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EXHIBIT 4a
C R E D I T A G R E E M E N T
This Credit Agreement (as it may from time to time be amended, restated or
otherwise modified, the "Agreement") is made effective as of the ____ day of
September, 1997, among THE STANDARD PRODUCTS COMPANY, an Ohio corporation
("Borrower"), 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, the banking
institutions named in Schedule 1 attached hereto and made a part hereof
(collectively, the "Banks", and individually, a "Bank") and NATIONAL CITY BANK,
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, as Agent for the Banks
under this Agreement ("Agent").
WITNESSETH:
WHEREAS, Borrower and the Banks desire to contract for the establishment
of credits in the aggregate principal amounts hereinafter set forth, to be made
available to Borrower upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Acquisition" shall mean the acquisition pursuant to a certain Stock Sale
Agreement of (i) the capital stock of Standard Products Industriel SA and
certain other corporate entities by a Subsidiary of Borrower and (ii) the
acquisition of the capital stock of Rubber Industrial Holding Company by
Borrower.
"Adjusted Prime Rate" shall mean the greater of (a) the Prime Rate or (b)
one-half of one percent ( 1/2%) in excess of the Federal Funds Effective Rate.
Any change in the Adjusted Prime Rate shall be effective immediately from and
after such change in the Adjusted Prime Rate.
"Advantage" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Bank in respect of the Debt, if such payment results in that
Bank having less than its pro rata share of the Debt then outstanding, than was
the case immediately before such payment.
"Applicable Facility Fee Rate" shall mean:
(a) for the period from the Closing Date through December 31, 1997, twelve
and one-half (12.50) basis points; and
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(b) commencing January 1, 1998, the number of basis points set forth in
the following matrix based on the result of the computation of the Leverage
Ratio for the most recently completed four (4) fiscal quarters:
LEVERAGE RATIO APPLICABLE FACILITY FEE
RATE
Greater than or equal to 2.50 to 1.00 25 basis points
Greater than or equal to 2.00 to 1.00 but less
than 2.50 to 1.00 20 basis points
Greater than or equal to 1.50 to 1.00 but less
than 2.00 to 1.00 17.5 basis points
Greater than or equal to 1.00 to 1.00 but less
than 1.50 to 1.00 12.5 basis points
Less than 1.00 to 1.00 10 basis points
Changes to the Applicable Facility Fee Rate shall be effective on the first day
of each fiscal quarter following the date upon which Agent received, or, if
earlier, should have received, pursuant to Section 5.3 hereof, the financial
statements of the Companies. The above matrix does not modify or waive, in any
respect, the requirements of Section 5.7 hereof, the rights of the Banks to
charge the Default Rate, or the rights and remedies of the Banks pursuant to
Articles VII and VIII hereof.
"Applicable LIBOR Margin" shall mean:
(a) for the period from the Closing Date through December 31, 1997,
twenty-two and one-half (22.50) basis points;
(b) commencing January 1, 1998, the number of basis points set forth in
the following matrix, based on the result of the computation of the Leverage
Ratio for the most recently completed four (4) fiscal quarters:
APPLICABLE LIBOR
LEVERAGE RATIO MARGIN
Greater than or equal to 3.00 to 1.00 75 basis points
Greater than or equal to 2.50 to 1.00 but less than 3.00 to
1.00 50 basis points
Greater than or equal to 2.00 to 1.00 but less than 2.50 to
1.00 40 basis points
Greater than or equal to 1.50 to 1.00 but less than 2.00 to
1.00 30 basis points
Greater than or equal to 1.00 to 1.00 but less than 1.50 to
1.00 22.5 basis points
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Less than 1.00 to 1.00 20 basis points
Changes to the Applicable LIBOR Margin shall be effective on the first day of
each fiscal quarter following the date upon which Agent received, or, if
earlier, should have received, pursuant to Section 5.3 hereof, the financial
statements of the Companies. The above matrix does not modify or waive, in any
respect, the requirements of Section 5.7 hereof, the rights of the Banks to
charge the Default Rate, or the rights and remedies of the Banks pursuant to
Articles VII and VIII hereof.
"Closing Date" shall mean the effective date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, together
with the rules and regulations promulgated thereunder.
"Commitment" shall mean the obligation hereunder of the Banks to make
Loans pursuant to the Revolving Credit Commitments and to participate in the
issuance of Letters of Credit (and the obligation of Agent to make Swing Loans)
up to the Total Commitment Amount during the Commitment Period (or such lesser
amount as shall be determined pursuant to Section 2.5 hereof).
"Commitment Percentage" shall mean, for each Bank, the percentage set
forth opposite such Bank's name under the column headed "Commitment Percentage"
as described in Schedule 1 hereof.
"Commitment Period" shall mean the period from the Closing Date to
September 30, 2002, or such earlier date on which the Commitment shall have
been terminated pursuant to Article VIII hereof, or such later date to which
the Commitment shall have been extended pursuant to Section 2.8 hereof.
"Company" shall mean Borrower or a Subsidiary.
"Companies" shall mean Borrower and all Subsidiaries.
"Consolidated" shall mean the resultant consolidation of the financial
statements of Borrower and its Subsidiaries in accordance with GAAP, including
principles of consolidation consistent with those applied in preparation of the
consolidated financial statements referred to in Section 6.12 hereof.
"Consolidated Depreciation and Amortization Charges" shall mean the
aggregate of all such charges for fixed assets, leasehold improvements and
general intangibles (specifically including goodwill) of Borrower and its
Subsidiaries for the period in question as determined on a Consolidated basis
and in accordance with GAAP.
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"Consolidated EBIT" shall mean, for any period, on a Consolidated basis
and in accordance with GAAP, Consolidated Net Earnings of the Companies for
such period plus the aggregate amounts deducted in determining such
Consolidated Net Earnings in respect of (a) taxes, (b) Consolidated Interest
Expense, (c) amortization charges for the write up of the assets of Standard
Products Industriel SA, a corporation organized under the laws of France, its
Subsidiaries or any other corporation or entity acquired by Borrower or any
Subsidiary of Borrower in connection with the Acquisition, and (d) the
extraordinary charges taken by Borrower resulting from the closing of two
plants in the third quarter of the 1997 fiscal year of the Companies.
"Consolidated EBITDA" shall mean, for any period, on a Consolidated basis
and in accordance with GAAP, Consolidated Net Earnings of the Companies for
such period plus the aggregate amounts deducted in determining such
Consolidated Net Earnings in respect of (a) taxes, (b) Consolidated Interest
Expense, (c) Consolidated Depreciation and Amortization Charges, (d) the
expense associated with amortization of intangible and other assets, and (e)
the extraordinary charges taken by Borrower resulting from the closing of two
plants in the third quarter of the 1997 fiscal year of the Companies.
"Consolidated Interest Expense" shall mean, for any period, interest
expense of Borrower and its Subsidiaries for such period, determined on a
Consolidated basis and in accordance with GAAP.
"Consolidated Net Earnings" shall mean, for any period, the Consolidated
net income (loss) of Borrower and its Subsidiaries for such period, determined
in accordance with GAAP.
"Consolidated Net Worth" shall mean the excess (as determined in
accordance with GAAP, but excluding from all such determinations any "foreign
currency translation adjustments") of the net book value (after deducting all
applicable valuation reserves and without giving consideration to any
reappraisal or write-up of assets effected after the Closing Date) of the
tangible assets (i.e., all assets other than intangibles such as patents, costs
of businesses over net assets acquired, goodwill and treasury shares) of the
Borrower and its Subsidiaries over all of their liabilities, all as determined
on a Consolidated basis.
"Consolidated Total Assets" shall mean as of the date of any determination
thereof, on a Consolidated basis and in accordance with GAAP, total assets of
the Companies.
"Continuing" with respect to an Event of Default, shall mean as follows:
once an Event of Default occurs, it shall be deemed to be Continuing and to
exist until (a) such time as Borrower has notified Agent in writing that such
Event of Default has been corrected and (b) such Event of Default has in fact
been corrected. Such correction of an Event of Default shall not be deemed to
be a waiver of such Event of Default unless an explicit written waiver shall
have been executed by the Majority Banks.
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"Controlled Group" shall mean a Company and each "person" (as therein
defined) required to be aggregated with a Company under Code Sections 414(b),
(c), (m) or (o).
"Debt" shall mean, collectively, all Indebtedness incurred by Borrower to
the Banks pursuant to this Agreement and includes the principal of and interest
on all Notes and each extension, renewal or refinancing thereof in whole or in
part, the facility fees, other fees and any prepayment premium payable
hereunder.
"Default Rate" shall mean a rate per annum which shall be two percent (2%)
in excess of the Prime Rate from time to time in effect.
"Derived LIBOR Rate" shall mean with reference to any LIBOR Loan a rate
per annum which shall be the sum of the Applicable LIBOR Margin plus the LIBO
Pre-Margin Rate therefor.
"Dollar" and the sign "$" shall mean lawful money of the United States of
America.
"Dollar Equivalent" of a Eurocurrency Loan shall mean the Dollar
equivalent of the amount of such Eurocurrency Loan, determined by Agent on the
basis of its spot rate at approximately 11:00 A.M. London time on the date two
(2) London Business Days before the date of such Eurocurrency Loan for the
purchase of the relevant Eurocurrency with Dollars for delivery on the date of
such Eurocurrency Loan. Agent shall notify Borrower of the Dollar Equivalent
of such Eurocurrency Loan at the time that Dollar Equivalent is determined.
"Domestic Business Day" shall mean a day of the year on which banks are
not required or authorized to close in Cleveland, Ohio.
"Environmental Laws" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the
government of the United States of America or by any state or municipality
thereof or by any court, agency, instrumentality, regulatory authority or
commission of any of the foregoing concerning health, safety and protection of,
or regulation of the discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean any of the following events that would
individually or in the aggregate have a material adverse effect on the
business, operations or condition (financial or otherwise) of the Companies on
a Consolidated basis: (a) the existence of any condition or event with respect
to an ERISA Plan which presents a risk of the imposition of an excise tax or
any other liability on a Company or of the imposition of a Lien on the assets
of a Company, (b) a Controlled Group member has engaged in a non-exempt
"prohibited transaction" (as defined under ERISA Section 406 or Code Section
4975) or a breach of a fiduciary duty under ERISA which could result in
liability to a Company, (c) a Controlled Group member has applied for a
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waiver from the minimum funding requirements of Code Section 412 or
ERISA Section 302 or a Controlled Group member is required to provide security
under Code Section 401(a)(29) or XXXXX Xxxxxxx 000, (x) a "reportable event"
(as defined under ERISA Section 4043) has occurred with respect of any Pension
Plan as to which notice is required to be provided to the PBGC, (e) a
Controlled Group member has withdrawn from a Multi-employer Plan in a "complete
withdrawal" or a "partial withdrawal" (as such terms are defined in ERISA
Sections 4203 and 4205, respectively), (f) a Multi-employer Plan is in or is
likely to be in reorganization under ERISA Section 4241, (g) a Pension Plan
(and any related trust) which is intended to be qualified under Code
Sections 401 and 501 fails to be so qualified or any "cash or deferred
arrangement" under any such Pension Plan fails to meet the requirements of
Code Section 401(k), (h) the PBGC takes any steps to terminate a Pension Plan
or appoint a trustee to administer a Pension Plan, or a Controlled Group
member takes steps to terminate a Pension Plan, (i) a Controlled Group member
or an ERISA Plan fails to satisfy any requirements of law applicable to an
ERISA Plan, or (j) a claim, action or suit is pending or threatened with
respect to an ERISA Plan, other than a routine claim for benefits.
"ERISA Plan" shall mean an "employee benefit plan" (within the meaning of
ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation
to contribute to such plan.
"Eurocurrency" shall mean Eurodollars, Deutsche Marks, Pounds Sterling and
French Francs, or any other non-U.S. currency agreed to by Agent and the Banks.
"Eurocurrency Loan" shall mean a Loan which is denominated in
Eurocurrency.
"Eurodollar" shall mean a Dollar denominated deposit in a bank or bank
branch outside of the United States.
"Event of Default" shall mean an event, condition or thing which
constitutes an event of default as defined in Article VII hereof.
"Federal Funds Effective Rate" shall mean for any day, the rate per annum
(rounded upward to the nearest 1/100 of one percent) announced by the Federal
Reserve Bank of New York (or any successor) on such day as being the weighted
average of the rates on overnight federal funds transactions arranged by
federal funds brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the same manner
as such Federal Reserve Bank computes and announces the weighted average it
refers to as the "Federal Funds Effective Rate" as of the date of this
Agreement.
"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer or treasurer.
"Fronting Bank" shall mean, as to a Letter of Credit transaction
hereunder, Agent as issuer of the Letter of Credit, or such other Bank as shall
agree, with the consent of Borrower, to
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issue the Letter of Credit in its own name, but on behalf of the Banks
hereunder.
"Funded Indebtedness" shall mean all Indebtedness that is funded,
including, but not limited to, current, long-term and Subordinated
Indebtedness, if any, plus all obligations relating to guaranties to repay
borrowed money, plus any reimbursement obligation (contingent or otherwise)
under any letter of credit or banker's acceptance maturing more than twelve
(12) months after the date originally provided to or obtained by a Company.
"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, applied on a basis consistent with the
past accounting practices and procedures of Borrower.
"Guarantor" shall mean one who pledges its credit or property in any
manner for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or one who
agrees conditionally or otherwise to make any purchase, loan or investment in
order thereby to enable another to prevent or correct a default of any kind.
"Guarantor of Payment" shall mean any one of "5" Rubber Corporation,
Xxxxxx Rubber Company, and Xxxx Industries, Inc., which are each executing and
delivering a Guaranty of Payment, or any other party which shall deliver a
Guaranty of Payment to Agent for the benefit of the Banks subsequent to the
Closing Date.
"Guaranty of Payment" shall mean each of the guaranties of payment of Debt
executed and delivered on or after the date hereof in connection herewith by
the Guarantors of Payment, as the same may be from time to time amended,
supplemented or otherwise modified.
"Indebtedness" shall mean, for any Company (a) all obligations to repay
borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all
obligations for the deferred purchase price of capital assets (excluding trade
payables), (c) all obligations under conditional sales or other title retention
agreements, (d) all lease obligations which have been or should be capitalized
on the books of such Company in accordance with GAAP, and (e) any reimbursement
obligation (contingent or otherwise) under any letter of credit or banker's
acceptance maturing more than twelve (12) months after the date originally
provided to or obtained by such Company. There shall be excluded from the
definition of Indebtedness any obligation of a Subsidiary arising from the sale
by that Subsidiary of Receivables to any other Person, whether on a recourse or
nonrecourse basis, that for purposes of GAAP is not classified upon the balance
sheet of that Subsidiary as a liability of that Subsidiary (such obligations
hereafter referred to as "Receivables Obligations").
"Interest Adjustment Date" shall mean the last day of each Interest
Period.
"Interest Period" shall mean a period of one (1), two (2), three (3), or
six (6) months (as selected by Borrower) commencing on the applicable borrowing
or conversion date of each
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LIBOR Loan and ending on each Interest Adjustment Date with respect
thereto; provided, however, that if any such period would be affected by a
reduction in the Commitment as provided in Section 2.5 hereof, prepayment or
conversion rights or obligations as provided in Section 2.1 or 3.5 hereof, or
maturity of LIBOR Loans as provided in Section 2.1 hereof, such period shall be
shortened to end on the date such Loan is to be prepaid or converted pursuant
to such provisions. If Borrower fails to select a new Interest Period with
respect to an outstanding LIBOR Loan that is denominated in Eurodollars at
least three (3) London Business Days prior to any Interest Adjustment Date,
Borrower shall be deemed to have converted such LIBOR Loan to a Prime Rate Loan
at the end of the then current Interest Period. If Borrower fails to select a
new Interest Period with respect to an outstanding LIBOR Loan that is
denominated in a Eurocurrency other than Eurodollars at least three (3) London
Business Days prior to any Interest Adjustment Date, such Loan shall be repaid
on the last day of the applicable Interest Period.
