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HA-LO INDUSTRIES, INC.
REVOLVING CREDIT AGREEMENT
DATED AS OF MARCH 31, 2000
COMERICA BANK, AS
ADMINISTRATIVE AGENT
AND
LASALLE BANK NATIONAL ASSOCIATION
AS SYNDICATION AGENT
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TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................................................1
1.1 Certain Defined Terms...........................................................................1
1.2 Euro...........................................................................................28
1.3 Interest Act (Canada)..........................................................................30
2. REVOLVING CREDIT........................................................................................30
2.1 Commitment.....................................................................................30
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness.....................................30
2.3 Requests for and Refundings and Conversions of Advances........................................31
2.4 Disbursement of Advances.......................................................................33
2.5 Swing Line Advances............................................................................36
2.6 Prime-based Interest Payments..................................................................41
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest Payments.........................41
2.8 Interest Payments on Conversions...............................................................42
2.9 Interest on Default............................................................................42
2.10 Prepayment of Revolving Credit Advances and Swing Line Advances................................43
2.11 Prime-based Advance in Absence of Election or Upon Default.....................................43
2.12 Revolving Credit Facility Fee..................................................................44
2.13 Mandatory Repayment of Revolving Advances; Mandatory Reduction of Revolving Credit
Aggregate Commitment...........................................................................44
2.14 Optional Reduction or Termination of Revolving CreditAggregate Commitment......................45
2.15 Application of Advances........................................................................46
3. LETTERS OF CREDIT.......................................................................................46
3.1 Letters of Credit..............................................................................46
3.2 Conditions to Issuance.........................................................................47
3.3 Notice.........................................................................................48
3.4 Letter of Credit Fees..........................................................................48
3.5 Other Fees.....................................................................................49
3.6 Drawings and Demands for Payment Under Letters of Credit.......................................50
3.7 Obligations Irrevocable........................................................................51
3.8 Risk Under Letters of Credit...................................................................52
3.9 Indemnification................................................................................53
3.10 Right of Reimbursement.........................................................................54
4. MARGIN ADJUSTMENTS......................................................................................54
4.1 Margin Adjustments.............................................................................54
5. CONDITIONS..............................................................................................55
5.1 Execution of Notes and this Agreement..........................................................55
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5.2 Corporate Authority............................................................................55
5.3 Collateral Documents, Guaranties and Other Documents...........................................56
5.4 Pro Forma Balance Sheet and Projections........................................................57
5.5 Existing Credit Facilities.....................................................................57
5.6 Xxxxxx Xxxxxxxx Report.........................................................................57
5.7 Insurance......................................................................................57
5.8 Compliance with Certain Documents and Agreements...............................................57
5.9 Opinion of Counsel.............................................................................57
5.10 Company's Certificate..........................................................................57
5.11 Payment of Fees................................................................................58
5.12 Financial Statements...........................................................................58
5.13 Xxxxxxxxx.xxx Acquisition Documents............................................................58
5.14 Continuing Conditions..........................................................................58
6. REPRESENTATIONS AND WARRANTIES..........................................................................59
6.1 Corporate Authority............................................................................59
6.2 Due Authorization - Borrowers..................................................................59
6.3 Due Authorization - Subsidiaries...............................................................59
6.4 Good Title, No Liens...........................................................................59
6.5 Taxes..........................................................................................60
6.6 No Defaults....................................................................................60
6.7 Enforceability of Agreement and Loan Documents -- Company......................................60
6.8 Enforceability of Loan Documents -- Subsidiaries...............................................60
6.9 Compliance with Laws...........................................................................60
6.10 Non-contravention -- Company...................................................................61
6.11 Non-contravention -- Subsidiaries..............................................................61
6.12 No Litigation..................................................................................61
6.13 Consents, Approvals and Filings, Etc...........................................................61
6.14 Agreements Affecting Financial Condition.......................................................62
6.15 No Investment Company or Margin Stock..........................................................62
6.16 ERISA, Canadian Pension Plans..................................................................62
6.17 Conditions Affecting Business or Properties....................................................63
6.18 Environmental and Safety Matters...............................................................63
6.19 Subsidiaries...................................................................................63
6.20 Accuracy of Information........................................................................63
6.21 Labor Relations................................................................................64
6.22 Existing Debt..................................................................................64
6.23 Solvency.......................................................................................64
6.24 Capitalization.................................................................................65
7. AFFIRMATIVE COVENANTS...................................................................................65
7.1 Financial Statements...........................................................................65
7.2 Certificates; Other Information................................................................66
7.3 Payment of Obligations.........................................................................67
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7.4 Conduct of Business; Maintenance of Existence; Compliance with Laws............................67
7.5 Maintenance of Property; Insurance.............................................................67
7.6 Inspection of Property; Books and Records, Discussions.........................................68
7.7 Notices........................................................................................68
7.8 Hazardous Material Laws........................................................................69
7.9A Maintain Consolidated EBITDA...................................................................69
7.9B Consolidated Interest Coverage Ratio...........................................................70
7.10 Minimum Consolidated Tangible Net Worth........................................................70
7.11 Maintain Consolidated Leverage Ratio...........................................................70
7.12 Taxes..........................................................................................70
7.13 Governmental and Other Approvals...............................................................71
7.14 Compliance with ERISA and Canadian Pension Law.................................................71
7.15 ERISA Notices..................................................................................71
7.16 Security.......................................................................................72
7.17 Defense of Collateral..........................................................................72
7.18 Use of Proceeds................................................................................72
7.19 Future Subsidiaries; Additional Collateral.....................................................72
7.20 Xxxxxxxxx.xxx Acquisition......................................................................73
7.21 Further Assurances.............................................................................73
8. NEGATIVE COVENANTS......................................................................................74
8.1 Limitation on Debt.............................................................................74
8.2 Limitation on Liens............................................................................75
8.3 Limitation on Guarantee Obligations............................................................76
8.4 Acquisitions...................................................................................76
8.5 Limitation on Mergers, other Fundamental Changes or Sale of Assets.............................76
8.6 Restricted Payments............................................................................77
8.7 Limitation on Capital Expenditures.............................................................77
8.8 Limitation on Investments, Loans and Advances..................................................77
8.9 Transactions with Affiliates...................................................................79
8.10 Sale and Leaseback.............................................................................79
8.11 Limitation on Negative Pledge Clauses..........................................................79
8.12 Prepayment of Debts............................................................................79
8.13 Amendment of Subordinated Debt Documents.......................................................80
8.14 Modification of Certain Agreements.............................................................80
9. DEFAULTS................................................................................................80
9.1 Events of Default..............................................................................80
9.2 Exercise of Remedies...........................................................................83
9.3 Rights Cumulative..............................................................................83
9.4 Waiver by Borrowers of Certain Laws............................................................83
9.5 Waiver of Defaults.............................................................................83
9.6 Set Off........................................................................................84
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10. PAYMENTS, RECOVERIES AND COLLECTIONS....................................................................84
10.1 Payment Procedure..............................................................................84
10.2 Application of Proceeds of Collateral..........................................................86
10.3 Pro-rata Recovery..............................................................................86
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS........................................................86
11.1 Reimbursement of Prepayment Costs..............................................................86
11.2 Eurocurrency Lending Office....................................................................87
11.3 Circumstances Affecting Eurocurrency-based Rate Availability...................................87
11.4 Laws Affecting Eurocurrency-based Advance Availability.........................................88
11.5 Increased Cost of Eurocurrency-based Advances..................................................88
11.6 Capital Adequacy and Other Increased Costs.....................................................89
11.7 Substitution of Banks..........................................................................90
11.8 Right of Banks to Fund through Branches and Affiliates.........................................91
12. AGENT...................................................................................................91
12.1 Appointment of Agent...........................................................................91
12.2 Deposit Account with Agent.....................................................................91
12.3 Scope of Agent's Duties........................................................................91
12.4 Successor Agent................................................................................92
12.5 Agent in its Individual Capacity...............................................................93
12.6 Credit Decisions...............................................................................93
12.7 Authority of Agent to Enforce This Agreement...................................................93
12.8 Indemnification of Agent.......................................................................93
12.9 Knowledge of Default...........................................................................94
12.10 Agent's Authorization; Action by Banks.........................................................94
12.11 Enforcement Actions by the Agent...............................................................94
12.12 Syndication Agent..............................................................................95
12.13 Collateral Matters.............................................................................95
13. MISCELLANEOUS...........................................................................................95
13.1 Accounting Principles..........................................................................95
13.2 Consent to Jurisdiction........................................................................96
13.3 Law of Illinois................................................................................96
13.4 Interest.......................................................................................96
13.5 Closing Costs and Other Costs; Indemnification.................................................97
13.6 Notices........................................................................................99
13.7 Further Action.................................................................................99
13.8 Successors and Assigns; Participations; Assignments............................................99
13.9 Indulgence....................................................................................103
13.10 Counterparts..................................................................................103
13.11 Amendment and Waiver..........................................................................103
13.12 Confidentiality...............................................................................104
13.13 Withholding Taxes.............................................................................104
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13.14 Taxes and Fees................................................................................105
13.15 WAIVER OF JURY TRIAL..........................................................................105
13.16 Complete Agreement; Conflicts.................................................................105
13.17 Severability..................................................................................105
13.18 Table of Contents and Headings................................................................106
13.19 Construction of Certain Provisions............................................................106
13.20 Independence of Covenants.....................................................................106
13.21 Reliance on and Survival of Various Provisions................................................106
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TABLE OF CONTENTS
(Continued)
Page
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TABLE OF CONTENTS
(Continued)
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TABLE OF CONTENTS
(Continued)
SCHEDULES
Schedule 1.1 Pricing Matrix
Schedule 1.2 Percentages and Allocations
Schedule 5.2 List of Jurisdictions in which Company and/or Subsidiaries do
business
Schedule 5.3(d) List of Jurisdictions in which to file financing statements
Schedule 6.9 Compliance with Laws
Schedule 6.12 Litigation
Schedule 6.16 Employee Pension Benefit Plans
Schedule 6.18 Environmental Matters
Schedule 6.19 Subsidiaries
Schedule 6.20 Contingent Obligations
Schedule 6.24 Capitalization
Schedule 7.23 List of Leased Properties
Schedule 8.1(b) Existing Funded Debt
Schedule 8.2 Permitted Liens
Schedule 8.8 Existing Investments
Schedule 8.9 Transactions with Affiliates
Schedule 13.6 Notices
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TABLE OF CONTENTS
(Continued)
EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF SWING LINE NOTE
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF SWING LINE BANK PARTICIPATION CERTIFICATE
F FORM OF NOTICE OF LETTERS OF CREDIT
G FORM OF BORROWING BASE CERTIFICATE
H FORM OF COVENANT COMPLIANCE REPORT
I FORM OF ASSIGNMENT AGREEMENT
J FORM OF GUARANTY (including Exhibit "A" - Joinder Agreement)
K FORM OF DOMESTIC SECURITY AGREEMENT
L-1 FORM OF COMPANY PLEDGE AGREEMENT
L-2 FORM OF CANADIAN SHARE PLEDGE AGREEMENT
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REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement ("Agreement") is made as of the 31st
day of March, 2000, by and among the financial institutions from time to time
signatory hereto (each, including Comerica Bank, individually a "Bank," and
any and all such financial institutions from time to time signatory hereto,
collectively the "Banks"), Comerica Bank, as administrative agent for the
Banks (in such capacity, "Agent"), LaSalle Bank National Association as
syndication agent, Ha-Lo Industries, Inc., an Illinois corporation
("Company") and the Canadian Permitted Borrower (as defined below).
RECITALS:
A. The Company has requested that the Banks extend to it credit and
letters of credit on the terms and conditions set forth herein.
B. The Banks are prepared to extend such credit as aforesaid, but only
upon the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the covenants contained herein, the
Company, the Banks and Agent agree as follows:
1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. For the purposes of this Agreement the
following terms will have the following meanings:
"Account(s)" shall mean any account or account receivable as defined
under the UCC, including without limitation, with respect to any Person, any
right of such Person to payment for goods sold or leased or for services
rendered.
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Account Party(ies)" shall mean, with respect to any Letter of Credit,
the account party or parties (which shall be the Company or any Guarantor) as
named in an application to the Agent for the issuance of such Letter of Credit.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by the Company, and made by the applicable Banks under Section 2.1
hereof or requested by the Company or the Canadian Permitted Borrower and made
by a Swing Line Bank under Section 2.5 hereof, including without limitation any
readvance, refunding or conversion of such borrowing pursuant to Section 2.3 or
2.5 hereof, any advance in respect of a Letter of Credit under Section 3.6
hereof (including without limitation the unreimbursed amount of any draws under
any Letters of Credit),
and shall include, as applicable, a Eurocurrency-based Advance, a Prime-based
Advance, and a Quoted Rate Advance.
"Affected Bank" shall have the meaning set forth in Section 11.7.
"Affiliate" shall mean, with respect to any Person, any other Person
or group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities
or by contract or otherwise. Unless otherwise specified to the contrary
herein, or the context requires otherwise, Affiliate shall refer to
Affiliates of the Company.
"Agent" shall mean Comerica Bank, in its capacity as administrative
agent for the Banks hereunder, or any successor administrative agent
appointed in accordance with Section 12.4 hereof.
"Agent's Canadian Affiliate" shall mean Comerica Bank-Canada.
"Agent's Correspondent" shall mean for Advances in eurodollars,
Agent's Grand Cayman Branch (or for the account of said branch office, at
Agent's main office in Detroit, Michigan, United States) and for Advances in
Canadian Dollars to Canadian Permitted Borrower, Agent's Canadian Affiliate
or such other bank or banks as Agent may from time to time designate by
written notice to the Company and the Banks.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus
one percent (1%).
"Alternative Currency" shall mean Canadian Dollars ("C$").
"Applicable Fee Percentage" shall mean, as of any date of
determination thereof, the applicable percentage used to calculate certain of
the fees due and payable hereunder, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as
Schedule 1.1.
"Applicable Interest Rate" shall mean (a) for Advances of the
Revolving Credit in any Permitted Currency, the Eurocurrency-based Rate or
the U.S. Prime-based Rate and (b) for Advances of the Swing Line (i) in
Dollars, the U.S. Prime-based Rate or a Quoted Rate and (ii) in Canadian
Dollars, the Canadian Prime-based Rate or a Quoted Rate, as selected by the
applicable Borrower from time to time subject to the terms and conditions of
this Agreement.
2
"Applicable Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as
Schedule 1.1.
"Asset Sale" shall mean the sale, transfer or other disposition by
the Company or any Subsidiary of any asset (other than stock or other
ownership interests of any Subsidiary) to any Person (other than to the
Company or any Guarantor), other than sales, transfers or other dispositions
of inventory in the ordinary course of business and sales or other
dispositions of assets that have been damaged, become obsolete or are no
longer useable or useful in the conduct of the business of the seller or
transferor thereof ; provided, however, that the term Asset Sale shall not
include the exercise by Xxxxxx Associates, Inc. of its rights to "put" its
interest in the land, building and improvements owned by it in Cincinnati,
Ohio to its former shareholders.
"Assignment Agreement" shall mean an Assignment Agreement
substantially in the form attached as Exhibit I hereto.
"Banks" shall mean Comerica Bank, LaSalle Bank National Association
and such other financial institutions from time to time parties hereto as
lenders and shall include the Banks and the Swing Line Banks and any assignee
which becomes a Bank pursuant to Section 13.8 hereof.
"Bankruptcy Code" shall mean Title 11 of the United States Code and
the rules promulgated thereunder.
"Borrowing Base" shall mean, the Domestic Borrowing Base or the
Canadian Borrowing Base, as the context may indicate or otherwise require.
"Borrowing Base Certificate" shall mean a Borrowing Base
certificate, substantially in the form of Exhibit G, with appropriate
insertions and executed by a Responsible Officer.
"Borrowing Base Obligor" shall mean any Domestic Borrowing Base
Obligor or the Canadian Permitted Borrower, and "Borrowing Base Obligors"
shall mean any of them, as the context indicates or otherwise requires.
"Borrowers" shall mean the Company and the Canadian Permitted
Borrower and "Borrower" shall mean either of them, as the context indicates
or otherwise requires.
"Business Day" shall mean any day other than a Saturday or a Sunday
on which commercial banks are open for domestic and international business
(including dealings in foreign exchange) in Detroit, London and New York.
"Canadian Benefit Plans" shall mean all material employee benefit
plans of any nature or kind whatsoever that are not Canadian Pension Plans
and are maintained or contributed to by any Loan Party having employees in
Canada.
3
"Canadian Borrowing Base" shall mean, as of any date of
determination, an amount equal to the sum of eighty-five percent (85%) of
Eligible Canadian Accounts; determined in each case on the basis of the most
recent Borrowing Base Certificates required to be submitted hereunder.
"Canadian Pension Plans" shall mean each plan which is considered to
be a pension plan for the purposes of, and subject to, any applicable pension
benefits standards statute and/or regulation in Canada established,
maintained or contributed to by any Loan Party for its employees or former
employees.
"Canadian Permitted Borrower" shall mean HA-LO Canada, Inc., a
corporation organized under the laws of Ontario, Canada.
"Canadian Prime-based Advance" shall mean an Advance which bears
interest at the Canadian Prime-based Rate.
"Canadian Prime Rate" shall mean, for any day, the per annum rate of
interest in effect for such day as announced from time to time by the Agent's
Canadian Affiliate in Toronto, Ontario as its "prime rate." (The "prime rate"
is a rate set by such Canadian Affiliate based upon various factors including
such Canadian Affiliate's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above or below such announced rate.) Any
change in the prime rate by such Canadian Affiliate shall take effect at the
opening of business on such day.
"Canadian Prime-based Rate" shall mean, for any day, that rate of
interest which is equal to the sum of the Applicable Margin plus the greater
of (i) the Canadian Prime Rate and (ii) an interest rate per annum equal to
the Canadian BA Rate in effect on such day, plus one percent (1%).
"Canadian Security Agreement" shall mean such local law security
agreement as shall be advisable or necessary under Canadian law to create and
perfect (subject to applicable local law limitations determined by counsel
acceptable to Agent) liens on the assets of the Canadian Permitted Borrower
and securing the advances to the Canadian Permitted Borrower.
"Canadian Share Pledge" shall mean such pledge agreement as shall be
advisable or necessary under applicable Canadian law to create and perfect
liens on the share capital of the Canadian Permitted Borrower and securing
the Indebtedness of the Company (subject to Section 956 of the Internal
Revenue Code) hereunder, substantially in the form of Exhibit L-2, as amended
or otherwise modified from time to time.
"Capital Expenditures" shall mean, for any period, with respect to
any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a Capitalized Lease)
of fixed or capital assets or additions to equipment, plant and property that
should be capitalized under GAAP on a consolidated balance sheet of such
Person and its Subsidiaries.
4
"Capitalized Lease" shall mean, as applied to any Person, any lease
of any property (whether real, personal or mixed) with respect to which the
discounted present value of the rental obligations of such Person as lessee
thereunder, in conformity with GAAP, is required to be capitalized on the
balance sheet of that Person.
"Change of Control" shall mean any of the following events or
circumstances: (a) any Person or "group" (withing the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), other
than the shareholders of Xxxxxxxxx.xxx, (on the Effective Date) shall either
(i) acquire beneficial ownership of more than 35% of any outstanding class of
common stock of the Company having ordinary voting power in the election of
directors of the Company or (ii) obtain the power (whether or not exercised)
to elect a majority of the Company's directors and in either case the
Company, the Agent or any of the Banks has obtained knowledge thereof, or (b)
after the consummation of the Xxxxxxxxx.xxx Acquisition, Xxxx Xxxxxxx and
Xxxx Xxxxxxxxx shall cease to exercise substantially the same or greater
duties and responsibilities as those s/he exercised prior to the consummation
of such acquisition.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Banks is
or has been granted or arises or has arisen, under or in connection with this
Agreement or the other Loan Documents.
"Collateral Documents" shall mean the Security Agreements, the
Pledge Agreements and all of the other acknowledgments, certificates, stock
powers, financing statements, instruments and other security documents
executed by the Company or any Guarantor in favor of the Agent for the
benefit of the Banks and delivered to the Agent, as security for the
Indebtedness, in each case as of the Effective Date or, from time to time,
subsequent thereto, in each case, as such collateral documents may be amended
or otherwise modified from time to time.
"Combined Borrowing Base" shall mean, as of any date of
determination, an amount equal to the sum of the value of the Domestic
Borrowing Base plus the value of the Canadian Borrowing Base, determined in
each case on the basis of the most recent Borrowing Base Certificates
required to be submitted hereunder.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking
corporation, its successors or assigns.
"Commitment" shall mean the Revolving Credit Aggregate Commitment.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or which is part of a group which includes
the Company and which is treated as a single employer under Section 414 of
the Internal Revenue Code.
"Company" is defined in the preamble.
5
"Company Pledge Agreement" shall mean the pledge agreement executed
and delivered by the Company in favor of the Agent covering the shares held
by the Company in each Significant Domestic Subsidiary and substantially in
the form of Exhibit L-1, as amended or otherwise modified from time to time.
"Consolidated" (or "consolidated") or "Consolidating" (or
"consolidating") shall mean, when used with reference to any financial term
in this Agreement, the aggregate for two or more Persons of the amounts
signified by such term for all such Persons determined on a consolidated
basis in accordance with GAAP. Unless otherwise specified herein, references
to Consolidated financial statements or data of the Company includes
consolidation with its Subsidiaries in accordance with GAAP; provided,
however that following the consummation of any Permitted Acquisition, in
calculating the financial covenants in Sections 7.9A through 7.11 hereof,
such newly acquired Subsidiary shall be deemed to be a Subsidiary of the
Company during all relevant periods prior to such acquisition and such
Subsidiary's financial results shall be consolidated with the Company's
financial results on a pro forma basis, to the extent that such Subsidiary's
financial results are not included in the Company's Consolidated financial
statements.
"Consolidated EBITDA" shall mean for any period, Consolidated Net
Income for such period PLUS, without duplication and only to the extent
reflected as a charge or reduction in the statement of such Consolidated Net
Income for such period, the sum of (a) income tax expense, (b) Consolidated
Interest Expense, (c) depreciation and amortization expense, including,
without limitation, amortization of intangibles (including, but not limited
to, goodwill) and organization costs, (d) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not
otherwise includible as a separate item in the statement of such Consolidated
Net Income for such period, non-cash losses on sales of assets outside of the
ordinary course of business), (e) fees, expenses, and/or out of pocket costs
in an amount not to exceed $3,000,000 in connection with the Xxxxxxxxx.xxx
Acquisition for the fiscal quarter in which the Xxxxxxxxx.xxx Acquisition
occurs and (f) restructuring charges taken in the third quarter of 1999 in an
aggregate amount not to exceed $30,000,000 and MINUS, to the extent included
in the statement of such Consolidated Net Income for such period, the sum of
(A) interest income, and (B) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includible as a separate
item in the statement of such Consolidated Net Income for such period) on the
sales of assets outside of the ordinary course of business.
"Consolidated Funded Debt" shall mean at any date, the aggregate
principal amount of all Funded Debt of the Company and its Subsidiaries at
such date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" shall mean for any period,
the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" shall mean for any period total cash
interest expense (including that attributable to Capitalized Leases) of the
Company and its Consolidated Subsidiaries
6
plus, without duplication, capitalized interest expense, plus all fees and
expenses incurred in connection with the Indebtedness to the extent such
costs are allocable to such period in accordance with GAAP.
"Consolidated Leverage Ratio" shall mean as at the last day of any
period, the ratio of (a) Consolidated Funded Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Net Income" shall mean for any period, the
consolidated net income (or loss) of the Company and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded (a) subject to the provisions set forth in the
definition of "Consolidated", the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary of the Company or is merged into or
consolidated with the Company or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of the Company) in which the
Company or any of its Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Company or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Company which is not a Loan
Party to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than any Loan Document) or Requirement of
Law applicable to such Subsidiary.
"Consolidated Tangible Net Worth" shall mean, as of any date of
determination, the total shareholders' equity of the Company and its
Consolidated Subsidiaries, together with the amount, if any, of preferred
stock which is classified as part of shareholders' equity, plus the
outstanding principal amount of Subordinated Debt as of such date, in each
case as reflected on the most recent regularly prepared quarterly balance
sheet of the Company and such Subsidiaries, which balance sheet shall be
prepared in accordance with GAAP, minus the book value of all intangible
assets, including without limitation, such items as goodwill, trademarks,
trade names, copyrights, patents, licenses and rights in any intangible
assets, and unamortized debt discount and expenses, as of such date
determined in accordance with GAAP, but excluding the effects of the currency
translation adjustment and of the pension adjustment under the additional
minimum liability section of FASB 87.
"Contractual Obligation" shall mean, as to any Person, any provision
of any security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which
it or any of its property is bound.
"Covenant Compliance Report" shall mean the report to be furnished
by the Company to the Agent pursuant to Section 7.2(a) hereof, in the form of
attached Exhibit H and certified by a Responsible Officer, in which report
the Company shall set forth, among other things, detailed calculations and
the resultant ratios or financial tests with respect to the financial
covenants contained in Sections 7.9A through 7.11 and 8.7 of this Agreement,
all in form and substance satisfactory to the Agent and the Majority Banks.
7
"Debt" shall mean the sum of the following, without duplication (a)
all Funded Debt of a Person, (b) all Guarantee Obligations of such Person,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person
or under any operating lease, (d) net termination obligations payable under
any interest rate swap transaction, basis swap transaction, forward rate
transaction, commodity swap transaction, equity transaction, equity index
transaction, foreign exchange transaction, cap transaction, floor transaction
(including any option with respect to any of these transactions and any
combination of any of the foregoing) entered into by such Person, (d) the
indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer solely to the extent such
indebtedness constitutes the recourse obligations of such Person in its
capacity as such a general partner or joint venturer, (e) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, and
(f) all other items of indebtedness, obligation, financial accommodation or
liability of a Person, whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or
several, which would be classified as liabilities on the balance sheet of
such Person in accordance with GAAP.
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
"Default" shall mean any event which with the giving of notice or
the passage of time, or both, would constitute an Event of Default under this
Agreement.
"Defaulting Bank" is defined in Section 2.4(c).
"Dollar Equivalent Amount" shall mean (a) with respect to Dollars or
an amount denominated in Dollars, such amount and (b) with respect to an
amount of any Alternative Currency or an amount denominated in such
Alternative Currency, the amount of Dollars that may be purchased with such
amount of Alternative Currency in the interbank foreign exchange market, at
the most favorable spot rate of exchange (including all related costs of
conversion) applicable to the relevant transaction determined by the Agent to
be available to it at or about 11:00 a.m. Detroit time (i) on the date on
which such calculation would be necessary for the delivery of Dollars on the
applicable date contemplated in this Agreement or (ii) for interest rate
setting purposes only, on the date which is two Business Days prior to the
commencement of an Interest Period (or such other number of days as shall be
reasonably deemed necessary by Agent, for purposes of this Agreement).
"Dollars" and the sign "$" shall mean lawful money of the United
States of America.
"Domestic Advance" shall mean any Advance other than a
Eurocurrency-based Advance.
8
"Domestic Borrowing Base" shall mean, as of any date of
determination, an amount equal to the sum of eighty-five percent (85%) of
Eligible Domestic Accounts; determined in each case on the basis of the most
recent Borrowing Base Certificates required to be submitted hereunder.
"Domestic Borrowing Base Obligors" shall mean the Company and each
Domestic Subsidiary which becomes a Guarantor pursuant to and in accordance
with the provisions of this Agreement and "Domestic Borrowing Base Obligor"
shall mean any of them.
"Domestic Security Agreement" shall mean the Domestic Security
Agreement substantially in the form of the Security Agreement annexed hereto
as Exhibit K executed and delivered by the Company and each Significant
Domestic Subsidiary in favor of the Agent, as amended or otherwise modified
from time to time.
"Domestic Subsidiary" shall mean any direct or indirect Subsidiary
of the Company which is incorporated under the laws of the United States of
America, or any state, territory or other political subdivision thereof.
"Effective Date" shall mean the date on which all the conditions
precedent set forth in Sections 5.1 through 5.14 have been satisfied.
"Eligible Canadian Account" shall mean an Account which has been
included in a Borrowing Base Certificate to determine the Canadian Borrowing
Base, and as to which Account the following is true and accurate as of the
time it was utilized to determine the Canadian Borrowing Base and as of the
time the Canadian Permitted Borrower has requested a Revolving Credit Advance
based in part thereon:
(a) such Account arose in the ordinary course of the business
of the Canadian Permitted Borrower out of either (i) a bona fide sale
of Inventory by the Canadian Permitted Borrower, and in such case such
Inventory has in fact been shipped to the appropriate Account Debtor or
the sale has otherwise been consummated in accordance with such order,
or (ii) services performed by the Canadian Permitted Borrower under an
enforceable contract, and in such case such services have in fact been
performed for the appropriate Account Debtor in accordance with such
contract;
(b) such Account represents a legally valid and enforceable
claim which is due and owing to the Canadian Permitted Borrower by such
Account Debtor and for such amount as is represented by the Canadian
Permitted Borrower to Agent in the applicable Borrowing Base
Certificate;
(c) it is evidenced by an invoice dated not later than the
date of shipment of the related Inventory or the performance of the
related services giving rise to such Account and (x) in the case of
Accounts in respect of which the Account Debtor is Ford Motor Company,
General Motors, General Electric or any other Account Debtors approved
by the Majority
9
Banks for treatment under this subclause (x), and their respective
Domestic or Canadian Subsidiaries, not more than one hundred twenty
(120) days have passed since the original invoice date corresponding to
such Account and (y) in the case of all other Accounts, not more than
ninety (90) days have passed since the original invoice date;
(d) the unpaid balance of such Account as represented by the
Canadian Permitted Borrower to Agent in the applicable Borrowing Base
Certificate is not subject to any defense, counterclaim, setoff, contra
account, credit, allowance or adjustment by the Account Debtor because
of returned, inferior or damaged Inventory or services, or for any
other reason, except for customary discounts allowed by the Canadian
Permitted Borrower in the ordinary course of business for prompt
payment, and there is no agreement between the Canadian Permitted
Borrower, the related Account Debtor and any other person for any
discount, concession or release of liability in respect of such
Account, in whole or in part;
(e) the transactions leading to the creation of such Account
comply with all applicable local, state and federal laws and
regulations of the jurisdiction in which such Account was created;
(f) the Canadian Permitted Borrower has granted to the Agent
on behalf of the Banks a perfected security interest in such Account
prior in right to all other persons or entities and such Account has
not been sold, transferred or otherwise assigned or encumbered by the
Canadian Permitted Borrower to any person or entity other than the
Agent on behalf of the Banks;
(g) it is not owing by an Account Debtor who, together with
any Affiliate of such Account Debtor, as of the date of determination,
has failed to pay twenty-five percent (25%) or more of the aggregate
amount of their respective Accounts owing to any Borrowing Base Obligor
(x) in the case of Accounts in respect of which the Account Debtor is
Ford Motor Company, General Motors, General Electric or any other
Account Debtors approved by the Majority Banks for treatment under
clause (c) above, and their respective Domestic or Canadian
Subsidiaries, within one hundred twenty (120) days since the original
invoice date corresponding to such Account and (y) in the case of all
other Accounts, within ninety (90) days since the original invoice
date;
(h) such Account is not represented by any note, trade
acceptance, draft or other negotiable instrument or by any chattel
paper, except any such as have been endorsed and delivered by the
Canadian Permitted Borrower to the Banks (or to Agent on behalf of the
Banks) on or prior to such Account's inclusion in any Borrowing Base
Certificate;
(i) the Canadian Permitted Borrower has not received, with
respect to such Account, any notice of the death of the related Account
Debtor or any general partner thereof, nor of the dissolution,
liquidation, termination of existence, insolvency, business failure,
appointment of a receiver for any part of the property of, assignment
for the benefit of
10
creditors by, or the filing of a petition in bankruptcy or the
commencement of any proceeding under any applicable bankruptcy or
insolvency laws or similar laws in effect affecting the enforceability
of creditors' rights generally by or against, such Account Debtor; and
(j) the Account Debtor on such Account is not:
(i) an Affiliate of the Company,
(ii) the United States of America or any department,
agency, or instrumentality thereof, or any other governmental
or quasi-governmental agency, foreign or domestic,
(iii) a citizen or resident of any jurisdiction other
than (X) the United States of America or (Y) Canada or (Z)
such other jurisdiction approved by the Majority Banks; unless
the Account is secured by a letter of credit in form and
substance (and issued by a bank) acceptable to Agent in the
exercise of its sole discretion, or
(iv) an Account Debtor whom Agent and Majority Banks
have, in their reasonable discretion, determined (based on
such facts as Agent and the Majority Banks deem appropriate)
not to be acceptable to Majority Banks, and as to which Agent
has notified the Company.
