1
EXHIBIT 10.8
------------
================================================================================
CREDIT AGREEMENT
dated as of
December 19, 1996
among
SINTER METALS, INC.,
CERTAIN SUBSIDIARIES OF SINTER METALS, INC.,
THE LENDERS NAMED HEREIN,
NBD BANK,
as Administrative Agent
and
SALOMON BROTHERS INC,
as Syndication Agent
-----------------------------
CITICORP USA, INC.,
as Documentation Agent
================================================================================
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms......................................................... 1
SECTION 1.02. Classification of Loans and Borrowings................................ 36
SECTION 1.03. Terms Generally ...................................................... 36
SECTION 1.04. Accounting Terms; GAAP................................................ 37
SECTION 1.05. Foreign Currency Amounts.............................................. 37
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments........................................................... 38
SECTION 2.02. Loans and Borrowings.................................................. 38
SECTION 2.03. Requests for Borrowings............................................... 39
SECTION 2.04. Swingline Loans....................................................... 41
SECTION 2.05. Letters of Credit..................................................... 43
SECTION 2.06. Funding of Borrowings................................................. 49
SECTION 2.07. Interest Elections.................................................... 50
SECTION 2.08. Termination and Reduction of Commitments.............................. 52
SECTION 2.09. Repayment of Loans; Evidence of Debt.................................. 53
SECTION 2.10. Amortization of Term Loans............................................ 54
SECTION 2.11. Prepayment of Loans................................................... 55
SECTION 2.12. Fees.................................................................. 59
SECTION 2.13. Interest.............................................................. 60
SECTION 2.14. Alternate Rate of Interest............................................ 61
SECTION 2.15. Increased Costs....................................................... 62
SECTION 2.16. Break Funding Payments................................................ 64
SECTION 2.17. Taxes................................................................. 65
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-Offs..................................................... 68
SECTION 2.19. Mitigation Obligations; Replacement of Lenders........................ 71
3
ii
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 3.01. Organization; Powers.................................................. 72
SECTION 3.02. Authorization; Enforceability......................................... 72
SECTION 3.03. Governmental Approvals; No Conflicts.................................. 73
SECTION 3.04. Financial Condition; No Material Adverse Change....................... 73
SECTION 3.05. Properties............................................................ 74
SECTION 3.06. Litigation and Environmental Matters.................................. 74
SECTION 3.07. Compliance with Laws and Agreements................................... 75
SECTION 3.08. Investment and Holding Company Status................................. 75
SECTION 3.09. Taxes................................................................. 75
SECTION 3.10. ERISA................................................................. 76
SECTION 3.11. Disclosure............................................................ 76
SECTION 3.12. Subsidiaries.......................................................... 76
SECTION 3.13. Insurance............................................................. 76
SECTION 3.14. Labor Matters......................................................... 76
SECTION 3.15. Solvency.............................................................. 77
ARTICLE IV
CONDITIONS
----------
SECTION 4.01. Effective Date........................................................ 77
SECTION 4.02. Each Credit Event..................................................... 82
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
SECTION 5.01. Financial Statements and Other Information............................ 83
SECTION 5.02. Notices of Material Events............................................ 84
SECTION 5.03. Information Regarding Collateral...................................... 85
SECTION 5.04. Existence; Conduct of Business........................................ 85
SECTION 5.05. Payment of Obligations................................................ 86
SECTION 5.06. Maintenance of Properties............................................. 86
SECTION 5.07. Insurance............................................................. 86
SECTION 5.08. Books and Records; Inspection and Audit Rights........................ 87
SECTION 5.09. Compliance with Laws.................................................. 88
4
iii
SECTION 5.10. Use of Proceeds and Letters of Credit................................. 88
SECTION 5.11. Subsidiaries.......................................................... 88
SECTION 5.12. Further Assurances.................................................... 89
SECTION 5.13. Casualty and Condemnation............................................. 89
SECTION 5.14. Rate Protection Arrangements.......................................... 90
SECTION 5.15. Fiscal Year........................................................... 90
ARTICLE VI
NEGATIVE COVENANTS
------------------
SECTION 6.01. Indebtedness.......................................................... 91
SECTION 6.02. Liens; Sale and Lease-Back Transactions............................... 92
SECTION 6.03. Fundamental Changes................................................... 94
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions; Asset Sales.................................... 95
SECTION 6.05. Hedging Agreements.................................................... 97
SECTION 6.06. Restricted Payments; Prepayments of Debt.............................. 97
SECTION 6.07. Transactions with Affiliates.......................................... 98
SECTION 6.08. Restrictive Agreements................................................ 98
SECTION 6.09. Capital Expenditures.................................................. 99
SECTION 6.10. Other Arrangements.................................................... 100
SECTION 6.11. Debt to Consolidated EBITDA........................................... 100
SECTION 6.12. Fixed Charge Coverage Ratio........................................... 101
SECTION 6.13. Interest Coverage Ratio............................................... 101
SECTION 6.14. Net Worth............................................................. 101
SECTION 6.15. EBITDA................................................................ 101
--------
ARTICLE VII
EVENTS OF DEFAULT 102
-----------------
--------
ARTICLE VIII
THE AGENTS 105
----------
5
iv
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.01. Notices............................................................... 108
SECTION 9.02. Waivers; Amendments................................................... 109
SECTION 9.03. Expenses; Indemnity; Damage Waiver.................................... 111
SECTION 9.04. Successors and Assigns................................................ 112
SECTION 9.05. Survival.............................................................. 115
SECTION 9.06. Counterparts; Integration; Effectiveness.............................. 115
SECTION 9.07. Severability.......................................................... 116
SECTION 9.08. Rights of Setoff...................................................... 116
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process...................................................... 116
SECTION 9.10. WAIVER OF JURY TRIAL.................................................. 117
SECTION 9.11. Headings.............................................................. 117
SECTION 9.12. Confidentiality....................................................... 118
SECTION 9.13. Interest Rate Limitation.............................................. 118
SECTION 9.14. Conversion of Currencies.............................................. 119
SECTION 9.15. Release of Liens and Guarantees ...................................... 119
SCHEDULES:
----------
Schedule 2.01 -- Commitments
Schedule 2.05(a) -- Letter of Credit
Schedule 3.05(a) -- Properties
Schedule 3.06(a) -- Environmental Matters
Schedule 3.06(b) -- Actions, Suits, Proceedings
Schedule 3.09 -- Taxes
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 3.14 -- Labor Matters
Schedule 4.01(o) -- Sources and Uses
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.07(d) -- Affiliate Transactions
Schedule 6.08 -- Existing Restrictions
6
v
EXHIBITS:
---------
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Company Guarantee
Exhibit C -- Form of Company Holdings Pledge Agreement
Exhibit D -- Form of Company Pledge Agreement
Exhibit E -- Form of Company Security Agreement
Exhibit F -- Form of Germany Subsidiary Guarantee
Exhibit G -- Form of Holdings Guarantee
Exhibit H-1 -- Form of Holdings Pledge Agreement
Exhibit H-2 -- Form of Holdings Assignment of Claims
Exhibit I -- Form of U.S. Subsidiary Guarantee
Exhibit J -- Form of U.S. Subsidiary Pledge Agreement
Exhibit K -- Form of U.S. Subsidiary Security Agreement
Exhibit L-1 -- Form of Opinion of U.S. Counsel
Exhibit L-2 -- Form of Opinion of Mortgage Counsel
Exhibit L-3 -- Form of Opinion of German Counsel
7
CREDIT AGREEMENT dated as of December 19,
1996 (as amended or modified from time to time in
accordance with the terms hereof, this "Agreement"),
among SINTER METALS, INC., a Delaware corporation
(the "Company"); SINTER METALS GMBH, a German limited
liability company and a wholly owned Subsidiary of
the Company ("Holdings"); such of the Eligible
Holdings Subsidiaries (as defined herein) as become
signatories hereto from time to time (the "Subsidiary
Borrowers" and, together with the Company and
Holdings, the "Borrowers"), the LENDERS party hereto,
NBD BANK, as Administrative Agent and Collateral
Agent, and SALOMON BROTHERS INC, as Syndication
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, bear interest at a
rate determined by reference to the Alternate Base Rate.
"ACQUIRED ENTITIES" means Powder Metal Holding, Inc., a
Delaware corporation, Krebsoege USA, Inc., a Delaware corporation, Metallwerk
Langensalza GmbH, a German limited liability company, and Krebsoge Sinterholding
GmbH, a German limited liability company.
"ACQUISITIONS" means the acquisitions in accordance with
applicable law of (i) Powder Metal Holding, Inc., a Delaware corporation, and
Krebsoege USA, Inc., a Delaware corporation, by the Company, pursuant to the
Stock Purchase Agreement, dated as of October 7, 1996, between ▇▇▇▇ Holding AG,
a Swiss corporation, and the Company, as amended, and (ii) Krebsoege
Sinterholding GmbH, a German limited liability company, and Metallwerk
Langensalza GmbH, a German limited liability company, by Holdings, pursuant to
the Stock Purchase Agreement, dated as of October 11, 1996, between ▇▇▇▇ Holding
AG, a Swiss corporation, and the Company, as amended.
8
2
"ADDITIONAL GUARANTEE" has the meaning set forth in the
definition of "German Borrower Condition".
"ADJUSTED DIBO RATE" means, with respect to any
Eurodeutschemark Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the DIBO
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means NBD Bank, in its capacity as
administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AGENTS" means the Administrative Agent and the Collateral
Agent.
"AGREEMENT CURRENCY" has the meaning set forth in Section
9.14(b).
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"APPLICABLE CREDITOR" has the meaning set forth in Section
9.14(b).
"APPLICABLE PERCENTAGE" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment or, as the context may require, the percentage of
the total U.S. Revolving Commitments or German Revolving Commitments represented
by such Lender's U.S. Revolving Commitment or German Revolving Commitment,
9
3
respectively. If the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Revolving Commitments
most recently in effect, giving effect to any assignments.
"APPLICABLE RATE" means, for any day the applicable rate per
annum set forth in the table below (i) under the caption "ABR Revolving Spread",
in the case of ABR Revolving Loans, (ii) under the caption "Tranche A ABR
Spread", in the case of ABR Loans that are Tranche A Term Loans, (iii) under the
caption "Tranche B ABR Spread", in the case of ABR Loans that are Tranche B Term
Loans, (iv) under the caption "FNBC Prime Rate Spread", in the case of German
Swingline Loans, (v) under the caption "Eurocurrency Term Loan Spread", in the
case of Eurocurrency Term Loans other than Tranche B Term Loans, (vi) under the
caption, "Eurocurrency Revolving Loan Spread" in the case of Eurocurrency
Revolving Loans and (vii) under the caption "Tranche B Eurodollar Spread", in
the case of Eurodollar Loans that are Tranche B Term Loans, in each case based
upon the Leverage Ratio as of the most recent determination date; PROVIDED that
from the date hereof until the earlier of August 19, 1997 and the date of
delivery of consolidated financial statements of the Company in respect of the
fiscal quarter ended June 30, 1997 (the "INITIAL PERIOD"), the "Applicable Rate"
shall be as set forth in the following provisions of this definition:
===================================================================================================================
ABR TRANCHE A EUROCURRENCY EUROCURRENCY TRANCHE B
--- --------- ------------ ------------ ---------
LEVERAGE RATIO: Revolving ABR TRANCHE B FNBC PRIME TERM LOAN REVOLVING EURODOLLAR
--------------- --------- --- --------- ---------- --------- --------- ----------
SPREAD SPREAD ABR SPREAD RATE SPREAD SPREAD LOAN SPREAD SPREAD
------ ------ ---------- ----------- ------ ----------- ------
-------------------------------------------------------------------------------------------------------------------
CATEGORY 1
----------
greater than or 1.00% 1.50% 2.00% 1.00% 2.50% 2.00% 3.00%
equal to 3.5
-------------------------------------------------------------------------------------------------------------------
CATEGORY 2
----------
greater than or .50% 1.00% 1.50% .50% 2.00% 1.50% 2.50%
equal to 3.25 and
less than 3.5
-------------------------------------------------------------------------------------------------------------------
CATEGORY 3
----------
greater than or .25% .75% 1.25% .25% 1.75% 1.25% 2.25%
equal to 3.0 and
less than 3.25
-------------------------------------------------------------------------------------------------------------------
CATEGORY 4
----------
greater than or equal .0% .50% 1.00% .0% 1.50% 1.00% 2.00%
to 2.75 and less than
3.0
-------------------------------------------------------------------------------------------------------------------
CATEGORY 5
----------
greater than or equal .0% .25% .75% .0% 1.25% .75% 1.75%
to 2.50 and less than
2.75
-------------------------------------------------------------------------------------------------------------------
CATEGORY 6
----------
less than 2.50 .0% .0% .75% .0% 1.00% .50% 1.75%
===================================================================================================================
10
4
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Company's fiscal year
based upon the Company's consolidated financial statements delivered pursuant to
Section 5.01(a) or (b) and (ii) each change in the Applicable Rate resulting
from a change in the Leverage Ratio shall be effective during the period
commencing on and including the date of delivery to the Administrative Agent of
such consolidated financial statements indicating such change and ending on the
date immediately preceding the effective date of the next such change; PROVIDED
that the Leverage Ratio shall be deemed to be in Category 1 (A) on any date that
an Event of Default has occurred and is continuing or (B) if the Company fails
to deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), within the period for delivery specified in
such Section, during the period from the expiration of the time for delivery
thereof until the date of delivery of such consolidated financial statements
and, PROVIDED, FURTHER, that (solely for the purposes of determining the
Applicable Rate hereunder) the Leverage Ratio as of the last day of the fiscal
quarters ended June 30, 1997 and September 30, 1997, shall be based on an
annualized calculation of Consolidated EBITDA equal to (i) in the case of the
Leverage Ratio at June 30, 1997, 200% of Consolidated EBITDA for the period of
two fiscal quarters ended June 30, 1997 and (ii) in the case of the Leverage
Ratio at September 30, 1997, 133 1/3% of Consolidated EBITDA for the period of
three fiscal quarters ended September 30, 1997.