"Letter of Credit" shall mean any standby letter of credit which shall be
issued by Agent or any Fronting Bank for the benefit of Borrower or a Guarantor
of Payment, including amendments thereto, if any, and shall have an expiration
date no later than the earlier of (a) one (1) year after its date of issuance
or (b) thirty (30) days prior to the last day of the Commitment Period.
"Leverage Ratio" shall mean, for the time period in question and on a
Consolidated basis and in accordance with GAAP, the ratio of Total Funded
Indebtedness to Consolidated EBITDA.
"LIBO Pre-Margin Rate" shall mean the rate per annum (rounded upwards, if
necessary, to the next higher 1/16 of 1%), as determined by Agent, which equals
the average rate per annum at which deposits in the relevant Eurocurrency or
Dollars are offered for deposits of the duration and amount in question, at
11:00 A.M. London time (or as soon thereafter as practicable) two (2) London
Business Days prior to the first day of the Interest Period in question, to
Agent by prime banking institutions in any Eurodollar market reasonably
selected by Agent.
"LIBOR Loan" shall mean a Eurocurrency Loan on which Borrower shall pay
interest at a rate based on the LIBO Pre-Margin Rate.
"Lien" shall mean any mortgage, security interest, lien, charge,
encumbrance on, pledge or deposit of, or conditional sale or other title
retention agreement with respect to any property or asset.
"Loan" or "Loans" shall mean the credit granted to Borrower by the Banks
and Agent in accordance with Section 2.1A hereof or by Agent in accordance with
Section 2.1C hereof.
"Loan Documents" shall mean this Agreement, each of the Notes and each of
the Guaranties of Payment.
"London Business Day" shall mean a day which is a Domestic Business Day
and on which banks are open for business in London, England, and quoting
deposit rates for the relevant
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Eurocurrency.
"Majority Banks" shall mean the holders of at least fifty-one percent
(51%) of the Total Commitment Amount, or, if there is any borrowing hereunder
(other than Swing Loans), the holders of at least fifty-one percent (51%) of
the amount outstanding under the Notes (other than the Swing Loan Note).
"Multi-employer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Note" or "Notes" shall mean any Revolving Credit Note or Notes, the Swing
Loan Note, or any other note delivered pursuant to this Agreement.
"Obligor" shall mean one whose credit or any of whose property is pledged
to the payment of the Debt and includes, without limitation, any Guarantor and
any signatory to a Related Writing.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
"Pension Plan" shall mean an ERISA Plan that is a "pension plan" (within
the meaning of ERISA Section 3(2)).
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, corporation, limited
liability company, institution, trust, estate, government or other agency or
political subdivision thereof or any other entity.
"Prime Rate" shall mean the fluctuating rate of interest which is publicly
announced from time to time by Agent at its principal place of business as
being its "prime rate" or "base rate" thereafter in effect, with each change in
the Prime Rate automatically, immediately and without notice changing the
fluctuating interest rate thereafter applicable hereunder, it being agreed that
the Prime Rate is not necessarily the lowest rate of interest then available
from Agent on fluctuating rate loans.
"Prime Rate Loan" shall mean a Loan on which Borrower shall pay interest
at a rate based on the Prime Rate.
"Receivables" shall mean any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale of merchandise or provision of services by Borrower or
any Subsidiary, and includes the right to payment of any interest or finance
charges and other obligations of such Person with respect thereto, together
with the following: (a) all rights to, but not any obligations under, all
related contracts or agreements pursuant to or under which such Person is
obligated to make payments with respect to the sale of goods or provision of
services; (b) all security interests, liens, guarantees, and other agreements
or arrangements of any nature whatsoever from time to time supporting or
securing
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any such right to payment; (c) all books and records evidencing or
otherwise relating to the foregoing; and (d) all collections and other
proceeds, including insurance policies, relating to any of the foregoing.
"Receivables Obligations Cap" shall mean, with respect to the portion of
the Receivables Obligations (as that term is defined in the definition of
Indebtedness) that would correspond to principal if those Receivables
Obligations were treated as indebtedness for purposes of GAAP, an amount equal
to Fifty Million Dollars ($50,000,000), which amount may be increased by the
aggregate amount of up to Five Million Dollars ($5,000,000) so long as no Event
of Default has occurred and is Continuing at the time of that increase.
"Related Writing" shall mean the Loan Documents and any assignment,
mortgage, security agreement, guaranty agreement, subordination agreement,
financial statement, audit report or other writing furnished by Borrower, any
Subsidiary or any Obligor, or any of their respective officers, to Agent or the
Banks pursuant to or otherwise in connection with this Agreement.
"Revolving Credit Commitment" shall mean the obligation hereunder of each
Bank, during the Commitment Period, to make Revolving Loans and to participate
in the issuance of Letters of Credit, up to the aggregate amount of Dollars (or
its Dollar Equivalent in Eurocurrency) set forth opposite such Bank's name
under the column headed "Maximum Amount" as listed in Schedule 1 hereof (or
such lesser amount as shall be determined pursuant to Section 2.5 hereof).
"Revolving Credit Note" shall mean any Revolving Credit Note executed and
delivered pursuant to Section 2.1A hereof.
"Revolving Loan" shall mean a Loan granted to Borrower by the Banks in
accordance with Section 2.1A hereof.
"Senior Notes" shall mean those certain notes issued pursuant to (a) the
6.55% Promissory Notes, dated December 16, 1993, in the aggregate principal
amount of Seventy-Five Million Dollars ($75,000,000) issued to the Metropolitan
Life Insurance Company and two of its affiliates, (b) that certain Senior Notes
Agreement, in the original principal amount of Fifteen Million Dollars
($15,000,000), dated as of June 30, 1989, as amended, between Borrower and
Nationwide Life Insurance Company and (c) that certain Senior Notes Agreement,
in the original principal amount of Ten Million Dollars ($10,000,000), dated as
of June 30, 1989, as amended, between Borrower and the Aid Association for
Lutherans.
"Significant Subsidiary" shall have the meaning set forth in Regulation
S-X promulgated by the Securities and Exchange Commission, as such regulation
may be amended from time to time.
"Stockholders' Equity" shall mean the excess (as determined on a
Consolidated basis and
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in accordance with GAAP, but excluding from all such
determinations any "foreign currency translation adjustments" reflected in the
Consolidated financial statements of Borrower and its Subsidiaries under the
heading "Shareholders' Equity") of the net book value (after deducting any
reappraisal or write-up of assets after the Closing Date) of all of the assets
(i.e., including intangibles such as patents, costs of businesses over net
assets acquired and goodwill arising out of the Acquisition) of Borrower and
its Subsidiaries on a Consolidated basis over the total liabilities thereof.
"Subordinated", as applied to Indebtedness, shall mean that the
Indebtedness has been subordinated (by written terms or written agreement
being, in either case, in form and substance reasonably satisfactory to Agent
and the Banks) in favor of the prior payment in full of the Debt.
"Subsidiary" of Borrower or any of its Subsidiaries shall mean (a) a
corporation more than fifty percent (50%) of the voting power or capital stock
of which is owned, directly or indirectly, by Borrower or by one or more other
Subsidiaries of Borrower or by Borrower and one or more Subsidiaries of
Borrower, (b) a partnership or limited liability company of which Borrower, one
or more other Subsidiaries of Borrower or Borrower and one or more Subsidiaries
of Borrower, directly or indirectly, is a general partner or managing member,
as the case may be, or otherwise has the power to direct the policies,
management and affairs thereof or (c) any other Person (other than a
corporation) in which Borrower, one or more other Subsidiaries of Borrower or
such Person, directly or indirectly, has at least a majority ownership interest
or the power to direct the policies, management and affairs thereof, except
that for purposes of this Agreement, so long as Borrower's ownership interest
is equal to or less than fifty percent (50%) in Nishikawa Standard Company
("XXXXX"), XXXXX shall not be considered to be a Subsidiary of Borrower or any
Subsidiary of Borrower.
"Swing Loan" shall mean a Loan granted to Borrower by Agent in accordance
with Section 2.1C hereof.
"Swing Loan Commitment" shall mean the discretionary facility established
by Agent pursuant to which and subject to such terms and conditions as Bank may
require from time to time, Borrower may, during the Commitment Period, request
Swing Loans up to the maximum aggregate amount at any time outstanding of
Fifteen Million Dollars ($15,000,000) on the terms and conditions set forth in
Section 2.1C hereof (or such lesser amount as shall be determined pursuant to
Section 2.5 hereof).
"Swing Loan Note" shall mean the Swing Loan Note executed and delivered
pursuant to Section 2.1C hereof.
"Total Capitalization" shall mean Total Funded Indebtedness plus
Stockholders' Equity.
"Total Commitment Amount" shall mean the obligation hereunder of the
Banks, during the Commitment Period, to make Loans and to participate in the
issuance of Letters of Credit up to the maximum aggregate principal amount of
Two Hundred Twenty-Five Million Dollars
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($225,000,000) (or such lesser amount as shall be determined pursuant
to Section 2.5 hereof). For purposes of determining the Total Commitment
Amount, the amount utilized by each Eurocurrency Loan shall be the Dollar
Equivalent amount of each such Eurocurrency Loan as of the most recent Interest
Adjustment Date.
"Total Funded Indebtedness" shall mean, for any period, on a Consolidated
basis and in accordance with GAAP, all Funded Indebtedness of the Companies.
"Unmatured Event of Default" shall mean an event, condition or thing which
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute, an Event of Default and which has
not been appropriately waived by the Majority Banks in writing or fully
corrected prior to becoming an actual Event of Default.
"Voting Stock" shall mean stock of a Person of a class or classes having
general voting power under ordinary circumstances to elect a majority of the
board of directors, managers or trustees of such corporation (irrespective of
whether or not at the time stock of any other class or classes shall have or
might have voting power by the reason of the happening of any contingency).
"Welfare Plan" shall mean an ERISA Plan that is a "welfare plan" within
the meaning of ERISA Section 3 (l).
"Wholly-Owned Subsidiary" shall mean each Subsidiary all of whose
outstanding stock, other than directors' qualifying shares, shall at the time
be owned by Borrower and/or by one or more Wholly-Owned Subsidiaries.
Any accounting term not specifically defined in this Article I shall have
the meaning ascribed thereto by GAAP.
The foregoing definitions shall be applicable to the singular and plurals
of the foregoing defined terms.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms and
provisions of this Agreement, each Bank will participate to the extent
hereinafter provided in making Loans to Borrower, and issuing Letters of Credit
at the request of Borrower, in such aggregate amount as Borrower shall request
pursuant to the Commitment; provided, however, that in no event shall the
aggregate principal amount of all Loans and the aggregate undrawn face amount
of all Letters of Credit outstanding under this Agreement during the Commitment
Period be in excess of the Total Commitment Amount.
Each Bank, for itself and not one for any other, agrees to participate in
Loans made and
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Letters of Credit issued hereunder during the Commitment Period on such
basis that (a) immediately after the completion of any borrowing by Borrower or
issuance of a Letter of Credit hereunder, the aggregate principal amount then
outstanding on the Notes issued to such Bank, when combined with such Bank's
pro rata share of the aggregate undrawn face amount of all issued and
outstanding Letters of Credit, shall not be in excess of the amount shown
opposite the name of such Bank under the column headed "Maximum Amount" as set
forth in Schedule 1 hereto, and (b) such aggregate principal amount outstanding
on the Notes issued to such Bank, excluding the Swing Loan Note, shall
represent that percentage of the aggregate principal amount then outstanding on
all Notes (including the Notes held by such Bank but excluding the Swing Loan
Note) which is such Bank's Commitment Percentage.
Each borrowing from the Banks hereunder (other than Swing Loans) shall be
made pro rata according to the Banks' respective Commitment Percentages. The
Loans may be made as Revolving Loans and Swing Loans, and Letters of Credit may
be issued, as follows:
A. Revolving Loans. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Banks shall make a Revolving Loan
or Revolving Loans to Borrower in such amount or amounts as Borrower may from
time to time request, but not exceeding in aggregate principal amount at any
one time outstanding hereunder the Revolving Credit Commitment, when such
Revolving Loans are combined with (a) the aggregate undrawn face amount of all
issued and outstanding Letters of Credit and (b) the aggregate outstanding
principal amount of all Swing Loans. Borrower shall have the option, subject
to the terms and conditions set forth herein, to borrow Revolving Loans
hereunder by means of any combination of (a) Prime Rate Loans maturing on the
last day of the Commitment Period, bearing interest at a rate per annum which
shall be the Adjusted Prime Rate from time to time in effect and drawn down in
aggregate amounts of not less than Five Million Dollars ($5,000,000), increased
by increments of One Million Dollars ($1,000,000), (or, with respect to a
Eurocurrency Loan other than a Eurodollar Loan, such approximately comparable
amount as shall result in a rounded number of the applicable Eurocurrency) or
(b) LIBOR Loans maturing on the last day of the Commitment Period, drawn down
in aggregate amounts of not less than Five Million Dollars ($5,000,000),
increased by increments of One Million Dollars ($1,000,000) (or, with respect
to a Eurocurrency Loan other than a Eurodollar Loan, such approximately
comparable amount as shall result in a rounded number of the applicable
Eurocurrency), bearing interest at a rate per annum which shall be the Derived
LIBOR Rate, fixed in advance of each Interest Period (but subject to changes in
the Applicable LIBOR Margin) as herein provided for each such Interest Period.
Each Prime Rate Loan shall be made in Dollars. With respect to each LIBOR
Loan, subject to the other provisions of this Agreement, Borrower shall have
the right to receive all of the proceeds of such LIBOR Loan in Eurocurrency.
Each LIBOR Loan shall be made in a single currency.
Borrower shall pay interest on the unpaid principal amount of Prime Rate
Loans outstanding from time to time from the date thereof until paid, on the
first day of each succeeding January, April, July and October of each year and
at the maturity thereof, commencing January 1, 1998. Borrower shall pay
interest at a fixed rate for each Interest Period (but subject to changes in
the Applicable LIBOR Margin) on the unpaid principal amount of each LIBOR Loan
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outstanding from time to time from the date thereof until paid, payable on each
Interest Adjustment Date with respect to an Interest Period (provided that if
an Interest Period exceeds three (3) months, the interest must be paid every
three (3) months, commencing three (3) months from the beginning of such
Interest Period).
At the request of Borrower, provided no Unmatured Event of Default or
Event of Default exists hereunder, the Banks shall convert Prime Rate Loans to
LIBOR Loans that are in Eurodollars at any time, subject to the notice
provisions of Section 2.2 hereof, and shall convert LIBOR Loans that are in
Eurodollars to Prime Rate Loans on any Interest Adjustment Date, unless notice
for another LIBOR Loan is given by Borrower as provided in Section 2.2 hereof.
The obligation of Borrower to repay the Revolving Loans made by each Bank
and to pay interest thereon shall be evidenced by a Revolving Credit Note of
Borrower substantially in the form of Exhibit A hereto, with appropriate
insertions, dated the Closing Date and payable to the order of such Bank on the
last day of the Commitment Period in the principal amount of its Revolving
Credit Commitment, or, if less, the aggregate unpaid principal amount of
Revolving Loans made hereunder by such Bank. Subject to the provisions of this
Agreement, Borrower shall be entitled under this Section 2.1A to borrow funds,
repay the same in whole or in part and re-borrow hereunder at any time and from
time to time during the Commitment Period.
B. Letters of Credit. Subject to the terms and conditions of this
Agreement, during the Commitment Period, Agent (or such other Bank, with the
consent of Borrower, as shall agree to be the Fronting Bank) shall, in its own
name, but only as agent for the Banks, issue such Letters of Credit for the
account of Borrower or any Guarantor of Payment, as Borrower may from time to
time request. Borrower shall not request any Letter of Credit (and neither
Agent nor any other Fronting Bank shall be obligated to issue any Letter of
Credit) if, after giving effect thereto, (a) the aggregate amount of all issued
and outstanding Letters of Credit would exceed Twenty Million Dollars
($20,000,000) or (b) the sum of (i) the aggregate outstanding principal amount
of the Revolving Loans, plus (ii) the aggregate of all issued and outstanding
Letters of Credit, plus (iii) the aggregate amount of all outstanding Swing
Loans shall exceed the Commitment. The issuance of each Letter of Credit shall
confer upon each Bank the benefits and liabilities of a participation
consisting of an undivided pro rata interest in the Letter of Credit to the
extent of such Bank's Commitment Percentage.
