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EXHIBIT (B)(1)
FORM OF MULTICURRENCY CREDIT AGREEMENT
DATED SEPTEMBER 19, 1996
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$175,000,000
MULTICURRENCY CREDIT AGREEMENT
Dated as of
SEPTEMBER 19, 1996
Among
TITAN WHEEL INTERNATIONAL, INC.,
THE BANKS PARTY HERETO,
and
XXXXXX TRUST AND SAVINGS BANK,
AS AGENT
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE REVOLVING CREDIT FACILITY
Section 1.1. The Revolving Loan Commitments
Section 1.2. The Term Loan Commitments
Section 1.3. Letters of Credit
SECTION 2. GENERAL PROVISIONS
Section 2.1. Applicable Interest Rates
(a) Domestic Rate Loans
(b) Adjusted CD Rate Loans
(c) Eurocurrency Loans
(d) Applicable Margin
Section 2.2. Minimum Borrowing Amounts
Section 2.3. Manner of Borrowing Committed Loans
(a) Notice to the Agent
(b) Notice to the Banks
(c) Borrower's Failure to Notify
(d) Disbursement of Committed Loans
Section 2.4. Rate and Currency Determinations
SECTION 3. THE COMPETITIVE BID FACILITY
Section 3.1. The Bid Loans
Section 3.2. Requests for Bid Loans
(a) Requests and Confirmations
(b) Invitation to Bid
(c) Bids
Section 3.3. Notice of Bids; Advice of Rate
Section 3.4. Acceptance or Rejection of Bids
Section 3.5. Notice of Acceptance or Rejection of Bids
(a) Notice to Banks Making Bids
(b) Disbursement of Bid Loans
(c) Notice to the Banks
Section 3.6. Interest on Bid Loans
Section 3.7. Telephonic Notice.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO ALL LOANS
Section 4.1. Interest Periods.
Section 4.2. Maturity of Loans
Section 4.3. Voluntary Prepayments
(a) Committed Loans
(b) Bid Loans
(c) Reborrowings
Section 4.4. Default Rate
Section 4.5. The Notes
Section 4.6. Commitment Terminations
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Section 4.7. Mandatory Prepayment
Section 4.8. Funding Indemnity.
Section 4.9. Subsidiary Borrower as a Borrower hereunder
Appointment of Company as Agent for Subsidiary Borrower
SECTION 5. FEES
Section 5.1. Facility Fee
Section 5.2. Letter of Credit Fees
Section 5.3. Commitment Fee
Section 5.4. Bid Loan Fee
Section 5.5. Agent Fees
Section 5.6. Fee Calculations
SECTION 6. PLACE AND APPLICATION OF PAYMENTS
Section 6.1. Place and Application of Payments
SECTION 7. DEFINITIONS; INTERPRETATION
Section 7.1. Definitions
Section 7.2. Interpretation
Section 7.3. Restricted Subsidiaries
SECTION 8. REPRESENTATIONS AND WARRANTIES
Section 8.1. Corporate Organization and Authority
Section 8.2. Subsidiaries
Section 8.3. Corporate Authority and Validity of Obligations
Section 8.4. Financial Statements
Section 8.5. Material Adverse Change
Section 8.6. No Litigation; No Labor Controversies
Section 8.7. Taxes
Section 8.8. Approvals
Section 8.9. ERISA
Section 8.10. Government Regulation
Section 8.11. Margin Stock
Section 8.12. Licenses and Authorizations; Compliance with Laws
Section 8.13. Ownership of Property; Liens
Section 8.14. No Burdensome Restrictions; Compliance with Agreements
Section 8.15. Full Disclosure
SECTION 9. CONDITIONS PRECEDENT
Section 9.1. Initial Borrowing
Section 9.2. All Loans
Section 9.3. Additional Conditions to Loans other than Refunding Borrowings
Section 9.4. Replacement of Bank
Section 9.5. Initial Credit Event of Subsidiary Borrower
SECTION 10. COVENANTS
Section 10.1. Maintenance of Business
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Section 10.2. Maintenance of Property
Section 10.3. Taxes
Section 10.4. Insurance
Section 10.5. Financial Reports and Rights of Inspection
Section 10.6. Leverage Ratio
Section 10.7. Minimum Tangible Net Worth
Section 10.8. Interest Coverage Ratio
Section 10.9. Debt to Earnings Ratio
Section 10.10. Investments, Loans, Advances and Guaranties
Section 10.11. Subsidiary Debt
Section 10.12. Liens
Section 10.13. Dividends and Certain Other Restricted Payments
Section 10.14. Mergers, Consolidations, Leases and Sales
Section 10.15. Maintenance of Subsidiaries
Section 10.16. Company as Operating Company
Section 10.17. ERISA
Section 10.18. Burdensome Contracts with Affiliates
Section 10.19. Change in Fiscal Year
Section 10.20. Change in the Nature of Business
Section 10.21. Use of Property and Facilities; Environmental, Health and Safety Laws
Section 10.22. Compliance with Laws
Section 10.23. Use of Loan Proceeds
Section 10.24. Designation of Restricted Subsidiaries
SECTION 11. EVENTS OF DEFAULT AND REMEDIES
Section 11.1. Events of Default
Section 11.2. Non-Bankruptcy Defaults
Section 11.3. Bankruptcy Defaults
Section 11.4. Collateral for Undrawn Letters of Credit
Section 11.5. Expenses
SECTION 12. CHANGE IN CIRCUMSTANCES
Section 12.1. Change of Law
Section 12.2. Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR or CD Rate
Section 12.3. Increased Cost and Reduced Return
Section 12.4. Lending Offices
Section 12.5. Discretion of Bank as to Manner of Funding
SECTION 13. THE AGENT
Section 13.1. Appointment and Authorization
Section 13.2. Agent and Affiliates
Section 13.3. Action by Agent
Section 13.4. Consultation with Experts
Section 13.5. Liability of Agent
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Section 13.6. Indemnification
Section 13.7. Credit Decision
Section 13.8. Resignation or Removal of Agent and Successor Agent
Section 13.9. Payments
SECTION 14. THE GUARANTEES
Section 14.1. The Guarantees
Section 14.2. Guarantee Unconditional
Section 14.3. Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances
Section 14.4. Waivers
Section 14.5. Limit on Recovery
Section 14.6. Stay of Acceleration
SECTION 15. MISCELLANEOUS
Section 15.1. Withholding Taxes
Section 15.2. No Waiver of Rights
Section 15.3. Non-Business Day
Section 15.4. Documentary Taxes
Section 15.5. Survival of Representations
Section 15.6. Survival of Indemnities
Section 15.7. Sharing of Set-Off
Section 15.8. Notices
Section 15.9. Counterparts
Section 15.10. Successors and Assigns
Section 15.11. Participants
Section 15.12. Assignment Agreements
Section 15.13. Amendments
Section 15.14. Headings
Section 15.15. Legal Fees, Other Costs and Indemnification
Section 15.16. Set Off
Section 15.17. Currency
Section 15.18. Currency Equivalence
Section 15.19. Entire Agreement
Section 15.20. Governing Law
Section 15.21. Personal Jurisdiction
(a) Exclusive Jurisdiction
(b) Other Jurisdictions
Section 15.22. Waiver Of Jury Trial
Section 15.23. Waiver Of Bond
Section 15.24. Advice Of Counsel
Signature
Exhibit A-1 Committed Revolving Note (Company only)
Exhibit AA-1 Committed Revolving Note (Both Borrowers)
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Exhibit A-2 Committed Term Note (Company only)
Exhibit AA-2 Committed Term Note (Both Borrowers)
Exhibit B Bid Note (Company only)
Exhibit BB Bid Note (Both Borrowers)
Exhibit C Bid Loan Request Confirmation
Exhibit D Invitation to Bid
Exhibit E Confirmation of Bid
Exhibit F Notice of Acceptance of Bid
Exhibit G Notice of Payment Request
Exhibit H Compliance Certificate
Exhibit I Subsidiary Guarantee Agreement
Exhibit J Employee Benefit Plans
Exhibit K Form of Opinion of Counsel
Exhibit L Certificates Regarding Projections
Exhibit M Election to Become a Borrower
Schedule 1.3 Form of Application for Standby Letter of Credit
Schedule 8.2 Subsidiaries of Titan Wheel International, Inc.
Schedule 10.12 Liens
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CREDIT AGREEMENT
To each of the Banks signatory hereto
Ladies and Gentlemen:
The undersigned, Titan Wheel International, Inc., an Illinois
corporation (the "Company") and Subsidiary Borrower (the Company and Subsidiary
Borrower being hereinafter referred to collectively as the "Borrowers" and
individually as a "Borrower"), each applies to you for your several
commitments, subject to all the terms and conditions hereof and on the basis of
the representations and warranties hereinafter set forth, to make available to
each Borrower credit accommodations to be divided into (i) a committed
revolving facility for loans and letters of credit and a discretionary bid
facility available solely for loans, and (ii) a committed term facility
available solely for loans, all as more fully hereinafter set forth. Each of
you is hereinafter referred to as a "Bank", all of you are hereinafter referred
to collectively as the "Banks" and Xxxxxx Trust and Savings Bank ("Xxxxxx
Bank") in its capacity as agent hereunder is hereinafter referred to as the
"Agent".
SECTION 1. THE REVOLVING CREDIT FACILITY.
Section 1.1. The Revolving Loan Commitments;. Subject to the
terms and conditions hereof, each Bank, by its acceptance hereof, severally
agrees to extend a revolving credit (the "Revolving Credit") in the form of a
loan or loans (individually a "Committed Revolving Loan" and collectively
"Committed Revolving Loans") to the Borrowers from time to time on a revolving
basis in U.S. Dollars and Alternative Currencies in an aggregate outstanding
Original Dollar Amount up to the amount of its commitment to make Revolving
Loans set forth on the applicable signature page hereof (its "Revolving
Commitment" and cumulatively for all the Banks the "Revolving Commitments"),
which Revolving Commitments on the date hereof total $115,000,000 (subject to
any reductions thereof pursuant to the terms hereof) prior to the Termination
Date. The sum of the aggregate Original Dollar Amount of outstanding Revolving
Loans (whether Committed Revolving Loans or Bid Loans) and L/C Obligations
shall not exceed the Revolving Commitments then in effect. Each Borrowing of
Committed Revolving Loans shall be made ratably from the Banks in proportion to
their respective Percentages. As provided in Section 2.3(a) hereof, the
Borrower may elect that each Borrowing of Committed Revolving Loans denominated
in U.S. Dollars be made available by means of (i) Eurocurrency Loans or (ii)
Domestic Rate Loans or (iii) Adjusted CD Rate Loans, or any combination
thereof. All Committed Revolving Loans denominated in an Alternative Currency
shall be Eurocurrency Loans. Each Borrowing of Committed Revolving Loans may
be repaid and the principal amount thereof reborrowed prior to the Termination
Date, subject to all reductions in the Revolving Commitments and all other
terms and conditions hereof. Notwithstanding anything in this Agreement to the
contrary, the Borrowers may not request Revolving Credit Loans unless at the
time of such request the Term Credit is fully utilized.
Section 1.2. The Term Loan Commitments. Subject to the terms and
conditions hereof, each Bank, by its acceptance hereof, severally agrees to
extend a revolving credit (the "Term Credit") in the form of a loan or loans
(individually a "Committed Term Loan" and collectively the "Committed Term
Loans") to the Borrowers from time to time on a revolving basis in U.S. Dollars
and Alternative Currencies in an aggregate outstanding Original Dollar
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Amount for both Borrowers, taken together, up to the amount of its commitment
to make Committed Term Loans set forth on the applicable signature page hereof
(its "Term Commitment" and cumulatively for all the Banks the "Term
Commitments"), which Term Commitments on the date hereof total $60,000,000
(subject to any reductions thereof pursuant to the terms hereof), prior to the
Termination Date. The sum of the aggregate Original Dollar Amount of
outstanding Committed Term Loans, to both Borrowers, taken together, shall not
exceed the Term Commitments then in effect. Each Borrowing of Committed Term
Loans shall be made ratably from the Banks in proportion to their respective
Percentages. As provided in Section 2.3(a) hereof, the Borrowers may elect
that each Borrowing of Committed Term Loans denominated in U.S. Dollars be made
available by means of (i) Eurocurrency Loans or (ii) Domestic Rate Loans or
(iii) Adjusted CD Rate Loans, or any combination thereof. All Committed Term
Loans denominated in an Alternative Currency shall be Eurocurrency Loans. Each
Borrowing of Committed Term Loans may be repaid and the principal amount
thereof reborrowed prior to the Termination Date, subject to all reductions in
the Term Commitments and all other terms and conditions hereof.
Section 1.3. Letters of Credit. (a) General Terms. Subject to
the terms and conditions hereof, as part of the Revolving Credit, the Agent
shall from time to time issue standby letters of credit (each a "Letter of
Credit") for the account of either or both of the Borrowers (whether or not
also for the account of any other Subsidiary of the Company as well) prior to
the Termination Date, in an aggregate undrawn face amount up to the amount of
the L/C Commitment, provided that the aggregate Original Dollar Amount of L/C
Obligations at any time outstanding shall not exceed the difference between the
Revolving Commitments in effect at such time and the aggregate Original Dollar
Amount of Revolving Loans (whether Committed Revolving Loans or Bid Loans) then
outstanding. Each Letter of Credit shall be issued by the Agent, but each Bank
shall be obligated to reimburse the Agent for its Percentage of the amount of
each drawing thereunder and, accordingly, the undrawn face amount of each
Letter of Credit shall constitute usage of the Revolving Commitment of each
Bank pro rata in accordance with each Bank's Percentage.
(b) Term. Each Letter of Credit issued hereunder shall expire not
later than the earlier of (i) one year from the date issued (or be cancelable
not later than one year from the date of issuance and each renewal) or (ii) the
Termination Date.
(c) General Characteristics. Each Letter of Credit issued
hereunder shall be payable in U.S. Dollars or an Available Foreign Currency,
shall conform to the general requirements of the Agent for the issuance of
standby letters of credit as to form and substance and shall be a letter of
credit which the Agent may lawfully issue.
(d) Applications. At the time a Borrower requests the Agent to
issue a Letter of Credit (or prior to the first issuance of a Letter of Credit
with regard to a Borrower, in the case of a continuing application), such
Borrower shall execute and deliver to the Agent an application for such Letter
of Credit in the form customarily prescribed by the Agent for a Letter of
Credit of the type requested (individually an "Application" and collectively
the "Applications"). The current form of the Agent's Application is attached
as Schedule 1.3 hereto. The Agent shall provide the Company and each Bank with
copies of any new form of Application that may, from time to time, be adopted
by the Agent. Notwithstanding anything
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contained in any Application to the contrary, (i) the Borrowers shall be
jointly and severally liable for all obligations in respect of each Letter of
Credit, (ii) the Borrowers shall pay fees in connection with each Letter of
Credit as set forth in Section 5.2 hereof, (iii) before the occurrence of an
Event of Default, the Agent will not call for the funding by a Borrower of any
amount under a Letter of Credit, or any other form of collateral security for
the Borrowers' joint and several obligations in connection with such Letter of
Credit, before being presented with a drawing thereunder, (iv) upon the
occurrence of the Termination Date, the full amount then available for drawing
under all outstanding Letters of Credit shall be immediately due and payable in
the manner described in Section 11.4 hereof, and (v) if the Agent is not timely
reimbursed in accordance with Section 1.3(e) hereof (whether out of the
proceeds of a Loan, including a Committed Revolving Loan made pursuant to
Section 2.3(c) hereof or otherwise) for the amount of any drawing under a
Letter of Credit on the date such drawing is paid, the Borrowers' joint and
several obligation to reimburse the Agent for the amount of such drawing shall
bear interest (which the Borrowers hereby promise to pay) from and after the
date such drawing is paid at a rate per annum equal to (x) in the case of a
drawing under a Letter of Credit denominated in U.S. Dollars or a Letter of
Credit denominated in an Available Foreign Currency as to which the Agent has
requested that the Borrowers reimburse such drawing in U.S. Dollars, the sum of
2% plus the Applicable Margin for Domestic Rate Loans plus the Domestic Rate
from time to time in effect, and (y) in the case of a drawing under a Letter of
Credit denominated in an Available Foreign Currency as to which the Agent has
requested that the Borrowers reimburse such drawing in such Available Foreign
Currency, the sum of 2% plus the Applicable Margin for Domestic Rate Loans plus
the Overnight Foreign Currency Rate. If the Agent issues any Letters of Credit
with expiration dates that are automatically extended, unless the Agent gives
notice that the expiration date will not so extend beyond its then scheduled
expiration date, the Agent will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date (i) the expiration date of such Letter of Credit if so extended would be
after the Termination Date, (ii) the Revolving Commitments have been terminated
or (iii) a Default or Event of Default exists and the Required Banks have given
the Agent instructions not to so permit the extension of the expiration date of
such Letter of Credit. The Agent agrees to issue amendments to the Letter(s)
of Credit increasing the amount, or extending the expiration date, thereof at
the request of the Borrower subject to the conditions of Section 9 and the
other terms of this Section 1.3. To the extent so required by any Bank, the
Agent shall furnish to such Bank copies of Letters of Credit and modifications
thereof.
(e) The Reimbursement Obligations. Subject to Section 1.3(d)
hereof, the joint and several obligations of the Borrowers to reimburse the
Agent for all drawings under a Letter of Credit (a "Reimbursement Obligation")
shall be governed by the Application related to such Letter of Credit, except
that (i) the reimbursement by the Borrowers of draws made under a Letter of
Credit denominated in U.S. Dollars shall be made in U.S. Dollars and (ii) the
reimbursement by the Borrowers of draws made under a Letter of Credit
denominated in an Available Foreign Currency shall be made by payment in U.S.
Dollars of the U.S. Dollar Equivalent, calculated on the date the Agent paid
such draw, of the amount paid by the Agent
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pursuant to such draw, or, if the Agent shall elect by notice to the Borrowers,
by payment in the Available Foreign Currency which was paid by the Agent
pursuant to such drawing in an amount equal to such drawing and (iii)
reimbursement in U.S. Dollars of a drawing paid shall be made by no later than
1:30 p.m. (Chicago time) on the date when each drawing is paid and
reimbursement in an Available Foreign Currency of a drawing paid shall be made
by no later than 12:00 noon local time at the place of payment or if earlier,
such local time as is necessary for such funds to be received and transferred
to the Agent for same day value on the day such Reimbursement Obligation is
due; any payment of a Reimbursement Obligation received after such time shall
be deemed to have been received by the Agent on the next Business Day. If the
Borrowers do not make any such reimbursement payment on the date due and the
Participating Banks fund their participations therein in the manner set forth
in Section 1.3(f) below, then all payments thereafter received by the Agent in
discharge of any of the relevant Reimbursement Obligations shall be distributed
in accordance with Section 1.3(f) below.
The joint and several obligations of the Borrowers to the
Agent under this Section 1.3 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever (except, without limiting the
Borrowers' joint and several obligations under each Application, to the extent
it is ultimately determined by a court of competent jurisdiction in a final
non-appealable order that a Borrower is relieved from its obligation to
reimburse the Agent for a drawing under a Letter of Credit because of the
Agent's gross negligence or willful misconduct in determining that documents
received under the Letter of Credit comply with the terms thereof).
(f) The Participating Interests. Each Bank (other than the Bank
then acting as Agent in issuing Letters of Credit), by its acceptance hereof,
severally agrees to purchase from the Agent, and the Agent hereby agrees to
sell to each such Bank (a "Participating Bank"), an undivided percentage
participating interest (a "Participating Interest"), to the extent of its
Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Upon any failure by the Borrowers to pay any
Reimbursement Obligation at the time required on the date the related drawing
is paid, as set forth in Section 1.3(e) above, or if the Agent is required at
any time to return to a Borrower or to a trustee, receiver, liquidator,
custodian or other Person any portion of any payment of any Reimbursement
Obligation, each Participating Bank shall, not later than the Business Day it
receives a certificate in the form of Exhibit G hereto from the Agent to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than the following Business Day, if such certificate is received after
such time, pay to the Agent (i) in the case of a Reimbursement Obligation
payable in U.S. Dollars, an amount equal to such Participating Bank's
Percentage of such unpaid or recaptured Reimbursement Obligation, such payment
to be made in lawful money in the United States, in immediately available funds
at the Agent's principal office in Chicago, Illinois, together with interest on
such amount accrued from the date the related payment was made by the Agent to
the date of such payment by such Participating Bank at a rate per annum equal
to (x) from the date the related payment was made by the Agent to the date two
(2) Business Days after payment by such Participating Bank is due hereunder,
the Federal Funds Rate for each such day and (y) from the date two
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(2) Business Days after the date such payment is due from such Participating
Bank to the date such payment is made by such Participating Bank, the Domestic
Rate in effect for each such day and (ii) in the case of a Reimbursement
Obligation payable in an Available Foreign Currency, an amount equal to such
Participating Bank's Percentage of such unpaid or recaptured Reimbursement
Obligation, such payment to be made in such Available Foreign Currency in such
funds which are then customary for the settlement of international transactions
in such currency, together with interest on such amount accrued from the date
the related payment was made by the Agent to the date of such payment by the
Participating Bank at a rate per annum equal to (x) from the date the related
payment was made by the Agent to the date two (2) Business Days after payment
by such Participating Bank is due hereunder, the Overnight Foreign Currency
Rate for each such day and (y) from the date two (2) Business Days after the
date such payment is due from such Participating Bank to the date such payment
is made by such Participating Bank, the sum of 1% plus the Overnight Foreign
Currency Rate for each such day. Each such Participating Bank shall thereafter
be entitled to receive its Percentage of each payment received in respect of
the relevant Reimbursement Obligation and of interest paid thereon, with the
Agent retaining its Percentage as a Bank hereunder.
The several obligations of the Participating Banks to the
Agent under this Section 1.3 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever (except, without limiting the
Borrowers' joint and several obligations under each Application, to the extent
it is ultimately determined that the Borrowers are relieved from their
obligation to reimburse the Agent for a drawing under a Letter of Credit
because of the Agent's gross negligence or willful misconduct in determining
that documents received under the Letter of Credit comply with the terms
thereof) and shall not be subject to any set-off, counterclaim or defense to
payment which any Participating Bank may have or have had against the
Borrowers, the Agent, any other Bank or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations shall not be
affected by any Default or Event of Default or by any reduction or termination
of any Commitment of any Bank, and each payment by a Participating Bank under
this Section 1.3 shall be made without any offset, abatement, withholding or
reduction whatsoever. The Agent shall be entitled to offset amounts received
for the account of a Bank under this Agreement against unpaid amounts due from
such Bank to the Agent hereunder (whether as fundings of participations,
indemnities or otherwise), but shall not be entitled to offset against amounts
owed to the Agent by any Bank arising outside this Agreement.
(g) Indemnification. The Participating Banks shall, to the extent
of their respective Percentages, indemnify the Agent (to the extent not
reimbursed by the Borrowers) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Agent's gross negligence or willful misconduct)
that the Agent may suffer or incur in connection with any Letter of Credit.
The obligations of the Participating Banks under this Section 1.3(g) and all
other parts of this Section 1.3 shall survive termination of this Agreement and
of all other L/C Documents.
(h) Outstanding Amount of Letters of Credit. For all purposes of
this Agreement, Letters of Credit shall be deemed outstanding as of any time in
an amount equal to the
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aggregate undrawn amount then available thereunder (determined in accordance
with Section 2.4 hereof) plus all unpaid Reimbursement Obligations then
outstanding. For such purposes, the undrawn amount available under a Letter of
Credit shall be the maximum amount which can be drawn thereunder under any
circumstances and over any period of time.
SECTION 2. GENERAL PROVISIONS.
Section 2.1. Applicable Interest Rates.
(a) Domestic Rate Loans. Each Domestic Rate Loan made by a Bank
shall bear interest (computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed) on the unpaid principal amount thereof
from the date such Loan is made until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Domestic Rate from time to time in effect, payable on the last day of the
applicable Interest Period and at maturity (whether by acceleration or
otherwise).
