1
EXHIBIT 10.1
================================================================================
SECOND
AMENDED AND RESTATED
TALON AUTOMOTIVE GROUP, INC. and
XXXXXX METAL PRODUCTS, CO.
AS DEBTORS IN POSSESSION
$100,000,000
CREDIT AGREEMENT
WITH
COMERICA BANK
AS AGENT
JUNE 29, 2001
================================================================================
2
TABLE OF CONTENTS
PAGE
1. DEFINITIONS.............................................................................................2
2. THE INDEBTEDNESS.......................................................................................21
2.1 Post-Petition Revolving Credit Advances.......................................................21
2.2 Swing Loan....................................................................................21
2.3 Pre-Petition Loans............................................................................21
2.4 Limitation on Amount of Advances..............................................................21
2.5 Amendment and Restatement.....................................................................22
2.6 Notes.........................................................................................22
2.7 Types of Loans and Maturity...................................................................22
2.8 Requests for Loans............................................................................22
2.9 Disbursement of Loans.........................................................................23
2.10 Facility Fees.................................................................................24
2.11 Optional Reduction or Termination of Revolving Loan Commitment................................24
2.12 Prepayment and Readvances.....................................................................25
2.13 Currency Appreciation; Reduction of Indebtedness..............................................25
2.14 Swing Loan Refunding..........................................................................25
2.15 Account Netting...............................................................................26
3. LETTERS OF CREDIT......................................................................................26
3.1 Letters of Credit.............................................................................26
3.2 Conditions to Issuance........................................................................26
3.3 Participations in Letters of Credit...........................................................27
3.4 Letter of Credit Fees.........................................................................27
3.5 Issuance Fees.................................................................................27
3.6 Draws Under Letters of Credit.................................................................28
3.7 Funding of Letter of Credit Payment as Advance................................................28
3.8 Obligations Irrevocable.......................................................................29
3.9 Risk Under Letters of Credit..................................................................30
3.10 Indemnification...............................................................................31
3.11 Right of Reimbursement........................................................................31
-i-
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
4. INTEREST, FEES AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS....................31
4.1 Interest......................................................................................31
4.2 Basis of Computation..........................................................................31
4.3 Prepayments...................................................................................32
4.4 Mandatory Repayments..........................................................................32
5. SPECIAL PROVISIONS.....................................................................................32
5.1 Increased Costs...............................................................................32
5.2 Availability of Alternative Currency..........................................................33
5.3 Refunding Advances in Same Currency...........................................................33
5.4 Judgment Currency.............................................................................33
6. PAYMENTS...............................................................................................33
6.1 Payment Procedure.............................................................................33
6.2 Application of Proceeds.......................................................................34
6.3 Pro-rata Recovery.............................................................................34
6.4 Deposits and Accounts.........................................................................35
6.5 Net Payments..................................................................................35
6.6 Tax Treaty Certificate........................................................................35
6.7 Replacement of Banks..........................................................................36
7. COLLATERAL AND PRIORITY................................................................................36
7.1 Security for the Post-Petition Indebtedness...................................................36
7.2 Perfection of Security Interests..............................................................36
7.3 Superpriority Administrative Expense Claim....................................................37
7.4 Additional Adequate Protection................................................................37
8. CONDITIONS.............................................................................................37
8.1 Conditions Precedent To Initial Loans and Effective Date......................................37
(a) Documents Executed and Filed.........................................................37
(b) Previously Executed And/Or Delivered Documents.......................................37
(c) Amendment Fee........................................................................38
(d) Agent's Fee..........................................................................38
-ii-
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
(e) Opinion of Borrower's Counsel........................................................38
(f) Approval of Agent's Counsel..........................................................38
8.2 Conditions for First Disbursement.............................................................38
(a) Interim Authorizing Orders...........................................................38
(b) Customer Agreements..................................................................38
(c) Other Orders.........................................................................39
(d) Lock-Up Agreement....................................................................39
8.3 Conditions Precedent to All Loans.............................................................39
(a) Effectiveness........................................................................39
(b) No Default; Representations and Warranties...........................................39
(c) Adverse Change, etc..................................................................39
(d) Enforceability of Documents..........................................................39
(e) Continuation of Orders...............................................................39
9. REPRESENTATIONS AND WARRANTIES.........................................................................39
9.1 Corporate Status..............................................................................39
9.2 Corporate Power and Authority; Business.......................................................40
9.3 No Violation..................................................................................40
9.4 Litigation....................................................................................40
9.5 Use of Proceeds...............................................................................40
9.6 Governmental Approvals, etc...................................................................40
9.7 True and Complete Disclosure..................................................................40
9.8 Financial Statements..........................................................................41
9.9 Security Interests............................................................................41
9.10 Tax Returns and Payments......................................................................41
9.11 Patents, etc..................................................................................41
9.12 Compliance with Laws, etc.....................................................................41
9.13 Properties....................................................................................41
9.14 Collective Bargaining Agreements..............................................................41
9.15 Indebtedness Outstanding......................................................................42
9.16 Environmental Protection......................................................................42
-iii-
5
TABLE OF CONTENTS
(CONTINUED)
PAGE
9.17 Senior Subordinated Debt Documents............................................................43
9.18 ERISA.........................................................................................43
9.19 The Budget....................................................................................44
9.20 Use of Advances...............................................................................44
9.21 Survival of Representations and Warranties....................................................44
10. AFFIRMATIVE COVENANTS..................................................................................44
10.1 Reporting Requirements Covenants..............................................................44
10.2 Insurance.....................................................................................46
10.3 Books, Records and Inspections................................................................47
10.4 Payment of Taxes and Utilities................................................................47
10.5 Compliance with Statutes, etc.................................................................47
10.6 Performance of Obligations....................................................................47
10.7 End of Fiscal Years; Fiscal Quarters..........................................................47
10.8 Environmental Events..........................................................................48
10.9 Further Guarantees and Liens..................................................................48
10.10 Compliance with Formula Amount................................................................48
10.11 Construction Liens............................................................................48
10.12 Defend Title..................................................................................48
10.13 ERISA.........................................................................................48
10.14 Crisis Manager................................................................................49
11. NEGATIVE COVENANTS.....................................................................................49
11.1 Changes in Business...........................................................................49
11.2 Liens.........................................................................................49
11.3 Indebtedness..................................................................................50
11.4 Financial Covenants...........................................................................50
11.5 Dividends.....................................................................................51
11.6 Stock Acquisition.............................................................................51
11.7 Extension of Credit...........................................................................51
11.8 Guarantee Obligations.........................................................................51
11.9 Subordinate Indebtedness......................................................................51
-iv-
6
TABLE OF CONTENTS
(CONTINUED)
PAGE
11.10 Property Transfer, Merger or Lease-Back.......................................................51
11.11 Acquisitions..................................................................................52
11.12 Other Agreements..............................................................................52
11.13 Use of Loan Proceeds..........................................................................52
11.14 Management Fees and Dividend..................................................................52
11.15 Capital Expenditures..........................................................................52
11.16 Excess Inventory..............................................................................52
11.17 Professional Fee Expenditures.................................................................53
11.18 Chapter 11 Claims/Return of Goods.............................................................53
12. DEFAULTS...............................................................................................53
12.1 Failure to Pay Monies Due.....................................................................53
12.2 Misrepresentation.............................................................................53
12.3 Noncompliance with Agreement..................................................................53
12.4 Other Defaults................................................................................53
12.5 Change of Control.............................................................................53
12.6 Repudiations, Revocations, Etc................................................................54
12.7 Inadequate Funding or Termination of Employee Benefit Plan(s).................................54
12.8 Occurrence of Certain Reportable Events.......................................................54
12.9 Liquidation/Conversion of Case/Appointment of Trustee or Examiner.............................54
12.10 Cross Defaults/Relief From Stay...............................................................54
12.11 Adequate Protection Not Acceptable............................................................54
12.12 Amendment or Stay of Interim Authorizing Order or Final Authorizing Order.....................54
12.13 Entry of Final Authorizing Order..............................................................55
12.14 Vacation of Authorizing Orders................................................................55
12.15 Opposition to Banks' Motions..................................................................55
12.16 Opposition to Banks' Claims...................................................................55
12.17 Exercise of Remedies..........................................................................55
12.18 Waiver of Defaults............................................................................56
13. AGENT..................................................................................................56
-v-
7
TABLE OF CONTENTS
(CONTINUED)
PAGE
13.1 Appointment of Agent..........................................................................56
13.2 Deposit Account with Agent....................................................................56
13.3 Exculpatory Provisions........................................................................56
13.4 Successor Agents..............................................................................57
13.5 Right of Agent as Bank........................................................................57
13.6 Credit Decisions..............................................................................57
13.7 Notices by Agent..............................................................................57
13.8 Agent's Fees..................................................................................57
13.9 Nature of Agency..............................................................................57
13.10 Actions; Confirmation of Agent's Authority to Act in Event of Default.........................58
13.11 Authority of Agent to Enforce Notes And This Agreement........................................58
14. MISCELLANEOUS..........................................................................................58
14.1 Law of Michigan; Submission to Jurisdiction...................................................58
14.2 Agent's Costs and Expenses....................................................................58
14.3 Notices.......................................................................................59
14.4 Further Action................................................................................59
14.5 Successors and Assigns........................................................................59
(a) Assignments..........................................................................59
(b) Participations.......................................................................60
14.6 Indulgence....................................................................................60
14.7 Counterparts..................................................................................60
14.8 Entire Agreement; Amendments; Waivers; Consents...............................................60
14.9 Confidentiality...............................................................................61
14.10 Interest......................................................................................61
14.11 Jury Waiver...................................................................................62
14.12 Conflicts.....................................................................................62
14.13 Effective Upon Execution......................................................................62
14.14 Collateral Valuations.........................................................................62
14.15 WAIVER OF CLAIMS..............................................................................62
14.16 Waiver of Section 506(c)......................................................................62
-vi-
8
TABLE OF CONTENTS
(CONTINUED)
PAGE
14.17 Waiver of Claims..............................................................................63
14.18 Section 364(c)(1). Priority, Professional and Administrative Expenses........................63
14.19 Waiver of Marshalling.........................................................................63
14.20 Waiver of Right to Obtain Alternative Financing...............................................64
14.21 Credit Bids...................................................................................64
14.22 Written Modifications.........................................................................64
14.23 Additional Documentation......................................................................64
-vii-
9
SECOND AMENDED AND RESTATED
TALON AUTOMOTIVE GROUP, INC.
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, made as of the 29th
day of June, 2001, between TALON AUTOMOTIVE GROUP, INC. a Michigan corporation
("TAG"), XXXXXX METAL PRODUCTS CO., a Nova Scotia corporation ("Xxxxxx", called
together with TAG, the "Borrowers" and either one referred to individually
herein as a "Borrower") in their capacity as Debtors in Possession in the Case
(defined below) and CCAA Case (defined below) each of the "Banks" party hereto,
and COMERICA BANK, a Michigan banking corporation as agent for the Banks (in
such capacity, "Agent").
WHEREAS, Borrowers, Agent and the Banks entered into a certain Credit
Agreement dated as of April 28, 1998, and certain amendments thereto (as so
amended, the "Original Agreement"), pursuant to which Borrowers incurred certain
indebtedness and obligations to Agent and the Banks and granted the Agent, on
behalf of the Banks, certain security interests, liens and mortgages for such
indebtedness and obligations;
WHEREAS, Borrowers, Agent and the Banks entered into a certain Amended
and Restated Credit Agreement dated as of February 16, 2001 ("Existing
Agreement") pursuant to which (i) indebtedness and obligations then outstanding
under the Original Agreement were renewed and reevidenced; (ii) Borrowers
incurred additional indebtedness and obligations to Agent and the Banks; and
(iii) security interests in Pre-Petition Collateral provided under the Original
Agreement were reaffirmed and continued in favor of Agent and the Banks as
security for Borrower's indebtedness and obligations under the Existing
Agreement; and
WHEREAS, pursuant to the Original Agreement and Existing Agreement the
Borrowers granted to the Agent, on behalf of the Banks party thereto (in such
capacity, called "Pre-Petition"), security interests in certain of their assets,
including all of the Borrowers' present and future accounts, general
intangibles, chattel paper, instruments, documents, inventory, equipment, firms,
certain real estate, and all products and proceeds of all the foregoing
(collectively, the "Pre-Petition Collateral"), and delivered or caused to be
delivered to the Agent, on behalf of the Lenders, various security agreements,
mortgages, assignments, notes, pledge agreements, guaranties and other documents
or instruments and amendments or supplements thereto; and
WHEREAS, on even date herewith (the "Petition Date"), TAG filed (i) a
voluntary petition (the "Petition") for relief under chapter 11 ("Case") of
title 11 of the United States Code (the Bankruptcy Code of 1978, as amended from
time to time, and together with the Federal Rules of Bankruptcy Procedure and
the Local Bankruptcy Rules for the Eastern District of Michigan, the "Bankruptcy
Code") with the United States Bankruptcy Court for the Eastern District of
Michigan (the "Bankruptcy Court"), and (ii) Xxxxxx filed a case seeking
arrangement under the Companies' Creditors Arrangement Act in the Superior Court
of Justice in the province of Ontario, Canada ("CCAA Case"); and
-1-
10
WHEREAS, as of the Petition Date, there was due and owing from the
Borrowers to the Agent and the Banks under the Existing Agreement a principal
amount not less than $71,284,460.00, plus accrued interest, unpaid interest,
costs and expenses (including attorneys', consultants', and other professionals'
fees) and other charges provided for by the Loan Documents (as defined in the
Existing Agreement). All of the foregoing obligations and any related contingent
claims, whether arising pre-petition or post-petition, are collectively referred
to as the "Pre-Petition Obligations"; and
WHEREAS, the Borrowers have requested that the Banks make Post-Petition
Advances (as defined below) to be used as provided in the Budget (as defined
below); and
WHEREAS, the Agent and the Banks are willing to make Post-Petition
Advances pursuant to the terms of this Agreement, but only upon the terms and
subject to the conditions contained herein and in the Interim Order and Final
Order (each as defined below); and
WHEREAS, the Borrowers have agreed to secure the Post-Petition Advances
and other obligations due under this Agreement to the Agent and the Banks, and
to provide adequate protection for the Pre-Petition Obligations, as provided in
the Interim Authorizing Order and/or the Final Authorizing Order; and
WHEREAS, accordingly, the parties hereto desire to amend and restate
the Existing Agreement in its entirety as set forth herein;
NOW, THEREFORE, it is agreed that the Existing Agreement is hereby
amended and restated in its entirety as follows:
1. DEFINITIONS
For the purposes of this Agreement the following terms (when
capitalized) will have the following meanings:
1.1 "Access Agreement" shall mean the Access and Security Agreement
among Borrower, Agent and Designated Customers dated as of February 16, 2001.
1.2 "Accounts" means, with respect to any Person, all accounts as
defined in the UCC.
1.3 "Acknowledgement of Leasehold Mortgage" shall mean, with respect to
any Leasehold Real Estate of any Person, an agreement between the landlord, the
registered encumbrancers with respect to the landlord's title to such Leasehold
Real Estate, the Agent and such Person (in its capacity as tenant) with respect
to the priority of, and the enforcement procedures relating to, the Mortgage
registered against such Leasehold Real Estate.
1.4 "Advance" shall mean a borrowing requested by a Borrower and made
by the Banks (or, in the case of the Swing Loans, made by Agent or the Canadian
Swingline Lender, as applicable), or otherwise made by Banks in the absence of
such a request pursuant to Section 2.14 hereof.
-2-
11
1.5 "Affiliate" shall mean, when used with respect to any Person, any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person. For purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
1.6 "Affiliate Loans" shall mean the following described unsecured
loans from time to time made by a Borrower to another Loan Party, to the extent
that the obligation with respect to such Loan is pledged to Agent on behalf of
the Banks and is subordinated to such Loan Party's obligations under the
Documents, all pursuant to documents and agreements satisfactory to Agent:
(a) a loan of Ten Million Dollars ($10,000,000) owing by
Xxxxxx to VS as of the date of the Original Agreement;
(b) Twenty Five Million Dollars ($25,000,000) of the proceeds
of Senior Subordinated Notes borrowed by Xxxxxx from TAG as of the date of the
Original Agreement for the purpose of repaying indebtedness of Xxxxxx that was
then existing; and
(c) additional Affiliate Loans in aggregate amount at any time
outstanding not to exceed Fifteen Million Dollars ($15,000,000).
1.7 "Agent" shall mean Comerica Bank in its capacity as Agent hereunder
or any successor appointed in accordance with Section 13.4 hereof.
1.8 "Agent's Fees" shall mean those fees and expenses required to be
paid by Borrowers to Agent for Agent's sole account under Section 13.8 hereof.
1.9 "Agreement" shall mean this Agreement as amended from time to time
in accordance with the terms hereof.
1.10 "Alternate Base Rate" shall mean, for any day, one percent (1%)
plus:
(a) in the case of any calculation of the Prime-based Rate for
an Advance denominated in Dollars, the Federal Funds Effective Rate; and
(b) in the case of any calculation of the Prime-based Rate for
an Advance denominated in Canadian Dollars, the BA Rate.
1.11 "Alternative Currency" shall mean Canadian Dollars.
1.12 "Applicable Interest Rate" shall mean the Prime-based Rate.
1.13 "Applicable Margin" shall mean:
-3-
12
(a) three percent (3%) per annum with respect to any
Prime-based Loan under the Swing Loan provided by the Canadian Swingline Lender
and two percent (2%) per annum with respect to any other Prime-based Loan under
this Agreement;
(b) four percent (4%) per annum with respect to any Letter of
Credit Fee; and
(c) one-half percent (1/2%) per annum with respect to Facility
Fee payments described in clause (a) of Section 2.10 of this Agreement.
1.14 "Assignment Agreement" shall mean an assignment agreement executed
by a Bank and delivered to Agent pursuant to Section 14.5(a) hereof, in the form
attached as Exhibit "A" hereto.
1.15 "Banks" shall mean each Bank signatory hereto, and each other
Person who becomes a Bank pursuant to Section 14.5(a) hereof.
1.16 "Borrowing Base" shall mean, as of any date:
I. the sum of:
(a) (i) ninety percent (90%) of the positive difference
between the Designated Eligible Accounts of each Designated Customer and the
Designated Customer Offsets for such Designated Customer, and (ii) eighty five
percent (85%) of the Eligible Accounts Receivable, plus
(b) (i) seventy percent (70%) of the value of the Designated
Eligible Inventory, and (ii) fifty percent (50%) of the value of the Eligible
Inventory, plus
(c) the lesser of Ten Million Dollars ($10,000,000) or fifty
percent (50%) of the Eligible Tooling Invoices, plus
(d) seventy five percent (75%) of the net realizable value of
Eligible Real Estate, to the extent Agent has obtained an appraisal in form and
content satisfactory to Agent identifying the net realizable value for such
Eligible Real Estate, plus
(e) (i)(x) during the Bulge Period only, the lesser of ninety
and two-tenths percent (90.2%) of the forced liquidation value of Eligible
Equipment, to the extent Agent has obtained an appraisal in form and content
satisfactory to Agent for such Eligible Equipment or Three Million Five Hundred
Thousand Dollars ($3,500,000) in excess of the amount determined under clause
(y) of this subsection (e)(i) below, and (y) at all other times eighty percent
(80%) of the forced liquidation value of Eligible Equipment, to the extent Agent
has obtained an appraisal in form and content satisfactory to Agent for such
Eligible Equipment, plus (ii) sixty percent (60%) of the net book value
(adjusted monthly upon the delivery of financial statements) of Eligible
Equipment acquired after the last delivery of an appraisal of Eligible
Equipment, satisfactory to Agent; minus
II. The sum of:
-4-
13
(a) the amount of any Pre-Petition Obligations outstanding as
of the date of calculation; and
(b) the amount of the Carveout.
1.17 "Budget" shall mean the consolidated weekly and monthly
projections which were delivered to the Agent and the Banks as of June 28, 2001
and are attached hereto as Exhibit "B", as it may be amended or supplemented
from time to time with the consent of the Agent, together with the limitations
on expenditures for the period covered thereby which are included as a portion
of the Budget.
1.18 "Budget Compliance Certificate" shall mean a written certificate,
in the form of Exhibit "H" signed by an authorized officer of the Borrowers
together with a certification that (i) the proceeds of the Post-Petition
Advances and Letters of Credit used during the previous week are for one of the
types of expenditures set forth in the Budget and in compliance with the maximum
amounts permitted to be expended thereunder for the relevant time period in
accordance with the Budget, subject to any Permitted Variance, and (ii) no
Default or Event of Default has occurred, or, if a Default or Event of Default
has occurred, that Default or Event of Default has occurred together with the
description thereof.
1.19 "Buildings and Fixtures" means all plant, buildings, structures,
erections, improvements, appurtenances and fixtures (including fixed machinery
and fixed equipment) situate on the Leasehold Real Estate or on the Real Estate,
or both, as the context requires.
1.20 "Bulge Period" shall mean the period commencing July 15, 2001 and
ending September 30, 2001.
1.21 "Business Day" shall mean any day on which commercial banks are
open for domestic and international business in Detroit, Michigan and, when used
in reference to any Swing Loan to be made by the Canadian Swingline Lender, also
a day on which the Canadian Swingline Lender is open for commercial business in
Toronto, Ontario.
1.22 "Canadian Dollars" and "$Cd" shall mean lawful currency of Canada.
1.23 "Canadian Swingline Lender" shall mean National Bank of Canada.
1.24 "Carveout" shall mean an amount described as the "Carveout" in the
Financing Order.
1.25 "Cash Collateral" shall mean all cash collateral (as defined in
Section 363(a) of the Bankruptcy Code and as such term is utilized in a case
under the CCAA) in the Borrowers' possession or control arising from, or
constituting proceeds of, Pre-Petition Collateral.
1.26 "Change in Control" shall mean the occurrence of either of the
following, unless such occurrence arises out of a Final Order of the Bankruptcy
Court in which the exchange of Senior Subordinated Debt for equity in TAG is
ordered in accordance with the terms of the Lock-up Agreement:
-5-
14
(a) Permitted Holders shall cease to control, directly or
indirectly, in each case free and clear of all Liens, a majority (on a fully
diluted basis) of the issued and outstanding shares of voting stock of TAG; and
(b) any "Change of Control" as defined in the Senior
Subordinated Note Indenture.
1.27 "Closing Date" shall mean the date the conditions described in
Section 8.1 of this Agreement.
1.28 "Collateral" means all Stock, Accounts, Inventory, Intellectual
Property, Equipment, Buildings and Fixtures, Leasehold Real Estate, Real Estate,
and all books, records, instruments, chattel paper, negotiable documents of
title, intangibles and proceeds of each Loan Party, including any bank accounts
and deposits therein, and any substitutions for, or replacements of, any of the
foregoing.
1.29 "Customer Agreement" shall mean that certain Accommodation
Agreement dated as of February 16, 2001 among Borrowers, Agent and Designated
Customers.
1.30 "Default" shall mean an event, occurrence or circumstance which,
with the giving of notice and/or passage of time, would constitute an Event of
Default.
1.31 "Default Rate" shall mean, with respect to any Loan, two percent
(2%) plus its Applicable Interest Rate.
1.32 "Designated Customer Offset" shall mean, at any time, the right of
a Designated Customer under a Customer Agreement to offset, against the
Designated Eligible Accounts owed by such Designated Customer from time to time,
Permitted Setoffs (as defined in the Customer Agreements).
1.33 "Designated Customers" shall mean, so long as the Customer
Agreement to which they are party remains in full force and effect, General
Motors Corporation and/or any of its Affiliates or subsidiaries and
DaimlerChrysler Corporation and/or any of its Affiliates or subsidiaries.
1.34 "Designated Eligible Accounts" shall mean Accounts which:
(a) are from time to time owing to a Borrower by a Designated
Customer;
(b) payment of which is subject to the terms of a Customer
Agreement; and
(c) would satisfy all of the requirements for Eligible
Accounts in the absence of the Designated Customer Offset provided for in the
relevant Customer Agreement.
1.35 "Designated Eligible Inventory" shall mean Inventory which:
(a) is subject to a repurchase obligation of a Designated
Customer pursuant to a Customer Agreement and such Designated Customer has
agreed to waive all rights of offset,
-6-
15
recoupment and deductions with respect to such repurchase obligation except as
expressly provided in such Customer Agreement;
(b) would satisfy all of the requirements for Eligible
Inventory in the absence of the relevant Designated Customer's right and
obligation to repurchase described in clause (a) above.
1.36 "Documents" shall mean this Agreement, the Notes, the Guaranties,
the Security Documents, the Financing Statements, the Letter of Credit
Agreements, the Customer Agreements, Access Agreements, the Lock-up Agreement
and all other documents, agreements and instruments delivered to Agent and/or
the Canadian Swingline Lender, in connection with this Agreement as the same may
be amended or modified from time to time.
1.37 "Dollars" and the sign "$" shall mean lawful money of the United
States of America.
1.38 "Dollar Amount" shall mean (i) with respect to each Advance made
or carried (or to be carried) in Dollars, the principal amount thereof and (ii)
with respect to each Advance made or carried (or to be made or carried) in an
Alternative Currency, the amount of Dollars which is equivalent to such amount
of Alternate Currency at the spot exchange rate determined by the Agent to be
available to it for the sale of Dollars for such Alternative Currency at
approximately 11:00 a.m. (Detroit time) two (2) Business Days before such
Advance is made, as such Dollar Amount may be adjusted from time to time
pursuant to Section 2.13 or 5.4 hereof. When used with respect to Alternative
Currency portion of an Advance being repaid or remaining outstanding at any time
or other amount of Dollars to be determined from an asset or other item
initially expressed as an amount of Alternative Currency, "Dollar Amount" shall
mean the amount of Dollars which is equivalent to the principal amount of such
Advance or other amount initially expressed as an amount of Alternative Currency
at the most favorable spot exchange rate determined by the Agent to be available
to it for the sale of Dollars for such Alternative Currency at the relevant
time.
1.39 "EBITDA" shall mean, as of the last day of any fiscal month or
quarter, Net Income plus the aggregate amounts deducted in determining Net
Income for such period in respect of taxes based on income, Michigan single
business tax, interest expense and depreciation and amortization, all determined
in accordance with GAAP; provided, however, that solely for the purpose of
calculating compliance with Section 11.4 hereof for periods in which
Restructuring Charges or Professional Fees have been incurred, the amount of
Restructuring Charges or Professional Fees incurred during such period of
calculation shall be added to the calculation of EBITDA for such period of
calculation.
1.40 "Eligible Accounts" shall mean an Account arising in the ordinary
course of the business of a Loan Party which meets each of the following
requirements:
(a) it is not owing more than ninety (90) days after the date
of the original invoice or other writing evidencing such Account;
-7-
16
(b) it arises from the sale or lease of goods and such goods
have been shipped or delivered to the account debtor; or it arises from services
rendered and such services have been performed;
(c) it is evidenced by an invoice, dated not later than the
date of shipment or performance, rendered to such account debtor, or some other
evidence of billing acceptable to Agent;
(d) it is not evidenced by any note, trade acceptance, draft
or other negotiable instrument or by any chattel paper, unless such note or
other document or instrument previously has been endorsed and delivered to
Agent;
(e) it is a valid, legally enforceable obligation of the
account debtor thereunder, and is not subject to any offset, counterclaim or
other defense on the part of such account debtor or to any claim on the part of
such account debtor denying liability thereunder in whole or in part;
(f) it is not an Account billed in advance, payable on
delivery, for consigned goods, for guaranteed sales, for unbilled sales, for
progress xxxxxxxx, payable at a future date in accordance with its terms,
subject to a retainage or holdback by the account debtor or insured by a surety
company;
(g) the Account is subject to a duly perfected Lien in favor
of the Agent on behalf of the Banks pursuant to the Security Documents ranking
in priority to all other Liens, which Lien has been duly registered, filed or
recorded in all applicable jurisdictions and all other steps necessary or of
advantage have been taken to create, perfect, preserve and protect such Lien;
(h) the Account does not constitute an obligation of: (i) any
Governmental Entity, unless such Account may be assigned to the Agent under
applicable law and all steps required by the Agent in connection therewith in
order that all monies due and to become due thereunder have been assigned to the
Agent in accordance with such laws, including notice to the applicable
Governmental Entity, have been duly taken, (ii) any Person organized, or located
in, a jurisdiction other than a state or territory of the United States or a
Province of Canada unless (x) the Account Debtor with respect thereto is a
subsidiary of General Motors Corporation, Ford Motor Company or DaimlerChrysler
Corporation organized under the laws of and located within the Republic of
Mexico or Brazil or (y) the Account is insured by export credit insurance
policies acceptable to Agent, the proceeds of which have been assigned to Agent
or (iii) any Affiliate of a Borrower; and
(i) the Account has not arisen out of a written order or
contract with or from an account debtor which by its nature or terms prevents,
restricts, forbids or makes void or unenforceable the assignment to the Agent of
such Account, or requires notice to, or the consent of, the account debtor.
An Account which is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Account.
-8-
17
1.41 "Eligible Equipment" shall mean Equipment owned by a Loan Party
which is:
(a) used in the ordinary course of such Loan Party's business;
(b) owned subject to a first perfected security interest
granted to Agent on behalf of the Banks and no other Liens; and
(c) subject to a duly perfected Lien in favor of the Agent
ranking in priority to all other Liens, which Lien has been duly registered,
filed or recorded in all applicable jurisdictions and all other steps necessary
or of advantage have been taken to create, perfect, preserve and protect such
Lien.
1.42 "Eligible Inventory" shall mean all Inventory of a Loan Party
which is in good and merchantable condition and is not obsolete or discontinued,
would properly be classified as "finished goods", "work-in-process" or "raw
materials" under GAAP, excluding:
(a) Inventory covered by or subject to a title retention
agreement or a seller's right to repurchase, or any consensual or nonconsensual
Lien (including without limitation purchase money security interests) other than
Liens in favor of Agent on behalf of Banks;
(b) any Inventory which is not subject to a duly perfected
Lien in favor of the Agent ranking in priority to all other Liens, which Lien
has been duly registered, filed or recorded in all applicable jurisdictions and
all other steps necessary or of advantage have been taken to create, perfect,
preserve and protect such Liens; and
(c) tooling inventory which is the subject of an Eligible
Tooling Invoice.
Inventory shall be valued at the lesser of cost or market value on a FIFO basis
and Inventory which is at any time Eligible Inventory, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be
Eligible Inventory.
1.43 "Eligible Tooling Invoices" shall mean invoices rendered and paid
by a Loan Party for payment in connection with a supplier's production of
tooling for such Loan Party, provided that (i) such Loan Party has in force a
contract for the sale of such tooling to a purchaser who is an automobile
manufacturer, a first tier supplier to an automobile manufacturer or other
Person acceptable to Agent, and provides a copy of such contract to Agent (ii)
such tooling is owned by such Loan Party; (iii) if such actions have been
requested by Agent or the Majority Banks, all steps deemed necessary by Agent to
perfect a first priority Lien on the relevant tooling in favor of Agent on
behalf of Banks shall have been taken, and (iv) each Eligible Tooling Invoice
shall cease to be an Eligible Tooling Invoice upon the earliest to occur of the
following:
(a) 240 days after the date of such invoice,
(b) delivery of the tooling related thereto to the Person
purchasing such tooling,
-9-
18
(c) default under or revocation or termination of the contract
or agreement pursuant to which such tooling is to be purchased from Loan Party,
(d) bankruptcy or insolvency of the Person purchasing such
tooling from the Loan Party or the supplier producing such tooling for such Loan
Party, or
(e) such tooling or Eligible Tooling Invoice becomes, or is
determined to be included within, Eligible Accounts Receivable, Eligible
Inventory or Eligible Equipment. For purposes of this definition, all goods or
invoices which would otherwise constitute "Eligible Tooling Invoices" which are
financed other than by Advances (including, without limitation, under the EDC
Financing) shall be excluded from this definition.