Each request for a Letter of Credit shall be delivered to Agent (and the
Fronting Bank, if the Fronting Bank is a Bank other than Agent) not later than
11:00 A.M. (Cleveland, Ohio time) three (3) Domestic Business Days prior to the
day upon which the Letter of Credit is to be issued. Each such request shall
be in a form reasonably acceptable to Agent (and the Fronting Bank, if the
Fronting Bank is a Bank other than Agent) and specify the face amount thereof,
the account party, the beneficiary, the intended date of issuance, the expiry
date thereof, and the nature of the transaction to be supported thereby.
Concurrently with each such request, Borrower, and any Guarantor of Payment for
whose benefit the Letter of Credit is to be issued, shall execute and deliver
to Agent (or the Fronting Bank, if the Fronting Bank is a Bank other than
Agent) an appropriate application and agreement, being in the standard form of
the Fronting Bank for such
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letters of credit, as amended to conform to the provisions of this
Agreement if required by Agent. Agent shall give each Bank notice of each such
request for a Letter of Credit.
In respect of each Letter of Credit and the drafts thereunder, if any,
whether issued for the account of Borrower or a Guarantor of Payment, Borrower
agrees (a) to pay to Agent, for the pro rata benefit of the Banks, a
non-refundable commission based upon the face amount of the Letter of Credit,
which shall be paid in advance on a quarter-annual basis, at the rate per annum
of the then current Applicable LIBOR Margin (i.e. the Applicable LIBOR Margin
in effect on the date that the Letter of Credit is issued and, as to each
quarter-annual payment date thereafter, the Applicable LIBOR Margin in effect
on the date of such quarter-annual payment) times the face amount of the Letter
of Credit from the date of the Letter of Credit to the date of its expiry; (b)
to pay to the Fronting Bank, for its sole account, an additional Letter of
Credit fee, which shall be paid on the date that such Letter of Credit is
issued, at the rate per annum of one-eighth of one percent (1/8%) of the face
amount of the Letter of Credit from the date of the Letter of Credit to the
date of its expiry; and (c) to pay to the Fronting Bank, for its sole account,
such other issuance, amendment, negotiation, draw, acceptance, telex, courier,
postage and similar transactional fees as are generally charged by such
Fronting Bank under its fee schedule as in effect from time to time.
Whenever a Letter of Credit is drawn, unless the amount drawn is
immediately reimbursed by Borrower, the amount outstanding thereunder shall be
deemed to be a Revolving Loan to Borrower subject to the provisions of Sections
2.1A and 2.2 hereof and shall be evidenced by the Revolving Credit Notes. Each
such Revolving Loan shall be deemed to be a Prime Rate Loan unless otherwise
requested by (in accordance with the notice provisions of Section 2.2(b)
hereof) and available to Borrower hereunder. Each Bank is hereby authorized to
record on its records relating to its Revolving Credit Note such Bank's pro
rata share of the amounts paid and not reimbursed on the Letters of Credit.
C. Swing Loans. Subject to the terms and conditions of this Agreement,
during the Commitment Period, so long as no Unmatured Event of Default or Event
of Default shall have occurred, Borrower may request a Swing Loan or Swing
Loans from Agent and Agent may grant such Swing Loan or Swing Loans in such
amount or amounts as Borrower may from time to time request, but not exceeding
in aggregate principal amount at any one time outstanding (i) the Swing Loan
Commitment, or (ii) Agent's Revolving Credit Commitment when all Swing Loans
are combined with Agent's pro rata share of the aggregate outstanding principal
amount of Revolving Loans and the aggregate undrawn face amount of all issued
and outstanding Letters of Credit. Each Swing Loan shall be due and payable on
the earlier of (a) demand made by Agent at any time upon one (1) Domestic
Business Day's prior notice to Borrower, (b) at the specific maturity thereof,
or (c) the last day of the Commitment Period; provided that, if no Unmatured
Event of Default or Event of Default shall have occurred at the time of such
demand, then Borrower shall, immediately after Borrower learns of such demand,
if and to the extent that Borrower is permitted to borrow Revolving Loans under
the terms of this Agreement at the time of such demand, be deemed to have
submitted a request for a Revolving Loan in an amount necessary to repay the
amount demanded, and the provisions of Section 2.1A hereof concerning
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minimum principal amounts and integral multiples thereof required for
requesting Revolving Loans shall not apply to Revolving Loans made pursuant to
this Section 2.1C.
Each Swing Loan shall bear interest at the Prime Rate or such other rate
as may be agreed upon by Borrower and Agent from time to time. Each Swing Loan
shall be drawn down in aggregate amounts of not less than Five Hundred Thousand
Dollars ($500,000), increased by increments of One Hundred Thousand Dollars
($100,000). Borrower shall pay interest to Agent, for the sole benefit of
Agent, on the unpaid principal amount of each Swing Loan outstanding from time
to time from the date thereof until paid, on the first day of each succeeding
January, April, July and October of each year, commencing January 1, 1998 and
at the specific maturity thereof. Each Swing Loan shall bear interest for a
minimum of one (1) day.
The obligation of Borrower to repay the Swing Loans and to pay interest
thereon shall be evidenced by a Swing Loan Note of Borrower substantially in
the form of Exhibit B hereto, with appropriate insertions, dated the date of
this Agreement and payable to the order of Agent on the last day of the
Commitment Period in the principal amount of the Swing Loan Commitment, or, if
less, the aggregate unpaid principal amount of Swing Loans made hereunder by
Agent. Subject to the provisions of this Agreement and in the sole discretion
of Agent, Borrower shall be entitled under this Section 2.1C to borrow funds,
repay the same in whole or in part and reborrow hereunder at any time and from
time to time during the Commitment Period.
Borrower shall not request any Swing Loan if, after giving effect thereto,
(a) the sum of the then aggregate outstanding principal amount of all Revolving
Loans, plus all outstanding Letters of Credit, plus all Swing Loans would
exceed the Total Commitment Amount, or (b) the aggregate outstanding principal
amount of all Swing Loans would exceed the Swing Loan Commitment.
If an Unmatured Event of Default or an Event of Default shall have
occurred and be Continuing, Agent may at any time, without notice to or the
consent of Borrower or the Banks, terminate the Swing Loan Commitment and
cause Revolving Loans to be made by the Banks in an aggregate amount equal to
the amount of principal and interest outstanding under the Swing Loan
Commitment, and the conditions precedent set forth in Section 2.2 hereof shall
not apply to such Revolving Loans. The proceeds of such Revolving Loans shall
be paid to Agent for payment of the Swing Loan Note.
SECTION 2.2. CONDITIONS TO LOANS AND LETTERS OF CREDIT. The obligation of
each Bank to make Loans and of Agent (and any Fronting Bank) to issue Letters
of Credit hereunder is conditioned, in the case of each borrowing or issuance
hereunder, upon:
(a) all conditions precedent as listed in Article IV hereof shall have
been satisfied;
(b) with respect to Loans, receipt by Agent from Borrower of a Notice of
Loan in the form of Exhibit C hereto, by 11:00 A.M. (Cleveland, Ohio time) on
the proposed date of borrowing, such notice to provide the aggregate amount of
Prime Rate Loans, and, if LIBOR
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Loans are requested, three (3) London Business Days' notice of the
proposed date, aggregate amount and initial Interest Period of such LIBOR
Loans; or, with respect to Letters of Credit, satisfaction of the notice
provisions set forth in Section 2.1B hereof. Agent shall notify each Bank of
the date, amount, type of currency and initial interest period (if applicable)
promptly upon the receipt of such notice, and, in any event, by 12:00 P.M.
(Cleveland, Ohio time) on the date such notice is received. With respect to
Prime Rate Loans and LIBOR Loans that are in Eurodollars, on the date such Loan
is to be made, each Bank shall provide Agent not later than 3:00 P.M.
(Cleveland, Ohio time) with the amount in Dollars (federal or other immediately
available funds), required of it. With respect to LIBOR Loans that are to be
funded in a Eurocurrency other than Eurodollars, each Bank shall provide Agent,
not later than 11:00 A.M. (Cleveland, Ohio time) on the date such disbursement
is to be made, with the amount of the applicable Eurocurrency required of it in
such Eurocurrency, in immediately available funds. With respect to LIBOR Loans
that are funded in a Eurocurrency other than Eurodollars, at no time shall the
aggregate outstanding amount of all such LIBOR Loans exceed One Hundred Million
Dollars ($100,000,000);
(c) the fact that no Unmatured Event of Default or Event of Default shall
then exist or immediately after the Loan or issuance of the Letter of Credit
would exist; and
(d) the fact that each of the representations and warranties contained in
Article VI hereof shall be true and correct in all material respects with the
same force and effect as if made on and as of the date of such Loan, or the
issuance of the Letter of Credit, except to the extent that any thereof
expressly relate to an earlier date.
The obligation of Agent to make Swing Loans hereunder is conditioned, in
each case, upon (i) its consent to do so, (ii) receipt by the Agent of notice
from Borrower by 11:00 A.M. (Cleveland, Ohio time) on the proposed date of
funding which states the aggregate amount and maturity of the borrowing, and
(iii) (c) and (d) above.
Each request for a Loan or the issuance of a Letter of Credit by
Borrower hereunder shall be deemed to be a representation and warranty by
Borrower as of the date of such request as to the facts specified in (c) and
(d) above. At no time shall Borrower request that LIBOR Loans be outstanding
for more than six (6) different Interest Periods at any one (1) time, and, if
Prime Rate Loans are outstanding, then LIBOR Loans shall be limited to five (5)
different Interest Periods at any one (1) time.
Each request for a LIBOR Loan shall be irrevocable and binding on Borrower
and Borrower shall indemnify Agent and the Banks against any loss or expense
incurred by Agent or the Banks as a result of any failure by Borrower to
consummate such transaction including, without limitation, any loss (including
loss of anticipated profits) or expense incurred by reason of liquidation or
re-employment of deposits or other funds acquired by the Banks to fund the
Loan. A certificate as to the amount of such loss or expense submitted by the
Banks to Borrower shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.3. PAYMENT ON NOTES, ETC.
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(a) Payments in Eurocurrency. With respect to any LIBOR Loan that was
made by the Banks in a Eurocurrency other than Eurodollars, all payments
(including prepayments) to Agent and the Banks of the principal of or interest
on such LIBOR Loan shall be made in the same Eurocurrency as the original Loan.
All such payments shall be remitted by Borrower to Agent at a designated
account at Agent's main office (or at such other office or account as
designated in writing by Agent to Borrower) not later than 11:00 A.M.
(Cleveland, Ohio Time) on the due date thereof in same day funds. In the event
that such payment is due on a date when Agent's main office is not open for
business, then such payment shall be made on the next preceding day upon which
Agent's main office is open for business. Any payments received by Agent after
11:00 A.M. (Cleveland, Ohio Time) shall be deemed to have been made and
received on the next following Domestic Business Day.
(b) Payments in Dollars. With respect to any LIBOR Loan or Prime Rate
Loan that was made by the Banks in Eurodollars or Dollars, all payments
(including prepayments) to Agent and the Banks of the principal of or interest
on such Loan shall be made in Dollars. With respect to any other payment to
Agent and the Banks that is not covered by subsection (a) hereof, such other
payment, including but not limited to principal, interest, fees or any other
amount owed by Borrower under this Agreement shall be made in Dollars. All
payments described in this subsection (b) shall be remitted to Agent at its
main office for the account of the Banks not later than 2:00 P.M. (Cleveland,
Ohio Time) on the due date thereof in immediately available funds. Any such
payments received by Agent after 2:00 P.M. (Cleveland, Ohio Time) shall be
deemed to have been made and received on the next following Domestic Business
Day.
(c) Payments Net of Taxes. All payments under this Agreement shall be
made absolutely net of, without deduction or offset for, and altogether free
and clear of, any and all present and future taxes, levies, deductions, charges
and withholdings and all liabilities with respect thereto, under the laws of
the United States of America or any foreign jurisdiction (or any state or
political subdivision thereof), excluding income and franchise taxes imposed on
any Bank under the laws of the United States or any foreign jurisdiction (or
any state or political subdivision thereof). If Borrower is compelled by law
to deduct any such taxes or levies (other than such excluded taxes) or to make
any such other deductions, charges or withholdings, Borrower shall pay such
additional amounts as may be necessary in order that the net payments after
such deduction, and after giving effect to any United States or foreign
jurisdiction (or any state or political subdivision thereof) income taxes
required to be paid by the Banks in respect of such additional amounts, shall
equal the amount of interest provided in Section 2.1 hereof for each Loan plus
any principal then due.
(d) Payments to Banks. Upon Agent's receipt of payments hereunder, Agent
shall immediately distribute to each Bank its ratable share of the amount of
principal, interest, and commitment and other fees received by it for the
account of such Bank. Payments received by Agent in Dollars shall be delivered
to the Banks in immediately available funds. Payments received by Agent in a
Eurocurrency (other than Eurodollars) shall be delivered to the Banks in same
day funds. Each Bank shall record any principal, interest or other payment,
the principal
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amounts of the Prime Rate Loans and the LIBOR Loans, the type of
currency for each Loan, all prepayments and the applicable dates with respect
to the Loans and payments, by such method as such Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from Borrower's obligations under each such Note. The aggregate unpaid amount
of Loans set forth on the records of Agent shall be rebuttably presumptive
evidence of the principal and interest owing and unpaid on each Note.
(e) Timing of Payments. Whenever any payment to be made hereunder,
including without limitation any payment to be made on any Note, shall be
stated to be due on a day which is not a Domestic Business Day, such payment
shall be made on the next succeeding Domestic Business Day and such extension
of time shall in each case be included in the computation of the interest
payable on such Note; provided, however, that, with respect to any LIBOR Loan,
if the next succeeding Domestic Business Day falls in the succeeding calendar
Month, such payment shall be made on the preceding Domestic Business Day and
the relevant Interest Period shall be adjusted accordingly.
SECTION 2.4. PREPAYMENT. Borrower shall have the right at any time or
from time to time to prepay on a pro rata basis, all or any part of the
principal amount of the Notes then outstanding as designated by Borrower, plus
interest accrued on the amount so prepaid to the date of such prepayment.
Borrower shall give Agent notice of prepayment of any Prime Rate Loans by not
later than 11:00 A.M. (Cleveland, Ohio time) on the Domestic Business Day such
prepayment is to be made and written notice of the prepayment of any LIBOR Loan
not later than 1:00 P.M. (Cleveland, Ohio time) three (3) London Business Days
before the Domestic Business Day on which such prepayment is to be made.
Prepayments of Prime Rate Loans shall be without any premium or penalty. In
any case of prepayment of any LIBOR Loans, Borrower agrees that if the LIBO
Pre-margin Rate as determined as of 11:00 A.M. (London time), three (3) London
Business Days prior to the Domestic Business Day of prepayment of any LIBOR
Loans (hereinafter, "Prepayment LIBOR") shall be lower than the last LIBO
Pre-margin Rates for those LIBOR Loans with respect to which prepayment is
intended to be made (hereinafter, "Last LIBOR"), then Borrower shall, upon
written notice by Agent, promptly pay to Agent, for the account of each of the
Banks, in immediately available funds, a prepayment fee equal to the product of
(a) a rate (the "Prepayment Rate") which shall be equal to the difference
between the Last LIBOR and the Prepayment LIBOR, times (b) all or such part of
the principal amounts of the Notes as relate to the LIBOR Loans to be prepaid,
times (c) the quotient obtained by dividing
(i) the number of days in the period commencing with the date on which such
prepayment is to be made to that date which coincides with the last day of the
Interest Period previously established when the LIBOR Loans, which are to be
prepaid, were made, by (ii) three hundred sixty (360). In addition, Borrower
shall immediately pay directly to Agent, for the account of the Banks, the
amount of any additional reasonable costs or expenses (including, without
limitation, cost of telex, wires, or cables) incurred by Agent or the Banks in
connection with the prepayment, upon Borrower's receipt of a written statement
from Agent. Each prepayment of a LIBOR Loan shall be in the aggregate principal
sum of not less than One Million Dollars ($1,000,000). In the event that
Borrower cancels a proposed LIBOR Loan subsequent to the delivery to Agent of
the notice of the proposed date, aggregate amount and initial Interest Period
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of such Loan, but prior to the draw down of funds thereunder, such cancellation
shall be treated as a prepayment subject to the aforementioned prepayment fee.