"Domestic Rate" means for any day the greater of:
(i) the rate of interest announced by the Agent from time
to time as its prime commercial rate, or equivalent, as in effect on
such day, with any change in the Domestic Rate resulting from a change
in said prime commercial rate to be effective as of the date of the
relevant change in said prime commercial rate; and
(ii) the sum of (x) the rate determined by the Agent in
good faith to be the prevailing rate per annum (not necessarily the
arithmetic average, and in any event rounded upward, if necessary, to
the next higher 1/100 of 1%) quoted to the Agent at approximately
10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on
such day (or, if such day is not a Business Day, on the immediately
preceding Business Day) by two or more Federal funds brokers selected
by the Agent for the sale to the Agent at face value of Federal funds
in an amount equal or comparable to the principal amount owed to the
Agent for which rate is being determined, plus (y) 1/2 of 1% (0.50%)
per annum.
(b) Adjusted CD Rate Loans. Each Adjusted CD Rate Loan made by a
Bank shall bear interest (computed on the basis of a year of 360 days and
actual days elapsed) on the unpaid principal amount thereof from the date such
Loan is made until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the sum of the Applicable Margin plus the Adjusted CD Rate,
payable on the last day of the applicable Interest Period and at maturity
(whether by acceleration or otherwise) and, if such Interest Period is longer
than 90 days, on the date occurring every 90 days after the date such Loan is
made.
"Adjusted CD Rate" means a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined in accordance with the
following formula:
CD Rate
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+ Assessment Rate
Adjusted CD Rate = 100%-CD Reserve Percentage
"Assessment Rate" means, with respect to any Interest Period
for a Borrowing of Adjusted CD Rate Loans, the assessment rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) imposed by the Federal
Deposit Insurance Corporation for insuring the Agent's
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liability for time deposits, as in effect from time to time.
"CD Rate" means, with respect to an Interest Period for a Borrowing of
Adjusted CD Rate Loans, the rate per annum determined by the Agent to be the
arithmetic average (rounded upwards, if necessary, to the nearest 1/100 of 1%)
of the rates quoted to the Agent in the secondary market at approximately 10:00
a.m. (Chicago time) on the first day of such Interest Period by three Chicago
or New York certificate of deposit dealers of recognized standing selected by
the Agent for the purchase at face value from the Agent of its certificates of
deposit with a term equal to such Interest Period and in an amount comparable
to the Adjusted CD Rate Loan scheduled to be made by the Agent as part of such
Borrowing.
"CD Reserve Percentage" means, for any Interest Period for a Borrowing
of Adjusted CD Rate Loans, the daily average for such Interest Period of the
rate of the maximum reserve requirement (including, without limitation, any
supplemental, marginal and emergency reserves) imposed by the Board of
Governors of the Federal Reserve System (or any successor) from time to time on
non-personal time deposits having a maturity equal to the applicable Interest
Period and in an amount equal to the principal amount of the Adjusted CD Rate
Loan made by the Agent for such Interest Period, subject to any amendments of
such reserve requirement by such Board or its successor, taking into account
any transitional adjustments thereto.
(c) Eurocurrency Loans. Each Eurocurrency Loan made by a Bank
shall bear interest (computed on the basis of a year of 360 days and actual
days elapsed) on the unpaid principal amount thereof from the date such Loan is
made until maturity (whether by acceleration or otherwise) at a rate per annum
equal to the sum of the Applicable Margin plus the Adjusted LIBOR, payable on
the last day of the applicable Interest Period and at maturity (whether by
acceleration or otherwise), and, if the applicable Interest Period is longer
than three months, on each day occurring every three months after the date such
Loan is made. All payments of principal and interest on a Loan shall be made
in the same currency as was advanced by the Banks in connection with such Loan.
"Adjusted LIBOR" means, for any Borrowing of Eurocurrency
Loans, a rate per annum determined in accordance with the following formula:
LIBOR
-------------------------------
Adjusted LIBOR = 100% - Eurocurrency Reserve Percentage
"LIBOR" means, for each Interest Period, (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rate of interest
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which
deposits in U.S. Dollars or the relevant Alternative Currency as appropriate,
in immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) two Business Days before the beginning of such Interest Period by
at least two major banks in the London interbank eurocurrency market for a
period equal to such Interest Period and in an amount equal or comparable to
the applicable Eurocurrency Loan scheduled to be outstanding from the Agent
during such Interest Period.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for
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deposits in U.S. Dollars or the relevant Alternative Currency as appropriate,
for a period equal to such Interest Period which appears on the Applicable
Telerate Page, as appropriate for such currency, as of 11:00 a.m. (London,
England time) on the date two Business Days before the commencement of such
Interest Period.
"Applicable Telerate Page" means, with regard to Eurocurrency Loans
denominated in U.S. Dollars, the display page designated as "Page 3750" on the
Telerate Service and with regard to each Alternative Currency, the display page
on the Telerate Service as determined by the Agent which displays the
appropriate British Bankers' Association Interest Settlement Rates for such
Alternative Currency (or such other page as may replace such pages, as
appropriate, on that service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for deposits
in U.S. Dollars or the Alternative Currency, as applicable).
"Eurocurrency Reserve Percentage" means, for any Borrowing of
Eurocurrency Loans, the daily average for the applicable Interest Period of the
maximum rate at which reserves (including, without limitation, any
supplemental, marginal and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) under Regulation D on "eurocurrency liabilities", as defined in such
Board's Regulation D (or in respect of any other category of liabilities that
includes deposits by reference to which the interest rate on Eurocurrency Loans
is determined or any category of extension of credit or other assets that
include loans by non-United States offices of any Bank to United States
residents), subject to any amendments of such reserve requirement by such Board
or its successor, taking into account any transitional adjustments thereto.
For purposes of this definition, the Eurocurrency Loans shall be deemed to be
"eurocurrency liabilities" as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.
(d) Applicable Margin;. With respect to Committed Term Loans, the
"Applicable Margin" shall mean a rate per annum equal to .625%. With respect
to Committed Revolving Loans and the facility fee payable under Section 5.1
hereof, the "Applicable Margin" shall mean the rate specified for such
Obligation below, subject to quarterly adjustment as hereinafter provided:
When Following Applicable Applicable Applicable Applicable
Status Exists For Margin Margin For Margin Margin
any Margin For Domestic Rate Eurocurrency For Adjusted CD For Facility
Determination Date Loans Is: Loans Is: Rate Loans Is: Fee Is:
Level I
Status 0% .250% .375% .1000%
Level II
Status 0% .375% .500% .1250%
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Level III
Status 0% .500% .625% .1500%
Level IV
Status 0% .625% .750% .1875%
Level V
Status 0% .750% .875% .2500%
provided, however, that all of the foregoing percentages set forth in the chart
above are subject to the following:
(i) on or before the date that is ten (10) Business Days
after the latest date by which the Company is required to deliver a
Compliance Certificate to the Agent for a given quarterly accounting
period pursuant to Section 10.5(b) hereof (each date that is ten
Business Days after the latest date by which the Company is required
to deliver a Compliance Certificate to the Agent being herein referred
to as the "Margin Determination Date"), the Agent shall determine
whether Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status exists as of the close of the applicable
quarterly accounting period (the "quarterly test period") and shall
also determine the Interest Coverage Ratio and Debt to Earnings Ratio
as of such close, in each case based upon such Compliance Certificate
and the financial statements delivered to the Agent under Section 10.5
hereof for such quarterly test period, and shall promptly notify the
Borrowers of such determination and of any change in the Applicable
Margin resulting therefrom;
(ii) the Applicable Margin for the Committed Revolving
Loans shall be the rate set forth in the chart above, after giving
effect to adjustments pursuant to Section 2.1(d)(iii) hereof, unless
the Interest Coverage Ratio as of the close of such quarterly test
period is less than 2.5 to 1.0. In such event, the Applicable Margin
for the Committed Revolving Loans in each case shall be .0625% above
the rate otherwise specified hereunder (after giving effect to
adjustments pursuant to such Section 2.1(d)(iii));
(iii) the Applicable Margin for the Committed Revolving
Loans shall be the rate set forth in the chart above, after giving
effect to adjustments pursuant to Section 2.1(d)(ii) hereof, unless
the Debt to Earnings Ratio as of the close of the relevant quarterly
test period is greater than 3.0 to 1.0. In such event, the Applicable
Margin for the Committed Revolving Loans in each case shall be .25%
above the rate otherwise specified hereunder (after giving effect to
adjustments pursuant to such Section 2.1(d)(ii)). Such increase in
the Applicable Margin shall be effective retroactively from the first
day of the relevant quarterly testing period immediately following the
quarterly accounting period in which the Debt to Earnings Ratio was to
be computed for purposes of this subsection and shall remain in effect
until the Margin Determination Date first to follow the close of a
quarterly test period such ratio falls below 3.0 to 1.0.
(iv) any change in the Applicable Margin (except for such
a change pursuant to Section 2(d)(iii) hereof) shall be effective as
of such Margin Determination Date, with
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such new Applicable Margin to continue in effect until the next Margin
Determination Date. If the Company has not delivered a Compliance
Certificate by the date such Compliance Certificate is required to be
delivered under Section 10.5 hereof, until a Compliance Certificate is
delivered before the next Margin Determination Date, the Applicable
Margin shall be the Applicable Margin for Level V Status as if the
Interest Coverage Ratio as calculated for purposes of Section
2.1(d)(ii) were less than 2.5 to 1.0 and the Debt to Earnings Ratio as
calculated for purposes of Section 2.1(d)(iii) were greater than 3.0
to 1.0. If the Company subsequently delivers a Compliance Certificate
before the next Margin Determination Date, the Applicable Margin
established by such Compliance Certificate shall take effect from the
date ten (10) Business Days after the date of such delivery and remain
effective until the next Margin Determination Date;
(v) the initial Applicable Margin in effect through the
first Margin Determination Date shall be the Applicable Margin for
Level I Status; and
(vi) if and so long as any Event of Default has occurred
and is continuing hereunder, notwithstanding anything herein to the
contrary, the Applicable Margin shall be the Applicable Margin for
Level V Status as if the Interest Coverage Ratio were less than 2.5 to
1.0 as calculated for purposes of Section 2.1(d)(ii) and the Debt to
Earnings Ratio as calculated for purposes of Section 2.1(d)(iii) were
greater than 3.0 to 1.0.
Section 2.2. Minimum Borrowing Amounts. Each Borrowing of
Domestic Rate Loans shall be in an amount not less than $500,000 and in
integral multiples of $100,000, provided that a Borrowing of Domestic Rate
Loans applied to pay a Reimbursement Obligation pursuant to Section 1.3(e)
hereof shall be in an amount equal to such Reimbursement Obligation. Each
Borrowing of Fixed Rate Loans denominated in U.S. Dollars shall be in an amount
not less than $2,000,000 and any larger amount which is an integral multiple of
$500,000. Each Borrowing of Eurocurrency Loans denominated in an Alternative
Currency shall be in an amount not less than an Original Dollar Amount of
$2,000,000 and in such integral multiple of 100,000 units of the relevant
currency as would have an Original Dollar Amount most closely approximating
$500,000 or an integral multiple thereof.
Section 2.3. Manner of Borrowing Committed Loans.
(a) Notice to the Agent. In order to borrow any Committed Loans,
the applicable Borrower shall give telephonic or telecopy notice to the Agent
(which notice shall be irrevocable once given and, if by telephone, shall be
promptly confirmed in writing) by no later than (i) 2:00 p.m. (Chicago time) on
the date at least four (4) Business Days prior to the date of such requested
Borrowing of Eurocurrency Loans denominated in an Alternative Currency, (ii)
2:00 p.m. (Chicago time) on the date at least three (3) Business Days prior to
the date of each requested Borrowing of Eurocurrency Loans denominated in U.S.
Dollars, (iii) 11:30 a.m. (Chicago time) on the date at least one (1) Business
Day prior to the date of each requested Borrowing of Adjusted CD Rate Loans,
and (iv) 11:30 a.m. (Chicago time) on the date of any requested Borrowing of
Domestic Rate Loans. Each such notice shall specify the date of the requested
Borrowing (which shall be a Business Day), the amount of the requested
Borrowing, the type of Loans to comprise such Borrowing, the currency in which
such Loans are to be denominated if such Borrowing is to be comprised of
Eurocurrency Loans denominated in an Alternative Currency, and, if such
Borrowing is to be comprised of Fixed Rate Loans, the Interest
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Period applicable thereto. The Borrowers agree that the Agent may rely on any
such telephonic or telecopy notice given by any person who identifies himself
or herself as being an Authorized Representative of a Borrower without the
necessity of independent investigation and, in the event any telephonic or
telecopy notice conflicts with the written confirmation, such telephonic or
telecopy notice shall govern if the Agent has acted in reliance thereon.
(b) Notice to the Banks. The Agent shall give prompt telephonic,
telex or telecopy notice to each Bank of any borrowing request it receives
pursuant to Section 2.3(a) above and, if such notice requests the Banks to make
Fixed Rate Loans, the Agent shall give notice to the applicable Borrower and
each of the Banks by like means of the interest rate applicable thereto (but,
if such notice is given by telephone, the Agent shall confirm such rate in
writing) and, if such Borrowing is denominated in an Alternative Currency, the
Original Dollar Amount thereof, promptly after the Agent has made such
determination.
(c) Borrower's Failure to Notify. In the event a Borrower fails
to give notice pursuant to Section 2.3(a) above of the reborrowing of the
principal amount of any maturing Borrowing of Committed Loans denominated in
U.S. Dollars and has not notified the Agent by (i) 10:00 a.m. (Chicago time) on
the day such Borrowing matures, if such Borrowing was comprised of Domestic
Rate Loans, Adjusted CD Rate Loans or Eurocurrency Loans denominated in U.S.
Dollars and 10:00 a.m. on the Business Day four (4) Business Days prior to the
day such Borrowing matures if such Borrowing was comprised of Eurocurrency
Loans denominated in an Alternative Currency that it intends to repay such
Borrowing, then (i) if such Borrowing was denominated in U.S. Dollars such
Borrower shall be deemed to have requested a Borrowing of Domestic Rate Loans
on such day in the amount of the maturing Borrowing of Committed Loans and (ii)
if such Borrowing was denominated in an Alternative Currency, such Borrower
shall be deemed to have requested a Borrowing in such Alternative Currency with
an Interest Period of one month, all subject to Section 9.2 hereof. In the
event the Borrower fails to give notice pursuant to Section 2.3(a) above of a
Borrowing equal to the amount of a Reimbursement Obligation and has not
notified the Agent by 10:00 a.m. (Chicago time) on the day such Reimbursement
Obligation becomes due that it intends to repay such Reimbursement Obligation
through funds not borrowed under this Agreement, the Borrower shall be deemed
to have requested a Borrowing of Domestic Rate Loans on such day in the amount
of the Reimbursement Obligation then due, subject to Section 9 hereof, which
Borrowing shall be applied to pay the Reimbursement Obligation then due.
(d) Disbursement of Committed Loans. Not later than 1:00 p.m.
(Chicago time) on the date of any Borrowing, each Bank shall make available its
Committed Loan in funds immediately available in Chicago, Illinois at the
principal office of the Agent, except to the extent such Borrowing is a
reborrowing, in whole or in part, of the principal amount of a maturing
Borrowing of Committed Loans (a "Refunding Borrowing"), in which case each Bank
shall record the Committed Loan made by it as a part of such Refunding
Borrowing on its books and records or on a schedule to its Committed Loan Note,
as provided in Section 4.5(d) hereof, and shall effect the repayment, in whole
or in part, as appropriate, of its maturing Committed Loan through the proceeds
of such new Committed Loan. Subject to Section 9 hereof, the Agent shall make
the proceeds of each non-Refunding Borrowing available to the applicable
Borrower at the Agent's principal office in Chicago, Illinois.
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Section 2.4. Rate and Currency Determinations. The Agent shall
determine each interest rate applicable to Obligations (other than interest
rates applicable to Bid Loans) and the Original Dollar Amount of all
Obligations, and a determination thereof by the Agent shall be conclusive and
binding except in the case of manifest error. The Original Dollar Amount of a
Loan shall be determined or redetermined, as applicable, effective as of the
first day of each Interest Period for such Loan. The Original Dollar Amount of
a Reimbursement Obligation shall be calculated on the date of the Agent's
payment of the drawing giving rise to such Reimbursement Obligation and on the
last day of each calendar quarter. The Original Dollar Amount of each Letter
of Credit shall be determined or redetermined, as applicable, on the date of
issuance, increase or extension of such Letter of Credit and on the last day of
each calendar quarter. At the request of any Bank, the Agent shall redetermine
the Original Dollar Amount of any Obligation at such times, and from time to
time, as may be requested for such Obligation.
SECTION 3. THE COMPETITIVE BID FACILITY.
Section 3.1. The Bid Loans. Either Borrower may request the Banks
to offer to make uncommitted loans (each a "Bid Loan" and collectively the "Bid
Loans") in U.S. Dollars in the manner set forth in this Section 3 and in
amounts such that the aggregate Original Dollar Amount of all outstanding
Revolving Loans (whether Committed Revolving Loans or Bid Loans) and L/C
Obligations shall not exceed the Revolving Commitments then in effect. The
Banks may, but shall have no obligation to, make such offers and the Borrowers
may, but shall have no obligation to, accept any such offers in the manner set
forth in this Section 3. Each Bank may offer to make Bid Loans in any amount
(whether greater than, equal to, or less than its Revolving Commitment),
subject to the limitations that (x) the aggregate Original Dollar Amount of all
Revolving Loans (whether Committed Revolving Loans or Bid Loans) and L/C
Obligations outstanding at any time shall not at any time exceed the Revolving
Commitments then in effect, (y) no Bid Loan shall be made if at the time
thereof or immediately after giving effect thereto, the aggregate principal
amount of Bid Loans then outstanding would exceed the lesser of the unused
Revolving Commitments or the Bid Loan Limit and (z) subject to the other
conditions of this Section 3.
Section 3.2. Requests for Bid Loans.
(a) Requests and Confirmations. In order to request a Borrowing
of Bid Loans (a "Bid Loan Request"), a Borrower shall give telephonic notice to
the Agent no later than 2:00 p.m. (Chicago time) one (1) Business Day before
the proposed date of such borrowing, which must be a Business Day (the
"Borrowing Date"), followed on the same day by a duly completed Bid Loan
Request Confirmation, delivered by telecopier or other means of facsimile
communication, substantially in the form of Exhibit C hereto or otherwise
containing the information required by this Section (a "Bid Loan Request
Confirmation"), to be received by the Agent no later than 2:30 p.m. (Chicago
time) on such day. Bid Loan Request Confirmations that do not conform
substantially to the format of Exhibit C or otherwise contain the information
required by this Section 3.2 shall be rejected by the Agent, and the Agent
shall give telephonic notice to the Company of such rejection promptly after it
determines (which determination shall be conclusive) that the Bid Loan Request
Confirmation does not substantially conform to the format of Exhibit C or
otherwise contain the information required by this Section 3.2. Requests for
Bid Loans shall in each case refer to this
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Agreement and specify (i) the proposed Borrowing Date (which must be a Business
Day), (ii) the aggregate principal amount thereof (which shall not be less than
$2,000,000 and shall be an integral multiple of $500,000, except as provided in
Section 3.4(ii) hereof), (iii) the Borrower requesting such Bid Loan and (iv)
up to three (3) Interest Periods of 7-180 days with respect to the entire
amount specified in such Bid Loan Request (and, if so desired by the such
Borrower, specifying the maximum amount such Borrower would borrow for any
specific Interest Period).
(b) Invitation to Bid. Upon receipt by the Agent of a Bid Loan
Request Confirmation that conforms substantially to the format of Exhibit C
hereto or otherwise contains the information required by this Section 3.2, the
Agent shall, by telephone (no later than 3:00 p.m. (Chicago time) on the same
day the Agent receives a Bid Loan Request Confirmation), promptly confirmed by
a telecopy or other form of facsimile communication in the form of Exhibit D
hereto, invite each Bank to bid, on the terms and conditions of this Agreement,
to make Bid Loans pursuant to the Bid Loan Request.
(c) Bids. Each Bank may, in its sole discretion, offer to make a
Bid Loan or Loans (a "Bid") to such Borrower responsive to the Bid Loan
Request. Each Bid by a Bank must be received by the Agent by telephone not
later than 9:30 a.m. (Chicago time) on the proposed Borrowing Date promptly
confirmed in writing by a duly completed Confirmation of Bid delivered by
telecopier or other means of facsimile communication substantially in the form
of Exhibit E hereto or otherwise containing the information required by this
subsection (c) (a "Confirmation of Bid"), to be received by the Agent on the
same day; provided, however, that any Bid made by the Agent must be made by
telephone to the Borrower by no later than 9:15 a.m. (Chicago time). Each Bid
and each Confirmation of Bid shall refer to this Agreement and specify (i) the
principal amount (which shall not be less than $2,000,000 and shall be an
integral multiple of $500,000) of each Bid Loan that the Bank is willing to
make to such Borrower, (ii) the interest rate (which shall be computed on the
basis of a 360 day year and actual days elapsed for a period equal to the
Interest Period applicable thereto) at which the Bank is prepared to make each
Bid Loan and (iii) the Interest Period applicable to each such offered Bid
Loan. The Agent shall reject any Bid if such Bid (i) does not specify all of
the information specified in the immediately preceding sentence, (ii) contains
any qualifying, conditional, or similar language, (iii) proposes terms other
than or in addition to those set forth in the Bid Loan Request to which it
responds, or (iv) is received by the Agent later than 9:30 a.m. (Chicago time).
Any Bid submitted by a Bank pursuant to this Section 3.2 shall be irrevocable
and shall be promptly confirmed by a telecopy or other form of facsimile
communication in the form of Exhibit E; provided that in all events the
telephone Bid received by the Agent shall be binding on the relevant Bank and
shall not be altered, modified, or in any other manner affected by any
inconsistent terms contained in, or terms missing from, the Bank's Confirmation
of Bid. Each offer contained in a Bid to make a Bid Loan in a certain amount,
at a certain interest rate, and for a certain Interest Period is referred to
herein as an "Offer".
Section 3.3. Notice of Bids; Advice of Rate. The Agent shall give
telephonic notice to the Borrower no later than 10:00 a.m. (Chicago time) on
the proposed Borrowing Date of the number of Bids made, the interest rate(s)
and Interest Period(s) applicable to each
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Bid, the maximum principal amount bid at each interest rate for each Interest
Period, and the identity of the Bank making such Bid. The Agent shall send a
written summary of all Bids received by it to the Company on the same day.
Section 3.4. Acceptance or Rejection of Bids. The Borrower who
request such Offers may in its sole and absolute discretion, subject only to
the provisions of this Section 3.4, irrevocably accept or reject, in whole or
in part, any Offer contained in a Bid. No later than 10:30 a.m. (Chicago time)
on the proposed Borrowing Date, such Borrower shall give telephonic notice to
the Agent of whether and to what extent it has decided to accept or reject any
or all of the Offers contained in the Bids made in response to a Bid Loan
Request, which notice shall be promptly confirmed by a telecopy or other form
of facsimile communication to be received by the Agent on the proposed
Borrowing Date; provided, however, that in the event any Offers are accepted
(i) such Borrower shall accept Offers for any of the Interest Periods specified
by such Borrower in its Bid Loan Request Confirmation solely on the basis of
ascending interest rates for each such Interest Period, (ii) if such Borrower
accepts an Offer for a Bid Loan at a particular interest rate for a particular
Interest Period but declines to borrow, or is in such event restricted by any
other condition hereof from borrowing, the maximum principal amount of Bid
Loans in respect of which Offers at such particular interest rate for such
particular Interest Period have been made, then such Borrower shall accept a
pro rata portion of each such Offer at such rate and for such Interest Period,
based as nearly as possible on the ratio of the maximum aggregate principal
amounts of Bid Loans for which each such Offer was made by each Bank (provided
that, if the available principal amount of Bid Loans to be so allocated is not
sufficient to enable Bid Loans to be so allocated to each relevant Bank in
integral multiples of $1,000,000, then such Borrower may round allocations up
or down in integral multiples not less than $500,000 as it shall deem
appropriate), (iii) the aggregate principal amount of all Offers accepted by
such Borrower shall not exceed the maximum amount contained in the related Bid
Loan Request Confirmation, (iv) no Offer of a Bid Loan shall be accepted in a
principal amount less than $2,000,000, except as provided in the immediately
preceding clause (ii) and (v) no Offer shall be accepted if after giving effect
to the Bid Loans to be made pursuant to such Offer the Bid Loans then
outstanding would exceed the lesser of the unused Revolving Commitments or the
Bid Loan Limit. Any telephone notice given by such Borrower pursuant to this
Section 3.4 shall be irrevocable and shall not be altered, modified, or in any
other manner affected by any inconsistent terms contained in, or terms missing
from, any written confirmation of such notice.