1.44 "Environmental Laws" shall mean the common law and all federal,
state, local and foreign laws or regulations, codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder, now or
hereafter in effect, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
constituent substances or wastes, including, without limitation, petroleum,
including crude oil or any fraction thereof, or any petroleum product
(collectively referred to as "Hazardous Materials"), into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), (ii) the manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport or handling of
Hazardous Materials, and (iii) underground storage tanks, and related piping,
and emissions, discharges, releases or threatened releases therefrom.
1.45 "Eligible Real Estate" shall mean Leasehold Real Estate and Real
Property of a Loan Party:
(a) which is used in the ordinary course of a Loan Party's
business;
(b) subject to a first perfected mortgage, deed of trust or
leasehold mortgage granted to Agent on behalf of Banks and no other Liens other
than Permitted Liens and (in the case of Leasehold Real Estate) Liens on the
owner's interests therein securing obligations of such owner; and
(c) for which Agent has received such surveys, appraisals,
title insurance, flood plain certificates, title opinions, environmental report
and other assurances and due diligence documentation as Agent shall require in
connection therewith.
1.46 "Equipment" means, with respect to any Person, all tools,
machinery, equipment, furniture, chattels, motor vehicles and accessories now
owned or hereafter acquired or reacquired by such Person, whether or not
conditionally or unconditionally sold to such Person.
1.47 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor act or code. Section references to ERISA are
to ERISA as in effect as of the date of this Agreement and any subsequent
amendment, supplement or substitution thereof.
-10-
19
1.48 "ERISA Affiliates" shall mean any entity, whether or not
incorporated, which is under common control or would be considered a single
employer with a Borrower within the meaning of Section 414(b), (c) or (m) of the
internal revenue code and regulations promulgated under those sections or within
the meaning of Section 4001(b) of ERISA and regulations promulgated under that
section.
1.49 "Equity Ownership Plan" shall mean the Talon Automotive Group,
Inc. Amended and Restated Equity Ownership Plan dated as of April 28, 1998.
1.50 "Event of Default" shall mean the Events of Default specified in
Sections 12.1 through 12.16 hereof.
1.51 "Facility Fee" shall mean the facility fees payable by Borrowers
to Agent for the account of the Banks pursuant to Section 2.10 hereof.
1.52 "Federal Funds Effective Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by it.
1.53 "Final Authorizing Order" shall mean a Final Order that contains
substantially the same terms and provisions as are set forth in the Interim
Authorizing Order, with such modifications as are acceptable to the Agent.
1.54 "Final Orders" shall mean: (a) an order of the Bankruptcy Court as
to which (i) the time for appeal has expired and no appeal has been timely taken
with respect to a finding of good faith under Section 364(e) of the Bankruptcy
Code, or (ii) any such appeal has been timely taken and such appeal has been
finally denied or dismissed; and (b) an order of the Canadian Court as to which:
(i) the time for appeal has expired and no appeal has been timely taken; or (ii)
any such appeal that has been timely taken has been finally denied or dismissed.
1.55 "First Day Orders" shall mean orders of the Bankruptcy Court and
the Canadian Court that are entered on or about the date the Cases are filed and
which are acceptable in form and substance to the Agent including any orders
permitting the Borrowers, or either of them, to pay holders of pre-petition
trade claims after the Petition Date.
1.56 "Financing Statements" shall mean financing statements filed in
accordance with the UCC, the Personal Property Security Act (Ontario) and any
other statutes deemed advisable by the Agent, in such filing offices as the
Agent deems advisable, describing the Agent (in its capacity as agent for the
Banks) as secured party and a Loan Party as debtor, covering the Collateral.
1.57 "GAAP" shall mean, at any time, generally accepted accounting
principles applied in a manner consistent with the application thereof used in
the financial statements of Borrowers referred to in Section 8.8 hereof.
-11-
20
1.58 "Guaranty" shall mean the TAG Guaranty, the Xxxxxx Guaranty, the
VS Guaranty and each other guaranty hereafter executed and delivered to Agent
and the Banks by a Loan Party pursuant to Section 10.9 hereof, in each case
guarantying payment and performance of all indebtedness and obligations of the
Borrowers hereunder.
1.59 "Hedging Agreements" shall mean any currency hedging agreement,
rate or currency sway or forward exchange agreement, or other rate protection or
foreign exchange agreement from time to time entered between a Borrower and one
or more of the Banks and, for the purposes of each Guaranty and other Security
Document, the obligations of the Borrowers under each such Hedging Agreement
shall be deemed to be obligations hereunder.
1.60 "Highest Lawful Rate" shall mean, with respect to each Bank, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on its Notes or
other indebtedness under laws applicable to such Bank which are in effect as of
the date hereof or, to the extent allowed by law, under such laws applicable to
such Bank which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws allow as of the date hereof.
1.61 "Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) the
deferred purchase price of assets or services which in accordance with GAAP
would be shown on the liability side of the balance sheet of such Person, (iii)
the face amount of all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder, (iv) all obligations of
any other Person secured by any Lien on any property owned by such first Person,
whether or not such obligations have been assumed by such first Person, and (v)
all capitalized lease obligations of such Person, (vi) all obligations of such
Person under interest rate agreements; provided, however, that the term
Indebtedness shall not include Affiliate Loans.
1.62 "Intellectual Property" means, with respect to any Person, any and
all issued patents and patent applications, industrial design registrations,
trade marks, registrations and applications therefor, trade names and styles,
logos, copyright registrations and applications therefor, all of the foregoing
owned by or licensed to such Person.
1.63 "Interest Period" shall mean, for each Prime-based Loan, an
initial period beginning on the date of the Advance thereof and ending on the
first Business Day of the month following the month in which such Advance is
made, and thereafter, successive Interest Periods ending on the first Business
Day of each month thereafter.
1.64 "Interim Authorizing Order" shall mean an interim order of the
Bankruptcy Court or the Initial Order of the Canadian Court in the form attached
hereto as Exhibit "I".
1.65 "Inventory" means, with respect to any Person, all inventory now
owned or hereafter acquired by such Person, including: (i) finished goods,
work-in-progress, raw materials, new and unused production, packing and shipping
supplies; (ii) all new and unused maintenance items; and (iii) all other
materials and supplies on hand to be used or consumed or which might be used or
consumed in connection with the manufacture, packing, shipping, advertising,
selling, or furnishing of goods.
-12-
21
1.66 "Leasehold Real Estate" means, with respect to any Person, real
estate held under a lease, agreement to lease or other right of occupation.
1.67 "Letter(s) of Credit" shall mean any standby letters of credit
hereafter issued by Agent at the request of TAG and for the account of a Loan
Party pursuant to Article 3 hereof or pursuant to Article 3 of the Existing
Agreement.
1.68 "Letter of Credit Agreement" shall mean in respect of each Letter
of Credit issued pursuant to this Agreement or the Existing Agreement, the
application of TAG requesting Agent to issue such Letter of Credit (including
the terms and conditions on the reverse side thereof or otherwise provided
therein), in the form and substance acceptable to Agent.
1.69 "Letter of Credit Fees" shall mean the fees payable to Agent for
the account of the Banks in connection with Letters of Credit pursuant to
Section 3.4 hereof.
1.70 "Letter of Credit Maximum" shall mean, as of any date, the lesser
of:
(a) Six Million Dollars ($6,000,000); or
(b) the Revolving Maximum minus the sum of the aggregate
principal amount of outstanding Loans
minus (in either case) the face amount of any Letters
of Credit issued pursuant to the Existing Agreement which remain unexpired and
unsurrendered.
1.71 "Letter of Credit Notice" shall mean Agent's notice of the
issuance of a Letter of Credit in the form attached hereto as Exhibit "D".
1.72 "Letter of Credit Obligation" shall mean the obligation of TAG
under each Letter of Credit Agreement to reimburse the Agent for each payment
made by the Agent under the Letter of Credit issued pursuant to such Letter of
Credit Agreement, together with all other sums, fees, charges and amounts which
may be owing under such Letter of Credit Agreement.
1.73 "Letter of Credit Payment" shall mean any amount paid or required
to be paid by the Agent in its capacity as issuer of a Letter of Credit as a
result of a draw against any Letter of Credit.
1.74 "Lien" means, with respect to any Property, any charge, mortgage,
pledge, hypothecation, security interest, lien, conditional sale (or other title
retention agreement or lease in the nature thereof), lease, servitude,
assignment, adverse claim, defect of title, restriction, trust, right to set-off
or other encumbrance of any kind in respect of such Property (including any Lien
accounted for as a capitalized lease obligation for purposes of a balance sheet
prepared in accordance with GAAP), whether or not filed, recorded or otherwise
perfected under applicable law.
1.75 "Loan" shall mean any one or more Swing Loan, Revolving Loan
and/or Letter of Credit Obligation (including Pre-Petition Loans outstanding),
or all of them, as the context indicates.
-13-
22
1.76 "Loan Party" shall mean each Borrower and each Subsidiary of a
Borrower.
1.77 "Lock-Up Agreement" shall mean that Agreement dated as of May 30,
2001, attached hereto as Exhibit "C", between the Borrowers and the holders of
at least two-thirds in number, and a majority in amount, of the Senior
Subordinated Notes, pursuant to which the noteholders agree, inter alia, to: (a)
refrain from taking any action to collect on the obligation of the Borrowers
arising out of, or related to, the Senior Subordinated Notes; and (b) vote for
acceptance of a plan of reorganization in the Bankruptcy Case, and an
arrangement in the CCAA Cases, acceptable to the Agent and the Banks.
1.78 "Majority Banks" shall mean Banks:
(a) that constitute not less than two-thirds in number of all
of the Banks; and
(b) that (i) so long as the Revolving Commitment is in effect,
have Percentages which, in aggregate, are not less than sixty six and two-thirds
percent (66 2/3%) or (ii) thereafter, hold outstanding Loans of not less than
sixty six and two-thirds percent (66 2/3%) of all Loans then outstanding.
1.79 "Material Adverse Effect" shall mean:
(a) any materially adverse effect with respect to the
operations, business, properties, assets, nature of assets, liabilities
(contingent or otherwise), financial condition or prospects of a Borrower; or
(b) any facts or circumstance as to which singly or in the
aggregate, create a reasonable likelihood of such a materially adverse change,
or a reasonable likelihood that a Borrower will be rendered unable to perform
obligations under any of the Documents, or a reasonable likelihood that Agent or
the Banks will be rendered unable to enforce in any material respect rights or
remedies purported to be granted them under any of the Documents.
1.80 "Mortgages" shall mean mortgages, deeds of trust or debentures
executed by a Loan Party pursuant to which such Person grants Agent (in its
capacity as agent for the Banks) a first priority mortgage on the Real Property
and/or Leasehold Real Estate of such Loan Party.
1.81 "Multiemployer Plans" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which Borrower or any ERISA
Affiliate is or has been required to contribute.
1.82 "Net Income" shall mean, for any period of any determination
thereof, the net income before extraordinary items all determined in accordance
with GAAP.
1.83 "Net Proceeds" shall mean, with respect to any sale or disposal of
any assets of a Borrower or any Subsidiary, the net proceeds of such event after
reasonable expenses associated with such sale or disposal (including reasonable
commissions, legal and accounting fees and expenses).
-14-
23
1.84 "Notes" shall mean any one or more of the promissory notes made by
Borrower to the Banks as evidence of Loans, or all of them, as the context
indicates.
1.85 "Pension Plans" shall mean any pension plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) which is or has been maintained
by or to which contributions are or have been made by a Borrower or any ERISA
Affiliate.
1.86 "Percentage" shall mean, with respect to any Bank, the percentage
set forth opposite its name on Exhibit "E" hereto, as such Percentages may
change from time to time pursuant to Section 14.5(a) hereto.
1.87 "Permitted Holders" shall mean (i) Xxxxxxxx X. Xxxxx, Xxxxxx X.
Xxxxx, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxx
X. Xxxxxx, Xxxxxxx T.O. Xxxxxx, Xxxxx X. Xxxxx or Xxxxxx X. Xxxxx, (ii) any
relative, family member or any Person controlled by any of the persons listed in
subparagraph (i) above, (iii) any trust including, without limitation, a
charitable remainder trust, created by or for the benefit of any of the persons
listed in subparagraphs (i) or (ii) above and (iv) any private foundation
created by any of the persons listed in subparagraphs (i) or (ii) above.
1.88 "Permitted Liens" shall mean:
(a) Liens for taxes, assessments or governmental charges or
claims not yet delinquent, or Liens for taxes, assessments or governmental
charges being contested in good faith and by appropriate proceedings for which
adequate reserves, (to the extent required by GAAP) have been established;
(b) Liens in respect of property or assets of a Loan Party
which were imposed by law in the ordinary course of business, such as carriers',
warehousemen's and construction Liens and other similar Liens arising in the
ordinary course of business, which are not delinquent or which are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or asset subject to
such Lien;
(c) Liens (other than any Lien imposed by ERISA or pursuant to
Environmental Laws) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other type
of social security, or to secure the performance of tenders, statutory
obligations, surety bonds, bids, leases, governmental contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations in respect of the payment for
borrow money or the equivalent);
(d) Easements, rights of way, restrictions, minor defects or
irregularities in title not interfering in any material respect with the
business of a Loan Party, in each case incurred in the ordinary course of
business and which do not materially impair for its intended purposes the Real
Property to which it relates and which do not materially adversely affect the
value of the Real Property to which it relates;
(e) The Lien of any judgment rendered which does not give rise
to a Default or Event of Default and Liens created by deposits of cash or cash
equivalents permitting the
-15-
24
relevant Loan Party to appeal court judgments that are being contested in good
faith by appropriate proceedings and do not give rise to a Default or an Event
of Default; and
(f) Assignments, leases or subleases granted to others not
interfering in any material respect with the ordinary conduct of the relevant
Loan Party's business and not materially affecting the value of the Collateral.
1.89 "Permitted Variances" shall mean variances from any line item
expenditure amounts shown on the Budget, not to exceed:
(a) with respect to any monthly period specified in the
Budget, fifteen percent (15%); and
(b) on a cumulative basis for the period beginning on the
Closing Date and ending on the date of any determination thereof fifteen percent
(15%).
1.90 "Person" shall mean an individual, corporation, partnership,
trust, incorporated or unincorporated organization, association, syndicate,
joint venture, joint stock company, or a government or any agent or political
subdivision thereof or other entity of any kind, and pronouns have a similarly
extended meaning.
1.91 "Post-Petition Advance(s)" shall mean any Loan or Advance
(including a Letter of Credit), made by the Agent and/or Banks pursuant to this
Agreement on and the Interim Authorizing Order or Final Authorizing Order or
after the Petition Date.
1.92 "Post-Petition Collateral" shall have the meaning set forth in the
Interim or Final Authorizing Order.
1.93 "Postponed Fee Rate" shall mean:
(a) in the event that the aggregate amount of Loans
outstanding at any time exceeds the amount of the Borrowing Base (determined
using only eighty percent (80%) of the forced liquidation of Eligible Equipment
for which Agent has obtained an appraisal in form and content satisfactory to
Agent - i.e. as if clause (x) of paragraph [(e)(i) were not a part of the
definition of Borrowing Base), .225%; and
(b) otherwise, .125%.
1.94 "Pre-Petition Loans" shall mean Loans (including Letters of
Credit) made by Agent and the Banks prior to the Petition Date pursuant to the
Existing Agreement.
1.95 "Prime Rate" shall mean:
(a) for all purposes other than those specified in clause (b)
below, the per annum interest rate established by Agent as its prime rate for
its borrowers as such rate may vary from time to time, which rate is not
necessarily the lowest rate on loans made by Agent at any such time, and
-16-
25
(b) with respect to Swing Loans made by the Canadian Swingline
Lender, the Canadian Swingline Lender's reference rate of interest for loans
made in Canadian Dollars to Canadian customers and designated as its "prime
rate," which rates are set by the Agent and Canadian Swingline Lender as their
prime rates for borrowers, based on their respective costs, desired return and
general economic conditions as such rates may vary from time to time, which
rates are not necessarily the lowest rate on loans made by the Lender or
Canadian Swingline Lender at any such time.
1.96 "Prime-based Loan" shall mean a Loan which bears interest at the
Prime-based Rate.
1.97 "Prime-based Rate" shall mean, as of any day:
(a) that rate of interest which is the greater of: (i) the
Prime Rate; or (ii) the Alternate Base Rate; plus
(b) the Applicable Margin then in effect.
1.98 "Professional Fees" shall mean fees paid or payable by Borrowers
for professional services (including consultant and legal fees and expenses to
be reimbursed to the Agent and Banks pursuant to the terms of this Agreement) in
amounts not exceeding and during the periods specified in the Budget.
1.99 "Projections" shall mean the analysis and financial projections
for the Borrowers and their respective business units, set forth in the Xxxxxx,
XxxXxxxxx & Xxxxxxxx Financial Projections for 2000-2002, copies of which were
delivered to Agent and the Banks on or about May 21, 2001.
1.100 "Property" means, with respect to any Person, any interest of
such Person in any land or property or asset, wherever situated, whether real or
immovable, personal, movable or mixed, tangible or corporeal, intangible or
incorporeal, including capital stock in any other Person.
1.101 "PSI Consolidation Plan" means the organizational and facility
restructuring plan as presented to the Banks on December 12, 2000 and included
in the CM&D projections. This plan includes the closure of four existing PSI
facilities, commonly referred to as Plant 5, Oxford, New Baltimore and APEC, in
2000 and 2001 and the movement of the related sales volume and corresponding
equipment into existing Xxxxxx operations in the Royal Oak, Michigan and
Windsor, Canada, and any remaining equipment would be sold. As part of the
closure, the current PSI division including the majority of it's administrative
infrastructure will be eliminated and/or transferred to the Xxxxxx Division of
the Talon Automotive Group.
1.102 "Quarterly Date" shall mean the last Business Day of each March,
June, September and December.
1.103 "Real Property" shall mean all right, title and interest of a
Loan Party in the real property (including, without limitation, that real
property described in Exhibit "F" hereto), whether as owner, lessee or
otherwise, and whether now existing or hereafter arising.
-17-
26
1.104 "Request for Loan" shall mean a request for an Advance under a
Note issued by a Borrower under this Agreement in the form annexed hereto as
Exhibit "G".
1.105 "Restructuring Charges" shall mean charges and expenses, for the
fiscal quarter of Borrowers ending December 31, 2000 up to Ten Million Two
Hundred Thousand Dollars ($10,200,000) and during the Borrowers' 2001 fiscal
year of up to One Million Five Hundred Thousand Dollars ($1,500,000) taken in
connection with the PSI Consolidation Plan.
1.106 "Revolving Loan" shall mean the revolving credit loans to be
advanced and readvanced to Borrowers pursuant to Section 2.1 hereof.
1.107 "Revolving Loan Commitment" shall mean One Hundred Million
Dollars ($100,000,000) or such lesser amount to which it may be reduced pursuant
to Section 2.11 or Section 4.4 hereof.
1.108 "Revolving Maximum" shall mean, as of any date, the lesser of:
(a) Revolving Loan Commitment, or (b) the Borrowing Base.
1.109 "Security Documents" means those agreements and other documents
in favor of the Agent for the benefit of itself and the Banks described in
Articles 7 and 8 and Section 10.9 hereof (or in the parallel Sections of the
Existing Agreement or Original Agreement), as such documents may be amended or
supplemented from time to time, and any other agreement or instrument which the
Agent for the benefit of itself and the Banks may from time to time deem
necessary for the purpose of obtaining, creating, perfecting, preserving or
protecting any of the Liens in favor of the Agent in any of the Collateral.
1.110 "Senior Subordinated Debt Documents" shall mean the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and all agreements
and documents executed in connection therewith.
1.111 "Senior Subordinated Notes" shall mean the Senior Subordinated
Notes issued by TAG pursuant to the Senior Subordinated Note Indenture in the
aggregate principal amount of One Hundred Twenty Million Dollars ($120,000,000)
due May 1, 2008.
1.112 "Senior Subordinated Note Indenture" shall mean the Senior
Subordinated Indenture between the TAG and U.S. Bank Trust National Association
as trustee, dated as of April 28, 1998, as amended or modified from time to
time.
1.113 "Services Agreement" shall mean that certain business services
agreement dated as of July 1, 1997, as amended and restated as of April 1, 1998,
between TAG and Talon L.L.C.
1.114 "Stock" shall mean, with respect to any Loan Party, any shares of
capital stock of any Person, or other equity or ownership interest in, any other
Person owned, held or otherwise controlled by such Loan Party.
1.115 "Subordination Agreement" shall mean a subordination agreement in
form and content satisfactory to Agent, subordinating payment of the Affiliate
Loans to the prior payment of all of the Indebtedness owing by Borrower to Agent
and the Banks.
-18-
27
1.116 "Subordinated Debt" of any Person shall mean, as of any date,
that Indebtedness of such Person for borrowed money which is expressly
subordinate and junior in right and priority of payment to the Advances and
other Indebtedness of such Person to the Agent and the Banks in manner and by
agreement satisfactory in form and substance to the Agent and subject to such
other terms and provisions, including without limitation maturities, covenants,
defaults, rates and fees, acceptable to the Agent, and shall include, without
limitation, all indebtedness owing pursuant to the Senior Subordinated Debt
Documents.
1.117 "Subsidiary" shall mean any corporation, limited partnership,
joint venture or other business entity in which a Borrower or a Subsidiary of
Borrower now or hereafter holds direct or indirect ownership of fifty percent
(50%) or more of the voting interests or equity interests.
1.118 "Superpriority Claim" shall mean: (i) a claim against a Borrower
in the Case which is an administrative expense claim authorized and established
by the Bankruptcy Court pursuant to Sections 364(c) and 507(b) of the Bankruptcy
Code and having priority over any or all administrative expenses of any kind,
including those specified in Sections 503(b), 507(b) and 546(c) of the
Bankruptcy Code and (ii) a claim holding a similar priority under the CCAA with
respect to the Canadian Case.
1.119 "Swingline Lender" shall mean Agent and the Canadian Swingline
Lender, as applicable.
1.120 "Swing Loan" shall mean the swing loans to be advanced and
readvanced to a Borrower from time to time pursuant to Section 2.2 hereof.
1.121 "Swing Loan Commitment" shall mean, as of any date,
(a) With respect to Swing Loans made by Agent to TAG, Ten Million
Dollars ($10,000,000);
(b) with respect to Swing Loans made by the Canadian Swingline
Lender to Xxxxxx, Twelve Million Five Hundred Thousand Canadian Dollars
($12,500,000 Cd);
minus, in either case, the principal amount of Pre-Petition Loans outstanding
and made by the Agent or Canadian Swingline Lender as "Swing Loans" under the
Existing Agreement; and
(c) with respect to all Swing Loans outstanding at any time
(whether advanced by Agent or the Canadian Swingline Lender, or both of them)
the principal amount by which the Revolving Maximum exceeds the aggregate amount
of Revolving Loans and Letters of Credit then outstanding.
1.122 "TAG Guaranty" shall mean a guaranty agreement executed and
delivered by the TAG to Agent and the Banks, pursuant to which the TAG
unconditionally guaranties payment and performance of the indebtedness and
obligations of Xxxxxx under this Agreement and the other Documents.
-19-
28
1.123 "Termination Date" shall mean the earlier to occur of: (a)
February 1, 2002; (b) July 30, 2001, if the Final Authorizing Orders have not
been entered by such date; (c) five Business Days following notice from the
Agent that a condition precedent to Post-Petition Advances cannot be satisfied;
(d) the effective date of any confirmed plan of reorganization; (e) the
effective date of any approved plan of arrangement in the CCAA Case; (f) the
consummation of a sale pursuant to Section 363 of the Bankruptcy Code or any
comparable provision of the CCAA, of all or substantially all of the assets of
either Borrower or of the equity of either Borrower; (g) the date on which the
Revolving Credit Commitments are terminated pursuant to Section 12.17 hereof.
1.124 "Termination Event" shall mean, (i) a "reportable event"
described in Section 4043 of ERISA or in the regulations thereunder (excluding
events for which the requirement for notice of such reportable event has been
waived by the PBGC) with respect to a Title IV Plan, or (ii) the withdrawal of a
Borrower or any ERISA Affiliate from a Title IV Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a Title IV Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings by the PBGC to terminate a Title
IV Plan or to appoint a trustee to administer a Title IV Plan, or (v) any other
event or condition which might constitute reasonable grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan, or (vi) the complete or partial withdrawal (within the
meaning of Section 4203 and 4205, respectively, of ERISA) of a Borrower or any
ERISA Affiliate from a Multiemployer Plan, or (vii) the insolvency or
reorganization (within the meaning of Section 4245 and 4241, respectively, or
ERISA) or termination of any Multiemployer Plan, or (viii) the failure to make
any payment or contribution to any Pension Plan or Multiemployer Plan or the
making of any amendment to any Pension Plan which could reasonably be expected
to result in the imposition of a Lien or the posting of a bond or other
security.
1.125 "Tooling Loan" shall mean all Advances at any time made and
outstanding hereunder for the purpose of financing dies, molds, tooling and
similar items to be produced for or by a Loan Party in connection with an
Eligible Tooling Invoice.
1.126 "Tooling Maximum" shall mean Twenty Million Dollars
($20,000,000).
1.127 "UCC" shall mean Public Act 174 of 1962 of State of Michigan, as
amended.
1.128 "Xxxxxx Guaranty" shall mean a guaranty agreement executed and
delivered by Xxxxxx to Agent and the Banks, pursuant to which Xxxxxx
unconditionally guarantees payment and performance of the indebtedness and
obligations of TAG under this Agreement and the other Documents.
1.129 "VS" shall mean VS Holdings, Inc., a Michigan corporation and a
wholly owned subsidiary of TAG.
1.130 "VS Guaranty" shall mean a guaranty agreement executed and
delivered by VS to Agent and the Banks pursuant to which VS unconditionally
guaranties payment and performance of the obligations of Borrowers under this
Agreement and the other Documents.
-20-
29
2. THE INDEBTEDNESS
2.1 POST-PETITION REVOLVING CREDIT ADVANCES. Each Bank for itself only,
subject to the terms and conditions of this Agreement, agrees to make
Post-Petition Advances as Prime-based Loans denominated in Dollars to the
Borrowers and to participate in Letters of Credit issued pursuant to Section
3.1, from time to time from and including the Effective Date to but excluding
the Termination Date, not to exceed in aggregate principal amount at any time
outstanding, the lesser of the Borrowing Base or the Revolving Maximum then in
effect.
2.2 SWING LOAN. Subject to the terms and conditions of this Agreement,
Agent and Canadian Swingline Lender agree to make Post-Petition Advances as
Prime-based Loans in the form of Swing Loans to Borrowers, in Dollars (in the
case of Agent) or Alternative Currency (in the case of the Canadian Swingline
Lender), in aggregate principal amount outstanding from time to time not to
exceed the Swing Loan Commitments applicable to Agent and Canadian Swingline
Lender.
2.3 PRE-PETITION LOANS. As of the Petition Date, the Lenders have
extended Pre-Petition Loans pursuant to the Existing Agreement as set forth on
Schedule 2.3 hereto. In the event any Borrower or the Agent receives in the
ordinary course of business, on or after the Petition Date, Cash Collateral,
such Cash Collateral shall be applied or deemed to have been applied as a
repayment of Pre-Petition Loans until such Pre-Petition Loans are fully paid,
and thereafter such Cash Collateral shall be applied or deemed applied to
Post-Petition Advances.
2.4 LIMITATION ON AMOUNT OF ADVANCES. The Dollar Amount of (i) the
aggregate principal amount of the Post-Petition Advances at any time outstanding
shall not exceed, at any time, the Borrowing Base, and (ii) the aggregate of all
Loans (including Post-Petition Advances and Pre-Petition Loans at the time
outstanding) shall not exceed the Revolving Loan Commitment; provided, further
that (A) the aggregate principal amount of Letters of Credit issued on or after
the Effective Date outstanding at any time shall not exceed the Letter of Credit
Maximum, and (B) the aggregate principal amount of all Post-Petition Revolving
Credit Advances outstanding at any time shall not exceed the Revolving Maximum
as of such time. The Borrowers will use the proceeds of the Post-Petition
Advances only to fund the amounts identified, and at the times specified, in the
Budget, subject only to Permitted Variances. The Borrowers acknowledge and agree
that the Agent and Banks have no obligation to fund (or allow the use of
Post-Petition Loans to pay) any expenditures not included in the Budget.
2.5 AMENDMENT AND RESTATEMENT. This Agreement amends and restates the
Existing Agreement, and all Advances and Letters of Credit outstanding under the
Existing Credit Agreement shall constitute Advances and Letters of Credit under
this Agreement and all fees and other obligations accrued under the Existing
Credit Agreement will continue to accrue and be paid under this Agreement,
subject to the rates and amounts specified in this Agreement. The Advances and
other obligations pursuant hereto are issued in exchange and replacement for the
Advances and other obligations under the Existing Agreement, shall not be a
novation or satisfaction thereof and shall be entitled to the same collateral,
plus additional collateral as specified herein.
-21-
30
2.6 NOTES. The Loans (including both Post-Petition Advances and the
Pre-Petition Loans) shall be evidenced by promissory notes made and delivered to
the Banks pursuant to the Original Agreement:
(a) in the case of the Revolving Loan, in the form attached as
Exhibit "G" to the Original Agreement made by TAG to each Bank in principal
amounts equal to each Bank's Percentage of the Revolving Loan Commitment;
(b) in the case of the Swing Loans, (i) advanced by Agent, in the
form attached as Exhibit "H" to the Original Agreement made by TAG to Agent in
the principal amount of Ten Million Dollars ($10,000,000) and (ii) advanced by
Canadian Swingline Lender, in the form attached as Exhibit "I" to the Prior
Agreement made by Xxxxxx to the Canadian Swingline Lender in the principal
amount of Twelve Million Five Hundred Thousand Canadian Dollars ($12,500,000
Cd).
2.7 TYPES OF LOANS AND MATURITY. Each of the Notes, and all principal
and interest then outstanding thereunder, shall mature and become due and
payable in full on the Termination Date. Each Loan from time to time outstanding
shall be a Prime-based Loan. The amount and date of each Loan, its Applicable
Interest Rate from time to time in effect, and the amount and date of any
repayment shall be noted on Agent's records, which records will be presumed
correct absent manifest error.
2.8 REQUESTS FOR LOANS. Borrower may request Post-Petition Advances by
delivery to Agent (and, in the case of a request by Xxxxxx for a Swing Loan from
Canadian Swingline Lender, simultaneous delivery to the Canadian Swingline
Lender) of a Request for Loan executed by an authorized officer and subject to
the following:
(a) each such Request for Loan shall indicate the Borrower who is
to utilize the proceeds thereof, Borrower who is to utilize the proceeds
thereof, Loan to which it relates and shall set forth all other information
required on the Request for Loan form;
(b) each such Request for Loan shall be delivered to Agent by 10:00
a.m. (Detroit time) on such proposed date;
(c) the principal amount of such Advance, plus the amount of any
outstanding Advance under the same Notes shall be at least: (i) in the case of a
Prime-based Loan (other than a Swing Loan), One Million Dollars ($1,000,000), or
a greater integral multiple of One Hundred Thousand Dollars ($100,000); and (ii)
in the case of a request for a Swing Loan, Two Hundred Fifty Thousand Dollars
($250,000) if made to Agent and Two Hundred Fifty Thousand Canadian Dollars
($250,000 Cd) if made to the Canadian Swingline Leader;
(d) a Request for Loan, once delivered to Agent, shall not be
revocable by Borrower;
(e) each Request for Loan shall constitute a certification by the
Borrower as of the date thereof that all of the conditions set forth in Sections
8.2 and 8.3 hereof are satisfied as of the date of such request and shall be
satisfied as of the date such Advance is requested;
-22-
31
(f) the principal amount requested, together with the principal
amount of all other Advances and Letter of Credit Obligations then outstanding
shall not exceed the Revolving Maximum;
(g) if such Request for Loan is for a Tooling Loan, the principal
amount requested, together with the principal amount of all other Tooling Loans
outstanding will not exceed the Tooling Maximum;
(h) if the Request for Loan is made by Xxxxxx (i) the Advance
requested shall be denominated in Canadian Dollars, and (ii) the Advance
requested shall be for a Prime-based Loan to be made by the Canadian Swingline
Lender.
