1
EXHIBIT 10.1
CREDIT AGREEMENT
This Agreement, dated as of July 13, 1999 is among 20 20 Corp. 70, a
Michigan corporation, the Lenders and Bank One, Michigan, as Agent. The parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any Person or division thereof, whether
through purchase of assets, merger or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority a majority (by percentage or voting power) of
the outstanding Capital Stock of any Person.
"Advance" means a borrowing hereunder, (i) made by the Lenders on the
same Borrowing Date, or (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Revolving Credit Loans of the same Type and, in the case
of Eurodollar Loans, for the same Interest Period.
"Aetna Holdings" means Aetna Holdings, Inc., a Delaware corporation.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One, Michigan in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders from time to time.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
2
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4 and
subject to Section 9.8.
"Alternate Prime Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which commitment fees are accruing per Section 2.5 at such time as set forth
in the Pricing Schedule.
"Applicable Margin" means, with respect to Loans and Facility LCs at
any time, the percentage rate per annum which is applicable at such time with
respect thereto as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Sale" means the sale, transfer or other disposition by the
Borrower or any Subsidiary of any asset of any kind to any Person.
"Authorized Officer" means any of the chief executive officer, the
president, any vice presidentor secretary of the Borrower, acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, Michigan, a Michigan banking corporation.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Borrower" means 20 20 Corp. 70, a Michigan corporation, and its
successors and assigns, including pursuant to its merger with Zenith Industrial
Corporation.
2
3
"Borrowing Date" means a date on which an Advance or Swing Loan is made
hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Detroit and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Detroit for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.
"Capital Stock" means (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock and
any warrants, rights or other options to purchase or otherwise acquire capital
stock or such securities or any other form of equity securities, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distribution of assets of, the issuing
Person, including without limitation trust beneficiary interests.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means:
(1) cash;
(2) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof (provided
that the full faith and credit of the United States of America is pledged in
support thereof);
(3) time deposits and certificates of deposit of any Lender or any
domestic commercial bank of recognized standing having capital and surplus in
excess of $250,000,000;
(4) commercial paper issued by others rated at least A-1 or the
equivalent thereof by Standard & Poor's Corporation or at least P-1 or the
equivalent thereof by Xxxxx'x Investors Service, Inc;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of
3
4
the types described in clause (1) above entered into with any bank meeting the
qualifications specified in clause (3) above;
(6) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $250,000,000;
(7) investments in money market funds which invest substantially all
their assets in securities of the type described in clauses (1), (2) (3) and (4)
above and in the case of (1), (2) and (3) maturing within one year after the
date of acquisition.
"Change of Control" means the occurrence of any of the following:
(1) The direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Borrower and its Subsidiaries or of Trianon and its Subsidiaries taken as
a whole to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act);
(2) The adoption of a plan relating to the liquidation or dissolution
of the Borrower or of Trianon;
(3) The consummation of any transaction (including, without limitation,
any merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principals and their Related Parties, becomes the
Beneficial Owner, directly or indirectly, of more than 20% of the Voting Stock
of Trianon, measured by voting power rather than number of shares;
(4) The first day on which a majority of the members of the Board of
Directors of the Borrower or of Trianon are not Continuing Directors;
(5) Trianon consolidates with, or merges into, any Person, or any
Person consolidates with, or merges with or into, Trianon, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of
Trianon or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where the Voting Stock of
Trianon outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance); or
(6) Trianon shall fail to own, free and clear of all Liens, 100% of the
Capital Stock of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means (i) all present and future Property of the Borrower
and of the Subsidiary Guarantors, including without limitation any funds held in
escrow pursuant to the Zenith Acquisition Documents, (ii) 64% of the Capital
Stock of SOFEDIT and (iii) 100% of the Capital Stock of Aetna Holdings, Aetna
Industries, Inc. and the Borrower.
"Collateral Documents" means, collectively, the Security Agreements,
the Mortgages and all other
4
5
agreements granting a Lien in favor of the Agent securing the Secured
Obligations, as any of the foregoing may be amended or modified from time to
time.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans, and to participate in Facility LCs issued upon the application of,
and Swing Loans made at the request of, the Borrower in an aggregate amount not
exceeding the amount set forth opposite its signature below or as set forth in
any Notice of Assignment relating to any assignment that has become effective
pursuant to Section 12.3.2, as such amount may be modified from time to time
pursuant to the terms hereof.
"Consolidated" or "consolidated" means, when used with reference to any
financial term in this Agreement, the aggregate for two or more Persons of the
amounts signified by such term for all such Persons determined on a consolidated
basis in accordance with Agreement Accounting Principles.
"Consolidated Adjusted EBITDA" means Consolidated Net Income plus, to
the extent deducted from revenues in determining Consolidated Net Income, (i)
Consolidated Interest Expense, (ii) expense for income taxes paid or accrued,
(iii) depreciation, (iv) amortization, and (v) with respect to the amounts
determined for any fiscal quarter in the fiscal year of the Borrower ended
December 31, 1998, such expenses as separately scheduled by the Borrower and
acceptable to the Agent, all calculated for the Borrower and its Subsidiaries on
a consolidated basis.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period.
"Consolidated Interest Expense" means, for any period, total net
interest and related expense owed to Persons other than the Borrower and its
Wholly Owned Subsidiaries (including, without limitation or duplication, that
portion of any Capitalized Lease Obligation attributable to interest expense in
conformity with Agreement Accounting Principles, amortization of debt discount,
all capitalized interest, the interest portion of any deferred payment
obligations, all commissions, discounts and other fees and charges owed with
respect to letter of credit and bankers acceptance financing, the net costs and
net payments under any interest rate hedging, cap or similar agreement or
arrangement, agency fees and capitalized transaction costs allocated to interest
expense) paid, payable or accrued during such period, without duplication for
any other period or otherwise, with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries, all as determined for the Borrower and its
Subsidiaries on a consolidated basis for such period in accordance with
Agreement Accounting Principles.
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period, determined in accordance with
Agreement Accounting Principles; provided that in determining Consolidated Net
Income there shall be excluded, without duplication: (a) the income of any
Person (other than a Subsidiary of the Borrower) in which any Person other than
the Borrower or any of its Subsidiaries has a joint interest or partnership
interest, except to the extent of the amount of dividends or other distributions
actually paid in cash to the Borrower or any of its Subsidiaries by such Person
during such period, (b) the income of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries or that Person's assets are acquired by the
Borrower or any of its Subsidiaries, (c) gains and losses from the sale,
exchange, transfer or other disposition of property or assets not in the
ordinary course of business of the Borrower and its Subsidiaries, and related
tax effects in
5
6
accordance with Agreement Accounting Principles, (d) any extraordinary or
non-recurring gains, and related tax effects in accordance with Agreement
Accounting Principles, (e) any other income not from the continuing operations
of the Borrower or its Subsidiaries, and related tax effects in accordance with
Agreement Accounting Principles, (f) the income of any Subsidiary of the
Borrower that is not a Guarantor to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that income is not
at the date of determination permitted by operation of the terms of its charter
or of any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, or its owners, and (g)
any non-cash items added to income, excluding any such non-cash items to the
extent it represents the reversal of an accrual or reserve for potential cash
items in any prior period.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis as of such time.
"Consolidated Rentals" means, with reference to any period, the Rentals
of the Borrower and its Subsidiaries calculated on a consolidated basis for such
period.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
maximum stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith and acceptable to the Agent.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Trianon or of the Borrower, as the case may
be, who:
(1) was a member of such Board of Directors on the date of this
Agreement; or
(2) was nominated for election to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance, the making of a
Swing Loan or the issuance of a Facility LC hereunder.
6
7
"Credit Extension Date" means the Borrowing Date for an Advance or
Swing Loan or the issuance date for a Facility LC or any conversion or
continuation thereof.
"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that (i) on any Borrowing Date
fails to make available to the Agent such Lender's Loans required to be made to
the Borrower on such Borrowing Date, (ii) shall not have made a payment to the
Agent required under this Agreement, (iii) shall not have made a payment to the
LC Issuer required under this Agreement, or (iv) is subject to receivership,
conservatorship or other insolvency proceeding. Once a Lender becomes a
Defaulting Lender, such Lender shall continue as a Defaulting Lender until such
time as such Defaulting Lender makes available to the Agent, the amount of such
Defaulting Lender's Loans and to the LC Issuer, such payments requested by the
LC Issuer together with all other amounts required to be paid to the Agent
and/or the LC Issuer pursuant to this Agreement.
"Disqualified Capital Stock" means (a) with respect to a Person, except
as to any Subsidiary of such Person, any Capital Stock of such Person that, by
its terms or by the terms of any security into which it is convertible,
exercisable or exchangeable, is, or upon the happening of an event or the
passage of time would be, required to be redeemed or repurchased (including at
the option of the holder thereof) by such Person or any of its Subsidiaries, in
whole or in part, on or prior to the Facility Termination Date and (b) with
respect to any Subsidiary of such Person (including with respect to any
Subsidiary of the Borrower), any Capital Stock other than any common equity with
no preference, privileges, or redemption or repayment provisions.
"Environmental Certificate" means an appropriately completed
environmental certificate, substantially in the form approved by the Agent,
delivered by each of the Borrower and the Subsidiary Guarantors, certified as
true and correct as of such date by an Authorized Officer of the Borrower and
each Subsidiary Guarantor.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Escrow Account" means the Escrow Account established pursuant to the
Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement dated the date hereof and
executed pursuant to the Zenith Acquisition between the Borrower and the sellers
party to the Zenith Acquisition Documents.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
7
8
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Agent to be the rate at
which Bank One offers or would offer to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
in the approximate amount of Bank One's relevant Eurodollar Loan and having a
maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Exchange Act" means the securities Exchange Act of 1934, as amended
from time to time, and the rules, regulations and interpretations thereunder.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or any political
subdivision thereof and (ii) the jurisdiction in which the Agent's or such
Lender's principal executive office and such Lender's applicable Lending
Installation is located or any political subdivision thereof.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Facility LC" is defined in Section 2.19.1.
"Facility LC Application" is defined in Section 2.19.3.
"Facility LC Collateral Account" is defined in Section 2.19.11.
"Facility Termination Date" means the earliest to occur of (a) July 13,
2004, (b) the date upon which a Public Offering of Capital Stock of Trianon is
made, or (c) the date upon which Trianon incurs, extends or refinances any
Indebtedness in excess of $10,000,000, other than extensions of existing
Indebtedness of Trianon with the same lender and the incurrence of Indebtedness
of Trianon pursuant to the Subordinated Debt Documents.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Detroit
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
8
9
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates, forward rates or commodity prices, including, but not limited
to, interest rate swap or exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Prime Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Prime Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"Governmental Authority" means any nation or government, any state, or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, whether foreign or domestic.
"Guarantor" means Trianon, Aetna Holdings, and all present and future
Subsidiaries of the Borrower.
"Guaranty" means that certain guaranty dated as of the date hereof
executed by the Guarantors in favor of the Agent, for the ratable benefit of the
Lenders, and any other guaranty executed in connection with this Agreement or
otherwise guaranteeing the Secured Obligations at any time, as each may be
amended or modified and in effect from time to time.
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) obligations of such Person to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, and (vii) any other obligation for borrowed money or other
financial accommodation or similar obligation which in accordance with Agreement
Accounting Principles would be shown as a liability on the consolidated balance
sheet of such Person, (viii) any Off Balance Sheet Liability, (ix) the undrawn
amount of any Letter of Credit issued for the account of such person and all
amounts drawn under any such Letters of Credit which have not been reimbursed by
such Person, (x) in the case of the Borrower, the amount of all Zenith
Acquisition Obligations, and (xi) any Contingent Obligations of any such Person,
other than any permissible Rate Hedging Obligations.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement; provided, however, notwithstanding anything
in this Agreement to the contrary and only at the Agent's sole option, for the
period from the date of this Agreement to the earlier of (i) the date that is 90
days after the date hereof and (ii) the date upon which the Arranger confirms
that the loan syndication process has been
9
10
complete (the "Syndication Period"), "Interest Period" means, with respect to a
Eurodollar Loan, a period of seven (7) days , provided that during such period
all Interest Periods shall end on the same day. Other than during the
Syndication Period, such Interest Period shall end on the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.19.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19.5.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Total Debt outstanding on such date to (ii) Consolidated Adjusted EBITDA for the
Borrower's then most-recently ended four fiscal quarters.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
10
11
"Loan" means any Revolving Credit Loan or any Swing Loan.
"Loan Documents" means this Agreement, the Facility LC Applications,
any Notes issued pursuant to Section 2.13, the Collateral Documents, the
Guaranties and all other agreements and documents executed or delivered in
connection with any of the foregoing at any time, as each may be amended or
modified from time to time.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole or of Trianon
and its Subsidiaries taken as a whole, (ii) the ability of the Borrower or any
Guarantor to perform its obligations under the Loan Documents to which it is a
party, or (iii) the validity or enforceability of any of the Loan Documents or
the rights or remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Obligation" is defined in Section 7.5.