Any Account which is at any time an Eligible Canadian Account but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Canadian Account. Any Account which at any time fails to
meet any of the foregoing requirements, but which the Agent and the Majority
Banks, in their sole discretion, approve shall be deemed to be an Eligible
Canadian Account.
"Eligible Domestic Account" shall mean an Account which has been
included in a Borrowing Base Certificate to determine the Domestic Borrowing
Base, and as to which Account the following is true and accurate as of the time
it was utilized to determine the Domestic Borrowing Base and as of the time the
Company requested a Revolving Credit Advance based in part thereon:
(a) such Account arose in the ordinary course of the business
of a Domestic Borrowing Base Obligor out of either (i) a bona fide sale
of Inventory by a Domestic Borrowing Base Obligor, and in such case
such Inventory has in fact been shipped to the appropriate Account
Debtor or the sale has otherwise been consummated in accordance with
such order, or (ii) services performed by a Domestic Borrowing Base
Obligor under an enforceable contract, and in such case such services
have in fact been performed for the appropriate Account Debtor in
accordance with such contract;
11
(b) such Account represents a legally valid and enforceable
claim which is due and owing to a Domestic Borrowing Base Obligor by
such Account Debtor and for such amount as is represented by the
Company to Agent in the applicable Borrowing Base Certificate;
(c) it is evidenced by an invoice dated not later than the
date of shipment of the related Inventory or the performance of the
related services, giving rise to such Account and (x) in the case of
Accounts of Ford Motor Company, General Motors, General Electric and
any other Account Debtor approved by the Majority Bank under this
subclause (x) and their respective Domestic or Canadian Subsidiaries,
not more than one hundred twenty (120) days have passed since the
original invoice date corresponding to such Account and (y) in the case
of all other Accounts, not more than ninety (90) days have passed since
the original invoice date;
(d) the unpaid balance of such Account as represented by the
Company to Agent in the applicable Borrowing Base Certificate is not
subject to any defense, counterclaim, setoff, contra account, credit,
allowance or adjustment by the Account Debtor because of returned,
inferior or damaged Inventory or services, or for any other reason,
except for customary discounts allowed by a Domestic Borrowing Base
Obligor in the ordinary course of business for prompt payment, and
there is no agreement between a Domestic Borrowing Base Obligor, the
related Account Debtor and any other person for any discount,
concession or release of liability in respect of such Account, in whole
or in part;
(e) the transactions leading to the creation of such Account
comply with all applicable local, state and federal laws and
regulations of the jurisdiction in which such Account was created;
(f) the Company or another Domestic Borrowing Base Obligor has
granted to the Agent on behalf of the Banks a perfected security
interest in such Account prior in right to all other persons or
entities and such Account has not been sold or transferred or otherwise
assigned or encumbered by such Domestic Borrowing Base Obligor to any
person or entity other than the Agent, on behalf of the Banks;
(g) it is not owing by an Account Debtor who, together with
any Affiliate of such Account Debtor, as of the date of determination,
has failed to pay twenty-five percent (25%) or more of the aggregate
amount of their respective Accounts owing to any Borrowing Base Obligor
(x) in the case of Accounts of Ford Motor Company, General Motors and
General Electric and any other Account Debtor approved by the Majority
Banks for treatment under clause (c) above, and their respective
Domestic or Canadian Subsidiaries, within one hundred twenty (120) days
since the original invoice date corresponding to such Account and (y)
in the case of all other Accounts, within ninety (90) days since the
original invoice date;
12
(h) such Account is not represented by any note, trade
acceptance, draft or other negotiable instrument or by any chattel
paper, except any such as have been endorsed and delivered by the
applicable Domestic Borrowing Base Obligor to the Banks (or to Agent on
behalf of the Banks) on or prior to such Account's inclusion in any
applicable Borrowing Base Certificate;
(i) the applicable Domestic Borrowing Base Obligor has not
received, with respect to such Account, any notice of the death of the
related Account Debtor or any general partner thereof, nor of the
dissolution, liquidation, termination of existence, insolvency,
business failure, appointment of a receiver for any part of the
property of, assignment for the benefit of creditors by, or the filing
of a petition in bankruptcy or the commencement of any proceeding under
any applicable bankruptcy or insolvency laws or similar laws in effect
affecting the enforceability of creditors' rights generally by or
against, such Account Debtor; and
(j) the Account Debtor on such Account is not:
(i) an Affiliate of the Company;
(ii) the United States of America or any department,
agency, or instrumentality thereof,
(iii) a citizen or resident of any jurisdiction other
than (X) the United States of America or (Y) Canada or (Z)
such other jurisdiction approved by the Majority Banks; unless
the Account is secured by a letter of credit in form and
substance (and issued by a bank) acceptable to Agent and the
Majority Banks in the exercise of its sole discretion, or
(iv) an Account Debtor whom Agent and the Majority
Banks have, in their reasonable discretion, determined (based
on such facts as Agent and the Majority Banks reasonably deem
appropriate) not to be acceptable to Agent, and as to which
Agent has notified the Company.
Any Account which is at any time an Eligible Domestic Account but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Domestic Account. Any Account which at any time fails to
meet any of the foregoing requirements, but which the Agent and the Majority
Banks, in their sole discretion, approve shall be deemed to be an Eligible
Domestic Account.
"EMU" shall mean Economic and Monetary Union as contemplated in the
Treaty on European Union.
13
"EMU Legislation" shall mean legislative measures of the European
Council (including European Council regulations) for the introduction of,
changeover to or operation of a single or unified European currency (whether
known as the euro or otherwise), being in part the implementation of the third
stage of EMU.
"Equity Interests" means, with respect to any Person, any and all
shares, share capital, interests, participations, warrants, options or other
equivalents (however designated) of capital stock of a corporation and any and
all equivalent ownership interests in a Person (other than a corporation).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code and the regulations in effect from time
to time thereunder.
"Eurocurrency-based Advance" shall mean any Advance which bears
interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of (a) the Applicable Margin (subject, if applicable, to
adjustment under Section 4.1 hereof), plus (b) in the case of any
Eurocurrency-based Advance, the quotient of:
(A) the per annum interest rate at which deposits in the
relevant eurocurrency are offered to Agent's
Eurocurrency Lending Office by other prime banks in
the eurocurrency market in an amount comparable to
the relevant Eurocurrency-based Advance and for a
period equal to the relevant Eurocurrency-Interest
Period at approximately 11:00 A.M. Detroit time two
(2) Business Days prior to the first day of such
Eurocurrency-Interest Period, divided by
(B) a percentage equal to 100% minus the maximum rate on
such date at which Agent is required to maintain
reserves on `Eurocurrency Liabilities' as defined in
and pursuant to Regulation D of the Board of
Governors of the Federal Reserve System or, if such
regulation or definition is modified, and as long as
Agent is required to maintain reserves against a
category of liabilities which includes eurocurrency
deposits or includes a category of assets which
includes eurocurrency loans, the rate at which such
reserves are required to be maintained on such
category,
such sum to be rounded upward, if necessary, to the nearest whole multiple of
1/100th of 1%.
"Eurocurrency-Interest Period" shall mean, for all Eurocurrency-based
Advances, an interest period of one, two or three months (or any lesser or
greater number of days agreed to in advance by the Company, Agent and the Banks)
as selected by the Company, as applicable, for a Eurocurrency-based Advance
pursuant to Section 2.3, hereof.
14
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at its Grand Cayman Branch or such other branch of
Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by written notice to Company and the Banks and (b) as to each of
the Banks, its office, branch or affiliate located at its address set forth on
the signature pages hereof (or identified thereon as its Eurocurrency Lending
Office), or at such other office, branch or affiliate of such Bank as it may
hereafter designate as its Eurocurrency Lending Office by written notice to
Company and Agent.
"Event of Default" shall mean each of the Events of Default specified
in Section 9.1 hereof.
"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, all as conclusively determined by the Agent (absent manifest
error), such sum to be rounded upward, if necessary, to the nearest whole
multiple of 1/100th of 1%.
"Fees" shall mean the Revolving Credit Facility Fee, the Letter of
Credit Fees and the other fees and charges payable by the Company to the Banks
or Agent hereunder.
"Financial Statements" shall mean all those balance sheets, earnings
statements, statement of cash flows, and other financial data (whether of the
Company or its Subsidiaries) which have been furnished to the Agent or the Banks
for the purposes of, or in connection with, this Agreement and the transactions
contemplated hereby.
"Funded Debt" of any Person shall mean (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or
services as of such date (other than operating leases and trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) the principal component of all obligations of such Person under
Capitalized Leases and (c) all obligations of such Person in respect of letters
of credit, acceptances or similar obligations issued or created for the account
of such Person PROVIDED, HOWEVER, that Funded Debt shall not include any Hedging
Transaction entered into by such Person prior to the occurrence of a termination
event with respect thereto.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect from time to time.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
15
"Guarantee Obligation" shall mean as to any Person (the
"guaranteeing person") any obligation of the guaranteeing person in respect
of any obligation of another Person (including, without limitation, any bank
under any letter of credit), the creation of which was induced by a
reimbursement agreement, counter indemnity or similar obligation issued by
the guaranteeing person, in either case guaranteeing or in effect
guaranteeing any Debt, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course
of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability
in respect thereof as determined by Company in good faith.
"Guarantor(s)" shall mean each Significant Domestic Subsidiary so
designated on Schedule 6.19 hereto and each other Significant Domestic
Subsidiary which is required by the Banks to guarantee the obligations of the
Borrowers hereunder and under the other Loan Documents.
"Guaranty" shall mean that certain guaranty of all outstanding
Indebtedness, executed and delivered (or to be executed and delivered) by the
Company as to the Indebtedness relating to the Canadian Permitted Borrower)
and the Guarantors (as to all Indebtedness) whether by execution thereof, or
by execution of the Joinder Agreement attached as "Exhibit A" to the form of
such Guaranty), to the Agent, on behalf of the Banks, in the form annexed
hereto as Exhibit J, as amended from time to time.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material in such amount and form as is defined
as such in (or for purposes of) the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal,
state, provincial, local, foreign or other governmental or quasi-governmental
authority or body (or any agency, instrumentality or political
16
subdivision thereof) pertaining to any hazardous, toxic or dangerous waste,
substance or material on or about any facilities owned, leased or operated by
the Company or any of its Subsidiaries, or any portion thereof including,
without limitation, those relating to soil, surface, subsurface ground water
conditions and the condition of the ambient air; and any state and local laws
and regulations pertaining to any hazardous, toxic or dangerous waste,
substance or material and/or asbestos; any so-called "superfund" or
"superlien" law; and any other federal, state, provincial, foreign or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material, as now or at any
time during the term of the Agreement in effect.
"Hedging Transaction" means each interest rate swap transaction,
basis swap transaction, forward rate transaction, commodity swap transaction,
equity transaction, equity index transaction, foreign exchange transaction,
cap transaction, floor transaction (including any option with respect to any
of these transactions and any combination of any of the foregoing) entered
into by the Company from time to time; provided that such transaction is
entered into for risk management purposes and not for speculative purposes.
"Hereof", "hereto", "hereunder" and similar terms shall refer to
this Agreement and not to any particular paragraph or provision of this
Agreement.
"Indebtedness" shall mean all indebtedness and liabilities
(including without limitation interest (including, without limitation,
interest accruing at the then applicable rate provided in this Agreement or
any other applicable Loan Document after the Revolving Credit Maturity Date
and interest accruing at the then applicable rate provided in this Agreement
or any other applicable Loan Document after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company or any Subsidiary, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding),
fees and other charges) arising under this Agreement or any of the other Loan
Documents, whether direct or indirect, absolute or contingent, of the Company
or any Subsidiary to any of the Banks or Affiliates thereof or to the Agent,
in any manner and at any time, whether arising under this Agreement, or under
any Guaranty or any of the other Loan Documents, due or hereafter to become
due, now owing or that may hereafter be incurred by the Company or any
Subsidiary to, any of the Banks or Affiliates thereof or to the Agent (and
which shall be deemed to include any liabilities of the Company or any
Subsidiary to any Bank arising in connection with account overdrafts), and
any judgments that may hereafter be rendered on such indebtedness or any part
thereof, with interest according to the rates and terms specified, or as
provided by law, any payment obligations, if any, under Hedging Transactions
evidenced by Interest Rate Protection Agreements, and any and all
consolidations, amendments, renewals, replacements, substitutions or
extensions of any of the foregoing; provided, however that for purposes of
calculating the Indebtedness outstanding under the Agreement or any of the
other Loan Documents, the direct and indirect and absolute and contingent
obligations of the Company and the Subsidiaries (whether direct or
contingent) shall be determined without duplication.
17
"Intercompany Loan" shall mean any loan (or advance in the nature of
a loan) by the Company to any Subsidiary, or by any Subsidiary to the Company
or to any other Subsidiary, provided that each such loan or advance is
subordinated in right of payment and priority to the Indebtedness on terms
and conditions satisfactory to Agent and the Majority Banks.
"Intercompany Loans, Advances or Investments" shall mean any
Intercompany Loan, and any advance or investment by the Company or any
Subsidiary (including without limitation any guaranty of obligations or
indebtedness to third parties) to or in another Subsidiary (or by any
Subsidiary to the Company).
"Intercompany Notes" shall mean the promissory notes issued or to be
issued by the Company or any Subsidiary to evidence an Intercompany Loan.
"Interest Period" shall mean (a) with respect to a
Eurocurrency-based Advance, a Eurocurrency-Interest Period commencing on the
day a Eurocurrency-based Advance is made, or on the effective date of an
election of the Eurocurrency-based Rate made under Section 2.3 hereof, and
(b) with respect to a Swing Line Advance carried at the Quoted Rate, an
interest period of one month (or any lesser number of days agreed to in
advance by the Company, Agent and a Swing Line Bank); provided, however that
(i) any Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day, except that as to
a Eurocurrency-Interest Period, if the next succeeding Business Day falls in
another calendar month, such Eurocurrency-Interest Period shall end on the
next preceding Business Day, and (ii) when a Eurocurrency-Interest Period
begins on a day which has no numerically corresponding day in the calendar
month during which such Eurocurrency-Interest Period is to end, it shall end
on the last Business Day of such calendar month, and (iii) no Interest Period
shall extend beyond the Revolving Credit Maturity Date.
"Interest Rate Protection Agreement" means any Hedging Transaction
entered into between the Company and any Bank or an Affiliate of a Bank in
respect of the credit extended to the Company under this Agreement.
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated
thereunder.
"Inventory" shall have the meaning assigned to it in the UCC on the
date of this Agreement.
"Investment" shall mean, when used with respect to any Person, (a)
any loan, investment or advance made by such Person to any other Person
(including, without limitation, any contingent obligation) in respect of any
capital stock, Debt, obligation or liability of such other Person and (b) any
other investment made by such Person (however acquired) in stock or other
ownership interests in any other Person, including, without limitation, any
investment made in exchange for the issuance of shares of stock of such
Person.
18
"Issuing Bank" shall mean LaSalle Bank National Association in its
capacity as issuer of one or more Letters of Credit hereunder, or its
successor designated by the Company and the Banks.
"Issuing Office" shall mean such office as Issuing Bank shall
designate as its Issuing Office.
"ITA" shall mean the Income Tax Act (Canada) as the same may, from
time to time be in effect.
"Joinder Agreement" shall mean a joinder agreement in the form
attached as Exhibit A to the form of the Guaranty, to be executed and
delivered by any Person required to be a Guarantor pursuant to Section 7.19
of this Agreement.
"Letter of Credit Agreement" shall mean, in respect of each Letter
of Credit, the Master Letter of Credit Agreement required by the Issuing Bank
to be executed by the Company and related documentation satisfactory to the
Issuing Bank of an Account Party or Account Parties requesting Issuing Bank
to issue such Letter of Credit, as amended from time to time.
"Letter of Credit Documents" is defined in Section 3.7.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to
Section 3.4 hereof.
"Letter of Credit Maximum Amount" shall mean Fifteen Million Dollars
($15,000,000).
"Letter of Credit Obligations" shall mean at any date of
determination, the sum of (a) the aggregate undrawn amount of all Letters of
Credit then outstanding, (b) the aggregate face amount of all Letters of
Credit requested but not yet issued as of such date and (c) the aggregate
amount of Reimbursement Obligations which have not been reimbursed by the
Company as of such date.
"Letter of Credit Payment" shall mean any amount paid or required to
be paid by the Issuing Bank in its capacity hereunder as issuer of a Letter
of Credit as a result of a draft or other demand for payment under any Letter
of Credit.
"Letter(s) of Credit" shall mean any standby letters of credit
issued by Issuing Bank at the request of or for the account of an Account
Party or Account Parties pursuant to Article 3 hereof.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional
sale or title retaining contract, sale and leaseback transaction, financing
statement or comparable notice or other filing or recording, Capitalized
Lease, subordination of any claim or right, or any other type of lien,
charge, encumbrance, preferential or priority arrangement, whether based on
common law or statute.
19
"Loan Documents" shall mean, collectively, this Agreement, the Notes
(if issued), the Letter of Credit Agreements, the Letters of Credit, the
Guaranty, the Collateral Documents, any Interest Rate Protection Agreement
and any other documents, instruments or agreements executed pursuant to or in
connection with any such document or this Agreement, as such documents may be
amended or otherwise modified from time to time.
"Loan Parties" shall mean collectively the Company, the Guarantors
and the Canadian Permitted Borrower, and "Loan Party" shall mean any one of
them, as the context indicates or otherwise requires.
"Majority Banks" shall mean (a) so long as the Revolving Credit
Aggregate Commitment is outstanding hereunder, at any time Banks holding not
less than 66_% of the aggregate principal amount of the Revolving Credit
Aggregate Commitment, and (b) if the Revolving Credit Aggregate Commitment
has been terminated, at any time Banks holding not less than 66_% of the
aggregate principal amount of the Indebtedness then outstanding hereunder
(provided that, for purposes of determining Majority Banks hereunder,
Indebtedness outstanding under the Swing Line or under any Letter of Credit
shall be allocated among the Banks based on their respective Revolving Credit
Percentages). Notwithstanding the foregoing however, so long as less than
three Banks are party to this Agreement, then "Majority Banks" shall mean all
Banks.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business or financial condition of the Company and its Subsidiaries
taken as a whole, (b) the ability of the Company and its Subsidiaries to
perform their respective obligations under this Agreement, the Notes (if
issued) or any other Loan Document to which any of them is a party, or (c)
the validity or enforceability of this Agreement, any of the Notes (if
issued) or any of the other Loan Documents or the rights or remedies of the
Agent or the Banks hereunder or thereunder.
"Multiemployer Plan" shall mean a Pension Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"National Currency Unit" shall mean a fraction or multiple of one
Euro Unit expressed in units of the former national currency of a
Participating Member State.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments received by the Company and/or any Subsidiary, as the
case may be, from such Asset Sale, net of the reasonable direct expenses of
sale such as commissions and pro rated property taxes, net of any taxes
actually payable by the Company or such Subsidiary in respect of such sale,
taking into account Company's or such Subsidiary's losses, if any, which are
available under applicable law to reduce in connection therewith and (subject
to Section 8.12 hereof) net of the amount of all payments required to be made
by the Company or such Subsidiary to repay Debt (other than Indebtedness)
secured by any asset which is the subject of such Asset Sale.
"Non-Defaulting Bank" is defined in Section 2.4(c).
20
"Notes" shall mean the Revolving Credit Notes and the Swing Line
Notes.
"Participating Member State" shall mean such country so described in
any EMU Legislation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" shall mean any plan established and maintained by the
Company or any other Loan Party which is qualified under Section 401(a) of
the Internal Revenue Code and subject to the minimum funding standards of
Section 412 of the Internal Revenue Code.
"Percentage" shall mean the Revolving Credit Percentage.
"Permitted Acquisition" shall mean any acquisition (including by way
of merger) by Company or any Guarantor of all or substantially all of the
assets of another Person, or of a division or line of business of another
Person, or shares of stock or other ownership interests of another Person,
which is conducted in accordance with the following requirements:
(a) Such acquisition is of a business or Person engaged in a line
of business reasonably related to that of the Company;
(b) If such acquisition is structured as a stock acquisition, then
the Person so acquired shall either (X) become a wholly-owned
Subsidiary of the Company or of a Guarantor and the Company
shall comply, or cause such Guarantor to comply, with Section
7.19 hereof or (Y) such Person shall be merged with and into
the Company or a Guarantor (with the Company or such Guarantor
being the surviving entity);
(c) If such acquisition is structured as the acquisition of
assets, such assets shall be acquired by Company or a
Guarantor;
(d) The Company shall have delivered to the Agent not less than
fifteen (15) nor more than ninety (90) days prior to the date
of such acquisition, notice of such acquisition together with
Pro Forma Projected Financial Information, copies of all
material documents relating to such acquisition, and
historical financial information (including income statements,
balance sheets and cash flows) covering at least two (2)
complete fiscal years of the acquisition target prior to the
effective date of the acquisition or the entire credit history
of the acquisition target, whichever period is shorter, in
each case in form and substance satisfactory to the Agent and
the Majority Banks;
(e) Both immediately before and after such acquisition no Default
or Event of Default shall have occurred and be continuing;
21
(f) The board of directors (or other Person(s) exercising similar
functions) of the seller of the assets or issuer of the shares
of stock or other ownership interests being acquired shall not
have disapproved such transaction or recommended that such
transaction be disapproved;
(g) The purchase price of such proposed new acquisition plus the
purchase price of all other acquisitions consummated in the
same fiscal year (excluding in each case, the value of any
common shares transferred as part of such acquisition), shall
not exceed Five Million Dollars ($5,000,000).
"Permitted Currencies" shall mean Dollars or any Alternative Currency.
"Permitted Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District
of Columbia or any possession of the United States, or any political
subdivision thereof, which are described in Section 103(a) of the
Internal Revenue Code and are graded in any of the highest three (3)
major grades as determined by at least one Rating Agency; or secured,
as to payments of principal and interest, by a letter of credit
provided by a financial institution or insurance provided by a bond
insurance company which in each case is itself or its debt is rated in
one of the highest three (3) major grades as determined by at least one
Rating Agency;
(c) Banker's acceptances, commercial accounts, demand deposit
accounts, certificates of deposit, or depository receipts issued by or
maintained with any Bank or a bank, trust company, savings and loan
association, savings bank or other financial institution whose deposits
are insured by the Federal Deposit Insurance Corporation and whose
reported capital and surplus equal at least $250,000,000, provided that
such minimum capital and surplus requirement shall not apply to demand
deposit accounts maintained by the Company or any of its Subsidiaries
in the ordinary course of business;
(d) Commercial paper rated at the time of purchase within the
two highest classifications established by not less than two Rating
Agencies, and which matures within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations itemized
in paragraph (a) above, and executed by a bank or trust company or by
members of the association of primary dealers or other recognized
dealers in United States government securities, the market value of
which must be maintained at levels at least equal to the amounts
advanced;
(f) Any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (a) through (e) above;
and
22
(g) Investments by any foreign Subsidiary in obligations
similar in nature, term and credit quality to those enumerated in
clauses (a) through (f) above, except that such Subsidiary's country of
incorporation shall be substituted for the United States of America,
each case.
"Permitted Liens" shall mean with respect to any Person:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of such
Person in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's liens or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure (i) the performance of bids, trade
contracts (other than for borrowed money), statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature or (ii) the performance of leases permitted hereunder, in
each case given or incurred on terms, in amounts and otherwise in the
ordinary course of business; and
(e) easements, rights-of-way, restrictions and other similar
encumbrances or Liens incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the
business of such Person;
"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, or a government
or any agency or political subdivision thereof or other entity of any kind.
"Pledge Agreement(s)" shall mean the Company Pledge Agreement, the
Canadian Share Pledge and any other pledge agreement executed and delivered by
any other Subsidiary in form satisfactory to the Agent, in each case as amended
or otherwise modified from time to time.
"Potential Financial Institution" is defined in Section 2.4(c).
23
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean (i) with respect to any Advances in
Dollars, the U.S. Prime-based Rate, and (ii) with respect to Swing Line Advances
in Canadian Dollars, the Canadian Prime-based Rate.
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition, a statement executed by a Responsible Officer (supported
by reasonable detail) setting forth the total consideration to be paid or
incurred in connection with the proposed acquisition, and pro forma combined
projected financial information for the Company and its Consolidated
Subsidiaries and the acquisition target (if applicable), consisting of projected
balance sheets as of the proposed effective date of the acquisition or the
closing date thereof and as of the end of at least the next succeeding three (3)
fiscal years of the Company following the acquisition and projected statements
of income and cash flows for each of those years, including sufficient detail to
permit calculation of the amounts and the ratios described in Sections 7.9A
through 7.11 and 8.7 hereof, as projected as of the effective date of the
acquisition and for those fiscal years and accompanied by (i) a statement
setting forth a calculation of the ratios and amounts so described, (ii) a
statement in reasonable detail specifying all material assumptions underlying
the projections and (iii) such other information as any Bank shall reasonably
request.
"Purchasing Bank" shall have the meaning set forth in Section 11.7.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest
at the Quoted Rate.
"Rating Agency" shall mean Xxxxx'x Investor Services Inc., Standard and
Poor's Ratings Services or any other nationally recognized statistical rating
organization which is acceptable to the Agent.
"Register" is defined in Section 13.8(f) hereof.
"Reimbursement Obligation(s)" shall mean the obligation of an Account
Party or Account Parties under each Letter of Credit Agreement and this
Agreement to reimburse the Issuing Bank for each payment made by the Issuing
Bank 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 to the Issuing Bank under such Letter of Credit Agreement or this
Agreement relating to Letters of Credit.
24
"Request for Advance" shall mean a Request for Revolving Credit Advance
or a Request for Swing Line Advance as the context may indicate.
"Request for Revolving Credit Advance" shall mean a Request for
Revolving Credit Advance issued by the Company under Section 2.3 of this
Agreement in the form annexed hereto as Exhibit A, as amended or otherwise
modified.
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by the Company under Section 2.5(c) of this Agreement in the form
attached hereto as Exhibit D, as amended or otherwise modified.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean the chief executive officer, chief
financial officer, the vice president of finance, treasurer or the president of
the Company or the Canadian Permitted Borrower, or with respect to compliance
with financial covenants, the chief financial officer, the vice president of
finance or the treasurer of the Company or the Canadian Borrower, as the case
may be, or any other officer having substantially the same authority and
responsibility.
"Revolving Credit" shall mean the revolving credit loan to be advanced
to the Company by the applicable Banks pursuant to Article 2 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by the
Company and made by the Banks under Section 2.1 of this Agreement, including
without limitation any readvance, refunding or conversion of such borrowing
pursuant to Section 2.3 hereof and any advance in respect of a Letter of Credit
under Section 3.6 hereof, and shall include, as applicable, a Eurocurrency-based
Advance and/or a Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean Eighty Million
Dollars ($80,000,000), subject to reduction or termination under Section 2.13,
2.14, or 9.2 hereof.
"Revolving Credit Facility Fee" shall mean the fees payable to Agent
for distribution to the Banks pursuant to Section 2.12 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
April 1, 2003, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall be terminated pursuant to Section 2.14 or Section 9.2 hereof.
25
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.1 hereof, made by the Company to each of the Banks in the
form annexed to this agreement as Exhibit B, as such notes may be amended or
supplemented from time to time, and any other notes issued in substitution,
replacement or renewal thereof from time to time.
"Revolving Credit Percentage" shall mean with respect to each Bank, its
percentage share, as set forth on Schedule 1.2 under column 1, of the Revolving
Credit and its risk participation in Letters of Credit and its participation in
any outstanding Swing Line Advances as such Schedule may be revised from time to
time by Agent in accordance with Section 13.8.
"Security Agreements" shall mean the Canadian Security Agreement and
the Domestic Security Agreement, and "Security Agreement" shall mean either of
them, as the context may indicate or otherwise require.
"Significant Domestic Subsidiary(ies)" shall mean, on the Effective
Date, those Domestic Subsidiaries identified as "Significant Subsidiaries" on
Schedule 6.19 hereto and thereafter, each other Subsidiary, whether existing on
the Effective Date or created or acquired (directly or indirectly) by the
Company thereafter, which:
(a) the total assets of which, on an individual basis, on any
date of determination, are more than $5,000,000; or
(b) which has, as of the most recent fiscal quarter than
ending, for the four preceding fiscal quarters, an EBITDA (calculated
in the same manner with respect to such Subsidiary as Consolidated
EBITDA is for the Company) of more than $1,000,000.
"Xxxxxxxxx.xxx" shall mean Xxxxxxxxx.xxx, Inc., a Delaware corporation.
"Xxxxxxxxx.xxx Acquisition" shall mean the transaction whereby the
Company will acquire the capital stock in Xxxxxxxxx.xxx on the terms and
conditions set forth in the Xxxxxxxxx.xxx Acquisition Documents.
"Xxxxxxxxx.xxx Acquisition Documents" shall mean the Agreement and Plan
of Merger and Plan of Reorganization dated as of January 17, 2000 by and among
the Company, Xxxxxxxxx.xxx and HA-LO Industries, Inc., a Delaware corporation
with all other documents and instruments executed and delivered in connection
with the Xxxxxxxxx.xxx Acquisition, as amended, subject to the terms hereof,
from time to time.
"Subordinated Debt" shall mean any Funded Debt of the Company which has
been subordinated in right of payment and priority to the Indebtedness, all on
terms and conditions satisfactory to the Agent and the Majority Banks.
26
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company or any other business
entity of which more than fifty percent (50%) of the outstanding voting stock,
share capital, membership or other interests, as the case may be, is owned
either directly or indirectly by any Person or one or more of its Subsidiaries,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by any Person and/or its
Subsidiaries. Unless otherwise specified to the contrary herein or the context
otherwise requires, Subsidiary(ies) shall refer to the Subsidiary(ies) of the
Company.
"Swing Line" shall mean the revolving credit loan to be advanced to the
Company or the Canadian Permitted Borrower by the Swing Line Bank pursuant to
Section 2.5 hereof, in an aggregate amount (subject to the terms hereof), not to
exceed, at any one time outstanding, the Swing Line Maximum Amount.
"Swing Line Advance" shall mean a borrowing made by a Swing Line Bank
to the Company pursuant to Section 2.5 hereof.
"Swing Line Banks" shall mean Comerica Bank and or any other Bank
designated as a Swing Line Bank by the Borrowers and the Banks, in its capacity
as lender under Section 2.5 of this Agreement or their respective successor as
lender of the Swing Line and "Swing Line Bank" shall mean any one of them as the
context indicates or otherwise requires.
"Swing Line Canadian Dollar Sublimit" shall mean Three Million Dollars
($3,000,000).
"Swing Line Maximum Amount" shall mean Ten Million Dollars
($10,000,000).
