars" and "$" shall mean the lawful currency of the United States of
America.
"Domestic Subsidiary" means any present and future Subsidiary which is
organized under the laws of the United States or any state or political
subdivision of the U.S. or any such state.
"Eligible Currency" means any currency other than Dollars (i) that is
readily available, (ii) that is freely traded, (iii) in which deposits are
customarily offered to banks in the London interbank market, (iv) which is
convertible into Dollars in the international interbank market and (v) as to
which an Equivalent Amount may be readily calculated. If, after the designation
by the Lenders of any currency as an Agreed Currency, (x) currency control or
other exchange regulations are imposed in the country in which such currency is
issued with the result that different types of such currency are introduced, (y)
such currency is, in the determination of the Agent, no longer readily available
or freely traded or (z) in the determination of the Agent, an Equivalent Amount
of such currency is not readily calculable, the Agent shall promptly notify the
Lenders and the Borrower, and such currency shall no longer be an Agreed
Currency until such time as all of the Lenders agree to reinstate such currency
as an Agreed Currency and promptly, but in any event within five Business Days
of receipt of such notice from the Administrative Agent, the Borrower shall
repay all Loans in such affected currency or convert such Loans into Loans in
Dollars or another Agreed Currency, subject to the other terms set forth in
Article II.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Equivalent Amount" of any currency with respect to any amount of Dollars
at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the
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arithmetical mean of the buy and sell spot rates of exchange of the Agent for
such other currency at 11:00 a.m., London time, on the date on or as of which
such amount is to be determined.
"Euro" and/or "EUR" means the euro referred to in Council Regulation (EC)
No. 1103/97 dated June 17, 1997 passed by the Council of the European Union, or,
if different, the then lawful currency of the member states of the European
Union that participate in the third stage of Economic and Monetary Union.
"Euro Implementation Date" means January 1, 1999.
"Eurocurrency" means any Agreed Currency.
"Eurocurrency Payment Office" of the Agent shall mean, for each of the
Agreed Currencies, the office, branch, affiliate or correspondent bank of the
Agent specified as the "Eurocurrency Payment Office" for such currency in
Schedule 1 hereto or such other office, branch, affiliate or correspondent bank
of the Agent as it may from time to time specify to the Borrower and each Lender
as its Eurocurrency Payment Office.
"Eurocurrency Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurocurrency Rate.
"Eurocurrency Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurocurrency Rate.
"Eurocurrency Reference Rate" means, with respect to a Eurocurrency
Advance for the relevant Interest Period, the applicable British Bankers'
Association LIBOR rate for deposits in the applicable Agreed Currency as
reported by any generally recognized financial information service as of 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period, provided that, if
no such British Bankers' Association LIBOR rate is available, the applicable
Eurocurrency Reference Rate for the relevant Interest Period shall instead be
the rate determined by the Agent to be the rate at which Bank One offers to
place deposits in the applicable Agreed Currency with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the approximate amount
of Bank One's relevant Eurocurrency Loan and having a maturity equal to such
Interest Period.
"Eurocurrency Rate" means, with respect to a Eurocurrency Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurocurrency
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest Period,
if any, plus (ii) the Applicable Margin, plus (iii) for Loans booked in the
United Kingdom, the Associated Costs Rate.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
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"Extension Request" is defined in Section 2.24.
"Facility LC" is defined in Section 2.21.1.
Facility LC Application" is defined in Section 2.21.3.
Facility LC Collateral Account" is defined in Section 2.21.11.
"Facility Termination Date" means September 7, 2006 or any later date as
may be specified as the Facility Termination Date in accordance with Section
2.24 or any earlier date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.
"FNF" shall mean Fidelity National Financial, Inc., and its successors and
assigns.
"Foreign Subsidiary" means any Subsidiary which is not a Domestic
Subsidiary.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, applied in a manner consistent with that used
in preparing the financial statements referred to in Section 5.4.
"Guarantor" means each present and future Significant Subsidiary of the
Borrower or Significant Subsidiary of any Subsidiary, and their successors and
assigns.
"Guaranty" means each Guaranty executed by any Guarantor pursuant to this
Agreement in favor of the Agent, for the ratable benefit of the Lenders, as
amended or modified and in effect from time to time.
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"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Rate Management Obligations, and (viii) any other obligation
for borrowed money or other financial accommodation which in accordance with
GAAP would be shown as a liability on the consolidated balance sheet of such
Person.
"Interest Period" means, with respect to a Eurocurrency Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Inventory Adjustment Charge" means the amount taken as non-cash charges
to income relating to adjustments for fixed asset inventory, either in the
period ending June 30, 2004, or in any period in the four fiscal quarters ending
June 30, 2004, provided, that the present value of the charges taken (as of June
30, 2004) does not exceed $4,000,000.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.
"LC Fee" is defined in Section 2.21.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.21.5.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent with respect
to each Agreed Currency listed on
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Schedule 2, the administrative information sheets provided to the Agent in
connection herewith or otherwise selected by such Lender or the Agent pursuant
to Section 2.19.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Consolidated Funded Indebtedness outstanding on such date to (ii) Consolidated
EBITDA for the Borrower's then most-recently ended four fiscal quarters.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant
to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Facility LC Applications and
any Notes issued pursuant to Section 2.15, the Collateral Documents, the
Negative Lien Agreement, the Guaranty and any and all other agreements,
documents, instruments and certificates now or hereafter delivered or executed
by or on behalf of the Borrower or any Subsidiary and delivered to the Agent,
the LC Issuer or any Lender in connection with this Agreement and the
transactions contemplated hereby.
"Loan Parties" means the Borrower, each Guarantor and any other Person who
becomes a party to this Agreement pursuant to a Joinder Agreement. As of the
Closing Date, the only Loan Party is the Borrower.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower or any Subsidiary to perform its obligations under the
Loan Documents to which it is a party, (iii) the Collateral or the Agent's Liens
(on behalf of itself and the lenders) on the Collateral or the priority of such
Liens, or (iv) the validity or enforceability of any of the Loan Documents or
the rights or remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $5,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Modify" and "Modification" are defined in Section 2.21.1.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which
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more than one employer is obligated to make contributions.
"National Currency Unit" means the unit of currency (other than a Euro
unit) of each member state of the European Union that participates in the third
stage of Economic and Monetary Union.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.15.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Loan Parties to the Lenders or to any Lender, the Agent or any indemnified party
arising under the Loan Documents.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capitalized Lease) from the date on which each fixed
lease payment is due under such Operating Lease to such date of determination,
of all fixed lease payments due under all Operating Leases of the Borrower and
its Subsidiaries.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last Business Day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
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"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower or any subsidiary which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
"Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Recapitalization Transaction" means the series of transactions described
on Schedule 3 hereto.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.21 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
11
"Required Lenders" means Lenders in the aggregate having at least a
majority of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least a majority of the
Aggregate Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Response Date" is defined in Section 2.20.
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Rate Management Obligations owing to one or more Lenders.
"Security Agreement" means each Pledge and Security Agreement, dated as of
the date hereof, between each Loan Party and the Agent, for the benefit of Agent
and the Lenders, and any other pledge or security agreement entered into, after
the Closing Date by any other Loan Party (as required by this Agreement or any
other Loan Document), or any other Person, as the same may be amended, restated
or otherwise modified from time to time.
"Significant Subsidiary" means each Domestic Subsidiary which meets any of
the following conditions:
(i) The Borrower's and its other Subsidiaries' investments in and
advances to the subsidiary exceed 20 percent of the total assets of the
Borrower and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year (for a proposed business combination to be
accounted for as a pooling of interests, this condition is also met when
the number of common shares exchanged or to be exchanged by the Borrower
exceeds 20 percent of its total common shares outstanding at the date the
combination is initiated); or
(ii) The Borrower's and its other Subsidiaries' proportionate share
of the total assets (after intercompany eliminations) of the subsidiary
exceeds 20 percent of the total assets of the Borrower and its
Subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(iii) The Borrower's and its other Subsidiaries' equity in the
income from
12
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the subsidiary
exceeds 20 percent of such income of the Borrower and its subsidiaries
consolidated for the most recently completed fiscal year.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Indebtedness" means all current and future Indebtedness and
other liabilities owing pursuant to the Subordinated Notes and any extensions,
refinancings, renewals or refundings thereof and any increases in the amount
thereof and, for any Person, any other Indebtedness of such Person which is
fully subordinated to all Secured Obligations by written agreements and
documents in form and substance satisfactory to the Agent as determined in its
reasonable discretion and which is governed by terms and provisions, including
without limitation maturities, covenants, defaults, rates and fees, acceptable
to the Agent as determined in its reasonable discretion.
"Subordinated Debt Documents" means the Subordinated Notes and all
agreements and documents executed in connection therewith at any time.
"Subordinated Notes" means the certain Notes to be issued by the Borrower
to CDR-Cookie Acquisition, L.L.C. as part of the Recapitalization Transaction,
which Notes are projected to be in the aggregate principal amount of
$15,000,000, which Notes are anticipated to be in the form of Exhibit G.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurocurrency Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurocurrency Loan.
13
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Michigan or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and prior
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (i) make Loans to the Borrower and
(ii) participate in Facility LCs issued upon the request of the Borrower, in
each case in Agreed Currencies from time to time provided that, (i) after giving
effect to the making of each such Loan and the issuance of each such Facility
LC, the Dollar Amount of such Lender's Outstanding Credit Exposure shall not
exceed its Commitment, (ii) all Floating Rate Loans shall be in Dollars and
(iii) the Aggregate Credit Exposure shall not exceed the Aggregate Commitment.
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow at any time prior to the Facility Termination Date. The Commitments to
extend credit hereunder shall expire on the Facility Termination Date. The LC
Issuer will issue Facility LCs hereunder on the terms and conditions set forth
in Section 2.21.
2.2. Determination of Dollar Amounts; Required Payments; Termination. (i)
The Agent will determine the Dollar Amount of:
(a) each Credit Extension as of the date three Business Days prior to
the Credit Extension Date or, if applicable, date of
conversion/continuation of such Credit Extension, and
(b) all outstanding Credit Extensions on and as of the last Business Day
of each quarter and on any other Business Day elected by the Agent
in its discretion or upon instruction by the Required Lenders.
14
Each day upon or as of which the Agent determines Dollar Amounts as described in
the preceding clauses (a) and (b) is herein described as a "Computation Date"
with respect to each Credit Extension for which a Dollar Amount is determined on
or as of such day. If at any time the Dollar Amount of the sum of the aggregate
principal amount of all outstanding Credit Extensions (calculated, with respect
to those Credit Extensions denominated in Agreed Currencies other than Dollars,
as of the most recent Computation Date with respect to each such Credit
Extension) exceeds the Aggregate Commitment, the Borrower shall immediately
repay the Aggregate Outstanding Credit Exposure an aggregate principal amount
sufficient to eliminate any such excess. If at any time the Dollar Amount of the
sum of the aggregate principal amount of all outstanding Advances (calculated,
with respect to those Advances denominated in Agreed Currencies other than
Dollars, as of the most recent Computation Date with respect to each such
Advance) exceeds the Aggregate Commitment, the Borrower shall immediately repay
Advances in an aggregate principal amount sufficient to eliminate any such
excess.
(ii) The Aggregate Outstanding Credit Exposure and all other unpaid
Obligations shall be paid in full by the Borrower on the Facility Termination
Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably according to their Pro Rata Shares.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurocurrency Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions and Increases in Aggregate Commitment. (i)
The Borrower agrees to pay to the Agent for the account of each Lender according
to its Pro Rata Share a commitment fee at a per annum rate equal to the
Applicable Fee Rate (per the Pricing Schedule) on the average daily Available
Aggregate Commitment from the date hereof to and including the Facility
Termination Date, payable on each Payment Date hereafter and on the Facility
Termination Date. The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$5,000,000 (or the Approximate Equivalent Amount if denominated in an Agreed
Currency other than Dollars), upon at least five Business Days' written notice
to the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Commitment may not be
reduced below the Dollar Amount of the Aggregate Outstanding Credit Exposure.