"Modify" and "Modification" are defined in Section 2.19.1.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgages" means each mortgage, deed of trust or similar agreement
entered into by the Borrower or any Guarantor for the benefit of the Agent to
secure the Secured Obligations pursuant to this Agreement and in form and
substance satisfactory to the Agent, as amended or modified from time to time.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, without duplication (a) in connection with
any sale or other disposition of any asset or any settlement by, or receipt of
payment in respect of, any property insurance claim or condemnation award, the
cash proceeds (including any cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such sale,
settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Agent to secure the Secured
Obligations) and other customary fees and expenses actually incurred in
connection therewith, taxes paid or reasonably estimated to be payable as a
result thereof, and any cash reserves required to be maintained for liabilities
associated with the sale (provided that such cash reserves shall become Net Cash
Proceeds when no longer required to be held as reserves), and (b) in connection
with any issuance or sale of any equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of investment banking fees, reasonable and
documented attorneys' fees, accountants' fees, underwriting discounts and
commissions and other reasonable and customary fees and expenses actually
incurred in connection therewith.
11
12
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit E.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from this clause (iv) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the
Borrower and its Subsidiaries.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Revolving Credit Loans
outstanding at such time, plus (ii) an amount equal to its Pro Rata Share of the
LC Obligations at such time, plus (iii) an amount equal to its pro Rata Share of
the Swing Loans at such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last Business Day of each month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
12
13
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" shall mean the per annum rate announced by the Agent from
time to time as its "prime rate" (it being acknowledged that such announced rate
may not necessarily be the lowest rate charged by the Agent to any of its
customers); which Prime Rate shall change simultaneously with any change in such
announced rate.
"Principals" means Xxxxxxx Xxxxx, Xxxxx Xxxxxxxx and Xxxx-Xxxx
Hergoualc'h.
"Pro Forma Financial Statements and Projections" mean the pro forma
financial statements giving effect to the Zenith Acquisition and projections of
the financial results of the Borrower furnished by the Borrower to the Agent
prior to the date of this Agreement.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment (or, if the
Commitments have expired or been terminated, the amount thereof immediately
prior to such expiration or termination) and the denominator of which is the
Aggregate Commitment (or, if the Aggregate Commitment has expired or been
terminated, the amount thereof immediately prior to such expiration or
termination).
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Public Offering" means the sale of Capital Stock of Trianon pursuant
to (a) a registration statement under the Securities Act that has been declared
effective by the SEC or (b) a public offering outside the United States and
which results, in either case, in an active trading market for such shares. An
active trading marketing shall be deemed to exist if such shares are listed on
the New York Stock Exchange, the American Stock Exchange, the Nasdaq Small Cap
Market, the Nasdaq National Market system or any other major (as determined by
the Agent) domestic or international trading market.
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Hedging Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as
13
14
from time to time in effect and any successor thereto or other regulation or
official interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Related Party" means:
(i) any 80% (or more) owned Subsidiary or immediate family member (in
the case of an individual) of any Principal, or
(ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to the in the immediately preceding clause
(i).
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the Aggregate Outstanding
Credit Exposure.
"Requirement of Law" means, as to any Person, any law (statutory or
common), order, writ, injunction, decree, award, treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its Property or to which the
Person or any of its Property is subject.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
14
15
"Revolving Credit Block Amount" means (i) zero if no amount has been
funded at any time under the Subordinated Debt Documents and (ii) at any time on
or after any amount is funded under the Subordinated Debt Documents, an amount
equal to the excess, if any, of (a) the Zenith Acquisition Obligations less an
amount deducted therefrom as approved by the Agent, provided that the amount
determined under this clause (a) shall not be less than the Zenith Acquisition
Obligations payable over the one year period following such time of
determination, over (b) the amount that is available to be drawn, but is
undrawn, by the Borrower under the Subordinated Debt Documents with Trianon.
"Revolving Credit Loan" means any loan made by any Lender under Section
2.1 (or any conversion or continuation thereof).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Rate Hedging Obligations of the Borrower or any of its Subsidiaries owing to
one or more Lenders or their Affiliates.
"Security Agreement" means each security agreement, pledge agreement,
pledge and security agreement or similar agreement entered into by the Borrower
or any Guarantor for the benefit of the Agent to secure the Secured Obligations
pursuant to this Agreement, in form and substance acceptable to the Agent, as
amended or modified from time to time.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules, regulations and interpretations thereunder.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SOFEDIT" means Societe Financiere d' etudes de Developpement
Industriel et Technologique, a French societe anonyme.
"Subordinated Debt Documents" means the Subordinated Debt Agreements
and all agreements, instruments and documents executed in connection therewith
at any time, in each case in form and substance satisfactory to the Agent and as
amended or modified from time to time as permitted hereunder.
"Subordinated Debt Agreements" means, collectively, all present and
future agreements between Trianon and First Chicago Capital Corp. and the other
lenders party thereto with respect to the funding of
15
16
Subordinated Indebtedness or, if acceptable to the Agent, Indebtedness by such
lenders to Trianon and the agreements between Trianon and the Borrower with
respect to the funding of Subordinated Indebtedness by Trianon to the Borrower,
in each case in form and substance satisfactory to the Agent and as amended or
modified from time to time as permitted hereunder.
"Subsidiary Guarantors" means each Guarantor which is a Subsidiary of
the Borrower.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Secured
Obligations to the written satisfaction of the Agent.
"Subsidiary" of a Person means any other Person more than 50% of the
outstanding Capital Stock having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of such
Person and its Subsidiaries, Property which (a) represents more than 10% of the
consolidated assets of such Person and its Subsidiaries as would be shown in the
consolidated financial statements of such Person and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made, (b) is responsible for more than 10% of the consolidated
net sales or of the consolidated net income of such Person and its Subsidiaries
as reflected in the financial statements referred to in clause (a) above, (c)
represents more than 25% of the consolidated assets of such Person and its
Subsidiaries as would be shown in the consolidated financial statements of such
Person and its Subsidiaries as of the date of this Agreement or (d) is
responsible for more than 25% of the consolidated net sales or of the
consolidated net income of such Person and its Subsidiaries as reflected in the
financial statements referred to in clause (c) above.
"Swing Loans" is defined in Section 2.20.1.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Total Debt" means at any time the Indebtedness of the Borrower and its
Subsidiaries less cash and Cash Equivalent Investments of the Borrower and its
Subsidiaries (including any cash or Cash Equivalent Investments on deposit in
the Escrow), calculated on a consolidated basis as of such time.
"Transferee" is defined in Section 12.4.
"Trianon" means Trianon Industries Corp., formerly known as MS
Acquisition Corp., a Delaware corporation.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
16
17
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice under this Agreement, or both, would constitute a Default.
"Voting Stock" of any Person as of any date means the Capital Stock of
such person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries and of the Borrower's and its Subsidiaries' material customers,
suppliers and vendors.
"Year 2000 Program" is defined in Section 5.19.
"Zenith" means Zenith Industrial Corporation, a Michigan corporation.
"Zenith Acquisition" means the Acquisition to be completed pursuant to
the Zenith Acquisition Documents.
"Zenith Acquisition Documents" means the Stock Purchase Agreement dated
May 6, 1999 between Trianon (and assigned to the Borrower) and the sellers
listed therein for the Acquisition of all of the Capital Stock of Zenith,
together with all agreements, documents and instruments executed in connection
therewith or otherwise pursuant thereto.
"Zenith Acquisition Obligations" means, at any time, the amounts
payable (exclusive of amounts previously paid) pursuant to the Zenith
Acquisition Documents, including without limitation all earn outs, commissions,
interest compensation payments and other payments payable thereunder, as
estimated from time to time by the Borrower pursuant to the most recent
certificate of the Borrower delivered pursuant to Section 6.1(iv) (or pursuant
to a certificate of the Borrower delivered on the date hereof prior to the
delivery of the first certificate under Section 6.1(iv)), provided that such
estimate and the amount thereof shall be acceptable to the Agent.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility
17
18
Termination Date, each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to (i) make Revolving Credit Loans to the Borrower and
(ii) participate in Facility LCs issued upon the request of the Borrower and
Swing Loans made by the Agent upon the request of the Borrower, provided that,
after giving effect to the making of each such Revolving Credit Loan and Swing
Loan and the issuance of each such Facility LC, (a) such Lender's Outstanding
Credit Exposure shall not exceed its Commitment and (b) the Aggregate
Outstanding Credit Exposure shall not exceed the difference of the Aggregate
Commitments minus the Revolving Credit Blocked Amount. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any time prior to
the Facility Termination Date. The Commitments to extend credit hereunder shall
expire on the Facility Termination Date. The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set forth in Section 2.19. The Agent may
make Swing Loans hereunder on the terms and conditions set forth in Section
2.20.
2.2. Required Payments; Termination. (i) The Aggregate Outstanding
Credit Exposure and all other unpaid Obligations shall be paid in full by the
Borrower on the Facility Termination Date.
(ii) If at any time the Aggregate Outstanding Credit Exposure
exceeds the difference of the Aggregate Commitments minus the Revolving Credit
Blocked Amount, the Borrower shall promptly prepay the Credit Extensions in an
amount equal to such excess.
(iii) In addition to all other payments of the Credit
Extensions required hereunder, the Borrower shall prepay the Credit Extensions
and reduce the Aggregate Commitments by an amount equal to 100% of all of the
Net Cash Proceeds, payable upon receipt of such Net Cash Proceeds, from any sale
or other disposition of any assets (exclusive of the sale of inventory in the
ordinary course of business upon customary credit terms), in excess of
$1,000,000 in aggregate amount in any fiscal year, provided that the Borrower
shall not be required to prepay the Credit Extensions from the Net Cash Proceeds
from the sale or any disposition of assets if such Net Cash Proceeds will be
used within 360 days of their receipt to purchase similar assets of comparable
value. The Borrower shall provide a certificate to the Agent within 20 days
after each sale of assets, which, but for the above proviso, would cause a
prepayment under this Section 2.2(iii), which certificate shall describe such
sale of assets and estimate when such Net Cash Proceeds will be used to purchase
similar assets of comparable value; and if such Net Cash Proceeds are not used
within 360 days after such sale or such earlier date when the Borrower has
determined not to purchase similar assets of comparable value with such Net Cash
Proceeds the Borrower will then prepay the Credit Extensions with, and reduce
the Aggregate Commitments by the amount of, such Net Cash Proceeds.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably according to their Pro Rata Shares.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender according to its Pro
Rata Share a commitment fee at a per annum rate equal to the Applicable Fee Rate
on the average daily amount of the difference between the Aggregate Commitment
minus the aggregate principal amount of the Revolving Credit Loans and the
Aggregate LC Obligations from the date hereof to and including the Facility
Termination Date, payable on each Payment Date hereafter and on the Facility
Termination Date. The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$5,000,000, upon at
18
19
least five Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be reduced below the sum of the Aggregate
Outstanding Credit Exposure plus the Revolving Credit Blocked Amount. All
reductions of the Commitments, whether optional or mandatory, shall reduce the
Commitments for all time periods stated for the Commitments. All accrued
commitment fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Credit Extensions hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $500,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the Available
Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $1,000,000 or any integral multiple of $500,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon two
Business Days' prior notice to the Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $5,000,000 or any integral multiple of
$1,000,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three Business Days' prior notice to the Agent.
2.8. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Detroit time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Detroit time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Detroit to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y)
19
20
the Borrower shall have given the Agent a Conversion/Continuation Notice (as
defined below) requesting that, at the end of such Interest Period, such
Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.6, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Detroit time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Prime Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period
may end after the Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance and Swing Loan shall bear interest at a rate per annum
equal to the Floating Rate in effect from time to time plus 2% per annum and
(iii) the LC Fee shall be increased by 2% per annum, provided that, during the
continuance of a Default under Section 7.6 or 7.7, the interest rates set forth
in clauses (i) and (ii) above and the increase in the LC Fee set forth in clause
(iii) above shall be applicable to all Credit Extensions without any election or
action on the part of the Agent or any Lender.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (Detroit time) on the date when
due and shall (except in the case of
20
21
Reimbursement Obligations for which the LC Issuer has not been fully indemnified
by the Lenders, or as otherwise specifically required hereunder) be applied
ratably by the Agent among the Lenders. Each payment delivered to the Agent for
the account of any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to
charge the account of the Borrower maintained with Bank One or any of its
Affiliates for each payment of principal, interest, Reimbursement Obligations
and fees as it becomes due hereunder. Each reference to the Agent in this
Section 2.12 shall also be deemed to refer, and shall apply equally, to the LC
Issuer, in the case of payments required to be made by the Borrower to the LC
Issuer pursuant to Section 2.19.6.
2.13. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
(c) the original stated amount of each Facility LC and the amount of LC
Obligations outstanding at any time, and (d) the amount of any sum received by
the Agent hereunder from the Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note (a "Note"). In such event, the Borrower shall prepare, execute and deliver
to such Lender a Note payable to the order of such Lender in a form supplied by
the Agent. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 12.3, except to the extent that any such
Lender or assignee subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described in paragraphs (i)
and (ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
21
22
2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest, commitment fees and LC Fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. Promptly after notice from the LC Issuer, the Agent will notify
each Lender of the contents of each request for issuance of a Facility LC
hereunder. The Agent will notify each Lender of the interest rate applicable to
each Eurodollar Advance promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Prime Rate.