Notwithstanding the foregoing, the Applicable Rate during the
Initial Period shall be the applicable rate per annum set forth above in
Category 1; provided that the Applicable Rate in effect for that portion, if
any, of the Initial Period commencing on the date (the "Reset Date") on which
the Reset Condition (as defined below) shall have been satisfied shall be based
on the Reset Date Leverage Ratio (as defined below) and the Category in the
above table applicable to a Leverage Ratio equal thereto. For purposes hereof,
the "RESET CONDITION" shall mean (i) the consummation of an Equity Issuance of
common stock of the Company pursuant to a public offering registered with the
Securities Exchange Commission pursuant to a registration statement declared
effective under the Securities Act of 1933, as amended, which contains (at the
time of effectiveness) a pro forma consolidated statement of income for the
Company and its Subsidiaries for the fiscal year ending December 31, 1996,
giving effect to the Transactions and the Equity Issuance (the "SEC PRO FORMA
INCOME STATEMENT") and (ii) the provision by the Company to the Lenders and the
Administrative Agent of copies of the final prospectus included in such
registration statement containing the SEC Pro Forma Income Statement and a
statement of Total Debt as of the Reset Date, Adjusted Pro Forma 1996 EBITDA and
the Reset Date Leverage Ratio, in form and detail reasonably satisfactory to the
Administrative Agent, prepared and certified by a Financial Officer of the
Company, which sets forth how such statement was derived from the SEC Pro Forma
Income
11
5
Statement. "ADJUSTED PRO FORMA 1996 EBITDA" shall mean the pro forma
Consolidated EBITDA of the Company and the Subsidiaries for the fiscal year
ended December 31, 1996, calculated on the basis of the SEC Pro Forma Income
Statement after adjusting the SEC Pro Forma Income Statement by (i) adding
thereto, to the extent not already reflected therein, the amount of projected
1997 cost savings (approximately $[6,000,000]) attributable to the Acquisitions,
as reflected in the Confidential Information Memorandum and (ii) making such
other adjustments, if any, as may be necessary to reflect any difference in the
actual amount of Net Proceeds received in connection with such Equity Issuance
from the amount of Net Proceeds utilized in preparing the SEC Pro Forma Income
Statement. "RESET DATE LEVERAGE RATIO" shall mean the ratio of (i) Total Debt as
of the Reset Date to (ii) Adjusted Pro Forma 1996 EBITDA.
"ASSESSMENT RATE" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; PROVIDED that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"BASE CD RATE" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"BASKET INDEBTEDNESS" means all Indebtedness of the Company
and its Subsidiaries created, incurred, assumed or otherwise permitted to exist
pursuant to clause (v), (vi) or (ix) of Section 6.01.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWERS" has the meaning set forth in the preamble to this
Agreement.
12
6
"BORROWING" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurocurrency Loans,
as to which a single Interest Period is in effect, or (b) a Swingline Loan.
"BORROWING REQUEST" means a request by a Borrower for a
Borrowing in accordance with Section 2.03 (or Section 2.04).
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in Detroit, Michigan or New York City are
authorized or required by law to remain closed; PROVIDED that, when used in
connection with a Eurocurrency Loan, the term "BUSINESS DAY" shall also exclude
any day on which banks are not open for dealings in deposits in the relevant
Eurocurrency in the London interbank market.
"CANADIAN LETTER OF CREDIT" means the letter of credit dated
February 16, 1990, issued by ▇▇▇▇▇▇ Financial, Inc., for the account of a
Subsidiary in favor of the Public Utilities Commission of St. ▇▇▇▇▇▇, in the
amount of $180,000 Canadian dollars, and any amendments, renewals, replacements
and extensions thereof. For purposes of this Agreement, the U.S. LC Exposure
attributable to the full amount of the Canadian Letter of Credit shall be deemed
to be $150,000 (and any U.S. LC Exposure attributable to any portion thereof
shall be the equivalent proportion of $150,000), except as otherwise set forth
in Section 2.05(e).
"CAPITAL EXPENDITURES" of any Person means, for any period,
(a) the additions to property, plant and equipment and other capital
expenditures of such Person and its consolidated subsidiaries that are (or would
be) set forth as expenditures for property, plant and equipment in a
consolidated statement of cash flows of the Company for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by such Person
and its consolidated subsidiaries during such period; provided, however, that
"Capital Expenditures" of the Company shall not include (x) payments of the
purchase price for (i) acquisitions of, or Investments in, additional
Subsidiaries, or (ii) for Investments in, or for purchases or other acquisitions
from any Person of assets constituting, going concerns or business units, or
(iii) for Investments in Joint Ventures or other Invested Entities, in each case
made in accordance with the provisions of Section 6.04(a) or (y) Investments
made pursuant to Section 6.04(a)(ix).
"CAPITAL LEASE OBLIGATIONS" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a
13
7
balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"CASH INTEREST EXPENSE" means, for any period, Consolidated
Interest Expense for such period less pay-in-kind Consolidated Interest Expense
and all other non-cash items that would be included in Consolidated Interest
Expense, including, as applicable, the items referred to in subclauses (i) and
(ii) of the definition of Consolidated Interest Expense.
"CHANGE IN CONTROL" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
other than Citicorp Venture Capital or its Affiliates (collectively, "CVC"), of
shares representing more than 20% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Company by Persons who were neither nominated nor elected by a
majority of (i) the members of the board of directors of the Company on the date
hereof and (ii) other directors so elected or nominated, taken together; or (c)
the acquisition of direct or indirect Control of the Company by any Person or
group other than CVC.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender's or such Issuing Bank's holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are U.S.
Revolving Loans, German Revolving Loans, Tranche A Term Loans, Tranche B Term
Loans, German Term Loans, German Swingline Loans or U.S. Swingline Loans and,
when used in reference to any Commitment, refers to whether such Commitment is a
U.S. Revolving Commitment, German Revolving Commitment, Tranche A Commitment,
Tranche B Commitment or German Term Commitment.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
14
8
"COLLATERAL" means any and all "Collateral", as defined in any
applicable Security Document.
"COLLATERAL AGENT" means NBD Bank, in its capacity as
collateral agent for the Secured Parties (as defined in the Security Documents)
under the Security Documents.
"COMMITMENT" means a German Revolving Commitment, U.S.
Revolving Commitment, Tranche A Commitment, Tranche B Commitment, German
Term Commitment or any combination thereof, as the context may require.
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY GUARANTEE" means the guarantee of the Company with
respect to the Obligations of Holdings, substantially in the form of Exhibit B,
as amended and supplemented from time to time in accordance with the terms
thereof and hereof.
"COMPANY HOLDINGS PLEDGE AGREEMENT" means the pledge agreement
among the Company and the Lenders with respect to the pledge of 65% of the
outstanding shares of common stock of Holdings, substantially in the form of
Exhibit C, as amended and supplemented from time to time in accordance with the
terms thereof and hereof.
"COMPANY PLEDGE AGREEMENT" means the pledge agreement between
the Company and the Collateral Agent, substantially in the form of Exhibit D, as
amended and supplemented from time to time in accordance with the terms thereof
and hereof.
"COMPANY SECURITY AGREEMENT" means the security agreement
between the Company and the Collateral Agent, substantially in the form of
Exhibit E, as amended and supplemented from time to time in accordance with the
terms thereof and hereof.
"CONFIDENTIAL INFORMATION MEMORANDUM" means the Confidential
Information Memorandum dated October 1996 relating to the credit facilities
contemplated by this Agreement, as supplemented by a revised term sheet dated
November 22, 1996, in each case in the form approved by the Company provided by
the Syndication Agent to potential Lenders.
15
9
"CONSOLIDATED EBITDA" means for any Person, without
duplication, for any period for which such amount is being determined, the sum
for such period of (i) Consolidated Net Income, (ii) provision for taxes based
on income, (iii) Consolidated Interest Expense and (iv) other noncash items
(including depreciation expense and amortization expense) reducing Consolidated
Net Income, all as determined on a consolidated basis for such Person and its
consolidated subsidiaries in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means for any Person, for any
period for which such amount is being determined, the interest expense of such
Person and its consolidated subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, including (i) the amortization of
debt discounts to the extent included in interest expense in accordance with
GAAP, (ii) the amortization of all fees (including fees with respect to interest
rate protection agreements or other interest rate hedging arrangements) payable
in connection with the incurrence of Indebtedness to the extent included in
interest expense in accordance with GAAP and (iii) the portion of any rents
payable under capital leases allocable to interest expense in accordance with
GAAP.
"CONSOLIDATED NET INCOME" shall mean, for any Person for any
period for which such amount is being determined, the net income (loss) of such
Person and its consolidated subsidiaries during such period determined on a
consolidated basis for such period taken as a single accounting period in
accordance with GAAP; PROVIDED that there shall be excluded (i) income (or loss)
of any Person (other than a consolidated subsidiary of the Person in respect of
which Consolidated Net Income is being determined) in which any other Person
(other than such Person or any of its consolidated subsidiaries) has an equity
interest, except to the extent of the amount of dividends or other distributions
actually paid to such Person or any of its consolidated subsidiaries by such
other Person during such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a consolidated subsidiary of such Person or is
merged into or consolidated with such Person or any of its consolidated
subsidiaries or the Person's assets are acquired by such Person or any of its
consolidated subsidiaries and (iii) any after-tax gains (but not pretax losses)
attributable to sales of assets out of the ordinary course of business.
"CONSOLIDATED NET WORTH" means, with respect to any Person, at
any date, all amounts which, in conformity with GAAP, would be included under
stock-holders' equity on a consolidated balance sheet of such Person and its
subsidiaries on such date.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether
16
10
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CONVERSION EVENT" has the meaning assigned to such term in
Section 2.18(f).
"CONVERSION PERCENTAGE" has the meaning assigned to such
term in Section 2.18(f).
"CONVERTED LOANS" has the meaning assigned to such term in
Section 2.18(f).
"CONVERTED OBLIGATION" has the meaning assigned to such term
in Section 2.18(f).
"CREDIT EVENT" has the meaning assigned to such term in
Section 4.02.
"DEFAULT" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"DEUTSCHE BANK TERMINATION DATE" means the earlier of (i) the
date on which the liquidity facilities provided by Deutsche Bank to Holdings and
its subsidiaries are terminated and (ii) June 30, 1997.
"DEUTSCHEMARKS" or "DM" refers to lawful money of the Federal
Republic of Germany.
"DIBO RATE" means, with respect to any Eurodeutschemark
Borrowing for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to DM deposits in the London
interbank market) at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, as the rate for DM deposits
with a maturity comparable to such Interest Period. In the event that such rate
is not available at such time for any reason, then the "DIBO RATE" with respect
to such Eurodeutschemark Borrowing for such Interest Period shall be the rate at
which Deutschemark deposits of DM 5,000,000 for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately
17
11
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"DISCLOSED MATTERS" means the environmental matters disclosed
in Schedule 3.06(a) and the actions, suits and proceedings disclosed in Schedule
3.06(b).
"DOLLAR EQUIVALENT" means, on any date of determination, with
respect to any amount in Deutschemarks, the equivalent in dollars of such
amount, and with respect to any amount in dollars, the Deutschemark equivalent
of such amount, determined in each case by the Administrative Agent using the
Exchange Rate with respect to Deutschemarks then in effect.
"DOLLARS" or "$" refers to lawful money of the United States
of America.
"EFFECTIVE DATE" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"EFFECTIVE PERIOD" means the period beginning on the Effective
Date and ending on and including the fifth Business Day following the Effective
Date.
"ELIGIBLE HOLDINGS SUBSIDIARIES" means Krebsoege Sinterholding
GmbH, Sintermetallwerk Krebsoege GmbH, Metallwerk Unterfranken GmbH and
Pressmetall Krebsoege GmbH and such other wholly owned subsidiaries of Holdings
as are included from time to time in the "organschaft" of Holdings.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, investigation, remediation, release or threatened
release of any Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
18
12
"EQUITY ISSUANCE" means the issuance by the Company or any
Subsidiary of any equity securities, or the receipt by the Company or any
Subsidiary of any capital contribution, other than any such issuance of equity
securities to, or receipt of any such capital contribution from, the Company or
a Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EUROCURRENCY" means dollars or Deutschemarks and, when used
with reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are either Eurodollar or Eurodeutschemark
Loans.
"EURODEUTSCHEMARK", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
(i) bear interest at a rate determined by reference to the Adjusted DIBO Rate
and (ii) are denominated in Deutschemarks.
19
13
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, (i) bear
interest at a rate determined by reference to the Adjusted LIBO Rate and (ii)
are denominated in dollars.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCESS CASH FLOW" means, for any period, the sum (without
duplication) of:
(a) the Consolidated Net Income (or loss) of the Company for
such period, adjusted to exclude any gains or losses attributable to
Prepayment Events; PLUS
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such Consolidated Net Income (or loss)
for such period; PLUS
(c) the sum of (i) the amount, if any, by which Net Working
Capital of the Company decreased during such period plus (ii) aggregate
cash proceeds received by the Company or its consolidated Subsidiaries
during such period from Capital Lease Obligations or from other
Indebtedness (in each case, other than CapEx Refinancing Indebtedness)
incurred by the Company or its consolidated Subsidiaries during such
period to finance Capital Expenditures, PROVIDED that such proceeds are
not expended or to be expended in the fiscal quarter when received or
the immediately following fiscal quarter to make Capital Expenditures;
MINUS
(d) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such period plus (ii) the
amount, if any, by which Net Working Capital of the Company increased
during such period; MINUS
(e) Capital Expenditures of the Company paid in cash during
such period, other than amounts paid from proceeds excluded as an
addition to Excess Cash Flow by the proviso to clause (c)(ii) above;
MINUS
(f) amounts paid in cash during such period on account of
items that were accounted for as noncash reductions of Consolidated Net
Income of the Company in such period or in a prior period; MINUS
20
14
(g) the aggregate principal amount of Indebtedness repaid or
prepaid by the Company and its consolidated Subsidiaries during such
period, excluding (i) Indebtedness in respect of Revolving Loans,
Swingline Loans and Letters of Credit, (ii) Term Loans prepaid pursuant
to Section 2.11(b) or (c), (iii) repayments or prepayments of
Indebtedness to the extent financed by incurring other Indebtedness,
including CapEx Refinancing Indebtedness, and (iv) repayments of
Indebtedness incurred under Section 6.01(iii), (v) and (ix) hereof that
permanently reduce (by an equivalent amount) the amount of Indebtedness
that the Company or its Subsidiaries may incur under the documentation
governing such Indebtedness.
