Exhibit 10.1
================================================================================
CREDIT AGREEMENT
DATED AS OF AUGUST 8, 2007
ENGLOBAL CORPORATION, ET AL.,
AS BORROWERS
COMERICA BANK
AS ADMINISTRATIVE AGENT AND LEAD ARRANGER
AND CERTAIN FINANCIAL INSTITUTIONS,
AS LENDERS
================================================================================
$50,000,000 SENIOR SECURED
REVOLVING CREDIT FACILITY
TABLE OF CONTENTS
Page
----
1. DEFINITIONS...............................................................1
1.1 Certain Defined Terms............................................1
2. REVOLVING CREDIT.........................................................15
2.1 Commitment......................................................15
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness......15
2.3 Requests for and Refundings and Conversions of Advances.........16
2.4 Disbursement of Advances........................................18
2.5 Interest Payments; Default Interest.............................19
2.6 Optional Prepayments............................................20
2.7 Prime-based Advance in Absence of Election or Upon Default......20
2.8 Revolving Credit Facility Fee...................................20
2.9 Mandatory Repayment of Revolving Credit Advances................21
2.10 Optional Reduction or Termination of Revolving Credit
Aggregate Commitment............................................21
2.11 Use of Proceeds of Advances.....................................22
2.12 Swing Line Advances.............................................22
3. LETTERS OF CREDIT........................................................26
3.1 Letters of Credit...............................................26
3.2 Conditions to Issuance..........................................26
3.3 Notice..........................................................27
3.4 Letter of Credit Fees; Increased Costs..........................27
3.5 Other Fees......................................................29
3.6 Drawings and Demands for Payment Under Letters of Credit........29
3.7 Obligations Irrevocable.........................................30
3.8 Risk Under Letters of Credit....................................31
3.9 Indemnification.................................................32
3.10 Right of Reimbursement..........................................33
4. [reserved]...............................................................33
5. CONDITIONS...............................................................33
5.1 Execution of Notes and this Agreement...........................33
5.2 Corporate Authority.............................................33
5.3 Notes, Agreement, Collateral Documents, Guaranties and
other Loan Documents............................................33
5.4 Insurance.......................................................34
5.5 Compliance with Certain Documents and Agreements................34
5.6 Opinions of Counsel.............................................34
5.7 Payment of Fees.................................................35
5.8 Governmental and Other Approvals................................35
5.9 Closing Certificate.............................................35
i
5.10 Existing Debt Documents.........................................35
5.11 Continuing Conditions...........................................35
6. REPRESENTATIONS AND WARRANTIES...........................................35
6.1 Corporate Authority.............................................35
6.2 Due Authorization...............................................36
6.3 Good Title; Leases; Assets; No Liens............................36
6.4 Taxes...........................................................36
6.5 No Defaults.....................................................36
6.6 Enforceability of Agreement and Loan Documents..................36
6.7 Compliance with Laws............................................36
6.8 Non-contravention...............................................36
6.9 Litigation......................................................37
6.10 Consents, Approvals and Filings, Etc............................37
6.11 Agreements Affecting Financial Condition........................37
6.12 No Investment Company or Margin Stock...........................37
6.13 ERISA...........................................................37
6.14 Conditions Affecting Business or Properties.....................38
6.15 Environmental and Safety Matters................................38
6.16 Subsidiaries....................................................38
6.17 Reserved........................................................38
6.18 Reserved........................................................38
6.19 Franchises, Patents, Copyrights, Tradenames, etc................38
6.20 Capital Structure...............................................38
6.21 Accuracy of Information.........................................38
6.22 Solvency........................................................39
6.23 Employee Matters................................................39
6.24 No Misrepresentation............................................39
7. AFFIRMATIVE COVENANTS....................................................39
7.1 Financial Statements............................................39
7.2 Certificates; Other Information.................................40
7.3 Payment of Obligations..........................................40
7.4 Conduct of Business and Maintenance of Existence;
Compliance with Laws............................................41
7.5 Maintenance of Property; Insurance..............................41
7.6 Inspection of Property; Books and Records, Discussions..........41
7.7 Notices.........................................................41
7.8 Hazardous Material Laws.........................................42
7.9 Financial Covenants.............................................43
7.10 Governmental and Other Approvals................................43
7.11 Compliance with ERISA; ERISA Notices............................44
7.12 Defense of Collateral...........................................44
7.13 Future Subsidiaries; Additional Collateral......................44
7.14 Accounts........................................................45
7.15 Use of Proceeds.................................................45
7.16 Further Assurances..............................................45
ii
8. NEGATIVE COVENANTS.......................................................45
8.1 Limitation on Debt..............................................45
8.2 Limitation on Liens.............................................46
8.3 Acquisitions....................................................46
8.4 Limitation on Mergers, Dissolution or Sale of Assets............47
8.5 Restricted Payments.............................................47
8.6 Limitation on Capital Expenditures..............................48
8.7 Limitation on Investments, Loans and Advances...................48
8.8 Transactions with Affiliates....................................48
8.9 Sale-Leaseback Transactions.....................................49
8.10 Limitations on Other Restrictions...............................49
8.11 Prepayment of Debt..............................................49
8.12 Amendment of Subordinated Debt Documents........................49
8.13 Modification of Certain Agreements..............................49
8.14 Fiscal Year.....................................................49
8.15 Limitation on Contracts.........................................49
9. DEFAULTS.................................................................49
9.1 Events of Default...............................................49
9.2 Exercise of Remedies............................................51
9.3 Rights Cumulative...............................................52
9.4 Waiver by Borrower of Certain Laws..............................52
9.5 Waiver of Defaults..............................................52
9.6 Set Off.........................................................52
10. PAYMENTS, RECOVERIES AND COLLECTIONS.....................................52
10.1 Payment Procedure...............................................52
10.2 Application of Proceeds of Collateral...........................53
10.3 Pro-rata Recovery...............................................54
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.........................54
11.1 Reimbursement of Prepayment Costs...............................54
11.2 Eurodollar Lending Office.......................................55
11.3 Circumstances Affecting Eurodollar-based Rate Availability......55
11.4 Laws Affecting Eurodollar-based Advance Availability............55
11.5 Increased Cost of Eurodollar-based Advances.....................55
11.6 Capital Adequacy and Other Increased Costs......................56
11.7 Right of Lenders to Fund through Branches and Affiliates........57
11.8 Margin Adjustment...............................................57
12. AGENT....................................................................57
12.1 Appointment of Agent............................................57
12.2 Deposit Account with Agent or any Lender........................58
12.3 Scope of Agent's Duties.........................................58
12.4 Successor Agent.................................................58
12.5 Credit Decisions................................................59
12.6 Authority of Agent to Enforce This Agreement....................59
iii
12.7 Indemnification of Agent........................................59
12.8 Knowledge of Default............................................60
12.9 Agent's Authorization; Action by Lenders........................60
12.10 Enforcement Actions by the Agent................................60
12.11 Collateral Matters..............................................60
12.12 Agents in their Individual Capacities...........................61
12.13 Agent's Fees....................................................61
12.14 Documentation Agent or other Titles.............................61
13. MISCELLANEOUS............................................................61
13.1 Accounting Principles...........................................61
13.2 Consent to Jurisdiction.........................................61
13.3 Law of Texas....................................................62
13.4 Interest........................................................62
13.5 Closing Costs and Other Costs; Indemnification..................62
13.6 Notices.........................................................64
13.7 Further Action..................................................64
13.8 Successors and Assigns; Participations; Assignments.............64
13.9 Counterparts....................................................67
13.10 Amendment and Waiver............................................67
13.11 Confidentiality.................................................68
13.12 Substitution of Lenders.........................................68
13.13 Withholding Taxes...............................................69
13.14 Taxes and Fees..................................................69
13.15 WAIVER OF JURY TRIAL............................................69
13.16 Patriot Act Notice..............................................70
13.17 Complete Agreement; Conflicts...................................70
13.18 Severability....................................................70
13.19 Table of Contents and Headings; Section References..............70
13.20 Construction of Certain Provisions..............................70
13.21 Independence of Covenants.......................................70
13.22 Joint and Several Liability.....................................70
13.23 Advertisements..................................................73
13.24 Reliance on and Survival of Various Provisions..................73
iv
Schedules:
Schedule 1.1 Applicable Margin Grid
Schedule 1.2 Commitments
Schedule 5.2 Jurisdictions Qualified to do Business
Schedule 5.3(d) Organizational Information
Schedule 6.1 Corporate Authority
Schedule 6.3(b) Real Property
Schedule 6.4 Taxes
Schedule 6.7 Compliance with Laws
Schedule 6.9 Litigation
Schedule 6.10 Consents, Approvals and Filings
Schedule 6.13 ERISA
Schedule 6.15 Environmental and Safety Matters
Schedule 6.16 Subsidiaries
Schedule 6.17 Reserved
Schedule 6.19 Tradenames
Schedule 6.20 Capital Structure
Schedule 6.23 Reserved
Schedule 8.1 Existing Debt
Schedule 8.7 Existing Investments
Schedule 8.8 Transactions with Affiliates
Schedule 13.6 Addresses for Notices
Exhibits:
Exhibit A Request for Revolving Credit Advance
Exhibit B Revolving Credit Notes
Exhibit C Swing Line Note
Exhibit D Request for Swing Line Advance
Exhibit E Notice of Letter of Credit
Exhibit F Assignment Agreement
Exhibit G Covenant Compliance Report
v
CREDIT AGREEMENT
This Credit Agreement ("Agreement") is made as of the 8th day of
August, 2007, by and among the financial institutions from time to time
signatory hereto (individually a "Lender," and any and all such financial
institutions collectively the "Lenders"), COMERICA BANK, as Administrative Agent
for the Lenders (in such capacity, the "Agent"), and ENGLOBAL CORPORATION, a
Nevada corporation ("Parent"), ENGLOBAL CORPORATE SERVICES, INC., a Texas
corporation ("Englobal Corporate"), ENGLOBAL ENGINEERING, INC., a Texas
corporation ("Englobal Engineering"), ENGLOBAL CONSTRUCTION RESOURCES, INC., a
Texas corporation ("Englobal Construction"), ENGLOBAL SYSTEMS, INC., a Texas
corporation ("Englobal Systems"), R.P.M. ENGINEERING, INC., a Louisiana
corporation ("RPM"), ENGLOBAL TECHNICAL SERVICES, INC., a Texas corporation
("Englobal Technical"), ENGLOBAL AUTOMATION GROUP, INC., a Texas corporation
("Englobal Automation"), PEI INVESTMENTS, a Texas general partnership ("PEI"),
and WRC CORPORATION, a Colorado corporation ("WRC"; WRC, PEI, Englobal
Technical, Englobal Automation, RPM, Englobal Systems, Englobal Construction,
Englobal Engineering, Englobal Corporate and Parent individually and
collectively herein called "Borrower".
RECITALS
A. Borrower has requested that the Lenders extend to it credit and
letters of credit on the terms and conditions set forth herein.
B. The Lenders are prepared to extend such credit as aforesaid, but
only on the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the covenants contained herein,
Borrower, the Lenders, and the Agent agree as follows:
1. DEFINITIONS.
1.1 Certain Defined Terms. For the purposes of this Agreement the
following terms will have the following meanings:
"Account(s) shall have the respective meanings assigned to them in the
UCC on the date of this Agreement.
"Account Control Agreement(s)" shall mean those certain account control
agreements, or similar agreements that are delivered pursuant to Section 7.14 of
this Agreement or otherwise, as the same may be amended, restated or otherwise
modified from time to time.
"Adjusted EBITDA" shall mean, for Borrowers, the Borrowers'
Consolidated EBITDA plus non-recurring transaction costs, one-time adjustments
for ConocoPhillips Ferndale losses ($12,756,000) prior to January 1, 2007 and
ongoing non-cash stock compensation expenses.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by the Borrower, and made by the Lenders under Section 2.1 hereof or
the Swing Line Lender under Section 2.12 hereof, including without limitation
any readvance, refunding or conversion of such borrowing pursuant to Section 2.3
or 2.12 hereof, and any advance deemed to have been made in respect of a Letter
of Credit under Section 3.6(a) hereof, and shall include, as applicable, a
Eurodollar-based Advance and a Prime-based Advance.
"Affected Lender" shall have the meaning set forth in Section 13.12
hereof.
1
"Affiliate" shall mean, when used with respect to any Person, any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Affiliate Receivables" shall mean, as of any time of determination,
any amounts in respect of loans or advances owing to a Borrower or another
Borrower from any of its Subsidiaries or Affiliates at such time.
"Agent" shall have the meaning set forth in the preamble, and include
any successor agents appointed in accordance with Section 12.4 hereof.
"Agent's Correspondent" shall mean for Eurodollar-based Advances,
Agent's Grand Cayman Branch (or for the account of said branch office, at
Agent's main office in Detroit, Michigan, United States).
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1.0%).
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean, (i) with respect to each
Revolving Credit Advance, the Eurodollar-based Rate or the Prime-based Rate, and
(ii) with respect to each Swing Line Advance, the Prime-based Rate or, if made
available to the Borrower by the Swing Line Lender at its option, the Quoted
Rate, in each case as selected by the Borrower from time to time subject to the
terms and conditions of this Agreement.
"Applicable Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as Schedule
1.1, such Applicable Margin to be adjusted solely as specified in Section 11.8
hereof.
"Asset Sale" shall mean the sale, transfer or other disposition by any
Borrower of any asset (other than the sale or transfer of less than one hundred
percent (100%) of the stock or other ownership interests of any Subsidiary) to
any Person (other than to Borrower or a Guarantor).
"Assignment Agreement" shall mean an Assignment Agreement substantially
in the form of Exhibit E hereto.
"Assignment of Note and Liens" means that certain Act of Assignment of
Note and Liens from R.P.M. Engineering, Inc., as assignor, in favor of Agent, as
assignee, assigning to the Agent for the benefit of the Banks the Baton Rouge
Note.
"Authorized Signer" shall mean each person who has been authorized by
the Borrower to execute and deliver any requests for Advances hereunder pursuant
to a written authorization delivered to the Agent and whose signature card or
incumbency certificate has been received by the Agent.
"Bankruptcy Code" shall mean Title 11 of the United States Code and the
rules promulgated thereunder.
"Baton Rouge Note" means that certain $1,480,000 promissory note
executed by Celtic Management Group in partial payment for the Baton Rouge
Property payable to the order of R.P.M. Engineering, Inc., secured by a lien on
the Baton Rouge Property and collaterally assigned to the Lenders pursuant to
the Assignment of Note and Liens.
2
"Baton Rouge Property" means that one (1) certain lot or parcel of
ground, together with all the buildings and improvements thereon, located at
00000 Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxx.
"Borrower" shall have the meaning set forth in the preamble to this
Agreement.
"Business Day" shall mean any day other than a Saturday or a Sunday on
which commercial banks are open for domestic and international business
(including dealings in foreign exchange) in Detroit, Michigan and New York, New
York, and in the case of a Business Day which relates to a Eurodollar-based
Advance, on which dealings are carried on in the London interbank eurodollar
market.
"Capital Expenditures" shall mean, for any period, with respect to any
Person (without duplication), the aggregate of all expenditures incurred by such
Person and its Subsidiaries during such period for the acquisition or leasing
(pursuant to a Capitalized Lease) of fixed or capital assets or additions to
equipment, plant and property that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) with respect to which the
discounted present value of the rental obligations of such Person as lessee
thereunder, in conformity with GAAP, is required to be capitalized on the
balance sheet of that Person.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Lenders is
or has been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise to secure the Indebtedness.
"Collateral Documents" shall mean the Security Agreement, the Pledge
Agreements, the Account Control Agreements, the Assignment of Note and Liens,
and all other security documents (and any joinders thereto) executed by any
Borrower in favor of the Agent on or after the Effective Date, in connection
with any of the foregoing collateral documents, in each case, as such collateral
documents may be amended or otherwise modified from time to time.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking
corporation, and its successors or assigns.
"Consolidated" (or "consolidated") or "Consolidating" (or
"consolidating") shall mean, when used with reference to any financial term in
this Agreement, the aggregate for two or more Persons of the amounts signified
by such term for all such Persons determined on a consolidated (or
consolidating) basis in accordance with GAAP, applied on a consistent basis.
Unless otherwise specified herein, "Consolidated" and "Consolidating" shall
refer to Parent and its Subsidiaries, determined on a Consolidated or
Consolidating basis.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any material agreement, instrument or
other undertaking to which such Person is a party or by which it or any of its
property is bound.
"Covenant Compliance Report" shall mean the report to be furnished by
Borrower to the Agent pursuant to Section 7.2(a) hereof, substantially in the
form attached hereto as Exhibit F and certified by a Responsible Officer of the
Borrower, in which report Borrower shall set forth the information specified
therein and which shall include a statement of then applicable level for the
Applicable Margin and Applicable Fee Percentages as specified in Schedule 1.1
attached to this Agreement.
"Debt" shall mean, as of any applicable date of determination thereof,
all items of indebtedness, obligation or liability of a Person, whether matured
or unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with GAAP, including without limitation, all Funded Debt of a Person,
all indebtedness of a Person in connection with a Hedging Transaction entered
into by such Person and all Off-Balance Sheet Liabilities of a Person. In the
case of Borrowers, the term "Debt" shall include, without limitation, the
Indebtedness.
3
"Default" shall mean any event that with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Distribution" is defined in Section 8.5 hereof.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Subsidiary" shall mean any Subsidiary of Borrower
incorporated or organized under the laws of the United States of America, or any
state or other political subdivision thereof or which is considered to be a
"disregarded entity" for United States federal income tax purposes and which is
not a "controlled foreign corporation" as defined under Section 957 of the
Internal Revenue Code, in each case provided such Subsidiary is owned by
Borrower or a Domestic Subsidiary of Borrower, and "Domestic Subsidiaries" shall
mean any or all of them.
"EBITDA" shall mean, with respect to any Person, and as to any
applicable period of determination, the Net Income of such Person for such
period before deduction for interest expense (determined in accordance with
GAAP), income taxes paid in cash (and other taxes of such Person determined by
reference to the income or profits of such Person) and the amount of
depreciation and amortization expense of such Person.
"Effective Date" shall mean the date on which all the conditions
precedent set forth in Sections 5.1 through 5.9 have been satisfied.
"Eligible Assignee" shall mean (a) a Lender; (b) an Affiliate of a
Lender; (c) any Person (other than a natural person) that is or will be engaged
in the business of making, purchasing, holding or otherwise investing in
commercial loans or similar extensions of credit in the ordinary course of its
business, provided that such Person is administered or managed by a Lender, an
Affiliate of a Lender or an entity or Affiliate of an entity that administers or
manages a Lender; or (d) any other Person (other than a natural person) approved
by the (i) Agent (and in the case of an assignment of a commitment under the
Revolving Credit, the Issuing Lender and Swing Line Lender), and (ii) unless a
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower, or any of the Borrower's Affiliates or Subsidiaries; and provided
further that notwithstanding clause (d)(ii) of this definition, no assignment
shall be made to an entity which is a competitor of any Borrower without the
consent of the Borrower, which consent may be withheld in its sole discretion.
"Equipment" shall have the meaning assigned to such term in the UCC on
the date of this Agreement together with all of the following to the extent, if
any, the same are not included within such definition: all machinery, equipment,
furniture, furnishings, fixtures, and other tangible personal property (except
Inventory) including, without limitation, data processing hardware and software,
motor vehicles, aircraft, dies, tools, jigs, and office equipment, as well as
all of such types of property that are leased and all rights and interests with
respect thereto under such leases to the extent that any such lease does not
prohibit or require a consent to the creation of a Lien in favor of the Bank
(including, without limitation, options to purchase) together with all present
and future additions and accessions thereto, replacements therefor, component
and auxiliary parts and supplies used or to be used in connection therewith, and
all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto wherever any of the
foregoing is located to the extent that any of the foregoing are now owned or
hereafter acquired by a Borrower and to the extent that any other Borrower now
or hereafter grants or purports to xxxxx x Xxxx upon all or any of the foregoing
as security for all or any portion of the Indebtedness.
4
"Equity Interest" shall mean (i) in the case of any corporation, all
capital stock and any securities exchangeable for or convertible into capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents of corporate
stock (however designated) in or to such association or entity, (iii) in the
case of a partnership or limited liability company, partnership or membership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distribution of assets of, the issuing Person, and
including, in all of the foregoing cases described in clauses (i), (ii), (iii)
or (iv), any warrants, rights or other options to purchase or otherwise acquire
any of the interests described in any of the foregoing cases.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code and the regulations in effect from time
to time thereunder.
"Eurodollar-based Advance" shall mean any Advance which bears interest
at the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean a per annum interest rate which is
equal to the sum of (a) the Applicable Margin, plus (b) the quotient of:
(i) the per annum interest rate at which deposits in the relevant
eurocurrency are offered to Agent's Eurodollar Lending Office by other prime
banks in the eurocurrency market in an amount comparable to the relevant
Eurodollar-based Advance and for a period equal to the relevant
Eurodollar-Interest Period at approximately 11:00 A.M. Detroit time two (2)
Business Days prior to the first day of such Eurodollar-Interest Period, divided
by
(ii) a percentage equal to 100% minus the maximum rate on such date at
which Agent is required to maintain reserves on `Eurocurrency Liabilities' as
defined in and pursuant to Regulation D of the Board of Governors of the Federal
Reserve System or, if such regulation or definition is modified, and as long as
Agent is required to maintain reserves against a category of liabilities which
includes eurocurrency deposits or includes a category of assets which includes
eurocurrency loans, the rate at which such reserves are required to be
maintained on such category,
such sum to be rounded upward, if necessary, to the nearest whole multiple of
1/100th of 1%.
"Eurodollar-Interest Period" shall mean, for any Eurodollar-based
Advance, an Interest Period of one, two, three or six months (or any shorter or
longer periods agreed to in advance by the Borrower, Agent and the Lenders) as
selected by Borrower, for such Eurodollar-based Advance pursuant to Section 2.3.
"Eurodollar Lending Office" shall mean, (a) with respect to the Agent,
Agent's office located at its Grand Caymans Branch or such other branch of
Agent, domestic or foreign, as it may hereafter designate as its Eurodollar
Lending Office by written notice to Borrower and the Lenders and (b) as to each
of the Lenders, its office, branch or affiliate located at its address set forth
on the signature pages hereof (or identified thereon as its Eurodollar Lending
Office), or at such other office, branch or affiliate of such Lender as it may
hereafter designate as its Eurodollar Lending Office by written notice to
Borrower and Agent.
"Event of Default" shall mean each of the Events of Default specified
in Section 9.1 hereof.
"Existing Debt Documents" shall mean (i) the Credit Agreement dated
July 27, 2004 between Borrower and Comerica Bank, as amended, together in each
case with all instruments, documents and agreements related thereto.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
5
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by Agent, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/100th of 1%.
"Fee Letter" shall mean the fee letter by and between ENGlobal
Corporation and Comerica Bank dated as of August 8, 2007 relating to the
Indebtedness hereunder, as amended, restated, replaced or otherwise modified
from time to time.
"Fees" shall mean the Revolving Credit Facility Fee, the Letter of
Credit Fees and the other fees and charges (including any agency fees) payable
by Borrower to the Lenders, the Issuing Lender or Agent hereunder or under the
Fee Letter.
"Fiscal Year" shall mean the twelve-month period ending on each
December 31.
"Foreign Subsidiary" shall mean any Subsidiary, other than a Domestic
Subsidiary, and "Foreign Subsidiaries" shall mean any or all of them, including
at the Effective Date, WRC Canada Ltd. and ENGlobal Canada ULC.
"Funded Debt" shall mean for the Borrowers, as of any month-end
determination date, the average total outstanding principal balance of Debt
(including Indebtedness under this Agreement, Letter of Credit Obligations and
Subordinated Debt) which should be classified in accordance with GAAP as "funded
indebtedness" or "long term indebtedness" on the Borrowers' balance sheet for
the then-ended month including, without limitation, the outstanding amount of
the Revolving Credit Advances and the Letter of Credit Obligations but excluding
any indebtedness incurred for the purpose of financing insurance premiums.
"GAAP" shall mean, as of any applicable date of determination,
generally accepted accounting principles in the United States of America, as
applicable on such date, consistently applied, as in effect on the Effective
Date.
"Governmental Authority means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other legal
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guarantee Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing Person in respect of any obligation
of another Person (the "primary obligor") (including, without limitation, any
bank under any letter of credit), the creation of which was induced by a
reimbursement agreement, guaranty agreement, keepwell agreement, purchase
agreement, counterindemnity or similar obligation issued by the guaranteeing
person, in either case guaranteeing or in effect guaranteeing any Debt, leases,
dividends or other obligations (the "primary obligations") of the primary
obligor in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
6
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
applicable Person in good faith.
"Guarantor(s)" shall mean each Domestic Subsidiary of a Borrower (which
is not a Borrower) which has executed and delivered to the Agent a Guaranty (or
a joinder to a Guaranty), and a Security Agreement (or a joinder to the Security
Agreement).
"Guaranty" shall mean, collectively, the guaranty agreements executed
and delivered by the applicable Guarantors on the Effective Date pursuant to
Section 5.3 hereof and those guaranty agreements executed and delivered from
time to time after the Effective Date (whether by execution of joinder
agreements or otherwise) pursuant to Section 7.13 hereof, in each case in form
and substance acceptable to the Agent and Lenders, as amended, restated or
otherwise modified from time to time.
"Hazardous Material" shall mean any hazardous or toxic waste, substance
or material defined or regulated as such in or for purposes of the Hazardous
Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations and other governmental restrictions and requirements issued
by any federal, state, local or other governmental or quasi-governmental
authority or body (or any agency, instrumentality or political subdivision
thereof) pertaining to any substance or material which is regulated for reasons
of health, safety or the environment and which is present or alleged to be
present on or about or used in any facilities owned, leased or operated by any
Borrower, or any portion thereof including, without limitation, those relating
to soil, surface, subsurface ground water conditions and the condition of the
indoor and outdoor ambient air; any so-called "superfund" or "superlien" law;
and any other United States federal, state or local statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material, as now or
at any time during the term of the Agreement in effect.
"Hedging Agreement" shall mean any agreement relating to a Hedging
Transaction entered into between the Borrower and any Lender or an Affiliate of
a Lender.
"Hedging Transaction" means each interest rate swap transaction, basis
swap transaction, forward rate transaction, equity transaction, equity index
transaction, foreign exchange transaction, cap transaction, floor transaction
(including any option with respect to any of these transactions and any
combination of any of the foregoing).
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities (including
without limitation principal, interest (including without limitation interest
accruing at the then applicable rate provided in this Agreement or any other
applicable Loan Document after the Revolving Credit Maturity Date and interest
accruing at the then applicable rate provided in this Agreement or any other
applicable Loan Document after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrowers whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), fees, expenses and other charges) arising under
this Agreement or any of the other Loan Documents, whether direct or indirect,
7
absolute or contingent, of any Borrower to any of the Lenders or Affiliates
thereof or to the Agent, in any manner and at any time, whether arising under
this Agreement, the Guaranty or any of the other Loan Documents (including
without limitation, payment obligations under Hedging Transactions evidenced by
Hedging Agreements), due or hereafter to become due, now owing or that may
hereafter be incurred by any Borrower to any of the Lenders or Affiliates
thereof or to the Agent, and which shall be deemed to include protective
advances made by Agent with respect to the Collateral under or pursuant to the
terms of any Loan Document and any liabilities of any Borrower to Agent or any
Lender arising in connection with any Lender Products, in each case whether or
not reduced to judgment, with interest according to the rates and terms
specified, and any and all consolidations, amendments, renewals, replacements,
substitutions or extensions of any of the foregoing; provided, however that for
purposes of calculating the Indebtedness outstanding under this Agreement or any
of the other Loan Documents, the direct and indirect and absolute and contingent
obligations of the Borrowers (whether direct or contingent) shall be determined
without duplication.
"Interest Period" shall mean (a) with respect to a Eurodollar-based
Advance, a Eurodollar-Interest Period, commencing on the day a Eurodollar-based
Advance is made, or on the effective date of an election of the Eurodollar-based
Rate made under Section 2.3 hereof, and (b) with respect to a Swing Line Advance
carried at the Quoted Rate, an interest period of 30 days (or any lesser number
of days agreed to in advance by the Borrower, Agent and the Swing Line Lender);
provided, however that (i) any Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next succeeding Business Day,
except that as to an Interest Period in respect of a Eurodollar-based Advance,
if the next succeeding Business Day falls in another calendar month, such
Interest Period shall end on the next preceding Business Day, (ii) when an
Interest Period in respect of a Eurodollar-based Advance begins on a day which
has no numerically corresponding day in the calendar month during which such
Interest Period is to end, it shall end on the last Business Day of such
calendar month, and (iii) no Interest Period in respect of any Advance shall
extend beyond the Revolving Credit Maturity Date.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986 of
the United States of America, as amended from time to time, and the regulations
promulgated thereunder.
"Inventory" shall mean any inventory as defined under the UCC.