SECTION 2.5. FACILITY AND OTHER FEES; TERMINATION OR REDUCTION OF
COMMITMENT.
(a) Borrower shall pay to Agent, for the ratable account of the Banks, as
a consideration for the Commitment hereunder, a facility fee from the date
hereof to and including the last day of the Commitment Period equal to (i) the
Applicable Facility Fee Rate, times (ii) the Total Commitment Amount. The
facility fee shall be payable, in arrears, on January 1, 1998, and
quarter-annually thereafter.
(b) Borrower shall pay to Agent, for its sole benefit, an annual fee as
set forth in that certain letter (the "Fee Letter"), dated of even date
herewith. The annual fee of Agent shall be payable, in advance for the
forthcoming year, upon the execution hereof and on each anniversary of the
Closing Date thereafter so long as any Bank shall have a Revolving Credit
Commitment hereunder or any Note or any Loan shall be outstanding.
(c) Borrower shall pay to Agent, for its sole benefit, on the Closing
Date, a syndication fee as set forth in the Fee Letter.
(d) Borrower may at any time or from time to time terminate in whole or
ratably in part the Commitment of the Banks hereunder to an amount not less
than the aggregate principal amount of the Loans and Letters of Credit then
outstanding, by giving Agent not fewer than five (5) Domestic Business Days'
notice; provided that, any such partial termination shall be in an aggregate
amount for all of the Banks of not less than Ten Million Dollars ($10,000,000).
Agent shall promptly notify each Bank of its proportionate amount and the date
of each such termination. After each such termination, the facility fees
payable hereunder shall be calculated upon the Commitment of the Banks as so
reduced. If Borrower terminates in whole the Commitment of the Banks, on the
effective date of such termination (Borrower having prepaid in full the unpaid
principal balance, if any, of the Notes outstanding, together with all interest
and facility and other fees accrued and unpaid and provided that no issued and
outstanding Letters of Credit shall exist) all of the Notes outstanding shall
be delivered to Agent marked "Canceled" and redelivered to Borrower. Any
partial reduction in the Commitment of the Banks shall be effective during the
remainder of the Commitment Period.
SECTION 2.6. COMPUTATION OF INTEREST AND FEES; DEFAULT RATE.
Interest on Loans and facility and other fees and charges hereunder shall be
computed on the basis of a year having three hundred sixty (360) days (or three
hundred sixty-five (365) days in the case of Eurocurrency Loans in Pounds
Sterling) and calculated for the actual number of days elapsed; provided,
however, that, Prime Rate Loans shall be computed on the basis of a year having
three hundred sixty-five (365) or three hundred sixty-six (366) days, as the
case may be, and calculated for the actual number of days elapsed. Anything
herein to the contrary notwithstanding, if an Event of Default shall occur
hereunder and shall be Continuing, (a) the principal of each Note and the
unpaid interest thereon shall bear interest, until paid, at the Default
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Rate; and (b) the fee for the aggregate undrawn face amount of issued
and outstanding Letters of Credit shall be increased to two percent (2%) in
excess of the then applicable fee from time to time in effect pursuant to
subpart (a) of Section 2.1B hereof. In no event shall the rate of interest
hereunder exceed the rate allowable by law.
SECTION 2.7. MANDATORY PAYMENTS AND CURRENCY.
(a) If the sum of (i) the aggregate principal amount of all Loans
outstanding (after converting each Eurocurrency Loan to its Dollar Equivalent)
and (ii) the undrawn face amount of all issued and outstanding Letters of
Credit at any time exceeds the Total Commitment Amount, Borrower shall, as
promptly as practicable, but in no event to be later than the next Domestic
Business Day, prepay an aggregate principal amount of the Loans sufficient to
bring the aggregate outstanding principal amount of all Loans and the undrawn
face amount of all issued and outstanding Letters of Credit within the
Commitment of the Banks. For purposes of computing the principal outstanding
on the Notes, the principal amount of Eurocurrency Loans in a Eurocurrency
other than Eurodollars shall be converted to their Dollar Equivalents as of the
most recent Interest Adjustment Date.
(b) In addition, if (with the consent of Agent and the Majority Banks or,
all of the Banks, if required by this Agreement) any Company sells more than
fifteen percent (15%) of the Consolidated Total Assets of the Companies
excluding Receivables the disposition of which is permitted by Subsection
5.11(c) hereof, during any twelve (12) month period, then the net proceeds of
sale shall be applied, on the date of sale, to the principal of the Revolving
Loans then outstanding and the Total Commitment Amount and the Revolving Credit
Commitments (on a pro rata basis) shall be permanently reduced by the amount of
such excess above the aforementioned fifteen percent (15%) threshold. In the
event that the assets being sold are sold in the ordinary course of business
and are replaced (within one hundred eighty (180) days of sale) by other assets
of equal value (which are not subject to any Lien, except purchase money Liens
if there were any Liens on the assets so sold), then the payment to Agent for
the benefit of the Banks described in this subpart (b) need not be made.
(c) Any prepayment of a LIBOR Loan pursuant to this Section 2.7 shall be
subject to the prepayment fees set forth in Section 2.4 hereof.
SECTION 2.8. EXTENSION OF COMMITMENT. After the fiscal year ending June
30, 1999 and after each fiscal year thereafter, upon the written request of
Borrower received by Agent upon delivery of the financial statements as
described in Section 5.3(b) hereof, the Banks shall have the option of
extending the Commitment for an additional year, such request to be
granted or denied within sixty (60) days after such request is received by
Agent; and the failure of the Banks to respond to such request within that
sixty (60) day period shall be deemed a denial of the requested extension.
Each such extension shall require the unanimous written consent of all of the
Banks and shall be upon such terms and conditions as may be agreed to by Agent,
Borrower, and the Banks.
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ARTICLE III. ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS
SECTION 3.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If at any time any
law, treaty or regulation (including, without limitation, Regulation D of the
Board of Governors of the Federal Reserve System) or the interpretation thereof
by any governmental authority charged with the administration thereof or any
central bank or other fiscal, monetary or other authority shall impose (whether
or not having the force of law), modify or deem applicable any reserve and/or
special deposit requirement (other than reserves included in the reserve
percentage of the Bank in question, the effect of which is reflected in the
interest rate(s) of the LIBOR Loan(s) in question) against assets held by, or
deposits in or for the amount of any Loans by, any Bank, and the result of the
foregoing is to increase the cost (whether by incurring a cost or adding to a
cost) to such Bank of making or maintaining hereunder LIBOR Loans or to reduce
the amount of principal or interest received by such Bank with respect to such
LIBOR Loans, then, upon demand by such Bank, Borrower shall pay to such Bank
from time to time on Interest Adjustment Dates with respect to such LIBOR
Loans, as additional consideration hereunder, additional amounts sufficient to
fully compensate and indemnify such Bank for such increased cost or reduced
amount, assuming (which assumption such Bank need not corroborate) such
additional cost or reduced amount was allocable to such LIBOR Loans. A
certificate as to the increased cost or reduced amount as a result of any event
mentioned in this Section 3.1, setting forth the calculations therefor, shall
be promptly submitted by such Bank to Borrower and shall, in the absence of
manifest error, be conclusive and binding as to the amount thereof.
Notwithstanding any other provision of this Agreement, after any such demand
for compensation by any Bank, Borrower, upon at least three (3) Domestic
Business Days' prior written notice to such Bank through Agent, may prepay the
affected LIBOR Loans in full or, with respect to LIBOR Loans that are in
Eurodollars, convert all LIBOR Loans to Prime Rate Loans regardless of the
Interest Period of any thereof. Any such prepayment or conversion shall be
subject to the prepayment fees set forth in Section 2.4 hereof. Each Bank shall
notify Borrower as promptly as practicable (with a copy thereof delivered to
Agent) of the existence of any event which will likely require the payment by
Borrower of any such additional amount under this Section.
SECTION 3.2. TAX LAW, ETC. In the event that, by reason of any law,
regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of law, any Bank shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Bank) and if any such
measures or any other similar measure shall result in an increase in the cost
to such Bank of making or maintaining any LIBOR Loan or in a reduction in the
amount of principal, interest or facility or other fee receivable by such Bank
in respect thereof, then such Bank shall promptly notify Borrower stating the
reasons therefor. Borrower shall thereafter pay to such Bank upon demand from
time to time on Interest Adjustment Dates with respect to such LIBOR Loans, as
additional consideration hereunder, such additional amounts as shall fully
compensate such Bank for such increased cost or reduced amount. A certificate
as to any such increased cost or reduced amount, setting forth the
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calculations therefor, shall be submitted by such Bank to Borrower and
shall, in the absence of manifest error, be conclusive and binding as to the
amount thereof.
If any Bank receives such additional consideration from Borrower pursuant
to this Section 3.2, such Bank shall use reasonable efforts to obtain the
benefits of any refund, deduction or credit for any taxes or other amounts on
account of which such additional consideration has been paid and shall
reimburse Borrower to the extent, but only to the extent, that such Bank shall
receive a refund of such taxes or other amounts together with any interest
thereon or an effective net reduction in taxes or other governmental charges
(including any taxes imposed on or measured by the total net income of such
Bank) of the United States or any state or subdivision thereof by virtue of any
such deduction or credit, after first giving effect to all other deductions and
credits otherwise available to such Bank. If, at the time any audit of such
Bank's income tax return is completed, such Bank determines, based on such
audit, that it was not entitled to the full amount of any refund reimbursed to
Borrower as aforesaid or that its net income taxes are not reduced by a credit
or deduction for the full amount of taxes reimbursed to Borrower as aforesaid,
Borrower, upon demand of such Bank, shall promptly pay to such Bank the amount
so refunded to which such Bank was not so entitled, or the amount by which the
net income taxes of such Bank were not so reduced, as the case may be.
Notwithstanding any other provision of this Agreement, after any such
demand for compensation by any Bank, Borrower, upon at least three (3) Domestic
Business Days' prior written notice to such Bank through Agent, may prepay the
affected LIBOR Loans in full or, with respect to LIBOR Loans that are in
Eurodollars, convert all LIBOR Loans to Prime Rate Loans regardless of the
Interest Period of any thereof. Any such prepayment or conversion shall be
subject to the prepayment fees set forth in Section 2.4 hereof.
SECTION 3.3. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In respect of any LIBOR Loans, in the event that any Bank
shall have determined that (a) for Eurodollar Loans, that Dollar deposits or
(b) for other Eurocurrency Loans, that deposits of the relevant Eurocurrency,
of the relevant amount for the relevant Interest Period for such LIBOR Loans
are not available to such Bank in the applicable Eurodollar market or that, by
reason of circumstances affecting such market, adequate and reasonable means do
not exist for ascertaining the LIBOR rate applicable to such Interest Period,
as the case may be, such Bank shall give prompt notice to Agent and Agent shall
promptly give notice of such determination to Borrower and (a) any notice of
new LIBOR Loans (or conversion of existing Loans to LIBOR Loans) previously
given by Borrower and not yet borrowed (or converted, as the case may be) shall
be deemed a notice to make Prime Rate Loans, and (b) Borrower shall be
obligated either to prepay, or, with respect to LIBOR Loans that are in
Eurodollars, to convert to Prime Rate Loans, any outstanding LIBOR Loans on the
last day of the then current Interest Period or Periods with respect thereto.
SECTION 3.4. INDEMNITY. Without prejudice to any other provisions of this
Article III, Borrower hereby agrees to indemnify each Bank against any loss or
expense which such Bank may sustain or incur as a consequence of any default by
Borrower in payment when due of
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any amount hereunder in respect of any LIBOR Loan, including, but not
limited to, any loss of profit, premium or penalty incurred by such Bank in
respect of funds borrowed by it for the purpose of making or maintaining such
LIBOR Loan, as determined by such Bank in the exercise of its sole but
reasonable discretion. A certificate as to any such loss or expense shall be
promptly submitted by such Bank to Borrower and shall, in the absence of
manifest error, be conclusive and binding as to the amount thereof.
SECTION 3.5. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty or regulation, or any change in any existing law,
treaty or regulation, or any interpretation thereof by any governmental or
other regulatory authority charged with the administration thereof, shall make
it unlawful for any Bank to fund any LIBOR Loans which it is committed to make
hereunder in any Eurocurrency or Dollars, as the case may be, the Commitment of
such Bank to fund such LIBOR Loans shall, upon the happening of such event
forthwith be suspended for the duration of such illegality, and such Bank shall
by written notice to Borrower and Agent declare that its Commitment with
respect to such Loans has been so suspended and, if and when such illegality
ceases to exist, such suspension shall cease and such Bank shall similarly
notify Borrower and Agent. If any such change shall make it unlawful for any
Bank to continue in effect the funding in the applicable Eurodollar market of
any LIBOR Loan previously made by it hereunder, such Bank shall, upon the
happening of such event, notify Borrower, Agent and the other Banks thereof in
writing stating the reasons therefor, and Borrower shall, on the earlier of (a)
the last day of the then current Interest Period or (b) if required by such
law, regulation or interpretation, on such date as shall be specified in such
notice, either convert all LIBOR Loans to Prime Rate Loans or prepay all LIBOR
Loans to the Banks in full or convert all affected LIBOR Loans that are
Eurodollar Loans to Prime Rate Loans. Any such prepayment or conversion shall
be subject to the prepayment fees described in Section 2.4 hereof.
SECTION 3.6. FUNDING. Each Bank may, but shall not be required to, make
LIBOR Loans hereunder with funds obtained outside the United States.
ARTICLE IV. CONDITIONS PRECEDENT
The obligation of the Banks to make the first Loan and of Agent (or any
Fronting Bank) to issue the first Letter of Credit is subject to Borrower
satisfying each of the following conditions:
SECTION 4.1. NOTES. Borrower shall have executed and delivered to each
Bank its Revolving Credit Note and to Agent the Swing Loan Note.
SECTION 4.2. GUARANTIES OF PAYMENT OF DEBT. Each of "5" Rubber
Corporation, Xxxxxx Rubber Company, and Xxxx Industries, Inc., shall have
executed and delivered its Guaranty of Payment to Agent for the benefit of the
Banks, each to be in form and substance satisfactory to Agent and the Banks.
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SECTION 4.3. OFFICER'S CERTIFICATE, RESOLUTIONS, ORGANIZATIONAL DOCUMENTS.
Borrower and each Guarantor of Payment shall deliver to each Bank an officer's
certificate certifying the names of the officers of Borrower or such Guarantor
of Payment authorized to sign the Loan Documents, together with the true
signatures of such officers and certified copies of (a) the resolutions of the
respective boards of directors of Borrower and each Guarantor of Payment
evidencing approval of the execution and delivery of the Loan Documents and the
execution of other Related Writings to which Borrower or such Guarantor of
Payment, as the case may be, is a party, and (b) the Articles (or Certificate)
of Incorporation and all amendments thereto of Borrower and each Guarantor of
Payment.
SECTION 4.4. LEGAL OPINIONS. Opinions of counsel for Borrower and each
Guarantor of Payment in form and substance satisfactory to Agent and the Banks
shall be delivered to each Bank.
SECTION 4.5. GOOD STANDING CERTIFICATES. A good standing certificate for
Borrower and each Guarantor of Payment issued no more than twenty (20) days
prior to the Closing Date by the Secretary of State in the state(s) where
Borrower or such Guarantor of Payment is incorporated shall be delivered to
each Bank.