For purposes of this definition, "CAPEX REFINANCING INDEBTEDNESS" means Capital
Lease Obligations or other Indebtedness to the extent the proceeds thereof are
used to refinance or repay Capital Lease Obligations or other Indebtedness the
cash proceeds of which (or of predecessor Indebtedness refinanced thereby) have
previously been included as a positive component of Excess Cash Flow in any
period or were excluded as an addition to Excess Cash Flow by the proviso to
clauses (c)(ii).
"EXCHANGE RATE" means, on any day, with respect to any
Deutschemarks, the rate at which Deutschemarks may be exchanged into dollars, as
set forth at approximately 11:00 a.m., Frankfurt time, on such date on the
Reuters World Currency Page for Deutschemarks. In the event that such rate does
not appear on any Reuters World Currency Page, the Exchange Rate shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the
Company, or, in the absence of such agreement, such Exchange Rate shall instead
be the arithmetic average of the spot rates of exchange of the Administrative
Agent in the market where its foreign currency exchange operations in respect of
Deutschemarks are then being conducted, at or about 10:00 a.m., local time, on
such date for the purchase of dollars for delivery two Business Days later;
PROVIDED that if at the time of any such determination, for any reason, no such
spot rate is being quoted, the Administrative Agent may use any reasonable
method it deems appropriate to determine such rate, and such determination shall
be conclusive absent manifest error.
"EXCLUDED TAXES" means, with respect to either Agent, any
Lender, either Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of any Borrower hereunder, and except as
otherwise provided in Section 2.17, (a) income or franchise taxes imposed on (or
measured by) its net income (including branch profits or similar taxes) imposed
as a result of a present or former connection between such Lender or any Agent
or Issuing Bank and the Governmental Authority imposing such tax (other than any
such connection arising solely from such Lender or any Agent or Issuing Bank
having executed, delivered or
21
15
performed its obligations or received a payment under, or enforced, this
Agreement) and (b) in the case of a Foreign Lender (other than an assignee
pursuant to a request by a Borrower under Section 2.19(b)), any withholding tax
that is imposed on amounts payable to such Foreign Lender (i) to the extent they
are in effect and would apply as of the date such Foreign Lender becomes a party
to this Agreement or (ii) to the extent they relate to payments received by a
new lending office designated by such Foreign Lender and are in effect and would
apply at the time such lending office is designated (other than any withholding
tax imposed on payments by any Borrower from a Payment Location other than one
identified in this Agreement or any schedule hereto as of the date hereof as a
Payment Location from which payments would be made), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the applicable Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means, with respect to the Company or any
Subsidiary, as the case may be, the chief financial officer, principal
accounting officer, treasurer, assistant treasurer or controller of the Company
or such Subsidiary.
"FIXED CHARGE COVERAGE RATIO" means, for any period for which
such ratio is being determined, the ratio for such period of (a) Consolidated
EBITDA of the Company minus Capital Expenditures referred to in clause (a) of
the definition thereof paid during such period to (b) the sum of (i) Cash
Interest Expense, (ii) cash tax expense, (iii) the amount of Restricted Payments
(other than those referred to in Section 6.06(a)(i) and Restricted Payments
received by the Company or a Subsidiary), and (iv) required principal payments
(whether at maturity or pursuant to any amortization, sinking fund or mandatory
scheduled prepayment, redemption or repurchase provisions) of Indebtedness for
borrowed money and payments in respect of the capitalized portion of Capital
Lease Obligations, in each case of the Company and its consolidated
Subsidiaries.
22
16
"FNBC PRIME RATE" means the rate of interest per annum
publicly announced from time to time by The First National Bank of Chicago,
Frankfurt Branch, as its prime rate in effect at its office in Frankfurt,
Germany. Each change in the FNBC Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than the Relevant Jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"GERMAN AUTHORIZED PERSON" means, with respect to any German
Borrower, (i) any Financial Officer, (ii) the chief financial officer of
Holdings and (iii) the controller of Holdings.
"GERMAN BORROWER CONDITION" means the following conditions
which must be satisfied with respect to any Subsidiary Borrower prior to such
Subsidiary Borrower making any Borrowing of German Revolving Loans or German
Swingline Loans:
(i) the Company shall have executed and delivered a new
guarantee agreement or an amendment to the Company Guarantee, in form
and substance satisfactory to the Administrative Agent and the Required
Lenders (the "ADDITIONAL GUARANTEE"), pursuant to which the Company (in
addition to its obligations under the Company Guarantee) irrevocably
and unconditionally guarantees all the obligations of Holdings under
the Holdings Guarantee or all the obligations of such Subsidiary
Borrower under this Agreement;
(ii) Holdings shall have executed and delivered the Holdings
Guarantee in respect of such Subsidiary Borrower;
(iii) the Company Pledge Agreement, the Company Security
Agreement and the U.S. Subsidiary Guarantee Agreement shall have been
amended in a manner satisfactory in form and substance to the
Collateral Agent and the Required Lenders in order to provide or
confirm that such agreements secure or guarantee, as applicable, the
Company's obligations under the Additional Guarantee;
23
17
(iv) such Subsidiary Borrower shall become party hereto by duly
executing and delivering a counterpart of this Agreement; and
(v) the Lenders shall have received opinions of U.S. and German
counsel for the Borrowers, addressed to the Lenders and in form and
substance satisfactory to the Administrative Agent and the Required
Lenders, as to the due authorization, execution, delivery, validity,
binding nature and enforceability of the agreements referred to in
clauses (i), (ii), (iii) and (iv) above, as to the continued validity
and enforceability of this Agreement in respect of the German Loan
Parties other than Holdings, as to noncontravention of documents, laws
and agreements and the absence of required governmental approvals, in
each case in connection with the execution, delivery and performance of
this Agreement and the other Loan Documents referred to above, and as
to such other matters relating to the foregoing as any Lender may
reasonably request.
"GERMAN BORROWERS" means Holdings and each Subsidiary Borrower
that has become party to this Agreement.
"GERMAN GROUP MEMBER" means at any time Holdings and each
Eligible Holdings Subsidiary at such time.
"GERMAN ISSUING BANK" means The First National Bank of
Chicago, in its capacity as the issuer of German Letters of Credit hereunder,
and any other Lender that may hereafter be designated as a German Issuing Bank
hereunder pursuant to a written instrument executed by the Company and such
Lender and approved by the Administrative Agent (such approval not to be
unreasonably withheld). A German Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such German
Issuing Bank, in which case the term "German Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"GERMAN LC DISBURSEMENT" means a payment made by the German
Issuing Bank pursuant to a Letter of Credit.
"GERMAN LC EXPOSURE" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding German Letters of Credit at such
time plus (b) the aggregate amount of all German LC Disbursements that have not
yet been reimbursed by or on behalf of the German Borrowers at such time. The
German LC Exposure of any German Revolving Lender at any time shall be its
Applicable Percentage (based on its German Revolving Commitment) of the total
German LC Exposure at such time.
24
18
"GERMAN LETTER OF CREDIT" means any Letter of Credit issued by
the German Issuing Bank pursuant to this Agreement.
"GERMAN LOAN PARTY" means any Loan Party that is organized
under the laws of the Federal Republic of Germany or any political subdivision
thereof.
"GERMAN REVOLVING COMMITMENT" means, with respect to each
Lender, the commitment, if any, of such Lender to make German Revolving Loans in
DM and to acquire participations in German Letters of Credit hereunder,
expressed in Deutschemarks as an amount representing the maximum aggregate
amount of such Lender's German Revolving Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's German Revolving
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its German Revolving
Commitment, as applicable. The initial aggregate amount of the Lenders' German
Revolving Commitments is DM 30,000,000.
"GERMAN REVOLVING EXPOSURE" means, with respect to any Lender
at any time, the sum at such time of (i) the outstanding principal amount of
such Lender's German Revolving Loans, (ii) such Lender's German LC Exposure and
(iii) such Lender's German Swingline Exposure.
"GERMAN REVOLVING LENDER" means a Lender with a German
Revolving Commitment or, if the German Revolving Commitments have terminated or
expired, a Lender with German Revolving Exposure.
"GERMAN REVOLVING LOAN" means a Loan made pursuant to clause
(e) of Section 2.01.
"GERMAN SUBSIDIARY GUARANTEE" means the guarantee of the
German Group Members other than Holdings with respect to the Obligations of
Holdings, substantially in the form of Exhibit F, as amended and supplemented
from time to time in accordance with the terms thereof and hereof.
"GERMAN SWINGLINE EXPOSURE" means, at any time, the aggregate
principal amount of all German Swingline Loans outstanding at such time. The
German Swingline Exposure of any Lender at any time shall be its Applicable
Percentage (based on its German Revolving Commitment) of the total German
Swingline Exposure at such time.
25
19
"GERMAN SWINGLINE LENDER" means The First National Bank of
Chicago (or an Affiliate thereof), in its capacity as lender of German Swingline
Loans hereunder, or any other Lender that may from time to time be designated to
replace the then-current German Swingline Lender in such capacity pursuant to a
written instrument signed by the Company and such Lender and approved by the
Administrative Agent (such approval not to be unreasonably withheld).
"GERMAN SWINGLINE LOAN" means a Loan made to a German Borrower
pursuant to Section 2.04(a).
"GERMAN TERM COMMITMENT" means, with respect to each Lender,
the commitment, if any, of such Lender to make a German Term Loan in DM
hereunder on the Effective Date, expressed in Deutschemarks as an amount
representing the maximum principal amount of the German Term Loan to be made by
such Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's German Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
German Term Commitment, as applicable. The initial aggregate amount of the
Lenders' German Term Commitments is DM 124,500,000.
"GERMAN TERM LENDER" means a Lender with a German Term
Commitment or an outstanding German Term Loan.
"GERMAN TERM LOAN" means a Loan made pursuant to clause (c) of
Section 2.01.
"GERMAN TERM LOAN MATURITY DATE" means June 30, 2003.
"GOVERNMENTAL AUTHORITY" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other
26
20
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"GUARANTEE AGREEMENTS" means the German Subsidiary Guarantee,
the Holdings Guarantee, the Company Guarantee, the U.S. Subsidiary Guarantee and
any Additional Guarantee.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances or wastes and all hazardous or toxic materials, substances, wastes or
other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature, in each case
above to the extent regulated pursuant to any Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"HISTORICAL STATEMENTS" has the meaning given to such term in
Section 3.04(a).
"HOLDINGS" has the meaning set forth in the preamble to this
Agreement.
"HOLDINGS ASSIGNMENT OF CLAIMS" means the collective reference
to the assignments of claims by Holdings in favor of the Lenders substantially
in the form of Exhibit H-2, as amended and supplemented from time to time in
accordance with the terms thereof and hereof.
"HOLDINGS GUARANTEE" means the guarantee of Holdings with
respect to the Obligations of each of the Subsidiary Borrowers, substantially in
the form of Exhibit G, as amended and supplemented from time to time in
accordance with the terms thereof and hereof.
27
21
"HOLDINGS PLEDGE AGREEMENT" means the pledge agreement among
Holdings and the Lenders with respect to the pledge by Holdings of all the
outstanding shares of common stock of Krebsoge Sinterholding GmbH and Metallwerk
Langensalza GmbH owned by Holdings, substantially in the form of Exhibit H-1, as
amended and supplemented from time to time in accordance with the terms thereof
and hereof.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind made to such Person, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid
(other than leases and accounts payable not otherwise constituting
Indebtedness), (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary course
of business and that are either (i) not overdue by more than 120 days or (ii)
subject to a bona fide dispute), (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes and
Other Taxes.
"INTEREST ELECTION REQUEST" means a request by a Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.07.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, (b) with respect
to any Eurocurrency Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest
28
22
Period of more than three months' duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period, and (c) with respect to any Swingline
Loan, monthly in arrears on the last day of each month.
"INTEREST PERIOD" means with respect to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the relevant Borrower may elect; PROVIDED, that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"INVESTED ENTITY" means any Person, other than a Subsidiary
but including, without limitation, any Joint Venture in which the Company or any
Subsidiary, as the case may be, holds an equity interest.
"INVESTED ENTITY EXPENSES" means the costs or expenses (i)
incurred by any Invested Entity and (ii) the payment of which by the Company or
any Subsidiary, as the case may be, on behalf of such Person would be
appropriately attributable to an investment by the Company or such Subsidiary,
as the case may be, in such Person.
"INVESTMENTS" shall have the meaning assigned to such term in
Section 6.04(a). For purposes hereof, the amount of an Investment at any time
shall mean the initial amount thereof less any return of capital, principal or
other investment amount (by way of redemption, capital distribution, repayment
or otherwise) in respect thereof, or repayment or reimbursement of Invested
Entity Expenses, or payment of any amount thereof by a Joint Venture or any
other Person other than the Company or a Subsidiary, but not less any interest,
dividends or other investment returns in respect thereof.
"ISSUING BANKS" means the German Issuing Bank and the U.S.
Issuing Bank.