2.9 DISBURSEMENT OF LOANS. Upon receiving any Request for Loan under
Section 2.8 hereof or upon Agent's or Canadian Swingline Lender's exercise of
its discretion to have their respective Swing Loans refunded by the Banks with
Revolving Loans pursuant to Section 2.14 hereof, Agent shall promptly notify
each Bank by wire, telex or by telephone, including facsimile transmission
(confirmed by wire or telex) of the date for such Advance, and the amount and
currency of the Advance to be made by said Bank pursuant to its Percentage of
the relevant Loan. Each Bank shall, not later than 2:00 p.m. (Detroit time) on
the date of such Advance, make available the amount of its Percentage of the
Advance in immediately available funds in the currency of the Advance to Agent,
at the office of Agent located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx.
Subject to submission of an executed Request for Loan without exceptions noted
in the compliance certification therein, Agent shall: (i) in the case of a
Revolving Loan made for the purpose of refunding a Swing Loan, apply the
proceeds of the Advance toward payment of the relevant Swing Loan, and (ii) in
each other case make available to Borrower, not later than 4:00 p.m. (Detroit
time) on such date, the aggregate of the amounts so received by it in like funds
by credit to an account of Borrower, maintained with Agent or to such other
account or third party as Borrower may direct. Unless Agent shall have been
notified by any Bank prior to the funding of any proposed Advance that such Bank
does not intend to make its Percentage of the Advance available, Agent may
assume that such Bank has made such amount available on such date and may, in
reliance upon such assumption, make available to Borrower a corresponding
amount. If such amount is not in fact made available to Agent by such Bank,
Agent shall be entitled to recover such amount on demand from such Bank. If such
Bank does not pay such amount forthwith upon Agent's demand therefor, the Agent
shall promptly notify Borrower and Borrower shall repay such amount to Agent.
Agent shall also be entitled to recover from such Bank or Borrower interest on
such amount in respect of each day from the date such amount was made available
by Agent to the date such amount is recovered by Agent, at a rate per annum
equal to the Applicable Interest Rate, in the case of Borrower and the Federal
Funds Effective Rate in the case of a Bank. The obligation of any Bank to make
any Advance shall not be affected by the failure of any other Bank to make any
Advance and no Bank shall have any liability to Borrower, the Agent, or any
other Bank for another Bank's failure to make any Advance hereunder.
2.10 FACILITY FEES. The Borrowers shall pay to the Agent, on behalf of
the Banks, the following described Facility Fees:
-23-
32
(a) on the first day of each month and on the date that the
Revolving Loan Commitment is terminated (whether pursuant to Section 2.11, 4.4
or 12.17 hereof), in the amount of the Applicable Margin for Facility Fees
multiplied by the average amount of the Revolving Loan Commitment in effect
during the monthly or other period ended as of the date for such payment; and
(b) unless, prior to such date, the Revolving Loan Commitment has
been reduced to zero and all Loans and Advances have been repaid in full and all
Letters of Credit have then expired and/or been surrendered to Agent, (i) on
October 1, 2001, in an amount equal to the Postponed Fee Rate multiplied by the
Revolving Loan Commitment then in effect (or, if the Revolving Loan Commitment
is then terminated, the aggregate amount of Loans, Advances and Letters of
Credit then outstanding), and (ii) on January 1, 2002, in an amount equal to the
Postponed Fee Rate multiplied by the Revolving Loan Commitment then in effect
(or, if the Revolving Loan Commitment is then terminated, the aggregate amount
of Loans, Advances and Letters of Credit then outstanding).
(c) a non-refundable closing fee, payable on the Effective Date,
in the amount of Five Hundred Thousand Dollars ($500,000).
Upon receipt of any such payment, Agent shall make prompt payment to
each Bank of its share of such Facility Fees or other fees, based on the
Percentages held by each Bank.
2.11 OPTIONAL REDUCTION OR TERMINATION OF REVOLVING LOAN COMMITMENT.
Upon at least five (5) Business Days' prior written notice to the Agent,
Borrowers may permanently reduce the Revolving Loan Commitment, in whole or in
part, provided that:
(a) each partial reduction of the Revolving Loan Commitment shall
be in an amount equal to Five Million Dollars ($5,000,000) or an integral
multiple thereof;
(b) each reduction or termination shall be accompanied by the
payment of the Facility Fee accrued on the amount of the Revolving Loan
Commitment so reduced through the date of such reduction or termination;
(c) the Revolving Loan Commitment as so reduced shall not be less
than the sum of undrawn face amount of outstanding Letters of Credit; and
(d) the Borrowers shall prepay Revolving Loans and/or Swing Loans
in the amount, if any, by which the principal amount of Revolving Loans and
Swing Loans, plus the aggregate face amount of all unexpired Letters of Credit
as of the date of such reduction exceeds the amount of the Revolving Loan
Commitment as so reduced, together with interest thereon to the date of
prepayment and any additional amounts required thereon pursuant to Section 5.1
hereof.
2.12 PREPAYMENT AND READVANCES. Each of the Loans from time to time
outstanding hereunder may be prepaid (subject to Sections 4.3) from time to time
in accordance with the terms of this Agreement. Amounts so prepaid shall be
available for readvance.
-24-
33
2.13 CURRENCY APPRECIATION; REDUCTION OF INDEBTEDNESS. If at any time
the Dollar Amount of Loans outstanding (including all Pre-Petition Loans and
Post-Petition Advances) added to the outstanding Letter of Credit Obligations,
calculated as of the last day of any Interest Period applicable to any Advance
exceeds the Revolving Maximum, the Borrowers shall, immediately on demand by
Agent, repay Advances of Revolving Loans or Swing Loans, or reduce any requests
for Advances of Revolving Loans or Swing Loans pending on such day, by an amount
equal to such excess.
2.14 SWING LOAN REFUNDING.
(a) The Agent or the Canadian Swingline Lender may at any time in
their sole and absolute discretion require that their respective Swing Loans be
refunded by a Revolving Loan which is a Prime-based Loan, and upon notice
thereof by the Agent or the Canadian Swingline Lender (as applicable) to the
Borrowers and the Banks, TAG shall be deemed to have requested a Revolving Loan
bearing interest at the Prime-based Rate in an amount equal to the Dollar Amount
of any such Swing Loan, and such Revolving Loan shall be made to refund such
Swing Loan. Such Revolving Loan shall be disbursed, and each Bank shall make its
Percentage thereof available, notwithstanding any failure to satisfy any
conditions for disbursement of any Loan set forth in Section 8.2 or 8.3 hereof
or any other condition; provided, however, that such disbursement: (A) shall not
be deemed to be a waiver of any Event of Default or Default, if any, and (B)
shall be made by each Bank on the Business Day after such notice is made to the
Bank. If for any reason (including without limitation as a result of the
occurrence of a bankruptcy filing), Revolving Loans may not be made and the
Agent is then requiring that any Swing Loan be refunded by a Revolving Loan,
effective on the date each Revolving Loan would otherwise have been made under
this Section 2.14, each Bank severally agrees that it shall unconditionally and
irrevocably, without regard to the occurrence of any Default or Event of
Default, in lieu of a disbursement of any Revolving Loan, to the extent of such
Bank's Percentage, purchase a participation interest in such Swing Loan.
(b) Each Bank's obligation to comply with the terms of this
Section 2.14, shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank or any Borrower may have
against the Agent, any Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default; (iii)
any adverse change in the condition (financial or otherwise) of any Borrower;
(iv) any breach of this Agreement by a Borrower or any other Bank; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
2.15 ACCOUNT NETTING. Borrowers authorize their respective Swingline
Lenders, daily or otherwise as and when determined by such applicable Swingline
Lender from time to time, to ascertain the position or net position (as the case
may be) between such Borrower and its Swingline Lender in respect to any deposit
accounts maintained by such Borrower with its Swingline Lender and that:
(a) if such position or net position is a credit in favor of such
Borrower, the applicable Swingline Lender may apply the amount of such credit or
any part thereof as a
-25-
34
repayment of the Swing Loan provided by the applicable Swingline Lender and the
applicable Swingline Lender will debit such account with the amount of such
repayment; and
(b) if such position or net position is a debit in favor of the
applicable Swingline Lender, the applicable Swingline Lender will make an
Advance under its Swing Loan in an amount as may be required to place such
account in such credit or net credit position as has been agreed between such
Borrower the applicable Swingline Lender from time to time, and the applicable
Swingline Lender may increase the unpaid balance owing under its Swing Loan, and
credit such account with the amount of such advance.
3. LETTERS OF CREDIT
3.1 LETTERS OF CREDIT. Pursuant to the Existing Agreement, certain
Letters of Credit have been issued by Agent, which Letters of Credit are
hereafter intended to constitute Letters of Credit under this Agreement for all
purposes. Subject to the terms and conditions of this Agreement, Agent may, at
the request of TAG, at any time and from time to time from the Closing Date
until the third (3rd) Business Day prior to the Maturity Date, issue additional
Letters of Credit for the accounts of Loan Parties, in an aggregate amount at
any one time outstanding not to exceed the Letter of Credit Maximum. Each Letter
of Credit shall provide an initial expiration date not later than the earlier of
(a) one (1) year from its date of issuance (subject to renewals) and that it is
available by drafts drawn at sight and presentation of documents.
3.2 CONDITIONS TO ISSUANCE. No Letter of Credit shall be issued
pursuant to Section 3.1 hereof unless, as of the date the issuance of such
Letter of Credit is requested:
(a) the face amount of the Letter of Credit requested, plus the
undrawn face amount of all other outstanding Letters of Credit will not exceed
the Letter of Credit Maximum;
(b) the face amount of the Letter of Credit requested, plus the
principal amount of all Loans then outstanding, will not exceed the Revolving
Maximum;
(c) the execution of the Letter of Credit Agreement with respect to
the Letter of Credit requested will not violate the terms and conditions of any
contract, agreement or other borrowing of TAG;
(d) TAG shall have delivered to Agent, not less than five (5)
Business Days prior to the requested date for issuance, the Letter of Credit
Agreement related thereto, together with such other documents and materials as
may be required pursuant to the terms thereof, and the terms of the proposed
Letter of Credit shall be satisfactory to Agent;
(e) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain Agent
from issuing the Letter of Credit, or any Bank from taking an acquiring of its
interest pursuant to Section 3.3 hereof, and no law, rule, regulation, request
or directive (whether or not having the force of law) of or from any
governmental authority shall prohibit or request that Agent refrain from
issuing, or any Bank refrain from taking an assignment of its interest in the
Letter of Credit requested or letters of credit generally;
-26-
35
(f) Agent shall have received the issuance fee required in
connection with the issuance of such Letter of Credit pursuant to Section 3.5
hereof; and
(g) all of the conditions set forth in Sections 8.2 and 8.3 hereof
are satisfied as of the date of such request and shall be satisfied as of the
date requested for issuance of such Letter of Credit.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by TAG of the matters set forth in this Section
3.2(a) through (g).
3.3 PARTICIPATIONS IN LETTERS OF CREDIT. Immediately upon the issuance
of any Letter of Credit, each Bank shall be deemed to have, without further
action on the part of Agent or any Bank, irrevocably and unconditionally
purchased and received, without recourse or warranty, a participation in and
assignment of Agent's engagement under such Letter of Credit in an amount equal
to each such Bank's then Percentage of the face amount of such Letter of Credit,
and Banks hereby absolutely and unconditionally assume, as primary obligors and
not sureties, and unconditionally agree to pay and discharge when due in
accordance with the terms hereof, their respective Percentages of the Letter of
Credit Payments under such Letters of Credit. Agent shall deliver to each Bank a
Letter of Credit Notice with respect to the issuance of each Letter of Credit,
not later than three (3) Business Days after issuance of each Letter of Credit,
specifying the amount thereof and each Bank's Percentage thereof.
3.4 LETTER OF CREDIT FEES. TAG agrees to pay to Agent, for the accounts
of the Banks, Letter of Credit Fees with respect to the undrawn face amount of
each Letter of Credit at a per annum rate equal to the Applicable Margin with
respect to Letters of Credit. Such fees shall be payable quarterly in arrears on
each Quarterly Date and shall be assessed for the actual number of days elapsed
from the date of the issuance of each Letter of Credit until the earlier of the
date of expiration of such Letter of Credit, or the date of surrender of such
Letter of Credit. Upon receipt of such payment, Agent shall make prompt payment
to each Bank of its share of the Letter of Credit Fees, based upon the
Percentage interests of each such Bank in the Letters of Credit to which such
Letters of Credit Fees relate.
3.5 ISSUANCE FEES. In connection with the Letters of Credit, TAG will
pay, for the sole account of the Agent, letter of credit issuance fees in the
amount of one-half percent (1/2%) of the face amount of each Letter of Credit
(payable on issuance) and standard administration, payment and cancellation
charges assessed by Agent, at the times, in the amounts and on the terms
separately agreed upon (or to be separately agreed upon from time to time)
between Agent and Borrower.
3.6 DRAWS UNDER LETTERS OF CREDIT.
(a) Upon receipt of any draw against a Letter of Credit, Agent
shall promptly notify TAG of the amount of such draw and the date for payment of
such draw. TAG hereby agrees to deposit with Agent, on the first Business Day
subsequent to such notice, funds sufficient to pay all Letter of Credit
Obligations with respect to such draws. So long as all of the conditions set
forth in Sections 2.8, 8.2 and 8.3 hereof are complied with, TAG shall be
entitled to fund such deposit with proceeds of an Advance requested in
accordance with Section 2.8
-27-
36
hereof. In the event that sufficient funds are not deposited with Agent on or
before the date for payment of a draw, Agent shall so notify Banks and,
immediately upon Agent's payment under any Letter of Credit and for all purposes
of this Agreement and the Documents, the amount paid as a result of such draw:
(i) shall constitute a Revolving Loan made by Banks in accordance with the
Percentages in effect on such date, whether or not TAG is then entitled to
request Advances under this Agreement or is in default hereunder or otherwise
(and TAG shall not be entitled to refuse any such Advance); (ii) shall be
evidenced by the Notes evidencing the Revolving Loans; (iii) shall bear interest
at the Default Rate applicable to Prime-based Loans which are Revolving Loans
until repaid; and (iv) shall be due and payable on demand.
(b) Any amounts so paid by Agent pursuant to a draft against any
Letter of Credit (regardless of whether it is considered to be an Advance), with
interest thereon as aforesaid, shall be considered to be a Revolving Loan for
all purposes of this Agreement and the Documents, and shall be covered thereby
to the full extent thereof.
(c) In the event that TAG fails to deposit with Agent funds
sufficient to pay Letter of Credit Obligations with respect to any draw (whether
through an Advance requested pursuant to Section 2.8 or otherwise) on a timely
basis, from the date of Agent's payment on such draw until such Letter of Credit
Obligations resulting from such draw shall have been paid, Borrowers shall not
be entitled to request or receive any direct Advance under Notes or to request
or receive any other Loans or the issuance of Letters of Credit hereunder.
3.7 FUNDING OF LETTER OF CREDIT PAYMENT AS ADVANCE. By or before 11:00
a.m. (Detroit Time) on the date for payment of any draw on any Letter of Credit,
Agent shall promptly notify each Bank by wire, telex or by telephone (confirmed
by wire, telecopy or telex) of the amount of such draw (providing each Bank with
a copy of the draft and accompanying certificate), and, if applicable, the
amount of resulting Advances to be made pursuant to Section 3.6(a) hereof. If
such an Advance is required pursuant to Section 3.6(a) hereof, each Bank hereby
irrevocably and unconditionally agrees to make available the amount of its
Percentage of such Advance in immediately available funds in Dollars to Agent,
at the office of Agent located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, no
later than 2:00 p.m. (Detroit time) on the date the Letter of Credit Payments
are to be made in connection with such draw. In the event such draw is not
considered to be or is subsequently determined not to constitute an Advance
hereunder, each Bank shall nevertheless be obligated to purchase from Agent a
participation interest in its Percentage of the draw, for an amount equal to its
Percentage thereof. If such amount is not in fact made available to Agent by
such Bank, as aforesaid, Agent shall be entitled to recover such amount on
demand from such Bank. If such Bank does not pay such amount forthwith upon
Agent's demand therefor, the Agent shall promptly notify TAG, and TAG shall
immediately repay such amount to Agent. Agent shall also be entitled to recover
from such Bank or TAG, as the case may be, interest on such amount in respect of
each day from the date such amount was paid by Agent pursuant to the draft
related thereto, at a rate per annum equal to: (i) in the case of TAG, the
Default Rate applicable to Prime-based Loans which are Revolving Loans; and (ii)
in the case of a Bank, the Federal Funds Effective Rate until two (2) Business
Days after such amount was paid by Agent and thereafter, the rate provided for
TAG in clause (i) of this sentence. The obligation of any Bank to make any
Advance hereunder shall not be affected by the failure of any other Bank to make
any Advance hereunder, or to fund its Percentage of any Letter of Credit
Payment, as the case may be, and no Bank shall have any
-28-
37
liability to either Borrower, the Agent, or any other Bank for another Bank's
failure to make any such Advance hereunder, or to fund the Percentage of any
other Bank.
3.8 OBLIGATIONS IRREVOCABLE. The obligations to make payments to Agent
with respect to Letter of Credit Obligations under Section 3.6 hereof, and the
obligations of Banks to make Advances with respect to and purchase interests in,
Letter of Credit Payments pursuant to Section 3.7 hereof, shall be irrevocable
and not subject to any qualification or exception whatsoever, including:
(a) invalidity or unenforceability of this Agreement or any other
Documents or any portions hereof or thereof;
(b) the existence of any claim, set-off, defense or other right
which any Borrower or any Bank may have against a beneficiary named in a Letter
of Credit, Agent, any Bank or any other Person;
(c) any draft, certificate or any other document presented in
connection with a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(d) the occurrence of any Default or Event of Default;
(e) payment by the Agent (other than as a result of its gross
negligence or willful misconduct) under any Letter of Credit against
presentation of a draft or accompanying certificate which does not comply with
the terms of the Letter of Credit;
(f) any failure, omission, delay or lack on the part of Agent or
any party to this Agreement or any of the Documents to enforce, assert or
exercise any right, power or remedy conferred upon Agent or any such party under
this Agreement or any Documents, or any other acts or omissions on the part of
the Agent or any such party;
(g) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets of any Borrower or
other Loan Party; the receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangements, composition with creditors
or readjustment or other similar proceedings affecting any Borrower, or any of
its assets, or any allegation or contest of the validity of this Agreement or
any of the Documents, in any such proceedings; and
(h) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, and any other event or action that would, in
the absence of this clause, result in the release or discharge by operation of
law of any Borrower from the performance or observance of any obligation,
covenant or agreement contained in this Agreement or any of the Documents.
3.9 RISK UNDER LETTERS OF CREDIT.
(a) In assigning and handling of Letters of Credit and any security
therefor, or any documents or instruments given in connection therewith, Agent
shall (as among Agent and
-29-
38
the Banks) have the sole right to take or refrain from taking any and all
actions under or upon the Letters of Credit; provided, however, that without the
prior written concurrence of the Banks, Agent shall not: (i) amend, modify,
terminate or release any of the obligations of Loan Parties respecting Letters
of Credit or under any of said documents or instruments or any security
interest, mortgage or guaranty given with respect thereto; (ii) compromise any
claim or waive any right or privilege against Loan Parties; or (iii) settle any
litigation respecting any Letter of Credit or any of said documents and
instruments.
(b) Subject to other terms and conditions of this Agreement, Agent
shall hold the Letter of Credit Agreements and the documents related thereto in
its own name and shall make all collections thereunder and otherwise administer
the Letters of Credit in accordance with Agent's regularly established practices
and procedures and Agent will have no further obligation with respect thereto.
In the administration of Letters of Credit, Agent shall not be liable (except
for the consequences solely resulting from its own willful misconduct or gross
negligence) for any action taken or omitted, and shall be entitled at all times
to rely upon on the advice of counsel, accountants, appraisers and other experts
selected by Agent and Agent may rely upon any notice, communication, certificate
or other statement from Borrowers, beneficiaries of Letters of Credit, or any
other Person which Agent believes to be authentic. Agent will, upon request,
furnish the Banks with copies of Letter of Credit Agreements, Letters of Credit
and Documents related thereto.
(c) In connection with the issuance and administration of Letters
of Credit and the assignments hereunder, Agent makes no representation and shall
have no responsibilities with respect to: (i) the obligations of the Loan
Parties or, the validity, sufficiency or enforceability of any document or
instrument given in connection therewith, or the taking of any action with
respect to same; (ii) the financial condition of, any representations made by,
or any act or omission of the Loan Parties or any other Person; or (iii) any
failure or delay in exercising any rights or powers possessed by Agent in its
capacity as issuer of Letters of Credit.
(d) If at any time Agent shall recover any part of any unreimbursed
amount for any Letter of Credit Obligation, or any interest thereon, Agent shall
receive same for the pro rata benefit of the Banks in accordance with their
respective Percentage interests therein and shall promptly deliver to each Bank
its share thereof, less Bank's pro rata share of the costs of such recovery,
including court costs and reasonable attorney's fees. If at any time any Bank
shall receive from any source whatsoever any payment on any such unreimbursed
amount or interest thereon in excess of such Bank's share of such payment, such
Bank will promptly pay over such excess to Agent for redistribution in
accordance with this Agreement.
3.10 INDEMNIFICATION. The Borrowers hereby indemnify and hold Agent and
each of the Banks harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses whatsoever which any such party may incur (or
which may be claimed against any such party by any person) by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to pay under, any Letter of Credit; provided, however, that the Borrowers shall
not be required to indemnify Agent or the Banks pursuant to this Section 3.10
for claims, damages, losses, liabilities, costs or expenses to the extent, but
only to the extent, caused by the willful and wrongful failure or willful and
wrongful misconduct or gross negligence of the Agent or such Bank. Nothing in
this Section 3.10 is intended nor shall be
-30-
39
deemed to limit, reduce or otherwise affect in any manner whatsoever the
reimbursement obligation of TAG contained in Section 3.6 hereof.
3.11 RIGHT OF REIMBURSEMENT. Each Bank agrees to reimburse the Agent on
demand, pro rata in accordance with their Percentages, for: (i) the
out-of-pocket costs and expenses of the Agent to be reimbursed by TAG pursuant
to any Letter of Credit Agreement or any Letter of Credit, to the extent not
reimbursed by TAG; and (ii) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, fees, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Agent (in its capacity as issuer of any Letter
of Credit) in any way relating to or arising out of this Agreement, any Letter
of Credit, any Letter of Credit Agreement, except to the extent that such
liabilities, losses, costs or expenses were incurred by Agent as a result of
Agent's gross negligence or willful misconduct.
4. INTEREST, FEES AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS,
PREPAYMENTS
4.1 INTEREST. The Notes and the Loans (including all Pre-Petition Loans
and Post-Petition Advances) hereunder shall bear interest from the Effective
Date on the unpaid principal balance thereof from time to time outstanding at
the Applicable Interest Rate, provided, however, that in no event shall any
Notes or Loans bear interest at a rate greater than its Highest Lawful Rate.
Interest with respect to all Loans shall be payable on the last day of each
Interest Period. Notwithstanding the foregoing, in the event and so long as an
Event of Default shall exist, all principal outstanding under the Notes shall
bear interest, payable on demand, from the date of such Event of Default or
acceleration at a rate per annum equal to the Default Rate, provided, however,
that in no event shall any Bank's Notes, Loans or other Indebtedness bear
interest at a rate greater than the Highest Lawful Rate applicable to such Bank.
4.2 BASIS OF COMPUTATION. The amount of all interest and fees hereunder
shall be computed for the actual number of days elapsed on the basis of a year
consisting of three hundred sixty (360) days. For the purposes hereof, whenever
interest is calculated on the basis of a year of 360 days or 365 days, each rate
of interest determined pursuant to such calculation expressed as an annual rate
for the purposes of the Interest Act (Canada) is equivalent to such rate as so
determined multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by 360 or 365 days as the case may be.
The principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Agreement, and the rates of interest stipulated in this
Agreement are intended to be nominal rates and not effective rates or yields.
4.3 PREPAYMENTS. The Borrowers may prepay Revolving Loans or Swing
Loans in whole at any time or in part from time to time, without premium or
penalty but with accrued interest on the principal being prepaid to the date of
such prepayment, provided that each prepayment shall be applied to Pre-Petition
Loans first, until such Pre-Petition Loans have been fully paid and satisfied.
Each prepayment under this Section 4.3 shall be made to the Agent, and promptly
upon receipt thereof, the Agent shall (except in the case of a payment on a
Swing Loan) remit to each Bank its share thereof in accordance with its
Percentage. In each notice of
-31-
40
prepayment under this Section 4.3, the Borrowers shall specify the date of
prepayment, the amount of the prepayment and the Advances to be prepaid.
4.4 MANDATORY REPAYMENTS. Immediately upon receipt of any proceeds of
any sale or other disposal of assets by a Borrower or other Loan Party (other
than sales of inventory in the ordinary course of business): (a) the Revolving
Loan Commitment shall be automatically and permanently reduced by an amount
equal to the Net Proceeds thereof, and (b) the Borrowers shall deliver the Net
Proceeds of such sale or other disposition, in the form received, to Agent for
application on Revolving Loans or Swing Loans. Each such prepayment shall be
made in accordance with Section 4.4 hereof; provided, however that such
prepayment shall not be required to be in the minimum amounts specified under
clause (i) of Section 4.3.
5. SPECIAL PROVISIONS
5.1 INCREASED COSTS. In the event that any change after the date hereof
in applicable law, treaty or governmental regulation, or in the interpretation
or application thereof, or compliance by Agent or any Bank with any request or
directive (whether or not having the force of law) from any central bank or
other financial, monetary or other authority:
(a) shall subject any of the Banks or Agent to any tax, duty or
other charge with respect to any Loan or any Note or shall change the basis of
taxation of payments to any of the Banks of the principal of or interest on any
Loan or any Note or any Letter of Credit or any other amounts due under this
Agreement (except for changes in the rate of tax on the overall net income or
gross receipts of any of the Banks or Agent imposed by the jurisdiction in which
Agent's or such Bank's principal executive office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System), risk-based capital requirement, liquidity ratio or special deposit, or
similar requirement against assets of, deposits with or for the account of, or
credit extended by any of the Banks or Agent or shall impose on any of the Banks
or Agent or the foreign exchange and interbank markets or other condition
affecting any Loan or any of the Notes or any Letter of Credit or any commitment
of Agent or any Bank under this Agreement;
and the result of any of the foregoing is to increase the costs to any of the
Banks or Agent of making, renewing or maintaining any part of the Loans or its
commitments hereunder or to reduce the amount or rate of return on any sum
received or receivable by, or the rate of return on the capital of, Agent or any
of the Banks under this Agreement, or under the Notes or under any Letter of
Credit Agreement, then such Bank (if applicable) shall promptly notify Agent,
and Agent shall promptly notify Borrowers and (if applicable) such Bank or Banks
of such fact and demand compensation therefor and, Borrowers hereby agree to pay
to Agent or such Bank such additional amount or amounts as will compensate such
Agent or Bank or Banks for such increased costs or reduced return within thirty
(30) days of such notice. A certificate of a Bank demanding such compensation
setting forth in reasonable detail the basis for determining such additional
amount or amounts necessary to compensate shall be conclusively presumed to be
correct save for manifest error.
-32-
41
5.2 AVAILABILITY OF ALTERNATIVE CURRENCY. The Agent and the Banks shall
not be required to make any Advance requested to be made in Alternative Currency
if, at any time prior to making such Advance, the Agent shall determine, in its
sole discretion, that (i) deposits in the Alternative Currency in the amounts
and maturities required to fund such Advance will not be available to the Agent
or any Bank; (ii) a fundamental change has occurred in the foreign exchange or
interbank markets with respect to the applicable Alternative Currency
(including, without limitation, changes in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls); or (iii) it has become otherwise materially impractical for the Agent
or any Bank to make such Advance in the applicable Alternative Currency. The
Agent shall promptly notify the Borrowers and Banks of any such determination.
5.3 REFUNDING ADVANCES IN SAME CURRENCY. If pursuant to any provisions
of this Agreement, the Borrower repays one or more Advances and on the same day
borrows an amount in the same currency, the Agent shall apply the proceeds of
such new borrowing to repay the principal of the Advance or Advances being
repaid and only an amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be remitted by the Agent to the
relevant Borrower, or by such Borrower to the Agent, as the case may be.
5.4 JUDGMENT CURRENCY. The obligation of Borrowers to make payments of
the principal of and interest on the Notes and any other amounts payable
hereunder in the currency specified for such payment herein or in the Notes
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment, which is expressed in or converted into any other currency, except
to the extent that such tender or recovery shall result in the actual receipt by
the Bank of the full amount of the particular currency expressed to be payable
herein or in the Notes. The Agent shall, using all amounts obtained or received
from Borrowers pursuant to any such tender or recovery in payment of principal
of and interest on the Notes, promptly purchase the applicable currency at the
most favorable spot exchange rate determined by the Agent to be available to it.
The obligation of Borrowers to make payments in the applicable currency shall be
enforceable as an alternative or additional cause of action solely for the
purpose of recovering in the applicable currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the currency
expressed to be payable herein or in the Notes.
6. PAYMENTS
6.1 PAYMENT PROCEDURE.
(a) Except as specifically set forth herein with respect to
payments to be made to the Canadian Swingline Lender in connection with Swing
Loans made by it, all payments by the Borrowers of principal of, or interest on,
the Notes or of Facility Fees, or of Letter of Credit Obligations or Letter of
Credit Fees and Agent's Fees, shall be made without setoff, deduction or
counterclaim on the date specified for payment under this Agreement not later
than 11:00 a.m. (Detroit time) in immediately available funds to Agent. Upon
receipt of each such payment, the Agent shall make payment to each Bank in like
funds on the same day of all amounts received by it to the extent received for
the account of such Bank.
(b) Unless the Agent shall have been notified by the Borrowers
prior to the date on which any payment to be made by Borrowers is due, that the
relevant Borrower does not
-33-
42
intend to remit such payment, the Agent may, in its discretion, assume such
payment has been remitted when so due and the Agent may, in reliance upon such
assumption, make available to each Bank on such payment date an amount equal to
such Bank's share of such assumed payment. If such payment has not in fact been
remitted to the Agent, each Bank shall forthwith on demand, repay to the Agent
the amount of such assumed payment made available to such Bank, together with
the interest thereon, in respect of each day from and including the date such
amount was made available by the Agent to such Bank to the date such amount is
repaid to the Agent at a rate equal to the Federal Funds Effective Rate, as the
same may vary from time to time.
(c) Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall be made (except as specifically
indicated to the contrary herein) on the next succeeding Business Day and such
extension of time shall be included in computing interest, if any, in connection
with such payment.
(d) All payments of principal and interest on each Advance shall be
payable in the currency in which such Advance was originally made. All other
payments of, fees and reimbursements by Borrowers to Agent and/or the Banks
shall be made in Dollars.
6.2 APPLICATION OF PROCEEDS. Notwithstanding anything to the contrary
in this Agreement or in any other Document, any proceeds received by the Agent
or any of the Banks after the Petition Date, including but not limited to any
offsets, voluntary payments by Borrowers or others and any other sums received
or collected in respect of the indebtedness hereunder, shall be applied first to
the costs and expenses of Agent in enforcement and collection and, second, to
payment in full of the Pre-Petition Loans, third, to the payment in full of the
Post-Petition Advances, fourth, to any other indebtedness and obligations of
Borrowers hereunder and then, if there is any excess, to Borrowers.