"Swing Line Notes" shall mean the swing line notes which may be issued
by the Company and the Canadian Permitted Borrower, as the case may be, in the
form annexed hereto as Exhibit C, as such Notes may be amended or supplemented
from time to time, and any notes issued in substitution, replacement or renewal
thereof from time to time.
"Treaty on European Union" shall mean the Treaty of Rome of March 25,
1957, as amended by the Single Xxxxxxxx Xxx 0000 and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992 and came into force on
November 1, 1993), as amended from time to time.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of any applicable state, and, unless specified otherwise, the Uniform
Commercial Code as in effect in the State of Illinois.
"U.S. Prime-based Advance" shall mean an Advance which bears interest
at the U.S. Prime-based Rate.
27
"U.S. Prime-based Rate" shall mean, for any day, that rate of interest
which is equal to the sum of the Applicable Margin plus the greater of (i) the
U.S. Prime Rate, and (ii) the Alternate Base Rate.
"U.S. Prime Rate" shall mean the per annum rate of interest announced
by the Agent at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which U.S. Prime Rate shall
change simultaneously with any change in such announced rate.
1.2 EURO.
(a) REDENOMINATION OF EUROCURRENCY-BASED ADVANCES AND
OTHER ADVANCES INTO EURO UNITS.
(i) Each obligation under this Agreement of a party
hereto which (A) was originally denominated in the former
national currency of a Participating Member State, or (B)
would otherwise have been denominated in such former national
currency prior to such date shall be denominated in, or
redenominated into, as applicable, the Euro Unit in accordance
with EMU Legislation and applicable state law, PROVIDED that,
if and to the extent that any EMU Legislation provides that
amounts denominated in the euro unit or the National Currency
Unit of a Participating Member State, that are payable by
crediting an account of the creditor within that country, may
be made in either Euro or National Currency Units, each party
to this Agreement shall be entitled to pay or repay any such
amounts in either the Euro Unit or such National Currency
Unit.
(ii) Subject to any EMU Legislation, references in
this Agreement to a minimum amount (or an integral multiple
thereof) in a National Currency Unit to be paid to or by a
party hereto shall be deemed to be a reference to such
reasonably comparable and convenient amount (or an integral
multiple thereof) in the Euro Unit as the Agent may from time
to time specify.
(b) PAYMENTS.
(i) All payments by any Loan Party or any Bank of
amounts denominated in the Euro or a National Currency Unit of
a Participating Member State, shall be made in immediately
available, freely transferable, cleared funds to the account
of the Agent in the principal financial center in such
Participating Member State, as from time to time designated by
the Agent for such purpose.
(ii) All amounts payable by the Agent to any party
under this Agreement in the National Currency Unit of a
Participating Member State shall instead be paid in the Euro
Unit.
28
(iii) The Agent shall not be liable to any party to
this Agreement in any way whatsoever for any delay, or the
consequences of any delay, in the crediting to any account of
any amount denominated in the Euro or a National Currency Unit
of a Participating Member State.
(iv) All references herein to the London interbank or
other national market with respect to any National Currency
Unit of a Participating Member State shall be deemed a
reference to the applicable markets and locations referred to
in the definition of "Business Day" in SECTION 1.1.
(c) If the basis of accrual of interest or fees expressed in
this Agreement with respect to the currency of any state that becomes a
Euro Member shall be inconsistent with any convention or practice in
the London interbank market for the basis of accrual of interest or
fees in respect of Euros, such convention or practice shall replace
such expressed basis effective as of and from the date on which such
state becomes a Euro Member; PROVIDED, that if any Advance in the
currency of such state is outstanding immediately prior to such date,
such replacement shall take effect, with respect to such Advance, at
the end of the then current Interest Period.
(d) INCREASED COSTS. The Company shall, from time to time upon
demand of any Bank (with a copy to the Agent), pay to such Bank the
amount of any cost or increased cost incurred by, or of any reduction
in any amount payable to or in the effective return on its capital to,
or of interest or other return foregone by, such Bank or any holding
company of such Bank as a result of the introduction of, changeover to
or operation of the Euro in a Participating Member State, other than
any such cost or reduction or amount foregone reflected in any interest
rate hereunder.
(e) UNAVAILABILITY OF EURO. If the Agent at any time
determines that: (i) the Euro has ceased to be utilized as the basic
accounting unit of the European Community; (ii) for reasons affecting
the market in Euros generally, Euros are not freely traded between
banks internationally; or (iii) it is illegal, impossible or
impracticable for payments to be made hereunder in Euro, then the Agent
may, in its discretion declare (such declaration to be binding on all
the parties hereto) that any payment made or to be made thereafter
which, but for this provision, would have been payable in the Euro
shall be made in a component currency of the Euro or Dollars (as
selected by the Agent (the "SELECTED CURRENCY") and the amount to be so
paid shall be calculated on the basis of the equivalent of the Euro in
the Selected Currency).
(f) ADDITIONAL CHANGES AT AGENT'S DISCRETION. This section and
other provisions of this Agreement relating to Euros and the National
Currency Units of Participating Member States shall be subject to such
further changes (including changes in interpretation or construction)
as the Agent may from time to time in its reasonable discretion notify
to the
29
Company and the Banks to be necessary or appropriate to reflect the
changeover to the Euro in Participating Member States.
1.3 INTEREST ACT (CANADA). For the purposes of disclosure under
the ITA, if and to the extent applicable, whenever interest is to be paid
hereunder and such interest is to be calculated on the basis of a period of
less than a calendar year, the yearly rate of interest to which the rate
determined pursuant to such calculation is equivalent is the rate so
determined multiplied by the actual number of days in the calendar year in
which the same is to be ascertained and divided by the number of days in such
period.
2. REVOLVING CREDIT
2.1 COMMITMENT. Subject to the terms and conditions of this
Agreement (including without limitation Section 2.3 hereof), each Bank
severally and for itself alone agrees to make Advances of the Revolving
Credit in Dollars to the Company from time to time on any Business Day during
the period from the Effective Date hereof until (but excluding) the Revolving
Credit Maturity Date in an aggregate amount, not to exceed at any one time
outstanding such Bank's Revolving Credit Percentage of the Revolving Credit
Aggregate Commitment. Subject to the terms and conditions set forth herein,
advances, repayments and readvances may be made under the Revolving Credit.
2.2 ACCRUAL OF INTEREST AND MATURITY; EVIDENCE OF INDEBTEDNESS.
(a) The Company hereby unconditionally promises to pay to the Agent for the
account of each Bank the then unpaid principal amount of each Revolving
Credit Advance (plus all accrued and unpaid interest) of such Bank to the
Company on the Revolving Credit Maturity Date and on such other dates and in
such other amounts as may be required from time to time pursuant to this
Agreement.
(b) Each Bank shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Company
to the appropriate lending office of such Bank resulting from each
Revolving Credit Advance made by such lending office of such Bank from
time to time, including the amounts of principal and interest payable
thereon and paid to such Bank from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to Section
13.8(f), and a subaccount therein for each Bank, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each
Revolving Credit Advance made hereunder, the type thereof and each
Interest Period applicable to any Eurocurrency-based Advance, (ii) the
amount of any principal or interest due and payable or to become due
and payable from the Company to each Bank hereunder in respect of the
Revolving Credit Advances and (iii) both the amount of any sum received
by the Agent hereunder from the Company in respect of the Revolving
Credit Advances and each Bank's share thereof.
30
(d) The entries made in the Register and the accounts of
each Bank maintained pursuant to paragraphs (b) and (c) of this
Section 2.1 shall absent manifest error, to the extent permitted by
applicable law, be conclusive evidence of the existence and amounts
of the obligations of the Company therein recorded; PROVIDED,
HOWEVER, that the failure of any Bank or the Agent to maintain the
Register or any such account, as applicable, or any error therein,
shall not in any manner affect the obligation of the Company to
repay the Revolving Credit Advances (and all other amounts owing
with respect thereto) made to such Company by the Bank in accordance
with the terms of this Agreement.
(e) The Company agrees that, upon written request to the
Agent (with a copy to the Company) by any Bank, the Company will
execute and deliver, to such Bank, at Company's own expense, a
Revolving Credit Note evidencing the outstanding Revolving Credit
Advances owing to such Bank; PROVIDED, that the delivery of such
Revolving Credit Notes shall not be a condition precedent to the
Effective Date.
2.3 REQUESTS FOR AND REFUNDINGS AND CONVERSIONS OF ADVANCES. The
Company may request an Advance of the Revolving Credit, refund any such Advance
in the same type of Advance or convert any such Advance to any other type of
Advance of the Revolving Credit only after delivery to Agent of a Request for
Revolving Credit Advance executed by a person previously authorized (in a
writing delivered to the Agent by the Company) to execute such Request, subject
to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set
forth the information required on the Request for Revolving Credit
Advance form annexed hereto as Exhibit A, including without limitation:
(i) the proposed date of such Advance, which must be
a Business Day;
(ii) whether such Advance is a refunding or
conversion of an outstanding Advance; and
(iii) whether such Advance is to be a Prime-based
Advance or a Eurocurrency-based Advance, and,
except in the case of a Prime-based Advance,
the first Interest Period applicable thereto.
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by noon (Detroit time) three (3) Business Days prior
to the proposed date of Advance, except in the case of a Prime-based
Advance, for which the Request for Advance must be delivered by noon
(Detroit time) on such proposed date for Advances;
(c) on the proposed date of such Advance,
31
(i) after giving effect to all Advances of the
Revolving Credit and of the Swing Line requested
by the Company on such date of determination
(including deemed Advances funded by Agent under
Section 3.6(a) hereof in respect of the
Company's or an applicable Account Party's
Reimbursement Obligation hereunder), the
aggregate outstanding principal amount of all
Advances to the Company on such date plus the
aggregate amount of Letter of Credit Obligations
on such date shall not exceed the lesser of then
applicable Revolving Credit Aggregate Commitment
and the Domestic Borrowing Base; and
(ii) after giving effect to all Advances requested
by the Company and the Canadian Permitted
Borrower on such date of determination
(including deemed Advances funded by Agent
under Section 3.6(a) hereof in respect of the
Company's or an applicable Account Party's
Reimbursement Obligation hereunder), the
Dollar Equivalent Amount of the aggregate
outstanding principal amount of all Advances
of the Revolving Credit and of the Swing Line
on such date plus the aggregate amount of
Letter of Credit Obligations on such date
shall not exceed the lesser of then
applicable Revolving Credit Aggregate
Commitment and the Combined Borrowing Base;
provided however, that, in the case of any Advance being applied
to refund an outstanding Advance, the aggregate principal amount
of such Advances to be refunded shall not be included for
purposes of calculating availability under this Section 2.3(c);
(d) in the case of a Prime-based Advance, the principal
amount of the initial funding of such Advance, as opposed to any
refunding or conversion thereof, shall be at least $1,000,000;
(e) in the case of a Eurocurrency-based Advance, the
principal amount of such Advance, plus the amount of any other
outstanding Advance of the Revolving Credit to be then combined
therewith having the same Applicable Interest Rate and Interest Period,
if any, shall be at least $2,000,000 (or a larger integral multiple of
$100,000), and at any one time there shall not be in effect more than
six (6) Applicable Interest Rates and Interest Periods;
(f) a Request for Revolving Credit Advance, once delivered to
Agent, shall not be revocable by the Company;
32
(g) each Request for Revolving Credit Advance shall
constitute a certification by the Company, as of the date thereof that:
(i) both before and after such Advance, the
obligations of the Loan Parties set forth in
this Agreement and the other Loan Documents
to which such Persons are parties are valid,
binding and enforceable obligations of such
Loan Parties respectively, consistent with
the representations as to same set forth in
Section 6.7 and 6.8 hereof ;
(ii) all conditions to Advances of the Revolving
Credit have been satisfied or waived by, the
requisite Banks, and shall remain satisfied
to the date of such Advance (both before and
after giving effect to such Advance);
(iii) there is no Default or Event of Default in
existence, and none will exist upon the
making of such Advance (both before and after
giving effect to such Advance);
(iv) the representations and warranties contained
in this Agreement and the other Loan
Documents are true and correct in all
material respects and shall be true and
correct in all material respects as of the
making of such Advance except to the extent
the same speaks to a different date (both
before and after giving effect to such
Advance); and
(v) the execution of such Request for Advance
will not violate the material terms and
conditions of any material contract,
agreement or other borrowing of the Company.
Agent, acting on behalf of the Banks, may, at its option, lend under
this Section 2 upon the telephone request of a person previously
authorized (in a writing delivered to the Agent) by the Company to make
such requests and, in the event Agent, acting on behalf of the Banks,
makes any such Advance upon a telephone request, the requesting person
shall fax to Agent, on the same day as such telephone request, a
Request for Advance. The Company hereby authorizes Agent to disburse
Advances under this Section 2.3 pursuant to the telephone instructions
of any person purporting to be a person identified by name on a written
list of persons authorized by the Company and delivered to Agent prior
to the date of such request to make Requests for Advance on behalf of
the Company. Notwithstanding the foregoing, the Company acknowledges
that the Company shall bear all risk of loss resulting from
disbursements made upon any telephone request. Each telephone request
for an Advance shall constitute a certification of the matters set
forth in the Request for Revolving Credit Advance form as of the date
of such requested Advance.
2.4 DISBURSEMENT OF ADVANCES.
33
(a) Upon receiving any Request for Revolving Credit Advance
from the Company under Section 2.3 hereof, Agent shall promptly notify
each Bank by wire, telex or telephone (confirmed by wire, telecopy or
telex) of the amount of such Advance to be made and the date such
Advance is to be made by said Bank pursuant to its Percentage of such
Advance. Unless such Bank's commitment to make Advances of the
Revolving Credit hereunder shall have been suspended or terminated in
accordance with this Agreement, each such Bank shall make available the
amount of its Percentage of each Advance in immediately available funds
to Agent, as follows:
(i) for Domestic Advances, at the office of Agent
located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, not later than 4:00 p.m.
(Detroit time) on the date of such Advance;
and
(ii) for Eurocurrency-based Advances, at the
Agent's Correspondent for the account of the
Eurocurrency Lending Office of the Agent, not
later than 12 noon (the time of the Agent's
Correspondent) on the date of such Advance.
(b) Subject to submission of an executed Request for
Revolving Credit Advance by the Company without exceptions noted in the
compliance certification therein, Agent shall make available to the
Company, the aggregate of the amounts so received by it from the Banks
in like funds and currencies:
(i) for Domestic Advances, not later than 4:00
p.m. (Detroit time) on the date of such
Advance by credit to an account of Company
maintained with Agent or to such other
account or third party as Company may
reasonably direct; and
(ii) for Eurocurrency-based Advances, not later
than 4:00 p.m. (the time of the Agent's
Correspondent) on the date of such Advance,
by credit to an account of the Company
maintained with Agent's Correspondent or to
such other account or third party as the
Company may reasonably direct.
(c) Agent shall deliver the documents and papers received by
it for the account of each Bank to such Bank or upon its order. Unless
Agent shall have been notified by any Bank prior to the date of any
proposed Revolving Credit Advance that such Bank does not intend to
make available to Agent such Bank's Percentage of such Advance, Agent
may assume that such Bank has made such amount available to Agent on
such date, as aforesaid and may, in reliance upon such assumption, make
available to the Company a corresponding amount. 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
34
notify the Company and the Company shall pay such amount to Agent, if
such notice is delivered to the Company prior to 1:00 p.m. (Detroit
time) on a Business Day, on the day such notice is received, and
otherwise on the next Business Day. Agent shall also be entitled to
recover from such Bank or the Company, as the case may be, but without
duplication, interest on such amount in respect of each day from the
date such amount was made available by Agent to the Company, to the
date such amount is recovered by Agent, at a rate per annum equal to:
(i) in the case of such Bank, for the first two
(2) Business Days such amount remains unpaid,
with respect to Domestic Advances, the
Federal Funds Effective Rate, and with
respect to Eurocurrency-based Advances,
Agent's aggregate marginal cost (including
the cost of maintaining any required reserves
or deposit insurance and of any fees,
penalties, overdraft charges or other costs
or expenses incurred by Agent as a result of
such failure to deliver funds hereunder) of
carrying such amount and thereafter, at the
rate of interest then applicable to such
Revolving Credit Advances; and
(ii) in the case of Company, the rate of interest
then applicable to such Advance of the
Revolving Credit.
The obligation of any Bank to make any Advance of the Revolving Credit
hereunder shall not be affected by the failure of any other Bank to
make any Advance hereunder, and no Bank shall have any liability to the
Company or any of its Subsidiaries, the Agent, any other Bank, or any
other party for another Bank's failure to make any loan or Advance
hereunder. In the event any Bank shall fail to advance any amounts
required to be advanced in accordance with the terms of this Article 2
(a "Defaulting Bank"), the Agent shall promptly provide written notice
thereof to the Company and to each other Bank (each such other Bank
being referred to in this Section as a "Non-Defaulting Bank"). Each
Non-Defaulting Bank shall have ten (10) Business Days from receipt of
said notice to exercise its option to agree to enter into an agreement
pursuant to which the Non-Defaulting Bank shall assume the Defaulting
Bank's rights and obligations under this Agreement, its Notes and the
other Loan Documents. The Non-Defaulting Bank shall exercise such
option by providing written notice of same to the Defaulting Bank (and
if there is more than one Non-Defaulting Bank, the assignment agreement
shall be entered into with the Non-Defaulting Bank who first notifies
the Defaulting Bank of its decision to exercise said option) and to the
Company. If no Non-Defaulting Bank shall exercise the above-described
option within the said ten (10) Business Day period and if the Company
shall, subject to Section 13.8(c) hereof, within thirty (30) days of
delivering the notice described above, advise such Defaulting Bank of
another bank or financial institution to which assignments are
permitted pursuant to Section 13.8(c) hereof and which is willing to
assume such Defaulting Bank's rights and obligations under this
Agreement, its Notes and the other Loan Documents (each such bank or
financial institution being hereinafter referred to as a "Potential
Financial Institution"), such Defaulting Bank
35
shall, subject to Section 13.8(c), assign its said rights and
obligations to the Potential Financial Institution; provided however
that any such assignment shall not alter the Company's remedies vis a
vis the Defaulting Bank.
2.5 SWING LINE ADVANCES. (a) The Swing Line Banks shall, on the
terms and subject to the conditions hereinafter set forth (including without
limitation Section 2.5(c) hereof), make one or more advances in Dollars or in
any Alternative Currency (each such advance being a "Swing Line Advance") to any
Borrower, from time to time on any Business Day during the period from the date
hereof to (but excluding) the Revolving Credit Maturity Date in a Dollar
Equivalent Amount not to exceed at any time outstanding the Swing Line Maximum
Amount. Each Swing Line Bank shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each of the Borrowers
to such Swing Line Bank resulting from each Swing Line Advance of such Bank from
time to time, including the amounts of principal and interest payable thereon
and paid to such Bank from time to time. The entries made in such account or
accounts of each such Swing Line Bank shall, to the extent permitted by
applicable law, be conclusive evidence, absent manifest error, of the existence
and amounts of the obligations of the Borrower therein recorded; provided,
however, that the failure of a Swing Line Bank to maintain such account, as
applicable, or any error therein, shall not in any manner affect the obligation
of each Borrower to repay the Swing Line Advances (and all other amounts owing
with respect thereto) made to such Borrower by such Swing Line Bank in
accordance with the terms of this Agreement. Advances, repayments and readvances
under the Swing Line may be made, subject to the terms and conditions of this
Agreement. Each Swing Line Advance shall mature and the principal amount thereof
shall be due and payable by the applicable Borrower on the last day of the
Interest Period applicable thereto (if any) and, in the case of any Prime-based
Advance, on the Revolving Credit Maturity Date.
The Borrowers agree that, upon the written request of a Swing Line Bank
(with a copy to the Company), each of the Borrowers will execute and deliver to
such Swing Line Bank Swing Line Notes; provided, that the delivery of such Swing
Line Notes shall not be a condition precedent to the Effective Date. The
Borrowers further agree that as of the Effective Date, Swing Line Advances may
only be requested (a) in Dollars by the Company or (b) in Canadian Dollars by
the Canadian Permitted Borrower.
(b) ACCRUAL OF INTEREST. Each Swing Line Advance shall,
from time to time after the date of such Advance, bear
interest at its Applicable Interest Rate. The amount and date
of each Swing Line Advance, its Applicable Interest Rate, its
Interest Period, if any, and the amount and date of any
repayment shall be noted on the applicable Swing Line Bank's
account maintained pursuant to Section 2.5(a), which records
will be conclusive evidence thereof, absent manifest error;
provided, however, that any failure by the applicable Swing
Line Bank to record any such information shall not relieve
the applicable Borrower of its obligation to repay the
outstanding principal amount of such Advance, all interest
accrued thereon and any amount payable with respect thereto
in accordance with the terms of this Agreement and the other
Loan Documents.
36
(c) REQUESTS FOR SWING LINE ADVANCES. A Borrower may
request a Swing Line Advance only after delivery to the
applicable Swing Line Bank of a Request for Swing Line
Advance executed by a person authorized (in a writing a copy
of which has been previously delivered to the Agent) by the
applicable Borrower to make such requests, subject to the
following and to the remaining provisions hereof:
(i) each such Request for Swing Line Advance
shall set forth the information required on the Request for
Advance form annexed hereto as Exhibit D, including without
limitation:
(A) the proposed date of such Swing Line
Advance, which must be a Business Day;
(B) whether such Swing Line Advance is to be
funded in Dollars or Canadian Dollars;
(C) whether such Swing Line Advance is to be
(x) in the case of Advances in Dollars, a U.S.
Prime-based Advance or a Quoted Rate Advance or, (y)
in the case of Advances in Canadian Dollars, a
Canadian Prime-based Advance or a Quoted Rate
Advance; and
(D) the duration of the Interest Period, if
any, applicable thereto.
(ii) in the case of the Company requesting any
Swing Line Advance in Dollars, on the proposed date of such
Swing Line Advance, after giving effect to all Swing Line
Advances requested by the Borrowers on such date of
determination, the Dollar Equivalent Amount of the aggregate
outstanding principal amount of all Swing Line Advances on
such date shall not exceed the Swing Line Maximum Amount; and
(iii) in the case of the Canadian Permitted
Borrower requesting any Swing Line Advance in Canadian
Dollars, on the proposed date of such Swing Line Advance,
after giving effect to all Swing Line Advances requested by
the Borrowers on such date of determination, the Dollar
Equivalent Amount of the aggregate outstanding principal
amount of all Swing Line Advances to the Canadian Permitted
Borrower on such date shall not exceed the lesser of (x) the
Swing Line Canadian Dollar Sublimit and (y) the Swing Line
Maximum Amount minus the aggregate outstanding principal
amount of all Swing Line Advances to the Company; and
(iv) after giving effect to all Advances of the
Revolving Credit and of the Swing Line requested by the
Company on such date of determination (including deemed
Advances funded by Agent under Section 3.6(a) hereof in
respect of the
37
Company's or an applicable Account Party's Reimbursement
Obligation hereunder), the aggregate outstanding principal
amount of all Advances to the Company on such date plus the
aggregate amount of Letter of Credit Obligations on such date
shall not exceed the lesser of then applicable Revolving
Credit Aggregate Commitment and the Domestic Borrowing Base;
and
(v) in the case of any Borrower requesting any
Swing Line Advance, on the proposed date of such Swing Line
Advance, after giving effect to all Advances of the Revolving
Credit and of the Swing Line and all Letters of Credit
requested by any Borrower on such date of determination, the
Dollar Equivalent Amount of the aggregate outstanding
principal amount of all Advances of the Revolving Credit and
of the Swing Line plus all Letter of Credit Obligations on
such date shall not exceed the lesser of the applicable
Revolving Credit Aggregate Commitment and the Combined
Borrowing Base;
(vi) in the case of a Prime-based Advance, the
principal amount of the initial funding of such Advance, as
opposed to any refunding or conversion thereof, shall be (x)
in the case of Advances in Dollars at least One Hundred
Thousand Dollars ($100,000) and (y) in the case of Advances
in Canadian Dollars at least One Hundred Thousand Canadian
Dollars (C$100,000);
(vii) each such Request for Swing Line Advance
shall be delivered to the applicable Swing Line Bank by 12
noon (Detroit time) on the proposed date of the Advance;
(viii) each Request for Swing Line Advance, once
delivered to a Swing Line Bank, shall be irrevocable by the
Borrowers, and shall constitute and include a certification
by the Company and, if applicable, the Canadian Permitted
Borrower as of the date thereof that:
(A) both before and after such Swing Line
Advance, the obligations of the Loan Parties to which
such Persons are parties set forth in this Agreement
and the other Loan Documents, are valid, binding and
enforceable obligations of the Loan Parties,
respectively, consistent with the representations as
to same set forth in Section 6.7 and 6.8 hereof;
(B) all conditions to the making of Swing
Line Advances have been satisfied or waived by the
requisite Banks (both before and after giving effect
to such Advance);
(C) both before and after the making of such
Swing Line Advance, there is no Default or Event of
Default in existence; and
38
(D) both before and after such Swing Line
Advance, the representations and warranties contained
in this Agreement and the other Loan Documents are
true and correct in all material respects.
The applicable Swing Line Bank shall promptly deliver to Agent by telecopy a
copy of any Request for Advance received hereunder.
(d) DISBURSEMENT OF SWING LINE ADVANCES. Subject to
submission of an executed Request for Swing Line Advance by a Borrower
without exceptions noted in the compliance certification therein and to
the other terms and conditions hereof, the applicable Swing Line Bank
shall make available to the applicable Borrower the amount so
requested, in like funds and currencies, not later than: for Prime-
based Advances or Quoted Rate Advances, not later than 4:00 p.m.
(Detroit time) on the date of such Advance by credit to an account of
the applicable Borrower maintained with Agent or to such other account
or third party as such Borrower may reasonably direct in writing.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance
by telephone, telex or telecopier.
(e) REFUNDING OF OR PARTICIPATION INTEREST IN SWING LINE
ADVANCES.
(i) The Agent, at any time in its sole and
absolute discretion, may on behalf of the applicable Borrower
(each of which hereby irrevocably directs the Agent to act on
its behalf) request each of the Banks (including the
applicable Swing Line Bank in its capacity as a Bank) to make
an Advance of the Revolving Credit to the Company in the
Dollar Equivalent Amount, equal to such Bank's Percentage of
the principal amount of the aggregate Swing Line Advances
outstanding to each such party on the date such notice is
given (the "Refunded Swing Line Advances"); provided however
that Swing Line Advances which are carried at the Quoted Rate
which are converted to Revolving Credit Advances at the
request of the Agent at a time when no Default or Event of
Default has occurred and is continuing, shall not be subject
to Section 11.1 and no losses, costs or expenses may be
assessed by the applicable Swing Line Bank against any
Borrower or the Banks as a consequence of such conversion. In
the case of each Refunded Swing Line Advance (whether such
Advance is outstanding in Dollars or in Canadian Dollars),
the applicable Advance of the Revolving Credit used to refund
such Swing Line Advance shall be a Prime-based Advance in
Dollars. In connection with the making of any such Refunded
Swing Line Advances or the purchase of a participation
interest in Swing Line Advances under Section 2.5(e)(ii)
hereof, the Swing Line Bank shall retain its claim against
the applicable Borrower for any unpaid interest or fees in
respect thereof. Unless (x) any of the events described in
Section 9.1(j) hereof shall have occurred and/or (y) the
outstanding Refunded Advance is outstanding in Canadian
Dollars (in which event the procedures of subparagraph (ii)
of this Section 2.5(e) shall apply) and regardless of whether
the conditions precedent set forth in this Agreement to the
39
making of an Advance of the Revolving Credit are then
satisfied but subject to Section 2.5(e)(iii), each Bank shall
make the proceeds of its Advance of the Revolving Credit
available to the Agent for the benefit of the Swing Line Bank
at the office of the Agent specified in Section 2.4(a) hereof
prior to 11:00 a.m. Detroit time (for Domestic Advances) on
the Business Day next succeeding the date such notice is
given. The proceeds of such Advances of the Revolving Credit
shall be immediately applied to repay the Refunded Swing Line
Advances in accordance with the provisions of Section 10.1
hereof.
(ii) If, (x) prior to the making of an Advance of
the Revolving Credit pursuant to subparagraph (i) of this
Section 2.5(e), one of the events described in Section 9.1(j)
hereof shall have occurred or (y) the Refunded Swing Line
Advance is outstanding in Canadian Dollars, each Bank will,
on the date such Advance of the Revolving Credit was to have
been made, purchase from the Swing Line Bank an undivided
participating interest in each Refunded Swing Line Advance in
an amount equal to the Dollar Equivalent Amount of its
Percentage of such Refunded Swing Line Advance; provided
however that if, for any reason, any Bank is prohibited from
making an Advance of the Revolving Credit in respect of such
Refunded Swing Line Advance, each such Bank shall be deemed
to and unconditionally agrees to purchase from the Swing Line
Bank a participation interest in the Dollar Equivalent Amount
of its Percentage of such Refunded Swing Line Advance. In
either case, each Bank within the time periods specified in
Section 2.5(e)(i) hereof, as applicable, shall immediately
transfer to the Agent, in immediately available funds in
Dollars, the amount of its participation and upon receipt
thereof the Agent will deliver to such Bank a Swing Line
Participation Certificate in the form of Exhibit E evidencing
such participation.
(iii) Each Bank's obligation to make Advances of
the Revolving Credit and to purchase participation interests
in accordance with clauses (i) and (ii) of this Section
2.5(e) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation,
(1) any set-off, counterclaim, recoupment, defense or other
right which such Bank may have against Swing Line Bank, the
Borrowers or any other Person for any reason whatsoever; (2)
the occurrence or continuance of any Default or Event of
Default; (3) any adverse change in the condition (financial
or otherwise) of any Borrower or any other Person; (4) any
breach of this Agreement by any Borrower or any other Person;
(5) any inability of the Borrowers to satisfy the conditions
precedent to borrowing set forth in this Agreement on the
date upon which such participating interest is to be
purchased; (6) the termination of the Revolving Credit
Aggregate Commitment hereunder; or (7) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Bank does not make
available to the Agent the amount required pursuant to clause
(i) or (ii) above, as the case may be, the Agent shall be
entitled to recover such amount on demand from such Bank,
together with interest
40
thereon for each day from the date of non-payment until such
amount is paid in full (x) for the first two (2) Business
Days such amount remains unpaid, at the Federal Funds
Effective Rate for Advances in Dollars (other than
eurodollars) and (y) thereafter, at the rate of interest then
applicable to such Swing Line Advances.
Notwithstanding the foregoing however no Bank shall be required, except
in the case of Swing Line Advances deemed to have been made pursuant to Sections
3.6(a) and 3.6(c) hereof, to make any Revolving Credit Advance to refund a Swing
Line Advance or to purchase a participation in a Swing Line Advance if prior to
the making of the Swing Line Advance by the Swing Line Bank, the Agent had
obtained actual knowledge that an Event of Default had occurred and was
continuing; provided, however that the obligation of the Banks to make such
Revolving Credit Advances shall be reinstated upon the date of which such Event
of Default has been waived by the requisite Banks, as applicable.
2.6 PRIME-BASED INTEREST PAYMENTS. Interest on the unpaid balance
of all Prime-based Advances of the Revolving Credit and all Swing Line Advances
carried at a Prime-based Rate from time to time outstanding shall accrue from
the date of such Advance to the Revolving Credit Maturity Date (and until paid),
at a per annum interest rate equal to the Prime-based Rate, and shall be payable
in immediately available funds quarterly commencing on the first day of the
calendar quarter next succeeding the calendar quarter during which the initial
Advance of such Revolving Credit or Swing Line Advance, as the case may be, is
made and on the first day of each calendar quarter thereafter. Interest accruing
at the U.S. Prime-based Rate shall be computed on the basis of a 360 day year
and assessed for the actual number of days elapsed, and in such computation
effect shall be given to any change in the interest rate resulting from a change
in the U.S. Prime-based Rate on the date of such change in the U.S. Prime-based
Rate. Subject to Section 1.3 hereof, interest accruing at the Canadian
Prime-based Rate shall be computed on the basis of a 365 day year and assessed
for the actual number of days elapsed, and in such computation effect shall be
given to any change in the interest rate resulting from a change in the Canadian
Prime-based Rate on the date of such change in the Canadian Prime-based Rate.
