CREDIT AGREEMENT
This Credit Agreement (the "Agreement"), dated as of November 6, 2003,
is among each of the Banks (as defined below), Standard Federal Bank, N.A.,
as Agent (as defined below), and Xxxxxxx Industries, Inc., a Delaware
corporation, as Borrower (as defined below).
In consideration of the mutual covenants, conditions and provisions as
hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS.
1.1 Definitions. For purposes of this Agreement, the following
capitalized terms will have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Acquired Debt" means any Indebtedness of any Person existing at the
time such Person became a Subsidiary or assumed by the Borrower or a
Subsidiary of the Borrower pursuant to an Acquisition permitted hereunder
(and not created or incurred in connection with or in anticipation of such
Acquisition).
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of all
or substantially all of any business or division of a Person, (b) the
acquisition of' in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, (other than Conbraco
Industries, Inc.), or otherwise causing any Person to become a Subsidiary, or
(c) a merger or consolidation or any other combination with another Person
(other than a Person that is a Subsidiary).
"Advances" means the Loans and the Letter of Credit Advances.
"Advance Date" means a Business Day on which Borrower has requested in
accordance with this Agreement that an Advance be made hereunder.
"Affiliate" when used with respect to any person means any other person
which, directly or indirectly, controls or is controlled by or is under common
control with such person, except that Conbraco Industries, Inc. shall not be
considered an Affiliate unless Borrower or one or more of its Subsidiaries
acquires a majority of the common stock of such corporation and a majority of
the directors of such corporation are employees or representatives of Borrower
or one or more of its Subsidiaries. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, means possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting securities
or by contract or otherwise.
"Agent" means, Standard Federal Bank, N.A., a national banking
association, when acting in its capacity as contractual representative of the
Banks, and not in its individual capacity as a Bank, and any permitted
successor(s) thereto, when so acting.
-1-
"Agent's Address" means 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxx, or at such other address as Agent may hereafter
specify to Borrower in writing.
"Agent's Counsel" means Xxxxxxxxx Xxxxxx PLLC.
"Aggregate Commitment Amount" means the aggregate amount of all the
Commitments of the Banks.
"Alternate Base Rate" means the higher of (i) the Prime Rate or (ii) the
Federal Funds Rate plus 0.50% per annum.
"Alternative Base Rate Advance" means Advances which bear interest
calculated by reference to the Alternative Base Rate.
"Applicable Lending Office" means, with respect to any Advance made by any
Bank or with respect to such Bank's Commitment, the office or branch of such
Bank or of any Affiliate of such Bank located at the address specified as the
applicable lending office or branch for such Bank set forth next to the name
of such Bank in the signature pages hereof or any other office or Affiliate of
such Bank or of any Affiliate of such Bank hereafter selected and notified to
the Borrower and the Agent by such Bank.
"Applicable Margin" means, with respect to Eurocurrency Advances at any
time, the percentage rate per annum which is applicable at such time as set
forth in the Pricing Schedule.
"Bank" means each and, when used in the plural, includes all of the
banking institutions and other lenders which have signed (or which may
hereafter become parties to) this Agreement (including Standard Federal Bank,
N.A., when acting as a Bank and not as Agent) and their respective
successor(s) and permitted assign(s).
"Borrower's Address" means 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxx 00000, Attention: Chief Financial Officer, or at such other
address as Borrower may hereafter specify to Agent in writing.
"Borrower" means Xxxxxxx Industries, Inc., a Delaware corporation, and
its permitted successor(s) and assign(s).
"Borrowing Date" means the date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.2.
"Borrower's Counsel" means Xxxxxxx Xxxxxxx, General Counsel to Borrower.
"British Pounds Sterling" or " " means the lawful currency of the United
Kingdom.
-2-
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurocurrency Advances, a day (other than a Saturday or Sunday)
on which banks generally are open in Detroit for the conduct of substantially
all of their commercial lending activities, interbank wire transfers can be
made on the Fedwire system and dealings in deposits in Dollars or the
relevant Permitted Currency are carried out in the relevant 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 and interbank wire transfers can
be made on the Fedwire system.
"Capital Lease" of any Person means any lease which, in accordance with
GAAP, is or should be capitalized on the books of such Person.
"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 distributions of assets
of, the issuing Person.
"Capitalization" is the sum of Total Debt and Net Worth.
"Closing Date" means the date that the first Advance is funded pursuant
to this Agreement.
"Commitment" means, with respect to each Bank, the commitment of each such
Bank to make Line of Credit Loans and to participate in Letter of Credit
Advances and Swingline Loans made through the Agent pursuant to Section 2.1, in
amounts not exceeding the Equivalent in Dollars of the aggregate principal
amount outstanding at any time equal to the respective commitment amount for
each such Bank set forth for such Bank on the signature pages hereto or
otherwise established pursuant to Section 8.13 or 9.2, as such amounts may be
modified from time to time pursuant hereto.
"Consolidated Interest Expense" means interest expense of the Borrower
and its Subsidiaries on a consolidated basis under GAAP.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consistent Basis" means, in reference to the application of GAAP (as
hereinafter defined), that the accounting principles observed in the current
period are comparable in all material respects to those applied in the
preceding period.
-3-
"Defaulting Bank" means any Bank that fails to make available to the
Agent such Bank's Loans required to be made hereunder or shall have not made
a payment required to be made to the Agent hereunder. Once a Bank becomes a
Defaulting Bank, such Bank shall continue as a Defaulting Bank until such
time as such Defaulting Bank makes available to the Agent the amount of such
Defaulting Bank's Loans and all other amounts required to be paid to the
Agent pursuant to this Agreement.
"Dollars" and "$" means the lawful money of the United States of America.
"Domestic Subsidiaries" means all Subsidiaries organized under the laws
of any of the states of the United States of America which are engaged in the
manufacturing business in the broadest sense of that term, but excluding
Arava Natural Resources Company, Inc. and its Subsidiaries.
"Documents" means, in upper or lower case form, all "documents" and
"instruments" as such terms are defined in the Uniform Commercial Code as
adopted and in effect in the State of Michigan, in which Borrower now or
hereafter has any right, title or interest.
"EBITDA" means consolidated net earnings of the Borrower and the
Subsidiaries excluding extraordinary gains, plus, to the extent deducted in
determining such net earnings, the sum of income taxes, interest expense,
depreciation and amortization, all determined in accordance with GAAP.
"Effective Rate" means the interest rate in effect for each respective
Loan from time to time when such Loan is not in default, as set forth in
Section 2 hereof.
"Environmental Protection Statute" means any federal, state or local
law, statute, or regulation enacted in connection with or relating to the
protection or regulation of the environment, including, but not limited to,
those laws, statutes and regulations regulating, relating to or imposing
liability or standards of conduct concerning the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of hazardous materials and any regulations issued or promulgated
in connection with such statutes by any governmental agency or
instrumentality, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liabilities Act, as amended (42
U.S.C. '9601 et seq.) and the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. '6901 et seq.).
"Equivalent" of an amount of one currency (the "first currency")
denominated in another currency (the "second currency"), as of any date of
determination, means the amount of the second currency which could be
purchased with the amount of the first currency at the spot or other relevant
rate of exchange quoted by the Agent at approximately 11:00 a.m. local time
on such date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.
-4-
"Euro" and/or " " means the Euro referred to in Council Regulation (EC)
No. 1103/97 dated June 17, 1997 passed by the Council of the European Union,
or, if different, the then lawful currency of the member states of the
European Union that participate in the third stage of Economic and Monetary
Union.
"Eurocurrency Advance" means an Advance which, except as otherwise
provided in Section 3.1, bears interest at the applicable Eurocurrency Rate.
"Eurocurrency Base Rate" means, with respect to a Eurocurrency Advance
for the relevant Interest Period, the rate determined by the Agent to be the
rate at which the Agent offers to place deposits in Permitted Currency in
which such Eurocurrency Advance is to be denominated 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, approximately
in the amount of the Agent's relevant Eurocurrency Advance and having a
maturity equal to such Interest Period, plus all other applicable costs,
expenses and reserves (including without limitation the cost of compliance
with any existing requirements of the Bank of England Act of 1998 and/or Bank
of England and/or the Financial Services Authority to place non-interest
bearing or special deposits with the Bank of England and/or pay fees to the
Financial Services Authority in connection with Advances denominated in
British Pounds Sterling) for any Eurocurrency Advance denominated in any
Optional Currency.
"Eurocurrency Rate" means, with respect to a Eurocurrency Advance for
the relevant Interest Period, the sum of (i) the quotient of (a) the
Eurocurrency Base Rate applicable to such Interest Period, divided by (b)
one, minus the Reserve Requirement (expressed as a decimal) applicable to
such Interest Period, plus (ii) the Applicable Margin.
"Event of Default" has the meaning set forth in Section 7.1 of this
Agreement.
"FASB" means the Financial Accounting Standards Board.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) 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 by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if such rate is
not so published for any day, the Federal Funds Rate for such day shall be
the average rate charged to the Agent on such day on such transactions, as
determined by the Agent.
"FLSA" means the federal Fair Labor Standards Act, as the same may from
time to time be amended or supplemented, including any rules or regulations
issued in connection therewith.
"Fundamental Subsidiaries" are those Subsidiaries identified on Exhibit
6.3.
-5-
"GAAP" means generally accepted accounting principles as set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the FASB or in such other statements by such other Person
as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination and
which are applied on a Consistent Basis.
"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.
"Guaranties" means, collectively, the guaranties of the Borrower's
obligations under the Loan Documents by each of the Domestic Subsidiaries
listed in Exhibit 1.15(b) to this Agreement and all Domestic Subsidiaries
that are hereafter required to sign Guaranties as provided in Section 5.12
hereof (individually, a "Guarantor" and, collectively, the "Guarantors").
"Indebtedness" means all items of indebtedness of any Person, direct or
indirect, joint or several, including (without implied limitation):
(a) all obligations of such Person for borrowed money evidenced
by bonds, notes, debentures or similar instruments, all reimbursement and
similar obligations under outstanding letters of credit, banker's acceptances
or similar instruments in respect of drafts or other claims which may be
presented or have been presented and have not yet been paid, and the unpaid
purchase price for goods, property or services acquired by such Person,
except for trade accounts and accrued expenses payable arising in the
ordinary course of business which are not past due within customary payment
terms;
(b) All indebtedness guaranteed, directly or indirectly, in any
manner, or endorsed (other than for collection or deposit in the ordinary
course of business), or discounted with recourse by the Person;
(c) All indebtedness in effect guaranteed by the Person,
directly or indirectly, through agreements, contingent or otherwise: (1) to
purchase such indebtedness; or (2) to purchase, sell, or lease (as lessee or
lessor) property, products, materials, or supplies or to purchase or sell
services, primarily for the purpose of enabling the Person to make payment of
such indebtedness or to insure the owner of the indebtedness against loss; or
(3) to supply funds to, or in any other manner invest in, the Person;
(d) All indebtedness secured by (or for which the holder of
such indebtedness has a right, contingent or otherwise, to be secured by),
any mortgage, deed of trust, pledge, lien, security interest, or other charge
or encumbrance upon property owned or acquired by the Person subject thereto,
whether or not the liabilities secured thereby have been assumed by the
Person;
(e) the aggregate outstanding amount of all Off Balance Sheet
Liabilities, based on the aggregate outstanding amount as if such
transactions were structured as an on balance sheet financing, whether or not
shown as a liability on a consolidated balance sheet of such Person,
determined in a manner satisfactory to the Agent; and
-6-
(f) all obligations of such Person as lessee which are
capitalized in accordance with GAAP under any Capital Lease.
"Interest Coverage Ratio" means the sum of EBITDA, less extraordinary
cash and non-cash income of the Borrower and its Subsidiaries, divided by the
amount of Consolidated Interest Expense (including interest arising from any
Capital Leases) for the applicable period, computed as of the end of each
fiscal quarter for the period of four fiscal quarters then ended.
"Interest Period" means, with respect to a Eurocurrency Advance, a
period of one, two or three months commencing on a Business Day selected by
the Borrower pursuant to this Agreement. Such Interest Period shall end on
the day which corresponds numerically to such date one, two, three or six
months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second,
third or sixth succeeding month. If an Interest Period would otherwise end
on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement by the Agent, on behalf of the Banks, for the account of the
Borrower.
"Letter of Credit Advance" has the meaning set forth in Section 2.2.5 of
this Agreement.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement or any lease in the nature thereof) and any
agreement to give any lien, mortgage, pledge, assignment, security interest,
charge or other encumbrance of any kind.
"Line of Credit" means the line of credit established under Section 2.1
of this Agreement.
"Line of Credit Loans" means any loans made by the Banks pursuant to
Section 2.1 of this Agreement.
"Line of Credit Maturity" means the earlier of November 6, 2006 or the
date the Commitments are terminated.
"Line of Credit Notes" has the meaning set forth in Section 2.3 of this
Agreement.
"Loans" means the Line of Credit Loans and the Swingline Loans.
"Loan Documents" means this Agreement, the Notes, the Guaranties,
applications for Letters of Credit and all other documents, instruments or
certificates executed and delivered to the Banks in connection with this
Agreement and the Loans.
-7-
"Margin Stock" means "margin stock" as defined in Regulations U or X or
"marginable OTC stock" or "foreign margin stock" within the meaning of
Regulation T or X.
"Maximum Rate" means the maximum non-usurious rate of interest that the
Banks are allowed to contract for, charge, take, reserve or receive under the
applicable laws of any applicable state or of the United States of America
(whichever from time to time permits the highest rate for the use,
forbearance or detention of money) after taking into account, to the extent
required by applicable law, any and all relevant payments or charges under
this Agreement, the Notes or under any other document or instrument executed
and delivered in connection herewith and the indebtedness evidenced by the
Notes.
"Net Worth" means the sum of the par or stated value of all outstanding
Capital Stock, amounts in excess of par or stated value, surplus and retained
earnings and other comprehensive income, all as determined in accordance with
GAAP for the Borrower and its Subsidiaries on a consolidated basis.
"Notes" means the Line of Credit Notes and any other promissory notes
issued by Borrower to the order of any one or more of the Banks evidencing
the Obligations of Borrower to repay the Loans.
"Obligations" means any and all liabilities, obligations, or
indebtedness owing by Borrower to the Agent and/or the Banks, of any kind or
description, irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising under any Loan Document.
"Off-Balance Sheet Liability" of a Person means (i) any obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, asset securitizations, factoring or similar transactions, (ii)
any liability under any sale and leaseback transaction which is not a Capital
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 (as reasonably
determined by the Agent) but which does not constitute a liability on the
balance sheets of such Person, but excluding from this clause (iv) operating
leases.
"Optional Currency" means any currency which is freely transferable and
convertible into Dollars and acceptable to all the Banks; provided, that,
subject to the terms of this Agreement, Euros and British Pounds Sterling
shall be deemed acceptable to the Banks.
"Overdue Rate" means (a) in respect of principal of Alternate Base Rate
Advance, a rate per annum that is equal to the sum of two percent (2%) per
annum plus the Alternate Base Rate, (b) in respect of principal of Eurocurrency
Advances, a rate per annum that is equal to the sum of two percent (2%) per
annum plus the per annum rate in effect thereon until the end of the then
current Interest Period for such Advance and, thereafter, a rate per annum that
is equal to the sum of two percent (2%) per annum plus the Alternate Base Rate
(or, in the case of any Eurocurrency Advance denominated in any Optional
Currency, the per annum rate equivalent to the Alternate Base Rate for such
-8-
currency as determined by the Agent), and (c) in respect of other amounts
payable by the Borrower hereunder (other than interest), a per annum rate that
is equal to the sum of two percent (2%) per annum plus the Alternate Base Rate.
"Permitted Currency" means Dollars and any Optional Currency.
"Permitted Liens" means (a) Liens for taxes, assessments or governmental
charges or levies which, for Borrower and all Subsidiaries other than Arava
Natural Resources Company and its Subsidiaries and XXXX Holding Company, Inc.
and its Subsidiaries are not yet due, or delinquent, or which can thereafter
be paid without penalty, or which are being contested in good faith in
accordance with this Agreement and against which appropriate reserves are
being maintained under GAAP, (b) unfiled inchoate construction Liens for
construction work in progress, (c) workmen's, repairmen's, warehousemen's and
carrier's Liens and other similar Liens, if any, arising in the ordinary
course of business, (d) Liens granted by Subsidiaries in favor of Borrower in
connection with inter-company loans, (e) each of the liens described in
Schedule 1.1(a) attached to this Agreement, and (f) other similar Liens
incidental to the normal business conduct of the ordinary course of business
of the Borrower and Subsidiaries in an aggregate amount not to exceed
$1,000,000.