All accrued commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Credit Extensions
hereunder. For purposes of calculating the commitment fee hereunder, the
principal amount of each Advance made in an Agreed Currency other than Dollars
shall be at any time the Dollar Amount of such Advance as determined on the most
recent Computation Date with respect to such Advance.
(ii) With the prior consent of the Agent (but without the consent of
any other Lender), the Borrower may request to increase the Aggregate Commitment
by up to $10,000,000 (not to exceed an Aggregate Commitment of $40,000,000). Any
such request to increase the Aggregate Commitment shall be deemed to be a
certification by the Borrower that at the time of such request, there exists no
Default or Unmatured Default and the representations and warranties contained in
Article V are true and correct as of such date or, if applicable only to a prior
date, as of such prior date. Any request from the Borrower to increase the
Aggregate Commitment shall be implemented by one or more existing Lenders (an
"Increasing Lender") agreeing to increase their Commitments (provided that no
Lender shall have any obligation to increase its Commitment) or by one or more
new lenders (a "New Lender") agreeing to become a Lender hereunder or by any
combination of the foregoing, as determined by the Agent in consultation with
the Borrower. Prior to any such increase in the Aggregate Commitment becoming
effective, the Agent shall have received:
15
(a) copies, certified by the secretary of the Borrower of its board
of directors' resolutions and of resolutions or actions of any other body
authorizing the increase in the Aggregate Commitment and the confirmation and
ratification of all other Loan Documents;
(b) a certificate, signed by the chief financial officer of the
Borrower, showing that after giving effect to the increase in the Aggregate
Commitment, no Default or Unmatured Default shall occur and the Borrower shall
be in compliance with all covenants in this Agreement;
(c) copies of all governmental and nongovernmental consents,
approvals, authorizations, declarations, registrations or filings required on
the part of the Borrower in connection with the increase in the Aggregate
Commitment, certified as true and correct in full force and effect as of the
date of the increase by a duly authorized officer of the Borrower, or if none
are required, a certificate of such officer to that effect;
(d) a confirmation and ratification of all Loan Documents signed by
the Borrower and any Guarantors, in form and substance satisfactory to the
Agent;
(e) evidence satisfactory to the Agent that no Material Adverse
Effect shall have occurred since the most recent financial statements provided
to the Lenders hereunder;
(f) any Increasing Lender, any New Lender and the Borrower shall
execute and deliver all agreements the Agent or its counsel may have reasonably
requested; and
(g) such other documents and conditions as the Agent or its counsel
may have reasonably requested.
Increases and new Commitments created pursuant to this clause (ii) shall become
effective on the date agreed among the Borrower, the Agent and the relevant
Increasing and New Lenders, which date shall be on or after the date all the
above conditions are satisfied, and any such New Lender shall become a Lender
hereunder and any Increasing Lender's Commitment shall be increased on such
effective date as specified in the agreements required pursuant to clause (g)
above. On the effective date of any increase in the Aggregate Commitment, (A)
each relevant Increasing Lender and New Lender shall make available to the Agent
such amounts in immediately available funds, for the benefit of the other
relevant Lenders, as being required in order to cause, after giving effect to
such increase and the use of such amounts to make payments to such other
relevant Lenders, each Lender's portion of the outstanding Loans to equal its
Pro Rata Share of the Aggregate Commitments and (B) the Borrower shall be deemed
to have repaid and reborrowed all outstanding Loans as of the date of any
increase in the Aggregate Commitment (with such reborrowing to consist of the
Loans, with related Interest Periods if applicable, specified in a notice
delivered by the Borrower in accordance with the requirements of Section 2.08,
and subject to Section 3.4).
2.6. Minimum Amount of Each Advance. Each Eurocurrency Advance shall be in
the minimum amount of $2,000,000 (and in multiples of $1,000,000 if in excess
thereof) (or the Approximate Equivalent Amounts if denominated in an Agreed
Currency other than Dollars), and each Floating Rate Advance shall be in the
minimum amount of $500,000 (and in multiples of $100,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the amount of the
Available Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to time pay,
without penalty
16
or premium, all outstanding Floating Rate Advances, or, in a minimum aggregate
amount of $500,000 or any integral multiple of $100,000 in excess thereof, any
portion of the outstanding Floating Rate Advances upon one Business Day prior
notice to the Agent. The Borrower may from time to time pay, subject to the
payment of any funding indemnification amounts required by Section 3.4 but
without penalty or premium, all outstanding Eurocurrency Advances, or, in a
minimum aggregate amount of $1,000,000 or any integral multiple of $1,000,000 in
excess thereof (or the Approximate Equivalent Amounts if denominated in an
Agreed Currency other than Dollars), any portion of the outstanding Eurocurrency
Advances upon three Business Days' prior notice to the Agent.
2.8. Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurocurrency
Advance, the Interest Period and the Agreed Currency applicable thereto from
time to time. The Borrower shall give the Agent irrevocable notice (a "Borrowing
Notice") not later than 10:00 a.m. (Detroit time) at least one Business Day
before the Borrowing Date of each Floating Rate Advance, three Business Days
before the Borrowing Date for each Eurocurrency Advance denominated in Dollars
and four Business Days before the Borrowing Date for each Eurocurrency Advance
denominated in an Agreed Currency other than Dollars, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurocurrency Advance, the Interest Period and
Agreed Currency applicable thereto.
Not later than noon (Detroit time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Detroit to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurocurrency Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.7. Each Eurocurrency Advance
shall continue as a Eurocurrency Advance until the end of the then applicable
Interest Period therefor, at which time:
(i) each such Eurocurrency Advance denominated in Dollars shall be
automatically converted into a Floating Rate Advance unless (x) such
Eurocurrency Advance is or was repaid in accordance with Section 2.7
or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that,
at the end of such Interest Period, such Eurocurrency Advance either
continue as a Eurocurrency Advance for the same or another Interest
Period or be converted into a Floating Rate Advance; and
(ii) each such Eurocurrency Advance denominated in an Agreed Currency
other than Dollars shall automatically continue as a Eurocurrency
Advance in the same Agreed Currency with an Interest Period of one
month unless (x) such Eurocurrency Advance is or was repaid in
accordance with Section 2.7 or (y) the Borrower shall have given the
Agent a Conversion/Continuation Notice (as defined below) requesting
that, at the end of such Interest Period, such Eurocurrency Advance
continue as a Eurocurrency Advance for the
17
same or another Interest Period.
Subject to the terms of Section 2.6, the Borrower may elect from time to time to
convert all or any part of an Advance of any Type into any other Type or Types
of Advances denominated in the same or any other Agreed Currency; provided that
any conversion of any Eurocurrency Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an Advance or continuation of a Eurocurrency Advance not later than 10:00
a.m. (Detroit time) at least one Business Day, in the case of a conversion into
a Floating Rate Advance, three Business Days, in the case of a conversion into
or continuation of a Eurocurrency Advance denominated in Dollars, or four
Business Days, in the case of a conversion into or continuation of a
Eurocurrency Advance denominated in an Agreed Currency other than Dollars, prior
to the date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation, and
(ii) the Agreed Currency, amount and Type(s) of Advance(s) into which
such Advance is to be converted or continued and, in the case of a
conversion into or continuation of a Eurocurrency Advance, the
duration of the Interest Period applicable thereto.
2.10. Method of Borrowing. On each Borrowing Date, each Lender shall make
available its Loan or Loans, if any, (i) if such Loan is denominated in Dollars,
not later than noon, Detroit time, in Federal or other funds immediately
available to the Agent, in Detroit, Michigan at its address specified in or
pursuant to Article XIII and, (ii) if such Loan is denominated in an Agreed
Currency other than Dollars, not later than noon, local time, in the city of the
Agent's Eurocurrency Payment Office for such currency, in such funds as may then
be customary for the settlement of international transactions in such currency
in the city of and at the address of the Agent's Eurocurrency Payment Office for
such currency. Unless the Agent determines that any applicable condition
specified in Article IV has not been satisfied, the Agent will make the funds so
received from the Lenders available to the Borrower at the Agent's aforesaid
address. Notwithstanding the foregoing provisions of this Section 2.10, to the
extent that a Loan made by a Lender matures on the Borrowing Date of a requested
Loan, such Lender shall apply the proceeds of the Loan it is then making to the
repayment of principal of the maturing Loan.
2.11. Changes in Interest Rate, etc. Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurocurrency Advance into a Floating Rate Advance pursuant to Section 2.9, to
but excluding the date it is paid or is converted into a Eurocurrency Advance
pursuant to Section 2.9 hereof, at a rate per annum equal to the Floating Rate
for such day. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurocurrency Advance shall bear interest
on the outstanding principal amount thereof from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined by the Agent as applicable
to such Eurocurrency Advance based upon the Borrower's selections under Sections
2.8 and 2.9 and otherwise in accordance with the terms hereof. No Interest
Period may end after the Facility Termination Date.
2.12. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the
18
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurocurrency Advance. During the continuance of
a Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurocurrency
Advance shall bear interest for the remainder of the applicable Interest Period
at the rate otherwise applicable to such Interest Period plus 2% per annum, (ii)
each Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum and (iii) the LC Fee
shall be increased by 2% per annum, provided that, during the continuance of a
Default under Section 7.6 or 7.7, the interest rates set forth in clauses (i)
and (ii) above and the increase in the LC Fee set forth in clause (iii) above
shall be applicable to all Credit Extensions without any election or action on
the part of the Agent or any Lender.
2.13. Method of Payment. (i) All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall (except in the case of Reimbursement Obligations for which the LC
Issuer has not been fully indemnified by the Lenders, or as otherwise
specifically required hereunder) be applied ratably by the Agent among the
Lenders. Each payment delivered to the Agent for the account of any Lender shall
be delivered promptly by the Agent to such Lender in the same type of funds that
the Agent received at its address specified pursuant to Article XIII or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Agent is hereby authorized to charge the account of the Borrower
maintained with Bank One for each payment of principal, interest, Reimbursement
Obligations and fees as it becomes due hereunder. Each reference to the Agent in
this Section 2.13 shall also be deemed to refer, and shall apply equally, to the
LC Issuer, in the case of payments required to be made by the Borrower to the LC
Issuer pursuant to Section 2.21.6.
(ii) Notwithstanding the foregoing provisions of this Section, if, after
the making of any Advance in any currency other than Dollars, currency control
or exchange regulations are imposed in the country which issues such currency
with the result that the type of currency in which the Advance was made (the
"Original Currency") no longer exists or the Borrower is not able to make
payment to the Agent for the account of the Lenders in such Original Currency,
then all payments to be made by the Borrower hereunder in such currency shall
instead be made when due in Dollars in an amount equal to the Dollar Amount (as
of the date of repayment) of such payment due, it being the intention of the
parties hereto that the Borrower take all risks of the imposition of any such
currency control or exchange regulations. For purposes of this Section 2.13(ii),
the commencement of the third stage of European Economic and Monetary Union and
the occurrence of the Euro Implementation Date shall not constitute the
imposition of currency control or exchange regulations.
2.14. Credit Extensions to be Made in Euro. If any Credit Extension made
(or to be made) on or after the Euro Implementation Date would, but for the
provisions of this Section 2.14, be capable of being made in either the Euro or
in a National Currency Unit, such Credit Extension shall be made in the Euro.
2.15. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
19
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Agreed Currency and Type thereof and
the Interest Period with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder, (c) the original stated amount of each Facility LC and the
amount of LC Obligations outstanding at any time, and (d) the amount of any sum
received by the Agent hereunder from the Borrower and each Lender's share
thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note in substantially the form of Exhibit E hereto (a "Note"). In such event,
the Borrower shall prepare, execute and deliver to such Lender a Note payable to
the order of such Lender. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (prior to any assignment pursuant to Section
12.3) be represented by one or more Notes payable to the order of the payee
named therein, except to the extent that any such Lender subsequently returns
any such Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.16. Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Agreed
Currencies and Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower, it being understood that the
foregoing authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower agrees
to deliver promptly to the Agent a written confirmation, if such confirmation is
requested by the Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, the records of the Agent and
the Lenders shall govern absent manifest error.