"Investment" shall mean, when used with respect to any Person, (a) any
loan, investment or advance made by such Person to any other Person (including,
without limitation, any Guarantee Obligation) in respect of any Equity Interest,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in Equity Interests in any other Person,
including, without limitation, any investment made in exchange for the issuance
of Equity Interest of such Person and any investment made as a capital
contribution to such other Person.
"Issuing Lender" shall mean Comerica Bank in its capacity as issuer of
one or more Letters of Credit hereunder, or its successor designated by Borrower
and the Revolving Credit Lenders.
"Issuing Office" shall mean such office as Issuing Lender shall
designate as its Issuing Office.
"Lender Products" shall mean any one or more of the following types of
services or facilities extended to the Borrowers by any Lender: (i) credit
cards, (ii) credit card processing services, (iii) debit cards, (iv) purchase
cards, (v) Automated Clearing House (ACH) transactions, (vi) cash management,
including controlled disbursement services, and (vii) establishing and
maintaining deposit accounts.
"Lenders" shall have the meaning set forth in the preamble, and shall
include the Revolving Credit Lenders, the Swing Line Lender and any assignee
which becomes a Lender pursuant to Section 13.8 hereof.
"Letter of Credit Agreement" shall mean, collectively, the letter of
credit application and related documentation executed and/or delivered by the
Borrower in respect of each Letter of Credit, in each case satisfactory to the
Issuing Lender, as amended, restated or otherwise modified from time to time.
8
"Letter of Credit Documents" shall have the meaning ascribed to such
term in Section 3.7(a) hereof.
"Letter of Credit Fees" shall mean the fees payable in connection with
Letters of Credit pursuant to Section 3.4(a) and (b) hereof.
"Letter of Credit Maximum Amount" shall mean Two Million Dollars
($2,000,000).
"Letter of Credit Obligations" shall mean at any date of determination,
the sum of (a) the aggregate undrawn amount of all Letters of Credit then
outstanding, and (b) the aggregate amount of Reimbursement Obligations which
remain unpaid as of such date.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Issuing Lender in its capacity hereunder as issuer of a Letter of
Credit as a result of a draft or other demand for payment under any Letter of
Credit.
"Letter(s) of Credit" shall mean any standby letters of credit issued
by Issuing Lender at the request of or for the account of Borrower pursuant to
Article 3 hereof.
"Lien" shall mean any security interest in or lien on or against any
property arising from any pledge, assignment, hypothecation, mortgage, security
interest, deposit arrangement, trust receipt, conditional sale or title
retaining contract, sale and leaseback transaction, Capitalized Lease,
consignment or bailment for security, or any other type of lien, charge,
encumbrance, title exception, preferential or priority arrangement affecting
property (including with respect to stock, any stockholder agreements, voting
rights agreements, buy-back agreements and all similar arrangements), whether
based on common law or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes
(if issued), the Letter of Credit Agreements, the Letters of Credit, the
Guaranty, the Subordination Agreements, the Collateral Documents, each Hedging
Agreement, and any other documents, certificates or agreements that are executed
and required to be delivered pursuant to any of the foregoing documents, as such
documents may be amended, restated or otherwise modified from time to time.
"Majority Lenders" shall mean at any time (a) so long as the Revolving
Credit Aggregate Commitment has not been terminated, the Revolving Credit
Lenders holding more than 50.0% of the Revolving Credit Aggregate Commitment and
(b) if the Revolving Credit Aggregate Commitment has been terminated (whether by
maturity, acceleration or otherwise), Revolving Credit Lenders holding more than
50.0% of the aggregate principal amount then outstanding under the Revolving
Credit Loans; provided that, for the purposes of determining Majority Lenders
hereunder the principal amount outstanding under the Swing Line shall be
allocated among the Revolving Credit Lenders based on their respective Revolving
Credit Percentages; provided further that, for purposes of determining Majority
Lenders hereunder, the Letter of Credit Obligations shall be allocated among the
Revolving Credit Lenders based on their respective Revolving Credit Percentages.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the condition (financial or otherwise), business, performance, operations,
properties or prospects of the Borrowers taken as a whole, (b) the ability of
any Borrower to perform its obligations under this Agreement, the Notes (if
issued) or any other Loan Document to which it is a party, or (c) the validity
or enforceability of this Agreement, any of the Notes (if issued) or any of the
other Loan Documents or the rights or remedies of the Agent or the Lenders
hereunder or thereunder.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Income" shall mean the net income (or loss) of a Person for any
applicable period of determination, determined in accordance with GAAP, but
excluding, in any event:
9
(a) any gains or losses on the sale or other disposition, not
in the ordinary course of business, of investments or fixed or
capital assets, and any taxes on the excluded gains and any
tax deductions or credits on account of any excluded losses;
and
(b) in the case of Borrowers, net earnings of any Person in
which a Borrower has an ownership interest, unless such net
earnings shall have actually been received by such Borrower in
the form of cash distributions.
"Net Worth" shall mean, with respect to any Person, and as to any
applicable date of determination, the excess of (a) the net book value of all
assets of such Person (excluding Affiliate Receivables) after all appropriate
deductions in accordance with GAAP (including, without limitation, reserves for
doubtful receivables, obsolescence, depreciation and amortization), over (b) all
Debt of such Person at such time.
"Notes" shall mean the Revolving Credit Notes and the Swing Line Note.
"Parent" shall mean ENGlobal Corporation, a Texas corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" shall mean any plan established and maintained by a
Borrower, or contributed to by a Borrower, which is qualified under Section
401(a) of the Internal Revenue Code and subject to the minimum funding standards
of Section 412 of the Internal Revenue Code.
"Percentage" shall mean the Revolving Credit Percentage.
"Permitted Acquisition" shall mean any acquisition by Borrowers of all
or substantially all of the assets of another Person, or of a division or line
of business of another Person, or any Equity Interests of another Person which
satisfies and/or is conducted in accordance with the following requirements:
(a) such acquisition is of a business or Person engaged
in a like-kind business which is compatible with, or
complementary to, the business of the Borrowers;
(b) Borrowers may not expend more than $2,500,000,
regardless of the form of consideration paid, on any
single acquisition without express written approval
from Agent);
(c) Borrowers may not expend more than $10,000,000 in
cash, when considering the aggregate of all such
acquisitions, from the date hereof until the
Revolving Credit Maturity Date; and
(d) Borrowers may not expend more than $20,000,000 in any
form of consideration, when considering the aggregate
of all such acquisitions, from the date hereof until
the Revolving Credit Maturity Date.
"Permitted Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state or commonwealth of the United
States or the obligations of the District of Columbia
or any possession of the United States, or any
political subdivision of any of the foregoing, which
are described in Section 103(a) of the Internal
Revenue Code and are graded in any of the highest
three (3) major grades as determined by at least one
Rating Agency; or secured, as to payments of
10
principal and interest, by a letter of credit
provided by a financial institution or insurance
provided by a bond insurance company which in each
case is itself or its debt is rated in one of the
highest three (3) major grades as determined by at
least one Rating Agency;
(c) Banker's acceptances, commercial accounts, demand
deposit accounts, certificates of deposit, other time
deposits or depository receipts issued by or
maintained with any Lender or any Affiliate thereof,
or any bank, trust company, savings and loan
association, savings bank or other financial
institution whose deposits are insured by the Federal
Deposit Insurance Corporation and whose reported
capital and surplus equal at least $250,000,000,
provided that such minimum capital and surplus
requirement shall not apply to demand deposit
accounts maintained by any Borrower in the ordinary
course of business;
(d) Commercial paper rated at the time of purchase within
the two highest classifications established by not
less than two Rating Agencies, and which matures
within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations
itemized in paragraph (a) above, and executed by a
bank or trust company or by members of the
association of primary dealers or other recognized
dealers in United States government securities, the
market value of which must be maintained at levels at
least equal to the amounts advanced; and
(f) Any fund or other pooling arrangement which
exclusively purchases and holds the investments
itemized in (a) through (e) above.
"Permitted Liens" shall mean with respect to any Person:
(a) Liens for (i) taxes or governmental assessments or
charges or (ii) customs duties in connection with the
importation of goods to the extent such Liens attach
to the imported goods that are the subject of the
duties, in each case (x) to the extent not yet due,
(y) as to which the period of grace, if any, related
thereto has not expired or (z) which are being
contested in good faith by appropriate proceedings,
provided that in the case of any such contest, any
proceedings for the enforcement of such liens have
been suspended and adequate reserves with respect
thereto are maintained on the books of such Person in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, processor's, landlord's liens or other
like liens arising in the ordinary course of business
which secure obligations that are not overdue for a
period of more than 30 days or which are being
contested in good faith by appropriate proceedings,
provided that in the case of any such contest, (x)
any proceedings commenced for the enforcement of such
Liens have been suspended and (y) appropriate
reserves with respect thereto are maintained on the
books of such Person in conformity with GAAP;
(c) (i) Liens incurred in the ordinary course of business
to secure the performance of statutory obligations
arising in connection with progress payments or
advance payments due under contracts with the United
States government or any agency thereof entered into
in the ordinary course of business and (ii) Liens
incurred or deposits made in the ordinary course of
business to secure the performance of statutory
obligations (not otherwise permitted under subsection
(g) of this definition), bids, leases, fee and
expense arrangements with trustees and fiscal agents,
trade contracts, surety and appeal bonds, performance
bonds and other similar obligations (exclusive of
obligations incurred in connection with the borrowing
11
of money, any lease-purchase arrangements or the
payment of the deferred purchase price of property),
provided, that in each case full provision for the
payment of all such obligations has been made on the
books of such Person as may be required by GAAP;
(d) any attachment or judgment lien that remains unpaid,
unvacated, unbonded or unstayed by appeal or
otherwise for a period ending on the earlier of (i)
thirty (30) consecutive days from the date of its
attachment or entry (as applicable) or (ii) the
commencement of enforcement steps with respect
thereto, other than the filing of notice thereof in
the public record;
(e) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes,
or zoning or other restrictions as to the use of real
properties, or any interest of any lessor or
sublessor under any lease permitted hereunder which,
in each case, does not materially interfere with the
business of such Person;
(f) Liens arising in connection with worker's
compensation, unemployment insurance, old age
pensions and social security benefits and similar
statutory obligations, provided that no enforcement
proceedings in respect of such Liens are pending and
provisions have been made for the payment of such
liens on the books of such Person as may be required
by GAAP; and
(g) continuations of Liens that are permitted under
subsections (a)-(g) hereof, provided such
continuations do not violate the specific time
periods set forth in subsections (b) and (d) and
provided further that such Liens do not extend to any
additional property or assets of any Borrower or
secure any additional obligations of any Borrower.
Regardless of the language set forth in this definition, no
Lien over the Equity Interests of any Borrower granted to any
Person other than to Agent for the benefit of the Lenders
shall be deemed a "Permitted Lien" under the terms of this
Agreement.
"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, firm or
association or a government or any agency or political subdivision thereof or
other entity of any kind.
"Pledge Agreement(s)" shall mean any pledge agreement executed and
delivered from time to time by any Borrower and any agreements, instruments or
documents related thereto, in each case in form and substance satisfactory to
Agent amended, restated or otherwise modified from time to time.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which
is equal to the sum of the Applicable Margin plus the greater of (i) the Prime
Rate, and (ii) the Alternate Base Rate.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Pro Forma Balance Sheet" shall mean the pro forma Consolidated balance
sheet of the Parent which has been certified by a Responsible Officer of the
Parent that it fairly presents in all material respects the pro forma
adjustments reflecting the transactions (including payment of all fees and
expenses in connection therewith) contemplated by this Agreement and the other
Loan Documents.
12
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition, a statement executed by the Parent (supported by
reasonable detail) setting forth the total consideration to be paid or incurred
in connection with the proposed acquisition, and pro forma combined projected
financial information for the Borrowers and the acquisition target (if
applicable), consisting of projected balance sheets as of the proposed effective
date of the acquisition and as of the end of at least the next succeeding three
(3) Fiscal Years following the acquisition and projected statements of income
and cash flows for each of those years, including sufficient detail to permit
calculation of the ratios described in Section 7.9 hereof, as projected as of
the effective date of the acquisition and as of the ends of those Fiscal Years
and accompanied by (i) a statement setting forth a calculation of the ratio so
described, (ii) a statement in reasonable detail specifying all material
assumptions underlying the projections and (iii) such other information as the
Agent or the Lenders shall reasonably request.
"Purchasing Lender" shall have the meaning set forth in Section 13.12.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Lender in its sole discretion with respect to a Swing Line Advance
and accepted by the Borrower.
"Quoted Rate Advance" means any Swing Line Advance which bears interest
at the Quoted Rate.
"Rating Agency" shall mean Xxxxx'x Investor Services, Inc., Standard
and Poor's Ratings Services, their respective successors or any other nationally
recognized statistical rating organization which is acceptable to the Agent.
"Register" is defined in Section 13.8(g) hereof.
"Reimbursement Obligation(s)" shall mean the aggregate amount of all
unreimbursed drawings under all Letters of Credit (excluding for the avoidance
of doubt, reimbursement obligations that are deemed satisfied pursuant to a
deemed disbursement under Section 3.6(a)).
"Request for Advance" shall mean a Request for Revolving Credit Advance
or a Request for Swing Line Advance, as the context may indicate or otherwise
require.
"Request for Revolving Credit Advance" shall mean a request for a
Revolving Credit Advance issued by the Borrower under Section 2.3 of this
Agreement in the form annexed hereto as Exhibit A.
"Request for Swing Line Advance" shall mean a request for a Swing Line
Advance issued by the Borrower under Section 2.12(b) of this Agreement in the
form attached hereto as Exhibit D.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean, with respect to any Person, the chief
executive officer, chief financial officer, treasurer, president or controller
of such Person, or with respect to compliance with financial covenants, the
chief financial officer or the treasurer of such Person, or any other officer of
such Person having substantially the same authority and responsibility.
"Revolving Credit" shall mean the revolving credit loans to be advanced
to Borrower by the applicable Revolving Credit Lenders pursuant to Article 2
hereof, in an aggregate amount (subject to the terms hereof), not to exceed, at
any one time outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by Borrower
and made by the Revolving Credit Lenders under Section 2.1 of this Agreement,
including without limitation any readvance, refunding or conversion of such
borrowing pursuant to Section 2.3 hereof and any deemed disbursement of an
Advance in respect of a Letter of Credit under Section 3.6(a) hereof, and may
include, subject to the terms hereof, Eurodollar-based Advances and Prime-based
Advances.
13
"Revolving Credit Aggregate Commitment" shall mean Fifty Million
Dollars ($50,000,000), subject to reduction or termination under Section 2.10 or
9.2 hereof.
"Revolving Credit Commitment Amount" shall mean with respect to any
Revolving Credit Lender, (i) if the Revolving Credit Aggregate Commitment has
not been terminated, the amount specified opposite such Revolving Credit
Lender's name in the column entitled "Revolving Credit Commitment Amount" on
Schedule 1.2, as adjusted from time to time in accordance with the terms hereof;
and (ii) if the Revolving Credit Aggregate Commitment has been terminated
(whether by maturity, acceleration or otherwise), the amount equal to its
Percentage of the aggregate principal amount outstanding under the Revolving
Credit (including the outstanding Letter of Credit Obligations and any
outstanding Swing Line Advances).
"Revolving Credit Facility Fee" shall mean the fee payable to Agent for
distribution to the Revolving Credit Lenders in accordance with Section 2.8
hereof.
"Revolving Credit Lenders" shall mean the financial institutions from
time to time parties hereto as lenders of the Revolving Credit.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
August 8, 2010, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall terminate in accordance with the provisions of this Agreement.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.2 hereof, made by Borrower to each of the Revolving
Credit Lenders in the form annexed hereto as Exhibit B, as such notes may be
amended or supplemented from time to time, and any other notes issued in
substitution, replacement or renewal thereof from time to time.
"Revolving Credit Percentage" means, with respect to any Revolving
Credit Lender, the percentage specified opposite such Revolving Credit Lender's
name in the column entitled "Revolving Credit Percentage" on Schedule 1.2, as
adjusted from time to time in accordance with the terms hereof.
"Security Agreement" shall mean, collectively, the security
agreement(s) executed and delivered by Borrower and the Guarantors on the
Effective Date pursuant to Section 5.3 hereof, and any such agreements executed
and delivered after the Effective Date (whether by execution of a joinder
agreement to any existing security agreement or otherwise) pursuant to Section
7.13 hereof, in form and substance satisfactory to the Agent, as amended,
restated or otherwise modified from time to time.
"Subordinated Debt" shall mean any unsecured Funded Debt of any
Borrower and other obligations under the Subordinated Debt Documents and any
other Funded Debt of any Borrower which has been subordinated in right of
payment and priority to the Indebtedness, all on terms and conditions
satisfactory to the Agent.
"Subordinated Debt Documents" shall mean and include any documents
evidencing any Subordinated Debt, in each case, as the same may be amended,
modified, supplemented or otherwise modified from time to time in compliance
with the terms of this Agreement.
"Subordination Agreements" shall mean, collectively any subordination
agreements entered into by any Person from time to time in favor of Agent in
connection with any Subordinated Debt, the terms of which are acceptable to the
Agent, in each case as the same may be amended, restated or otherwise modified
from time to time, and "Subordination Agreement" shall mean any one of them.
14
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company, partnership or any
other business entity of which more than fifty percent (50%) of the outstanding
voting stock, share capital, membership, partnership or other interests, as the
case may be, is owned either directly or indirectly by any Person or one or more
of its Subsidiaries, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by any
Person and/or its Subsidiaries. Unless otherwise specified to the contrary
herein or the context otherwise requires, Subsidiary(ies) shall refer to the
Subsidiary(ies) of Parent.
"Sweep Agreement" means any agreement relating to the "Sweep to Loan"
automated system of the Agent or any other cash management arrangement which the
Borrower and the Agent have executed for the purposes of effecting the borrowing
and repayment of Swing Line Advances.
"Swing Line" shall mean the revolving credit loans to be advanced to
Borrower by the Swing Line Lender pursuant to Section 2.12 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Swing Line Maximum Amount.
"Swing Line Advance" shall mean a borrowing requested by Borrower and
made by Swing Line Lender pursuant to Section 2.12 hereof and may include,
subject to the terms hereof, Quoted Rate Advances and Prime-based Advances.
"Swing Line Lender" shall mean Comerica Bank in its capacity as lender
of the Swing Line under Section 2.12 of this Agreement, or its successor as
subsequently designated hereunder.
"Swing Line Maximum Amount" shall mean Five Million Dollars
($5,000,000.00).
"Swing Line Note" shall mean the swing line note which may be issued by
Borrower to Swing Line Lender pursuant to Section 2.12(a) hereof in the form
annexed hereto as Exhibit C, as such note may be amended or supplemented from
time to time, and any note or notes issued in substitution, replacement or
renewal thereof from time to time.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable state; provided that, unless specified
otherwise or the context otherwise requires, such terms shall refer to the
Uniform Commercial Code as in effect in the State of Texas.
"USA Patriot Act" is defined in Section 6.7.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
2. REVOLVING CREDIT.
2.1 Commitment. Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Revolving Credit Lender
severally and for itself alone agrees to make Advances of the Revolving Credit
in Dollars to Borrower from time to time on any Business Day during the period
from the Effective Date hereof until (but excluding) the Revolving Credit
Maturity Date in an aggregate amount, not to exceed at any one time outstanding
such Lender's Revolving Credit Percentage of the Revolving Credit Aggregate
Commitment. Subject to the terms and conditions set forth herein, advances,
repayments and readvances may be made under the Revolving Credit.
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness.
(a) Borrower hereby unconditionally promises to pay to
the Agent for the account of each Revolving Credit
Lender the then unpaid principal amount of each
Revolving Credit Advance (plus all accrued and unpaid
15
interest) of such Revolving Credit Lender to Borrower
on the Revolving Credit Maturity Date and on such
other dates and in such other amounts as may be
required from time to time pursuant to this
Agreement. Subject to the terms and conditions
hereof, each Revolving Credit Advance shall, from
time to time from and after the date of such Advance
(until paid), bear interest at its Applicable
Interest Rate.
(b) Each Revolving Credit Lender shall maintain in
accordance with its usual practice an account or
accounts evidencing indebtedness of Borrower to the
appropriate lending office of such Revolving Credit
Lender resulting from each Revolving Credit Advance
made by such lending office of such Revolving Credit
Lender from time to time, including the amounts of
principal and interest payable thereon and paid to
such Revolving Credit Lender from time to time under
this Agreement.
(c) The Agent shall maintain the Register pursuant to
Section 13.8(g), and a subaccount therein for each
Revolving Credit Lender, in which Register and
subaccounts (taken together) shall be recorded (i)
the amount of each Revolving Credit Advance made
hereunder, the type thereof and each
Eurodollar-Interest Period applicable to any
Eurodollar-based Advance, (ii) the amount of any
principal or interest due and payable or to become
due and payable from Borrower to each Revolving
Credit Lender hereunder in respect of the Revolving
Credit Advances and (iii) both the amount of any sum
received by the Agent hereunder from Borrower in
respect of the Revolving Credit Advances and each
Revolving Credit Lender's share thereof.
(d) The entries made in the Register maintained pursuant
to paragraph (c) of this Section 2.2 shall, absent
manifest error, to the extent permitted by applicable
law, be prima facie evidence of the existence and
amounts of the obligations of Borrower therein
recorded; provided, however, that the failure of any
Revolving Credit Lender or the Agent to maintain the
Register or any account, as applicable, or any error
therein, shall not in any manner affect the
obligation of Borrower to repay the Revolving Credit
Advances (and all other amounts owing with respect
thereto) made to Borrower by the Revolving Credit
Lenders in accordance with the terms of this
Agreement.
(e) Borrower agrees that, upon written request to the
Agent by any Revolving Credit Lender, Borrower will
execute and deliver, to such Revolving Credit Lender,
at Borrower's own expense, a Revolving Credit Note
evidencing the outstanding Revolving Credit Advances
owing to such Revolving Credit Lender.
2.3 Requests for and Refundings and Conversions of Advances. Borrower
may request an Advance of the Revolving Credit, a refund of any Revolving Credit
Advance in the same type of Advance or to convert any Revolving Credit Advance
to any other type of Revolving Credit Advance only by delivery to Agent of a
Request for Revolving Credit Advance executed by an Authorized Signer for the
Borrower, subject to the following:
(a) each such Request for Revolving Credit Advance shall
set forth the information required on the Request for
Revolving Credit Advance, including without
limitation:
(i) the proposed date of such Revolving Credit
Advance (or the refunding or conversion of
an outstanding Revolving Credit Advance),
which must be a Business Day;
(ii) whether such Advance is a new Revolving
Credit Advance or a refunding or conversion
of an outstanding Revolving Credit Advance;
and
16
(iii) whether such Revolving Credit Advance is to
be a Prime-based Advance or a
Eurodollar-based Advance, and, except in the
case of a Prime-based Advance, the first
Eurodollar-Interest Period applicable
thereto, provided, however, that the initial
Revolving Credit Advance made under this
Agreement shall be a Prime-based Advance,
which may then be converted into a
Eurodollar-based Advance in compliance with
this Agreement.
(b) each such Request for Revolving Credit Advance shall
be delivered to Agent by 12:00 p.m. (Detroit time)
three (3) Business Days prior to the proposed date of
the Revolving Credit Advance, except in the case of a
Prime-based Advance, for which the Request for
Revolving Credit Advance must be delivered by 12:00
p.m. (Detroit time) on the proposed date for such
Revolving Credit Advance;
(c) on the proposed date of such Revolving Credit
Advance, the sum of (x) the aggregate principal
amount of all Revolving Credit Advances and Swing
Line Advances outstanding on such date (including,
without duplication) the Advances that are deemed to
be disbursed by Agent under Section 3.6(a) hereof in
respect of Borrower's Reimbursement Obligations
hereunder), plus (y) the Letter of Credit Obligations
as of such date, in each case after giving effect to
all outstanding requests for Revolving Credit
Advances and Swing Line Advances and for the issuance
of any Letters of Credit, shall not exceed the
Revolving Credit Aggregate Commitment;
(d) in the case of a Prime-based Advance, the principal
amount of the initial funding of such Advance, as
opposed to any refunding or conversion thereof, shall
be at least $1,000,000 or the remainder available
under the Revolving Credit Aggregate Commitment if
less than $1,000,000;
(e) in the case of a Eurodollar-based Advance, the
principal amount of such Advance, plus the amount of
any other outstanding Revolving Credit Advance to be
then combined therewith having the same
Eurodollar-Interest Period, if any, shall be at least
$2,000,000 (or a larger integral multiple of
$250,000) or the remainder available under the
Revolving Credit Aggregate Commitment if less than
$2,000,000 and at any one time there shall not be in
effect more than four (4) different
Eurodollar-Interest Periods;
(f) a Request for Revolving Credit Advance, once
delivered to Agent, shall not be revocable by
Borrower and shall constitute a certification by
Borrower as of the date thereof that:
(i) all conditions to the making of Revolving
Credit Advances set forth in this Agreement
have been satisfied, and shall remain
satisfied to the date of such Revolving
Credit Advance (both before and immediately
after giving effect to such Revolving Credit
Advance);
(ii) there is no Default or Event of Default in
existence, and none will exist upon the
making of such Revolving Credit Advance
(both before and immediately after giving
effect to such Revolving Credit Advance);
and
(iii) the representations and warranties of the
Borrowers contained in this Agreement and
the other Loan Documents are true and
correct in all material respects and shall
be true and correct in all material respects
as of the date of the making of such
Revolving Credit Advance (both before and
immediately after giving effect to such
Revolving Credit Advance), other than any
representation or warranty that expressly
speaks only as of a different date;
17
Agent, acting on behalf of the Revolving Credit Lenders, may also, at its
option, lend under this Section 2.3 upon the telephone or email request of an
Authorized Signer of the Borrower to make such requests and, in the event Agent,
acting on behalf of the Revolving Credit Lenders, makes any such Advance upon a
telephone or email request, an Authorized Signer shall fax or deliver by
electronic file to Agent, on the same day as such telephone or email request, an
executed Request for Revolving Credit Advance. Borrower hereby authorizes Agent
to disburse Advances under this Section 2.3 pursuant to the telephone or email
instructions of any person purporting to be an Authorized Signer.
Notwithstanding the foregoing, Borrower acknowledges that Borrower shall bear
all risk of loss resulting from disbursements made upon any telephone or email
request. Each telephone or email request for an Advance from an Authorized
Signer for the Borrower shall constitute a certification of the matters set
forth in the Request for Revolving Credit Advance form as of the date of such
requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance from
Borrower under Section 2.3 hereof, Agent shall promptly notify each Revolving
Credit Lender by wire, telex or telephone (confirmed by wire, telecopy or telex)
of the amount of such Advance being requested and the date such Revolving Credit
Advance is to be made by each Revolving Credit Lender in an amount equal to its
Revolving Credit Percentage of such Advance. Unless such Revolving Credit
Lender's commitment to make Revolving Credit Advances hereunder shall have been
suspended or terminated in accordance with this Agreement, each such Revolving
Credit Lender shall make available the amount of its Revolving Credit Percentage
of each Revolving Credit Advance in immediately available funds to Agent, as
follows:
(i) for Prime-based Advances, at the office of Agent
located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, not later than 1:00 p.m. (Detroit time) on the
date of such Advance; and
(ii) for Eurodollar-based Advances, at the Agent's
Correspondent for the account of the Eurodollar
Lending Office of the Agent, not later than 12:00
p.m. (the time of the Agent's Correspondent) on the
date of such Advance.
(b) Subject to submission of an executed Request for Revolving Credit
Advance by Borrower without exceptions noted in the compliance certification
therein, Agent shall make available to Borrower the aggregate of the amounts so
received by it from the Revolving Credit Lenders in like funds and currencies:
(i) for Prime-based Advances, not later than 4:00 p.m.
(Detroit time) on the date of such Revolving Credit
Advance, by credit to an account of Borrower
maintained with Agent or to such other account or
third party as Borrower may reasonably direct in
writing in compliance with Section 7.4(e), provided
such direction is timely given; and
(ii) for Eurodollar-based Advances, not later than 4:00
p.m. (the time of the Agent's Correspondent) on the
date of such Revolving Credit Advance, by credit to
an account of Borrower maintained with Agent's
Correspondent or to such other account or third party
as Borrower may direct in compliance with Section
7.4(e), provided such direction is timely given.