6.3 PRO-RATA RECOVERY. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the indebtedness and
obligations of Borrowers hereunder in excess of its pro rata share of payments
then or thereafter obtained by all Banks upon all such indebtedness and
obligations, such Bank shall purchase from the other Banks such participations
in the Notes and/or Letter of Credit Obligations held by them as shall be
necessary to cause such purchasing Bank to share the excess payment or other
recovery ratably in accordance with the respective aggregate principal amounts
of each Bank's Loans and risk participations in Letters of Credit outstanding as
of the date of the Event of Default; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing holder, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. To the extent any
payment received by Agent or any Bank is deemed a preference, fraudulent
transfer or otherwise by a court of competent jurisdiction which requires Agent
or any Bank to disgorge such payment, then such payment will be deemed to have
never occurred and the Loan will be increased accordingly.
6.4 DEPOSITS AND ACCOUNTS. In addition to and not in limitation of any
rights of any Agent, Bank or other holder of any Note or assignee of Letter of
Credit Agreements and Letter of Credit Obligations under applicable law, Agent,
each Bank and each other such holder shall, in
-34-
43
the event and so long as there exists an Event of Default and without notice or
demand of any kind, have the right to liquidate and collect all property or
assets of any Borrower (including deposits and other credits), whether presently
owned or hereafter acquired, in possession or control of (or owing by) Agent or
such Bank or other holder for any purpose, and to apply the proceeds of any such
liquidations and collections, and offset any amounts owing to Borrowers (or
either of them) against obligations hereunder and under the Notes and the
Documents, provided, however, that any such amount so applied by Agent or such
Bank or other holder on any of the Notes shall be subject to the provisions of
Section 6.2 and 6.3.
6.5 NET PAYMENTS. All payments by Loan Parties under this Agreement or
any Document shall be increased and made in such amounts as may be necessary in
order that all such payments received (after deduction or withholding for or on
account of any present or future taxes, levies, imposts, duties or other charges
of whatsoever nature, including interest and penalties, imposed by any
government or any political subdivision or taxing authority thereof, other than
any tax on or measured by the net income of a Bank pursuant to the income tax
laws of the United States or of the jurisdiction in which it is incorporated or
the jurisdiction where such Bank's lending office is located or in which it has
any other contacts or connection that would subject it to taxation therein
(collectively, "Taxes") including deductions applicable to additional sums
payable under this Section 6.5), shall not be less than the amounts otherwise
specified to be paid under this Agreement and/or the Documents. The Loan Parties
agree to make the required withholding and pay the full amount withheld to the
relevant taxing authority. A certificate as to the calculation of any additional
amounts payable to a Bank under this Section 6.5 submitted to the Borrowers by
such Bank shall, absent manifest error, be presumed correct for all purposes.
With respect to each deduction or withholding for or on account of any Taxes,
the relevant Loan Party shall promptly furnish to each Bank such certificates,
receipts and other documents as may be required (in the judgment of such Bank)
to establish any tax credit to which such Bank may be entitled. Borrowers agree
to reimburse each Bank, upon the written request of such Bank, for taxes imposed
on or measured by the net income of such Bank pursuant to the laws of the United
States of America, any State or political subdivision thereof, or the
jurisdiction in which such Bank is incorporated, or a jurisdiction in which the
principal office or lending office of such Bank is located, or under the laws of
any political subdivision or taxing authority of any such jurisdiction, as such
Bank shall determine are or were payable by such Bank in respect of amounts
payable to such Bank pursuant to this Section 6.5.
6.6 TAX TREATY CERTIFICATE. Each Bank (and each Person who becomes a
Bank pursuant to Section 14.5 hereof) that is not incorporated under the laws of
the United States of America or a state thereof, or which is lending from a
lending office that is not incorporated under the laws of the United States of
America or a state thereof agrees that, on or prior to the date it becomes a
Bank hereunder, it will deliver to Borrowers and the Agent duly completed copies
of United States Internal Revenue Service Form W-8 BEN or W-8 ECI, or any
successor applicable form (a "Tax Form"), certifying that such Bank is entitled
to receive payments hereunder payable to it without deduction or withholding of
any United States Federal taxes. Each Bank that delivers a Tax Form pursuant to
the immediately preceding sentence further agrees to deliver to Borrowers and
Agent further copies of such Tax Form or other manner of certification, as the
case may be, on or before the date that any such form or certification expires
or becomes obsolete or upon the occurrence of any event requiring a change in
the most recent form or certification previously delivered by it, unless in any
such case there has occurred, on or
-35-
44
prior to the date on which any such delivery would otherwise be required, any
change in law, rule, regulation, treaty, convention or directive, or any change
in the interpretation or application of any thereof, that renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form or certification with respect to it. Notwithstanding
any provision of Section 6.5 to the contrary, Loan Parties shall not have any
obligation to pay any Taxes (except to the extent required by law) pursuant to
Section 6.5 to the extent that such Taxes result from: (i) the failure of any
Bank to comply with its obligations pursuant to this Section 6.6; or (ii) any
representation made on a Tax Form by such Bank proving to have been incorrect,
false or misleading in any material respect when made or deemed to be made.
6.7 REPLACEMENT OF BANKS. In the event and so long as any Bank shall
require Borrower to pay additional amounts pursuant to Section 5.1 or 6.5 hereof
or its obligation to make Loans denominated in Alternative Currency suspended
pursuant to Section 5.2 hereof, so long as there does not exist any Event of
Default hereunder, Borrower shall be entitled to (without prejudice to such
Bank's right to receive such additional amounts) require such Bank to assign its
interests hereunder and in the Loans (in accordance with the procedures and
subject to the restrictions set forth in Section 14.5(a) hereof) to such other
bank or financial institution as may be selected by Borrower and approved by
Agent.
-36-
45
7. COLLATERAL AND PRIORITY
7.1 SECURITY FOR THE POST-PETITION INDEBTEDNESS. Pursuant to the
Interim Authorizing Orders and the Final Authorizing Orders, as security for the
full and timely payment and performance of all Indebtedness now existing. or
hereafter arising, the Borrowers have granted to the Agent a valid, binding
enforceable, duly perfected security interest in the Post-Petition Collateral,
subject only to liens specified in the Interim Orders and the Final Orders.
7.2 PERFECTION OF SECURITY INTERESTS. At the request of the Agent, the
Borrowers shall execute and deliver to the Agent documentation satisfactory to
the Agent evidencing the security interests and liens granted hereby and
providing for the perfection of such security interests and liens, including,
without limitation, financing statements and assignments of notes, and the
automatic stay provisions of Section 362 of the Bankruptcy Code, and the stay
entered in the CCAA Case, are modified to permit the execution, delivery and
filing of such documentation; provided however, that no such documentation shall
be required as a condition to the validity, priority or perfection of any of the
security interests or liens created pursuant to this Agreement or any other
document, which security interests and liens shall be deemed valid and properly
perfected upon entry of the Interim Authorizing Orders. The Borrowers hereby
irrevocably make, constitute and appoint the Agent (and all other persons
designated by the Agent for that purpose) as the Borrowers' true and lawful
agent and attorney-in-fact to sign such Borrower's name on any such agreements,
instruments and documents referred to in this Section 7.2 and to deliver such
agreements, instruments and documents to such persons as the Agent in its sole
discretion, may elect. The Borrowers agree to pay on demand any recording tax,
filing fees or other cost incurred by the Agent in connection with recording or
filing any documentation requested under this Section 7.2.
7.3 SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIM. Subject to the
provisions of Section 14.18, the Post-Petition Advances and all other
obligations of the Borrowers arising hereunder after the Effective Date shall
constitute, in accordance with Section 364(c)(1) of the Bankruptcy Code, a claim
having priority over any and all administrative expenses of the kind specified
in Section 503(b) or 507(b) of the Bankruptcy Code or any comparable provision
of the CCAA or the orders entered in the CCAA Case.
7.4 ADDITIONAL ADEQUATE PROTECTION. Any of the Banks reserves, with
respect to Pre-Petition Loans, the right to petition the Bankruptcy Court or the
Canadian Court for additional adequate protection with respect to any
Pre-Petition Collateral and to retain all rights under the Existing Credit
Agreement, the Bankruptcy Code, or otherwise; provided that, if such additional
adequate protection causes the Borrowers to violate the Budget, then the amount
of such increase in disbursements to the Banks required by such additional
adequate protection shall not be included in calculating compliance with the
Budget.
8. CONDITIONS
8.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND EFFECTIVE DATE. The right
of Borrowers to request the initial Loans and Letters of Credit pursuant to this
Agreement is subject to, and the Closing Date of this Agreement shall be, the
date of satisfaction of the following conditions:
-37-
46
(a) DOCUMENTS EXECUTED AND FILED. The Borrowers shall have executed
(or caused to be executed) and delivered to the Agent and, as appropriate, all
of the documents, instruments and agreements indicated on the Closing Checklist
and each such document, instrument and other agreement shall be in form
satisfactory to Agent and the Majority Banks.
(b) PREVIOUSLY EXECUTED AND/OR DELIVERED DOCUMENTS. Borrowers (and
each other Loan Party, by its acknowledgment hereof) hereby acknowledge and
agrees:
(i) Each of them are party to certain of the "Documents"
(as defined in the Original Agreement and the Existing
Agreement) and it is intended and agreed that each such
"Document" so executed and/or delivered in connection
with the Original Agreement or Existing Agreement shall
continue in full force and effect in connection with
this Agreement and shall constitute a Document as
defined herein;
(ii) To the extent that any "Document" executed in
connection with the Original Agreement or Existing
Agreement (including each Note and Security Document)
to which a Borrower or other Loan Party is party
contains any reference to the Original Agreement or
Existing Agreement, each such reference is hereby
deemed amended to constitute a reference to this
Agreement;
(iii) Each of the security agreements included in the
Documents to which they are parties are hereby amended
to replace, in Section 6.1 of each such security
agreement the words "so long as any Event of Default
exists, at the sole discretion of Agent, the
Indebtedness may be put on a Remittance Basis...," with
the words "The Indebtedness shall be on a Remittance
Basis..."
(iv) Each security interest, Lien, mortgage or other
encumbrance granted pursuant to "Documents" executed
and/or delivered under or pursuant to the Original
Agreement or Existing Agreement are intended to
continue hereunder from the original dates of the
grants, attachment and perfection thereof under such
"Documents" executed and/or delivered in connection
with the Original Agreement or Existing Agreement.
(c) CLOSING FEE. Each of the Banks shall have been paid the closing
fee required under Section 2.10(c) hereof.
(d) AGENT'S FEE. Agent shall have been paid such portions of the
Agent's Fees as are due and payable on the Closing Date pursuant to a separate
fee letter between Agent and Borrowers dated June 27, 2001. Such Agent's Fee
shall be deemed fully earned as of the Closing Date and shall not be refundable
under any circumstance.
-38-
47
(e) OPINION OF BORROWER'S COUNSEL. Agent shall have received, with
signed copies thereof for each Bank, opinions of counsel to the Loan Parties
addressed to Agent and the Banks covering such matters as Agent shall require.
(f) APPROVAL OF AGENT'S COUNSEL. All actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all other related legal matters shall
have been satisfactory to and approved by legal counsel for the Agent, and said
counsel shall have been furnished with such certified copies of actions and
proceedings and such other instruments and documents as they shall have
reasonably requested.
8.2 CONDITIONS FOR FIRST DISBURSEMENT. The obligation of the Agent and
the Banks to make the first Post-Petition Advance hereunder is subject to
receipt by each Bank and the Agent of the following documents and completion of
the following matters, in form and substance satisfactory to each Bank and the
Agent:
(a) INTERIM AUTHORIZING ORDERS. A true copy of the Interim
Authorizing Orders entered by the Bankruptcy Court and the Canadian Court.
(b) CUSTOMER AGREEMENTS. Agent and the Banks shall have received,
in form and substance satisfactory to the Agent and the Banks, such
acknowledgments and confirmations from the Designated Customers with respect to
the customer accommodations and credit enhancements provided for by the Customer
Agreements and the Customer Agreements shall have been expressly assumed by
Borrowers and shall be in full force and effect.
(c) OTHER ORDERS. No orders shall be entered by the Bankruptcy
Court which the Agent or Banks reasonably determine will have a materially
adverse impact on the Borrowers, their ability to continue their respective
business operations, or the interests of Agent and the Banks in the Collateral
security position. In addition, all First Day Orders shall have been entered and
true copies of such order shall have been delivered to the Agent.
(d) LOCK-UP AGREEMENT. True, executed copies of the Lock-up
Agreement and such evidence as Agent and the Banks that such Lock-Up Agreements
continue in full force and effect.
8.3 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the Agent and
the Banks to make Advances and Loans (other than Revolving Loans required for
the purpose of refunding Swing Loans) and the obligation of Agent to issue any
Letter of Credit shall be subject to the satisfaction of the following
conditions:
(a) EFFECTIVENESS. The Effective Date shall have occurred and the
Termination Date shall not have occurred.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of the
making of such Loan or Advance or the issuance of such Letter of Credit and
after giving effect thereto: (i) there shall exist no Default or Event of
Default; and (ii) all representations and warranties contained herein or in the
other Documents shall be true and correct in all material respects.
-39-
48
(c) ADVERSE CHANGE, ETC. Except for those events specifically
described in the recitals to this Agreement, since May 31, 2001, nothing shall
have occurred or become known which the Agent or the Banks shall have determined
has a Materially Adverse Effect.
(d) ENFORCEABILITY OF DOCUMENTS. Both before and after such
Advance, the obligations of the Borrowers in the Documents shall be valid,
binding and enforceable.
(e) CONTINUATION OF ORDERS. The Interim Authorizing Orders, or the
Final Authorizing Orders if they have been entered, shall be in full force and
effect as of the date of such extension of credit and shall not have been
vacated, reversed, modified or amended in any respect, and, in the. event that
such order is the subject of any pending appeal, no performance of any
obligation of any party hereto shall have been stayed pending appeal.
9. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this Agreement
and to make Loans and Advances hereunder, the Borrowers represent and warrant to
the Agent and the Banks:
9.1 CORPORATE STATUS. Each Loan Party is a duly organized and validly
existing corporation in good standing under the laws of the jurisdiction of its
organization, has the corporate or other organizational power and authority and
has obtained all requisite governmental licenses, authorizations, consents and
approvals necessary to own and operate its property and assets and to transact
the business in which it is engaged and presently proposes to engage, including,
without limitation, those required by the Environmental Laws, and is duly
qualified and is authorized to do business in, and is in good standing in, all
jurisdictions where by virtue of the nature of its activities or extent of its
properties it is required to be so qualified and where the failure to be so
qualified would have a Material Adverse Effect.
9.2 CORPORATE POWER AND AUTHORITY; BUSINESS. Subject only to the entry
of the Interim Authorizing Order and the Final Order each Loan Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which they are party and each of them has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Documents to which they are party and has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of the Borrowers and/or
other Loan Party thereto enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or by equitable
principles relating to enforceability, good faith and fair dealing.
9.3 NO VIOLATION. Neither the execution, delivery or performance by the
Loan Parties of the Documents, nor compliance with the terms and provisions
thereof, nor the consummation of the transactions contemplated therein will
result in a material contravention of any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, or (except to the extent resulting from the filing
of the Case and the CCAA Case, or resulting from the implementation of the
Interim Order and/or Final Order) will conflict or be inconsistent, in any
material respect, with or result in any breach of any of the
-40-
49
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any Lien upon any of the property or
assets of any of them pursuant to the terms of, any indenture, mortgage, deed of
trust, material agreement or other material instruments to which any of them are
parties.
9.4 LITIGATION. Except as specifically set forth on Schedule 9.4
hereto, there are no actions, judgments, suits or proceedings pending or, to the
Borrowers' knowledge, threatened against any Loan Party that are likely to have
a Material Adverse Effect.
9.5 USE OF PROCEEDS. Neither the making of any Loan hereunder, nor the
use of the proceeds thereof, will violate or be inconsistent with the provisions
of Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
9.6 GOVERNMENTAL APPROVALS, ETC. Other than the Interim Order and/or
Final Order no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any third party
or any foreign or domestic governmental or public body or authority, or by any
subdivision thereof, is required to authorize or is required in connection with
the execution, delivery and performance of any Document or the transactions
contemplated therein, or the legality, validity, binding effect or
enforceability of any Document.
9.7 TRUE AND COMPLETE DISCLOSURE. All factual information heretofore
or contemporaneously furnished by or on behalf of Borrowers in writing to Agent
or any Bank for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
hereafter furnished to Agent or any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information not misleading. Except as specifically set forth on Schedule 9.7
hereto, there is no fact known to Borrowers which affects the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of any other Loan Party which would have a
Material Adverse Effect and which has not been disclosed herein.
9.8 FINANCIAL STATEMENTS. The Borrowers have heretofore delivered to
the Agent and the Banks balance sheets and statements of operations,
stockholders' equity and cash flow for the fiscal year ended December 31, 2000
and the month ended May 31, 2001. The balance sheets and the other financial
statements referred to in the preceding sentence were prepared in accordance
with GAAP, and fairly present in all material respects the financial position of
the entities described therein and the results of its operations and cash flows
for the periods covered thereby.
9.9 SECURITY INTERESTS. There exist no Liens, in the property or
assets of the other Loan Parties except to the extent specifically permitted
under Section 11.2 hereof.
9.10 TAX RETURNS AND PAYMENTS. Except as set forth on Schedule 9.10
hereto, each Loan Party has filed all tax returns required to be filed by it and
has paid all taxes and assessments payable by it which have become due, other
than those not yet delinquent and except for those contested in good faith and
for which adequate reserves have been established to the extent required by
GAAP.
-41-
50
9.11 PATENTS, ETC. Each Loan Party has all material patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of its
respective businesses as presently conducted and as proposed to be conducted.
9.12 COMPLIANCE WITH LAWS, ETC. Except as set forth on Schedule 9.12
hereto, each Loan Party is in compliance, in all material respects, with all
applicable laws and regulations, including without limitation those relating to
pollution and environmental control, equal employment opportunity and employee
safety, in all jurisdictions in which it is presently doing business, and will
comply, in all material respects, with all such laws and regulations which may
be imposed in the future in jurisdictions in which any of them may then be doing
business.
9.13 PROPERTIES. Each Loan Party has good and marketable title to and
beneficial ownership of all properties owned by it (subject only to Liens
permitted by Section 11.2 hereof), as reflected in the balance sheets mentioned
in Section 9.8 above and hold all material licenses, certificates of occupancy
or operation and similar certificates and clearances of municipal and other
authorities necessary to own and operate its properties in the manner and for
the purposes currently operated.
9.14 COLLECTIVE BARGAINING AGREEMENTS. Set forth on Schedule 9.14
hereto is a list and description (including dates of termination) of all
collective bargaining or similar agreements to which the Loan Parties are party
or are subject as of the date hereof and any union, labor organization or other
bargaining agent in respect of their respective employees on the date indicated
in Schedule 9.14 hereto. There are no strikes pending or, to Borrowers'
knowledge, threatened against any Loan Party that are likely to have a Material
Adverse Effect.
9.15 INDEBTEDNESS OUTSTANDING. Set forth on Schedule 9.15 hereto is a
list and description of all Indebtedness of Borrowers (other than the Loans)
that are outstanding immediately as of the Closing Date.
9.16 ENVIRONMENTAL PROTECTION. Except as set forth on Schedule 9.16
hereto and except to the extent such failure or circumstance would not have a
Material Adverse Effect:
(a) The Loan Parties have all permits, licenses and other
authorizations which are required with respect to the operation of their
businesses under any Environmental Law and each such authorization is in full
force and effect.
(b) The Loan Parties are compliance with all terms and conditions
of the permits, licenses and authorizations specified in Subsection 9.16(a)
above, and are also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any Environmental Law applicable to them and their
businesses, assets, operations and properties (including, without limitation,
compliance with standards, schedules and timetables therein), including without
limitation those arising under the Resource Conservation and Recovery Act of
1976, as amended, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986
-42-
51
("CERCLA"), the Federal Water Pollution Control Act, the Federal Clean Air Act,
and the Toxic Substances Control Act.
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the knowledge of
Borrowers threatened against any Loan Party under any Environmental Law.
(d) No Loan Party has received notice that it has been identified
as a potentially responsible party under CERCLA or any comparable state law nor
have any of them received any notification that any hazardous substances or any
pollutant or contaminant, as defined in CERCLA and its implementing regulations,
or any toxic substance, hazardous waste, hazardous constituents, hazardous
materials, asbestos or asbestos containing materials, petroleum, including crude
oil and any fractions thereof, or other wastes, chemicals, substances or
materials regulated by any Environmental Laws (collectively "Hazardous
Materials") that it or any of their respective predecessors in interest has
used, generated, stored, tested, handled, transported or disposed of, has been
found at any site at which any governmental agency or private party is
conducting a remedial investigation or other action pursuant to any
Environmental Law.
(e) To the best knowledge of Borrowers, there have been no
releases (i.e., any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) of Hazardous Materials by any Loan Party on, upon, into or
from any of the real properties owned or operated by them at any time. To the
best knowledge of Borrowers there has been no such releases on, upon, under or
into any such real property or in the vicinity of any of such real property
that, through soil, surface water or groundwater migration or contamination, may
be located on, in or under such real properties.
(f) To the best knowledge of Borrowers, there is no friable
asbestos in, on, or at the respective real properties or any facility or
equipment of any Loan Party.
(g) To the best knowledge of Borrowers, no real property owned or
operated by any Loan Party is: (i) listed or proposed for listing on the
National Priorities List under CERCLA; or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
governmental authority.
(h) To the best of Borrowers' knowledge, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent compliance by any Loan
Party with any Environmental Law, or which may give rise to any common law or
legal liability, including, without limitation, liability under CERCLA or
similar state, local or foreign laws, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing or notice of violation, study or
investigation, based on or related to the manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport, shipping or handling,
or the emission, discharge, release or threatened release into the environment,
of any pollutant, contaminant, chemical or industrial, toxic or hazardous
substance or waste.
-43-
52
9.17 SENIOR SUBORDINATED DEBT DOCUMENTS. All Advances and all other
present and future indebtedness, obligations and liabilities pursuant to this
Agreement and the Loan Documents, is "Senior Debt" as defined in the Senior
Subordinated Debt Documents and, other than the Advances and all other present
and future indebtedness, obligations and liabilities pursuant to the Loan
Documents, there is, as of the date of this Agreement, no other "Designated
Senior Debt" thereunder.
9.18 ERISA. Except as specifically set forth in Schedule 9.18 hereof:
(a) Each of the Borrowers and the ERISA Affiliates is in
compliance in all material respects with all applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
employee benefit plans, Pension Plans and Multiemployer Plans.
(b) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan which resulted or would
result in a liability to a Borrower or any ERISA Affiliate.
(c) The sum of the amount of unfunded benefit liabilities
(determined in accordance with Statement of Financial Accounting Standards No.
35) under all Title IV Plans (excluding each Title IV Plan with an amount of
unfunded benefit liabilities of zero or less) is not more than Zero Dollars ($0)
as of the Closing Date.
(d) Neither of the Borrowers nor any ERISA Affiliate has any
obligation to contribute to or any liability or potential liability (including,
but not limited to, actual or potential withdrawal liability) with respect to
any Multiemployer Plan or any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code. Neither of the
Borrowers nor any ERISA Affiliate has incurred or reasonably expects to incur
any withdrawal liability under Section 4201 et seq. of ERISA to any
Multiemployer Plan or any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code.
(e) Neither of the Borrowers nor any ERISA Affiliate has
incurred any accumulated funding deficiency (whether or not waived) with respect
to any Pension Plan.
(f) Neither of the Borrowers nor any ERISA Affiliate has or
reasonably expects to become subject to a Lien in favor of any Pension Plan
under Section 302(f) or 307 of ERISA or Section 401(a)(29) or 412(n) of the
Code.
(g) The execution, performance and delivery of the Documents
by Borrower will not involve any prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code for which an exemption
therefrom is not available.
9.19 THE BUDGET. The Budget is based on good faith estimates and
assumptions believed by the Borrowers to be tenable at the time made, and on the
best information available.
-44-
53
9.20 USE OF ADVANCES. The Borrowers will use the proceeds of the
Post-Petition Advances only to fund the amounts identified, and at the times
specified, in the Budget, subject to Permitted Variances.
9.21 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All the
representations and warranties of the Borrower contained in Section 9.1 through
9.20, inclusive, shall survive the execution and delivery of this Agreement and
shall continue in full force and effect until all amounts owing hereunder have
been repaid and the credit facilities made available hereunder have been
terminated, notwithstanding any investigation made at any time by or on behalf
of the Agent or any of the Banks.
10. AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, for so long as this Agreement is in
effect and until the are fully terminated and the Loans and Letter of Credit
Obligations together with interest, fees and all other obligations incurred
hereunder or under the Loan Documents are paid in full it will and, will cause
each other Loan Party to:
10.1 REPORTING REQUIREMENTS COVENANTS. Furnish or cause to be furnished
to Agent (with a copy for each Bank):
(a) as soon as available and in any event within ninety (90)
days after the close of each fiscal year of TAG, balance sheets of TAG (i) as at
the end of such fiscal year and the related statements of operations,
stockholders equity and cash flows for such fiscal year, setting forth
comparative figures for the preceding fiscal year, and a report on such balance
sheets and financial statements by independent certified public accountants of
recognized national standing, which report shall not be qualified as to the
scope of audit or as to the status of Borrowers as a going concern, and shall
state that such financial statements fairly present, in all material respects,
the financial position of Borrowers as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, in conformity
with GAAP, and (ii) copies of tax returns filed for the Borrowers for the fiscal
year then ended;
(b) as soon as available and in any event within thirty (30)
days after the end of each month: (i) the consolidated and consolidating balance
sheets of TAG as at the end of such month and the related statements of
operations, of stockholders' equity and of cash flows for such month and for the
elapsed portion of the fiscal year ended with the last day of such month, and in
each case setting forth comparative figures for the related periods in the prior
fiscal year, subject to normal year-end audit adjustment, (ii) reports on the
Loan Parties' Inventory, agings of each Loan Parties' Accounts Receivable (with
an aging summary) and accounts payable (with an aging summary), and (iii)
written monthly management discussion and analysis of the Borrowers' financial
results for the month then ended and a comparison of such results to the
projected results for such month included in the Projections; in each case, in
form and content satisfactory to Agent and certified by the chief financial
officer, controller or chief accounting officer of Borrowers;
(c) at the time of the delivery of the financial statements
provided for in Subsections 10.1(a) and (b), (i) a certificate of the chief
financial officer, controller or chief
-45-
54
accounting officer of TAG to the effect that no Default or Event of Default
exists, or, if any Default or Event of Default does exist, specifying the nature
and extent thereof, which certificate shall be accompanied by a compliance
certificate in a form reasonably acceptable to the Agent setting forth the
calculations required to establish whether Borrowers were in compliance with the
covenants in this Agreement as at the end of such period, and (ii) a compliance
certificate from the chief financial officer, controller or chief accounting
officer of Xxxxxx dated as of the end of the month ended immediately prior
thereto, in a form reasonably acceptable to the Agent, setting forth the
calculations required to establish whether Xxxxxx was in compliance with the
terms and conditions for EDC Financing;
(d) within four (4) days after the end of each week: (i) a
Borrowing Base calculation and certification; (ii) an Accounts Receivable
summary report; (iii) inventory reports; (iv) fixed asset reports; (v) accounts
payable agings; (vi) tooling reports; and (vii) Budget Compliance Certificate
setting forth a comparison of total cash receipts and disbursements for such
month with those projected in the Budget for such week; in each case in form and
content satisfactory to Agent and certified by the chief financial officer,
controller or chief accounting officer of Borrowers;
(e) promptly upon receipt thereof, a copy of each annual
"management letter" submitted to Borrowers by its independent accountants in
connection with any annual audit made by them of the books of Borrowers;
(f) promptly upon any officer of a Borrower obtaining
knowledge of any condition or event which constitutes a Default or Event of
Default, or becoming aware that any Bank has given any notice or taken any other
action with respect to a claimed Default or Event of Default under this
Agreement, an officers' certificate specifying the nature and period of
existence of any such condition or event, or specifying the nature of such
claimed Default or Event of Default, and explaining the action Borrowers have
taken or proposes to take with respect thereto;
(g) within (i) ninety (90) days after the end of each fiscal
year of TAG, a copy of TAG's Form 10-K Report filed with the Securities Exchange
Commission for such annual accounting period, and (ii) forty five (45) days
after the end of each fiscal quarter of TAG, a copy of TAG's Form 10-Q Report
filed with the Securities Exchange Commission for such quarterly accounting
period; and
(h) promptly after the filing or delivery thereof, by
Borrower, or the receipt thereof by either Borrower, copies of all operating
reports, business plans, and other financial information filed with the
Bankruptcy Court or delivered to the U.S. Trustee, and copies of all pleadings
or reports filed with the Bankruptcy Court by either Borrower, or by any other
Person in connection with either the Case of the CCAA Case.
(i) with reasonable promptness, such other information and
data with respect to Loan Parties as from time to time may be reasonably
requested by any Bank.
10.2 INSURANCE. Keep its insurable properties (including but not
limited to the Collateral) adequately insured and maintain (a) insurance against
fire and other risks customarily
-46-
55
insured against under an "all-risk" policy and such additional risks customarily
insured against by companies engaged in the same or a similar business to that
of the relevant Loan Party, (b) necessary worker's compensation insurance, (c)
public liability and product liability insurance, and (d) such other insurance
as may be required by law or as may be reasonably required in writing by the
Agent or the Majority Banks, all of which Insurance shall be in such amounts,
containing such terms, in such form, for such purposes, prepaid for such time
period, and written by such companies as shall be satisfactory to the Agent and
the Majority Banks. All such policies shall contain a provision whereby they may
not be canceled or amended except upon thirty (30) days' prior written notice to
the Agent. The Borrowers will promptly deliver to the Agent, at the Agent's
request, evidence satisfactory to the Agent that such insurance has been so
procured and, with respect to casualty insurance, made payable to the Agent. If
the relevant Loan Party fails to maintain satisfactory insurance as herein
provided, the Agent shall have the option to do so, and the Borrowers agree to
repay the Agent upon demand, with interest at the Prime-based Rate then in
effect for the Revolving Loan, all amounts so expended by the Agent. The
Borrowers hereby appoint the Agent or any employee or agent of the Agent as
attorney-in-fact, which appointment is coupled with an interest and irrevocable,
and authorizes the Agent or any employee or agent of the Agent, on behalf of the
Borrowers or the relevant Loan Party, to adjust and compromise any loss under
said insurance (which adjustment or compromise shall only be made with the
Borrowers' consent if an Event of Default has not occurred and is not continuing
hereunder) and to endorse any check or draft payable in connection with returned
or unearned premiums on said insurance or the proceeds of said insurance, and
any amount so collected shall be applied toward repair and/or replacement of the
Collateral to which such casualty occurred or satisfaction of the Indebtedness
in accordance in accordance with the provisions governing such application in
the Documents pursuant to which Agent's Liens on such Collateral were granted.
The Borrowers shall, immediately upon the filing of the Cases, cause all
policies of insurance to reflect the interest of the respective debtors in
possession as insured parties.