Section 3.5. Notice of Acceptance or Rejection of Bids.
(a) Notice to Banks Making Bids. The Agent shall give telephonic
notice to each Bank whether any of the Offers contained in its Bid has been
accepted (and if so, in what amount, at what interest rate and for what
Interest Period) no later than 10:45 a.m. (Chicago time) on the proposed
Borrowing Date, and each successful bidder will thereupon become bound, subject
to Section 9 and the other applicable conditions hereof, to make the Bid
Loan(s) in respect of which its Bid has been accepted. As soon as practicable
thereafter the Agent shall send written notice substantially in the form of
Exhibit F hereto to each such successful bidder; provided, however, that
failure to give such notice shall not affect the obligation of such successful
bidder to disburse its Bid Loans as herein required.
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(b) Disbursement of Bid Loans. Not later than 12:00 Noon (Chicago
time) on the Borrowing Date for each Borrowing of a Bid Loan(s), each Bank
bound to make a Bid Loan(s) in accordance with Section 3.5(a) shall make
available to the Agent the principal amount of each such Bid Loan in
immediately available funds at the Agent's principal office in Chicago,
Illinois. The Agent shall promptly thereafter make available to the applicable
Borrower like funds as received from each Bank, at such office of the Agent in
Chicago, Illinois.
(c) Notice to the Banks. As soon as practicable after each
Borrowing Date for Bid Loans, the Agent shall notify each Bank of the aggregate
amount of Bid Loans advanced pursuant to a Bid Loan Request on such Borrowing
Date, the Interest Period(s) therefor, and the lowest and highest interest
rates at which Bid Loans were made for each Interest Period.
Section 3.6. Interest on Bid Loans. The Borrowers shall pay
interest on the unpaid principal amount of each Bid Loan so accepted from the
applicable Borrowing Date to the maturity thereof at the rate of interest
applicable to such Bid Loan as determined pursuant to the above provisions
(calculated on the basis of a 360 day year and the actual number of days
elapsed) payable on the last day of the Interest Period applicable to such Bid
Loan and at maturity (whether by acceleration or otherwise), and, if the
applicable Interest Period is longer than 90 days, on each day occurring every
90 days after the date such Loan is made.
Section 3.7. Telephonic Notice. Each Bank's telephonic notice to
the Agent of its Bid pursuant to Section 3.2(c), and a Borrower's telephonic
acceptance of any Offer contained in a Bid pursuant to Section 3.4, shall be
irrevocable and binding on such Bank and the Borrowers and shall not be
altered, modified, or in any other manner affected by any inconsistent terms
contained in, or missing from, any telecopy or other confirmation of such
telephonic notice. It is understood and agreed by the parties hereto that the
Agent shall be entitled to act, or to fail to act, hereunder in reliance on its
records of any telephonic notices provided for herein and that the Agent shall
not incur any liability to any Person in so doing if its records conflict with
any telecopy or other confirmation of a telephone notice or otherwise, provided
that the Agent has acted, or failed to act, in good faith. It is further
understood and agreed by the parties hereto that the times of day as set forth
in this Section 3 are for the convenience of all the parties for providing
notices and that no party shall incur any liability or other responsibility for
any failure to provide such notices within the specified times; provided,
however, that the Agent shall have no obligation to notify a Borrower of any
Bid received by it later than 9:30 a.m. (Chicago time) on the proposed
Borrowing Date, and no acceptance by a Borrower of any Offer contained in a Bid
shall be effective to bind any Bank to make a Bid Loan, nor shall the Agent be
under any obligation to notify any Person of an acceptance, if notice of such
acceptance is received by the Agent later than 10:30 a.m. (Chicago time) on the
proposed Borrowing Date.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO ALL LOANS.
Section 4.1. Interest Periods. As provided in Section 2.3 hereof,
in the case of Committed Loans, and Section 3.2 hereof, in the case of Bid
Loans, at the time of each request for the Borrowing of Loans hereunder the
Borrower requesting such Borrowing shall select an Interest Period applicable
to such Loans from among the available options. The term "Interest Period"
means the period commencing on the date a Borrowing of Loans is
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made and ending, (a) in the case of Domestic Rate Loans, on the last day of the
calendar quarter in which such Loan is made (i.e. the first to occur of March
31, June 30, September 30, and December 31 following the date such Borrowing is
made); (b) in the case of Adjusted CD Rate Loans, the date, as such Borrower
may select, 30, 60, 90 or 180 days thereafter, or if all Banks so consent, 360
days thereafter, (c) in the case of Eurocurrency Loans, the date, as such
Borrower may select, 1, 2, 3 or 6 months thereafter, or if all Banks so
consent, 12 months thereafter; and (d) in the case of Bid Loans, the date, as
such Borrower may select, 7-180 days thereafter; provided, however, that:
(a) any Interest Period for a Borrowing of Domestic Rate
Loans commencing less than 90 days before the Termination Date shall
end on the Termination Date;
(b) with respect to any Borrowing of Fixed Rate Loans,
the Borrowers may not select an Interest Period that extends beyond
the Termination Date;
(c) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided that, in the case of an Interest Period for a Borrowing of
Eurocurrency Loans, if such extension would cause the last day of such
Interest Period to occur in the following calendar month, the last day
of such Interest Period shall be the immediately preceding Business
Day; and
(d) for purposes of determining the Interest Period for a
Borrowing of Eurocurrency Loans, a month means a period starting on
one day in a calendar month and ending on the numerically
corresponding day in the next calendar month; provided, however, that
if there is no numerically corresponding day in the month in which
such an Interest Period is to end or if such an Interest Period begins
on the last Business Day of a calendar month, then such Interest
Period shall end on the last Business Day of the calendar month in
which such Interest Period is to end.
Section 4.2. Maturity of Loans. Each Loan shall mature and become
due and payable on the last day of the Interest Period applicable thereto.
Section 4.3. Voluntary Prepayments.
(a) Committed Loans. Each Borrower shall have the privilege of
prepaying without premium or penalty any Borrowing of Domestic Rate Loans in
whole or in part (but, if in part, then in an amount not less than $500,000 and
in integral multiples of $100,000) and (ii) at any time upon prior notice to
the Agent (which shall advise each Bank thereof promptly thereafter) which
notice shall specify whether the Domestic Rate Loan being prepaid is a
Committed Revolving Loan or a Committed Term Loan, such prepayment to be made
by the payment of the principal amount to be prepaid and accrued interest
thereon to the date fixed for prepayment. The Borrower may not prepay any
Fixed Rate Loan before its maturity. Notwithstanding the foregoing, the
Committed Term Loans may only be prepaid if there are no Revolving Loans and
L/C Obligations outstanding.
(b) Bid Loans. The Borrower may not prepay any Bid Loan before
its maturity.
(c) Reborrowings. Any amount paid or prepaid before the
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again.
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Section 4.4. Default Rate. If any payment of principal on any
Loan is not made when due (whether by acceleration or otherwise), such Loan
shall bear interest (computed on the basis of a year of 360 days and actual
days elapsed) from the date such payment was due until paid in full, payable on
demand, at a rate per annum equal to:
(a) with respect to any Domestic Rate Loan, the sum of
two percent (2%) plus the Domestic Rate from time to time in effect
plus the Applicable Margin;
(b) with respect to any Fixed Rate Loan the sum of two
percent (2%) plus the rate of interest in effect thereon at the time
of such default (including the effect of any increase to Level V
Status as a result of such default) until the end of the Interest
Period applicable thereto and, thereafter, at a rate per annum equal
to (i) in the case of Fixed Rate Loans denominated in U.S. Dollars the
sum of two percent (2%) plus the Domestic Rate from time to time in
effect plus the Applicable Margin and (ii) in the case of Fixed Rate
Loans denominated in an Alternative Currency, the sum of two percent
(2%) plus the Overnight Foreign Currency Rate from time to time in
effect plus the Applicable Margin.
Section 4.5. The Notes. (a) (i) All Committed Revolving Loans
made to the Company by a Bank shall be evidenced by a promissory note of the
Company, in the form of Exhibit A-1 hereto (individually, along with any
substitute promissory note delivered pursuant to clause (a)(ii) below, a
"Committed Revolving Note" and collectively the "Committed Revolving Notes"),
each such Committed Revolving Note to be dated the date hereof, payable to the
order of the applicable Bank and otherwise in the form of Exhibit A-1 hereto.
(ii) All Committed Revolving Loans made to the Borrowers by a Bank on and after
the date the Subsidiary Borrower has delivered the documents required to become
a Borrower in accordance with the first paragraph of this Agreement shall be
evidenced by a Committed Revolving Note of the Borrowers, jointly and
severally, in the form of Exhibit AA-1 hereto, each such Committed Revolving
Note to be dated and delivered the date the Subsidiary Borrower becomes a
Borrower hereunder, payable to the order of the applicable Bank and otherwise
in the form of Exhibit AA-1 hereto. Each Bank, upon its receipt of the
Committed Revolving Note to be delivered pursuant to clause (a)(ii) above,
shall return to the Company the Committed Revolving Note it received pursuant
to clause (a)(i) above marked canceled.
(b)(i) All Committed Term Loans made to the Company by a Bank shall
be evidenced by a promissory note of the Company, in the form of Exhibit A-2
hereto (individually, along with any substitute promissory note delivered
pursuant to clause (b)(ii) below, a "Committed Term Note" and collectively the
"Committed Term Notes"), each such Committed Term Note to be dated the date
hereof, payable to the order of the applicable Bank and otherwise in the form
of Exhibit A-2 hereto. (ii) All Committed Term Loans made to the Borrowers by a
Bank on and after the date Subsidiary Borrower has delivered the documents
required to become a Borrower in accordance with the first paragraph of this
Agreement shall be evidenced by a Committed Term Note of the Borrowers, jointly
and severally, in the form of Exhibit AA-2 hereto, each such Committed Term
Note to be dated and delivered the date the Subsidiary Borrower becomes a
Borrower hereunder, payable to the order of the applicable Bank and otherwise
in the form of Exhibit AA-2 hereto. Each Bank, upon its receipt of the
Committed Term Note to be delivered pursuant to clause (b)(ii) above,
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shall return to the Company the Committed Term Note it received pursuant to
clause (b)(i) above marked canceled.
(c)(i) All Bid Loans made to the Company by a Bank shall be evidenced
by a promissory note of the Company, in the form of Exhibit B hereto
(individually, along with any substitute promissory note delivered pursuant to
clause (c)(ii) below, a "Bid Note" and collectively the "Bid Notes"), each such
Bid Note to be dated the date hereof, payable to the order of the applicable
Bank and otherwise in the form of Exhibit B hereto. (ii) All Bid Loans made to
the Borrowers by a Bank on and after the date Subsidiary Borrower has delivered
the documents required to become a Borrower in accordance with the first
paragraph of this Agreement shall be evidenced by a Bid Note of the Borrowers,
jointly and severally, in the form of Exhibit BB hereto, each such Bid Note to
be dated and delivered the date the Subsidiary Borrower becomes a Borrower
hereunder, payable to the order of the applicable Bank and otherwise in the
form of Exhibit BB hereto. Each Bank, upon its receipt of the Bid Note to be
delivered pursuant to clause (c)(ii) above, shall return to the Company the Bid
Note it received pursuant to clause (c)(i) above marked canceled.
(d) Each Bank shall record on its books and records or on a
schedule to the appropriate Note the amount of each Loan made by it to the
Borrowers, the Borrower to whom such Loan was made, the Interest Period and
currency thereof, all payments of principal and interest and the principal
balance from time to time outstanding thereon, in respect of any Fixed Rate
Loan, the interest rate applicable thereto and, in respect of any Committed
Loan, the type of such Loan. The record thereof, whether shown on such books
and records of a Bank or on a schedule to any Note, shall be prima facie
evidence as to all such matters; provided, however, that the failure of any
Bank to record any of the foregoing or any error in any such record shall not
limit or otherwise affect the obligation of the Borrowers to repay all Loans
made to them hereunder together with accrued interest thereon. At the request
of any Bank and upon such Bank tendering to the Borrowers the Note to be
replaced, the Borrowers shall furnish a new Note to such Bank to replace any
outstanding Note and at such time the first notation appearing on a schedule on
the reverse side of, or attached to, such Note shall set forth the aggregate
unpaid principal amount of all Loans, if any, then outstanding thereon.
Section 4.6. Commitment Terminations. The Company shall have the
right at any time and from time to time, upon three (3) Business Days' prior
written notice to the Agent, to terminate without premium or penalty, in whole
or in part, the Commitments, any partial termination to be made in an amount
not less than $1,000,000 or any larger amount that is an integral multiple of
$1,000,000, and to reduce ratably each Bank's Commitment; provided that (i) no
portion of the Term Commitments may be terminated unless all Revolving
Commitments have been terminated, (ii) the Revolving Credit Commitments may not
be reduced to an amount less than the aggregate Original Dollar Amount of
Committed Revolving Loans (whether Committed Revolving Loans or Bid Loans) and
L/C Obligations then outstanding and (iii) the Term Credit Commitment may not
be reduced to an amount less than the aggregate Original Dollar Amount of
Committed Term Loans then outstanding. Any termination of Commitments pursuant
to this Section 4.6 may not be reinstated. No Facility Fee shall accrue on any
portion of the Revolving Credit Commitments that has been
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terminated.
Section 4.7. Mandatory Prepayment. (a) If, within thirty (30)
days after receiving notice under Section 10.5 of a Change of Control Event,
the Required Banks notify the Borrowers that they require prepayment of the
Notes, on the date set forth in such notice (which date shall be no earlier
than (x) five (5) days after such notice is given or (y) the day on which
either Borrower repays any other Debt before its original scheduled due date,
whichever day is earlier), the Borrowers shall pay in full all Obligations then
outstanding, including the prepayment of L/C Obligations in the manner
contemplated by Section 11.4 hereof, and the Commitments shall terminate in
full.
(b) If the aggregate Original Dollar Amount of (i) outstanding
Revolving Loans and L/C Obligations shall at any time for any reason exceed the
Revolving Commitments then in effect, or (ii) outstanding Committed Term Loans
shall at any time for any reason exceed the Term Commitments then in effect,
the Company shall, within three (3) Business Days, pay the amount of such
excess to the Agent for the ratable benefit of the Banks as a prepayment of
Loans (to be applied to such Loan as the Company shall direct at the time of
such payment) and, if necessary, a prefunding of Letters of Credit.
Immediately upon determining the need to make any such prepayment the Company
shall notify the Agent of such required prepayment. Each such prepayment shall
be accompanied by a payment of all accrued and unpaid interest on the Loans
prepaid and shall be subject to Section 4.8.
Section 4.8. Funding Indemnity. In the event any Bank shall incur
any loss, cost or expense (including, without limitation, any loss of profit,
and any loss, cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund or
maintain any Fixed Rate Loan or the relending or reinvesting of such deposits
or amounts paid or prepaid to such Bank) as a result of:
(a) any payment or prepayment of a Fixed Rate Loan on a
date other than the last day of its Interest Period for any reason,
whether before or after default, and whether or not such payment is
required by any provisions of this Agreement, or
(b) any failure (because of a failure to meet the
conditions of Section 9 or otherwise) by a Borrower to borrow a Fixed
Rate Loan on the date specified in a notice given pursuant to Section
2.3 or 3.4 hereof,
then, upon the demand of such Bank, the Borrowers shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrowers, with a
copy to the Agent, a certificate executed by an officer of such Bank setting
forth the amount of such loss, cost or expense in reasonable detail (including
an explanation of the basis for and the computation of such loss, cost or
expense) and the amounts shown on such certificate if reasonably calculated
shall be conclusive.
Section 4.9. Subsidiary Borrower as a Borrower hereunder:
Appointment of Company as Agent for Subsidiary Borrower. (a) Subsidiary
Borrower shall be a party hereto from and after such time as it shall have
delivered an Election to Become a Borrower along with the documentation similar
to that described in Section 9.1(a) and (b) in form and substance satisfactory
to the Banks along with the substitute Notes required pursuant to Section 4.5
hereof. Notwithstanding anything herein to the contrary, until such time as
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Subsidiary Borrower shall have delivered an Election to Become a Borrower,
along with documentation similar to that described in Section 9.1(a) and (b) in
form and substance satisfactory to the Banks along with the substitute Notes
required pursuant to Section 4.5 hereof, Subsidiary Borrower shall not be
deemed to be a Borrower under this Agreement. Upon its delivery of such
documents, the Subsidiary Borrower shall be conclusively deemed to be a direct
signatory to this Agreement.
(b) Subsidiary Borrower hereby irrevocably appoints the Company as
its agent hereunder to make any and all requests on Subsidiary Borrower's
behalf, including without limitation requests under Section 1, 2 or 3 hereof
for Loans or Letters of Credit to be made to Subsidiary Borrower, to give and
receive any and all notices under the Loan Documents, to accept amounts on
behalf of Subsidiary Borrower and to take any other action contemplated by the
Loan Documents with respect to credit extended hereunder to Subsidiary
Borrower. The Agent and the Banks shall be entitled to conclusively presume
that any action by the Company under the Loan Documents is taken on behalf of
Subsidiary Borrower whether or not the Company so indicates and that any notice
delivered to the Company has also been delivered to Subsidiary Borrower.
SECTION 5. FEES.
Section 5.1. Facility Fee. The Company shall pay to the Agent for
the ratable account of the Banks in accordance with their Percentages a
facility fee at the rate per annum equal to the percentage set forth in the
applicable row of the last column of the chart set forth in Section 2.1(d)
hereof (as then determined and computed) in effect on each day of the
applicable quarter on the average daily amount of the Revolving Commitments
hereunder (whether used or unused), payable quarterly in arrears on the last
day of each March, June, September, and December, commencing with the first of
such dates after the date hereof, and on the Termination Date.
Section 5.2. Letter of Credit Fees. On the date of issuance or
extension, or increase in the amount, of any Letter of Credit pursuant to
Section 1.3 hereof, the Company shall pay to the Agent, for the sole benefit of
the Agent, an issuance fee equal to 1/8 of 1% (0.125) of the face amount of (or
of the increase in the face amount of) such Letter of Credit. In addition,
quarterly in arrears, on the last day of each calendar quarter, commencing on
the first of such dates after the date hereof, the Company shall pay to the
Agent, for the ratable benefit of the Banks in accordance with their
Percentages, (i) a letter of credit fee at a rate per annum equal to the
Applicable Margin for Committed Revolving Loans which are Eurocurrency Loans in
effect during each day of such quarter applied to the daily average face amount
of Financial Letters of Credit outstanding during such quarter and (ii) a
letter of credit fee at a rate per annum equal to the greater of (x) fifty
percent (50%) of the Applicable Margin for Committed Revolving Loans which are
Eurocurrency Loans in effect during each day of such quarter and (y) 0.25%,
applied to the daily average face amount of Performance Letters of Credit
outstanding during such quarter.
Section 5.3. Commitment Fee. The Borrowers shall pay to the Agent
for the ratable account of the Banks in accordance with their Percentages a
commitment fee at the rate per annum equal to 0.10% per annum on the average
daily unused amount of the Term Commitments hereunder, payable quarterly in
arrears on last day of each March, June,
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September, and December, commencing with the first of such dates after the date
hereof, and on the Termination Date.
Section 5.4. Bid Loan Fee. The Borrowers shall pay to the Agent
for its own account an administrative fee of $250 for each Bid Loan Request by
the Borrowers in excess of six in any given calendar month, such fee to be
payable no later than 3:00 p.m. (Chicago time) on the date each such Bid Loan
Request is received and to be deemed fully earned whether or not any Bid Loan
is made pursuant to such Bid Loan Request.
Section 5.5. Agent Fees. The Borrowers shall pay to the Agent the
fees agreed to in a letter exchanged between them dated August 1, 1996.
Section 5.6. Fee Calculations. All fees payable hereunder shall
be computed on the basis of a year of 365 or 366 days, as applicable, for the
actual number of days elapsed.
SECTION 6. PLACE AND APPLICATION OF PAYMENTS.
Section 6.1. Place and Application of Payments. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and
of all other amounts payable by the Borrower under this Agreement, shall be
made to the Agent by no later than 12:00 noon (Chicago time) at the principal
office of the Agent in Chicago, Illinois (or such other location in the State
of Illinois as the Agent may designate to the Company) or, if such payment is
to be made in an Agreement Currency, no later than 12:00 noon local time at the
place of payment (or such earlier local time as is necessary for such funds to
be received and transferred to the Agent for same day value on the day such
Obligation is due) to such office as the Agent has previously specified in a
notice to the Borrower for the benefit of the Person or Persons entitled
thereto. Any payments received after such time shall be deemed to have been
received by the Agent on the next Business Day. All such payments shall be
made (i) in U.S. Dollars, in immediately available funds at the place of
payment, or (ii) in the case of any Loans denominated in an Alternative
Currency or any Reimbursement Obligations payable in an Available Foreign
Currency, in such Alternative Currency or such Available Foreign Currency, as
applicable, in such funds as are then customary for the settlement of
international transactions in such currency. Any payment by the Borrowers to
the Agent for account of the Banks in accordance with the terms hereof shall,
to the extent of such payment, discharge the Borrowers' obligation to make such
a payment to the Banks, provided that if any such payment is rescinded or must
otherwise be restored or returned, the Borrowers' obligations to the Banks with
respect to such payment shall be reinstated as if such payment had never been
made. All such payments shall be made, in all cases, without setoff or
counterclaim and without reduction for, and free from, any and all present or
future taxes, levies, imposts, duties, fees, charges, deductions, withholdings,
restrictions or conditions of any nature imposed by any government or any
political subdivision or taxing authority thereof (but excluding any taxes
imposed or measured by the net income of any Bank). The Agent will promptly
thereafter (and in any case before the close of business on the day the Agent
receives such funds, if timely received by the Agent) cause to be distributed
like funds relating to the payment of principal or interest on Committed Loans
or fees ratably to the Banks and like funds relating to the payment of any
other amount payable to any Bank to such Bank, in each case to be applied in
accordance with the terms of this Agreement. If the Agent fails to distribute
such payments to any Bank by such times, the Agent shall pay to
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such Bank interest on the amount not paid in respect of each day during the
period commencing on the date such payment was received by the Agent (or the
following Business Day in the case of payments received after 12:00 noon
(Chicago time)) and ending on but excluding the date the Agent pays such amount
at a rate per annum equal to (i) if such payment was received by the Agent on
account of an Obligation denominated in U.S. Dollars, the effective rate
charged to the Agent for overnight federal funds transactions with member banks
of the federal reserve system for each day as determined by the Agent (or in
the case of a day which is not a Business Day, then for the preceding day) and
(ii) if such payment was received by the Agent on account of an Obligation
denominated in an Agreement Currency, at the Overnight Foreign Currency Rate.