2.17. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurocurrency Advance shall be payable on the last day
of its applicable Interest Period, on any date on which the Eurocurrency Advance
is prepaid, whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurocurrency Advance having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest and commitment fees shall be calculated for
actual days elapsed on the basis of a 360-day year, except for interest on Loans
denominated in British Pounds Sterling which shall be calculated for actual days
elapsed on the basis of a 365-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.18. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Promptly after notice from the LC Issuer, the Agent will notify each
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Lender of the contents of each request for issuance of a Facility LC hereunder.
The Agent will notify each Lender of the interest rate applicable to each
Eurocurrency Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Alternate Base Rate.
2.19. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.20. Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.21. Facility LCs.
2.21.1. Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby and commercial
Letters of Credit (each, a "Facility LC") and to renew, extend, increase,
decrease or otherwise modify each Facility LC ("Modify," and each such
action a "Modification"), from time to time from and including the date of
this Agreement and prior to the Facility Termination Date upon the request
of the Borrower; provided that immediately after each such Facility LC is
issued or Modified, (i) the aggregate amount of the outstanding LC
Obligations shall not exceed $30,000,000 and (ii) the Aggregate
Outstanding Credit Exposure shall not exceed the Aggregate Commitment. No
Facility LC shall have an expiry date later than the fifth Business Day
prior to the Facility Termination Date.
2.21.2. Participations. Upon the issuance or Modification by the LC
Issuer of a Facility LC in accordance with this Section 2.21, the LC
Issuer shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably sold to each Lender, and each Lender
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and the
related LC Obligations in proportion to its Pro Rata Share.
2.21.3. Notice. Subject to Section 2.21.1, the Borrower shall give
the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least five
Business Days prior to the proposed date of
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issuance or Modification of each Facility LC, specifying the beneficiary,
the proposed date of issuance (or Modification) and the expiry date of
such Facility LC, and describing the proposed terms of such Facility LC
and the nature of the transactions proposed to be supported thereby. Upon
receipt of such notice, the LC Issuer shall promptly notify the Agent, and
the Agent shall promptly notify each Lender, of the contents thereof and
of the amount of such Lender's participation in such proposed Facility LC.
The issuance or Modification by the LC Issuer of any Facility LC shall, in
addition to the conditions precedent set forth in Article IV (the
satisfaction of which the LC Issuer shall have no duty to ascertain), be
subject to the conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as the LC Issuer shall have
reasonably requested (each, a "Facility LC Application"). In the event of
any conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
2.21.4. LC Fees. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, a letter of credit fee at a per annum rate equal to the
Applicable Fee Rate for Facility LCs in effect from time to time on the
average daily undrawn stated amount under such standby Facility LC, such
fee to be payable in arrears on each Payment Date (each such fee described
in this sentence an "LC Fee"). The Borrower shall also pay to the LC
Issuer for its own account (x) at the time of issuance of each Facility
LC, a fronting fee in an amount equal to 0.125% of the stated amount of
such Facility LC at the time of issuance, and (y) documentary and
processing charges in connection with the issuance or Modification of and
draws under Facility LCs in accordance with the LC Issuer's standard
schedule for such charges as in effect from time to time.
2.21.5. Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Facility LC of any demand for payment under such
Facility LC, the LC Issuer shall notify the Agent and the Agent shall
promptly notify the Borrower and each other Lender as to the amount to be
paid by the LC Issuer as a result of such demand and the proposed payment
date (the "LC Payment Date"). The responsibility of the LC Issuer to the
Borrower and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material
respects with such Facility LC. The LC Issuer shall endeavor to exercise
the same care in the issuance and administration of the Facility LCs as it
does with respect to letters of credit in which no participations are
granted, it being understood that in the absence of any gross negligence
or willful misconduct by the LC Issuer, each Lender shall be
unconditionally and irrevocably liable without regard to the occurrence of
any Default or any condition precedent whatsoever, to reimburse the LC
Issuer on demand for (i) such Lender's Pro Rata Share of the amount of
each payment made by the LC Issuer under each Facility LC to the extent
such amount is not reimbursed by the Borrower pursuant to Section 2.21.6
below, plus (ii) interest on the foregoing amount to be reimbursed by such
Lender, for each day from the date of the LC Issuer's demand for such
reimbursement (or, if such demand is made after 11:00 a.m. (Chicago time)
on such date, from the next succeeding Business Day) to the date on which
such Lender pays the amount to be reimbursed by it, at a rate of interest
per annum equal to the Federal Funds Effective Rate for the first three
days and, thereafter, at a rate of interest equal to the rate applicable
to Floating Rate Advances.
2.21.6. Reimbursement by Borrower. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the LC Issuer on or before the
applicable LC Payment Date for any amounts to be paid by the LC Issuer
upon any drawing under any Facility LC,
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without presentment, demand, protest or other formalities of any kind;
provided that neither the Borrower nor any Lender shall hereby be
precluded from asserting any claim for direct (but not consequential)
damages suffered by the Borrower or such Lender to the extent, but only to
the extent, caused by (i) the willful misconduct or gross negligence of
the LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or
(ii) the LC Issuer's failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying with the
terms and conditions of such Facility LC. All such amounts paid by the LC
Issuer and remaining unpaid by the Borrower shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day falls
on or before the applicable LC Payment Date and (y) the sum of 2% plus the
rate applicable to Floating Rate Advances for such day if such day falls
after such LC Payment Date. The LC Issuer will pay to each Lender ratably
in accordance with its Pro Rata Share all amounts received by it from the
Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by the LC
Issuer, but only to the extent such Lender has made payment to the LC
Issuer in respect of such Facility LC pursuant to Section 2.21.5. Subject
to the terms and conditions of this Agreement (including without
limitation the submission of a Borrowing Notice in compliance with Section
2.8 and the satisfaction of the applicable conditions precedent set forth
in Article IV), the Borrower may request an Advance hereunder for the
purpose of satisfying any Reimbursement Obligation.
2.21.7. Obligations Absolute. The Borrower's obligations under this
Section 2.21 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the LC Issuer, any
Lender or any beneficiary of a Facility LC. The Borrower further agrees
with the LC Issuer and the Lenders that the LC Issuer and the Lenders
shall not be responsible for, and the Borrower's Reimbursement Obligation
in respect of any Facility LC shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any
of its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Facility LC. The
Borrower agrees that any action taken or omitted by the LC Issuer or any
Lender under or in connection with each Facility LC and the related drafts
and documents, if done without gross negligence or willful misconduct,
shall be binding upon the Borrower and shall not put the LC Issuer or any
Lender under any liability to the Borrower. Nothing in this Section 2.21
is intended to limit the right of the Borrower to make a claim against the
LC Issuer for damages as contemplated by the proviso to the first sentence
of Section 2.21.6.
2.21.8. Actions of LC Issuer. The LC Issuer shall be entitled to
rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document 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, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or
it shall first
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be indemnified to its reasonable 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. Notwithstanding any other
provision of this Section 2.21, the LC Issuer shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and
any action taken or failure to act pursuant thereto shall be binding upon
the Lenders and any future holders of a participation in any Facility LC.
2.21.9. Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against any
and all claims and damages, losses, liabilities, costs or expenses which
such Lender, the LC Issuer or the Agent may incur (or which may be claimed
against such Lender, the LC Issuer or the Agent by any Person whatsoever)
by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any
actual or proposed use of any Facility LC, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the LC
Issuer may incur by reason of or in connection with (i) the failure of any
other Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any defaulting Lender) or (ii) by reason of or
on account of the LC Issuer issuing any Facility LC which specifies that
the term "Beneficiary" included therein includes any successor by
operation of law of the named Beneficiary, but which Facility LC does not
require that any drawing by any such successor Beneficiary be accompanied
by a copy of a legal document, satisfactory to the LC Issuer, evidencing
the appointment of such successor Beneficiary; provided that the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the Agent
for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of the LC Issuer in determining whether a request
presented under any Facility LC complied with the terms of such Facility
LC or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Nothing in this Section 2.21.9 is intended
to limit the obligations of the Borrower under any other provision of this
Agreement.
2.21.10. Lenders' Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and employees
(to the extent not reimbursed by the Borrower) against any cost, expense
(including reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from such indemnitees'
gross negligence or willful misconduct or the LC Issuer's failure to pay
under any Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of the Facility LC) that such
indemnitees may suffer or incur in connection with this Section 2.21 or
any action taken or omitted by such indemnitees hereunder.
2.21.11. Facility LC Collateral Account. The Borrower agrees that it
will, upon the request of the Agent or the Required Lenders and until the
final expiration date of any Facility LC and thereafter as long as any
amount is payable to the LC Issuer or the Lenders in respect of any
Facility LC, maintain a special collateral account pursuant to
arrangements satisfactory to the Agent (the "Facility LC Collateral
Account") at the Agent's office at the address specified pursuant to
Article XIII, in the name of such Borrower but under the sole dominion and
control of the Agent, for the benefit of the Lenders and in which such
Borrower shall have no interest other than as set forth in Section 8.1.
The Borrower hereby pledges, assigns and grants to the
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Agent, on behalf of and for the ratable benefit of the Lenders and the LC
Issuer, a security interest in all of the Borrower's right, title and
interest in and to all funds which may from time to time be on deposit in
the Facility LC Collateral Account to secure the prompt and complete
payment and performance of the Obligations. The Agent will invest any
funds on deposit from time to time in the Facility LC Collateral Account
in certificates of deposit of Bank One having a maturity not exceeding 30
days. Nothing in this Section 2.21.11 shall either obligate the Agent to
require the Borrower to deposit any funds in the Facility LC Collateral
Account or limit the right of the Agent to release any funds held in the
Facility LC Collateral Account in each case other than as required by
Section 8.1.
2.21.12. Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.
2.22. Market Disruption. Notwithstanding the satisfaction of all
conditions referred to in Article II and Article IV with respect to any Advance
in any Agreed Currency other than Dollars, if there shall occur on or prior to
the date of such Advance any change in national or international financial,
political or economic conditions or currency exchange rates or exchange controls
which would in the reasonable opinion of the Agent or the Required Lenders make
it impracticable for the Eurocurrency Loans comprising such Advance to be
denominated in the Agreed Currency specified by the Borrower, then the Agent
shall forthwith give notice thereof to the Borrower and the Lenders, and such
Loans shall not be denominated in such Agreed Currency but shall, except as
otherwise set forth in Section 2.14, be made on such Borrowing Date in Dollars,
in an aggregate principal amount equal to the Dollar Amount of the aggregate
principal amount specified in the related Borrowing Notice or
Conversion/Continuation Notice, as the case may be, as Floating Rate Loans,
unless the Borrower notifies the Agent at least one Business Day before such
date that (i) it elects not to borrow on such date or (ii) it elects to borrow
on such date in a different Agreed Currency, as the case may be, in which the
denomination of such Loans would in the opinion of the Agent and the Required
Lenders be practicable and in an aggregate principal amount equal to the Dollar
Amount of the aggregate principal amount specified in the related Borrowing
Notice or Conversion/Continuation Notice, as the case may be.
2.23. Judgment Currency. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due from the Borrower hereunder in the
currency expressed to be payable herein (the "specified currency") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main Chicago office on the
Business Day preceding that on which final, non-appealable judgment is given.
The obligations of the Borrower in respect of any sum due to any Lender or the
Agent hereunder shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Business Day
following receipt by such Lender or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Lender or the Agent (as the
case may be) may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally due to such
Lender or the Agent, as the case may be, in the specified currency, the Borrower
agrees, to the fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify such Lender or
the Agent, as the case may be, against such loss, and if the amount of the
specified currency so purchased exceeds (a) the sum originally due to any Lender
or the Agent, as the case may be, in the specified currency and (b) any amounts
shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 12.2, such Lender or the
Agent, as the case may be, agrees to remit such excess to the Borrower.
25
2.24. Extension of Facility Termination Date. The Borrower may request
one-year extensions of the Facility Termination Date by submitting a request for
an extension to the Agent (an "Extension Request") no more than 90 and no less
than 30 days prior to the first anniversary of the then existing Facility
Termination Date. Promptly upon receipt of an Extension Request, the Agent shall
notify each Lender thereof and shall request each Lender to approve the
Extension Request. Each Lender approving the Extension Request shall deliver its
written consent no later than 15 days prior the then existing Facility
Termination Date. If the consent of each of the Lenders is received by the
Agent, the Facility Termination Date shall be extended by one year and the Agent
shall promptly notify the Borrower and each Lender of the new Facility
Termination Date.