"Person" or "Persons" means natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, lenders, trust companies, land trusts,
vehicle trusts, business trusts or other organizations, irrespective of
whether they are legal entities, and governments and agencies and political
subdivisions thereof.
"Pricing Schedule" means the following schedule:
Eurocurrency
Capitalization Facility Applicable Margin and All-in
Tier Ratio 1 Fee Letter of Credit Fee Drawn Cost
I 3 >20% 25.0 bp2 50.0 bp 75.0 bp
II >10%, but 20.0 bp 42.5 bp 62.5 bp
< = 20%
III <10% 15.0 xx 00.0 xx 00.0 xx
0 Defined as Total Debt/Capitalization.
2 "bp" means basis points per annum.
3 All fees will be calculated by the Capitalization Ratio as of the
latest fiscal quarter for which financial statements have been
delivered pursuant to Section 5.3.1, provided, however, that if such
statements are not delivered as required by Section 5.3.1, the Tier
I fees shall apply.
"Prime Rate" means and refers to the rate of interest announced publicly
from time to time by the Agent as its prime commercial lending rate.
Reference to the Prime Rate shall not be affected by the fact that Agent may
make loans at different rates from time to time with respect to the class of
Loans for which the Prime Rate is established. Any change in any of the
interest rates chargeable hereunder resulting from a change in the Prime Rate
shall become effective on the day on which each change in the Prime Rate is
effective.
-9-
"Prohibited Transaction" has the meaning set forth in Section 406 or
Section 2003(a) of ERISA.
"Ratable Share" means for each Bank a percentage based on the ratio of
such Bank's Commitment to the aggregate Commitments of all Banks, which as to
aggregate Advances (including participations in Letter of Credit Advances and
Swingline Loans) of such Bank will be limited to the respective Commitment
amount for such Bank. If the Commitments have expired or been terminated,
then such Bank's Commitment for purposes of determining its Ratable Share
shall be deemed equal to the amount of its Commitment immediately prior to
such expiration or termination.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation T" means Regulation T 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.
"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.
"Regulation X" means Regulation X 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.
"Reportable Event" has the meaning set forth in Section 4043 of ERISA.
"Requirement of Law" means, with respect to any Person, the certificate
(or articles) of incorporation and bylaws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.
"Requisite Banks" means Banks whose Ratable Shares equal or exceed 51%.
"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.
"Restricted Subsidiaries" means those Domestic Subsidiaries that have
executed or are required to execute Guarantees.
"Same Day Funds" means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements
and payments in any Optional Currency, same day or other funds as may be
determined by the Agent to be customary in the place of disbursement or
payment for the settlement of international banking transactions in such
Optional Currency.
-10-
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Subsidiaries" means those entities listed on Schedule 1.1(b) to this
Agreement and all entities in which the Borrower hereafter acquires, directly
or indirectly, any equity or ownership interest, except minority interests in
(1) Conbraco Industries, Inc. and (2) other entities, the aggregate value of
which interests (on a cost basis) does not exceed $10,000,000, provided that,
Conbraco Industries, Inc. shall not be considered a Subsidiary even if
Borrower or one or more of its Subsidiaries acquires a majority of the common
stock of such corporation unless and until a majority of the Directors of
such corporation are employees or representatives of Borrower or its
Subsidiaries.
"Swingline Loan" has the meaning set forth in Section 2.9 of this
Agreement.
"Tangible Net Worth" means, as of any date, (a) Net Worth less (b) the
net book value of all items of the following character which are included in
the assets of the Borrower and its Subsidiaries on a consolidated basis: (i)
goodwill, including, without limitation, the excess of cost over book value of
any asset, (ii) organization or experimental expenses, (iii) unamortized debt
discount and expense, (iv) patents, trademarks, trade names, copyrights and
other intellectual property, (v) deferred taxes (net of valuation allowances)
and deferred charges, (vi) franchises, licenses and permits, (vii) notes and
other loans or receivables owing by any Affiliate, director or employee in
excess of $1,000,000 in the aggregate for all of the foregoing, and (viii)
other assets which are deemed intangible assets under GAAP, all as determined
in accordance with GAAP for the Borrower and its Subsidiaries on a
consolidated basis.
"Taxes" means any taxes, charges, fees, levies or other assessments
based upon or measured by net or gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, withholding, payroll, employment, excise,
premium or property taxes, together with any interest and penalties,
additions to tax and additional amounts imposed by any federal, state, local
or foreign taxing authority upon any Person.
"Total Debt" means all Indebtedness of the Borrower and its Subsidiaries
on a consolidated basis.
"Total Outstanding Amount" means the aggregate principal amounts at any
time outstanding of the Line of Credit Advances, the outstanding face amount
of Letters of Credit and all outstanding Swingline Loans, which shall not
exceed in the aggregate an Equivalent in Dollars equal to the amount of the
Aggregate Commitment Amount.
"Type" means, with respect to any Advance, its nature as a Alternative
Base Rate Advance or a Eurocurrency Advance.
"United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland.
-11-
"Unmatured Event of Default" means an event, act, or occurrence which
with the giving of notice or the lapse of time, or both, would become an
Event of Default.
1.2 Accounting Terms. (a) All accounting terms not specifically
defined herein, to the extent not inconsistent with definitions set forth in
Section 1.1 of this Agreement, will be construed in accordance with GAAP as
in effect from time to time, including, without limitation, applicable
statements, bulletins and interpretations issued by the FASB and bulletins,
opinions, interpretations and statements issued by the American Institute of
Certified Public Accountants or its committees, provided that, if the
Borrower notifies the Banks that it wishes to amend any covenant or term
hereof to eliminate the effect of any change in GAAP (or if the Requisite
Banks notify the Borrower that the Banks wish to amend any covenant or term
for such purpose), then the Borrower's compliance with such covenants and
terms shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective until either such notice is
withdrawn or such covenant or term is amended in a manner satisfactory to the
Borrower and the Requisite Banks. When used herein, the term "financial
statements" will include the notes and schedules thereto.
(b) The Borrower shall deliver to the Banks, at the same time as
the delivery of any annual or quarterly financial statement, (i) a
description in reasonable detail of any material variation between the
application or other modification of accounting principles employed in the
preparation of such statement and the application or other modification of
accounting principles employed in the preparation of the immediately prior
annual or quarterly financial statements as to which no objection has been
made in accordance with the first sentence of subsection (a) above and (ii)
if requested by the Agent, reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) The Borrower agrees to take all necessary action, including
without limitation any necessary acknowledgments or consents from the
Borrower's auditors as may be required under applicable law, to ensure that
the Agent and the Banks may rely on the audited financial statements of the
Borrower and its Subsidiaries delivered to the Agent and the Banks after the
Closing Date.
1.3 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement will have the defined meanings when used in the Loan Documents
or any certificate or other document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement will refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references of Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
-12-
2. AMOUNT AND TERMS OF LOANS.
2.1 Amount of Line of Credit. Each Bank agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Line of Credit
Loans to the Borrower and to participate in Letter of Credit Advances to the
Borrower pursuant to Section 2.6 from time to time from and including the
Closing Date to but excluding the Line of Credit Maturity not to exceed an
aggregate principal amount at any time outstanding the Dollar Equivalent of the
amount of its respective Commitment as of the date any such Advance is made;
provided, however, that (i) the Equivalent in Dollars of the aggregate
principal amount of Letter of Credit Advances outstanding at any time shall not
exceed $15,000,000, (ii) the Equivalent in Dollars of the aggregate principal
amount of all Advances in Optional Currencies outstanding at any time shall not
exceed $15,000,000, and (iii) the Equivalent in Dollars of the aggregate
principal amount of all Advances outstanding at any time shall not exceed the
Aggregate Commitment Amount; and the Borrower will not be entitled to obtain
any Advance if each such condition, in addition to other conditions contained
herein, is not satisfied both before and after giving effect to such Advance.
2.2 Notice and Manner of Borrowing.
2.2.1 Nature of Advances. The Advances (other than Swingline
Loans) may be Alternative Base Rate Advances or Eurocurrency Advances, or a
combination thereof, selected by Borrower in accordance with Sections 2.2.2
and 2.2.3, provided that, notwithstanding anything herein to the contrary,
Advances denominated in any Optional Currency cannot be Alternative Base Rate
Advances.
2.2.2 Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advances and, in the case of
each Eurocurrency Advance, the Interest Period and Permitted Currency
applicable thereto from time to time. The Borrower shall give the Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Detroit
time) at least one Business Day before the Borrowing Date of each Alternative
Base Rate Advance and three Business Days before the Borrowing Date for each
Eurocurrency 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 Eurocurrency Advance, the Interest
Period and Permitted Currency applicable thereto.
Agent shall deliver to each Bank a copy of the Borrowing Notice timely
received by Agent from Borrower on the day received. Not later than noon
(local time) on each Borrowing Date, each Bank shall make available its Loan
or Loans in Same Day Funds at the principal office of Agent in the case of
Advances denominated in Dollars and to the designated Applicable Lending
Office of the Agent or at such other place specified by the Agent in the case
of Advances denominated in any Optional Currency. The Agent will make the
funds so received from the Banks available to the Borrower at the Agent's
aforesaid location.
-13-
2.2.3 Conversion and Continuation of Outstanding Advances.
Alternative Base Rate Advances shall continue as Alternative Base Rate
Advances unless and until such Alternative Base Rate Advances are converted
into Eurocurrency Advances pursuant to this Section 2.2.3. Each Eurocurrency
Advance shall continue as a Eurocurrency Advance until the end of the then
applicable Interest Period therefor, at which time such Eurocurrency Advance
shall either be paid, or it will automatically be converted into an
Alternative Base Rate Advance unless the Borrower shall have given the Agent
a Conversion/Continuation Notice (as defined below) requesting that, at the
end of such Interest Period, such Eurocurrency Advance shall continue as a
Eurocurrency Advance for the same or another Interest Period; provided, that
(a) Eurocurrency Advances may not be converted from one Permitted Currency to a
different Permitted Currency and (b) Eurocurrency Advances owing in any
Optional Currency shall not be automatically converted but shall be due and
payable at the end of the relevant Interest Period. Subject to the terms of
Section 2.6, the Borrower may elect from time to time to convert all or any
part of an Alternative Base Rate Advance into a Eurocurrency Advance. The
Borrower shall give the Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of an Alternative Base Rate Advance into a
Eurocurrency Advance or continuation of a Eurocurrency 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 Eurocurrency Advance and the
duration of the Interest Period and Permitted Currency
applicable thereto.
2.2.4 Changes in Interest Rate, etc. Each Alternative Base
Rate Advance shall bear interest on the outstanding principal amount thereof,
for each day from and including the date such Advance is made or is
automatically converted from a Eurocurrency Advance into a Alternative Base
Rate Advance pursuant to Section 2.2.3, but excluding the date it is paid or
is converted into a Eurocurrency Advance pursuant to Section 2.2.3 hereof, at
a rate per annum equal to the Alternative Base Rate for such day. Changes
in the rate of interest on that portion of any Advance maintained as a
Alternative Base Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurocurrency Advance shall bear
interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including)
the last day of such Interest Period at the interest rate determined by the
Agent as applicable to such Eurocurrency Advance based upon the Borrower's
selections under Sections 2.2.2 and 2.2.3 and otherwise in accordance with
the terms hereof. No Interest Period may end after the Line of Credit
Maturity.
-14-
2.2.5 Ratable Advances. Each Bank, on the date any Advance
(other than Swingline Loans) is requested to be made, shall make its Ratable
Share of such Advance available in Same Day Funds at the principal office of
Agent in the case of Advances denominated in Dollars and to the designated
Applicable Lending Office of the Agent or at such other place specified by the
Agent in the case of Advances denominated in any Optional Currency, in each
case for disbursement to Borrower. Unless Agent shall have received notice
from any Bank prior to the date such Advance is requested to be made under
this Section 2.2 that such Bank will not make available to Agent such Bank's
Ratable Share of such Advance, Agent may assume that such Bank has made such
portion available to Agent on the date such Advance is requested to be made
in accordance with this Section 2.2. If and to the extent such Bank shall
not have so made such Ratable Share available to Agent, Agent may (but shall
not be obligated to) make such amount available to Borrower, and such Bank
agrees to pay to Agent forthwith on demand such amount together with interest
thereon, for each day from the date such amount is made available to Borrower
by Agent until the date such amount is repaid to Agent, at the Federal Funds
Rate (or, in the case of any Eurocurrency Advance denominated in any Optional
Currency, the per annum rate equivalent to the Federal Funds Rate for such
currency as determined by the Agent) for the first five days and thereafter at
the applicable interest rate. If such Bank shall pay such amount to Agent
together with interest, such amount so paid shall constitute a Loan by such
Bank as a part of such Advance for purposes of this Agreement. The failure
of any Bank to make its Ratable Share of any such Advance available to Agent
shall not relieve any other Bank of its obligations to make available its
Ratable Share of such Advance on the date such Advance is requested to be
made, but no Bank shall be responsible for failure of any other Bank to make
such Ratable Share available to Agent on the date of any such Advance.
Subject to the terms and conditions of this Agreement, Agent shall, on the
date any issuance of a Letter of Credit advance (a "Letter of Credit
Advance") is requested to be made, issue the related Letter of Credit on
behalf of the Banks for the account of the Borrower. Notwithstanding
anything herein to the contrary, Agent may decline to issue any requested
Letter of Credit on the basis that the beneficiary, the purpose of issue or
the terms and conditions of drawing are unacceptable to it in its reasonable
discretion, including without limitation, if Agent determines that the
purpose of such issuance is outside the ordinary course of business of
Borrower.
2.2.6 Disbursement. Upon fulfillment of the conditions set
forth in this Section 2.2, Section 3.5 (and subject to Agent's then current
deadlines for wire transfers and crediting of Agent and Bank accounts), and
Sections 8.2.1 and 8.2.2, Agent will disburse such Advance to Borrower in
Same Day Funds at Borrower's expense.
2.2.7 Minimum Advances. Except for Swingline Loans, no
Advances shall be for an aggregate amount of less than $5,000,000 (or the
approximate Equivalent thereof in any applicable Optional Currency). No more
than five different Interest Periods may exist at any time.
2.3 Authorization and Issuance of Line of Credit Notes. All
Advances made by the Banks pursuant to the Line of Credit will be evidenced
by separate promissory notes of Borrower, in the form of Exhibit 2.3 to this
Agreement (each a "Line of Credit Note" and collectively the "Line of Credit
Notes"), to be executed and delivered by Borrower to each of the Banks, in
the principal amount of each such Bank's Commitment, on the Closing Date.
-15-
2.4 Facility Fees. On the last day of each March, June, September
and December, commencing December 31, 2003, for the pro rata benefit of the
Banks, the Borrower shall pay a Facility Fee equal to the per annum
percentage identified as the Facility Fee in the Pricing Schedule to be
determined by multiplying the amount of the aggregate Commitments of all
Banks by the appropriate Facility Fee.
2.5 Use of Proceeds. The proceeds of the Line of Credit Loans will
be used by Borrower (i) for working capital, (ii) to finance Acquisitions,
(iii) to reimburse any Bank for any payment under Letters of Credit and (iv)
for general corporate purposes.
2.6 Interest Payment Dates; Interest Basis. Interest accrued on
each Alternative Base Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof. Interest
accrued on each Eurocurrency Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurocurrency Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurocurrency Advance having an Interest Period longer than
three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest 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.
2.7 Prepayments. Borrower may prepay, in whole or in part, but in
an amount not less than $10,000,000 (or the approximate Equivalent thereof in
the applicable Optional Currency) at any time upon one (1) Business Day's
notice, without premium or penalty, any Alternative Base Rate Advances.
Eurocurrency Advances may only be prepaid at the end of an Interest Period as
provided above in Section 2.2.3. Swingline Loans may only be prepaid with the
permission of the Agent. Any other provisions of this Agreement to the
contrary notwithstanding, if at any time during the term of this Agreement,
(a) the Equivalent in Dollars of the aggregate principal amount of Letter of
Credit Advances outstanding at any time shall exceed $15,000,000, (b) the
Equivalent in Dollars of the aggregate principal amount of all Advances in
Optional Currencies outstanding at any time shall exceed $15,000,000, or (c)
the Equivalent in Dollars of the aggregate principal amount of all Advances
outstanding at any time shall exceed the Aggregate Commitment Amount, the
Borrower will immediately, and in any event within two (2) Business Days,
remit and pay to Agent such amounts as may be necessary so that no such
excess as described in the foregoing clauses (a), (b) or (c) shall exist.