SECTION 4.6. CLOSING, AGENT, SYNDICATION AND LEGAL FEES. A closing fee of
five (5) basis points times the amount of the Total Commitment Amount shall be
paid on the Closing Date to Agent for the ratable benefit of each Bank, based
upon each Bank's Commitment Percentage. In addition, Borrower shall pay to
Agent, for its sole benefit, the agent fee and the syndication fee described in
Section 2.5 hereof. Borrower shall also pay all legal fees and expenses of
Agent in connection with the preparation and negotiation of the Loan Documents.
SECTION 4.7. LIEN SEARCHES. With respect to the property owned or leased
by Borrower, Borrower shall cause to be delivered to Agent the results of
Uniform Commercial Code lien searches, satisfactory to Agent and the Banks.
SECTION 4.8. INSURANCE CERTIFICATE. Borrower shall deliver to Agent
evidence of insurance on XXXXX 27 form, and otherwise satisfactory to Agent and
the Banks, of adequate personal property and liability insurance of Borrower.
SECTION 4.9. NO MATERIAL ADVERSE CHANGE. No material adverse change, in
the opinion of Agent and the Majority Banks, shall have occurred in the
financial condition, operations or prospects of the Companies on or prior to
the Closing Date.
SECTION 4.10. CLOSING CERTIFICATE. On the Closing Date, Borrower shall
deliver to Agent, for the benefit of the Banks, a certificate signed by a
Financial Officer of Borrower certifying as to the accuracy of the warranties
and representations, compliance with the covenants and absence of any Unmatured
Event of Default or Event of Default under this
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Agreement.
SECTION 4.11. NO MATERIAL LITIGATION. No Company shall be the subject of
any material litigation, in the opinion of Agent and the Majority Banks, as of
the Closing Date.
SECTION 4.12. MISCELLANEOUS. Such other items and conditions as may be
reasonably required by Agent or the Banks on or prior to the Closing Date shall
be satisfied.
ARTICLE V. COVENANTS
Borrower agrees that so long as the Commitment remains in effect and
thereafter until the principal of and interest on all Notes and all other
payments and fees due hereunder shall have been paid in full, Borrower shall
perform and observe, and shall cause each Subsidiary to perform and observe,
each of the following provisions:
SECTION 5.1. INSURANCE. Each Company shall (a) maintain insurance to such
extent and against such hazards and liabilities as is commonly maintained by
companies similarly situated (or self-insurance in accordance with prudent
insurance practice); and (b) within thirty (30) days of any Bank's reasonable
written request, furnish to such Bank such information about any Company's
insurance as that Bank may from time to time reasonably request, which
information shall be prepared in form and detail reasonably satisfactory to
such Bank and certified by a Financial Officer of such Company or Borrower.
SECTION 5.2. MONEY OBLIGATIONS. Each Company shall pay in full (a) prior
in each case to the date when penalties would attach, all taxes, assessments
and governmental charges and levies (except only those so long as and to the
extent that the same shall be contested in good faith by appropriate and timely
proceedings and for which adequate reserves have been established in accordance
with GAAP) for which it may be or become liable or to which any or all of its
properties may be or become subject; (b) all of its wage obligations to its
employees in compliance with the Fair Labor Standards Act (29 U.S.C. 206-207)
or any comparable provisions; and (c) all of its other obligations calling for
the payment of money (except only those so long as and to the extent that the
same shall be contested in good faith and for which adequate reserves have been
established in accordance with GAAP) before such payment becomes overdue,
which, for the items in subsection (c) only, if unpaid would have a material
adverse effect on the business, operations or condition (financial or
otherwise) of the Companies on a Consolidated basis.
SECTION 5.3. FINANCIAL STATEMENTS. Borrower shall furnish to each Bank:
(a) within forty-five (45) days after the end of each of the first three
quarter-annual periods of each fiscal year of Borrower, balance sheets of
Borrower and its Subsidiaries as of the end of such period and statements of
income (loss), shareholders equity and cash flow for the quarter and fiscal
year to date periods, all prepared on a Consolidated basis, in accordance with
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GAAP (except for footnotes and subject to normal year-end adjustments), and in
form and detail reasonably satisfactory to the Banks and certified by a
Financial Officer of Borrower;
(b) within ninety (90) days after the end of each fiscal year of Borrower,
an annual audit report of Borrower and its Subsidiaries for that year prepared
on a Consolidated and consolidating basis, in accordance with GAAP, and in form
and detail reasonably satisfactory to the Banks or as set forth in Borrower's
Annual Report to Stockholders and certified by Xxxxxx Xxxxxxxx LLP or another
independent public accountant reasonably satisfactory to the Banks, which
report shall include balance sheets and statements of income (loss),
stockholder's equity and cash-flow for that period;
(c) concurrently with the delivery of the financial statements in (a) and
(b) above, a Compliance Certificate in the form of Exhibit D hereto, signed by
the Chief Executive Officer, President or Chief Financial Officer of Borrower;
(d) with the delivery of the quarterly and annual financial statements
described in (a) and (b) above, a copy of any management report;
(e) within sixty (60) days after the end of each fiscal year of Borrower,
annual pro-forma projections of Borrower and its Subsidiaries for the then
current fiscal year, to be in form reasonably acceptable to Agent;
(f) as soon as available, copies of all notices, reports, definitive proxy
or other statements and other documents sent by Borrower to its shareholders,
to the holders of any of its debentures or bonds or the trustee of any
indenture securing the same or pursuant to which they are issued, or sent by
Borrower (in final form) to any securities exchange or over the counter
authority or system, or to the Securities and Exchange Commission or any
similar federal agency having regulatory jurisdiction over the issuance of
Borrower's securities; and
(g) within ten (10) days of any Bank's written request, such other
information about the financial condition, properties and operations of any
Company as such Bank may from time to time reasonably request, which
information shall be submitted in form and detail reasonably satisfactory to
such Bank and certified by a Financial Officer of the Company or Companies in
question.
SECTION 5.4. FINANCIAL RECORDS. Each Company shall at all times maintain
true and complete records and books of account including, without limiting the
generality of the foregoing, appropriate reserves for possible losses and
liabilities, all in accordance with GAAP, and at all reasonable times (during
normal business hours and upon prior written reasonable notice to the Company
in question and Borrower) permit the Banks to examine that Company's books and
records and to make excerpts therefrom and transcripts thereof.
SECTION 5.5. FRANCHISES. Each Company shall preserve and maintain at all
times its corporate or other existence, as the case may be, and its rights and
franchises, the failure to maintain any of which would have a material adverse
effect on the business, operations or
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condition (financial or otherwise) of the Companies on a Consolidated
basis; provided, however, that this Section 5.5 shall not prevent any
dissolution or liquidation of any Subsidiary or any merger or consolidation
otherwise permitted by this Agreement.
SECTION 5.6. ERISA COMPLIANCE. No Company shall incur any material
accumulated funding deficiency within the meaning of ERISA, or any material
liability to the PBGC, established thereunder in connection with any ERISA
Plan. Borrower shall furnish to the Banks (a) as soon as possible and in any
event within sixty (60) days after any Company knows that any Reportable Event,
as defined under ERISA Section 4043, with respect to any ERISA Plan has
occurred, a statement of the Financial Officer of such Company or Borrower,
setting forth details as to such Reportable Event and the action which such
Company proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC if a copy of such notice is
available to such Company, and (b) promptly after receipt thereof a copy of any
notice dealing with plan disqualification or a monetary obligation such
Company, or any member of the Controlled Group may receive from the PBGC or the
Internal Revenue Service with respect to any ERISA Plan administered by such
Company; provided, that this latter clause shall not apply to notices of
general application promulgated by the PBGC or the Internal Revenue Service.
Borrower shall promptly notify the Banks of any material taxes assessed,
proposed to be assessed or which Borrower has reason to believe may be assessed
against a Company by the Internal Revenue Service with respect to any ERISA
Plan. As used in this Section "material" means the measure of a matter of
significance which shall be determined as being an amount exceeding Ten Million
Dollars ($10,000,000). As soon as practicable, and in any event within twenty
(20) days, after any Company becomes aware that an ERISA Event has occurred,
such Company shall provide Bank with notice of such ERISA Event with a
certificate by a Financial Officer of such Company or Borrower setting forth
the details of the event and the action such Company or another Controlled
Group member proposes to take with respect thereto. Borrower shall, at the
reasonable request of Agent or any Bank, deliver or caused to be delivered to
Agent or such Bank, as the case may be, true and correct copies of any
documents relating to the ERISA Plan of any Company.
SECTION 5.7. FINANCIAL COVENANTS.
(a) NET WORTH. Borrower shall not suffer or permit its Consolidated Net
Worth at any time, based upon Borrower's financial statements for the most
recent fiscal quarter, to fall below the minimum amount required, which minimum
amount required shall be One Hundred Sixty Million Dollars ($160,000,000) on
the Closing Date through June 29, 1998, with such minimum amount required to be
positively increased by the Increase Amount on June 30, and by an additional
Increase Amount on each successive June 30 thereafter. As used herein, the
term "Increase Amount" shall mean an amount equal to fifty percent (50%) of
Borrower's Consolidated Net Earnings (with no deduction for losses) for the
fiscal year then ended.
(b) FUNDED INDEBTEDNESS TO CAPITALIZATION. Borrower shall not suffer or
permit at any time, on a Consolidated basis, the ratio of (i) Total Funded
Indebtedness to (ii) Total Capitalization to exceed .50 to 1.00, based upon
Borrower's financial statements for the
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most recently completed fiscal quarter.
(c) INTEREST COVERAGE. If at anytime Borrower suffers or permits the
Total Funded Indebtedness to Capitalization ratio described in Section 5.7 (b)
above to exceed .45 to 1.00, Borrower shall not suffer or permit at any time
its ratio of Consolidated EBIT to Consolidated Interest Expense to be less than
2.00 to 1.00, based upon Borrower's financial statements for the most recent
calendar quarter and the three (3) previous calendar quarters (on a rolling
four (4) quarter basis).
SECTION 5.8. LIENS. No Company shall create, assume or suffer to exist
any Lien upon any of its property or assets whether now owned or hereafter
acquired; provided that this Section shall not apply to the following:
(a) Liens for taxes not yet due or which are being actively contested in
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
(b) other statutory Liens incidental to the conduct of its business or the
ownership of its property and assets which (i) were not incurred in connection
with the borrowing of money or the obtaining of advances or credit, and (ii)
which do not in the aggregate materially detract from the value of its property
or assets or materially impair the use thereof in the operation of its
business;
(c) Liens on property or assets of a Company to secure obligations of such
Company to another Company;
(d) purchase money Liens on fixed assets securing existing or future
Indebtedness so long as the aggregate unpaid principal balance of all such
Indebtedness does not exceed Twenty-Five Million Dollars ($25,000,000) (or the
Dollar equivalent thereof) at any one time outstanding;
(e) Liens on or in any Receivables of a Subsidiary that secure or purport
to secure or otherwise relate to any Receivables Obligations (as that term is
defined in the definition of Indebtedness) of that Subsidiary, but only to the
extent those Receivables Obligations do not exceed the Receivables Obligations
Cap;
(f) zoning or deed restrictions, public easements, minor title
irregularities and similar matters having no adverse effect as a practical
matter on the ownership or use of any of the property in question;
(g) any Liens securing or given in lieu of surety, stay, appeal or
performance bonds, or securing performance of contracts or bids (other than
contracts for the payment of money borrowed), or deposits required by law or as
a condition to the transaction of business or the exercise of any right,
privilege or license;
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(h) any Lien disclosed in the financial statements delivered in accordance
with Section 6.12 or in Schedule 5.8, or any license or royalty agreement, or
any lease of electronic data processing equipment;
(i) any Lien, mortgage or security interest on any fixed asset of any
corporation or other entity acquired by any Company after the date of this
Agreement which Lien, mortgage or security interest was in existence at the
time of the acquisition of such fixed asset (and did not arise out of the
acquisition thereof); provided, however, that the Indebtedness secured by all
such Liens, mortgages or security interest shall not exceed the aggregate of
Ten Million Dollars ($10,000,000) (or the equivalent thereof if not
denominated in Dollars) at any one time outstanding; and
(j) any Liens that are not otherwise permitted hereunder so long as the
aggregate of the Indebtedness secured thereby does not exceed an amount equal
to ten percent (10%) of Stockholders' Equity.
SECTION 5.9. REGULATIONS U and X. No Company shall take any action that
would result in any non-compliance of the Loans with Regulations U and X of the
Board of Governors of the Federal Reserve System.
SECTION 5.10. INVESTMENTS AND LOANS. No Company shall (a) make or hold
any investment in any stocks, bonds or securities of any kind, (b) be or become
a party to any joint venture or other partnership without the prior written
consent of Agent and the Majority Banks (which consent will not be unreasonably
withheld), (c) make or keep outstanding any advance or loan to any Person, or
(d) be or become a Guarantor of any kind, except guarantees securing only
indebtedness of the Companies incurred or permitted pursuant to this Agreement;
provided, that this Section shall not apply to (i) any endorsement of a check
or other medium of payment for deposit or collection through normal banking
channels or similar transaction in the normal course of business, (ii) any
investment in direct obligations of the United States of America or any agency
or instrumentality thereof or in certificates of deposit or banker's
acceptances issued by a member bank of the Federal Reserve System or by a
commercial bank located in any other jurisdiction that permits the cash
evidenced by such certificates of deposit or bankers' acceptances to be freely
remitted to the United States of America, (iii) any investment in commercial
paper or securities which at the time of such investment is assigned the rating
of "P-2" or better or "A-2" or better in accordance with the rating systems
employed by Xxxxx'x Investor Service, Inc. or Standard and Poor's Corporation,
respectively; (iv) the holding of Subsidiaries, joint venture interests or
partnership interests listed on Schedule 6.1 attached hereto and made a part
hereof; (v) any investment permitted pursuant to Section 5.12 below; (vi)
foreign exchange contracts, currency swap agreements or similar agreements or
arrangements designed to protect a Company against fluctuations in currency
values and interest swap obligations, including interest rate swaps, caps,
floors, collars and similar agreements, entered into in the ordinary course of
a Company's business; (vii) investments in securities of trade creditors or
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customers received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (viii) investments made by a Company as a result of consideration
received in connection with the sale of assets or stock permitted by this
Agreement; (ix) investments by Borrower in XXXXX in an amount (including such
investments existing on the Closing Date and any such investments made
subsequent to the Closing Date) not to exceed Fifteen Million Dollars
($15,000,000) (without giving effect to the net income of XXXXX subsequent to
the Closing Date); (x) investments in a Subsidiary of Borrower or in a
corporation or other entity which becomes a Subsidiary of Borrower as a result
of such investment, or that will merge or consolidate with Borrower or a
Subsidiary of Borrower, or an investment in Borrower by a Subsidiary of
Borrower; (xi) loans and advances to employees made in the ordinary course of
business and consistent with past practice or to a director or officer of a
Company; provided, however, that the aggregate of all loans and advances to all
directors and officers shall not exceed Five Hundred Thousand Dollars
($500,000) (or the equivalent thereof in any other currency) at any one time
outstanding; and (xii) other matters not otherwise permitted in (i) through
(xi) above in an aggregate amount not exceeding ten percent (10%) of
Stockholders' Equity.