2.7 EUROCURRENCY-BASED INTEREST PAYMENTS AND QUOTED RATE INTEREST
PAYMENTS.
(a) Interest on each Eurocurrency-based Advance of the
Revolving Credit shall accrue at its Applicable Interest Rate and shall
be payable in immediately available funds on the last day of the
Interest Period applicable thereto. Interest accruing at the
Eurocurrency-based Rate shall be computed on the basis of a 360 day
year and assessed for the actual number of days elapsed from the first
day of the Interest Period applicable thereto to but not including the
last day thereof.
(b) Interest on each Quoted Rate Advance of the Swing Line
shall accrue at its Quoted Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable
thereto. Interest on Advances to Company at a Quoted Rate shall be
computed on the basis of a 360 day year and interest on Advances to the
Canadian
41
Permitted Borrower accruing at a Quoted Rate shall be computed on the
basis of a 365 day year, in each case assessed for the actual number of
days elapsed from the first day of the Interest Period applicable
thereto to, but not including the last day thereof.
(c) If the basis of accrual of interest or fees expressed in
this Agreement with respect to the National Currency Unit of a
Participating Member State shall be inconsistent with any convention or
practice in the London interbank market or other applicable interbank
market, as the case may be, for the basis of accrual of interest or
fees with respect to the Euro, such convention or practice shall
replace such expressed basis, effective as of and from the date on
which such country becomes a Participating Member State; provided that
if any Eurocurrency-based Advance in the currency of such country is
outstanding immediately prior to such date, such replacement shall take
effect, with respect to such Advance, at the end of the then current
Interest Period.
2.8 INTEREST PAYMENTS ON CONVERSIONS. Notwithstanding anything to
the contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
2.9 INTEREST ON DEFAULT. (a) In the case of the Company, in the
event and so long as any Event of Default shall exist, in the case of any Event
of Default under Section 9.1(a), 9.1(b) or 9.1(j), immediately upon the
occurrence thereof, and in the case of all other Events of Default, upon notice
from the Majority Banks, interest shall be payable daily on all Eurocurrency-
based Advances of the Revolving Credit and Quoted Rate Advances from time to
time outstanding at a per annum rate equal to the Applicable Interest Rate plus
two percent (2%) for the remainder of the then existing Interest Period, if any,
and at all other such times, with respect to Prime-based Advances from time to
time outstanding, at a per annum rate equal to the Prime-based Rate plus two
percent (2%).
(b) Subject to applicable Canadian law, in the case the
Canadian Permitted Borrower, upon a default by Canadian Permitted
Borrower in the payment of interest or any other amount (other than
principal) due under this Agreement or any of the other Loan Documents
to which such Borrower is a party, upon written notice of Majority
Banks confirmed by written notice from Agent to such Borrower, such
Borrower shall pay interest on such overdue amount, both before and
after judgment, at a rate per annum equal to (i) the rate of interest
payable under this SECTION 2.9(b) on the principal amount to which such
overdue interest relates, in the case of overdue interest, (ii) the
Canadian Prime Rate PLUS two percent (2%), in the case of all such
overdue amounts denominated in Canadian Dollars, and (iii) the U.S.
Prime Rate PLUS two percent (2%), in the case of all such other overdue
amounts denominated in Dollars (all of which other overdue amounts, for
greater certainty, shall not include overdue principal or interest in
any case), in each case, calculated on a daily basis from the date such
amount becomes overdue for so long as such amount remains overdue and
on the basis of the actual number of days elapsed in a 360 day year in
the case of amounts denominated in U.S. Dollars and a 365 day year in
the case of amounts denominated in Canadian Dollars. Such interest
shall be payable upon demand by Agent. From and after
42
the occurrence of any Event of Default and so long as it is continuing
under SECTION 9.1(a) or 9.1(b) or so long as any other Event of Default
shall have occurred and be continuing and upon written notice of
Majority Banks confirmed by written notice from Agent to the Company,
the Letter of Credit Fee shall be increased by two percent (2%) per
annum.
2.10 PREPAYMENT OF REVOLVING CREDIT ADVANCES AND SWING LINE ADVANCES.
(a) The Company may prepay all or part of the outstanding balance of any
Prime-based Advance(s) of the Revolving Credit at any time, provided that the
amount of any partial prepayment shall be at least One Million Dollars
($1,000,000) and, after giving effect to any such partial prepayment, the
aggregate balance of Prime-based Advance(s) of the Revolving Credit remaining
outstanding, if any, shall be at least Five Hundred Thousand Dollars ($500,000).
The Company may prepay all or part of any Eurocurrency-based Advance (subject to
not less than two (2) Business Days' notice to Agent) provided that the minimum
amount of any such partial prepayment shall be at least One Million Dollars
($1,000,000), and, after giving effect to any such partial prepayment, the
unpaid portion of such Advance which is refunded or converted under Section 2.3
hereof shall be at least Two Million Dollars ($2,000,000); provided further,
however that if the prepayment of a Eurocurrency-based Advance is made on a day
other than the last Business Day of the then current Interest Period applicable
to such Eurocurrency-based Advance, then, pursuant to Section 11.1, the
applicable Borrower solely as to its own Advances shall compensate the Banks for
any losses.
(b) Borrowers may prepay all or part of the outstanding
balance of any Swing Line Advance carried at a Prime-based Rate at any
time, provided that the minimum amount of any partial prepayment shall
be a Dollar Equivalent Amount of Twenty Five Thousand Dollars ($25,000)
and, after giving effect to any such partial prepayment, the aggregate
balance of such Swing Line Advances remaining outstanding, if any,
shall be at least a Dollar Equivalent Amount of One Hundred Thousand
Dollars ($100,000). The Borrowers may prepay all or part of any Swing
Line Advances carried at the Quoted Rate (subject to not less than two
(2) Business Days' notice to the applicable Swing Line Bank and Agent),
provided that the amount of any such partial payment shall be at least
a Dollar Equivalent Amount of Twenty Five Thousand Dollars ($25,000),
after giving effect of any such partial prepayment, and the unpaid
portion of such Advance which is refunded or converted under Section
2.5(c) hereof shall be at least a Dollar Equivalent Amount of Two
Hundred Thousand Dollars ($200,000); provided further, however that if
the prepayment of a Quoted Rate Advance is made on a day other than the
last Business Day of the then current Interest Period applicable to
such Quoted Rate Advance, then, pursuant to Section 11.1, the
applicable Borrower solely as to its own Advances shall compensate the
Banks for any losses.
(c) Any prepayment made in accordance with this Section shall
be subject to Section 11.1 hereof, but otherwise without premium,
penalty or prejudice to the right to readvance under the terms of this
Agreement.
2.11 PRIME-BASED ADVANCE IN ABSENCE OF ELECTION OR UPON DEFAULT. If,
(a) as to any outstanding Eurocurrency-based Advance of the Revolving Credit,
Agent has not received payment of all outstanding principal and accrued interest
on the last day of the Interest Period applicable
43
thereto, or does not receive a timely Request for Advance meeting the
requirements of Section 2.3 hereof with respect to the refunding or conversion
of such Advance, or (b) subject to Section 2.9 hereof, if on such day a Default
or an Event of Default shall have occurred and be continuing, then the principal
amount thereof which is not then prepaid in the case of a Eurocurrency-based
Advance shall, absent a contrary election of the Majority Banks, be converted
automatically to a Prime-based Advance and the Agent shall thereafter promptly
notify the Company of said action.
2.12 REVOLVING CREDIT FACILITY FEE. From the Effective Date to the
Revolving Credit Maturity Date, the Company shall pay to the Agent for
distribution to the Banks pro-rata in accordance with their respective
Percentages, a Revolving Credit Facility Fee quarterly in arrears commencing
July 1, 2000 (in respect of the prior fiscal quarter or portion thereof, except,
with respect to the first fiscal quarter after the Effective Date, such payment
shall not be made until and shall include all amounts due at the completion of
the next full fiscal quarter), and on the first day of each fiscal quarter
thereafter. The Revolving Credit Facility Fee payable to each Bank shall be
determined by multiplying the Applicable Fee Percentage times the the Revolving
Credit Aggregate Commitment then in effect (whether used or unused). The
Revolving Credit Facility Fee shall be computed on the basis of a year of three
hundred sixty (360) days and assessed for the actual number of days elapsed.
Whenever any payment of the Revolving Credit Facility Fee shall be due on a day
which is not a Business Day, the date for payment thereof shall be extended to
the next Business Day. Upon receipt of such payment, Agent shall make prompt
payment to each Bank of its share of the Revolving Credit Facility Fee based
upon its respective Percentage. It is expressly understood that the Revolving
Credit Facility Fees described in this Section are not refundable under any
circumstances.
2.13 MANDATORY REPAYMENT OF REVOLVING ADVANCES; MANDATORY REDUCTION
OF REVOLVING CREDIT AGGREGATE COMMITMENT.
(a) If at any time and for any reason with respect to the Borrowers
the Dollar Equivalent Amount aggregate outstanding principal amount of Revolving
Credit Advances plus Swing Line Advances hereunder, plus the outstanding Letter
of Credit Obligations, shall exceed the lesser of the then applicable (i)
Revolving Credit Aggregate Commitment and (ii) Combined Borrowing Base, each of
the Borrowers shall immediately reduce any pending request for any Advance on
such day by the amount of such excess and, to the extent any excess remains
thereafter, immediately repay an amount of the Indebtedness equal to such excess
and, to the extent such Indebtedness consists of Letter of Credit Obligations,
provide cash collateral on the basis set forth in Section 9.2 hereof. Each of
the Borrowers acknowledges that, with respect to those Advances which it has
requested, in connection with any repayment required hereunder, it shall also be
responsible for the reimbursement of any prepayment or other costs required
under Section 11.1 hereof; provided, however, that the Borrower shall, in order
to reduce any such prepayment costs and expenses, first prepay such portion of
the Indebtedness then carried as a Prime-based Advance, if any.
(b) If at any time and for any reason with respect to the Canadian
Permitted Borrower, one hundred and five percent (105%) of the aggregate Dollar
Equivalent Amount of all Advances
44
in Canadian Dollars hereunder for the account of such Borrower as of such time,
exceeds the Swing Line Canadian Dollar Sublimit, then in each case, Canadian
Permitted Borrower shall immediately repay that portion of the Indebtedness
outstanding to such Borrower then carried as a Prime-based Advance, if any, by
the Dollar Equivalent Amount of such Excess, and/or reduce on such day any
pending request for an Advance submitted by such Borrower by the Dollar
Equivalent Amount of such Excess, to the extent thereof; and provided that no
Event of Default has occurred and is continuing, compliance with this Section
2.13(b) shall be tested as of the last day of each calendar month or, upon the
written request of the Borrower from time to time, as of the last day of each
calendar month, provided the Borrowers furnish Agent with current quarterly
financial statements complying with the requirements set forth in Section 7.1(b)
hereof. Upon the occurrence and during the continuance of any Event of Default,
compliance with this Section 2.13(b) shall be tested on a daily or other basis
satisfactory to Agent in its sole discretion.
(c) Subject to clause (e) below, immediately upon receipt by the
Company or any Subsidiary of any Net Cash Proceeds from any Asset Sale pursuant
to Section 8.5(f) hereof (other than the sale of any asset or assets, in a
single transaction or series of transactions, with a value less than $250,000)
the Company shall be obligated to permanently reduce the amount of the Revolving
Credit Aggregate Commitment by an amount equal to one hundred percent (100%) of
such Net Cash Proceeds.
(d) The reductions of the Revolving Credit Aggregate Commitment
pursuant to clause (c) above shall be accompanied by prepayments of principal
sufficient to reduce the outstanding principal balance under the Revolving
Credit (taking into account outstanding Letters of Credit and Swing Line
Advances) to an amount not greater than the Commitment, as so reduced.
(e) To the extent that, on the date any mandatory repayment of the
Revolving Advances under this Section 2.13 is due, the Indebtedness under the
Revolving Credit or any other Indebtedness to be prepaid is being carried, in
whole or in part, at the Eurocurrency-based Rate and no Default or Event of
Default has occurred and is continuing, the Company may deposit the amount of
such mandatory prepayment in a cash collateral account to be held by the Agent,
for and on behalf of the Banks (which shall be an interest-bearing account), on
such terms and conditions as are reasonably acceptable to Agent and the Banks.
Subject to the terms and conditions of said cash collateral account, sums on
deposit in said cash collateral account shall be applied (until exhausted) to
reduce the principal balance of the Revolving Credit on the last day of each
Interest Period attributable to the Eurocurrency-based Advances of such
Revolving Credit, thereby avoiding breakage costs under Section 11.1 hereof.
2.14 OPTIONAL REDUCTION OR TERMINATION OF REVOLVING CREDIT AGGREGATE
COMMITMENT. Provided that no Event of Default has occurred and is continuing,
the Company may upon at least five Business Days' prior written notice to the
Agent, permanently reduce the Revolving Credit Aggregate Commitment in whole at
any time, or in part from time to time, without premium or penalty, provided
that: (i) each partial reduction of the Revolving Credit Aggregate Commitment
shall be in an aggregate amount equal to Five Million Dollars ($5,000,000) or a
larger integral
45
multiple of One Million Dollars ($1,000,000); (ii) each reduction shall be
accompanied by the payment of the Revolving Credit Facility Fee, if any, accrued
on the amount of the partial reduction to the date of such reduction; (iii) the
Company shall prepay in accordance with the terms hereof the amount, if any, by
which the aggregate unpaid principal amount of Advances outstanding hereunder,
plus the aggregate undrawn amount of outstanding Letter of Credit Obligations,
exceeds the amount of the then applicable Revolving Credit Aggregate Commitment
as so reduced, together with interest thereon to the date of prepayment; (iv) no
such reduction shall reduce the Revolving Credit Aggregate Commitment to an
amount which is less than the aggregate undrawn amount of any Letters of Credit
outstanding at such time; and (v) no such reduction shall reduce the Swing Line
Commitment unless the Company so elects; provided, however that if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurocurrency-based Advance or a Quoted Rate Advance and such
termination or reduction is made on a day other than the last Business Day of
the then current Interest Period applicable to such Eurocurrency-based Advance
or such Quoted Rate Advance, then, pursuant to Section 11.1, the applicable
Borrower shall compensate the Banks for any losses or, the applicable Borrower
may deposit the amount of such prepayment in a collateral account as provided in
Section 2.13(e) in each case, solely with respect to Advances requested by it.
Reductions of the Revolving Credit Aggregate Commitment and any accompanying
prepayments of Advances of the Revolving Credit shall be distributed by Agent to
each Bank in accordance with such Bank's Percentage thereof, and will not be
available for reinstatement by or readvance to the Company, and any accompanying
prepayments of Advances of the Swing Line shall be distributed by Agent to the
Swing Line Bank and will not be available for reinstatement by or readvance to
the Company. Any reductions of the Revolving Credit Aggregate Commitment
hereunder shall reduce each Bank's portion thereof proportionately (based on the
applicable Percentages), and shall be permanent and irrevocable. Any payments
made pursuant to this Section shall be applied first to outstanding Prime-based
Advances under the Revolving Credit, next to Swing Line Advances carried at the
Prime-based Rate, next to Eurocurrency-based Advances of the Revolving Credit
and then to Swing Line Advances carried at the Quoted Rate.
2.15 APPLICATION OF ADVANCES. Advances of the Revolving Credit
(including Swing Line Advances) shall be available, subject to the terms hereof,
to fund working capital needs, the Xxxxxxxxx.xxx Acquisition, Permitted
Acquisitions or other general corporate purposes of the Company.
3. LETTERS OF CREDIT
3.1 LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement, Issuing Bank shall through the Issuing Office, at any time and from
time to time from and after the date hereof until ten (10) Business Days prior
to the Revolving Credit Maturity Date, upon the written request of an Account
Party(ies) accompanied by a duly executed Letter of Credit Agreement and such
other documentation related to the requested Letter of Credit as the Issuing
Bank may require, issue Letters of Credit in Dollars for the account of such
Account Party(ies), in an aggregate amount for all Letters of Credit issued
hereunder at any one time outstanding not to exceed the Letter of Credit Maximum
Amount. Each Letter of Credit (including any renewal thereof) shall be in a
46
minimum face amount of One Hundred Thousand Dollars ($100,000) (or such lesser
amount as may be agreed to by Issuing Bank) and each Letter of Credit (including
any renewal thereof) shall expire one (1) day prior to the Revolving Credit
Maturity Date in effect on the date of issuance thereof. The submission of all
applications in respect of and the issuance of each Letter of Credit hereunder
shall be subject in all respects to the Uniform Customs and Practices for
Documentary Credits of the International Chamber of Commerce, 1993 Revisions,
ICC Publication No. 500 or, if applicable, International Standby Practices 98,
and any successor documentation thereto, as selected by the Issuing Bank. In the
event of any conflict between this Agreement and any Letter of Credit Document
other than any Letter of Credit, this Agreement shall control.
3.2 CONDITIONS TO ISSUANCE. No Letter of Credit shall be issued at
the request and for the account of any Account Party(ies) unless, as of the date
of issuance of such Letter of Credit:
(a) in the case of any Account Party:
(i) after giving effect to the Letter of Credit
requested, the outstanding Letter of Credit Obligations does
not exceed the Letter of Credit Maximum Amount;
(ii) after giving effect to the Letter of Credit
requested, the outstanding Letter of Credit Obligations on
such date plus the aggregate amount of all Advances requested
by or outstanding to the Company on such date does not exceed
the lesser of the then applicable Revolving Credit Aggregate
Commitment and the Domestic Borrowing Base; and
(iii) after giving effect to the Letter of Credit
requested, the outstanding Letter of Credit Obligations on
such date plus the aggregate amount of all Advances requested
by or outstanding to the Borrowers on such date does not
exceed the lesser of the then applicable Revolving Credit
Aggregate Commitment and the Combined Borrowing Base;
(b) the obligations of the Loan Parties set forth in this
Agreement and the other Loan Documents are valid, binding and enforceable
obligations of such Loan Parties and the valid, binding and enforceable nature
of this Agreement and the other Loan Documents has not been disputed by the
Company;
(c) the representations and warranties contained in this
Agreement and the other Loan Documents are true in all material respects as if
made on such date except to the extent the same speaks to a different date, and
both immediately before and immediately after issuance of the Letter of Credit
requested, no Default or Event of Default exists;
(d) 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 material contract, agreement or other borrowing of the
relevant Account Party;
47
(e) the Account Party requesting the Letter of Credit shall
have delivered to Issuing Bank at its Issuing Office, not less than three (3)
Business Days prior to the requested date for issuance (or such shorter time as
the Issuing Bank, in its sole discretion, may permit), the Letter of Credit
Agreement related thereto, together with such other documents and materials as
may be required pursuant to the terms thereof, and the terms of the proposed
Letter of Credit shall be satisfactory to Issuing Bank;
(f) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain Issuing
Bank from issuing the Letter of Credit requested, or any Bank from taking an
assignment of its Percentage thereof pursuant to Section 3.6 hereof, and no law,
rule, regulation, request or directive (whether or not having the force of law)
shall prohibit or request that Issuing Bank refrain from issuing, or any Bank
refrain from taking an assignment of its Percentage of, the Letter of Credit
requested or letters of credit generally;
(g) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or unduly
burdensome for the Issuing Bank to issue or any Bank to take an assignment of
its Percentage of the requested Letter of Credit, no suspension of or material
limitation on trading on the New York Stock Exchange or any other national
securities exchange, no declaration of a general banking moratorium by banking
authorities in the United States, Michigan or the respective jurisdictions in
which the Banks, the applicable Account Party and the beneficiary of the
requested Letter of Credit are located, and no establishment of any new
restrictions on transactions involving letters of credit or on banks materially
affecting the extension of credit by banks; and
(h) Issuing Bank shall have received the issuance fees
required in connection with the issuance of such Letter of Credit pursuant to
Section 3.4 hereof.
Each Letter of Credit Agreement submitted to Issuing Bank pursuant hereto shall
constitute the certification by the Company and the Account Party of the matters
set forth in Section 3.2 (a) through (d) hereof. The Issuing Bank shall be
entitled to rely on such certification without any duty of inquiry.
3.3 NOTICE. The Issuing Bank will deliver to the Agent and each Bank
and the Company, concurrently with or promptly following its delivery of any
Letter of Credit, a true and complete copy of each Letter of Credit and notice,
substantially in the form attached as Exhibit F, to each Bank, specifying the
amount thereof and the amount of such Bank's Percentage thereof.
3.4 LETTER OF CREDIT FEES. The Company shall pay to the Issuing Bank
for distribution to the Banks in accordance with their Percentages, letter of
credit fees as follows:
48
(a) A per annum letter of credit fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto (based on the
amount of each Letter of Credit) in the amount of the Applicable Fee
Percentage (determined with reference to Schedule 1.1 to this Agreement).
(b) A letter of credit facing fee in the amount equal to
the greater of (x) one-eighth percentage point (0.125%) per annum on the
undrawn amount of each Letter of Credit and (y) $250 to be retained by
Issuing Bank for its own account.
(c) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or cause to be deemed applicable any reserve, special deposit,
limitation or similar requirement against letters of credit issued or
participated in by, or assets held by, or deposits in or for the account of,
Issuing Bank or any Bank or (ii) impose on Issuing Bank or any Bank any other
condition regarding this Agreement, the Letters of Credit or any
participations in such Letters of Credit, and the result of any event
referred to in clause (i) or (ii) above shall be to increase the cost or
expense to Issuing Bank or such Bank of issuing or maintaining or
participating in any of the Letters of Credit (which increase in cost or
expense shall be determined by the Issuing Bank's or such Bank's reasonable
allocation of the aggregate of such cost increases and expenses resulting
from such events), then, upon demand by the Issuing Bank or such Bank, as the
case may be, the Company shall, within thirty (30) days following demand for
payment, pay to Issuing Bank or such Bank, as the case may be, from time to
time as specified by the Issuing Bank or such Bank, additional amounts which
shall be sufficient to compensate the Issuing Bank or such Bank for such
increased cost and expense, together with interest on each such amount from
ten days after the date demanded until payment in full thereof at the
Prime-based Rate. A certificate as to such increased cost or expense incurred
by the Issuing Bank or such Bank, as the case may be, as a result of any
event mentioned in clause (i) or (ii) above, submitted to the applicable
Account Party, shall be conclusive evidence, absent manifest error, as to the
amount thereof.
(d) All payments by the Company to the Agent for
distribution to the Issuing Bank or the Banks under this Section 3.4 shall be
made in Dollars and in immediately available funds at the Issuing Office or
such other office of the Agent as may be designated from time to time by
written notice to the Company by the Agent. The fees described in clauses (a)
and (b) above shall be nonrefundable under all circumstances, shall be
payable quarterly in advance (or such lesser period, if applicable, for
Letters of Credit issued with stated expiration dates of less than one year)
upon the issuance of each such Letter of Credit, and shall be calculated on
the basis of a 360 day year and assessed for the actual number of days from
the date of the issuance thereof to the stated expiration thereof.
3.5 OTHER FEES. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees, the Company and the applicable Account
Party(ies) shall pay, for the sole account of the Issuing Bank, standard
documentation, administration, payment and cancellation charges assessed by
Issuing Bank or the Issuing Office, at the times, in the amounts and on the
terms set forth
49
or to be set forth from time to time in the standard fee schedule of the
Issuing Office in effect from time to time and delivered to the relevant
Account Party(ies).
3.6 DRAWINGS AND DEMANDS FOR PAYMENT UNDER LETTERS OF CREDIT.
(a) The Company and each applicable Account Party agree to
pay to the Issuing Bank, on the day on which the Issuing Bank shall honor a
draft or other demand for payment presented or made under any Letter of
Credit, an amount equal to the amount paid by the Issuing Bank in respect of
such draft or other demand under such Letter of Credit and all expenses paid
or incurred by the Agent relative thereto. Unless the Company or the
applicable Account Party shall have made such payment to the Agent for the
account of the Issuing Bank on such day, upon each such payment by the
Issuing Bank, the Agent shall be deemed to have disbursed to the Company, and
the Company shall be deemed to have elected to substitute for its
Reimbursement Obligation, with respect to Letters of Credit denominated in
Dollars, a Prime-based Advance of the Revolving Credit for the account of the
Banks in an amount equal to the amount so paid by the Issuing Bank in respect
of such draft or other demand under such Letter of Credit. Such Prime-based
Advance shall be deemed disbursed notwithstanding any failure to satisfy any
conditions for disbursement of any Advance set forth in Section 2 hereof and,
to the extent of the Advances so disbursed, the Reimbursement Obligation of
the Company under this Section 3.6 shall be deemed satisfied.
(b) If the Issuing Bank shall honor a draft or other demand
for payment presented or made under any Letter of Credit, the Issuing Bank
shall provide notice thereof to the Company and the applicable Account Party
on the date such draft or demand is honored, and to Agent on such date unless
the Company shall have satisfied its Reimbursement Obligation under Section
3.6(a) hereof by payment to the Agent on such date. The Issuing Bank shall
further use reasonable efforts to provide notice to the Company or applicable
Account Party prior to honoring any such draft or other demand for payment,
but such notice, or the failure to provide such notice, shall not affect the
rights or obligations of the Issuing Bank with respect to any Letter of
Credit or the rights and obligations of the parties hereto, including without
limitation the obligations of the Company or applicable Account Party under
Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Bank of each Letter of
Credit hereunder, each Bank shall automatically acquire a pro rata
participation interest in such Letter of Credit and each related Letter of
Credit Payment based on its respective Revolving Credit Percentage. Each
Bank, on the date a draft or demand under any Letter of Credit is honored (or
the next succeeding Business Day if the notice required to be given by Agent
to the Banks under Section 3.6(b) hereof is not given to the Banks prior to
2:00 p.m. (Detroit time) on such date of draft or demand), shall make its
Percentage of the amount paid by the Issuing Bank, and not reimbursed by the
Company or applicable Account Party on such day, in immediately available
funds at the principal office of the Agent for the account of Issuing Bank.
If and to the extent such Bank shall not have made such pro rata portion
available to the Agent, such Bank, the Company and the applicable Account
Party severally agree to pay to the Issuing Bank forthwith on demand such
amount together with interest thereon, for each day from the date such amount
was paid by the Issuing Bank until such amount is
50
so made available to the Agent at a per annum rate equal to the interest rate
applicable during such period to the related Advance deemed to have been
disbursed under Section 3.6(a) in respect of the reimbursement obligation of
the Company and the applicable Account Party, as set forth in Section
2.4(c)(i) or 2.4(c)(ii) hereof, as the case may be. If such Bank shall pay
such amount to the Agent for the account of Issuing Bank together with such
interest, such amount so paid shall be deemed to constitute an Advance by
such Bank disbursed in respect of the reimbursement obligation of the Company
under Section 3.6(a) hereof for purposes of this Agreement, effective as of
the dates applicable under said Section 3.6(a). The failure of any Bank to
make its pro rata portion of any such amount paid by the Issuing Bank
available to the Agent for the account of Issuing Bank shall not relieve any
other Bank of its obligation to make available its pro rata portion of such
amount, but no Bank shall be responsible for failure of any other Bank to
make such pro rata portion available to the Agent for the account of Issuing
Bank.
(d) Nothing in this Agreement shall be construed to require
or authorize any Bank to issue any Letter of Credit, it being recognized that
the Issuing Bank shall be the sole issuer of Letters of Credit under this
Agreement.
3.7 OBLIGATIONS IRREVOCABLE. The obligations of the Company and any
Account Party to make payments to Agent for the account of Issuing Bank or
the Banks with respect to Letter of Credit Obligations under Section 3.6
hereof, shall be unconditional and irrevocable and not subject to any
qualification or exception whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to any Letter of Credit (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to or under any of the Letter of Credit
Documents;
(c) The existence of any claim, setoff, defense or other
right which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent, the Issuing Bank or any Bank or any other person or entity,
whether in connection with any of the Letter of Credit Documents, the
transactions contemplated herein or therein or any unrelated transactions;
(d) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(e) Payment by the Issuing Bank to the beneficiary under
any Letter of Credit against presentation of documents which do not comply
with the terms of such Letter of Credit,
51
including failure of any documents to bear any reference or adequate reference
to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of the
Agent, Issuing Bank or any Bank or any party to any of the Letter of Credit
Documents to enforce, assert or exercise any right, power or remedy conferred
upon the Agent, Issuing Bank, any Bank or any such party under this
Agreement, any of the other Loan Documents or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent, Issuing
Bank, any Bank or any such party; or
(g) Any other event or circumstance that would, in the
absence of this Section 3.7, result in the release or discharge by operation
of law or otherwise of the Company or any Account Party from the performance
or observance of any obligation, covenant or agreement contained in Section
3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company or any Account Party has or
may have against the beneficiary of any Letter of Credit shall be available
hereunder to the Company or any Account Party against the Agent, Issuing Bank
or any Bank.
3.8 RISK UNDER LETTERS OF CREDIT. (a) In the administration and
handling of Letters of Credit and any security therefor, or any documents or
instruments given in connection therewith, as among the Agent and the Banks,
Issuing Bank shall have the sole right to take or refrain from taking any and
all actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this
Agreement, Issuing Bank shall issue the Letters of Credit and shall hold the
documents related thereto in its own name and shall make all collections
thereunder and otherwise administer the Letters of Credit in accordance with
Issuing Bank's regularly established practices and procedures. In the
administration of Letters of Credit, Issuing Bank shall not be liable for any
action taken or omitted on the advice of counsel, accountants, appraisers or
other experts selected by Issuing Bank with due care and Issuing Bank may
rely upon any notice, communication, certificate or other statement from the
Company, any Account Party, beneficiaries of Letters of Credit, or any other
Person which Issuing Bank believes to be authentic. Issuing Bank will, upon
request, furnish the Banks with copies of Letter of Credit Documents related
thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Issuing Bank makes no
representation and shall have no responsibility with respect to (i) the
obligations of the Company or any Account Party 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 Company, the applicable Account Party or any other Person, or (iii)
any failure or delay in exercising any rights or powers possessed by Issuing
Bank in its capacity as issuer of Letters of Credit in the absence of its
gross negligence or willful misconduct. Each of the Banks
52
expressly acknowledges that it has made and will continue to make its own
evaluations of the Company's and the Account Parties' creditworthiness
without reliance on any representation of Issuing Bank or Issuing Bank's
officers, agents and employees.
(d) If at any time Issuing Bank shall recover any part of
any unreimbursed amount for any draw or other demand for payment under a
Letter of Credit, or any interest thereon, Agent or Issuing Bank, as the case
may be, shall receive same for the PRO RATA benefit of the Banks in
accordance with their respective Percentages and shall promptly deliver to
each Bank its share thereof, less such Bank's pro rata share of the costs of
such recovery, including court costs and 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 Percentage
of such payment, such Bank will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.