2.17. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and Swing Loans, the Agent may book the
Swing Loans and the LC Issuer may book the Facility LCs at any Lending
Installation selected by such Lender, the Agent or the LC Issuer, as the case
may be, and may change its Lending Installation from time to time. All terms of
this Agreement shall apply to any such Lending Installation and the Loans,
Facility LCs, participations in LC Obligations and Swing Loans and any Notes
issued hereunder shall be deemed held by each Lender or the LC Issuer, as the
case may be, for the benefit of any such Lending Installation. Each Lender and
the LC Issuer may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it or Facility LCs will be issued by it and
for whose account Loan payments or payments with respect to Facility LCs and
Swing Loans are to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the
22
23
Borrower, the interest rate applicable to the relevant Loan.
2.19. Facility LCs.
2.19.1. Issuance. The LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue standby and
commercial letters of credit (each, a "Facility LC") and to renew,
extend, increase, decrease or otherwise modify each Facility LC
("Modify," and each such action a "Modification"), from time to time
from and including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the
aggregate amount of the outstanding LC Obligations shall not exceed
$5,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall not
exceed the Aggregate Commitment. No Facility LC shall have an expiry
date later than the earlier of (x) the date one month prior to the then
known Facility Termination Date and (y) one year after its issuance.
2.19.2. Participations. Upon the issuance or Modification by
the LC Issuer of a Facility LC in accordance with this Section 2.19,
the LC Issuer shall be deemed, without further action by any party
hereto, to have absolutely, automatically, unconditionally and
irrevocably sold to each Lender, and each Lender shall be deemed,
without further action by any party hereto, to have absolutely,
automatically, unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata
Share.
2.19.3. Notice. Subject to Section 2.19.1, the Borrower shall
give the LC Issuer notice prior to 10:00 a.m. (Detroit time) at least
five Business Days (or such lesser period as agreed to by the LC
Issuer) prior to the proposed date of issuance or Modification of each
Facility LC, specifying the beneficiary, the proposed date of issuance
(or Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such
notice, the LC Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender, of the contents thereof and of the
amount of such Lender's participation in such proposed Facility LC. The
issuance or Modification by the LC Issuer of any Facility LC shall, in
addition to the conditions precedent set forth in Article IV (the
satisfaction of which the LC Issuer shall have no duty to ascertain),
be subject to the conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments
and agreements relating to such Facility LC as the LC Issuer shall have
reasonably requested (each, a "Facility LC Application"). In the event
of any conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall control.
2.19.4. LC Fees. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, with respect to each Facility LC, a letter of credit fee
at a per annum rate equal to the Applicable Margin for Eurodollar Loans
in effect from time to time on the average daily undrawn stated amount
under such standby Facility LC, such fee to be payable in arrears on
each Payment Date, (each such fee described in this sentence an "LC
Fee"). The Borrower shall also pay to the LC Issuer for its own account
(x) at the time of issuance of each Facility LC, a fronting fee in an
amount equal to 0.25% per annum on the average daily undrawn stated
amount under each Facility LC, and (y) documentary and processing
23
24
charges in connection with the issuance or Modification of and draws
under Facility LCs in accordance with the LC Issuer's standard schedule
for such charges as in effect from time to time.
2.19.5. Administration; Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent
shall promptly notify the Borrower and each other Lender as to the
amount to be paid by the LC Issuer as a result of such demand and the
proposed payment date (the "LC Payment Date"). The responsibility of
the LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment
shall be in conformity in all material respects with such Facility LC.
The LC Issuer shall endeavor to exercise the same care in the issuance
and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being
understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be absolutely,
unconditionally and irrevocably liable (and such obligation shall not
be affected by any circumstance, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender has or may have against the LC Issuer, the Agent or the Borrower
or any if its Subsidiaries or anyone else for any reason whatsoever;
(B) the occurrence or continuance of an Unmatured Default or a Default;
(C) any adverse change in the condition (financial or otherwise) of the
Borrower or any of its Subsidiaries or any other Guarantor; (D) any
breach of this Agreement or any other Loan Document by any other
Lender, the Borrower or any Guarantor; or (E) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing ,including without limitation the Borrower's failure to
satisfy any conditions contained in Article IV or any other provision
of this Agreement) to reimburse the LC Issuer on demand for (i) such
Lender's Pro Rata Share of the amount of each payment made by the LC
Issuer under each Facility LC to the extent such amount is not
reimbursed by the Borrower pursuant to Section 2.19.6 below, plus (ii)
interest on the foregoing amount to be reimbursed by such Lender, for
each day from the date of the LC Issuer's demand for such reimbursement
(or, if such demand is made after 11:00 a.m. (Detroit time) on such
date, from the next succeeding Business Day) to the date on which such
Lender pays the amount to be reimbursed by it, at a rate of interest
per annum equal to the Federal Funds Effective Rate for the first three
days and, thereafter, at a rate of interest equal to the rate
applicable to Floating Rate Advances.
2.19.6. Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the later of (x) the applicable LC Payment Date and (y) the
date on which the Borrower shall have received the related notice from
the Agent under Section 2.19.5 for any amounts to be paid by the LC
Issuer upon any drawing under any Facility LC, without presentment,
demand, protest or other formalities of any kind; provided that neither
the Borrower nor any Lender shall hereby be precluded from asserting
any claim for direct (but not consequential) damages suffered by the
Borrower or such Lender to the extent, but only to the extent, caused
by (i) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC issued by
it complied with the terms of such Facility LC or (ii) the LC Issuer's
failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day from the later of (x) the applicable LC Payment
Date and (y) the date on which the Borrower shall have received the
related notice from the Agent under Section 2.19.5 until paid at a rate
per annum equal to (x) the rate applicable to Floating Rate
24
25
Advances for such day if such day falls on or before the applicable LC
Payment Date and (y) the sum of 2% plus the rate applicable to Floating
Rate Advances for such day if such day falls after such LC Payment
Date. The LC Issuer will pay to each Lender ratably in accordance with
its Pro Rata Share all amounts received by it from the Borrower for
application in payment, in whole or in part, of the Reimbursement
Obligation in respect of any Facility LC issued by the LC Issuer, but
only to the extent such Lender has made payment to the LC Issuer in
respect of such Facility LC pursuant to Section 2.19.5. Subject to the
terms and conditions of this Agreement (including without limitation
the submission of a Borrowing Notice in compliance with Section 2.8 and
the satisfaction of the applicable conditions precedent set forth in
Article IV), the Borrower may request an Advance hereunder for the
purpose of satisfying any Reimbursement Obligation.
2.19.7. Obligations Absolute. The Borrower's obligations under
this Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put the LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.19.7 is intended to limit the right of the
Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.19.6.
2.19.8. Actions of LC Issuer. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.19, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.19.9. Indemnification. The Borrower hereby agrees to
indemnify and hold harmless
25
26
each Lender, the LC Issuer and the Agent, and their respective
directors, officers, agents and employees from and against any and all
claims and damages, losses, liabilities, costs or expenses which such
Lender, the LC Issuer or the Agent may incur (or which may be claimed
against such Lender, the LC Issuer or the Agent by any Person
whatsoever) by reason of or in connection with the issuance, execution
and delivery or transfer of or payment or failure to pay under any
Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any Defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, reasonably satisfactory to the LC Issuer,
evidencing the appointment of such successor Beneficiary; provided that
the Borrower shall not be required to indemnify any Lender, the LC
Issuer or the Agent for any claims, damages, losses, liabilities, costs
or expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of the LC Issuer in determining
whether a request presented under any Facility LC complied with the
terms of such Facility LC or (y) the LC Issuer's failure to pay under
any Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.19.9 is intended to limit the obligations of the
Borrower under any other provision of this Agreement or of any Lender
against another Lender.
2.19.10. Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.19 or any action taken or omitted by such
indemnitees hereunder.
2.19.11. Facility LC Collateral Account. The Borrower agrees
that it will, upon the request of the Agent or the Required Lenders and
until the final expiration date of any Facility LC and thereafter as
long as any amount is payable to the LC Issuer or the Lenders in
respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Agent (the "Facility LC
Collateral Account") at the Agent's office at the address specified
pursuant to Article XIII, in the name of such Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders
and in which such Borrower shall have no interest other than as set
forth in Section 8.1. The Borrower hereby pledges, assigns and grants
to the Agent, on behalf of and for the ratable benefit of the Lenders
and the LC Issuer, a security interest in all of the Borrower's right,
title and interest in and to all funds which may from time to time be
on deposit in the Facility LC Collateral Account to secure the prompt
and complete payment and performance of the Obligations. The Agent will
invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a
maturity not exceeding 30 days. Nothing in this Section 2.19.11 shall
either obligate the Agent to require the Borrower until after a Default
to deposit any funds in the Facility LC Collateral Account or limit the
right of the Agent to
26
27
release any funds held in the Facility LC Collateral Account in each
case other than as required by Section 8.1.
2.19.12. Rights as a Lender. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
2.20 Swing Loans.
2.20.1. Making of Swing Loans. The Agent may elect in its sole
discretion to make loans (the "Swing Loans") to the Borrower from time
to time prior to the Facility Termination Date; provided that
immediately after each such Swing Loan is made (i) the aggregate amount
of all outstanding Swing Loans shall not exceed $5,000,000 and (ii) the
Aggregate Outstanding Credit Exposure shall not exceed the Aggregate
Commitment. Swing Loans shall be in a minimum amount of $100,000.
Interest on each Swing Loan shall be at the Floating Rate, shall be
secured as part of the Secured Obligations by the Collateral and shall
otherwise be subject to all the terms and conditions applicable to
Loans, except that all interest thereon shall be payable to the Agent
solely for its own account.
2.20.2. Swing Loan Borrowing Requests. The Agent may make
Swing Loans, provided that the Agent has received a request in writing
or via telephone from an Authorized Officer for funding of a Swing Loan
no later than noon, Detroit time, on the Business Day on which such
Swing Loan is requested to be made. The Borrower agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice
for Swing Loans signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by
the Agent, the records of the Agent shall govern, absent manifest
error.
2.20.3. Repayment of Swing Loans; Participation by Lenders.
(i) The Agent may at any time in its sole and absolute discretion
require that any Swing Loan be refunded by a Revolving Credit Loan
which is a Floating Rate Borrowing from the Lenders, and upon written
notice thereof by the Agent to the Lenders and the Borrower, the
Borrower shall be deemed to have requested a Revolving Credit Loan
which is a Floating Rate Advance in an amount equal to the amount of
such Swing Loan, and such Floating Rate Advance shall be made to refund
such Swing Loan. Each Lender shall be absolutely, irrevocably and
unconditionally obligated to fund its Pro Rata Share of such Floating
Rate Advance or, if applicable, purchase a participating interest in
the Swing Loans pursuant to Section 2.20.3(ii), and such obligation
shall not be affected by any circumstance, including, without
limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender has or may have against the Agent or the
Borrower or any if its Subsidiaries or anyone else for any reason
whatsoever; (B) the occurrence or continuance of an Unmatured Default
or a Default, subject to Section 2.20.3(ii); (C) any adverse change in
the condition (financial or otherwise) of the Borrower or any of its
Subsidiaries or any other Guarantor; (D) any breach of this Agreement
or any other Loan Document by any other Lender, the Borrower or any
Guarantor; or (E) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing (including
without limitation the Borrower's failure to satisfy any conditions
contained in Article IV or any other provision of this Agreement).
(ii) If, due to any Default (including without
limitation as a result of the occurrence of an Event of Default with
respect to the Borrower or any of its Subsidiaries pursuant
27
28
to Sections 7.6 or 7.7) Floating Rate Loans may not be made by the
Lenders as described in Section 2.1(e)(ii), then (A) the Borrower
agrees that each Swing Loan not paid pursuant to Section 2.20.3(i)
shall bear interest, payable on demand by the Agent, at the Floating
Rate plus 2%, and (B) effective on the date each such Floating Rate
Loan would otherwise have been made, each Lender severally agrees that
it shall absolutely, automatically, irrevocably and unconditionally,
without regard to the occurrence of any Unmatured Default or Default or
any other circumstances as described in Section 2.20.3(i)(A) - (E)
above and without further action by any party hereto, in lieu of deemed
disbursement of Revolving Credit Loans, to the extent of such Lender's
Pro Rata Share, purchase a participating interest in the Swing Loans by
paying its Pro Rata Share thereof. Each Lender will immediately
transfer to the Agent, in immediately available funds, the amount of
its participation. After such payment to the Agent, each Lender shall
share on a pro rata basis (calculated by reference to its Pro Rata
Share) in any interest which accrues thereon and in all repayments
thereof. If and to the extent that any Lender shall not have so made
the amount of such participating interest available to the Agent, such
Lender and the Borrower severally agree to pay to the Agent forthwith
on demand such amount together with interest thereon, for each day from
the date of demand (or, if such demand is made after 11:00 a.m.
(Detroit time) on such date, from the next succeeding Business Day) by
the Agent until the date such amount is paid to the Agent, at (x) in
the case of the Borrower, the interest rate specified above and (y) in
the case of such Lender, the Federal Funds Effective Rate for the first
three days after the date of demand by the Agent and thereafter at the
interest rate specified above.