Borrower may terminate the Line of Credit at any time upon delivery of
written notice to Agent sixty (60) days prior to such termination.
2.8 Loan Account. Advances will be charged to an account in
Borrower's name on Agent's books, and Agent will debit to such account the
amount of each Advance when made and credit to such account the amount of
each repayment thereunder. Agent will render Borrower, from time to time, a
statement setting forth the debit balance in the loan account, which will be
deemed conclusive absent manifest error. Such statement will be prima facie
-16-
evidence of the correctness of the Advances owing to the Banks by Borrower
hereunder, unless there is manifest error evident on its face. Similarly,
each Bank is hereby authorized by Borrower to record in its books and
records, the date, and amount and type of each Advance and the duration of
the related Interest Period (if applicable), the amount of each payment or
prepayment of principal thereon, which books and records shall constitute
prima facie evidence of the information so recorded, provided, however, that
failure of any Bank to record, or any error in recording, any such
information shall not relieve Borrower of its obligation to repay the
outstanding principal amounts of the Loans, all accrued interest thereon and
other amounts payable with respect thereto in accordance with the terms of
the Notes and this Agreement.
2.9 Swingline Loans. The Agent may, in its sole discretion and
without having any obligation to do so, make interim advances (hereinafter
sometimes referred to as "Swingline Loans") of its own funds to the Borrower
prior to the Line of Credit Maturity in an aggregate amount not to exceed an
Equivalent in Dollars of $15,000,000 at any one time outstanding; provided,
however, that no Swingline Loans shall be made after the Agent has received
written requests not to make Swingline Loans from the Requisite Banks.
Swingline Loans shall bear interest at a rate determined by the Agent, and
interest and principal shall be payable by the Borrower upon demand by the
Agent. The aggregate amount of all Swingline Loans outstanding on the date
any regular Advance is made shall be included as a previously disbursed
portion of such regular Advance in which each Bank shall participate based
upon its Ratable Share and the Agent shall thereupon be immediately
reimbursed for the full amount of such Swingline Loans from the proceeds of
such regular Advance. If no regular Advance is made for any period of 60
days, whether by reason of the failure to comply with any condition for a
regular Advance or otherwise, or at any other time as determined by the Agent
in its sole discretion, each Bank shall absolutely and unconditionally, upon
request of the Agent, on the Business Day after receiving such request, remit
to the Agent such Bank's Ratable Share of all outstanding Swingline Loans,
whereupon, such Swingline Loans shall be automatically converted to a regular
Alternative Base Rate Advance in Dollars effective on such next Business Day.
In no event will any Swingline Loan be made if, after giving effect to such
Swingline Loan, the Equivalent in Dollars of the aggregate principal amount
of all Advances would exceed the Aggregate Commitment Amount or the
Equivalent in Dollars of the aggregate principal amount of all Swingline
Loans would exceed $15,000,000.
3. GENERAL PROVISIONS.
3.1 Overdue Rate.
3.1.1 Overdue Rate. Upon the occurrence and during the
continuance of an Event of Default, all outstanding Advances will bear
interest thereafter, at the option of Agent and/or at the request of the
Requisite Banks or automatically without any action by the Agent or the Banks
in the case of any Event of Default under Section 7.1.6 or 7.1.7, and without
affecting any of the Bank's rights and remedies provided for herein and in
the Notes, at the Overdue Rate.
-17-
3.1.2 Late Charge. If any required payment under any Advance
is not paid within ten (10) days from the date it is due, at the option of
Agent and/or at the request of the Requisite Banks, a late charge of five
cents ($.05) for each Dollar of the payment so overdue may be charged.
3.2 Computation of Interest and Fees; Maximum Interest Rate.
3.2.1 Calculation Of Interest. Interest shall be calculated
for actual days elapsed on the basis of a 360-day year, except for interest
on Loans denominated in British Pounds Sterling which shall be calculated for
actual days elapsed on the basis of a 365-day year. Interest will accrue
from the date of any Advance up to but excluding the date of repayment of the
Loan, in accordance with the provisions hereof.
3.2.2 Maximum Rate. Notwithstanding anything to the contrary
contained in this Agreement, Borrower will not be obligated to pay, and the
Banks will not be entitled to charge, collect or receive, interest in excess
of the Maximum Rate and in the event the Banks ever receive, collect or
apply, as interest, any such excess, such amount which would be excessive
interest will be deemed a partial prepayment of principal and treated
hereunder as such; and, if the principal hereof is paid in full, any
remaining excess will immediately be returned to Borrower. If any
construction of this Agreement, the Notes or the other Loan Documents
indicates a different right given to the Banks to ask for, demand or receive
any larger sum as interest, such as a mistake in calculation or wording, this
clause will override and control, it being the intention of Borrower and the
Banks that this Agreement, the Notes and the other Loan Documents will in all
respects comply with applicable law, and proper adjustment will automatically
be made accordingly. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the Maximum Rate, Borrower
and the Banks will, to the maximum extent permitted by law (i) characterize
any non-principal payment as an expense, fee or premium rather than as
interest; (ii) exclude voluntary prepayments and the effects thereof; and
(iii) amortize, prorate, allocate and spread the total amount of interest
through the entire contemplated term of such indebtedness until payment in
full of the principal (including the period of any extension or renewal
thereof) so that the interest on account of such indebtedness will not exceed
the Maximum Rate.
3.3 Conditions Precedent to the Execution and Delivery of this
Agreement. The obligation of the Banks to execute and deliver this Agreement
is subject to the fulfillment, in form and substance satisfactory to Agent
and its counsel, of each of the following conditions, unless otherwise noted:
3.3.1 Line Of Credit Note, Guaranties, etc. Agent will have
received each of the following documents, duly executed and delivered by
Borrower, each of which will be in full force and effect:
(a) The Line of Credit Notes, in the form of Exhibit 2.3.
(b) The Guaranties, in the form of Exhibit 3.3.1(b) to
this Agreement.
(c) Such other documents and certificates as may be
necessary or desirable to evidence the Obligations,
representations, warranties and covenants of Borrower
hereunder and the Guarantors under the Guaranties.
-18-
3.3.2 Good Standing Certificates. Agent will have received a
good standing certificate of Borrower and each of the Guarantors listed on
Exhibit 3.3.2 hereto from each state in which Borrower and each such
Guarantor is organized and each other state, if different, in which the
principal part of its business activity is conducted, dated a recent date,
indicating that Borrower and each such Guarantor is in good standing in each
such state; provided, if such good standing certificates for any Guarantor is
not available at closing, Borrower shall certify that such Guarantor is in
good standing.
3.3.3 Resolutions. Agent will have received a copy of the
resolutions of the Board of Directors of Borrower and each Restricted
Subsidiary (i) authorizing the execution, delivery and performance of the
Loan Documents, (ii) authorizing the borrowing contemplated hereunder, and
(iii) certified by the Secretary of Borrower or the Restricted Subsidiary,
respectively, as of the Closing Date, which certificate will state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate.
3.3.4 Charter. Agent will have received certified copies of
the charter of Borrower and each Restricted Subsidiary, certified by an
officer of Borrower and each Restricted Subsidiary, respectively, on the
Closing Date, as true, complete and correct copies thereof.
3.3.5 Incumbency Certificates. Agent will have received a
certificate of the Secretary of Borrower and each Restricted Subsidiary as to
the incumbency and signatures of the person or persons authorized to execute
and deliver the Loan Documents.
3.3.6 Certificate Regarding Representations and Warranties.
Agent will have received a certificate of the Chief Financial Officer, the
Vice President-Legal or Chief Executive Officer of Borrower stating, on
behalf of Borrower, that each of the representations and warranties made in
or pursuant to Section 4 of this Agreement or which are contained in any
other Loan Document or any certificate, document or financial or other
statement furnished by Borrower at any time under or in connection herewith,
is true and correct in all respects on and as of the Closing Date.
3.3.7 Reimbursement. Agent will have received reimbursement
for legal fees and expenses incurred by Agent in the preparation of the
transactions contemplated by this Agreement.
3.3.8 No Litigation or Investigation. No suit, action,
investigation, inquiry or other proceeding, including, without limitation,
the enactment or promulgation of a statute or rule by or before any
arbitrator or any Governmental Authority will be pending and no preliminary
or permanent injunction or order by a state or federal court will have been
entered (i) in connection with any Loan Document or any of the transactions
contemplated hereby or thereby or (ii) which, in any such case, in the
reasonable judgment of the Banks, would have a material adverse effect on (A)
the transactions contemplated by this Agreement or (B) the business,
operations, properties, condition (financial or otherwise) or prospects of
Borrower.
-19-
3.3.9 Insurance. Agent will have received a schedule, entitled
Schedule 3.3.9, setting forth the policies of insurance, including the
effective dates of such policies, carried by Borrower and its Subsidiaries on
the Closing Date.
3.3.10 No Event of Default. No Event of Default and no
Unmatured Event of Default will have occurred and be continuing on the date
of the Loans, nor will either result from the making of such Loans.
3.3.11 Opinion of Counsel. Agent and each of the Banks will
have received the written opinion, dated the Closing Date, of Borrower's and
Restricted Subsidiaries' Counsel in substantially the same form as that
attached hereto as Exhibit 3.3.11.
3.3.12 Repayment of Existing Obligations. The entire amount
owing under the Credit Agreement dated November 29, 2000 among the Borrower,
the Banks named therein and the Agent is fully paid and all obligations to
loan money or make advances thereunder are terminated.
3.3.13 Fees. The Borrower shall have paid the Agent and the Banks
all closing fees agreed upon among the Borrower, the Agent and the Banks, or
any of them.
3.3.14 Financial Statements. The Agent shall have received audited
consolidated financial statements for the Borrower and its Subsidiaries for the
fiscal years ending in 2000, 2001 and 2002, unaudited interim consolidated
financial statements for the Borrower and its Subsidiaries for each fiscal
quarter ended after the most recently ended fiscal year, and such other
financial statements as required by the Agent, in each case in form and
substance satisfactory to the Agent.
3.3.15 Lien Searches. The Agent shall have received satisfactory results
of such Lien searches as required by the Agent.
3.3.16 Certificate Regarding USA Patriot Act. Agent shall have
received a certificate of the Borrower with respect to the USA Patriot Act in
form satisfactory to the Agent.
3.3.17 Other Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement will have
been delivered and/or executed and will be in form and substance satisfactory
to Agent and its counsel.
3.4 Conditions Precedent to all Advances under the Line of Credit
Loans. The obligation of the Banks and each of them to make Advances,
including any Letter of Credit Advance, is subject to the fulfillment, in
form and substance satisfactory to Agent and its counsel, of each of the
following conditions on or before the date of each such Advance:
3.4.1 No Event Of Default. As of the date of making the
Advance, no Event of Default and no Unmatured Event of Default will have
occurred or be continuing, nor will either result from or exist after the
making of such Advance.
-20-
3.4.2 Agreement in Full Force and Effect. This Agreement and
each of the other Loan Documents will be in full force and effect.
3.4.3 Representations and Warranties True and Correct. Each of
the representations and warranties made in or pursuant to Section 4 of this
Agreement or which are contained in any other Loan Document or any
certificate, document or financial or other statement furnished by Borrower
and/or any Subsidiary at any time under or in connection with any of the
transactions contemplated by the Loan Documents, will be true and correct in
all material respects on and as of the date of the Advance as if made on and
as of the date of the Advance (unless stated to relate to a specific earlier
date, in which case such representations and warranties will be true and
correct in all material respects as of such earlier date).
3.4.4 Financial Statements. Agent will have received the
consolidated quarterly financial statements of Borrower as delivered to Agent
in accordance with Sections 5.3.1 and 5.3.2 below.
3.4.5 No Change. There has been no change that has a
materially adverse effect on the business, operations, properties, condition
(financial or otherwise) or prospects of Borrower and its Subsidiaries, taken
as a whole, since the date of the last financial statements of Borrower
delivered to Agent.
3.5 Compensation for Increased Costs.
(a) In the event after the date of execution of this
Agreement, any introduction of any law, or any change in any law, or the
interpretation or application thereof by any court or Governmental Authority
charged with the administration thereof, or the compliance with any guideline
or request from any Governmental Authority (whether or not having the force
of law), which has the effect of:
(i) subjecting any Bank to any tax, deduction or
withholding with respect to this Agreement or any other Loan Document (other
than any tax based upon the overall net income of any such Bank), or
(ii) imposing, modifying or deeming applicable
any reserve, special deposit, insurance premium or similar requirement
against assets held by, or deposits in or for the account of, or loans by,
any Bank, with respect to this Agreement or the other Loan Documents, or
(iii) imposing upon any Bank any other condition
or expense with respect to this Agreement or any other Loan Document and the
result of any of the foregoing is to increase the cost to any such Bank,
reduce the income receivable by any such Bank, impose any expense upon any
such Banker reduce the amount of any payment receivable by any such Bank with
respect to any Note, or with respect to any Bank's Commitment hereunder or
under any Letter of Credit Advance, or any portion thereof, by an amount
which any such Bank deems to be material, such Bank shall from time to time
notify the Agent and Borrower thereof by delivery of a certificate of an
officer of such Bank of the nature described in the next sentence, and the
Borrower shall pay to the Agent for delivery to such Bank that amount which
shall compensate such Bank (on an after tax basis) for such increase in cost,
reduction in income, additional expense, reduced amount or reduced rate of
-21-
return. A certificate setting forth in reasonable detail such increase in
cost, reduction in income or additional expense or reduced amount or reduced
rate of return, and the manner of calculating the same as determined by such
Bank, shall be submitted by such Bank to the Agent and Borrower and, absent
manifest error, shall be conclusive as to the amount thereof (provided that
such determination be made reasonably and in good faith).
(b) If any Bank shall have determined that the
introduction of or any change in any applicable law regarding capital
adequacy, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (or
any of its branches) with any request or directive regarding capital adequacy
(whether or not having the force of law) or any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's capital as a consequence of its obligations hereunder,
its Commitment hereunder, or the transactions contemplated hereby to a level
below that which such Bank could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's policies with respect to
liquidity and capital adequacy) by an amount deemed by such Bank to be
material, then the Borrower shall pay to the Agent for delivery to such Bank
promptly, such additional amount or amounts determined by such Bank as will
compensate such Bank for such reduced rate of return.
(c) Borrower acknowledges that compensation to the Bank
for any increased costs incurred by the Bank and payable by Borrower pursuant
to this subsection may take the form of an effective increase in the interest
rate payable under the Loans.
(d) Borrower shall have access to any and all
documentation relied upon by the Bank in determining the events set forth in
subsection (b) of this Section 3.5, any calculations of a reduced rate of
return, and the interest rate calculation pursuant to Section 3.5(c).
3.6 Letters of Credit. Any Letter of Credit shall have a term not
exceeding one year, not including renewals, and shall not in any event expire
later than the Line of Credit Maturity. In no event shall the aggregate face
amount of all outstanding Letter of Credit Advances exceed an Equivalent in
Dollars of $15,000,000. Borrower will pay to Agent for the pro rata benefit
of the Banks a per annum fee equal to the Applicable Margin multiplied by the
face amount of any newly issued or renewed Letter of Credit at the time of
issuance or renewal of such Letter of Credit. Additionally, Borrower will pay
a fee to the Agent for its own account computed at a rate agreed upon between
the Agent and the Borrower multiplied by the face amount of any newly issued
or renewed Letter of Credit at the time of issuance or renewal of such Letter
of Credit. The Borrower further agrees to pay to the Agent, on demand, such
other customary administrative fees, charges and expenses of the Agent in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued. Such fees are non-refundable and Borrower shall not be entitled to
any rebate of any portion thereof if such Letter of Credit does not remain
outstanding through its stated expiry date or for any other reason. Nothing
in this Agreement shall be construed to require or authorize any Bank to
issue any Letter of Credit, it being recognized that Agent has the sole
-22-
obligation under this Agreement (subject to the terms and conditions of this
Agreement) to issue Letters of Credit on behalf of the Banks. Upon such
issuance by Agent, each Bank shall automatically acquire a pro rata risk
participation interest in such Letter of Credit Advance based on its Ratable
Share. If Agent shall honor a draft or other demand for payment presented or
made under any Letter of Credit, Agent shall provide notice thereof to each
Bank prior to 2:00 p.m. Eastern Time on the second Business Day immediately
preceding the date such draft or demand is to be honored. Unless Borrower
shall have satisfied its reimbursement obligation by payment to Agent on the
date that such draft or demand is to be honored, each Bank, on the date the
draw under the Letter of Credit is to be honored, shall make its Ratable
Share of the amount paid by Agent available in Same Day Funds at the
principal office of Agent for the account of Agent. If and to the extent
such Bank shall not have made such Ratable Share portion available to Agent,
such Bank agrees to pay to Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount was paid by
Agent until such amount is so made available to Agent at a per annum rate
equal to the Federal Funds Rate (or, in the case of any Eurocurrency Advance
denominated in any Optional Currency, the per annum rate equivalent to the
Federal Funds Rate for such currency as determined by the Agent) for the first
five days and thereafter at the applicable interest rate. If such Bank shall
pay such amount to Agent together with such interest, such amount so paid
shall constitute an Advance by such Bank disbursed in respect of the
reimbursement obligation of Borrower. The failure of any Bank to make its
pro rata portion of any such amount paid by Agent available to Agent shall
not relieve any other Bank of its obligation to make available its pro rata
portion of such amount, but no Bank shall be responsible for failure of any
other Bank to make such pro rata portion available to Agent.