Anything contained herein to the contrary notwithstanding, all
payments and collections received in respect of the indebtedness evidenced by
the Notes and Applications received, in each instance, by the Agent or any of
the Banks after the occurrence of an Event of Default shall be remitted to the
Agent and distributed as follows:
(a) first, to the payment of any reasonable outstanding
costs and expenses incurred by the Agent in protecting, preserving or
enforcing rights under this Agreement, the Notes and the Applications
and in any event including all reasonable costs and expenses of a
character which the Borrowers have agreed to pay under Sections 11.5
and 15.15 hereof (such funds to be retained by the Agent for its own
account unless it has previously been reimbursed for such costs and
expenses by the Banks, in which event such amounts shall be remitted
to the Banks to reimburse them for payments theretofore made to the
Agent);
(b) second, to the payment of any outstanding interest or
other fees or indemnification amounts due under the Notes, the
Applications or this Agreement other than for principal, ratably as
among the Agent and the Banks in accord with the amount of such
interest and other fees or amounts owing each;
(c) third, to the payment of (i) the principal of the
Committed Term Note first, (ii) the principal of the other Notes next
and (iii) after all amounts in clause (i) and (ii) have been paid, to
any liabilities in respect of unpaid drawings under the Letters of
Credit and to the Agent to be held as collateral security for any
undrawn Letters of Credit (until the Agent is holding an amount of
cash equal to the then outstanding amount of all such Letters of
Credit), the aggregate amount paid to or held as collateral security
for the Banks to be allocated pro rata as among the Banks in accord
with the then respective aggregate unpaid principal balances of the
Notes as to which such payments relate and the Letters of Credit;
(d) fourth, to the Agent and the Banks ratably in accord
with the amounts of other Obligations owing to each of them (other
than those described above) unless and until all such indebtedness,
obligations and liabilities have been fully paid and satisfied; and
(e) fifth, to the Borrowers or whoever may be lawfully
entitled thereto.
SECTION 7. DEFINITIONS; INTERPRETATION.
Section 7.1. Definitions. The following terms when used herein
have the following meanings:
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"Adjusted CD Rate" is defined in Section 2.1(b) hereof.
"Adjusted CD Rate Loan" means a Loan bearing interest at the rate
specified in Section 2.1(b) hereof.
"Adjusted LIBOR" is defined in Section 2.1(c) hereof.
"Affiliate" shall mean any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, the Borrower, (ii) which beneficially owns or holds 5% or
more of any class of the Voting Stock of the Borrower or (iii) 5% or more of
the Voting Stock (or in the case of a Person which is not a corporation, 5% or
more of the equity interest) of which is beneficially owned or held by the
Borrower or a Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agent" means Xxxxxx Trust and Savings Bank and any successor pursuant
to Section 13.8 hereof.
"Agreement Currency" means and includes Available Foreign Currency and
Alternative Currency.
"Alternative Currency" means French Francs, Pounds Sterling, Deutsche
Marks and Lira.
"Applicable Margin" is defined in Section 2.1(d) hereof.
"Applicable Telerate Page" is defined in Section 2.1(c) hereof.
"Xxxxxxxxx Acquisition" means the acquisition by Titan Tire
Corporation of certain assets of PATC.
"Assessment Rate" is defined in Section 2.1(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Company pursuant to Section 9.1(d) hereof or on any
update of any such list provided by the Company to the Agent, or any further or
different officer(s) or employee(s) of the Company so named by any Authorized
Representative of the Company in a written notice to the Agent. Any Authorized
Representative of the Company shall for all purposes be conclusively deemed to
be an Authorized Representative of Subsidiary Borrower.
"Available Foreign Currency" shall mean any currency other than United
States Dollars, so long as such currencies are freely transferable and
convertible into United States Dollars and are traded and readily available to
each Bank in the London interbank market.
"Bank" means each bank signatory hereto and its successors, and any
assignee of a Bank pursuant to Section 15.12 hereof.
"Bid" is defined in Section 3.2(c) hereof.
"Bid Loan" is defined in Section 3.1 hereof.
"Bid Loan Limit" shall mean an amount equal to the Revolving
Commitments if and so long as Level I, Level II or Level III exist and equal at
all other times to 50% of the Revolving Commitments.
"Bid Loan Request" is defined in Section 3.2(a) hereof.
"Bid Loan Request Confirmation" is defined in Section 3.2(a) hereof.
"Bid Note" is defined in Section 4.5(c) hereof.
"Borrowers" is defined in the introductory paragraph hereof, with (i)
the term
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"Borrowers" to mean the Borrowers, collectively, and, also, each individually,
and (ii) all promises and covenants (including promises to pay) and
representations and warranties of and by the Borrowers made in the Loan
Documents or any instruments or documents delivered pursuant thereto to be and
constitute the joint and several promises, covenants, representations and
warranties of and by each and all of such corporations. The term "Borrower"
appearing in such singular form shall be deemed a reference to any of the
Borrowers unless the context in which such term is used shall otherwise
require.
"Borrowing" means the total of Loans of a single type made by one or
more Banks on a single date and for a single Interest Period. Borrowings of
Committed Loans are made and maintained ratably from each of the Banks
according to their Percentages. Borrowings of Bid Loans are made from a Bank
or Banks in accordance with the procedures of Section 3 hereof.
"Borrowing Date" is defined in Section 3.2(a) hereof.
"Business Day" means any day other than a Saturday or Sunday on which
(w) banks are not authorized or required to close in Chicago, Illinois or New
York, New York and (x) the Federal Reserve Bank for such cities is generally
open for transaction of its business and (y) if the applicable Business Day
relates to the borrowing or payment of a Eurocurrency Loan denominated in U.S.
Dollars, on which banks are dealing in U.S. Dollar deposits in the interbank
market in London, England and, (z) if the applicable Business Day relates to
the borrowing or payment of a Eurocurrency Loan denominated in an Alternative
Currency, on which banks and foreign exchange markets are open for business in
the city where disbursements of or payments on such Loan are to be made.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" means, for any Person, the amount of
such Person's liabilities under Capitalized Leases determined at any date in
accordance with GAAP.
"CD Rate" is defined in Section 2.1(b) hereof.
"CD Reserve Percentage" is defined in Section 2.1(b) hereof.
"CERCLA" is defined in Section 8.12(b) hereof.
"Change of Control Event" means (i) any Person or two or more Persons
acting in concert shall have acquired after the date hereof beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly
of securities of the Company (or other securities convertible into such
securities) representing 15% or more of the combined voting power of all
securities of the Company entitled to vote in the election of directors, (ii)
during any period of 24 consecutive months, commencing before or after the date
of this Agreement, individuals who at the beginning of such 24 month period
were directors of the Company (the "Initial Directors") shall cease for any
reason other than death or disability to constitute a majority of the Board of
Directors of the Company unless any subsequent or other members of such Board
are nominated by a majority of the Initial Directors, (iii) any Person or two
or more Persons acting in concert shall have acquired after the date hereof by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of control
over securities of the Company (or other securities convertible into such
securities) representing 15% or more of the combined voting power of all
securities
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of the Company entitled to vote in the election of directors, or (iv) Xxxxxx,
for a period in excess of one hundred eighty (180) consecutive days, shall
cease to be a director or executive officer of the Company for any reason,
including without limitation death, resignation, retirement or incapacity, and
an individual acceptable to the Required Banks shall not be performing the
duties and functions of such director or executive officer of the Company
within said 180-day period provided that such acceptance of such director or
executive officer by the Required Banks shall not be unreasonably withheld.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committed Loans" means and includes Committed Revolving Loans and
Committed Term Loans.
"Commitments" means the Revolving Commitments and the Term
Commitments.
"Committed Loan Note" means the Committed Revolving Note and the
Committed Term Note.
"Committed Revolving Loan" is defined in Section 1.1 hereof.
"Committed Revolving Note" is defined in Section 4.5(a) hereof.
"Committed Term Note" is defined in Section 4.5(b) hereof.
"Compliance Certificate" means a certificate in the form of Exhibit H
hereto.
"Confirmation of Bid" is defined in Section 3.2(c) hereof.
"Consolidated Net Income" means, for any period, the net income (or
net loss) of the Company and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking
to which such Person is a party or by which it or any of its Property is bound.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any Subsidiary, are treated
as a single employer under Section 414 of the Code.
"Convertible Subordinated Notes" shall mean those certain Convertible
Subordinated Debentures Due 2000 issued by the Company in an aggregate face
principal amount of $103,500,000 and bearing interest at a rate of 4.75% per
annum and otherwise as described in the Form S-1 Registration Statement
therefor as filed with the SEC on October 8, 1993 as modified by the Amendment
No. 2 to Form S-1 Registration Statement filed with the SEC on November 4,
1993.
"Credit Event" means the advancing of any Loan, including any
Refunding Borrowing, or the issuance of, or extension of the expiration date or
increase in the amount of, any Letter of Credit.
"Debt" means, for any Person, any Indebtedness of such Person only of
the types described in clauses (i) through (vii) of the definition of such
term.
"Debt to Earnings Ratio" means, as of any time the same is to be
determined, the ratio of Total Funded Debt at such time to EBITDA for the four
fiscal quarters of the Company then ended.
"Default" means any event or condition the occurrence of which would,
with the
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passage of time or the giving of notice, or both, constitute an Event of
Default.
"Deutsche Xxxx" means the lawful currency of the Federal Republic of
Germany.
"Domestic Rate" is defined in Section 2.1(a) hereof.
"Domestic Rate Loan" means a Loan bearing interest at the rate
specified in Section 2.1(a) hereof.
"Domestic Subsidiary" shall mean any Subsidiary which is not a Foreign
Subsidiary.
"EBIT" means, for any period, Consolidated Net Income for such period
plus all amounts deducted in arriving at such Consolidated Net Income amount
for such period for Interest Expense and for foreign, federal, state and local
income tax expense.
"EBITDA" means, for any period, EBIT for such period plus all amounts
deducted in arriving at such EBIT in respect of all amounts properly charged
for depreciation of fixed assets and amortization of intangible assets during
such period on the books of the Company and its Subsidiaries.
"Election to Become a Borrower" means an Election to Become a Borrower
in the form of Exhibit M hereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Code) as the Company, (ii) partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Code) with the Company, and (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
the Company, any corporation described in clause (i) above or any partnership
or trade or business described in clause (ii) above.
"Eurocurrency Loan" means a Loan bearing interest at the rate
specified in Section 2.1(c) hereof.
"Eurocurrency Reserve Percentage" is defined in Section 2.1(c) hereof.
"Event of Default" means any of the events or circumstances specified
in Section 10.1 hereof.
"Existing Credit Agreement" means the Credit Agreement dated as of
July 14, 1994, among the Company and the banks referred to therein and the
Agent, as agent, as amended and supplemented.
"Facility Fee" means the fee payable by the Company to the Banks under
Section 5.1 hereof.
"Federal Funds Rate" shall mean the Federal funds rate described in
clause (x) of Section 2.1(a)(ii) hereof.
"Financial Letter of Credit" shall mean any standby Letter of Credit
which represents an irrevocable obligation to the beneficiary on the part of
the Agent (i) to repay money borrowed by or advanced to or for the account of
the account party or (ii) to make any payment on account of any indebtedness
undertaken by the account party, in the event the account party fails to
fulfill its obligation to the beneficiary and any other standby Letter of
Credit which is not a Performance Letter of Credit.
"Fixed Rate Loan" means Adjusted CD Rate Loans, Eurocurrency Loans and
Bid
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Loans.
"Foreign Subsidiary" shall mean each Subsidiary which is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or more than 80% of the sales, earnings or assets (determined on
a consolidated basis) of such Subsidiary are located or derived from operations
in territories of the United States of America and jurisdictions outside the
United States of America.
"French Franc" means the lawful currency of the Republic of France.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, applied by the Company and its Subsidiaries on a
basis consistent with the preparation of the Company's most recent financial
statements furnished to the Banks pursuant to Section 8.4 hereof.
"Guarantor" means the Company and in addition includes each Subsidiary
of the Company that executes and delivers to the Agent a Subsidiary Guarantee
Agreement in the form of Exhibit I hereto along with the accompanying closing
documents required by Sections 9.1 or 10.15 hereof, as applicable.
"Guaranty" by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any Indebtedness, dividend or other obligation (including, without limitation,
limited or full recourse obligations in connection with sales of receivables or
any other Property) of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, all obligations
incurred through an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any Property or assets constituting
security therefor, (ii) to advance or supply funds (x) for the purchase or
payment of such Indebtedness or obligation, or (y) to maintain working capital
or other balance sheet condition, or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation, or (iii)
to lease property or to purchase Securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purpose of all computations made under this Agreement, the
amount of a Guaranty in respect of any obligation shall be deemed to be equal
to the maximum aggregate amount of such obligation or, if the Guaranty is
limited to less than the full amount of such obligation, the maximum aggregate
potential liability under the terms of the Guaranty.
"Hazardous Material" means and includes (a) any asbestos, PCBs or
dioxins or insulation or other material composed of or containing asbestos,
PCBs or dioxins and (b) any petroleum product or derivative or other
hydrocarbon, and any hazardous or toxic waste, substance or material defined as
such in (or for purposes of) CERCLA, any so-called "Superfund" or "Superlien"
law, or any other applicable federal, state, local or other statute, law,
ordinance, code, rule, regulation, order or decree regulating or pertaining to
any such waste, substance or material, as now or at any time hereinafter in
effect.
"Indebtedness" means and includes, for any Person, all obligations of
such Person, without duplication, which are required by GAAP to be shown as
liabilities on its balance
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sheet, and in any event shall include all of the following whether or not so
shown as liabilities (i) obligations of such Person for borrowed money, (ii)
obligations of such Person representing the deferred purchase price of property
or services other than accounts payable arising in the ordinary course of
business on terms customary in the trade, (iii) obligations of such Person
evidenced by notes, acceptances, or other instruments of such Person or arising
out of letters of credit issued for such Person's account, (iv) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (v)
Capitalized Lease Obligations of such Person, (vi) obligations for which such
Person is obligated pursuant to a Guaranty and (vii) obligations arising out of
or relating to any interest rate or foreign currency swap, cap, collar, option,
forward or similar agreements entered into by such Person (it being understood
that for purposes of this Agreement the amount of Indebtedness attributable to
such agreement shall be an amount equal to the highest termination payment, if
any, that would be payable by such Person upon termination of such agreement
for any reason, on the date of determination).
"Interest Coverage Ratio" means, for any period of four consecutive
fiscal quarters of the Company ending with the most recently completed such
fiscal quarter, the ratio of EBIT to Interest Expense for such period.
"Interest Expense" means, for any period, the sum of all interest
charges minus the sum of all interest income of the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP. Computations of Interest Expense on a pro forma basis for
Indebtedness having a variable interest rate shall be calculated at the rate
for such Indebtedness in effect on the date of any determination.
"Interest Period" is defined in Section 4.1 hereof.
"Investments" is defined in Section 10.10 hereof.
"L/C Commitment" means $30,000,000.
"L/C Documents" means the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the Applications
and this Agreement.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lending Office" is defined in Section 12.4 hereof.
"Letter of Credit" is defined in Section 1.3(a) hereof.
"Leverage Ratio" means, as of any time the same is to be determined,
the ratio of Total Funded Debt of the Company and its Subsidiaries to Total
Capitalization of the Company and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP.
"Level I Status" shall mean, for any Margin Determination Date, that
as of the close of the quarterly test period with reference to which such
Margin Determination Date was set, the Pricing Leverage Ratio is less than or
equal to 25%.
"Level II Status" shall mean, for any Margin Determination Date, that
as of the close of the quarterly test period with reference to which such
Margin Determination Date was set, the Pricing Leverage Ratio is greater than
25% but less than or equal to 35%.
"Level III Status" shall mean, for any Margin Determination Date, that
as of the close
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of the quarterly test period with reference to which such Margin Determination
Date was set, the Pricing Leverage Ratio is greater than 35% but less than or
equal to 45%.
"Level IV Status" shall mean, for any Margin Determination Date, that
as of the close of the quarterly test period with reference to which such
Margin Determination Date was set, the Pricing Leverage Ratio is greater than
45% but less than or equal to 55%.
"Level V Status" shall mean, for any Margin Determination Date, that
as of the close of the quarterly test period with reference to which such
Margin Determination Date was set, the Pricing Leverage Ratio is greater than
55%.
"LIBOR" is defined in Section 2.1(c) hereof.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, including, but not
limited to, the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale, security agreement or trust receipt, or a lease,
consignment or bailment for security purposes. The term "Lien" shall also
include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this definition, a Person
shall be deemed to be the owner of any Property which it has acquired or holds
subject to a conditional sale agreement, Capitalized Lease or other arrangement
pursuant to which title to the Property has been retained by or vested in some
other Person for security purposes, and such retention of title shall
constitute a "Lien."
"Lira" means the lawful currency of the Republic of Italy.
"Loan" means and includes Committed Loans and Bid Loans, and each of
them singly, and the term "type" of Loan refers to its status as a Committed
Loan or Bid Loan or, if a Committed Loan, to its status as a Domestic Rate
Loan, Adjusted CD Rate Loan or Eurocurrency Loan.
"Loan Documents" means this Agreement, the Notes, the Applications,
the Letters of Credit, the Election to Become a Borrower, when delivered, and
each Subsidiary Guarantee Agreement delivered to the Agent pursuant to Sections
9.1 or 10.15 hereof, as applicable.
"Margin Determination Date" is defined in Section 2.1(d) hereof.
"Material Plan" is defined in Section 11.1(f) hereof.
"Note" means and includes the Committed Loan Notes and the Bid Notes
and each individually, unless the context in which such term is used shall
otherwise require.
"Obligations" means all fees payable hereunder, all obligations of the
Borrowers to pay principal or interest on Loans and Reimbursement Obligations,
and all other payment obligations of the Borrowers arising under or in relation
to any Loan Document.
"Offer" is defined in Section 3.2(c) hereof.
"Original Dollar Amount" means (i) the amount of any Obligation, if
such Obligation is denominated in U.S. Dollars and, (ii) in relation to any
Obligation denominated in an Agreement Currency, the U.S. Dollar Equivalent of
such Obligation on the day such amount is being computed.
"Overnight Foreign Currency Rate" shall mean for any amount payable in
a currency other than U.S. Dollars, the rate of interest per annum as
determined by the Agent (rounded upwards, if necessary, to the nearest whole
multiple of one-sixteenth of one percent (1/16 of
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37
1%)) at which overnight or weekend deposits of the appropriate currency for
delivery in immediately available and freely transferable funds would be
offered by the Agent to major banks in the interbank market upon request of
such major banks for the applicable period as determined above and in an amount
comparable to the unpaid principal amount of the related Loan or Reimbursement
Obligation (or, if the Agent is not placing deposits in such currency in the
interbank market, then the Agent's cost of funds in such currency for such
period).
"Participating Bank" is defined in Section 1.3(f) hereof.
"PATC" is defined in Section 10.10(n) hereof.
"PBGC" is defined in Section 10.17 hereof.
"Percentage" means, for each Bank, the percentage of the Commitments
represented by such Bank's Commitment or, if the Commitments have been
terminated, the percentage held by such Bank (including through participation
interests in Reimbursement Obligations) of the aggregate principal amount of
all outstanding Obligations.
"Performance Letter of Credit" shall mean any standby Letter of Credit
which represents an irrevocable obligation to the beneficiary on the part of
the Agent to make payment on account of any default by the account party in the
performance of a nonfinancial or commercial obligation.
"Permitted Company Redemption" shall mean the redemption by the
Company after the date hereof of not more than 30% of the issued and
outstanding common stock which constitutes Voting Stock of the Company on the
date hereof on a fully diluted basis provided the amount expended on and after
the date hereof for such redemptions aggregates (on a cumulative basis) not
more than $100,000,000.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Plan" means, with respect to the Company and each Subsidiary at any
time, an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code and
either (i) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group of which the Company or such Subsidiary is a
part, (ii) is maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group of which the Company or such Subsidiary
is a part is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions, or (iii) under which a
member of the Controlled Group of which the Company or such Subsidiary is a
part has any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years or by reason of being deemed a contribution
sponsor under Section 4069 of ERISA.
"Pounds Sterling" means the lawful currency of the United Kingdom.
"Pricing Leverage Ratio" means, as of any time the same is to be
determined, the ratio of Total Funded Debt less Subordinated Debt to Total
Capitalization of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Property" means any interest in any kind of property or asset,
whether real, personal
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or mixed, or tangible or intangible, whether now owned or hereafter acquired.
"Refunding Borrowing" is defined in Section 2.3(d) hereof.
"Reimbursement Obligation" is defined in Section 1.3(e) hereof.
"Required Banks" means, as of the date of determination thereof, Banks
holding at least 51% of the Percentages.
"Restricted Payment" is defined in Section 10.13 hereof.
"Restricted Subsidiary" means any Subsidiary which the Company has
irrevocably designated in writing to the Agent, which shall promptly deliver
copies of such designation to the Banks, as being a "restricted subsidiary" for
purposes of this Agreement and any subsidiaries of any such Subsidiary.
"Revolving Commitments" is defined in Section 1.1 hereof.
"Revolving Loans" means and includes Committed Revolving Loans and Bid
Loans.
"Security" has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
"Set-Off" is defined in Section 15.7 hereof.
"Shareholder's Equity" means, as of any date the same is to be
determined, the total shareholder's equity (including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock, but
excluding minority interests in Subsidiaries) which would appear on a balance
sheet of the Company and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles. Notwithstanding
anything herein to the contrary, for the purposes of determining Shareholder's
Equity, no value shall be attributed to any Restricted Subsidiary or any
Investment therein.
"Subordinated Debt" means the Convertible Subordinated Notes and all
other unsecured Debt of the Company that is expressly subordinated and made
junior to the payment and performance in full of the obligations of the Company
hereunder to the Banks and Agent, and evidenced by a subordination agreement or
other written instrument approved by the Agent and the Required Banks in their
sole discretion, pursuant to documentation, containing interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in each case in form and
substance satisfactory to the Agent and Required Banks in their discretion.
"Subsidiary Guarantee Agreement" means a letter to the Agent in the
form of Exhibit I hereto executed by a Subsidiary whereby it acknowledges it is
party hereto as a Guarantor.
"Subsidiary Borrower" means any one Wholly-owned Subsidiary of the
Company organized and existing under the laws of Ireland.
The term "subsidiary" shall mean, as to any particular parent Person,
any Person of which more than 50% (by number of votes) of the Voting Stock
shall be owned by such parent Person and/or one or more Persons which are
themselves subsidiaries of such parent Person. The term "Subsidiary" shall
mean a subsidiary of the Company and shall include any subsidiaries of any such
Subsidiary.
"Tangible Net Worth" means, as of any time the same is to be
determined, the Shareholders' Equity less the sum of (i) the aggregate book
value of all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill, patents,
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39
trademarks, trade names, copyrights, franchises and deferred charges
(including, without limitation, unamortized debt discount and expense,
organization costs and deferred research and development expense) and similar
assets and (ii) the write-up of assets above cost.
"Xxxxxx" shall mean Xxxxxxx Xxxxxx, Jr., an individual of Heathrow,
Florida.
"Telerate Service" means the Dow Xxxxx Telerate Service.
"Term Commitments" is defined in Section 1.2 hereof.
"Termination Date" means September 19, 2001 or such earlier date on
which the Commitments are terminated in whole pursuant to Sections 4.6, 4.7,
11.2 or 11.3 hereof.
"Titan Tire" means Titan Tire, Inc., a corporation organized under the
laws of Illinois.
"Titan Tire Indebtedness" means indebtedness of Titan Tire in the
aggregate principal amount of $11,500,000 owing to The CIT Group/Business
Credit Inc. outstanding on the date hereof.
"Total Capitalization" means the sum of Total Funded Debt and Tangible
Net Worth.
"Total Funded Debt" means, without duplication on a consolidated
basis, obligations of the Company and its Subsidiaries (excluding Restricted
Subsidiaries) for (i) borrowed money and (ii) arising out of letters of credit,
issued for the account of the Company or such Subsidiary (provided that up to
$10,000,000 of such obligations attributable to the undrawn portion of such
letters of credit shall not be included in calculating Total Funded Debt), less
the sum of cash and marketable securities of the Company in excess of
$5,000,000.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the Controlled Group to
the PBGC or such Plan under Title IV of ERISA.