2.21. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender when it is
not required to make such payments to all Lenders, or if any Lender's obligation
to make or continue, or to convert Floating Rate Advances into, Eurodollar
Advances shall be suspended pursuant to Section 3.3 when not all Lenders'
obligations have been suspended or if any Lender is a Defaulting Lender (any
Lender so affected an "Affected Lender"), the Borrower may elect, if such
amounts continue to be charged or such suspension is still effective, to replace
such Affected Lender as a Lender party to this Agreement, provided that no
Default or Unmatured Default shall have occurred and be continuing at the time
of such replacement, and provided further that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Borrower and the Agent shall agree, as of such date, to purchase for cash
the Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit C and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Affected
Lender to be terminated as of such date and to comply with the requirements of
Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such
Affected Lender in same day funds on the day of such replacement all interest,
fees and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5.
28
29
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement,
the adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation or the LC Issuer with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) subjects any Lender or any applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any
Lender in respect of its Eurodollar Loans Facility LCs or
participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its
Eurodollar Loans, or of issuing or participating in Facility
LCs, or reduces any amount receivable by any Lender or any
applicable Lending Installation or the LC Issuer in connection
with its Eurodollar Loans, Facility LC or participations
therein, or requires any Lender or any applicable Lending
Installation or LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by
it, by an amount deemed material by such Lender or the LC
Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Facility LCs or participations therein, then, within 30
days of demand by such Lender or the LC Issuer, as the case may be, the Borrower
shall pay such Lender or the LC Issuer, as the case may be, such additional
amount or amounts as will compensate such Lender or the LC Issuer, as the case
may be, for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender, the Agent
or the LC Issuer determines the amount of capital required or expected to be
maintained by such Lender, the Agent or the LC Issuer, any Lending Installation
of such Lender or LC Issuer, or any corporation controlling such Lender, the
Agent or the LC Issuer is increased as a result of a Change, then, within 30
days of demand by such Lender, the Agent or the LC Issuer, the Borrower shall
pay such Lender, the Agent or the LC Issuer the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased
29
30
capital which such Lender, the Agent or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's policies as to capital adequacy).
"Change" means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender, the Agent or the LC Issuer or any Lending
Installation or any corporation controlling any Lender, the Agent or LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the account of
any Lender, the LC Issuer or the Agent hereunder or under any Note or Facility
LC Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or Facility LC Application or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note or Facility LC Application
("Other Taxes").
30
31
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuer
and each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent , the LC Issuer or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant
to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, on or prior to the date of this Agreement or, in the case of any
Transferee, on or prior to the date of the assignment pursuant to Section 12.3
by which such Transferee becomes a Lender, (i) deliver to each of the Borrower
and the Agent two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to each
of the Borrower and the Agent a duly completed United States Internal Revenue
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Agent (x) renewals
or additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete or incorrect, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Agent.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Lender which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent or the Borrower, as the case may be, did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or properly completed, because
such Lender failed to notify the Agent or the Borrower, as the case may be, of a
change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the Agent or
the Borrower, as the case may be, fully for all amounts paid, directly or
indirectly, by the Agent or the Borrower, as the case may be, as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent or
the Borrower, as the case may be, under this subsection, together with all costs
and expenses related thereto (including attorneys fees and time charges of
attorneys for the Agent or the Borrower, as the case may be, which attorneys may
31
32
be employees of the Agent or the Borrower, as the case may be). The obligations
of the Lenders under this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Agent) as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Credit Extension. The Lenders shall not be required to
make the initial Credit Extension hereunder unless the Borrower has furnished to
the Agent with sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of
good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower, of its by-laws and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the
Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by
name and title and bear the signatures of the Authorized
Officers and any other officers of the Borrower authorized to
sign the Loan Documents to which the Borrower is a party, upon
which certificate the Agent and the Lenders shall be entitled
to rely until informed of any change in writing by the
Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
32
33
(v) A written opinion of the Borrower's and Guarantor's counsel,
addressed to the Lenders in substantially the form of Exhibit
A, and such other opinions as may be required by the Agent.
(vi) Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(vii) Executed copies of all Guaranties, Collateral Documents and
other documents in connection therewith requested by the
Agent, together with all organizational documents and
resolutions of the Borrower and each Guarantor, all necessary
consents and other related documents in connection with the
Loan Documents and all UCC, judgment and other lien and
encumbrance searches, title searches and insurance, surveys
and other documents required by the Agent (other than such
documents as may be allowed to be delivered post closing by
the Agent).
(viii) The insurance certificate described in Section 5.21.
(ix) Copies of all governmental and nongovernmental consents,
approvals, authorizations, declarations, registrations or
filings required on the part of the Borrower or any Guarantor
in connection with the execution, delivery and performance of
the Loan Documents, or the transactions contemplated hereby or
thereby or as a condition to the legality, validity or
enforceability of the Loan Documents, certified as true and
correct in full force and effect as of the date of this
Agreement by a duly authorized officer of the Borrower.
(x) Payment of all fees owing by the Borrower to the Lenders and
the Agent and the Arranger as of the date of this Agreement.
(xi) An Environmental Certificate executed by the Borrower together
with all environmental audits and reports reasonably required
by the Agent.
(xii) Evidence of the completion of the Zenith Acquisition and all
due diligence with respect to the Borrower and, its
Subsidiaries, Zenith and its Subsidiaries and the Zenith
Acquisition, including but not limited to, the review of all
Zenith Acquisition Documents (including without limitation the
Escrow Agreement and documents granting the Agent a security
interest in the funds on deposit therein), all terms,
conditions and provisions of the Zenith Acquisition, all final
projections, all pro forma and prospective financial
statements, audited year end financial statements for Zenith
and the Borrower, all sources and uses statements, pro forma
covenant compliance projections and certificates, the
organizational structure of the Borrower and its Subsidiaries
after the Zenith Acquisition, all environmental matters
relating to Zenith, all appraisals and customer and supplier
checkings acceptable to the Agent, and the form and structure,
including without limitation the financial, legal, accounting,
tax and all other aspects of the Zenith Acquisition (further
including, without limitation, evidence satisfactory to the
Agent that the Borrower and Zenith will be merging immediately
after the closing of the Zenith Acquisition and making an
election satisfactory to the Agent under Section 338(h)(10) of
the Code), all of which shall be satisfactory to the Agent and
its counsel.
33
34
(xiii) Evidence satisfactory to the Agent that no Material Adverse
Effect with respect to Zenith or any its Subsidiaries, the
Borrower or any of its Subsidiaries or Trianon or any of its
Subsidiaries since December 31, 1998.
(xiv) Delivery of such other agreements and documents, and the
satisfaction of such other conditions as may be reasonably
required by the Agent, including without limitation a solvency
certificate of the Borrower, a reliance letter from the
auditors and accountants for the Borrower and for Zenith, such
funding instructions, sources and uses certificate and other
certificates required by the Agent and such evidence of the
perfection and priority of all liens and security interests as
required by the Agent, all of which shall be satisfactory to
the Agent and its counsel.
(xv) The execution and delivery of all Subordinated Debt Documents
and any related documents and opinions in connection therewith
required by the Agent, each in form and substance satisfactory
to the Agent.
(xvi) Such other documents and conditions as the Agent or its
counsel may have reasonably requested.
4.2. Each Credit Extension. The Lenders shall not be required to
make any Revolving Credit Loan, the Agent shall not be required to make any
Swing Loan and the LC Issuer shall not be required to issue a Facility LC unless
on the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Credit Extension Date in all
material respects except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been
true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Agent.
(iv) In the case of any issuance of a Facility LC, a properly
completed Facility LC Application and such other documentation
in connection therewith as requested by the Agent.
Each Borrowing Notice or request for issuance of a Facility LC or
making of a Swing Loan with respect to each such Credit Extension shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
34
35
In order to induce Lenders, the LC Issuer and the Agent to enter into
this Agreement and to make each Credit Extension, the Borrower represents and
warrants to each Lender, the LC Issuer and the Agent, on the date hereof and on
each Credit Extension Date, that the following statements are true, correct and
complete (it being understood and agreed that the representations and warranties
made on the date hereof are deemed to be made concurrently with, and giving
effect to, the consummation of the Zenith Acquisition and the merger of Zenith
and the Borrower, with Zenith being the surviving entity and assuming all
obligations of and becoming the Borrower as contemplated hereby):
5.1. Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation or limited liability company duly and properly
incorporated or organized, as the case may be, validly existing and (to the
extent such concept applies to such entity) in good standing under the laws of
its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted except where the failure to do so could not result in a Material
Adverse Effect.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by the Borrower of the Loan Documents to which it is a party and the performance
of its obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower is a party constitute
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and subject also to the availability of equitable
remedies if equitable remedies are sought.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower or any of its Subsidiaries of the Loan Documents to
which any of them is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
Requirement of Law binding on the Borrower or any of its Subsidiaries or their
respective Property or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, articles or certificate of organization, by-laws,
or operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture, instrument or agreement to which the Borrower or
any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of the Borrower or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, or any subdivision thereof, which has not been obtained by
the Borrower or any of its Subsidiaries, is required to be obtained by the
Borrower or any of its Subsidiaries in connection with the execution and
delivery of the Loan Documents, the Credit Extensions under this Agreement, the
payment and performance by the Borrower of the Obligations or the legality,
validity, binding effect or enforceability of any of the Loan Documents.
5.4. Financial Statements. The December 31, 1998 and March 31, 1999
consolidated financial statements of Zenith and its Subsidiaries heretofore
delivered to the Lenders were prepared in accordance with Agreement Accounting
Principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of Zenith and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended, subject, in the case of interim statements, to routine
year-end adjustments and the absence of footnotes. The Pro Forma Financial
35
36
Statements and Projections fairly present the pro forma consolidated financial
condition of the Borrower and its Subsidiaries after giving effect to the Zenith
Acquisition in accordance with Agreement Accounting Principles, and contain
reasonable assumptions and give appropriate effect to those assumptions, and are
based on estimates and assumptions considered reasonable by the Borrower's
management and the best information available to the Borrower's management at
the time made, and use information consistent with the plans of the Borrower (it
being recognized by the Lenders that such Projections as to future events are
not to be viewed as facts and necessarily were based on numerous assumptions
with respect to industry performance, general business, economic and competitive
conditions and uncertainties, taxes and other matters which are beyond the
control of the Borrower, such that there can be no assurance that such
projections will be realized and actual results may differ from the projected
results).
5.5. Material Adverse Change. Since December 31, 1998 there has been
no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries or if
Trianon and its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended December 31, 1994. No tax liens have been filed
and no claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.7, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extension or the Zenith
Acquisition. Other than any liability incident to any litigation, arbitration or
proceeding which could not reasonably be expected to have a Material Adverse
Effect, the Borrower has no material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $100,000. Neither the Borrower nor any other member
of the Controlled Group contributes to or is a sponsor of a Multiemployer Plans.
Each Plan complies in all material respects with all applicable requirements of
law and regulations. No Reportable Event has occurred with respect to any Plan
which could have a Material Adverse Effect. Neither the Borrower nor any other
member of the Controlled
36
37
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan, which could have a Material
Adverse Effect.
5.10. Accuracy of Information. To the Borrower's knowledge, no
information, exhibit or report furnished by or on behalf of the Borrower or any
of its Subsidiaries to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact (known to
the Borrower in the case of any document not furnished by the Borrower)
necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin Stock constitutes less than 25% of the
value of those assets of the Borrower and its Subsidiaries which are subject to
any limitation on sale, pledge, or other restriction hereunder or under any
agreement or instrument between the Borrower or any of its Subsidiaries and any
Lender or Affiliate of any Lender relating the Indebtedness within the scope of
Section 7.5.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is
a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property or other Requirements
of Law except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a Material Adverse Effect.
5.14. Ownership of Properties; Liens. On the date of this Agreement,
the Borrower and its Subsidiaries will have good title, free of all Liens other
than those permitted by Section 6.15, to all of the Property and assets
reflected in the Borrower's most recent consolidated financial statements
provided to the Agent as owned by the Borrower and its Subsidiaries. The
Collateral Documents grant to the Agent, securing the Secured Obligations, a
first priority, enforceable and perfected lien and security interest in all
Collateral, subject only to such Liens permitted by Section 6.15 and such Liens
and priorities permitted by and described in the relevant Collateral Documents
for the pledge of the Capital Stock of SOFEDIT, Aetna Industries, Inc., Aetna
Holdings, Inc. and the Borrower.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the Borrower considers the effect of Environmental Laws on the business of the
Borrower and its Subsidiaries, in the course of which they identify and evaluate
potential risks and liabilities accruing to the Borrower due to Environmental
Laws. On the basis of this consideration, except as set forth in Schedule 5.16,
the Borrower has concluded that Environmental Laws cannot reasonably be expected
to have a Material Adverse Effect. Except as set
37
38
forth in Schedule 5.16, neither the Borrower nor any Subsidiary has received any
notice to the effect that its operations are not in material compliance with any
of the requirements of applicable Environmental Laws or are the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Year 2000. The Borrower has made a full and complete assessment
of the Year 2000 Issues and has a realistic and achievable program for
remediating the Year 2000 Issues on a timely basis (the "Year 2000 Program").