3.9 INDEMNIFICATION. The Company hereby indemnifies and agrees to
hold harmless the Banks, the Issuing Bank and the Agent, and their respective
officers, directors, employees and agents, from and against any and all
claims, damages, losses, liabilities, reasonable costs or expenses of any
kind or nature whatsoever which the Banks, the Issuing Bank or the Agent or
any such Person incur or which are claimed against any of them by reason of
or in connection with any Letter of Credit except, in each instance, to the
extent the same arise as a result of the gross negligence or wilful
misconduct of any such Indemnified Person, and none of the Issuing Bank, any
Bank or the Agent or any of their respective officers, directors, employees
or agents shall be liable or responsible for:
(a) the use which may be made of any Letter of Credit or
for any acts or omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged, in the
absence of gross negligence or wilful misconduct of the Issuing Bank;
(c) payment by the Issuing Bank to the beneficiary under
any Letter of Credit against presentation of documents which do not strictly
comply with the terms of any Letter of Credit (unless such payment resulted
from the gross negligence or willful misconduct of the Issuing Bank),
including failure of any documents to bear any reference or adequate
reference to such Letter of Credit;
(d) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or
(e) any other event or circumstance whatsoever arising in
connection with any Letter of Credit in the absence of gross negligence or
wilful misconduct of the Issuing Bank;
53
provided, however, that with respect to subparagraphs (a)(i) through (a)(v)
of this Section 3.9, neither the Company nor any of the Account Parties shall
be required to indemnify the Issuing Bank, the other Banks and the Agent and
such other persons, and the Issuing Bank shall be liable to the Company and
the Account Parties to the extent, but only to the extent, of any direct, as
opposed to consequential or incidental, damages suffered by the Company and
the Account Parties which were caused by the Issuing Bank's gross negligence,
willful misconduct or wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand
for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit.
(f) It is understood that in making any payment under a
Letter of Credit the Issuing Bank will rely on documents presented to it
under such Letter of Credit as to any and all matters set forth therein
without further investigation and regardless of any notice or information to
the contrary.
3.10 RIGHT OF REIMBURSEMENT. Each Bank agrees to reimburse the
Issuing Bank on demand, pro rata in accordance with its respective Revolving
Credit Percentage, for (i) the reasonable out-of-pocket costs and expenses of
the Issuing Bank to be reimbursed by the Company or any Account Party
pursuant to any Letter of Credit Agreement or any Letter of Credit, to the
extent not reimbursed by the Company or any Account Party and (ii) any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, fees, reasonable out-of-pocket expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against Issuing Bank in any way relating to or arising out of this Agreement,
any Letter of Credit, any documentation or any transaction relating thereto,
or any Letter of Credit Agreement, to the extent not reimbursed by the
Company or any Account Party, except to the extent that such liabilities,
losses, costs or expenses were incurred by Issuing Bank as a result of
Issuing Bank's gross negligence or willful misconduct or by the Issuing
Bank's wrongful dishonor of any Letter of Credit after the presentation to it
by the beneficiary thereunder of a draft or other demand for payment and
other documentation strictly complying with the terms and conditions of such
Letter of Credit.
4. MARGIN ADJUSTMENTS
4.1 MARGIN ADJUSTMENTS. Adjustments to the Applicable Margins and
the Applicable Fee Percentages, based on Schedule 1.1, shall be implemented
on a quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder and the Applicable
Fee Percentage, upon the date of delivery of the financial statements
under Sections 7.1(a) and 7.1(b) hereunder and the Covenant Compliance
Report under Section 7.2(a) hereof, in each case establishing
applicability of the appropriate adjustment, in each case with no
retroactivity or claw-back. In the event the Company fails timely to
deliver such financial statements or the Covenant Compliance Report and
such failure continues for three (3) days, then (but without affecting
54
the Event of Default resulting therefrom) from the date delivery of
such financial statements and report was required until such financial
statements and report are delivered, the margins and fee percentages
shall be at the next higher level (if any) on the Pricing Matrix
attached to this Agreement as Schedule 1.1.
(b) From the Effective Date until the required date of
delivery (or, if earlier, delivery) under Section 7.1(b) of the
Company's financial statements for the fiscal quarter ending June 30,
2000, the margins and fee percentages shall be those set forth under
the Level IV column of the Pricing Matrix attached to this Agreement as
Schedule 1.1; provided however that in the event the Company's
financial statements for the quarter ending March 31, 2000 demonstrate
that the Consolidated Leverage Ratio exceeds 3.0 to 1, the Applicable
Margin shall then be adjusted in accordance with the Pricing Matrix.
Thereafter, all margins and fee percentages shall be based upon the
Company's quarterly financial statements and Covenant Compliance
Reports, subject to recalculation as provided in Subsection 4.1(a)
above.
5. CONDITIONS
The obligations of the Banks to make Advances or loans pursuant to this
Agreement and the obligation of the Issuing Bank to issue Letters of Credit are
subject to the following conditions:
5.1 EXECUTION OF NOTES AND THIS AGREEMENT. Each of the Loan Parties
shall have executed and delivered to Agent for the account of each Bank
requesting Notes, the Revolving Credit Notes and the Swing Line Note, this
Agreement and the other Loan Documents to which it is a party (including all
schedules, exhibits, certificates, opinions, financial statements and other
documents to be delivered pursuant hereto), and such Notes, and this Agreement
and the other Loan Documents shall be in full force and effect.
5.2 CORPORATE AUTHORITY. Agent shall have received:
(a) For each Loan Party, a certificate of its Secretary or
Assistant Secretary as to:
(i) resolutions of the board of directors or
managers, as applicable of such Loan Party evidencing approval
of the transactions contemplated by this Agreement and the
other Loan Documents to which such Loan Party is a party and
authorizing the execution and delivery thereof and, in the
case of the Borrowers, the borrowing of Advances and the
requesting of Letters of Credit hereunder,
(ii) the incumbency and signature of the officers of
such Loan Party executing any Loan Document,
(iii) a certificate of good standing or continued
existence (or the equivalent thereof) from the state of its
incorporation, and from every state or other jurisdiction
where the character of its assets or the nature of its
activities makes such
55
qualifications necessary and where failure to be so qualified
would have a Material Adverse Effect, listed on Schedule 5.2
hereof if issued by such jurisdiction, subject to the
limitations (as to qualification and authorization to do
business) contained in Section 6.1, and
(iv) copies of such Loan Party's articles of
incorporation and bylaws or other constitutional documents, as
in effect on the Effective Date;
5.3 COLLATERAL DOCUMENTS, GUARANTIES AND OTHER DOCUMENTS. (a) As
security for all Indebtedness of Borrowers to the Banks hereunder (but subject
to allocation of the Indebtedness and related limitations as provided in the
Collateral Documents) the Agent shall have received the following documents in
connection herewith:
(i) the Company Pledge Agreement executed and
delivered by the Company;
(ii) the Canadian Share Pledge executed and
delivered by the Company;
(iii) the Domestic Security Agreement, executed
and delivered by the Company and each
Guarantor;
(iv) the Canadian Security Agreement executed by
the Canadian Permitted Borrower (but only to
secure Indebtedness of the Canadian
Permitted Borrower); and
(v) the Guaranty executed by Company and each
Guarantor.
(b) Agent shall have received copies of uniform commercial
code requests for information, or a similar search report certified by
a party acceptable to the Agent, dated a date reasonably near to the
Effective Date, listing all effective financing statements which name
the Company or any Subsidiary (under their present names or under any
previous names) as debtors and which are filed in the jurisdictions in
which filings are to be made pursuant to the Collateral Documents,
together with (i) copies of such financing statements, (ii) executed
Uniform Commercial Code (Form UCC-3) Termination Statements, if any,
necessary to release all Liens and other rights of any Person in any
Collateral described in the Collateral Documents previously granted by
any Person (other than Liens permitted by Section 8.2) and (iii) such
other Uniform Commercial Code Form UCC-3 Termination Statements as the
Agent may reasonably request.
(d) Any documents (including, without limitation, financing
statements, amendments to financing statements and assignments of
financing statements, and stock powers) reasonably required to be filed
in connection with the Collateral Documents to create, in favor of the
Agent (for and on behalf of the Banks), a perfected security interest
in the Collateral thereunder shall have been delivered to the Agent in
a proper form for filing
56
in each office in each jurisdiction listed in Schedule 5.3(d), or other
office, as the case may be.
5.4 PRO FORMA BALANCE SHEET AND PROJECTIONS. The Company shall have
delivered to the Agent (a) a pro forma consolidated balance sheet of Company
and its Subsidiaries (the "Pro Forma Balance Sheet") certified by a
Responsible Officer of Company that it fairly presents the pro forma
adjustments reflecting the consummation of the transactions contemplated in
this Agreement, including all material fees and expenses in connection
therewith, subject to normal year end adjustments and (b) revised quarterly
projections through the 2000 fiscal year.
5.5 EXISTING CREDIT FACILITIES. All existing Funded Debt, other than
Funded Debt expressly permitted hereunder, together with all interest, all
prepayment premiums and other amounts due and payable with respect thereto,
shall have been paid in full and the related commitments terminated and all
Liens securing payment of any such Funded Debt have been released and the
Agent shall have received all Uniform Commercial Code Form UCC-3 terminations
statements or other instruments as may be suitable or appropriate in
connection therewith, or undertakings from the applicable secured parties as
to the termination and discharge thereof satisfactory in form and substance
to Agent.
5.6 XXXXXX XXXXXXXX REPORT. On or before the Effective Date, the
Agent shall have received the Xxxxxx Xxxxxxxx Report shall have been reissued
to the Agent and the Banks.
5.7 INSURANCE. The Agent shall have received evidence satisfactory
to it that the Loan Parties have obtained the insurance policies required by
Section 7.5 hereof and that such insurance policies are in full force and
effect.
5.8 COMPLIANCE WITH CERTAIN DOCUMENTS AND AGREEMENTS. The Loan
Parties (and any of their respective Subsidiaries or Affiliates) shall have
each performed and complied in all material respects with all agreements and
conditions contained in this Agreement, other Loan Documents, or any
agreement or other document executed thereunder and required to be performed
or complied with by each of them (as of the applicable date) and none of such
parties shall be in material default in the performance or compliance with
any of the terms or provisions hereof or thereof.
5.9 OPINION OF COUNSEL. Loan Parties shall furnish Agent prior to
the initial Advance under this Agreement, and with signed copies for each
Bank, opinions of counsel to the Loan Parties, dated the Effective Date and
covering such matters as reasonably required by and otherwise reasonably
satisfactory in form and substance to the Agent and each of the Banks.
5.10 COMPANY'S CERTIFICATE. The Agent shall have received for the
benefit of the Banks, a certificate of a Responsible Officer of the Company
dated the date of the making of Advances hereunder, stating that to the best
of his or her knowledge after due inquiry, (a) the conditions set forth in
this Section 5 have been satisfied; (b) the representations and warranties
made by Loan Parties in this Agreement or any of the other Loan Documents,
shall have been true and correct in
57
all material respects when made and shall be true and correct in all material
respects on and as of the Effective Date; (c) no Default or Event of Default
shall have occurred and be continuing; (d) since September 30, 1999 nothing
shall have occurred (and neither the Agent nor the Banks shall have become
aware of any facts or conditions not previously known) which either the Agent
or any of the Banks shall reasonably determine has had, or could reasonably
be expected to have, a Material Adverse Effect; and (e) there shall have been
no material changes to the pro forma opening balance sheet of the Company
previously delivered to the Agent.
5.11 PAYMENT OF FEES. Company shall have paid to the Agent all fees,
costs and expenses required to be paid to Agent upon execution of this
Agreement under the terms of this Agreement and under the terms of the Agency
Fee Letter dated March 21, 2000 from Comerica Bank to the Company.
5.12 FINANCIAL STATEMENTS. The Company shall have delivered to the
Agent and each Bank a copy of each of the following (i) audited financial
statements of the Company and its Consolidated Subsidiaries for the fiscal
year ending on December 31, 1999 as described in Section 7.1(a), prepared and
presented in accordance with GAAP (except as otherwise noted in the footnotes
thereto), (ii) Company prepared unaudited financial statements of the Company
and its Consolidated Subsidiaries, as described in Section 7.1(b) for the
period ending February 29, 2000 and (iii) financial projections (as described
in Section 5.4) in form and substance satisfactory to the Agent and the Banks.
5.13 XXXXXXXXX.XXX ACQUISITION DOCUMENTS. The Agent and the Banks
shall have reviewed and approved the Xxxxxxxxx.xxx Purchase Agreement and the
terms of the convertible preferred shares to be issued in connection with the
Xxxxxxxxx.xxx Acquisition.
5.14 CONTINUING CONDITIONS. The obligations of the Banks to make
Advances (including the initial Advance) under this Agreement and the
obligation of the Issuing Bank to issue any Letters of Credit shall be
subject to the continuing conditions that:
(1) No Default or Event of Default shall exist as of the date of the
Advance or the request for the Letter of Credit; and
(2) Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be true and correct
in all material respects as of the date of the Advance or Letter of Credit
except to the extent the same speaks to a different date.
58
6. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants and such representations and
warranties shall survive until the Revolving Credit Maturity Date and thereafter
until the expiration of all Letters of Credit and the final payment in full of
the Indebtedness and the performance by the Borrowers of all other obligations
under this Agreement (provided, however, that these representations and
warranties shall not constitute a guaranty by the Canadian Permitted Borrower of
any Indebtedness of the Company hereunder):
6.1 CORPORATE AUTHORITY. Each Loan Party is a corporation (or other
business entity) duly organized or formed and existing in good standing under
the laws of the state or jurisdiction of its incorporation or formation, each
other Subsidiary is a corporation or other business entity duly organized or
formed and existing in good standing under the laws of the jurisdiction of its
incorporation; and each Loan Party and each Subsidiary is duly qualified and
authorized to do business as a foreign corporation in each jurisdiction where
the character of its assets or the nature of its activities makes such
qualification necessary and where failure to be so qualified would have a
Material Adverse Effect.
6.2 DUE AUTHORIZATION - BORROWERS. Execution, delivery and performance,
as applicable, by each of the Borrowers of this Agreement, the other Loan
Documents to which such Borrower is a party and any other documents and
instruments required under or in connection with this Agreement or the other
Loan Documents (or to be so executed and delivered), and the issuance of the
Notes by such Borrower (if requested) are within such Borrower corporate powers,
have been duly authorized, are not in contravention of applicable law or the
terms of such Borrower organizational documents and, except as have been
previously obtained or as referred to in Section 6.13, below, do not require the
consent or approval, material to the transactions contemplated by this Agreement
and the other Loan Documents, of any governmental body, agency or authority.
6.3 DUE AUTHORIZATION - SUBSIDIARIES. Execution, delivery and
performance, as applicable, by a Subsidiary of the Guaranty, and the other Loan
Documents to which such Subsidiary is a party, if any, and all other documents
and instruments required of such Subsidiary under or in connection with this
Agreement and the other Loan Documents (or to be so executed and delivered), are
within the corporate or limited liability company powers of each such
Subsidiary, have been duly authorized, are not in contravention of applicable
law or the terms of such Subsidiary's organizational documents, and, except as
have been previously obtained (or as referred to in Section 6.13 below), do not
require the consent or approval, material to the transactions contemplated by
this Agreement and the other Loan Documents, of any governmental body, agency or
authority.
6.4 GOOD TITLE, NO LIENS. Company and its Subsidiaries have good and
marketable title to or a valid leasehold interest in all of their respective
material properties, subject to the exceptions stated in the next sentence.
There are no security interests in, liens, mortgages, or other encumbrances on
and no financing statements on file with respect to any of the property owned by
Company or its Subsidiaries, except for any defects that, individually or in the
aggregate could not
59
reasonably be expected to have a Material Adverse Effect, and Liens permitted
pursuant to Section 8.2.
6.5 TAXES. Each of the Loan Parties, and each of their respective
Subsidiaries has filed on or before their respective due dates or within the
applicable grace periods, all federal, state and foreign material tax returns
which are required to be filed to date or has obtained extensions for filing
such tax returns and is not delinquent in filing such returns in accordance with
such extensions and has paid all taxes which have become due pursuant to those
returns or pursuant to any assessments therefor received by any such party, as
the case may be, to the extent such taxes have become due, except to the extent
such tax payments are being actively contested in good faith by appropriate
proceedings and with respect to which adequate provision has been made on the
books of such Loan Party or such other Subsidiary as may be required by GAAP.
6.6 NO DEFAULTS. There exists no material default under the provisions
of any instrument evidencing any indebtedness for borrowed money of any Loan
Party or any of their respective Subsidiaries which is permitted hereunder or of
any material agreement relating thereto.
6.7 ENFORCEABILITY OF AGREEMENT AND LOAN DOCUMENTS -- COMPANY. This
Agreement, each of the other Loan Documents to which the Company is a party have
each been duly executed and delivered by their respective duly authorized
officers and (assuming due execution and delivery by the other parties hereto
and thereto, other than the Company or a Subsidiary of the Company) constitute
the valid and binding obligations of the Company, enforceable in accordance with
their respective terms, except as enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of creditor's rights,
generally and by general principles of equity (regardless of whether enforcement
is considered in a proceeding in law or equity).
6.8 ENFORCEABILITY OF LOAN DOCUMENTS -- SUBSIDIARIES. The Loan
Documents to which each of the Subsidiaries is a party, if any, each been duly
executed and delivered by the duly authorized officers or members or managers,
as the case may be, of the Subsidiaries party thereto and (assuming due
execution by the other parties hereto and thereto, other than the Company or a
Subsidiary of the Company) constitute the valid and binding obligations of such
Subsidiaries, to the extent a party thereto, enforceable in accordance with
their respective terms, except as enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of creditor's rights,
generally and by general principles of equity (regardless of whether enforcement
is considered in a proceeding in law or equity).
6.9 COMPLIANCE WITH LAWS. Except as disclosed on Schedule 6.9, each of
the Loan Parties, and each of their respective Subsidiaries has complied with
all applicable federal, state and local laws, ordinances, codes, rules,
regulations and guidelines having the force of law (including consent decrees
and administrative orders) except to the extent that failure to comply therewith
would not have a Material Adverse Effect; and except as set forth in Schedule
6.9 hereof.
60
6.10 NON-CONTRAVENTION -- COMPANY. The execution, delivery and
performance, as applicable, by the Company, of this Agreement and the other Loan
Documents to which it is a party and any other documents and instruments
required under or in connection with this Agreement by the Company are not in
contravention of the terms of any indenture, agreement or undertaking to which
the Company is a party or by which its properties are bound or affected where
such violation would reasonably be expected to have a Material Adverse Effect.
6.11 NON-CONTRAVENTION -- SUBSIDIARIES. The execution, delivery and
performance, as applicable, by a Subsidiary of those Loan Documents are not in
contravention of the terms of any material indenture, agreement or undertaking
to which such Loan Party is a party or by which it or its properties are bound
or affected where such violation would reasonably be expected to have a Material
Adverse Effect.
6.12 NO LITIGATION. Except for De Minimis Matters or as set forth on
Schedule 6.12 hereof, there is no suit, action, proceeding, including, without
limitation, any bankruptcy proceeding, or governmental investigation pending
against or, to the knowledge of the Company, threatened against any Loan Party
or any of their respective Subsidiaries (other than any suit, action or
proceeding in which such Loan Party or such Subsidiary is the plaintiff or
creditor and in which no counterclaim or cross-claim against such Loan Party or
such Subsidiary has been filed), nor has any Loan Party or any of their
respective Subsidiaries or, to the knowledge of the Company any of its or their
officers, members, managers, or directors, as the case may be, been subject to
any suit, action, proceeding or governmental investigation as a result of which
any such officer, member, manager or director is or may be entitled to
indemnification by any Loan Party or any of their respective Subsidiaries, as
applicable, which suits, actions, proceedings or governmental investigations are
reasonably likely to be resolved adversely to such Loan Party or such
Subsidiary, and if so resolved are reasonably likely to have a Material Adverse
Effect. Except as set forth on Schedule 6.12, there is not outstanding against
any Loan Party or any Subsidiary any judgment, decree, injunction, rule, or
order of any court, government, department, commission, agency, instrumentality
or arbitrator nor is any Loan Party or any other Subsidiary in violation of any
applicable law, regulation, ordinance, order, injunction, decree or requirement
of any governmental body or court where such matters would reasonably be
expected to have a Material Adverse Effect.
6.13 CONSENTS, APPROVALS AND FILINGS, ETC. Except as have been
previously obtained or, in the case of any non-governmental person or party,
except for DeMinimis Matters, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory authority or any
securities exchange or any other person or party (whether or not governmental)
is required in connection with the execution, delivery and performance: (i) by
the Borrowers of this Agreement and by any of the Loan Parties of other Loan
Documents to which they are a party; or (ii) by any Loan Party, of the liens,
pledges, security interests or other encumbrances granted, conveyed or otherwise
established (or to be granted, conveyed or otherwise established) by or under
this Agreement or the other Loan Documents, except for such filings to be made
concurrently herewith
61
as are required by the Collateral Documents to perfect liens in favor of the
Agent and except for such consents, approvals or filings the failure to obtain
or file which would not have a Material Adverse Effect. All such authorizations,
consents, approvals, licenses, qualifications, exemptions, filings, declarations
and registrations which have previously been obtained or made, as the case may
be, are in full force and effect and are not the subject of any attack, or to
the knowledge of the Company threatened attack (in any material respect) by
appeal or direct proceeding or otherwise.
6.14 AGREEMENTS AFFECTING FINANCIAL CONDITION. None of the Loan Parties
nor any of their respective Subsidiaries is party to any agreement or instrument
or subject to any charter or other corporate restriction which has a Material
Adverse Effect.
6.15 NO INVESTMENT COMPANY OR MARGIN STOCK. None of the Loan Parties
nor any of their respective Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. None of the Loan
Parties nor any of their respective Subsidiaries is engaged principally, or as
one of its important activities, directly or indirectly, in the business of
extending credit for the purpose of purchasing or carrying margin stock. None of
the proceeds of any of the Advances will be used by any Loan Party nor any of
their respective Subsidiaries to purchase or carry margin stock or will be made
available by any Loan Party or any of their respective Subsidiaries in any
manner to any other Person to enable or assist such Person in purchasing or
carrying margin stock. Terms for which meanings are provided in Regulation U of
the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph
with such meanings.
6.16 ERISA, CANADIAN PENSION PLANS. (a) None of the Loan Parties nor
any of their respective Subsidiaries maintains or contributes to any Pension
Plan subject to Title IV of ERISA, except as set forth on Schedule 6.16 hereto;
and there is no material accumulated funding deficiency within the meaning of
ERISA, or any existing liability with respect to any of the Pension Plans owed
to the Pension Benefit Guaranty Corporation or any successor thereto, and no
"reportable event" or "prohibited transaction", as defined in ERISA, has
occurred with respect to any Pension Plan which is reasonably likely to result
in material liability, and all such Pension Plans are in material compliance
with the requirements of the Internal Revenue Code and ERISA.
(b) Schedule 6.16 sets forth all Canadian Benefit Plans (other
than, for greater certainty, universal plans created by and to which
any Loan Party is obligated to contribute by statute) and Canadian
Pension Plans adopted by each Loan Party. The Canadian Pension Plans
are duly registered under the ITA and all other applicable laws which
require registration and no event has occurred which is reasonably
likely to cause the loss of such registered status. All material
obligations of each Loan Party (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with the Canadian Pension Plans and the funding agreements
therefor have been performed in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian
Pension Plans or the Canadian Benefit Plans. There are no outstanding
disputes concerning the assets of the Canadian Pension Plans or the
Canadian Benefit Plans. Each of
62
the Canadian Pension Plans is fully funded on a solvency basis (using
actuarial methods and assumptions which are consistent with the
valuations last filed with the applicable Governmental Authorities and
which are consistent with generally accepted actuarial principles).
6.17 CONDITIONS AFFECTING BUSINESS OR PROPERTIES. Neither the
respective businesses nor the properties of any Loan Party nor any of their
respective Subsidiaries is affected by any fire, explosion, accident, strike,
lockout or other dispute, drought, storm, hail, earthquake, embargo, Act of God
or other casualty (not covered by insurance) which is reasonably likely to have
a Material Adverse Effect, or if such event or condition were to continue for
more than ten (10) additional days would reasonably be expected to have a
Material Adverse Effect.
6.18 ENVIRONMENTAL AND SAFETY MATTERS. Except as set forth in Schedules
6.18 and 6.12 and except for such matters as are not likely to have a Material
Adverse Effect:
(a) all facilities and property owned or leased by the Loan
Parties or any of their respective Subsidiaries, are in material
compliance with all Hazardous Material Laws;
(b) to the best knowledge of the Company, there have been no
unresolved and outstanding past, and there are no pending or threatened
(i) claims, complaints, notices or requests
for information received by any Loan Party or any of their
respective Subsidiaries with respect to any alleged violation
of any Hazardous Material Law, or
(ii) written complaints, notices or
inquiries to any Loan Party or any of their respective
Subsidiaries regarding potential liability of the Loan Parties
or any of their respective Subsidiaries under any Hazardous
Material Law; and
(c) to the knowledge of the Company, no conditions exist at,
on or under any property now or previously owned or leased by the Loan
Parties or any of their respective Subsidiaries which, with the passage
of time, or the giving of notice or both, would give rise to liability
of the Loan Parties or any of their respective Subsidiaries under any
Hazardous Material Law.
6.19 SUBSIDIARIES. Except as disclosed on Schedule 6.19 hereto, the
Company has no Subsidiaries.
6.20 ACCURACY OF INFORMATION. (a) Each of the Company's financial
statements furnished to Agent and the Banks prior to the date of this Agreement
pursuant to Section 5.12 hereof, fairly presents in all material respects
(subject to year-end adjustments in the case of interim statements) the
financial condition of the Company and the results of their operations for the
periods covered thereby, and has been prepared in accordance with GAAP (except
as otherwise noted in the footnotes
63
thereto and with respect to the calculation of Inventory). The projections and
pro forma financial information contained in the materials referenced in this
clause (a) are based upon good faith estimates and assumptions believed by
management of the Company to be reasonable at the time made, it being recognized
by the Banks that such financial information as it relates to future events is
not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein.
(b) Since September 30, 1999 through the Effective Date there
has been no material adverse change in the financial condition of the Company
and its Subsidiaries taken as a whole, to the best knowledge of the Company,
neither the Company nor any of its Subsidiaries has any contingent obligations
(including any liability for taxes) as of the Effective Date not disclosed by or
reserved against in the September 30, 1999 balance sheets, as applicable, except
as set forth on Schedule 6.20 hereof, and at the present time there are no
unrealized or anticipated losses from any present commitment of the Company or
any of its Subsidiaries which contingent obligations and losses in the aggregate
are likely to have a Material Adverse Effect.
6.21 LABOR RELATIONS. None of the Loan Parties nor any of their
respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. To the knowledge of
Company, there is (i) no unfair labor practice complaint pending against the
Loan Parties nor any of their respective Subsidiaries or threatened against any
of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against any of them or, to the knowledge of Company,
threatened against either of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Company or any Subsidiary or to the knowledge of
Company, threatened against either of them and (iii) no union representation
question existing with respect to the employees of the Loan Parties or any of
their respective Subsidiaries, in each case or in the aggregate which could
reasonably be expected to have a Material Adverse Effect.
6.22 EXISTING DEBT. Schedule 8.1 hereto sets forth a true and complete
list of all Debt for borrowed money (other than Indebtedness) of the Company and
its Subsidiaries as of the Effective Date that is in excess of $100,000 for any
one issue and that is to remain outstanding after giving effect to this
Agreement, in each case showing the aggregate principal amount thereof and the
name of the Company (or issuer) and any other entity which directly or
indirectly guaranteed such debt.
6.23 SOLVENCY. After giving effect to the consummation of the
transactions contemplated by this Agreement, the Company and its Subsidiaries
will each be solvent, able to pay its indebtedness as it matures and will have
capital sufficient to carry on its business and all business in which it is
about to engage. This Agreement is being executed and delivered by the Company
to Agent and the Banks in good faith and in exchange for fair, equivalent
consideration. Neither the Company nor any Subsidiary is insolvent, nor will the
Company or any Subsidiary be rendered insolvent by the Company's execution and
delivery to Agent and the Banks of this Agreement or by the consummation of the
transactions contemplated by this Agreement, and the capital and monies
remaining in the Company and their Subsidiaries are not now and will not become
so unreasonably
64
small as to preclude the Company or their Subsidiaries from carrying on their
businesses. Neither the Company nor any Subsidiary intends to nor does
management of the Company or any Subsidiary believe it will incur debts beyond
its ability to pay as they mature. Neither the Company nor any Subsidiary
contemplates filing a petition in bankruptcy or for an arrangement or
reorganization under the Bankruptcy Code or any similar law of any jurisdiction
now or hereafter in effect relating to the Company or any Subsidiary, nor does
the Company or any Subsidiary have any knowledge of any threatened bankruptcy or
insolvency proceedings against the Company or any Subsidiary.
6.24 CAPITALIZATION. The authorized capital stock of the Company, each
Significant Domestic Subsidiary and each foreign Subsidiary which would qualify
as a Significant Domestic Subsidiary, but for the fact it is not a Domestic
Subsidiary is as set forth in Schedule 6.24. All issued and outstanding shares
of capital stock of each such Subsidiary held by the Company are duly authorized
and validly issued, fully paid, nonassessable, free and clear of all Liens
(other than Permitted Liens) and such shares were issued in compliance with all
applicable state and federal laws concerning the issuance of securities. Except
as disclosed on Schedule 6.24, there are no preemptive or other outstanding
rights, options, warrants, conversion rights or similar agreements or
understandings for the purchase or acquisition from the Company or any
Subsidiary disclosed on Schedule 6.24, of any shares of capital stock or other
securities of any Subsidiary held by the Company.
7. AFFIRMATIVE COVENANTS
Each of the Borrowers covenants and agrees that it will, and, as
applicable, it will cause each of its Subsidiaries, until the Revolving Credit
Maturity Date and thereafter until expiration of all Letters of Credit and final
payment in full of the Indebtedness and the performance by the Borrowers of all
other obligations under this Agreement and the other Loan Documents, to:
7.1 FINANCIAL STATEMENTS. Furnish to the Agent:
(a) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Company a
copy of the audited Consolidated and unaudited Consolidating financial
statements of the Company and its Subsidiaries as at the end of such
year and the related audited statements of income, shareholders equity
and cash flows for such year and underlying assumptions, setting forth
in each case in comparative form the figures for the previous year,
with an opinion satisfactory to the Agent and the Required Banks and
certified as being fairly stated in all material respects by a
nationally recognized certified public accounting firm reasonably
satisfactory to the Agent and the Banks; and
(b) as soon as available, but in any event not later than
forty-five (45) days after the end of each fiscal quarter, Company
prepared unaudited Consolidated and Consolidating financial statements
of the Company as at the end of such fiscal quarter and the related
unaudited statements of income, shareholders equity and cash flows of
the Company for the
65
portion of the fiscal year through the end of such fiscal quarter,
setting forth in each case in comparative form the figures for the
previous year and the budgeted figures for the then current fiscal
year, and certified by a Responsible Officer as being fairly stated in
all material respects; and
(c) as soon as available, but in any event not later than
twenty-five (25) days after the end of each month, Company prepared
unaudited Consolidated and Consolidating financial statements of the
Company as at the end of such month and the related unaudited
statements of income, shareholders equity and cash flows of the Company
for the portion of the fiscal year through the end of such fiscal
month, setting forth in each case in comparative form the figures for
the previous year, and certified by a Responsible Officer as being
fairly stated in all material respects; and
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods (except as
approved by such officer and disclosed therein), provided however that the
financial statements delivered pursuant to clauses (b) and (c) hereof will not
be required to include footnotes and will be subject to year-end adjustments.