"Unrestricted Subsidiary" means any Subsidiary of the Company which is
not a Restricted Subsidiary.
"U.S. Dollar Equivalent" shall mean the amount of United States
Dollars which would be realized by converting a foreign currency into United
States Dollars in the spot market at the exchange rate quoted by the Agent at
9:00 a.m. Chicago time on the date of determination to prime banks in the
London interbank foreign exchange market for the purchase of United States
Dollars with such foreign currency.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Voting Stock" shall mean Securities of any class or classes the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Indebtedness shall be
owned by the Company and/or one or more of its Wholly-owned Subsidiaries.
Section 7.2. Interpretation. The foregoing definitions shall be
equally applicable to both the singular and plural forms of the terms defined.
All references to times of day
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herein shall be references to Chicago, Illinois time unless otherwise
specifically provided. 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, the same shall be done in accordance with GAAP consistently applied,
except where such principles are inconsistent with the specific provisions of
this Agreement.
Section 7.3. Restricted Subsidiaries. Notwithstanding anything
herein to the contrary, the term "Subsidiaries" as used in the definitions of
the terms "Consolidated Net Income", "Debt to Earnings Ratio", "EBIT",
"EBITDA", "Interest Expense", "Leverage Ratio", "Pricing Leverage Ratio",
"Shareholder's Equity", "Tangible Net Worth" and "Total Funded Debt" shall
exclude Restricted Subsidiaries.
SECTION 8. REPRESENTATIONS AND WARRANTIES.
The Borrowers hereby represent and warrant to each Bank as to
themselves and, where the following representations and warranties apply to
Subsidiaries, as to each Subsidiary, as follows:
Section 8.1. Corporate Organization and Authority. Each Borrower
is duly organized and existing in good standing under the laws of the
jurisdiction of its incorporation; has all necessary corporate power to carry
on its present business; and is duly licensed or qualified and in good standing
in each jurisdiction in which the nature of the business transacted by it or
the nature of the Property owned or leased by it makes such licensing or
qualification necessary and in which the failure to be so licensed or qualified
would materially and adversely affect its financial condition, business,
operations, Properties, condition (financial or otherwise) or prospects.
Section 8.2. Subsidiaries. Schedule 8.2 (as updated from time to
time pursuant to Sections 10.5(a)(viii) and 10.15) hereto identifies each
Subsidiary, the jurisdiction of its incorporation or organization, as the case
may be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by the Company and the
Subsidiaries and, if such percentage is not 100% (excluding directors'
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding. Each Subsidiary is duly incorporated and
existing in good standing as a corporation under the laws of the jurisdiction
of its incorporation, has all necessary corporate power to carry on its present
business, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business transacted by it or the nature
of the Property owned or leased by it makes such licensing or qualification
necessary and in which the failure to be so licensed or qualified would have a
material adverse effect on the financial condition, or the Property, business
or operations, of such Subsidiary. All of the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and outstanding and fully
paid and nonassessable. As of the date of this Agreement, the Company has not
designated any Subsidiary as a Restricted Subsidiary. All such shares owned by
the Company are owned beneficially, and of record, free of any Lien.
Section 8.3. Corporate Authority and Validity of Obligations.
Each Borrower has full right and authority to enter into this Agreement and the
other Loan Documents to which
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it is a party, to make the borrowings herein provided for, to issue its Notes
in evidence thereof, to apply for the issuance of the Letters of Credit, and to
perform all of its obligations under the Loan Documents to which it is a party.
Each Guarantor has full right and authority to enter into its Subsidiary
Guaranty Agreement and to perform all of its obligations thereunder. Each Loan
Document to which it is a party has been duly authorized, executed and
delivered by each Borrower and each Guarantor and constitutes valid and binding
obligations of each Borrower and each Guarantor enforceable in accordance with
its terms. No Loan Document, nor the performance or observance by either
Borrower or any Guarantor of any of the matters or things therein provided for,
contravenes any provision of law or any charter or by-law provision of either
Borrower or any Guarantor or (individually or in the aggregate) any material
Contractual Obligation of or affecting either Borrower or any Guarantor or any
of their respective Properties or results in or requires the creation or
imposition of any Lien on any of the Properties or revenues of either Borrower
or any Guarantor.
Section 8.4. Financial Statements. The audit report of the
Company for the year ended December 31, 1995, including a consolidated balance
sheet as of December 31, 1995 and a consolidated statement of profit and loss
and consolidated statement of cash flows for the 12 months ended said date,
certified by Price Waterhouse, and the interim consolidated and consolidating
balance sheets of the Company and the Subsidiaries as at March 31, 1996 and
June 30, 1996 and consolidated and consolidating statements of profit and loss
for the respective three and six months then ended prepared by the Company and
heretofore furnished to the Banks, all as heretofore presented to the Banks,
fairly present the financial condition of the Company and the Subsidiaries as
at said dates and the results of operations for the periods covered thereby.
As of the date hereof, the Company and the Subsidiaries have no known
contingent liabilities which are material to the Company or any Subsidiary
other than as indicated on the financial statements accompanying said audit
report.
Section 8.5. Material Adverse Change. Since June 30, 1996, there
have been no material adverse changes in the business, operations, Properties,
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole.
Section 8.6. No Litigation; No Labor Controversies. (a) There is
no litigation or governmental proceeding pending, or to the knowledge of the
Borrowers or any Guarantor threatened, against the Borrowers or any Subsidiary
which, if adversely determined, could (individually or in the aggregate)
materially adversely affect the financial, or other condition, operations,
business, Property or prospects of the Company and its Subsidiaries taken as a
whole.
(b) There are no labor controversies pending or, to the knowledge
of the Borrowers or any Guarantor threatened, against the Company or any
Subsidiary which could (insofar as the Company may reasonably foresee)
materially adversely affect the business, operations, Property, financial or
other condition or prospects of the Company and its Subsidiaries taken as a
whole.
Section 8.7. Taxes. The Company and its Subsidiaries have filed
all United States federal tax returns, and all other tax returns, required to
be filed and have paid all taxes due pursuant to such returns or pursuant to
any assessment received by the Company or any
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Subsidiary, except such taxes, if any, as are being contested in good faith and
for which adequate reserves have been provided. No notices of tax liens have
been filed and no claims are being asserted concerning any such taxes, which
liens or claims are material to the financial condition of the Company and its
Subsidiaries on a consolidated basis taken as a whole. The charges, accruals
and reserves on the books of the Company and its Subsidiaries for any taxes or
other governmental charges are adequate.
Section 8.8. Approvals. No authorization, consent, license,
exemption, filing or registration with any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Company or any Subsidiary or from any other Person, is necessary to the
valid execution, delivery or performance by the Company or any Subsidiary of
any Loan Document to which it is a party, except for such thereof as have been
obtained and are in full force and effect.
Section 8.9. ERISA. The Company and its ERISA Affiliates are in
compliance in all material respects with the Code and ERISA to the extent
applicable to them and have received no notice to the contrary from the
Internal Revenue Service, the Department of Labor or the Pension Benefit
Guaranty Corporation ("PBGC"); as of December 31, 1995, the liability of the
Company and its ERISA Affiliates to the PBGC in respect of unfunded employee
benefit plan liabilities would not have been in excess of $1,600,000 if all
employee benefit plans covering any officers or employees of the Company and
its ERISA Affiliates had been terminated as of such date. Neither the Company
nor any ERISA Affiliate has (i) failed to make a required contribution or
payment of a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
or (ii) made a complete or partial withdrawal under Sections 4203 or 4205 of
ERISA from a multiemployer plan. Neither the Company nor any ERISA Affiliate
maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment (other than as required under Section 601 of ERISA)
which could result in a material obligation to pay money, except for such plans
as are listed in Exhibit J hereto.
Section 8.10. Government Regulation. Neither Borrower nor any
Subsidiary is an "investment company" nor a company "controlled" by an
"investment company organized or otherwise created under the laws of the United
States or of a State" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 8.11. Margin Stock. Neither the Company nor any Subsidiary
is engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock ("margin stock" to have the same meaning herein as in
Regulation U of the Board of Governors of the Federal Reserve System). Neither
Borrower will use the proceeds of any Loan or Letter of Credit in a manner that
violates any provision of Regulation U or X of the Board of Governors of the
Federal Reserve System.
Section 8.12. Licenses and Authorizations; Compliance with Laws.
(a) The Company and each Subsidiary has all necessary licenses, permits and
governmental authorizations to own and operate its Properties and to carry on
its business as currently
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conducted and contemplated.
(b) The Company and each Subsidiary is in compliance in all
material respects with all applicable state and federal environmental, health
and safety statutes and regulations, including, without limitation, regulations
promulgated under the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section Section 6901 et seq. and, to the best knowledge of the Borrowers, have
not acquired, incurred or assumed, directly or indirectly, any material
contingent liability in connection with the release of any toxic or hazardous
waste or substance into the environment. Neither the Company nor any
Subsidiary is the subject of any evaluation under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Specified Amendments and Reauthorization Act of 1986, 42 U.S.C. Section
Section 9601 et seq ("CERCLA").
Section 8.13. Ownership of Property; Liens. As of the date hereof,
the Company and the Subsidiaries have good and defensible title to their
respective assets as reflected on the consolidated balance sheet of the Company
and the Subsidiaries dated as of June 30, 1996 (except for sales by the
Borrower and such Subsidiaries in the ordinary course of their respective
businesses), subject to no Liens or encumbrances other than such thereof as are
permitted by Section 10.12 hereof.
Section 8.14. No Burdensome Restrictions; Compliance with
Agreements. Neither the Company nor any Subsidiary is (a) party or subject to
any law, regulation, rule or order, or any Contractual Obligation that
(individually or in the aggregate) materially adversely affects, or (insofar as
the Borrowers may reasonably foresee) may so affect, the business, operations,
Property, condition (financial or otherwise) or prospects of the Company and
the Subsidiaries taken as a whole or (b) in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement to which it is a party, which default materially
adversely affects, or (insofar as the Borrowers may reasonably foresee) may so
affect, the business, operations, Property, financial or other condition, or
prospects of the Company and the Subsidiaries taken as a whole.
Section 8.15. Full Disclosure. All information heretofore
furnished by the Borrowers to the Agent or any Bank for purposes of or in
connection with the Loan Documents or any transaction contemplated thereby is,
and all such information hereafter furnished by the Borrowers to the Agent or
any Bank will be, true and accurate in all material respects and not misleading
on the date as of which such information is stated or certified.
SECTION 9. CONDITIONS PRECEDENT.
The obligation of each Bank to make any Loan, or of the Agent
to issue, extend the expiration date (including by not giving notice of
non-renewal) of or increase the amount of any Letter of Credit, shall be
subject to the following conditions precedent:
Section 9.1. Initial Borrowing. Prior to the initial Credit
Event:
(a) The Agent shall have received for each Bank the
favorable written opinion of Schmiedeskamp, Robertson, Neu & Xxxxxxxx,
counsel to the Company and the Guarantors, in substantially the form
of Exhibit K hereto, and otherwise in form and substance satisfactory
to the Required Banks;
(b) The Agent shall have received for each Bank (i)
certified copies of
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resolutions of the Board of Directors of the Company and each
Guarantor authorizing the execution, delivery and performance of, and
indicating the authorized signers of, the Loan Documents to which it
is a party and all other documents relating thereto and the specimen
signatures of such signers, (ii) copies of the Articles of
Incorporation and by-laws for the Company and each Guarantor certified
by its Secretary or other appropriate officer, together with a
certificate of good standing certified by the appropriate governmental
officer in the jurisdiction of its incorporation and (iii) the duly
executed and delivered Loan Documents (other than Loan Documents which
are not required to be delivered until the Subsidiary Borrower elects
to become a Borrower hereunder);
(c) The Agent shall have received a Subsidiary Guaranty
Agreement from each Subsidiary (except as set forth in Section 10.15
hereof);
(d) The Agent shall have received from the Company a list
of its Authorized Representatives;
(e) Evidence satisfactory to the Agent that the proceeds
of such initial Credit Event shall be used to repay all borrowings
other than "Bid Loans" (as such term is defined in the Existing Credit
Agreement) outstanding under the Existing Credit Agreement. All "Bid
Loans" outstanding under the Existing Credit Agreement shall, upon the
initial Credit Event, for all purposes be deemed to be Bid Loans
outstanding hereunder. Upon such Credit Event, the Company and Banks
agree that the Existing Credit Agreement has been terminated so that
no additional borrowings, or rollovers of borrowings outstanding
thereunder, will be permitted (the Borrowers hereby irrevocably
authorizing and directing the Banks to disburse the proceeds of the
first Borrowing hereunder to repay all borrowings outstanding
thereunder); and
(f) Certificates, signed by Authorized Representatives of
the Company, stating that on the date hereof no Default or Event of
Default has occurred and is continuing.
Section 9.2. All Loans. As of the time of each Credit Event
hereunder (including the initial Credit Event):
(a) The Agent shall have received (i) in the case of any
Loan, the Notes of the Borrowers for each Bank required to be
delivered pursuant to Section 4.5 hereof and the notice required by
Section 2.3 or 3.5 hereof, as applicable, (ii) in the case of the
issuance of any Letter of Credit, a duly completed Application for
such Letter of Credit and, (iii) in the case of an extension or
increase in the amount of a Letter of Credit, a written request
therefor, in a form acceptable to the Agent;
(b) Each of the representations and warranties of the
applicable Borrowers set forth in Section 8 (other than Section 8.5)
hereof shall be true and correct as of said time, except to the extent
that any such representation or warranty relates solely to an earlier
date;
(c) The Borrowers shall be in full compliance with all of
the terms and conditions hereof, and no Default or Event of Default
shall have occurred and be continuing or would occur as a result of
making such Credit Event;
(d) After giving effect to the Credit Event, the
aggregate Original Dollar
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Amount of (i) all Revolving Loans (whether Committed Revolving Loans
or Bid Loans) and L/C Obligations outstanding hereunder shall not
exceed the Revolving Commitments, (ii) all Bid Loans outstanding
hereunder shall not exceed the lesser of the unused Revolving
Commitments or the Bid Loan Limit, (iii) all Committed Term Loans
outstanding hereunder shall not exceed the Term Commitments and (iv)
all L/C Obligations shall not exceed the L/C Commitment;
(e) Such Credit Event shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to any Bank (including, without
limitation, Regulation U of the Board of Governors of the Federal
Reserve System) as then in effect;
Each request for a Borrowing hereunder and each request for the issuance of,
increase in the amount of, or extension of the expiration date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrowers on
the date of such Borrowing as to the facts specified in paragraphs (b) and (c)
of this Section 9.2.
Section 9.3. Additional Conditions to Loans other than Refunding
Borrowings. In addition to the conditions set forth in Sections 9.1 and 9.2
hereof, as of the time of each Borrowing other than a Refunding Borrowing, the
representations and warranties set forth in Section 8.5 hereof shall be true as
of said time (except that the date referenced therein shall be deemed a
reference to the date as of which the most recent financial statements
furnished to the Banks pursuant to Section 10.5(a)(i) or 10.5(a)(iii) were
prepared), and the request for such Borrowing, as referred to in Section
9.2(a), shall be and constitute a representation and warranty as to such
matters specified in Section 8.5 hereof (after giving effect to such
notification in the date referenced therein).
Section 9.4. Replacement of Bank. In the event the condition
precedent to extending credit hereunder set forth in Section 9.2(e) hereof has
not been satisfied by reason of circumstances which do not similarly affect the
Required Banks, then the Borrowers may request other Banks hereunder not
affected by such circumstances to assume in full the Commitment then in effect
of each Bank affected by such circumstances (such Bank in such case being
herein referred to as the "Replaceable Bank"), and to purchase the Notes issued
to the Replaceable Bank and its participation in Letters of Credit at a price
equal to the outstanding principal amount of such Notes and the Replaceable
Bank's share of unpaid Reimbursement Obligations in respect of the Letters of
Credit plus any accrued and unpaid interest on such Notes and Reimbursement
Obligations plus accrued and unpaid facility and letter of credit fees owed to
the Replaceable Bank, and if any Bank or Banks in their sole discretion agree
so to assume in full the Commitment of the Replaceable Bank (each an "Assuming
Bank"), and after payment by the Borrowers to the Replaceable Bank of all
amounts due under the Loan Documents to such Bank (including any amount
specified as due in a certificate submitted under Section 4.8 or 12.3 hereof)
not so paid by the Assuming Bank, then such assumption shall take place in the
manner set forth in subsection (b) below. In the event more than one Bank
agrees to so assume the Commitment of the Replaceable Bank, such Assuming Banks
shall effect such assumption ratably in accordance with their existing
Commitments (but in any event rounded, to the extent possible, to the nearest
$1,000,000). In the event no Bank or Banks agrees to assume in full the
Commitment of the
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Replaceable Bank, then the Borrowers may nominate one or more
banks not then party to this Agreement so to assume in full the Commitment of
the Replaceable Bank, and if such nominated bank or banks are acceptable to the
Required Banks (excluding the Replaceable Bank), such assumption shall take
place in the manner set forth in subsection (b) below and each such bank or
banks shall become a Bank hereunder (each a "New Bank") and the Replaceable
Bank shall no longer be a party hereto or have any rights hereunder, except as
set forth in Section 15.15 hereof.
(b) In the event a Replaceable Bank's Commitment is to be assumed
in full by an Assuming Bank or Banks or a New Bank, then such assumption shall
take place on a date acceptable to the Borrowers, the Replaceable Bank and the
Assuming Bank or New Bank, as the case may be, and such assumption shall take
place through the payment of all amounts due under the Loan Documents to the
Replaceable Bank and the execution of such instruments and documents as shall,
in the reasonable opinion of the Agent, be reasonably necessary or appropriate
for the Assuming Bank or New Bank to assume in full the Commitment of the
Replaceable Bank (including, without limitation, the issuance of new Notes and
the execution of an amendment hereto making any New Bank a party hereto).
In the event no Assuming Bank or New Bank agrees to assume in full the
Commitment of the Replaceable Bank, then such Replaceable Bank shall remain a
party hereto and its Commitment shall remain in effect on the terms and
conditions set forth in this Agreement (including the conditions precedent set
forth in Section 9.2 hereof).
Section 9.5. Initial Credit Event of Subsidiary Borrower. (a)
Prior to the initial Credit Event relating to Subsidiary Borrower:
(i) The Subsidiary Borrower shall have executed and
delivered to the Agent, with sufficient copies for each Bank, an
Election to Become a Borrower;
(ii) The Subsidiary Borrower shall have delivered, or
caused to be delivered, documentation similar to that described in
Section 9.1(a) and (b) hereof in form and substance satisfactory to
the Banks;
(iii) As of the time of the initial Credit Event relating
to the Subsidiary Borrower, the Subsidiary Borrower shall be deemed to
represent and warrant that the representations and warranties set
forth in Section 8 hereof are true and correct, including the
representation and warranty that since June 30, 1996, there have been
no material adverse changes in its business, operations, Properties,
condition (financial or otherwise) or prospects.
SECTION 10. COVENANTS.
The Borrowers agree that, so long as any Note or L/C
Obligation is outstanding hereunder or any credit is available to or in use by
a Borrower hereunder, except to the extent compliance in any case or cases is
waived in writing by the Required Banks:
Section 10.1. Maintenance of Business. (a) Each Borrower will
preserve and keep in force and effect its corporate existence and all material
leases, licenses and permits necessary to the proper conduct of its business,
subject to provisions of Section 10.14 hereof. (b) The Company will cause each
Subsidiary to preserve and keep in force and effect, its corporate existence
and all material leases, licenses and permits necessary to the proper conduct
of its business, subject to provisions of Section 10.14 hereof.
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Section 10.2. Maintenance of Property. The Company will maintain,
preserve and keep its plant, Properties and equipment in reasonable repair,
working order and condition in all material respects (except for equipment or
other property no longer used or useful in the conduct of its business or the
business of the Subsidiaries) and will from time to time make all needful and
proper repairs, renewals, replacements, additions and betterments thereto so
that at all times the overall efficiency thereof shall be preserved and
maintained and the Company will cause each Subsidiary to do so in respect of
its plant, Properties and equipment.
Section 10.3. Taxes. The Company will duly pay and discharge, and
will cause each Subsidiary to duly pay and discharge, all taxes, rates,
assessments, fees and governmental charges upon or against the Company or
Subsidiary or against their respective properties, in each case before the same
become delinquent and before penalties accrue thereon, unless and to the extent
that the same are being contested in good faith and by appropriate proceedings
which prevent enforcement of the matter under contest.
Section 10.4. Insurance. The Company will insure and keep insured,
and will cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable property owned by it which is of
a character usually insured by companies similarly situated and in amounts
usually insured by companies similarly situated and operating like properties;
and the Company will insure, and will cause each Subsidiary to insure, such
other hazards and risks (including employers' and public and product liability
risks) with good and responsible insurance companies as and to the extent
usually insured by companies similarly situated and conducting similar
businesses. The Company will upon request of the Agent furnish a certificate
setting forth in summary form the nature and extent of the insurance maintained
pursuant to this Section 10.4.
Section 10.5. Financial Reports and Rights of Inspection. (a) The
Company will maintain, and will cause each Subsidiary to develop and maintain,
a system of accounting in accordance with GAAP and will furnish to the Agent
and each Bank such information respecting the business, financial condition,
assets and liabilities (whether absolute or contingent) of the Company and the
Subsidiaries as the Agent or such Bank may reasonably request; and without any
request, will furnish to the Agent (which shall promptly provide copies to the
Banks):
(i) within 50 days after the end of each of the first
three quarterly fiscal periods of the Company, a copy of the Company's
Form 10-Q Report filed with the SEC;
(ii) within 50 days after the end of each of the first
three quarterly fiscal periods of the Company, the consolidated
balance sheet of the Company and the Subsidiaries (other than the
Restricted Subsidiaries and in any event attributing no value to the
Restricted Subsidiaries and any Investments therein) as of the end of
such quarterly period and a related consolidated income statement and
statement of cash flows of the Company and the Subsidiaries (other
than the Restricted Subsidiaries and in any event excluding any income
of the Restricted Subsidiaries except to the extent distributed in
cash actually paid to the Company) for such quarterly fiscal period
and for the elapsed portion of the fiscal year ended with the last day
of such quarterly
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period, all of which shall be certified by the Treasurer of the
Company as being prepared, to the best of his knowledge, in accordance
with GAAP consistently applied subject to normal year-end adjustments
and provided that such statements may omit footnote disclosures
required by GAAP;
(iii) within 100 days after the end of each fiscal year of
the Company, a copy of the Company's Form 10-K Report filed with the
SEC, including a copy of the annual audit report of the Company and
the Subsidiaries for such year with accompanying financial statements,
prepared by the Company and certified by Price Waterhouse or any other
independent public accountants of recognized standing selected by the
Company and satisfactory to the Required Banks, in accordance with
GAAP;
(iv) within 100 days after the end of each fiscal year of
the Company, the consolidating schedules presenting a consolidated
balance sheet of the Company and the Subsidiaries (other than the
Restricted Subsidiaries and in any event attributing no value to the
Restricted Subsidiaries and any Investments therein) as of the end of
such fiscal year and the related consolidated income statement and
statement of cash flows of the Company (other than the Restricted
Subsidiaries and in any event excluding any income of the Restricted
Subsidiaries except to the extent distributed in cash actually paid to
the Company) prepared by and accompanied by a certificate from the
same public accountants which prepared the audit report for the
Company for such year, to the effect that the deletion of the
Restricted Subsidiaries from the audited statement for such year was
in substantial conformity with GAAP;
(v) as soon as available, and in any event no less than
30 days following the commencement of each fiscal year of the Company,
a copy of a business and financial plan for the Company and its
Subsidiaries (other than the Restricted Subsidiaries) for such fiscal
year, month by month, on a consolidated basis (other than the
Restricted Subsidiaries and in any event (x) attributing no value to
the Restricted Subsidiaries or any Investment therein and (y)
excluding any income of the Restricted Subsidiaries except to the
extent distributed in cash actually paid to the Company), together
with such supporting schedules and details as the Required Banks may
reasonably request but in any event including projected balance
sheets, projected cash flow (including details of cash disbursements)
and a projected income statement in each case for each of the
following 12 months;
(vi) not later than 10 days after the receipt thereof, a
copy of any final management letters on internal accounting controls
for the Company or any Subsidiary prepared by its independent public
accountants;
(vii) promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports which the
Company sends to its shareholders, and copies of all other regular,
periodic and special reports and all registration statements which the
Company files with the SEC or any successor thereto, or with any
national securities exchange; and
(viii) an updated Schedule 8.2 along with the financial
statements delivered under subsection (ii) or (iv) above, as
applicable, for any calendar quarter during
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which there is a change in any of the facts specified in Schedule 8.2
hereto, as then most recently updated.