(c) Agent shall deliver the documents and papers received by it for the
account of each Revolving Credit Lender to such Revolving Credit Lender. Unless
Agent shall have been notified by any Revolving Credit Lender at least two (2)
Business Days prior to the date of any proposed Revolving Credit Advance that
such Revolving Credit Lender does not intend to make available to Agent such
Revolving Credit Lender's Percentage of such Advance, Agent may assume that such
Revolving Credit Lender has made such amount available to Agent on such date, as
aforesaid. Agent may, but shall not be obligated to, make available to Borrower
18
the amount of such payment in reliance on such assumption. If such amount is not
in fact made available to Agent by such Revolving Credit Lender, as aforesaid,
Agent shall be entitled to recover such amount on demand from such Revolving
Credit Lender. If such Revolving Credit Lender does not pay such amount
forthwith upon Agent's demand therefor and the Agent has in fact made a
corresponding amount available to Borrower, the Agent shall promptly notify
Borrower and Borrower shall pay such amount to Agent, if such notice is
delivered to Borrower prior to 1:00 p.m. (Detroit time) on a Business Day, on
the day such notice is received, and otherwise on the next Business Day, and
such amount paid by Borrower shall be applied as a prepayment of the Revolving
Credit (without any corresponding reduction in the Revolving Credit Aggregate
Commitment), reimbursing Agent for having funded said amounts on behalf of such
Revolving Credit Lender. The Borrower shall retain its claim against such
Revolving Credit Lender with respect to the amounts repaid by it to Agent and,
if such Revolving Credit Lender subsequently makes such amounts available to
Agent, Agent shall promptly make such amounts available to the Borrower as a
Revolving Credit Advance. Agent shall also be entitled to recover from such
Revolving Credit Lender or Borrower, as the case may be, but without
duplication, interest on such amount in respect of each day from the date such
amount was made available by Agent to Borrower, to the date such amount is
recovered by Agent, at a rate per annum equal to:
(i) in the case of such Revolving Credit Lender, for the
first two (2) Business Days such amount remains
unpaid, the Federal Funds Effective Rate, and
thereafter, at the rate of interest then applicable
to such Revolving Credit Advances; and
(ii) in the case of Borrower, the rate of interest then
applicable to such Advance of the Revolving Credit.
Until such Revolving Credit Lender has paid Agent such amount, such Revolving
Credit Lender shall have no interest in or rights with respect to such Advance
for any purpose whatsoever. The obligation of any Revolving Credit Lender to
make any Revolving Credit Advance hereunder shall not be affected by the failure
of any other Revolving Credit Lender to make any Advance hereunder, and no
Revolving Credit Lender shall have any liability to Borrower or any of its
Subsidiaries, the Agent, any other Revolving Credit Lender, or any other party
for another Revolving Credit Lender's failure to make any loan or Advance
hereunder.
2.5 Interest Payments; Default Interest. (a) (a) Interest on the unpaid
balance of all Prime-based Advances of the Revolving Credit and the Swing Line
from time to time outstanding shall accrue from the date of such Advance to the
date repaid, at a per annum interest rate equal to the Prime-based Rate, and
shall be payable in immediately available funds commencing on October 1, 2007,
and on the first day of each calendar quarter thereafter. Whenever any payment
under this Section 2.5(a) shall become due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next Business Day.
Interest accruing at the Prime-based Rate shall be computed on the basis of a
360 day year and assessed for the actual number of days elapsed, and in such
computation effect shall be given to any change in the interest rate resulting
from a change in the Prime-based Rate on the date of such change in the
Prime-based Rate.
(b) Interest on each Eurodollar-based Advance of the Revolving Credit
shall accrue at its Eurodollar-based Rate and shall be payable in immediately
available funds on the last day of the Eurodollar-Interest Period applicable
thereto (and, if any Eurodollar-Interest Period shall exceed three months, then
on the last Business Day of the third month of such Eurodollar-Interest Period,
and at three month intervals thereafter). Interest accruing at the
Eurodollar-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed from the first day of the
Eurodollar-Interest Period applicable thereto to but not including the last day
thereof.
(c) Interest on each Quoted Rate Advance of the Swing Line shall accrue
at its Quoted Rate and shall be payable in immediately available funds on the
last day of the Interest Period applicable thereto. Interest accruing at the
Quoted Rate shall be computed on the basis of a 360-day year and assessed for
the actual number of days elapsed from the first day of the Interest Period
applicable thereto to, but not including, the last day thereof.
19
(d) Notwithstanding anything to the contrary in the preceding sections,
all accrued and unpaid interest on any Revolving Credit Advance refunded or
converted pursuant to Section 2.3 hereof and any Swing Line Advance refunded
pursuant to Section 2.12(e) hereof, shall be due and payable in full on the date
such Advance is refunded or converted.
(e) In the case of any Event of Default under Section 9.1(i),
immediately upon the occurrence thereof, and in the case of any other Event of
Default, immediately upon receipt by Agent of notice from the Majority Lenders,
interest shall be payable on demand on all Revolving Credit Advances and Swing
Line Advances from time to time outstanding at a per annum rate equal to the
Applicable Interest Rate in respect of each such Advance plus, in the case of
Eurodollar-based Advances and Quoted Rate Advances, two percent (2%) for the
remainder of the then existing Interest Period, if any, and at all other such
times, and for all Prime-based Advances from time to time outstanding, at a per
annum rate equal to the Prime-based Rate plus two percent (2%).
2.6 Optional Prepayments.
(a) (i) The Borrower may prepay all or part of the outstanding
principal of any Prime-based Advance(s) of the Revolving Credit at any time,
provided that, after giving effect to any partial prepayment, the aggregate
balance of Prime-based Advance(s) of the Revolving Credit remaining outstanding
shall be at least One Million Dollars ($1,000,000), and (ii) the Borrower may
prepay all or part of the outstanding principal of any Eurodollar-based Advance
of the Revolving Credit at any time (subject to not less than five (5) Business
Day's notice to Agent).
(b) (i) The Borrower may prepay all or part of the outstanding
principal of any Swing Line Advance carried at the Prime-based Rate at any time,
provided that after giving effect to any partial prepayment, the aggregate
balance of such Prime-based Swing Line Advances remaining outstanding shall be
at least Zero Dollars ($0.00) and (ii) the Borrower may prepay all or part of
the outstanding principal of any Swing Line Advance carried at the Quoted Rate
at any time (subject to not less than one (1) day's notice to the Swing Line
Lender) provided that after giving effect to any partial prepayment, the
aggregate balance of such Quoted Rate Swing Line Advances remaining outstanding
shall be at least Zero Dollars ($0.00).
(c) Any prepayment of a Prime-based Advance made in accordance with
this Section shall be without premium or penalty and any prepayment of any other
type of Advance shall be subject to the provisions of Section 11.1 hereof, but
otherwise without premium or penalty.
2.7 Prime-based Advance in Absence of Election or Upon Default. If, (a)
as to any outstanding Eurodollar-based Advance of the Revolving Credit or any
outstanding Quoted Rate Advance of the Swing Line, Agent has not received
payment of all outstanding principal and accrued interest on the last day of the
Interest Period applicable thereto, or does not receive a timely Request for
Advance meeting the requirements of Section 2.3 or 2.12 hereof with respect to
the refunding or conversion of such Advance, or (b) subject to Section 2.5(d)
hereof, if on the last day of the applicable Interest Period a Default or an
Event of Default shall have occurred and be continuing, then, on the last day of
the applicable Interest Period the principal amount of any Eurodollar-based
Advance, which has not been prepaid shall, absent a contrary election of the
Majority Lenders, be converted automatically to a Prime-based Advance and the
Agent shall thereafter promptly notify Borrower of said action.
2.8 Revolving Credit Facility Fee. From the Effective Date to the
Revolving Credit Maturity Date, Borrower shall pay to the Agent for distribution
to the Revolving Credit Lenders pro-rata in accordance with their respective
Percentages, a Revolving Credit Facility Fee quarterly in arrears commencing
October 1, 2007 (in respect of the prior quarter or any portion thereof), and on
the first day of each calendar quarter thereafter. Whenever any payment of the
Revolving Credit Facility Fee shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next Business Day. The
Revolving Credit Facility Fee payable to each Revolving Credit Lender shall be
20
determined by multiplying the Applicable Fee Percentage times the average daily
amount by which such Lender's Percentage of the Revolving Credit Aggregate
Commitment then in effect (whether used or unused). The Revolving Credit
Facility Fee shall be computed on the basis of a year of three hundred sixty
(360) days and assessed for the actual number of days elapsed. Upon receipt of
such payment, Agent shall make prompt payment to each Lender of its share of the
Revolving Credit Facility Fee based upon its respective Revolving Credit
Percentage. It is expressly understood that the Revolving Credit Facility Fees
described in this Section are not refundable under any circumstances.
2.9 Mandatory Repayment of Revolving Credit Advances.
(a) If at any time and for any reason the aggregate outstanding
principal amount of Revolving Credit Advances plus Swing Line Advances, plus the
outstanding Letter of Credit Obligations, shall exceed the Revolving Credit
Aggregate Commitment, Borrower shall immediately reduce any pending request for
a Revolving Credit Advance on such day by the amount of such excess and, to the
extent any excess remains thereafter, repay any Revolving Credit Advances and
Swing Line Advances in an amount equal to the lesser of the outstanding amount
of such Advances and the amount of such remaining excess, with such amounts to
be applied between the Revolving Credit Advances and Swing Line Advances as
determined by the Agent and then, to the extent that any excess remains after
payment in full of all Revolving Credit Advances and Swing Line Advances, to
provide cash collateral in support of any Letter of Credit Obligations in an
amount equal to the lesser of 105% of the amount of such Letter of Credit
Obligations and the amount of such remaining excess, with such cash collateral
to be provided on the basis set forth in Section 9.2 hereof. Borrower
acknowledges that, in connection with any repayment required hereunder, it shall
also be responsible for the reimbursement of any prepayment or other costs
required under Section 11.1 hereof. Any payments made pursuant to this clause
(a) shall be applied first to outstanding Prime-based Advances under the
Revolving Credit, next to Swing Line Advances carried at the Prime-based Rate,
and then to Eurodollar-based Advances of the Revolving Credit, and then to Swing
Line Advances carried at the Quoted Rate.
(b) To the extent that, on the date any mandatory repayment of the
Revolving Credit Advances under this Section 2.9 or payment pursuant to the
terms of any of the Loan Documents is due, the Indebtedness under the Revolving
Credit or any other Indebtedness to be prepaid is being carried, in whole or in
part, at the Eurodollar-based Rate and no Default or Event of Default has
occurred and is continuing, Borrower may deposit the amount of such mandatory
prepayment in a cash collateral account to be held by the Agent, for and on
behalf of the Revolving Credit Lenders, on such terms and conditions as are
reasonably acceptable to Agent and upon such deposit the obligation of Borrower
to make such mandatory prepayment shall be deemed satisfied. Subject to the
terms and conditions of said cash collateral account, sums on deposit in said
cash collateral account shall be applied (until exhausted) to reduce the
principal balance of the Revolving Credit on the last day of each
Eurodollar-Interest Period attributable to the Eurodollar-based Advances of such
Revolving Advance, thereby avoiding breakage costs under Section 11.1 hereof;
provided, however, that if a Default or Event of Default shall have occurred at
any time while sums are on deposit in the cash collateral account, Agent may, in
its sole discretion, elect to apply such sums to reduce the principal balance of
such Eurodollar-based Advances prior to the last day of the applicable
Eurodollar-Interest Period, and the Borrower will be obligated to pay any
resulting breakage costs under Section 11.1.
2.10 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. Borrower may, upon at least five (5) Business Days' prior written
notice to the Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to Five Million
Dollars ($5,000,000) or a larger integral multiple of One Hundred Thousand
Dollars ($100,000); (ii) each reduction shall be accompanied by the payment of
the Revolving Credit Facility Fee, if any, accrued and unpaid to the date of
such reduction; (iii) Borrower shall prepay in accordance with the terms hereof
the amount, if any, by which the aggregate unpaid principal amount of Revolving
21
Credit Advances and Swing Line Advances (including, without duplication, any
deemed Advances made under Section 3.6 hereof) outstanding hereunder, plus the
Letter of Credit Obligations, exceeds the amount of the then applicable
Revolving Credit Aggregate Commitment as so reduced, together with interest
thereon to the date of prepayment; (iv) no reduction shall reduce the Revolving
Credit Aggregate Commitment to an amount which is less than the aggregate
undrawn amount of any Letters of Credit outstanding at such time; and (v) no
such reduction shall reduce the Swing Line Maximum Amount unless Borrower so
elects, provided that the Swing Line Maximum Amount shall at no time be greater
than the Revolving Credit Aggregate Commitment; provided, however that if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurodollar-based Advance or a Quoted Rate Advance and such
termination or reduction is made on a day other than the last Business Day of
the then current Interest Period applicable to such Eurodollar-based Advance or
such Quoted Rate Advance, then, pursuant to Section 11.1, Borrower shall
compensate the Revolving Credit Lenders and/or the Swing Line Lender for any
losses or, so long as no Default or Event of Default has occurred and is
continuing, Borrower may deposit the amount of such prepayment in a collateral
account as provided in Section 2.9(b). Reductions of the Revolving Credit
Aggregate Commitment and any accompanying prepayments of Advances of the
Revolving Credit shall be distributed by Agent to each Revolving Credit Lender
in accordance with such Revolving Credit Lender's Revolving Percentage thereof,
and will not be available for reinstatement by or readvance to Borrower, and ay
accompanying prepayment of Advances of the Swing Line shall be distributed by
Agent to the Swing Line Lender and will not be available for reinstatement or
readvance to the Borrower. Any reductions of the Revolving Credit Aggregate
Commitment hereunder shall reduce each Revolving Credit Lender's portion thereof
proportionately (based on the applicable Percentages), and shall be permanent
and irrevocable. Any payments made pursuant to this Section shall be applied
first to outstanding Prime-based Advances under the Revolving Credit, next to
Swing Line Advances carried at the Prime-based Rate, then to Eurodollar-based
Advances of the Revolving Credit, and then to Swing Line Advances carried at the
Quoted Rate.
2.11 Use of Proceeds of Advances. Advances of the Revolving Credit
shall be used to finance working capital and other lawful corporate purposes.
2.12 Swing Line Advances.
(a) Commitment. The Swing Line Lender may, on the terms and subject to
the conditions hereinafter set forth (including without limitation Section
2.12(c) hereof), but shall not be required to, make one or more Advances (each
such advance being a "Swing Line Advance") to the Borrower from time to time on
any Business Day during the period from the Effective Date hereof until (but
excluding) the Revolving Credit Maturity Date in an aggregate amount not to
exceed at any one time outstanding the Swing Line Maximum Amount. Subject to the
terms set forth herein, advances, repayments and readvances may be made under
the Swing Line.
(b) Accrual of Interest and Maturity; Evidence of Indebtedness.
(i) Swing Line Lender shall maintain in accordance with
its usual practice an account or accounts evidencing
indebtedness of the Borrower to Swing Line Lender
resulting from each Swing Line Advance from time to
time, including the amount and date of each Swing
Line Advance, its Applicable Interest Rate, its
Interest Period, if any, and the amount and date of
any repayment made on any Swing Line Advance from
time to time. The entries made in such account or
accounts of Swing Line Lender shall be prima facie
evidence, absent manifest error, of the existence and
amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of
Swing Line Lender to maintain such account, as
applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay
the Swing Line Advances (and all other amounts owing
with respect thereto) in accordance with the terms of
this Agreement.
(ii) The Borrower agrees that, upon the written request of
Swing Line Lender, the Borrower will execute and
deliver to Swing Line Lender a Swing Line Note.
22
(iii) Borrower unconditionally promises to pay to the Swing
Line Lender the then unpaid principal amount of such
Swing Line Advance (plus all accrued and unpaid
interest) on the Revolving Credit Maturity Date and
on such other dates and in such other amounts as may
be required from time to time pursuant to this
Agreement. Subject to the terms and conditions
hereof, each Swing Line Advance shall, from time to
time after the date of such Advance (until paid),
bear interest at its Applicable Interest Rate.
(c) Requests for Swing Line Advances. Borrower may request a Swing
Line Advance by the delivery to Swing Line Lender of a Request
for Swing Line Advance executed by an Authorized Signer for
the Borrower, subject to the following:
(i) each such Request for Swing Line Advance shall set
forth the information required on the Request for
Advance, including without limitation, (A) the
proposed date of such Swing Line Advance, which must
be a Business Day, (B) whether such Swing Line
Advance is to be a Prime-based Advance or a Quoted
Rate Advance, and (C) in the case of a Quoted Rate
Advance, the duration of the Interest Period
applicable thereto;
(ii) on the proposed date of such Swing Line Advance,
after giving effect to all outstanding requests for
Swing Line Advances made by Borrower as of the date
of determination, the aggregate principal amount of
all Swing Line Advances outstanding on such date
shall not exceed the Swing Line Maximum Amount;
(iii) on the proposed date of such Swing Line Advance,
after giving effect to all outstanding requests for
Revolving Credit Advances and Swing Line Advances)
and Letters of Credit requested by the Borrower on
such date of determination (including, without
duplication, Advances that are deemed disbursed
pursuant to Section 3.6(a) hereof in respect of the
Borrower's Reimbursement Obligations hereunder), the
sum of (x) the aggregate principal amount of all
Revolving Credit Advances and the Swing Line Advances
outstanding on such date plus (y) the Letter of
Credit Obligations on such date shall not exceed the
Revolving Credit Aggregate Commitment;
(iv) (A) in the case of a Swing Line Advance that is a
Prime-based Advance, the principal amount of the
initial funding of such Advance, as opposed to any
refunding or conversion thereof, shall be at least
Zero Dollars ($0.00) or such lesser amount as may be
agreed to by the Swing Line Lender, and (B) in the
case of a Swing Line Advance that is a Quoted Rate
Advance, the principal amount of such Advance, plus
any other outstanding Swing Line Advances to be then
combined therewith having the same Interest Period,
if any, shall be at least Zero Dollars ($0.00) or
such lesser amount as may be agreed to by the Swing
Line Lender, and at any time there shall not be in
effect more than two (2) Interest Rates and Interest
Periods;
(v) each such Request for Swing Line Advance shall be
delivered to the Swing Line Lender by 3:00 p.m.
(Detroit time) on the proposed date of the Swing Line
Advance;
(vi) each Request for Swing Line Advance, once delivered
to Swing Line Lender, shall not be revocable by
Borrower, and shall constitute and include a
certification by Borrower as of the date thereof
that:
(A) all conditions to the making of Swing Line
Advances set forth in this Agreement shall
have been satisfied and shall remain
satisfied to the date of such Swing Line
Advance (both before and immediately after
giving effect to such Swing Line Advance);
23
(B) there is no Default or Event of Default in
existence, and none will exist upon the
making of such Swing Line Advance (both
before and immediately after giving effect
to such Swing Line Advance); and
(C) the representations and warranties of the
Borrower contained in this Agreement and the
other Loan Documents are true and correct in
all material respects and shall be true and
correct in all material respect as of the
date of the making of such Swing Line
Advance (both before and immediately after
giving effect to such Swing Line Advance),
other than any representation or warranty
that expressly speaks only as of a different
date;
(vii) At the option of the Agent, subject to revocation by
Agent at any time and from time to time and so long
as the Agent is the Swing Line Lender, Borrower may
utilize the Agent's "Sweep to Loan" automated system
for obtaining Swing Line Advances and making periodic
repayments. At any time during which the "Sweep to
Loan" system is in effect, Swing Line Advances shall
be advanced to fund borrowing needs pursuant to the
terms of the Sweep Agreement. Each time a Swing Line
Advance is made using the "Sweep to Loan" system,
Borrower shall be deemed to have certified to the
Agent and the Lenders each of the matters set forth
in clause (vi) of this Section 2.12(b). Principal and
interest on Swing Line Advances requested, or deemed
requested, pursuant to this Section shall be paid
pursuant to the terms and conditions of the Sweep
Agreement without any deduction, setoff or
counterclaim whatsoever. Unless sooner paid pursuant
to the provisions hereof or the provisions of the
Sweep Agreement, the principal amount of the Swing
Loans shall be paid in full, together with accrued
interest thereon, on the Revolving Credit Maturity
Date. Agent may suspend or revoke Borrower's
privilege to use the "Sweep to Loan" system at any
time and from time to time for any reason and,
immediately upon any such revocation, the "Sweep to
Loan" system shall no longer be available to Borrower
for the funding of Swing Line Advances hereunder (or
otherwise), and the regular procedures set forth in
this Section 2.12 for the making of Swing Line
Advances shall be deemed immediately to apply. Agent
may, at its option, also elect to make Swing Line
Advances upon Borrower's telephone requests on the
basis set forth in the last paragraph of Section 2.3,
provided that the Borrower complies with the
provisions set forth in this Section 2.12.
(d) Disbursement of Swing Line Advances. Upon receiving any
executed Request for Swing Line Advance from the Borrower and
the satisfaction of the conditions set forth in Section
2.12(c) hereof, Swing Line Lender shall make available to
Borrower the amount so requested in Dollars not later than
4:00 p.m. (Detroit time) on the date of such Advance, by
credit to an account of Borrower maintained with Agent or to
such other account or third party as the Borrower may
reasonably direct in writing in compliance with Section 13.6,
provided such direction is timely given. Swing Line Lender
shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
(e) Refunding of or Participation Interest in Swing Line Advances.
(i) The Agent, at any time in its sole and absolute
discretion, may, in each case on behalf of the
Borrower (which hereby irrevocably directs the Agent
to act on their behalf) request each of the Revolving
Credit Lenders (including the Swing Line Lender in
its capacity as a Revolving Credit Lender) to make an
Advance of the Revolving Credit to Borrower, in an
amount equal to such Revolving Credit Lender's
Revolving Credit Percentage of the aggregate
24
principal amount of the Swing Line Advances
outstanding on the date such notice is given (the
"Refunded Swing Line Advances"); provided however
that the Swing Line Advances carried at the Quoted
Rate which are refunded with Revolving Credit
Advances at the request of the Swing Line Lender at a
time when no Default or Event of Default has occurred
and is continuing shall not be subject to Section
11.1 and no losses, costs or expenses may be assessed
by the Swing Line Lender against the Borrower or the
Revolving Credit Lenders as a consequence of such
refunding. The applicable Revolving Credit Advances
used to refund any Swing Line Advances shall be
Prime-based Advances. In connection with the making
of any such Refunded Swing Line Advances or the
purchase of a participation interest in Swing Line
Advances under Section 2.12(e)(ii) hereof, the Swing
Line Lender shall retain its claim against Borrower
for any unpaid interest or fees in respect thereof
accrued to the date of such refunding. Unless any of
the events described in Section 9.1(i) hereof shall
have occurred (in which event the procedures of
Section 2.12(e)(ii) shall apply) and regardless of
whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance
are then satisfied (but subject to Section
2.12(e)(iii)), each Revolving Credit Lender shall
make the proceeds of its Revolving Credit Advance
available to the Agent for the benefit of the Swing
Line Lender at the office of the Agent specified in
Section 2.4(a) hereof prior to 11:00 a.m. Detroit
time on the Business Day next succeeding the date
such notice is given, in immediately available funds.
The proceeds of such Revolving Credit Advances shall
be immediately applied to repay the Refunded Swing
Line Advances, subject to Section 11.1 hereof.
(ii) If, prior to the making of an Advance of the
Revolving Credit pursuant to Section 2.12(e)(i)
hereof, one of the events described in Section 9.1(i)
hereof shall have occurred, each Revolving Credit
Lender will, on the date such Advance of the
Revolving Credit was to have been made, purchase from
the Swing Line Lender an undivided participating
interest in each Swing Line Advance that was to have
been refunded in an amount equal to its Revolving
Credit Percentage of such Swing Line Advance. Each
Revolving Credit Lender within the time periods
specified in Section 2.12(e)(i) hereof, as
applicable, shall immediately transfer to the Agent,
for the benefit of the Swing Line Lender, in
immediately available funds, an amount equal to its
Revolving Credit Percentage of the aggregate
principal amount of all Swing Line Advances
outstanding as of such date. Upon receipt thereof,
the Agent will deliver to such Revolving Credit
Lender a Swing Line Participation Certificate
evidencing such participation.
(iii) Each Revolving Credit Lender's obligation to make
Revolving Credit Advances to refund Swing Line
Advances, and to purchase participation interests, in
accordance with Section 2.12(e)(i) and (ii),
respectively, shall be absolute and unconditional and
shall not be affected by any circumstance, including,
without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such
Revolving Credit Lender may have against Swing Line
Lender, Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of any
Default or Event of Default; (C) any adverse change
in the condition (financial or otherwise) of Borrower
or any other Person; (D) any breach of this Agreement
or any other Loan Document by Borrower or any other
Person; (E) any inability of Borrower to satisfy the
conditions precedent to borrowing set forth in this
Agreement on the date upon which such Revolving
Credit Advance is to be made or such participating
interest is to be purchased; (F) the termination of
the Revolving Credit Aggregate Commitment hereunder;
or (G) any other circumstance, happening or event
whatsoever, whether or not similar to any of the
foregoing. If any Revolving Credit Lender does not
make available to the Agent the amount required
pursuant to Section 2.12(e)(i) or (ii) hereof, as the
25
case may be, the Agent on behalf of the Swing Line
Lender, shall be entitled to recover such amount on
demand from such Revolving Credit Lender, together
with interest thereon for each day from the date of
non-payment until such amount is paid in full (x) for
the first two (2) Business Days such amount remains
unpaid, at the Federal Funds Effective Rate and (y)
thereafter, at the rate of interest then applicable
to such Swing Line Advances. The obligation of any
Revolving Credit Lender to make available its pro
rata portion of the amounts required pursuant to
Section 2.12(e)(i) or (ii) hereof shall not be
affected by the failure of any other Revolving Credit
Lender to make such amounts available, and no
Revolving Credit Lender shall have any liability to
Borrower, the Agent, the Swing Line Lender, or any
other Revolving Credit Lender or any other party for
another Revolving Credit Lender's failure to make
available the amounts required under Section
2.12(e)(i) or (ii) hereof.
(iv) Notwithstanding the foregoing, no Revolving Credit
Lender shall be required to make any Revolving Credit
Advance to refund a Swing Line Advance or to purchase
a participation in a Swing Line Advance if at least
two (2) Business Days prior to the making of such
Swing Line Advance by the Swing Line Lender, the
officers of the Swing Line Lender immediately
responsible for matters concerning this Agreement
shall have received written notice from Agent or any
Lender that Swing Line Advances should be suspended
based on the occurrence and continuance of a Default
or Event of Default and stating that such notice is a
"notice of default"; provided, however that the
obligation of the Revolving Credit Lenders to make
such Revolving Credit Advances (or purchase such
participations) shall be reinstated upon the date on
which such Default or Event of Default has been
waived by the requisite Lenders.
3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Issuing Lender shall through the Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of Borrower accompanied
by a duly executed Letter of Credit Agreement and such other documentation
related to the requested Letter of Credit as the Issuing Lender may require,
issue Letters of Credit in Dollars for the account of Borrower, in an aggregate
amount for all Letters of Credit issued hereunder at any one time outstanding
not to exceed the Letter of Credit Maximum Amount. Each Letter of Credit shall
be in a minimum face amount of Ten Thousand Dollars ($10,000) (or such lesser
amount as may be agreed to by Issuing Lender) and each Letter of Credit
(including any renewal thereof) shall expire not later than the first to occur
of (i) one year after the date of issuance thereof and (ii) ten (10) Business
Days prior to the Revolving Credit Maturity Date in effect on the date of
issuance thereof. The submission of all applications in respect of and the
issuance of each Letter of Credit hereunder shall be subject in all respects to
the International Standby Practices 98, and any successor documentation thereto
and to the extent not inconsistent therewith, the laws of the State of Texas. In
the event of any conflict between this Agreement and any Letter of Credit
Document other than any Letter of Credit, this Agreement shall control.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of Borrower unless, as of the date of issuance of
such Letter of Credit:
(a) (i) after giving effect to the Letter of Credit requested, the
Letter of Credit Obligations do not exceed the Letter of
Credit Maximum Amount; and (ii) after giving effect to the
Letter of Credit requested, the Letter of Credit Obligations
on such date plus the aggregate amount of all Revolving Credit
Advances and Swing Line Advances (including all Advances
deemed disbursed by Agent under Section 3.6(a) hereof in
respect of Borrower' Reimbursement Obligations) hereunder
requested or outstanding on such date do not exceed the
Revolving Credit Aggregate Commitment;
(b) the representations and warranties of the Borrowers contained
in this Agreement and the other Loan Documents are true and
correct in all material respects and shall be true and correct
in all material respects as of date of the issuance of such
Letter of Credit (both before and immediately after the
issuance of such Letter of Credit), other than any
representation or warranty that expressly speaks only as of a
different date;
26
(c) there is no Default or Event of Default in existence, and none
will exist upon the issuance of such Letter of Credit;
(d) Borrower shall have delivered to Issuing Lender at its Issuing
Office, not less than three (3) Business Days prior to the
requested date for issuance (or such shorter time as the
Issuing Lender, in its sole discretion, may permit), the
Letter of Credit Agreement related thereto, together with such
other documents and materials as may be required pursuant to
the terms thereof, and the terms of the proposed Letter of
Credit shall be reasonably satisfactory to Issuing Lender;
(e) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or
restrain Issuing Lender from issuing the Letter of Credit
requested, or any Revolving Credit Lender from taking an
assignment of its Revolving Credit Percentage thereof pursuant
to Section 3.6 hereof, and no law, rule, regulation, request
or directive (whether or not having the force of law) shall
prohibit the Issuing Lender from issuing, or any Revolving
Credit Lender from taking an assignment of its Revolving
Credit Percentage of, the Letter of Credit requested or
letters of credit generally;
(f) there shall have been (i) no introduction of or change in the
interpretation of any law or regulation, (ii) no declaration
of a general banking moratorium by banking authorities in the
United States, Michigan or the respective jurisdictions in
which the Revolving Credit Lenders, the Borrower and the
beneficiary of the requested Letter of Credit are located, and
(iii) no establishment of any new restrictions by any central
bank or other governmental agency or authority on transactions
involving letters of credit or on banks generally that, in any
case described in this clause (e), would make it unlawful or
unduly burdensome for the Issuing Lender to issue or any
Revolving Credit Lender to take an assignment of its Revolving
Credit Percentage of the requested Letter of Credit or letters
of credit generally; and
(g) Issuing Lender shall have received the issuance fees required
in connection with the issuance of such Letter of Credit
pursuant to Section 3.4 hereof.