2.25. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into Eurocurrency Advances shall be suspended pursuant to Section 3.3 (any
Lender so affected an "Affected Lender"), the Borrower may elect, if such
amounts continue to be charged or such suspension is still effective, to replace
such Affected Lender as a Lender party to this Agreement, provided that no
Default or Unmatured Default shall have occurred and be continuing at the time
of such replacement, and provided further that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Borrower and the Agent shall agree, as of such date, to purchase for cash
the Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit C and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Affected
Lender to be terminated as of such date and to comply with the requirements of
Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such
Affected Lender in same day funds on the day of such replacement (A) all
interest, fees and other amounts then accrued but unpaid to such Affected Lender
by the Borrower hereunder to and including the date of termination, including
without limitation payments due to such Affected Lender under Sections 3.1, 3.2
and 3.5, and (B) an amount, if any, equal to the payment which would have been
due to such Lender on the day of such replacement under Section 3.4 had the
Loans of such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation or the LC
Issuer to any Taxes, or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to any Lender or the LC
Issuer in respect of its Eurocurrency Loans, Facility LCs or
participations therein, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge,
26
special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurocurrency Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation or the LC
Issuer of making, funding or maintaining its Eurocurrency Loans
(including, without limitation, any conversion of any Loan
denominated in an Agreed Currency other than Euro into a Loan
denominated in Euro), or of issuing or participating in Facility LCs
or reduces any amount receivable by any Lender or any applicable
Lending Installation or the LC Issuer in connection with its
Eurocurrency Loans, Facility LCs or participations therein or
requires any Lender or any applicable Lending Installation or the LC
Issuer to make any payment calculated by reference to the amount of
Eurocurrency Loans, Facility LCs or participations therein held or
interest received by it, by an amount deemed material by such Lender
or the LC Issuer, as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurocurrency Loans (including, without limitation, any
conversion of any Loan denominated in an Agreed Currency other than Euro into a
Loan denominated in Euro) or Commitment or of issuing or participating in
Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurocurrency Loans, Commitment, Facility LCs or participations therein,
then, within 15 days of demand by such Lender or the LC Issuer, as the case may
be, the Borrower shall pay such Lender or the LC Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or the LC
Issuer, as the case may be, for such increased cost or reduction in amount
received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or the LC Issuer or any
corporation controlling such Lender or the LC Issuer is increased as a result of
a Change, then, within 15 days of demand by such Lender or the LC Issuer, the
Borrower shall pay such Lender or the LC Issuer the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or the LC Issuer or any Lending
Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its
27
Eurocurrency Loans at a suitable Lending Installation would violate any
applicable law, rule, regulation, or directive, whether or not having the force
of law, or if the Required Lenders determine that (i) deposits of a type,
currency and maturity appropriate to match fund Eurocurrency Advances are not
available or (ii) the interest rate applicable to Eurocurrency Advances does not
accurately reflect the cost of making or maintaining Eurocurrency Advances, then
the Agent shall suspend the availability of Eurocurrency Advances and require
any affected Eurocurrency Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurocurrency Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurocurrency
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurocurrency Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note or Facility LC
Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
Facility LC Application or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Facility LC Application ("Other
Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of its
Commitment, any Loans made by it hereunder, or otherwise in connection with its
participation in this Agreement and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent, the LC
Issuer or such Lender makes demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to the Agent two duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to the
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Borrower and the Agent (x) renewals or additional copies of such form (or
any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms
28
so delivered by it, such additional forms or amendments thereto as may be
reasonably requested by the Borrower or the Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding 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, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurocurrency Loans to reduce any liability of the Borrower to
such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurocurrency Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurocurrency Loan shall
be calculated as though each Lender funded its Eurocurrency Loan through the
purchase of a deposit of the type, currency and maturity corresponding to the
deposit used as a reference in determining the Eurocurrency Rate applicable to
such Loan, whether in fact that is the case or not.
29
Unless otherwise provided herein, the amount specified in the written statement
of any Lender shall be payable on demand after receipt by the Borrower of such
written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4
and 3.5 shall survive payment of the Obligations and termination of this
Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension hereunder unless the Loan Parties have furnished to
the Agent with sufficient copies for the Lenders.
(i) This Agreement or counterparts hereof shall have been duly executed
by the Borrower, the Agent and the Lenders; and the Agent shall have
received duly executed copies of the Loan Documents and such other
documents, instruments, agreements and legal opinions as the Agent
shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, each in
form and substance reasonably satisfactory to the Agent.
(ii) Copies of the articles or certificate of incorporation of each Loan
Party, together with all amendments, and a certificate of good
standing, each certified by the appropriate governmental officer in
its jurisdiction of incorporation, as well as any other information
required by Section 326 of the USA PATRIOT ACT or necessary for the
Agent or any Lender to verify the identity of each Loan Party as
required by Section 326 of the USA PATRIOT Act.
(iii) Copies, certified by the Secretary or Assistant Secretary of each
Loan Party, of its by-laws and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which each Loan
Party is a party.
(iv) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each Loan Party, which shall identify by name and title
and bear the signatures of the Authorized Officers and any other
officers of each Loan Party authorized to sign the Loan Documents to
which such Loan Party is a party, upon which certificate the Agent
and the Lenders shall be entitled to rely until informed of any
change in writing by such Loan Party.
(v) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(vi) A written opinion of the Loan Parties' counsel, addressed to the
Lenders in substantially the form of Exhibit A.
(vii) Any Notes requested by a Lender pursuant to Section 2.15 payable to
the order of each
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such requesting Lender.
(viii) Written money transfer instructions, in substantially the form of
Exhibit D, addressed to the Agent and signed by an Authorized
Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
(ix) If the initial Credit Extension will be the issuance of a Facility
LC, a properly completed Facility LC Application.
(x) Each Loan Party shall have delivered executed copies of all Loan
Documents to which it is a party.
(xi) The Agent shall have received all Lien and other searches that the
Agent deems necessary, the Loan Parties shall have delivered UCC
termination statements or amendments to existing UCC financing
statements with respect to any filings against the Collateral as may
be requested by the Agent and shall have authorized the filing of
such termination statements or amendments, the Agent shall have been
authorized to file any UCC financing statements that the Agent deems
necessary to perfect its Liens in the Collateral and Liens creating
a first priority security interest in the Collateral in favor of the
Agent shall have been perfected.
(xii) The Agent shall have completed its business due diligence and the
Loan Parties' corporate structure, capital structure, material
accounts and governing documents shall be acceptable to the Agent.
In addition, the terms and conditions of all Indebtedness of each
Loan Party shall be acceptable to Agent.
(xiii) The Borrower shall have delivered evidence of insurance coverage in
form, scope, and substance reasonably satisfactory to the Agent and
otherwise in compliance with the terms of Section 6.7.
(xiv) The Loan Parties shall have delivered such other documents as the
Agent, any Lender or its counsel may have reasonably requested.
4.2. Each Credit Extension. The Lenders shall not be required to make any
Credit Extension unless on the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are true
and correct as of such Credit Extension Date except to the extent
any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall
have been true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Credit Extension
shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice or request for issuance of a Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2(i) and
(ii) have been satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition to making a
Credit Extension.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries is
a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5.2. Authorization and Validity. Each of the Borrower and each Loan Party
has the power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder. The
execution and delivery by the Borrower and each other Loan Party of the Loan
Documents to which it is a party and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents to which the Borrower and each other Loan Party is a party
constitute legal, valid and binding obligations of the Borrower or such Loan
Party, as the case may be, enforceable against the Borrower or such Loan Party,
as the case may be, in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and delivery
by the Borrower or any other Loan Party of the Loan Documents to which it is a
party, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its Subsidiaries or (ii) the Borrower's or any Subsidiary's
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of any such indenture, instrument
or agreement. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.4. Financial Statements. The December 31, 2003 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
5.5. Material Adverse Change. Since December 31, 2003 there has been no
change in the
32
business, Property, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect, other than the Recapitalization Transaction.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP and as to which no Lien exists. The United
States income tax returns of the Borrower and its Subsidiaries have been audited
by the Internal Revenue Service through the fiscal year ended December 31, 2001.
No tax liens have been filed and no claims are being asserted with respect to
any such taxes. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.7, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extensions. Other than any
liability incident to any litigation, arbitration or proceeding which (i) could
not reasonably be expected to have a Material Adverse Effect or (ii) is set
forth on Schedule 5.7, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Schedule 5.8 sets forth (a) a correct and complete list of the name
and relationship to the Borrower of each and all of the Borrower's Subsidiaries,
(b) the location of the chief executive office of the Borrower and each of its
Subsidiaries and each other location where any of them have maintained their
chief executive office in the past five years, and (c) the type of entity of the
Borrower and each of its Subsidiaries. With respect to each Loan Party, Schedule
5.8 also sets forth the employer or taxpayer identification number of each Loan
Party and the organizational identification number issued by each Loan Party's
jurisdiction of organization or a statement that no such number has been issued.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $2,000,000. Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, neither the Borrower nor any other member of
the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained
33
in (i) any agreement to which it is a party, which default could reasonably be
expected to have a Material Adverse Effect or (ii) any agreement or instrument
evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 6.16, on
the date of this Agreement, the Borrower and its Subsidiaries will have good
title, free of all Liens other than those permitted by Section 6.16, to all of
the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101
of an employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan (within the meaning of Section 4975 of
the Code), and neither the execution of this Agreement nor the making of Credit
Extensions hereunder gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Reportable Transactions. The Borrower does not intend to treat the
Advances and the other transactions contemplated hereby as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In
the event the Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Agent thereof. The Borrower acknowledges
that the Agent and/or one or more of the Lenders may treat its Advances and the
other transactions contemplated hereby as part of a transaction that is subject
to Treasury Regulation Section 1.6011-4 or Section 301.6112-1, and the Agent and
such Lender or Lenders, as applicable, may file such IRS forms or maintain such
lists and other records as they may determine is required by such Treasury
Regulations.
34
5.20. Subordinated Indebtedness. The Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness. All Secured Obligations are
"Senior Indebtedness"" as defined in the Subordinated Notes and are and will be
incurred in compliance with the Subordinated Notes This Agreement and the other
Loan Documents are the "Credit Agreements" as defined in the Subordinated Notes
Other than the Secured Obligations, there is no other "Senior Indebtedness"
thereunder. There is no event of default or event or condition which would
become an event of default with notice or lapse of time or both, under the
Subordinated Debt Documents and each of the Subordinated Debt Documents is in
full force and effect.
5.21 Solvency. (i) Immediately after the consummation of the transactions
to occur on the date hereof and immediately following the making of each Loan,
if any, made on the date hereof and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of the Borrower and
its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the
debts and liabilities, subordinated or otherwise, of the Borrower and its
Subsidiaries on a consolidated basis; (b) the present fair saleable value of the
Property of the Borrower and its Subsidiaries on a consolidated basis will be
greater than the amount that will be required to pay the probable liability of
the Borrower and its Subsidiaries on a consolidated basis on their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Borrower and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(ii) The Borrower does not intend to, or to permit any of its Subsidiaries
to, and does not believe that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
5.22 Security Interest in Collateral. The provisions of this Agreement and
the other Loan Documents create legal and valid Liens on all the Collateral in
favor of the Agent, for the benefit of the Agent and the Lenders, and such Liens
constitute perfected and continuing Liens on the Collateral, securing the
Secured Obligations, enforceable against the applicable Loan Party and all third
parties, and having priority over all other Liens on the Collateral except in
the case of (a) Permitted Liens, to the extent any such Permitted Liens would
have priority over the Liens in favor of the Agent pursuant to any applicable
law and (b) Liens perfected only by possession (including possession of any
certificate of title) to the extent the Agent has not obtained or does not
maintain possession of such Collateral.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
35
(i) Within 90 days after the close of each of its fiscal years or, if
later, within 5 days after the Borrower's annual filing with the
Securities and exchange Commission, an unqualified audit report
certified by independent certified public accountants acceptable to
the Lenders, prepared in accordance with GAAP on a consolidated and
consolidating basis (consolidating statements need not be certified
by such accountants) for itself and its Subsidiaries, including
balance sheets as of the end of such period, related profit and loss
and reconciliation of surplus statements, and a statement of cash
flows, accompanied by (a) promptly when received by the Borrower,
any management letter prepared by said accountants, and (b)
promptly, if requested by the Agent, a certificate of said
accountants that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion
of such accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof.