(b) Each Report required by Section 10.5(a)(ii) or (iv) shall be
accompanied by a certificate in the form attached hereto as Exhibit H signed on
behalf of the Company by its Chairman, President or Treasurer setting forth
compliance in reasonable detail with Sections 10.6, 10.7, 10.8, 10.9, 10.10 and
10.13 hereof and stating that no Default or Event of Default exists hereunder
as of the date of such certificate, or if such Default or Event of Default
exists the nature thereof shall be specified. Each audit report called for by
Section 10.5(a)(iii) hereof shall be accompanied by a statement of the
accountants certifying such statements to the effect that in the course of
their audit (conducted in accordance with generally accepted auditing
standards) they have obtained no knowledge that a Default or Event of Default
has occurred hereunder or, if they have obtained any such knowledge, describing
the same. In the event the Company is no longer required to file Form 10-Q and
10-K Reports with the SEC, the Company need not furnish such Reports to the
Agent, but shall nonetheless provide the Agent the financial statements
previously contained in such Reports by the times required by subsections
(a)(i) and (iii) above.
(c) Each projection furnished to the Bank pursuant to Section
10.5(a)(v) shall be accompanied by a written certificate in the form attached
hereto as Exhibit L signed on behalf of the Company by its Controller,
Treasurer or President to the effect that (i) such projection has been prepared
on a basis consistent with the Company's historical financial statements and
records, together with the assumptions set forth in such projection, and (ii)
such projection reflects the reasonable analysis of the Company's management
and does not reflect results or financial conditions which are more favorable
in any material respect than such management's reasonable expectations as to
the matters set forth therein.
(d) The Borrowers will promptly (and in any event within three
Business Days after knowledge thereof shall have come to the attention of any
responsible officer of the Borrower) give written notice to the Agent and each
Bank:
(i) of the occurrence of any Change of Control Event,
(ii) of any Default or Event of Default,
(iii) of any threatened or pending litigation, governmental
proceeding or labor dispute against the Company or any Subsidiary
which if adversely determined would materially adversely affect the
business, Properties, condition (financial or otherwise) or prospects
of the Company or any Subsidiary;
(iv) of any material development in any such litigation,
proceeding or dispute (whether or not previously disclosed to the
Banks pursuant to the terms hereof) which in any case has a reasonable
possibility of such an effect;
(v) of any default in the payment of rent due under any
lease necessary to the proper conduct of the business of the Company
or any Subsidiary or any action to terminate any such lease or of the
receipt of any notice of any alleged breach of the terms of any such
lease; and
(vi) of the receipt of any notice of any alleged breach of
the terms of, or default under, any Contractual Obligation and of any
notice of alleged material noncompliance with any laws or regulations
of the type described in Section 8.12
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hereof.
(e) Upon reasonable notice from the Agent or any Bank, each
Borrower will permit the Agent, such Bank and their representatives during
normal business hours to visit and inspect, under such Borrower's guidance, any
of the properties of such Borrower or any Subsidiary, to examine all of their
books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers, employees and independent public
accountants (and by this provision each Borrower authorizes such accountants to
discuss with the Banks (and such Persons as any Bank may designate) the
finances and affairs of such Borrower and the Subsidiaries) all at such
reasonable times and as often as may be reasonably requested.
Section 10.6. Leverage Ratio. The Company will at all times
maintain its Leverage Ratio at not more than 65%, provided that if and so long
as the aggregate amount of Convertible Subordinated Notes outstanding is less
than $10,000,000, the Company will maintain its Leverage Ratio at not more than
60%.
Section 10.7. Minimum Tangible Net Worth. The Company will at all
times maintain its Tangible Net Worth at not less than the Required Amount.
For purposes of this Section, the term "Required Amount" shall mean the Base
Amount plus (i) 50% of Consolidated Net Income for each fiscal year (if
positive for such year) commencing with the fiscal year beginning on January 1,
1997 and (ii) 75% of (a) cash proceeds from a public offering of the common
capital stock or preferred stock of the Company after the date of this
Agreement (such proceeds to be net of seller's and underwriting discounts,
accounting, legal and printing fees and other costs directly incurred and
payable as a result of such offering and also net of repurchases) and (b) the
principal amount of any convertible Subordinated Debt which is converted into
common or preferred shares of the Company. For purposes of this Section, the
term "Base Amount" shall mean as of any time, the greater of (i) $100,000,000
or (ii) the difference between $150,000,000 and the aggregate amount
theretofore expended for Permitted Company Redemptions.
Section 10.8. Interest Coverage Ratio. The Company will as of the
end of each calendar quarter maintain an Interest Coverage Ratio for the four
calendar quarters then ended of not less than 2.0 to 1.0.
Section 10.9. Debt to Earnings Ratio. The Company will as of the
end of each calendar quarter maintain the Debt to Earnings Ratio at not more
than 3.5 to 1.0.
Section 10.10. Investments, Loans, Advances and Guaranties. The
Company will not, and will not permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other Person, or be or become liable as endorser, guarantor, surety or
otherwise for any debt, obligation or undertaking of any other Person, or
otherwise agree to provide funds for payment of the obligations of another, or
supply funds thereto or invest therein or otherwise assure a creditor of
another against loss or apply for or become liable to the issuer of a letter of
credit which supports an obligation of another or subordinate any claim or
demand it may have to the claim or demand of any other Person (cumulatively,
all of the foregoing, being "Investments"); provided, however, that the
foregoing provisions shall not apply to nor operate to prevent:
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(a) investments in direct obligations of the United
States of America or of any agency or instrumentality thereof whose
obligations constitute full faith and credit obligations of the United
States of America provided that any such obligation matures within one
year from the date it is acquired by the Borrower or Subsidiary;
(b) investments in commercial paper rated P-1 by Xxxxx'x
Investors Services, Inc. or A-1 by Standard & Poor's Ratings Group, a
division of The XxXxxx-Xxxx Companies, Inc. maturing within one year
of its date of issuance;
(c) investments in certificates of deposit issued by any
United States commercial bank having capital and surplus of not less
than $200,000,000 or by any Bank in each case maturing within one year
from the date of issuance thereof or in eurodollar time deposits
maturing not more than one year from the date of acquisition thereof
placed with any Bank or other such commercial bank or in banker's
acceptances endorsed by any Bank or other such commercial bank and
maturing within six months of the date of acceptance;
(d) investments in repurchase obligations with a term of
not more than seven (7) days for underlying securities of the types
described in subsection (a) above entered into with any bank meeting
the qualifications specified in subsection (c) above, provided all
such agreements require physical delivery of the securities securing
such repurchase agreement, except those delivered through the Federal
Reserve Book Entry System;
(e) investments in money market funds that invest solely,
and which are restricted by their respective charters to invest
solely, in investments of the type described in the immediately
preceding subsections (a), (b), (c) and (d) above;
(f) ownership of stock, obligations or securities
received in settlement of debts (created in the ordinary course of
business) owing to the Borrower or any Subsidiary;
(g) endorsements of negotiable instruments for collection
in the ordinary course of business;
(h) liabilities in respect of letters of credit issued by
the Agent or any Bank;
(i) the Subsidiary Guarantee Agreements;
(j) loans and advances to employees in the ordinary
course of business for travel, relocation, and similar purposes;
(k) acquisitions of all or substantially all of the
assets or business of any other Person or division thereof, or of all
or substantially all the Voting Stock of a Person, so long as (i) no
Default or Event of Default exists or would exist after giving effect
to such acquisition, (ii) the Board of Directors or other governing
body of such Person whose Property or Voting Stock is being so
acquired has approved the terms of such acquisition, (iii) the Company
can demonstrate that on a pro forma basis after giving effect to such
acquisition it will continue to comply through the term of this
Agreement with all the terms and conditions of the Loan Documents and
(iv) the Company has provided to the Banks such financial and other
information regarding the Person whose Property or Voting Stock is
being so acquired, including historical financial statements, and a
description of such Person, as the Agent or the Required
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Banks have reasonably requested;
(l) Investments by the Company in Subsidiaries (other
than the Restricted Subsidiaries), provided that Investments in such
Subsidiaries that become Subsidiaries through an acquisition must
comply with the provisions of subsection (k) above;
(m) loans and advances by Wholly-owned Subsidiaries to
the Company and other Wholly-owned Subsidiaries (other than the
Restricted Subsidiaries); and
(n) a guaranty from Dyneer Corporation to Pierelli
Xxxxxxxxx Tire Corporation ("PATC") guaranteeing obligations assumed
by Titan Tire Corporation as part of the Xxxxxxxxx Acquisition to
remediate any environmental conditions existing at PATC's facility in
Des Moines, Iowa, provided that the right to recover on such guaranty
is expressly limited to $1,000,000 in the aggregate.
(o) Investments by the Company in Restricted
Subsidiaries, provided that the aggregate amount of such Investments
outstanding at any one time shall not exceed the lesser of (i) 10% of
Tangible Net Worth and (ii) $15,000,000.
The Company acknowledges and agrees that neither it nor any
Subsidiary may make any Investment in a Restricted Subsidiary except as
permitted in (o) above. In determining the amount of Investments,
acquisitions, loans, advances and guarantees permitted under this Section
10.10, Investments and acquisitions shall always be taken at the original cost
thereof (regardless of any subsequent appreciation or depreciation therein),
loans and advances shall be taken at the principal amount thereof then
remaining unpaid, and guarantees shall be taken at the amount of obligations
guaranteed thereby.
Section 10.11. Subsidiary Debt. No Subsidiary shall have
outstanding at any time any Debt other than:
(a) Debt of Wholly-owned Subsidiaries to the Company or
to other Wholly-owned Subsidiaries (other than Restricted
Subsidiaries);
(b) Debt of Subsidiary Borrower outstanding hereunder;
(c) Debt of Subsidiaries not otherwise permitted by this
Section aggregating not more than $40,000,000 at any one time
outstanding;
(d) Debt of Titan Tire in an amount not to exceed
$20,000,000 at any one time outstanding, provided that after September
30, 1996 no Debt of Titan Tire shall be permitted to be outstanding
pursuant to this Section 10.11(d); and
(e) Debt of Restricted Subsidiaries.
Section 10.12. Liens. The Company will not nor will it permit any
Subsidiary to create, incur, permit to exist or to be incurred any Lien of any
kind on any Property owned by the Company or any Subsidiary; provided, however,
that this Section 10.12 shall not apply to nor operate to prevent:
(a) the currently existing Liens set forth on Schedule
10.12 attached hereto;
(b) Liens in connection with worker's compensation,
unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges,
good faith deposits in connection with tenders, contracts or leases to
which the Company or any Subsidiary is a party (other than contracts
for borrowed money), or other deposits required to be made in the
ordinary course of business; provided that in each case the obligation
secured is not overdue or,
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if overdue, is being contested in good faith by appropriate
proceedings and adequate reserves have been established therefor;
(c) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings and adequate
reserves have been established therefor;
(d) Liens arising out of judgments or awards against the
Company or any Subsidiary with respect to which the Company or such
Subsidiary shall be prosecuting an appeal or proceeding for review and
with respect to which it shall have obtained a stay of execution
pending such appeal or proceeding for review; provided that the
aggregate amount of liabilities (including interest and penalties, if
any) of the Company and the Subsidiaries secured by such Liens shall
not exceed $1,000,000 at any one time outstanding;
(e) Liens for property taxes not yet subject to penalties
for nonpayment, or survey exceptions, encumbrances, mineral or royalty
reservations, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, pipe lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of its properties, which exceptions,
encumbrances, easements, reservations, rights and restrictions do not
in the aggregate materially detract from the value of such properties
or materially impair their use in the operation of the business of the
Company and its Subsidiaries;
(f) Liens upon any Property acquired by the Company or
any Subsidiary after the date hereof (A) to secure the payment of all
or any part of the purchase price of such Property upon the
acquisition thereof by the Company or such Subsidiary, or (B) to
secure any indebtedness issued, assumed or guaranteed by the Company
or any Subsidiary prior to, at the time of, or within 90 days after
the acquisition of such Property, which indebtedness is issued,
assumed or guaranteed for the purpose of financing all or any part of
the purchase price of such Property, provided that (i) in the case of
any such acquisition the Lien shall not apply to any Property other
than the Property so acquired or purchased and (ii) the aggregate
amount of indebtedness so secured by such Liens shall not exceed
$15,000,000 at any one time outstanding;
(g) Liens of or upon any Property (other than inventory
and accounts receivable) existing at the time of acquisition thereof
by the Company or any Subsidiary and not created in contemplation of
such acquisition;
(h) Liens of or upon any Property of a corporation
existing at the time such corporation is merged with or into or
consolidated with the Company or any Subsidiary or existing at the
time of a sale or transfer of the properties of a corporation (or
division thereof) as an entirety or substantially as an entirety to
the Company or any Subsidiary and not created in contemplation of such
transaction, provided that (i) the Lien shall not apply to any
Property not subject thereto immediately prior to such merger,
consolidation, sale or transfer and (ii) any Lien of or upon any
Property existing at the time of acquisition thereof complies with
subsection (g) above;
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(i) Liens to secure indebtedness of any Subsidiary to the
Company or to another Subsidiary so long as the indebtedness so
secured is not related to any indebtedness (other than indebtedness
hereunder) of the Company or such other Subsidiary to any Person other
than the Company or such other Subsidiary;
(j) Liens in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any State
thereof, or in favor of any other country or political subdivision, to
secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any indebtedness incurred or
guaranteed for the purpose of financing or refinancing all or any part
of the purchase price of the Property subject to such Liens, or the
cost of constructing or improving the Property subject to such
mortgages (including, without limitation, mortgages incurred in
connection with pollution control, industrial revenue or similar
financings);
(k) Liens upon any Property of Foreign Subsidiaries
(excluding the Subsidiary Borrower) securing indebtedness permitted by
Section 10.11(c) hereof if and so long as such Subsidiaries are not
required to provide Subsidiary Guarantee Agreements hereunder and
provided the proceeds of such indebtedness were used to finance their
general working capital requirements (including capital expenditures)
and their acquisitions to the extent permitted by Section 10.10(k)
hereof;
(l) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien
referred to in the foregoing paragraphs (a) through (k), inclusive,
provided, however, that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so
secured at the time of such extension, renewal or replacement, and
that such extension, renewal or replacement shall be limited to the
Property which was subject to the Lien so extended, renewed or
replaced;
(m) Liens not otherwise permitted under this Section
10.12 on Property (other than (i) Property of the Company, (ii) shares
of capital stock in any Subsidiary and (iii) accounts receivable,
inventory and similar working capital assets) securing Indebtedness in
an aggregate principal amount not exceeding $3,000,000 at any time
outstanding;
(n) Liens upon any property of Titan Tire to secure
credit extended to Titan Tire to finance its general working capital
requirements (including capital expenditures), provided that (i) prior
to September 30, 1996 the Company shall cause each holder of such
Liens to deliver a pay-out letter to the Agent indicating that such
Liens will be released upon the payment of the indebtedness secured by
such Liens, such letter to be in form and substance satisfactory to
the Agent and (ii) such Liens are released no later than September 30,
1996; and
(o) Liens upon Property of a Restricted Subsidiary to
secure credit extended to such Restricted Subsidiary to finance its
general working capital requirements (including capital expenditures).
Section 10.13. Dividends and Certain Other Restricted Payments. The
Company will not during any calendar year (a) declare or pay any dividends on
or make any other
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distributions in respect of any class of its capital stock or any warrant to
acquire any such capital stock (other than dividends payable solely in its
capital stock) or (b) directly or indirectly or through any Subsidiary
purchase, redeem or otherwise acquire or retire any of its capital stock or any
warrant to acquire any such capital stock (except out of the proceeds of, or in
exchange for, a substantially concurrent issue and sale of its capital stock)
(each such non-excepted declarations or payments of dividends, purchases,
redemptions, retirements and distributions in respect to capital stock being
herein collectively called a "Restricted Payment") if at the time of such
Restricted Payment or immediately after giving effect thereto, (i) any Event of
Default or Default shall occur or be continuing or (ii) the amount of all
Restricted Payments made since the date hereof would exceed 50% of Consolidated
Net Income for the period (taken as a single accounting period) commencing on
the date hereof and terminating at the last fiscal quarter preceding the date
of the Restricted Payment at issue. Notwithstanding the foregoing, this
Section shall not apply to nor prohibit the Permitted Company Redemption if at
the time thereof and immediately after giving effect thereto, no Event of
Default or Default shall occur or be continuing.
Section 10.14. Mergers, Consolidations, Leases and Sales. (a) The
Company will not, and will not permit any Subsidiary to, sell, transfer, of or
otherwise dispose of all or any substantial part of its property, assets or
business, or in any event sell or discount (with or without recourse) any of
its notes or accounts receivable or be or become liable as lessee of any
property theretofore owned by the Company or any Subsidiary; provided, however,
that this Section shall not apply to nor prohibit the sale by the Company or
any Subsidiary of assets no longer used or useful in the conduct of their
respective businesses or from selling inventory in the ordinary course of its
business.
A sale or disposition of assets of the Company shall be deemed
substantial for the foregoing purposes (i) if such assets are sold below the
book value of such assets, such assets constituted 10% or more of the total
assets of the Company or (ii) such assets constituted 20% or more of the total
assets of the Company.
(b) The Company will not, and will not permit any Subsidiary to,
be a party to any merger or consolidation, provided, however that this Section
shall not apply to nor prohibit the merger of any Subsidiary (other than
Subsidiary Borrower) or any other Person acquired as a result of or created to
effect an acquisition permitted by Section 10.10(k) hereof into the Company or
any other Subsidiary as to which the Company holds either directly or
indirectly at least the same percentage equity ownership.
Section 10.15. Maintenance of Subsidiaries. The Company will not
assign, sell or transfer, or permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock of a Subsidiary other than to the Company
or another Wholly-owned Subsidiary, provided that this Section shall not apply
to nor operate to prevent:
(a) the transfer of shares of capital stock of the
Borrower or any Subsidiary as consideration to the transferor in any
acquisition permitted by Section 10.10(k) hereof, provided that
notwithstanding anything herein to the contrary, the Company shall
maintain Subsidiary Borrower as a Wholly-owned Subsidiary (except for
shares of capital stock of Subsidiary Borrower issued, sold or
transferred pursuant to Section 10.15(b)); and
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(b) the issuance, sale and transfer to any Person of any
shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such
Person as a director of such Subsidiary.
As a condition to establishing or acquiring any Subsidiary,
unless the Required Banks otherwise agree, the Company shall (i) cause such
Subsidiary to execute a Subsidiary Guarantee Agreement, (ii) cause such
Subsidiary to deliver documentation similar to that described in Section 9.1(a)
and (b) relating to the authorization for, execution and delivery of, and
validity of such Subsidiary's obligations as a Guarantor hereunder and under
the Subsidiary Guarantee Agreement in form and substance satisfactory to the
Required Banks (including an opinion of counsel from the jurisdiction in which
such Subsidiary is organized) and (iii) deliver an updated Schedule 8.2 to
reflect the new Subsidiary. Upon its delivery of such Subsidiary Guarantee
Agreement, such Subsidiary shall be conclusively deemed to be a direct
signatory hereto. Notwithstanding the foregoing, no Subsidiary Guarantee
Agreement shall be required from (i) any Foreign Subsidiary if and so long as
(x) its assets do not exceed an amount equal to ten percent (10%) of
Shareholder's Equity as of the close of the then most recently completed
calendar year and (y) the aggregate of Investments by the Borrower and the
Subsidiaries in such Foreign Subsidiary after the date hereof do not exceed
$20,000,000 at any one time outstanding and (ii) Restricted Subsidiaries.
Anything herein to the contrary notwithstanding, the Company shall have 60 days
from the date hereof to deliver an executed Subsidiary Guarantee Agreement of
Sirmac Officine Meccaniche SpA. If any Foreign Subsidiary (other than Sirmac
Officine Meccaniche SpA) required to execute a Subsidiary Guarantee Agreement
is unable to execute such a Subsidiary Guarantee Agreement without causing the
undistributed earnings of such Foreign Subsidiary (as determined for Federal
income tax purposes) to be treated as a deemed dividend to the Company for
Federal income tax purposes, such Foreign Subsidiary shall not be required to
execute a Subsidiary Guarantee Agreement but instead the Company shall pledge
2/3 of the stock of such Foreign Subsidiary as security for the Obligations,
such pledge to be made pursuant to documentation satisfactory to the Agent.
Section 10.16. Company as Operating Company. Notwithstanding
Sections 10.10 and 10.14 or any other provision of this Agreement, the Company
will at all times remain an operating company, and the assets owned directly by
the Company and its Wholly-owned Subsidiaries (other than Restricted
Subsidiaries) which are Domestic Subsidiaries (without regard to their
ownership of equity interests in Subsidiaries) shall at all times constitute
the majority of the total consolidated assets of the Company and its
Subsidiaries.
Section 10.17. ERISA. The Company will, and will cause each ERISA
Affiliate to, promptly pay and discharge all obligations and liabilities
arising under the Code or ERISA of a character which if unpaid or unperformed
would result in the imposition of a lien against any of their respective
properties or assets or a material obligation to pay money (including, but not
limited to any liability to a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA), will promptly notify the Banks when the Company becomes
aware of the occurrence of any Reportable Event (as defined in Section 4043 of
ERISA) which could result in the termination by the Pension Benefit Guaranty
Corporation ("PBGC") of any employee benefit plan covering any officers or
employees of the Company or any ERISA Affiliate, any benefits
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of which are, or are required to be, guaranteed by the PBGC (a "Plan") or of
receipt of any notice from the PBGC of its intention to seek termination of any
such Plan or appointment of a trustee therefor. The Company will, and will
cause each ERISA Affiliate to, notify the Bank of its or any ERISA Affiliate's
intention to terminate any Plan and will not, and will not permit any ERISA
Affiliate to, terminate any such Plan, the termination of which will result in
a material liability to the Company or any ERISA Affiliate, unless the Company
and its ERISA Affiliates shall be in compliance with all of the terms and
conditions of this Agreement after giving effect to any estimated liability to
the PBGC (as determined by the Plan's independent actuaries) resulting from
such termination or withdrawal.
Section 10.18. Burdensome Contracts with Affiliates. The Company
will not, and will not permit any Subsidiary to, enter into (x) any contract,
agreement or business arrangement with an Affiliate on terms and conditions
which in the aggregate would be reasonably likely to materially adversely
affect the business, condition (financial or otherwise), Properties or
operations of the Company and the Subsidiaries taken as a whole or (y) any
contract, agreement or business arrangement with a Restricted Subsidiary on
terms and conditions which are less favorable to the Company or such Subsidiary
than would be usual and customary in similar contracts, agreements or business
arrangements between persons not affiliated with each other (other than the
sale of inventory to a Restricted Subsidiary utilizing the Company's standard
transfer pricing methods for divisional and intercompany sales as currently
utilized by the Company in the ordinary course of the Company's business as
presently conducted).