7.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Agent:
(a) Together with the financial statements delivered pursuant
to Section 7.1(b) hereof, a Covenant Compliance Report;
(b) Within twenty-five (25) days after and as of the end of
each month ending on or before June 30, 2000 and within fifteen (15)
days after and as of the end of each month ending thereafter, a summary
aging of accounts receivable, in form and substance satisfactory to the
Agent and the Majority Banks, and, if requested by Agent, accompanied
in each case by supporting detail reasonably satisfactory to the Agent
and the Banks;
(c) Within twenty-five (25) days after and as of the end of
each month ending on or before June 30, 2000, and within fifteen (15)
days after and as of the end of each month ending thereafter, a
Borrowing Base Certificate as of the last day of the preceding month;
(d) Together with the financial statements delivered pursuant
to Section 7.1(a) hereof, annual projections for the Company in form
reasonably acceptable to the Agent and the Banks;
(e) Promptly after the sending or filing thereof, copies of
each financial statement in form and substance satisfactory to the
Agent and the Majority Banks sent by Company or any Subsidiary to its
stockholders or members, and copies of each regular, periodic or
special report, registration statement or prospectus as filed by the
Company or any of its Subsidiaries
66
with any securities exchange or the Securities Exchange Commission or
any successor agency thereto; and
(f) Promptly and in form to be reasonably satisfactory to
Majority Banks, such additional financial and/or other information, or
other reports as any Bank may from time to time reasonably request.
The Company shall furnish to Agent and from time to time, such additional
schedules, certificates and reports respecting all or any of the Collateral, the
items or amounts received by the Loan Parties in full or partial payment
thereof, and any goods (the sale or lease of which shall have given rise to any
of the Collateral) possession of which has been obtained by the Loan Parties,
all to such extent as Agent may reasonably request. Any such schedule,
certificate or report shall be certified as accurate in all material respects by
duly authorized officers of Company and shall be in such form and detail as
Agent may reasonably specify.
7.3 PAYMENT OF OBLIGATIONS. Subject to Section 7.12 hereof, pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all of its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the applicable Obligor.
7.4 CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE; COMPLIANCE WITH
LAWS.
(a) Continue to engage solely in the business as now conducted
by it and businesses reasonably related thereto and preserve, renew and
keep in full force and effect its existence, except as otherwise
permitted pursuant to Sections 8.4 and 8.5;
(b) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct
of its business except as otherwise permitted pursuant to Section 8.5,
except where the failure to maintain same could not reasonably be
expected to result in a Material Adverse Effect; and
(c) comply with all Contractual Obligations and Requirements
of Law, except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
7.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property necessary in
its business in working order and maintain insurance coverage on its physical
assets and against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature (including without
limitation casualty and public liability and property damage insurance), and in
the event of acquisition of additional property, real or personal, or of
incurrence of additional risks of any nature, increase such insurance coverage
in such manner and to such extent as prudent business judgment and present
practice or any applicable Requirements of Law would dictate; and
67
in the case of all policies covering any Collateral, all such insurance policies
shall provide that the loss payable thereunder shall be payable to the
applicable Loan Party, and to the Agent for the benefit of the Banks (Agent as
lender loss payee) as their respective interests may appear, and certificates
evidencing such policies, including all endorsements thereto, shall be deposited
with Agent.
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS, DISCUSSIONS. Permit
Agent and each Bank (if accompanied by Agent), through their authorized
attorneys, accountants and representatives (a) at all reasonable times during
normal business hours, upon request of Agent or such Bank, to examine the
Company's and each Subsidiary's books, accounts, records, ledgers and assets and
properties of every kind and description wherever located; (b) at any time and
from time to time, at the request of the Majority Banks, to conduct full or
partial collateral audits of the Company and its Subsidiaries to be completed by
an appraiser as may be selected by Agent and the Majority Banks, with all
reasonable costs and expenses of such audits to be reimbursed by Company, and
(c) permit Agent and each Bank or their authorized representatives, at
reasonable times and intervals, to visit all of their respective offices,
discuss their respective financial matters with their respective officers and
independent certified public accountants, and, by this provision, Company
authorizes such accountants to discuss the finances and affairs of Company and
their Subsidiaries (provided that Company is given an opportunity to participate
in such discussions) and examine any of its or their books and other corporate
records. Notwithstanding the foregoing, all information furnished to the Agent
or the Banks hereunder shall be subject to the undertaking of the Banks set
forth in Section 13.12 hereof; provided, however, that prior to the occurrence
and continuance of any Default or Event of Default, the Company shall be
required to reimburse the Agent for the reasonable costs and expenses of no more
than two (2) such audits conducted in any year and provided further, however,
that Company shall be required to reimburse the Agent for all reasonable costs
and expenses of all audits conducted after the occurrence and during the
continuance of a Default or Event of Default.
7.7 NOTICES. Promptly give notice to the Agent of:
(a) the occurrence of any Default or Event of Default upon
obtaining knowledge thereof;
(b) any (1) default or event of default under any material
Contractual Obligation of Company or any Subsidiary of which the
Company or such Subsidiary has knowledge or (ii) litigation,
investigation or proceeding which may exist at any time between the
Company or any Subsidiary and any Governmental Authority, which if not
cured or if it is adversely determined, as the case may be, would be
reasonably expected to have a Material Adverse Effect or (iii) any
change in the financial condition of the Company or any of its
Subsidiaries since the date of the last audited financial statements
delivered pursuant to Section 7.1(a) hereof which could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is believed by the
Company to be $500,000 or more and which is not covered by insurance or
in which injunctive or similar relief is sought;
68
(d) any development or event which the Company believes is
reasonably likely to have a Material Adverse Effect;
(e) promptly after becoming aware of the taking by the
Internal Revenue Service or any foreign taxing jurisdiction of a
written tax position which could reasonably be expected to have a
Material Adverse Effect upon the Company (or any such tax position
taken by the Company) setting forth the details of such position and
the estimated financial impact thereof;
(f) not less than 10 days prior to the proposed effective date
thereof, copies of any proposed material amendments, restatements or
other modification to any Subordinated Debt Documents or, following the
completion of such acquisition, the Xxxxxxxxx.xxx Acquisition
Documents; and
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to
therein and stating what action, if any, the Company proposes to take with
respect thereto.
7.8 HAZARDOUS MATERIAL LAWS.
(a) Use and operate all of its facilities and properties in
material compliance with all material Hazardous Material Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations under Hazardous Material Laws in effect and remain in
material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Hazardous Material Laws;
(b) Promptly notify Agent and provide copies upon receipt of
all written claims, complaints, notices or inquiries received by the
Company or any of its Subsidiaries of a material nature relating to its
facilities and properties or compliance with Hazardous Material Laws,
and promptly cure all violations of or noncompliance with all Hazardous
Material Laws to the extent that such violations could reasonably be
likely to have a Material Adverse Effect; and
(c) Provide such information and certifications which any Bank
may reasonably request from time to time to evidence compliance with
this Section 7.8.
7.9A MAINTAIN CONSOLIDATED EBITDA. Maintain as of the end of each
period specified below (provided that this covenant shall not be tested after
September 30, 2000), Consolidated EBITDA of not less than the amounts
specified below:
------------------------------------------------ --------------------------------------
Period Amount
------------------------------------------------ ---------------------------------------
69
------------------------------------------------ ---------------------------------------
4/1/00 through 6/30/00 $2,000,000
------------------------------------------------ ---------------------------------------
7/01/00 through 9/30/00 $1,000,000
------------------------------------------------ ---------------------------------------
7.9B CONSOLIDATED INTEREST COVERAGE RATIO. Maintain as of the last
day of each fiscal quarter, for the four consecutive fiscal quarters then
ending, during any period set forth below, a Consolidated Interest Coverage
Ratio of not less than the following amounts during the periods set forth
below:
----------------------------------------------------- ----------------------------------
PERIOD RATIO
----------------------------------------------------- ----------------------------------
The Effective Date through 12/30/00 1.75 to 1
----------------------------------------------------- ----------------------------------
12/31/00 through 6/29/01 2.00 to 1
----------------------------------------------------- ----------------------------------
6/30/01 and thereafter 2.5 to 1
----------------------------------------------------- ----------------------------------
7.10 MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Maintain, at the end
of each fiscal quarter, a minimum Consolidated Tangible Net Worth of not less
than $122,000,000 plus (on a cumulative basis) for each fiscal quarter ending
on or after the Effective Date, the sum of (a) 50% of Consolidated Net Income
(not reduced by losses) earned in such fiscal quarter plus (b) 100% of the
proceeds of any Equity Interests issued during such fiscal quarter (net of
reasonable and customary costs and expenses and expenses of issuance).
7.11 MAINTAIN CONSOLIDATED LEVERAGE RATIO. Maintain as of the last
day of each fiscal quarter (beginning with the quarter ending December 31,
2000), for the four consecutive fiscal quarters then ending, during any
period set forth below, a Consolidated Leverage Ratio of not more than the
following amounts during the periods specified below:
----------------------------------------------------- ----------------------------------
PERIOD RATIO
----------------------------------------------------- ----------------------------------
12/31/2000 through 3/30/01 4.50 to 1
----------------------------------------------------- ----------------------------------
3/31/01 through 6/29/01 4.00 to 1
----------------------------------------------------- ----------------------------------
6/30/01 through 9/29/01 3.75 to 1
----------------------------------------------------- ----------------------------------
9/30/01 through 12/30/01 3.50 to 1
----------------------------------------------------- ----------------------------------
12/31/01 and thereafter 3.00 to 1
----------------------------------------------------- ----------------------------------
7.12 TAXES. Pay and discharge all taxes and other governmental
charges, and all material contractual obligations calling for the payment of
money, before the same shall become overdue, unless and to the extent only
that such payment is being contested in good faith by appropriate
70
proceedings and is reserved for, as required by GAAP or where the failure to pay
any such matter could not have a Material Adverse Effect.
7.13 GOVERNMENTAL AND OTHER APPROVALS. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance by such Loan Parties, of this Agreement or the other
Loan Documents.
7.14 COMPLIANCE WITH ERISA AND CANADIAN PENSION LAW.
(a) In respect of any Pension Plan, comply in all material
respects with all requirements imposed by ERISA as presently in effect
or hereafter promulgated or the Internal Revenue Code, including, but
not limited to, the minimum funding requirements of any Pension Plan,
except where the failure to comply could not have a Material Adverse
Effect.
(b) For each existing Canadian Pension Plan ensure that such
plan retains its registered status under and is administered in a
timely manner in all material respects in accordance with the
applicable pension plan text, funding agreement, the ITA and all other
applicable laws.
(c) For each Canadian Pension Plan hereafter adopted by any
Borrower or any Subsidiary which is required to be registered under the
ITA or any other applicable laws, use best efforts to seek and receive
confirmation in writing from the applicable Governmental Authorities to
the effect that such plan is unconditionally registered under the ITA
and such other applicable laws.
(d) For each existing Canadian Pension Plan and Canadian
Benefit Plan hereafter adopted, in a timely fashion perform in all
material respects all obligations (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with such plan and the funding media therefor, except where
the failure to so perform could not reasonably be expected to have a
Material Adverse Effect.
7.15 ERISA NOTICES. Promptly notify Agent upon the occurrence of any of
the following events if such event is likely to have a Material Adverse Effect:
(a) the termination, other than a standard termination, of any
Pension Plan subject to Subtitle C of Title IV of ERISA;
(b) the Company's or any Subsidiary's receipt of notice of the
appointment of a trustee by a United States District Court to
administer any Pension Plan subject to Title IV of ERISA;
71
(c) the Company's or any Subsidiary's receipt of notice of the
commencement by the PBGC of any proceeding to terminate any Pension
Plan subject to Title IV of ERISA;
(d) the failure of a Company or any Subsidiary to make any
payment in respect of any Pension Plan required under Section 412 of
the Internal Revenue Code;
(e) the withdrawal of a Company or any Subsidiary from any
Multiemployer Plan if the Company reasonably believes that such
withdrawal would give rise to the imposition of withdrawal liability
with respect thereto; or
(f) the occurrence of a "reportable event" which is required
to be reported by a Company under Section 4043 of ERISA or a
"prohibited transaction" as defined in Section 406 of ERISA or Section
4975 of the Internal Revenue Code which in either case is likely to
have a Material Adverse Effect.
7.16 SECURITY. Take such actions as the Agent or the Majority Banks
may from time to time reasonably request to establish and maintain first
perfected security interests in and Liens on all of its Collateral, subject
only to Permitted Liens and other liens permitted under Section 8.2 hereof.
7.17 DEFENSE OF COLLATERAL. Defend the Collateral from any Liens
other than Liens permitted by Section 8.2.
7.18 USE OF PROCEEDS. Use all Advances of the Revolving Credit as
set forth in Section 2.15 hereof. Company shall not use any portion of the
proceeds of any such advances for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) in any manner which violates the provisions of
Regulation T, U or X of said Board of Governors or for any other purpose in
violation of (x) any applicable statute or regulation or (y) the terms and
conditions of this Agreement.
7.19 FUTURE SUBSIDIARIES; ADDITIONAL COLLATERAL.
(a) With respect to each Person which becomes a Significant Domestic
Subsidiary of the Company (directly or indirectly) on or after the Effective
Date, within ten (10) days of the date such Person is created, acquired or
otherwise becomes a Significant Domestic Subsidiary (whichever first occurs),
cause such Subsidiary to execute and deliver to the Agent (x) a Joinder
Agreement whereby such Domestic Subsidiary becomes obligated as a Guarantor
under the Guaranty and (y) the Domestic Security Agreement; and
(b) With respect to the share capital (or other ownership interests)
of each Person, which becomes a Significant Domestic Subsidiary subsequent to
the Effective Date, within ten (10) days of the date such Person is created,
acquired or becomes a Significant Domestic Subsidiary
72
(whichever first occurs), the Company shall execute, or cause to be executed,
and deliver to the Agent a stock pledge encumbering hereof, 100% of the share
capital held by the Company or any Subsidiary of each such Significant Domestic
Subsidiary to secure the Indebtedness of the Borrowers; and
(c) In the event any Significant Domestic Subsidiary is created,
acquired or otherwise becomes a Significant Domestic Subsidiary pursuant to
Section 7.20 hereof or a Permitted Acquisition, the Company shall, concurrently
with the consummation of such acquisition, execute and deliver, or cause to be
executed and delivered, a Joinder Agreement to the Guaranty and the Domestic
Security Agreement executed by such Subsidiaries and the Company shall pledge to
the Agent for the benefit of the Banks all of the shares issued to it by such
Subsidiary pursuant to the Company Pledge Agreement,
in each case in form satisfactory to the Agent and the Majority Banks, in their
reasonable discretion, together with such supporting documentation, including
without limitation corporate authority items, certificates and opinions of
counsel, as reasonably required by the Agent and the Majority Banks and the
Company shall take, or cause to be taken, such steps as are necessary under
applicable law to perfect the liens to be granted under this Section 7.19.
7.20 XXXXXXXXX.XXX ACQUISITION. Within 45 days following the Effective
Date and subject to Section 7.19(c) hereof, the Company shall consummate the
Xxxxxxxxx.xxx Acquisition, substantially on the same terms and conditions as
described in the Xxxxxxxxx.xxx Acquisition Documents approved by the Agent and
the Banks on or prior to the Effective Date and otherwise on terms and
conditions satisfactory to the Agent and the Banks.
7.21 FURTHER ASSURANCES. Execute and deliver or cause to be executed
and delivered to Agent within a reasonable time following Agent's request, and
at the Company' expense, such other documents or instruments as Agent may
reasonably require to effectuate more fully the purposes of this Agreement or
the other Loan Documents.
7.22 YEAR 2000. Each of the Loan Parties has reviewed the areas in
their business and operations which could be adversely affected by, and have
developed a program to address on a timely basis the risk that computer
applications used by the Loan Parties may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999. Any reprogramming required to permit the proper
functioning, in and following the year 2000 to the extent the same is reasonably
likely to result in a Material Adverse Effect, of (i) any such Loan Party's
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which such Loan Party's systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, has been completed. The cost to the Loan Parties of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Loan Parties (including, without limitation, reprogramming errors
and the failure of others' systems or equipment) has not and will not result in
a Default or a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the
73
Loan Parties are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit the Loan
Parties to conduct their business without Material Adverse Effect.
7.23 LESSORS ACKNOWLEDGMENTS. The Company shall use its best efforts to
deliver, or cause to be delivered, to the Agent within sixty (60) days following
the Effective Date, lessors's acknowledgments and consents covering such leased
property listed on Schedule 7.23 hereof as may be requested by the Agent and the
Majority Banks, in each case in form and substance reasonably satisfactory to
the Agent and the Majority Banks.
8. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, until the Revolving Credit
Maturity Date and thereafter until expiration of all Letters of Credit and final
payment in full of the Indebtedness and the performance by Borrowers of all
their other obligations under this Agreement and the other Loan Documents, it
will not, and it will not permit any of its Subsidiaries, to:
8.1 LIMITATION ON DEBT. Create, incur, assume or suffer to exist
any Debt, except:
(a) Indebtedness under this Agreement and the other Loan
Documents;
(b) any Debt, other than pursuant to this Agreement, existing
on the Effective Date and set forth in Schedule 8.1(b) attached hereto
and any renewals or refinancing of such Debt in amounts not exceeding
the scheduled amounts (less any required amortization according to the
terms thereof), on substantially the same terms and otherwise in
compliance with this Agreement;
(c) Debt of the Borrowers or any other Subsidiary, excluding
Debt otherwise permitted under this Section 8.1, incurred to finance
the acquisition of fixed or capital assets (whether pursuant to a loan
or a Capitalized Lease) in an aggregate amount not exceeding $2,000,000
at any time outstanding, and any renewals or refinancing of such Debt
in amounts not exceeding the scheduled amounts (less any required
amortization according to the terms thereof), on substantially the same
terms as in effect on the Effective Date and otherwise in compliance
with this Agreement;
(d) Subordinated Debt;
(e) Debt under any Hedging Transactions;
(f) current unsecured trade, utility or nonextraordinary
accounts payable (including without limitation, operating leases and
short term Debt owed to vendors) arising in the ordinary course of such
Borrower's or such Subsidiary's businesses;
74
(g) Debt in respect of taxes, assessments or governmental
charges to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 7.12;
(h) Debt arising from judgments or decrees in circumstances
not constituting an Event of Default under Section 9.2;
(i) Intercompany Loans, but only to the extent permitted under
the other applicable terms and limitations of this Agreement, including
but not limited to Section 8.8 hereof;
(j) Debt assumed pursuant to a Permitted Acquisition, provided
that such Debt was not entered into, extended or renewed in
contemplation of such acquisition (including Debt secured by Liens
permitted by Section 8.2(c)), provided that the aggregate amount of all
such Debt shall not exceed $2,000,000;
(k) additional unsecured Debt not exceeding $5,000,000 in
aggregate principal amount at any one time outstanding.
8.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Permitted Liens;
(b) Liens securing Debt permitted by Section 8.1(c) incurred
to finance the acquisition of fixed or capital assets, provided that
(i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Debt, (iii) the amount of Debt secured thereby is not increased and
(iv) the principal amount of Debt secured by any such Lien shall at no
time exceed 100% of the original purchase price of such property;
(c) any Lien securing Debt assumed pursuant to a Permitted
Acquisition, provided that such Lien is limited to the property so
acquired, and was not entered into, extended or renewed in
contemplation of such acquisition;
(d) Liens in favor of Agent, for the benefit of the Banks, as
security for the Indebtedness (including any Indebtedness under any
Interest Rate Protection Agreements);
(e) attachments, judgments and other similar Liens (other than
any judgment that is described in clause (i) of Section 9.1 and
constitutes an Event of Default thereunder), arising in connection with
court proceedings, provided that the execution or other
75
enforcement of such Liens is effectively stayed and claims secured
thereby are being actively contested in good faith by appropriate
proceedings; and
(f) other Liens, existing on the Effective Date, set forth on
Schedule 8.2.
8.3 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except, (a) the Guaranty, (b) Guarantee
Obligations by Company or any Guarantor in respect of Funded Debt incurred by
Company or any other Guarantor, as the case may be, in compliance with this
Agreement; and (c) Guarantee Obligations in respect of Debt incurred by any
Person, provided that the aggregate principal amount of such Debt at any time
outstanding does not exceed $1,000,000.
8.4 ACQUISITIONS. Except pursuant to Section 7.20 hereof and except for
Permitted Acquisitions, purchase or otherwise acquire or become obligated for
the purchase of all or substantially all or any material portion of the assets
or business interests of any Person, firm or corporation, or any shares of stock
(or other ownership interests) of any corporation, trusteeship or association,
or any business or going concern, or in any other manner effectuate or attempt
to effectuate an expansion of present business by acquisition.
8.5 LIMITATION ON MERGERS, OTHER FUNDAMENTAL CHANGES OR SALE OF ASSETS.
Enter into any merger or consolidation or convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired or make any material change in its capital structure or
present method of conducting business, except:
(a) inventory leased or sold in the ordinary course of
business;
(b) obsolete or worn out property, property no longer useful
in the conduct of a Company's or any Subsidiary's business;
(c) (i) mergers or consolidations in connection with a
Permitted Acquisition and (ii) mergers or consolidations of a wholly
owned Subsidiary with or into any Guarantor (so long as such Guarantor
shall be the continuing or surviving entity); provided that at the time
of each such merger or consolidation, both before and after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing;
(d) sales or transfers (other than sales or transfers of stock
or other ownership interests) between Company or any Guarantor or
between any Guarantors;
(e) any sale and leaseback arrangement to the extent permitted
under Section 8.10 hereof;
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(f) subject to Section 2.13(b) hereof (and provided that no
Default or Event of Default has occurred and is continuing at the time
of each such sale), Asset Sales in which the sales price is at least
the fair market value of the assets sold and the aggregate amount of
such Asset Sales is less than $1,000,000 in any fiscal year, and other
Asset Sales approved by the Majority Banks;
(g) corporate restructuring / "Roll-Up", in a manner
consistent with the terms of this Agreement and otherwise on terms
satisfactory to the Agent and the Majority Banks in their reasonable
discretion; and
(h) the exercise by Xxxxxx Associates, Inc. of its rights to
"put" its interests (or the right of the former shareholders to
purchase the interest of Xxxxxx Associates, Inc.), in the building and
improvements owned by it in Cincinnati, Ohio to its former
shareholders.
8.6 RESTRICTED PAYMENTS. Declare or make, or permit any Subsidiary to,
declare or make any distributions, dividend, payment or other distribution of
assets, properties, cash, rights, obligations or securities (collectively,
"Distributions") on account of any membership interests or any shares of any
class of its capital stock, as applicable, or issue, purchase, redeem or
otherwise acquire for value any membership interests or any shares of its
capital stock, as applicable, or any warrants, rights or options to acquire such
shares or membership interests, now or hereafter outstanding; except that
(a) the Company's Subsidiaries may make Distributions to the
Company; and
(b) the Company may declare and pay dividends payable solely
in its capital stock; and
(c) payments in cash on or after May 1, 2001 pursuant to the
redemption by holders of certain convertible preferred stock of those
shares, as permitted under the Xxxxxxxxx.xxx Acquisition Documents, but
only so long as no Default or Event of Default has occurred and is
continuing (both before and after giving effect thereto) and so long as
no more than $5,000,000 in Advances under this Agreement shall be used
to fund such payments.
8.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for:
(a) the Xxxxxxxxx.xxx Acquisition permitted pursuant to
Section 7.20 hereof, and Permitted Acquisitions permitted by Sections
8.4 and 8.5 hereof, to the extent assets are acquired as the result of
expenditures which constitute Capital Expenditures; and
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(b) Capital Expenditures, the amount of which shall not exceed
(i) $30,000,000 in fiscal year 2000, and (ii) $20,000,000 in any fiscal
year thereafter.
8.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any Investment,
or purchase any assets constituting a business unit of, or make any other
investment in, any Person, except:
(a) Permitted Investments;
(b) Investments existing on the Effective Date and listed on
Schedule 8.8 hereof;
(c) extensions of trade credit in the ordinary course of
business;
(d) loans and advances to officers and employees of the
Company or any Subsidiary in the ordinary course of business in an
aggregate amount, not to exceed $1,000,000 at any one time outstanding;
(e) Intercompany Loans, Advances or Investments made on or
after the Effective Date to the Company, or by the Company to any
Guarantor or by any Guarantor to the Company or any other Guarantor
(provided that any Intercompany Loan hereunder shall be evidenced by
and funded under an Intercompany Note which Intercompany Note shall be
pledged to the Agent for the benefit of the Banks pursuant to the
Domestic Security Agreement), provided that at the time any such loan,
advance or investment is made (before and after giving effect thereto)
no Event of Default has occurred and is continuing;
(f) loans and advances by the Company to Xxxxxxxxx.xxx (x)
existing on the Effective Date, in the aggregate outstanding amount of
$15,000,000 to Xxxxxxxxx.xxx and (y) after the Effective Date, until
the consummation of the Xxxxxxxxx.xxx Acquisition additional loans and
advances in an aggregate amount not to exceed $5,000,000 at any one
time outstanding [it being understood that following the consummation
of the Xxxxxxxxx.xxx Acquisition in accordance with Section 7.20
hereof, the survivor of the Xxxxxxxxx.xxx Acquisition shall be a
Guarantor subject to clause (e) hereof]; provided however that any such
loans and advances shall be evidenced by and funded under an
Intercompany Note which Intercompany Note shall be pledged to the Agent
for the benefit of the Banks pursuant to the Domestic Security
Agreement;
(g) Intercompany Loans and Advances by the Company (directly
or through a Guarantor) to the Canadian Permitted Borrower in an
aggregate amount not to exceed $5,000,000 at any one time outstanding;
provided, however that if any such loans and advances shall be
evidenced by and funded under an Intercompany Note such Intercompany
Note shall be pledged to the Agent for the benefit of the Banks
pursuant to the Domestic Security Agreement;
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(h) Intercompany Loans and Advances by the Company (directly
or through a Guarantor) to the Company's Foreign Subsidiaries in an
aggregate amount not to exceed $5,000,000 at any one time outstanding;
provided however that any such loans and advances shall be evidenced by
and funded under an Intercompany Note such Intercompany Note shall be
pledged to the Agent for the benefit of the Banks pursuant to the
Domestic Pledge Agreement;
(i) Investments in respect of Hedging Transactions;
(j) Permitted Acquisitions permitted pursuant to Section 8.4;
and.
(k) other investments in any Person in an amount not to exceed
$2,000,000 at any one time outstanding.
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.8 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
8.9 TRANSACTIONS WITH AFFILIATES. Except as set forth in Schedule 8.9
and subject to the provisions of Section 8.15 hereof, enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate of a
Company or any Subsidiary except (i) the transactions otherwise permitted under
this Agreement; (b) transactions in the ordinary course of a Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than it would obtain in a comparable arms length
transaction from unrelated third parties; and (c) transactions between or among
Company and any Guarantors not involving any other Affiliates.
8.10 SALE AND LEASEBACK. Enter into any arrangement with any Person
providing for the leasing by the Company or any Subsidiary of real or personal
property which has been or is to be sold or transferred by the Company or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of a Company or such Subsidiary, as the case may be.
8.11 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into any agreement,
document or instrument which would restrict or prevent Company and its
Subsidiaries from granting Agent on behalf of Banks liens upon, security
interests in and pledges of their respective assets which are senior in priority
to all other Liens, except for Permitted Liens and any other agreements,
documents or instruments pursuant to which Liens not prohibited by the terms of
this Agreement are created, entered into, or allowed to exist.
8.12 PREPAYMENT OF DEBTS. Prepay, purchase, redeem or defease any Debt
for money borrowed (including without limitation any Subordinated Debt) or any
Capital Lease, other than
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pursuant to the current terms thereof, excluding, subject to the terms hereof,
(i) prepayments of the Indebtedness; and (ii) regularly scheduled payments of
principal and interest on any Subordinated Debt, subject to the blockage and
other provisions contained in any applicable subordination agreement;
8.13 AMENDMENT OF SUBORDINATED DEBT DOCUMENTS. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) any of the
material terms and conditions of those documents or instruments evidencing or
otherwise related to any Debt set forth on Schedule 8.1, any Subordinated Debt,
or waive (or permit to be waived) any provision thereof in any material respect,
without the prior written approval of Agent and the Majority Banks; for purposes
of those documents or instruments evidencing or otherwise related to such Debt,
any increase in the original interest rate or principal amount, any shortening
of the original amortization, any change in financial covenants, any change in
any default, remedial or other repayment terms and any change in or waiver of
conditions contained therein which are required under or necessary for
compliance with this Agreement or the other Loan Documents shall (without
reducing the scope of this Section 8.13) be deemed to be material.
8.14 MODIFICATION OF CERTAIN AGREEMENTS. Make, permit or consent to any
amendment or other modification to the constitutional documents of any of the
Loan Parties, the Xxxxxxxxx.xxx Acquisition Documents or any other acquisition
documents delivered in connection with Permitted Acquisitions, except to the
extent that any such amendment (i) does not violate the terms and conditions of
this Agreement or any of the other Loan Documents, (ii) does not materially
adversely affect the interest of the Banks as creditor under this Agreement or,
the other Loan Documents and (iii) could not reasonably be expected to have a
Material Adverse Effect.