3.7 Termination of Commitments and Payment on Line of Credit
Maturity. Notwithstanding anything to the contrary contained herein, no Bank
shall be obligated to make any Line of Credit Advance beyond the date of the
Line of Credit Maturity, and all amounts due and owing the Banks shall be due
and payable on the date of the Line of Credit Maturity.
3.8 Tax Documents (a) At least five Business Days prior to the
first date on which interest or fees are payable hereunder for the account of
any Bank, each Bank that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to each of
the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI and Form W-8 or W-9 and any
additional forms necessary for claiming complete exemption from United States
withholding taxes (or any successor or substitute forms), certifying in
either case that such Bank is entitled to receive payments under this
Agreement and the Loans without deduction or withholding of any United States
federal income taxes. Each Bank which so delivers a Form W-8BEN or W-8ECI
and a Form W-8 or W-9 and any additional forms necessary for claiming
complete exemption from United States withholding taxes (or any successor or
substitute forms) further undertakes to deliver to each of the Borrower and
the Agent two additional copies of such forms (or any successor or substitute
forms) on or before the date that such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent to the
-23-
extent it may lawfully do so, in each case certifying that such Bank is
entitled to receive payments under this Agreement and the Loans without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent
such Bank from duly completing and delivering any such form with respect to
it and such Bank advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax.
(b) Each Bank which is neither a resident of the United Kingdom
nor a bank carrying on a bona fide banking business in the United Kingdom
agrees to furnish, to the extent it is required to do so to be exempt from
any withholding tax, on or before the date such Bank makes a Loan to the
Borrower in British Pounds Sterling in the United Kingdom, to the Agent and
the relevant Borrower evidence satisfactory to the Agent and the Borrower
that such Bank has filed with the United Kingdom Inland Revenue a "Claim on
Behalf of a United States Domestic Corporation to Relief from United Kingdom
Income Tax on Interest and Royalties Arising in the United Kingdom" or other
appropriate form or forms of exemption from withholding tax and received from
the Inland Revenue authority that payments to such Bank by the Borrower
hereunder may be made gross; provided that such Bank's failure to furnish
such evidence shall not relieve the Borrower of any of its obligations under
this Agreement.
(c) If any governmental authority of any jurisdiction asserts a
claim that the Agent did not properly withhold tax from amounts paid to or
for the account of any Bank (because the appropriate form was not delivered
or was not properly executed, or because such Bank failed to notify the Agent
of a change in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason relating to such
Bank's failure to comply with the terms of this Agreement) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to the Agent
under this Section, together with all costs and expenses (including attorney
costs). The obligations of the Banks under this subsection shall survive the
payment of all Obligations.
3.9 Applicable Lending Office. Each Bank and the Agent may make and
book its Loans and, in the case of the Agent, issue Letters of Credit, at any
Applicable Lending Office(s) selected by such Bank or the Agent, as the case
may be, and each Bank and the Agent may change its Applicable Lending Office(s)
from time to time. Each Bank may, by written notice to the Agent and the
Borrower, designate one or more Applicable Lending Offices which are to make
and book Loans and for whose account Loan payments are to be made. The Agent
may, by written notice to the Borrower, designate one or more Applicable
Lending Offices which are to make and book Swingline Loans and issue and book
Letters of Credit and for whose accounts Loan payments and Letter of Credit
reimbursements are to be made and through which its functions are to be
performed. All terms of this Agreement shall apply to any such Applicable
Lending Office(s) and the Notes shall be deemed held by each Bank and the
Agent, as the case may be, for the benefit of such Applicable Lending Office.
-24-
3.10 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Eurocurrency Advance, or a request for a continuation or conversion of a
Eurocurrency Advance or a request for a conversion of a Alternate Base Rate
Advance to a Eurocurrency Advance, (a) in the case of any Eurocurrency Advance,
deposits in the relevant Permitted Currency for periods comparable to the
Interest Period elected by the Borrower are not available to any Bank in the
relevant interbank or secondary market, or (b) any Bank reasonably determines
that the Eurocurrency Base Rate will not adequately and fairly reflect the cost
to such Bank of making, funding or maintaining the related Eurocurrency Advance
and such Bank has provided to the Agent and the Borrower a certificate prepared
in good faith to that effect, or (c) by reason of national or international
financial, political or economic conditions or by reason of any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect, or the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank with any directive of such authority (whether or not
having the force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for any Bank (i) to make or fund the
relevant Eurocurrency Advance or (ii) to continue such Eurocurrency Advance as
a Eurocurrency Advance of the then existing type or (iii) to convert a Loan to
such a Eurocurrency Advance, then the Borrower shall not be entitled, so long
as such circumstances continue, to request a Eurocurrency Advance of the
affected type or a continuation of or conversion to a Eurocurrency Advance of
the affected type. In the event that such circumstances no longer exist, the
Banks shall again honor requests, subject to this Agreement, for Eurocurrency
Advances of the affected type and requests for continuations of and conversions
to Eurocurrency Advances of the affected type.
3.11 Substitution of Bank. If (i) the obligation of any Bank to
make or maintain Eurocurrency Advances has been suspended pursuant to Section
3.10 when not all Banks' obligations have been suspended or (ii) any Bank is
a Defaulting Bank, the Borrower shall have the right, if no Default or Event
of Default then exists, to replace such Bank (a "Replaced Bank") with one or
more other Banks or other lenders (collectively, the "Replacement Bank")
acceptable to the Agent, provided that (x) at the time of any replacement
pursuant to this Section 3.11, the Replacement Bank shall enter into one or
more Assignment and Acceptances, pursuant to which the Replacement Bank shall
acquire the Commitments and outstanding Advances and other obligations of the
Replaced Bank and, in connection therewith, shall pay to the Replaced Bank in
respect thereof an amount equal to the sum of (A) the amount of principal of,
and all accrued interest on, all outstanding Loans of the Replaced Bank, (B)
the amount of all accrued, but theretofore unpaid, fees owing to the Replaced
Bank and (C) the amount which would be payable by the Borrower to the
Replaced Bank pursuant to Section 7.4 if the Borrower prepaid at the time of
such replacement all of the Loans of such Replaced Bank outstanding at such
time and (y) all obligations of the Borrower then owing to the Replaced Bank
(other than those specifically described in clause (x) above in respect of
which the assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment and
Acceptances, the payment of amounts referred to in clauses (x) and (y) above
and, if so requested by the Replacement Bank, delivery to the Replacement
Bank of the appropriate Note or Notes executed by the Borrower, the
-25-
Replacement Bank shall become a Bank hereunder and the Replaced Bank shall
cease to constitute a Bank hereunder. The provisions of this Agreement shall
continue to govern the rights and obligations of a Replaced Bank with respect
to any Loans made or any other actions taken by such Bank while it was a
Bank. Nothing herein shall release any Defaulting Bank from any obligation
it may have to the Borrower, the Agent or any other Bank. Each Bank agrees
to take such actions, at the Borrower's expense, as may be reasonably
necessary to effect the foregoing if it shall become a Replaced Bank.
3.12 No Setoff or Deduction. All payments of principal of and
interest on the Advances and other amounts payable by the Borrower hereunder
shall be made by the Borrower without setoff or counterclaim, and free and
clear of, and without deduction or withholding for, or on account of, any
present or future taxes, levies, imposts, duties, fees, assessments, or other
charges of whatever nature, imposed by any governmental authority, or by any
department, agency or other political subdivision or taxing authority, unless
required by applicable laws. If any such taxes, levies, imposts, duties,
fees, assessments, or other charges are required to be withheld from any
amounts payable hereunder with respect to any Advance in any Optional
Currency, the amounts so payable shall be increased to the extent necessary
to yield to the payee thereof the interest or any such other amounts payable
hereunder at the rates and in the amounts specified in this Agreement.
3.13 International Transaction. (a) This Agreement arises in the
context of an international transaction, and the specification of payment in a
specific currency at a specific place pursuant to this Agreement is of the
essence. Such specified currency shall be the currency of account and payment
under this Agreement. The obligations of the Borrower hereunder shall not be
discharged by an amount paid in any other currency or at another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid, on
prompt conversion into the applicable currency and transfer to the Banks under
normal banking procedure, does not yield the amount of such currency due under
this Agreement. In the event that any payment, whether pursuant to a judgment
or otherwise, upon conversion and transfer, does not result in payment of the
amount of such currency due under this Agreement, the Banks shall have an
independent cause of action against the Borrower for the currency deficit.
(b) If for purposes of obtaining judgment in any court it becomes
necessary to convert any currency due hereunder into any other currency, the
Borrower will pay such additional amount, if any, as may be necessary to ensure
that the amount paid in respect of such judgment is the amount in such other
currency which, when converted at the Agent's spot rate of exchange prevailing
on the date of payment, would yield the same amount of the currency due
hereunder. Any amount due from the Borrower under this Section 3.12(b) will be
due as a separate debt and shall not be affected by judgment being obtained for
any other sum due under or in respect of this Agreement.
4. REPRESENTATIONS AND WARRANTIES. In order to induce each Bank to enter
into this Agreement and to provide the Loans, Borrower represents and
warrants to each Bank that the following statements are true, correct and
complete at the date hereof and at the date of each Advance and the issuance
of each Letter of Credit:
-26-
4.1 Organization, Powers, Good Standing.
4.1.1 Organization and Good Standing. Each of the Borrower and
its Subsidiaries (a) is a legal entity duly organized, validly existing and
in good standing under the laws of the respective jurisdiction of its
organization, (b) has full power, authority and legal right to own and
operate its property and to conduct the business in which it is currently
engaged, (c) is duly qualified and is in good standing under the laws of each
jurisdiction in which the failure to so qualify may have a material adverse
affect on its business, its Subsidiaries, taken as a whole, or the ability of
the Borrower to repay the Loan or to observe and perform its obligations
under the Loan Documents, and (d) is in compliance in all material respects
with all Requirements of Law, except where the lack of compliance could not
reasonably be expected to materially adversely impact the business,
operations, properties or condition (financial or otherwise) of the Borrower
and its Subsidiaries, taken as a whole, or the ability of the Borrower to
repay the Loan or to observe and perform its obligations under the Loan
Documents.
4.1.2 Power and Authority. Borrower has full power and
authority to execute, deliver and perform the Loan Documents, including,
without limitation, to borrow under this Agreement. Each Guarantor has full
power and authority to execute, deliver and perform the Guaranties. Borrower
and each Guarantor has taken all necessary action to authorize the execution,
delivery and performance of the Loan Documents and Borrower has taken all
necessary action to borrow under this Agreement. No consent or authorization
of, or filing with, any Person (including, without limitation, any
Governmental Authority) is required in connection with the execution,
delivery and performance by Borrower or any Guarantor or the validity or
enforceability against Borrower or any Guarantor of the Loan Documents.
4.2 Authorization of Borrowing; Etc.
4.2.1 No Violation. The execution, delivery and performance by
Borrower of this Agreement and the other Loan Documents and the execution,
delivery and performance by any Guarantor of the Guaranties do not and will
not (a) violate any Requirement of Law applicable to Borrower or any
Subsidiary, (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contractual obligation
of Borrower or any Subsidiary, (c) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any of Borrower's or any
Subsidiary's properties or assets, other than in favor of the Banks, or (d)
require any approval of any court or Governmental Authority or any approval
or consent of any Person under any contractual obligation of Borrower.
4.2.2 Legally Valid and Binding. The Loan Documents and all
other documents contemplated hereby and thereby, when executed and delivered,
will be the legally valid and binding obligations of Borrower and of the
Guarantors, as the case may be, enforceable against it and them in accordance
with their respective terms, except as enforcement may be limited by
equitable principals or by bankruptcy, insolvency, reorganization, moratorium
or similar laws, or equitable principles relating to or limiting creditors'
rights generally.
-27-
4.3 Subsidiaries. Schedule 1.1(b) correctly sets forth as to each
Subsidiary, its name, the jurisdiction of its organization, the name of its
immediate parent and the percentage of its Capital Stock that is directly or
indirectly owned by Borrower. Other than (1) as set forth in its annual
reports as filed with the SEC, which have been disclosed in writing to the
Banks, (2) stock acquisitions made since its most recent annual report filed
with the SEC, (3) the Subsidiaries, and (4) the existing minority stock
interests owned by Borrower in Conbraco Industries, Inc., Borrower does not
own more than $10,000,000 (on a cost basis) in the aggregate of Capital Stock
in any Persons.
4.4 Title. Borrower and Subsidiaries, as applicable, have good and
valid legal title to the assets reflected in Borrower's consolidated
financial statements dated as of December 28, 2002 previously submitted to
each of the Banks. There are no Liens, charges or encumbrances (other than
Permitted Liens), on such property or assets referenced in the prior sentence
except those reflected on such financial statements.
4.5 Litigation; Adverse Facts. Except as set forth on Schedule 4.5
to this Agreement, there is no action, suit, dispute, investigation, inquiry,
arbitration, tax claim or other proceeding (including, without limitation,
the enactment or promulgation of a statute or rule) at law or in equity or
before or by any arbitrator or Governmental Authority pending or, to the
knowledge of Borrower, threatened, against Borrower or any Subsidiary which
might reasonably be expected to result in any material adverse change in the
business, operations, properties or in the business prospects or condition
(financial or otherwise), of Borrower and its Subsidiaries, taken as a whole,
or would materially adversely affect Borrower's ability to perform its
Obligations hereunder and under any other Loan Document.
4.6 Payment of Taxes. Other than Mining Remedial Recovery
Corporation and its Subsidiaries and XXXX Holding Company, Inc. and its
Subsidiaries all material tax returns and reports required to be filed by
Borrower and each Subsidiary have been prepared in accordance with acceptable
standards and have been timely filed, and all Taxes, assessments, fees and
amounts required to be withheld and paid to a Governmental Authority, and
other governmental charges upon Borrower and each Subsidiary and upon their
properties, assets, income and franchises which are shown on such returns to
be due and payable have been paid when due and payable. Borrower does not
know of any proposed, asserted or assessed tax deficiency against it or any
Subsidiary which might reasonably be expected to result in any material
adverse change in the condition (financial or otherwise) of Borrower or any
Subsidiary (other than Mining Remedial Recovery Corporation and its
Subsidiaries). Neither Borrower nor any Subsidiary is a party to, bound by
or obligated under any tax sharing or similar agreement.
4.7 Materially Adverse Agreements; Performance.
4.7.1 No Material Adverse Agreements. Neither Borrower nor any
Subsidiary is a party to or subject to any material agreement, instrument,
charter or other internal restriction materially adversely affecting the
business, properties or assets of Borrower or any Guarantor or the
operations, business prospects or condition (financial or otherwise) of
Borrower and Guarantors, taken as a whole.
-28-
4.7.2 No Default. Neither Borrower nor any Subsidiary is in
material default in the performance, observance or fulfillment of any of the
material obligations, covenants or conditions contained in any of its
contractual obligations and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute such a default, which,
taken as a whole, could reasonably be expected to adversely affect the
business, operations, property or assets, the business prospects, or
condition (financial or otherwise), of its Subsidiaries taken as a whole, or
the ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents
4.7.3 Ownership of Intellectual Property. Borrower and each
Domestic Subsidiary owns or possesses all patents, trademarks, service marks,
trade names, copyrights, licenses and rights necessary for the present and
planned future conduct of its business, without any known conflict with the
rights of others.