Section 10.19. Change in Fiscal Year. The Company will not change
its fiscal year.
Section 10.20. Change in the Nature of Business. The Company will
not, and will not permit any Subsidiary to, engage in any business or activity
if as a result the general nature of the business of the Company or any
Subsidiary would be changed in any material respect from the general nature of
the business engaged in by the Company or such Subsidiary on the date of this
Agreement.
Section 10.21. Use of Property and Facilities; Environmental, Health
and Safety Laws. The Company will, and will cause each of its Subsidiaries to,
comply in all material respects with the requirements of all federal, state and
local environmental and health and safety laws, rules, regulations and orders
applicable to or pertaining to the Properties or business operations of the
Company or any Subsidiary of the Company. Without limiting the foregoing, the
Company will not, and will not permit any Person to, except in accordance with
applicable law, dispose of any Hazardous Material into, onto or from any real
property owned or operated by the Company or any of its Subsidiaries. The
Company will, and will cause each Subsidiary to, promptly provide the Banks
with copies of any notice it receives, or is required to give, with respect to
any material non-compliance (or alleged non-compliance) with any such
environmental, health or safety laws, rules, regulations or orders.
Section 10.22. Compliance with Laws. Without limiting any of the
other covenants of the Company in this Section 10, the Company will, and will
cause each of its Subsidiaries to, conduct its business, and otherwise be, in
compliance with all applicable laws, regulations, ordinances and orders of any
governmental or judicial authorities; provided, however, that neither the
Company nor any Subsidiary of the Company shall be required to comply with
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any such law, regulation, ordinance or order, including any relating to
environmental, health or safety, if (x) it shall be contesting such law,
regulation, ordinance or order in good faith by appropriate proceedings and
reserves in conformity with GAAP have been provided therefor on the books of
the Company or such Subsidiary, as the case may be, or (y) the failure to
comply therewith could not in the aggregate have a material adverse effect on
the business, operations, Property or financial or other condition of the
Company and its Subsidiaries taken as a whole.
Section 10.23. Use of Loan Proceeds. The Borrowers will use all
credit under this Agreement solely (i) to finance general working capital
needs, (ii) for general corporate purposes including without limitation
acquisitions permitted by Section 10.10(k) hereof, (iii) for repurchases of the
Company's common stock permitted hereunder and (iv) to refinance indebtedness
of the Company and its Subsidiaries outstanding on the date hereof.
Section 10.24. Designation of Restricted Subsidiaries. The Company
will not designate a Subsidiary as a Restricted Subsidiary unless immediately
prior to such designation no Default or Event of Default has occurred and is
continuing and the Company can demonstrate that on a pro forma basis after
giving effect to such designation it will continue to comply through the term
of this Agreement with all the terms and conditions of the Loan Documents.
SECTION 11. EVENTS OF DEFAULT AND REMEDIES.
Section 11.1. Events of Default. Any one or more of the following
shall constitute an Event of Default:
(a) (i) default in the payment when due of any principal
on any Note or any Loan evidenced thereby or any Reimbursement
Obligation, whether at the stated maturity thereof or at any other
time provided in any Loan Document; or (ii) default in the payment
when due of interest on any Note or any Loan evidenced thereby or any
Reimbursement Obligation or in the payment when due of any fee or
other Obligation;
(b) default by a Borrower in the observance or
performance of any covenant set forth in Sections 10.1(a), 10.5(d)(i)
or (ii), 10.6, 10.7, 10.8, 10.9, 10.10, 10.11, 10.12, 10.13, 10.14,
10.15, 10.16, 10.17, 10.18, 10.19, 10.23 or 10.24 hereof or default
after notice to the Company in the observance of any other covenant
set forth in Section 10.5 hereof;
(c) default by either Borrower in the observance or
performance of any other provision hereof not mentioned in (a) or (b)
above, which is not remedied within thirty (30) days after notice
thereof to the Company by the Agent or any Bank;
(d) any representation or warranty made herein by either
Borrower, or in any statement or certificate furnished pursuant hereto
by either Borrower, or in connection with any Loan made hereunder,
proves untrue in any material respect as of the date of the issuance
or making thereof;
(e) the Company or any Subsidiary shall fail within sixty
(60) days to pay, bond or otherwise discharge any judgment or order
for the payment of money in excess of $4,000,000 (other than any
judgment for which a financially sound and reputable insurer has
admitted liability), which is not stayed on appeal or otherwise
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being appropriately contested in good faith in a manner that stays
execution on such judgment;
(f) the Company or any other member of its Controlled
Group shall fail to pay when due an amount or amounts aggregating in
excess of $500,000 which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans having aggregate Unfunded Vested Liabilities
in excess of $500,000 (collectively, a "Material Plan") shall be filed
under Title IV of ERISA by the Company or any other member of its
Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to administer
any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against the Company or any member of its
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within ninety (90) days
thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated;
(g) (A) default shall occur in the payment when due
(subject to any applicable grace period) of any indebtedness for
borrowed money aggregating in excess of $4,000,000 which was incurred,
assumed or guaranteed by the Company or any Subsidiary (other than a
Restricted Subsidiary), or (B) default or the happening of any event
shall occur under any indenture, agreement or other instrument under
which any indebtedness for borrowed money aggregating in excess of
$4,000,000 was incurred, assumed or guaranteed by the Company or any
Subsidiary (other than a Restricted Subsidiary) if the effect of such
default is to accelerate, or permit the acceleration of, the maturity
of such indebtedness and such default or event continues uncured,
unremedied and unwaived beyond any applicable period of grace, or (C)
default shall occur in the payment when due (whether at the stated
maturity or by acceleration or mandatory prepayment in full but not
otherwise) of any indebtedness for borrowed money aggregating in
excess of $4,000,000 which was incurred, assumed or guaranteed by any
one or more of the Restricted Subsidiaries if the Required Banks, in
good faith, believe such default could materially and adversely affect
the financial condition, business, operations, Properties, condition
(financial or otherwise) or prospects of the Company and its
Subsidiaries (other than the Restricted Subsidiaries) taken as a
whole;
(h) any party obligated on any guarantee of any
Obligations shall purport to disavow, revoke, repudiate or terminate
such guarantee or such guarantee shall be determined to be
unenforceable by a court of competent jurisdiction or shall otherwise
cease to be in full force and effect other than in accordance with its
terms;
(i) any agreement purporting to subordinate payment of
any indebtedness to the prior payment of the Notes or any other
Obligations shall be terminated or shall otherwise cease to have any
force or effect;
(j) the Company or any Subsidiary makes any payment on
account of the principal of or interest on any indebtedness which
payment is prohibited under the
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terms of any agreement or other instrument subordinating such
indebtedness to the Notes or any other Obligations;
(k) any payment or distribution of principal or interest
shall be made on or in respect of, or the Company or any Subsidiary
shall acquire, prepay or retire, any indebtedness subordinated to the
prior payment of the Notes or other Obligations, in each case prior to
the stated maturity thereof or prior to any other times required for
payment thereof as are in force and effect as of the date hereof;
(l) the Company or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make
an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any
substantial part of its property, (v) institute any proceeding seeking
to have entered against it an order for relief under the United States
Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations
of any such proceeding filed against it, or (vi) fail to contest in
good faith any appointment or proceeding described in Section 11.1(m)
hereof; or
(m) a custodian, receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Company or any
Subsidiary or any substantial part of any of their Property, or a
proceeding described in Section 11.1(l)(v) shall be instituted against
the Company or any Subsidiary, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for
a period of sixty (60) days.
Section 11.2. Non-Bankruptcy Defaults. When any Event of Default
other than those described in Sections 11.1(l) or (m) has occurred and is
continuing, the Agent shall, by notice to the Borrowers, (a) if so directed by
the Required Banks, terminate the remaining Commitments of the Banks hereunder
on the date stated in such notice (which may be the date thereof); and (b) if
so directed by the Banks holding more than 51% of the aggregate Original Dollar
Amount of all Loans then outstanding, (1) declare the principal of and the
accrued interest on all outstanding Loans to be forthwith due and payable and
thereupon all Obligations payable hereunder shall be and become immediately due
and payable without further demand, presentment, protest or notice of any kind
and (2) enforce any and all rights and remedies available to it under the Loan
Documents or applicable law. The Agent, after giving notice to the Borrowers
pursuant to Section 11.1 or this Section 11.2, shall also promptly send a copy
of such notice to the other Banks, but the failure to do so shall not impair or
annul the effect of such notice.
Section 11.3. Bankruptcy Defaults. When any Event of Default
described in subsections (l) or (m) of Section 11.1 hereof has occurred and is
continuing, then all outstanding Obligations payable hereunder shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligation of the Banks to extend further credit
pursuant to any of the terms hereof shall immediately terminate.
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Section 11.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 4.7 or under Section 11.2 or 11.3
above, the Borrowers shall forthwith pay the amount required to be so prepaid,
to be held by the Agent as provided in subsection (b) below. Such prepayment
shall be made in U.S. Dollars, unless the Agent elects by notice to the
Borrowers, that such prepayment with regard to a Letter of Credit denominated
in an Alternative Available Currency be made in such Alternative Available
Currency.
(b) All amounts prepaid pursuant to subsection (a) above shall be
held by the Agent in a separate collateral account (such account, and the
credit balances, properties and any investments from time to time held therein,
and any substitutions for such account, any certificate of deposit or other
instrument evidencing any of the foregoing and all proceeds of and earnings on
any of the foregoing being collectively called the "Account") as security for,
and for application by the Agent (to the extent available) to, the
reimbursement of any payment under any Letter of Credit then or thereafter made
by the Agent and the Banks, and to the payment of the unpaid balance of any
Loans and all other Obligations. The Account shall be held in the name of and
subject to the exclusive dominion and control of the Agent for the benefit of
the Agent and the Banks. If and when requested by the Company, the Agent shall
invest funds held in the Account from time to time in direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a remaining maturity of one
year or less, provided that the Agent is irrevocably authorized to sell
investments held in the Account when and as required to make payments out of
the Account for application to amounts due and owing from the Borrowers to the
Agent or Banks under the Loan Documents; provided, however, that if (i) the
Borrowers shall have made payment of all such obligations referred to in
subsection (a) above, (ii) all relevant preference or other disgorgement
periods relating to the receipt of such payments have passed, and (iii) no
Letters of Credit, Commitments, Loans or other Obligations remain outstanding
hereunder, then the Agent shall repay to the Company any remaining amounts held
in the Account.
Section 11.5. Expenses. The Borrowers agree to pay to the Agent
and each Bank, or any other holder of any Note outstanding hereunder, all costs
and expenses incurred or paid by the Agent and such Bank or any such holder,
including reasonable attorneys' fees (which may include allocated costs of
in-house counsel) and court costs, in connection with any Default or Event of
Default hereunder or in connection with the enforcement of any of the terms
hereof or of any Note.
SECTION 12. CHANGE IN CIRCUMSTANCES.
Section 12.1. Change of Law. Notwithstanding any other provisions
of this Agreement or any Note, if at any time after the date hereof any change
in applicable law or regulation or in the interpretation or administration
thereof makes it unlawful for any Bank to make or continue to maintain
Eurocurrency Loans or to give effect to its obligations as contemplated hereby,
such Bank shall promptly give notice thereof to the Borrowers, with a copy to
the Agent, and such Bank's obligations to make or maintain Eurocurrency Loans
under this Agreement shall terminate until it is no longer unlawful for such
Bank to make or maintain such Eurocurrency Loans. The Borrowers shall prepay
on demand the outstanding
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principal amount of any such affected Eurocurrency Loans, together with all
interest accrued thereon and all other amounts then due and payable to such
Bank under this Agreement; provided, however, that if the affected Eurocurrency
Loan was denominated in U.S. Dollars and subject to all of the terms and
conditions of this Agreement, the Borrowers may then elect to borrow the
principal amount of the affected Eurocurrency Loan from such Bank by means of a
Domestic Rate Loan or Adjusted CD Rate Loan from such Bank that shall not be
made ratably by the Banks but only from such affected Bank and payments whereon
shall be made contemporaneously with payments on the relevant Borrowing of
Eurocurrency Loans.
Section 12.2. Unavailability of Deposits or Inability to Ascertain,
or Inadequacy of, LIBOR or CD Rate. If on or prior to the first day of any
Interest Period for any Borrowing of Eurocurrency Loans or Adjusted CD Rate
Loans:
(a) the Agent determines that deposits in United States
Dollars or Agreement Currencies in the applicable amounts are not
being offered to it in the off-shore Eurocurrency market or domestic
certificate of deposit market, as applicable, for such Interest
Period, or
(b) any Bank shall advise the Agent that LIBOR or the CD
Rate as determined by the Agent will not adequately and fairly reflect
the cost to such Bank of funding its Eurocurrency Loans or Adjusted CD
Rate Loans, as applicable, for such Interest Period,
then the Agent shall forthwith give notice thereof to the Borrowers and the
Banks, whereupon, until the Agent notifies the Borrowers that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make Eurocurrency Loans or Adjusted CD Rate Loans, as applicable, shall be
suspended. The Banks shall promptly give notice to the Agent, who will
promptly give notice to the Borrower, if the circumstances giving rise to such
suspension cease to exist.
Section 12.3. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any obligation to make Committed
Loans, or (y) the date of the related Bid, in the case of any Bid Loan, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law if of the type
generally complied with by such Bank in accordance with its banking practices)
of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans, its
Notes or its obligation to make Fixed Rate Loans or its obligation to
issue or participate in Letters of Credit, or shall change the basis
of taxation of payments to any Bank (or its Lending Office) of the
principal of or interest on its Fixed Rate Loans or any other amounts
due under this Agreement in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans or its obligation to issue or
participate in Letters of Credit (except for changes in the rate of
tax on the overall net income of such Bank or its Lending Office
imposed by the jurisdiction in which such Bank's principal executive
office or Lending Office is
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located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirements (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, such as, for example, a change in official
reserve requirements, but excluding (A) with respect to any Adjusted
CD Rate Loan, any such requirement to the extent included in the CD
Reserve Percentage used in computing the Adjusted CD Rate for such
Loan and (B) with respect to any Eurocurrency Loan, any such
requirement to the extent included in the Eurocurrency Reserve
Percentage used in computing the Adjusted LIBOR for such Loan) against
assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Lending Office) or shall impose on any Bank (or its
Lending Office) or on the United States market for certificates of
deposit or the interbank market any other condition affecting its
Fixed Rate Loans, its Notes or its obligation to make Fixed Rate
Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan or its
obligation to issue or participate in Letters of Credit, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending Office)
under this Agreement or under its Notes with respect thereto, by an amount
deemed by such Bank to be material, then after demand by such Bank (with a copy
to the Agent), the Borrowers shall promptly pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction. In determining such amount, the Bank may use any reasonable
averaging and attribution methods.
(b) If any Bank shall determine that the adoption after the date
hereof of any applicable law, rule or regulation regarding capital adequacy, or
any change in any existing law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank (or any of its branches) with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Bank or
any Person controlling such Bank as a consequence of such Bank's obligations
hereunder or for the credit which is the subject matter hereof to a level below
that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Bank or any Person
controlling such Bank with respect to liquidity and capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
fifteen (15) days after demand by such Bank, the Borrowers shall pay to the
Agent for the account of such Bank such additional amount or amounts reasonably
determined by such Bank as will compensate such Bank for such reduction.
Section 12.4. Lending Offices. Each Bank may, at its option, elect
to make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or
affiliates as it may from time to time elect and designate in a notice to the
Borrower and the Agent.
Section 12.5. Discretion of Bank as to Manner of Funding.
Notwithstanding any
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other provision of this Agreement, each Bank shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each Fixed Rate Loan that is a Committed Loan through the purchase
of deposits in the relevant market having a maturity corresponding to such
Loan's Interest Period and bearing an interest rate equal to LIBOR or the CD
Rate, as applicable, for such Interest Period.
SECTION 13. THE AGENT.
Section 13.1. Appointment and Authorization. Each Bank hereby
irrevocably appoints Xxxxxx Trust and Savings Bank as Agent for the Banks under
this Agreement and hereby authorizes the Agent to take such action as Agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The relationship between the Agent and the Banks is and
shall be that of Agent and principal only, and nothing contained in this
Agreement or any other Loan Document shall be construed to constitute the Agent
as a trustee or fiduciary for any Bank, Borrower or Guarantor.
Section 13.2. Agent and Affiliates. In its capacity as a lender
hereunder, the Agent shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as
though it were not an Agent, and the Agent and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrowers or any Subsidiary or affiliate of the Borrowers as if it were not
the Agent hereunder. The terms Bank and Banks as used in the Loan Documents,
unless the context otherwise clearly requires, include the Agent in its
individual capacity as a Bank.
Section 13.3. Action by Agent. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless the Agent shall be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. In all cases in which this Agreement does
not require the Agent to take certain actions, the Agent shall be fully
justified in using its discretion in failing to take or in taking any action
hereunder. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Event of Default, except
as expressly provided in Section 11.2. The Agent shall be acting as an
independent contractor hereunder and nothing herein shall be deemed to impose
on the Agent any fiduciary obligations to the Banks or the Borrowers.
Section 13.4. Consultation with Experts. The Agent may consult
with legal counsel, independent public accountants and other experts selected
by it and shall not be liable 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.
Section 13.5. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or not taken by it in connection herewith (i) with the consent or at the
request of the Required Banks or (ii) in the absence of its own gross
negligence or willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain,
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inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrowers; (iii) the
satisfaction of any condition specified in Section 9, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, request or statement
(whether written or oral) or other document believed by it to be genuine or to
be signed or sent by the proper party or parties and, in the case of legal
matters, in relying on the advice of counsel (including counsel for the
Borrowers). The Agent may treat the Banks that are named herein as the holders
of the Notes and the indebtedness contemplated herein unless and until the
Agent receives notice of the assignment of the Note and the indebtedness held
by a Bank hereunder pursuant to an assignment contemplated by Section 15.12
hereof.
Section 13.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment (or, if the Commitments have been terminated in
whole, ratably in accordance with its outstanding Loans), indemnify the Agent
(to the extent not reimbursed by the Borrowers) against any cost, expenses
(including reasonable counsels' fees and disbursements), claims, demands,
actions, losses, obligations, damages, penalties, judgments, suits or liability
(except such as result from the Agent's gross negligence or willful misconduct)
that the Agent may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.
Section 13.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
Section 13.8. Resignation or Removal of Agent and Successor Agent.
Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving written notice thereof to the
Banks and the Borrowers at any time and may be removed by the Required Banks
upon thirty (30) days prior written notice to the Agent. Upon any such
resignation or removal of the Agent, the Required Banks shall have the right to
appoint, with the consent of the Borrowers (and in the case of removal, with
the consent of the Bank being removed as Agent, whose consent shall not be
unreasonably withheld), a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks, and shall have accepted such
appointment, within thirty (30) days after, as the case may be, the retiring
Agent's giving of notice of resignation or if appropriate, the removed Agent's
receipt of notice of removal, then the retiring or removed Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any state
thereof that has a combined capital and surplus of at least $200,000,000. Upon
the acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and
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become vested with all the rights and duties of the retiring or removed Agent,
and the retiring or removed Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent or any Agent's removal hereunder as Agent, the provisions of this Section
13 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent.
Section 13.9. Payments. Unless the Agent shall have been notified
by a Bank prior to the date on which such Bank is scheduled to make payment to
the Agent of the proceeds of a Loan (which notice shall be effective upon
receipt) that such Bank does not intend to make such payment, the Agent may
assume that such Bank has made such payment when due and the Agent may in
reliance upon such assumption (but shall not be required to) make available to
the Borrowers the proceeds of the Loan to be made by such Bank and, if any Bank
has not in fact made such payment to the Agent, such Bank shall, on demand, pay
to the Agent the amount made available to the Borrowers attributable to such
Bank together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Borrowers and
ending on (but excluding) the date such Bank pays such amount to the Agent at a
rate per annum equal to the Federal Funds Rate. If such amount is not received
from such Bank by the Agent immediately upon demand, the Borrowers will, on
demand, repay to the Agent the proceeds of the Loan attributable to such Bank
with interest thereon at a rate per annum equal to the interest rate applicable
to the relevant Loan, but without such payment being considered a payment or
prepayment of a Loan, so that the Borrowers will have no liability under
Section 4.8 hereof with respect to such payment. If any Bank shall fail to
fund a Loan which it is obligated hereunder to fund, such Bank shall pay the
reasonable attorneys' fees incurred by the Borrower in enforcing its right to
borrow such a Loan. However, if it is determined that such Bank was not
obligated to fund such Loan, the Borrower shall pay to such Bank any reasonable
attorneys' fees incurred by such Bank in defending such an action.
SECTION 14. THE GUARANTEES.
Section 14.1. The Guarantees. To induce the Banks to provide the
credits described herein and in consideration of benefits expected to accrue to
each Guarantor and each Borrower by reason of the Commitments and for other
good and valuable consideration, receipt of which is hereby acknowledged, each
Borrower hereby unconditionally and irrevocably agrees it is jointly and
severally liable for, and guarantees jointly and severally, and each Guarantor
hereby unconditionally and irrevocably guarantees jointly and severally to the
Agent and the Banks, and each other holder of the indebtedness guaranteed
hereby, the due and punctual payment of all present and future indebtedness of
the Borrowers evidenced by or arising out of the Loan Documents, including, but
not limited to, the due and punctual payment of principal of and interest on
the Loans, on the Notes and on the Reimbursement Obligations and the due and
punctual payment of all other Obligations now or hereafter owed by the
Borrowers under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration or otherwise, according to
the terms hereof and thereof. In case of failure by any Borrower punctually to
pay any indebtedness or other obligations guaranteed hereby, each Guarantor and
each Borrower hereby unconditionally agrees jointly and severally to make such
payment or to cause such payment
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to be made punctually as and when the same shall become due and payable,
whether at stated maturity, by acceleration or otherwise, and as if such
payment were made by the defaulting Borrower.
Section 14.2. Guarantee Unconditional. The obligations of each
Guarantor and each Borrower as a guarantor under this Section 14 shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any other Borrower
or of any other Guarantor under this Agreement or any other Loan
Document or by operation of law or otherwise;
(b) any modification or amendment of or supplement to
this Agreement or any other Loan Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, any other Borrower, any other Guarantor,
or any of their respective assets, or any resulting release or
discharge of any obligation of any other Borrower or of any other
Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off or other rights
which any Borrower or any Guarantor may have at any time against the
Agent, any Bank or any other Person, whether or not arising in
connection herewith;
(e) any failure to assert, or any assertion of, any claim
or demand or any exercise of, or failure to exercise, any rights or
remedies against any other Borrower, any other Guarantor or any other
Person or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of any Borrower, regardless of
what obligations of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or
against any other Borrower or any other Guarantor for any reason of
this Agreement or of any other Loan Document or any provision of
applicable law or regulation purporting to prohibit the payment by any
other Borrower or any other Guarantor of the principal of or interest
on any Note or any other amount payable by it under the Loan
Documents; or
(h) any other act or omission to act or delay of any kind
by the Agent, any Bank or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Borrowers or the Guarantor under this Section 14.
Section 14.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances. Each Borrower's and each Guarantor's obligations under
this Section 14 shall remain in full force and effect until the Commitments are
terminated and the principal of and interest on the Notes and all other amounts
payable by any Borrower under this Agreement and all other Loan Documents shall
have been paid in full. If at any time any payment of the principal of or
interest on any Note or any other amount payable by any Borrower under the Loan
Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of either Borrower or of a Guarantor,
or
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otherwise, each Borrower's and each Guarantor's obligations under this Section
14 with respect to such payment shall be reinstated at such time as though such
payment had become due but had not been made at such time.
Section 14.4. Waivers. (a) General. Each Borrower and each
Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and any notice not provided for herein, as well as any requirement that at any
time any action be taken by the Agent, any Bank or any other Person against
another Borrower, another Guarantor or any other Person.