Each Letter of Credit Agreement submitted to Issuing Lender pursuant hereto
shall constitute the certification by Borrower of the matters set forth in
Sections 3.2 (a) and (b) hereof. The Agent shall be entitled to rely on such
certification without any duty of inquiry.
3.3 Notice. The Issuing Lender shall deliver to the Agent, concurrently
with or promptly following its issuance of any Letter of Credit, a true and
complete copy of each Letter of Credit. Promptly upon its receipt thereof, with
respect to ay Letter of Credit in excess of $100,000, Agent shall give notice,
substantially in the form attached as Exhibit E, to each Revolving Credit Lender
of the issuance of each Letter of Credit, specifying the amount thereof and the
amount of such Revolving Credit Lender's Percentage thereof.
3.4 Letter of Credit Fees; Increased Costs. (a) Borrower shall pay
letter of credit fees as follows:
(i) A per annum letter of credit fee with respect to the
undrawn amount of each Letter of Credit issued
pursuant hereto (based on the amount of each Letter
of Credit) in the amount of the Applicable Fee
Percentage (determined with reference to Schedule 1.1
to this Agreement) shall be paid to the Agent for
distribution to the Revolving Credit Lenders in
accordance with their Percentages.
(ii) A letter of credit facing fee on the face amount of
each Letter of Credit shall be paid to the Agent for
distribution to the Issuing Lender for its own
account, in accordance with the terms of the
applicable Fee Letter.
27
(b) All payments by Borrower to the Agent for distribution to the
Issuing Lender or the Revolving Credit Lenders under this
Section 3.4 shall be made in Dollars in immediately available
funds at the Issuing Office or such other office of the Agent
as may be designated from time to time by written notice to
Borrower by the Agent. The fees described in clauses (a)(i)
and (ii) above (i) shall be nonrefundable under all
circumstances, (ii) in the case of fees due under clause
(a)(i) above, shall be payable annually in advance and (iii)
in the case of fees due under clause (a)(ii) above, shall be
payable upon the issuance of such Letter of Credit and upon
any amendment thereto or extension thereof. The fees due under
clause (a)(i) above shall be determined by multiplying the
Applicable Fee Percentage times the undrawn amount of the face
amount of each such Letter of Credit on the date of
determination, and shall be calculated on the basis of a 360
day year and assessed for the actual number of days from the
date of the issuance thereof to the stated expiration thereof.
The parties hereto acknowledge that, unless the Issuing Lender
otherwise agrees, any material amendment and any extension to
a Letter of Credit issued hereunder shall be treated as a new
Letter of Credit for the purposes of the letter of credit
facing fee.
(c) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or
governmental authority charged with the administration
thereof, adopted after the date hereof, shall either (i)
impose, modify or cause to be deemed applicable any reserve,
special deposit, limitation or similar requirement against
letters of credit issued or participated in by, or assets held
by, or deposits in or for the account of, Issuing Lender or
any Revolving Credit Lender or (ii) impose on Issuing Lender
or any Revolving Credit Lender any other condition regarding
this Agreement, the Letters of Credit or any participations in
such Letters of Credit, and the result of any event referred
to in clause (i) or (ii) above shall be to increase the cost
or expense to Issuing Lender or such Revolving Credit Lender
of issuing or maintaining or participating in any of the
Letters of Credit (which increase in cost or expense shall be
determined by the Issuing Lender's or such Revolving Credit
Lender's reasonable allocation of the aggregate of such cost
increases and expenses resulting from such events), then, upon
demand by the Issuing Lender or such Revolving Credit Lender,
as the case may be, Borrower shall, within thirty (30) days
following demand for payment, pay to Issuing Lender or such
Revolving Credit Lender, as the case may be, from time to time
as specified by the Issuing Lender or such Revolving Credit
Lender, additional amounts which shall be sufficient to
compensate the Issuing Lender or such Revolving Credit Lender
for such increased cost and expense (together with interest on
each such amount from ten days after the date such payment is
due until payment in full thereof at the Prime-based Rate),
provided that if the Issuing Lender or such Revolving Credit
28
Lender could take any reasonable action, without cost or
administrative or other burden or restriction to such Lender,
to mitigate or eliminate such cost or expense, it agrees to do
so within a reasonable time after becoming aware of the
foregoing matters. Each demand for payment under this Section
3.4(c) shall be accompanied by a certificate of Issuing Lender
or the applicable Revolving Credit Lender setting forth the
amount of such increased cost or expense incurred by the
Issuing Lender or such Revolving Credit Lender, as the case
may be, as a result of any event mentioned in clause (i) or
(ii) above, and in reasonable detail, the methodology for
calculating and the calculation of such amount, which
certificate shall be prepared in good faith and shall be
conclusive evidence, absent manifest error, as to the amount
thereof.
3.5 Other Fees. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees, Borrower shall pay, for the sole account
of the Issuing Lender, standard documentation, administration, payment and
cancellation charges assessed by Issuing Lender or the Issuing Office, at the
times, in the amounts and on the terms set forth or to be set forth from time to
time in the standard fee schedule of the Issuing Office in effect from time to
time.
3.6 Drawings and Demands for Payment Under Letters of Credit.
(a) If the Issuing Lender shall honor a draft or other demand for
payment presented or made under any Letter of Credit, Borrower agrees to pay to
the Issuing Lender an amount equal to the amount paid by the Issuing Lender in
respect of such draft or other demand under such Letter of Credit and all
reasonable expenses paid or incurred by the Agent relative thereto not later
than 1:00 p.m. (Detroit time), on (i) the Business Day that Borrower receive
notice of such presentment and honor, if such notice is received prior to 11:00
a.m. (Detroit time) or (ii) the Business Day immediately following the day that
Borrower received such notice, if such notice is received after 11:00 a.m.
(Detroit time). Unless Borrower shall have made such payment to the Agent for
the account of the Issuing Lender on such day, the Agent shall be deemed to have
disbursed to Borrower and to have elected to substitute for the reimbursement
obligation, with respect to the applicable Letter of Credit honored by the
Issuing Lender, a Prime-based Advance of the Revolving Credit (which Advance may
be subsequently converted at any time into a Eurodollar-based Advance pursuant
to Section 2.3 hereof) on behalf of and for the account of the Revolving Credit
Lenders in an aggregate amount equal to the amount so paid by the Issuing Lender
in respect of such draft or other demand under such Letter of Credit. Such
Prime-based Advance shall be deemed disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Advance set forth in Section 2
hereof and, to the extent of the Advances so disbursed, the reimbursement
obligation of Borrower under this Section 3.6 shall be deemed satisfied.
(b) If the Issuing Lender shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the Issuing Lender shall
provide notice thereof to Borrower on the date such draft or demand is honored,
and to each Revolving Credit Lender on such date unless Borrower shall have
satisfied its reimbursement obligations under Section 3.6(a) hereof by payment
to the Agent (for the benefit of the Issuing Lender) on such date. The Issuing
Lender shall further use reasonable efforts to provide notice to Borrower prior
to honoring any such draft or other demand for payment, but such notice, or the
failure to provide such notice, shall not affect the rights or obligations of
the Issuing Lender with respect to any Letter of Credit or the rights and
obligations of the parties hereto, including without limitation the obligations
of Borrower under Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Lender of each Letter of Credit
hereunder, each Revolving Credit Lender shall automatically acquire a pro rata
participation interest in such Letter of Credit and each related Letter of
Credit Payment based on its respective Revolving Credit Percentage. Each
Revolving Credit Lender, on the date a draft or demand under any Letter of
Credit is honored (or the next succeeding Business Day if the notice required to
be given by Issuing Lender to the Revolving Credit Lenders under Section 3.6(b)
hereof is not given to the Revolving Credit Lenders prior to 2:00 p.m. (Detroit
time) on such date of draft or demand), shall make its Revolving Credit
Percentage of the amount paid by the Issuing Lender, and not reimbursed by
Borrower on such day, in immediately available funds at the principal office of
the Agent for the account of Issuing Lender. If and to the extent such Revolving
Credit Lender shall not have made such pro rata portion available to the Agent,
such Revolving Credit Lender agrees to pay to the Agent for the account of the
Issuing Lender forthwith on demand such amount together with interest thereon,
for each day from the date such amount was paid by the Issuing Lender until such
amount is so made available to the Agent at the Federal Funds Effective Rate for
the first three days and thereafter at a Prime-based Rate applicable during such
period to the related Advance deemed to have been disbursed under Section 3.6(a)
in respect of the reimbursement obligation of Borrower. If such Revolving Credit
Lender shall pay such amount to the Agent for the account of Issuing Lender
together with such interest, if any, such amount so paid shall be deemed to
29
constitute an Advance by such Revolving Credit Lender disbursed in respect of
the reimbursement obligation of Borrower under Section 3.6(a) hereof for
purposes of this Agreement, effective as of the dates applicable under said
Section 3.6(a). The failure of any Revolving Credit Lender to make its pro rata
portion of any such amount paid by the Issuing Lender available to the Agent for
the account of Issuing Lender shall not relieve any other Revolving Credit
Lender of its obligation to make available its pro rata portion of such amount,
but no Revolving Credit Lender shall be responsible for failure of any other
Revolving Credit Lender to make such pro rata portion available to the Agent for
the account of Issuing Lender.
Notwithstanding the foregoing however no Revolving Credit Lender shall
be deemed to have acquired a participation in a Letter of Credit if the officers
of the Issuing Lender immediately responsible for matters concerning this
Agreement shall have received written notice from Agent or any Lender at least
two (2) Business Days prior to the date of the issuance of such Letter of Credit
that the issuance of Letters of Credit should be suspended based on the
occurrence and continuance of a Default or Event of Default and stating that
such notice is a "notice of default"; provided, however that the Revolving
Credit Lenders shall be deemed to have acquired such a participation upon the
date on which such Default or Event of Default has been waived by the requisite
Revolving Credit Lenders, as applicable. In the event that the Issuing Lender
receives such a notice, the Issuing Lender shall have no obligation to issue any
Letter of Credit until such notice is withdrawn by Agent or such Lender or until
the requisite Lenders have waived such Default or Event of Default in accordance
with the terms of this Agreement.
(d) Nothing in this Agreement shall be construed to require or
authorize any Revolving Credit Lender to issue any Letter of Credit, it being
recognized that the Issuing Lender shall be the sole issuer of Letters of Credit
under this Agreement.
3.7 Obligations Irrevocable. The obligations of Borrower to make
payments to Agent for the account of Issuing Lender or the Revolving Credit
Lenders with respect to Letter of Credit Obligations under Section 3.6 hereof,
shall be unconditional and irrevocable and not subject to any qualification or
exception whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of
Credit, any Letter of Credit Agreement, any other
documentation relating to any Letter of Credit, this Agreement
or any of the other Loan Documents (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to or under
any Letter of Credit Document;
(c) The existence of any claim, setoff, defense or other right
which Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee
may be acting), the Agent, the Issuing Lender or any Revolving
Credit Lender or any other Person, whether in connection with
this Agreement, any of the Letter of Credit Documents, the
transactions contemplated herein or therein or any unrelated
transactions;
(d) Any draft or other statement or document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(e) Payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do
not comply with the terms of such Letter of Credit, including
failure of any documents to bear any reference or adequate
reference to such Letter of Credit;
30
(f) Any failure, omission, delay or lack on the part of the Agent,
Issuing Lender or any Revolving Credit Lender or any party to
any of the Letter of Credit Documents to enforce, assert or
exercise any right, power or remedy conferred upon the Agent,
Issuing Lender, any Revolving Credit Lender or any such party
under this Agreement, any of the other Loan Documents or any
of the Letter of Credit Documents, or any other acts or
omissions on the part of the Agent, Issuing Lender, any
Revolving Credit Lender or any such party; or
(g) Any other event or circumstance that would, in the absence of
this Section 3.7, result in the release or discharge by
operation of law or otherwise of Borrower from the performance
or observance of any obligation, covenant or agreement
contained in Section 3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Borrower has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to Borrower
against the Agent, Issuing Lender or any Revolving Credit Lender. With respect
to any Letter of Credit, nothing contained in this Section 3.7 shall be deemed
to prevent Borrower, after satisfaction in full of the absolute and
unconditional obligations of Borrower hereunder with respect to such Letter of
Credit, from asserting in a separate action any claim, defense, set off or other
right which they (or any of them) may have against Agent, Issuing Lender or any
Revolving Credit Lender in connection with such Letter of Credit.
3.8 Risk Under Letters of Credit.
(a) In the administration and handling of Letters of Credit and any
security therefor, or any documents or instruments given in connection
therewith, Issuing Lender shall have the sole right to take or refrain from
taking any and all actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this Agreement, Issuing
Lender shall issue the Letters of Credit and shall hold the documents related
thereto in its own name and shall make all collections thereunder and otherwise
administer the Letters of Credit in accordance with Issuing Lender's regularly
established practices and procedures and will have no further obligation with
respect thereto. In the administration of Letters of Credit, Issuing Lender
shall not be liable for any action taken or omitted on the advice of counsel,
accountants, appraisers or other experts selected by Issuing Lender with due
care and Issuing Lender may rely upon any notice, communication, certificate or
other statement from Borrower, beneficiaries of Letters of Credit, or any other
Person which Issuing Lender believes to be authentic. Issuing Lender will, upon
request, furnish the Revolving Credit Lenders with copies of Letter of Credit
Documents related thereto.
(c) In connection with the issuance and administration of Letters of
Credit and the assignments hereunder, Issuing Lender makes no representation and
shall have no responsibility with respect to (i) the obligations of Borrower or
the validity, sufficiency or enforceability of any document or instrument given
in connection therewith, or the taking of any action with respect to same, (ii)
the financial condition of, any representations made by, or any act or omission
of Borrower or any other Person, or (iii) any failure or delay in exercising any
rights or powers possessed by Issuing Lender in its capacity as issuer of
Letters of Credit INCLUDING, WITHOUT LIMITATION, LOSSES, COSTS, DAMAGES,
LIABILITIES AND EXPENSES IN ANY WAY OR TO THE EXTENT OWED, IN WHOLE OR IN PART,
UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY
ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ISSUING LENDER, in the absence of
its gross negligence or willful misconduct. Each of the Revolving Credit Lenders
expressly acknowledges that it has made and will continue to make its own
evaluations of Borrower's creditworthiness without reliance on any
representation of Issuing Lender or Issuing Lender's officers, agents and
employees.
31
(d) If at any time Issuing Lender shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent or Issuing Lender, as the case may be,
shall receive same for the pro rata benefit of the Revolving Credit Lenders in
accordance with their respective Percentages and shall promptly deliver to each
Revolving Credit Lender its share thereof, less such Revolving Credit Lender's
pro rata share of the costs of such recovery, including court costs and
attorney's fees. If at any time any Revolving Credit Lender shall receive from
any source whatsoever any payment on any such unreimbursed amount or interest
thereon in excess of such Revolving Credit Lender's Percentage of such payment,
such Revolving Credit Lender will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.
3.9 Indemnification. Borrower hereby indemnifies and agrees to hold
harmless the Revolving Credit Lenders, the Issuing Lender and the Agent and
their respective Affiliates, and the respective officers, directors, employees
and agents of such Persons (each an "L/C Indemnified Person"), from and against
any and all claims, damages, losses, liabilities, costs or expenses of any kind
or nature whatsoever which the Revolving Credit Lenders, the Issuing Lender or
the Agent or any such Person may incur or which may be claimed against any of
them by reason of or in connection with any Letter of Credit (collectively, the
"L/C Indemnified Amounts"), and none of the Issuing Lender, any Revolving Credit
Lender or the Agent or any of their respective officers, directors, employees or
agents shall be liable or responsible for:
(a) the use which may be made of any Letter of Credit or for any
acts or omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents or of
any endorsement thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient,
fraudulent or forged;
(c) payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do
not strictly comply with the terms of any Letter of Credit
(unless such payment resulted from the gross negligence or
willful misconduct of the Issuing Lender), including failure
of any documents to bear any reference or adequate reference
to such Letter of Credit;
(d) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or
(e) any other event or circumstance whatsoever arising in
connection with any Letter of Credit.
It is understood that in making any payment under a Letter of Credit the Issuing
Lender will rely on documents presented to it under such Letter of Credit as to
any and all matters set forth therein without further investigation and
regardless of any notice or information to the contrary.
With respect to subparagraphs (a) through (e) hereof, (i) no Borrower shall be
required to indemnify any L/C Indemnified Person for any L/C Indemnified Amounts
to the extent such amounts result from the gross negligence or willful
misconduct of such L/C Indemnified Person or any officer, director, employee or
agent of such L/C Indemnified Person and (ii) the Agent and the Issuing Lender
shall be liable to each Borrower to the extent, but only to the extent, of any
direct, as opposed to consequential or incidental, damages suffered by Borrower
which were caused by the gross negligence or willful misconduct of the Issuing
Lender or any officer, director, employee or agent of the Issuing Lender or by
the Issuing Lender's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit.
32
3.10 Right of Reimbursement. Each Revolving Credit Lender agrees to
reimburse the Issuing Lender on demand, pro rata in accordance with its
respective Revolving Credit Percentage, for (i) the reasonable out-of-pocket
costs and expenses of the Issuing Lender to be reimbursed by Borrower pursuant
to any Letter of Credit Agreement or any Letter of Credit, to the extent not
reimbursed by Borrower or any other Borrower and (ii) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, fees,
reasonable out-of-pocket expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against Issuing
Lender in any way relating to or arising out of this Agreement (including
Section 3.6(c) hereof), any Letter of Credit, any documentation or any
transaction relating thereto, or any Letter of Credit Agreement, to the extent
not reimbursed by Borrower, INCLUDING, WITHOUT LIMITATION, LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, FEES
AND OUT-OF-POCKET EXPENSES IN ANY WAY OR TO THE EXTENT OWED, IN WHOLE OR IN
PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN
PART BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ISSUING LENDER, except to
the extent that such liabilities, losses, costs or expenses were incurred by
Issuing Lender as a result of Issuing Lender's gross negligence or willful
misconduct or by the Issuing Lender's wrongful dishonor of any Letter of Credit
after the presentation to it by the beneficiary thereunder of a draft or other
demand for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit.
4. [RESERVED]
5. CONDITIONS.
The obligations of the Lenders to make Advances or loans pursuant to
this Agreement and the obligation of the Issuing Lender to issue Letters of
Credit are subject to the following conditions:
5.1 Execution of Notes and this Agreement. Borrower shall have executed
and delivered to Agent for the account of each Lender requesting Notes, the
Revolving Credit Notes and/or the Swing Line Note; Borrower shall have executed
and delivered this Agreement; and each Borrower shall have executed and
delivered the other Loan Documents to which such Borrower is required to be a
party (including all schedules and other documents to be delivered pursuant
hereto); and such Notes (if any), this Agreement and the other Loan Documents
shall be in full force and effect.
5.2 Corporate Authority. Agent shall have received, with a counterpart
thereof for each Lender:
(a) For each Borrower,:
(i) Corporate Resolutions and Incumbency Certification of
each Borrower authorizing the transactions
contemplated by this Agreement and the other Loan
Documents,
(ii) a certificate of good standing or continued existence
(or the equivalent thereof) from the state of its
incorporation or formation, and from every state or
other jurisdiction where such Borrower is qualified
to do business, which jurisdictions are listed on
Schedule 5.2 attached hereto, and
(iii) copies of such Borrower's articles of incorporation
and bylaws or other constitutional documents, as in
effect on the Effective Date.
5.3 Notes, Agreement, Collateral Documents, Guaranties and other Loan
Documents.
(a) The Agent shall have received the following documents, each in form
and substance satisfactory to Agent and fully executed by each party thereto:
33
(i) a Revolving Credit Note, drawn to the order of each
Lender that has requested the delivery of Notes, as
applicable, executed and delivered by the Borrower
and dated the Effective Date;
(ii) a Swing Line Note drawn to the order of the Swing
Line Lender executed by the Borrower and dated the
Effective Date;
(iii) a fully executed copy of this Agreement dated the
Effective Date.
(b) The following Collateral Documents, each in form and substance
acceptable to Agent and fully executed by each party thereto and dated as of the
Effective Date:
(i) the Security Agreement, executed and delivered by the
Borrowers;
(ii) the Pledge Agreement; and
(iii) the Assignment of Note and Liens.
(c) The Agent shall have received Certified copies of uniform
commercial code requests for information, or a similar search report certified
by a party acceptable to the Agent, dated a date reasonably prior to the
Effective Date, listing all effective financing statements in the jurisdiction
noted on Schedule 5.3(d) which name any Borrower (under their present names or
under any previous names used within five (5) years prior to the date hereof) as
debtors, together with (x) copies of such financing statements, and (y)
authorized Uniform Commercial Code (Form UCC-3) Termination Statements, if any,
necessary to release all Liens and other rights of any Person in any Collateral
described in the Collateral Documents previously granted by any Person (other
than Liens permitted by Section 8.2 of this Agreement).
(d) The Agent shall have received any documents (including, without
limitation, financing statements, amendments to financing statements and
assignments of financing statements, stock powers executed in blank and any
endorsements) requested by Agent and reasonably required to be provided in
connection with the Collateral Documents to create, in favor of the Agent (for
and on behalf of the Lenders), a first priority perfected security interest in
the Collateral thereunder shall have been filed, registered or recorded, or
shall have been delivered to Agent in proper form for filing, registration or
recordation.
5.4 Insurance. The Agent shall have received evidence reasonably
satisfactory to it that the Borrowers have obtained the insurance policies
required by Section 7.5 hereof and that such insurance policies are in full
force and effect.
5.5 Compliance with Certain Documents and Agreements. Each Borrower
shall have each performed and complied in all material respects with all
agreements and conditions contained in this Agreement and the other Loan
Documents, to the extent required to be performed or complied with by such
Borrower. No Person (other than Agent, Lenders and Issuing Lender) party to this
Agreement or any other Loan Document shall be in material default in the
performance or compliance with any of the terms or provisions of this Agreement
or the other Loan Documents or shall be in material default in the performance
or compliance with any of the material terms or material provisions of, in each
case to which such Person is a party.
5.6 Opinions of Counsel. The Borrowers shall furnish Agent prior to the
initial Advance under this Agreement, with signed copies for each Lender,
opinions of counsel to the Borrowers, including opinions of local counsel to the
extent deemed necessary by the Agent, in each case dated the Effective Date and
covering such matters as reasonably required by and otherwise reasonably
satisfactory in form and substance to the Agent and each of the Lenders.
34
5.7 Payment of Fees. Borrower shall have paid to Comerica Bank any fees
due under the terms of the Fee Letter, along with any other fees, costs or
expenses due and outstanding to the Agent or the Lenders as of the Effective
Date (including reasonable fees, disbursements and other charges of counsel to
Agent).
5.8 Governmental and Other Approvals. Agent shall have received copies
of all authorizations, consents, approvals, licenses, qualifications or formal
exemptions, filings, declarations and registrations with, any court,
governmental agency or regulatory authority or any securities exchange or any
other person or party (whether or not governmental) received by any Borrower in
connection with the transactions contemplated by the Loan Documents to occur on
the Effective Date.
5.9 Closing Certificate. The Agent shall have received, with a signed
counterpart for each Lender, a certificate of a Responsible Officer of Borrower
dated the Effective Date (or, if different, the date of the initial Advance
hereunder), stating that to the best of his or her respective knowledge after
due inquiry, (a) the conditions set forth in this Section 5 have been satisfied
to the extent required to be satisfied by any Borrower; (b) the representations
and warranties made by the Borrowers in this Agreement or any of the other Loan
Documents, as applicable, are true and correct in all material respects; (c) no
Default or Event of Default shall have occurred and be continuing; and (d) since
[March 31, 2007], nothing shall have occurred which has had, or could reasonably
be expected to have, a material adverse change on the business, results of
operations, conditions, property or prospects (financial or otherwise) of any
Borrower.
5.10 Existing Debt Documents. On the Effective Date, the Agent shall
have received evidence satisfactory to it that contemporaneous with the initial
Advance, all Debt under the Existing Debt Documents shall be paid in full, all
commitments to lend thereunder shall have been terminated, and all Liens
securing Debt thereunder shall be terminated and released or assigned to Agent
to secure the Indebtedness under the Loan Documents.
5.11 Continuing Conditions. The obligations of each Lender to make
Advances (including the initial Advance) under this Agreement and the obligation
of the Issuing Lender to issue any Letters of Credit shall be subject to the
continuing conditions that:
(a) No Default or Event of Default shall exist as of the date of
the Advance or the request for the Letter of Credit, as the
case may be; and
(b) Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be
true and correct in all material respects as of the date of
the Advance or Letter of Credit (as the case may be) as if
made on and as of such date (other than any representation or
warranty that expressly speaks only as of a different date).
6. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to the Agent, the Lenders, the Swing
Lenders and the Issuing Lender as follows:
6.1 Corporate Authority. Each Borrower is a corporation (or other
business entity) duly organized and existing in good standing under the laws of
the state or jurisdiction of its incorporation or formation, as applicable, and,
other than as set forth on Schedule 6.1 hereto, each Borrower is duly qualified
and authorized to do business as a foreign corporation in each jurisdiction
where the character of its assets or the nature of its activities makes such
qualification and authorization necessary except where failure to be so
qualified or be in good standing could not reasonably be expected to have a
Material Adverse Effect. Each Borrower has all requisite corporate, limited
liability or partnership power and authority to own all its property (whether
real, personal, tangible or intangible or of any kind whatsoever) and to carry
on its business.
35
6.2 Due Authorization. Execution, delivery and performance of this
Agreement, and the other Loan Documents, to which each Borrower is party, and
the issuance of the Notes by Borrower (if requested) are within such Person's
corporate, limited liability or partnership power, have been duly authorized,
are not in contravention of any law applicable to such Borrower or the terms of
such Borrower's organizational documents and, except as have been previously
obtained or as referred to in Section 6.10, below, do not require the consent or
approval of any governmental body, agency or authority or any other third party
except to the extent that such consent or approval is not material to the
transactions contemplated by the Loan Documents.
6.3 Good Title; Leases; Assets; No Liens(a) . (a) Each Borrower, to the
extent applicable, has good and valid title (or, in the case of real property,
good and marketable title) to all assets owned by it, subject only to the Liens
permitted under section 8.2 hereof, and each Borrower has a valid leasehold or
interest as a lessee or a licensee in all of its leased real property;
(b) There are no Liens on and no financing statements on file with
respect to any of the assets owned by the Borrowers, except for the Liens
permitted pursuant to Section 8.2 of this Agreement.
6.4 Taxes. Except as set forth on Schedule 6.4 hereof, each Borrower
has filed on or before their respective due dates or within the applicable grace
periods, all United States federal, state, local and other tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all material taxes which have become due pursuant to those returns or
pursuant to any assessments received by any such Borrower, as the case may be,
to the extent such taxes have become due, except to the extent such taxes are
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate provision has been made on the books of such
Borrower as may be required by GAAP.
6.5 No Defaults. No Borrower is in default under or with respect to any
agreement, instrument or undertaking to which is a party or by which it or any
of its property is bound which would cause or would reasonably be expected to
cause a Material Adverse Effect.
6.6 Enforceability of Agreement and Loan Documents. This Agreement and
each of the other Loan Documents to which any Borrower is a party (including
without limitation, each Request for Advance), have each been duly executed and
delivered by its duly authorized officers and constitute the valid and binding
obligations of such Borrower, enforceable against such Borrower in accordance
with their respective terms, except as enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of creditor's rights,
generally and by general principles of equity (regardless of whether enforcement
is considered in a proceeding in law or equity).
6.7 Compliance with Laws. (a) Except as disclosed on Schedule 6.7, each
Borrower has complied with all applicable federal, state and local laws,
ordinances, codes, rules, regulations and guidelines (including consent decrees
and administrative orders) including but not limited to Hazardous Material Laws,
and is in compliance with any Requirement of Law, except to the extent that
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect; and (b) neither the extension of credit made pursuant to this
Agreement or the use of the proceeds thereof by the Borrowers will violate the
Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto, or The United and Strengthening America by providing appropriate Tools
Required to Intercept and Obstruct Terrorism ("USA Patriot Act") Act of 2001,
Public Law 10756, October 26, 2001 or Executive Order 13224 of September 23,
2001 issued by the President of the United States (66 Fed. Reg. 49049 (2001)).