SECTION 5.11. MERGER AND SALE OF ASSETS. No Company shall merge or
consolidate with any other corporation or sell, lease or transfer or otherwise
dispose of all or a substantial part of its assets to any person or entity,
except that if no Unmatured Event of Default or Event of Default shall then
exist or immediately thereafter shall begin to exist:
(a) any Subsidiary may merge with (i) Borrower (provided that Borrower
shall be the continuing or surviving corporation), (ii) any other Wholly-Owned
Subsidiary (other than a Guarantor of Payment), or (iii) any one or more
Guarantors of Payment, provided that with respect to this subsection (iii)
either (A) the continuing or surviving corporation shall be a Wholly-Owned
Subsidiary which is a Guarantor of Payment, or (B) after giving effect to any
merger pursuant to this sub-clause (iii), Borrower and/or one or more
Wholly-Owned Subsidiaries which are Guarantors of Payment shall own not less
than the same percentage of the outstanding Voting Stock of the continuing or
surviving corporation as Borrower and/or one or more Wholly-Owned Subsidiaries
(which are Guarantors of Payment) owned of the merged Subsidiary immediately
prior to such merger,
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of any
of its assets to (i) Borrower, (ii) any other Wholly-Owned Subsidiary (other
than a Guarantor of Payment), (iii) any Wholly-Owned Subsidiary which is a
Guarantor of Payment, or (iv) any Guarantor of Payment, of which Borrower
and/or one or more Wholly-Owned Subsidiaries, which are Guarantors of Payment,
shall own not less than the same percentage of Voting Stock as Borrower and/or
one or more Wholly-Owned Subsidiaries (which are Guarantors of Payment) then
own of the Subsidiary making such sale, lease, transfer or other disposition,
or
(c) Borrower may sell, transfer or otherwise dispose of all or part of its
Receivables to any Subsidiary, and any Subsidiary may sell, transfer or
otherwise dispose of Receivables to any Person, whether such sale is with or
without recourse, if the obligations of such Subsidiary to
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the purchaser thereof in respect of such sale, transfer or disposition
are Receivables Obligations (as that term is defined in the definition of
Indebtedness) of that Subsidiary, but only to the extent those Receivables
Obligations do not exceed the Receivables Obligations Cap.
SECTION 5.12. ACQUISITIONS. No Company shall acquire or permit any
Subsidiary to acquire the assets or stock of any other Person for aggregate
consideration in excess of Two Million Dollars ($2,000,000); provided, however,
that Borrower or any Guarantor of Payment may acquire the stock or assets of
another Person for aggregate consideration in excess of Two Million Dollars
($2,000,000) so long as: (a) Borrower or such Guarantor of Payment, as the
case may be, is the surviving entity; (b) the business to be acquired is
similar to the lines of business of the Companies or a related line of business
or a business using related technology; (c) the Companies are in full
compliance with the Loan Documents both prior to and subsequent to the
transaction; and (d) Borrower shall provide to Agent and the Banks, at least
twenty (20) days prior to such acquisition, historical financial statements of
the target entity and a pro forma financial statement of the Companies
accompanied by a certificate of a Financial Officer of Borrower showing pro
forma compliance with Section 5.7 hereof, both before and after the proposed
acquisition.
SECTION 5.13. NOTICE. Borrower shall cause a Financial Officer of
Borrower to promptly notify Agent and the Banks whenever any Unmatured Event of
Default or Event of Default may occur hereunder.
SECTION 5.14. ENVIRONMENTAL COMPLIANCE. Each Company shall comply in all
respects with any and all Environmental Laws, the violation of which would have
a material adverse effect on the business, operations or condition (financial
or otherwise) of the Companies on a Consolidated basis, including, without
limitation, all Environmental Laws in jurisdictions in which any Company owns
or operates a facility or site, arranges for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts for transport any hazardous
substances, solid waste or other wastes or holds any interest in real property
or otherwise. Borrower shall furnish to the Banks promptly after receipt
thereof a copy of any notice any Company may receive from any governmental
authority, private person or entity or otherwise that any material litigation
or proceeding pertaining to any environmental, health or safety matter has been
filed or is threatened against such Company, any real property in which such
Company holds any interest or any past or present operation of such Company.
No Company shall allow the release or disposal of hazardous waste, solid waste
or other wastes on, under or to any real property in which any Company holds
any interest or performs any of its operations, in violation of any
Environmental Law, the violation of which would have a material adverse effect
on the business, operations or condition (financial or otherwise) of the
Companies on a Consolidated basis. As used in this Section, "litigation or
proceeding" means any demand, claim, notice, suit, suit in equity action,
administrative action, investigation or inquiry whether brought by any
governmental authority, private person or entity or otherwise. Borrower shall
defend, indemnify and hold Agent and the Banks harmless against all costs,
expenses, claims, damages, penalties and liabilities of every kind or nature
whatsoever (including reasonable attorneys fees) arising out of or resulting
from the noncompliance of any Company with any
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Environmental Law.
SECTION 5.15. SUBSIDIARY GUARANTIES. Each domestic Significant Subsidiary
or other affiliate of a Company, created, acquired or held subsequent to the
Closing Date, shall immediately execute and deliver to Agent a Guaranty of
Payment of all of the Debt, such agreement to be substantially in the form of
Exhibit E attached hereto.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Subject only to such exceptions, if any, as may be fully disclosed in an
officer's certificate furnished by Borrower to each Bank prior to the execution
and delivery hereof, Borrower represents and warrants that the statements set
forth in this Article VI are true, correct and complete.
SECTION 6.1. CORPORATE EXISTENCE; SUBSIDIARIES; FOREIGN
QUALIFICATION. Each Company is a corporation duly organized, validly existing,
and in good standing under the laws of its state of incorporation and is duly
qualified and authorized to do business and is in good standing as a foreign
corporation in the jurisdictions where the character of its property or its
business activities makes such qualification necessary, except where the
failure to so qualify will not cause or result in a material adverse effect to
the business, operations or condition (financial or otherwise) of such Company.
Schedule 6.1 sets forth each Subsidiary of Borrower, its state of
incorporation and the percentage of the capital stock owned by Borrower or
another Subsidiary, as the case may be.
SECTION 6.2. CORPORATE AUTHORITY. Borrower has the corporate right and
power and is duly authorized and empowered to enter into, execute, deliver the
Loan Documents to which it is a party and to perform and observe the provisions
of the Loan Documents. The Loan Documents to which Borrower is a party have
been duly authorized and approved by Borrower's Board of Directors and are the
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, receivership, moratorium
and similar laws affecting creditors' rights generally and general principles
of equity (whether such enforcement is sought in equity or at law). The
execution, delivery and performance of the Loan Documents will not conflict
with nor result in any breach in any of the provisions of, or constitute a
default under, or result in the creation of any Lien (other than Liens
permitted under Section 5.8 of this Agreement) upon any assets or property of
Borrower under the provisions of, Borrower's Articles of Incorporation or
Regulations or any agreement to which Borrower is a party by which its assets
may be bound.
SECTION 6.3. COMPLIANCE WITH LAWS. Each Company:
(a) holds permits, certificates, licenses, orders, registrations,
franchises, authorizations, and other approvals from federal, state, local, and
foreign governmental and
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regulatory bodies necessary for the conduct of its business and is in
compliance with all applicable laws relating thereto, the violation of which
would have a material adverse effect on the business, operations or condition
(financial or otherwise) of the Companies on a Consolidated basis;
(b) is in compliance with all federal, state, local, or foreign applicable
statutes, rules, regulations, and orders , the violation of which would have a
material adverse effect on the business, operations or condition (financial or
otherwise) of the Companies on a Consolidated basis, including, without
limitation, those relating to environmental protection, occupational safety and
health, and equal employment practices; and
(c) is not in violation of or in default under any agreement to which it
is a party or by which its assets are subject or bound, the violation or
default of which would have a material adverse effect on the business,
operations or condition (financial or otherwise) of the Companies on a
Consolidated basis.
SECTION 6.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. Except as
disclosed on Schedule 6.4, hereto, and except for any of the following that
individually or in the aggregate would not have a material adverse effect on
the business, operations or condition (financial or otherwise) of the Companies
on a Consolidated basis, there are (a) no lawsuits, actions, investigations, or
other proceedings pending or threatened against Borrower or any of its
Subsidiaries, or in respect of which Borrower or any of its Subsidiaries may
have any liability, in any court or before any governmental authority,
arbitration board, or other tribunal, (b) no orders, writs, injunctions,
judgments, or decrees of any court or government agency or instrumentality to
which any Company is a party or by which the property or assets of any Company
are bound and (c) no grievances, disputes, or controversies outstanding with
any union or other organization of the employees of any Company, or threats of
work stoppage, strike, or pending demands for collective bargaining.
SECTION 6.5. TITLE TO ASSETS; CHIEF EXECUTIVE OFFICE. Each Company has
good title to and ownership of all property it purports to own, which property
is free and clear of all Liens, except those permitted under Section 5.8
hereto. The chief executive office of Borrower is located at 0000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000.
SECTION 6.6. LIENS AND SECURITY INTERESTS. Except for Liens permitted
pursuant to Section 5.8 hereof, (a) there is no financing statement outstanding
covering any personal property of any Company; (b) there is no mortgage
outstanding covering any real property of any Company; and (c) no real or
personal property of any Company is subject to any security interest or Lien of
any kind.
SECTION 6.7. TAX RETURNS. Except as set forth on Schedule 6.7, all
federal, state and local tax returns and other reports required by law to be
filed in respect of the income, business, properties and employees of Borrower
have been filed and all taxes, assessments, fees and other governmental charges
which are due and payable have been paid, except as otherwise
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permitted herein. Except as set forth on Schedule 6.7, the provision for taxes
on the books of Borrower is adequate for all years not closed by applicable
statutes and for the current fiscal year.
SECTION 6.8. ENVIRONMENTAL LAWS. Each Company is in compliance with any
and all Environmental Laws , the violation of which would have a material
adverse effect on the business, operations or condition (financial or
otherwise) of the Companies on a Consolidated basis, including, without
limitation, all Environmental Laws in all jurisdictions in which any Company
owns or operates, or has owned or operated, a facility or site, arranges or has
arranged for disposal or treatment of hazardous substances, solid waste or
other wastes, accepts or has accepted for transport any hazardous substances,
solid waste or other wastes or holds or has held any interest in real property
or otherwise. Other than as disclosed on Schedule 6.4, no litigation or
proceeding arising under, relating to or in connection with any Environmental
Law is pending or, to the best of their knowledge, threatened against any
Company, any real property in which any Company holds or has held an interest
or any past or present operation of any Company which would have a material
adverse effect on the business, operations or condition (financial or
otherwise) of the Companies on a Consolidated basis. No release, threatened
release or disposal of hazardous waste, solid waste or other wastes is
occurring, or has occurred (other than those that are currently being cleaned
up in accordance with Environmental Laws), on, under or to any real property in
which any Company holds any interest or performs any of its operations, in
violation of any Environmental Law, the violation of which would have a
material adverse effect on the business, operations or condition (financial or
otherwise) of the Companies on a Consolidated basis. As used in this Section,
"litigation or proceeding" means any demand, claim, notice, suit, suit in
equity, action, administrative action, investigation or inquiry whether
brought by any governmental authority, private person or entity or otherwise.
SECTION 6.9. EMPLOYEE BENEFITS PLANS. No ERISA Event has occurred or is
expected to occur with respect to an ERISA Plan. Full payment has been made of
all material amounts which a Controlled Group member is required, under
applicable law or under the governing documents, to have been paid as a
contribution to or a benefit under each ERISA Plan. The liability of each
Controlled Group member with respect to each ERISA Plan, other than any Pension
Plan, has been, in all material respects, fully funded based upon reasonable
and proper actuarial assumptions, fully insured or reserved for on its
financial statements to the extent required by GAAP. No changes have occurred
or are expected to occur that would cause an increase in the cost of providing
benefits under the ERISA Plan by an aggregate amount that is material. With
respect to each Pension Plan that is intended to be qualified under Code
Section 401(a): (a) the Pension Plan and any associated trust operationally
comply with the applicable requirements of Code Section 401(a); (b) the Pension
Plan has been amended to comply with all such requirements as currently in
effect, other than those requirements for which a retroactive amendment can be
made within the "remedial amendment period" available under Code Section 401(b)
(as extended under Treasury Regulations and other Treasury pronouncements upon
which taxpayers may rely); (c) the Pension Plan has received a favorable
determination letter from the Internal Revenue Service stating that the Pension
Plan qualifies under Code Section 401(a), and, if applicable, that any cash or
deferred arrangement under the Pension Plan qualifies under Code Section
401(k), unless the Pension Plan was first adopted at a time for which the
above-described "remedial amendment period" has not yet expired; (d) the
Pension Plan currently satisfies the
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requirements of Code Section 410(b), without regard to any retroactive
amendment that may be made within the above-described "remedial amendment
period"; and (e) no contribution made to the Pension Plan is subject to an
excise tax under Code Section 4972. As used in this Section, "material" means
the measure of a matter of significance which shall be determined as being an
amount exceeding Ten Million Dollars ($10,000,000).
SECTION 6.10. CONSENTS OR APPROVALS. No consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority or any other Person is required to be obtained or
completed by Borrower in connection with the execution, delivery or performance
of any of the Loan Documents, which has not already been obtained or completed.
SECTION 6.11. SOLVENCY. Borrower has received consideration which is the
reasonable equivalent value of the obligations and liabilities that Borrower
has incurred to the Banks. Borrower is not insolvent as defined in any
applicable state or federal statute, nor will Borrower be rendered insolvent by
the execution and delivery of the Loan Documents to Agent and the Banks.
Borrower is not engaged or about to engage in any business or transaction for
which the assets retained by it will be an unreasonably small capital, taking
into consideration the obligations to Agent and the Banks incurred hereunder.
Borrower does not intend to, nor does it believe that it will, incur debts
beyond its ability to pay them as they mature.
SECTION 6.12. FINANCIAL STATEMENTS. The June 30, 1997 Consolidated
audited financial statements of Borrower, furnished to Agent and the Banks,
have been prepared in accordance with GAAP, and fairly present in all material
respects the Companies' financial condition as of the date of such financial
statements and the results of their operations for the interim period then
ending. Since June 30, 1997, there has been no material adverse change in any
Company's financial condition, properties or business nor, except as disclosed
in writing to Agent or in accordance with GAAP, any change in any Company's
accounting procedures.
SECTION 6.13. REGULATIONS. Borrower is not engaged principally or as one
of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States of America). Neither the granting of any Loans (or any conversion
thereof) nor the use of the proceeds of the Loans will violate, or be
inconsistent with, the provisions of Regulation U or X of said Board of
Governors.
SECTION 6.14. INTELLECTUAL PROPERTY. Each Company owns, possesses, or has
the right to use all the patents, patent applications, trademarks, service
marks, copyrights, licenses, and rights with respect to the foregoing necessary
and material for the conduct of its business without any known conflict with
the rights of others.
SECTION 6.15. INSURANCE. Each Company maintains with financially sound
and reputable insurers insurance with coverage and limits as required by law
and as is customary with persons engaged in the same businesses as the
Companies.
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SECTION 6.16. INVESTMENT COMPANY ACT. Borrower is not an "investment
company" or an "affiliated Person" of, or "promotor" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (15 U.S.C. Section 80(a)(1), et seq.).
SECTION 6.17. ACCURATE AND COMPLETE STATEMENTS. Neither the Loan
Documents nor any written statement made by any Company in connection with any
of the Loan Documents contains any untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein or in the
Loan Documents not misleading.
SECTION 6.18. DEFAULTS. No Unmatured Event of Default or Event of Default
exists hereunder, nor will any begin to exist immediately after the execution
and delivery hereof.
ARTICLE VII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
SECTION 7.1. PAYMENTS. If the principal of or interest on any Note or any
commitment or other fee shall not be paid in full punctually when due and
payable, or within five (5) days thereafter.
SECTION 7.2. SPECIAL COVENANTS. If any Company or any Obligor shall fail
or omit to perform and observe Sections 5.7 or 5.8.
SECTION 7.3. OTHER COVENANTS. If any Company or any Obligor shall fail or
omit to perform and observe any agreement or other provision (other than those
referred to in Sections 7.1 or 7.2 hereof) contained or referred to in this
Agreement or any Related Writing that is on such Company's or Obligor's part,
as the case may be, to be complied with, and that Unmatured Event of Default
shall not have been fully corrected within thirty (30) calendar days after the
giving of written notice thereof to Borrower by Agent or any Bank that the
specified Unmatured Event of Default is to be remedied.
SECTION 7.4. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material information furnished by any Company or any
Obligor to the Banks or any thereof or any other holder of any Note, shall be
false or erroneous in any material respect.