Based on such assessment and on the Year 2000 Program the Borrower does not
reasonably anticipate that Year 2000 Issues will have a Material Adverse Effect.
5.20. Subordinated Indebtedness. All representations and warranties of
the Borrower and of Trianon contained in any Subordinated Debt Document are true
and correct in all material respects. All Subordinated Debt documents are
described on Schedule 5.20 hereto. All Secured Obligations and Contingent
Obligations of Trianon with respect to the Secured Obligations are senior debt
and are entitled to the benefits of the subordination provisions of the
Subordinated Debt Documents. There is no event of default or event or condition
which could become an event of default with notice or lapse of time or both,
under the Subordinated Debt Documents and each of the Subordinated Debt
Documents is in full force and effect. The lenders under the Subordinated Debt
Documents have a commitment satisfactory to the Agent to lend up to $75,000,000
to Trianon and Trianon has a commitment satisfactory to the Agent to lend up to
$75,000,000 to the Borrower under the Subordinated Debt Documents, which
commitments are in full force and effect.
5.21. Insurance. The certificate signed by the President or Chief
Financial Officer of the Borrower, that attests to the existence and adequacy
of, and summarizes, the property and casualty insurance program carried by the
Borrower with respect to itself and its Subsidiaries and that has been furnished
by the Borrower to the Agent and the Lenders, is complete and accurate. This
summary includes the insurer's or insurers' name(s), policy number(s),
expiration date(s), amount(s) of coverage, type(s) of coverage, exclusion(s),
and deductibles. This summary also includes similar information, and describes
any reserves, relating to any self-insurance program that is in effect.
5.22. Solvency. (i) Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making of
the Credit Extensions on the date hereof and after giving effect to the
application of the proceeds of such Credit Extensions, (a) the fair value of the
assets of the Borrower and its Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated,
38
39
contingent or otherwise, of the Borrower and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the Property of the Borrower and
its Subsidiaries on a consolidated basis will be greater than the amount that
will be required to pay the probable liability of the Borrower and its
Subsidiaries on a consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) the Borrower and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.23. Zenith Acquisition. Simultaneously with the disbursement of the
initial Credit Extension hereunder, the Borrower will complete the Zenith
Acquisition in accordance with the Zenith Acquisition Documents and in
accordance with all laws and regulations and all other Requirements of Law, and
will acquire, free and clear of all Liens, good and marketable title to all
Capital Stock of Zenith. Complete and correct copies of all Zenith Acquisition
Documents have been delivered to the Agent on or before the Zenith Acquisition
Date, and the Borrower has satisfied all conditions precedent required as of
closing under the Zenith Acquisition to complete the Zenith Acquisition. The
total consideration paid at or about closing for the Zenith Acquisition will not
exceed $101,000,000. On or within one Business Day of the closing of the Zenith
Acquisition, the Borrower and Zenith will merge, and Zenith shall be the
surviving corporation and will be the Borrower and assume all Secured
Obligations and all other obligations and liabilities of the Borrower under the
Loan Documents.
5.24. Intellectual Property. Set forth on Schedule 5.24 is a complete
and accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of the Borrower
and each of its Subsidiaries showing the jurisdiction in which registered, the
registration number and the date of registration. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames, service
marks, copyrights, technology, know-how and processes necessary for the conduct
of its business as currently conducted (the "Intellectual Property") except for
those the failure to own or license which could not reasonably be expected to
have a Material Adverse Effect. No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower or any of its Subsidiaries know of any valid basis for any such claim,
the use of such Intellectual Property by the Borrower and each of its
Subsidiaries does not infringe on the rights of any Person, and, to the
knowledge of the Borrower, no Intellectual Property has been infringed,
misappropriated or diluted by any other Person except for such claims,
infringements, misappropriation and dilutions that, in the aggregate, could not
have a Material Adverse Effect.
39
40
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted accounting principles and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating statements
need not be certified by such accountants) for itself and its
Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (a)
any management letter prepared by said accountants, (b) a
certificate of said accountants that, in the course of their
examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants,
any Default or Unmatured Default shall exist, stating the
nature and status thereof and (c) a letter from said
accountants addressed to the Lenders acknowledging that the
Lenders are extending credit in primary reliance on such
financial statements and authorizing such reliance.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated
and consolidating profit and loss and reconciliation of
surplus statements and a statement of cash flows for the
period from the beginning of such fiscal year to the end of
such quarter, all certified by its chief financial officer.
(iii) As soon as available, but in any event within by the beginning
of each fiscal year of the Borrower, a copy of the plan and
forecast (including a projected consolidated and consolidating
balance sheet, income statement, covenant compliance and funds
flow statement) of the Borrower for such fiscal year.
(iv) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer
showing the calculations necessary to determine compliance
with this Agreement, including without limitation a
calculation of the financial covenants and a calculation of
the Zenith Acquisition Obligations and the Revolving Credit
Blocked Amount, and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
40
41
(v) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(vii) As soon as possible and in any event within 15 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a
Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the SEC.
(x) Prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development,
financial or otherwise (including, without limitation,
developments with respect to Year 2000 Issues), which could
reasonably be expected to have a Material Adverse Effect.
(xi) Within five days prior to the date each payment is due from
the Borrower pursuant to the Escrow Agreement, a compliance
certificate in substantially the form of Exhibit B signed by
its chief financial officer showing the calculations necessary
to determine compliance with this Agreement after giving
effect to such payment under the Escrow Agreement on a pro
forma basis acceptable to the Agent, and including without
limitation a calculation of financial covenants and the
calculation of the Zenith Acquisition Obligations and the
Revolving Credit Block Amount after giving effect to the
payment to be made pursuant to the Escrow Agreement, and
stating that no Default or Unmatured Default exists after
giving effect to such payment under the Escrow Agreement, or
if any Default or Unmatured Default exists or would be caused
by the payment under the Escrow Agreement, stating the nature
and status thereof.
(xii) Such other information (including non-financial information
and information reasonably satisfactory to the Agent regarding
the Borrower's Year 2000 Program) as the Agent or any Lender
may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Credit Extensions for general corporate
purposes and complete the Zenith Acquisition. The
41
42
Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Credit Extensions to purchase or carry any Margin Stock or to make any
other Acquisition.
6.3. Collateral Documents. The Borrower will, and will cause each
Guarantor to, promptly (i) execute and deliver such Collateral Documents and
other documents, within 10 days after the date hereof, as the Agent agreed at
closing could be delivered post closing, including without limitation board
resolutions of SOFEDIT, (ii) execute and deliver additional Collateral
Documents, within 10 days after request therefor by the Agent, sufficient to
grant to the Agent liens and security interests, securing the Secured
Obligations, in any present or after acquired Collateral, and including without
limitation , and (iii) cause each Person becoming a Subsidiary of the Borrower
or any other Guarantor from time to time to execute and deliver to the Lenders
and the Agent, within 10 days after such Person becomes a Subsidiary, a Guaranty
and other Collateral Documents, together with other related documents described
in Article IV sufficient to grant to the Agent for the benefit of the Lenders
and the Agent liens and security interests in all Collateral securing the
Secured Obligations. The Borrower shall notify the Agent, within 10 days after
the occurrence thereof, of the acquisition of any Collateral that is not subject
to the existing Collateral Documents, any Person becoming a Subsidiary and any
other event or condition, other than the passage of time, that may require
additional action of any nature in order to preserve the effectiveness and
perfected status of the liens and security interests of the Agent with respect
to all Collateral pursuant to the Collateral Documents, including without
limitation delivering the originals of all promissory notes and other
instruments to the Agent and delivering the originals of all stock certificates
or other certificates evidencing any Capital Stock which is Collateral at any
time. Additionally, without limiting the foregoing, the Borrower agrees to
deliver such environmental reports as reasonably required by the Agent in
connection with any real property acquired the Borrower or any of its
Subsidiaries after the date hereof.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all Requirements of Law, except where the failure to
do so would not have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and
42
43
condition, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times, except where the failure to do so would not have a
Material Adverse Effect. .
6.9. Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate. Without
limiting the foregoing, the Agent or any of its Agents or representatives may
conduct comprehensive field audits of the Borrowers and its Subsidiaries books,
records, properties and assets, including without limitation all Collateral at
the Borrower's expense, provided that if no Default has occurred and is
continuing not more than two such field audits (exclusive of filed audits
conducted prior to the date hereof) shall be at the expense of the Borrower in
any fiscal year.
6.10. Dividends. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
Capital Stock (other than dividends payable in its own Capital Stock) or redeem,
repurchase or otherwise acquire or retire any of its Capital Stock at any time
outstanding, except that any Subsidiary may declare and pay dividends or make
distributions to the Borrower or to a Wholly-Owned Subsidiary. The Borrower will
not issue any Disqualified Stock.
6.11. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans and the Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and described in
Schedule 6.11 and any refinancing thereof which does not
increase the principal amount thereof.
(iii) Indebtedness under the Zenith Acquisition Documents, without
giving effect to any amendment or modification thereof.
(iv) Subordinated Indebtedness pursuant to the Subordinated Debt
Documents.
(v) Other Indebtedness in aggregate outstanding amount for the
Borrower and its Subsidiaries on a consolidated basis not to
exceed $5,000,000.
6.12. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that
(i) a Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary and
(ii) Zenith shall merge into the Borrower as required under this Agreement, and
Zenith shall be the surviving corporation.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
43
44
(i) Sales of inventory in the ordinary course of business and
surplus equipment which is not material in amount.
(ii) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than as allowed by clauses (i) and (ii) of this Section 6.13),
as permitted by this Section during the twelve-month period
ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries on a
consolidated basis.
Notwithstanding anything in this Section 6.13 to the contrary, no such leases,
sales or other dispositions of Property may be made (other than pursuant to
clause (i) above) if any Default or Unmatured Default has occurred and is
continuing and all leases, sales and other dispositions of Property at any time
shall be for not less than the fair market value of such Property as determined
in good faith by the Borrower and at least 75% of the consideration therefor
received by the Borrower or such Subsidiary shall be in the form of cash.
6.14. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 6.14.
(iii) The Zenith Acquisition, subject to the terms of this
Agreement.
(iv) Capital Expenditures to the extent permitted by Section 6.16
of this Agreement.
(v) Other Investments in aggregate amount for the Borrower and its
Subsidiaries on a consolidated basis not to exceed $1,000,000.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
44
45
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule
6.15, but no increase in the amount secured thereby, as such
amount is reduced form time to time.
(vi) Liens in favor of the Agent, granted pursuant to any
Collateral Document.
(vii) Any Lien to secure payment of a portion of the purchase price
of any tangible fixed asset acquired by the Borrower or any
Subsidiary may be created or suffer to exist upon such fixed
asset if the outstanding principal amount of the Indebtedness
is secured by such Lien does not at any time exceed the
purchase price paid for such fixed asset, provided that such
Lien does not encumber any other asset at any time owned by
the Borrower or any Subsidiary, and provided, further, that
not more than one such Lien shall encumber such fixed asset at
any one time.
6.16. Capital Expenditures. The Borrower will not, as calculated for
the Borrower and its Subsidiaries on a consolidated basis, expend, or be
committed to expend, for (i) Capital Expenditures for any fiscal year of the
Borrower, exclusive of the Capital Expenditures allowed pursuant to clause (ii)
of this Section 6.16, an amount in excess of the sum of (a) $7,500,000 plus (b)
the amount of Capital Expenditures allowed for the previous fiscal year under
this clause (i) (commencing with the fiscal year ending December 31, 2000 and
without giving effect to any increase in the amount thereof caused by this
clause (b)) minus the amount of actual Capital Expenditures for the previous
fiscal year or (ii) Capital Expenditures for plant expansion (i.e., for the
purchase of land, building and equipment) for the period from and including the
date hereof to and including December 31, 2001 in excess of $35,000,000, subject
to evidence satisfactory to the Agent of new contracts and other business
sufficient to justify such plant expansion. In addition to the foregoing
limitation, the Borrower will not expend, or be committed to expend, for Capital
Expenditures, an amount in excess of the amount permitted by the Zenith
Acquisition Documents.
6.17. Year 2000. The Borrower will take and will cause each of its
Subsidiaries to take all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that Year 2000 Issues
will not have a Material Adverse Effect. At the request of the Agent, the
Borrower will provide a description of the Year 2000 Program, together with any
updates or progress reports with respect thereto.
6.18. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
45
46
6.19. Subordinated Indebtedness; other Indebtedness. (i) The Borrower
will not, and will not permit any Subsidiary to, make any amendment or
modification to the indenture, note or other agreement evidencing or governing
any Subordinated Indebtedness (including without limitation the Subordinated
Debt Documents) or other Indebtedness, or directly or indirectly voluntarily
prepay, defease or in substance defease, purchase, redeem, retire or otherwise
acquire, any Subordinated Indebtedness or other Indebtedness. The Borrower will
not reduce or terminate in any way the commitments to lend pursuant to the
Subordinated Debt Documents, and will take all action to ensure that the
commitments to lend under the Subordinated Debt Documents will continue in full
force and effect. The Borrower will cause (a) all amounts to be paid in
connection with the Zenith Acquisition after the date hereof (i.e., all payments
in connection with any earn outs or other payments due after the closing of the
Zenith Acquisition) and (b) any other payments to be made by the Borrower and
its Subsidiaries, to the extent requested by the Agent and not prohibited, to be
made from the proceeds of Subordinated Indebtedness incurred pursuant to the
Subordinated Debt Documents.