6.8 Non-contravention. The execution, delivery and performance of this
Agreement and the other Loan Documents (including each Request for Advance) to
which each Borrower is a party are not in contravention of the terms of any
36
indenture, agreement or undertaking to which such Borrower is a party or by
which it or its properties are bound where such violation could reasonably be
expected to have a Material Adverse Effect.
6.9 Litigation. Except as set forth on Schedule 6.9 hereof, there is no
suit, action, proceeding, including, without limitation, any bankruptcy
proceeding or governmental investigation pending against or to the knowledge of
Borrower, threatened against any Borrower (other than any suit, action or
proceeding in which a Borrower is the plaintiff and in which no counterclaim or
cross-claim against such Borrower has been filed), or any judgment, decree,
injunction, rule, or order of any court, government, department, commission,
agency, instrumentality or arbitrator outstanding against any Borrower, nor is
any Borrower in violation of any applicable law, regulation, ordinance, order,
injunction, decree or requirement of any governmental body or court which could
in any of the foregoing events reasonably be expected to have a Material Adverse
Effect.
6.10 Consents, Approvals and Filings, Etc. Except as set forth on
Schedule 6.10 hereof, no material authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory authority or any
securities exchange or any other Person (whether or not governmental) is
required in connection with the execution, delivery and performance: (a) by any
Borrower of this Agreement and any of the other Loan Documents to which such
Borrower is a party or (b) by the Borrowers of the grant of Liens granted,
conveyed or otherwise established (or to be granted, conveyed or otherwise
established) by or under this Agreement or the other Loan Documents, as
applicable, except in each case for (i) such matters which have been previously
obtained, and (ii) such filings to be made concurrently herewith or promptly
following the Effective Date as are required by the Collateral Documents to
perfect Liens in favor of the Agent. All such material authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations which have previously been obtained or made, as the case may be,
are in full force and effect and, to the best knowledge of Borrower, are not the
subject of any attack or threatened attack (in each case in any material
respect) by appeal or direct proceeding or otherwise.
6.11 Agreements Affecting Financial Condition. No Borrower is party to
any agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse
Effect.
6.12 No Investment Company or Margin Stock. No Borrower is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. No Borrower is engaged principally, or as one of its important
activities, directly or indirectly, in the business of extending credit for the
purpose of purchasing or carrying margin stock. None of the proceeds of any of
the Advances will be used by any Borrower to purchase or carry margin stock.
Terms for which meanings are provided in Regulation U of the Board of Governors
of the Federal Reserve System or any regulations substituted therefore, as from
time to time in effect, are used in this paragraph with such meanings.
6.13 ERISA. No Borrower maintains or contributes to any Pension Plan
subject to Title IV of ERISA, except as set forth on Schedule 6.13 hereto or
otherwise disclosed to the Agent in writing. There is no accumulated funding
deficiency within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, or any outstanding liability with respect to any Pension
Plans owed to the PBGC other than future premiums due and owing pursuant to
Section 4007 of ERISA, and no "reportable event" as defined in Section 4043(c)
of ERISA has occurred with respect to any Pension Plan other than an event for
which the notice requirement has been waived by the PBGC. None of the Borrowers
has engaged in a prohibited transaction with respect to any Pension Plan, other
than a prohibited transaction for which an exemption is available and has been
obtained, which could subject such Borrowers to a material tax or penalty
imposed by Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
Each Pension Plan is being maintained and funded in accordance with its terms
and is in material compliance with the requirements of the Internal Revenue Code
and ERISA. No Borrower has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to have
resulted in any Withdrawal Liability and, except as notified to Agent in writing
following the Effective Date, no such Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA) or insolvent (within the meaning
of Section 4245 of ERISA).
37
6.14 Conditions Affecting Business or Properties. Neither the
respective businesses nor the properties of any Borrower is affected by any
fire, explosion, accident, strike, lockout or other dispute, drought, storm,
hail, earthquake, embargo, Act of God, or other casualty (except to the extent
such event is covered by insurance sufficient to ensure that upon application of
the proceeds thereof, no Material Adverse Effect could reasonably be expected to
occur) which could reasonably be expected to have a Material Adverse Effect.
6.15 Environmental and Safety Matters. Except as set forth in Schedules
6.9, 6.10 and 6.15:
(a) all facilities and property owned or leased by the Borrowers
are in compliance with all Hazardous Material Laws;
(b) to the best knowledge of Borrower, there have been no
unresolved and outstanding past, and there are no pending or
threatened:
(i) claims, complaints, notices or requests for
information received by any Borrower with respect to
any alleged violation of any Hazardous Material Law,
or
(ii) written complaints, notices or inquiries to any
Borrower regarding potential liability of any
Borrowers under any Hazardous Material Law; and
(c) to the best knowledge of Borrower, no conditions exist at, on
or under any property now or previously owned or leased by any
Borrower which, with the passage of time, or the giving of
notice or both, are reasonably likely to give rise to
liability under any Hazardous Material Law or create a
significant adverse effect on the value of the property.
6.16 Subsidiaries. Except as disclosed on Schedule 6.16 hereto as of
the Effective Date, and thereafter, except as disclosed to the Agent in writing
from time to time, no Borrower has any Subsidiaries.
6.17 Reserved.
6.18 Reserved
6.19 Franchises, Patents, Copyrights, Tradenames, etc. The Borrowers
possess all franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the conduct of
their business substantially as now conducted without known conflict with any
rights of others. Schedule 6.19 contains a true and accurate list of all trade
names and any and all other names used by any Borrower during the five-year
period ending as of the Effective Date.
6.20 Capital Structure. Schedule 6.20 attached hereto sets forth all
issued and outstanding Equity Interests of each Borrower (other than Parent),
including the number of authorized, issued and outstanding Equity Interests of
each Borrower(other than Parent), the par value of such Equity Interests and the
holders of such Equity Interests, all on and as of the Effective Date. All
issued and outstanding Equity Interests of each Borrower are duly authorized and
validly issued, fully paid, nonassessable, free and clear of all Liens (except
for the benefit of Agent) and such Equity Interests were issued in compliance
with all applicable state, federal and foreign laws concerning the issuance of
securities. Except as disclosed on Schedule 6.19, there are no preemptive or
other outstanding rights, options, warrants, conversion rights or similar
agreements or understandings for the purchase or acquisition from any Borrower,
of any Equity Interests of any Borrower.
6.21 Accuracy of Information. (a) The audited financial statements for
the Fiscal Year ended December 31, 2006, furnished to Agent and the Lenders
prior to the Effective Date fairly present in all material respects the
financial condition of the Parent and its Consolidated Subsidiaries and the
results of their operations for the periods covered thereby, and have been
prepared in accordance with GAAP.
38
(b) From December 31, 2006 through the Effective Date, there has been
no material adverse change in the business, operations, condition, property or
prospects (financial or otherwise) of the Borrowers, taken as a whole.
(c) To the best knowledge of the Borrowers, as of the Effective Date,
(i) the Borrowers do not have any material contingent obligations (including any
liability for taxes) not disclosed by or reserved against in the opening balance
sheet to be delivered hereunder and (ii) there are no unrealized or anticipated
losses from any present commitment of the Borrowers which contingent obligations
and losses in the aggregate could reasonably be expected to have a Material
Adverse Effect.
6.22 Solvency. After giving effect to the consummation of the
transactions contemplated by this Agreement and other Loan Documents, each
Borrower will be solvent, able to pay its indebtedness as it matures and will
have capital sufficient to carry on its businesses and all business in which it
is about to engage. This Agreement is being executed and delivered by the
Borrower to Agent and the Lenders in good faith and in exchange for fair,
equivalent consideration. The Borrowers do not intend to nor does management of
the Borrowers believe the Borrowers will incur debts beyond their ability to pay
as they mature. The Borrowers do not contemplate filing a petition in bankruptcy
or for an arrangement or reorganization under the Bankruptcy Code or any similar
law of any jurisdiction now or hereafter in effect relating to any Borrower, nor
does any Borrower have any knowledge of any threatened bankruptcy or insolvency
proceedings against a Borrower.
6.23 Employee Matters. There are no strikes, slowdowns, work stoppages,
unfair labor practice complaints, grievances, arbitration proceedings or
controversies pending or, to the best knowledge of the Borrower, threatened
against any Borrower by any employees of any Borrower, other than non-material
employee grievances or controversies arising in the ordinary course of business.
6.24 No Misrepresentation. Neither this Agreement nor any other Loan
Document, certificate, information or report furnished or to be furnished by or
on behalf of a Borrower to Agent or any Lender in connection with any of the
transactions contemplated hereby or thereby, contains a misstatement of material
fact, or omits to state a material fact required to be stated in order to make
the statements contained herein or therein, taken as a whole, not misleading in
the light of the circumstances under which such statements were made. There is
no fact, other than information known to the public generally, known to any
Borrower after diligent inquiry, that could reasonably be expect to have a
Material Adverse Effect that has not expressly been disclosed to Agent in
writing.
7. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees, so long as any Lender has any commitment
to extend credit hereunder, or any of the Indebtedness remains outstanding and
unpaid, that it will, and, as applicable, it will cause each of its Subsidiaries
to:
7.1 Financial Statements. Furnish to the Agent, in form and detail
satisfactory to Agent, with sufficient copies for each Lender, the following
documents:
(a) as soon as available, but in any event within one hundred
(100) days after the end of each Fiscal Year, a copy of the
audited Consolidated and unaudited Consolidating financial
statements of the Parent and its Consolidated Subsidiaries as
at the end of such Fiscal Year and the related audited
Consolidated and unaudited Consolidating statements of income,
stockholders equity, and cash flows of the Parent and its
Consolidated Subsidiaries for such Fiscal Year or partial
Fiscal Year and underlying assumptions, setting forth in each
case in comparative form the figures for the previous Fiscal
Year, certified as being fairly stated in all material
respects by an independent, nationally recognized certified
public accounting firm reasonably satisfactory to the Agent;
39
(b) as soon as available, but in any event within forty-five (45)
days after the end of each month (unless such month end is
also the end of a fiscal quarter or a Fiscal Year), commencing
with the first full month after the Effective Date, Parent
prepared unaudited Consolidated and Consolidating balance
sheets of the Parent and its Consolidated Subsidiaries as at
the end of such month and the related unaudited statements of
income, stockholders equity and cash flows of the Parent and
its Consolidated Subsidiaries for the portion of the Fiscal
Year through the end of such fiscal month, setting forth in
each case in comparative form the figures for the
corresponding periods in the previous year; and
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods (except as
approved by a Responsible Officer and disclosed therein), provided however that
the financial statements delivered pursuant to clauses (b) and (c) hereof will
not be required to include footnotes and will be subject to change from audit
and year-end adjustments.
7.2 Certificates; Other Information. Furnish to the Agent, in form and
detail acceptable to Agent, with sufficient copies for each Lender, the
following documents:
(a) Concurrently with the delivery of the financial statements
described in Sections 7.1(a) and 7.1(b) of this Agreement for
each fiscal year-end and fiscal month-end, respectively, a
Covenant Compliance Report duly executed by a Responsible
Officer of Parent;
(b) Promptly upon receipt thereof, copies of all significant
reports submitted by the Parents' firm(s) of certified public
accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or
related internal control systems of the Parents made by such
accountants, including any comment letter submitted by such
accountants to management in connection with their services;
(c) Within forty-five (45) days after and as of the end of each
month, including the last month of each Fiscal Year, or more
frequently as requested by the Agent or the Majority Lenders
the monthly aging of the accounts receivable and accounts
payable of the Borrowers;
(d) Promptly after filing same, a copy of Borrowers' annual
federal income tax return;
(e) Any additional information as required by any Loan Document,
and such additional schedules, certificates and reports
respecting all or any of the Collateral, the items or amounts
received by the Borrowers in full or partial payment thereof,
and any goods (the sale or lease of which shall have given
rise to any of the Collateral) possession of which has been
obtained by the Borrowers, all to such extent as Agent may
reasonably request from time to time, any such schedule,
certificate or report to be certified as true and correct in
all material respects by a Responsible Officer of the
applicable Borrower and shall be in such form and detail as
Agent may reasonably specify; and
(f) Such additional financial and/or other information as Agent or
any Lender may from time to time reasonably request, promptly
following such request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy, at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, including without limitation all
assessments, governmental charges, claims for labor, supplies, rent or other
40
obligations, except where the amount or validity thereof is currently being
appropriately contested in good faith and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrowers.
7.4 Conduct of Business and Maintenance of Existence; Compliance with
Laws.
(a) Continue to engage in their respective business and operations
substantially as conducted immediately prior to the Effective Date;
(b) Preserve, renew and keep in full force and effect its existence and
maintain its qualifications to do business in each jurisdiction where such
qualifications are necessary for its operations, except as otherwise permitted
pursuant to Section 8.4;
(c) Take all action it deems necessary in its reasonable business
judgment to maintain all rights, privileges and franchises necessary for the
normal conduct of its business except where the failure to so maintain such
rights, privileges or franchises could not, either singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(d) Comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, either singly
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
and
(e) (i) Continue to be a Person whose property or interests in property
is not blocked or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg. 49079
(2001)) (the "Order"), (ii) not engage in the transactions prohibited by Section
2 of that Order or become associated with Persons such that a violation of
Section 2 of the Order would arise, and (iii) not become a Person on the list of
Specially Designated National and Blocked Persons, or (iv) otherwise not become
subject to the limitation of any OFAC regulation or executive order.
7.5 Maintenance of Property; Insurance. (a) Keep all material property
it deems, in its reasonable business judgment, useful and necessary in its
business in working order (ordinary wear and tear excepted); (b) maintain
insurance coverage with financially sound and reputable insurance companies on
physical assets and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and nature
(including without limitation casualty and public liability and property damage
insurance), and in the event of acquisition of additional property, real or
personal, or of the incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business
judgment and present practice or any applicable Requirements of Law would
dictate; (c) in the case of all insurance policies covering any Collateral, such
insurance policies shall provide that the loss payable thereunder shall be
payable to the applicable Borrower, and to the Agent (as mortgagee, or, in the
case of personal property interests, lender loss payee) as their respective
interests may appear; (d) in the case of all public liability insurance
policies, such policies shall list the Agent as an additional insured, as Agent
may reasonably request; and (e) if requested by Agent, certificates evidencing
such policies, including all endorsements thereto, to be deposited with Agent,
such certificates being in form and substance reasonably acceptable to Agent.
7.6 Inspection of Property; Books and Records, Discussions. Permit
Agent and each Lender, through their authorized attorneys, accountants and
representatives, at Borrowers' cost and expense, to examine each Borrower's
books, accounts, records, ledgers, assets and properties of every kind and
description, wherever located, at all reasonable times during normal business
hours, upon oral or written request of Agent or such Lender.
7.7 Notices. Promptly give written notice to the Agent of:
41
(a) the occurrence of any Default or Event of Default of
which any Borrower has knowledge;
(b) any (i) litigation or proceeding existing at any time
between any Borrower and any Governmental Authority
or other third party, or any investigation of any
Borrower conducted by any Governmental Authority,
which in any case if adversely determined would have
a Material Adverse Effect or (ii) any material
adverse change in the financial condition of any
Borrower since the date of the last audited financial
statements delivered pursuant to Section 7.1(a)
hereof;
(c) the occurrence of any event which any Borrower
believes could reasonably be expected to have a
Material Adverse Effect, promptly after concluding
that such event could reasonably be expected to have
such a Material Adverse Effect;
(d) promptly after becoming aware thereof, the taking by
the Internal Revenue Service or any foreign taxing
jurisdiction of a written tax position (or any such
tax position taken by any Borrower in a filing with
the Internal Revenue Service or any foreign taxing
jurisdiction) which could reasonably be expected to
have a Material Adverse Effect, setting forth the
details of such position and the financial impact
thereof;
(e) (i) all jurisdictions in which any Borrower proposes
to become qualified after the Effective Date to
transact business, (ii) the acquisition or creation
of any new Subsidiaries, (iii) any material change
after the Effective Date in the authorized and issued
Equity Interests of any Borrower or any other
material amendment to any Borrower's charter, by-laws
or other organizational documents, such notice, in
each case, to identify the applicable jurisdictions,
capital structures or amendments as applicable,
provided that such notice shall be given not less
than ten (10) Business Days prior to the proposed
effectiveness of such changes, acquisition or
creation, as the case may be (or such shorter period
to which Agent may consent);
(f) not less than fifteen (15) Business Days (or such
other shorter period to which Agent may agree) prior
to the proposed effective date thereof, any proposed
material amendments, restatements or other
modifications to any Subordinated Debt Documents; and
(g) any default or event of default by any Person under
any Subordinated Debt Document, concurrently with
delivery or promptly after receipt (as the case may
be) of any notice of default or event of default
under the applicable document, as the case may be.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of Borrower setting forth details of the occurrence referred
to therein and, in the case of notices referred to in clauses (a), (b), (c), (d)
and (g) hereof stating what action the applicable Borrower has taken or proposes
to take with respect thereto.
7.8 Hazardous Material Laws.
(a) Use and operate all of its facilities and properties in material
compliance with all applicable Hazardous Material Laws, keep all material
required permits, approvals, certificates, licenses and other authorizations
required under such Hazardous Material Laws in effect and remain in compliance
therewith, and handle all Hazardous Materials in material compliance with all
applicable Hazardous Material Laws;
(b) (i) Promptly notify Agent and provide copies upon receipt of all
written claims, complaints, notices or inquiries received by any Borrower
relating to its facilities and properties or compliance with Hazardous Material
42
Laws which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect and (ii) promptly cure and have dismissed with prejudice
to the reasonable satisfaction of Agent and the Majority Lenders any material
actions and proceedings relating to compliance with Hazardous Material Laws to
which any Borrower is named a party, other than such actions or proceedings
being contested in good faith and with the establishment of reasonable reserves;
(c) To the extent necessary to comply in all material respects with
Hazardous Material Laws, remediate or monitor contamination arising from a
release or disposal of Hazardous Material, which solely, or together with other
releases or disposals of Hazardous Materials could reasonably be expected to
have a Material Adverse Effect;
(d) Provide such information and certifications which Agent or any
Lender may reasonably request from time to time to evidence compliance with this
Section 7.8.
7.9 Financial Covenants.
(a) Debt to Capitalization Ratio. Maintain as of the last day of each
calendar month during the term of this Agreement a ratio of (a) Funded Debt to
(b) the sum of (i) Debt plus (ii) Net Worth of not more than 0.40 to 1.
(b) Minimum Net Worth. Maintain as of the last day of each calendar
quarter during the term of this Agreement a minimum Net Worth of not less than
the sum of (i) $40,116,000 plus (ii) 75% of Net Income earned in each fiscal
quarter beginning with the quarter ending March 31, 2007 (without deduction for
losses) plus (iii) 100% of the net proceeds of any offering, sale or other
transfer of any capital stock or equity securities of any kind of the Borrowers
after the date hereof; provided for purposes of this covenant adjustments may be
made for any non-recurring transaction costs incurred by Borrowers.
(c) Maximum Leverage Ratio. Maintain as of the last day of each
calendar month during the term of this Agreement a ratio of Funded Debt to
Adjusted EBITDA for the twelve (12) month period ending on each date occurring
during the term of this Agreement no greater than 3.00 to 1; provided that, for
purposes of this covenant and subject to Agent approval, Adjusted EBITDA shall
have added back (A) the trailing 12-month EBITDA of new acquisitions exceeding a
gross purchase price of $2,500,000; provided further that for any calculation
hereunder that includes a calendar month prior to the date of Borrower's
purchase of AmTech Inspection, Cleveland Inspection or WRC Corporation (each
hereinafter called, an "Acquisition" and each month occurring before an
Acquisition, being a "Pre-Acquisition Month"), Adjusted EBITDA shall include,
for each Pre-Acquisition Month, a number equal to (i) the Adjusted EBITDA of
AmTech Inspection, Cleveland Inspection or WRC Corporation (as applicable) for
each calendar month after the applicable Acquisition divided by (ii) the number
of calendar months since the applicable Acquisition and (B) expenses associated
with any Borrower's issuance and/or granting of stock options to Borrower's
directors and employees; provided further that for any calculation hereunder,
Adjusted EBITDA shall exclude losses incurred prior to January 1, 2007
associated with the ConocoPhillips-Ferndale, Washington project which have
occurred prior to January 1, 2007.
(d) Asset Coverage Ratio. Maintain at all times during the term of this
Agreement a ratio of (a) the outstanding balance of the Revolving Credit
Advances to (b) the sum, as of the last day of each calendar month, of (i)
outstanding billed accounts receivable and (ii) unbilled accounts receivable of
not more than 1.00 to 1.00
7.10 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary or reasonably requested by Agent in
connection with the execution, delivery and performance by any Borrower of, as
applicable, this Agreement, the other Loan Documents, the Subordinated Debt
Documents, or any other documents or instruments to be executed and/or delivered
43
by any Borrower, as applicable in connection therewith or herewith, except where
the failure to so apply for, obtain or maintain could not reasonably be expected
to have a Material Adverse Effect.
7.11 Compliance with ERISA; ERISA Notices. (a) Comply in all material
respects with all material requirements imposed by ERISA and the Internal
Revenue Code, including, but not limited to, the minimum funding requirements
for any Pension Plan, except to the extent that any noncompliance could not
reasonably be expected to have a Material Adverse Effect.
(b) Promptly notify Agent upon the occurrence of any of the following
events in writing: (i) the termination, other than a standard termination, as
defined in ERISA, of any Pension Plan subject to Subtitle C of Title IV of ERISA
by any Borrower; (ii) the appointment of a trustee by a United States District
Court to administer any Pension Plan subject to Title IV of ERISA; (iii) the
commencement by the PBGC, of any proceeding to terminate any Pension Plan
subject to Title IV of ERISA; (iv) the failure of any Borrower to make any
payment in respect of any Pension Plan required under Section 412 of the
Internal Revenue Code or Section 302 of ERISA; (v) the withdrawal of any
Borrower from any Multiemployer Plan if any Borrower reasonably believes that
such withdrawal would give rise to the imposition of Withdrawal Liability with
respect thereto; or (vi) the occurrence of (x) a "reportable event" which is
required to be reported by a Borrower under Section 4043 of ERISA other than any
event for which the reporting requirement has been waived by the PBGC or (y) a
"prohibited transaction" as defined in Section 406 of ERISA or Section 4975 of
the Internal Revenue Code other than a transaction for which a statutory
exemption is available or an administrative exemption has been obtained.
7.12 Defense of Collateral. Defend the Collateral from any Liens other
than Liens permitted by Section 8.2.
7.13 Future Subsidiaries; Additional Collateral.
(a) With respect to each Person which becomes a Domestic Subsidiary of
Borrower (directly or indirectly) subsequent to the Effective Date, whether by
Permitted Acquisition or otherwise, cause such new Domestic Subsidiary to
execute and deliver to the Agent, for and on behalf of each of the Lenders
(unless waived by Agent):
(i) within thirty (30) days after the date such Person
becomes a Domestic Subsidiary (or such longer time
period as the Agent may determine), such Subsidiary
shall (y) a joinder agreement to this Agreement to
become a Borrower or (z) a Guaranty, or in the event
that a Guaranty already exists, a joinder agreement
to the Guaranty whereby such Domestic Subsidiary
becomes obligated as a Guarantor under the Guaranty;
and
(ii) within thirty (30) days after the date such Person
becomes a Domestic Subsidiary (or such longer time
period as the Agent may determine), a joinder
agreement to the Security Agreement whereby such
Domestic Subsidiary grants a Lien over its assets
(other than Equity Interests which should be governed
by (b) of this Section 7.13) as set forth in the
Security Agreement, and such Domestic Subsidiary
shall take such additional actions as may be
necessary to ensure a valid first priority perfected
Lien over such assets of such Domestic Subsidiary,
subject only to the other Liens permitted pursuant to
Section 8.2 of this Agreement;
(b) With respect to the Equity Interests of each Person which becomes
(whether by Permitted Acquisition or otherwise) (i) a Domestic Subsidiary
subsequent to the Effective Date, cause the Borrower that holds such Equity
Interests to execute and deliver such Pledge Agreements, and take such actions
as may be necessary to ensure a valid first priority perfected Lien over one
hundred percent (100%) of the Equity Interests of such Domestic Subsidiary held
by a Borrower, such Pledge Agreements to be executed and delivered (unless
waived by Agent) within thirty (30) days after the date such Person becomes a
Domestic Subsidiary (or such longer time period as Agent may determine); and
(ii) a Foreign Subsidiary subsequent to the Effective Date, the Equity Interests
44
of which is held directly by Borrower or one of its Domestic Subsidiaries, cause
the Borrower that holds such Equity Interests to execute and deliver such Pledge
Agreements and take such actions as may be necessary to ensure a valid first
priority perfected Lien over sixty-five percent (65%) of the Equity Interests of
such Foreign Subsidiary, such Pledge Agreements to be executed and delivered
(unless waived by Agent) within thirty (30) days after the date such Person
becomes a Foreign Subsidiary (or such longer time period as Agent may
determine); and in each case in form reasonably satisfactory to the Agent, in
its reasonable discretion, together with such supporting documentation,
including without limitation corporate authority items, certificates and
opinions of counsel, as reasonably required by the Agent. Upon the Agent's
request, Borrowers shall take, or cause to be taken, such additional steps as
are necessary or advisable under applicable law to perfect and ensure the
validity and priority of the Liens granted under this Section 7.13.
7.14 Accounts. Maintain all deposit accounts and securities accounts of
any Borrower with Agent or a Lender, provided that, with respect to any such
accounts maintained with any Lender (other than Agent), such Borrower (i) shall
cause to be executed and delivered an Account Control Agreement in form and
substance satisfactory to Agent and (ii) has taken all other steps necessary, or
in the opinion of the Agent, desirable to ensure that Agent has a perfected
security interest in such account.
7.15 Use of Proceeds. Use all Advances of the Revolving Credit as set
forth in Section 2.11 hereof. Borrower shall not use any portion of the proceeds
of any such advances for the purpose of purchasing or carrying any "margin
stock" (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) in any manner which violates the provisions of Regulation T, U
or X of said Board of Governors or for any other purpose in violation of any
applicable statute or regulation.
7.16 Further Assurances. (a) Take such actions as the Agent or Majority
Lenders may from time to time reasonably request to establish and maintain first
priority perfected security interests in and Liens on all of the Collateral,
subject only to those Liens permitted under Section 8.2 hereof, including
executing and delivering such additional pledges, assignments, mortgages, lien
instruments or other security instruments covering any or all of the Borrowers'
assets as Agent may reasonably require, such documentation to be in form and
substance reasonably acceptable to Agent, and prepared at the expense of the
Borrower; and
(b) Execute and deliver or cause to be executed and delivered to Agent
within a reasonable time following Agent's request, and at the expense of the
Borrower, such other documents or instruments as Agent may reasonably require to
effectuate more fully the purposes of this Agreement or the other Loan
Documents.
8. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any Lender has any
commitment to extend credit hereunder, or any of the Indebtedness remains
outstanding and unpaid, it will not, and, as applicable, it will not permit any
of its Subsidiaries to:
8.1 Limitation on Debt. Create, incur, assume or suffer to exist any
Debt, except:
(a) Indebtedness of any Borrower to Agent and the Lenders
under this Agreement and/or the other Loan Documents;
(b) any Debt existing on the Effective Date and set forth
in Schedule 8.1 attached hereto and any renewals or
refinancing of such Debt;
(c) any Debt of Borrower or any Subsidiary incurred to
finance the acquisition of fixed or capital assets,
whether pursuant to a loan or a Capitalized Lease
provided that both at the time of and immediately
after giving effect to the incurrence thereof (i) no
Default or Event of Default shall have occurred and
be continuing, and (ii) the aggregate amount of all
such Debt at any one time outstanding (including,
45
without limitation, any Debt of the type described in
this clause (c) which is set forth on Schedule 8.1
hereof) shall not exceed $2,000,000, and any renewals
or refinancings of such Debt on terms substantially
the same or better than those in effect at the time
of the original incurrence of such Debt;
(d) Subordinated Debt;
(e) Debt under any Hedging Transactions, provided that
such transaction is entered into for risk management
purposes and not for speculative purposes;
(f) Debt arising from judgments or decrees not deemed to
be a Default or Event of Default under subsection (g)
of Section 9.1;
(g) Debt owing to a Person that is a Borrower, but only
to the extent permitted under Section 8.7 hereof;
(h) additional unsecured Debt not otherwise described
above, provided that the aggregate amount of all such
Debt shall not exceed $2,000,000 at any one time
outstanding; and
(i) current unsecured trade, utility or non-extraordinary
accounts payable arising in the ordinary course of
business.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Permitted Liens;
(b) Liens securing Debt permitted by Section 8.1(c),
provided that (i) such Liens are created upon fixed
or capital assets acquired by the applicable Borrower
after the date of this Agreement (including without
limitation by virtue of a loan or a Capitalized
Lease), (ii) any such Lien is created solely for the
purpose of securing indebtedness representing or
incurred to finance the cost of the acquisition of
the item of property subject thereto, (iii) the
principal amount of the Debt secured by any such Lien
shall at no time exceed 100% of the sum of the
purchase price or cost of the applicable property,
equipment or improvements and the related costs and
charges imposed by the vendors thereof and (iv) the
Lien does not cover any property other than the fixed
or capital asset acquired;
(c) Liens created pursuant to the Loan Documents;
(d) other Liens, existing on the Effective Date, set
forth on Schedule 8.2 and renewals, refinancings and
extensions thereof on substantially the same or
better terms as in effect on the Effective Date and
otherwise in compliance with this Agreement; and
(e) Liens approved by the Majority Lenders after the
Effective Date.