10.3 BOOKS, RECORDS AND INSPECTIONS. Each Loan Party will keep true
books of records and accounts of all its business transactions in accordance
with GAAP or (with respect to activities and transactions in foreign
jurisdictions) such other accounting principals as may be required in such
foreign jurisdiction and shall permit, upon reasonable prior notice by Agent to
any authorized officer of Borrowers, officers and designated representatives of
the Agent and/or any Banks to visit and inspect properties or assets of each
Loan Party and to examine the books of account of each Loan Party and to discuss
the affairs, finances and accounts of Borrower and with its and their officers
and independent accountants, all at such times and intervals as the Agent may
reasonably request, including, without limitation audits of Inventory and
Accounts Receivable to be performed by or on Agent's behalf at Borrowers'
expense: (a) so long as no Event of Default is existing, up to four (4) times
each calendar year in Agent's discretion, and (b) in the event and so long as an
Event of Default exists, at such intervals as Agent or the Majority Banks may
require.
10.4 PAYMENT OF TAXES AND UTILITIES. Each Loan Party will pay and
discharge all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties belonging to it, and
all utility charges, dues, rates and assessments of whatever nature or kind and
to whomever assessed now or hereafter charged or payable with respect to the
Real Property, prior to the date on which material penalties attach thereto, and
all
-47-
56
lawful claims which, if unpaid, might become a Lien or charge upon any
properties of any Loan Party or cause a failure or forfeiture of title thereto;
provided that neither Borrower shall not be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings promptly instituted and diligently conducted if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
10.5 COMPLIANCE WITH STATUTES, ETC. Each Loan Party will comply with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property other
than non-compliance which would not reasonably be expected to have a Material
Adverse Effect.
10.6 PERFORMANCE OF OBLIGATIONS. Borrowers will: (a) perform all of
their obligations under the Access Agreement and Customer Agreements, and will
promptly deliver to Agent copies of each notice or report issued by or to a
Borrower pursuant to the terms thereof, and (b) perform in all material respects
all of their obligations under the terms of each mortgage, indenture, security
agreement, other debt instrument, their respective trade obligations and
material contracts by which they are bound or to which they are party, except
where nonperformance would not have a Material Adverse Effect and except to the
extent that non-compliance with any of the foregoing is specifically described
on Schedule 8.7 hereto.
10.7 END OF FISCAL YEARS; FISCAL QUARTERS. Borrower will have its
fiscal years end on December 31 and the first three fiscal quarters of each year
end on each of the thirteenth (13th), twenty sixth (26th) and thirty ninth
(39th) week of each year.
10.8 ENVIRONMENTAL EVENTS.
(a) The Borrowers will promptly give notice to the Agent upon
becoming aware of any of the following which would reasonably be expected to
result in liability under any Environmental Law: (i) of any violation of any
Environmental Law; (ii) of any inquiry, proceeding, investigation or other
action, including a request for information or a notice of potential
environmental liability from any foreign, federal, state or local environmental
agency or board; or (iii) of the discovery of the release of any Hazardous
Material at, on, under or from any of the real properties owned or operated by
any Loan Party or any facility or equipment thereat in excess of reportable or
allowable standards or levels under any Environmental Law.
(b) In the event of the presence of any Hazardous Material on
any of the real properties owned or operated by any Loan Party which is in
violation of, or which could reasonably be expected to result in liability
under, any Environmental law, in each case which would have a Material Adverse
Effect, upon discovery thereof and the determination of its materiality, shall
take all necessary steps to initiate and expeditiously complete all remedial,
corrective and other action to mitigate and eliminate any such adverse effect,
and shall keep the Agent informed of their actions and the results.
10.9 FURTHER GUARANTEES AND LIENS. Borrowers will, immediately after
any Person at any time becoming a direct or indirect Subsidiary of a Borrower,
deliver or cause to be delivered to the Agent a pledge of all of the issued
capital stock of such Person, and a guarantee
-48-
57
from such Person, together with all Security Documents applicable to such Person
in the Agent's opinion, and evidence of the registration, filing and recording
of the Liens on the property of such Person constituted by such Security
Documents in all jurisdictions where such registration, filing or recording is
necessary or of advantage to the creation, perfection, preservation or
protection of such Liens, all in form, scope and substance acceptable to the
Agent.
10.10 COMPLIANCE WITH FORMULA AMOUNT. In the event that, at any time,
the principal amount of the Loans and Letters of Credit exceeds the Borrowing
Base, pay to Agent, for application on Swing Loans and/or Revolving Loans, an
amount sufficient to eliminate such excess.
10.11 CONSTRUCTION LIENS. Upon receiving notice or obtaining knowledge
of a construction lien registered upon title to the Real Property, the Borrowers
will forthwith discharge, or cause to be discharged, such lien.
10.12 DEFEND TITLE. Each Loan Party shall warrant and defend its title
to the Real Property and ensure that each document relating to the Real Property
to which it is a party constitutes a legal, valid, and binding obligation
enforceable against it in accordance with its terms.
10.13 ERISA. Borrower will furnish to each of the Banks:
(a) promptly upon knowing or having reason to know of the
occurrence of any: (i) Termination Event; or (ii) "prohibited transaction,"
within the meaning of Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder, which in the
case of all such events described in clause (i) or (ii) results or could
reasonably be expected to result in a liability of a Borrower or any ERISA
Affiliates in the aggregate in excess of Five Hundred Thousand Dollars
($500,000), a written notice specifying the nature thereof, what action Borrower
or ERISA Affiliates have taken, are taking or propose to take with respect
thereto, and, when known, any action taken or threatened by the Internal Revenue
Service, Department of Labor, PBGC or Multiemployer Plan sponsor with respect
thereto; and
(b) if requested by Agent or any Bank, copies of: (i) all
notices received by a Borrower or ERISA Affiliates of PBGC's intent to terminate
any Title IV Plan or to have a trustee appointed to administer any Title IV
Plan, the notice of which event is required pursuant to the preceding paragraph
(a); (ii) upon the request of the Agent each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by a Borrower or any of its ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan;
(iii) the most recent actuarial valuation report for each Title IV Plan; and
(iv) all notices received by a Borrower or any ERISA Affiliates from a
Multiemployer Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA.
10.14 CRISIS MANAGER. Retain Xxxxxx XxxXxxxxx and Xxxxxxxx, or such
other professional acceptable to the Agent and the Majority Banks to act as the
Borrower's crisis manager with the duties of advising and reporting to the
Borrowers with respect to, and monitoring, the business and affairs of the
Borrowers, including the right and authorization to
-49-
58
communicate directly, freely and openly with the Agent and each Bank and their
respective advisors and professionals.
11. NEGATIVE COVENANTS
Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Commitments are fully terminated and the Loans together
with interest, fees and all other obligations incurred hereunder or under the
Documents are paid in full, it will not and, it will not permit any Loan Party
to:
11.1 CHANGES IN BUSINESS. Materially alter the character of its primary
businesses from, or enter into businesses materially different from its business
as conducted as of the Closing Date except for such changes contemplated by the
PSI Consolidation Plan.
11.2 LIENS. Create, incur, assume or suffer to exist any Lien upon or
with respect to any of its property or assets, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets or
assign any right to receive income, or file or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute, except:
(a) to Agent on behalf of the Banks;
(b) Permitted Liens;
(c) Liens upon real or tangible personal property acquired by
a Loan Party provided that: (i) any such Lien either encumbers such property
prior to the acquisition thereof or is created solely for the purpose of
securing indebtedness incurred to finance the acquisition thereof; (ii) the
principal amount of the indebtedness secured by such Lien does not exceed the
fair value of the property at the time such Lien was created; (iii) such Lien
does not extend to or cover any other property other than the assets so
acquired; and (iv) the incurrence of the indebtedness secured by such Lien is
permitted by Section 11.3(c) hereof;
(d) Liens granted to Designated Customers under the Access
Agreement;
(e) Liens approved by the Bankruptcy Court or the Canadian
Court and granted to secured creditors of the Borrowers as adequate protection;
provided that such Liens are (A) junior and subordinate in all respect to the
Liens granted to the Agent in respect of the Post-Petition Loans and the
Designated Post-Petition Loans and (B) do not secure Indebtedness in excess of
$500,000 in the aggregate;
(f) Such other Liens authorized under the Budget or the
Interim Authorizing Order or the Final Authorizing Order, as applicable; and
(g) Liens upon the "EDC Financing Collateral" as defined in
the Existing Agreement, securing indebtedness specifically permitted under
clause (h) of Section 11.3 hereof;
-50-
59
11.3 INDEBTEDNESS. Contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) pursuant to this Agreement and the Documents;
(b) Indebtedness existing as of the Effective Date and listed
on Schedule 9.15 hereof;
(c) Indebtedness (excluding indebtedness incurred under real
estate operating leases existing as of the date hereof and increases thereunder)
incurred after the Closing Date to finance the cost of its acquisitions and
capital leases of personal tangible property (together with indebtedness and/or
liabilities under new real estate operating lease(s)) not to exceed Two Hundred
Fifty Thousand Dollars ($250,000) for an annual period;
(d) trade indebtedness incurred in accordance with the Budget
and the Interim Authorizing Orders or Final Authorizing Order;
(e) the Affiliate Loans;
(f) the Indebtedness under the Senior Subordinated Debt
Documents;
(g) obligations under Hedging Agreements; and
(h) existing Indebtedness to the Economic Development
Corporation specifically identified on Schedule 9.5 hereto.
11.4 FINANCIAL COVENANTS. Permit EBITDA, on a cumulative basis from
December 1, 2000 to the end of each of the following months, to be less than the
amount set forth opposite each such month:
(i) May, 2001: $4,884,000;
(ii) June, 2001: $7,357,000;
(iii) July, 2001: $6,533,000;
(iv) August, 2001: $8,466,000;
(v) September, 2001: $11,922,000;
(vi) October, 2001: $13,961,000;
(vii) November, 2001: $15,938,000; and
(viii) December, 2001: $17,290,000.
11.5 DIVIDENDS. Declare or pay any dividend on, or make any other
distribution with respect to (whether by reduction of capital or otherwise) any
shares of its capital stock.
-51-
60
11.6 STOCK ACQUISITION. Purchase, redeem, retire or otherwise acquire
any of the shares of its capital stock, or make any commitment to do so.
11.7 EXTENSION OF CREDIT. Make loans, advances or extensions of credit
to any Person, except for: (a) sales on open account in the ordinary course of
business; (b) Affiliate Loans; and (c) promissory notes issued to TAG pursuant
to the Equity Ownership Plan.
11.8 GUARANTEE OBLIGATIONS. Guarantee or otherwise be or become
responsible for obligations of any other Person, whether by agreement to
purchase the indebtedness of any other Person, agreement for the furnishing of
funds, goods, supplies or services for the purpose of paying or discharging
indebtedness of any other person, or otherwise, except for:
(a) by endorsement of negotiable instruments in the ordinary
course of business for deposit or collection;
(b) the Guaranties;
(c) TAG's guaranties of the lease obligations of Xxxxxx under
and in connection with Veltri's existing equipment lease from ABN AMRO Canada
and Westcoast Capital Corporation and the real property lease for Veltri's
Windsor, Ontario location;
(d) Veltri's existing guaranty of Senior Subordinated Notes
pursuant to Senior Subordinated Debt Documents; and
(e) by virtue of issuance of Letters of Credit in accordance
with the terms of this Agreement.
11.9 SUBORDINATE INDEBTEDNESS. Subordinate any indebtedness due to it
from a Person to indebtedness of other creditors of such Person.
11.10 PROPERTY TRANSFER, MERGER OR LEASE-BACK. (a) Sell, lease,
transfer or otherwise dispose of properties or assets except for (i) sales and
transfers of assets having an aggregate book value of no more than One Hundred
Thousand Dollars ($100,000) during any calendar year, (ii) sales and transfers
among Loan Parties, (iii) sales of Inventory in the ordinary course of business,
(iv) sales of machinery and equipment which are simultaneously replaced with
machinery and equipment of at least equivalent value or used to repay debt
related thereto, (v) sales, for fair market values, of machinery and equipment
currently located at the facilities currently operated by TAG's "Production
Stamping" division and commonly referred to as the "Oxford Plant", "New
Baltimore Plant" and "Plant 5", and (vi) other sales and dispositions of assets
with aggregate book value not to exceed Five Million Dollars ($5,000,000) the
terms of which are approved in writing by the Agent and the Banks; provided that
the Net Proceeds of each such sale or other disposition of property described in
clauses (v) and (vi) above shall be applied toward a mandatory reduction of
Loans and Advances then outstanding and a permanent reduction of the Revolving
Loan Commitment, and provided further that Borrowers acknowledge and agree that
notwithstanding anything to the contrary set forth above, any releases of
Collateral arising out of the sale or other disposition of property described in
clauses (v) and (vi) above, remain subject to the consent of all Banks in
accordance with Section 14.8(a) hereof and that the foregoing provisions of this
Section 11.10 do not constitute a consent to
-52-
61
releases of interests in Collateral in connection with the potential for sales,
leases or dispositions described above, (b) change its name, consolidate with or
merge into any other corporation, permit another corporation to merge into it,
acquire all or substantially all the properties or assets of any other person,
enter into any reorganization or recapitalization or reclassify its capital
stock.
11.11 ACQUISITIONS. Purchase or hold beneficially any Stock or other
securities of, or make any investment or acquire any interest whatsoever in, any
other Person or acquire all or substantially all of the assets of any Person, or
of any operating or business unit of any person except for existing investments
in and loans and advances to Loan Parties existing as of the Effective Date.
11.12 OTHER AGREEMENTS. Agree to (a) any amendment or revision to the
Services Agreement, which would have the effect of increasing the amount or
accelerating the date for, any payments thereunder, or (b) any modification to
or termination of any obligation of a Designated Customer under any Access
Agreement or Customer Agreement or with respect to any Designated Eligible
Account or Designated Eligible Inventory, or (c) any modification to or
termination of any obligation or agreement under the Lock-Up Agreement.
11.13 USE OF LOAN PROCEEDS. Use or permit use of the proceeds of Loans
for purposes other than those permitted under this Agreement and will not use or
permit the use of any such Loan proceeds in violation of Regulation U or G of
the Federal Reserve Board as now or hereafter in effect, or for any other
purpose which violates provisions of regulations of the Federal Reserve Board.
11.14 MANAGEMENT FEES AND DIVIDEND. Pay any management, consulting,
business services or similar fees (including any fees or other amounts payable
pursuant to the Services Agreement) or amounts to any Affiliate.
11.15 CAPITAL EXPENDITURES. Make, or contract or agree to make, capital
expenditures which would exceed the amount in the Budget, subject to Permitted
Variances.
11.16 EXCESS INVENTORY. Purchase, acquire or possess, at any time, "raw
materials" Inventory in excess of what is necessary to produce parts for
Designated Customers under then outstanding "releases" issued by such Designated
Customers in accordance with effective purchase orders.
11.17 PROFESSIONAL FEE EXPENDITURES. Pay or make arrangements for the
payment of professional fees except as specifically identified, and at the times
specified, in the Budget and in the Interim Authorizing Orders and Final
Authorizing Orders.
11.18 CHAPTER 11 CLAIMS/RETURN OF GOODS. (i) Incur, create, assume,
suffer to exist or permit any administrative expense, unsecured claim, or other
Superpriority Claim or Lien which is pari passu with or senior to the claims, as
the case may be, of the Agent and the Post-Petition Banks against the Borrowers,
or apply to the Bankruptcy Court or to the Canadian Court for authority to do
so, or (ii) return goods pursuant to Section 546(g) of the Bankruptcy Code (or
otherwise return goods on account of any pre-petition Indebtedness) to any
creditor of the Borrowers unless ordered by the Bankruptcy Court after notice
and a hearing, or to consent to
-53-
62
any creditor taking setoff against pre-petition Indebtedness based upon any such
return pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise.
12. DEFAULTS
12.1 FAILURE TO PAY MONIES DUE. If a Borrower shall fail to pay, when
due, (a) any principal, interest, or fee under any Note or this Agreement and
two (2) days shall pass after the due date therefor without cure, or (b) any
Letter of Credit Obligation to be paid hereunder or under any Letter of Credit
Agreement in accordance with the terms hereof and thereof and two (2) days shall
pass after the due date without cure.
12.2 MISREPRESENTATION. If any warranty or representation of any Loan
Party in connection with or contained in this Agreement or any other Document,
or if any financial data or other information now or hereafter furnished to the
Agent or the Banks by or on behalf of a Loan Party shall prove to be false or
misleading in any material respect and, in the case of any such circumstance
which is capable of being cured within a period of thirty (30) days, the
continuation thereof for a period of thirty (30) days after the earlier of: (i)
Borrowers' actual knowledge thereof, or (ii) written notice by Bank to
Borrowers.
12.3 NONCOMPLIANCE WITH AGREEMENT. If any Loan Party shall fail to
perform any of its obligations and covenants under, or shall fail to comply with
any of the provisions of, this Agreement or any of the other Documents and, in
the case of any such circumstance which is capable of being cured within a
period of thirty (30) days, the continuation thereof for a period of thirty (30)
days after the earlier of: (i) Borrowers' actual knowledge thereof, or (ii)
written notice by Bank to Borrowers.
12.4 OTHER DEFAULTS. If any Loan Party shall default in the due payment
of any of its post-petition indebtedness (other than the Indebtedness and the
Senior Subordinated Notes) which is in the aggregate in an amount greater than
Five Hundred Dollars ($500,000) or in the observance or performance of any term,
covenant or condition in any agreement or instrument evidencing, securing or
relating to such indebtedness, and such default shall continue for a period
sufficient to permit acceleration of the indebtedness.
12.5 CHANGE OF CONTROL. If any Change of Control occurs, whether by
reason of death, merger, consolidation or sale and such Change of Control
adversely impacts, in the sole judgment of the Banks, upon the ability of the
Borrowers to carry on business as theretofore conducted.
12.6 REPUDIATIONS, REVOCATIONS, ETC. (i) If there is any repudiation,
revocation or any attempt to repudiate or revoke any Document by any Loan Party,
or (ii) if any Designated Customer shall default in payment or performance of
any of its obligations under an Access Agreement or Customer Agreement and such
default continues for a period in excess of five (5) Business Days or if any
Designated Customer shall repudiate, revoke, modify or terminate, or attempt to
repudiate, revoke, modify or terminate any Access Agreement or Customer
Agreement, or any of its obligations thereunder or shall engage in any
resourcing as described in the Customer Agreements, or (iii) if any holder of
Senior Subordinated Notes shall repudiate,
-54-
63
revoke or attempt to repudiate or revoke any obligation under the Lock-Up
Agreement or shall breach any obligation owed by it under the Lock-up Agreement.
12.7 INADEQUATE FUNDING OR TERMINATION OF EMPLOYEE BENEFIT PLAN(S). If
a Borrower or ERISA Affiliate shall fail to meet its minimum funding
requirements under ERISA with respect to any Pension Plan or if any Termination
Event occurs with respect to any such Pension Plan and such event continues for
thirty (30) days and there shall result therefrom a liability which is likely to
have a Material Adverse Effect.
12.8 OCCURRENCE OF CERTAIN REPORTABLE EVENTS. If there shall occur,
with respect to any Pension Plan maintained by a Borrower or any ERISA
Affiliate, any reportable event (within the meaning of Section 4043(b) of ERISA)
which constitutes a ground for the termination of any such plan, and such event
continues for thirty (30) days, provided that termination of such plan or
appointment of such trustee would have a Material Adverse Effect.
12.9 LIQUIDATION/CONVERSION OF CASE/APPOINTMENT OF TRUSTEE OR EXAMINER.
If the Case is converted to a case under chapter 7 of the Bankruptcy Code, or a
trustee or examiner with enlarged powers relating to the operation of the
business of the Borrowers is appointed in the Case or in the CCAA Case, or the
Case or CCAA Case bankruptcy case is dismissed (or any judgment, order or decree
therefor shall be entered);
12.10 CROSS DEFAULTS/RELIEF FROM STAY. The Bankruptcy Court or the
Canadian Court shall enter an order (i) granting a creditor relief from the
automatic stay provided by Section 362 of the Bankruptcy Code or the stay
entered pursuant to the CCAA to permit foreclosure to the holder of assets
having an aggregate value in excess of $500,000, or (ii) adjudicating the
Borrowers' right to use Cash Collateral, or (iii) which, in the reasonable
discretion of the Agent, has a material adverse impact on either Borrower or
either Borrower's ability to continue its business operations;
12.11 ADEQUATE PROTECTION NOT ACCEPTABLE. Any creditor of a Borrower
receives any adequate protection payment which is not provided for under the
Budget, or any Lien is granted as adequate protection other than as set forth in
the Interim Authorizing Order or the Final Authorizing Order;
12.12 AMENDMENT OR STAY OF INTERIM AUTHORIZING ORDER OR FINAL
AUTHORIZING ORDER. An order of the Bankruptcy Court or the Canadian Court is
entered amending, supplementing or staying the Interim Authorizing Orders or the
Final Authorizing Orders issued by such court, without the prior consent of the
Agent;
12.13 ENTRY OF FINAL AUTHORIZING ORDER. The Final Authorizing Orders
are not entered within 30 days after the Petition Date;
12.14 VACATION OF AUTHORIZING ORDERS. An order of the Bankruptcy Court
or the Canadian Court is entered vacating the Interim Authorizing Orders or the
Final Authorizing Orders;
12.15 OPPOSITION TO BANKS' MOTIONS. Any Borrower shall support (in any
such case by way of any motion or other pleading filed with the Bankruptcy Court
or the Canadian Court
-55-
64
executed by or on behalf of a Borrower or by argument in open court) any other
Person's opposition to, any motion made in the Bankruptcy Court or the Canadian
Court by Agent or any Bank seeking confirmation of the amount of such Agent's or
Banks' claim or the validity and enforceability of the Liens in favor of such
Agent and the Banks (including, without limitation, the Liens securing
Pre-Petition Obligations owed to such Lender); or
12.16 OPPOSITION TO BANKS' CLAIMS. Any Borrower shall seek to, or shall
support (in any such case by way of any motion or other pleading filed with the
Bankruptcy Court or the Canadian Court executed by or on behalf of a Borrower or
by argument in open court) any other Person's motion to, disallow in whole or in
part any Bank's claim in respect of the Pre-Petition Indebtedness or the
Post-Petition Indebtedness or to challenge the validity and enforceability of
the Liens in favor of the Agent or any Bank (including, without limitation, the
Liens securing Pre-Petition Obligations owed to such Bank).
12.17 EXERCISE OF REMEDIES. If an Event of Default has occurred and is
continuing hereunder:
(a) Agent may, and upon the written direction of the Majority
Banks, Agent shall, terminate Banks' commitments to make Post-Petition Advances
and Agent's commitment to issue Letters of Credit;
(b) Agent may and upon the written direction of the Majority
Banks, Agent shall: (i) declare the entire unpaid balance of the indebtedness
hereunder, including the Post-Petition Advances and the Notes, immediately due
and payable, without presentment, notice or demand, all of which are hereby
expressly waived by Borrower, and/or (ii) immediately prevent Borrowers further
utilization of Cash Collateral and/or (iii) the Agent may, and upon being told
to do so by the Majority Banks shall, demand immediate delivery of Cash
Collateral for application against the Loans in accordance with the terms of
this Agreement, and the Borrowers agree to deliver such Cash Collateral upon
demand, in an amount equal to the maximum amount that may be available to be
drawn at any time prior to the stated expiry of all outstanding Letters of
Credit, or any one or more of the foregoing, whereupon the commitments hereunder
shall terminate forthwith and all such amounts, including such Cash Collateral,
shall become immediately due and payable, as the case may be; and
(c) Immediately and automatically upon the occurrence of any
Event of Default specified in Sections 12.9 through 12.16 above, and
notwithstanding the lack of any declaration by Agent under preceding clause (b),
the entire unpaid principal of the Loans and other indebtedness hereunder,
including the Notes, shall become automatically due and payable;
(d) The Agent may and, upon being directed to do so by the
Majority Banks, shall, in addition to the remedies provided herein, exercise and
enforce any and all other rights and remedies available to it or the Agent and
Banks, whether arising under this Agreement or any other Document or under
applicable law, in any manner deemed appropriate by the Agent, including suit in
equity, action at law, or other appropriate proceedings, whether for the
specific performance (to the extent permitted by law) of any covenant or
agreement contained in any other Document or in aid of the exercise of any power
granted in any other Loan Document.
-56-
65
12.18 WAIVER OF DEFAULTS. No Event of Default shall be waived by the
Banks except in a writing made in accordance with Section 14.8 hereof. No single
or partial exercise of any right, power or privilege hereunder, nor any delay in
the exercise thereof, shall preclude other or further exercise of Agent's rights
or of Banks' rights by Agent. No waiver of any Event of Default shall extend to
any other or future Event of Default. No forbearance on the part of the Agent in
enforcing Agent's or any of Banks' rights shall constitute a waiver of any of
their respective rights. Borrowers expressly agree that this Section may not be
waived or modified by Banks or Agent by course of performance, estoppel or
otherwise.
13. AGENT
13.1 APPOINTMENT OF AGENT. Each Bank appoints and authorizes Agent to
act on behalf of such Bank or holder under the Documents and to exercise the
respective powers hereunder and thereunder as are specifically delegated to or
required of them by the terms hereof and thereof, together with such powers as
may be reasonably incidental thereto, including, the power to execute financing
or similar statements or notices and other documents. Each Bank agrees (which
agreement shall survive any termination of this Agreement) to reimburse Agent
(to the extent Agent is not reimbursed by Borrowers), for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees) incurred by
Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Loan Parties under this Agreement or the Documents
or any other instrument executed pursuant hereto, pro rata according to such
Bank's Percentage of the Loans. Agent shall not be required to take any action
under the Documents, or to prosecute or defend any suit in respect of the
Documents, unless indemnified to its satisfaction by the Banks against loss,
costs, liability and expense. If any indemnity furnished pursuant hereto shall
become impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given.
13.2 DEPOSIT ACCOUNT WITH AGENT. Borrowers hereby authorize Agent to
charge its general deposit account, if any, maintained with Agent for the amount
of any principal, interest or other payment due under this Agreement, the Notes,
any Letter of Credit Agreement or other Document when the same becomes due and
payable under the terms of this Agreement, the Notes, and Letter of Credit
Agreement or the other Documents.
13.3 EXCULPATORY PROVISIONS. Agent agrees to exercise its rights and
powers, and to perform its duties as Agent hereunder and under the Documents in
accordance with its usual customs and practices in bank-agency transactions, but
only upon and subject to the express terms and conditions of this Section 13.3
(and no implied covenants or other obligations shall be read into this Agreement
against the Agent). Agent shall not be liable to any Bank for any action taken
or omitted to be taken by it under this Agreement or any document executed
pursuant hereto, or in connection herewith or therewith, except for its own
willful misconduct or gross negligence, nor be responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any document executed pursuant
hereto, or any security thereunder, nor to make any inquiry respecting the
performance by Borrowers of obligations hereunder or thereunder, and each of
them shall be entitled to rely upon advice of counsel concerning legal matters
and upon any notice, consent, certificate, statement or writing which is
believes to be genuine and to have been presented by a proper person.
-57-
66
13.4 SUCCESSOR AGENTS. Agent may resign as such at any time upon at
least thirty (30) days prior notice to Borrowers and all Banks. If Agent at any
time shall resign, Majority Banks may appoint a successor Agent which shall
thereupon become Agent hereunder and shall be entitled to receive from the prior
Agent such documents of transfer and assignment as such successor Agent may
reasonably request.
13.5 RIGHT OF AGENT AS BANK. Agent, in its capacity as a Bank, shall
have the same rights and powers with respect to the credit extended by it, and
the Notes held by it, and with respect to participation interests in Letters of
Credit issued and Letter of Credit Agreements entered pursuant hereto, as any
Bank, and may exercise the same as if it were not Agent, or the issuer of
Letters of Credit, and the term "Bank" and, when appropriate, "holder" shall
include Agent its individual capacity.
13.6 CREDIT DECISIONS. Each Bank acknowledges that it has and shall,
independently of Agent and each other Bank and based on the financial statements
of Loan Parties and such other documents, information and investigations as it
has deemed appropriate, made its own credit decision to extend credit hereunder
from time to time. Each Bank also acknowledges that it will, independently of
Agent and each other Bank and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any document
executed pursuant hereto.
13.7 NOTICES BY AGENT. Agent shall give prompt notice to each Bank of
each notice or request required or permitted to be given to Agent by Borrower
pursuant to the terms of this Agreement and of any litigation commenced by or
against Agent with respect to this Agreement.
13.8 AGENT'S FEES. The Borrowers shall pay to Agent the Agent's Fees at
the times and in the amount set forth (or to be set forth from time to time) in
a letter agreement between Agent and Borrowers. The Agent's Fees described in
this Section are not refundable under any circumstances.
13.9 NATURE OF AGENCY. The appointment of Agent as agent is for the
convenience of Banks and the Borrowers in making Advances of the Loans, issuing
Letters of Credit, collecting fees and principal and interest on the Loans and
dealing with Borrower. No Bank is purchasing the Loans from Agent and this
Agreement is not intended to be a purchase or participation agreement.
13.10 ACTIONS; CONFIRMATION OF AGENT'S AUTHORITY TO ACT IN EVENT OF
DEFAULT. Subject to Section 14.8 hereof, Agent is hereby expressly authorized to
act in all litigation and in all other respects as the representative of Banks
where Agent considers it to be necessary or desirable in order to carry out the
purposes of this Agreement or any of the Documents. In conducting such
litigation hereunder on behalf of Banks, Agent shall at all times be indemnified
by Banks as provided in Section 13.1 hereof. Agent shall undertake to give each
Bank prompt notice of any litigation commenced against Agent and/or Banks with
respect to this Agreement the Documents or any matter referred to herein or
therein.
-58-
67
13.11 AUTHORITY OF AGENT TO ENFORCE NOTES AND THIS AGREEMENT. Each
Bank, subject to the terms and conditions of this Agreement, authorizes the
Agent with full power and authority as attorney-in-fact to institute and
maintain actions, suits or proceedings for the collection and enforcement of the
Notes, this Agreement and the Documents (or any of them) and to file such proofs
of claim or other documents as may be necessary to have the claims of the Banks
allowed in any proceeding relative to the Borrowers or its creditors or
affecting its properties, and to take such other actions which Agent considers
to be necessary or desirable for the protection, collection and enforcement of
the Notes, this Agreement or the Documents (or any of them). The Banks hereby
agree to indemnify Agent for any and all actions taken by Agent at the direction
of the Majority Banks.
14. MISCELLANEOUS
14.1 LAW OF MICHIGAN; SUBMISSION TO JURISDICTION. This Agreement, the
Notes and Documents have been delivered at Detroit, Michigan, and shall be
governed by and construed and enforced in accordance with the laws of the State
of Michigan except in the case of certain of the Documents executed by Loan
Parties organized in Canada, which Documents expressly state that they are to be
governed by the laws of Ontario, Canada. Whenever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
14.2 AGENT'S COSTS AND EXPENSES. Borrowers shall pay all costs and
expenses, including, by way of description and not limitation, reasonable
attorney fees and out-of-pocket expenses and lien and title search fees incurred
by Agent in connection with the commitment, consummation, and closing of the
loans contemplated hereby and in the exercise and enforcement of its rights and
prerogatives hereunder and under the Documents. All costs, including attorney
fees, incurred by Agent in revising, protecting, exercising or enforcing any of
its rights hereunder and under the Documents, or otherwise incurred by Agent in
connection with an Event of Default or incurred by Agent or any of the Banks in
connection with the enforcement hereof, including by way of description and not
limitation, such charges in any court or bankruptcy proceedings or arising out
of any claim or action by any person against Agent or any Bank which would not
have been asserted were it not for Agent's or such Bank's relationship with
Borrower hereunder or under the Documents, shall also be paid by Borrowers.
14.3 NOTICES. Except as otherwise provided herein, all notices
hereunder shall be sufficient if made in writing and delivered to the mailing
and delivery address of the respective parties indicated on the signature pages
to this Agreement, or transmitted to the facsimile or telex numbers set forth on
their respective signature pages to this Agreement. All such notices shall be
deemed received (i) two (2) Business Days after deposit thereof in the mails, if
given by mail, (ii) one (1) Business Day after deposit with express courier
service, or (iii) if by facsimile or telex transmission, the Business Day of
transmission if transmitted during customary business hours of the addressee
and, if not transmitted during such business hours, the following Business Day,
provided, however, that notices to the Agent shall not be effective until actual
receipt thereof.