4.8 Disclosure. No representation or warranty of Borrower contained
in this Agreement or in any other Loan Document or other document,
certificate or written statement furnished to the Banks by or on behalf of
Borrower with respect to the business prospects or condition (financial or
otherwise) of Borrower and each Subsidiary for use in connection with the
transactions contemplated by this Agreement, contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading. For purposes of
the previous sentence the phrase "material fact," is a fact or facts which,
taken as a whole, could reasonably be expected to adversely affect the
business, operations, property or assets, the business prospects, or
condition (financial or otherwise), of Borrower and its Subsidiaries taken as
a whole, or the ability of Borrower to repay the Loans or to observe and
perform its obligations under the Loan Documents. There is no material fact
known to Borrower which adversely affects the business, operations, property
or assets, the business prospects, or condition (financial or otherwise), of
Borrower and its Subsidiaries, taken as a whole, which has not been disclosed
herein or in such other documents, certificates and statements furnished to
the Banks for use in connection with the transactions contemplated hereby.
4.9 ERISA Compliance. Borrower and Subsidiaries are in compliance
in all material respects with any applicable provisions of ERISA. Except as
set forth on Schedule 4.9 to this Agreement, (i) neither a Reportable Event
nor a Prohibited Transaction has occurred or is continuing in relation to any
pension plan, which, taken as a whole, could reasonably be expected to
adversely affect the business, operations, property or assets, the business
prospects, or condition (financial or otherwise), of Borrower and its
Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan
or to observe and perform its obligations under the Loan Documents, and (ii)
Borrower and each Subsidiary have not incurred any liability to the Pension
Benefit Guaranty Corporation, except where the occurrence of such event could
not reasonably be expected to adversely affect the business, operations,
property or assets, the business prospects, or condition (financial or
otherwise), of Borrower and its Subsidiaries taken as a whole, or the ability
of Borrower to repay the Loan or to observe and perform its obligations under
the Loan Documents.
-29-
4.10 Environmental Matters. Except as set forth in Schedule 4.10 to
this Agreement, Borrower and each Subsidiary has complied in all respects
with all Environmental Protection Statutes, except where the lack of
compliance could not reasonably be expected to materially adversely impact
the business, operations, properties or condition (financial or otherwise) of
Borrower and its Subsidiaries, taken as a whole, or the ability of Borrower
to repay the Loan or to observe and perform its obligations under the Loan
Documents. Except as set forth on Schedule 4.10 to this Agreement, neither
Borrower nor any Subsidiary, nor, to the best of Borrower's knowledge, any
other person, used any real property owned or leased by Borrower or any
Subsidiary in the disposal of or to refine, generate, produce, store, treat,
transfer, release or transport any hazardous waste or hazardous substance, or
been designated by the United States Environmental Protection Agency or under
any Environmental Protection Statute as a hazardous waste or hazardous
substance disposal or removal site, superfund or clean-up site or candidate
for removal or closure pursuant to any Environmental Protection Statute,
which, taken as a whole, could reasonably be expected to adversely affect the
business, operations, property or assets, the business prospects, or
condition (financial or otherwise), of its Subsidiaries taken as a whole, or
the ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents. Other than Mining Remedial Recovery
Corporation and its Subsidiaries and XXXX Holding Company, Inc. and its
Subsidiaries, no lien arising under or in connection with any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary. Borrower agrees to indemnify
and hold each Bank harmless from any and all violations by Borrower or any
Subsidiary of any Environmental Protection Statute.
4.11 Investment Company. Borrower is not directly or indirectly
controlled by, or acting on behalf of, a Person which is an "Investment
Company" within the meaning of the Investment Company Act of 1940, as
amended, that is organized or otherwise created under the laws of the United
States, any State of the United States, the District of Columbia, Puerto
Rico, the Philippine Islands, the Virgin Islands or any other possession of
the United States.
4.12 Regulations T, U and X. No part of the proceeds of the
Advances will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
Neither Borrower nor any Subsidiary is engaged principally, or as one of its
important activities, in the business of extending credit for the purposes of
purchasing or carrying any Margin Stock. If requested by Agent, Borrower
will furnish Agent with a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in said Regulation. Borrower also
warrants that no part of the proceeds of the borrowings hereunder will be
used by it for any purpose which violates, or which is inconsistent with, the
provisions of Regulation T, U or X. After applying the proceeds of each
Advance, Margin Stock will not constitute more than 25% of the value of the
assets (either of the Borrower alone or of the Borrower and its Subsidiaries on
a consolidated basis) that are subject to any provisions of this Agreement that
may cause the Advances to be deemed secured, directly or indirectly, by Margin
Stock.
-30-
4.13 Indebtedness. Neither Borrower nor any Subsidiary has any
outstanding Indebtedness except Indebtedness described in (1) Schedule 4.13
to this Agreement or (2) permitted under Section 6.1 of this Agreement.
4.14. Solvency. Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making
of each Advance, including Line of Credit Loans and the issuance of any
Letter of Credit, if any, made on the date hereof and after giving effect to
the application of the proceeds of such Advances, (a) the fair value of the
assets of the Borrower and its Fundamental Subsidiaries on a consolidated
basis will exceed the debts and liabilities, subordinated, contingent or
otherwise, of the Borrower and its Fundamental Subsidiaries on a consolidated
basis; (b) the Borrower and its Fundamental 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 (c) the Borrower and its Fundamental 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 not
conducted and are proposed to be conducted after the date hereof.
4.15 Reportable Transaction. Unless the Borrower has made the
determination referred to in the following sentence, the Borrower does not
intend to treat the Obligations and related transactions contemplated by the
Loan Documents as a "reportable transaction" under Sections 6011, 6111 or
6112 of the Internal Revenue Code or the treasury regulations promulgated
thereunder. In the event the Borrower determines to treat any of the
Obligations or such transactions as such a "reportable transaction", the
Borrower shall immediately notify the Agent.
4.16 Survival. All of the representations and warranties set forth
in this Section 4 will survive until all of the Obligations are satisfied in
full and there remain no outstanding Commitments hereunder.
5. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until all
of the Obligations are satisfied and the Commitments hereunder have been
terminated, Borrower will perform each and all of the following:
5.1 Use of Proceeds. Borrower will use the proceeds of the Advances
only for the purposes set forth in Section 2.5.
5.2 Accounting Records. Borrower will maintain adequate records in
accordance with sound business practices and GAAP, applied on a Consistent
Basis, except for changes required by GAAP, changes in accordance with GAAP
and approved by the Agent or other changes consented to in writing by the
Requisite Banks (which consent will not be unreasonably withheld). Upon five
(5) days' prior notice, Borrower will provide, and cause each Subsidiary to
provide, access to representatives of each Bank to visit any of the
properties of Borrower or any Subsidiary and examine the books of account and
discuss Borrower's and each Subsidiary's affairs, finances and accounts with,
and be advised of the same by, Borrower's and each Subsidiary's officers and
outside auditors, all at such reasonable times and as often as any Bank may
reasonably request.
-31-
5.3 Reports. Borrower will deliver to the Banks and the Agent:
5.3.1 Quarterly Reports. As soon as available and in any event
within forty five (45) days after the end of each of the first three quarters
of each fiscal year of Borrower, management prepared consolidated financial
statements of Borrower and Subsidiaries as of the end of such quarter, and
the consolidated statements of profit and loss and surplus of Borrower and
Subsidiaries from the beginning of Borrower's and Subsidiaries' fiscal year
to the end of such quarter, certified as correct (subject to year end
adjustments) by the chief financial officer of Borrower.
5.3.2 Annual Reports. As soon as available, and in any event
within ninety (90) days after the end of each fiscal year of Borrower, the
complete audited, consolidated financial statements of Borrower and
Subsidiaries, including the consolidated balance sheet of Borrower and
Subsidiaries as of the end of such year and the consolidated statements of
profit and loss and surplus of Borrower and Subsidiaries for the fiscal year
then ended, certified by Ernst & Young (without a going concern or similar
financially adverse qualification), or such other independent certified
public accountants of recognized standing, to be prepared in accordance with
GAAP and to present fairly the financial position and results of operation of
Borrower and Subsidiaries. Additionally, if requested by the Agent, the
Borrower will provide internally prepared consolidating financial statements
within 90 days after the end of each fiscal year.
5.3.3 Accounts Receivable and Payable Aging. Upon the request
of Agent or Requisite Banks, accounts receivable aging reports, accounts
payable aging reports and inventory certifications.
5.3.4 Compliance Certificate. Within forty five (45) days
after the end of each calendar quarter, a compliance certificate in the form
of Exhibit 5.3.4 to this Agreement, duly completed and executed by the Chief
Financial Officer of Borrower.
5.3.5 Copies of Reports Sent to the Banks. Unless otherwise
specified, copies of all of the reports furnished under this Section 5.3
shall be sent by Borrower directly to the Banks.
5.3.6 Report of Certain Events. Promptly upon Borrower
becoming aware of the occurrence of any: (a) Unmatured Event of Default or
Event of Default; (b) Reportable Event; or (c) Prohibited Transaction in
connection with any pension plan or any trust created thereunder, a written
notice specifying the nature thereof, what action Borrower is taking or
proposes to take with respect thereto, and, when known, any action taken by
the Internal Revenue Service with respect thereto, will be delivered to Agent
by Borrower.
5.3.7 Threat of Bankruptcy. Promptly upon becoming aware of
any Person's seeking to obtain or threatening in writing to seek to obtain a
decree or order for relief with respect to Borrower or any Restricted
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect, a written notice
thereof specifying what action Borrower or such Restricted Subsidiary is
taking or proposes to take with respect thereto.
-32-
5.3.8 Amendments to Charter or Bylaws. Promptly, copies of all
amendments to the charter or bylaws of Borrower and, if requested by the
Agent, any Guarantor.
5.3.9 Copy of Process. Promptly, and in any event within five
(5) days after the receipt thereof by Borrower or any Subsidiary, a copy of
any notice, summons, citation, directive, letter or other form of
communication from any Governmental Agency or instrumentality, in any way
concerning any action or omission on the part of Borrower or any Subsidiary
in connection with any Environmental Protection Statute, or concerning the
filing of a lien upon, against or in connection with Borrower or any
Subsidiary, or any of their real or personal property, in connection with any
Environmental Protection Statute, except where such action or omission by
Borrower or any Subsidiary could not reasonably be expected to materially
adversely impact the business, operations, properties or condition (financial
or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the
ability of the Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
5.3.10 Copy of SEC Filings. Promptly after the sending or
filing thereof, copies of all reports, proxy statements and financial
statements which Borrower files with its shareholders or any securities
exchange or the SEC, including, without limitation, all reports on Form 10-K,
10-Q, and 8-K. Such reports need not include exhibits. Borrower agrees to
promptly provide Agent with exhibits specifically requested by Agent or any
Bank.
5.3.11 Copy of Process From Governmental Authority. Promptly,
and in any event within five (5) days of the receipt thereof by Borrower, a
copy of a notice, summons, citation, directive, letter, complaint, or other
form of communication from the U.S. Department of Labor, or any other
Governmental Authority or instrumentality, or any other Person, in any way
concerning any action or omission on the part of Borrower or any Subsidiary
in connection with the payment of minimum and/or overtime wages to its
employees, or concerning the filing of a lien upon, against or in connection
with Borrower or any Subsidiary, or any of its real or personal property, in
connection with the FLSA, except where such action or omission by Borrower or
any Subsidiary could not reasonably be expected to materially adversely
impact the business, operations, properties or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the
ability of the Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
5.3.12 Notice Of Litigation. Promptly, upon Borrower making a
determination with respect to any litigation or proceeding in which it or any
Restricted Subsidiary is a party that an adverse decision in any such matter
is reasonably likely to require it to pay more than $10,000,000 in excess of
the amount of any insurance covering such claim, or deliver assets the value
of which exceeds such sum or of the institution of any other suit or
proceeding to which Borrower or any Subsidiary is a party that, by itself or
together with any other such matters, might materially and adversely affect
the operations, financial condition, property, or business prospects of the
Borrower and its Subsidiaries, taken as a whole.
-33-
5.3.13 Other Information. Promptly, such other information and
data with respect to Borrower or any Subsidiary as from time to time may be
reasonably requested by any Bank.
5.3.14 Pro Forma Compliance Certificate. Not less than 30 days
prior to the consummation of any proposed Acquisition which, when aggregated
with all other Acquisitions consummated directly or indirectly by the
Borrower since the date of the most recent Compliance Certificate furnished
pursuant to Section 5.3.4 hereof, will result in a cumulative increase in the
Borrower's Total Debt as a result of all such Acquisitions of $25,000,000 or
more, a pro forma management compliance certificate certifying that all
covenants set forth in Sections 5 and 6 hereof will be complied with as of
the date of such Acquisition(s).
5.3.15 Other Information. Such other information as any Bank
may reasonably request.
5.4 Financial Covenants. Borrower will at all times comply with the
following financial covenants:
5.4.1 Tangible Net Worth Requirements. Borrower will maintain
a minimum Tangible Net Worth of $566,000,000, to be adjusted upward at the
end of each fiscal quarter, commencing with the fiscal quarter ending
September 27, 2003, by twenty five percent (25%) of positive net income after
taxes and before dividends for such quarter. Once adjusted upward, the
Tangible Net Worth requirement set forth herein will not decrease downward
except for the cash cost of repurchases of treasury stock at cost.
5.4.2 Total Debt to Capitalization Ratio. Borrower will not
permit the ratio of Borrower's Total Debt to Capitalization to exceed 35.0%,
on a consolidated basis.
5.4.3 Interest Coverage Ratio. Borrower will not permit the
Interest Coverage Ratio to be less than 4.50 to 1.00, on a consolidated basis
as calculated on a rolling four (4) quarter basis.
5.5 Corporate Existence. Except as permitted under Section 6.3,
Borrower will at all times preserve and keep in full force and effect its and
each Restricted Subsidiary's corporate existence except for (i) Mining
Remedial Recovery Corporation and its Subsidiaries, the book value of which,
when combined with other Restricted Subsidiaries made subject to this
exception is less than $5,000,000 in the aggregate, and (ii) individual
Restricted Subsidiaries whose book value is less than $1,000,000 and any
rights material to its business and will maintain its and each Restricted
Subsidiary's right to transact business in each jurisdiction where its assets
or the nature of its activities makes such qualification necessary, except
where the failure could not reasonably be expected to materially impact,
adversely impact for business, operations, properties or condition (financial
or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the
ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
-34-
5.6 Payment of Taxes and Claims. Borrower will pay all Taxes,
assessments and other governmental charges imposed upon Borrower or any
Restricted Subsidiary (other than Mining Remedial Recovery Corporation and
its Subsidiaries) before any penalty or interest accrues thereon; provided,
however, that Borrower will not be required to pay any such Taxes,
assessments, or charges if (a) the validity thereof will currently be
contested in good faith by appropriate proceedings, (b) Borrower will have
set aside on its books adequate reserves with respect to such Taxes,
assessments, or charges and (c) Borrower gives notice in writing of such
action to Agent and the Banks; provided that any such Taxes, assessments, or
charges will be paid immediately upon the commencement of proceedings to
foreclose any liens securing the same, or upon institution of distrait
proceedings.
5.7 Insurance. Borrower will maintain and cause each Subsidiary to
maintain, in full force and effect, adequate fire and extended risk coverage,
business interruption, workers' compensation, public liability and such other
insurance coverage's as may be required by law and/or in such amounts as is
customary in the case of entities of well-established reputation engaged in
the same or similar business. Borrower will allow representatives of each
Bank to meet with senior management of Borrower and any Subsidiary, from time
to time as the Banks reasonably request in order to assess the adequacy of
such insurance policies.
5.8 Compliance With Laws, etc. Borrower will exercise all due
diligence in order to comply, in all material respects, with all Requirements
of Laws, except where the lack of compliance could not reasonably be expected
to materially adversely impact the business, operations, properties or
condition (financial or otherwise) of Borrower and the Subsidiaries, taken as
a whole, or the ability of Borrower to repay the Loan or observe and perform
any of its obligations under the Loan Documents, including, without
limitation, the following:
5.8.1 Workers Compensation Laws. Borrower will comply with all
applicable workers' compensation laws, regulations and administrative rules,
directives or requirements. Borrower will furnish Agent upon demand evidence
in form and substance as Agent or its counsel may reasonably require in order
to verify such compliance. In the event that Borrower is qualified to self-
insure under such laws, regulations and administrative rules, directives or
requirements, and that Borrower is not otherwise precluded from so self-
insuring by the terms of this Agreement, Borrower will fully comply with all
such laws, regulations, rules, directives and requirements pertaining to its
self-insured status.