Regardless of the provisions of this Section 8.2, no Lien over the Equity
Interests of any Borrower (other than Parent) or any Subsidiary of Borrower
(except for those Liens for the benefit of Agent and the Lenders) shall be
permitted under the terms of this Agreement.
8.3 Acquisitions. Except for Permitted Acquisitions and acquisitions
permitted under Sections 8.5 or 8.7, if any, purchase or otherwise acquire or
become obligated for the purchase of all or substantially all or any material
46
portion of the assets or business interests or a division or other business unit
of any Person, or any Equity Interest of any Person, or any business or going
concern.
8.4 Limitation on Mergers, Dissolution or Sale of Assets. Enter into
any merger or consolidation or convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, Equity Interests, receivables and leasehold interests), whether now
owned or hereafter acquired or liquidate, wind up or dissolve, except:
(a) Inventory leased or sold in the ordinary course of
business;
(b) obsolete, damaged, uneconomic or worn out machinery,
parts, property or Equipment, or property or
Equipment no longer used or useful in the conduct of
the applicable Borrower's business;
(c) Permitted Acquisitions;
(d) mergers or consolidations of any Subsidiary of
Borrower with or into Borrower or any Guarantor so
long as the Borrower or such Guarantor shall be the
continuing or surviving entity; provided that at the
time of each such merger or consolidation, both
before and after giving effect thereto, no Default or
Event of Default shall have occurred and be
continuing or result from such merger or
consolidation;
(e) any Subsidiary of Borrower may liquidate or dissolve
into Borrower or a Guarantor if Borrower determines
in good faith that such liquidation or dissolution is
in the best interests of Borrower, so long as no
Default or Event of Default has occurred and is
continuing or would result therefrom;
(f) sales or transfers, including without limitation upon
voluntary liquidation from any Borrower to Borrower
or a Guarantor, provided that the applicable Borrower
or Guarantor takes such actions as Agent may
reasonably request to ensure the perfection and
priority of the Liens in favor of the Lenders over
such transferred assets;
(g) (i) Asset Sales (exclusive of asset sales permitted
pursuant to all other subsections of this Section
8.4) in which the sales price is at least equal to
the fair market value of the assets sold and the
consideration received is cash or cash equivalents or
Debt of any Borrower being assumed by the purchaser,
provided that the aggregate amount of such Asset
Sales does not exceed $1,000,000 in any Fiscal Year
and no Default or Event of Default has occurred and
is continuing at the time of each such sale (both
before and after giving effect to such Asset Sale),
and (ii) other Asset Sales approved by the Majority
Lenders in their sole discretion;
(h) the sale or disposition of Permitted Investments and
other cash equivalents in the ordinary course of
business; and
(i) dispositions of owned or leased vehicles in the
ordinary course of business.
The Lenders hereby consent and agree to the release by Agent of any and all
Liens on the property sold or otherwise disposed of in compliance with this
Section 8.4.
8.5 Restricted Payments. Declare or make any distributions, dividend,
payment or other distribution of assets, properties, cash, rights, obligations
or securities (collectively, "Distributions") on account of any of its Equity
Interests, as applicable, or purchase, redeem or otherwise acquire for value any
of its Equity Interests, as applicable, or any warrants, rights or options to
acquire any of its Equity Interests, now or hereafter outstanding (collectively,
"Purchases"), except that:
47
(a) each Borrower may pay cash Distributions to the
Parent;
(b) each Borrower may declare and make Distributions
payable in the Equity Interests of such Borrower,
provided that the issuance of such Equity Interests
does not otherwise violate the terms of this
Agreement and no Default or Event of Default has
occurred and is continuing at the time of making such
Distribution or would result from the making of such
Distribution;
(c) the redemption, repurchase or acquisition of any
shares of Parent's capital stock payable upon an
employee's termination pursuant to its employee stock
option, repurchase, or similar plan; provided,
however, that after giving effect to such redemption,
repurchase or acquisition, Parent and each other
Borrower, as applicable, shall be in full compliance
with the terms of this Agreement; and
(d) that Parent may repurchase annually up to $100,000 of
its common stock in connection with the Parent's
employee stock purchase plan.
8.6 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for Capital
Expenditures, the amount of which in any Fiscal Year shall not exceed the sum of
$3,250,000.
8.7 Limitation on Investments, Loans and Advances. Make or allow to
remain outstanding any Investment (whether such investment shall be of the
character of investment in shares of stock, evidences of indebtedness or other
securities or otherwise) in, or any loans or advances to, any Person other than:
(a) Permitted Investments;
(b) Investments existing on the Effective Date and listed
on Schedule 8.7 hereof;
(c) sales on open account in the ordinary course of
business;
(d) intercompany loans or intercompany Investments made
by any Borrower to or in any Guarantor or Borrower;
(e) Investments in respect of Hedging Transactions
provided that such transaction is entered into for
risk management purposes and not for speculative
purposes;
(f) loans and advances to employees, officers and
directors of any Borrower for moving, entertainment,
travel and other similar expenses in the ordinary
course of business in the aggregate at any time
outstanding;
(g) Permitted Acquisitions and Investments in any Person
acquired pursuant to a Permitted Acquisition; and
(h) Investment in the Baton Rouge Note.
8.8 Transactions with Affiliates. Except as set forth in Schedule 8.8,
enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliates of the Borrowers except: (a) transactions with Affiliates that are
the Borrower or Guarantors; (b) transactions otherwise permitted under this
Agreement; and (c) transactions in the ordinary course of a Borrower's business
and upon fair and reasonable terms no less favorable to such Borrower than it
would obtain in a comparable arms length transaction from unrelated third
parties.
48
8.9 Sale-Leaseback Transactions. Enter into any arrangement with any
Person providing for the leasing by a Borrower of real or personal property
which has been or is to be sold or transferred by such Borrower to such Person
or to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of such Borrower,
as the case may be.
8.10 Limitations on Other Restrictions. Except for this Agreement or
any other Loan Document, enter into any agreement, document or instrument which
would (i) restrict the ability of any Subsidiary of the Borrower to pay or make
dividends or distributions in cash or kind to Borrower or any Guarantor, to make
loans, advances or other payments of whatever nature to any Borrower, or to make
transfers or distributions of all or any part of its assets to any Borrower; or
(ii) restrict or prevent any Borrower from granting Agent on behalf of Lenders
Liens upon, security interests in and pledges of their respective assets, except
to the extent such restrictions exist in documents creating Liens permitted by
Section 9.2(b) hereunder.
8.11 Prepayment of Debt. Make any prepayment (whether optional or
mandatory), repurchase, redemption, defeasance or any other payment in respect
of any Subordinated Debt.
8.12 Amendment of Subordinated Debt Documents. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) the Subordinated
Debt Documents except as permitted in the applicable Subordinated Debt Documents
and Subordination Agreements, or if no such restrictions exist in the applicable
Subordinated Debt Documents or Subordination Agreements, without the prior
written consent of the Agent.
8.13 Modification of Certain Agreements. Make, permit or consent to any
amendment or other modification to the constitutional documents of any Borrower
except to the extent that any such amendment or modification (i) does not
violate the terms and conditions of this Agreement or any of the other Loan
Documents, (ii) does not materially adversely affect the interest of the Lenders
as creditors and/or secured parties under any Loan Document and (iii) could not
reasonably be expected to have a Material Adverse Effect.
8.14 Fiscal Year. Permit the Fiscal Year of any Borrower to end on a
day other than December 31.
8.15 Limitation on Contracts. Without prior written approval from
Agent, the Borrower will not enter into (i) any fixed price engineering
procurement and construction contract that exceeds $2,000,000 or (ii) any fixed
price engineering services contract that exceeds $5,000,000.
9. DEFAULTS.
9.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest
on the Indebtedness under the Revolving Credit Loans
(including the Swing Line) or (ii) any Reimbursement
Obligation or (iii) any Fees;
(b) non-payment of any other amounts due and owing by
Borrower under this Agreement or by any Borrower
under any of the other Loan Documents to which it is
a party, other than as set forth in subsection (a)
above;
(c) default in the observance or performance of any of
the conditions, covenants or agreements of Borrower
set forth in Sections 7.1, 7.2, 7.7, 7.9, 7.11 and
7.13 or Article 8 in its entirety, provided that an
Event of Default arising from a breach of Sections
7.1(a) through (c) or 7.2(a) through (i) shall be
deemed to have been cured upon delivery of the
required item; and provided further that any Event of
49
Default arising solely due to a breach of Section
7.7(a) shall be deemed cured upon the earlier of (x)
the giving of the notice required by Section 7.7(a)
and (y) the date upon which the Default or Event of
Default giving rise to the notice obligation is cured
or waived;
(d) default in the observance or performance of any of
the other conditions, covenants or agreements set
forth in this Agreement or any of the other Loan
Documents by any Borrower and continuance thereof for
a period of thirty (30) consecutive days;
(e) any representation or warranty made by any Borrower
herein or in any certificate, instrument or other
document submitted pursuant hereto proves untrue or
misleading in any material adverse respect when made;
(f) (i) default by any Borrower in the payment of any
indebtedness for borrowed money, whether under a
direct obligation or guaranty (other than
Indebtedness hereunder) of any Borrower in excess of
Two Hundred Fifty Thousand Dollars ($250,000) (or the
equivalent thereof in any currency other than
Dollars) individually or in the aggregate when due
and continuance thereof beyond any applicable period
of cure and or (ii) failure to comply with the terms
of any other obligation of any Borrower with respect
to any indebtedness for borrowed money (other than
Indebtedness hereunder) in excess of Two Hundred
Fifty Thousand Dollars ($250,000) (or the equivalent
thereof in any currency other than Dollars)
individually or in the aggregate, which continues
beyond any applicable period of cure and which would
permit the holder or holders thereto to accelerate
such other indebtedness for borrowed money, or
require the prepayment, repurchase, redemption or
defeasance of such indebtedness;
(g) the rendering of any judgment(s) (not covered by
adequate insurance from a solvent carrier which is
defending such action without reservation of rights)
for the payment of money in excess of the sum of Two
Hundred Fifty Thousand Dollars ($250,000) (or the
equivalent thereof in any currency other than
Dollars) individually or in the aggregate against any
Borrower, and such judgments shall remain unpaid,
unvacated, unbonded or unstayed by appeal or
otherwise for a period of sixty (60) consecutive days
from the date of its entry;
(h) the occurrence of (i) a "reportable event", as
defined in ERISA, which is determined by the PBGC to
constitute grounds for a distress termination of any
Pension Plan subject to Title IV of ERISA maintained
or contributed to by or on behalf of any Borrower for
the benefit of any of its employees or for the
appointment by the appropriate United States District
Court of a trustee to administer such Pension Plan
and such reportable event is not corrected and such
determination is not revoked within thirty (30) days
after notice thereof has been given to the plan
administrator of such Pension Plan (without limiting
any of Agent's or any Lender's other rights or
remedies hereunder), or (ii) the termination or the
institution of proceedings by the PBGC to terminate
any such Pension Plan, or (iii) the appointment of a
trustee by the appropriate United States District
Court to administer any such Pension Plan, or (iv)
the reorganization (within the meaning of Section
4241 of ERISA) or insolvency (within the meaning of
Section 4245 of ERISA) of any Multiemployer Plan, or
receipt of notice from any Multiemployer Plan that it
is in reorganization or insolvency, or the complete
or partial withdrawal by any Borrower from any
Multiemployer Plan, which in the case of any of the
foregoing, could reasonably be expected to have a
Material Adverse Effect;
(i) except as expressly permitted under this Agreement,
any Borrower shall be dissolved (other than a
dissolution of a Subsidiary of Borrower which is not
a Guarantor or Borrower) or liquidated (or any
judgment, order or decree therefor shall be entered)
except as otherwise permitted herein; or if a
50
creditors' committee shall have been appointed for
the business of any Borrower; or if any Borrower
shall have made a general assignment for the benefit
of creditors or shall have been adjudicated bankrupt
and if not an adjudication based on a filing by a
Borrower, it shall not have been dismissed within
sixty (60) days, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to
effect a plan or arrangement with creditors or shall
fail to pay its debts generally as such debts become
due in the ordinary course of business (except as
contested in good faith and for which adequate
reserves are made in such party's financial
statements); or shall file an answer to a creditor's
petition or other petition filed against it,
admitting the material allegations thereof for an
adjudication in bankruptcy or for reorganization; or
shall have applied for or permitted the appointment
of a receiver or trustee or custodian for any of its
property or assets; or such receiver, trustee or
custodian shall have been appointed for any of its
property or assets (otherwise than upon application
or consent of a Borrower ) and shall not have been
removed within sixty (60) days; or if an order shall
be entered approving any petition for reorganization
of any Borrower and shall not have been reversed or
dismissed within sixty (60) days;
(j) the validity, binding effect or enforceability of any
subordination provisions relating to any Subordinated
Debt shall be contested by any Person party thereto
(other than any Lender, Agent, or Issuing Lender), or
such subordination provisions shall fail to be
enforceable by Agent and the Lenders in accordance
with the terms thereof, or the Indebtedness shall for
any reason not have the priority contemplated by this
Agreement or such subordination provisions; or
(k) any Loan Document shall at any time for any reason
cease to be in full force and effect (other than in
accordance with the terms thereof or the terms of any
other Loan Document), as applicable, or the validity,
binding effect or enforceability thereof shall be
contested by any party thereto (other than any
Lender, Swing Line Lender, Agent, or Issuing Lender),
or any Person shall deny that it has any or further
liability or obligation under any Loan Document, or
any such Loan Document shall be terminated (other
than in accordance with the terms thereof or the
terms of any other Loan Document), invalidated,
revoked or set aside or in any way cease to give or
provide to the Lenders and the Agent the benefits
purported to be created thereby.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent may, and shall, upon being directed to do so
by the Majority Lenders, declare the Revolving Credit Aggregate Commitment
terminated; (b) the Agent may, and shall, upon being directed to do so by the
Majority Lenders, declare the entire unpaid principal Indebtedness, including
the Notes, immediately due and payable, without presentment, notice or demand,
all of which are hereby expressly waived by the Borrower; (c) upon the
occurrence of any Event of Default specified in Section 9.1(i) and
notwithstanding the lack of any declaration by Agent under preceding clauses (a)
or (b), the entire unpaid principal Indebtedness shall become automatically and
immediately due and payable, and the Revolving Credit Aggregate Commitment shall
be automatically and immediately terminated; (d) the Agent shall, upon being
directed to do so by the Majority Lenders, demand immediate delivery of cash
collateral, and each Borrower agrees to deliver such cash collateral upon
demand, in an amount equal to 105% of the maximum amount that may be available
to be drawn at any time prior to the stated expiry of all outstanding Letters of
Credit; (e) the Agent may, and shall, upon being directed to do so by the
Majority Lenders, notify Borrower or any Borrower that interest shall be payable
on demand on all Indebtedness (other than Revolving Credit Advances and Swing
Line Advances, with respect to which Section 2.6 hereof shall govern) owing from
time to time to the Agent or any Lender, at a per annum rate equal to the then
applicable Prime-based Rate plus two percent (2%); and (f) the Agent may, and
shall, upon being directed to do so by the Majority Lenders or the Lenders, as
applicable (subject to the terms hereof), exercise any remedy permitted by this
Agreement, the other Loan Documents or law.
51
9.3 Rights Cumulative. No delay or failure of Agent and/or Lenders in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Lenders under this Agreement are cumulative
and not exclusive of any right or remedies which Lenders would otherwise have.
9.4 Waiver by Borrower of Certain Laws. To the extent permitted by
applicable law, each Borrower hereby agrees to waive, and does hereby absolutely
and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the
Lenders except in a writing signed by an officer of the Agent in accordance with
Section 13.10 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude other
or further exercise of their rights by Agent or the Lenders. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Lenders in enforcing any of their
rights shall constitute a waiver of any of their rights. The Borrower expressly
agrees that this Section may not be waived or modified by the Lenders or Agent
by course of performance, estoppel or otherwise.
9.6 Set Off. Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to Borrower but subject to the provisions of Section 10.3 hereof (any
requirement for such notice being expressly waived by Borrower), setoff and
apply against any and all of the obligations of Borrower now or hereafter
existing under this Agreement, whether owing to such Lender, any Affiliate of
such Lender or any other Lender or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of Borrower and any property of Borrower from time to time in possession
of such Lender, irrespective of whether or not such deposits held or
indebtedness owing by such Lender may be contingent and unmatured and regardless
of whether any Collateral then held by Agent or any Lender is adequate to cover
the Indebtedness. Promptly following any such setoff, such Lender shall give
written notice to Agent and Borrower of the occurrence thereof. Borrower hereby
grants to the Lenders and the Agent a lien on and security interest in all such
deposits, indebtedness and property as collateral security for the payment and
performance of all of the obligations of Borrower under this Agreement. The
rights of each Lender under this Section 9.6 are in addition to the other rights
and remedies (including, without limitation, other rights of setoff) which such
Lender may have.
10. PAYMENTS, RECOVERIES AND COLLECTIONS.
10.1 Payment Procedure.
(a) All payments to be made by Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise provided herein, all payments made by the Borrower of principal,
interest or fees hereunder shall be made without setoff or counterclaim on the
date specified for payment under this Agreement and must be received by Agent
not later than 1:00 p.m. (Detroit time) on the date such payment is required or
intended to be made in Dollars in immediately available funds to Agent at
Agent's office located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000, for
the ratable benefit of the Revolving Credit Lenders in the case of payments in
respect of the Revolving Credit and any Letter of Credit Obligations. Any
payment received by the Agent after 1:00 p.m. (Detroit time) shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. Upon receipt of each such payment, the Agent shall
make prompt payment to each applicable Lender, or, in respect of
Eurodollar-based Advances, such Lender's Eurodollar Lending Office, in like
funds and currencies, of all amounts received by it for the account of such
Lender.
52
(b) Unless the Agent shall have been notified in writing by Borrower at
least two (2) Business Days prior to the date on which any payment to be made by
Borrower is due that Borrower does not intend to remit such payment, the Agent
may, in its sole discretion and without obligation to do so, assume that
Borrower has remitted such payment when so due and the Agent may, in reliance
upon such assumption, make available to each Revolving Credit Lender, on such
payment date an amount equal to such Lender's share of such assumed payment. If
Borrower has not in fact remitted such payment to the Agent, each Lender shall
forthwith on demand repay to the Agent the amount of such assumed payment made
available or transferred to such Lender, together with the interest thereon, in
respect of each day from and including the date such amount was made available
by the Agent to such Lender to the date such amount is repaid to the Agent at a
rate per annum equal to the Federal Funds Effective Rate for the first two (2)
Business Days that such amount remains unpaid, and thereafter at a rate of
interest then applicable to such Revolving Credit Advances.
(c) Subject to the definition of "Interest Period" in Section 1 of this
Agreement, whenever any payment to be made hereunder shall otherwise be due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest, if any, in connection with such payment.
(d) All payments to be made by Borrower under this Agreement or any of
the Notes (including without limitation, payments under the Swing Line and/or
Swing Line Note) shall be made without setoff or counterclaim, as aforesaid,
and, subject to full compliance by each Lender (and each assignee and
participant pursuant to Section 13.8) with Section 13.13, without deduction for
or on account of any present or future withholding or other taxes of any nature
imposed by any governmental authority or of any political subdivision thereof or
any federation or organization of which such governmental authority may at the
time of payment be a member (other than any taxes on the overall income, net
income, net profits or net receipts or similar taxes (or any franchise taxes
imposed in lieu of such taxes) on the Agent or any Lender (or any branch
maintained by Agent or a Lender) as a result of a present or former connection
between the Agent or such Lender and the governmental authority, political
subdivision, federation or organization imposing such taxes), unless Borrower is
compelled by law to make payment subject to such tax. In such event, Borrower
shall:
(i) pay to the Agent for Agent's own account and/or, as
the case may be, for the account of the Lenders such
additional amounts as may be necessary to ensure that
the Agent and/or such Lender or Lenders (including
Swing Line Lender) receive a net amount equal to the
full amount which would have been receivable had
payment not been made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities
according to applicable law, and send to the Agent or
the applicable Lender or Lenders, as the case may be,
such certificates or certified copy receipts as the
Agent or such Lender or Lenders (including Swing Line
Lender) shall reasonably require as proof of the
payment by Borrower of any such taxes payable by
Borrower.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes,
levies, imposts, duties, fees, deductions and withholdings or similar charges
together with interest (and any taxes payable upon the amounts paid or payable
pursuant to this Section 10.1) thereon. Borrower shall be reimbursed by the
applicable Lender for any payment made by Borrower under this Section 10.1 if
the applicable Lender is not in compliance with its obligations under Section
13.13 at the time of the Borrower's payment.
10.2 Application of Proceeds of Collateral. Notwithstanding anything to
the contrary in this Agreement, following the occurrence of any Event of Default
under Section 9.1(i), and following the occurrence of any other Event of Default
and the termination of the Revolving Credit Aggregate Commitment, the
53
acceleration of any Indebtedness arising under this Agreement or the exercise of
any other remedy in each case by the requisite Lenders under Section 9.2 hereof,
the Agent shall apply the proceeds of any Collateral, together with any offsets,
voluntary payments by any Borrower or others and any other sums received or
collected in respect of the Indebtedness first, to pay all incurred and unpaid
fees and expenses of the Agent under the Loan Documents and any protective
advances made by Agent with respect to the Collateral under or pursuant to the
terms of any Loan Document, next, to pay any fees and expenses owed to the
Issuing Lender hereunder, next, to the Indebtedness under the Revolving Credit
(including the Swing Line and any Reimbursement Obligations), on a pro rata
basis, next to any obligations owing by any Borrower under any Hedging
Agreements on a pro rata basis, next, to any other Indebtedness on a pro rata
basis, and then, if there is any excess, to the Borrowers, as the case may be.
10.3 Pro-rata Recovery. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise)
on account of principal of, or interest on, any of the Advances made by it, or
the participations in Letter of Credit Obligations or Swing Line Advances held
by it in excess of its pro rata share of payments then or thereafter obtained by
all Lenders upon principal of and interest on all such Indebtedness, such Lender
shall purchase from the other Lenders such participations in the Revolving
Credit, and/or the Letter of Credit Obligation held by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably in accordance with the applicable Percentages of the Lenders;
provided, however, that if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing holder, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
11.1 Reimbursement of Prepayment Costs. If (i) Borrower makes any
payment of principal with respect to any Eurodollar-based Advance on any day
other than the last day of the Interest Period applicable thereto (whether
voluntarily, pursuant to any mandatory provisions hereof, by acceleration, or
otherwise); (ii) Borrower converts or refunds (or attempts to convert or refund)
any such Advance on any day other than the last day of the Interest Period
applicable thereto (except as described in Section 2.5(e)); (iii) Borrower fails
to borrow, refund or convert any Eurodollar-based Advance after notice has been
given by Borrower to Agent in accordance with the terms hereof requesting such
Advance; or (iv) or if the Borrower fails to make any payment of principal in
respect of a Eurodollar-based Advance when due, the Borrower shall reimburse
Agent for itself and/or on behalf of any Lender, as the case may be, within ten
(10) Business Days of written demand therefor for any resulting loss, cost or
expense incurred (excluding the loss of any Applicable Margin) by Agent and
Lenders, as the case may be, as a result thereof, including, without limitation,
any such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Lenders, as
the case may be, shall have funded or committed to fund such Advance. The amount
payable hereunder by Borrower to Agent for itself and/or on behalf of any
Lender, as the case may be, shall be deemed to equal an amount equal to the
excess, if any, of (a) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, refunded or converted, for the period
from the date of such prepayment or of such failure to borrow, refund or
convert, through the last day of the relevant Interest Period, at the applicable
rate of interest for said Advance(s) provided under this Agreement, over (b) the
amount of interest (as reasonably determined by Agent and Lenders, as the case
may be) which would have accrued to Agent and Lenders, as the case may be, on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurocurrency market. Calculation of any amounts
payable to any Lender under this paragraph shall be made as though such Lender
shall have actually funded or committed to fund the relevant Advance through the
purchase of an underlying deposit in an amount equal to the amount of such
Advance and having a maturity comparable to the relevant Interest Period;
provided, however, that any Lender may fund any Eurodollar-based Advance in any
manner it deems fit and the foregoing assumptions shall be utilized only for the
purpose of the calculation of amounts payable under this paragraph. Upon the
written request of Borrower, Agent and Lenders shall deliver to Borrower a
certificate setting forth the basis for determining such losses, costs and
expenses, which certificate shall be conclusively presumed correct, absent
manifest error.
54
11.2 Eurodollar Lending Office. For any Eurodollar Advance, if Agent or
a Lender, as applicable, shall designate a Eurodollar Lending Office which
maintains books separate from those of the rest of Agent or such Lender, Agent
or such Lender, as the case may be, shall have the option of maintaining and
carrying the relevant Advance on the books of such Eurodollar Lending Office.
11.3 Circumstances Affecting Eurodollar-based Rate Availability. If,
with respect to any Eurodollar-Interest Period, Agent or the Majority Lenders
(after consultation with Agent) shall determine in good faith that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars in the applicable amounts are not being offered to the
Agent or such Lenders for such Eurodollar-Interest Period, then Agent shall
forthwith give notice thereof to Borrower. Thereafter, until Agent notifies
Borrower that such circumstances no longer exist, (i) the obligation of Lenders
to make Eurodollar-based Advances, and the right of Borrower to convert an
Advance to or refund an Advance as a Eurodollar-based Advance, as the case may
be, shall be suspended, and (ii) effective upon the last day of each
Eurodollar-Interest Period related to any existing Eurodollar-based Advance,
each such Eurodollar-based Advance shall automatically be converted into a
Prime-based Advance (without regard to satisfaction of any conditions to
conversion contained elsewhere herein).
11.4 Laws Affecting Eurodollar-based Advance Availability. If, after
the date of this Agreement, the adoption or introduction of, or any change in,
any applicable law, rule or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any of the Lenders
(or any of their respective Eurodollar Lending Offices) with any request or
directive (whether or not having the force of law) of any such authority, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Eurodollar Lending Offices) to honor its obligations hereunder to
make or maintain any Advance with interest at the Eurodollar-based Rate, such
Lender shall forthwith give notice thereof to Borrower and to Agent. Thereafter,
(a) the obligations of the applicable Lenders to make Eurodollar-based Advances
and the right of Borrower to convert an Advance into or refund an Advance as a
Eurodollar-based Advance shall be suspended and thereafter Borrower may select
as Applicable Interest Rates only those which remain available and which are
permitted to be selected hereunder, and (b) if any of the Lenders may not
lawfully continue to maintain an Advance to the end of the then current
Eurodollar-Interest Period applicable thereto as a Eurodollar-based Advance, the
applicable Advance shall immediately be converted to a Prime-based Advance and
the Prime-based Rate shall be applicable thereto for the remainder of such
Eurodollar-Interest Period. For purposes of this Section, a change in law, rule,
regulation, interpretation or administration shall include, without limitation,
any change made or which becomes effective on the basis of a law, rule,
regulation, interpretation or administration presently in force, the effective
date of which change is delayed by the terms of such law, rule, regulation,
interpretation or administration.
11.5 Increased Cost of Eurodollar-based Advances. If, after the date of
this Agreement, the adoption or introduction of, or any change in, any
applicable law, rule or regulation or 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 of the
Lenders (or any of their respective Eurodollar Lending Offices) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(a) shall subject any of the Lenders (or any of their
respective Eurodollar Lending Offices) to any tax,
duty or other charge with respect to any Advance or
shall change the basis of taxation of payments to any
of the Lenders (or any of their respective Eurodollar
Lending Offices) of the principal of or interest on
any Advance or any other amounts due under this
Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of
the Lenders or any of their respective Eurodollar
Lending Offices); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System),
55
special deposit or similar requirement against assets
of, deposits with or for the account of, or credit
extended by, any of the Lenders (or any of their
respective Eurodollar Lending Offices) or shall
impose on any of the Lenders (or any of their
respective Eurodollar Lending Offices) or the foreign
exchange and interbank markets any other condition
affecting any Advance;
and the result of any of the foregoing matters is to increase the costs to any
of the Lenders of maintaining any part of the Indebtedness hereunder as a
Eurodollar-based Advance or to reduce the amount of any sum received or
receivable by any of the Lenders under this Agreement in respect of a
Eurodollar-based Advance, then such Lender shall promptly notify Agent, and
Agent shall promptly notify Borrower of such fact and demand compensation
therefor and, within ten (10) Business Days after such notice, Borrower agrees
to pay to such Lender or Lenders such additional amount or amounts as will
compensate such Lender or Lenders for such increased cost or reduction, provided
that each Lender agrees to take any reasonable action, to the extent such action
could be taken without cost or administrative or other burden or restriction to
such Lender, to mitigate or eliminate such cost or reduction, within a
reasonable time after becoming aware of the foregoing matters. Agent will
promptly notify Borrower of any event of which it has knowledge which will
entitle Lenders to compensation pursuant to this Section, or which will cause
Borrower to incur additional liability under Section 11.1 hereof, provided that
Agent shall incur no liability whatsoever to the Lenders or Borrower in the
event it fails to do so. A certificate of Agent (or such Lender, if applicable)
setting forth the basis for determining such additional amount or amounts
necessary to compensate such Lender or Lenders shall accompany such demand and
shall be conclusively presumed to be correct absent manifest error.