(ii) Within 45 days after the close of the first three quarterly periods
of each of its fiscal years or, if later, within 5 days after the
Borrower's quarterly filing with the Securities and exchange
Commission, for itself and its Subsidiaries, consolidated unaudited
balance sheets as at the close of each such period and consolidated
and consolidating profit and loss and reconciliation of surplus
statements and a statement of cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all
certified by its chief financial officer.
(iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the form
of Exhibit B signed by its chief financial officer showing the
calculations necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status
thereof.
(iv) Within 270 days after the close of each fiscal year, a statement of
the Unfunded Liabilities of each Single Employer Plan, certified as
correct by an actuary enrolled under ERISA.
(v) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect
to any Plan, a statement, signed by the chief financial officer of
the Borrower, describing said Reportable Event and the action which
the Borrower proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 days after receipt by
the Borrower, a copy of (a) any notice or claim to the effect that
the Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a
Material Adverse Effect.
(vii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
36
(viii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports
which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission.
(ix) On each yearly anniversary of the Closing Date, a certificate of
good standing for the Borrower and each other Person which has
pledged collateral in support of the Obligations from the
appropriate governmental officer in its jurisdiction of
incorporation or organization.
(x) Such other information (including non-financial information) as the
Agent or any Lender may from time to time reasonably request.
If any information which is required to be furnished to the Lenders under
this Section 6.1 is required by law or regulation to be filed by the Borrower
with a government body on an earlier date, then the information required
hereunder shall be furnished to the Lenders at such earlier date.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for working capital and for other
general corporate purposes (including acquisitions). The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Advances to
purchase or carry any "margin stock" (as defined in Regulation U).
6.3. Notices.
(a) the occurrence of any Default or Unmatured Default;
(b) any other development, financial or otherwise, which could
reasonably be expected to have a Material Adverse Effect;
(c) any Lien (other than Permitted Liens) or claim made or asserted
against any of the Collateral;
(d) its decision to change, (i) such Loan Party's name or type of
entity, (ii) such Loan Party's articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate
of organization, by-laws, or operating or other management agreement, and
(iii) the location where any Collateral is held or maintained; provided
that, in no event shall the Agent receive notice of such change less than
thirty days prior thereto; and
(e) any loss, damage, or destruction to the Collateral in the amount
of $500,000 or more, whether or not covered by insurance.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay
37
when due all taxes, assessments and governmental charges and levies upon it or
its income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with GAAP.
6.6. Insurance. (a) The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried. All such insurance shall
be in amounts, cover such assets and be under policies acceptable to the Agent
in its reasonable discretion.
(b) Upon the request of the Agent, all insurance policies required
under Section 6.6(a) shall name the Agent (for the benefit of the Agent and the
Lenders) as an additional insured or as loss payee, as applicable, and shall
provide that, or contain loss payable clauses, in form and substance
satisfactory to the Agent.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws.
6.8. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to (a) inspect any of the Property, the Collateral, and books and
financial records of the Borrower and each Subsidiary, (b) examine and make
copies of the books of accounts and other financial records of the Borrower and
each Subsidiary, and (c) discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Agent or any
Lender may designate.
6.10. Additional Collateral; Further Assurances.
(a) The Company represents that there are no Significant
Subsidiaries as of the Closing Date. Subject to applicable law, each Loan
Party shall, unless the Required Lenders otherwise consent, cause each
Significant Subsidiary of the Borrower formed or acquired after the
Closing Date in accordance with the terms of this Agreement to (1) become
a party to this Agreement by executing the Joinder Agreement set forth as
Exhibit H hereto (the "Joinder Agreement"), (2) guarantee payment and
performance of the Guaranteed Obligations pursuant to the Guaranty.
(b) Upon the request of the Agent, each Loan Party shall (i) grant
Liens to the Agent, for the benefit of the Agent and the Lenders, pursuant
to such documents as the Agent may reasonably deem necessary and deliver
such property, documents, and instruments as the Agent may request to
perfect the Liens of the Agent in any Property of such Loan Party which
constitutes Collateral, and (ii) in connection with the foregoing
requirements, or either of them, deliver to the Agent all items of the
type required by Section 4.1 (as applicable). Upon execution and delivery
of such Loan Documents and other instruments, certificates, and
agreements, each such Person shall automatically become a Guarantor
hereunder and thereupon shall have all of
38
the rights, benefits, duties, and obligations in such capacity under the
Loan Documents.
6.11. Dividends. The Borrower will not, nor will it permit any Subsidiary
to, declare or pay any dividends or make any distributions on its capital stock
(other than dividends payable in its own common stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except that (i) any Subsidiary may declare and pay dividends or make
distributions to the Borrower or to a Wholly-Owned Subsidiary, (ii) the Borrower
may declare and pay dividends on its capital stock provided that no Default or
Unmatured Default shall exist before or after giving effect to such dividends or
be created as a result thereof and (iii) the Borrower may declare and pay
dividends and make any other distributions, redemptions or repurchases in
connection with the Recapitalization Transaction.
6.12. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans and the Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and described in Schedule
6.12.
(iii) Indebtedness arising under Rate Management Transactions related to
the Loans.
(iv) Other unsecured Indebtedness in aggregate principal amount not
exceeding $2,000,000.
6.13. Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that a Subsidiary may
merge into the Borrower or a Wholly-Owned Subsidiary.
6.14. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property that, together
with all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than inventory in the
ordinary course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such lease,
sale or other disposition occurs, do not constitute a Substantial
Portion of the Property of the Borrower and its Subsidiaries.
(iii) Other sales or dispositions of Property in the ordinary course of
business that, together with all other Property previously sold or
disposed of after the Closing Date as permitted pursuant to this
Section do not exceed $2,000,000 in the aggregate.
6.15. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist, any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
39
(ii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 6.15.
(iii) Acquisitions which the Company or any Subsidiary is able to
consummate without requesting any Advance under this Agreement and
so long as no Default or Unmatured Default shall have occurred and
be continuing at the time of such Acquisition (both before and after
giving effect to the Acquisition).
(iv) Acquisitions (other than described in clause (iii) above) which do
not exceed $15,000,000 in the aggregate during the term of this
Agreement so long as (A) no single Acquisition exceeds $8,000,000 in
total consideration paid by the Borrower or any Subsidiary, (B)
Borrower provides a pro forma covenant compliance certificate to the
Agent not less than ten (10) days prior to the consummation of any
such Acquisition and (C) no Default or Unmatured Default shall have
occurred and be continuing at the time of such Acquisition (both
before and after giving effect to the Acquisition).
6.16. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more than
60 days past due.
(iii) Liens arising out of pledges or deposits under worker's compensation
laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other encumbrances
or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which
do not in any material way affect the marketability of the same or
interfere with the use thereof in the business of the Borrower or
its Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 6.16.
(vii) Liens in favor of the Agent, for the benefit of the Lenders, granted
pursuant to any Collateral Document.
6.17. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.18. Subordinated Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, make any amendment or modification to the indenture,
note or other agreement evidencing or
40
governing any Subordinated Indebtedness, or directly or indirectly voluntarily
prepay, defease or in substance defease, purchase, redeem, retire or otherwise
acquire, any Subordinated Indebtedness. In addition, the Borrower will not repay
the Subordinated Notes in full (whether due to acceleration or according to
scheduled amortization) on or before the Facility termination Date.
6.19. Sale of Accounts. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse.
6.20. Recapitalization Transaction. With respect to the Recapitalization
Transaction, the Borrower shall:
(i) Within thirty (30) days after the consummation of the
Recapitalization Transaction, deliver to the Agent copies of all
material documents relating to the Recapitalization Transaction
(other than the Subordinated Debt Documents described in clause (ii)
below, including copies of all related public filings which shall
include a pro forma balance sheet, demonstrating pro forma
compliance with the covenants in Section 6.21, both immediately
before and after giving effect to the Recapitalization Transaction;
(ii) (A) Within five (5) days after the incurrence of the
Subordinated Debt to CDR-Cookie Acquisition, L.L.C, deliver
certified copies of all Subordinated Debt Documents to the Agent,
which documents shall be reasonably satisfactory to the Agent, and
(B) prior to the incurrence of the Subordinated Debt, CDR-Cookie
Acquisition, L.L.C. and the Agent shall have executed and delivered
a subordination agreement in form and substance satisfactory to the
Agent.
6.21. Financial Covenants.
6.21.1. Interest Coverage Ratio. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters, of (i)
Consolidated EBIT to (ii) Consolidated Interest Expense to be less than
6.0 to 1.0. The Interest Coverage Ratio under this Section 6.21.1 shall be
calculated commencing December 31, 2004 as follows:
QUARTER ENDING CONSOLIDATED EBIT CONSOLIDATED INTEREST EXPENSE
-------------- ----------------- -----------------------------
I. December 31, 2004 For four consecutive fiscal For the fiscal quarter ending
quarters then ending December 31, 2004 multiplied by 4
II. March 30, 2005 For four consecutive fiscal For the two consecutive fiscal
quarters then ending quarters then ending multiplied
by 2
III. June 30, 2005 and each For four consecutive fiscal For the four consecutive fiscal
fiscal quarter thereafter quarters then ending quarters then ending
6.21.2. Leverage Ratio. The Borrower will not permit the ratio,
determined as of the end of each of its fiscal quarters, of (i)
Consolidated Funded Indebtedness to (ii) Consolidated EBITDA for the then
most-recently ended four fiscal quarters to be greater than 1.1 to 1.0.
41
6.21.3. Minimum Total Capitalization. The Borrower will at all times
maintain Consolidated Total Capitalization of not less than the sum of
(i)(A) prior to the consummation of the Recapitalization Transaction,
$225,000,000, and (B) after the consummation of the Recapitalization
Transaction and commencing September 30, 2004, 85% of the opening
Consolidated Total Capitalization immediately after giving effect to the
Recapitalization Transaction, plus (ii) 50% of Consolidated Net Income
earned in each fiscal year beginning with the year ending December 31,
2004 (without deduction for losses).
All financial covenants in this Section 6.21 are contemplated to be
calculated exclusive of (i) one time charges not to exceed $55,000,000 to
be assessed in consummation of the Recapitalization Transaction and (ii)
one time non-cash charges not to exceed $3,000,000 for asset impairment.
All such charges are to be provided to the Agent on a schedule provided by
the Borrower, with appropriate explanations, which schedule must be in
form and substance reasonably satisfactory to the Agent.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
any Loan Party or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any commitment fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
7.3. The breach by any Loan Party of any of the terms or provisions of
Article VI.
7.4. The breach by any Loan Party (other than a breach which constitutes a
Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within five days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other
42
than by a regularly scheduled payment) prior to the stated maturity thereof; or
the Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and its Subsidiaries which, when taken together with
all other Property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $2,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $2,000,000 or any Reportable Event shall occur in connection
with any Plan.
7.11. Nonpayment by the Borrower or any Subsidiary of any Rate Management
Obligation when due or the breach by the Borrower or any Subsidiary of any term,
provision or condition contained in any Rate Management Transaction or any
transaction of the type described in the definition of "Rate Management
Transactions," whether or not any Lender or Affiliate of a Lender is a party
thereto.
7.12. Any Change in Control shall occur.
7.13. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.14. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to
43
comply with any of the terms or provisions of any Guaranty to which it is a
party, or any Guarantor shall deny that it has any further liability under any
Guaranty to which it is a party, or shall give notice to such effect.
7.15. Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or the Borrower shall fail to
comply with any of the terms or provisions of any Collateral Document.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Facility LC Collateral Account. (i) If any Default
described in Section 7.6 or 7.7 occurs with respect to any Loan Party, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any further
notice, act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time, less (y) the
amount on deposit in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not been
applied against the Obligations (such as difference, the "Collateral Shortfall
Amount"). If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, and (b) upon notice to the Borrower
and in addition to the continuing right to demand payment of all amounts payable
under this Agreement, make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account. After the occurring of any Default, the Agent
may exercise any rights and remedies provided to the Agent under the Loan
Documents or at law or equity, including all remedies provided under the UCC.