9. DEFAULTS
9.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal of any Advance
or interest thereon in accordance with the terms hereof, (ii) any
Reimbursement Obligation, or (iii) any Fees, and in the case of
interest payments and Fees, continuance thereof for three (3) Business
Days;
(b) non-payment of any money by any Borrower under this
Agreement or by any Loan Party under any of the other Loan Documents to
which it is a party, other than as set forth in subsection (a), above
within five (5) Business Days after notice from Agent that the same is
due and payable;
(c) default in the observance or performance of any of the
conditions, covenants or agreements of any Borrower set forth in
Sections 7.1, 7.2(a), 7.2(c), 7.4(a), 7.5, 7.6, 7.7, 7.9A through 7.11,
7.18, 7.19(c) or 8 (in its entirety);
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(d) default in the observance or performance of any of the
other conditions, covenants or agreements set forth in this Agreement
by the Borrowers and continuance thereof for a period of thirty (30)
consecutive days after written notice from Agent;
(e) any representation or warranty made by the Borrowers or
any Subsidiary to the Agent and the Banks herein or in any certificate,
document or financial or other written statement furnished by it at any
time under or in connection with this Agreement or any other Loan
Document proves untrue or misleading in any material adverse respect on
or as of the date when made or deemed made;
(f) default in the observance or performance of or failure to
comply with any of the conditions, covenants or agreements of the
Borrowers or any Subsidiary set forth in any of the other Loan
Documents, and the continuance thereof beyond any period of grace or
cure specified in any such document or, in the case of the Collateral
Documents, continuance thereof for a period of thirty (30) days after
written notice from Agent;
(g) default (i) by any Borrower or any Subsidiary in the
payment of any indebtedness for borrowed money (other than Indebtedness
hereunder, but including without limitation any Subordinated Debt)
having an aggregate principal balance in excess of One Million Dollars
($1,000,000) (or the equivalent thereof in any currency other than
Dollars) individually or in the aggregate when due (whether by
acceleration or otherwise) and continuance thereof beyond any
applicable period of cure or (ii) failure to comply with the terms of
any other obligation of any Borrower or any Domestic Subsidiary with
respect to any indebtedness for borrowed money (other than Indebtedness
hereunder) having an aggregate principal balance in excess of One
Million Dollars ($1,000,000) (or the equivalent thereof in any currency
other than Dollars) individually or in the aggregate, which continues
beyond any applicable period of cure and which would permit the holder
or holders thereto to accelerate such other indebtedness for borrowed
money or (iii) failure to comply with the terms of any other obligation
of any foreign Subsidiary with respect to any indebtedness for borrowed
money (other than Indebtedness hereunder) in excess of $1,000,000
individually or in the aggregate, which continues beyond any applicable
period of cure, if by reason of such default the holder or holders
thereof have accelerated such other indebtedness for borrowed money;
except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the
books of such Subsidiary, as the case may be;
(h) the rendering of any judgment(s) for the payment of money
in excess of the sum of One Million Dollars ($1,000,000) (or the
equivalent thereof in any currency other than Dollars) individually or
in the aggregate against any Borrower or any Subsidiary, and such
judgments shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) consecutive days,
except as covered by adequate
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insurance with a reputable carrier and an action is pending in which an
active defense is being made with respect thereto;
(i) the occurrence of a "reportable event", as defined in
ERISA (or, with respect to any Canadian Pension Plan, any comparable
event under Canadian pension laws), which is determined to constitute
grounds for a distress termination by the PBGC of any Pension Plan
subject to Title IV of ERISA (or Canadian pension law, if applicable)
maintained or contributed to by or on behalf of a Borrower or any of
its Subsidiaries for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a
trustee to administer such Pension Plan and such reportable event is
not corrected and such determination is not revoked within sixty (60)
days after notice thereof has been given to the plan administrator of
such Pension Plan (without limiting any of Agent's or any Bank's other
rights or remedies hereunder), or the institution of proceedings by the
PBGC to terminate any such Pension Plan or to appoint a trustee by the
appropriate United States District Court to administer any such Pension
Plan, which in either case could reasonably be expected to have a
Material Adverse Effect (or, with respect to any Canadian Pension Plan,
the institution of any comparable proceedings under Canadian pension
laws);
(j) a Borrower or any Subsidiary shall be dissolved or
liquidated (or any judgment, order or decree therefor shall be entered)
or; if a creditors' committee shall have been appointed for the
business of a Borrower or any Subsidiary; or if a Borrower or any
Subsidiary shall have made a general assignment for the benefit of
creditors or shall have been adjudicated bankrupt and if not an
adjudication based on a filing by the Company or such Subsidiaries it
shall not have been dismissed within sixty (60) days, or shall have
filed a voluntary petition in bankruptcy or for reorganization or to
effect a plan or arrangement with creditors or shall fail to pay its
debts generally as such debts become due in the ordinary course of
business (except as contested in good faith and for which adequate
reserves are made); or shall file an answer to a creditor's petition or
other petition filed against it, admitting the material allegations
thereof for an adjudication in bankruptcy or for reorganization; or
shall have applied for or permitted the appointment of a receiver or
trustee or custodian for any of its property or assets; or such
receiver, trustee or custodian shall have been appointed for any of its
property or assets (otherwise than upon application or consent of a
Borrower or any of its Subsidiaries) and shall not have been removed
within sixty (60) days; or if an order shall be entered approving any
petition for reorganization of a Borrower or any Subsidiary and shall
not have been reversed or dismissed within sixty (60) days; or a
Borrower or any Subsidiary shall take any action (corporate or other)
authorizing or in furtherance any of the actions described above in
this subsection;
(k) a Change of Control shall occur;
(l) any material provision of any Collateral Document shall at
any time for any reason cease to be valid, binding and enforceable
against any Loan Party which is a party thereto, as applicable, or the
validity, binding effect or enforceability thereof shall be
82
contested by any Loan Party or any Loan Party shall deny that it has
any or further liability or obligation under any Collateral Document,
or any such Loan Document shall be terminated, invalidated, revoked or
set aside or in any way cease to give or provide to the Banks and the
Agent the benefits purported to be created thereby (except, in each
instance, to the extent the Indebtedness has been paid in full and the
Commitment has been terminated).
9.2 EXERCISE OF REMEDIES. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent may, and shall, upon being directed to do so
by the Majority Banks, declare the Commitments terminated; (b) the Agent may,
and shall, upon being directed to do so by the Majority Banks, declare the
entire unpaid principal Indebtedness, immediately due and payable, without
presentment, notice or demand, all of which are hereby expressly waived by
Borrowers; (c) upon the occurrence of any Event of Default specified in
subsection 9.1(j), above, and notwithstanding the lack of any declaration by
Agent under preceding clause (b), the entire unpaid principal Indebtedness shall
become automatically and immediately due and payable, and the Commitments shall
be automatically and immediately terminated; (d) the Agent shall, upon being
directed to do so by the Majority Banks, demand immediate delivery of cash
collateral, and Company and each Account Party agrees 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, and (e) the Agent may, and shall, if directed to do so by the
Majority Banks or the Banks, as applicable (subject to the terms hereof),
exercise any remedy permitted by this Agreement, the other Loan Documents or
law.
9.3 RIGHTS CUMULATIVE. No delay or failure of Agent and/or 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, or the exercise of any other power, right or
privilege. The rights of Agent and Banks under this Agreement are cumulative and
not exclusive of any right or remedies which Banks would otherwise have.
9.4 WAIVER BY BORROWERS OF CERTAIN LAWS. To the extent permitted by
applicable law, each of the Borrowers hereby agrees to waive, and does hereby
absolutely and irrevocably waive and relinquish the benefit and advantage of any
valuation, stay, appraisement, extension or redemption laws now existing or
which may hereafter exist, which, but for this provision, might be applicable to
any sale made under the judgment, order or decree of any court, on any claim for
interest on the Notes, or any security interest or mortgage contemplated by or
granted under or in connection with this Agreement. These waivers have been
voluntarily given, with full knowledge of the consequences thereof.
9.5 WAIVER OF DEFAULTS. No Event of Default shall be waived by the
Banks except in a writing signed by an officer of the Agent in accordance with
Section 13.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude other
or further exercise of their rights by Agent or the Banks. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent
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or the Banks in enforcing any of their rights shall constitute a waiver of any
of their rights. Each of the Borrowers expressly agree that this Section may not
be waived or modified by the Banks or Agent by course of performance, estoppel
or otherwise.
9.6 SET OFF. Upon the occurrence and during the continuance of any
Event of Default, each Bank may at any time and from time to time, without
notice to the applicable Borrower but subject to the provisions of Section 10.3
hereof, (any requirement for such notice being expressly waived by the
Borrowers) set off and apply against any and all of the obligations of such
Borrower and only of such Borrower, now or hereafter existing under this
Agreement or the other Loan Documents, whether owing to such Bank, any Affiliate
of such Bank or any other Bank or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of such Borrower, irrespective of whether or not such deposits held or
indebtedness owing by such Bank may be contingent and unmatured and regardless
of whether any Collateral then held by Agent or any Bank is adequate to cover
the Indebtedness. Promptly following any such setoff, such Bank shall give
written notice to Agent and to the applicable Borrowers of the occurrence
thereof. Each of the Borrowers hereby grants to the Banks and the Agent a lien
on and security interest in all such deposits, indebtedness and property as
collateral security for the payment and performance of all of the obligations of
the Borrowers under this Agreement. The rights of each Bank under this Section
9.6 are in addition to the other rights and remedies (including, without
limitation, other rights of setoff) which such Bank may have.
10. PAYMENTS, RECOVERIES AND COLLECTIONS
10.1 PAYMENT PROCEDURE.
(a) All payments by the Loan Parties in respect of principal
of, or interest on, any Advance in Dollars or in respect of any Letter
of Credit Obligations or Fees which are payable in Dollars shall be
made without setoff or counterclaim on the date specified for payment
under this Agreement not later than noon (Detroit time) (except in the
case of the termination of the commitments and the payment in full of
all Indebtedness, then 2:00 p.m. (Detroit time)) in Dollars in
immediately available funds to Agent, for the ratable account of the
Banks, at Agent's office located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000. Payments made by the Borrowers in respect of
principal of, or interest on, any Advance in any Alternative Currency
shall be made in such Alternative Currency in immediately available
funds for the account of Agent's Eurocurrency Lending Office, at the
Agent's Correspondent, for the ratable account of the Banks, not later
than noon (the local time of Agent's Correspondent). Upon receipt of
each such payment, the Agent shall make prompt payment to each Bank,
or, in respect of Eurocurrency-based Advances, such Bank's Eurocurrency
Lending Office, in like funds and currencies, of all amounts received
by it for the account of such Bank.
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(b) Unless the Agent shall have been notified by the Company
prior to the date on which any payment to be made by any Loan Party
under any Loan Document is due that the applicable Loan Party does not
intend to remit such payment, the Agent may, in its sole discretion and
without obligation to do so, assume that such Loan Party has remitted
such payment 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 Loan Party
has not in fact remitted such payment to the Agent each Bank shall
forthwith on demand repay to the Agent the amount of such assumed
payment made available or transferred 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 per annum equal to (i) for
Prime-based Advances, the Federal Funds Effective Rate (daily average),
as the same may vary from time to time, and (ii) with respect to
Eurocurrency-based Advances or Quoted Rate Advances, Agent's aggregate
marginal cost (including the cost of maintaining any required reserves
or deposit insurance and of any fees, penalties, overdraft charges or
other costs or expenses incurred by Agent) of carrying such amount.
(c) Subject to the definition of Interest Period, whenever any
payment to be made hereunder shall otherwise be due on a day which is
not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in computing
interest, if any, in connection with such payment.
(d) All payments to be made by the Borrowers under this
Agreement or any of the Notes (including without limitation payments
under the Swing Line) shall be made without setoff or counterclaim, as
aforesaid, and, subject to compliance by the Banks with Section 13.13,
without deduction for or on account of any present or future
withholding or other taxes of any nature imposed by any governmental
authority or of any political subdivision thereof or any federation or
organization of which such governmental authority may at the time of
payment be a member, unless such Borrower is compelled by law to make
payment subject to such tax. In such event, such Borrower shall:
(i) pay to the Agent for Agent's own account
and/or, as the case may be, for the account
of the applicable Banks (and, in the case of
Advances of the Swing Line, pay to the
applicable Swing Line Bank which funded such
Advances) such additional amounts as may be
necessary to ensure that the Agent and/or
such Bank or Banks receive a net amount
equal to the full amount which would have
been receivable had payment not been made
subject to such tax; and
(ii) remit such tax to the relevant taxing
authorities according to applicable law, and
send to the Agent or the applicable Bank
(including the applicable Swing Line Bank)
or Banks, as the case may be, such
certificates or certified copy receipts as
the Agent or such
85
Bank or Banks shall reasonably require as
proof of the payment by such Borrower, of
any such taxes payable by such Borrower.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes,
levies, imposts, duties, charges, fees, deductions and withholdings and any
restrictions or conditions resulting in a charge together with interest (and any
taxes payable upon the amounts paid or payable pursuant to this Section 10.1)
thereon, or the payment or delivery of funds into or out of any jurisdiction
other than the United States (whether assessed against any of Borrower, Agent or
any of the Banks). The applicable Borrower shall be reimbursed by such Bank for
any payment made by the applicable Borrower under this Section 10.1 if the
applicable Bank is not in compliance with its obligations under Section 13.13.
10.2 APPLICATION OF PROCEEDS OF COLLATERAL. Notwithstanding anything to
the contrary in this Agreement, after the occurrence and during the continuance
of an Event of Default, the proceeds of any Collateral, together with any
offsets, voluntary payments by a Borrower or any other Loan Party or others and
any other sums received or collected in respect of the Indebtedness, shall be
applied, first, to the Advances and any Reimbursement Obligations on a pro rata
basis (or in such order and manner as determined by the Majority Banks; subject,
however, to the applicable Percentages of the loans held by each of the Banks),
next, to any other Indebtedness on a PRO RATA basis, and then, if there is any
excess, to the Person entitled thereto, as the case may be.
10.3 PRO-RATA RECOVERY. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise)
on account of principal of, or interest on, any of the Indebtedness in excess of
its pro rata share of payments then or thereafter obtained by all Banks upon
principal of and interest on all Indebtedness, such Bank shall purchase from the
other Banks such participations in the Revolving Credit, and/or Reimbursement
Obligation 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
Percentage with each of them; provided, however, that if all or any portion of
the excess payment or other recovery is thereafter recovered from such
purchasing holder, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
11.1 REIMBURSEMENT OF PREPAYMENT COSTS. If any payment of principal
with respect to any Eurocurrency-based Advance or Quoted Rate Advance is made on
any day other than the last day of the Interest Period applicable thereto
(whether voluntarily, by acceleration, or otherwise but subject to the
provisions of Section 2.13(e) hereof), or if a Borrower converts or refunds (or
attempts to convert or refund) any such Advance on any day other than the last
day of the Interest Period applicable thereto; or if a Borrower fails to borrow,
refund or convert into any Eurocurrency-based Advance or Quoted Rate Advance
after notice has been given by such Borrower to Agent in accordance with the
terms hereof requesting such Advance, or if a Borrower fails to make any payment
of principal or interest in respect of a Eurocurrency-based Advance or Quoted
Rate
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Advance when due, such Borrower shall reimburse Agent for itself and/or on
behalf of any Bank, as the case may be, on demand for any resulting loss, cost
or expense incurred (excluding the loss of any Applicable Margin) by Agent and
Banks, as the case may be as a result thereof, including, without limitation,
any such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Banks, as the
case may be, shall have funded or committed to fund such Advance. Such amount
payable by the such Borrower to Agent for itself and/or on behalf of any Bank,
as the case may be, may include, without limitation, an amount equal to the
excess, if any, of (a) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, refunded or converted, for the period
from the date of such prepayment or of such failure to borrow, refund or
convert, through the last day of the relevant Interest Period, at the applicable
rate of interest for said Advance(s) provided under this Agreement, over (b) the
amount of interest (as reasonably determined by Agent and Banks, as the case may
be) which would have accrued to Agent and Banks, as the case may be, on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurocurrency market. Calculation of any amounts payable
to any Bank under this paragraph shall be made as though such Bank shall have
actually funded or committed to fund the relevant Advance through the purchase
of an underlying deposit in an amount equal to the amount of such Advance and
having a maturity comparable to the relevant Interest Period; provided, however,
that any Bank may fund any Eurocurrency-based Advance or Quoted Rate Advance, as
the case may be, in any manner it deems fit and the foregoing assumptions shall
be utilized only for the purpose of the calculation of amounts payable under
this paragraph. Upon the written request of any Borrower, Agent and Banks shall
deliver to such Borrower a certificate setting forth the basis for determining
such losses, costs and expenses, which certificate shall be conclusively
presumed correct, absent manifest error.
11.2 EUROCURRENCY LENDING OFFICE. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Bank, as applicable, shall
designate a Eurocurrency Lending Office which maintains books separate from
those of the rest of Agent or such Bank, Agent or such Bank, as the case may be,
shall have the option of maintaining and carrying the relevant Advance on the
books of such Eurocurrency Lending Office.
11.3 CIRCUMSTANCES AFFECTING EUROCURRENCY-BASED RATE AVAILABILITY. If
with respect to any Interest Period, Agent or the Majority Banks (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being offered to the Agent or
such Banks for such Interest Period, then Agent shall forthwith give notice
thereof to the Company. Thereafter, until Agent notifies the Company that such
circumstances no longer exist, (i) the obligation of Banks to make
Eurocurrency-based Advances, and the right of the Company to convert an Advance
to or refund an Advance as a Eurocurrency-based Advance, as the case may be,
shall be suspended, and (ii) the Company shall repay in full (or cause to be
repaid in full) the then outstanding principal amount of each such
Eurocurrency-based Advance covered hereby, together with accrued interest
thereon, any amounts payable under Section 11.1 hereof, and all other amounts
payable hereunder on the last day of the then current Interest Period applicable
to such Advance. Upon the date for repayment as aforesaid and unless the Company
notifies Agent to the contrary within two (2)
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Business Days after receiving a notice from Agent pursuant to this Section, such
outstanding principal amount shall be converted to a Prime-based Advance as of
the last day of such Interest Period.
11.4 LAWS AFFECTING EUROCURRENCY-BASED ADVANCE AVAILABILITY. If, after
the date of this Agreement, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate, such Bank shall forthwith give notice
thereof to the Company and to Agent. Thereafter, (a) the obligations of Banks to
make Eurocurrency-based Advances and the right of the Company to convert an
Advance into or refund an Advance as a Eurocurrency-based Advance shall be
suspended and thereafter the Company may select as Applicable Interest Rates
only those which remain available and which are permitted to be selected
hereunder, and (b) if any of the Banks may not lawfully continue to maintain an
Advance to the end of the then current Interest Period applicable thereto as a
Eurocurrency-based Advance, the applicable Advance shall immediately be
converted to a Prime-based Advance and the Prime-based Rate shall be applicable
thereto for the remainder of such Interest Period. For purposes of this Section,
a change in law, rule, regulation, interpretation or administration shall
include, without limitation, any change made or which becomes effective on the
basis of a law, rule, regulation, interpretation or administration presently in
force, the effective date of which change is delayed by the terms of such law,
rule, regulation, interpretation or administration.
11.5 INCREASED COST OF EUROCURRENCY-BASED ADVANCES. If the adoption
after the date of this Agreement of, or any change after the date of this
Agreement in, any applicable law, rule or regulation of or in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Agent or any of the Banks (or any of their respective Eurocurrency
Lending Offices) with any request or directive (whether or not having the force
of law) made by any such authority, central bank or comparable agency after the
date hereof:
(a) shall subject any of the Banks (or any of their respective
Eurocurrency Lending Offices) to any tax, duty or other charge with
respect to any Advance or shall change the basis of taxation of
payments to any of the Banks (or any of their respective Eurocurrency
Lending Offices) of the principal of or interest on any Advance or any
other amounts due under this Agreement in respect thereof (except for
changes in the rate of tax on the overall net income of any of the
Banks or any of their respective Eurocurrency Lending Offices imposed
by the jurisdiction in which such Bank's principal executive office or
Eurocurrency Lending Office is located); or
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(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any of the Banks (or any of their respective Eurocurrency
Lending Offices) or shall impose on any of the Banks (or any of their
respective Eurocurrency Lending Offices) or the foreign exchange and
interbank markets any other condition affecting any Advance;
and the result of any of the foregoing is to increase the costs to any of the
Banks of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or to reduce the amount of any sum received or
receivable by any of the Banks under this Agreement in respect of a
Eurocurrency-based Advance, then such Bank shall promptly notify Agent, and
Agent (or such Bank, as aforesaid) shall promptly notify the Company of such
fact and demand compensation therefor and, within fifteen (15) days after such
notice, the Company agrees to pay to such Bank such additional amount or amounts
as will compensate such Bank or Banks for such increased cost or reduction.
Agent will promptly notify the Company of any event of which it has knowledge
which will entitle Banks to compensation pursuant to this Section, or which will
cause the Company to incur additional liability under Section 11.1 hereof,
provided that Agent shall incur no liability whatsoever to the Banks in the
event it fails to do so. A certificate of Agent (or such Bank, if applicable)
setting forth the basis for determining such additional amount or amounts
necessary to compensate such Bank or Banks shall be conclusively presumed to be
correct save for manifest error. For purposes of this Section, a change in law,
rule, regulation, interpretation, administration, request or directive shall
include, without limitation, any change made or which becomes effective on the
basis of a law, rule, regulation, interpretation, administration, request or
directive presently in force, the effective date of which change is delayed by
the terms of such law, rule, regulation, interpretation, administration, request
or directive.
11.6 CAPITAL ADEQUACY AND OTHER INCREASED COSTS. In the event that
after the Effective Date the adoption of or any change in any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank or Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank or
Agent with any guideline, request or directive of any such authority (whether or
not having the force of law), including any risk based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Bank or Agent (or any corporation controlling such Bank or
Agent) and such Bank or Agent, as the case may be, determines that the amount of
such capital is increased by or based upon the existence of such Bank's or
Agent's obligations or Advances hereunder and such increase has the effect of
reducing the rate of return on such Bank's or Agent's (or such controlling
corporation's) capital as a consequence of such obligations or Advances
hereunder to a level below that which such Bank or Agent (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank or Agent to be material (collectively, "Increased Costs"), then
Agent or such Bank shall notify the Borrowers, and thereafter the Borrowers
shall pay to such Bank or Agent, as the case may be, from time to time, upon
request by such Bank or Agent, additional amounts
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sufficient to compensate such Bank or Agent (or such controlling corporation)
for any increase in the amount of capital and reduced rate of return which such
Bank or Agent reasonably determines to be allocable to the existence of such
Bank's or Agent's obligations or Advances hereunder; notwithstanding the
forgoing, however, the Borrowers shall not be required to pay any increased
costs under Sections 11.3, 11.5 or 3.4(c) for any period ending prior to the
date that is 90 days prior to the making of a Bank's initial request for such
additional amounts unless the applicable change in law or other event resulting
in such increased costs is effective retroactively to a date more than 90 days
prior to the date of such request, in which case a Bank's request for such
additional amounts relating to the period more than 180 days prior to the making
of the request must be given not more than 90 days after such Bank becomes aware
of the applicable change in law or other event resulting in such increased
costs. A statement as to the amount of such compensation, prepared in good faith
and in reasonable detail by such Bank or Agent, as the case may be, shall be
submitted by such Bank or by Agent to the Borrowers, reasonably promptly after
becoming aware of any event described in this Section 11.6 and shall be
conclusive, absent manifest error in computation.
11.7 SUBSTITUTION OF BANKS. If (a) the obligation of any Bank to make
Eurocurrency-based Advances has been suspended pursuant to Section 11.3, 11.4 or
11.6 or (b) any Bank has demanded compensation under Section 3.4(c), 11.1 or
11.5 (in each case, an "Affected Bank"), then the Company shall have the right
(subject to Section 13.8 hereof), with the assistance of the Agent, to seek a
substitute Bank or Banks (which may be one or more of the Banks (the "Purchasing
Bank" or "Purchasing Banks")) to purchase the Advances of the Revolving Credit
and other Indebtedness payable to such Bank and assume the commitments
(including without limitation its participations in Swing Line Advances and
Letters of Credit) under this Agreement of such Affected Bank. The Affected Bank
shall be obligated to sell its Advances of the Revolving Credit and other
Indebtedness payable to such Bank and assign its commitments to such Purchasing
Bank or Purchasing Banks within fifteen days after receiving notice from Company
requiring it to do so, at an aggregate price equal to the outstanding principal
amount thereof, plus unpaid interest accrued thereon up to but excluding the
date of the sale. In connection with any such sale, and as a condition thereof,
Company shall pay to the Affected Bank all fees accrued for its account
hereunder to but excluding the date of such sale, plus, if demanded by the
Affected Bank within ten Business Days after such sale, (i) the amount of any
compensation which would be due to the Affected Bank under Section 11.1 if the
Company has prepaid the outstanding Eurocurrency-based Advances of the Affected
Bank on the date of such sale and (ii) any additional compensation accrued for
its account under Sections 3.4(c), 11.5 and 11.6 to but excluding said date.
Upon such sale, the Purchasing Bank or Purchasing Banks shall assume the
Affected Bank's commitment, and the Affected Bank shall be released from its
obligations thereafter arising hereunder to a corresponding extent. If any
Purchasing Bank is not already one of the Banks, the Affected Bank, as assignor,
such Purchasing Bank, as assignee, the Company and the Agent, shall enter into
an Assignment Agreement pursuant to Section 13.8 hereof, whereupon such
Purchasing Bank shall be a Bank party to this Agreement, shall be deemed to be
an assignee hereunder and shall have all the rights and obligations of a Bank
with a Revolving Credit Percentage equal to its ratable share of the then
applicable Revolving Credit Aggregate Commitment. In connection with any
assignment pursuant to this Section 11.7, the Company or the Purchasing
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Bank shall pay to the Agent the administrative fee for processing such
assignment referred to in Section 13.8.
11.8 RIGHT OF BANKS TO FUND THROUGH BRANCHES AND AFFILIATES. Each Bank
(including without limitation the Swing Line Bank) may, if it so elects, fulfill
its commitment as to any Advance hereunder by designating a branch or Affiliate
of such Bank to make such Advance; PROVIDED that (a) such Bank shall remain
solely responsible for the performances of its obligations hereunder and (b) no
such designation shall result in any material increased costs to the Company or
any other Loan Party. Comerica Bank in its capacity as a Bank and as a Swing
Line Bank hereto designates its Canadian Affiliate to make Advances hereunder in
Canadian Dollars.
12. AGENT
12.1 APPOINTMENT OF AGENT. Each Bank and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or
holder under this Agreement and the other Loan Documents and to exercise such
powers hereunder and thereunder as are specifically delegated to Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto, including without limitation the power to execute or
authorize the execution of financing or similar statements or notices, and other
documents. In performing its functions and duties under this Agreement, the
Agent shall act solely as agent of the Banks and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for the Borrowers. Each Bank agrees (which agreement shall survive
any termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees and
disbursements) incurred by Agent hereunder or in connection herewith or with an
Event of Default or in enforcing the obligations of the Loan Parties under this
Agreement or the other Loan Documents or any other instrument executed pursuant
hereto, and for which Agent is not reimbursed by the Loan Parties, pro rata
according to such Bank's Percentage, but excluding any such expense resulting
from Agent's gross negligence or wilful misconduct. Agent shall not be required
to take any action under the Loan Documents, or to prosecute or defend any suit
in respect of the Loan Documents, unless indemnified to its satisfaction by the
Banks against loss, costs, liability and expense (excluding liability resulting
from its gross negligence or wilful misconduct). If any indemnity furnished to
Agent shall become impaired, it may call for additional indemnity and cease to
do the acts indemnified against until such additional indemnity is given.
12.2 DEPOSIT ACCOUNT WITH AGENT. Each of the Borrowers hereby
authorize Agent, in Agent's sole discretion, upon notice to such Borrower to
charge its general deposit account(s), if any, maintained with Agent for the
amount of any principal, interest, or other amounts or costs due under this
Agreement when the same become due and payable under the terms of this Agreement
or the Notes.
12.3 SCOPE OF AGENT'S DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations in respect of any
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Bank shall be read into this Agreement against the Agent). None of Agent, its
Affiliates nor any of their respective directors, officers, employees or agents
shall be liable to any Bank for any action taken or omitted to be taken by it or
them under this Agreement or any document executed pursuant hereto, or in
connection herewith or therewith with the consent or at the request of the
Majority Banks (or all of the Banks for those acts requiring consent of all of
the Banks) (except for its or their own wilful misconduct or gross negligence),
nor be responsible for or have any duties to ascertain, inquire into or verify
(a) any recitals or warranties made by the Borrowers, or any Subsidiary or
Affiliate of the Borrowers, or any officer thereof contained herein or therein,
(b) the effectiveness, enforceability, validity or due execution of this
Agreement or any document executed pursuant hereto or any security thereunder,
(c) the performance by Borrowers of their respective obligations hereunder or
thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation the making of any Advance or the issuance of any
Letter of Credit. Agent and its Affiliates shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegraph, telex, facsimile transmission or oral communication) reasonably
believed by it to be genuine and correct and to have been sent or given by or on
behalf of a proper person. Agent may treat the payee of any Note as the holder
thereof. Agent may employ agents and may consult with legal counsel (who may be
counsel for a Borrower), independent public accountants and other experts
selected by it and shall not be liable to the Banks (except as to money or
property received by them or their authorized agents), for the negligence or
misconduct of any such agent selected by it with reasonable care or for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
12.4 SUCCESSOR AGENT. Agent may resign as such at any time upon at
least 30 days prior notice to Company and all Banks. If Agent at any time shall
resign or if the office of Agent shall become vacant for any other reason,
Majority Banks shall, by written instrument, appoint successor agent(s)
satisfactory to such Majority Banks, and, so long as no Event of Default has
occurred and is continuing, to Company. Such successor agent shall thereupon
become the Agent hereunder, as applicable, and shall be entitled to receive from
the prior Agent such documents of transfer and assignment as such successor
Agent may reasonably request. Any such successor Agent shall be a commercial
bank organized under the laws of the United States or any state thereof and
shall have a combined capital and surplus of at least $500,000,000. If a
successor is not so appointed or does not accept such appointment before the
resigning Agent's resignation becomes effective, the resigning Agent may appoint
a temporary successor to act until such appointment by the Majority Banks is
made and accepted or if no such temporary successor is appointed as provided
above by the resigning Agent, the Majority Banks shall thereafter perform all of
the duties of the resigning Agent hereunder until such appointment by the
Majority Banks is made and accepted. Such successor Agent shall succeed to all
of the rights and obligations of the resigning Agent as if originally named. The
resigning Agent shall duly assign, transfer and deliver to such successor Agent
all moneys at the time held by the resigning Agent hereunder after deducting
therefrom its expenses for which it is entitled to be reimbursed. Upon such
succession of any such successor Agent, the resigning Agent shall be discharged
from its duties and obligations, in its capacity as Agent, thereafter arising
hereunder, and the provisions of this Article 12 shall continue in effect for
the benefit of the
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resigning Agent in respect of any actions taken or omitted to be taken by it
while it was acting as Agent.
12.5 AGENT IN ITS INDIVIDUAL CAPACITY. Comerica Bank, its Affiliates
and their respective successors and assigns, shall have the same rights and
powers hereunder as any other Bank and may exercise or refrain from exercising
the same as though Comerica Bank were not the Agent. Comerica Bank and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrowers (or their Subsidiaries)
as if Comerica Bank were not acting as Agent hereunder, and may accept fees and
other consideration therefor without having to account for the same to the
Banks.
12.6 CREDIT DECISIONS. Each Bank acknowledges that it has,
independently of Agent and each other Bank and based on the financial statements
of the Borrowers 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.
12.7 AUTHORITY OF AGENT TO ENFORCE 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 any Indebtedness
outstanding under this Agreement or any other Loan Document and to file such
proofs of debt or other documents as may be necessary to have the claims of the
Banks allowed in any proceeding relative to the Loan Parties, or their
respective creditors or affecting their respective properties, and to take such
other actions which Agent considers to be necessary or desirable for the
protection, collection and enforcement of the Notes, this Agreement or the other
Loan Documents.
12.8 INDEMNIFICATION OF AGENT. The Banks agree to indemnify the Agent
and its Affiliates (to the extent not reimbursed by the Loan Parties, but
without limiting any obligation of the Loan Parties to make such reimbursement),
ratably according to their respective Percentages, from and against any and all
claims, damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever (including, without limitation, fees and disbursements of counsel)
which may be imposed on, incurred by, or asserted against the Agent and its
Affiliates in any way relating to or arising out of this Agreement, any of the
other Loan Documents or the transactions contemplated hereby or any action taken
or omitted by the Agent and its Affiliates under this Agreement or any of the
Loan Documents; provided, however, that no Bank shall be liable for any portion
of such claims, damages, losses, liabilities, costs or expenses resulting from
the Agent's or its Affiliates's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent and its
Affiliates promptly upon demand for its ratable share of any out-of-pocket
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Agent
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and its Affiliates in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Loan
Documents, to the extent that the Agent and its Affiliates is not reimbursed for
such expenses by the Loan Parties, but without limiting the obligation of the
Loan Parties to make such reimbursement. Each Bank agrees to reimburse the Agent
and its Affiliates promptly upon demand for its ratable share of any amounts
owing to the Agent and its Affiliates by the Banks pursuant to this Section,
provided that, if the Agent or its Affiliates is subsequently reimbursed by the
Loan Parties for such amounts, it shall refund to the Banks on a pro rata basis
the amount of any excess reimbursement. If the indemnity furnished to the Agent
and its Affiliates under this Section shall, in the judgment of the Agent, be
insufficient or become impaired, the Agent may call for additional indemnity
from the Banks and cease, or not commence, to take any action until such
additional indemnity is furnished.
12.9 KNOWLEDGE OF DEFAULT. It is expressly understood and agreed that
the Agent shall be entitled to assume that no Event of Default has occurred and
is continuing, unless the officers of the Agent immediately responsible for
matters concerning this Agreement shall have been notified in a writing
specifying such Event of Default and stating that such notice is a "notice of
default" by a Bank or by a Borrower. Upon receiving such a notice, the Agent
shall promptly notify each Bank of such Event of Default and provide each Bank
with a copy of such notice and, shall endeavor to provide such notice to the
Banks within three (3) Business Days (but without any liability whatsoever in
the event of its failure to do so). Agent shall also furnish the Banks, promptly
upon receipt, with copies of all other notices or other information required to
be provided by the Company hereunder.