SECTION 7.5. CROSS DEFAULT. If any Company or any Obligor shall default
in the payment of principal or interest due and owing upon any other obligation
for borrowed money beyond any period of grace provided with respect thereto or
in the performance or observance of any other agreement, term or condition
contained in any agreement under which such obligation is created, if the
effect of such default is to accelerate the maturity of such indebtedness or to
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permit the holder thereof to cause such indebtedness to become due prior to its
stated maturity; provided, however, that this Section 7.5 shall not apply if
and to the extent that the aggregate balance of all such obligations in default
as aforesaid does not exceed Ten Million Dollars ($10,000,000) at any time
outstanding (or the Dollar equivalent thereof as determined on the date of such
default) except that this proviso shall not apply to any default in the payment
of Indebtedness evidenced by the Senior Notes or any Receivables Obligations as
the same may be outstanding from time to time.
SECTION 7.6. ERISA DEFAULT. The Majority Banks determine that one or more
ERISA Events has occurred.
SECTION 7.7. CHANGE OF CONTROL. If any "person" or "group" shall become
the "beneficial owner" (as those terms are respectively used in the Securities
and Exchange Act of 1934, as amended, and the rules and regulations thereunder)
(other than individuals owning four percent (4%) or more of the issued and
outstanding capital stock of Borrower on the Closing Date and members of their
families, including siblings, spouse, children and grandchildren of any of them
or any trust whose principal beneficiary is such individual, or one or more
members of the family of any of them) of more than fifty percent (50%) of the
outstanding voting stock of Borrower or shall otherwise acquire the power
(whether by contract, by proxy or otherwise) to elect a majority of Borrower's
board of directors.
SECTION 7.8. JUDGMENTS. If one or more judgments for the payment of
money in an aggregate amount in excess of Five Million Dollars ($5,000,000)
(or the equivalent thereof if not denominated in Dollars) (unless such judgment
(i) shall have been reserved by the applicable Company on the date hereof or
(ii) shall be insured and the insurance carrier shall have acknowledged in
writing liability in respect of the full amount thereof or shall have been
ordered by a court of competent jurisdiction to pay such judgment) shall be
rendered and remain undischarged against Borrower or any of its Subsidiaries or
any combination thereof and as to which either (x) execution shall not be
effectively stayed within a period of thirty (30) consecutive days or (y) any
action shall be legally taken by a judgment creditor to levy upon assets or
properties of Borrower or any of its Subsidiaries to enforce any such judgment.
SECTION 7.9. SOLVENCY. If any Company or any Obligor shall (a)
discontinue business, or (b) generally not pay its debts as such debts become
due, or (c) make a general assignment for the benefit of creditors, or (d)
apply for or consent to the appointment of a receiver, a custodian, a trustee,
an interim trustee or liquidator of all or a substantial part of its assets, or
(e) be adjudicated a debtor or have entered against it an order for relief
under Title 11 of the United States Code, as the same may be amended from time
to time, or (f) file a voluntary petition in bankruptcy or file a petition or
an answer seeking reorganization or an arrangement with creditors or seeking to
take advantage of any other law (whether federal or state) relating to relief
of debtors, or admit (by answer, by default or otherwise) the material
allegations of a petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal or state) relating to relief of
debtors, or (g) suffer or permit to continue unstayed and in effect for ninety
(90) consecutive days any judgment, decree or order entered by a court of
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competent jurisdiction, which approves a petition seeking its reorganization or
appoints a receiver, custodian, trustee, interim trustee or liquidator of all
or a substantial part of its assets, or (h) take, or omit to take, any action
in order thereby to effect any of the foregoing.
ARTICLE VIII. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or elsewhere,
SECTION 8.1. OPTIONAL DEFAULTS. If any Event of Default referred to in
Section 7.1, 7.2., 7.3, 7.4, 7.5, 7.6, 7.7 or 7.8 hereof shall occur and be
Continuing, the Majority Banks shall have the right in their discretion, by
directing Agent, on behalf of the Banks, to give written notice to Borrower,
to:
(a) terminate the Commitment and the credits hereby established, if not
theretofore terminated, and, immediately upon such election, the obligations of
Banks, and each thereof, to make any further Loan or Loans and the obligation
of Agent (or any Fronting Bank) to issue any Letter of Credit hereunder
immediately shall be terminated, and/or
(b) accelerate the maturity of all of the Debt (if it be not already due
and payable), whereupon all of the Debt shall become and thereafter be
immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby waived
by Borrower.
SECTION 8.2. AUTOMATIC DEFAULTS. If any Event of Default referred to in
Section 7.9 hereof shall occur:
(a) all of the Commitment and the credits hereby established shall
automatically and immediately terminate, if not theretofore terminated, and no
Bank thereafter shall be under any obligation to grant any further Loan or
Loans hereunder, nor shall Agent (or any Fronting Bank) be obligated to issue
any Letter of Credit hereunder, and
(b) the principal of and interest on any Notes then outstanding, and all
of the Debt to the Banks, shall thereupon become and thereafter be immediately
due and payable in full (if it be not already due and payable), all without any
presentment, demand or notice of any kind, which are hereby waived by Borrower.
SECTION 8.3. LETTERS OF CREDIT. If the maturity of the Notes is
accelerated pursuant to Sections 8.1 or 8.2 hereof, Borrower shall immediately
deposit with Agent, as security for Borrower's and any Guarantor of Payment's
obligations to reimburse Agent and the Banks for any then outstanding Letters
of Credit, cash equal to the sum of the aggregate undrawn balance of any then
outstanding Letters of Credit. Agent and the Banks are hereby authorized, at
their option, to deduct any and all such amounts from any deposit balances then
owing by any Bank to or for the credit or account of any Company, as security
for Borrower's and any
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Guarantor of Payment's obligations to reimburse Agent and the Banks for any
then outstanding Letters of Credit.
SECTION 8.4. OFFSETS. If there shall occur or exist any Event of Default
referred to in Section 7.9 hereof or if the maturity of the Notes is
accelerated pursuant to Section 8.1 or 8.2 hereof, each Bank shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Debt then owing by Borrower to that Bank (including,
without limitation, any participation purchased or to be purchased pursuant to
Section 8.5 hereof), whether or not the same shall then have matured, any and
all deposit balances and all other indebtedness then held or owing by that Bank
to or for the credit or account of Borrower, all without notice to or demand
upon Borrower or any other person, all such notices and demands being hereby
expressly waived by Borrower.
SECTION 8.5. EQUALIZATION PROVISION. Each Bank agrees with the other
Banks that if it, at any time, shall obtain any Advantage over the other Banks
or any thereof in respect of the Debt (except as to Swing Loans as set forth in
Section 2.1C and except under Article III hereof), it shall purchase from the
other Banks, for cash and at par, such additional participation in the Debt as
shall be necessary to nullify the Advantage. If any such Advantage resulting in
the purchase of an additional participation as aforesaid shall be recovered in
whole or in part from the Bank receiving the Advantage, each such purchase
shall be rescinded, and the purchase price restored (but without interest
unless the Bank receiving the Advantage is required to pay interest on the
Advantage to the person recovering the Advantage from such Bank) ratably to the
extent of the recovery. Each Bank further agrees with the other Banks that if
it at any time shall receive any payment for or on behalf of Borrower on any
indebtedness owing by Borrower to that Bank by reason of offset of any deposit
or other indebtedness, it will apply such payment first to any and all
indebtedness owing by Borrower to that Bank pursuant to this Agreement
(including, without limitation, any participation purchased or to be purchased
pursuant to this Section or any other Section of this Agreement). Borrower
agrees that any Bank so purchasing a participation from the other Banks or any
thereof pursuant to this Section may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank was a direct creditor of Borrower in the amount of such
participation.
ARTICLE IX. THE AGENT
The Banks authorize National City Bank and National City Bank hereby
agrees to act as agent for the Banks in respect of this Agreement upon the
terms and conditions set forth elsewhere in this Agreement, and upon the
following terms and conditions:
SECTION 9.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers hereunder as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither Agent
nor any of its directors, officers, attorneys or employees shall be liable for
any action taken or omitted to be taken by it or them
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hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct.
SECTION 9.2. NOTE HOLDERS. Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with it,
signed by such payee and in form satisfactory to Agent.
SECTION 9.3. CONSULTATION WITH COUNSEL. Agent may consult with legal
counsel selected by it and shall not be liable for any action taken or suffered
in good faith by it in accordance with the opinion of such counsel.
SECTION 9.4. DOCUMENTS. Agent shall not be under any duty to examine into
or pass upon the validity, effectiveness, genuineness or value of any Loan
Documents or any other Related Writing furnished pursuant hereto or in
connection herewith or the value of any collateral obtained hereunder, and
Agent shall be entitled to assume that the same are valid, effective and
genuine and what they purport to be.
SECTION 9.5. AGENT AND AFFILIATES. With respect to the Loans, Agent shall
have the same rights and powers hereunder as any other Bank and may exercise
the same as though it were not Agent, and Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Company or affiliate thereof.
SECTION 9.6. KNOWLEDGE OF DEFAULT. It is expressly understood and agreed
that Agent shall be entitled to assume that no Unmatured Event of Default or
Event of Default has occurred and is Continuing, unless Agent has been notified
by a Bank or a Company in writing that such Bank or Company believes that an
Unmatured Event of Default or Event of Default has occurred and is Continuing
and specifying the nature thereof.
SECTION 9.7. ACTION BY AGENT. So long as Agent shall be entitled,
pursuant to Section 9.6 hereof, to assume that no Unmatured Event of Default or
Event of Default shall have occurred and be Continuing, Agent shall be entitled
to use its discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, or with respect to taking or
refraining from taking any action or actions which it may be able to take under
or in respect of, this Agreement. Agent shall incur no liability under or in
respect of this Agreement by acting upon any notice, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties, or with respect to anything which it may
do or refrain from doing in the reasonable exercise of its judgment, or which
may seem to it to be necessary or desirable in the premises.
SECTION 9.8. NOTICES, DEFAULT, ETC. In the event that Agent shall have
acquired actual knowledge of any Unmatured Event of Default, Agent shall
promptly notify the Banks and shall take such action and assert such rights
under this Agreement as the Majority Banks shall direct and Agent shall inform
the other Banks in writing of the action taken. Agent may take such action and
assert such rights as it deems to be advisable, in its discretion, for the
protection of the
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interests of the holders of the Notes.
SECTION 9.9. INDEMNIFICATION OF AGENT. The Banks agree to indemnify
Agent (to the extent not reimbursed by Borrower), ratably according to their
respective Commitment Percentages from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against Agent in its capacity as agent in any way
relating to or arising out of this Agreement or any Loan Document or any action
taken or omitted by Agent with respect to this Agreement or any Loan Document,
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorney fees) or disbursements resulting from Agent's
gross negligence, willful misconduct or from any action taken or omitted by
Agent in any capacity other than as agent under this Agreement.
SECTION 9.10. SUCCESSOR AGENT. Agent may resign as agent hereunder by
giving not fewer than thirty (30) days' prior written notice to Borrower and
the Banks. If Agent shall resign under this Agreement, then either (a) the
Majority Banks shall appoint from among the Banks a successor agent for the
Banks (with the consent of Borrower so long as an Event of Default has not
occurred and which consent shall not be unreasonably withheld), or (b) if a
successor agent shall not be so appointed and approved within the thirty (30)
day period following Agent's notice to the Banks of its resignation, then Agent
shall appoint a successor agent who shall serve as agent until such time as the
Majority Banks appoint a successor agent. Upon its appointment, such successor
agent shall succeed to the rights, powers and duties as agent, and the term
"Agent" shall mean such successor effective upon its appointment, and the
former agent's rights, powers and duties as agent shall be terminated without
any other or further act or deed on the part of such former agent or any of the
parties to this Agreement.
ARTICLE X. MISCELLANEOUS
SECTION 10.1. BANKS' INDEPENDENT INVESTIGATION. Each Bank, by its
signature to this Agreement, acknowledges and agrees that Agent has made no
representation or warranty, express or implied, with respect to the
creditworthiness, financial condition, or any other condition of any Company or
with respect to the statements contained in any information memorandum
furnished in connection herewith or in any other oral or written communication
between Agent and such Bank. Each Bank represents that it has made and shall
continue to make its own independent investigation of the creditworthiness,
financial condition and affairs of the Companies in connection with the
extension of credit hereunder, and agrees that Agent has no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto (other than such
notices as may be expressly required to be given by Agent to the Banks
hereunder), whether coming into its possession before the granting of the first
Loans hereunder or at any time or times thereafter.
SECTION 10.2. NO WAIVER; CUMULATIVE REMEDIES. No omission or course of
dealing on the part of Agent, any Bank or the holder of any Note in exercising
any
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right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy hereunder. The remedies herein provided are cumulative
and in addition to any other rights, powers or privileges held by operation of
law, by contract or otherwise.
SECTION 10.3. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of any Loan Document nor consent to any
variance therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Banks and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Anything herein to the contrary notwithstanding, unanimous consent of the Banks
shall be required with respect to (a) any increase in the Commitment hereunder,
(b) the extension of maturity of the Notes, the payment date of interest
thereunder, or the payment of facility or other fees or amounts payable
hereunder, (c) any reduction in the rate of interest on the Notes, or in any
amount of principal or interest due on any Note, or the payment of facility or
other fees hereunder or any change in the manner of pro rata application of any
payments made by Borrower to the Banks hereunder, (d) any change in any
percentage voting requirement, voting rights, or the Majority Banks definition
in this Agreement, (e) the release of any Guarantor of Payment, or (f) any
amendment to this Section 10.3 or Section 8.5 hereof. Notice of amendments or
consents ratified by the Banks hereunder shall immediately be forwarded by
Borrower to all Banks. Each Bank or other holder of a Note shall be bound by
any amendment, waiver or consent obtained as authorized by this Section,
regardless of its failure to agree thereto.
SECTION 10.4. NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, if to a Bank, mailed or delivered to it,
addressed to the address of such Bank specified on the signature pages of this
Agreement, or, as to each party, at such other address as shall be designated
by such party in a written notice to each of the other parties. All notices,
statements, requests, demands and other communications provided for hereunder
shall be deemed to be given or made when delivered or three (3) Domestic
Business Days after being deposited in the mails with postage prepaid by
registered or certified mail, addressed as aforesaid, or sent by facsimile with
telephonic confirmation of receipt, except that notices from Borrower to Agent
or the Banks pursuant to any of the provisions hereof shall not be effective
until received by Agent or the Banks, as the case may be.
SECTION 10.5. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand
all reasonable costs and expenses of the Banks and Agent, including, but not
limited to, (a) the collection and disbursement of all funds hereunder and the
other instruments and documents to be delivered hereunder, (b) extraordinary
expenses of Agent or the Banks in connection with the administration of the
Loan Documents and the other instruments and documents to be delivered
hereunder, (c) the reasonable fees and out-of-pocket expenses of special
counsel for the Banks, with respect thereto and of local counsel, if any, who
may be
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retained by said special counsel with respect thereto, and (d) all costs
and expenses, including reasonable attorneys' fees, in connection with the
restructuring or enforcement of the Loan Documents or any Related Writing.
Borrower also agrees to pay any reasonable expenses of the Banks and Agent
incurred in connection with the preparation of the Loan Documents and any
Related Writings. In addition, Borrower shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution and delivery of the Loan Documents, and the other instruments and
documents to be delivered hereunder, and agrees to save Agent and each Bank
harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.
SECTION 10.6. INDEMNIFICATION. Borrower agrees to defend, indemnify and
hold harmless Agent and the Banks from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorney fees) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Agent or any Bank in connection with any investigative, administrative or
judicial proceeding (whether or not such Bank or Agent shall be designated a
party thereto) or any other claim by any person or entity relating to or
arising out of this Agreement or any actual or proposed use of proceeds of the
Loans hereunder or any activities of any Company or any Obligor or any of their
affiliates; provided that no Bank nor Agent shall have the right to be
indemnified under this Section for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction. All obligations
provided for in this Section 10.6 shall survive any termination of this
Agreement.