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
44
(iv) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Obligations have been indefeasibly paid in full and
the Aggregate Commitment has been terminated, any funds remaining in the
Facility LC Collateral Account shall be returned by the Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry date of
any Facility LC to a date after the Facility Termination Date or
forgive all or any portion of the principal amount thereof or any
Reimbursement Obligation related thereto, or reduce the rate or
extend the time of payment of interest or fees thereon or
Reimbursement Obligations related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date, or reduce the amount or extend
the payment date for, the mandatory payments required under Section
2.2, or increase the amount of the Aggregate Commitment (except as
permitted pursuant to Section 2.5(ii)) or of the Commitment of any
Lender hereunder or the commitment to issue Facility LCs, or permit
the Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any guarantor of any Advance or, except as provided in the
Collateral Documents or Section 10.16, release all or substantially
all of the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. The Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party to this
Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders, the LC
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit
45
Extension shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to Section 8.2,
and then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent, the LC Issuer and the Lenders until the
Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent, the LC Issuer and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Agent,
the LC Issuer and the Lenders relating to the subject matter thereof other than
those contained in the fee letter described in Section 10.13 which shall survive
and remain in full force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the Agent
and the Arranger for any reasonable and properly documented costs, internal
charges and out-of-pocket expenses (including reasonable and properly documented
attorneys' fees and time charges of attorneys for the Agent, which attorneys may
be employees of the Agent) paid or incurred by the Agent or the Arranger in
connection with the preparation, negotiation, execution, delivery, syndication,
distribution (including, without limitation, via the internet), review,
amendment, modification, and administration of the Loan Documents. The Borrower
also agrees to reimburse the Agent, the Arranger, the LC Issuer and the Lenders
for any reasonable and properly documented costs, internal charges and
out-of-pocket expenses (including reasonable and properly documented attorneys'
fees and time charges of attorneys for the
46
Agent, the Arranger, the LC Issuer and the Lenders, which attorneys may be
employees of the Agent, the Arranger, the LC Issuer or the Lenders) paid or
incurred by the Agent, the Arranger, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer, each Lender, their respective affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer, any Lender or any affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP in a manner consistent with that
used in preparing the financial statements referred to in Section 5.4. If at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and the Borrower, the Agent or the
Required Lenders shall so request, the Agent, the Lenders and the Loan Parties
shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders), provided that, until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and the Borrower shall provide to the Agent and the Lenders
reconciliation statements showing the difference in such calculation, together
with the delivery of monthly, quarterly and annual financial statements required
hereunder.
9.9. Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have any liability with respect to, and the Borrower hereby
47
waives, releases and agrees not to xxx for, any special, indirect, consequential
or punitive damages suffered by the Borrower in connection with, arising out of,
or in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11. Confidentiality. The Agent and each Lender agrees to hold any
confidential information which it may receive from the Borrower in connection
with this Agreement in confidence, except for disclosure (i) to its Affiliates
and to the Agent and any other Lender and their respective Affiliates, (ii) to
legal counsel, accountants, and other professional advisors to such Lender or to
a Transferee, (iii) to regulatory officials, (iv) to any Person as requested
pursuant to or as required by law, regulation, or legal process, (v) to any
Person in connection with any legal proceeding to which it is a party, (vi) to
its direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties,
(vii) permitted by Section 12.4, and (viii) to rating agencies if requested or
required by such agencies in connection with a rating relating to the Advances
hereunder. Without limiting Section 9.4, the Borrower agrees that the terms of
this Section 9.11 shall set forth the entire agreement between the Borrower and
each Lender (including the Agent) with respect to any confidential information
previously or hereafter received by such Lender in connection with this
Agreement, and this Section 9.11 shall supersede any and all prior
confidentiality agreements entered into by such Lender with respect to such
confidential information. Notwithstanding anything herein to the contrary,
confidential information shall not include, and each party to any of the Loan
Documents and their respective Affiliates (and the respective partners,
directors, officers, employees, advisors, representatives and other agents of
each of the foregoing and their Affiliates) may disclose to any and all Persons,
without limitation of any kind, (i) any information with respect to the U.S.
federal and state income tax treatment of the transactions contemplated hereby
and any facts that may be relevant to understanding such tax treatment, which
facts shall not include for this purpose the names of the parties or any other
Person named herein, or information that would permit identification of the
parties or such other Persons, or any pricing terms or other nonpublic business
or financial information that is unrelated to such tax treatment or facts, and
(ii) all materials of any kind (including opinions or other tax analyses)
relating to such tax treatment or facts that are provided to any of the Persons
referred to above, and it is hereby confirmed that each of the Persons referred
to above has been authorized to make such disclosures since the commencement of
discussions regarding the transactions contemplated hereby.
9.12. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
9.14. USA PATRIOT ACT NOTIFICATION. The following notification is provided
to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C.
Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual, Agent
and the Lenders will ask for Borrower's name, residential address, tax
identification number, date of birth, and other information that will allow
Agent and the Lenders to identify Borrower, and, if Borrower is not an
individual, Agent and the Lenders will ask for
48
Borrower's name, tax identification number, business address, and other
information that will allow Agent and the Lenders to identify Borrower. Agent
and the Lenders may also ask, if Borrower is an individual, to see Borrower's
driver's license or other identifying documents, and, if Borrower is not an
individual, to see Borrower's legal organizational documents or other
identifying documents.
9.15 Amendment and Restatement. This Agreement is an amendment and
restatement of that certain line of credit agreement dated as of August 7, 2003,
between the Borrower and Bank One, NA, as amended (the "Original Loan
Agreement"). All "Liabilities" under the Original Loan Agreement and all Liens
securing payment of "Liabilities" under the Original Loan Agreement shall in all
respects be continuing and this Agreement shall not be deemed to evidence or
result in a novation or repayment and re-borrowing of such "Liabilities". This
Agreement shall supersede the Original Loan Agreement. From and after the
Effective Date, this Agreement shall govern the terms of the "Liabilities" under
the Original Loan Agreement. To the extent not replaced by Loan Documents dated
as of the Closing Date, any "Loan Documents" (as defined in the Original Loan
Agreement) executed in connection with the Original Loan Agreement (other than
any such Loan Document that is specifically terminated by the parties thereto)
shall continue to be effective, and all references in those prior Loan Documents
to the "Credit Agreement", the "Loan Agreement" or the "Agreement" shall be
deemed to refer to this Agreement without further amendment thereof.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Illinois Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or
49
employees shall be liable to the Borrower, the Lenders or any Lender for any
action taken or omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith except to the extent such
action or inaction is determined in a final non-appealable judgment by a court
of competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries.
10.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Agent, which counsel may be employees of the Agent. For purposes
of determining compliance with the conditions specified in Sections 4.1 and 4.2,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Agent shall have received notice from such
Lender prior to the applicable date specifying its objection thereto.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and
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indemnify the Agent ratably in proportion to their respective Commitments (or,
if the Commitments have been terminated, in proportion to their Commitments
immediately prior to such termination) (i) for any amounts not reimbursed by the
Borrower for which the Agent is entitled to reimbursement by the Borrower under
the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf
of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders)
and (iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that (i) no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(vii)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of
the Lenders under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger 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 and the other Loan Documents. Except for any notice, report, document
or other information expressly required to be furnished to the Lenders by the
Agent or Arranger hereunder, neither the Agent nor the Arranger shall have any
duty or responsibility (either initially or on a continuing basis) to provide
any Lender with any notice, report, document, credit information or other
information concerning the affairs, financial condition or business of the
Borrower or any of its Affiliates that may come into the possession of the Agent
or Arranger (whether or not in their respective capacity as Agent or Arranger)
or any of
51
their Affiliates.
10.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated April 7, 2004, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Collateral Documents. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Borrower on their behalf the
Security Agreement(s) and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Security Agreement(s).
10.16. Collateral Releases. The Lenders hereby empower and authorize the
Agent to execute and deliver to the Borrower on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved by the Required
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in
writing.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 12.3, and (iii) any transfer by Participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3.2. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties
53
thereto have complied with the provisions of Section 12.3. The Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3;
provided, however, that the Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which
holds any Note to direct payments relating to such Loan or Note to another
Person. Any assignee of the rights to any Loan or any Note agrees by acceptance
of such assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Outstanding Credit Exposure owing to such Lender, any
Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender under the Loan Documents. In the event of any such
sale by a Lender of participating interests to a Participant, such
Lender's obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of its
Outstanding Credit Exposure and the holder of any Note issued to it in
evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrower
and the Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Credit Exposure
or Commitment in which such Participant has an interest which would
require consent of all of the Lenders pursuant to the terms of Section 8.2
or of any other Loan Document
12.2.3. Benefit of Certain Provisions. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of setoff
provided in Section 11.1 with respect to the amount of participating
interests sold to each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a
Lender. The Borrower further agrees that each Participant shall be
entitled to the benefits of Sections 3.1, 3.2, 3.4, 3.5, 9.6 and 9.10 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 12.3, provided that (i) a Participant shall
not be entitled to receive any greater payment under Section 3.1, 3.2 or
3.5 than the Lender who sold the participating interest to such
Participant would have received had it retained such interest for its own
account, unless the sale of such interest to such Participant is made with
the prior written consent of the Borrower, and (ii) any Participant not
incorporated under the laws of the United States of America or any State
thereof agrees to comply with the provisions of Section 3.5 to the same
extent as if it were a Lender.
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12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit C or in such other form as may be
agreed to by the parties thereto. Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
Fund shall either be in an amount equal to the entire applicable
Commitment and Loans of the assigning Lender or (unless each of the
Borrower and the Agent otherwise consents) be in an aggregate amount not
less than $5,000,000. The amount of the assignment shall be based on the
Commitment or outstanding Loans (if the Commitment has been terminated)
subject to the assignment, determined as of the date of such assignment or
as of the "Trade Date," if the "Trade Date" is specified in the
assignment.
12.3.2. Consents. The consent of the Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund, provided that the
consent of the Borrower shall not be required if a Default has occurred
and is continuing. The consent of the Agent shall be required prior to an
assignment becoming effective unless the Purchaser is a Lender with a
Revolving Commitment (in the case of an assignment of a Revolving
Commitment) or is a Lender, an Affiliate of a Lender or an Approved Fund
(in the case of an assignment of any other Commitment or Loans. The
consent of the Issuing Bank shall be required prior to an assignment of a
Revolving Commitment becoming effective unless the Purchaser is a Lender
with a Revolving Commitment. Any consent required under this Section
12.3.2 shall not be unreasonably withheld or delayed.
12.3.3. Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Sections 12.3.1 and
12.3.2, and (ii) payment of a $3,500 fee to the Agent for processing such
assignment (unless such fee is waived by the Agent), such assignment shall
become effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment
and Outstanding Credit Exposure under the applicable assignment agreement
constitutes "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under
the Loan Documents, to the same extent as if it were an original party
thereto, and the transferor Lender shall be released with respect to the
Commitment and Outstanding Credit Exposure assigned to such Purchaser
without any further consent or action by the Borrower, the Lenders or the
Agent. In the case of an assignment covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a Lender hereunder but shall continue to be entitled to the benefits of,
and subject to, those provisions of this Agreement and the other Loan
Documents which survive payment of the Obligations and termination of the
applicable agreement. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section
12.3 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance
with Section 12.2. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.3.3, the transferor Lender, the Agent and the
Borrower shall, if the transferor Lender or the Purchaser desires that its
Loans be evidenced by Notes, make appropriate arrangements so that new
Notes
55
or, as appropriate, replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
12.3.4. Register. The Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Chicago,
Illinois a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice.