29
23
"JOINT VENTURE" means a limited purpose corporation,
partnership, joint venture or other similar legal entity now or hereafter formed
by the Company or any Subsidiary with another Person or Persons (other than
Affiliates of the Company) in order to conduct a common venture or enterprise
with such Person or Persons and in which the equity interests are owned by such
Person or Persons and the Company or such Subsidiary, as the case may be;
PROVIDED that no entity within the definition of German Group Member or
Subsidiary shall be deemed a Joint Venture and no Joint Venture shall be deemed
to result from the ownership by any Person of directors' qualifying shares or
other shares or equity interests owned to satisfy applicable statutory or
regulatory requirements.
"JUDGMENT CURRENCY" has the meaning assigned to such term in
Section 9.14.
"LC BORROWER" has the meaning assigned to such term in
Section 2.05(a).
"LC DISBURSEMENT" means any German LC Disbursement or U.S.
LC Disbursement.
"LC EXPOSURE" means, at any time, the sum of (a) the U.S. LC
Exposure and (b) the German LC Exposure. The LC Exposure of any Revolving Lender
at any time shall be the sum of its Applicable Percentages of the U.S.
LC Exposure and the German LC Exposure.
"LENDERS" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lenders.
"LETTER OF CREDIT" means any German Letter of Credit or U.S.
Letter of Credit.
"LEVERAGE RATIO" means, on any date, the ratio of (a) Total
Debt on such date to (b) Consolidated EBITDA of the Company for the most recent
period of four consecutive fiscal quarters ended on or prior to such date.
"LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such
30
24
page of such Service, as determined by the Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as
the rate for dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the "LIBO RATE" with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which dollar deposits of $5,000,000 for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Guarantee
Agreements, the Security Documents and any Notes.
"LOAN PARTIES" means each Borrower and each Subsidiary that is
party to any Loan Document.
"LOANS" means the loans made by any of the Lenders to the
Borrowers pursuant to this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, assets, operations or condition, financial or otherwise, of
(i) the Company and the Subsidiaries taken as a whole, (ii) the Company and its
U.S. Subsidiaries, taken as a whole, or (iii) Holdings and its subsidiaries,
taken as a whole, (b) the ability of the Company and its U.S. Subsidiaries,
taken as a whole, or of Holdings and its subsidiaries, taken as a whole, to
perform any of their monetary obligations or any other material obligations
under the Loan Documents to which they are party or (c) the material rights of
or material remedies available to the Lenders under the Loan Documents.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Company and its Subsidiaries in an
aggregate principal
31
25
amount exceeding $5,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of the Company or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGE" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"MORTGAGED PROPERTY" means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on
Schedule 3.05(a) as Mortgaged Properties, and includes each other parcel of real
property and improvements thereto with respect to which a Mortgage is granted
pursuant to Section 5.11 or 5.12.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any event (a) the cash
proceeds received by the Company or any Subsidiary in respect of such event
including (i) any cash received in respect of any non-cash proceeds, but only as
and when received, (ii) in the case of a casualty, the amount of insurance
proceeds in excess of $250,000 (or the equivalent in foreign currency), and
(iii) in the case of a condemnation or similar event, the amount of condemnation
awards and similar payments in excess of $250,000, net of (b) the sum of (i) all
fees and out-of-pocket expenses paid or payable by the Company and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event (which amounts may be reasonably estimated to the extent not then known),
(ii) in the case of a sale or other disposition of an asset (including pursuant
to a casualty or condemnation), the amount of all payments required to be made
by the Company and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) by the Company and the
Subsidiaries during the year that such event occurred or the next succeeding
year, and the amount of any reserves established by the Company and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case that are directly attributable to such event (as determined
reasonably and in good faith by the chief financial officer of the Company);
provided, however, that (x) any excess of estimated fees and expenses
32
26
under clause (b)(i) over the actual amounts thereof shall constitute Net
Proceeds and be deemed to have been received on the date such excess can be
determined and (y) any excess of estimated taxes or contingency reserves under
clause (b)(iii) over the actual amounts of taxes referred to in such clause or
contingent liabilities payable shall constitute Net Proceeds and be deemed to
have been received at the end of the period referred to in such clause, in the
case of taxes, and at the time any such excess portion of the contingency
reserve is reversed (and in the amount of such reversal), in the case of
contingency reserves.
"NET WORKING CAPITAL" of any Person means, at any date, (a)
the consolidated current assets of such Person and its consolidated subsidiaries
as of such date (excluding cash and Permitted Investments) minus (b) the
consolidated current liabilities of such Person and its consolidated
subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness). Net Working Capital at any date may be a positive or negative
number. Net Working Capital increases when it becomes more positive or less
negative and decreases when it becomes less positive or more negative.
"NOTE" means any promissory note delivered by a Borrower
pursuant to Section 2.09.
"OBLIGATIONS" of any Loan Party means the obligations of such
Loan Party under this Agreement or any other Loan Document to which it is party
with respect to the payment (as a Borrower, guarantor or otherwise) of (i) the
principal of and interest on Loans made hereunder when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise and (ii) all other monetary obligations of such Loan Party hereunder
and under any other Loan Document.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document (other than Excluded Taxes and Indemnified Taxes).
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means a certificate in the form
attached to the Company Security Agreement, or any other form approved by the
Collateral Agent.
33
27
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes, assessments and governmental
charges or levies that are not yet due or are being contested in
compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security or similar laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business
of the Company or any Subsidiary;
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America or the Federal Republic of Germany (or by any agency
thereof to the extent such obligations are backed by the full faith
and credit of the United States of America or the Federal Republic of
Germany, as the case may be), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of
acquisition, a credit rating of A-1 or P-1 (or an equivalent rating)
from S&P or from Moody's, as
34
28
the case may be (or an equivalent rating from a comparable German
rating agency);
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any U.S. or German
office of any commercial bank organized under the laws of the United
States of America or any State thereof or of the Federal Republic of
Germany which has (i) a combined capital and surplus and undivided
profits of not less than $500,000,000 and (ii) either (x) issues, or
has a parent company which issues, commercial paper rated at least A-1
(or an equivalent rating) by S&P or P-1 (or an equivalent rating) by
Moody's (or a rating equivalent to the foregoing from a comparable
German rating agency) or (y) has a long-term unsecured debt rating of
at least A- (or an equivalent rating) by S&P or A3 (or an equivalent
rating) by Moody's (or a rating equivalent to the foregoing from a
comparable German rating agency); and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"PERSON" means any natural person, corporation, limited
liability company, trust, mutual fund, joint venture, association, company,
partnership, Governmental Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PLEDGE AGREEMENTS" means the Company Pledge Agreement, the
Company Holdings Pledge Agreement, the Holdings Pledge Agreement and the U.S.
Subsidiary Pledge Agreement.
"PREPAYMENT EVENT" means:
(a) any sale, transfer or other disposition (including pursuant
to a sale and leaseback transaction) of any property or asset of the
Company or any Subsidiary, other than (i) dispositions described in
clauses (i), (ii), and (iii) of Section 6.04(b) and (ii) other
dispositions to the extent such dispositions do not
35
29
result in aggregate Net Proceeds exceeding $1,000,000 during any
fiscal year of the Company; or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of,
any property or asset of the Company or any Subsidiary, but only to
the extent that the Net Proceeds therefrom have not been applied to
repair, restore or functionally replace such property or asset within
270 days after such event; or
(c) any Equity Issuance.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by NBD Bank as its prime rate in effect at its
principal office in Detroit; each change in the Prime Rate shall be effective
from and including the date such change is publicly announced as being
effective.
"PRO FORMA FINANCIAL STATEMENTS" has the meaning given to such
term in Section 3.04(b).
"RATE PROTECTION AGREEMENT" means any interest rate swap,
interest rate cap or similar agreement or arrangement (including options)
designed to protect a Borrower against fluctuations in interest rates.
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"RELEVANT JURISDICTION" means (i) in the case of any Loan to
the Company, the United States of America, and (ii) in the case of any Loan to
any of the German Borrowers, the Federal Republic of Germany.
"REQUIRED LENDERS" means, at any time, Lenders having
Revolving Exposures, Term Loans and unused Commitments representing at least 51%
of the sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Company or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the
36
30
purchase, redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock of the Company or any Subsidiary or any option,
warrant or other right to acquire any such shares of capital stock of the
Company or any Subsidiary.
"REVOLVING AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"REVOLVING COMMITMENT" means, collectively, the German
Revolving Commitment and the U.S. Revolving Commitment.
"REVOLVING EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"REVOLVING LENDER" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
"REVOLVING LOAN" means a Loan made pursuant to clause (d) or
(e) of Section 2.01.
"REVOLVING MATURITY DATE" means June 30, 2003.
"RICHTON PARK IDB" means the Industrial Development Revenue
Bonds issued by the Village of Richton Park, ▇▇▇▇ County, Illinois, pursuant to
the Trust Agreement, dated as of April 1, 1996, between the Company and Mellon
Bank, N.A., as trustee.
"S&P" means Standard & Poor's.
"SECURITY AGREEMENTs" means the Company Security Agreement and
the U.S. Subsidiary Security Agreement.
"SECURITY DOCUMENTS" means the Mortgages, the Holdings
Assignment of Claims, the Pledge Agreements, the Security Agreements and each
other security agreement or other instrument or document executed and delivered
pursuant to Section 5.11 or 5.12 to secure the Obligations, or any portion
thereof, of any Loan Party.
37
31
"STATUTORY RESERVE RATE" means, with respect to any currency,
a fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate of the
maximum reserve, liquid asset or similar percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by any Governmental Authority of the jurisdiction of such currency to which
banks in such jurisdiction are subject (a) with respect to the Base CD Rate, for
new negotiable time deposits in dollars of over $100,000 with maturities of
approximately three months and (b) with respect to the LIBO Rate for Loans in
dollars and the DIBO Rate for Loans in Deutschemarks, as the case may be, for
any category of deposits or liabilities customarily used to fund loans in such
currency or by reference to which interest rates applicable to Loans in such
currency are determined. Such reserve, liquid asset or similar percentages
shall, in the case of dollars, include those imposed pursuant to Regulation D of
the Board. Eurocurrency Loans shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under Regulation D or any
other applicable law, rule or regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"SUBSIDIARY" means any subsidiary of the Company; PROVIDED,
HOWEVER, that PEAK Werkstoff GmbH, Krebsoege Feida Danyang Filters, Krebsoege
Excel (Filters) PVT. Ltd., Sintered Metals Components, (Pty) Ltd., Sinter Metals
Foreign Sales Corporation and any Joint Venture or other Invested Entity in
which the Company or any Subsidiary makes an Investment pursuant to and in
accordance with Section 6.04, (i) shall, if a consolidated subsidiary of the
Company for purposes of financial statements prepared in accordance with GAAP,
be deemed a "consolidated Subsidiary" for purposes of references to financial
statements or references to or definitions of financial or accounting terms and
any related financial covenants and (ii) shall not otherwise be deemed a
Subsidiary or subsidiary for purposes of this
38
32
Agreement. Any non-U.S. Subsidiary, at least 98% of the outstanding shares of
each class of which are owned, controlled or held by the Company and/or other
wholly owned Subsidiaries, shall be deemed to be a "wholly owned Subsidiary" for
purposes of this Agreement.
"SUBSIDIARY BORROWERS" has the meaning set forth in the
preamble to this Agreement.
"SWINGLINE EXPOSURE" means, at any time, (a) the sum of the
U.S. Swingline Exposure and (b) the German Swingline Exposure. The Swingline
Exposure of any Lender at any time shall be the sum of its Applicable
Percentages of the U.S. Swingline Exposure and the German Swingline Exposure.
"SWINGLINE LENDERS" means the German Swingline Lender and the
U.S. Swingline Lender.
"SWINGLINE LOAN" means any German Swingline Loan or U.S.
Swingline Loan.
"SYNDICATION AGENT" means Salomon Brothers Inc, in its
capacity as syndication agent for the Lenders hereunder.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOANS" means Tranche A Term Loans, Tranche B Term Loans
and German Term Loans.
"THREE-MONTH SECONDARY CD RATE" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
39
33
"TOTAL DEBT" means, at any date, all Indebtedness of the
Company and its consolidated Subsidiaries at such date to the extent such
Indebtedness should be reflected as a liability on a consolidated balance sheet
of the Company (excluding any such items which appear only in the notes to such
consolidated balance sheet) at such date in accordance with GAAP.
"TRANCHE A COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan in dollars
hereunder, expressed in dollars as an amount representing the maximum principal
amount of the Tranche A Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche A
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche A Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche A Commitments
is $30,000,000.
"TRANCHE A LENDER" means a Lender with a Tranche A Commitment
or an outstanding Tranche A Term Loan.
"TRANCHE A MATURITY DATE" means June 30, 2003.
"TRANCHE A TERM LOAN" means a Loan made pursuant to clause (a)
of Section 2.01.
"TRANCHE B COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan in dollars
hereunder, expressed in dollars as an amount representing the maximum principal
amount of the Tranche B Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche B Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche B Commitments
is $115,000,000.
"TRANCHE B LENDER" means a Lender with a Tranche B Commitment
or an outstanding Tranche B Term Loan.
"TRANCHE B MATURITY DATE" means June 30, 2005.
40
34
"TRANCHE B TERM LOAN" means a Loan made pursuant to clause (b)
of Section 2.01.
"TRANSACTIONS" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof, the issuance of Letters of
Credit hereunder and the consummation of the Acquisitions.
"TYPE", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate, the
Adjusted DIBO Rate, the Alternate Base Rate or the FNBC Prime Rate.
"U.S. ISSUING BANK" means NBD Bank, in its capacity as the
issuer of U.S. Letters of Credit hereunder, and any other Lender that may
hereafter be designated as a U.S. Issuing Bank hereunder pursuant to a written
instrument executed by the Company and such Lender and approved by the
Administrative Agent (such approval not to be unreasonably withheld). A U.S.
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of such U.S. Issuing Bank, in which case the term
"U.S. Issuing Bank" shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate. In addition, Mellon Bank, N.A., shall be deemed
a U.S. Issuing Bank in respect of the U.S. Letters of Credit listed in Schedule
2.05(a) and any successive renewals thereof.
"U.S. LC DISBURSEMENT" means a payment made by the U.S.