12.10 AGENT'S AUTHORIZATION; ACTION BY BANKS. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make any
request, or to take any other action on behalf of the Banks (including without
limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder) may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice, or (ii) pursuant to the written consent of the
requisite Percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
12.11 ENFORCEMENT ACTIONS BY THE AGENT. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct; provided, however, that the Agent shall not be required to act or omit
to act if, in the
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judgment of the Agent, such action or omission may expose the Agent to personal
liability or is contrary to this Agreement, any of the Loan Documents or
applicable law. Except as expressly provided above or elsewhere in this
Agreement or the other Loan Documents, no Bank (other than the Agent, acting in
its capacity as agent) shall be entitled to take any enforcement action of any
kind under any of the Loan Documents.
12.12 SYNDICATION AGENT. The Bank identified on the facing page of this
Agreement as Syndication Agent shall not have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, the Bank so
identified as Syndication Agent shall not have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on the Bank so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
12.13 COLLATERAL MATTERS.
(a) The Agent is authorized by and on behalf of all the Banks,
without the necessity of any notice to or further consent from the Banks, from
time to time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain a perfected security
interest in and Liens upon the Collateral granted pursuant to the Loan
Documents.
(b) The Banks irrevocably authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Revolving Credit Aggregate Commitment
and payment in full of all Indebtedness payable under this Agreement and under
any other Loan Document; (ii) constituting property sold or to be sold or
disposed of as part of or in connection with any disposition expressly permitted
hereunder; (iii) constituting property in which a Loan Party owned no interest
at the time the Lien was granted or at any time thereafter; or (iv) if approved,
authorized or ratified in writing by the Majority Banks, or all the Banks, as
the case may be, as provided in Section 13.11. Upon request by the Agent at any
time, the Banks will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this Section 12.13(b).
13. MISCELLANEOUS
13.1 ACCOUNTING PRINCIPLES. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder, subject to year-end audit adjustments thereto and the
omission of footnote disclosure in the case of unaudited statements, shall be
prepared in accordance with GAAP.
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13.2 CONSENT TO JURISDICTION. The Borrowers, Agent and Banks hereby
irrevocably submit to the non-exclusive jurisdiction of any United States
Federal Court sitting in Detroit, Michigan or Chicago, Illinois or any Michigan
state court sitting in Detroit, Michigan or any Illinois State court sitting in
Chicago, Illinois in any action or proceeding arising out of or relating to this
Agreement or any of the Loan Documents and the Borrowers, Agent and Banks hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in any such United States Federal Court , Michigan state
court or Illinois state court. Each of the Borrowers irrevocably consent to the
service of any and all process in any such action or proceeding brought in any
court in or of the State of Michigan and the state of Illinois by the delivery
of copies of such process to such Borrower at its address specified on the
signature page hereto or by certified mail directed to such address or such
other address as may be designated by such Borrower in a notice to the other
parties that complies as to delivery with the terms of Section 13.6. Nothing in
this Section shall affect the right of the Banks and the Agent to serve process
in any other manner permitted by law or limit the right of the Banks or the
Agent (or any of them) to bring any such action or proceeding against any
Borrower or any Subsidiary or any of its or their property in the courts with
subject matter jurisdiction of any other jurisdiction. The Borrower hereby
irrevocably waive any objection to the laying of venue of any such suit or
proceeding in the above described courts.
13.3 LAW OF ILLINOIS. This Agreement and the Notes shall be governed
by and construed and enforced in accordance with the laws of the State of
Illinois (without regard to its conflict of laws provisions). Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
13.4 INTEREST. (a) In the case of the Company: In the event the
obligation of the Company to pay interest on the principal balance of the
outstanding Advances is or becomes in excess of the maximum interest rate which
the Company permitted by law to contract or agree to pay, giving due
consideration to the execution date of this Agreement, then, in that event, the
rate of interest applicable with respect to such Bank's Percentage shall be
deemed to be immediately reduced to such maximum rate and all previous payments
in excess of the maximum rate shall be deemed to have been payments in reduction
of principal and not of interest.
(b) In the case of the Canadian Permitted Borrower: If any
provision of this Agreement or any of the other Loan Documents would
obligate such Borrower to make any payment of interest or other amount
payable to any Bank in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by that Bank of interest
at a criminal rate (as such terms are construed under the CRIMINAL CODE
(Canada)) then, notwithstanding such provision, such amount or rate
shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be
so prohibited by law or so result in a receipt by that Bank of interest
at a criminal rate, such adjustment to be effected, to the extent
necessary, as follows: (a) firstly,
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by reducing the amount or rate of interest required to be paid to the
affected Bank under this Agreement; and (b) thereafter, by reducing any
fees, commissions, premiums and other amounts required to be paid to
the affected Bank which would constitute interest for purposes of
Section 347 of the CRIMINAL CODE (Canada). Notwithstanding the
foregoing, and after giving effect to all adjustments contemplated
thereby, if any Bank shall have received an amount in excess of the
maximum permitted by Section 347 of the CRIMINAL CODE (Canada), then
such Borrower making such payment, shall be entitled, by notice in
writing to the affected Bank, to obtain reimbursement from that Bank in
an amount equal to such excess, and pending such reimbursement, such
amount shall be deemed to be an amount payable by that Bank to that
Borrower. Any amount or rate of interest referred to in this Agreement
shall be determined in accordance with generally accepted actuarial
practices and principles as an effective annual rate of interest over
the term that any Advance remains outstanding on the assumption that
any charges, fees or expenses that fall within the meaning of
"interest" (as defined in the CRIMINAL CODE (Canada)) shall, if they
relate to a specific period of time, be pro-rated over that period of
time and otherwise be pro-rated over the period from the Effective Date
to the Revolving Credit Maturity Date and, in the event of a dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Agent shall be conclusive for the purposes of such
determination.
13.5 CLOSING COSTS AND OTHER COSTS; INDEMNIFICATION. (a) The Company
agrees to pay, or reimburse the Agent and the Syndication Agent for payment of,
within five Business Days of demand therefor (except for closing costs which
shall be payable on the Effective Date) (i) all reasonable costs and expenses,
including, by way of description and not limitation, house and outside attorney
fees (without duplication of fees and expenses for the same services) and
advances, appraisal and accounting fees, and lien search fees incurred in
connection with the commitment, negotiation, consummation and closing of the
loans contemplated hereby or in connection with the administration of this
Agreement (including the costs associated with copying and distributing to the
Banks any financial statements, notices, reports or other documents delivered to
the Agent which are required to be delivered to the Banks hereunder) or any
amendment, refinancing or restructuring of the credit arrangements provided
under this Agreement, (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing,
recording or amendment of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting to
pay such taxes or fees, and (iii) all reasonable costs and expenses of the
Agent, the Syndication Agent or any of the Banks (including reasonable fees and
expenses of house and outside counsel (but without duplication of fees and
expenses for the same services) in connection with any action or proceeding
relating to a court order, injunction or other process or decree restraining or
seeking to restrain the Agent or any of the Banks from paying any amount under,
or otherwise relating in any way to, any Letter of Credit and any and all costs
and expenses which any of them may incur relative to any payment under any
Letter of Credit. At Agent's option, all of said amounts required to be paid by
the Company, if not paid when due, may be charged by Agent as a Prime-based
Advance of the Revolving Credit against the Indebtedness.
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(b) The Companys agrees to indemnify and hold Agent and each
of the Banks harmless from all loss, cost, damage, liability or expenses,
including reasonable house and outside attorneys' fees and disbursements (but
without duplication of fees and expenses for the same services), incurred by
Agent and the Banks by reason of an Event of Default, or enforcing the
obligations of the Loan Parties under this Agreement or any of the other Loan
Documents or in the prosecution or defense of any action or proceeding
concerning any matter growing out of or connected with this Agreement or any of
the Loan Documents, excluding, however, any loss, cost, damage, liability or
expenses arising solely as a result of the gross negligence or willful
misconduct of the party seeking to be indemnified under this Section 13.5(b).
(c) The Company agrees to defend, indemnify and hold harmless
Agent and each of the Banks, and their respective employees, agents, officers
and directors from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs or expenses of whatever kind or nature
arising out of or related to (i) the presence, disposal, release or threatened
release of any Hazardous Materials on, from or affecting any premises owned or
occupied by the Borrowers or any of their respective Subsidiaries in violation
or non-compliance with applicable Hazardous Material Laws, (ii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Materials, (iii) any lawsuit or other
proceeding brought or threatened, settlement reached or governmental order or
decree relating to such Hazardous Materials, (iv) if any Event of Default exists
and remains uncured, the cost of removal of all Hazardous Materials in violation
or non-compliance with applicable Hazardous Material Laws from all or any
portion of any premises owned by the Borrowers or their respective Subsidiaries,
(v) the taking of necessary precautions to protect against the release of
Hazardous Materials on or affecting any premises owned by the Borrowers or any
of their respective Subsidiaries, (vi) if any Event of Default exists and
remains uncured, complying with all Hazardous Material Laws in respect of
premises owned or occupied by Borrowers or any of their respective Subsidiaries
(or any property previously owned or occupied by a Borrower or a Subsidiary, to
the extent a Lien had been granted to Banks thereon pursuant to the Loan
Documents) and/or (vii) if any Event of Default exists and remains uncured, any
violation of Hazardous Material Laws in respect of premises owned or occupied by
Borrowers or any of their respective Subsidiaries (or any property previously
owned or occupied by a Borrower or a Subsidiary, to the extent a Lien had been
granted to Banks thereon pursuant to the Loan Documents), including without
limitation, reasonable attorneys and consultants fees, investigation and
laboratory fees, environmental studies required by Agent or any Bank in
connection with the violation of Hazardous Material Laws in respect of premises
owned by Borrowers or occupied or any of their respective Subsidiaries (or any
property previously owned or occupied by a Borrower or a Subsidiary, to the
extent a Lien had been granted to Banks thereon pursuant to the Loan Documents)
whether before or after the occurrence of any Default or Event of Default
hereunder, court costs and litigation expenses, excluding however, those arising
as a result of its or their gross negligence or willful misconduct or arising
solely after Agent or any Bank, or any third party on its or their behalf, shall
have taken possession or control or title to any such premises. The obligations
of the Borrowers under this Section 13.5(c) shall be in addition to any and all
other obligations and liabilities the Borrowers may have to Agent or any of the
Banks at common law or pursuant to any other agreement.
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13.6 NOTICES. Except as expressly provided otherwise in this
Agreement, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall
be given by personal delivery, by mail, by reputable overnight courier, by
telex or by facsimile and addressed or delivered to it at its address set
forth on Schedule 13.6 or at such other address as may be designated by such
party in a notice to the other parties that complies as to delivery with the
terms of this Section 13.6. Any notice, if personally delivered or if mailed
and properly addressed with postage prepaid and sent by registered or
certified mail, shall be deemed given when received or when delivery is
refused; any notice, if given to a reputable overnight courier and properly
addressed, shall be deemed given two (2) Business Days after the date on
which it was sent, unless it is actually received sooner by the named
addressee; and any notice, if transmitted by telex or facsimile, shall be
deemed given when received (answer back confirmed in the case of telexes and
receipt confirmed in the case of telecopies). Agent may, but, except as
specifically provided herein, shall not be required to, take any action on
the basis of any notice given to it by telephone, but the giver of any such
notice shall promptly confirm such notice in writing or by telex or
facsimile, and such notice will not be deemed to have been received until
such confirmation is deemed received in accordance with the provisions of
this Section set forth above. If such telephonic notice conflicts with any
such confirmation, the terms of such telephonic notice shall control.
13.7 FURTHER ACTION. Each Loan Party, from time to time, upon
written request of Agent will make, execute, acknowledge and deliver or cause
to be made, executed, acknowledged and delivered, all such further and
additional instruments, and take all such further action as may reasonably be
required to carry out the intent and purpose of this Agreement or the Loan
Documents, and to provide for Advances under and payment of the Notes,
according to the intent and purpose herein and therein expressed.
13.8 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) This Agreement shall be binding upon and shall inure to
the benefit of Borrowers and the Banks and their respective successors and
assigns.
(b) The foregoing shall not authorize any assignment by the
Borrowers, of their rights or duties hereunder, and, except as otherwise
provided herein, no such assignment shall be made (or effective) without the
prior written approval of the Banks.
(c) The Borrowers and Agent acknowledge that each of the
Banks may at any time and from time to time, subject to the terms and
conditions hereof, assign or grant participations in such Bank's rights and
obligations hereunder (on a pro rata basis only) and under the other Loan
Documents to any commercial bank, savings and loan association, insurance
company, pension fund, mutual fund, commercial finance company or other
similar institution, the identity of which institution is approved by Company
and Agent, such approval not to be unreasonably withheld or delayed;
provided, however, that (i) except as otherwise described in clause (iii) of
this Section
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13.8(c), the approval of Company shall not be required upon the occurrence
and during the continuance of an Event of Default, (ii) the approval of
Company and Agent shall not be required for any such sale, transfer,
assignment or participation to the Affiliate of an assigning Bank, any other
Bank or any Federal Reserve Bank and (iii) no assignment shall be made or
participation granted to an entity which is a competitor of Company and its
Subsidiaries without the consent of the Company, which consent may be
withheld in the sole discretion of Company. The Company authorizes each Bank
to disclose to any prospective assignee or participant, once approved by
Company and Agent, any and all financial information in such Bank's
possession concerning the Loan Parties which has been delivered to such Bank
pursuant to this Agreement; provided that each such prospective participant
shall execute a confidentiality agreement consistent with the terms of
Section 13.12 hereof.
(d) Each assignment by a Bank of all or any portion of its
rights and obligations hereunder and under the other Loan Documents, which
assignments shall be on a pro rata basis, shall be made pursuant to an
Assignment Agreement substantially (as determined by Agent) in the form
attached hereto as Exhibit I (with appropriate insertions acceptable to
Agent) (provided however that such Bank need not deliver an Assignment
Agreement in connection with assignments to such Bank's Affiliates or to a
Federal Reserve Bank) and shall be subject to the terms and conditions
hereof, and to the following restrictions:
(i) each assignment shall be in a minimum amount
of the lesser of (x) Five Million Dollars
($5,000,000) or such lesser amount as the
Agent shall agree and (y) the entire
remaining amount of assigning Bank's
aggregate interest in the Revolving Credit
(and participations in any outstanding
Letters of Credit) and other Indebtedness;
provided however that, after giving effect
to such assignment, in no event shall the
entire remaining amount (if any) of
assigning Bank's aggregate interest in the
Revolving Credit (and participations in any
outstanding Letters of Credit) and other
Indebtedness be less than $5,000,000; and
(ii) no assignment shall be effective unless
Agent has received from the assignee (or
from the assigning Bank) an assignment fee
of $3,500 for each such assignment.
In connection with any assignment, Borrowers and Agent shall be entitled to
continue to deal solely and directly with the assigning Bank in connection
with the interest so assigned until (x) the Agent shall have received a
notice of assignment duly executed by the assigning Bank and an Assignment
Agreement (with respect thereto) duly executed by the assigning Bank and each
assignee; and (y) the assigning Bank shall have delivered to the Agent the
original of each Note held by the assigning Bank under this Agreement. From
and after the date on which the Agent shall notify Company and the assigning
Bank that the foregoing conditions shall have been satisfied and all consents
(if any) required shall have been given, the assignee thereunder shall be
deemed to be a Bank party to this Agreement. To the extent that rights and
obligations hereunder shall have been assigned to such
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assignee as provided in such notice of assignment (and Assignment Agreement),
such assignee shall have the rights and obligations of a Bank under this
Agreement and the other Loan Documents (including without limitation the
right to receive fees payable hereunder in respect of the period following
such assignment). In addition, the assigning Bank, to the extent that rights
and obligations hereunder shall have been assigned by it as provided in such
notice of assignment (and Assignment Agreement), but not otherwise, shall
relinquish its rights and be released from its obligations under this
Agreement and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the
duly executed Assignment Agreement and assuming the Company has consented to
such assignment (if its consent is required), Company shall, execute and
deliver, and shall cause Canadian Permitted Borrower to execute and deliver,
as applicable, to the Agent in exchange for any surrendered Note, new Note(s)
payable to the order of the assignee in an amount equal to the amount
assigned to it pursuant to such notice of assignment (and Assignment
Agreement), and with respect to the portion of the Indebtedness retained by
the assigning Bank, to the extent applicable, new Note(s) payable to the
order of the assigning Bank in an amount equal to the amount retained by such
Bank hereunder. Agent, the Banks and the Borrowers acknowledge and agree that
any such new Note(s) shall be given in renewal and replacement of the
surrendered Notes and shall not effect or constitute a novation or discharge
of the Indebtedness evidenced by any surrendered Note, and each such new Note
may contain a provision confirming such agreement. In addition, promptly
following receipt of such Notes, Agent shall prepare and distribute to
Borrowers and the assigning Bank and the assignee Bank a revised Schedule 1.2
to this Agreement setting forth the applicable new Percentages of the Banks
(including the assignee Bank), taking into account such assignment.
(e) Each Bank agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be
subject to the following restrictions (which shall be set forth in the
applicable Participation Agreement):
(i) such Bank shall remain the holder of its
Notes hereunder, notwithstanding any such
participation;
(ii) except as expressly set forth in this
Section 13.8(e) with respect to rights of
setoff and the benefits of Section 11
hereof, a participant shall have no direct
rights or remedies hereunder;
(iii) a participant shall not reassign or
transfer, or grant any sub-participations in
its participation interest hereunder or any
part thereof; and
(iv) such Bank shall retain the sole right and
responsibility to enforce the obligations of
the Loan Parties relating to this Agreement
and the other Loan Documents, including,
without limitation, the right to
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proceed against any Guaranties, or cause
Agent to do so (subject to the terms and
conditions hereof), and the right to approve
any amendment, modification or waiver of any
provision of this Agreement without the
consent of the participant (other than a
participant which is an Affiliate of such
Bank), except for those matters covered by
Section 13.11(a) through (e) and (h) hereof
(provided that a participant may exercise
approval rights over such matters only on an
indirect basis, acting through such Bank,
and the Borrowers, Agent and the other Banks
may continue to deal directly with such Bank
in connection with such Bank's rights and
duties hereunder).
Each of the Borrowers agrees that each participant shall be deemed to have
the right of setoff under Section 9.6 hereof in respect of its participation
interest in amounts owing under this Agreement and the other Loan Documents
to the same extent as if the Indebtedness were owing directly to it as a Bank
under this Agreement, shall be subject to the pro rata recovery provisions of
Section 11.3 hereof and shall be entitled to the benefits of Section 11
hereof. The amount, terms and conditions of any participation shall be as set
forth in the participation agreement between the issuing Bank and the Person
purchasing such participation, and none of the Loan Parties, the Agent and
the other Banks shall have any responsibility or obligation with respect
thereto, or to any Person to whom any such participation may be issued. No
such participation shall relieve any issuing Bank of any of its obligations
under this Agreement or any of the other Loan Documents, and all actions
hereunder shall be conducted as if no such participation had been granted.
All amounts payable by the any of the Borrowers hereunder shall be determined
as if such Bank had not sold such participation, and no participant shall be
entitled to receive any greater amount pursuant to Sections 9.3 and 11 hereof
than the transferor Bank would have been entitled to receive in respect of
the amount of the participation transferred by such transferor Bank to such
participant had no such transfer occurred.
(f) The Agent shall maintain at its principal office a copy
of each Assignment Agreement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Banks, the Percentages
of such Banks and the principal amount of each type of Advance owing to each
such Bank from time to time. The entries in the Register shall be conclusive
evidence, absent manifest error, and the Loan Parties, the Agent, and the
Banks may treat each Person whose name is recorded in the Register as the
owner of the Advances recorded therein for all purposes of this Agreement.
The Register shall be available for inspection by any Loan Party or any Bank
upon reasonable notice to the Agent and a copy of such information shall be
provided to any such party on its prior written request. The Agent shall give
prompt written notice to the Company of the making of any entry in the
Register or any change in such entry.
(g) Nothing in this Agreement, the Notes or the other Loan
Documents, expressed or implied, is intended to or shall confer on any Person
other than the respective parties hereto and thereto and their successors and
assignees and participants permitted hereunder and
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thereunder any benefit or any legal or equitable right, remedy or other claim
under this Agreement, the Notes or the other Loan Documents.
13.9 INDULGENCE. No delay or failure of Agent and the 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 the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
13.10 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.
13.11 AMENDMENT AND WAIVER. No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
any Borrower or any Subsidiary therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Banks (or by
the Agent at the written request of the Majority Banks) or, if this Agreement
expressly so requires with respect to the subject matter thereof, by all
Banks (and, with respect to any amendments to this Agreement or the other
Loan Documents, by any Borrower or the Subsidiaries which are signatories
thereto), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the following: (a) increase any Bank's
commitments hereunder, (b) reduce the principal of, or interest on, any
outstanding Indebtedness or any Fees or other amounts payable hereunder, (c)
postpone any date fixed for any payment of principal of, or interest on, any
outstanding Indebtedness or any Fees or other amounts payable hereunder, (d)
waive any Event of Default specified in Sections 9.1(a) or (b) hereof, (e)
except as expressly permitted hereunder, or under the Collateral Documents,
release or defer the granting or perfecting of a lien or security interest in
any Collateral or release any guaranty or similar undertaking provided by any
Person except as shall be otherwise expressly permitted in this Agreement or
any other Loan Document, provided however that Agent shall be entitled to
release any Collateral which any Borrower or any Subsidiary is permitted to
sell or transfer under the terms of this Agreement or the other Loan
Documents without notice to or any further action or consent of the Banks,
(f) terminate or modify any indemnity provided to the Banks hereunder or
under the other Loan Documents, except as shall be otherwise expressly
provided in this Agreement or any other Loan Document, (g) take any action
which requires the approval or consent of all Banks pursuant to the terms of
this Agreement or any other Loan Document, or (h) change the definitions of
"Domestic Borrowing Base", "Canadian Borrowing Base", "Eligible Domestic
Account", "Eligible Canadian Accounts", "Revolving Credit Percentage",
"Interest Period"," Majority Banks", or this Section 13.11; and provided
further, that no amendment, waiver or consent shall, unless in writing signed
by the applicable Swing Line Bank, do any of the following: (x) reduce the
principal of, or interest on, the Swing Line Note or (y) postpone any date
fixed for any payment of principal of, or interest on, the Swing Line Note;
and provided further, however, that no amendment, waiver, or consent shall,
unless in writing and signed by the Agent or
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the Issuing Bank in addition to all the Banks, affect the rights or duties of
the Agent, or the Issuing Bank, as the case may be under this Agreement or
any other Loan Document. All references in this Agreement to "Banks" or "the
Banks" shall refer to all Banks, unless expressly stated to refer to Majority
Banks.
13.12 CONFIDENTIALITY. Each Bank agrees that it will not disclose
without the prior consent of Company (other than to its employees, its
Subsidiaries, another Bank, an Affiliate of a Bank or to its auditors or
counsel) any information with respect to the Loan Parties, which is furnished
pursuant to this Agreement or any of the other Loan Documents; provided that
any Bank may disclose any such information (a) as has become generally
available to the public or has been lawfully obtained by such Bank from any
third party under no duty of confidentiality to the Loan Parties, (b) as may
be required or appropriate in any report, statement or testimony submitted
to, or in respect to any inquiry, by, any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Bank,
including the Board of Governors of the Federal Reserve System of the United
States, the Office of the Comptroller of the Currency or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States
or elsewhere) or their successors, (c) as may be required in respect to any
summons or subpoena or in connection with any litigation, (d) in order to
comply with any law, order, regulation or ruling applicable to such Bank, and
(e) to any permitted transferee or assignee or to any approved participant
of, or with respect to, the Notes, as aforesaid.
13.13 WITHHOLDING TAXES. If any Bank is not incorporated under the
laws of the United States or a state thereof, such Bank shall promptly (but
in any event prior to the initial payment of interest hereunder) deliver to
the Agent two executed copies of (i) Internal Revenue Service Form W-8 BEN or
any successor thereto, specifying the applicable tax treaty between the
United States and the jurisdiction of such Bank's domicile which provides for
the exemption from withholding on interest payments to such Bank, (ii)
Internal Revenue Service Form W-8 ECI or any successor thereto, evidencing
that the income to be received by such Bank hereunder is effectively
connected with the conduct of a trade or business in the United States or
(iii) other evidence satisfactory to the Agent that such Bank is exempt from
United States income tax withholding with respect to such income; provided,
however, that such Bank shall not be required to deliver to Agent the
aforesaid forms or other evidence with respect to Advances to the Borrowers
or any Subsidiary which is or subsequently becomes a Borrower hereunder, if
such Bank has assigned its interest in the Revolving Credit (including any
outstanding Advances thereunder and participations in Letters of Credit
issued hereunder) and any Notes issued to it by the Borrowers, to an
Affiliate which is incorporated under the laws of the United States or a
state thereof, and so notifies the Agent. Such Bank shall amend or supplement
any such form or evidence as required to insure that it is accurate, complete
and non-misleading at all times. Promptly upon notice from the Agent of any
determination by the Internal Revenue Service that any payments previously
made to such Bank hereunder were subject to United States income tax
withholding when made, such Bank shall pay to the Agent the excess of the
aggregate amount required to be withheld from such payments over the
aggregate amount actually withheld by the Agent. In addition, from time to
time upon the reasonable request and at the sole expense of the Company, each
Bank and the Agent shall (to the extent it is able to do so based upon
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applicable facts and circumstances), complete and provide the Borrowers with
such forms, certificates or other documents as may be reasonably necessary to
allow the Borrowers, as applicable, to make any payment under this Agreement
or the other Loan Documents without any withholding for or on the account of
any tax under Section 10.1(d) hereof (or with such withholding at a reduced
rate), provided that the execution and delivery of such forms, certificates
or other documents does not adversely affect or otherwise restrict the right
and benefits (including without limitation economic benefits) available to
such of the Bank or the Agent, as the case may be, under this Agreement or
any of the other Loan Documents, or under or in connection with any
transactions not related to the transactions contemplated hereby.
13.14 TAXES AND FEES. Should any tax (other than as a result of a
Bank's failure to comply with Section 13.13 or a tax based upon the net
income or capitalization of any Bank or the Agent by any jurisdiction where a
Bank or Agent is located), recording or filing fee become payable in respect
of this Agreement or any of the other Loan Documents or any amendment,
modification or supplement hereof or thereof, the each of the Borrowers
agrees to pay the same, together with any interest or penalties thereon
arising from such Borrower's act or omission, and agrees to hold the Agent
and the Banks harmless with respect thereto. Notwithstanding the foregoing,
nothing contained in this Section 13.14 shall affect or reduce the rights of
any Bank or the Agent under Section 11.5 hereof.
13.15 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE BORROWERS
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANKS, THE
AGENT, NOR THE BORROWERS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY THE BANKS AND THE AGENT OR THE BORROWERS EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL OF THEM.
13.16 COMPLETE AGREEMENT; CONFLICTS. This Agreement, the Notes (if
issued), any Requests for Revolving Credit Advance and Requests for Swing
Line Advance hereunder, and the other Loan Documents contain the entire
agreement of the parties hereto with respect to the subject matter hereof,
superseding all prior agreements, discussions and understandings relating to
the subject matter hereof, and none of the parties shall be bound by anything
not expressed in writing in connection therewith. In the event of any
conflict between the terms of this Agreement and the other Loan Documents,
this Agreement shall govern.
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13.17 SEVERABILITY. In case any one or more of the obligations of
the Loan Parties under this Agreement, the Notes or any of the other Loan
Documents shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining obligations of the
Loan Parties shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not
affect the validity, legality or enforceability of the obligations of the
Loan Parties under this Agreement, the Notes or any of the other Loan
Documents in any other jurisdiction.
13.18 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions
hereof.
13.19 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such Person, whether or not expressly specified in such provision.
13.20 INDEPENDENCE OF COVENANTS. Each covenant hereunder shall be
given independent effect (subject to any exceptions stated in such covenant)
so that if a particular action or condition is not permitted by any such
covenant (taking into account any such stated exception), the fact that it
would be permitted by an exception to, or would be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default.
13.21 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms,
covenants, agreements, representations and warranties of the Borrowers or any
party to any of the Loan Documents made to the Banks and the Agents herein or
in any of the Loan Documents or in any certificate, report, financial
statement or other document furnished by or on behalf of the Borrowers or any
Subsidiary to the Agent and the Banks in connection with this Agreement or
any of the Loan Documents shall be deemed to have been relied upon by the
Banks, notwithstanding any investigation heretofore or hereafter made by any
Bank or on such Bank's behalf, and those covenants and agreements of the
Borrowers set forth in Section 11.1 hereof (together with any other
indemnities of the Borrowers or any Subsidiary contained elsewhere in this
Agreement or in any of the other Loan Documents) and of Banks set forth in
Section 12.8 hereof shall survive the repayment in full of the Indebtedness
and the termination of the Revolving Credit Aggregate Commitment.
* * *
[SIGNATURES FOLLOW ON SUCCEEDING PAGE]
106
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, HA-LO INDUSTRIES, INC.
as Agent
By:_________________________ By:_________________________________________
Its:________________________ Its:________________________________________
HA-LO CANADA, INC.
By:_________________________________________
Its:________________________________________
SWING LINE BANK: COMERICA BANK
By:_________________________________________
Its:________________________________________
BANKS: COMERICA BANK
By:_________________________________________
Its:________________________________________
LASALLE BANK NATIONAL ASSOCIATION
By:_________________________________________
Its:________________________________________
107
SCHEDULE 1.1
APPLICABLE MARGIN GRID
HA-LO INDUSTRIES, INC.
$80,000,000 REVOLVING CREDIT FACILITY
(BASIS POINTS PER ANNUM)
------------------------------------- --------------- -------------------- ---------------------- ---------------------
BASIS FOR XXXXX X XXXXX XX XXXXX XXX XXXXX XX
PRICING
------------------------------------- --------------- -------------------- ---------------------- ---------------------
GREATER THAN GREATER THAN GREATER THAN
OR EQUAL TO OR EQUAL TO OR EQUAL TO
1.50:1.00 2.00:1.00 2.50:1.00
but but but
LESS THAN LESS THAN LESS THAN LESS THAN
Consolidated Leverage Ratio 1.50:1.00 2.00:1.00 2.50:1.00 3.00:1.00
------------------------------------- --------------- -------------------- ---------------------- ---------------------
Eurocurrency-based Rate Margin 125.00 145.00 170.00 190.00
------------------------------------- --------------- -------------------- ---------------------- ---------------------
Revolving Credit Facility Fee 25.00 30.00 30.00 35.00
------------------------------------- --------------- -------------------- ---------------------- ---------------------
Prime-based Rate Margin 0.00 0.00 20.00 40.00
------------------------------------- --------------- -------------------- ---------------------- ---------------------
Letter of Credit Fees (exclusive of 125.00 145.00 170.00 190.00
Facing fees)
------------------------------------- --------------- -------------------- ---------------------- ---------------------
------------------------------------- --------------------- ------------------
BASIS FOR LEVEL V LEVEL VI
PRICING
------------------------------------- --------------------- ------------------
GREATER THAN GREATER THAN
OR EQUAL TO OR EQUAL TO
3.00:1.00
but
LESS THAN
Consolidated Leverage Ratio 3.50:1.00 3.50:1.00
------------------------------------- --------------------- ------------------
Eurocurrency-based Rate Margin 212.50 235.00
------------------------------------- --------------------- ------------------
Revolving Credit Facility Fee 37.50 40.00
------------------------------------- --------------------- ------------------
Prime-based Rate Margin 62.50 85.00
------------------------------------- --------------------- ------------------
Letter of Credit Fees (exclusive of 212.50 235.00
Facing fees)
------------------------------------- --------------------- ------------------
108