11.6 Capital Adequacy and Other Increased Costs.
(a) If, after the date of this Agreement, the adoption or
introduction of, or any change in any applicable law,
treaty, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or
not presently applicable to any Lender or Agent, or
any interpretation or administration thereof by any
governmental authority charged with the
interpretation or administration thereof, or
compliance by any Lender or Agent with any guideline,
request or directive of any such authority (whether
or not having the force of law), including any risk
based capital guidelines, affects or would affect the
amount of capital required to be maintained by such
Lender or Agent (or any corporation controlling such
Lender or Agent) and such Lender or Agent, as the
case may be, determines that the amount of such
capital is increased by or based upon the existence
of such Lender's or Agent's obligations or Advances
hereunder and such increase has the effect of
reducing the rate of return on such Lender's or
Agent's (or such controlling corporation's) capital
as a consequence of such obligations or Advances
hereunder to a level below that which such Lender or
Agent (or such controlling corporation) could have
achieved but for such circumstances (taking into
consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender or Agent
to be material (collectively, "Increased Costs"),
then Agent or such Lender shall notify Borrower, and
thereafter Borrower shall pay to such Lender or
Agent, as the case may be, within ten (10) Business
Days of written demand therefor from such Lender or
Agent, additional amounts sufficient to compensate
such Lender or Agent (or such controlling
corporation) for any increase in the amount of
capital and reduced rate of return which such Lender
or Agent reasonably determines to be allocable to the
existence of such Lender's or Agent's obligations or
Advances hereunder. A statement setting forth the
amount of such compensation, the methodology for the
calculation and the calculation thereof which shall
also be prepared in good faith and in reasonable
detail by such Lender or Agent, as the case may be,
shall be submitted by such Lender or by Agent to
Borrower, reasonably promptly after becoming aware of
any event described in this Section 11.6(a) and shall
be conclusively presumed to be correct, absent
manifest error.
56
(b) Notwithstanding the foregoing, however, Borrower
shall not be required to pay any increased costs
under Sections 11.5, 11.6 or 3.4(c) for any period
ending prior to the date that is 180 days prior to
the making of a Lender's initial request for such
additional amounts unless the applicable change in
law or other event resulting in such increased costs
is effective retroactively to a date more than 180
days prior to the date of such request, in which case
a Lender's request for such additional amounts
relating to the period more than 180 days prior to
the making of the request must be given not more than
180 days after such Lender becomes aware of the
applicable change in law or other event resulting in
such increased costs.
11.7 Right of Lenders to Fund through Branches and Affiliates. Each
Lender (including without limitation, the Swing Line Lender) may, if it so
elects, fulfill its commitment as to any Advance hereunder by designating a
branch or Affiliate of such Lender to make such Advance; provided that (a) such
Lender shall remain solely responsible for the performances of its obligations
hereunder and (b) no such designation shall result in any material increased
costs to Borrower.
11.8 Margin Adjustment. Adjustments to the Applicable Margins and the
Applicable Fee Percentages, based on Schedule 1.1, shall be implemented on a
quarterly basis as follows:
(a) Such adjustments shall be given prospective effect
only, effective as to all Advances outstanding
hereunder, the Applicable Fee Percentage and the
Letter of Credit Fee, upon the date of delivery of
the financial statements under Sections 7.1(a) and
7.1(b) hereunder and the Covenant Compliance Report
under Section 7.2(a) hereof, in each case
establishing applicability of the appropriate
adjustment and in each case with no retroactivity or
claw-back. In the event Borrower shall fail timely to
deliver such financial statements or the Covenant
Compliance Report and such failure continues for
three (3) days, then (but without affecting the Event
of Default resulting therefrom) from the date
delivery of such financial statements and report was
required until such financial statements and report
are delivered, the Applicable Margins and Applicable
Fee Percentages shall be at the highest level on the
Pricing Matrix attached to this Agreement as Schedule
1.1.
(b) From the Effective Date until the date of delivery of
the financial statements under Section 7.1(b) hereof,
and the Covenant Compliance Report under Section
7.2(a) hereof, reflecting two (2) consecutive,
profitable quarters of earnings, the Applicable
Margins and Applicable Fee Percentages shall be those
set forth under the Level III column of the pricing
matrix attached to this Agreement as Schedule 1.1.
Thereafter, Applicable Margins and Applicable Fee
Percentages shall be based upon the quarterly
financial statements and Covenant Compliance Reports,
subject to recalculation as provided in Section
11.8(a) above.
12. AGENT.
12.1 Appointment of Agent. Each Lender and the holder of each Note (if
issued) irrevocably appoints and authorizes the Agent to act on behalf of such
Lender or holder under this Agreement and the other Loan Documents and to
exercise such powers hereunder and thereunder as are specifically delegated to
Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto, including without limitation the power to execute
or authorize the execution of financing or similar statements or notices, and
other documents. In performing its functions and duties under this Agreement,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for any Borrower.
57
12.2 Deposit Account with Agent or any Lender. Borrower authorizes
Agent and each Lender, in Agent's or such Lender's sole discretion, upon notice
to the Borrower to charge its general deposit account(s), if any, maintained
with the Agent or such Lender for the amount of any principal, interest, or
other amounts or costs due under this Agreement when the same become due and
payable under the terms of this Agreement or the Notes.
12.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Lender (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it or them under this
Agreement or any document executed pursuant hereto, or in connection herewith or
therewith with the consent or at the request of the Majority Lenders (or all of
the Lenders for those acts requiring consent of all of the Lenders) INCLUDING,
WITHOUT LIMITATION, LOSSES, COSTS, DAMAGES, LIABILITIES AND EXPENSES IN ANY WAY
OR TO THE EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT ACT OR OMISSION OF ANY
KIND BY AGENT (except for its or their own willful misconduct or gross
negligence), nor be responsible for or have any duties to ascertain, inquire
into or verify (a) any recitals or warranties made by the Borrowers or any
Affiliate of the Borrowers, or any officer thereof contained herein or therein,
(b) the effectiveness, enforceability, validity or due execution of this
Agreement or any document executed pursuant hereto or any security thereunder,
(c) the performance by the Borrowers of their respective obligations hereunder
or thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation in connection with the making of any Advance or the
issuance of any Letter of Credit. Agent and its Affiliates shall be entitled to
rely upon any certificate, notice, document or other communication (including
any cable, telegraph, telex, facsimile transmission or oral communication)
believed by it to be genuine and correct and to have been sent or given by or on
behalf of a proper person. Agent may treat the payee of any Note as the holder
thereof. Agent may employ agents and may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable to
the Lenders (except as to money or property received by them or their authorized
agents), for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
12.4 Successor Agent. Agent may resign as such at any time upon at
least thirty (30) days prior notice to Borrower and each of the Lenders. If
Agent at any time shall resign or if the office of Agent shall become vacant for
any other reason, Majority Lenders shall, by written instrument, appoint
successor agent(s) ("Successor Agent") satisfactory to such Majority Lenders
and, so long as no Default or Event of Default has occurred and is continuing,
to Borrower (which approval shall not be unreasonably withheld or delayed);
provided, however that any such successor Agent shall be a bank or a trust
company or other financial institution which maintains an office in the United
States, or a commercial bank organized under the laws of the United States or
any state thereof, or any Affiliate of such bank or trust company or other
financial institution which is engaged in the banking business, and shall have a
combined capital and surplus of at least $500,000,000. Such Successor Agent
shall thereupon become the Agent hereunder, as applicable, and Agent shall
deliver or cause to be delivered to any successor agent such documents of
transfer and assignment as such Successor Agent may reasonably request. If a
Successor Agent is not so appointed or does not accept such appointment before
the resigning Agent's resignation becomes effective, the resigning Agent may
appoint a temporary successor to act until such appointment by the Majority
Lenders and, if applicable, Borrower, is made and accepted, or if no such
temporary successor is appointed as provided above by the resigning Agent, the
Majority Lenders shall thereafter perform all of the duties of the resigning
Agent hereunder until such appointment by the Majority Lenders and, if
applicable, Borrower, is made and accepted. Such Successor Agent shall succeed
to all of the rights and obligations of the resigning Agent as if originally
named. The resigning Agent shall duly assign, transfer and deliver to such
Successor Agent all moneys at the time held by the resigning Agent hereunder
after deducting therefrom its expenses for which it is entitled to be reimbursed
58
hereunder. Upon such succession of any such Successor Agent, the resigning Agent
shall be discharged from its duties and obligations, in its capacity as Agent
hereunder, except for its gross negligence or willful misconduct arising prior
to its resignation hereunder, and the provisions of this Article 12 shall
continue in effect for the benefit of the resigning Agent in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
12.5 Credit Decisions. Each Lender acknowledges that it has,
independently of Agent and each other Lender and based on the financial
statements of Borrower and such other documents, information and investigations
as it has deemed appropriate, made its own credit decision to extend credit
hereunder from time to time. Each Lender also acknowledges that it will,
independently of Agent and each other Lender and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this
Agreement, any Loan Document or any other document executed pursuant hereto.
12.6 Authority of Agent to Enforce This Agreement. Each Lender, subject
to the terms and conditions of this Agreement, grants the Agent full power and
authority as attorney-in-fact to institute and maintain actions, suits or
proceedings for the collection and enforcement of any Indebtedness outstanding
under this Agreement or any other Loan Document and to file such proofs of debt
or other documents as may be necessary to have the claims of the Lenders allowed
in any proceeding relative to any Borrower, or their respective creditors or
affecting their respective properties, and to take such other actions which
Agent considers to be necessary or desirable for the protection, collection and
enforcement of the Notes, this Agreement or the other Loan Documents.
12.7 Indemnification of Agent. The Lenders agree (which agreement shall
survive the expiration or termination of this Agreement) to indemnify the Agent
and its Affiliates (to the extent not reimbursed by Borrower, but without
limiting any obligation of Borrower to make such reimbursement), ratably
according to their respective Revolving Credit Percentages, from and against any
and all claims, damages, losses, liabilities, costs or expenses of any kind or
nature whatsoever (including, without limitation, reasonable fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against the Agent and its Affiliates in any way relating to or arising out of
this Agreement, any of the other Loan Documents or the transactions contemplated
hereby or any action taken or omitted by the Agent and its Affiliates under this
Agreement or any of the Loan Documents INCLUDING, WITHOUT LIMITATION, CLAIMS,
DAMAGES, LOSSES, LIABILITIES, COSTS AND EXPENSES IN ANY WAY OR TO THE EXTENT
OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY OR
CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY
AGENT, LENDERS OR THEIR AFFILIATES; provided, however, that no Lender shall be
liable for any portion of such claims, damages, losses, liabilities, costs or
expenses resulting from the Agent's or its Affiliate's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent and its Affiliates promptly upon demand for its ratable
share of any reasonable out-of-pocket expenses (including, without limitation,
reasonable fees and expenses of house and outside counsel) incurred by the Agent
and its Affiliates in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Loan
Documents, to the extent that the Agent and its Affiliates are not reimbursed
for such expenses by Borrower, but without limiting the obligation of Borrower
to make such reimbursement. Each Lender agrees to reimburse the Agent and its
Affiliates promptly upon demand for its ratable share of any amounts owing to
the Agent and its Affiliates by the Lenders pursuant to this Section, provided
that, if the Agent or its Affiliates are subsequently reimbursed by Borrower for
such amounts, they shall refund to the Lenders on a pro rata basis the amount of
any excess reimbursement. If the indemnity furnished to the Agent and its
Affiliates under this Section shall become impaired as determined in the Agent's
reasonable judgment or Agent shall elect in its sole discretion to have such
indemnity confirmed by the Lenders (as to specific matters or otherwise), Agent
shall give notice thereof to each Lender and, until such additional indemnity is
provided or such existing indemnity is confirmed, the Agent may cease, or not
commence, to take any action. Any amounts paid by the Lenders hereunder to the
Agent or its Affiliates shall be deemed to constitute part of the Indebtedness
hereunder.
59
12.8 Knowledge of Default. It is expressly understood and agreed that
the Agent shall be entitled to assume that no Default or Event of Default has
occurred and is continuing, unless the officers of the Agent immediately
responsible for matters concerning this Agreement shall have received a written
notice from a Lender or a Borrower specifying such Default or Event of Default
and stating that such notice is a "notice of default". Upon receiving such a
notice, the Agent shall promptly notify each Lender of such Default or Event of
Default and provide each Lender with a copy of such notice and shall endeavor to
provide such notice to the Lenders within three (3) Business Days (but without
any liability whatsoever in the event of its failure to do so). The Agent shall
also furnish the Lenders, promptly upon receipt, with copies of all other
notices or other information required to be provided by Borrower hereunder.
12.9 Agent's Authorization; Action by Lenders. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Lenders to give any approval or consent, or to make
any request, or to take any other action on behalf of the Lenders (including
without limitation the exercise of any right or remedy hereunder or under the
other Loan Documents), the Agent shall be required to give such approval or
consent, or to make such request or to take such other action only when so
requested in writing by the Majority Lenders or the Lenders, as applicable
hereunder. Action that may be taken by the Majority Lenders, any other specified
Percentage of the Lenders or all of the Lenders, as the case may be (as provided
for hereunder) may be taken (i) pursuant to a vote of the requisite percentages
of the Lenders as required hereunder at a meeting (which may be held by
telephone conference call), provided that Agent exercises good faith, diligent
efforts to give all of the Lenders reasonable advance notice of the meeting, or
(ii) pursuant to the written consent of the requisite percentages of the Lenders
as required hereunder, provided that all of the Lenders are given reasonable
advance notice of the requests for such consent.
12.10 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Lenders or all of the Lenders, as the case may be (as provided for hereunder),
shall direct; provided, however, that the Agent shall not be required to act or
omit to act if, in the reasonable judgment of the Agent, such action or omission
may expose the Agent to personal liability for which Agent has not been
satisfactorily indemnified hereunder or is contrary to this Agreement, any of
the Loan Documents or applicable law. Except as expressly provided above or
elsewhere in this Agreement or the other Loan Documents, no Lender (other than
the Agent, acting in its capacity as agent) shall be entitled to take any
enforcement action of any kind under this Agreement or any of the other Loan
Documents.
12.11 Collateral Matters.
(a) The Agent is authorized on behalf of all the Lenders, for
themselves and on behalf of each Lender Affiliate that is party to any Hedging
Agreement with a Borrower, without the necessity of any notice to or further
consent from the Lenders or any such Lender Affiliate, from time to time to take
any action with respect to any Collateral or the Collateral Documents which may
be necessary to perfect and maintain a perfected security interest in and Liens
upon the Collateral granted pursuant to the Loan Documents.
(b) The Lenders for themselves and on behalf of each Lender Affiliate
that is party to any Hedging Agreement with a Borrower irrevocably authorize the
Agent, in its reasonable discretion, to the full extent set forth in the
post-amble to Section 13.10 hereof, (1) to release or terminate any Lien granted
to or held by the Agent upon any Collateral (a) upon termination of the
Revolving Credit Aggregate Commitment and payment in full of all Indebtedness
payable under this Agreement and under any other Loan Document; (b) constituting
property (including, without limitation, Equity Interests in any Person) sold or
to be sold or disposed of as part of or in connection with any disposition
(whether by sale, by merger or by any other form of transaction and including
the property of any Subsidiary that is disposed of as permitted hereby)
permitted in accordance with the terms of this Agreement; (c) constituting
property in which a Borrower owned no interest at the time the Lien was granted
60
or at any time thereafter; or (d) if approved, authorized or ratified in writing
by the Majority Lenders, or all the Lenders, as the case may be, as provided in
Section 13.10; (2) to subordinate the Lien granted to or held by Agent on any
Collateral to any other holder of a Lien on such Collateral which is permitted
by Section 8.2(b) hereof; and (3) if all of the Equity Interests held by the
Borrowers in any Person are sold or otherwise transferred to any transferee
other than Borrower or a Subsidiary of Borrower as part of or in connection with
any disposition (whether by sale, by merger or by any other form of transaction)
permitted in accordance with the terms of this Agreement, to release such Person
from all of its obligations under the Loan Documents (including, without
limitation, under any Guaranty). Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 12.11(b).
12.12 Agents in their Individual Capacities. Comerica Bank and its
Affiliates, successors and assigns shall each have the same rights and powers
hereunder as any other Lender and may exercise or refrain from exercising the
same as though such Lender were not the Agent. Comerica Bank and its Affiliates
may (without having to account therefor to any Lender) accept deposits from,
lend money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Borrowers as if such Lender were not acting
as the Agent hereunder, and may accept fees and other consideration therefor
without having to account for the same to the Lenders.
12.13 Agent's Fees. Until the Indebtedness has been repaid and
discharged in full and no commitment to extend any credit hereunder is
outstanding, Borrower shall pay to the Agent, as applicable, any agency or other
fee(s) set forth (or to be set forth from time to time) in the applicable Fee
Letter on the terms set forth therein. The agency fees referred to in this
Section 12.13 shall not be refundable under any circumstances.
12.14 Documentation Agent or other Titles. Any Lender identified on the
facing page or signature page of this Agreement or in any amendment hereto or as
designated with consent of the Agent in any assignment agreement as Lead
Arranger, Documentation Agent, Syndications Agent or any similar titles, shall
not have any right, power, obligation, liability, responsibility or duty under
this Agreement as a result of such title other than those applicable to all
Lenders as such. Without limiting the foregoing, the Lenders so identified shall
not have or be deemed to have any fiduciary relationship with any Lender as a
result of such title. Each Lender acknowledges that it has not relied, and will
not rely, on the Lender so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.
13. MISCELLANEOUS.
13.1 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP.
13.2 Consent to Jurisdiction. The Borrower, the Agent and Lenders
hereby irrevocably submit to the non-exclusive jurisdiction of any United States
Federal Court or Texas state court sitting in Houston, Texas in any action or
proceeding arising out of or relating to this Agreement or any of the Loan
Documents and the Borrower, Agent and Lenders hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
any such United States Federal Court or Texas state court. Each Borrower
irrevocably consents to the service of any and all process in any such action or
proceeding brought in any court in or of the State of Texas by the delivery of
copies of such process to it at the applicable addresses specified on the
signature page hereto or by certified mail directed to such address or such
other address as may be designated by it in a notice to the other parties that
complies as to delivery with the terms of Section 13.6. Nothing in this Section
shall affect the right of the Lenders and the Agent to serve process in any
other manner permitted by law or limit the right of the Lenders or the Agent (or
any of them) to bring any such action or proceeding against any Borrower or any
of their property in the courts with subject matter jurisdiction of any other
jurisdiction. Borrower irrevocably waives any objection to the laying of venue
of any such suit or proceeding in the above described courts.
61
13.3 Law of Texas. This Agreement, the Notes and the other Loan
Documents shall be governed by and construed and enforced in accordance with the
laws of the State of Texas (without regard to its conflict of laws provisions).
Whenever possible each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
13.4 Interest. Agent, Lenders, Borrowers and any other parties to the
Loan Documents intend to contract in strict compliance with applicable usury law
from time to time in effect. In furtherance thereof such Persons stipulate and
agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in effect. Neither
Borrower nor any present or future guarantors, endorsers, or other Persons
hereafter becoming liable for payment of any Indebtedness shall ever be liable
for unearned interest thereon or shall ever be required to pay interest thereon
in excess of the maximum amount that may be lawfully contracted for, charged, or
received under applicable law from time to time in effect, and the provisions of
this section shall control over all other provisions of the Loan Documents which
may be in conflict or apparent conflict herewith. Agent and Lenders expressly
disavow any intention to contract for, charge, or collect excessive unearned
interest or finance charges in the event the maturity of any Indebtedness is
accelerated. If (a) the maturity of any Indebtedness is accelerated for any
reason, (b) any Indebtedness is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum, or (c)
Agent or any Lender or any other holder of any or all of the Indebtedness shall
otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Indebtedness to an amount
in excess of that permitted to be charged by applicable law then in effect, then
all sums determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal of
the related Indebtedness or, at such Lender's or holder's option, promptly
returned to Borrower or the other payor thereof upon such determination. In
determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable law, Agent,
Lenders, Borrowers (and any other payors thereof) shall to the greatest extent
permitted under applicable law, (i) characterize any non-principal payment as an
expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and
spread the total amount of interest throughout the entire contemplated term of
the instruments evidencing the Indebtedness in accordance with the amounts
outstanding from time to time thereunder and the maximum legal rate of interest
from time to time in effect under applicable law in order to lawfully contract
for, charge, or receive the maximum amount of interest permitted under
applicable law. In the event applicable law provides for an interest ceiling
under Chapter 303 of the Texas Finance Code (the "Texas Finance Code") as
amended, for that day, the ceiling shall be the "weekly ceiling" as defined in
the Texas Finance Code, provided that if any applicable law permits greater
interest, the law permitting the greatest interest shall apply. As used in this
section the term "applicable law" means the laws of the State of Texas or the
laws of the United States of America, whichever laws allow the greater interest,
as such laws now exist or may be changed or amended or come into effect in the
future.
13.5 Closing Costs and Other Costs; Indemnification.
(a) Borrower shall pay or reimburse (a) Agent and its Affiliates for
payment of, on demand, all reasonable costs and expenses, including, by way of
description and not limitation, reasonable in-house and outside attorney fees
and advances, appraisal and accounting fees, lien search fees, and required
travel costs, incurred by Agent and its Affiliates in connection with the
commitment, consummation and closing of the loans contemplated hereby, or in
connection with the administration or enforcement of this Agreement or the other
Loan Documents (including the obtaining of legal advice regarding the rights and
responsibilities of the parties hereto) or any refinancing or restructuring of
the loans or Advances provided under this Agreement or the other Loan Documents,
or any amendment or modification thereof requested by Borrower, and (b) Agent
and its Affiliates and each of the Lenders, as the case may be, for all stamp
and other taxes and duties payable or determined to be payable in connection
with the execution, delivery, filing or recording of this Agreement and the
other Loan Documents and the consummation of the transactions contemplated
62
hereby, and any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes or duties. Furthermore, all reasonable
costs and expenses, including without limitation attorney fees, incurred by
Agent and its Affiliates and, after the occurrence and during the continuance of
an Event of Default, by the Lenders in revising, preserving, protecting,
exercising or enforcing any of its or any of the Lenders' rights against
Borrower or any other Borrower, or otherwise incurred by Agent and its
Affiliates and the Lenders in connection with any Event of Default or the
enforcement of the loans (whether incurred through negotiations, legal
proceedings or otherwise), including by way of description and not limitation,
such charges in any court or bankruptcy proceedings or arising out of any claim
or action by any person against Agent, its Affiliates, or any Lender which would
not have been asserted were it not for Agent's or such Affiliate's or Lender's
relationship with Borrower hereunder or otherwise, shall also be paid by
Borrower. All of said amounts required to be paid by Borrower hereunder and not
paid forthwith upon demand, as aforesaid, shall bear interest, from the date
incurred to the date payment is received by Agent, at the Prime-based Rate, plus
two percent (2%).
(b) Borrower agrees to indemnify and hold Agent and each of the Lenders
(and their respective Affiliates) harmless from all loss, cost, damage,
liability or expenses, including reasonable house and outside attorneys' fees
and disbursements (but without duplication of such fees and disbursements for
the same services), incurred by Agent and each of the Lenders by reason of an
Event of Default, or enforcing the obligations of any Borrower under this
Agreement or any of the other Loan Documents, as applicable, or in the
prosecution or defense of any action or proceeding concerning any matter growing
out of or connected with this Agreement or any of the Loan Documents,
INCLUDING, WITHOUT LIMITATION, LOSSES, COSTS, DAMAGES, LIABILITIES AND EXPENSES
IN ANY WAY OR TO THE EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY
OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY AGENT, LENDERS OR THEIR AFFILIATES
excluding, however, any loss, cost, damage, liability or expenses to the extent
arising as a result of the gross negligence or willful misconduct of the party
seeking to be indemnified under this Section 13.5(b).
(c) The Borrower agrees to defend, indemnify and hold harmless Agent
and each Lender (and their respective Affiliates), and their respective
employees, agents, officers and directors from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs or expenses
of whatever kind or nature (including without limitation, reasonable attorneys
and consultants fees, investigation and laboratory fees, environmental studies
required by Agent or any Lender in connection with the violation of Hazardous
Material Laws), court costs and litigation expenses, arising out of or related
to (i) the presence, use, disposal, release or threatened release of any
Hazardous Materials on, from or affecting any premises owned or occupied by any
Borrower in violation of or the non-compliance with applicable Hazardous
Material Laws, (ii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to such Hazardous Materials,
(iii) any lawsuit or other proceeding brought or threatened, settlement reached
or governmental order or decree relating to such Hazardous Materials, and/or
(iv) complying or coming into compliance with all Hazardous Material Laws
(including the cost of any remediation or monitoring required in connection
therewith) or any other Requirement of Law INCLUDING, WITHOUT LIMITATION,
CLAIMS, DEMANDS, PENALTIES, FINES, LIABILITIES, SETTLEMENTS, DAMAGES, COSTS AND
EXPENSES IN ANY WAY OR TO THE EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY AGENT, LENDERS OR THEIR AFFILIATES; provided,
however, that the Borrower shall have no obligations under this Section 13.5(c)
with respect to claims, demands, penalties, fines, liabilities, settlements,
damages, costs or expenses to the extent arising as a result of the gross
negligence or willful misconduct of the Agent or such Lender, as the case may
be. The obligations of Borrower under this Section 13.5(c) shall be in addition
to any and all other obligations and liabilities Borrower may have to Agent or
any of the Lenders at common law or pursuant to any other agreement.
63
13.6 Notices.
(a) Except as expressly provided otherwise in this Agreement (and
except as provided in clause (b) below), all notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing and shall be given by personal delivery, by mail, by
reputable overnight courier or by facsimile and addressed or delivered to it at
its address set forth on Schedule 13.6 or at such other address as may be
designated by such party in a notice to the other parties that complies as to
delivery with the terms of this Section 13.6. Any notice, if personally
delivered or if mailed and properly addressed with postage prepaid and sent by
registered or certified mail, shall be deemed given when received or when
delivery is refused; any notice, if given to a reputable overnight courier and
properly addressed, shall be deemed given two (2) Business Days after the date
on which it was sent, unless it is actually received sooner by the named
addressee; and any notice, if transmitted by facsimile, shall be deemed given
when received. The Agent may, but, except as specifically provided herein, shall
not be required to, take any action on the basis of any notice given to it by
telephone, but the giver of any such notice shall promptly confirm such notice
in writing, by facsimile, and such notice will not be deemed to have been
received until such confirmation is deemed received in accordance with the
provisions of this Section set forth above. If such telephonic notice conflicts
with any such confirmation, the terms of such telephonic notice shall control.
Any notice given by the Agent or any Lender to the Borrower shall be deemed to
be a notice to all of the Borrowers.
(b) Notices and other communications provided to any the Agent and the
Lenders party hereto under this Agreement or any other Loan Document may be
delivered or furnished by electronic communication (including email and Internet
or intranet websites) pursuant to procedures approved by the Agent. The Agent or
the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications (including email and
Internet or intranet websites) pursuant to procedures approved by it. Unless
otherwise agreed to in a writing by and among the parties to a particular
communication, (i) notices and other communications sent to an email address
shall be deemed received upon the sender's receipt of an acknowledgment from the
intended recipient (such as by the "return receipt requested" function, return
email, or other written acknowledgment) and (ii) notices and other
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its email address
as described in the foregoing clause (i) of notification that such notice or
other communication is available and identifying the website address therefore.
13.7 Further Action. Borrower, from time to time, upon written request
of Agent will make, execute, acknowledge and deliver or cause to be made,
executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and to
provide for Advances under and payment of the Notes, according to the intent and
purpose herein and therein expressed.
13.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to the benefit
of the Borrower and the Lenders and their respective successors and assigns.
(b) The foregoing shall not authorize any assignment by Borrower of its
rights or duties hereunder, and, except as otherwise provided herein, no such
assignment shall be made (or be effective) without the prior written approval of
the Lenders.
(c) No Lenders may at any time assign or grant participations in such
Lender's rights and obligations hereunder and under the other Loan Documents
except (i) by way of assignment to any Eligible Assignee in accordance with
clause (d) of this Section, (ii) by way of a participation in accordance with
the provisions of clause (e) of this Section or (iii) by way of a pledge or
assignment of a security interest subject to the restrictions of clause (f) of
this Section (and any other attempted assignment or transfer by any Lender shall
be deemed to be null and void).