Issuing Bank pursuant to a U.S. Letter of Credit.
"U.S. LC EXPOSURE" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding U.S. Letters of Credit at such time
plus (b) the aggregate amount of all U.S. LC Disbursements that have not yet
been reimbursed by or on behalf of the Company at such time. The U.S. LC
Exposure of any U.S. Revolving Lender at any time shall be its Applicable
Percentage (based on its U.S. Revolving Commitment) of the total U.S. LC
Exposure at such time.
"U.S. LETTER OF CREDIT" means any Letter of Credit issued by a
U.S. Issuing Bank pursuant to this Agreement, including the Canadian Letter of
Credit and the Letters of Credit listed in Schedule 2.05(a), and any successive
renewals thereof.
"U.S. REVOLVING COMMITMENT" means, with respect to each
Lender, the commitment, if any, of such Lender to make U.S. Revolving Loans in
dollars and to acquire participations in U.S. Letters of Credit hereunder,
expressed in dollars as an amount representing the maximum aggregate amount of
such Lender's U.S.
41
35
Revolving Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's U.S. Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its U.S. Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' U.S. Revolving Commitments is $30,000,000.
"U.S. REVOLVING EXPOSURE" means, with respect to any Lender at
any time, the sum at such time of (i) the outstanding principal amount of such
Lender's U.S. Revolving Loans, (ii) such Lender's U.S. LC Exposure and (iii)
such Lender's U.S. Swingline Exposure.
"U.S. REVOLVING LENDER" means a Lender with a U.S. Revolving
Commitment or, if the U.S. Revolving Commitments have terminated or expired, a
Lender with U.S. Revolving Exposure.
"U.S. REVOLVING LOAN" means a Loan made pursuant to clause (d)
of Section 2.01.
"U.S. SUBSIDIARY GUARANTEE" means the guarantee of the U.S.
Subsidiary Loan Parties with respect to the Obligations of the Company,
substantially in the form of Exhibit I, as amended and supplemented from time to
time in accordance with the terms thereof and hereof.
"U.S. SUBSIDIARY LOAN PARTY" means any Subsidiary organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
"U.S. SUBSIDIARY PLEDGE AGREEMENT" means the pledge agreement
among the U.S. Subsidiaries and the Collateral Agent, substantially in the form
of Exhibit J, as amended and supplemented from time to time in accordance with
the terms thereof and hereof.
"U.S. SUBSIDIARY SECURITY AGREEMENT" means the security
agreement substantially in the form of Exhibit K, between the Collateral Agent
and the U.S. Subsidiary Loan Parties, as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"U.S. SWINGLINE EXPOSURE" means, at any time, the aggregate
principal amount of all U.S. Swingline Loans outstanding at such time. The U.S.
Swingline
42
36
Exposure of any Lender at any time shall be its Applicable Percentage (based on
its U.S. Revolving Commitment) of the total U.S. Swingline Exposure at such
time.
"U.S. SWINGLINE LENDER" means NBD Bank, in its capacity as
lender of U.S. Swingline Loans hereunder, or any other Lender that may from time
to time be designated to replace the then-current U.S. Swingline Lender in such
capacity pursuant to a written instrument signed by the Company and such Lender
and approved by the Administrative Agent (such approval not to be unreasonably
withheld).
"U.S. SWINGLINE LOAN" means a Loan made to the Company
pursuant to Section 2.04(c).
"U.S. TERM LOAN" means a Tranche A Term Loan or a Tranche B
Term Loan.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Class
(E.G., a "Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class
and Type (E.G., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (E.G., a "Revolving Borrowing") or by Type
(E.G., a "Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to
43
37
refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement
and (e) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
SECTION 1.05. FOREIGN CURRENCY AMOUNTS. Except as otherwise
specified herein in connection with the determination of the Dollar Equivalent
of dollars or Deutschemarks pursuant to a provision hereof requiring such a
determination or referring to such Dollar Equivalent, and except in connection
with determining the U.S. LC Exposure attributable to the Canadian Letter of
Credit, (i) the amount of any Indebtedness or Investment incurred or made in a
currency other than dollars, and the amount of any payments subsequently made or
received in respect thereof in such a foreign currency, shall, for purposes of
the provisions of Article VI hereof (including in particular any baskets or
limitations expressed in dollars contained therein), be deemed to be the dollar
equivalent of the foreign currency amount, based on prevailing spot exchange
rates in New York, at or about the close of business on the date which such
Indebtedness or Investment is incurred or made and (ii) the amount of any
Material Indebtedness or other threshold amount denominated in a foreign
currency shall for purposes of Article VI hereof and the definition of "Net
Proceeds", be deemed to be the dollar equivalent thereof (determined as
specified in clause (i) above) as of the date of occurrence of any event
specified in, or of the determination of any matter to be determined under,
Article VI for purposes of determining whether a Default has occurred.
44
38
ARTICLE II
THE CREDITS
-----------
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make a Tranche A Term Loan to the
Company during the Effective Period, in dollars, in a principal amount not
exceeding its Tranche A Commitment, (b) to make a Tranche B Term Loan to the
Company during the Effective Period, in dollars, in a principal amount not
exceeding its Tranche B Commitment, (c) to make a German Term Loan to Holdings
during the Effective Period, in Deutschemarks, in a principal amount not
exceeding its German Term Commitment, (d) to make U.S. Revolving Loans to the
Company from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender's U.S. Revolving
Exposure exceeding such Lender's U.S. Revolving Commitment or the aggregate
amount of the Lenders' U.S. Revolving Exposures exceeding the aggregate amount
of the U.S. Revolving Commitments and (e) to make German Revolving Loans to
Holdings and, subject to prior satisfaction of the German Borrower Condition
with respect to one or more of the Subsidiary Borrowers, to each such Subsidiary
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender's German
Revolving Exposure exceeding such Lender's German Revolving Commitment or the
aggregate amount of the Lenders' German Revolving Exposures exceeding the
aggregate amount of the German Revolving Commitments. Notwithstanding any other
provision hereof, the Tranche A Term Loans, the Tranche B Term Loans and the
German Term Loans shall be available only in a single drawing on a single date
of Borrowing on or prior to the last day of the Effective Period, and no other
Borrowing (or issuance of a Letter of Credit) may be effected hereunder prior to
the making of the Term Loans. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Company and the German Borrowers as
applicable, may borrow, prepay and reborrow Revolving Loans. Amounts repaid in
respect of Term Loans may not be reborrowed.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Loan (other than
a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; PROVIDED that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, (i) each Borrowing of U.S.
Revolving Loans or U.S. Term Loans shall be comprised entirely of ABR Loans or
Eurodollar
45
39
Loans as the Company may request in accordance herewith and (ii) each Borrowing
of German Revolving Loans or German Term Loans shall be comprised entirely of
Eurodeutschemark Loans. Each Swingline Loan shall bear interest as set forth in
Section 2.13(a) or (c), as applicable. Each Lender at its option may make any
Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of any Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the
commencement of each Interest Period for any Eurodeutschemark Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of DM
1,000,000 and not less than DM 5,000,000. At the time that each ABR Revolving
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000; PROVIDED that an ABR Revolving Borrowing may be
in an aggregate amount that is equal to the entire unused balance of the total
U.S. Revolving Commitments or that is required to finance the reimbursement of a
U.S. LC Disbursement as contemplated by Section 2.05(e). At the time that each
Borrowing of German Revolving Loans is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of DM 1,000,000; PROVIDED that a
Borrowing of German Revolving Loans may be in an aggregate amount (i) that is
equal to the entire unused balance of the total German Revolving Commitments, or
(ii) that is required to finance the reimbursement of a German LC Disbursement
as contemplated by Section 2.05(e). Each German Swingline Loan shall be in an
amount that is an integral multiple of DM 250,000, and each U.S. Swingline Loan
shall be an amount that is an integral multiple of $250,000. Borrowings of more
than one Type and Class may be outstanding at the same time; PROVIDED that there
shall not at any time be more than a total of 20 Eurodollar Borrowings and
Eurodeutschemark Borrowings in the aggregate outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date, in the case of Revolving Loans, Tranche A Maturity
Date, in the case of Tranche A Term Loans, Tranche B Maturity Date, in the case
of Tranche B Term Loans, or German Term Loan Maturity Date, in the case of
German Term Loans.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Revolving
Borrowing or Term Borrowing, a Borrower shall notify the Administrative Agent of
such request by telephone or telecopy (a) in the case of a Eurodollar Borrowing,
not
46
40
later than 11:00 a.m., Detroit time, three Business Days before the date of the
proposed Borrowing, (b) in the case of an ABR Borrowing, not later than 11:00
a.m., Detroit time, one Business Day before the date of the proposed Borrowing,
or (c) in the case of a Eurodeutschemark Borrowing, not later than 11:00 a.m.,
London time, three Business Days before the date of the proposed Borrowing;
PROVIDED that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of a U.S. LC Disbursement as contemplated by Section 2.05(e) may
be given not later than 10:00 a.m., Detroit time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the applicable Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the identity of the Borrower and whether the requested
Borrowing is to be a U.S. Revolving Borrowing, German Revolving
Borrowing, Tranche A Term Borrowing, Tranche B Term Borrowing or
German Term Borrowing;
(ii) the aggregate amount of such Borrowing expressed in dollars
or, in the case of a German Revolving Borrowing or German Term
Borrowing, in Deutschemarks;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing, a
Eurodollar Borrowing or a Eurodeutschemark Borrowing;
(v) in the case of a Eurocurrency Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period", and the currency of
such Borrowing, which shall be dollars in the case of a Eurodollar
Borrowing or Deutschemarks in the case of a Eurodeutschemark
Borrowing; and
(vi) the location and number of the relevant Borrower's account
to which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing if denominated in dollars or a
Eurodeutschemark Borrowing if denominated in Deutschemarks. If no Interest
Period is specified with respect to any requested Eurocurrency Borrowing, then
the relevant Borrower shall be deemed to have selected an Interest Period of one
month's duration. Promptly
47
41
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. SWINGLINE LOANS. (a) GERMAN SWINGLINE LOANS.
Subject to the terms and conditions set forth herein, the German Swingline
Lender agrees to make German Swingline Loans to Holdings or, subject to the
prior satisfaction of the German Borrower Condition with respect to one or more
Subsidiary Borrowers, to each of such Subsidiary Borrowers from time to time
during the Revolving Availability Period, in an aggregate principal amount at
any time outstanding that will not result in (i) the aggregate principal amount
of outstanding German Swingline Loans exceeding DM 15,000,000 or (ii) the sum of
the total German Revolving Exposures exceeding the total German Revolving
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, each German Borrower may borrow, prepay and reborrow German
Swingline Loans.
(b) REQUESTS FOR GERMAN SWINGLINE LOANS. To request a German
Swingline Loan, a German Authorized Person of a German Borrower shall notify the
German Swingline Lender of such request by telephone or telecopy, not later than
11:00 a.m., Frankfurt time (which telephonic request shall be confirmed promptly
thereafter by such German Borrower by telecopy), on the day of a proposed German
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
German Swingline Loan. The German Swingline Lender will promptly advise the
Administrative Agent of any such notice received from a German Borrower. The
German Swingline Lender shall make each German Swingline Loan available to the
relevant German Borrower by means of a credit to the general deposit account of
such Borrower with the German Swingline Lender (or, in the case of a German
Swingline Loan made to finance the reimbursement of a German LC Disbursement as
provided in Section 2.05(e), by remittance to the German Issuing Bank) by
3:00 p.m., Frankfurt time, on the requested date of such German Swingline Loan.
(c) U.S. SWINGLINE LOANS. Subject to the terms and conditions
set forth herein, the U.S. Swingline Lender agrees to make U.S. Swingline Loans
to the Company from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding U.S. Swingline Loans exceeding
$10,000,000 or (ii) the sum of the total U.S. Revolving Exposures exceeding the
total U.S. Revolving Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Company may borrow, prepay and
reborrow U.S. Swingline Loans.
48
42
(d) REQUESTS FOR U.S. SWINGLINE LOANS. To request a U.S.
Swingline Loan, a Financial Officer of the Company shall notify the
Administrative Agent of such request by telephone or telecopy, not later than
11:00 a.m., Detroit time (which telephonic request shall be confirmed promptly
thereafter by the Company by telecopy), on the day of a proposed U.S. Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested U.S. Swingline Loan.
The Administrative Agent will promptly advise the U.S. Swingline Lender of any
such notice received from the Company. The U.S. Swingline Lender shall make each
U.S. Swingline Loan available to the Company by means of a credit to the general
deposit account of the Company with the U.S. Swingline Lender (or, in the case
of a U.S. Swingline Loan made to finance the reimbursement of a U.S. LC
Disbursement as provided in Section 2.05(e), by remittance to the relevant U.S.
Issuing Bank) by 3:00 p.m., Detroit time, on the requested date of such U.S.
Swingline Loan.
(e) SWINGLINE PARTICIPATIONS. The U.S. Swingline Lender or the
German Swingline Lender, as the case may be, may by written notice given to the
Administrative Agent (i) not later than 10:00 a.m., Detroit time, on any
Business Day, in the case of U.S. Swingline Loans, or (ii) 10:00 a.m., Frankfurt
time, on any Business Day in Frankfurt, in the case of German Swingline Loans,
require the U.S. Revolving Lenders or the German Revolving Lenders, as
applicable, to acquire participations on such Business Day in all or a portion
of the outstanding U.S. Swingline Loans or German Swingline Loans, as
applicable. Such notice shall specify the aggregate amount of Swingline Loans in
which Revolving Lenders will participate. Promptly upon receipt of such notice,
the Administrative Agent will give notice thereof to each affected Revolving
Lender, specifying in such notice such Lender's Applicable Percentage of such
Swingline Loan or Loans (based on such Lender's U.S. Revolving Commitment or
German Revolving Commitment, as the case may be). Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the relevant Swingline
Lender, such Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds of the appropriate currency, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Revolving
Lenders), and the Administrative Agent shall promptly pay to the relevant
Swingline Lender the
49
43
amounts so received by it from the relevant Revolving Lenders. The
Administrative Agent shall notify the Company and the relevant German Borrower,
if applicable, of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the relevant Swingline Lender.