12.4. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is not incorporated under the laws of the United States
or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
(i) if to the Borrower, or any other party to a Loan
Document at its address or telecopier number set forth on the
signature page hereof;
(ii) if to the Administrative Agent, at its address or
telecopier number set forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or telecopier number
set forth on the signature page hereof;
56
(iv) if to a Lender, to it at its address (or telecopier
number) set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the LC Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Agent or as otherwise determined by the Agent,
provided that the foregoing shall not apply to notices to any Lender or the LC
Issuer pursuant to Article II if such Lender or the LC Issuer, as applicable,
has notified the Agent that it is incapable of receiving notices under such
Article by electronic communication. The Agent or the Borrower may, in its
respective discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it or
as it otherwise determines, provided that such determination or approval may be
limited to particular notices or communications.
Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
14.1. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the Agent,
the LC Issuer and when the Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties
57
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
14.2. Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any assignment and assumption
agreement shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, or any other state laws based on the
Uniform Electronic Transactions Act.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF MICHIGAN, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR MICHIGAN STATE
COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT, MICHIGAN.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
58
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Agent
have executed this Agreement as of the date first above written.
COVANSYS CORPORATION
By: _______________________________________
Title: ____________________________________
00000 Xxxx Xxxxxx Xxxx Xxxx,
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: ________________________________
Telephone: ( )
FAX: ( )
Commitments
$30,000,000 BANK ONE, NA,
Individually and as Agent and LC Issuer
By: _______________________________________
Title: ____________________________________
00000 Xxxxxxxxxxxx Xxxxxxx
Mail Code MI1-8937
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:_________________________________
Telephone: ( )
FAX: ( )
59
PRICING SCHEDULE
APPLICABLE MARGIN LEVEL I STATUS LEVEL II STATUS
----------------- -------------- ---------------
Eurocurrency Rate 1.20% 1.55%
Floating Rate Minus 0.50% Minus 0.50%
APPLICABLE FEE RATE LEVEL I STATUS LEVEL II STATUS
------------------- -------------- ---------------
Commitment Fee 0.125% 0.125%
Facility LC Fee 0.90% 1.55%
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if the Aggregate Outstanding Credit
Exposure on such date is $20,000,000 or less.
"Level II Status" exists at any date if the Aggregate Outstanding Credit
Exposure on such date is greater than $20,000,000.
"Status" means either Level I Status or Level II Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Aggregate Outstanding Credit
Exposure, adjusted on a daily basis by the Agent.
60
EXHIBIT A
FORM OF OPINION
September 7, 2004
The Agent, the LC Issuer and the Lenders who are parties to the
Credit Agreement described below.
Gentlemen/Ladies:
We are counsel for Covansys Corporation (the "Borrower"), and have
represented the Borrower in connection with its execution and delivery of (i) a
Credit Agreement dated as of September 7, 2004 (the "Agreement") among the
Borrower, the Lenders named therein, and Bank One, NA, as Agent and as LC
Issuer, and providing for Credit Extensions in an aggregate principal amount not
exceeding $30,000,000 at any one time outstanding and (ii) the other Loan
Documents. All capitalized terms used in this opinion and not otherwise defined
herein shall have the meanings attributed to them in the Agreement.
We have examined the Borrower's **[describe constitutive documents of
Borrower and appropriate evidence of authority to enter into the transaction]**,
the Loan Documents and such other matters of fact and law which we deem
necessary in order to render this opinion. Based upon the foregoing, it is our
opinion that:
l. Each of the Borrower and its Subsidiaries is a corporation,
partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such concept
applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
2. The execution and delivery by the Borrower of the Loan Documents to
which it is a party and the performance by the Borrower of its obligations
thereunder have been duly authorized by proper corporate proceedings on the part
of the Borrower and will not:
(a) require any consent of the Borrower's shareholders or members
(other than any such consent as has already been given and remains in full
force and effect);
(b) violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture, instrument or agreement to which the Borrower
or any of its Subsidiaries is a party or is subject, or by which it, or
its Property, is bound, or conflict with or constitute a default
thereunder; or
(c) result in, or require, the creation or imposition of any Lien
in, of or on the Property of the Borrower or a Subsidiary pursuant to the
terms of any indenture, instrument or agreement binding upon the Borrower
or any of its Subsidiaries.
61
3. The Loan Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower and constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their terms except to the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against the Borrower or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement, the payment and performance by
the Borrower of the Obligations, or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
6. The Secured Obligations constitute senior indebtedness which is
entitled to the benefits of the subordination provisions of all outstanding
Subordinated Indebtedness.
7. The provisions of the Collateral Documents are sufficient to create
in favor of the Lenders and, to the extent they have entered into Rate
Management Transactions with the Borrower, the Lenders' Affiliates, a security
interest in all right, title and interest of the Borrower in those items and
types of collateral described in the Collateral Documents in which a security
interest may be created under Article 9 of the Uniform Commercial Code as in
effect on the date hereof in Illinois. Financing statements on Form UCC-1's have
been duly executed by the Borrower and have been duly filed in each filing
office indicated in Exhibit A hereto under the Uniform Commercial Code in effect
in each state in which said filing offices are located. The description of the
collateral set forth in said financing statements is sufficient to perfect a
security interest in the items and types of collateral described therein in
which a security interest may be perfected by the filing of a financing
statement under the Uniform Commercial Code as in effect in such states. Such
filings are sufficient to perfect the security interest created by the
Collateral Documents in all right, title and interest of the Borrower in those
items and types of collateral described in the Collateral Documents in which a
security interest may be perfected by the filing of a financing statement under
the Uniform Commercial Code in such states, except that we express no opinion as
to personal property affixed to real property in such manner as to become a
fixture under the laws of any state in which the collateral may be located and
we call your attention to the fact that the Lenders' (and, if applicable, their
Affiliates') security interest in certain of such collateral may not be
perfected by filing financing statements under the Uniform Commercial Code.
This opinion may be relied upon by the Agent, the LC Issuer, the Lenders
and their participants, assignees and other transferees.
Very truly yours,
62
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of September 7, 2004 (as amended, modified, renewed or
extended from time to time, the "Agreement") among the Covansys Corporation (the
"Borrower"), the lenders party thereto and Bank One, NA, as Agent for the
Lenders and as LC Issuer. Unless otherwise defined herein, capitalized terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
5. Schedule II attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement, the
Security Agreement and the other Loan Documents and the status of compliance.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
63
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this day of ________, ____.
COVANSYS CORPORATION
By: _______________________________________
Its: ________________________________
64
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of Section 6.21 of
the Agreement
65
SCHEDULE II TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
66
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below, the interest in and to all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto that represents the
amount and percentage interest identified below of all of the Assignor's
outstanding rights and obligations under the respective facilities identified
below (including without limitation any letters of credit, guaranties and
swingline loans included in such facilities and, to the extent permitted to be
assigned under applicable law, all claims (including without limitation contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor: ________________________________
2. Assignee: ________________________________ [and is an Affiliate/Approved
Fund of [identify Lender](1)
3. Borrower(s): Covansys Corporation
4. Agent: Bank One, NA, as the agent under the Credit Agreement.
5. Credit Agreement: The Credit Agreement dated as of September 7, 2004 among
Covansys Corporation, the Lenders party thereto, Bank
One, NA, as Agent, and the other agents party thereto.
(1) Select as applicable.
6. Assigned Interest:
67
Aggregate Amount of
Commitment/Outstanding Amount of Percentage Assigned of
Credit Exposure for all Commitment/Outstanding Commitment/Outstanding Credit
Facility Assigned Lenders* Credit exposure Assigned* Exposure(2)
----------------- ----------------------- ------------------------- -----------------------------
____________(3) $ $ ____________%
____________ $ $ ____________%
____________ $ $ ____________%
7. Trade Date: __________________________________________ (4)
Effective Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By: ________________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By: ________________________________
Title:
Consented to and Accepted:
BANK ONE, NA, as Agent
By: __________________________________
Title:
[Consented to:](6)
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/
Outstanding Credit Exposure of all Lenders thereunder.
(3) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment," "Term Loan Commitment,", etc.)
(4) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
[NAME OF RELEVANT PARTY]
By: __________________________________
Title:
68
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Documents, (v) inspecting any of the property, books or records of the
Borrower, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
(v) agrees to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Lender, and (vii)
attached as Schedule 1 to this Assignment and Assumption is any documentation
required to be delivered by the Assignee with respect to its tax status pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee and (b) agrees that (i) it will, independently and without reliance on
the Agent, the Assignor 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 the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.
2. Payments. The Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee. From and
after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
69
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Michigan.
70
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call Xxxxxxxx Xxxxxxx at 312-732-8844)
(For Forms after Primary Syndication call Xxx Xxxxx at 000-000-0000)
71
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call Xxxxxxxx Xxxxxxx at 312-732-8844)
(For Forms after Primary Syndication call Xxx Xxxxx at 000-000-0000)
72
EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, NA,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated September 7, 2004 (as the same may be amended or
modified, the "Credit Agreement"), among Covansys Corporation (the
"Borrower"), the Lenders named therein and the Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.16 of the Credit Agreement.
Facility Identification Number(s) ______________________________________________
Customer/Account Name __________________________________________________________
Transfer Funds To ______________________________________________________________
____________________________________________________________
For Account No. ________________________________________________________________
Reference/Attention To _________________________________________________________
Authorized Officer (Customer Representative) Date ____________________________
_______________________________ _________________________________
(Please Print) Signature
Bank Officer Name Date ____________________________
_______________________________ _________________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
73
EXHIBIT E
NOTE
[Date]
Covansys Corporation, a Michigan corporation (the "Borrower"), promises to
pay to the order of ____________________________________ (the "Lender") the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at the place specified in Article II of the
Agreement, together with interest on the unpaid principal amount hereof at the
rates and on the dates set forth in the Agreement. The Borrower shall pay the
principal of and accrued and unpaid interest on the Loans in full on the
Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement dated as of September 7, 2004 (which, as it
may be amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Borrower, the lenders party thereto, including the
Lender, the LC Issuer and Bank One, NA, as Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. This Note is secured pursuant to the Collateral
Documents and guaranteed pursuant to the Guaranty, all as more particularly
described in the Agreement, and reference is make thereto for a statement of the
terms and provisions thereof. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
COVANSYS CORPORATION
By: ____________________________________
Print Name: ____________________________
Title: _________________________________
74
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF COVANSYS CORPORATION,
DATED SEPTEMBER 7, 2004
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
---------------------------------------------------------------------
75
EXHIBIT F
ASSOCIATED COSTS RATE
1. Definitions.
In this Exhibit F:
"Act" means the Bank of England Act of 1998.
The terms "Eligible Liabilities" and "Special Deposits" have the meanings
ascribed to the them under or pursuant to the Act or by the Bank of England (as
may be appropriate), on the day of the application of the formula set forth in
this Exhibit F.
"Fee Base" has the meaning ascribed to it for the purposes of, and shall
be calculated in accordance with, the Fees Regulations.
"Fees Regulations" means, as appropriate, either: (i) the Banking
Supervision (Fees) Regulations 1998, or (ii) such regulations as from time to
time may be in force, relating to the payment of fees for banking supervision in
the United Kingdom.
"FSA" means the Financial Services Authority.
2. Calculation of the Associated Costs Rate.
The Associated Costs Rate is an incremental per annum addition to the
interest rate charged with respect to each Eurocurrency Loan to compensate the
Lenders for the cost attributable to such Eurocurrency Loan resulting from the
imposition from time to time under or pursuant to the Act and/or by the Bank of
England and/or the FSA (or other United Kingdom governmental authorities or
agencies) of a requirement to place non-interest bearing or Special Deposits
(whether interest bearing or not) with the Bank of England and/or pay fees to
the FSA calculated by reference to the liabilities used to fund the relevant
Eurocurrency Loan.
The "Associated Costs Rate" is the rate determined by the Agent to be
equal to the rate (rounded upward, if necessary, to the next higher 1/100 of 1%)
resulting from the application of the following formula:
For Pounds Sterling:
AB + C(B - D) + E x 0.01
------------------------
100 - (A + C)
For other Agreed Currencies:
E x 0.01
--------
300
where on the day of application of the formula,
A is the percentage of Eligible Liabilities (in excess of any stated
minimum) which the Agent is from time to time required to maintain
as an interest free cash ratio deposit with
76
the Bank of England.
B is the Eurocurrency Base Rate applicable to the related Eurocurrency
Loan.