5.8.2 Pension Plans. Neither Borrower nor any of its pension
plans will engage in any Prohibited Transaction; incur any "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA)whether
or not waived; or terminate any such pension plan in a manner which could
result in the imposition of a lien on the property of Borrower, pursuant to
Section 4068 of ERISA or any successor provision thereto.
5.8.3 FLSA Compliance. Borrower will comply with FLSA and will
furnish Agent upon demand evidence in form and substance as Agent or its
counsel will require to verify such compliance.
-35-
5.8.4 Environmental Compliance. Borrower will comply with all
applicable Environmental Protection Statutes.
5.9 Payment of Indebtedness. Borrower and each of its majority
owned Subsidiaries (except Mining Remedial Recovery Corporation and its
Subsidiaries and XXXX Holding Company, Inc. and its Subsidiaries) will pay
all of its Indebtedness, promptly when due in accordance with the terms of
such Indebtedness, except to the extent that failure to pay such Indebtedness
would not constitute an Event of Default under Section 7.1.4 hereof.
5.10 Maintenance of Franchises, etc. Borrower and each Restricted
Subsidiary will do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the rights, licenses, permits,
franchises, agency agreements, and trade names material to the conduct of its
business, and maintain and operate such businesses properly and efficiently,
and in substantially the manner in which they are presently conducted and
operated (subject to changes in the ordinary course of business), except
where the failure to do so could not reasonably be expected to materially
adversely impact the business, operations, properties or condition (financial
or otherwise) of Borrower and the Subsidiaries, taken as a whole, or the
ability of Borrower to repay the Loan or observe and perform any of its
obligations under the Loan Documents.
5.11 Further Assurances. At any time or from time to time, upon the
request of Agent, Borrower will execute and deliver such further documents
and do such other acts and things as Agent may reasonably request in order to
effect fully the purpose of this Agreement, the other Loan Documents and
other agreements contemplated hereby and to provide for payment of and
security for the Loan made hereunder in accordance with the terms of this
Agreement.
5.12 New Guaranties. If at the end of any Fiscal Year, as required
under Section 6.3 or as otherwise required hereunder, the Restricted
Subsidiaries do not meet the test set forth in the following sentence,
additional Domestic Subsidiaries must, within sixty (60) days of the end of
such most recent Fiscal Year, execute Guaranties so that the Domestic
Subsidiaries that have executed guarantees meet such test. The test is that
the Domestic Subsidiaries that have executed Guarantees must have (a) the net
earnings, before taxes, which, together with the respective Subsidiaries, and
Borrower (but excluding Subsidiaries that are not Restricted Subsidiaries)
for the most recent fiscal year of the Borrower constitute eighty percent
(80%) percent or more of the consolidated net earnings of the Borrower and
the Subsidiaries, as determined in accordance with GAAP, and (b) total
assets, calculated in accordance with GAAP, which, together with their
respective Subsidiaries and Borrower (but excluding Subsidiaries that are not
Restricted Subsidiaries) for most recent fiscal year end of the Borrower,
constitute eighty percent (80%) percent or more of the consolidated Total
Assets of the Borrower and the Subsidiaries. The Guaranty shall be in the
form of Exhibit 3.5.1(b) and the Subsidiaries executing the guaranty shall
deliver with the executed guaranty certified copies of such Subsidiary's
organizational documents, including resolutions authorizing the execution and
delivery of such Guaranty, and together with an opinion of counsel for such
Subsidiary in form and substance satisfactory to the Agent and its counsel.
Notwithstanding the foregoing, no newly acquired Domestic Subsidiary shall be
-36-
required to deliver such a guaranty so long as the giving of such a guaranty
would constitute a default under the terms of any loan document between such
acquired Domestic Subsidiary and a bona fide lending institution which was
entered into prior to, but not in contemplation of, such Acquisition.
6. NEGATIVE COVENANTS. Borrower covenants and agrees that, until all of
the Obligations are satisfied and the Commitments hereunder have been
terminated, Borrower will not, without the prior written consent of the
Requisite Banks do any of the following:
6.1 Indebtedness. Except as set forth on Schedule 4.13 to this
Agreement, Borrower will not, and will cause each of the Subsidiaries (but
excluding any Subsidiary organized in Europe and any Subsidiary in which
Borrower directly or indirectly owns less than a majority interest) not to,
create, incur, assume, permit or otherwise become or remain, directly or
indirectly, liable with respect to any Indebtedness except for (i) the
Obligations, (ii) Indebtedness with respect to Permitted Liens, (iii)
Indebtedness of Borrower and its wholly-owned Subsidiaries in an aggregate
amount not to exceed $25,000,000 Dollars, (iv) Acquired Debt in an aggregate
amount not to exceed $50,000,000 and (v) consolidating inter-company
indebtedness as shown on consolidating financial statements delivered
pursuant to Section 5.3.1 of this Agreement. Furthermore, Borrower and
Restricted Subsidiaries, from and after the Closing Date, shall not make new
loans or advances to transfer assets to, or make investments in Subsidiaries
that are not Restricted Subsidiaries, net of repayments or advances from
Subsidiaries that are not Restricted Subsidiaries, in excess of $45,000,000.
6.2 Liens. Borrower will not, and will cause each Restricted
Subsidiary not to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind of
Borrower or any Subsidiary, whether now owned or hereafter acquired except
(i) Permitted Liens, (ii) liens created by or resulting from any litigation
or legal proceeding (including any regulatory enforcement actions) and
against which adequate reserves under GAAP are being maintained which is
currently being contested in good faith by appropriate proceedings, and, if
the amount of any such Lien exceeds $1,000,000 and the Requisite Banks so
request, such Lien shall have been bonded over in a manner reasonably
satisfactory to the Requisite Banks, (iii) Liens for taxes not delinquent or
being contested in good faith, (iv) Liens created in connection with workers'
compensation, unemployment insurance, and social security, or to secure the
performance of bids, tenders or contracts (other than for the repayment of
borrowed money), leases, statutory obligations, surety and appeal bonds, (v)
Liens existing on the Closing Date as set forth on Schedule 6.2 hereof, (vi)
Liens representing the extension, renewal or replacement of a Lien under
immediately preceding clause (v) in respect of the same property of the same
Subsidiary, (vii) Liens securing Acquired Debt permitted by Section 6.1(iv),
provided that such Liens do not extend to any assets other than the property
financed with such Acquired Debt and such Lien was not created or incurred in
connection with or in anticipation of the related Acquisition; and (viii)
Liens securing indebtedness permitted under Section 6.1(iii) up to an
aggregate amount of $25,000,000.
-37-
6.3 Restriction on Fundamental Changes. Borrower will not, and will
cause each Fundamental Subsidiary not to fundamentally change the nature of
its business, enter into any merger, consolidation, reorganization or
recapitalization, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell (other than in the ordinary
course of its business), assign, lease, transfer or otherwise dispose of, in
one transaction or a series of transactions, all or any part of its business,
property, assets or securities, whether now owned or hereafter acquired, or
acquire by purchase or otherwise, all or substantially all the business,
property, assets, securities or interest of any Person; provided that (a) a
Domestic Subsidiary may merge or consolidate with Borrower, provided that the
Borrower will be the surviving corporation; (b) a Domestic Subsidiary may
merge or consolidate with another Domestic Subsidiary that is both a
Fundamental Subsidiary and a Restricted Subsidiary; (c) a Domestic Subsidiary
may sell, lease, transfer or otherwise dispose of any of its assets to
Borrower or another Domestic Subsidiary that is both a Fundamental Subsidiary
and a Restricted Subsidiary; (d) Borrower may acquire or form additional
Subsidiaries; provided that each such newly formed or acquired Subsidiary is
wholly-owned by Borrower (unless Borrower has obtained the prior written
consent of the Requisite Banks to acquire or form a Subsidiary which will not
be wholly-owned, which consent will not be unreasonably withheld); and
further provided that each such newly formed or acquired Subsidiary becomes,
on its formation, both a Restricted Subsidiary and a Fundamental Subsidiary;
and (e) Borrower and its Subsidiaries may dispose of any assets if the
aggregate book value (disregarding any write-downs of such book value other
than ordinary depreciation and amortization) of all of the business, assets,
rights, revenues and property disposed of after the date of this Agreement
shall be less than 5% of such aggregate book value of the Consolidated total
assets of the Borrower and its Subsidiaries as of the most recently ended
fiscal year, and if immediately after such transaction, no Unmatured Event of
Default or Event of Default shall exist or shall have occurred and be
continuing. On the closing of any transaction permitted by this Section 6.3,
the test required by Section 5.12 must be met.
6.4 Environmental Statutes. Borrower will not, and will not permit
any other Person to violate an Environmental Protection Statute, except where
such violation could not reasonably be expected to materially adversely
impact the business, operations, properties or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the
ability of the Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
6.5 Conflicting Agreements. Borrower will not, and will cause each
Subsidiary not to, enter into any agreement containing any material
provisions which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
6.6 Misrepresentations. Borrower will not, and will cause each
Subsidiary not to, furnish any Bank any certificate or other document that
will contain any untrue statement of material fact or that will omit to state
a material fact necessary to make it not misleading in light of the
circumstances under which it was furnished. For purposes of the previous
sentence the phrase "material fact," is a fact or facts which, taken as a
-38-
whole, could reasonably be expected to adversely affect the business,
operations, property or assets, the business prospects, or condition
(financial or otherwise), of Borrower and its Subsidiaries taken as a whole,
or the ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
6.7 Violation of Regulations. Borrower will not make any investment
of any nature which would result in the violation of Regulations T, U or X.
6.8 Subsidiary Distribution of Earnings. Borrower will not, and
will cause each Subsidiary not to, enter into any agreement which could
prohibit, or have the effect of prohibiting, the payment of dividends by or
other distribution of the earnings of any Subsidiary to Borrower.
6.9 Scope of Business Activity. Borrower will not and will cause
each Subsidiary not to engage in any business or activities other than those
representing its respective, present business, provided that Borrower or any
Subsidiary may acquire or commence new or additional related businesses which
do not materially adversely affect the nature or operation of Borrower's or
such Subsidiary's existing business.
6.10 Dividends and Distributions; Capital Structure. Borrower will
not, and will cause each Subsidiary not to, pay or declare any dividends or
other distributions upon its Capital Stock (except, in the case of the
Subsidiaries, dividends or other distributions to such Subsidiary's parent
corporation), or purchase or retire, or commit Borrower or any Subsidiary to
purchase or retire, any of its Capital Stock at any time, during any period
that Borrower is in default under Section 5.4 hereof or such distribution,
purchase or retirement would render Borrower in default under Section 5.4
hereof.
7. EVENTS OF DEFAULT; ACCELERATION; REMEDIES.
7.1 Events of Default. The occurrence of any one or more of the
following events, acts or occurrences will constitute an event of default (an
"Event of Default") hereunder:
7.1.1 Failure to Make Payments When Due. Borrower fails to pay
any principal and/or interest owing under any Note when such amount is due
(whether at stated maturity, as a result of a mandatory prepayment
requirement, by acceleration, by notice of prepayment or otherwise) and the
continuation thereof for three (3) days beyond the date due, or Borrower
fails to pay any other amounts (including, without limitation, interest,
fees, costs and expenses) payable under this Agreement, and the continuation
thereof for three (3) days beyond the date due, or any other Loan Document or
in connection with any Letter of Credit, when such amounts are due.
7.1.2 Breach of Representation, Warranty or Certification. Any
representation, warranty or certification made or furnished by Borrower or
any Subsidiary under this Agreement, any other Loan Document or in any
statement, document, letter or other writing or instrument furnished or
delivered to any Bank pursuant to or in connection with this Agreement or
other Loan Document or as an inducement to the Banks to enter into this
Agreement, will, at any time, prove to have been materially false, incorrect
or incomplete when made, effective or reaffirmed, as the case maybe.
-39-
7.1.3 Default Under Loan Documents, etc. Borrower or any
Subsidiary (to the extent such term, covenant, condition or agreement is
applicable to such Subsidiary) fails to observe, or perform any term,
covenant, condition, agreement set forth in Sections 5.1, 5.2, 5.4, 5.5,
5.8, 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9 and 6.10.
7.1.4 Default on Other Agreements. (i) the Borrower or any
Subsidiary shall fail to make any payment in respect of Indebtedness owing on
any bond, debenture, note or other evidence of Indebtedness for borrowed
money in an aggregate amount in excess of $15,000,000 (other than the Notes)
when due or within any applicable grace period; or (ii) any event or
condition shall occur which results in the acceleration of the maturity of
Indebtedness owing on any bond, debenture, note or other evidence of
Indebtedness for borrowed money outstanding in an aggregate amount in excess
of $15,000,000 of the Borrower or any Subsidiary (including, without
limitation, any required mandatory prepayment or "put" of such Indebtedness
to the Borrower or any Subsidiary) or enables (or, with the giving of notice
or lapse of time or both, would enable) the holders of such Indebtedness or
commitment or any Person acting on such holders' behalf to accelerate the
maturity thereof or terminate any such commitment (including, without
limitation, any required mandatory prepayment or "put" of such Indebtedness
to the Borrower or any Subsidiary). As used in this Section 7.1.4, the term
"Subsidiary" shall be deemed to exclude Mining Remedial Recovery Corporation
and its Subsidiaries and XXXX Holding Company, Inc. and its Subsidiaries.
7.1.5 Other Defaults Under Loan Documents. Borrower or any
Subsidiary will default in the performance of or compliance with any term or
covenant contained in this Agreement or the other Loan Documents (other than
those referred to above in Sections 7.1.1, 7.1.2 or 7.1.3 of this Agreement
or in the following sentence), and such default will continue unremedied for
a period of thirty (30) days; provided, that the thirty (30)day time period
will not start until Agent or any Bank provides Notice to Borrower in the
case of defaults under Sections 5.3.1, 5.3.2, 5.3.3, 5.3.4,5.3.5, 5.9, 5.10,
5.11 and 5.12.
7.1.6 Involuntary Bankruptcy; Appointment of Trustee, etc.
(a) If an involuntary case seeking the liquidation or
reorganization of Borrower or any Restricted Subsidiary under any chapter of
the federal Bankruptcy Code or any similar proceeding will be commenced
against Borrower or any Restricted Subsidiary under any other applicable law
and any one or more of the following events occur: (i) Borrower or such
Subsidiary consents to the institution of the involuntary case; (ii) the
petition commencing the involuntary case is not timely controverted; (iii)
the petition commencing the involuntary case is not dismissed within sixty
(60) days of its filing; (iv) an interim trustee is appointed to take
possession of all or a substantial portion of the property and/or to operate
all or any substantial portion of the business of Borrower or such
Subsidiary; or (v) an order for relief will have been issued or entered
therein.
-40-
(b) A decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator, sequestrator,
custodian, trustee or other officer having similar powers of Borrower or any
Restricted Subsidiary to take possession of all or a substantial portion of
the property and/or to operate all or a substantial portion of the business
of Borrower or such Subsidiary will have been entered and, within sixty (60)
days from the date of entry, is not vacated, discharged or bonded against, or
any similar relief will be granted against Borrower or such Subsidiary under
any applicable federal or state law, and, within sixty (60) days from the
date of entry, is not vacated, discharged or bonded against.
7.1.7 Voluntary Bankruptcy; Appointment of Trustee, etc.
(a) Borrower or any Restricted Subsidiary will (i)
institute a voluntary case seeking liquidation or reorganization under any
chapter of the federal Bankruptcy Code; (ii) file a petition, answer or
complaint or will otherwise institute any similar proceeding under any other
applicable law, or will consent thereto; (iii) consent to the conversion of a
voluntary case to an involuntary case; (iv) consent to the conversion of an
involuntary case to a voluntary case; (v) consent or acquiesce to the
appointment of a trustee, receiver, liquidator, sequestrator, custodian or
other officer with similar powers to take possession of all or a substantial
portion of the property and/or to operate all or a substantial portion of the
business of Borrower or any Restricted Subsidiary; or (vi)make a general
assignment for the benefit of creditors.
(b) The Board of Directors of Borrower or the governing
body of any Restricted Subsidiary adopts any resolution or otherwise
authorizes action to approve any of the foregoing; provided, that nothing
herein shall be construed to prevent Arava Natural Resources Company, Inc.,
in its capacity as a shareholder of Mining Remedial Recovery Corporation,
from adopting resolutions or authorizing action with respect to Mining
Remedial Recovery Corporation and or its Subsidiaries.