Any amounts received by a Swingline Lender from a Borrower (or other party on
behalf of such Borrower) in respect of a Swingline Loan after receipt by such
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the relevant Swingline Lender, as their interests may appear.
The purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve the relevant Borrower of any default in the payment thereof.
(f) CONDITIONS. Notwithstanding anything herein to the
contrary, a Swingline Lender shall not make any Swingline Loans at any time such
Swingline Lender is aware that the conditions to the making of such Swingline
Loan set forth in Section 4.02 have not been satisfied unless such conditions
shall have been waived in accordance with this Agreement.
(g) In the event the U.S. Swingline Lender or the German
Swingline Lender is at any time replaced by another Lender hereunder as
contemplated by the definitions of such terms herein, the Company or Holdings,
as the case may be, will on the effective date of such replacement, repay in
full all outstanding Swingline Loans of the replaced Swingline Lender, and all
accrued and unpaid interest thereon.
SECTION 2.05. LETTERS OF CREDIT. (a) GENERAL. Subject to the
terms and conditions set forth herein, each of the Company and Holdings (each,
an "LC Borrower") may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the
U.S. Issuing Bank or German Issuing Bank, as applicable, at any time and from
time to time during the Revolving Availability Period. The Letters of Credit
heretofore issued by Mellon Bank, N.A., for the account of the Company which are
listed in Schedule 2.05(a) (and any successive renewals from time to time
thereof) shall, from and after the date of the initial Borrowing hereunder, be
deemed to be U.S. Letters of Credit issued pursuant to this Agreement in respect
of which Mellon Bank, N.A., will be a U.S. Issuing Bank hereunder. The Canadian
Letter of Credit (and any successive renewals from time to time thereof) shall,
from and after the date of the initial Borrowing hereunder, be deemed to be U.S.
Letters issued pursuant to this Agreement by the U.S. Issuing Bank. In the event
of any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of
50
44
credit application or other agreement submitted by an LC Borrower to, or entered
into by an LC Borrower with, the Issuing Bank relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), an LC Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Issuing Bank) to
the U.S. Issuing Bank, in the case of the Company, or the German Issuing Bank,
in the case of Holdings, and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit (which shall be payable in dollars, in the case of a U.S.
Letter of Credit, and be payable in Deutschemarks, in the case of a German
Letter of Credit), the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. An LC Borrower shall submit a letter of credit application on
such Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
relevant LC Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension (i) in the case
of U.S. Letters of Credit, (A) the U.S. LC Exposure shall not exceed $20,000,000
and (B) the total U.S. Revolving Exposures shall not exceed the total U.S.
Revolving Commitments and (ii) in the case of German Letters of Credit, (X) the
German LC Exposure shall not exceed DM 30,000,000 until the Deutsche Bank
Termination Date and DM 10,000,000 thereafter and (Y) the total German Revolving
Exposures shall not exceed the total German Revolving Commitments. The relevant
Issuing Bank shall notify the Administrative Agent of any issuance or amendment
of any Letter of Credit within five Business Days of such event.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (and
any amendment to a Letter of Credit increasing the amount thereof) and without
any
51
45
further action on the part of the Issuing Bank or the Lenders, each Issuing Bank
hereby grants to each U.S. Revolving Lender, in the case of a U.S. Letter of
Credit, and each German Revolving Lender, in the case of a German Letter of
Credit, and each U.S. Revolving Lender or German Revolving Lender, as the case
may be, hereby acquires from each Issuing Bank, a participation in such Letter
of Credit equal to such Lender's Applicable Percentage (based on its U.S.
Revolving Commitment or its German Revolving Commitment, as appropriate) of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each such U.S. Revolving
Lender or German Revolving Lender, as the case may be, hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the relevant Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement in respect of such U.S. Letter of Credit or German Letter of
Credit, as applicable, made by such Issuing Bank and not reimbursed by an LC
Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to an LC Borrower for any reason.
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If an Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the relevant LC Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 11:00 a.m. (in Detroit, Michigan or
Frankfurt, Germany, as applicable), on the date that such LC Disbursement is
made, if such LC Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., in Detroit, Michigan or Frankfurt, Germany, as the case may
be, on such date, or, if such notice has not been received by such LC Borrower
prior to such time on such date, then not later than 11:00 a.m., Detroit time,
or Frankfurt time, as applicable, on (i) the Business Day that such LC Borrower
actually receives such notice, if such notice is received prior to 10:00 a.m. on
the day of receipt, or (ii) the Business Day immediately following the day that
such LC Borrower receives such notice, if such notice is not received prior to
such time on the day of receipt; PROVIDED that the Company or Holdings may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or Section 2.04, as the case may be, that such payment be
financed with an ABR Revolving Borrowing, a U.S. Swingline Borrowing or a German
Swingline Borrowing, as the case may be, in an equivalent amount and, to the
extent so financed, the obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Loans, U.S.
52
46
Swingline Loan or German Swingline Loan. Notwithstanding the foregoing, any LC
Disbursement in respect of the Canadian LC shall be repaid in Canadian dollars,
PROVIDED, that upon any failure to make such repayment in Canadian dollars when
due, such repayment obligation shall be converted into a dollar obligation at
the prevailing dollar spot exchange rates at the close of business in New York
City on the date reimbursement is due. If an LC Borrower fails to make such
payment when due, the Administrative Agent shall notify each U.S. Revolving
Lender, in the case of a U.S. Letter of Credit, and each German Revolving
Lender, in the case of a German Letter of Credit, of the applicable LC
Disbursement, the payment then due from such LC Borrower in respect thereof and
such Lender's Applicable Percentage thereof. Promptly following receipt of such
notice, each such Revolving Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the relevant LC Borrower, in
the same currency payable by such LC Borrower (giving effect to any conversion
of a reimbursement obligation in respect of the Canadian Letter of Credit to a
dollar obligation) and in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, MUTATIS
MUTANDIS, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts
so received by it from the relevant Revolving Lenders. Promptly following
receipt by the Administrative Agent of any payment from an LC Borrower pursuant
to this paragraph, the Administrative Agent shall distribute such payment to the
relevant Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse such Issuing Bank, then to such
Lenders and such Issuing Bank as their interests may appear. Any payment made by
a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for
any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve any LC Borrower of its obligation to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. An LC Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, any LC Borrower's obligations hereunder.
53
47
Neither the Administrative Agent, the Lenders nor the Issuing Banks, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of an
Issuing Bank; PROVIDED that nothing in this paragraph (f) shall be construed to
excuse an Issuing Bank from liability to any LC Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the LC Borrowers to the extent permitted by applicable law)
suffered by such LC Borrower that are caused by an Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of an Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) DISBURSEMENT PROCEDURES. An Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. An Issuing Bank shall promptly
notify the Administrative Agent and the relevant LC Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing
Bank has made or will make an LC Disbursement thereunder; PROVIDED that any
failure to give or delay in giving such notice shall not relieve such LC
Borrower of its obligation to reimburse such Issuing Bank and the Revolving
Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If an Issuing Bank shall make any LC
Disbursement, then, unless the relevant LC Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that such LC Borrower reimburses
such LC Disbursement, at (i) the rate per annum then applicable to ABR
54
48
Revolving Loans, in the case of U.S. LC Disbursements and (ii) the rate per
annum then applicable to German Swingline Loans, in the case of German LC
Disbursements; PROVIDED that, if an LC Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.13(d) shall apply. Interest accrued pursuant to this paragraph shall be for
the account of the relevant Issuing Bank, except that interest accrued on and
after the date of payment by any Revolving Lender pursuant to paragraph (e) of
this Section to reimburse an Issuing Bank shall be for the account of such
Lender to the extent of such payment.
(i) REPLACEMENT OF AN ISSUING BANK. An Issuing Bank may be
replaced at any time by written agreement among the relevant LC Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank, or of the appointment of any additional Issuing Bank as
contemplated hereby (which shall not require the consent of any other Issuing
Bank). At the time any such replacement of an Issuing Bank shall become
effective, the relevant LC Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after
the effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein
to the term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall
occur and be continuing, on the Business Day that an LC Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with U.S. LC Exposure or
German LC Exposure, as applicable, representing greater than 50% of the total
U.S. LC Exposure or German LC Exposure, as applicable) demanding the deposit of
cash collateral pursuant to this paragraph, such LC Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to 105% of the U.S.
LC Exposure or German LC Exposure, as applicable, (in dollars or Deutschemarks,
as applicable) as of such date plus any accrued and unpaid interest thereon;
PROVIDED that the obligation to deposit such cash collateral shall become
effective immediately, and such deposits shall become immediately due and
payable, without demand or other notice of any
55
49
kind, upon the occurrence of any Event of Default with respect to either LC
Borrower described in clause (h) or (i) of Article VII. Each such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the obligations of LC Borrowers under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the risk and
expense of the relevant LC Borrower, such deposits shall not bear interest;
PROVIDED that the Administrative Agent shall invest such deposits solely in
Permitted Investments. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in the applicable account shall be applied by
the Administrative Agent to reimburse the relevant Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the relevant LC Borrower for the LC Exposure at such time or, if the maturity of
the Loans has been accelerated (but subject to the consent of Revolving Lenders
with LC Exposure representing greater than 50% of the total LC Exposure), be
applied to satisfy other obligations of the LC Borrowers under this Agreement.
If an LC Borrower is required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to such LC Borrower within three
Business Days after all Events of Default have been cured or waived.
SECTION 2.06. FUNDING OF BORROWINGS. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds (i) by 11:00 a.m., Detroit time, in the
case of U.S. Term Loans or U.S. Revolving Loans, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders, and (ii) by 11:00 a.m., Frankfurt time, in the case of German
Term Loans or German Revolving Loans, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders;
PROVIDED that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the relevant Borrower by
promptly crediting the amounts so received, in like funds, to an account of such
Borrower maintained with the Administrative Agent in Detroit, Michigan (in the
case of dollar Loans) or in Frankfurt, Germany (in the case of Deutschemark
Loans), in each case designated by such Borrower in the applicable Borrowing
Request; PROVIDED that Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent directly to the relevant Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make
56
50
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and each Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, (x) the Federal Funds Effective Rate (in the
case of a Borrowing in dollars) and (y) the rate determined by the
Administrative Agent to be the cost of funding such amount (in the case of a
Borrowing in Deutschemarks) or (ii) in the case of such Borrower, the interest
rate applicable to the subject Loan. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.07. INTEREST ELECTIONS. (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, (i)
the Company may elect to convert an ABR Borrowing or a Eurodollar Borrowing to a
Borrowing of the other Type or to continue such Borrowing as a Borrowing of the
same Type, and (ii) in the case of a Eurocurrency Borrowing, the relevant
Borrower may elect Interest Periods therefor, all as provided in this Section. A
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued. Notwithstanding any contrary provision herein, this Section shall not
be construed to permit any Borrower to (i) change the currency of any Borrowing
or (ii) convert any Deutschemark Borrowing to an ABR Borrowing or a Eurodollar
Borrowing.
(b) To make an election pursuant to this Section, a Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if such Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
relevant Borrower.
57
51
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) in the case of ABR Borrowings or Eurodollar Borrowings,
whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If a Borrower fails to deliver a timely Interest Election
Request with respect to a Eurocurrency Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing, if a
Eurodollar Borrowing, shall be converted to an ABR Borrowing and if a
Eurodeutschemark Borrowing shall become due and payable on the last day of the
then-current Interest Period. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Company, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
58
52
(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period therefor would commence before and end after a date on which any
principal of the Loans of such Class is scheduled to be repaid and (ii) the sum
of the aggregate principal amount of outstanding Eurodollar Borrowings of such
Class with Interest Periods ending on or prior to such scheduled repayment date
plus the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, (i) the Tranche A Commitments, Tranche B
Commitments and German Term Commitments shall terminate at 5:00 p.m., Detroit
time, on the last day of the Effective Period and (ii) the Revolving Commitments
shall terminate on the Revolving Maturity Date.
(b) The Company may at any time terminate, or from time to
time reduce, the Commitments of any Class; PROVIDED that (i) each reduction of
the Commitments of any Class shall be in an amount that is (x) an integral
multiple of $1,000,000 and not less than $5,000,000, in the case of Tranche A
Commitments, Tranche B Commitments or U.S. Revolving Commitments, or (y) an
integral multiple of DM 1,000,000 and not less than DM 5,000,000, in the case of
German Term Commitments or German Revolving Commitments, (ii) the Company shall
not terminate or reduce any U.S. Revolving Commitments if, after giving effect
to any concurrent prepayment of the Revolving Loans in accordance with Section
2.11, the sum of the U.S. Revolving Exposures would exceed the total U.S.
Revolving Commitments and (iii) the Company shall not terminate or reduce any
German Revolving Commitments if, after giving effect to any concurrent
prepayment of the German Revolving Loans in accordance with Section 2.11, the
sum of the German Revolving Exposures would exceed the total German Revolving
Commitments.
(c) In the event and on each occasion that any mandatory
prepayment of Loans is required pursuant to Section 2.11(b), (c) or (d) in an
amount that exceeds the then outstanding principal amount, if any, of all Term
Loans hereunder, then the German Revolving Commitments and/or the U.S. Revolving
Commitments shall be automatically and permanently reduced on the date any such
prepayment would be required under Section 2.11 in an amount equal to such
excess (or in an amount equal to the full amount of such required prepayment if
no Term Loans are outstanding), or the Dollar Equivalent thereof, as the case
may be. Any such reduction shall be allocated, in the case of a Prepayment Event
affecting a German Borrower, first to the German Revolving Commitments, and
otherwise shall be allocated between the U.S. Revolving Commitments and the
German Revolving Commitments as the
59
53
Company, after consultation with the Administrative Agent, shall in its sole
discretion determine.