(ii) If at any time any Borrower or Guarantor shall enter into
or be a party to any instrument or agreement with respect to any Indebtedness
which in the aggregate, together with any related Indebtedness, exceeds
$500,000, including all such instruments or agreements in existence as of the
date hereof and all such instruments or agreements entered into after the date
hereof, relating to or amending any terms or conditions applicable to any of
such Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Borrower
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Borrower, the Agent and the Lenders shall
enter into an amendment to this Agreement or an additional agreement (as the
Agent may request), providing for substantially the same covenants, terms,
conditions and defaults as those provided for in such instrument or agreement to
the extent required and as may be selected by the Agent. In addition to the
foregoing, any covenants or defaults or similar provisions (which include
without limitation any provisions requiring any mandatory prepayments or
defeasance under the Subordinated Debt Documents) contained in any Subordinated
Debt Document not substantially provided for in this Agreement or more favorable
to the holders of Subordinated Indebtedness issued in connection therewith are
hereby incorporated by reference into this Agreement to the same extent as if
set forth fully herein, and no subsequent amendment, waiver, termination or
modification thereof shall affect any such covenants, terms, conditions or
defaults as incorporated herein.
6.20. Required Rate Hedging Agreements. The Borrower will maintain one
or more Rate Hedging Agreements with one or more financial institutions
reasonably acceptable to the Agent in its reasonable discretion in such amounts
and on such terms as mutually agreed upon between the Borrower and the Agent.
6.21. Financial Contracts. The Borrower will not, nor will it permit
any Subsidiary to, enter into or remain liable upon any Financial Contract,
except: (i) Rate Hedging Agreements required under Section 6.20 and (ii) other
Financial Contracts to hedge fluctuations in interest rates, exchange rates and
commodity prices and which are not for purposes of financial speculation.
6.22. Financial Covenants.
6.22.1. Interest Coverage Ratio. The Borrower will not permit
the ratio, determined as of the end of each of its fiscal quarters for
the then most-recently ended four fiscal quarters, of (i)
46
47
Consolidated Adjusted EBITDA to (ii) cash Consolidated Interest Expense
to be less than (a) 3.50 to 1.00 as of the end of any fiscal quarter of
the Company ending on or prior to December 31, 2001 or (b) 4.00 to 1.00
as of the end of any fiscal quarter thereafter.
6.22.2. Fixed Charge Coverage Ratio. The Borrower will not
permit the ratio, determined as of the end of each of its fiscal
quarters for the then most-recently ended four fiscal quarters, of (i)
Consolidated Adjusted EBITDA minus Consolidated Capital Expenditures to
(ii) Consolidated Interest Expense, plus Consolidated Rentals, plus
current maturities of principal Indebtedness, plus expense for taxes
paid or accrued, all calculated for the Borrower and its Subsidiaries
on a consolidated basis, to be less than (a) 1.10 to 1.00 as of the end
of any fiscal quarter of the Company ending on or prior to December 31,
2001 or (b) 1.15 to 1.00 as of the end of any fiscal quarter
thereafter.
6.22.3. Leverage Ratio. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters, of (i)
Total Debt to (ii) Consolidated Adjusted EBITDA for the then
most-recently ended four fiscal quarters to be greater than (a) 4.50 to
1.00 as of the end of any fiscal quarter of the Company ending on or
prior to December 31, 1999, (b) 4.25 to 1.00 as of the end of any
fiscal quarter of the Company ending at any time from and including
March 31, 2000 to and including December 31, 2000, (c) 4.00 to 1.0 as
of the end of any fiscal quarter of the Company and again at any time
from and including March 31, 2001 to and including Xxxxxxxx 00, 0000,
(x) 3.50 to 1.0 as of the end of any fiscal quarter of the Company
ending at any time from and including March 31, 2002 to and including
December 31, 2002, (e) 3.00 to 1.0 as of the end of any fiscal quarter
of the Company ending at any time from and including March 31, 2003 to
and including December 31, 2003, or (f) 2.50 to 1.00 as of the end of
any fiscal quarter thereafter.
.
6.22.4. Minimum EBITDA . The Borrower will not permit
Consolidated Adjusted EBITDA, determined as of the end of each of its
fiscal quarters for the then most recently ended four fiscal quarters,
to be less than (a) $45,000,000 as of the end of any fiscal quarter of
the Company ending on or prior to Xxxxx 00, 0000, (x) $48,000,000 as of
the end of any fiscal quarter of the Company ending at any time from
and including June 30, 2000 to and including March 31, 2001 or (c)
$50,000,000 as of the end of any fiscal quarter thereafter.
6.22.5. Minimum Net Worth. The Borrower will at all times
maintain Consolidated Net Worth of not less than the sum of (i) the
amount of the opening Consolidated Net Worth acceptable to the Agent
minus $3,000,000 plus (ii) 75% of Consolidated net income of the
Borrower and its Subsidiaries for each of the fiscal years of the
Borrower ending December 31, 1999 and December 31, 2000 and 50% of
Consolidated net income of the Borrower and its Subsidiaries for each
of the fiscal years of the Borrower ending thereafter, to be added as
of the end of each such fiscal year, provided that if such net income
is negative in any such fiscal year the amount added for each such
fiscal year shall be zero and it shall not reduce the amount added for
any other fiscal year, plus (iii) 100% of the Net Cash Proceeds from
the sale or other offering of Capital Stock of the Borrower.
47
48
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any Guarantor to the Lenders or the Agent under or in
connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any commitment fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.19 or 6.22.
7.4. The Borrower or any Guarantor shall fail to observe or perform
or otherwise breach (other than a failure or breach which constitutes a Default
under another Section of this Article VII) any of the terms or provisions of
this Agreement or any other Loan Document which is not remedied within fifteen
days after written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any Guarantor to pay when due any
Indebtedness, Rate Hedging Obligation or Operating Lease Obligation aggregating
in excess of $1,000,000 ("Material Obligation"); or the default by the Borrower
or any Guarantor in the performance (beyond the applicable grace period with
respect thereto, if any) of any term, provision or condition contained in any
agreement under which any such Material Obligation was created or is governed,
or any other event shall occur or condition exist, the effect of which default
or event is to cause, or to permit the holder or holders of such Material
Obligation to cause, such Material Obligation to become due prior to its stated
maturity; or any Material Obligation of the Borrower or any Guarantor shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stated maturity thereof; or
the Borrower or any Guarantor shall not pay, or admit in writing its inability
to pay, its debts generally as they become due.
7.6. The Borrower or any Guarantor shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
48
49
7.7. Without the application, approval or consent of the Borrower or
any Guarantor a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any Guarantor or any Substantial Portion
of its Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower or any Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower or any Guarantor which, when taken
together with all other Property of the Borrower or any Guarantor so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs, constitutes a
Substantial Portion and would have a Material Adverse Effect.
7.9. The Borrower or any Subsidiary Guarantor shall fail within 30
days to pay, bond or otherwise discharge one or more (i) judgments or orders for
the payment of money in excess of $1,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $1,000,000 or the aggregate amount of all liabilities as
a result of any Reportable Event in connection with any Plan shall exceed in the
aggregate $1,000,000.
7.11. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $1,000,000 or requires
payments exceeding $1,000,000 per annum.
7.12. If the Borrower or any other member of the Controlled Group
contributes to or is a sponsor of a Multiemployer Plan, the Borrower or any
other member of the Controlled Group shall have been notified by the sponsor of
a Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contributions of the
Borrower and the other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans which are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the respective plan years of each such Multiemployer Plan immediately
preceding the plan year in which the reorganization or termination occurs by an
amount exceeding $1,000,000.
7.13. The Borrower or any Subsidiary Guarantor shall (i) be the
subject of any proceeding or investigation pertaining to the release by the
Borrower, any Subsidiary Guarantor or any other Person of any toxic or hazardous
waste or substance into the environment, or (ii) violate any Environmental Law,
which, in the case of an event described in clause (i) or clause (ii), could
reasonably be expected to have a Material Adverse Effect.
7.14. Any Change in Control shall occur.
49
50
7.15. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
7.16. Any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any Collateral purported
to be covered thereby, except as permitted by the terms hereof or of any
Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Collateral Document, or the Borrower shall
fail to comply with any of the terms or provisions of any Collateral Document.
7.17. The representations and warranties set forth in Section 5.15
(Plan Assets; Prohibited Transactions") shall at any time not be true and
correct.
7.18. The commitment to lend by the lenders under the Subordinated
Debt Documents to Trianon or the commitment to lend by Trianon under the
Subordinated Debt Documents to the Borrower shall be terminated, reduced or
otherwise modified in any manner.
7.19. (i) the Zenith Acquisition shall be unwound, reversed or
otherwise rescinded in whole or in any material part for any reason, or (ii) the
Borrower shall agree to any material amendment to, or waiver of any material
rights under, or otherwise change any material terms of, any of the Zenith
Acquisition Document, in a manner adverse to the Borrower or any of its
Subsidiaries or to Lenders without the prior written consent of Agent.
7.20. If any payment be made pursuant to the Escrow Agreement would
cause a Default or an Unmatured Default as determined by the Agent or as shown
by the compliance certificate required to be delivered pursuant to Section
6.1(xi).
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Facility LC Collateral Account. (i) If any Default
described in Section 7.6 or 7.7 occurs and is continuing with respect to the
Borrower, the obligations of the Lenders to make Revolving Credit Loans
hereunder, the obligation and power of the LC Issuer to issue Facility LCs and
the power of the Agent to make Swing Loans shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any further
notice, act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time, less (v) the
amount on deposit in the Facility LC Collateral Accountant such time which is
free
50
51
and clear of all rights and claims of third parties and has not been applied
against the Obligations (such difference, the "Collateral Shortfall Amount"). If
any other Default occurs and is continuing, the Required Lenders (or the Agent
with the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Revolving Credit Loans hereunder, the
obligation and power of the LC Issuer to issue Facility LCs, and the power of
the Agent to make Swing Loans, or declare the Obligations to be due and payable,
or both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which the
Borrower hereby expressly waives and (b) upon notice to the Borrower and in
addition to the continuing right to demand payment of all amounts payable under
this Agreement, make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(iv) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Obligations have been indefeasibly paid in full and
the Aggregate Commitment has been terminated, any funds remaining in the
Facility LC Collateral Account shall be returned by the Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder and
the power of the Agent to make Swing Loans as a result of any Default (other
than any Default as described in Section 7.6 or 7.7 with respect to the
Borrower) and before any judgment or decree for the payment of the Obligations
due shall have been obtained or entered, the Required Lenders (in their sole
discretion) shall so direct, the Agent shall, by notice to the Borrower, rescind
and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry date
of any Facility LC to a date after the Facility Termination Date
or forgive all or any portion of the principal amount thereof or
any Reimbursement Obligation related thereto, or reduce the rate
or extend the time of payment of interest or fees thereon or
Reimbursement Obligations related thereto.
51
52
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required
under Section 2.2, or permit the Borrower to assign its rights
under this Agreement.
(iv) Amend this Section 8.2.
(v) Except as allowed in the Loan Documents, release any material
Guarantor or release all or substantially all of the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. No increase in the Commitment of any Lender shall be
permitted without the consent of such Lender. The Agent may waive payment of the
fee required under Section 12.3.2 without obtaining the consent of any other
party to this Agreement. Notwithstanding anything herein to the contrary, no
Defaulting Lender shall be entitled to vote (whether to consent or to withhold
its consent) with respect to any amendment, modification, termination or waiver
and, for purposes of the determining the Required Lenders, the Commitments and
the Outstanding Credit Exposure of each Defaulting Lender shall be disregarded
and the Agent shall have the ability, but not the obligation, to replace any
Defaulting Lender with another lender or lenders.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full. The Agent may, and upon being directed to do so by the Required
Lenders, shall, in addition to all other remedies under the Loan Documents,
exercise and enforce any and all other rights and remedies arising under any
Loan Document, under applicable law or otherwise, in any manner deemed
appropriate by the Agent, including suit and equity, action at law or other
appropriate proceedings, whether for the specific performance (to the extent
permitted by law) of any covenant or agreement contained in any Loan Document or
in the aid of the exercise of any power granted in any Loan Document.