7.1.8 Judgments and Attachments.
(a) Borrower or any Restricted Subsidiary will suffer any
money judgment(s), fines or penalties not covered by insurance, writ(s) or
warrant(s) of attachment or similar process(es) involving an amount, in the
aggregate, in excess of $15,000,000 and will not satisfy, discharge, vacate,
bond or stay the same within a period of thirty (30) days or, in any event,
within ten (10) days of the date of any proposed sale thereunder.
(b) A judgment creditor will obtain possession of any
material portion of the properties or assets of Borrower or any Restricted
Subsidiary by any means, including, without limitation, levy, distraint,
replevin or self-help.
7.1.9 Dissolution. Any order, judgment or decree will be
entered against Borrower or any Restricted Subsidiary having assets in excess
of $1,000,000 decreeing the dissolution or division of it and such order will
remain undischarged or unstayed for a period in excess of thirty (30) days.
-41-
7.1.10 Termination of Loan Documents, etc. Any of the Loan
Documents will cease to be in full force and effect for any reason other than
a release or termination thereof upon the full payment and satisfaction of
the Obligations.
7.1.11 Environmental Violations. A breach of Sections 4.10,
5.8.4 or 6.4 will have occurred.
7.1.12 Change of Control. Any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 35% or more of the outstanding shares of
the voting stock of the Borrower; or (ii) as of any date a majority of the
Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors by
the Board of Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described in clause (B).
7.2 Remedies; Termination of Commitments. Upon the occurrence of an
Event of Default all Obligations will, at the request of the Requisite Banks,
immediately be due and payable without presentment, demand, protest, notice
or other requirements of any kind, all of which are hereby expressly waived
by Borrower, and all Commitments of the Banks hereunder will terminate, at
the direction of the Requisite Banks, without further action of any kind,
provided, however, if any of the events described in Section 7.1.6 or 7.1.7
occurs, all Obligations and Commitments of the Banks shall immediately
terminate. Upon acceleration, Agent will proceed to protect, exercise and
enforce the Banks' rights and remedies hereunder and under the other Loan
Documents and any other rights and remedies as are provided bylaw or equity.
If the Loan being repaid is a Eurocurrency Advance, the Borrower shall pay
the compensation set forth in Section 7.4 below. Agent may determine, in its
sole discretion, the order and manner in which the Banks' rights and remedies
are to be exercised, and all payments received by Agent will be applied as
follows: first, to all costs and expenses incurred by Agent in collecting any
Obligations by reason of such Event of Default; second, pro rata to accrued
interest; third, pro rata to other Obligations; fourth, to a cash collateral
account maintained at the Agent up to the aggregate face amount of all
outstanding Letters of Credit issued hereunder to secure Borrower's
reimbursement obligation in connection with such Letters of Credit; and
fifth, to Borrower or as otherwise provided by any Requirement of Law.
During the existence of any Event of Default, at the request of the Agent
and/or the Requisite Banks, Borrower shall forthwith deposit into a cash
collateral account with the Agent an amount of cash equal to the aggregate
face amount of all outstanding Letters of Credit issued hereunder, to secure
Borrower's reimbursement obligation in connection with such Letters of
Credit.
-42-
7.3 Right of Set-Off. In addition to all other remedies available
to the Banks, after any Event of Default, each Bank is hereby authorized at
any time and from time to time, without further notice to Borrower, to setoff
and proportionately apply said amount between the other Banks, any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Bank to or for the
credit or the account of Borrower, against any and all the obligations of
Borrower, now or hereafter existing under any Loan Document.
7.4 Compensation. Upon the request of any Bank, delivered to the
Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Bank for any loss, cost or expense incurred
by such Bank as a result of:
(a) any payment or prepayment of a Eurocurrency Advance on a
date other than the last day of an Interest Period for such Loan; or
(b) any failure by the Borrower to prepay a Eurocurrency
Advance on the date for such prepayment specified in the relevant notice of
prepayment hereunder; or
(c) any failure by the Borrower to borrow a Eurocurrency
Advance on the date for the Borrowing of which such Eurocurrency Advance is a
part specified in the applicable Borrowing Notice delivered pursuant to
Section 2.2.2; such compensation to include, without limitation, an amount
equal to the excess, if any, of (x) the amount of interest which would have
accrued on the amount so paid or prepaid or not prepaid or borrowed for the
period from the date of such payment, prepayment or failure to prepay or
borrow to the last day of the then current Interest Period for such
Eurocurrency Advance (or, in the case of a failure to prepay or borrow, the
Interest Period for such Eurocurrency Advance which would have commenced on
the date of such failure to prepay or borrow) at the applicable rate of
interest for such Eurocurrency Advance provided for herein over (y) the
amount of interest (as reasonably determined by such Bank) such Bank would
have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading lenders in the London
interbank market (if such Loan is a Eurocurrency Advance).
8. THE AGENT AND RELATIONS AMONG BANKS, ETC.
8.1 Appointment. Each Bank hereby designates and appoints the Agent
the limited administrative agent for all Banks under this Agreement and the
other Loan Documents. Each Bank hereby irrevocably authorizes Agent on its
behalf to take or refrain from taking any action, and to exercise or refrain
from the exercise of any power, as is required or permitted by the Banks to
be taken under the provisions of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto, subject
only to the express limitations of this Agreement. The duties of Agent under
this Agreement and the other Loan Documents are mechanical and administrative
in nature, are limited to those expressly provided herein, and do not
establish a fiduciary relationship as between the Agent and any Bank. In
performing its function and duties under this Agreement and the other Loan
Documents, Agent will act solely as an agent of Banks and assumes no
obligation towards or relationship of agency or trust with Borrower. Agent
may perform any of its duties under this Agreement or another Loan Document
by or through its agents or employees.
-43-
8.2 Advances and Payments.
8.2.1 Advances: In General. All Advances will be made by
Agent on behalf of the Banks on the requested Advance Date, except that the
Ratable Share of any Bank which the Agent receives after 12:00 p.m. Eastern
Time on the Advance Date, or at any time after the Advance Date, will be
disbursed on the Business Day following its receipt. Nothing in this
Agreement or any other Loan Document is to be construed to require Agent to
advance funds on behalf of any Bank or to relieve any Bank from its
obligation to make Advances or to prejudice any rights that Borrower may have
against any Bank as a result of any default by that Bank hereunder.
8.2.2 Advances. In order to minimize transfers between the
Agent and each Bank of funds representing the Bank's Ratable Share of an
Advance, a Borrower payment, or (to the extent that Agent has not been
promptly reimbursed by Borrower) other amounts for which the Agent is
entitled to Bank reimbursement or indemnification, coincidental transfer and
loan account adjustments may be made on a "net" basis. Not later than the
Business Day immediately preceding an Advance Date or a date on which Bank
reimbursement of the Agent is requested, Agent will advise each Bank by
telephone or telecopy as to the purpose and aggregate amount to be disbursed
or paid by Agent and the Advance Date or actual or anticipated payment date,
as the case may be; the amount which is such Bank's Ratable Share thereof;
and, if in order to cause all loan accounts maintained by Agent for such Bank
to conform to its Ratable Share of the Loan, the amount which such Bank is
requested to remit to Agent will be different, the identity of the loan
account(s) requiring adjustment and the nature and amounts due to or from the
Bank with respect thereto. All amounts which a Bank is required to remit to
Agent will be made available to Agent by transfer of same day funds to the
designated wire account of Agent not later than 12:00 p.m. Eastern Time on
the Advance Date, as evidenced by a wire transfer number or actual receipt by
Agent. Agent will have no liability to Borrower for the failure of any Bank
to make an Advance on the Advance Date, and if any Advance Date is on a day
when any of the Banks are not open for business, then each Bank shall
transfer to Agent its Ratable Share on the next day such Bank is open for
business.
8.2.3 Distribution of Payments. All Loan payments in respect
of Advances, interest, fees or expenses incurred by the Banks and required by
Borrower to be reimbursed will be deemed paid when immediately available U.S.
currency or its equivalent is paid in the amount required by Borrower to
Agent. On the Business Day Agent receives a Borrower payment, Agent will
advise each Bank by telephone or telecopy of the aggregate amount and such
Bank's Ratable Share of amounts actually received by Agent in respect of
Advances, interest, fees, or, to the extent that the Banks previously have
remitted to Agent therefor, reimbursements for other amounts for which Agent
has required Bank reimbursement or indemnification. Agent will pay to such
Bank on the same Business Day, by transfer to such Bank's wire account (as
specified by such Bank on Exhibit 8.2.3 to this Agreement or as amended by
such Bank from time to time after the date hereof) its Ratable Share,
"netted" as permitted herein, of any such payment received by Agent not later
than 12:00 p.m. (Eastern Time), and otherwise on the next Business Day.
-44-
8.2.4 Return of Payments. Any Agent payment to a Bank under
this Agreement in the belief or expectation that a related payment has been
or will be received by Agent from Borrower, which related payment in fact is
not received by Agent, will entitle Agent to recover such amount from the
Bank without set-off, counterclaim or deduction of any kind. If Agent
determines at any time that an amount received by Agent under this Agreement
must be returned to Borrower or paid to any other Person pursuant to any
solvency law or otherwise, then, notwithstanding any other term or condition
of this Agreement, Agent will not be required to distribute any portion
thereof to any Bank. However, if Agent has previously distributed such
amount, each Bank will repay to Agent on demand any portion of such amount
that Agent has distributed to such Bank, together with interest at such rate,
if any, as Agent is required to pay to Borrower or such other Person, without
set-off, counterclaim or deduction of any kind by the Bank.
8.3 Dissemination of Information. Agent will distribute promptly to
each Bank the executed promissory notes evidencing such Bank's Ratable Share
of the Loans. Agent will have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other
information with respect to Borrower (other than information or notices
received by it in accordance herewith and only if not received by the Banks
from Borrower), whether coming into its possession before the date of this
Agreement or at any time or times thereafter. Agent will use its best
efforts after written request therefor by any Bank, and only if not received
by such Bank from Borrower, to distribute promptly to each Bank copies of
every notice, request, communication, report or other information received by
Agent from Borrower pursuant to this Agreement or another Loan Document;
provided, that Agent will be liable to the Banks for a failure to do so only
if such failure is attributable to Agent's gross negligence or willful
misconduct, which will not include the Agent's failure to obtain any of the
foregoing from Borrower.
8.4 Amendments, Consents and Waivers for Certain Actions. Agent is
authorized and empowered on behalf of the Banks to amend or modify in writing
any provision of this Agreement or another Loan Document which relates or
pertains to the Borrower, or to consent to or waive Borrower's performance of
any obligation hereunder or of any Event of Default, only with the prior
written consent of the Requisite Banks or all of the Banks, as the case may
be. When Agent requests the written consent of any Bank and does not receive
a written approval of such consent from any Bank within ten (10) Business
Days after such Bank's receipt of such request, then such Bank will be deemed
to have denied such consent. Borrower agrees that it will not assert any
claim of amendment, modification, consent or waiver which is not in writing,
which writing (i) references this Agreement or any of the other Loan
Documents and (ii) is signed by the Requisite Banks or all of the Banks, as
the case may be.
8.5 Exculpation. Agent and its officers, directors, employees and
agents will be liable to any Bank only for the performance of their express
obligations under this Agreement and the other Loan Documents and for their
own gross negligence or willful misconduct in the performance of any action
taken or omitted in connection therewith. If any apportionment or
distribution of payments made by Agent in good faith is subsequently
determined to have been made in error, Agent will not be liable therefor, but
-45-
the sole recourse of any Bank to whom payment was due but not made will be to
recover from other Banks any payment in excess of the amount to which they
are determined to be entitled (and such other Banks hereby agree to return to
such Bank any such erroneous payments received by them). The Agent shall use
its best efforts to assist the Banks in determining when any such excess
payment has been made and in facilitating the recovery thereof. In
performing its functions and duties hereunder, Agent will exercise the same
care which it would in dealing with loans for its own account. Agent will
not be responsible to any Bank for the truth or completeness of any recitals,
statements, representations or warranties herein, the execution,
effectiveness, genuineness, validity, enforceability, collectability, or
sufficiency of this Agreement or any other Loan Document or the transactions
contemplated thereby, or the financial condition of Borrower. Agent will not
be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Loan Document, the financial condition of Borrower, or the
existence or possible existence of any Event of Default. Agent at any time
may request instructions from the Requisite Banks with respect to any action,
inaction, failure or approval which, by the terms of this Agreement or any
other Loan Document, Agent is permitted or required to take or to grant, and
if such instructions are promptly requested, Agent may refrain from taking
any action or withhold any approval and may refrain from any action or
withhold any approval until it has received such instructions from the
Requisite Banks. No Bank will have any right of action whatsoever against
Agent as a result of Agent acting or refraining from acting in accordance
with instructions of the Requisite Banks or all of the Banks, as the case may
require.
8.6 Reliance. Agent may rely upon any written notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telecopy or telegram) believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person, and with respect to all matters pertaining to this
Agreement or any other Loan Document, upon advice of legal counsel as to
legal matters, independent accountants as to audit and accounting matters,
and other experts selected by it, and when doing so will not be liable to any
Bank for any action taken or omitted by Agent in good faith. If any written
confirmation of a telephonic notice or instructions differs from the action
taken by Agent in connection with such telephonic notice of instructions,
Agent's records will govern absent manifest error.
8.7 Credit Decisions. Each Bank acknowledges that, independently of
Agent and each other Bank and based on the financial information received by
it and such other documents, information, and independent investigation of
the financial condition and affairs of Borrower as it has deemed appropriate,
it has made and will continue to make its own appraisal of the
creditworthiness of Borrower and credit decisions to participate in the Loans
in accordance with this Agreement. Each Bank also acknowledges that,
independently of Agent and each other Bank, and based on such other
documents, information, and investigations as it deems appropriate at
anytime, it will continue to make its own credit decisions as to exercising
or not exercising from time to time any rights and privileges available to it
under this Agreement or any other Loan Document.
-46-
8.8 Indemnification.
8.8.1 Agent Indemnification. Each Bank agrees (which agreement
shall survive any termination of this Agreement) to indemnify Agent according
to such Bank's Ratable Share from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, excess Advances or payments of any kind or nature whatsoever which
may at any time be imposed on, incurred by, or asserted against Agent in any
way relating to or arising out of this Agreement or another Loan Document,
including (without limitation) the reimbursement of Agent for all expenses
(including reasonable attorneys' and paralegals' fees, the allocated expense
of in-house attorneys and paralegals, and all out-of-pocket expenses)
incurred by Agent under or in connection with this Agreement or another Loan
Document or in enforcing the Obligations, in all cases as to which Agent is
not reimbursed by Borrower, provided that no Bank will be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, Advances or payments
as are determined by a court of competent jurisdiction in a final, non-
appealable decision or order to have resulted solely from Agent's gross
negligence or, willful misconduct. Agent will not be required to take any
action hereunder or under any other Loan Document, or to prosecute or defend
any action or proceeding in respect of this Agreement or another Loan
Document, unless it is indemnified to its satisfaction by the Banks against
losses, costs, liabilities, and expenses. If any indemnity in favor of Agent
is impaired, Agent may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given.
8.8.2 Borrower Indemnification. The Borrower hereby agrees to
indemnify the Agent, each Bank, their respective affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Agent, any Bank or any affiliate is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan 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. In no
event will any Bank's claim for indemnification, as damages, losses arising,
in the ordinary course of each Bank's business, out of Loans for which the
rate charged by Bank is less than the rate paid by such Bank for borrowed
funds. The obligations of the Borrower under this Section 8.8.2 shall
survive the termination of this Agreement.
8.9 Successor. Agent may resign as such at any time upon at least
30 days' prior notice to Borrower and all Banks, which resignation will be
effective when a successor Agent is in place. If Agent resigns, the
Requisite Banks may appoint another Person as a successor Agent which
thereupon will become the Agent. If no successor to the Agent is appointed
by the Requisite Banks and accepts such appointment within 30 days after the
retiring Agent's notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which will be one of the
-47-
Banks or a commercial banking institution organized under the laws of the
United States or a United States branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance by any successor an appointment as Agent
hereunder, such successor Agent will be entitled to receive from the retiring
Agent such documents of transfer and assignment as such successor Agent may
reasonably request, and will thereupon succeed to, and become vested with all
rights, powers, privileges, and duties of the retiring Agent, and the
retiring Agent will be discharged from all duties and obligations arising
under this Agreement and the other Loan Documents from and after the date on
which its resignation is effective. After any retiring Agent's resignation
or removal hereunder as Agent, the provisions of this Agreement and the other
Loan Documents will continue to bind and inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent. If the
successor Agent is not one of the Banks, Borrower shall have right to
reasonably approve such successor Agent.