-59-
68
14.4 FURTHER ACTION. Borrowers, from time to time, upon written request
of Agent will make, execute, acknowledge and deliver or cause to be made,
executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may be required to carry out
the intent and purpose of this Agreement and the Documents, and to provide for
Loans under and payment of the Notes, according to the intent and purpose herein
and therein expressed.
14.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of Borrowers, Agent and Banks and their respective
successors and assigns, provided that the foregoing shall not authorize any
assignment by Borrowers of any rights or duties hereunder. Any Bank may sell,
assign, grant participations in, or otherwise transfer to any other Person all
or part of the interests of such Bank under this Agreement and the Notes and the
Documents (including its participation interests in Letters of Credit), and
Loans made and to be made by such Bank, subject to the following terms and
conditions:
(a) ASSIGNMENTS. Each Bank, with the written consent of the
Agent (which consent shall not be unreasonably withheld) may assign all or a
portion of its Loans, Notes and other interests and obligations under this
Agreement and the Documents pursuant to an Assignment Agreement to another Bank
or (with the consent of TAG which consent shall not unreasonably be withheld,
provided that no such consent shall be required in connection with any
assignment made during any period when an Event of Default is existing) to other
commercial banks or financial institutions, provided that the aggregate amount
of the Commitments and Loans so assigned, and the portion thereof retained by
such assigning Bank (if any), shall in each case be not less than Five Million
Dollars ($5,000,000) after giving effect to such assignment. Any such assignment
will become effective five (5) Business Days after the Agent's receipt of a copy
of the Assignment Agreement executed by the assigning Bank and the assignee
Bank, payment to Agent of a processing and recordation fee in the amount of
Three Thousand Five Hundred Dollars ($3,500) for Agent's sole account, and
delivery to Agent (in escrow, pending issuance of Notes pursuant to the
following sentence) of the assigning Bank's then effective Note. On or before
such effective date (x) Agent shall provide TAG with written notice of such
assignment, (y) Borrowers shall execute and deliver to Agent new Notes made
payable to the assignee and assignor, and (z) Agent shall prepare and deliver to
Borrowers and the Banks a new Exhibit "E" to this Agreement (which new Exhibit
"E" shall automatically and without further action or consent be deemed to amend
and restate the prior Exhibit "E") setting forth the Percentages in effect as a
result of such assignment, whereupon the assignee will become a "Bank" for all
purposes of this Agreement and the other Documents, to the extent of such
assignment.
(b) PARTICIPATIONS. Each Bank may transfer or grant
participating interests in its Loans, Notes and other interests and obligations
hereunder to any Person ("Participants") provided that, as between such
transferring Bank and its Participant, such Bank shall retain all of its power,
authority and discretion to grant or participate in the granting of any waiver,
consent or other approval hereunder and to participate in the approval of any
amendment to this Agreement, such Bank's Notes, the Documents or any other
instrument or agreement delivered hereunder or in connection herewith, except
that such Bank may agree with any Participant that during the existence of the
Participant's interest, such Bank will not, without consent of such Participant,
agree to any amendment, modification, waiver, release or consent which pursuant
to
-60-
69
the terms hereof, requires the consent of all Banks. All amounts payable by
Borrower hereunder shall be determined as if the Bank had not sold such
participation.
14.6 INDULGENCE. No delay or failure of Agent and Banks in exercising
any right, power or privilege hereunder shall affect such right, power or
privilege nor shall any single or partial exercise thereof preclude any further
exercise thereof, nor the exercise of any other right, power or privilege. The
rights of Agent and Banks hereunder are cumulative and are not exclusive of any
rights or remedies which Agent and Banks would otherwise have.
14.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
14.8 ENTIRE AGREEMENT; AMENDMENTS; WAIVERS; CONSENTS. This Agreement,
the Notes, the Letter of Credit Agreements and Letters of Credit, the Documents,
and any agreements, certificates, or other documents given pursuant to the
foregoing, contain and will contain the entire agreement of the parties hereto,
and none of the parties shall be bound by anything not expressed in writing,
except that Borrowers shall be bound by telephonic requests for Loans made
hereunder. No amendment or waiver of any provision of this Agreement or any
Document, nor consent to any departure by Borrowers therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Agent
and the Majority Banks and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall:
(a) unless in writing and signed by all Banks;
(i) postpone a Maturity Date or any other date
fixed for any payment of principal of, or
interest on, any Loans, Letter of Credit
Obligation or any fees payable hereunder;
(ii) reduce the principal of, or interest on, any
Note or any Letter of Credit Obligation or
any fees or other amounts payable hereunder;
(iii) subject Banks to any additional obligations,
increase the aggregate amount of principal
indebtedness which may be incurred under the
Notes, or (except as specifically set forth
in Section 14.5(a) hereof) change the
Percentages;
(iv) release any Collateral for any of Borrowers'
obligations and indebtedness to Agent and
the Bank;
(v) change this Section 14.8;
(vi) change the definition of "Majority Banks" or
otherwise change the Percentage required to
take or authorize any action hereunder; and
(b) unless in writing and signed by the Agent in addition
to all Banks, affect the rights or duties of the Agent under this Agreement or
any Document.
-61-
70
14.9 CONFIDENTIALITY. Each Bank agrees that all documentation and other
information made available by Borrower to such Bank under the terms of this
Agreement shall (except to the extent required by regulatory authority or legal
or governmental process or otherwise by governmental authority or law, or if
such documentation and other information is publicly available or hereafter
becomes publicly available other than by action of such Bank, or was theretofore
known or hereafter becomes known to such Bank independent of any disclosure
thereto by a Borrower) be held in the strictest confidence by such Bank and used
solely in administration and enforcement of Loans from time to time outstanding
from such Bank to Borrowers and in the prosecution or defense of legal
proceedings arising in connection herewith; provided that: (i) such Bank may
disclose such documentation and information to the Agent and/or to any other
Bank which is a party to this Agreement; and (ii) such Bank may disclose such
documentation and other information to any other bank or other Person to which
such Bank sells or proposes to sell a participation in its Loans hereunder if
such other bank or Person, prior to such disclosure, agrees for the benefit of
Borrower to comply with the provisions of this Section 14.9.
14.10 INTEREST. It is the intention of the parties hereto that each
Bank and the Agent shall conform to usury laws applicable to them, if any.
Accordingly, if the transactions with any Bank or Agent contemplated hereby
would be usurious under such applicable laws, then, notwithstanding anything to
the contrary in the Notes or Documents payable to Agent or such Bank, this
Agreement or any other agreement entered into in connection with or as security
for or guaranteeing this Agreement or the Indebtedness, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest under
applicable law that is contracted for, taken, reserved, charged or received by
Agent or such Bank under the Notes payable to Agent or such Bank, this
Agreement, the Documents or under any other agreement entered into in connection
with or as security for or guaranteeing this Agreement or such Notes or
Documents shall under no circumstances exceed the Highest Lawful Rate and any
excess shall be credited automatically, if theretofore paid, on the principal
amount of Loans owed to such Agent or Bank or, if it has no Loans outstanding,
shall be refunded to Borrower by such Bank, (ii) in the event that the maturity
of any such Note or other Indebtedness hereunder is accelerated or in the event
of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to such Bank may never include more
than the Highest Lawful Rate and excess interest, if any, to Agent or such Bank
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by Agent or such Bank (as
applicable) on the principal amount of the Indebtedness owed to Agent or such
Bank (as applicable) by the Borrower or, if no such Indebtedness is then
outstanding, shall be refunded to the Borrower. Without limiting the foregoing,
in no event shall the aggregate "interest" (as defined in Section 347 of the
Criminal Code (Canada), as the same may be amended, replaced or enacted from
time to time) payable under this Agreement exceed the maximum amount of interest
on the "credit advanced" (as defined in that section under this Agreement
lawfully permitted under that section).
14.11 JURY WAIVER. Each of the parties to this agreement hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the Documents or the
transactions contemplated hereby or thereby.
-62-
71
14.12 CONFLICTS. In the event of direct conflict between the provision
of this Agreement and any term of any Security Document, the relevant term of
this Agreement shall control.
14.13 EFFECTIVE UPON EXECUTION. This amendment to and restatement of
the Existing Agreement shall become effective upon the later of the execution
hereof by the Banks, Agent and Borrowers and the Effective Date and shall remain
effective until all Loans and obligations hereunder have been repaid and
discharged in full and no commitment to fund any Loan hereunder remains
outstanding.
14.14 COLLATERAL VALUATIONS. Borrowers agree to permit Agent and its
designees to conduct such fair market value appraisals, inspections, surveys
and/or testing, whether for environmental contamination or otherwise, that Agent
deems necessary, on any and all real property upon which Agent may possess a
mortgage or other lien securing the Loans, and the cost of such appraisals,
inspections, surveys and testing are part of the costs and expenses for which
Borrowers must reimburse Agent upon demand.
14.15 WAIVER OF CLAIMS. EACH BORROWER, IN EVERY CAPACITY, INCLUDING,
BUT NOT LIMITED TO, AS A SHAREHOLDER, PARTNER, OFFICER, DIRECTOR, INVESTOR
AND/OR CREDITOR OF BORROWER, OR ANY ONE OR MORE OF THEM, HEREBY WAIVES,
DISCHARGES AND FOREVER RELEASES AGENT AND EACH BANK, AND THEIR RESPECTIVE
EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND
ASSIGNS, FROM AND OF ANY AND ALL CLAIMS, CAUSES OF ACTION, DEFENSES,
COUNTERCLAIMS OR OFFSETS AND/OR ALLEGATIONS EACH OR BOTH MAY HAVE OR MAY HAVE
MADE OR WHICH ARE BASED ON FACTS OR CIRCUMSTANCES ARISING AT ANY TIME UP THROUGH
AND INCLUDING THE DATE OF THIS AGREEMENT, WHETHER KNOWN OR UNKNOWN, AGAINST ANY
OR ALL OF AGENT, ANY BANK OR BANKS, AND THEIR RESPECTIVE EMPLOYEES, OFFICERS,
DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND ASSIGNS.
14.16 WAIVER OF SECTION 506(C). In consideration of the Post-Petition
Advances to be made to the Borrowers hereunder, there shall be no surcharge
under any provision of the Bankruptcy Code or the CCAA, including Section
506(c), against the Agent or Banks' respective Collateral for any charges or
expenses.
14.17 WAIVER OF CLAIMS. In consideration of the Post-Petition Loans to
be made to the Borrowers hereunder, as well as the use of Cash Collateral and
the other accommodations provided herein, each Borrower, for itself, hereby (a)
waives any and all claims it may have against the Agent or any Bank, or their
respective directors, officers, employees or agents, or any of them, including
those arising out of, or related to the Existing Agreement, this Agreement or
any other Loan Document, from the beginning of time (including prior to the
Petition Date) to the date hereof, and (b) agrees not to assert any such claim
or any claim under chapter 5 of the Bankruptcy Code, or any claim under any
provision of the CCAA, against the Agent or any Bank, or their respective
directors, officers, employees or agents, or any of them, in any form or manner
whatsoever.
-63-
72
14.18 SECTION 364(C)(1). PRIORITY, PROFESSIONAL AND ADMINISTRATIVE
EXPENSES. Notwithstanding anything herein to the contrary, the payment and
administrative claims of, and the security interests and Liens securing, the
Post-Petition Indebtedness shall be subordinate to the Carveout in the manner
set forth in the Interim Authorizing Orders or the Final Authorizing Orders, as
applicable; provided, that the fees and expenses of professionals engaged by the
Borrowers and by one statutory committee pursuant to Sections 327 and 1103 of
the Bankruptcy Code, and by the professionals and the monitor engaged in the
CCAA Case, (collectively, the "Professional Fees"), which are allowed by the
Bankruptcy Court or the Canadian Court, as the case may be, upon proper
application therefor, to be paid out of the Carveout shall be first paid from
any amounts held by such professionals as a retainer before being paid pursuant
to this Section 14.18; and provided, further, that the Banks shall not be
required on account of the provisions of this Section 14.18 to disgorge any
payment received in respect of the Pre-Petition Loans or the Post-Petition
Loans, whether such disgorgement is in the form of a loan repayment, interest
payment or reimbursement of fees and costs or otherwise. Professional Fees shall
only be paid from the Carveout from and after the date the Banks cease providing
Advances under this Agreement. Prior to any cessation of Advances, Professional
Fees shall be paid from the Advances in the manner, and subject to the
restrictions, set forth in the Interim Authorizing Order and Final Authorizing
Orders.
14.19 WAIVER OF MARSHALLING. The Agent and the Lenders shall have no
obligation to xxxxxxxx all or any portion of the Collateral upon any realization
or foreclosure under this Agreement or any Security Document or other Loan
Document, and any court having jurisdiction over this Agreement may order the
sale of all or any portion of the Collateral. Any sale of, or the grant of
options to purchase (for the option period thereof or after exercise thereof),
or any other realization upon, all or any portion of the Collateral under this
Agreement or any Document by the Agent or the Banks after foreclosure shall
operate to divest all right, title, interest, claim and demand, either at law or
in equity, of the Borrowers in and to the Collateral so sold, optioned or
realized upon, and shall bar both at law and in equity the Borrowers and any and
all persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon or any part thereof from, through and under the Borrowers. No
delay on the part of the Lenders or the Agent in exercising any power of sale,
lien, option or other right hereunder or under any other Document and no notice
or demand which may be given to or made upon the Borrowers with respect to any
power of sale, lien, option or any other right hereunder or thereunder shall
constitute a wavier thereof, or limit or impair the right of the Agent and the
Banks to take any action or to exercise any power of sale, lien, option or any
other right under this Agreement, the Documents or otherwise, nor shall any
single or partial exercise thereof, or the exercise of any power, lien, option
or other right under this Agreement or otherwise, all without notice or demand
(except as otherwise provided by the terms of this Agreement), prejudice its
rights against any Borrower in any respect. Each and every remedy given the
Agent and the Banks shall, to the extent permitted by law, be cumulative and
shall be in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity or by statute.
14.20 WAIVER OF RIGHT TO OBTAIN ALTERNATIVE FINANCING. In consideration
of the PostPetition Loans to be made to the Borrowers hereunder, each Borrower
hereby further waives any right it may have to obtain an order by the Bankruptcy
Court authorizing any one or more of the Borrowers to obtain financing pursuant
to Section 364 of the Bankruptcy Code from any Person
-64-
73
other than the Agent and the Banks, unless such financing would result in all of
the Indebtedness (whether arising before, on or after the Petition Date) being
paid in full, in cash, on or before the closing of the new financing.
14.21 CREDIT BIDS. The Agent and Lenders shall have the right to credit
bid the Lenders' claims under the Existing Agreement, this Agreement, the
Interim Authorizing Order or the Final Authorizing Order in any sale under
Section 363(k) of the Bankruptcy Code.
14.22 WRITTEN MODIFICATIONS. Agent and Banks anticipate that
discussions addressing the Loans may take place in the future. During the course
of such discussions, Agent, Banks and Borrowers, may touch upon and possibly
reach a preliminary understanding on one or more issues prior to concluding
negotiations. Notwithstanding this fact and absent an express written waiver by
Agent and Majority Banks (or to the extent required pursuant to Section 14.8 of
this Agreement, all of the Banks), Agent and the Banks will not be bound by an
agreement on any individual issues unless and until an agreement is reached on
all issues and such agreement is reduced to writing and signed by Borrower,
Agent and Majority Banks (or to the extent required pursuant to Section 14.8 of
this Agreement, all of the Banks).
14.23 ADDITIONAL DOCUMENTATION. Each Borrower agrees to execute any and
all additional or supplemental documentation, and provide such further
assistance and assurances as Agent may require, in Agent's sole and absolute
discretion, to give full effect of the terms, conditions and intentions of this
Agreement.
[signatures on the following pages]
-65-
74
WITNESS the due execution hereof as of the day and year first above
written.
TALON AUTOMOTIVE GROUP INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------------
Its: Vice President
---------------------------------------------
000 Xxxxxxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
XXXXXX METAL PRODUCTS CO.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------------
Its: Vice President
---------------------------------------------
000 Xxxxxxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
COMERICA BANK, as Agent and Bank
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------------
Xxxxxx X. Xxxxx
Its: Vice President
---------------------------------------------
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx
--------------------------------------------
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
-66-
00
XXXXXXXX XXXX XX XXXXXX, XXX XXXX
BRANCH
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------------
Xxxx X. Xxxxxxxxx
Its: Asst. Vice President
---------------------------------------------
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Xxxxx X. Xxxxxx
Its: Vice President
---------------------------------------------
-------------------------------------------------
-------------------------------------------------
Telephone No.
-----------------------------------
Facsimile No.
-----------------------------------
BNP PARIBAS
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Xxxxx X. Xxxxxx
Its: Director
---------------------------------------------
By: /s/ Xxxxxxxx X. Xxxx
----------------------------------------------
Xxxxxxxx X. Xxxx
Its: Managing Director
---------------------------------------------
-------------------------------------------------
-------------------------------------------------
Telephone No. 000 000 0000
-----------------------------------
Facsimile No. 000 000 0000
-----------------------------------
MICHIGAN NATIONAL BANK
By: /s/ Xxxxxxx Xxxxx
----------------------------------------------
Its: Group Mgr.
---------------------------------------------
-------------------------------------------------
-------------------------------------------------
Telephone Xx. 0 - 000 - 000 - 0000
-----------------------------------
Xxxxxxxxx Xx. 0 - 000 - 000 - 0000
-----------------------------------
-67-
76
FLEET CAPITAL CORPORATION, as assignee of
Fleet National Bank, f/k/a "Bank Boston, NA"
By: /s/ Xxxxx Xxxxxx
----------------------------------------------
Its: Senior Vice President
---------------------------------------------
-------------------------------------------------
-------------------------------------------------
Telephone No. 000 000 0000
-----------------------------------
Facsimile No. 000 000 0000
-----------------------------------
DRESDNER BANK AG NEW YORK AND
GRAND CAYMEN BRANCHES
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------
Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Its: Vice President Vice President
---------------------------------------------
-------------------------------------------------
-------------------------------------------------
Telephone Xx. 000/000 - 0000
-----------------------------------
Xxxxxxxxx No. 212/429 - 4930
-----------------------------------
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxx
----------------------------------------------
Its: Group Senior V.P.
---------------------------------------------
-------------------------------------------------
-------------------------------------------------
Telephone No. 000 000 0000
-----------------------------------
Facsimile No. 000 000 0000
-----------------------------------
Each of the undersigned hereby acknowledges and agrees to the foregoing
amendment and restatement of the Prior Agreement.
VS HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Its: Vice President
--------------------------
-68-
77
SCHEDULE 9.4
Threatened Litigation
1. Borrowers are in default under the Senior Subordinated Notes for
failure to pay the interest payment due as of November 1, 2000 (and may
not be able to pay subsequent interest payments due thereunder), and
some or all of the holders of the such notes may institute proceedings
against the Borrowers.
2. Under the PSI Consolidation Plan, Borrowers are intending to close
their Oxford and New Baltimore plants prior the expiration of the real
estate leases therefor. While the Borrowers plan on seeking subtenants
for these properties (i) such actions may be a default under the leases
and the landlords may institute proceedings against the Borrowers, (ii)
appropriate subtenants may not be available, and/or (iii) the Landlords
may not consent to such subleases.
3. Liberty Bidco v. Talon Automotive Group d/b/a Production Stamping,
Inc.: Liberty Bidco ("Plaintiff") allegedly received an assignment by
Enamelcote of over $350,000 in receivables allegedly owed by TAG four
months after Enamelcote filed suit against TAG. Enamelcote subsequently
went out of business. Plaintiff then filed suit against TAG in Xxxxx
County Circuit Court, and TAG received summary disposition of that suit
and for sanctions against the opposing party, which have been paid.
Plaintiff has appealed the summary disposition. Briefs have been filed
and the parties await the decision of the Michigan Court of Appeals.
4. Xxxxxxxx v. Talon Automotive Group, Inc.: Xxxxxxxx ("Plaintiff"), a
former hourly production employee at Production Stamping's New
Baltimore plant has filed suit in Oakland County Circuit Court alleging
sexual harassment and discrimination with alleged damages in excess of
$25,000. Discovery has begun, but TAG does not believe the suit has
merit and will defend the same aggressively.
5. Xxxxxxxx v. Talon Automotive Group, Inc.: Xxxxxxxx ("Plaintiff"), a
former quality control employee at TAG's Oxford plant has filed suit in
Oakland County Circuit Court alleging sexual harassment and
discrimination with alleged damages in excess of $25,000. Discovery has
begun, but TAG does not believe the suit has merit and will defend the
same aggressively.
6. Royal Oak Community Credit Union has made a possible environmental
claim against the Hawthorne Metal Products Division of TAG in November,
1998 alleging migration of hydrocarbon-like contamination from or near
the property line shared by the Royal Oak Community Credit Union and
Hawthorne Metal Products Company. No claim has been filed and TAG does
not believe that this claim, if filed, has any merit.
7. In 1998 and 1999, TAG received various notices of patent infringement
from attorneys for the Lemelson Foundation Partnership relating to
various manufacturing applications. TAG is reviewing these patent
claims to determine whether any of TAG's processes and applications are
affected thereby.
-69-
78
SCHEDULE 9.7
Potential Material Claims
See Schedule 9.4
Borrowers have entered into the Access Agreement and the Customer
Agreement with the Agent and the Designated Customers.
-70-
79
SCHEDULE 9.10
Tax Returns and Payments
None.
-71-
80
SCHEDULE 9.12
Compliance with Laws
MIOSHA VIOLATIONS
CITATION 1 SERIOUS
ITEM# DESCRIPTION STATUS
8a Guard ledge in scrap pit DISPUTE W/MIOSHAR
19 One set of palm buttons for two employees DISPUTE W/MIOSHAR
22 Build up sides of scrap pit conveyor DISPUTE W/MIOSHAR
23 Light curtain at end of cowl line inadequate DISPUTE W/MIOSHAR
24 Guard chains and rollers on scrap pit STARTED, BUT NOT COMPLETE
conveyor
ITEM# DESCRIPTION STATUS
39 Inadequate die set procedures DISPUTE W/MIOSHA
55 Not providing contractors with on-site DISPUTE W/MIOSHA
access to MSDS
56 Employee not trained to use solvent Dispute w/MIOSHA
CITATION 2 WILLFUL SERIOUS
1a thru g Inadequate safety distance DISPUTE W/MIOSHA
ABATED. VERIFY W/NEW PROCEDURE-
2 Rescue training in confined spaces DISPUTE W/MIOSHA
QUOTE FROM ENVIROAIR --
20 ASSOCIATES - $3,000-
3a thru j Develop, document and utilize lockout DISPUTE W/MIOSHA
procedures ABATED. VERIFY W/LOCKOUT PROGRAM
AND TRAINING RECORDS
CITATION 3 OTHER THAN SERIOUS
ITEM# DESCRIPTION STATUS
19a thru f Maintain record of last two press insp. STARTED, BUT NOT COMPLETE
ALL CITATIONS AND ITEMS ARE UNDER APPEAL. HEARINGS ARE SCHEDULED FOR LATER THIS
MONTH.
XXXXXX METAL PRODUCTS ARE REPRESENTED BY XXXXX, XXXXXXX & XXXXXXXX.
-72-
81
SCHEDULE 9.14
Collective Bargaining Agreements
------------------------------ --------------------------------------------- -----------------------------------------
PLANT UNION EXPIRATION DATE
------------------------------ --------------------------------------------- -----------------------------------------
VMA Canadian Auto Workers (Local 195) May 17, 2002
------------------------------ --------------------------------------------- -----------------------------------------
VSC *CAW-Canada (Local 195) Ratified 12/16/00
Eff. 3/18/01 to 3/17/04
------------------------------ --------------------------------------------- -----------------------------------------
VGL United Auto Workers (Local 2381) September 10, 2002
------------------------------ --------------------------------------------- -----------------------------------------
Royal Oak United Auto Workers August 17, 2001
------------------------------ --------------------------------------------- -----------------------------------------
PSI - New Baltimore United Steel Workers February, 2002
& Cricklewood
------------------------------ --------------------------------------------- -----------------------------------------
PSI - Oxford United Steel Workers No Later Than May 31, 2001
------------------------------ --------------------------------------------- -----------------------------------------
J&R Manufacturing International Association of Machinists & February 21, 2003
Aerospace Workers
------------------------------ --------------------------------------------- -----------------------------------------
*National Automobile, Aerospace Transportation and General Workers Union of
Canada (CAW-CANADA) Local 195.
-73-
82
SCHEDULE 9.15
Indebtedness Outstanding
(000's)
1. Note Payable - Bonds $ 120,000.00
2. Other LTD - J&R Sub Debt 80.00
3. Capital Leases 1,451.00
4. EDC $ 340.00
--------------------------------------------------------------------------
$ 121,871.00
============
-74-
83
SCHEDULE 9.16
Environmental Matters
Royal Oak Community Credit Union has made a possible environmental claim against
the Hawthorne Metal Products Division of TAG in November, 1998 alleging
migration of hydrocarbon-like contamination from or near the property line
shared by the Royal Oak Community Credit Union and Hawthorne Metal Products
Company. No claim has been filed and TAG does not believe that this claim, if
filed, has any merit.
-75-
84
SCHEDULE 9.18
ERISA
None.
-76-
85
EXHIBIT "A"
ASSIGNMENT AGREEMENT
This Assignment Agreement is dated as of the _____ day of
____________________, ______, among ____________________ ("Assignor"), and
____________________ ("Assignee").
Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Second Amended and Restated Credit Agreement, dated
as of June _____, 2001, as amended from time to time in accordance with its
terms, ("Loan Agreement"), by and among Talon Automotive Group, Inc., a Michigan
corporation ("TAG"), Xxxxxx Metal Products Co., a Nova Scotia corporation
("Xxxxxx" called together with TAG, the "Borrowers" and either one referred to
individually herein as a "Borrower"), Comerica Bank, a Michigan banking
corporation as Agent for the Banks named therein, and the Banks (including
Assignor);
WHEREAS, Assignor's current Percentage under the Loan Agreement is
_____%, and in accordance with such Percentage, Assignor has pro rata interests
in the Loan and each of the Commitments ("Assignor Commitment");
WHEREAS, Assignee desires to acquire from Assignor, and Assignor
desires to assign to Assignee, that portion of the Assignor Commitment so that,
upon completion of the assignment, Assignee will be a Bank for all purposes
under the Loan Agreement with a Percentage under the Loan Agreement of
__________ percent (_____%) and commensurate interests in each of the Loans and
each Commitment.
NOW, THEREFORE, IT IS AGREED:
1. Assignment
Effective on the Assignment Effective Date, Assignor hereby
assigns to Assignee, without recourse or representation or warranty (other than
as expressly provided herein), that portion described on Annex I hereto as the
Assignee's share ("Assignee's Share") of all of Assignor's rights, title and
interest arising under or in connection with the Loan Agreement and Documents
including, without limitation, all rights with respect to the Loans, to the
extent attributable to Assignee's Share. It is the intent of this Assignment
Agreement that from and after the Assignment Effective Date the Assignee shall
be deemed a "Bank", as defined in the Loan Agreement and shall benefit from and
be subject to all of the rights and obligations of a "Bank" under the Loan
Agreement and shall further be a Bank, as defined in the Voting Agreement dated
by Agent and the Banks contemporaneously with the Loan Agreement.
2. Assumption
Effective on the Assignment Effective Date, Assignee hereby
assumes from Assignor all of Assignor's obligations arising under the Loan
Agreement relating to Assignee's Share or in connection with the Assignee's
Share of all outstanding Loans and Commitments now or hereafter outstanding or
issued under the Loan Agreement, and Assignor shall be released from all of its
obligations under the Loan Agreement relating to Assignee's Share of
-77-
86
Loans and Commitments now or hereafter outstanding or issued pursuant to the
terms of the Loan Agreement.
3. Effectiveness
This Assignment Agreement shall become effective on the date
(the "Assignment Effective Date") which is five (5) Business Days subsequent to
the Agent's receipt of an originally executed copy of this Assignment Agreement
and the processing and recording fee due together therewith, in the amount of
$3,500, in accordance with Section 14.5(a) of the Loan Agreement. In the event
that, due to any Advance or payment on Loans, or of any Advance occurring
between the date hereof and the Assignment Effective Date, the amount of
outstanding Loans indicated as assigned to Assignee and retained by Assignor on
Annex I hereto does not accurately reflect the actual principal balance of Loans
to be acquired in accordance with the Percentage interests in Loans acquired by
Assignee and retained by Assignor, Agent shall be authorized, on such Assignment
Effective Date to, without further consent of any party, make such corrections
to Annex I hereto as are necessary to accurately reflect the principal balance
of then outstanding Loans assigned and retained hereby, in accordance with such
Percentages.
4. Payment of Interest and Fees to Assignee
(a) It is agreed that, between Assignor and Assignee,
Assignee shall be entitled to all interest on any
Loan and all Commitment Fees which accrue on the
Assignee's Share subsequent to the Assignment
Effective Date. Notwithstanding the foregoing, with
respect to payments of such interest and Commitment
Fees attributable to Assignee's Share which are
received by Agent for distribution to the Banks
subsequent to the Assignment Effective Date, Agent is
hereby entitled and instructed to remit such amounts
directly to Assignee, without regard to the period
during which such amounts accrued, and Assignor and
Assignee shall promptly make such adjustments between
themselves as are necessary for proper application of
interest and Commitment Fees accrued prior to the
Assignment Effective Date, in accordance with
subsections (b) and (c) below.
(b) In the event that Assignor receives or collects any
interest on any Loan attributable to Assignee's Share
which accrued subsequent to the Assignment Effective
Date, or any Commitment Fees which are attributable
to Assignee's Share and which accrued subsequent to
the Assignment Effective Date, Assignor shall
promptly distribute such payment to Assignee.
(c) In the event Assignee receives or collects any
interest on any Loan which accrued other than on
Assignee's Share or prior to the Assignment Effective
Date or any Commitment Fees which accrued other than
on Assignee's Share or prior to the Assignment
Effective Date, Assignee shall promptly distribute
such payment to Assignor.
-78-
87
(f) To the extent payments under clause (b) or (c) above
are not made within two (2) Business Days of receipt,
the Person to which such payment is owing shall be
entitled to recover such amount together with
interest thereon at a rate per annum equal to the
Federal Funds Rate from the date such amounts were
received by such other Person, to and including the
date of payment.
(e) The Agent, by acceptance of this Assignment
Agreement, consents to the assignments described
above and agrees to make payments in respect of
interest and Fees as described in clause (a) above.
5. Payments on Assignment Effective Date. In consideration of the
assignment of Assignee's Share: (i) Assignee agrees to pay to Assignor, on the
Assignment Effective Date, an amount in U.S. Dollars which represents the
principal amount of the Loans attributable to Assignee's Share outstanding as of
the Assignment Effective Date; and (ii) Assignor agrees to pay to Assignee the
assignment fee (if any) specified in Annex I hereto on the Assignment Effective
Date.
6. Representations and Warranties
(a) Assignor and Assignee each represent and warrant:
(i) it has full power and authority, and has
taken all action necessary, to execute and
deliver this Assignment Agreement and to
fulfill its obligations under, and to
consummate the transactions contemplated by,
this Assignment Agreement;
(ii) the making and performance by it of this
Assignment Agreement and all documents
required to be executed and delivered by it
hereunder do not and will not violate any
law or regulation of the jurisdiction of its
incorporation or any other law or regulation
applicable to it;
(iii) this Assignment Agreement has been duly
executed and delivered by it and constitutes
its legal, valid and binding obligation,
enforceable in accordance with its terms;
and
(iv) all approvals, authorizations, or other
actions by, or filing with, any governmental
authority necessary for the validity or
enforceability of its obligations under this
Assignment Agreement have been obtained.