(d) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the affected Lenders of the contents thereof. Each notice delivered
by the Company pursuant to this Section shall be irrevocable; PROVIDED that a
notice of termination of any Revolving Commitments delivered by the Company may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Company (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.09. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) Each
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Borrower on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Borrower as provided in Section 2.10 and (iii)
to each Swingline Lender the then unpaid principal amount of each Swingline Loan
on the Revolving Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class, Type and
currency thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender
60
54
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of any Borrower to repay the Loans in
accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
to a Borrower be evidenced by a promissory note. In such event, the relevant
Borrower shall prepare, execute and deliver to such Lender a promissory note (a
"Note") payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns) and in a form reasonably satisfactory to
the Administrative Agent and consistent with the terms of this Agreement.
Thereafter, the Loans evidenced by each such Note and interest thereon shall at
all times (including after assignment pursuant to Section 9.04) be represented
by one or more Notes in such form payable to the order of the payee named
therein (or, if such Note is a registered Note, to such payee and its registered
assigns).
SECTION 2.10. AMORTIZATION OF TERM LOANS. (a) Subject to
adjustment pursuant to paragraph (e) of this Section, the Company shall repay
Tranche A Term Borrowings on each of the following dates in the aggregate
principal amount set forth for such date: (i) $1,000,000 on the last day of
March, June, September and December of 1997, 1998, 1999, 2000 and 2001; (ii)
$1,250,000 on the last day of March, June, September and December of 2002; and
(iii) $2,500,000 on March 31, 2003 and on the Tranche A Maturity Date.
(b) Subject to adjustment pursuant to paragraph (e) of this
Section, the Company shall repay Tranche B Term Borrowings on each of the
following dates in the aggregate principal amount set forth for such date: (i)
$1,000,000 on December 31 of 1997, 1998, 1999, 2000, 2001 and 2002; and (ii)
$21,800,000 on the last day of June and December of 2003 and 2004 and on the
Tranche B Maturity Date.
(c) Subject to adjustment pursuant to paragraph (e) of this
Section, Holdings shall repay German Term Borrowings on each of the following
dates in the aggregate principal amount set forth for such date: (i) DM
1,875,000 on the last day of March, June, September and December of 1997; (ii)
DM 2,812,500 on the last day of March, June, September and December of 1998;
(iii) DM 3,750,000 on the last day of March, June, September and December of
1999; (iv) DM 4,687,500 on the last day of March, June, September and December
of 2000 and 2001; (v) DM 5,625,000 on the last day of March, June, September and
December of 2002; and (vi) DM 15,375,000 on March 31, 2003 and on the German
Term Loan Maturity Date.
61
55
(d) To the extent not previously paid, (i) all Tranche A Term
Loans shall be due and payable on the Tranche A Maturity Date, (ii) all Tranche
B Term Loans shall be due and payable on the Tranche B Maturity Date, and (iii)
all German Term Loans shall be due and payable on the German Term Loan Maturity
Date.
(e) If the initial aggregate amount of the Lenders' Term
Commitments of any Class exceeds the aggregate principal amount of Term Loans of
such Class that are made during the Effective Period, then the scheduled
repayments of Term Borrowings of such Class to be made pursuant to this Section
shall be reduced ratably by an aggregate amount equal to such excess. Any
prepayment of a Term Borrowing of any Class shall be applied to reduce the
subsequent scheduled repayments of the Term Borrowings of such Class to be made
pursuant to this Section ratably, in accordance with the amounts of such
scheduled repayments.
(f) Prior to any repayment of any Term Borrowings of any Class
under this Section 2.10, the relevant Borrower shall select the Borrowing or
Borrowings of the applicable Class to be repaid and shall notify the
Administrative Agent by telephone or telecopy of such selection not later than
(i) 11:00 a.m., Detroit time, in the case of Tranche A Term Borrowings or
Tranche B Term Borrowings, and (ii) 11:00 a.m., Frankfurt time, in the case of
German Term Borrowings, in each case three Business Days before the scheduled
date of such repayment (any such telephonic notice to be promptly confirmed by
such Borrower by telecopy); PROVIDED that each repayment of Term Borrowings of
any Class shall be applied to repay any outstanding ABR Term Borrowings of such
Class before any other Borrowings of such Class. If a Borrower fails to make a
timely selection of the Borrowing or Borrowings to be repaid, such repayment
shall be applied, first, to repay any outstanding ABR Term Borrowings of the
applicable Class and, second, to other Borrowings of such Class in the order of
the remaining duration of their respective Interest Periods (the Borrowing with
the shortest remaining Interest Period to be repaid first). Each repayment of a
Borrowing shall be applied ratably to the Loans included in the repaid
Borrowing. Repayments of Term Borrowings shall be accompanied by accrued
interest.
SECTION 2.11. PREPAYMENT OF LOANS. (a) A Borrower shall have
the right at any time and from time to time to prepay any Borrowing of such
Borrower in whole or in part, subject to the requirements of this Section
applicable to optional prepayments.
(b) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Company or any Subsidiary in respect of any
Prepayment Event other than an Equity Issuance, the Borrowers shall, not later
than the Business Day next following the day on which such Net Proceeds are
received by the Company or any Subsidiary, prepay Term Borrowings (in accordance
with
62
56
paragraph (e) below) in an aggregate amount equal to such Net Proceeds (or the
Dollar Equivalent thereof on the payment date in the case of Borrowings in a
currency other than that of such Net Proceeds). For purposes of this paragraph
(b), Net Proceeds in respect of any Prepayment Event referred to in clause (b)
of the definition of "Prepayment Event" shall be deemed received on the later of
the date of actual receipt of such Net Proceeds by the Company or any Subsidiary
and the date on which the relevant event becomes a Prepayment Event pursuant to
clause (b) of such definition.
(c) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Company or any Subsidiary in respect of any
Equity Issuance, the Borrowers shall, not later than the Business Day next
following the day on which such Net Proceeds are received, prepay Term
Borrowings (in accordance with paragraph (e) below) in an aggregate amount equal
to 75% of such Net Proceeds.
(d) Following the end of each fiscal year of the Company,
commencing with the fiscal year ending December 31, 1997, the Borrowers shall
prepay Term Borrowings (in accordance with paragraph (e) below) in an aggregate
amount equal to (i) 75% of Excess Cash Flow for such fiscal year if the Leverage
Ratio as of the last day of such fiscal year is greater than 2.0 to 1.0 and (ii)
50% of Excess Cash Flow for such fiscal year if the Leverage Ratio as of the
last day of such fiscal year is equal to or less than 2.0 to 1.0. Each
prepayment pursuant to this paragraph shall be made on or before the date on
which financial statements are delivered pursuant to Section 5.01 with respect
to the fiscal year for which Excess Cash Flow is being calculated (and in any
event within 105 days after the end of such fiscal year).
(e) Prior to any optional prepayment of Borrowings hereunder,
a Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to paragraph
(g) of this Section; PROVIDED that each prepayment of Borrowings of any Class
shall be applied to prepay any ABR Borrowings of such Class before any other
Borrowings of such Class. If a Borrower fails to make a timely selection of the
Borrowing or Borrowings to be prepaid, such prepayment shall be applied, first,
to prepay any outstanding ABR Borrowings of the applicable Class and, second, to
other Borrowings of such Class in the order of the remaining duration of their
respective Interest Periods (the Borrowing with the shortest remaining Interest
Period to be prepaid first). In the event of any optional prepayment of Term
Borrowings made at a time when Term Borrowings of more than one Class remain
outstanding, a Borrower shall select the amount of each Class to be prepaid,
PROVIDED that each prepayment resulting from a Prepayment Event with respect to
a German Borrower shall first be applied to German Term
63
57
Borrowings. Optional prepayments used to prepay any Class of Term Borrowings
shall be applied pro rata to the remaining amortization payments of such Class.
(f) Mandatory prepayments of Term Borrowings hereunder shall
be allocated pro rata among the Classes of Term Borrowings based on the
aggregate principal amount of outstanding Borrowings of each such Class
(including the Dollar Equivalent of any Eurodeutschemark Borrowings). Amounts
allocated to each Class shall be applied pro rata to the remaining amortization
payments of such Class. In the event that mandatory prepayments are made at a
time when no amounts are outstanding under any Class of Term Borrowing, or in
the event that a portion of a mandatory prepayment reduces to zero the amount
outstanding under all Classes of Term Borrowings, mandatory prepayments
hereunder will be applied to Revolving Borrowings in such amounts as the
Administrative Agent may determine.
(g) On any date when the aggregate U.S. Revolving Exposures of
the Lenders exceed the aggregate U.S. Revolving Commitments or the aggregate
German Revolving Exposures of the Lenders exceed the aggregate German Revolving
Commitments, the Borrowers will prepay Loans and/or cash collateralize
outstanding Letters of Credit in accordance with the provisions of Section
2.05(j), in such amounts as may be necessary to eliminate such excess (treating
the cash collateralized portion of outstanding Letters of Credit, solely for
purposes of the foregoing, as no longer being outstanding).
(h) The relevant Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the relevant
Swingline Lender) by telephone or telecopy (confirmed by telecopy promptly
following any such telephonic notice) of any prepayment hereunder (i) in the
case of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00
a.m., Detroit time, one Business Day before the date of prepayment, (ii) in the
case of prepayment of a Eurodeutschemark Revolving Borrowing, not later than
11:00 a.m., Frankfurt time, three Business Days before the date of prepayment,
(iii) in the case of prepayment of an ABR Revolving Borrowing or U.S. Swingline
Borrowing, not later than 11:00 a.m., Detroit time, on the date of prepayment or
(iv) in the case of prepayment of a German Swingline Loan, not later than 11:00
a.m., Frankfurt time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid (in accordance with paragraph (e) of
this Section) and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment; PROVIDED that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.08, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other
64
58
than a notice relating solely to Swingline Loans), the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.
(i) In the event the amount of any mandatory prepayment
required to be made on any date pursuant to this Section shall exceed the amount
of the Loans of the relevant Class of Borrowings that are ABR Borrowings or
Swingline Borrowings or that have Interest Periods ending on such date (the
amount of any such excess being called the "Excess Amount"), the relevant
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay on such date all the outstanding ABR Loans, Swingline Loans and Loans
having Interest Periods ending on such date within such Class of Borrowing and
to deposit an amount equal to the Excess Amount with the Collateral Agent in a
cash collateral account maintained (pursuant to customary account documentation
of the Administrative Agent) by and in the sole dominion and control of the
Collateral Agent, and otherwise subject to the terms of this paragraph (i). Any
amounts so deposited shall be held by the Collateral Agent as collateral for the
Obligations of the relevant Borrower and applied to the prepayment of the
Eurodollar Loans or Eurodeutschemark Loans of such Class at the end of the
current Interest Periods applicable thereto. On any Business Day on which (x)
collected amounts remain on deposit in or to the credit of such cash collateral
account after giving effect to the payments made on such date pursuant to this
Section 2.11(i) and (y) the relevant Borrower shall have delivered to the
Collateral Agent a written request or a telephonic request (which telephonic
request shall be promptly confirmed by telecopy) that such remaining collected
amounts be invested in the Permitted Investments specified in such request, the
Collateral Agent shall use its reasonable efforts to invest such remaining
collected amounts in such Permitted Investments; PROVIDED, HOWEVER, that the
Collateral Agent shall have continuous dominion and full control over any such
investments (and over any interest that accrues thereon) to the same extent that
it has dominion and control over such cash collateral account and no Permitted
Investment shall mature after the end of the Interest Period for the Loan in
respect of which it is to be applied. The depositing Borrower shall not have any
right to withdraw any amount from such cash collateral account until the
relevant Loans subject to prepayment hereunder and accrued interest thereon are
paid in full, at which time the Collateral Agent shall, promptly upon the
written request of the relevant depositing Borrower, release to such Borrower
the amount due such Borrower from such cash collateral account, unless a Default
or Event of Default then exists or would result from such release.
65
59
SECTION 2.12. FEES. (a) Each of the Company and Holdings
agrees to pay to the Administrative Agent for the account of each Lender a
facility fee at the rate of 0.50% per annum, on the average daily amount
(regardless of usage) of the U.S. Revolving Commitment (in the case of the
Company) and the German Revolving Commitment (in the case of Holdings) of such
Lender during the preceding quarter (or shorter period commencing and including
the Effective Date and ending on and excluding the date on which such Commitment
terminates). Accrued facility fees shall be payable in arrears on the last day
of March, June, September and December of each year and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof. All facility fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The facility fees in
respect of the U.S. Revolving Commitments shall be payable by the Company in
dollars and the facility fees in respect of the German Revolving Commitments
shall be payable by Holdings in Deutschemarks.
(b) The Company or Holdings, as applicable, agrees to pay (i)
to the Administrative Agent for the account of each Revolving Lender a
participation fee (in dollars or Deutschemarks, respectively) with respect to
its participations in U.S. Letters of Credit or German Letters of Credit, as
applicable, which shall accrue, at a rate per annum equal to the Applicable Rate
that would apply in calculating interest on Eurocurrency Revolving Loans, on the
average daily amount of such Lender's U.S. LC Exposure or German LC Exposure, as
applicable (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date of this Agreement
to but excluding the later of the date on which such Lender's Revolving
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to each Issuing Bank a fronting fee (in dollars or
Deutschemarks, respectively), which shall accrue at the rate of .125% per annum
on the average daily amount of the U.S. LC Exposure or German LC Exposure, as
applicable, attributable to Letters of Credit issued by such Issuing Bank
(excluding any portion thereof attributable to unreimbursed LC Disbursements),
during the period from and including the date of this Agreement to but excluding
the later of the date of termination of the Revolving Commitments and the date
on which there ceases to be any LC Exposure, as well as such Issuing Banks'
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on such last day,
commencing on the first such date to occur after the date of this Agreement;
PROVIDED that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable
66
60
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 365 days (or 366 days in a leap year) and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) The Borrowers agree to pay to the Agents, for their own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrowers and the Agents.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Banks, in the case of fees payable to them) for distribution, in the case of
commitment fees, participation fees and facility fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. INTEREST. (a) U.S. Swingline Loans and the Loans
comprising each ABR Borrowing shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall
bear interest at the Adjusted LIBO Rate or the Adjusted DIBO Rate, as
applicable, for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
(c) German Swingline Loans shall bear interest at the FNBC
Prime Rate.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by any Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section, (ii) in the case of any other amount with
respect to any Tranche A Loan, Tranche B Loan or U.S. Revolving Loan, 2% plus
the rate applicable to ABR Revolving Loans as provided in paragraph (a) of this
Section or (iii) in the case of any other amount with respect to any German Term
Loan or German Revolving Loan, 2% plus the FNBC Prime Rate.