SECTION 10.7. CAPITAL ADEQUACY. To the extent not covered by Article III
hereof, if any Bank shall have determined, after the date hereof, that the
adoption of any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its lending office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital (or the capital of its
holding company) as a consequence of its obligations hereunder to a level below
that which such Bank (or its holding company) could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
or the policies of its holding company with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
thirty (30) days after demand by such Bank (with a copy to Agent), Borrower
shall pay to such Bank such additional amount or amounts as shall compensate
such Bank (or its holding company) for such reduction. Each Bank shall
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. Failure on the part of any Bank to demand
compensation for any reduction
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in return on capital with respect to any period shall not constitute a
waiver of such Bank's rights to demand compensation for any reduction in return
on capital in such period or in any other period. The protection of this
Section shall be available to each Bank regardless of any possible contention
of the invalidity or inapplicability of the law, regulation or other condition
which shall have been imposed.
SECTION 10.8. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS. The
obligations of the Banks hereunder are several and not joint. Nothing contained
in this Agreement and no action taken by Agent or the Banks pursuant hereto
shall be deemed to constitute the Banks a partnership, association, joint
venture or other entity. No default by any Bank hereunder shall excuse the
other Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among Borrower and the Banks with respect to the Loan Documents
and the Related Writings is and shall be solely that of debtor and creditors,
respectively, and neither Agent nor any Bank has any fiduciary obligation
toward Borrower with respect to any such documents or the transactions
contemplated thereby.
SECTION 10.9. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 10.10. BINDING EFFECT; BORROWER'S ASSIGNMENT. This Agreement
shall become effective when it shall have been executed by Borrower, Agent and
by each Bank and thereafter shall be binding upon and inure to the benefit of
Borrower, Agent and each of the Banks and their respective successors and
assigns, except that Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of Agent and
all of the Banks. By executing this Agreement, Borrower hereby gives notice to
National City Bank, as agent under the Credit Agreement dated as of January 19,
1993, as amended, to terminate in full, as of the Closing Date, the credit
facility provided by such Credit Agreement.
SECTION 10.11. BANK ASSIGNMENTS/PARTICIPATIONS. With the written consent
(which shall not be unreasonably withheld) of Agent, and the written consent
(which shall not be unreasonably withheld) of Borrower so long as no Event of
Default or Unmatured Event of Default has occurred and is Continuing, any Bank
may assign its rights and obligations under this Agreement to another financial
institution, provided that each such assignment shall be in a minimum amount of
Five Million Dollars ($5,000,000) and upon terms that are acceptable to Agent.
Each assignment shall be subject to the payment, by the assignor, of a service
fee of Three Thousand Dollars ($3,000) to Agent, for the sole benefit of Agent,
on or prior to the date of transfer of the assigned interest. In the event
that a Bank grants a participation to another financial institution, the voting
rights of such participant shall be limited to those items requiring the
unanimous consent of the Banks pursuant to Section 10.3 hereof.
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SECTION 10.12. SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to Sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement.
SECTION 10.13. INVESTMENT PURPOSE. Each of the Banks represents and
warrants to Borrower that it is entering into this Agreement with the present
intention of acquiring any Note issued pursuant hereto for investment purposes
only and not for the purpose of distribution or resale, it being understood,
however, that each Bank shall at all times retain full control over the
disposition of its assets.
SECTION 10.14. ENTIRE AGREEMENT. This Agreement, the Notes and any other
agreement, document or instrument attached hereto or referred to herein or
executed on or as of the date hereof integrate all the terms and conditions
mentioned herein or incidental hereto and supersede all oral representations
and negotiations and prior writings with respect to the subject matter hereof.
SECTION 10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement,
each of the Notes and any Related Writing shall be governed by and construed in
accordance with the laws of the State of Ohio and the respective rights and
obligations of Borrower and the Banks shall be governed by Ohio law, without
regard to principles of conflict of laws. Borrower hereby irrevocably submits
to the non-exclusive jurisdiction of any Ohio state or federal court sitting in
Cleveland, Ohio, over any action or proceeding arising out of or relating to
this Agreement, any Loan Document or any Related Writing, and Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Ohio state or federal court. Borrower hereby
irrevocably waives, to the fullest extent permitted by law, any objection it
may now or hereafter have to the laying of venue in any action or proceeding in
any such court as well as any right it may now or hereafter have to remove such
action or proceeding, once commenced, to another court on the grounds of FORUM
NON CONVENIENS or otherwise. Borrower agrees that a final, nonappealable
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
SECTION 10.16. LEGAL REPRESENTATION OF PARTIES. The Loan Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement or any
other Loan Document to be construed or interpreted against any party shall not
apply to any construction or interpretation hereof or thereof.
SECTION 10.17. JUDGMENT CURRENCY. If Agent, on behalf of the Banks,
obtains a judgment or judgments against Borrower in a Eurocurrency (other than
Eurodollars),
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the obligations of Borrower in respect of any sum adjudged to be
due to Agent or the Banks hereunder or under the Notes (the "Judgment Amount")
shall be discharged only to the extent that, on the Domestic Business Day
following receipt by Agent of the Judgment Amount in the Eurocurrency, Agent,
in accordance with normal banking procedures, purchases Dollars with the
Judgment Amount in such Eurocurrency. If the amount of Dollars so purchased is
less than the amount of Dollars that could have been purchased with the
Judgment Amount on the date or dates the Judgment Amount (excluding the portion
of the Judgment Amount which has accrued as a result of the failure of Borrower
to pay the sum originally due hereunder or under the Notes when it was
originally due hereunder or under the Notes) was originally due and owing to
Agent or the Banks hereunder or under the Notes (the "Original Due Date") (the
"Loss"), Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify Agent or such Bank, as the case may be, against the
Loss, and if the amount of Dollars so purchased exceeds the amount of Dollars
that could have been purchased with the Judgment Amount on the Original Due
Date, Agent or such Bank agrees to remit such excess to Borrower.
SECTION 10.18 CONFIDENTIALITY. Each Bank hereby (a) acknowledges that
Borrower and each of its Subsidiaries have many trade secrets and much
financial, environmental and other data and information the confidentiality of
which is important to their business and (b) agrees to keep confidential any
such trade secret, data or information designated by any Company as
confidential or that such Bank knows or should know is confidential, except
that this Section 10.18 shall not preclude any Bank from furnishing any such
secret, data or information (i) as may be required by order of any court of
competent jurisdiction or requested by any governmental agency having any
regulatory authority over that Bank or its securities, (ii) to any other party
to this Agreement, (iii) or to any actual or prospective transferee,
participant or subparticipant (so long as such prospective transferee,
participant or subparticipant is a financial institution) of all or part of
that Bank's rights arising out of or in connection with the Related Writings
and this Agreement or any thereof so long as such prospective transferee,
participant or subparticipant to whom disclosure is made agrees to be bound by
the provisions of this Section 10.18, (iv) to anyone if it shall have been
already publicly disclosed (other than by that Bank in contravention of this
Section 10.18), (v) to the extent reasonably required in connection with the
exercise of any right or remedy under this Agreement or any Related Writing and
(vi) to that Bank's legal counsel, auditors and accountants.
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SECTION 10.19. JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS,
OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR
ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
Address: 0000 Xxxxx Xxxxxx Xxxx THE STANDARD PRODUCTS COMPANY
Xxxxxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxxxx Xxxx By:____________________________
Treasurer ___________________________
Address: National City Bank Building NATIONAL CITY BANK
0000 Xxxx Xxxxx Xxxxxx, 00xx Floor As a Bank and as Agent
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xx. Xxxxxxxx X. Xxxx By:____________________________
Vice President __________________________
Address: 000 Xxxxxxxx Xxx. XXXXXXXX XXXX
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Mr. Xxxxxxx Xxxx By:____________________________
Vice President __________________________
Address: 000 Xxxxxxxx Xxx., 0xx Xxxxx XXX BANK
Detroit, Michigan 48226
Attention: Xx. Xxxx Xxxxx By:____________________________
Vice President __________________________
[Signatures Continued on Next Page]
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Address: 000 Xxxxxx Xxxxxx XXXXXXX NATIONAL ASSOCIATION
Xxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx By:___________________________
Assistant Vice President _________________________
Address: One Wall Street, 22nd Floor THE BANK OF NEW YORK
New York, New York 10286
Attn: Xx. Xxxxxxx X. Xxxxxx, Xx. By:___________________________
Vice President _________________________
Address: 000 Xxxx Xxxxxx Xxxxxx XXXXXX TRUST AND SAVINGS BANK
00xx Xxxxx, Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxxxx By:___________________________
Vice President _________________________
Address: 000 Xxxxxxx Xxxxxx BANKBOSTON, N.A.
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxxxx By:___________________________
Managing Director __________________________
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SCHEDULE 1
COMMITMENT
BANKING INSTITUTIONS PERCENTAGE MAXIMUM AMOUNT
-------------------- ---------- --------------
National City Bank 22.22222223% $ 50,000,000
Comerica Bank 17.77777778% $ 40,000,000
NBD Bank 17.77777778% $ 40,000,000
KeyBank National Association 17.77777778% $ 40,000,000
The Bank of New York 8.88888888% $ 20,000,000
Xxxxxx Trust and Savings Bank 8.88888888% $ 20,000,000
BankBoston, N.A. 6.66666667% $ 15,000,000
----------- --------------
Total Commitment Amount 100% $225,000,000
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EXHIBIT A
REVOLVING CREDIT NOTE
$__________ Cleveland, Ohio
September __, 1997
FOR VALUE RECEIVED, the undersigned THE STANDARD PRODUCTS COMPANY
("Borrower") promises to pay on the last day of the Commitment Period, as
defined in the Credit Agreement, to the order of _________ ("Bank") at the Main
Office of NATIONAL CITY BANK, as Agent, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000-0000 the principal sum of
................................................................... DOLLARS
or the aggregate unpaid principal amount of all Revolving Loans made by Bank to
Borrower pursuant to Section 2.1A of the Credit Agreement, as hereinafter
defined, whichever is less, in lawful money of the United States of America;
provided that Loans which are Eurocurrency Loans, as defined in the Credit
Agreement, (other than Eurodollar Loans, as defined in the Credit Agreement)
shall be payable in the applicable Eurocurrency, as defined in the Credit
Agreement, at the place or places designated in the Credit Agreement. Borrower
also agrees to pay any additional amount that is required to be paid pursuant
to Section 10.17 of the Credit Agreement. As used herein, "Credit Agreement"
means the Credit Agreement dated as of September ___, 1997, among Borrower, the
banks named therein and National City Bank, as Agent, as the same may from time
to time be restated, amended or otherwise modified. Capitalized terms used
herein shall have the meanings ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid principal amount of
each Revolving Loan from time to time outstanding, from the date of such
Revolving Loan until the payment in full thereof, at the rates per annum which
shall be determined in accordance with the provisions of Section 2.1A of the
Credit Agreement. Such interest shall be payable on each date provided for in
such Section 2.1A; provided, however, that interest on any principal portion
which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of any thereof,
will be shown on the records of Bank by such method as Bank may generally
employ; provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs
by reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum which
shall be the Default Rate. All payments of principal of and interest on this
Note shall be made in immediately available funds.
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This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.
Except as expressly provided in the Credit Agreement, Borrowers expressly
waives presentment, demand, protest and notice of any kind.
THE STANDARD PRODUCTS COMPANY
By:_________________________________
Title:________________________
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EXHIBIT B
SWING LOAN NOTE
$15,000,000 Cleveland, Ohio
September __, 1997
FOR VALUE RECEIVED, the undersigned THE STANDARD PRODUCTS COMPANY
("Borrower") promises to pay on the earlier of (a) demand made by Bank (as
hereinafter defined), (b) the specific maturity thereof, or (c) the last day of
the Commitment Period, as defined in the Credit Agreement, to the order of
NATIONAL CITY BANK ("Bank") at the Main Office of NATIONAL CITY BANK, as Agent,
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000 the principal sum of
FIFTEEN MILLION AND 00/100............................................. DOLLARS
or the aggregate unpaid principal amount of all Swing Loans made by Bank to
Borrower pursuant to Section 2.1C of the Credit Agreement, as hereinafter
defined, whichever is less, in lawful money of the United States of America.
As used herein, "Credit Agreement" means the Credit Agreement dated as of
September ___, 1997, among Borrower, the banks named therein and National City
Bank, as Agent, as the same may from time to time be restated, amended or
otherwise modified. Capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid principal amount of
each Swing Loan from time to time outstanding, from the date of such Swing Loan
until the payment in full thereof, at the rates per annum which shall be
determined in accordance with the provisions of Section 2.1C of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.1C; provided, however, that interest on any principal portion which
is not paid when due shall be payable on demand.
The amount of each Swing Loan, and the payments of principal of any
thereof, will be shown on the records of Bank by such method as Bank may
generally employ; provided, however, that failure to make any such entry shall
in no way detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs
by reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum which
shall be the Default Rate. All payments of principal of and interest on this
Note shall be made in immediately available funds.
This Note is the Swing Loan Note referred to in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the right of the
undersigned to anticipate payments
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hereof, the right of the holder hereof to declare this Note due prior to its
stated maturity, and other terms and conditions upon which this Note is issued.
Except as expressly provided in the Credit Agreement, Borrowers expressly
waives presentment, demand, protest and notice of any kind.
THE STANDARD PRODUCTS COMPANY
By:________________________________
Title:_________________________
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EXHIBIT C
NOTICE OF LOAN
[Date]_______________________, 19____
National City Bank
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention:
Ladies and Gentlemen:
The undersigned, __________________, refers to the Credit Agreement, dated
as of ______, 1997 ("Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, the Banks, as defined in the
Credit Agreement, and National City Bank, as Agent, and hereby gives you
notice, pursuant to Section 2.2 of the Credit Agreement that the undersigned
hereby requests a Loan under the Credit Agreement, and in the connection sets
forth below the information relating to the Loan (the "Proposed Loan") as
required by Section 2.2 of the Credit Agreement:
(a) The Domestic Business Day of the Proposed Loan is __________, 19__.
(b) The amount of the Proposed Loan is $_______________.
(c) The Proposed Loan is to be a Revolving Loan ____ /Swing Loan ___.
(Check one.)
(c) The Proposed Loan is to be a Prime Rate Loan ____ /LIBOR Loan ___.
(Check one.)
(d) If the Proposed Loan is a LIBOR Loan, the Interest Period requested is
one month ___, two months ___, three months ___, six months ____
(Check one.)
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Loan:
(i) the representations and warranties contained in each Loan
Document are true and correct in all material respects before and after
giving effect to the Proposed Loan and the application of the proceeds
therefrom, as though made on and as of such date;
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(ii) no event has occurred, or would result from such Proposed Loan,
or the application of proceeds therefrom, which constitutes an Unmatured
Event of Default or Event of Default; and
(iii) the conditions set forth in Section 2.2 and Article IV of the
Credit Agreement have been satisfied.
Very truly yours,
THE STANDARD PRODUCTS COMPANY
By:________________________________
Name:
Title:
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EXHIBIT D
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended ____________________
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected President or Chief Financial Officer of THE
STANDARD PRODUCTS COMPANY, an Ohio corporation ("Borrower");
(2) I am familiar with the terms of that certain Credit Agreement, dated
as of ______, 1997, among the undersigned, the Banks, as defined in the Credit
Agreement, and National City Bank, as Agent (as the same may be amended,
supplemented or otherwise modified, the "Credit Agreement", the terms defined
therein and not otherwise defined in this Certificate being used herein as
therein defined), and the terms of the other Loan Documents, and I have made,
or have caused to be made under my supervision, a review in reasonable detail
of the transactions and condition of Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;
(3) The review described in paragraph (2) above did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
or constituted an Unmatured Event of Default or Event of Default, at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate;
(4) The representations and warranties made by Borrower contained in each
Loan Document are true and correct in all material respects as though made on
and as of the date hereof; and,
(5) Set forth on Attachment I hereto are calculations of the financial
covenants set forth in Section 5.7 of the Credit Agreement and the financial
covenants relating to all of Borrower's other Indebtedness, which calculations
show compliance with the terms thereof.
IN WITNESS WHEREOF, we have signed this certificate the ___ day of
_________, 19___.
THE STANDARD PRODUCTS COMPANY
By:____________________________________
Title:____________________________