8.10 Agent as a Bank. Agent, in its capacity as a Bank, will have
the same rights, powers, duties and liabilities with respect to the Loans as
any other Bank and may exercise the same as if it were not the Agent. Unless
otherwise required by the context, the terms "Bank", "Banks" and" Requisite
Banks" or any similar terms will include the Agent when acting in its
individual capacity. Agent may lend money to, and generally engage in any
kind of banking, trust or other business with Borrower to the same extent as
any other financial institution.
8.11 Borrower Not A Beneficiary. The provisions of this Section 8
are solely for the benefit of Agent and the Banks and Borrower will have no
rights as a third party beneficiary of any of the provisions hereof;
provided, however, Borrower will be bound by the provisions hereof. Borrower
will have no right against Agent acting in its capacity as Agent, for any
claims of Borrower arising from this Agreement, all such claims being
assertable only against the Banks.
8.12 Sharing Among Banks. Without affecting the rights of the
Borrower hereunder, each of the Banks agrees with every other Bank that, in
the event it shall receive payment on account of the Loan in excess of its
pro rata portion, according to the principal amount of its participation in
Advances then outstanding, of a payment due all of the Banks, whether such
payment be voluntary, involuntary or by operation of law, by application of
setoff of any indebtedness or otherwise, then such Bank shall promptly
purchase from each of the other Banks, without recourse, for cash and at face
value, ratably in accordance with the principal amounts of the participations
in Advances then outstanding, interest of the other Banks in the Loans in
such an amount that each of the Banks shall have received payment pro rata on
account of its participation in the Loans in accordance with the unpaid
principal amount thereof then owing to it; provided, that if any such
purchase be made by any Bank and if any such excess payment relating thereto
or any part thereof is thereafter recovered from such Bank, appropriate
adjustments in the related purchases from the other Banks shall be made by
rescission and restoration of the purchase price as to the portion of such
excess payment so recovered.
-48-
8.13 Assignments/Participations
8.13.1. Permitted Assignments. Any Bank 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 8.13.1 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 Bank or an affiliate thereof; provided,
however, that if an Event of Default has occurred and is continuing, 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 Bank 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) $10,000,000 or (ii) the remaining amount of the assigning
Bank's outstanding Loans.
8.13.2. Effect; Closing Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Section 8.13.1, and
(ii) payment of a $3,500 fee to the Agent for processing such assignment
(unless such fee is waived by the Agent), such assignment shall become
effective on the effective date specified in such assignment. The assignment
shall contain a representation by the Purchaser to the effect that none of
the consideration used to make the purchase of the Loans under the applicable
assignment agreement constitutes "plan assets" as defined under ERISA and
that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Bank
party to this Agreement and any other Loan Document executed by or on behalf
of the Banks and shall have all the rights and obligations of a Bank 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 Banks or the
Agent shall be required to release the transferor Bank with respect to the
percentage of the Aggregate Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section
8.13.2, the transferor Bank, the Agent and the Borrower shall, if the
transferor Bank 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 Bank and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each casein
principal amounts reflecting their respective and outstanding Loans, as
adjusted pursuant to such assignment.
8.13.3. Participations. Any Bank may sell to any financial institution
or institutions, and such financial institution or institutions may further
sell, a participation interest (undivided or divided) in, the Advances and such
Bank's rights and benefits under this Agreement, the Notes and the other Loan
Documents, and to the extent of that participation interest such participant or
participants shall have the same rights and benefits against the Borrower under
Section 3.5 and 7.3 as it or they would have had if such participant or
participants were the Bank making the Advances to the Borrowers hereunder,
provided, however, that (i) such Bank's obligations under this Agreement shall
remain unmodified and fully effective and enforceable against such Bank, (ii)
-49-
such Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Bank shall remain the holder of its
Notes for all purposes of this Agreement, (iv) the Borrowers, the Agent and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement, and
(v) such Bank shall not grant to its participant (other than a participant
which is an Affiliate of that Bank) any rights to consent or withhold consent
to any action taken by such Bank or the Agent under this Agreement other than
action requiring the consent of all of the Banks hereunder.
8.14 Other Agents. No Bank designated as a "managing agent",
"syndication agent", "documentation agent" or "co-agent" in its capacity as
such shall have any rights, duties or responsibilities hereunder, or any
fiduciary relationship with any Bank or the Borrower, and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or otherwise exist against any it in such capacity.
9. MISCELLANEOUS.
9.1 Costs and Attorneys' Fees. All fees, costs and expenses
incurred by Agent in connection with the preparation, execution, delivery,
performance and administration of the Loan Documents, any and all amendments,
supplements and modifications thereof and the other instruments and documents
to be delivered hereunder in connection with any matters contemplated by or
arising out of this Agreement, whether (a) to commence, defend any action
commenced by any party other than Borrower, or intervene in any litigation or
to file a petition, complaint, answer, motion or other pleadings, (b) to take
any other action in or with respect to any suit or proceedings (bankruptcy or
otherwise), (c) to consult with officers of Agent or to advise Agent or (d)
to enforce any rights of the Banks to collect any of the Obligations,
including, without limitation, reasonable fees, costs and expenses of Agent's
attorneys and paralegals, the allocated costs of Agent's internal counsel,
together with interest thereon at the rate equal to 2% above the highest
Effective Rate hereunder, will be part of the Obligations, payable on demand.
Upon and during the continuance of an Event of Default, Borrower shall
reimburse each Bank for such Bank's reasonable fees, costs and expenses
incurred in connection with the enforcement of this Agreement and the other
Loan Documents. All of the foregoing amounts may, at Agent's option, be
charged as an Advance under the Loan.
9.2 Waivers, Modifications in Writing. No failure or delay on the
part of Agent or any Bank in exercising any right, power or remedy hereunder
will operate as a waiver thereof, nor will any single or partial exercise of
any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
provided for under this Agreement, in the Notes and in the other Loan
Documents are cumulative and are not exclusive of any remedies that may be
available to the Banks at law, in equity or otherwise. No amendment,
modification, supplement, termination, consent or waiver of or to any
provision of this Agreement, the Notes or the other Loan Documents, nor any
consent to any departure therefrom, will in any event be effective unless the
same will be in writing and signed by or on behalf of the Borrower and the
Requisite Banks and, to the extent any rights or duties of the Agent may be
affected thereby, the Agent, provided, however, that no such amendment,
-50-
modification, termination, waiver or consent shall, without the consent of the
Agent and all of the Banks, (i) authorize or permit the extension of time for,
or any reduction of the amount of, any payment of the principal of, or interest
on, the Notes or any Letter of Credit reimbursement obligation, or any fees or
other amount payable hereunder, (ii) amend or terminate the respective
Commitment of any Bank or modify the provisions of this Section regarding the
taking of any action under this Section or the provisions of this Section 9.2
or the definition of Requisite Banks, or (iii) provide for the discharge of any
material Guarantor, except to the extent provided in this Agreement.
Notwithstanding anything herein to the contrary, no Defaulting Bank shall be
entitled to vote (whether to consent or to withhold its consent) with respect
to any amendment, modification, termination or waiver of any provision of this
Agreement or any departure therefrom or any direction from the Banks to the
Agent, and, for purposes of determining the Requisite Banks at any time when
any Bank is a Defaulting Bank under this Agreement, the Commitments and
Advances of such Defaulting Banks shall be disregarded.
9.3 Notices, etc. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto will be in writing and (except for financial statements and other
related informational documents to be furnished pursuant hereto which maybe
sent by first-class mail, postage prepaid), will be personally delivered or
sent by registered or certified mail, postage prepaid or sent by nationally
recognized overnight delivery service and, if mailed, will be deemed to be
received for purposes of this Agreement three (3) Business Days after mailing
by the sender or one (1) Business Day if sent by overnight delivery service.
Unless otherwise specified in a notice sent or delivered in accordance with
the foregoing provisions of this Section 9.3, notices, demands, instruments
and other communications in writing will be given to or made upon the
respective parties hereto as follows: if to Agent, at Agent's Address, with
a copy to Agent's Counsel; if to Borrower, at Borrower's Address, with a copy
to Borrower's Counsel and if to a Bank, the address that appears on the
signature page to this Credit Agreement.
9.4 Notice of Wrongful Act or Omission by Agent or Banks. No action
will be commenced by Borrower against Agent or any Bank arising out of or
attributable to any act or omission of Agent or any Bank unless a notice
specifically describing the act or omission will have been given to Agent or
such Bank thirty (30) days prior to such judicial action.
9.5 Agent's Failure to Advance. If Agent will be in breach of the
Banks' obligation under this Agreement by reason of failure to make an
Advance, notwithstanding Borrower's conformance with the provisions of
hereof, Borrower's sole remedies on account thereof will be: (a) to compel
Agent to make the Advance which is determined to have been wrongfully
withheld; and (b) to recover actual and provable damages on account of such
breach, and neither Agent nor any Bank will ever be liable to Borrower for
consequential damages, whatever the nature of the breach by Agent or such
Bank hereunder.
9.6 Headings. Section headings used in this Agreement are for
convenience of reference only and will not constitute a part of this
Agreement for any other purpose or affect the construction of this Agreement.
-51-
9.7 Execution in Counterparts. This Agreement may be executed in
counterparts and by different parties on separate counterparts, both of which
counterparts, when so executed and delivered, will be deemed to be an
original and both of which counterparts, taken together, will constitute but
one and the same agreement. This Agreement will become effective upon the
execution of a counterpart hereof by each of the parties hereto.
9.8 Binding Effect; Assignment. This Agreement will be binding
upon, and inure to the benefit of, Borrower and the Banks, and the
irrespective successors and assigns; provided, however, that Borrower may not
assign its rights hereunder or in connection herewith or any interest herein
(voluntarily, by operation of law or otherwise) without the prior written
consent of all of the Banks. This Agreement will not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and each of their respective successors and assigns.
9.9 Severability of Provisions. Any provision of this Agreement
which is illegal, invalid, prohibited or unenforceable in any jurisdiction
will, as to such jurisdiction, be ineffective to the extent of such
illegality, invalidity, prohibition or unenforceability without invalidating
or impairing the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
9.10 Survival of Agreements; Representations, Warranties Indemnities
and Covenants. All agreements, representations, warranties, indemnities and
covenants made herein will survive the execution and delivery of this
Agreement, the making of the Loans hereunder and the execution and delivery
of the Notes.
9.11 Independence of Covenants. All covenants under this Agreement
will each be given independent effect so that if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant, by an exception thereto, or be otherwise
within the limitations thereof, will not avoid the occurrence of an Event of
Default or Unmatured Event of Default if such action is taken or condition
exists.
9.12 Construction of Agreement. Neither this Agreement nor any
uncertainty or ambiguity herein will be construed or resolved against any
Bank, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by each of the parties and their counsel and
will be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of all
parties hereto.
9.13 Complete Agreement. This Agreement, together with the exhibits
and schedules to this Agreement, the Notes and the other Loan Documents, and
the other agreements referred to herein or by their terms referring hereto,
is intended by the parties as a final expression of their agreement and is
intended as a complete statement of the terms and conditions of their
agreement.
-52-
9.14 Equitable Relief. Borrower recognizes that, in the event
Borrower fails to perform, observe or discharge any of its Obligations under
this Agreement, any remedy at law may prove to be inadequate relief to the
Banks; therefore, Borrower agrees that the Banks will be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
9.15 No Fiduciary Relationship. No provision herein or in any of
the other Loan Documents and no course of dealing between the parties will be
deemed to create any fiduciary duty by Agent or the Banks to Borrower.
9.16 Choice of Law. The validity of this Agreement, its
construction, interpretation and enforcement and the rights of the parties
hereto will be determined under, governed by and construed in accordance with
the internal laws of the State of Michigan, without regard to principles of
conflicts of law.
9.17 Venue; Jurisdiction. The parties agree that all actions or
proceedings arising in connection with this Agreement, the Loan Documents,
the Advances may be tried and litigated in the federal courts of the United
States of the Eastern District of Michigan. Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Borrower irrevocably
consents to the service of process out of any such courts in any such action
or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to Borrower, at its address set forth for notices in
this Agreement, such service to become effective ten (10) days after such
mailing. Nothing herein will affect the right of any Bank to serve process
in any other manner permitted by law. Borrower irrevocably waives any right
it may have to assert the doctrine of forum non conveniens or to object to
venue to the extent any proceeding is brought in accordance with this Section
9.17.
9.18 Other Waivers. Borrower hereby waives, to the extent permitted
by applicable law, in connection with a "claim and delivery" action by any
Bank or Agent on any Bank's behalf pursuant to Michigan Court Rule 3.105, the
right to request that a court require any Bank to post a bond pursuant to
Michigan Court Rule 3.105(E)(4)(c)(i).
9.19 Waivers Voluntary. The waivers contained in this Agreement are
freely, knowingly and voluntarily given by each party, without any duress or
coercion, after each party has had opportunity to consult with its counsel
and has carefully and completely read all of the terms and provisions of this
Agreement, specifically including the waivers contained in this Section 9.
Neither the Banks nor Borrower will be deemed to have relinquished the
waivers contained herein except by a writing signed by the party to be
charged with having relinquished any such waiver.
9.20 Waiver of Jury Trial. Banks and Borrower acknowledge and
agree that there may be a constitutional right to a jury trial in connection
with any claim, dispute or lawsuit arising between them, but that such right
may be waived. Accordingly, the parties agree that notwithstanding such
constitutional right, in this commercial matter the parties believe and agree
that it will be in their best interest to waive such right, and accordingly,
-53-
hereby waive such right to jury trial, and further agree that the best forum
for hearing any claim, dispute or lawsuit, if any, arising in connection with
this Agreement, any Loan Document or the relationship between the Banks and
Borrower, will be a court of competent jurisdiction sitting without a jury.
BORROWER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE
WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND
BORROWER ACKNOWLEDGES AND AGREES THAT (a) EACH OF THE WAIVERS SET FORTH
HEREIN, WERE KNOWINGLY AND VOLUNTARILY MADE; (b) THE OBLIGATIONS OF THE BANKS
HEREUNDER, INCLUDING THE OBLIGATION TO ADVANCE AND LEND FUNDS TO BORROWER IN
ACCORDANCE HEREWITH, WILL BE STRICTLY CONSTRUED AND WILL BE EXPRESSLY SUBJECT
TO SUCH BORROWER'S COMPLIANCE IN ALL RESPECTS WITH THE TERMS AND CONDITIONS
HEREIN SET FORTH; AND (c) NO REPRESENTATIVE OF ANY BANK HAS WAIVED OR
MODIFIED ANY OF THE PROVISIONS OF THIS AGREEMENT AS OF THE DATE HEREOF AND NO
SUCH WAIVER OR MODIFICATION FOLLOWING THE DATE HEREOF WILL BE EFFECTIVE
UNLESS MADE IN ACCORDANCE WITH SECTION 9.2 HEREOF.
[INTENTIONALLY LEFT BLANK - SIGNATURES ON FOLLOWING PAGES]
-54-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first hereinabove set forth.
"BORROWER"
XXXXXXX INDUSTRIES, INC.
By:
Print Name:
Its:
"BANKS"
STANDARD FEDERAL BANK, N.A., as a
Bank and as Agent
By:
Print Name:
Its:
Ratable Share as of the Closing Date:
30.00%
Commitment as of the Closing Date:
$45,000,000
Address for Notice:
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000-0000
Attn: Xxx Xxxx
-55-
SUNTRUST BANK, as a Bank and as
Syndication Agent
By:
Print Name:
Its:
Ratable Share as of the Closing Date:
21.666666667%
Commitment as of the Closing Date:
$32,500,000
Address for Notice:
----------------------------------
----------------------------------
Attn: ---------------------------
UNION PLANTERS BANK, NATIONAL
ASSOCIATION, as a Bank and as
Documentation Agent
By:
Print Name:
Its:
Ratable Share as of the Closing Date:
21.666666667%
Commitment as of the Closing Date:
$32,500,000
Address for Notice:
----------------------------------
----------------------------------
Attn: ---------------------------
-56-
FIRST TENNESSEE BANK, as a Bank and as
Managing Agent
By:
Print Name:
Its:
Ratable Share as of the Closing Date:
16.666666667%
Commitment as of the Closing Date:
$25,000,000
Address for Notice:
----------------------------------
----------------------------------
Attn: ---------------------------
REGIONS BANK, as a Bank
By:
Print Name:
Its:
Ratable Share as of the Closing Date:
10.00%
Commitment as of the Closing Date:
$15,000,000
Address for Notice:
----------------------------------
----------------------------------
Attn: ---------------------------
-57-