C is the level of interest-bearing Special Deposits, expressed as a
percentage of Eligible Liabilities, which the Agent is required from
time to time to maintain by the Bank of England (or other United
Kingdom governmental authority or agency).
D is the percentage rate per annum payable by the Bank of England to
the Agent on Special Deposits.
E is the rate payable by the Agent to the FSA pursuant to the Fees
Regulations and expressed in pounds per 1,000,000 Pounds Sterling of
the Fee Base of the Agent.
(A, B, C and D are to be expressed in the formula as numbers and not as
percentages. A negative result obtained from subtracting D from B shall be
counted as zero.)
The Associated Costs Rate attributable to a Eurocurrency Loan for any period
shall be calculated at or about 11:00 a.m. (London time) on the first day of
such period for the duration of such period.
The determination of the Associated Costs Rate by the Agent in relation to any
period shall, in the absence of manifest error, be conclusive and binding on all
parties hereto.
77
SCHEDULE 1
EUROCURRENCY PAYMENT OFFICES OF THE AGENT
Currency Eurocurrency Payment Office
-------- ---------------------------
Dollars Bank One, NA
Euros __________, _____________
78
SCHEDULE 2
LENDING INSTALLATIONS
Lender Floating Rate Loans Eurocurrency Loans (list all)
------ ------------------- -----------------------------
Bank One, NA Bank One, NA Bank One, NA
Southfield, Michigan [Southfield, Michigan]
**[NOTES: 1) YOU MAY CREATE A SCHEDULE OF LENDING INSTALLATIONS COVERING ALL
LENDERS AND AGREED CURRENCIES OR, ALTERNATIVELY, RELY ON THE ADMINISTRATIVE
INFORMATION SHEETS SUPPLIED TO THE AGENT TO IDENTIFY LENDING INSTALLATIONS.
2) THE SCHEDULES OR ADMINISTRATIVE INFORMATION SHEETS SHOULD BE COMPLETED FOR
ALL LENDERS AND FOR ALL AGREED CURRENCIES PRIOR TO THE INITIAL FUNDING (YOU MAY
WANT TO USE ANOTHER FORMAT TO FIT MORE INFORMATION PER LINE). ALTHOUGH THIS IS
TIME CONSUMING, IT WILL HELP IDENTIFY POTENTIAL WITHHOLDING TAX ISSUES EARLY IN
THE TRANSACTION.]**
79
SCHEDULE 3
DESCRIPTION OF RECAPITALIZATION TRANSACTION
80
SCHEDULE 5.7
LITIGATION
(SEE SECTION 5.7)
81
SCHEDULE 5.8
SUBSIDIARIES
(SEE SECTION 5.8)
Jurisdiction of Owned Percent
Name of Subsidiary Organization By Ownership
------------------- ------------ -- ---------
82
SCHEDULE 6.12
INDEBTEDNESS
(SEE SECTION 6.12)
Maturity
Indebtedness Indebtedness and Amount
Incurred By Owed To of Indebtedness
----------- ------- ---------------
83
SCHEDULE 6.15
INVESTMENTS
(SEE SECTION 6.15)
Investment Jurisdiction of Owned Amount of Percent
In Organization By Investment Ownership
-- ------------ -- ---------- ---------
84
SCHEDULE 6.16
LIENS
(SEE SECTION 6.16)
85
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 7, 2004
AMONG
COVANSYS CORPORATION,
THE LENDERS,
BANK ONE, NA
AS AGENT
AND
X.X. XXXXXX SECURITIES INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS..................................................................... 1
ARTICLE II. THE CREDITS..................................................................... 14
2.1. Commitment................................................................. 14
2.2. Determination of Dollar Amounts; Required Payments; Termination............ 14
2.3. Ratable Loans.............................................................. 15
2.4. Types of Advances.......................................................... 15
2.5. Commitment Fee; Reductions and Increases in Aggregate Commitment........... 15
2.6. Minimum Amount of Each Advance............................................. 16
2.7. Optional Principal Payments................................................ 16
2.8. Method of Selecting Types and Interest Periods for New Advances............ 17
2.9. Conversion and Continuation of Outstanding Advances........................ 17
2.10. Changes in Interest Rate, etc.............................................. 18
2.11. Rates Applicable After Default............................................. 18
2.12. Method of Payment.......................................................... 19
2.13. Noteless Agreement; Evidence of Indebtedness............................... 19
2.14. Telephonic Notices......................................................... 20
2.17. Interest Payment Dates; Interest and Fee Basis............................. 20
2.18. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions...................................................................... 20
2.19. Lending Installations...................................................... 21
2.20. Non-Receipt of Funds by the Agent.......................................... 21
2.21. Facility LCs............................................................... 21
2.21.1. Issuance............................................................... 21
2.21.2. Participations......................................................... 21
2.21.3. Notice................................................................. 21
2.21.4. Fees................................................................... 22
2.21.5. Administration; Reimbursement by Lenders............................... 22
2.21.6. Reimbursement by Borrower.............................................. 22
2.21.7. Obligations Absolute................................................... 23
2.21.8. Actions of LC Issuer................................................... 23
2.21.9. Indemnification........................................................ 24
2.21.10. Lenders' Indemnification.............................................. 24
2.21.11. Facility LC Collateral Account........................................ 24
2.21.12. Rights as a Lender.................................................... 25
2.22. Market Disruption.......................................................... 25
2.23. Judgment Currency.......................................................... 25
2.24. Extension of Facility Termination Date..................................... 26
2.25. Replacement of Lender...................................................... 26
i
ARTICLE III. YIELD PROTECTION; TAXES......................................... 26
3.1. Yield Protection........................................... 26
3.2. Changes in Capital Adequacy Regulations.................... 27
3.3. Availability of Types of Advances.......................... 27
3.4. Funding Indemnification.................................... 28
3.5. Taxes...................................................... 28
3.6. Lender Statements; Survival of Indemnity................... 29
ARTICLE IV. CONDITIONS PRECEDENT............................................ 30
4.1. Initial Credit Extension................................... 30
4.2. Each Credit Extension...................................... 31
ARTICLE V. REPRESENTATIONS AND WARRANTIES.................................. 32
5.1. Existence and Standing..................................... 32
5.2. Authorization and Validity................................. 32
5.3. No Conflict; Government Consent............................ 32
5.4. Financial Statements....................................... 32
5.5. Material Adverse Change.................................... 32
5.6. Taxes...................................................... 33
5.7. Litigation and Contingent Obligations...................... 33
5.8. Schedule 5.8............................................... 33
5.9. ERISA...................................................... 33
5.10. Accuracy of Information.................................... 33
5.11. Regulation U............................................... 33
5.12. Material Agreements........................................ 33
5.13. Compliance With Laws....................................... 34
5.14. Ownership of Properties.................................... 34
5.15. Plan Assets; Prohibited Transactions....................... 34
5.16. Environmental Matters...................................... 34
5.17. Investment Company Act..................................... 34
5.18. Public Utility Holding Company Act......................... 34
5.19. Reportable Transactions.................................... 34
5.20. Subordinated Indebtedness.................................. 35
5.21. Solvency................................................... 35
5.4. Security Interest in Collateral............................ 35
ARTICLE VI. COVENANTS....................................................... 35
6.1. Financial Reporting........................................ 35
6.2. Use of Proceeds............................................ 37
6.3. Notices.................................................... 37
6.4. Conduct of Business........................................ 37
6.5. Taxes...................................................... 37
6.6. Insurance.................................................. 38
ii
6.7. Compliance with Laws....................................... 38
6.8. Maintenance of Properties.................................. 38
6.9. Inspection................................................. 38
6.12. Additional Collateral; Further Assurances.................. 38
6.13. Dividends.................................................. 39
6.14. Indebtedness............................................... 39
6.15. Merger..................................................... 39
6.16. Sale of Assets............................................. 39
6.17. Investments and Acquisitions............................... 39
6.18. Liens...................................................... 40
6.19. Affiliates................................................. 40
6.20. Subordinated Indebtedness.................................. 40
6.21. Sale of Accounts........................................... 41
6.22. Recapitalization Transaction............................... 41
6.23. Financial Covenants........................................ 41
6.23.1. Interest Coverage Ratio........................... 41
6.23.2. Leverage Ratio.................................... 41
6.23.3. Minimum Total Capitalization...................... 42
ARTICLE VII. DEFAULTS........................................................ 42
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.................. 44
8.1. Acceleration; Facility LC Collateral Account............... 44
8.2. Amendments................................................. 45
8.3. Preservation of Rights..................................... 45
ARTICLE IX. GENERAL PROVISIONS.............................................. 46
9.1. Survival of Representations................................ 46
9.2. Governmental Regulation.................................... 46
9.3. Headings................................................... 46
9.4. Entire Agreement........................................... 46
9.5. Several Obligations; Benefits of this Agreement............ 46
9.6. Expenses; Indemnification.................................. 46
9.7. Numbers of Documents....................................... 47
9.8. Accounting................................................. 47
9.9. Severability of Provisions................................. 47
9.10. Nonliability of Lenders.................................... 47
9.11. Confidenitality............................................ 48
9.12. Nonreliance................................................ 48
9.13. Disclosure................................................. 48
9.14. USA PATRIOT ACT NOTIFICATION............................... 48
9.15. Amendment and Restatement.................................. 49
iii
ARTICLE X. THE AGENT.............................................................. 49
10.1. Appointment; Nature of Relationship............................... 49
10.2. Powers............................................................ 49
10.3. General Immunity.................................................. 49
10.4. No Responsibility for Loans, Recitals, etc........................ 50
10.5. Action on Instructions of Lenders................................. 50
10.6. Employment of Agents and Counsel.................................. 50
10.7. Reliance on Documents; Counsel.................................... 50
10.8. Agent's Reimbursement and Indemnification......................... 50
10.9. Notice of Default................................................. 51
10.10. Rights as a Lender................................................ 51
10.11. Lender Credit Decision............................................ 51
10.12. Successor Agent................................................... 52
10.13. Agent and Arranger Fees........................................... 52
10.14. Delegation to Affiliates.......................................... 52
10.15. Execution of Collateral Documents................................. 52
10.16. Collateral Releases............................................... 52
ARTICLE XI. SETOFF; RATABLE PAYMENTS............................................... 53
11.1. Setoff............................................................ 53
11.2. Ratable Payments.................................................. 53
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...................... 53
12.1. Successors and Assigns............................................ 53
12.2. Participations.................................................... 54
12.2.1. Permitted Participants; Effect........................... 54
12.2.2. Voting Rights............................................ 54
12.2.3. Benefit of Certain Provisions............................ 54
12.3. Assignments....................................................... 55
12.3.1. Permitted Assignments.................................... 55
12.3.2. Consents................................................. 55
12.3.3. Effect; Effective Date................................... 55
12.3.4. Register................................................. 56
12.4. Dissemination of Information...................................... 56
12.5. Tax Treatment..................................................... 56
ARTICLE XIII. NOTICES................................................................ 56
13.1. Notices; Effectiveness; Electronic Communication.............................. 56
12. 1. Notices; Effectiveness; Electronic Communication......... 56
iv
ARTICLE XIV. COUNTERPARTS...................................................... 57
14.1. Counterparts; Effectiveness.................................. 57
14.2. Electronic Execution of Assignments.......................... 58
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...... 58
15.1. CHOICE OF LAW................................................ 58
15.2. CONSENT TO JURISDICTION...................................... 58
15.3. WAIVER OF JURY TRIAL......................................... 58
PRICING SCHEDULE................................................................ 60
EXHIBIT A. FORM OF OPINION.................................................... 61
EXHIBIT B. COMPLIANCE CERTIFICATE............................................. 63
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION..................... 73
EXHIBIT E. NOTE............................................................... 74
EXHIBIT F. .................................................................. 76
ASSOCIATED COSTS RATE........................................................... 76
SCHEDULE 3. EUROCURRENCY PAYMENT OFFICES OF THE AGENT......................... 78
SCHEDULE 4. LENDING INSTALLATIONS............................................. 79
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS................................ 82
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS................................ 84
SCHEDULE 2. INDEBTEDNESS AND LIENS............................................ 85
v