8.4 Distribution of Proceeds of Collateral. All proceeds of any
realization on the Collateral pursuant to the Collateral Documents to be applied
to the Secured Obligations (subject to any priorities and other provisions in
the Collateral Documents, and it is acknowledged that the indebtedness,
obligations and liabilities secured by the Capital Stock of SOFEDIT and existing
prior to the date hereof shall be entitled to the proceeds of such Collateral
before the application thereof to the Secured Obligations) and any payments
received by the Agent or any Lender pursuant to the Guaranties subsequent to and
during the continuance of any Default, shall be allocated and distributed by the
Agent as follows:
52
53
(a) First, to the payment of all reasonable costs and
expenses, including without limitation all reasonable attorneys' fees, of the
Agent in connection with the enforcement of the Loan Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees required to be paid
under any Loan Document including commitment fees, owing to the Lenders, the LC
Issuer and Agent pursuant to the Lender Indebtedness on a pro rata basis in
accordance with the Obligations consisting of fees owing to the Lenders and
Agent under the Obligations, for application to payment of such liabilities;
(c) Third, to the Lenders (and/or their Affiliates in
connection with any Rate Hedging Obligations which are part of the Secured
Obligations), the LC Issuer and the Agent on a pro rata basis in accordance with
the Secured Obligations consisting of principal (including without limitation
any cash collateral for any outstanding Facility Letters of Credit), interest
and Rate Hedging Obligations which are part of the Secured Obligations, for
application to payment of such Secured Obligations;
(d) Fourth, to the payment of any and all other Secured
Obligations owing to the Lenders, the LC Issuer and the Agent on a pro rata
basis in accordance with the total amount of such Obligations owing to each of
the Lenders and the Agent, for application to payment of such Secured
Obligations; and
(e) Fifth, to the Borrower, its Subsidiaries or such other
Person as may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest, fees or other
amounts delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due from such Defaulting
Lender to the Agent or the LC Issuer, and
(ii) Second, to Credit Extensions required to be made by such
Defaulting Lender on any Borrowing Date to the extent such
Defaulting Lender fails to make such Credit Extensions.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Secured Obligations (other than those
owing to a Defaulting Lender), any funds then held in escrow by the Agent
pursuant to the preceding sentence shall be distributed to each Defaulting
Lender, pro rata in proportion to amounts that would be due to each Defaulting
Lender but for the fact that it is a Defaulting Lender.
ARTICLE IX
GENERAL PROVISIONS
53
54
9.1. Survival of Representations. All representations and warranties
of the Borrower contained in this Agreement shall survive the making of the
Credit Extensions herein contemplated, but shall only be deemed made on the date
hereof and on each Credit Extension Date.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer, the Agent nor any Lender
shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent, the LC Issuer and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Agent, the LC Issuer and the Lenders relating to the subject matter thereof
other than the letters described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
Agent and the Arranger for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent) paid or incurred by the Agent or
the Arranger in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, and administration of
the Loan Documents. The Borrower also agrees to reimburse the Agent, the
Arranger, the LC Issuer and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, the Arranger, the LC Issuer and the Lenders, which attorneys may
be employees of the Agent, the Arranger, the LC Issuer or the Lenders) paid or
incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents. Expenses being reimbursed by
the Borrower under this Section include, without limitation, the cost and
expense of obtaining an appraisal of each parcel of real property or interest in
real property described in the relevant Collateral Documents, which appraisal
shall be in conformity with the applicable requirements of any law or any
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, reformed or otherwise modified
from time to time, and any rules promulgated to implement such provisions and
costs and expenses incurred in connection with the Reports described in the
following sentence. The Borrower acknowledges that from time to time Bank One
may prepare and may distribute to the Lenders (but shall have no obligation or
duty to prepare or to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrower's assets for internal use by
54
55
Bank One from information furnished to it by or on behalf of the Borrower, after
Bank One has exercised its rights of inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent, the Arranger, the LC Issuer or
any Lender is a party thereto) which any of them may pay or incur at any time
(including without limitation those arising in connection with transactions
which occur prior to the date of this Agreement) arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated hereby
(including without limitation the Zenith Acquisition) or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. Accounting. (i) Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall (unless otherwise disclosed to the
Lenders in writing at the time of delivery thereof in the manner described in
subsection (ii) below) be prepared, in accordance with Agreement Accounting
Principles (subject, in the case of financial statements which are not fiscal
year end statements, to the absence of footnotes and year-end audit adjustments)
; provided that, if the Borrower notifies the Agent that it wishes to amend any
covenant in Article VI to eliminate the effect of any change in Agreement
Accounting Principles (or if the Agent notifies the Borrower that the Agent or
the Required Lenders wish to amend Article VI for such purpose), then the
Borrower's compliance with such covenants shall be determined on the basis of
Agreement Accounting Principles in effect immediately before the relevant change
in Agreement Accounting Principles became effective until either such notice is
withdrawn or such covenant or any such defined term is amended in a manner
satisfactory to the Borrower and the Required Lenders. Notwithstanding anything
herein, in any financial statements of the Borrower or in Agreement Accounting
Principles to the contrary, for purposes of calculating and determining
compliance with the financial covenants in Section 6.22 and determining the
Applicable Margin and Applicable Fee Rate, including defined terms used therein,
any Acquisitions made by the Borrower or any of its Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the period for which such financial covenants and the
Applicable Margin and Applicable Fee Rate were calculated shall be deemed to
have occurred on the first day of the relevant period for which such financial
covenants and the Applicable Margin and Applicable Fee Rate were calculated on a
pro forma basis acceptable to the Agent. Notwithstanding anything in Section
6.22 or in the Pricing Schedule (or the defined terms as used therein), such
financial covenants shall be tested, and the Applicable Margin or Applicable Fee
Rate shall be adjusted, for the first time based on the results for the fiscal
quarter ending September 30, 1999.
(ii) The Borrower shall deliver to the Lenders at the same
time as the delivery of any annual financial statement under Section 5.1(i) and
(ii) (x)a description in reasonable detail of any material variation between the
application or other modification of accounting principles employed in the
55
56
preparation of such statement and the application or other modification of
accounting principles employed in the preparation of the immediately prior
annual or monthly financial statements as to which no objection has been made in
accordance with the last sentence of subsection (i) above and (y) reasonable
estimates of the difference between such statements arising as a consequence
thereof.
(iii) To enable the ready and consistent determination of
compliance with the covenants set forth in Article VI hereof, the Borrower will
not change the last day of its fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30 and September 30 of each year, respectively.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower
on the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to xxx for, any special, indirect or consequential
damages suffered by the Borrower in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials to the extent required by such regulatory officials, (iv) to any
Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which such
Lender is a party, (vi) to such Lender's direct or indirect contractual
counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, and (vii) permitted by Section
12.4.
9.12. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any Margin Stock for the repayment of the Credit
Extensions provided for herein.
56
57
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, Michigan is
hereby appointed by each of the Lenders as its contractual representative
(herein referred to as the "Agent") hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Agent agrees to act as
such contractual representative upon the express conditions contained in this
Article X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).
57
58
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
58
59
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns
59
60
its duties and obligations to an Affiliate pursuant to this Section 10.12, then
the term "Prime Rate" as used in this Agreement shall mean the prime rate, base
rate or other analogous rate of the new Agent.
10.13. Agent's Fee; Etc.. The Borrower agrees to pay to the Agent, for
its own account, the amounts agreed to by the Borrower and the Agent pursuant to
separate agreements from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Collateral Documents. The Lenders hereby empower
and authorize the Agent to execute and deliver to the Borrower on their behalf
the Collateral Documents and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Collateral Documents.
10.16. Collateral Releases. The Lenders hereby empower and authorize
the Agent to execute and deliver to the Borrower on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved by the Required
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in
writing.
10.17. Co-Agents, Documentation Agent, Syndication Agent, etc. No
Lender identified in this Agreement or otherwise as a "Documentation Agent"
"Syndication Agent" nor "Co-Agent" have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to such Lenders as it makes
with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs and is continuing, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender or any Affiliate of any Lender to or for the credit or account of the
Borrower may be offset and applied toward the payment of the Obligations owing
to such Lender, whether or not the Obligations, or any part hereof, shall then
be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit
60
61
Exposure held by the other Lenders so that after such purchase each Lender will
hold its Pro Rata Share of the Aggregate Outstanding Credit Exposure. If any
Lender, whether in connection with setoff or amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its Obligations
or such amounts which may be subject to setoff, such Lender agrees, promptly
upon demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their respective Pro Rata
Shares of the Aggregate Outstanding Credit Exposure. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made. If an amount to be setoff is to be applied to Indebtedness of the
Borrower to a Lender other than Indebtedness comprised of the Outstanding Credit
Exposure of such Lender, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness comprised of such Outstanding Credit
Exposure.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents (other than pursuant to the merger with Zenith as contemplated
hereunder and the assumption of all Secured Obligations and other obligations
under the Loan Documents by Zenith in connection therewith) and (ii) any
assignment by any Lender must be made in compliance with Section 12.3.
Notwithstanding clause (ii) of this Section, any Lender may at any time, without
the consent of the Borrower or the Agent, assign all or any portion of its
rights under this Agreement and any Note to a Federal Reserve Bank; provided,
however, that no such assignment to a Federal Reserve Bank shall release the
transferor Lender from its obligations hereunder. The Agent may treat the Person
which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with Section 12.3 in the
case of an assignment thereof or, in the case of any other transfer, a written
notice of the transfer is filed with the Agent. Any assignee or transferee of
the rights to any Loan or any Note agrees by acceptance of such transfer or
assignment to be bound by all the terms and provisions of the Loan Documents.
Any request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the owner of the rights to any
Loan (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder, transferee or assignee of the
rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Outstanding Credit
Exposure of such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding
Credit Exposure and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and
the Agent shall
61
62
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
forgives principal, interest, or any Reimbursement Obligation or
reduces the interest rate or fees payable with respect to any such
Credit Extension or Commitment, extends the Facility Termination Date,
postpones any date fixed for any regularly-scheduled payment of
principal of or interest on any Loan in which such Participant has an
interest, or any regularly-scheduled payment of fees on any such Credit
Extension or Commitment, releases any guarantor of any such Credit
Extension or releases any collateral held in the Facility LC Collateral
Account (except in accordance with the terms hereof) or all or
substantially all of any other collateral, if any, securing any such
Credit Extension.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit C or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower and the Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or
an Affiliate thereof; provided, however, that if a Default has occurred
and is continuing or if such assignment is to another Lender or an
Affiliate of a Lender, the consent of the Borrower shall not be
required. Such consent shall not be unreasonably withheld or delayed.
Each such assignment with respect to a Purchaser which is not a Lender
or an Affiliate thereof shall (unless each of the Borrower and the
Agent otherwise consents) be in an amount not less than the lesser of
(i) $5,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Section
12.3.1, and (ii) payment of a $4,000 fee to the Agent for processing
such assignment (unless such fee is waived by the Agent), such
assignment shall become effective on the effective date specified in
such assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the
applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the
62
63
Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement
and any other Loan Document executed by or on behalf of the Lenders and
shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto,
and no further consent or action by the Borrower, the Lenders or the
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Outstanding Credit
Exposure assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments,
as adjusted pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth in its administrative questionnaire or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
63
64
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF MICHIGAN.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR MICHIGAN STATE
COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT, MICHIGAN.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
64
65
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
65
66
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
2020 Corp. 70
By:
----------------------------------
Title:
-------------------------------
-------------------------------
-------------------------------
Attention:
--------------------------
Telephone: ( )
FAX: ( )
66
67
COMMITMENTS LENDERS
----------- -------
For the period from and including the BANK ONE, MICHIGAN,
date of this Agreement to and including Individually and as Agent
June 30, 2000: $100,000,000
By:
--------------------------------
From and including July 1, 2000 and Title:
including June 30, 2001: -----------------------------
$92,000,000 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
From and including July 1, 2001 and Attention: Michigan Corporate Banking
to and including June 30, 2002: Telephone: (000) 000-0000
$84,000,000 FAX: (000) 000-0000
From and including July 1, 2002
and to and including June 30, 2003:
$68,000,000
From and including July 1, 2003
to but excluding the Facility Termination
Date: $52,000,000
67
68
COMMITMENTS LENDERS
----------- -------
For the period from and including the CREDIT SUISSE FIRST BOSTON
date of this Agreement to and including
June 30, 2000: $25,000,000
By:
----------------------------------
From and including July 1, 2000 and Title:
including June 30, 2001: -------------------------------
$23,000,000
From and including July 1, 2001 and By:
to and including June 30, 2002: ----------------------------------
$21,000,000
Title:
-------------------------------
From and including July 1, 2002 and
to and including June 30, 2003:
$17,000,000
00 Xxxxxxx Xxxxxx
From and including July 1, 0000 Xxx Xxxx, Xxx Xxxx 00000
to but excluding the Facility Termination
Date: $13,000,000 Attention:
---------------------------
Telephone: (212) -
---- ------
FAX: (212) -
---- ------
68
69
PRICING SCHEDULE
====================================================================================================================
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
MARGIN STATUS STATUS STATUS STATUS STATUS
--------------------------------------------------------------------------------------------------------------------
Eurodollar Rate 2.00% 2.25% 2.50% 2.75% 3.00%
And LC Fees
--------------------------------------------------------------------------------------------------------------------
Floating Rate 0.75% 1.00% 1.25% 1.50% 1.75%
====================================================================================================================
====================================================================================================================
APPLICABLE FEE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
RATE STATUS STATUS STATUS STATUS STATUS
--------------------------------------------------------------------------------------------------------------------
Commitment Fee 0.375% 0.500% 0.500% 0.500% 0.625%
====================================================================================================================
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1(i) or (ii).