64
(d) Each assignment by a Lender of all or any portion of its rights and
obligations hereunder and under the other Loan Documents, shall be subject to
the following terms and conditions:
(i) each such assignment shall be made on a pro rata
basis, and shall be in a minimum amount of the lesser
of (x) One Million Dollars ($1,000,000) or such
lesser amount as the Agent shall agree and (y) the
entire remaining amount of assigning Lender's
aggregate interest in the Revolving Credit (and
participations in any outstanding Letters of Credit);
provided however that, after giving effect to such
assignment, in no event shall the entire remaining
amount (if any) of assigning Lender's aggregate
interest in the Revolving Credit (and participations
in any outstanding Letters of Credit) be less than
$5,000,000; and
(ii) the parties to any assignment shall execute and
deliver to Agent an Assignment Agreement
substantially (as determined by Agent) in the form
attached hereto as Exhibit E (with appropriate
insertions acceptable to Agent), together with a
processing and recordation fee in the amount, if any,
required as set forth in the Assignment Agreement
(provided however that such Lender need not deliver
an Assignment Agreement in connection with
assignments to such Lender's Affiliates or to a
Federal Reserve Bank).
Until the Assignment Agreement becomes effective in accordance with its terms,
and Agent has confirmed that the assignment satisfies the requirements of this
Section 13.8, the Borrower and the Agent shall be entitled to continue to deal
solely and directly with the assigning Lender in connection with the interest so
assigned. From and after the effective date of each Assignment Agreement that
satisfies the requirements of this Section 13.8, the assignee thereunder shall
be deemed to be a party to this Agreement, such assignee shall have the rights
and obligations of a Lender under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment) and the assigning Lender shall
relinquish its rights and be released from its obligations under this Agreement
and the other Loan Documents.
Upon request, Borrower shall execute and deliver to the Agent, new
Note(s) payable to the order of the assignee in an amount equal to the amount
assigned to the assigning Lender pursuant to such Assignment Agreement, and with
respect to the portion of the Indebtedness retained by the assigning Lender, to
the extent applicable, new Note(s) payable to the order of the assigning Lender
in an amount equal to the amount retained by such Lender hereunder. The Agent,
the Lenders and the Borrower acknowledge and agree that any such new Note(s)
shall be given in renewal and replacement of the Notes issued to the assigning
lender prior to such assignment and shall not effect or constitute a novation or
discharge of the Indebtedness evidenced by such prior Note, and each such new
Note may contain a provision confirming such agreement.
(e) The Borrower and the Agent acknowledge that each of the Lenders may
at any time and from time to time, subject to the terms and conditions hereof,
grant participations in such Lender's rights and obligations hereunder (on a pro
rata basis only) and under the other Loan Documents to any Person (other than a
natural person or to Borrower or any of Borrower's Affiliates or Subsidiaries);
provided that any participation permitted hereunder shall comply with all
applicable laws and shall be subject to a participation agreement that
incorporates the following restrictions:
(i) such Lender shall remain the holder of its Notes
hereunder (if such Notes are issued), notwithstanding
any such participation;
(ii) a participant shall not reassign or transfer, or
grant any sub-participations in its participation
interest hereunder or any part thereof; and
65
(iii) such Lender shall retain the sole right and
responsibility to enforce the obligations of the
Borrowers relating to the Notes and the other Loan
Documents, including, without limitation, the right
to proceed against any Guarantors, or cause the Agent
to do so (subject to the terms and conditions
hereof), and the right to approve any amendment,
modification or waiver of any provision of this
Agreement without the consent of the participant
(unless such participant is an Affiliate of such
Lender), except for those matters covered by Section
13.10(a) through (e) hereof (provided that a
participant may exercise approval rights over such
matters only on an indirect basis, acting through
such Lender and the Borrowers, Agent and the other
Lenders may continue to deal directly with such
Lender in connection with such Lender's rights and
duties hereunder). Notwithstanding the foregoing,
however, in the case of any participation granted by
any Lender hereunder, the participant shall not have
any rights under this Agreement or any of the other
Loan Documents against the Agent, any other Lender or
any Borrower; provided, however that the participant
may have rights against such Lender in respect of
such participation as may be set forth in the
applicable participation agreement and all amounts
payable by the Borrowers hereunder shall be
determined as if such Lender had not sold such
participation. Each such participant shall be
entitled to the benefits of Article 11 of this
Agreement to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant
to clause (d) of this Section, provided that no
participant shall be entitled to receive any greater
amount pursuant to such the provisions of Article 11
than the issuing Lender would have been entitled to
receive in respect of the amount of the participation
transferred by such issuing Lender to such
participant had no such transfer occurred and each
such participant shall also be entitled to the
benefits of Section 9.6 hereof as though it were a
Lender, provided that such participant agrees to be
subject to Section 10.3 hereof as though it were a
Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledge or assignee for such Lender as a party hereto.
(g) The Agent shall maintain at its principal office a copy of each
Assignment Agreement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders, the Percentages of such
Lenders and the principal amount of each type of Advance owing to each such
Lender from time to time. The entries in the Register shall be conclusive
evidence, absent manifest error, and the Borrower, the Agent, and the Lenders
may treat each Person whose name is recorded in the Register as the owner of the
Advances recorded therein for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender upon reasonable notice
to the Agent and a copy of such information shall be provided to any such party
on their prior written request. The Agent shall give prompt written notice to
the Borrower of the making of any entry in the Register or any change in such
entry.
(h) Borrower authorizes each Lender to disclose to any prospective
assignee or participant which has satisfied the requirements hereunder, any and
all financial information in such Lender's possession concerning the Borrowers
which has been delivered to such Lender pursuant to this Agreement, provided
that each such prospective assignee or participant shall execute a
confidentiality agreement consistent with the terms of Section 13.11 hereof or
shall otherwise agree to be bound by the terms thereof.
(i) Nothing in this Agreement, the Notes or the other Loan Documents,
expressed or implied, is intended to or shall confer on any Person other than
the respective parties hereto and thereto and their successors and assignees and
66
participants permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement, the Notes or the
other Loan Documents.
13.9 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
Loan Documents may be transmitted and/or signed by facsimile. The effectiveness
of any such documents and signatures shall, subject to applicable law, have the
same force and effect as manually-signed originals and shall be binding on all
Borrowers, the Agent and the Lenders. The Agent may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
13.10 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, nor consent to any departure by any
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and the Majority Lenders (or by the Agent at the
written request of the Majority Lenders) or, if this Agreement expressly so
requires with respect to the subject matter thereof, by all Lenders (and, with
respect to any amendments to this Agreement or the other Loan Documents, by any
Borrower or the Guarantors that are signatories thereto), and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by the Lender or Lenders affected thereby,
do any of the following: (a) increase any Lender's commitments hereunder, (b)
reduce the principal of, or interest on, any outstanding Indebtedness or any
Fees or other amounts payable hereunder, (c) postpone any date fixed for any
payment of principal of, or interest on, any outstanding Indebtedness or any
Fees or other amounts payable hereunder, (d) except as expressly permitted
hereunder or under the Collateral Documents, release all or substantially all of
the Collateral or release any material guaranty provided by any Person in favor
of Agent and the Lenders, provided however that Agent shall be entitled, without
notice to or any further action or consent of the Lenders, to release any
Collateral which any Borrower is permitted to sell, assign or otherwise transfer
in compliance with this Agreement or the other Loan Documents or release any
guaranty to the extent expressly permitted in this Agreement or any of the other
Loan Documents (whether in connection with the sale, transfer or other
disposition of the applicable Guarantor or otherwise), (e) terminate or modify
any indemnity provided to the Lenders hereunder or under the other Loan
Documents, except as shall be otherwise expressly provided in this Agreement or
any other Loan Document, or (f) change the definitions of "Revolving Credit
Percentage", "Interest Periods", "Majority Lenders", Section 10.2 hereof or this
Section 13.10; provided, further, that notwithstanding the foregoing, the
Revolving Credit Maturity Date may be postponed or extended only with the
consent of all of the Revolving Credit Lenders; provided further, that no
amendment, waiver or consent shall, unless in a writing signed by the Swing Line
Lender, do any of the following: (x) reduce the principal of, or interest on,
the Swing Line Note or (y) postpone any date fixed for any payment of principal
of, or interest on, the Swing Line Note; and provided further, however, that no
amendment, waiver, or consent shall, unless in a writing signed by the Agent
affect the rights or duties of the Agent under this Agreement or any other Loan
Document. All references in this Agreement to "Lenders" or "the Lenders" shall
refer to all Lenders, unless expressly stated to refer to Majority Lenders (or
the like).
The Agent shall, upon the written request of the Borrower, execute and
deliver to the Borrowers such documents as may be necessary to evidence (1) the
release of any Lien granted to or held by the Agent upon any Collateral: (a)
upon termination of the Revolving Credit Aggregate Commitment and payment in
full of all Indebtedness payable under this Agreement and under any other Loan
Document; (b) which constitutes property (including, without limitation, Equity
Interests in any Person) sold or to be sold or disposed of as part of or in
connection with any disposition (whether by sale, by merger or by any other form
of transaction and including the property of any Subsidiary that is disposed of
as permitted hereby) permitted in accordance with the terms of this Agreement;
(c) which constitutes property in which a Borrower owned no interest at the time
the Lien was granted or at any time thereafter; or (d) if approved, authorized
or ratified in writing by the Majority Lenders, or all the Lenders, as the case
may be, as provided in this Section 13.10; or (2) the release of any Person from
its obligations under the Loan Documents (including without limitation the
67
Guaranty) if all of the Equity Interests of such Person that were held by a
Borrower are sold or otherwise transferred to any transferee other than Borrower
or a Subsidiary of Borrower as part of or in connection with any disposition
(whether by sale, by merger or by any other form of transaction) permitted in
accordance with the terms of this Agreement; provided that (i) Agent shall not
be required to execute any such release or subordination agreement under clauses
(1) or (2) above on terms which, in the Agent's opinion, would expose the Agent
to liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty or such release shall not in
any manner discharge, affect or impair the Indebtedness or any Liens upon any
Collateral retained by any Borrower, including (without limitation) the proceeds
of the sale or other disposition, all of which shall constitute and remain part
of the Collateral.
13.11 Confidentiality. Each Lender agrees that it will not disclose
without the prior consent of the Borrower (other than to its employees, its
Subsidiaries, another Lender, an Affiliate of a Lender or to its auditors or
counsel) any information with respect to the Borrowers which is furnished
pursuant to this Agreement or any of the other Loan Documents; provided that any
Lender may disclose any such information (a) as has become generally available
to the public or has been lawfully obtained by such Lender from any third party
under no duty of confidentiality to any Borrower, (b) as may be required or
appropriate in any report, statement or testimony submitted to, or in respect to
any inquiry, by, any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender, including the Board of Governors
of the Federal Reserve System of the United States, the Office of the
Comptroller of the Currency or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in respect to any summons or
subpoena or in connection with any litigation, (d) in order to comply with any
law, order, regulation, ruling or other requirement of law applicable to such
Lender, and (e) to any prospective assignee or participant in accordance with
Section 13.8(g) hereof.
13.12 Substitution of Lenders. If (a) any Lender has failed to fund its
Revolving Credit Percentage of any Revolving Credit Advance, or to fund a
Revolving Credit Advance to repay a Swing Line Advance or any Reimbursement
Obligations, (b) the obligation of any Lender to make Eurodollar-based Advances
has been suspended pursuant to Section 11.3 or 11.4, (c) any Lender has demanded
compensation under Section 3.4(d), 11.1, 11.5 or 11.6 or (d) any Lender has not
approved an amendment, waiver or other modification of this Agreement, if such
amendment or waiver has been approved by the Majority Lenders and the consent of
such Lender is required (in each case, an "Affected Lender"), then the Agent or
the Borrower shall have the right to make written demand on the Affected Lender
(with a copy to the Borrower in the case of a demand by the Agent or with a copy
to the Agent in the case of a demand by the Borrower) to assign and the Affected
Lender shall assign, to one or more financial institutions that comply with the
provisions of Section 13.8 hereof (the "Purchasing Lender" or "Purchasing
Lenders") to purchase the Advances of the Revolving Credit Loan and/or Swing
Line of such Affected Lender (including, without limitation, its participating
interests in outstanding Swing Line Advances and Letters of Credit) and assume
the commitment of the Affected Lender to extend credit under the Revolving
Credit (including without limitation its obligation to purchase participations
interest in Swing Line Advances and Letters of Credit) under this Agreement. The
Affected Lender shall be obligated to sell its Advances of the Revolving Credit
Loan and/or Swing Line Advances and assign its commitment to extend credit under
the Revolving Credit (including without limitation its obligations to purchase
participations in Swing Line Advances and Letters of Credit) to such Purchasing
Lender or Purchasing Lenders within ten (10) days after receiving notice from
the Borrower requiring it to do so, at an aggregate price equal to the
outstanding principal amount thereof, plus unpaid interest accrued thereon up to
but excluding the date of the sale. In connection with any such sale, and as a
condition thereof, the Borrower shall pay to the Affected Lender all fees
accrued for its account hereunder to but excluding the date of such sale, plus,
if demanded by the Affected Lender within ten (10) Business Days after such
sale, (i) the amount of any compensation which would be due to the Affected
Lender under Section 11.1 if the Borrower had prepaid the outstanding
Eurodollar-based Advances of the Affected Lender on the date of such sale and
(ii) any additional compensation accrued for its account under Sections 3.4(d),
11.5 and 11.6 to but excluding said date. Upon such sale, the Purchasing Lender
or Purchasing Lenders shall assume the Affected Lender's commitment, and the
Affected Lender shall be released from its obligations hereunder to a
68
corresponding extent. If any Purchasing Lender is not already one of the
Lenders, the Affected Lender, as assignor, such Purchasing Lender, as assignee,
the Borrower and the Agent, shall enter into an Assignment Agreement pursuant to
Section 13.8 hereof, whereupon such Purchasing Lender shall be a Lender party to
this Agreement, shall be deemed to be an assignee hereunder and shall have all
the rights and obligations of a Lender with a Revolving Credit Percentage equal
to its ratable share of the then applicable Revolving Credit Aggregate
Commitment and the applicable Percentages of the Term Loan of the Affected
Lender. In connection with any assignment pursuant to this Section 13.12, the
Borrower or the Purchasing Lender shall pay to the Agent the administrative fee
for processing such assignment referred to in Section 13.8.
13.13 Withholding Taxes. If any Lender is not a "united states person"
within the meaning of Section 7701(a)(30) of the Internal Revenue Code, such
Lender shall promptly (but in any event prior to the initial payment of interest
hereunder or prior to its accepting any assignment under Section 13.8 hereof, as
applicable) deliver to the Agent two executed copies of (i) Internal Revenue
Service Form W-8BEN or any successor form specifying the applicable tax treaty
between the United States and the jurisdiction of such Lender's domicile which
provides for the exemption from withholding on interest payments to such Lender,
(ii) Internal Revenue Service Form W-8ECI or any successor form evidencing that
the income to be received by such Lender hereunder is effectively connected with
the conduct of a trade or business in the United States or (iii) other evidence
satisfactory to the Agent that such Lender is exempt from United States income
tax withholding with respect to such income; provided, however, that such Lender
shall not be required to deliver to Agent the aforesaid forms or other evidence
with respect to Advances to Borrower, if such Lender has assigned its entire
interest hereunder (including its Revolving Credit Commitment Amount, any
outstanding Advances hereunder and participations in Letters of Credit issued
hereunder and any Notes issued to it by Borrower), to an Affiliate which is
incorporated under the laws of the United States or a state thereof, and so
notifies the Agent. Such Lender shall amend or supplement any such form or
evidence as required to insure that it is accurate, complete and non-misleading
at all times. Promptly upon notice from the Agent of any determination by the
Internal Revenue Service that any payments previously made to such Lender
hereunder were subject to United States income tax withholding when made, such
Lender shall pay to the Agent the excess of the aggregate amount required to be
withheld from such payments over the aggregate amount actually withheld by the
Agent. In addition, from time to time upon the reasonable request and the sole
expense of Borrower, each Lender and the Agent shall (to the extent it is able
to do so based upon applicable facts and circumstances), complete and provide
Borrower with such forms, certificates or other documents as may be reasonably
necessary to allow Borrower, as applicable, to make any payment under this
Agreement or the other Loan Documents without any withholding for or on the
account of any tax under Section 10.1(d) hereof (or with such withholding at a
reduced rate), provided that the execution and delivery of such forms,
certificates or other documents does not adversely affect or otherwise restrict
the rights and benefits (including without limitation economic benefits)
available to such Lender or the Agent, as the case may be, under this Agreement
or any of the other Loan Documents, or under or in connection with any
transactions not related to the transactions contemplated hereby.
13.14 Taxes and Fees. Should any tax (other than as a result of a
Lender's failure to comply with Section 13.13 or a tax based upon the net income
or capitalization of any Lender or the Agent by any jurisdiction where a Lender
or the Agent is or has been located), or recording or filing fee become payable
in respect of this Agreement or any of the other Loan Documents or any
amendment, modification or supplement hereof or thereof, Borrower agrees to pay
the same, together with any interest or penalties thereon arising from
Borrower's actions or omissions, and agrees to hold the Agent and the Lenders
harmless with respect thereto. Notwithstanding the foregoing, nothing contained
in this Section 13.14 shall affect or reduce the rights of any Lender or the
Agent under Section 11.5 hereof.
13.15 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT AND THE BORROWER
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE LENDERS, THE AGENT NOR THE
BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDERS AND
THE AGENT OR THE BORROWER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF
THEM.
69
13.16 Patriot Act Notice. Pursuant to Section 326 of the USA Patriot
Act, the Agent and the Lenders hereby notify the Borrowers that if they or any
of their Subsidiaries open an account, including any loan, deposit account,
treasury management account, or other extension of credit with Agent or any
Lender, the Agent or the applicable Lender will request the applicable Person's
name, tax identification number, business address and other information
necessary to identify such Person (and may request such Person's organizational
documents or other identifying documents) to the extent necessary for the Agent
and the applicable Lender to comply with the USA Patriot Act.
13.17 Complete Agreement; Conflicts. This Agreement, the Notes (if
issued), any Requests for Revolving Credit Advance, Requests for Swing Line
Advances, and the Loan Documents contain the entire agreement of the parties
hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by
anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
13.18 Severability. In case any one or more of the obligations of the
Borrowers under this Agreement, the Notes or any of the other Loan Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of the Borrowers shall
not in any way be affected or impaired thereby, and such invalidity, illegality
or unenforceability in one jurisdiction shall not affect the validity, legality
or enforceability of the obligations of the Borrowers under this Agreement, the
Notes or any of the other Loan Documents in any other jurisdiction.
13.19 Table of Contents and Headings; Section References. The table of
contents and the headings of the various subdivisions hereof are for convenience
of reference only and shall in no way modify or affect any of the terms or
provisions hereof and references herein to "sections," "subsections," "clauses,"
"paragraphs," "subparagraphs," "exhibits" and "schedules" shall be to sections,
subsections, clauses, paragraphs, subparagraphs, exhibits and schedules,
respectively, of this Agreement unless otherwise specifically provided herein or
unless the context otherwise clearly indicates.
13.20 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
13.21 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
13.22 Joint and Several Liability
70
(a) Each of the Borrowers acknowledges and agrees that it
is the intent of the parties that each such Borrower
be primarily liable for the obligations as a joint
and several obligor. It is the intention of the
parties that with respect to liability of any
Borrower hereunder arising solely by reason of its
being jointly and severally liable for Advances and
other extensions of credit taken by Borrower, the
obligations of such Borrower shall be absolute,
unconditional and irrevocable irrespective of:
(i) any lack of validity, legality or
enforceability of this Agreement or any Note
as to any Borrower, as the case may be;
(ii) the failure of any Lender or any holder of
any Note:
(a) to enforce any right or remedy against
any Borrower, as the case may be, or any
other Person (including any Guarantor) under
the provisions of this Agreement, such Note,
or otherwise, or
(b) to exercise any right or remedy against
any guarantor of, or collateral securing,
any obligations;
(iii) any change in the time, manner or place of
payment of, or in any other term of, all or
any of the Indebtedness, or any other
extension, compromise or renewal of any
Indebtedness;
(iv) any reduction, limitation, impairment or
termination of any Indebtedness with respect
to any Borrower, as the case may be, for any
reason, including any claim of waiver,
release, surrender, alteration or
compromise, and shall not be subject to (and
each of the Borrowers hereby waives any
right to or claim of) any defense (other
than the defense of payment in full of the
Indebtedness) or setoff, counterclaim,
recoupment or termination whatsoever by
reason of the invalidity, illegality,
nongenuineness, irregularity, compromise,
unenforceability of, or any other event or
occurrence affecting, any Indebtedness with
respect to any Borrower, as the case may be;
(v) any addition, exchange, release, surrender
or nonperfection of any collateral, or any
amendment to or waiver or release or
addition of, or consent to departure from,
any guaranty, held by any Lender or any
holder of the Notes securing any of the
Indebtedness; or
(vi) any other circumstance which might otherwise
constitute a defense (other than the defense
of payment in full of the Indebtedness)
available to, or a legal or equitable
discharge of, any Borrower, as the case may
be, any surety or any guarantor.
(b) Each of the Borrowers agrees that its joint and
several liability hereunder shall continue to be
effective or be reinstated, as the case may be, if at
any time any payment (in whole or in part) of any of
the Indebtedness is rescinded or must be restored by
any Lender or any holder of any Note, upon the
insolvency, bankruptcy or reorganization of any
Borrower, as the case may be, as though such payment
had not been made;
(c) Each of the Borrowers hereby expressly waives: (i)
notice of the Lenders' acceptance of this Agreement;
(ii) notice of the existence or creation or non
payment of all or any of the Indebtedness other than
notices expressly provided for in this Agreement;
(iii) presentment, demand, notice of dishonor,
71
protest, and all other notices whatsoever other than
notices expressly provided for in this Agreement;
(iv) any claim or defense based on an election of
remedies; and (v) all diligence in collection or
protection of or realization upon the Indebtedness or
any part thereof, any obligation hereunder, or any
security for or guaranty of any of the foregoing.
(d) No delay on any of the Lenders part in the exercise
of any right or remedy shall operate as a waiver
thereof, and no single or partial exercise by any of
the Lenders of any right or remedy shall preclude
other or further exercise thereof or the exercise of
any other right or remedy. No action of any of the
Lenders permitted hereunder shall in any way affect
or impair any such Lenders' rights or any Borrower's
Indebtedness under this Agreement.
(e) Each of the Borrowers hereby represents and warrants
to each of the Lenders that it now has and will
continue to have independent means of obtaining
information concerning the Borrowers' affairs,
financial condition and business. Lenders shall not
have any duty or responsibility to provide any
Borrower with any credit or other information
concerning such Borrower's affairs, financial
condition or business which may come into the
Lenders' possession.
(f) Each of the Borrowers represents and warrants (i)
that the business operations of the Borrowers are
interrelated and that the business operations of the
Borrowers complement one another, and such entities
have a common business purpose, and (ii) that, to
permit their uninterrupted and continuous operations,
such entities now require and will from time to time
hereafter require funds and credit accommodations for
general business purposes and that (iii) the proceeds
of advances under the Revolving Credit and the other
credit facilities extended hereunder will directly or
indirectly benefit the Borrowers hereunder, severally
and jointly, regardless of which Borrower receives
part or all of the proceeds of such Advances.
(g) Notwithstanding anything to the contrary contained
herein, it is the intention of the Borrowers, Agent
and the Lenders that the amount of the respective
Borrowers' obligations hereunder shall be in, but not
in excess of, the maximum amount thereof not subject
to avoidance or recovery by operation of applicable
law governing bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or
conveyances or other similar laws (collectively,
"Applicable Insolvency Laws"). To that end, but only
in the event and to the extent that the Borrowers'
respective obligations hereunder or any payment made
pursuant thereto would, but for the operation of the
foregoing proviso, be subject to avoidance or
recovery under Applicable Insolvency Laws, the amount
of the Borrowers' respective obligations hereunder
shall be limited to the largest amount which, after
giving effect thereto, would not, under Applicable
Insolvency Laws, render the Borrower's respective
obligations hereunder unenforceable or avoidable or
subject to recovery under Applicable Insolvency Laws.
To the extent any payment actually made hereunder
exceeds the limitation contained in this Section
13.22(h), then the amount of such excess shall, from
and after the time of payment by the Borrowers (or
any of them), be reimbursed by the Lenders upon
demand by such Borrowers. The foregoing proviso is
intended solely to preserve the rights of the Agent
and the Lenders hereunder against the Borrowers to
the maximum extent permitted by Applicable Insolvency
Laws and neither any Borrower nor any Guarantor nor
any other Person shall have any right or claim under
this Section 13.22(h) that would not otherwise be
available under Applicable Insolvency Laws.
72
13.23 Advertisements. The Agent and the Lenders may disclose the names
of the Borrowers and the existence of the Indebtedness in general advertisements
and trade publications.
13.24 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Borrowers to any of
the Loan Documents made herein or in any of the Loan Documents or in any
certificate, report, financial statement or other document furnished by or on
behalf of any Borrower in connection with this Agreement or any of the Loan
Documents shall be deemed to have been relied upon by the Lenders,
notwithstanding any investigation heretofore or hereafter made by any Lender or
on such Lender's behalf, and those covenants and agreements of the Borrower set
forth in Section 13.5 hereof (together with any other indemnities of any
Borrower contained elsewhere in this Agreement or in any of the other Loan
Documents) and of Lenders set forth in Section 12.7 hereof shall survive the
repayment in full of the Indebtedness and the termination of any commitment to
extend credit.
[Signatures Follow On Succeeding Page]
73
WITNESS the due execution hereof as of the day and year first above
written.
BORROWERS: ENGLOBAL CORPORATION,
a Nevada corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx
Chief Financial Officer and Treasurer
ENGLOBAL CORPORATE SERVICES, INC., a
Texas corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
ENGLOBAL ENGINEERING, INC.,
a Texas corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
ENGLOBAL CONSTRUCTION
RESOURCES, INC., a Texas corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
ENGLOBAL SYSTEMS, INC.,
a Texas corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
R.P.M. ENGINEERING, INC.,
a Louisiana corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
ENGLOBAL TECHNICAL SERVICES, INC.,
a Texas corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
Signature Page 1
ENGLOBAL AUTOMATION GROUP, INC.,
a Texas corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
PEI INVESTMENTS,
a Texas general partnership
By:
-----------------------------------
its general partner
WRC CORPORATION,
a Colorado corporation
By: /s/ X.X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx,
Chief Financial Officer and Treasurer
Signature Page 2
AGENT: COMERICA BANK,
as Administrative Agent
By: Xxxxx X. XxXxxx
-----------------------------------
Xxxxx X. XxXxxx
Senior Vice President-Texas Division
LENDERS: COMERICA BANK,
as a Lender, as Issuing Lender
and as Swing Line Lender
By: Xxxxx X. XxXxxx
-----------------------------------
Xxxxx X. XxXxxx
Senior Vice President-Texas Division
TRUSTMARK NATIONAL BANK,
as a Lender
By:
-----------------------------------
Name:
Title:
LASALLE BANK,
as a Lender
By:
-----------------------------------
Name:
Title:
Signature Page 3
Schedule 1.1
Applicable Margin Grid
Revolving Credit Facility
(basis points per annum)
--------------------------------------------------------------------------------------------------------------
Basis for Pricing Level I Level II Level III**
--------------------------------------------------------------------------------------------------------------
Funded Debt to EBITDA Ratio* Less than 2.00x Less than or equal to Greater than 2.50x
2.5x but greater than
or equal to 2.00x
--------------------------------------------------------------------------------------------------------------
Revolving Credit Eurodollar Margin 125 bps 150 bps 175 bps
--------------------------------------------------------------------------------------------------------------
Revolving Credit Prime-Based Rate Minus 25 bps Minus 25 bps Minus 25 bps
Margin
--------------------------------------------------------------------------------------------------------------
Revolving Credit Facility Fee 25 bps 25 bps 25 bps
--------------------------------------------------------------------------------------------------------------
Letter of Credit Fees (exclusive 125 bps 150 bps 175 bps
of facing fees)
--------------------------------------------------------------------------------------------------------------
* Definitions as set forth in the Credit Agreement.
** Level III pricing shall be in effect until the Borrowers have submitted a
Covenant Compliance Report and financial statements in accordance with Section
7.1(b) of this Agreement to Agent reflecting two (2) consecutive, profitable
quarters of earnings, after which time the pricing grid shall govern.
Schedule 1.2
Commitments
of
Revolving Credit Lenders
----------------------------------------------------------------------------------------------------
Percentage of Aggregate Revolving
Revolving Credit Lender Revolving Credit Commitment Amount Credit Commitment Amount
----------------------------------------------------------------------------------------------------
Comerica Bank $25,000,000 50%
----------------------------------------------------------------------------------------------------
LaSalle Bank $12,500,000 25%
----------------------------------------------------------------------------------------------------
Trustmark National Bank $12,500,000 25%
----------------------------------------------------------------------------------------------------
Total: $50,000,000 100%
----------------------------------------------------------------------------------------------------