(b) Assignor represents and warrants to Assignee that:
(i) Assignor owns the Assignor Commitment and the
Loans that are the subject of this Assignment
Agreement and the Assignee's Share and the Loans
attributable to Assignee's Share are subject to no
liens or security interests created by Assignor; (ii)
the assignment contemplated by this Assignment
Agreement complies with the provisions of Section
14.5 of the Loan
-79-
88
Agreement; (iii) Assignor has, prior hereto,
delivered to Assignee a complete and true set of
copies of Loan Agreement and all of the Documents in
Assignor's possession.
(c) Assignee represents and warrants that it has made its
own independent investigation of the financial
condition and affairs of the Company and other
parties to the Documents and of the Loans and Letters
of Credit attributable to Assignee's Share and has
made and shall continue to make its own appraisal of
the creditworthiness of the Company and other parties
to the Documents.
7. Expenses
Assignor and Assignee agree that each of them shall bear its
own expenses in connection with the preparation and execution of this Assignment
Agreement, provided, however, that the processing and recordation fee payable to
Agent pursuant to Section 14.5(a) of the Loan Agreement shall be paid by
____________________.
8. Miscellaneous
(a) Neither Agent nor any Bank (including Assignor) shall
be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of the Loan Agreement
or Documents or for any representations, warranties,
recitals or statements made therein or in any written
or oral statement or in any financial or other
statements, instruments, reports, certificates or any
other documents made or furnished or made available
to Assignee or by or on behalf of the Company or any
other person obligated under the Documents to
Assignor or Assignee in connection with the Documents
and the transactions contemplated thereby nor shall
any such Person be required to ascertain or inquire
as to the performance or observance of any of the
terms, conditions, provisions, covenants or
agreements contained in any of the Documents or as to
the use of the proceeds of the Loans or as to the
existence or possible existence of any Default or
Event of Default.
(b) Neither Agent nor the Bank (including Assignor) shall
have any duty or responsibility either initially or
on a continuing basis to make any investigation of
the financial condition and affairs of Company or any
Subsidiary in connection with the making of the Loans
or Assignee's acquisition of Assignee's Share or to
provide Assignee with any credit or other information
with respect thereto, whether coming into its
possession before the making of the Loans or at any
time or times thereafter, and shall further have no
responsibility with respect to the accuracy of, or
the completeness of, any information provided to
Assignee by or on behalf of Company.
-80-
89
(c) The Assignee appoints and authorizes the Agent to
take such action on its behalf and to exercise such
powers under the Loan Agreement and the Documents as
are delegated to the Agent by the terms thereof,
together with such powers as are reasonably
incidental thereto.
(d) The validity, construction and enforceability of this
Assignment Agreement shall be governed by the laws
of, and enforceable in, the State of Michigan.
(e) No term or provision of this Assignment Agreement may
be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the
parties to this Assignment Agreement.
(f) This Assignment Agreement may be executed in one or
more counterparts, each of which shall be an original
but all of which, taken together, shall constitute
one and the same instrument.
(g) All payments hereunder or in connection herewith
shall be made in U.S. Dollars and in immediately
available funds by wire transfer, if payable by
Assignee to Assignor, to the account of Assignor as
designated in Annex I hereto, and if payable by
Assignor to Assignee, to the account of Assignee, as
designated in Annex I hereto, and, if payable by
Agent, in accordance with the applicable provisions
of the Loan Agreement. The address of the Assignee
for notice purposes under the Loan Agreement shall be
as set forth in Annex I hereto.
(h) This Assignment Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective successors and assigns. Neither Assignee
nor Assignor may assign or transfer any of its rights
or obligations under this Assignment Agreement except
in accordance with Section 14.5 of the Loan
Agreement.
(i) In case any provision in this Assignment Agreement
shall be held invalid, illegal or unenforceable, the
validity, legality and enforceability of the
remaining provisions hereof will not in any way be
affected or impaired thereby.
-81-
90
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first written above.
ASSIGNOR:___________________________________
By:_________________________________________
Its:________________________________________
ASSIGNEE:___________________________________
By:_________________________________________
Its:________________________________________
Received and Acknowledged:
COMERICA BANK, as Agent
By:____________________________________
Its:___________________________________
-82-
91
ANNEX I
To
ASSIGNMENT & ASSUMPTION AGREEMENT
1. Borrowers:
Talon Automotive Group, Inc.
Xxxxxx Metal Products Co.
2. Date of Credit Agreement:
June _____, 2001
3. Assignor:
4. Assignee:
5. Date of Assignment Agreement:
6. Assignee's Share:
(a) Assignee's Percentage....................................................................._________%
(b) Dollar Amount of Assignee's Percentage of Revolving Loans ...............................$__________
(c) Dollar Amount of Assignee's Share of Assignor's Swing Loans..............................$__________
(d) Total Principal Amount of Outstanding Loans Assigned.....................................$__________
7. Assignor's Remaining Interests:
(a) Assignor's Retained Percentage............................................................_________%
(b) Dollar Amount of Assignor's Retained Percentage of Revolving Loans.......................$__________
(c) Dollar Amount of Assignors Retained Swing Loans..........................................$__________
(d) Total Principal Amount of Outstanding Loans Retained by Assignor.........................$__________
-83-
92
8. Payment Instructions:
Assignor:
ABA No.:
Attention:
Reference:
Assignee:
ABA No.:
Attention:
Reference:
9. Assignee's Notice Instructions:
Accepted and Agreed:
ASSIGNOR:___________________________ ASSIGNEE:___________________________
By:_________________________________ By:_________________________________
Its:________________________________ Its:________________________________
-84-
93
EXHIBIT "B"
BUDGET
-85-
94
EXHIBIT "C"
LOCK-UP AGREEMENT
-86-
95
LOCKUP AGREEMENT
This Lockup Agreement ("Agreement"), dated as of May 30, 2001, is entered
into by and among Talon Automotive Group, Inc., a Michigan corporation
("Talon"), VS Holdings, Inc., a Michigan corporation ("Holdings"), Xxxxxx
Metal Products Company, a Nova Scotia unlimited liability company ("Products")
(Talon, together with Holdings and Products, the "Company"), and the
undersigned holders ("Consenting Holders") of the Company's 9.625% Senior
Subordinated Notes Due 2008 (the "Notes").
WHEREAS, pursuant to an Indenture dated April 28, 1998 (the "Indenture"),
the Company has previously issued the Notes;
WHEREAS, certain of the Consenting Holders have formed an ad hoc committee
for the purpose of negotiating with the Company (the "Noteholders Committee"),
and have engaged Milbank, Tweed, Xxxxxx & XxXxxx LLP ("Milbank") as legal
counsel and Xxxxxx Capital Partners ("Xxxxxx") as financial advisors;
WHEREAS, the Company and the Consenting Holders have engaged in good faith
negotiations with the objective of reaching an agreement with regard to a
financial reorganization of the Company;
WHEREAS, the Company and the Consenting Holders now desire to implement a
financial restructuring of the Company on the terms set forth in this Agreement
and in the Term Sheet ("Term Sheet") attached hereto as Schedule 1 (the
"Financial Restructuring");
WHEREAS, in order to implement the Financial Restructuring, the Company
has determined (i) to cause Talon and Holdings to commence cases (collectively,
the "Chapter 11 Case") under chapter 11 of the United States Bankruptcy Code
(the "Bankruptcy Code") for the Company in the United States Bankruptcy Court
for the Eastern District of Michigan (the "Bankruptcy Court"), (ii) to cause
Products to commence a case in Canada (the "CCAA Case") under the Companies'
Creditors Arrangement Act (the "CCAA") in the Ontario Superior Court of Justice
(the "Canadian Court"), (iii) to prepare and file in the Chapter 11 Case and
the CCAA Case a plan of reorganization (the "Plan") and accompanying disclosure
statement (the "Disclosure Statement") for the purpose of implementing the
Financial Restructuring in accordance with this Agreement and the Term Sheet,
and (iv) to have the Disclosure Statement approved and Plan confirmed by the
Bankruptcy Court and the Canadian Court in accordance with the timetable
provided herein; and
WHEREAS, each of the Consenting Holders is prepared to commit to vote is
claims (as defined in the Bankruptcy Code) in the principal amount of Notes
held by such Consenting Holder (for each such Consenting Holder, in the
principal amount set forth below its name on its signature page to this
Agreement, the "Subject Claims") to accept the Plan, subject to the terms and
conditions of this Agreement and the Term Sheet;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and
FN
-87-
96
sufficiency of which are hereby acknowledged, the Company and the Consenting
Holders agree as follows:
1. Forbearance. During the period commencing on the date hereof and ending
on the earlier of June 29, 2001, and the date that the Chapter 11 Case and the
CCAA Case are filed (the "Commencement Date"), and so long as no "Agreement
Termination Event" (as defined in Paragraph 8 of this Agreement) has occurred,
each Consenting Holder agrees: (A) to forbear from the exercise of any rights or
remedies it may have under the Consenting Holder's Notes, the Indenture or other
applicable law with respect to any default in existence or arising under the
Consenting Holder's Notes and the Indenture; and (B) that in the event of any
action by an Indenture Trustee to enforce rights and remedies triggered by a
Default or an Event of Default under the Indenture, to direct the Trustee to
forbear from exercising such rights and remedies, but only if and to the extent
(i) such action by the Consenting Holder is authorized and permissible under the
Indenture and the Notes, and (ii) no indemnity is required by the Indenture
Trustee arising from or in connection with such directions.
2. Restriction on Transfer. Each Consenting Holder agrees that, so long as
this Agreement has not been terminated in accordance with Paragraph 8 hereof, it
shall not sell, transfer or assign any of the Notes or Subject Claims arising
under the Notes or any option thereon or any right or interest (voting or
otherwise and including any participation interest) therein, unless the
transferee thereof agrees in writing to be bound by all the terms of this
Agreement by executing a counterpart signature page of this Agreement, and the
transferor provides the Company with a copy thereof, in which event the Company
shall be deemed to have to constitute obligations in favor of such transferee,
and the Company shall confirm that acknowledgment in writing upon the request of
such transferee.
3. Preparation of Restructuring Documents. The Company shall instruct its
counsel promptly to deliver to the Consenting Holders for their review and
approval of the Plan, the Disclosure Statement, the DIP Facility (as defined in
the Term Sheet), the Bankruptcy Court and Canadian Court orders to be prepared
in connection therewith, and all other documents or agreements to be executed or
implemented in connection therewith, or otherwise contemplated by, the Financial
Restructuring, each of which documents and agreements shall be consistent in all
material respects with this Agreement and the Term Sheet (collectively, the
"Restructuring Documents"). The Company shall coordinate with the Consenting
Holders in preparing the Restructuring Documents and shall afford Milbank,
counsel to the Noteholders Committee, a reasonable opportunity to review and
comment upon the Restructuring Documents prior to their filing. The Company and
the Consenting Holders agree that (a) the negotiation of this Agreement and the
attached Term Sheet, and (b) the delivery of any information by the Company to
the Consenting Holders in connection with this Agreement and the attached Term
Sheet, are not intended by the Company to be a solicitation of the Consenting
Holders' approval of any plan of reorganization within the meaning of Section
1125 of the Bankruptcy Code. The Company and the Consenting Holders further
agree that this Agreement is not a financial accommodation contract that would
be unenforceable under Section 365(c)(2) of the Bankruptcy Code, and each agrees
not to take any contrary position in the Chapter 11 Case or the CCAA Case.
FN
-88-
97
4. Company Covenants Regarding Timetable. The Company agrees that it
shall: (i) deliver a draft of the Plan, the Disclosure Statement and the DIP
Facility documents to Milbank prior to commencement of the Chapter 11 Case and
the CCAA Case; (ii) commence the Chapter 11 Case and CCAA Case on or prior to
June 29, 2001; (iii) deliver a draft of all Restructuring Documents other than
those contemplated in subparagraph (i) above to each Consenting Holder at least
5 business days prior to the Bankruptcy Court hearing on approval of the
Disclosure Statement; (iv) obtain an order of the Bankruptcy Court approving the
Disclosure Statement on or prior to September 17, 2001; and (v) obtain an order
of the Bankruptcy Court confirming the Plan on or prior to October 31, 2001. The
Company further agrees that the effective date of the Plan shall be on or prior
to December 17, 2001.
5. Certain Other Company Covenants. The Company agrees that it shall take
all reasonable steps necessary and desirable to obtain any and all required
regulatory and/or third party approvals for the Financial Restructuring.
6. Voting. Subject to the condition that, and so long as, no Agreement
Termination Event has occurred, including without limitation (i) the Disclosure
Statement has been approved by the Bankruptcy Court (and the Canadian Court if
required under applicable law) by September 17, 2001, (ii) the Disclosure
Statement as so approved contains information in respect of the Company's
business and operations that is not materially inconsistent with the information
heretofore provided by the provided by the Company to the Consenting Holders,
Milbank or Xxxxxx, and (iii) the terms of the Plan and all Restructuring
Documents are consistent in all material respects with the terms set forth in
and contemplated by this Agreement and the Term Sheet, then each Consenting
Holder agrees that it shall timely vote (or shall cause or instruct any
custodial agent to so vote) the Subject Claims to accept the Plan and shall not
revoke or withdrawal such vote.
7. Support of the Financial Restructuring; Additional Covenants. As long
as this Agreement has not been terminated in accordance with Paragraph 8 hereof,
the Company will take all necessary and appropriate actions to achieve
confirmation of the Plan, including, upon approval of the Disclosure Statement
by the Bankruptcy Court (and the Canadian Court if required under applicable
law), recommending to the holders of claims and interests impaired under the
Plan that they vote to approve the Plan. As long as this Agreement has not been
terminated in accordance with Paragraph 8 hereof, neither the Company nor any
Consenting Holder will (i) object to confirmation of the Plan or otherwise
commence any proceeding to oppose or alter the Plan or any of the Restructuring
Documents in any way inconsistent with this Agreement and the Term Sheet
appended hereto and incorporated herein, (ii) vote for, consent to, support or
participate in the formulation of any plan of reorganization or liquidation
other than the Plan proposed or filed or to be proposed or filed in any chapter
11 case or chapter 7 case, or any CCAA case, commenced in respect of the Company
or any of its subsidiaries, (iii) directly or indirectly seek, solicit, support
or encourage any plan other than the Plan, or any sale, proposal or offer of
dissolution, winding up, liquidation, reorganization, merger or restructuring of
the Company or any of its subsidiaries that reasonably could be expected to
prevent, delay or impede the successful implementation of the Financial
Restructuring as contemplated by the Plan and the Restructuring Documents, (iv)
object to the Disclosure Statement or the solicitation of consents to the Plan,
or (v) take any other action that is inconsistent with, or that would delay
confirmation of, the Plan. Notwithstanding the foregoing or anything else in
this Agreement to the contrary, no Consenting Holder shall be barred from
objecting to (x) approval of the
FN
-89-
98
Disclosure Statement if such Disclosure Statement contains a material
misstatement or omission or fails to contain adequate information for the
purposes of Bankruptcy Code Section 1125 or other applicable law, or (y)
confirmation of the Plan, or approval, execution or implementation of any
Restructuring Document, if such Plan or Restructuring Document contains terms
that are materially inconsistent with this Agreement or the Term Sheet. In
addition, except as expressly provided herein, nothing herein is intended to,
or does, in any manner, waive, limit, impair, or restrict the ability of the
Company or any Consenting Holder to protect and preserve all of its rights,
remedies, and interests, including, without limitation, with respect to its
Subject Claims or any other claims, or with respect to such parties' full
participation and role in the Chapter 11 Case or the CCAA Case.
8. Termination of Agreement. This Agreement shall terminate
automatically upon the occurrence of any "Agreement Termination Event" (as
hereinafter defined), unless the occurrence of such Agreement Termination Event
is waived in writing by Consenting Holders holding not less than sixty seven
percent (67%) of the aggregate principal amount of Notes that constitute
Subject Claims (excluding the claims of "insider holders" as defined on the
signature pages hereto). If any Agreement Termination Event occurs (and has not
been so waived) at the time when permission of the Bankruptcy Court and the
Canadian Court shall be required for the Consenting Holders to change or
withdraw (or cause to be changed or withdrawn) their votes to accept the Plan,
the Company shall not oppose any attempt by any of the Consenting Holders to
change or withdraw (or cause to be changed or withdrawn) such votes at such
time. Upon the occurrence of an Agreement Termination Event, each Consenting
Holder and the Company shall have all rights that are available to it under the
Notes, the Indenture, applicable law or otherwise, including, without
limitation, the right to take action on account of any then existing default
under the Notes or Indenture.
An "Agreement Termination Event" shall mean any of the following:
(a) The Chapter 11 Case and CCAA Case to implement the Financial
Restructuring are not commenced by June 29, 2001;
(b) The Bankruptcy Court fails to enter an order in the Chapter 11
Case approving the Disclosure Statement with respect to the Plan by
September 17, 2001;
(c) The Plan or any of the Restructuring Documents as filed by the
Company or approved in the Chapter 11 Case or the CCAA Case contains any
term that is materially inconsistent in any respect with the Financial
Restructuring contemplated by and provided for in this Agreement and the
Term Sheet, or has been modified, amended or replaced in any respect that
makes it materially inconsistent in any respect with this Agreement and the
Term Sheet;
(d) The Bankruptcy Court in the Chapter 11 Case (and the Canadian
Court in the CCAA Case, if required under applicable law) fails to enter an
order confirming the Plan by October 31, 2001;
(e) The Plan is not effective by its terms and substantially
consummated by December 17, 2001;
FN
-90-
99
(f) The Company breaches any other provision of this
Agreement, including, without limitation, ceasing to use its reasonable
best efforts to obtain approval of the Disclosure Statement and/or
confirmation of the Plan;
(g) The Chapter 11 Case of the Company is converted to a case
under chapter 7 of the Bankruptcy Code;
(h) A chapter 11 trustee is appointed in the Chapter 11 Case;
(i) The Company defaults under the DIP Facility and, except as
provided in subparagraph 8(l) below, such default has not been waived
or cured in accordance with the terms of the DIP Facility;
(j) The Company fails to comply with any covenants contained
in this Agreement or the Term Sheet;
(k) Any representation or warranty made by the Company or its
agents or representatives to the Noteholders Committee, the Consenting
Holder, or in connection with this Agreement or the Term Sheet
(including without limitation representations relating to the Company's
financial performance) is false or misleading in any material respect
when made;
(l) The Company fails to meet the financial covenants
contained in the DIP Facility or fails to meet or comply with any other
provision of the DIP Facility that is material to the Company's
financial performance, business operations or ability to confirm and
consummate the Plan in a timeframe consistent with the provisions of
Paragraph 4 above;
(m) A material adverse change occurs in the assets,
liabilities, business operations or financial condition of the Company
after the date of this Agreement, including, but not limited to, a
change in circumstances rendering the liquidity provided in the Exit
Facility as contemplated in Section I of the Term Sheet (attached
hereto as Schedule 1) inadequate in the judgment of the Noteholders
Committee, but not including, however, any material adverse change that
occurs solely by reason of the filing of the Chapter 11 Case;
(n) The Company, on or before the date that the Plan is
confirmed by the Bankruptcy Court and the Canadian Court, fails to
obtain an order or orders authorizing the assumption by the Company of
the prepetition contracts with each of Ford Motor Company, General
Motors Corporation, or DaimlerChrysler AG, or any of their affiliated
companies, and
(o) The due diligence review being conducted by the financial
advisors and legal counsel to the Noteholders Committee reveals any
materially adverse matter not previously disclosed or otherwise known
to the Consenting Holders, Milbank or Xxxxxx.
9. Specific Performance. It is understood and agreed by each of
the parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any
FN
-91-
100
party and each non-breaching party shall be entitled, in addition to any other
remedies, to the remedy of specific performance and injunctive or other
equitable relief as a remedy for any such breach, without the necessity of
securing or posting a bond or other security in connection with such equitable
relief.
10. Good Faith Negotiation of Restructuring Documents. The Company and
each Consenting Holder covenants and agrees to negotiate in good faith the
Restructuring Documents, which the Company covenants will be, in all material
respects, consistent with this Agreement and the Term Sheet.
11. Representations and Warranties. The Company, on the one hand, and each
of the Consenting Holders, on the other, represents and warrants to the other
that the following statements are true, correct and complete as of the date
hereof:
(a) Corporate Power and Authority. It has all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated by, and perform its respective obligations under, this Agreement,
including, as to each Consenting Holder, that as of the date hereof, it is the
beneficial owner of, and/or the investment adviser or manager for the beneficial
owners of (with the power to vote and dispose of), the Subject Claims;
(b) Authorization. The execution and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by all
necessary action on its part, and the Company further represents that the
Financial Restructuring, this Agreement and the attached Term Sheet have been
approved in writing by the Boards of Directors and similar governing bodies of
the Company and the Subsidiaries;
(c) No Conflicts. The execution, delivery and performance by it of
this Agreement do not and shall not (i) violate any provision of law, rule or
regulation applicable to it or any of its subsidiaries or its certificate of
incorporation or by-laws or those of any of its subsidiaries or (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it or any of
its subsidiaries is a party or under its certificate of incorporation or
by-laws; except however that the filing of the Chapter 11 Case and CCAA Case,
and the implementation of the Financial Restructuring, may constitute events of
default under certain of the Company's contracts.
(d) Governmental Consents. The execution, delivery and performance by
it of this Agreement do not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by, any
Federal, state or other governmental authority or regulatory body, except such
filings as may be necessary and/or required for disclosure by the Securities
and Exchange Commission or similar Canadian regulatory body, in connection with
the commencement of the Chapter 11 Case and the CCAA Case, and the approval of
the Disclosure Statement and confirmation of the Plan; and
(e) Binding Obligation. This Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its terms,
except as enforcement may
FN
-92-
101
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
12. No Transfers to Company Insiders. Except as disclosed on attached
Schedule 2, the Company represents and warrants that it has made no transfer of
property of the Company, including without limitation the making of loans, to
any officer, director, shareholder, employee or any insider of the Company
within the year ending upon the date hereof, other than compensation paid in
the ordinary course of the Company's business operations, and the Company
further covenants and agrees that it shall not make any such transfer at any
time in the future until a new post-effective date board of directors is in
place pursuant to the terms of the Term Sheet and such new board of directors
has formally approved the transfer.
13. Employment, Consulting and Other Contracts. The Company will not
assume (as that term is used in Section 365 of the Bankruptcy Code) any
employment, consulting or similar contracts without the prior agreement of the
Noteholders Committee, except for those employment agreements listed on
Schedule 3 hereto.
14. Further Acquisition of Securities. This Agreement shall in no way be
construed to preclude any of the Consenting Holders from acquiring additional
Notes. However, any and all rights and claims obtained by a Consenting Holder
with respect to, on account of or pursuant to any subsequently acquired Notes
shall automatically be deemed to be Subject Claims and to be subject to the
terms of, and the obligations of such Consenting Holder under, this Agreement
and the Term Sheet.
15. Effectiveness; Amendments. This Agreement shall not become effective
and binding on the parties hereto unless and until counterpart signature pages
to this Agreement have been executed and delivered by the Company, and by
Consenting Holders that hold in the aggregate at least sixty seven (67%) of the
aggregate of issued and outstanding Notes that constitute Subject Claims
(excluding the claims of "insider holders" as defined on the signature pages
hereto). Once effective, this Agreement may not be modified, amended or
supplemented except in writing signed by the Company, and by Consenting Holders
holding not less than sixty seven percent (67%) of the aggregate of Notes that
constitute Subject Claims (excluding the claims of "insider holders" as defined
on the signature pages hereto).
16. Disclosure of Individual Holdings. Unless required by applicable law
or regulation (including without limitation the Schedule of Twenty Largest
Creditors, Statements of Affairs, and other schedules required under the
Bankruptcy Code, Federal Rules of Bankruptcy Procedure, Local Rules of the
Bankruptcy Court, U.S. Trustee Guidelines, and their respective Canadian
counterparts, to be filed by the Company in the Chapter 11 Case or CCAA Case),
the Company shall not disclose the holdings of Subject Claims of any of the
Consenting Holders without the prior written consent of such Consenting Holder;
and if announcement or disclosure is so required by law or regulation, the
Company shall afford the Consenting Holders a reasonable opportunity to review
and comment upon any such announcement or disclosure prior to the Company
making such announcement or disclosure. The foregoing shall not prohibit the
Company from disclosing the approximate aggregate holdings of Notes of all
Consenting Holders. Once executed and effective, a copy of this Agreement may
be delivered to (i) the Company's bank group lenders, (ii) the Company's
principal trade vendors and customers, and
FN
-93-
102
(iii) with consent of the Consenting Holders (which consent shall not
unreasonably be withheld) to other parties in interest.
17. Accredited Investors. Each Consenting Holder represents that (i) it
is a sophisticated investor with respect to the transactions described herein
with sufficient knowledge and experience in owning and investing in securities
similar to the Notes held by such Consenting Holder to evaluate properly the
transactions contemplated by this Agreement and it has made its own analysis
and decision to enter in this Agreement; and (ii) it is an "accredited
investor" within the meaning of Section 2(a)(15) of the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
18. Impact of Appointment to Creditors Committee. Notwithstanding
anything herein to the contrary, in the event that any Consenting Holder is
appointed to and serves on a committee of creditors in the Company's Chapter 11
Case, the terms of this Agreement shall not be construed so as to limit such
Consenting Holder's exercise, in its sole discretion, of its fiduciary duties,
if any, to any person or entity arising from its service on such committee, and
any such exercise of such fiduciary duties shall not be deemed to constitute a
breach of the terms of this Agreement; provided, however, that the fact of such
service on such committee (i) shall not otherwise affect the continuing
validity or enforceability of this Agreement and (ii) shall not modify or limit
the obligations of such individual Consenting Holder to vote its Subject Claims
to accept the Plan, provided that no Agreement Termination Event has occurred
and this Agreement remains in effect.
19. Official Unsecured Creditors Committee. In conjunction with the
Chapter 11 Case and pursuant to either Sections 1102(a)(1) or (a)(2) of the
Bankruptcy Code, the Company shall support the appointment of an official
committee comprised of Consenting Holders and such other holders of unsecured
claims as may be appointed by the Office of United States Trustee (the "Official
Committee"). The Official Committee shall, subject to compliance with the
applicable provisions of the Bankruptcy Code, be entitled to retain Milbank and
Xxxxxx to represent the Official Committee and assist in the prosecution of the
Plan and related matters. In the event that the Official Committee in the
Chapter 11 Case does not retain Milbank or Xxxxxx, the Company shall actively
support the approval, under Section 503(b) of the Bankruptcy Code, of the
payment of the reasonable costs and fees incurred by Milbank and Xxxxxx on
behalf of the Noteholders Committee.
20. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of law provision that would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in the U.S. District
Court for the Southern District of New York. By execution and delivery of this
Agreement, each of the parties hereto hereby irrevocably accepts and submits
itself to the nonexclusive jurisdiction of such court, generally and
unconditionally, with respect to any such action, suit or proceeding.
Notwithstanding the foregoing consent to jurisdiction, upon the commencement of
the Company's Chapter 11 Case, each of the parties hereto hereby
FN
-94-
103
agrees that the Bankruptcy Court shall have exclusive jurisdiction of all
matters arising out of or in connection with this Agreement.
21. Fees and Expenses. The Company shall perform and shall not terminate
its fee agreements with Milbank and Xxxxxx except as otherwise provided in the
applicable engagement agreements. Five (5) business days prior to the
Commencement Date, the Company shall pay in full any outstanding bills, plus
an estimate of unbilled fees and costs up to the filing of the voluntary
chapter 11 petition, of Milbank and Xxxxxx. If any party brings an action
against any other party based upon a breach by such other party of its
obligations under this paragraph, the prevailing party shall be entitled to
all reasonable expenses incurred, including reasonable attorneys', accountants'
and financial advisors' fees in connection with such action.
22. Notices. All notices and consents hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered by courier
service, messenger, or telecopy, or initially deposited in the mails, by
certified or registered mail, postage prepaid return receipt requested, to the
following addresses, or such other addresses as may be furnished hereafter by
notice in writing, to the following parties:
(b) if to the Company, to:
Talon Automotive Group, Inc.
000 Xxxxxxxx Xx.
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx
With copies to:
Xxxxxx Xxxxxxx, P.L.C.
000 Xxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
and
Xxxxx & Xxxxxxx
000 X. Xxxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx, 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
(c) if to any Consenting Holder, to such Consenting Holder at the
address shown for such holder on the applicable signature page
hereto, to the attention of the person who has signed this
Agreement on behalf of such holder,
FN
-95-
104
With a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 X. Xxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxx Xxxxx, Esq.
Attention: Xxxx Xxxxxxx, Esq.
23. Survival. Notwithstanding the sale of its Subject Claims in accordance
with Paragraph 2 hereof or the termination of the Consenting Holders'
obligations hereunder in accordance with Paragraph 8 hereof, the Company's
obligations and agreements set forth in Paragraphs 16, 20 and 21 hereof shall
survive such termination and shall continue in full force and effect for the
benefit of the Consenting Holders in accordance with the terms hereof.
24. Reservation of Rights. This Agreement and the Term Sheet are part of a
proposed settlement of a dispute among the parties hereto. Except as expressly
provided in this Agreement and the Term Sheet: (A) nothing herein is intended
to, or does, in any manner waive, limit, impair or restrict the ability of the
Company, each Consenting Holder and any trustee under the Notes and Indenture to
protect and preserve its rights, remedies and interests, including without
limitation, its claims against the other; (B) nothing herein shall be deemed an
admission of any kind; and (C) nothing contained herein effects a modification
of the rights of the Company and the Consenting Holders or any trustee under the
Notes and Indenture, unless and until the Plan is confirmed and the Financial
Restructuring becomes effective. If the transactions contemplated herein are not
consummated, or if this Agreement is terminated for any reason, the parties
hereto fully reserve any and all of their rights. Pursuant to Federal Rule of
Evidence 408 and any applicable state rules of evidence, or comparable Canadian
rules of evidence, this Agreement and all negotiations relating thereto shall
not be admissible into evidence in any proceeding other than a proceeding to
enforce its terms.
25. Representation by Counsel. Each party hereto acknowledges that it has
been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly, any rule of law or any
legal decision that would provide any party hereto with a defense to the
enforcement of the terms of this Agreement against such party based upon lack of
legal counsel, shall have no application and is expressly waived.
26. Consideration. It is hereby acknowledged by the parties hereto that,
other than the Company's agreements, covenants, representations and warranties,
as more particularly set forth herein and in the Term Sheet, no consideration
shall be due or paid to the Consenting Holders for their agreement to vote the
Subject Claims to accept the Plan in accordance with the terms and conditions of
this Agreement.
27. Acknowledgment. This Agreement is not and shall not be deemed to be a
solicitation for the tender or exchange of the Notes, a solicitation for waivers
to the Notes or the Indenture, or a solicitation for consents to the Plan. The
acceptance of the Consenting Holders
FN
-96-
105
will not be solicited until such Parties have received the Disclosure Statement
and related ballots, as approved by the Bankruptcy Court.
28. Headings. The headings of the paragraphs and subparagraphs of this
Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
29. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of the parties and their respective successors, assigns, heirs,
executors, administrators and representatives.
30. Several, Not Joint, Obligations. The agreements, representations and
obligations of the Consenting Holders under this Agreement and the Term Sheet
are, in all respects, several and not joint.
31. Prior Negotiations. This Agreement supersedes all prior negotiations
with respect to the subject matter hereof.
32. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
33. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the parties hereto, and no other
person or entity shall be a third party beneficiary hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
TALON AUTOMOTIVE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
FN
-97-
106
VS HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX METAL PRODUCTS COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
-98-
107
FRANKLIN AGE HIGH INCOME FUND
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Executive Vice-President
Principal amount of Notes: $20,850,000
FRANKLIN UNIVERSAL TRUST
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Executive Vice-President
Principal amount of Notes: $2,250,000
FRANKLIN XXXXXXXXX HIGH YIELD FUND
By: /s/ Xxxxxxxxx Xxxxxx-Xxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxx-Xxxxxx
Title: Portfolio Manager
Principal amount of Notes: $5,200,000
FRANKLIN STRATEGIC INCOME FUND
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Portfolio Manager
Principal amount of Notes: $800,000
-99-
108
AEGON USA INVESTMENT MANAGEMENT INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Principal amount of Notes: $7,000,000
---------
-100-
109
SUNAMERICA INC. / AIG
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name:
Title: Managing Director
Principal amount of Notes: $24.46 million
-------------
-101-
110
GRANDVIEW CAPITAL MANAGEMENT LLC
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Portfolio Manager
Principal amount of Notes: $4,345,000
---------
-102-
111
XXXXX XXXXX INCOME FUND OF BOSTON
XXXXX XXXXX HIGH INCOME PORTFOLIO
XXXXX XXXXX CDOI
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Portfolio Manager, Vice President
Principal amount of Notes: $9,000,000
-------------
-103-
112
XXX XXXXXX HIGH INCOME CORPORATE BOND FUND*
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Principal amount of Notes: $7,029,000.00
-------------
XXX XXXXXX HIGH YIELD FUND**
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Principal amount of Notes: $4,686,000.00
-------------
XXX XXXXXX STRATEGIC INCOME FUND**
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Principal amount of Notes: $
-------------
XXX XXXXXX HIGH INCOME TRUST***
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Principal amount of Notes: $140,000.00
-------------
-104-
113
XXX XXXXXX HIGH INCOME TRUST II***
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Principal amount of Notes: $110,000.00
-----------
*As provided for in Section 8.1 of the Agreement and Declaration of Trust dated
as of May 10, 1995, as amended and restated as of June 21, 1995, and further
amended, of the Xxx Xxxxxx High Income Corporate Bond Fund (the "Fund") (under
which the Fund is organized as a business trust under the laws of the State of
Delaware), the shareholders, trustees, officers, employees, and other agents of
the Fund shall not personally be bound by or liable for the matters set forth
hereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder. A Certificate of Trust
referring to the Agreement and Declaration of Trust of the Fund is on file with
the Secretary of State of Delaware.
**As provided for in Section 8.1 of the Agreement and Declaration of Trust of
the Xxx Xxxxxx Trust (the "Trust") dated as of May 10, 1995, and further
amended (under which the Trust is organized as a business trust under the laws
of the State of Delaware and the Xxx Xxxxxx Strategic Income Fund and the Xxx
Xxxxxx High Yield Fund (collectively, the "Series") are organized as series of
the Trust), the shareholders, trustees, officers, employees, and other agents
of the Trust and the Series shall not personally be bound by or liable for the
matters set forth hereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder. A Certificate of
Trust referring to the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of Delaware.
***As provided for in Section 5.5 of the Declarations of Trust, as amended, of
each of the Xxx Xxxxxx High Income Trust and the Xxx Xxxxxx High Income Trust
II (collectively, the "Funds") (under which each of the Funds is organized as
an unincorporated business trust under the laws of the Commonwealth of
Massachusetts), the shareholders, trustees, officers, employees and other
agents of the Funds shall not personally be bound by or liable for the matters
set forth herein, or shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder.
-105-
114
INSIDER HOLDERS
TALON FINANCE COMPANY L.L.C.
(in its capacity as a Consenting Holder)
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
Principal Amount of Notes: $7,250,000
EASTSIDE LENDING CORPORATION
(in its capacity as a Consenting Holder)
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
Principal Amount of Notes: $1,850,000
AGLEY INVESTORS, L.L.C.
(in its capacity as a Consenting Holder)
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Managing Member
Principal Amount of Notes: $1,000,000
-106-
115
INSIDER HOLDERS
THE TIMMIS FAMILY FOUNDATION
(in its capacity as a Consenting Holder)
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
Principal Amount of Notes: $1,000,000
TIMMIS FAMILY CHARITABLE TRUST U/A/D 9/23/92
(in its capacity as a Consenting Holder)
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
Principal Amount of Notes: $300,000
XXXXX X. XXXXX LIVING TRUST U/A/D 7/1/85
(in its capacity as a Consenting Holder)
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Trustee
Principal Amount of Notes: $200,000
-107-
116
SCHEDULE 1
TERM SHEET TO LOCKUP AGREEMENT REGARDING
CHAPTER 11 RESTRUCTURING OF TALON
AUTOMOTIVE GROUP, INC. AND ITS SUBSIDIARIES
The terms discussed herein are part of a proposed comprehensive
compromise, each element of which is consideration for the other elements and
is an integral component of the proposed reorganization. Capitalized terms used
herein, if not defined, are used as defined in the Lockup Agreement. This Term
Sheet is not enforceable unless and until it becomes a schedule to the executed
Lockup Agreement.
I. CREDIT AGREEMENT
o DIP Facility and Exit Facility: The Company shall enter into a
Debtor-in-Possession ("DIP Facility") and a post-Chapter 11 Case working
capital exit facility ("Exit Facility") on terms substantially the same
as those contained in the Amended and Restated Talon Automotive Group,
Inc. Credit Agreement With Comerica Bank as Agent, dated February 16,
2001, among the bank lenders and the Company (the "SCF"), including
specifically, but without limitation, the same provisions relating to
availability and advances, and with the following additional terms:
o The amount of DIP Facility borrowing base availability shall be
acceptable to the Committee;
o The amount of Exit Facility borrowing base availability shall be
acceptable to the Committee; and
o Definitive documentation, including other covenants, terms and
conditions, acceptable to the Committee.
II. 9.625% NOTES
o Talon shall contribute all its assets, subject to its liabilities (except
the liabilities arising under the 9.625% Notes) to Holdings; the
Noteholders shall receive in exchange for their Notes ninety seven
percent (97%) of the new common stock of reorganized Holdings (minus any
shares distributed under the Plan on account of other unsecured claims);
the Notes, and the guaranties of the Notes, and all rights and
obligations thereunder, shall be extinguished; Talon shall receive 3% of
the new common stock of Holdings; and Holdings shall own 100% of the
equity in reorganized Products.
III. OTHER UNSECURED CREDITORS
o The claims of ordinary course critical trade vendors will be unimpaired
under the Plan. The treatment of all other general unsecured creditors
(e.g., claims
FN
-108-
117
SCHEDULE 1
TERM SHEET TO LOCKUP AGREEMENT REGARDING
CHAPTER 11 RESTRUCTURING OF TALON
AUTOMOTIVE GROUP, INC. AND ITS SUBSIDIARIES
arising from rejected contracts, claims based upon notes and other
unsecured financial accommodations) shall be subject to the mutual
agreement of the Company and the Committee, to be agreed upon prior
to commencement of the Chapter 11 Case. Canadian counsel shall
confirm, prior to the commencement of the Canadian Case, that
Holdings will be able to retain one hundred percent (100%) of the
equity in Products upon the consummation of such Canadian
bankruptcy proceeding for Products.
IV. COMMON AND PREFERRED STOCK
o The holders of the old common and preferred stock of Talon ("Old
Equity") will receive three series of warrants representing a total
of 20.0% of the fully diluted equity of Holdings with exercise
prices pursuant to the schedule below.
o Warrants: The Old Equity will receive 3 series of warrants. The
Series A and Series B warrants will each represent 2.5% of the
stock of Holdings. The Series C warrants will represent 15.0% of
the stock of Holdings. The exercise price of each series of
warrants has been set in the chart below at a level representing a
recovery of the face value of the 9.625% Notes for the Noteholders,
assuming 10,000,000 shares initially issued (300,000 to the Old
Equity; and 9,700,000 to the Noteholders and any other unsecured
creditors receiving shares on their claims), and taking into
account dilution created by any preceding series of Series A and B
warrants:
o Warrants Percentage Recovery on Notes Strike Price Number of Shares
-------- ---------------------------- ------------ ----------------
o Series A 70% $ 8.66 256,410
o Series B 80% $ 9.89 262,985
o Series C 93% $ 11.51 1,856,364
o The warrants: (i) shall have a five year term; (ii) shall contain
customary anti-dilution provisions (but not covering dilution
resulting from the issuance of equity securities to management);
(iii) shall contain additional customary protections found in
warrants to the effect that in the event of any combination or
subdivision of the outstanding shares (including but not limited to
in reverse stock splits), the warrant shares and cash exercise
price shall be adjusted proportionately; and (iv) shall not be
subject to any future valuation or pricing premised upon the
Black-Scholes formula or any other valuation methodology.
FN
-109-
118
SCHEDULE 1
TERM SHEET TO LOCKUP AGREEMENT REGARDING
CHAPTER 11 RESTRUCTURING OF TALON
AUTOMOTIVE GROUP, INC. AND ITS SUBSIDIARIES
o On the Effective Date of the Plan, all shares of old common and old
preferred stock of Holdings, and all options, warrants and other
rights in respect of such common and preferred stock, shall be
cancelled, extinguished and discharged.
V. BOARD COMPOSITION
o The Board of Directors of Holdings shall be comprised of five members
(the "New Board"). Three members shall be appointed by the holders of
the 9.625% Notes, and one member shall be appointed by Old Equity
(three year term), which members shall be identified five days prior
to the hearing on confirmation of the Plan. The fifth member shall be
the CEO of the Company. The same persons shall comprise the Board of
Directors of reorganized Products.
VI. RELATED PROVISIONS
o The Plan shall provide that all causes of action of the Company on
the date of this Term Sheet, and all causes of action created by the
filing of the Chapter 11 Case, shall be preserved for the benefit of
reorganized Holdings and Products; provided, however, that the Plan
may contain release and exculpatory provisions for the benefit of
current and former officers and directors of the Company limited to
acts and omissions in their capacity as officers and directors.
However, any release and exculpation provisions of the Plan shall not
be applicable to (i) avoidance actions listed in Bankruptcy Code
Section 550(a), (ii) borrowed money, (ii) employment contracts, (iii)
consulting contracts, (iv) the receipt of transfers from the Company,
direct or indirect, in connection with acquisitions by the Company of
subsidiaries, business enterprises or other material assets, and (v)
any acts or omissions that constitute gross negligence, fraud, or
willful misconduct.
o The Company represents that all material property of the Company
is subject to a non-avoidable perfected security interest in favor of
the lenders under the SCF.
o Holdings and Products will not assume or seek to assume (as that term
is used in Section 365 of the Bankruptcy Code) any employment,
consulting or similar contract, except pursuant to prior agreement
with the Committee.
o The Plan will provide that the Company's claims against Xxxx Xxxxx,
et al., will be placed in a litigation trust, which will be shared on
a pro-rata basis by the holders of new common shares.
FN
-110-
119
SCHEDULE 2
The Company has paid management fees to Talon LLC in the amount of $41,667 per
month through December, 2000.
The Company participates in several group employee benefit and insurance plans
with affiliated companies, and the Company has made and continues to make
certain payments to such affiliates for the Company's share of the legal fees,
benefits, premiums and claims related to such plans.
The Company uses the law firm of Timmis & Xxxxx LLP as its general counsel. One
of the current shareholders of the Company is a partner in the law firm, and the
Company has made and continues to make certain payments of legal fees to the law
firm for legal services rendered.
The Company leases certain of its manufacturing facilities in Canada from Xxxxx
Xxxxxx, and the Company has made and continues to make certain payments of
rents and amounts pursuant to the leases of such facilities.
The Company leased a facility in Chesterfield, Michigan from an affiliate on a
temporary basis through October, 2000, and has made certain payments of rents
and other amounts for the lease of such facility.
FN
-111-
120
SCHEDULE 3
1. Amended and Restated Employment Agreement for Xxxxxxx X. Xxxxxx dated
May __, 2001.
2. Employment Agreement for Xxxxx X. Xxxxxxxx dated March 1, 2001.
FN
-112-
121
EXHIBIT "D"
LETTER OF CREDIT NOTICE
To: The Banks party to the Second Amended and Restated Credit Agreement
dated as of June ____, 2001 ("Agreement") between Talon Automotive
Group, Inc. ("Company"), certain other borrowers, Comerica Bank as
Agent and the financial institutions defined as Banks therein.
Capitalized terms used herein and not defined to the contrary
have the meanings given them in the Agreement
Pursuant to Section 3.3 of the Agreement you are hereby notified that:
a. On ____________________, _______, pursuant to Section 3.1
of the Agreement, Agent issued the following described Letter
of Credit:
Letter of Credit Face Initial
No./Type Beneficiary Amount Expiration
--------- ----------- ------ ----------
b. The risk participations acquired by the Banks in connection
with the issuance of such Letter of Credit in accordance with
the Percentages pursuant to Section 3.3 of the Agreement are
as follows:
Comerica Bank. 100%
c. The Letter of Credit Fees with respect to the above-mentioned
Letter of Credit payable at the rate per annum equal to
______________________________(1)
Dated this _____ day of ____________________, ________.
COMERICA BANK, as Agent
By:______________________________________
Its:_____________________________________
--------
(1) Insert "the Applicable Margin" for standby Letters of Credit.
-113-
122
EXHIBIT "E"
PERCENTAGES
BANK PERCENTAGE
---- ----------
Comerica Bank 30%
Michigan National Bank 15%
National Canada Finance Corporation 15%
Dresdner Bank AG New York and 10%
Grand Cayman Branches
BNP Paribas 10%
LaSalle National Bank National Association 10%
Fleet Bank 10%
-114-
123
EXHIBIT "F"
REAL PROPERTY
Fee Simple - Oakland County
Parcel 1:
Part of the Xxxxxxxxx 0/0 xx Xxxxxxx 0, Xxxx 0 Xxxxx, Xxxxx 00 East,
more particularly described as, beginning at a point in the East and West 1/4
line of Section 5, distant North 88 degrees 37 minutes 30 seconds East 180 feet
from the West 1/4 corner of Section 5; thence North 88 degrees 37 minutes 30
seconds East 513.81 feet along the East and West 1/4 line of Section 5; thence
North 1 degree 28 minutes 40 seconds West 1346.13 feet; thence South 88 degrees
38 minutes 00 seconds West 520.02 feet to a point which is 180 feet East of the
West line of Section 5; thence South 01 degrees 47 minutes 0 seconds East
1346.27 feet parallel to and 180 feet East of the West line of Section 5 to the
point of beginning, and except the North 60 feet thereof.
Parcel Identification No. 00-00-000-000
Parcel 2:
Land in the City of Royal Oak, Oakland County, Michigan, described as:
Part of the Xxxxxxxxx 0/0 xx Xxxxxxx 0, Xxxx 0 Xxxxx, Xxxxx 00 East, described
as: Beginning on the West line of Section 5, South 1 degree 07 minutes East
703.5 feet from the Northwest corner of the Section; thence North 88 degrees 38
minutes East 120 feet; thence South 1 degree 07 minutes East 620.78 feet; thence
South 88 degrees 38 minutes West 120 feet to the West line of the section;
thence North 1 degree 07 minutes West 620.78 feet to the point of beginning.
Parcel Identification No. 00-00-000-000
Parcel 3:
Part of the Northwest 1/4 of Section 5, beginning on the West line of
Section, South 1 degree 07 minutes East 1384.28 feet from the Northwest corner
of section, thence North 88 degrees 38 minutes, East 120 feet, South 1 degree 07
minutes East, 616 feet, South 88 degrees 38 minutes West 120 feet to West line
of section, North 1 degree 07 minutes West 616 feet to the point of beginning.
Parcel Identification No. 00-00-000-000
-115-
124
Leasehold Property - Macomb County
Parcel 1:
Premises situated in the Township of Xxxxxxxx (Mt. Xxxxxxx Post Office), Macomb
County, Michigan to wit: On real estate presently identified as Lot 3, Jetview
Subdivision and South 80 Feet of Xxx 00, Xxxxxxxxx Xxxxxxxxxxx Xx. 0 and the
East half of Xxx 00 Xxxxxxxxx Xxxx Xx. 0, all commonly known as 40739 and 00000
Xxxxx Xxxxx and 40650-40730 Production Drive, of which Tenants will lease 80' x
250' for a total of 20,000 square feet.
Commonly known as: 40500/40650/40630 Production Drive
Parcel Identification No.: 00-00-000-000
Parcel 2:
Premises situated in the Township of Xxxxxxxx (Mt. Xxxxxxx Post Office), Macomb
County, Michigan to wit: On real estate presently identified as Xxx 0, Xxxxxxx
Xxxxxxxxxxx.
Xxxxxxxx known as: 00000/00000 Xxxxx Xxxxx
Parcel Identification No.: 00-00-000-000
Parcel 3:
The North 125 feet of Xxx 0, Xxxxxxxxx Xxxxxxxxxx Xxxxxx Subdivision, as
recorded in Liber 52, Page(s) 43 and 44 of Plats, Macomb County Records.
Commonly known as: 40731 Production Drive
Parcel Identification No.: 00-00-000-000
Parcel 4:
Land in the township of Xxxxxxxx, Macomb County, Michigan, described
as:
Parcel 1: The North 80 feet of the South 160 feet, of Xxx 00 - XXXXX
XXXX XXXXXXXXXXX XX. 0, according to the Plat thereof as recorded in Liber 55,
Page 34 of Plats, Macomb County Records.
-116-
125
Parcel 2: The South 80 feet, of the North 240 feet, of Xxx 00 - XXXXX
XXXX XXXXXXXXXXX XX. 0, according to the Plat thereof as recorded in Liber 55,
Page 34 of Plats, Macomb County Records.
Parcel 3: Lot 3, of JET-VIEW SUBDIVISION, according to the Plat thereof
as recorded in Liber 42, Page 26 of Plats, Macomb County Records.
Parcel 4: Lot 2, of JET-VIEW SUBDIVISION, according to the Plat thereof
as recorded in Liber 42, Page 26 of Plats, Macomb County Records.
Parcel 5: Part of Private Claim 172, beginning at a point 950 feet,
North 0 degrees 58 minutes East, and North 89 degrees 02 minutes West, 158 feet,
from the Northwest corner of North River and Xxxxx Roads; thence North 89
degrees 02 minutes West, 12 feet; thence North 0 degrees 58 minutes East, 80
feet, parallel with Xxxxx Road; thence South 89 degrees 02 minutes East, 12
feet, to the Northwest corner of Lot 3 of JET-VIEW SUBDIVISION, according to the
Plat thereof as recorded in Liber 42, Page 26 of Plats, Macomb County Records;
thence along the West line Lot 3 of said JET-VIEW SUBDIVISION, 80 feet, to the
point of beginning. Containing .02 of an acre of land more or less, including
all improvements and appurtenances now on the premises, subject to the existing
building and use restrictions, easements, and zoning ordinances, if any.
Commonly known as: 40730 Production Drive
Parcel Identification No.: 00-00-000-000
Parcel 5:
Certain real estate located in the township of Xxxxxxxx, Macomb County,
Michigan, described as follows:
The South 50 feet of Lot 28 and the North 160 feet of Xxx 00, "Xxxxx Xxxx
Xxxxxxxxxxx Xx. 0", xxx Xxxxxxxxxx Subdivision of part of Private Claim 172,
T.2N., R. 14 E., Xxxxxxxx Township, Macomb County.
and
All of Lot 4, "JET-VIEW", a Subdivision as recorded in Liber 42, Page 26 of
Plats, Macomb County Records.
Commonly known as: 40801-40875 Xxxxx Street
Parcel Identification No.: 00-00-000-000
-117-
126
Parcel 6:
A parcel of land located in and being a part of P.C. 195, T.3 N., R. 14 E.,
Chesterfield Township, Macomb County, Michigan and being more particularly
described as follows:
Commencing at a point 228.87 ft. N. 89(degree)49'00" W. and 33.00 feet N.
00(degree)11'00" E. from the intersection of the East line of P.C. 195 and the
South line of T.3 N., R. 14 E., Chesterfield Township, and thence extending N.
89(degree)49'00" W. 304.72 ft., thence N. 00(degree)40'04" E. 262.50 ft., thence
N. 89(degree)49'00" W. 190.91 ft., thence N. 04(degree)43'14" E. 263.33 ft.,
thence S. 89(degree)49'00" E. 407.84 ft., thence along a curve (Radius-55')
concave to the Northeast, whose long chord bears S. 55(degree)23'08 E. 42.12
ft., thence S. 00(degree)11'00" W. 201.18 ft., thence S. 89(degree)49'00"E.
30.00 ft., thence S. 00(degree)11'00" W. 300.00 ft. to the point of beginning
and containing 4.573 acres of land.
Commonly known as: 00000 Xxxxxxx Xxxxx Xxx
Parcel Identification No.: 015-009-032-376-019-00-00
Parcel 7:
A parcel of land located in and being a part of P.C. 195, T.3 N., R. 14 E.,
Chesterfield Township, Macomb County, Michigan and being more particularly
described as follows:
Commencing at a point 75.04 ft. N.04(degree)24'45" E. from the intersection of
the South line of Chesterfield Township and the East line of P.C. 195 and thence
extending 131.67 ft., along the arc of a curve to the right (R-1372.69 ft.)
whose long chord bears S. 71(degree)38'57" W. 131.62 ft., thence No.
89(degree)49' W. 109.61 ft. along the North R.O.W. line of Xxxxxxx X. Xxxxx Hwy.
(33 ft. wd, ROW), thence N. 00(degree)11'00" E. 259.00 ft., thence S.
89(degree)49'00" E., 250.46 ft., thence S. 04(degree)24'45" W. 217.76 ft. along
the East line of P.C. 195 (also the West line of P.C. 147) to the point of
beginning and containing 1.378 acres of land.
Reserving easements of record.
Commonly known as: 00000 Xxxxxxx Xxxxx Xxx.
Parcel Identification No.: 015-009-032-451-025-00-00
Parcel 8 - Leasehold Interest:
Lot(s) 67 of Assessor's Cricklewood Plat, according to the Plat thereof recorded
in Liber 35 of Plats, page(s) 12 of Macomb County Records.
-118-
127
Leasehold Property - Oakland County
Parcel 1:
Part of the East 1/2 of the Southwest 1/4 of Section 9, Town 5 North,
Range 10 East, Oxford Township, Oakland County, Michigan. Being more
particularly described as commencing at the Southwest corner of said Section 9;
thence South 87(degree)53'30" East 1943.10 feet along the South line of said
Section 9 to a point; thence North 01(degree)16'23" East 1226.31 feet to the
point of beginning; thence proceeding North 01(degree)16'23" East 612.55 feet to
the point; thence South 88(degree)43'37" East 536.00 feet to a point; thence
South 01(degree)16'23" West 609.07 feet to a point; thence South
80(degree)51'09" West 140.13 feet to a point; thence North 88(degree)43'37" West
395.92 feet to the point of beginning. Containing 7.532 acres. Reserved
therefrom all easements and right of ways of record. Also, together with and
subject to easement rights for ingress and egress with public utilities
described hereafter.
Commonly known as: 0000 X-Xxxxxxx Xxxxx, Xxxxxx, XX.
Parcel Identification No.: P 00-00-000-000
DESCRIPTION OF EASEMENT FOR PRIVATE ROAD RIGHT-OF-WAY
A private easement for ingress and egress with public utilities over,
across and under a 66 foot wide strip of land described as part of the East 1/2
of the Xxxxxxxxx 0/0 xx Xxxxxxx 0, Xxxxxxxx 0 Xxxxx, Xxxxx 10 East, Oxford
Township, Oakland County, Michigan. Being more particularly described as
commencing at the Southwest corner of said Section 9; thence South
87(degree)16'23" East 1910.10 feet along the South line of said Section 9 to the
point of beginning; thence proceeding South 87(degree)53'30" East 66.00 feet
along the South line of said Section 9 to a point; thence North 01(degree)16'23"
East 1806.34 feet to a point; thence South 88(degree)43'37" East 897.17 feet to
a point on the Westerly Right-of-Way line of M-24 Highway as widened; thence
North 18(degree)27'55" West 70.12 feet along the Westerly Right-of-Way line of
M-24 Highway as widened; thence North 88(degree)43'37" West 939.48 feet of a
point; thence South 01(degree)16'23" West 1871.38 feet to the point of
beginning.
Parcel 2:
Suite 203 of a building located on a parcel located in the City of Xxxx, County
of Oakland, State of Michigan, as follows:
A part of the Southwest 1/4 of Xxxxxxx 00, Xxxx 0 Xxxxx, Xxxxx 00 Xxxx, Xxxx of
Xxxx, Oakland County, Michigan. Being more particularly described as beginning
at a point North 2(degree)0'29" West 922.00 feet and North 87(degree)28'55" East
60.00 feet from the Southwest Section Corner; thence North 2(degree)0'29" West
421.76 feet; thence North 87(degree)59'31" East 30.36 feet; thence North
64(degree)50'49" East 371.71 feet; thence North 87(degree)28'55" East 886.52
feet; thence South 2(degree)1'28" East 446.55 feet; thence South
87(degree)28'55" West 612.33 feet; thence along a curve to the left having a
radius of 738.77 feet, a chord bearing South 73(degree)47'19" West 349.77 feet,
a distance of 353.13 feet; thence along a curve to the right having a radius of
314 feet, a chord bearing South
-119-
128
73(degree)47'19" West 148.66 feet a distance of 150.09 feet; thence South
87(degree)28'55" West 163.28 feet to the point of beginning.
Commonly known as: 000 Xxxxxxxx Xxxxx, Xxxxx 000
Parcel Identification No.: 00-00-000-000
Personal Property No: 00-00-000-000
Parcel 3:
Suite 270 of a building located on a parcel located in the City of Xxxx, County
of Oakland, State of Michigan, as follows:
A part of the Southwest 1/4 of Xxxxxxx 00, Xxxx 0 Xxxxx, Xxxxx 00 Xxxx, Xxxx of
Xxxx, Oakland County, Michigan. Being more particularly described as beginning
at a point North 2(degree)0'29" West 922.00 feet and North 87(degree)28'55" East
60.00 feet from the Southwest Section Corner; thence North 2(degree)0'29" West
421.76 feet; thence North 87(degree)59'31" East 30.36 feet; thence North
64(degree)50'49" East 371.71 feet; thence North 87(degree)28'55" East 886.52
feet; thence South 2(degree)1'28" East 446.55 feet; thence South
87(degree)28'55" West 612.33 feet; thence along a curve to the left having a
radius of 738.77 feet, a chord bearing South 73(degree)47'19" West 349.77 feet,
a distance of 353.13 feet; thence along a curve to the right having a radius of
314 feet, a chord bearing South 73(degree)47'19" West 148.66 feet a distance of
150.09 feet; thence South 87(degree)28'55" West 163.28 feet to the point of
beginning.
Commonly known as: 000 Xxxxxxxx Xxxxx, Xxxxx 000
Parcel Identification No.: 00-00-000-000
Personal Property No: 00-00-000-000
Parcel 4:
An area of approximately 15,400 square feet of garage space in Royal Oak Service
Center building located as follows:
A part of the Northwest 1/4 of Section 0, Xxxx 0 Xxxxx, Xxxxx 00 Xxxx, Xxxx of
Royal Oak, County of Oakland, Michigan. Beginning at a point South
1(degree)47'0" East 45 feet and North 88(degree)38'0" East 240 feet from the
Northwest Section Corner; thence North 88(degree)38'0" East 278.11 feet; to the
westerly line of Grand Trunk Western Railroad right of way; thence South
30(degree)38'0" East 1506.25 feet; thence South 88(degree)38'00" West 999.58
feet; thence North 1(degree)47'0" West 1308.50 feet to the point of beginning.
Except for a part taken for roadway purposes described as beginning at a point
North 88(degree)38'0" East 240 feet and South 1(degree)47'0" East 45 feet from
the Northwest Section Corner; thence South 1(degree)47'0" East 20 feet; thence
northeasterly 28.25 feet to
-120-
129
a point distant easterly 20 feet from the point of beginning; thence westerly 20
feet along the South line of 00 Xxxx Xxxx to the point of beginning.
Commonly know as: 4600 Xxxxxxxx
Parcel Identification No.: 00-00-000-000
Parcel 5:
City of Rochester Hills, County of Oakland, State of Michigan, to
wit: Office/Engineering & Light Industrial space consisting of approximately
4,531 square feet at 0000 Xxxxxxxxx, Xxxxx #0.
Commonly know as: 0000 Xxxxxxxxx, Xxxxx #0
Personal Property No: 00-00-000-000
Leasehold Property - Clay County Tennessee
Description of Property, Third Civil District, Clay County Tennessee, being a
portion of the property described in Deed Book 54, Page 142, Tax Map 55, Parcel
33.0: Lying and being in the third Civil District of Clay County, Tennessee,
beginning at a point in the Northern Right of Way of Highway 53, said point
being reference by a 1/2" aluminum pipe in the fence row and to a concrete
marker in the northern right of way of 53, and on the east side of Xxxx Arms
Road, at N52 degrees 05'54"E 80.394', thence from the point of beginning with
the Northern right xx xxx xx Xxxxxxx 00 S52 degrees 05'54" W 499.324', thence
S44 degrees 28'07" W 151.300' to a concrete marker, thence S52 degrees 20'36" W
261.536' to a concrete marker, thence S51 degrees 33'47" W 57,400', thence
leaving the right of way of 53 and with the chain link fence N37 degrees 44'57"
W 622.267' to a metal fence post at the intersection of the fence, thence N 48
degrees 03'44" E 386.459', thence N 70 degrees 13'56" E 446.620', thence S 55
degrees 42'03" E 512.399' to the point of beginning containing 11.924 acres more
or less. Based on a field survey by Xxxxxxx X. Xxxx R.L.S. #1748 on August 4,
1998. Bearings based on Tennessee Grid North. This Parcel subject to any right
of ways, easements, and/or restrictions that may affect this property.
Xxxxxx - Location in Canada, identified in various debentures filed in
favor of Agent on behalf of banks.
-121-
130
EXHIBIT "G"
REQUEST FOR LOAN
A. Request
The undersigned authorized officer of ___________________________(2)
("Company"), pursuant to that certain Second Amended and Restated Credit
Agreement dated June ____, 2001 between and among Company, certain other
borrowers, the Banks, and COMERICA BANK, as Agent for the Banks (the
"Agreement"), hereby requests an Advance on ____________________, ____ in the
amount of ______________________ Dollars ($_________________)(3) under the
Note(s) ("Notes") made by the undersigned to said Banks evidencing the
_______________(4) Loans.
The Applicable Interest Rate for the requested Advance shall be the
Prime-based Rate.
B. Application of Proceeds
C. Request Irrevocable
Upon Agent's receipt of this Request for Loan, this Request for Loan
shall be irrevocable.
D. Certification
The undersigned hereby certifies that all conditions set forth in the
Agreement for the Advance requested hereby are satisfied and shall be satisfied
both as of the date of this request and the date requested for the Advance
requested hereby.
E. Defined Terms
Capitalized terms used herein, unless specifically defined to the
contrary herein, have the meanings given them in the Agreement.
Dated this _____ day of ____________________, ______.
By:________________________________________
Its:_______________________________________
------
(2) Insert Talon Automotive Group, Inc. or Xxxxxx Metal Products Co. as
applicable.
(3) This amount shall not be less than $500,000, for a Prime-based Loan (other
than a Swing Loan) or $800,000 for a Eurocurrency-based Loan.
(4) Insert "Revolving Loan" or "Swing Loan" as applicable.
-122-
131
EXHIBIT "H"
BUDGET COMPLIANCE CERTIFICATE
-123-
132
EXHIBIT "I"
INTERIM AUTHORIZING ORDER
-124-
133
EXHIBIT "J"
LOCK-UP AGREEMENT
-125-