"Level I Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, the
Leverage Ratio is less than 2.75 to 1.00.
"Level II Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, (i)
the Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
less than or equal to 3.25 to 1.00.
"Level III Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, (i)
the Borrower has not qualified for Level I Status or Level II Status and (ii)
the Leverage Ratio is less than 3.75 to 1.00.
"Level IV Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, (i)
the Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Leverage Ratio is less than 4.25 to 1.00.
"Level V Status" exists at any date if the Borrower has not qualified
for Level I Status, Level II Status, Level III Status or Level IV Status.
"Status" means either Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective 60 days after the
69
70
end of each fiscal quarter. If the Borrower fails to deliver the Financials to
the Agent at the time required pursuant to Section 6.1 or any other Default has
occurred and is continuing, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in the
foregoing table until such Default is cured or waived under the Agreement.
Notwithstanding the foregoing, the Applicable Margin for the period from the
date hereof until it shall be adjusted for the first time based on the results
for the fiscal quarter ending September 30, 1999 shall be the Applicable Margin
assuming the Borrower's Status is Level IV Status.
70
71
EXHIBIT A
FORM OF OPINION
July 13, 1999
The Agent, the LC Issuer and the Lenders who are parties to the Credit Agreement
described below.
Gentlemen/Ladies:
We are counsel for 20 20 Corp. 70 (the "Borrower") and the Guarantors,
and have represented the Borrower in connection with its execution and delivery
of a Credit Agreement dated as of July 13, 1999 (the "Agreement") among the
Borrower, the Lenders named therein, and Bank One, Michigan, as Agent, and as LC
Issuer. All capitalized terms used in this opinion and not otherwise defined
herein shall have the meanings attributed to them in the Agreement.
We have examined the Borrower's and each Guarantor's organizational
documents and appropriate evidence of authority to enter into the transaction,
the Loan Documents and such other matters of fact and law which we deem
necessary in order to render this opinion. Based upon the foregoing, it is our
opinion that:
l. Each of the Borrower and its Subsidiaries and each other
Guarantor is a corporation, partnership or limited liability company duly and
properly incorporated or organized, as the case may be, validly existing and (to
the extent such concept applies to such entity) in good standing under the laws
of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
2. The execution and delivery by each of the Borrower and each
Guarantor of the Loan Documents to which it is a party and the performance by
each of the Borrower and each Guarantor of its obligations thereunder have been
duly authorized by proper corporate proceedings on the part of the Borrower and
each Guarantor and will not:
(a) require any consent of the Borrower's or any Guarantor's
shareholders or members (other than any such consent as has already
been given and remains in full force and effect);
(b) violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of
its Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii)
the provisions of any indenture, instrument or agreement to which the
Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a
default thereunder; or
(c) result in, or require, the creation or imposition of any
Lien in, of or on the Property of the Borrower or a Subsidiary pursuant
to the terms of any indenture, instrument or agreement binding upon the
Borrower or any of its Subsidiaries.
71
72
3. The Loan Documents to which the Borrower and each Guarantor is a
party have been duly executed and delivered by the Borrower and each Guarantor
and constitute legal, valid and binding obligations of the Borrower and each
Guarantor enforceable against the Borrower and each Guarantor in accordance with
their terms except to the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against the Borrower or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by the
Borrower or any of its Subsidiaries, is required to be obtained by the Borrower
or any of its Subsidiaries in connection with the execution and delivery of the
Loan Documents, the borrowings under the Agreement, the payment and performance
by the Borrower and each Guarantor of the Obligations, or the legality,
validity, binding effect or enforceability of any of the Loan Documents.
6. All Secured Obligations are senior debt under the Subordinated
Debt Documents and are entitled to the benefits of the subordination provisions
of the Subordinated Debt Documents. The Subordinated Debt Documents to which the
Borrower is a party have been duly executed and delivered by the Borrower and
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
7. The provisions of the Collateral Documents are sufficient to
create in favor of the Lenders a security interest in all right, title and
interest of the Borrower and each Guarantor in those items and types of
collateral described in the Collateral Documents in which a security interest
may be created under Article 9 of the Uniform Commercial Code as in effect on
the date hereof in Michigan. Financing statements on Form UCC-1's have been duly
executed by the Borrower and each Guarantor and have been duly filed in each
filing office indicated in Exhibit A hereto under the Uniform Commercial Code in
effect in each state in which said filing offices are located. The description
of the collateral set forth in said financing statements is sufficient to
perfect a security interest in the items and types of collateral described
therein in which a security interest may be perfected by the filing of a
financing statement under the Uniform Commercial Code as in effect in such
states. Such filings are sufficient to perfect the security interest created by
the Collateral Documents in all right, title and interest of the Borrower and
each Guarantor in those items and types of collateral described in the
Collateral Documents in which a security interest may be perfected by the filing
of a financing statement under the Uniform Commercial Code in such states,
except that we express no opinion as to personal property affixed to real
property in such manner as to become a fixture under the laws of any state in
which the collateral may be located and we call your attention to the fact that
the Lenders' security interest in certain of such collateral may not be
perfected by filing financing statements under the Uniform Commercial Code.
8. Upon payment for the Capital Stock of Zenith pursuant to the
Zenith Acquisition Documents, the Borrower will acquire, free and clear of any
Lien, 100% of the Capital Stock of Zenith.
72
73
On the date hereof, the Borrower and Zenith have merged, and Zenith is the
surviving entity and has assumed all Secured Obligations and all other
obligations and liabilities of the Borrower under the Loan Documents. The
opinion in this paragraph 8 assumes that the Borrower does not have notice of
any adverse claim with respect to the Capital Stock of Zenith.
9. The Mortgages are in proper form for the creation of the liens
and security interests contemplated thereby and for recording in the real
property records of the recording office in the County in which the Real
Property is located. The Mortgages create a valid and perfected mortgage lien
and security interest in the real and other property described in each Mortgage.
This opinion may be relied upon by the Agent, the LC Issuer the Lenders
and their participants, assignees and other transferees.
Very truly yours,
73
74
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of July 13, 1999 (as amended, modified, renewed or
extended from time to time, the "Agreement") among 2020 Corp. 70 (the
"Borrower"), the lenders party thereto and Bank One, Michigan, as Agent for the
Lenders and as LC Issuer. Unless otherwise defined herein, capitalized terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
5. Schedule II attached hereto sets forth the determination of the
interest rates to be paid for Advances, the LC Fee rates and the commitment fee
rates commencing on the date described in thew Pricing Schedule.
6. Schedule III attached hereto sets forth the estimate of the Zenith
Acquisition Obligations and the Revolving Credit Blocked Amount.
7. Schedule IV attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement, the
Collateral Documents and the other Loan Documents and the status of compliance.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
-----------------------------------------------------------------------
74
75
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this day of
, .
-------------------------------------
75
76
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of , with
Provisions of and of
the Agreement
76
77
SCHEDULE II TO COMPLIANCE CERTIFICATE
Borrower's Applicable Margin Calculation
77
78
SCHEDULE III TO COMPLIANCE CERTIFICATE
Estimate of Zenith Acquisition Obligations and Revolving Credit Blocked Amount
78
79
SCHEDULE IV TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
79
80
EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
(the "Assignor") and (the "Assignee")
is dated as of , . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Outstanding Credit Exposure, if the applicable
Commitment has been terminated) purchased by the Assignee hereunder is set forth
in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after
this Assignment Agreement, together with any consents required under the Credit
Agreement, are delivered to the Agent. In no event will the Effective Date occur
if the payments required to be made by the Assignee to the Assignor on the
Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. On and after the Effective
Date, the Assignee shall be entitled to receive from the Agent all payments of
principal, interest Reimbursement Obligations and fees with respect to the
interest assigned hereby. The Assignee will promptly remit to the Assignor any
interest on Loans and fees received from the Agent which relate to the portion
of the Commitment or Outstanding Credit Exposure assigned to the Assignee
hereunder for periods prior to the Effective Date and not previously paid by the
Assignee to the Assignor. In the event that either party hereto receives any
payment to which the other party hereto is entitled under this Assignment
Agreement, then the party receiving such amount shall promptly remit it to the
other party hereto.
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in connection
with this Assignment Agreement unless otherwise specified in Item 6 of Schedule
1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly
80
81
authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and
hold the Assignor harmless against all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement, and
(ix) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Michigan.
9. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may
be executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart and such facsimile shall be deemed to be
an original counterpart of this Assignment Agreement.
81
82
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto
have executed this Assignment Agreement by executing Schedule 1 hereto as of the
date first above written.
82
83
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: , 19
---------------
3. Amounts (As of Date of Item 2 above):
4. Assignee's Commitment (or Outstanding Credit Exposure with respect to
terminated Commitments) purchased
hereunder: $
-------------
5. Proposed Effective Date:
-----------------
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
----------------- ----------------
Title: Title:
-------------- -------------
83
84
ACCEPTED AND CONSENTED TO BY ACCEPTED AND CONSENTED TO BY
2020 Corp. 70 BANK ONE, MICHIGAN
By: By:
------------------------- -------------------------
Title: Title:
---------------------- ----------------------
84
85
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet,
which must include notice addresses for the Assignor
and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name: Telephone No.:
--------------------- -------------------------
Fax No.: Telex No.:
----------------- -----------------------------
Answerback:
-----------------------------
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:
---------------------------------------------
---------------------------------------------
Account Name & Number for Wire Transfer:
---------------------------------------
---------------------------------------
Other Instructions:
-------------------------------------------------------------
-------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNOR:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name: Telephone No.:
--------------------------- -------------------------
Fax No.: Telex No.:
----------------------- -----------------------------
Answerback:
-----------------------------
KEY OPERATIONS CONTACTS:
Booking Installation: Booking Installation:
----------- -------------------
Name: Name:
--------------------------- -------------------------
Telephone No.: Telephone No.:
------------------ -------------------------
Fax No.: Fax No.:
------------------------ -------------------------------
Telex No.: Telex No.:
---------------------- ------------------------------
Answerback: Answerback:
--------------------- -----------------------------
85
86
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:
----------------------------------------------
----------------------------------------------
Account Name & Number for Wire Transfer:
----------------------------------------
----------------------------------------
Other Instructions:
-------------------------------------------------------------
-------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNEE:
----------------------------------------------
----------------------------------------------
----------------------------------------------
86
87
BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name: Name:
------------------------------- ------------------------------
Telephone No.: (313) Telephone No.:(313)
--------------------- ---------------------
Fax No.: (313) Fax No.: (313)
--------------------------- --------------------------
INITIAL FUNDING STANDARDS:
Libor - Fund 2 days after rates are set.
BANK ONE WIRE INSTRUCTIONS: Bank One, Michigan, ABA #
------------------
ADDRESS FOR NOTICES FOR BANK ONE: 000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
Attn:
---------------------------------------
Fax No. (313) 225- .
----
87
88
EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, Michigan,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated July 13, 1999 (as the same may be amended or
modified, the "Credit Agreement"), among 2020 Corp. 70 (the
"Borrower"), the Lenders named therein, the LC Issuer and the Agent.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
Facility Identification Number(s)
-----------------------------------------------
Customer/Account Name
-----------------------------------------------------------
Transfer Funds To
---------------------------------------------------------------
---------------------------------------------------------------
For Account No.
----------------------------------------------------------------
Reference/Attention To
---------------------------------------------------------
Authorized Officer (Customer Representative) Date
-----------------------
-------------------------------------------- ---------------------------
(Please Print) Signature
Bank Officer Name Date
-----------------------
-------------------------------------------- ---------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
88
89
EXHIBIT E
NOTE
[Date]
, a (the "Borrower"),
promises to pay to the order of (the
"Lender") the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One,
Michigan in Detroit, Michigan, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of July 13, 1999 (which, as it
may be amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Borrower, the lenders party thereto, including the
Lender, the LC Issuer and Bank One, Michigan, as Agent, to which Agreement
reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. This Note is secured pursuant to the
Collateral Documents and guaranteed pursuant to the Guaranty, all as more
specifically described in the Agreement, and reference is made thereto for a
statement of the terms and provisions thereof. Capitalized terms used herein and
not otherwise defined herein are used with the meanings attributed to them in
the Agreement.
--------------------------
By:
-----------------------
Print Name:
---------------
Title:
--------------------
89
90
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF ,
DATED ,
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
----------------------------------------------------------------------------------------------------------------
90
91
SCHEDULE 5.7
LITIGATION
91
92
SCHEDULE 5.8
SUBSIDIARIES
Investment Jurisdiction of Owned Amount of Percent
In Organization By Investment Ownership
-----------------------------------------------------------------------------------------------------------------
92
93
SCHEDULE 5.24
DESCRIPTION OF INTELLECTUAL PROPERTY
93
94
SCHEDULE 6.11
INDEBTEDNESS
Maturity
Indebtedness Indebtedness and Amount
Incurred By Owed To of Indebtedness
----------- ------- ---------------
94
95
SCHEDULE 6.14
INVESTMENTS
Investment Jurisdiction of Owned Amount of Percent
In Organization By Investment Ownership
-- ------------ -- ---------- ---------
95
96
SCHEDULE 6.15
LIENS
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To Encumbered of Indebtedness
----------------------------------------------------------------------------------------------------------------
96