(b) Subrogation and Contribution. Each Guarantor and each
Borrower hereby irrevocably waives any claim or other right it may now or
hereafter acquire against any other Borrower or any other Guarantor that arises
from the existence, payment, performance or enforcement of such Guarantor's
obligations under this Section 14 or any other Loan Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, or any right to participate in any claim or
remedy of the Agent, any Bank or any other holder of the indebtedness
guaranteed hereby against any other Borrower or any other Guarantor whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from
any other Borrower or any other Guarantor directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other right.
Section 14.5. Limit on Recovery. Notwithstanding any other
provision hereof, the right to recovery of the Agent and the Banks against each
Guarantor under this Section 14 shall not exceed $1.00 less than the amount
which would render such Guarantor's obligations under this Section 14 void or
voidable under applicable law, including without limitation fraudulent
conveyance law.
Section 14.6. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by any Borrower under this Agreement or any
other Loan Document is stayed upon the insolvency, bankruptcy or reorganization
of such Borrower, all such amounts otherwise subject to acceleration under the
terms of this Agreement or the other Loan Documents shall nonetheless be
payable jointly and severally by the Guarantors and the other Borrowers
hereunder forthwith on demand by the Agent made at the request of the Required
Banks.
SECTION 15. MISCELLANEOUS.
Section 15.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 15.1(b) hereof, each
payment by the Borrowers and the Guarantors under this Agreement or the other
Loan Documents or in respect of the Letters of Credit shall be made without
withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient) imposed by or within the
jurisdiction in which either Borrower or any Guarantor is domiciled, any
jurisdiction from which either Borrower or any Guarantor makes any payment, or
(in each case) any political subdivision or taxing authority thereof or
therein. If any such withholding is so required, the Borrowers or such
Guarantors, as applicable shall make the withholding, pay the amount withheld
to the appropriate governmental authority before penalties attach
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thereto or interest accrues thereon and forthwith pay such additional amount as
may be necessary to ensure that the net amount actually received by each Bank
and the Agent free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which that Bank or the Agent (as the
case may be) would have received had such withholding not been made. If the
Agent or any Bank pays any amount in respect of any such taxes, penalties or
interest the Borrowers and the Guarantors shall reimburse the Agent or that
Bank for that payment on demand in the currency in which such payment was made.
If the Borrowers or the Guarantors pay any such taxes, penalties or interest,
it shall deliver official tax receipts evidencing that payment or certified
copies thereof to the Bank or Agent on whose account such withholding was made
(with a copy to the Agent if not the recipient of the original) on or before
the thirtieth day after payment. If any Bank or the Agent determines it has
received or been granted a credit against or relief or remission for, or
repayment of, any taxes paid or payable by it because of any taxes, penalties
or interest paid by the Borrowers or the Guarantors and evidenced by such a tax
receipt, such Bank or Agent shall, to the extent it can do so without prejudice
to the retention of the amount of such credit, relief, remission or repayment,
pay to the Borrowers or such Guarantor, as applicable, such amount as such Bank
or Agent determines is attributable to such deduction or withholding and which
will leave such Bank or Agent (after such payment) in no better or worse
position than it would have been in if the Borrowers had not been required to
make such deduction or withholding. Nothing in this Agreement shall interfere
with the right of each Bank and the Agent to arrange its tax affairs in
whatever manner it thinks fit nor oblige any Bank or the Agent to disclose any
information relating to its tax affairs or any computations in connection with
such taxes.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Company and the Agent on or before the earlier of the
date the initial Borrowing is made hereunder and thirty (30) days after the
date hereof, two duly completed and signed copies of either Form 1001 (relating
to such Bank and entitling it to a complete exemption from withholding under
the Code on all amounts to be received by such Bank, including fees, pursuant
to the Loan Documents and the Loans) or Form 4224 (relating to all amounts to
be received by such Bank, including fees, pursuant to the Loan Documents and
the Loans) of the United States Internal Revenue Service. Thereafter and from
time to time, each Bank shall submit to the Company and the Agent such
additional duly completed and signed copies of one or the other of such Forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) requested by the Company in a
written notice, directly or through the Agent, to such Bank and (ii) required
under then-current United States law or regulations to avoid or reduce United
States withholding taxes on payments in respect of all amounts to be received
by such Bank, including fees, pursuant to the Loan Documents or the Loans or
the Letters of Credit. Upon the request of the Company, each Bank that is a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Company and the Agent a certificate to the effect
that it is such United States person.
(c) Inability of Bank to Submit Forms. If any Bank determines, as
a result of any
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change in applicable law, regulation or treaty, or in any official application
or interpretation thereof, that it is unable to submit to the Company or Agent
any form or certificate that such Bank is obligated to submit pursuant to
subsection (b) of this Section 15.1. or that such Bank is required to withdraw
or cancel any such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Bank shall
promptly notify the Company and Agent of such fact and the Bank shall to that
extent not be obligated to provide any such form or certificate and will be
entitled to withdraw or cancel any affected form or certificate, as applicable.
Section 15.2. No Waiver of Rights. No delay or failure on the part
of the Agent or any Bank or on the part of the holder or holders of any Note in
the exercise of any power or right under any Loan Document shall operate as a
waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise thereof preclude any other or further exercise of any other
power or right, and the rights and remedies hereunder of the Agent, the Banks
and the holder or holders of any Notes are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
Section 15.3. Non-Business Day. If any payment of principal or
interest on any Note or any fees shall fall due on a day which is not a
Business Day, (i) interest at the rate such Note bears for the period prior to
maturity shall continue to accrue on such principal from the stated due date
thereof to and including the next succeeding Business Day and (ii) such
principal, interest and fees shall be payable on such next succeeding Business
Day
Section 15.4. Documentary Taxes. The Borrowers agree that they
will pay any documentary, stamp or similar taxes payable in respect to any Loan
Document, the Applications or the Letters of Credit, including interest and
penalties, in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any credit is then in use or available
hereunder.
Section 15.5. Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
Section 15.6. Survival of Indemnities. All indemnities and all
other provisions relative to reimbursement to the Banks of amounts sufficient
to protect the yield of the Banks with respect to the Loans, including, but not
limited to, Section 4.8, Section 12.3 and Section 15.15 hereof, shall survive
the termination of this Agreement and the other Loan Documents and the payment
of the Loans and all other Obligations hereunder.
Section 15.7. Sharing of Set-Off. Each Bank agrees with each other
Bank a party hereto that if such Bank shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise ("Set-off"),
on any of the Loans or Reimbursement Obligations in excess of its ratable share
of payments on all such obligations then outstanding to the Banks, then such
Bank shall purchase for cash at face value, but without recourse, ratably from
each of the other Banks such amount of the Loans or Reimbursement Obligations,
or participations therein, held by each such other Banks (or interest therein)
as shall be necessary to cause such Bank to share such excess payment ratably
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with all the other Banks; provided, however, that if any such purchase is made
by any Bank, and if such excess payment or part thereof is thereafter recovered
from such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest. For purposes of this
Section 15.7, amounts owed to or recovered by, the Agent in connection with
Reimbursement Obligations in which Banks have been required to fund their
participation shall be treated as amounts owed to or recovered by the Agent as
a Bank hereunder.
Section 15.8. Notices. Except as otherwise specified herein, all
notices under the Loan Documents shall be in writing (including cable,
telecopy, telex or other electronic communication) and shall be given to a
party hereunder at its address, telecopier number or telex number set forth
below or such other address, telecopier number or telex number as such party
may hereafter specify by notice to the Agent and the Borrowers, given by
courier, by United States certified or registered mail, or by other
telecommunication device capable of creating a written record of such notice
and its receipt. Notices under the Loan Documents to the Banks and the Agent
shall be addressed to their respective addresses, telecopier, telex, or
telephone numbers set forth on the signature pages hereof, and to the Borrowers
and the Guarantors to:
Titan Wheel International
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Schmiedeskamp, Robertson, Neu & Xxxxxxxx
525 Jersey
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Xx.
Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in this Section 15.8 or on the signature pages hereof and a
confirmation of receipt of such telecopy has been received by the sender, (ii)
if given by telex, when such telex is transmitted to the telex number specified
in this Section 15.8 or on the signature pages hereof and the answerback is
received by sender, (iii) if given by courier, when delivered, (iv) if given by
mail, three Business Days after such communication is deposited in the mail,
registered with return receipt requested, addressed as aforesaid or (v) if
given by any other means, when delivered at the addresses specified in this
Section 15.8 or on the signature pages hereof; provided that any notice given
pursuant to Section 1 hereof shall be effective only upon receipt and notices
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xxxxxxxxx xx xxxxxxx (x), (xx), (xxx), and (v) above that are received after
normal business hours will be deemed received at the opening of business on the
next Business Day.
Section 15.9. Counterparts. This Agreement may be executed in any
number of counterpart signature pages, and by the different parties on
different counterparts, each of which when executed shall be deemed an original
but all such counterparts taken together shall constitute one and the same
instrument.
Section 15.10. Successors and Assigns. This Agreement shall be
binding upon the Borrowers and their successors and assigns, and shall inure to
the benefit of each of the Banks and the benefit of their respective successors
and assigns, including any subsequent holder of any Note. The Borrowers may
not assign any of their rights or obligations under any Loan Document without
the written consent of all of the Banks.
Section 15.11. Participants. Each Bank shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Bank at any time and from time to time to one
or more other Persons; provided that (i) no such participation shall relieve
any Bank of any of its obligations under this Agreement, (ii) no Bank shall
agree with such participant not to exercise any of its rights hereunder without
the consent of such participant except for rights which under the terms hereof
may only be exercised by all Banks and (iii) no such participant shall have any
direct rights under this Agreement except as provided in this Section 15.11,
and the Agent shall have no obligation or responsibility to such participant.
Any agreement pursuant to which such participation is granted shall provide
that the granting Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrowers and Guarantors under this Agreement
and the other Loan Documents including, without limitation, the right to
approve any amendment, modification or waiver of any provision of the Loan
Documents, except that such agreement may provide that such Bank will not agree
to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation
in which such participant has an interest. Any party to which such a
participation has been granted shall have the benefits of Section 4.8 and
Section 12.3 hereof. Each Borrower and each Guarantor authorizes each Bank to
disclose to any participant or prospective participant under this Section 15.11
any financial or other information pertaining to the Borrowers or any
Guarantor.
Section 15.12. Assignment Agreements. Each Bank may, from time to
time upon at least five Business Days' notice to the Agent, assign to other
commercial lenders or a Federal Reserve Bank part of its rights and obligations
under this Agreement (including without limitation the indebtedness evidenced
by the Notes then owned by such assigning Bank, together with an equivalent
proportion of its obligation to make loans and advances and participate in
Letters of Credit hereunder) pursuant to written agreements executed by such
assigning Bank, such assignee lender or lenders, the Borrowers and the Agent,
which agreements shall specify in each instance the portion of the indebtedness
evidenced by the Notes which is to be assigned to each such assignee lender and
the portion of the Commitments of the assigning Bank to be assumed by it (the
"Assignment Agreements"); provided, however, that (i) each such assignment
shall be of a constant, and not a varying,
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percentage of the assigning Bank's rights and obligations under this Agreement
and the assignment shall cover the same percentage of such Bank's Revolving
Commitments, Term Commitments, Loans, Notes and interests in Letters of Credit;
(ii) unless the Agent and the Company otherwise consent, the aggregate amount
of the Commitments, Loans, Notes and interests in the Letters of Credit of the
assigning Bank being assigned to such assignee lender pursuant to each such
assignment (determined as of the effective date of the relevant Assignment
Agreement) shall in no event be less than $10,000,000 and shall be an integral
multiple of $5,000,000; (iii) each Bank shall maintain for its own account at
least $10,000,000 of its Commitment or assign all of its Commitment; (iv) the
Agent and the Company must each consent (except for assignments to a Federal
Reserve Bank), which consent shall not be unreasonably withheld, to each such
assignment to a party which was not an original signatory of this Agreement or
an Affiliate of such a signatory; and (v) the assignee lender must pay to the
Agent a processing and recordation fee of $2,500. Upon the execution of each
Assignment Agreement by the assigning Bank thereunder, the assignee lender
thereunder, the Company and the Agent and payment to such assigning Bank by
such assignee lender of the purchase price for the portion of the indebtedness
of the Borrowers being acquired by it, (i) such assignee lender shall thereupon
become a "Bank" for all purposes of this Agreement with Commitments in the
amounts set forth in such Assignment Agreement and with all the rights, powers
and obligations afforded a Bank hereunder, (ii) such assigning Bank shall have
no further liability for funding the portion of its Commitments assumed by such
other Bank and (iii) the address for notices to such assignee Bank shall be as
specified in the Assignment Agreement executed by it. Concurrently with the
execution and delivery of such Assignment Agreement, the Borrowers shall
execute and deliver Notes to the assignee Bank in the amount of its Revolving
Commitment and Term Commitment and new Notes to the assigning Bank in the
amounts of its Revolving Commitment and Term Commitment after giving effect to
the reduction occasioned by such assignment, such Notes to constitute "Notes"
for all purposes of this Agreement. Upon its receipt of such Notes, the
assigning Bank shall return its old Notes to the Borrower marked cancelled.
Section 15.13. Amendments. Any provision of the Loan Documents may
be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by (a) the Borrowers, (b) the Required Banks, and (c) if the
rights or duties of the Agent are affected thereby, the Agent; provided that:
(i) no amendment or waiver pursuant to this Section 15.13
shall (A) increase the Commitment of any Bank without the consent of
such Bank or (B) reduce the amount of or postpone any fixed date for
payment of any principal of or interest on any Loan or Reimbursement
Obligation or of any fee payable hereunder or (C) extend the
Termination Date without the consent of each Bank; and
(ii) no amendment or waiver pursuant to this Section 15.13
shall, unless signed by each Bank, change any provision of Section 9,
Section 11, this Section 15.13, or the definition of Required Banks,
or affect the number of Banks required to take any action under the
Loan Documents.
Section 15.14. Headings. Section headings used in this Agreement
are for reference only and shall not affect the construction of this Agreement.
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Section 15.15. Legal Fees, Other Costs and Indemnification. The
Borrowers agree to pay all reasonable costs and expenses of the Agent in
connection with the preparation and execution of and any amendment, waiver or
consent related to the Loan Documents. The Borrowers further agree to
indemnify each Bank, the Agent, and their respective directors, officers and
employees, against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor, whether or not the indemnified Person is a
party thereto) which any of them may incur or reasonably pay arising out of or
relating to any Loan Document or any of the transactions contemplated thereby
or the direct or indirect application or proposed application of the proceeds
of any Loan or Letter of Credit, other than (i) those which arise from the
gross negligence or willful misconduct of the party claiming indemnification or
(ii) for costs or liabilities incurred in suits which are exclusively among the
Banks or the Banks and the Agent regarding damages not caused by the Borrowers
or any Guarantor. The Borrowers, upon demand by the Agent or a Bank at any
time, shall reimburse the Agent or Bank for any legal or other expenses
incurred in connection with investigating or defending against any of the
foregoing, except if the same is directly due to the gross negligence or
willful misconduct of the party to be indemnified or is for such a suit
exclusively among the Banks or the Banks and the Agent.
Section 15.16. Set Off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Bank and each subsequent
holder of any Note is hereby authorized by each Borrower and each Guarantor at
any time or from time to time, without notice to the Borrowers, to the
Guarantors or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts, and in whatever currency denominated) and any other indebtedness at
any time held or owing by that Bank (or any affiliate thereof) or that
subsequent holder to or for the credit or the account of the Borrowers or any
Guarantor, whether or not matured, against and on account of the obligations
and liabilities of the either Borrower or any Guarantor to that Bank or that
subsequent holder under the Loan Documents, including, but not limited to, all
claims of any nature or description arising out of or connected with the Loan
Documents, irrespective of whether or not (a) that Bank or that subsequent
holder shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or Notes and other amounts due hereunder shall have
become due and payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
Section 15.17. Currency. Each reference in this Agreement to U.S.
Dollars or to an Agreement Currency (the "relevant currency") is of the
essence. To the fullest extent permitted by law, the obligation of the
Borrowers in respect of any amount due in the relevant currency under this
Agreement shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Bank entitled to receive such payment
may, in accordance with normal banking procedures, purchase with the sum paid
in such other currency (after any
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premium and costs of exchange) on the Business Day immediately following the
day on which such party receives such payment. If the amount in the relevant
currency that may be so purchased for any reason falls short of the amount
originally due, the Borrowers shall pay such additional amounts, in the
relevant currency, as may be necessary to compensate for the shortfall. Any
obligations of the Borrowers not discharged by such payment shall, to the
fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
Section 15.18. Currency Equivalence. If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due from a
Borrower hereunder or under the Applications in the currency expressed to be
payable herein or under the Applications (the "specified currency") into
another currency, the parties agree that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Agent could
purchase the specified currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of the
Borrowers in respect of any such sum due to any Bank or the Agent hereunder or
under any Note shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that, on the Business Day
following receipt, such Bank or the Agent, as applicable, may in accordance
with normal banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than
the sum originally due to such Bank or the Agent in the specified currency, the
Borrowers agree, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank and the Agent against such loss, and if the
amount of the specified currency so purchased exceeds the sum of (a) the amount
originally due to the applicable Bank or the Agent in the specified currency
plus (b) any amounts shared with other Banks as a result of allocations of such
excess as a disproportionate payment to such Bank under Section 15.7 hereof,
such Bank or the Agent, as the case may be, agrees to remit such excess to the
Borrowers.
Section 15.19. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior or contemporaneous agreements, whether written or oral,
with respect thereto are superseded thereby.
Section 15.20. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois.
Section 15.21. PERSONAL JURISDICTION.
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
THE AGENT, THE BANKS, THE BORROWERS AND THE GUARANTORS AGREE THAT ALL DISPUTES
AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN XXXX
COUNTY, ILLINOIS, BUT EACH OF THE AGENT, THE BANKS, THE BORROWERS AND THE
GUARANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF XXXX COUNTY, ILLINOIS. THE BORROWERS AND
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THE GUARANTORS WAIVE IN ALL DISPUTES ANY OBJECTION THAT THEY MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b) OTHER JURISDICTIONS. THE BORROWERS AND THE GUARANTORS AGREE
THAT THE AGENT AND EACH OF THE BANKS SHALL HAVE THE RIGHT TO PROCEED AGAINST
THE BORROWERS AND THE GUARANTORS OR THEIR PROPERTY IN A COURT IN ANY LOCATION
TO ENABLE THE AGENT OR ANY BANK TO REALIZE ON PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY BANK. THE
BORROWERS AND THE GUARANTORS AGREE THAT THEY WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY
THE AGENT OR ANY BANK TO REALIZE ON PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF THE AGENT OR ANY BANK. THE BORROWERS AND THE
GUARANTORS WAIVE ANY OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE COURT
IN WHICH THE AGENT OR ANY BANK HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION.
SECTION 15.22. WAIVER OF JURY TRIAL. EACH BORROWER, EACH GUARANTOR,
THE AGENT AND EACH BANK EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,
BETWEEN THE AGENT OR ANY BANK AND ANY BORROWER OR ANY GUARANTOR ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH
OR THE TRANSACTIONS RELATED THERETO. EACH OF THE BORROWERS, THE GUARANTORS,
THE AGENT AND THE BANKS HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 15.23. WAIVER OF BOND. EACH BORROWER AND EACH GUARANTOR
WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE AGENT OR ANY BANK IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON ANY SECURITY FOR THE NOTES AND ANY OTHER
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE AGENT OR ANY BANK, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER, OR PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE AGENT OR ANY
BANK AND ANY BORROWER OR GUARANTOR.
SECTION 15.24. ADVICE OF COUNSEL. EACH BORROWER AND EACH GUARANTOR
REPRESENTS TO THE AGENT AND EACH BANK THAT IT HAS DISCUSSED THIS AGREEMENT WITH
ITS LAWYERS.
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Upon your acceptance hereof in the manner hereinafter set
forth, this Agreement shall be a contract between us for the purposes
hereinabove set forth.
Signature;Dated as of this 19th day of September, 1996.
Titan Wheel International, Inc.
By Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Secretary
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Accepted and Agreed to as of the day and year last above written.
000 Xxxx Xxxxxx Xxxxxx XXXXXX TRUST AND SAVINGS BANK,
Xxxxxxx, Xxxxxxxx 00000 in its individual capacity as a
Bank and
Attention: Xxxxx X. Xxxxxx as Agent
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
By Xxxxx X. Xxxxxx
Revolving Commitment: $23,000,000 Name: Xxxxx X. Xxxxxx
Term Commitment: $12,000,000 Title: Vice President
Lending Offices:
Domestic Rate Loans: 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Eurocurrency Loans: Nassau Branch
c/o 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Bid Loans: 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
CD Rate Loans: 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
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One First National Plaza THE FIRST NATIONAL BANK OF CHICAGO
Mail Suite 0088
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000 By Xxxx X. Xxxxx
Telephone: (000) 000-0000 Name: Xxxx X. Xxxxx
Title: Vice President
Revolving Commitment: $23,000,000
Term Commitment: $12,000,000
Lending Offices:
Domestic Rate Loans: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Eurocurrency Loans: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Bid Loans: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
CD Rate Loans: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
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233 X. Xxxxxx Drive, Suite 2800 NATIONSBANK, N.A.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000 By Xxxx Xxxxx Xxxx
Telephone: (000) 000-0000 Name: Xxxx Xxxxx Xxxx
Title: Vice President
Revolving Commitment: $23,000,000
Term Commitment: $12,000,000
Lending Offices:
Domestic Rate Loans: Independence Center
000 X. Xxxxx Xxxxxx
XX 1-001-15-03
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Eurocurrency Loans: Independence Center
000 X. Xxxxx Xxxxxx
XX 1-001-15-03
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Bid Loans: Independence Center
000 X. Xxxxx Xxxxxx
XX 1-001-15-03
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
CD Rate Loans: Independence Center
000 X. Xxxxx Xxxxxx
NC 1-001-15-03
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
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Institutional Banking MERCANTILE BANK OF ST. LOUIS NATIONAL
One Mercantile Center ASSOCIATION
7th & Washington
Tram 00-0
Xx. Xxxxx, Xxxxxxxx 00000 By Xxxxxx X. Xxxxxx, Xx.
Attention: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000 Title: Vice President
Telephone: (000) 000-0000
Revolving Commitment: $13,142,857.14
Term Commitment: $6,857,142.86
Lending Offices:
Domestic Rate Loans: One Mercantile Center
7th & Washington
Tram 00-0
Xx. Xxxxx, Xxxxxxxx 00000
Eurocurrency Loans: One Mercantile Center
7th & Washington
Tram 00-0
Xx. Xxxxx, Xxxxxxxx 00000
Bid Loans: One Mercantile Center
7th & Washington
Tram 00-0
Xx. Xxxxx, Xxxxxxxx 00000
CD Rate Loans: One Mercantile Center
7th & Washington
Tram 00-0
Xx. Xxxxx, Xxxxxxxx 00000
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25 Park Place SUNTRUST BANK, ATLANTA
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxx By Xxxxxxx X. Xxxx
Telecopy: (000) 000-0000 Name: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000 Title: Banking Officer
Revolving Commitment: $16,428,571.43
Term Commitment: $8,571,428.57
By Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Group Vice President
Lending Offices:
Domestic Rate Loans: 00 Xxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Eurocurrency Loans: 00 Xxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Bid Loans: 00 Xxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
CD Rate Loans: 00 Xxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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000 Xxxxx XxXxxxx Xxxxxx XXX AMRO BANK N.V.
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Czech
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
By Xxxxxxx X. Czech
Revolving Commitment: $16,428,571.43 Name: Xxxxxxx X. Czech
Term Commitment: $8,571,428.57 Title: Vice President
By Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Lending Offices:
Domestic Rate Loans: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Eurocurrency Loans: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Bid Loans: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
CD Rate Loans: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
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