(e) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving Loans
of any Class, upon termination of the Revolving Commitments for such Class;
PROVIDED that (i) interest accrued pursuant to paragraph (d) of this Section
shall be payable on
67
61
demand, (ii) in the event of any repayment or prepayment of any Loan (other than
a prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurocurrency Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
FNBC Prime Rate, Adjusted LIBO Rate or Adjusted DIBO Rate shall be determined by
the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the
commence- ment of any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or Adjusted
DIBO Rate for such Interest Period;
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate or Adjusted DIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing
for such Interest Period; or
(c) in the case of a Deutschemark Borrowing, the
Administrative Agent determines (which determination shall be
conclusive absent manifest error) that deposits in Deutschemarks are
not generally available, or cannot be obtained by certain categories of
financial institutions represented among the Lenders, in the London
interbank market;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective,
and any Eurocurrency Borrowing so
68
62
requested to be continued shall be converted to an ABR Borrowing denominated in
dollars at the Exchange Rate determined by the Administrative Agent on the last
day of the then current Interest Period with respect thereto, (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as an ABR Borrowing and (iii) any request by any Borrower for a Eurodeutschemark
Borrowing shall be ineffective; PROVIDED that if the circumstances giving rise
to such notice affect Borrowings in only one currency, then requests for
Eurocurrency Borrowings in the other currency shall be permitted.
SECTION 2.15. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate or Adjusted
DIBO Rate) or Issuing Bank; or
(ii) impose on any Lender or Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurocurrency
Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Company
or the relevant German Borrower, as applicable, will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or Issuing Bank's capital or on the capital
of such Lender's or Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or Issuing Bank's policies and the policies of
such Lender's or Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Company or the relevant German Borrower,
as applicable, will pay to such Lender or the relevant Issuing Bank, as the case
may be, such additional amount or amounts as will com-
69
63
pensate such Lender or Issuing Bank or such Lender's or Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Company or the relevant German Borrower,
as the case may be, and shall be conclusive absent manifest error. The Borrowers
shall pay such Lender or Issuing Bank, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof by the Company
or such German Borrower.
(d) Failure or delay on the part of any Lender or Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; PROVIDED
that the Borrowers shall not be required to compensate a Lender or Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 90 days prior to the date that such Lender or Issuing Bank, as the case may
be, notifies the Company or the relevant German Borrower, as the case may be, of
the Change in Law giving rise to such increased costs or reductions and of such
Lender's or Issuing Bank's intention to claim compensation therefor; PROVIDED
FURTHER that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 90-day period referred to above shall be
extended to include the period of retroactive effect thereof.
(e) Notwithstanding any other provision of this Agreement, if,
after the date hereof, (i) any Change in Law shall make it unlawful for any
Lender to make or maintain any Eurocurrency Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurocurrency Loan, or
(ii) there shall have occurred any change in national or international
financial, political or economic conditions (including the imposition of or any
change in exchange controls) or currency exchange rates which would make it
impracticable for any Lender to make Loans denominated in the relevant
Eurocurrency to, or for the account of, a Borrower, then, by written notice to
the Company and to the Administrative Agent:
(i) such Lender may declare that Eurocurrency Loans (in the
affected currency or currencies) will not thereafter (for the duration
of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods and ABR Loans will not thereafter (for
such duration) be converted into Eurodollar Loans if the affected
currency is dollars), whereupon any request for a Eurocurrency
Borrowing (in the affected currency or currencies) (or to convert an
ABR Borrowing to a Eurocurrency Borrowing or to continue a Eurocurrency
Borrowing (in the affected currency or currencies), as the case may be,
for an additional Interest Period) shall, as to such Lender
70
64
only, be deemed a request for an ABR Loan (or a request to continue an
ABR Loan as such for an additional Interest Period or to convert a
Eurocurrency Loan into an ABR Loan, as the case may be), unless such
declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurocurrency
Loans (in the affected currency or currencies), made by it be converted
to ABR Loans (at the then current Exchange Rate, in the case of any
conversion of Eurodeutschemark Loans), in which event all such
Eurocurrency Loans (in the affected currency or currencies) shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (f) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurocurrency Loans that would have been made by such Lender or the
converted Eurocurrency Loans of such Lender shall instead be applied to repay
the ABR Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurocurrency Loans.
(f) For purposes of this Section 2.15, a notice to the Company
by any Lender shall be effective as to each Eurocurrency Loan made by such
Lender, if lawful, on the last day of the Interest Period currently applicable
to such Eurocurrency Loan; in all other cases such notice shall be effective on
the date of receipt by the Company.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurocurrency Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurocurrency Loan other than on the last day
of the Interest Period applicable thereto, (c) the conversion of any
Eurodeutschemark Loan or German Swingline Loan to a dollar denominated Loan
pursuant to Section 2.15(e) or 2.18(f), (d) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(g) and is revoked in accordance therewith), or (e)
the assignment of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by a Borrower
pursuant to Section 2.19, then, in any such event, the relevant Borrower shall
compensate each Lender for the loss, cost and expense attributable to such event
(and in the case of any conversion of Eurodeutschemark Loans or German Swingline
Loans to dollar denominated Loans, such loss, cost or expense shall also include
any loss, cost or expense sustained by a German Revolving Lender as a result of
such
71
65
conversion). In the case of a Eurocurrency Loan, such loss, cost or expense to
any Lender, to the extent that it relates to interest costs associated with
funding, shall be deemed to consist solely of an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate or Adjusted DIBO Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for deposits in the same
currency of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Company and shall be conclusive absent manifest error. The relevant
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof by the Company.
SECTION 2.17. TAXES. (a) Subject to paragraphs (e) and (f)
below, any and all payments by or on account of any obligation of any Borrower
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if any
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
(b) In addition, subject to paragraphs (e) and (f) below, the
Borrowers shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) Subject to paragraphs (e) and (f) below, the relevant
Borrower shall indemnify the Administrative Agent, each Lender and each Issuing
Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or such Issuing Bank, as the case may be, on or with respect to any payment by
or on account of any obligation of any Borrower hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts
72
66
payable under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority, PROVIDED that such Borrower shall have no obligation to
so indemnify the Administrative Agent, any Lender or any Issuing Bank with
respect to any Indemnified Taxes or Other Taxes to the extent that such Borrower
has paid amounts owing in respect of Indemnified Taxes or Other Taxes pursuant
to Section 2.17(a) or (b) and complied with Section 2.17(d). A certificate as to
the amount of such payment or liability delivered to the Company by a Lender or
the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf
of a Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e)(i) Each Lender organized under the laws of a jurisdiction
outside the United States of America shall, on or prior to the date of its
execution and delivery of this Agreement, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender, as the case may be, and from
time to time thereafter at the time or times prescribed by applicable law or if
requested in writing by the Company or any Agent (but only so long thereafter as
such Lender remains lawfully able to do so), provide each Agent and the Company
with Internal Revenue Service Form 1001 or 4224, as appropriate (or, in the case
of any Lender that is not a "bank" as defined in Section 881(c)(3)(A) of the
Code, Internal Revenue Form W-8 and a statement that it is not a "bank" as
defined in Section 881(c)(3)(A) of the Code), or any successor form prescribed
by the Internal Revenue Service, certifying that such Lender is exempt from or
is entitled to a reduced rate of United States withholding tax on payments under
this Agreement or the Notes. If the form provided by a Lender at the time such
Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered an Excluded Tax unless and until such Lender provides the
appropriate form certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered an Excluded Tax for periods
governed by such form. If any form or document referred to in this subsection
(e)(ii) requires the disclosure of information, other than information necessary
to compute the tax payable and information required on the date hereof by
Internal Revenue Form 1001 or 4224, that the Lender reasonably considers to be
73
67
confidential, the Lender shall give notice thereof to the Company and shall not
be obligated to include in such form or document such confidential information.
(ii) Each Lender to a German Borrower, which Lender is
organized under the laws of a jurisdiction outside the Federal Republic of
Germany shall, on or prior to the date of its execution and delivery of this
Agreement, and on the date of the Assignment and Acceptance pursuant to which it
became a Lender, as the case may be, and from time to time thereafter at the
time or times prescribed by applicable law or if requested in writing by any
German Borrower or any Agent (but only so long thereafter as such Lender remains
lawfully able to do so), provide each Agent and each German Borrower with
properly completed and executed documentation prescribed by German law or
regulation or reasonably requested by the Company and certifying or otherwise
demonstrating that such Lender is exempt from or is entitled to a reduced rate
of German withholding tax on payments under this Agreement or the Notes such
that each German Borrower is permitted to make such payments without withholding
or at a reduced rate of withholding. If the form provided by a Lender at the
time such Lender first becomes a party to this Agreement indicates a German
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered an Excluded Tax unless and until such Lender provides the
appropriate documentation certifying or otherwise demonstrating that a lesser
rate applies, whereupon withholding tax at such lesser rate only shall be
considered an Excluded Tax for periods governed by such form or other
documentation. If any form or document referred to in this subsection (e)(ii)
requires the disclosure of information, other than information necessary to
compute the tax payable and other information required on the date thereof by
the appropriate documentation relating to the exemption from or entitlement to a
reduced rate of German withholding tax, that the Lender reasonably considers to
be confidential, the Lender shall give notice thereof to the Borrowers and shall
not be obligated to include in such documentation such confidential information.
(f) For any period with respect to which a Lender has failed
to provide the Borrowers with the appropriate form or other documentation
described in subsection (e) (OTHER THAN if such failure is due to a change in
law occurring after the date on which such form of other documentation
originally was required to be provided or if such form or other documentation
otherwise is not required under subsection (e)), such Lender shall not be
entitled to indemnification under subsection (a) or (c) with respect to
Indemnified Taxes or Other Taxes imposed by the United States or Germany that
would not have been imposed had such Lender provided such form or documentation;
PROVIDED, HOWEVER, that should a Lender become subject to Indemnified Taxes or
Other Taxes because of its failure to deliver a form or other documentation
required hereunder, the relevant Borrower shall take
74
68
such steps as such Lender shall reasonably request to assist such Lender to
recover such Indemnified Taxes or Other Taxes.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SET-OFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) from a payment location in the United States or, in
the case of Deutschemark payments, in Germany prior to 2:00 p.m., Detroit time
or Frankfurt time, as the case may be, on the date when due, in immediately
available funds, without set-off or counterclaim (provided that any payment in
Deutschemarks may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for purposes of
calculating interest thereon unless SWIFT payment instructions shall have been
given by the payor bank not later than 10:00 a.m., Frankfurt time, in respect of
such payment). Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent, in the case of dollar
payments, at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and in
the case of Deutschemark payments, at the offices of its Affiliate, The First
National Bank of Chicago, Frankfurt Branch, at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, except payments to be made directly to an Issuing
Bank or a Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Loan Documents shall be
made to the Persons specified therein. The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest or fees, interest thereon or fees shall be
payable for the period of such extension. All payments under each Loan Document
shall be made in dollars or Deutschemarks, as specified therein, and in the
absence of any specification, in dollars (based, if necessary, on the Exchange
Rate in effect on the date of payment).
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in
75
69
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) Subject to the provisions of paragraph (f) of this
Section, if any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving Loans or Term Loans of any Class or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans or Term Loans
of any Class and participations in LC Disbursements and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans or Term Loans of such Class and
participations in such LC Disbursements and Swingline Loans of other Lenders to
the extent necessary so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans or Term Loans or any Class
and participations in such LC Disbursements and Swingline Loans; PROVIDED that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by the Borrowers pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in LC Disbursements to any assignee or participant,
other than to the Company or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from a Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that such Borrower will not make such payment, the Administrative
Agent may assume that such Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the relevant Issuing Bank, as the case may be, the amount due. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders or such Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from
76
70
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, (i) in the case of a Borrowing in
dollars, at the Federal Funds Effective Rate and (ii) in the case of a Borrowing
in Deutschemarks, at the rate reasonably determined by the Administrative Agent
to be the cost to it of funding such amount.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04, 2.05(d) or (e), 2.06(b) or 2.18(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
(f) In the event that the Commitments are terminated or the
Loans are accelerated pursuant to Article VII hereof (a "Conversion Event"),
then (except as set forth below) the Obligations of each German Loan Party that
are denominated in Deutschemarks shall automatically be converted to obligations
of the same Loan Party denominated in dollars. Such conversion shall be effected
based upon the Exchange Rate in effect at the time of the occurrence of the
applicable Conversion Event, as determined by the Administrative Agent in
accordance with the terms hereof. Upon any conversion, each converted Obligation
("Converted Obligation") in respect of any outstanding and unpaid Loan, LC
Disbursement, fee or other amount due hereunder shall bear interest at the rate
applicable to overdue ABR Borrowings under Section 2.13(d). Upon any such
Conversion Event, the Tranche B Lenders, on the one hand, and the German
Revolving Lenders and German Term Lenders, on the other hand, shall
automatically and without any further act be deemed to have exchanged, at par,
participations in Tranche B Loans for participations in Loans and unpaid LC
Disbursements included in the Converted Obligations (collectively, "Converted
Loans") in such amounts as shall be necessary so that, after giving effect
thereto, each Tranche B Lender holds participations in the principal amount of
Converted Loans in an amount equal to its Conversion Percentage of all Converted
Loans. All such participations shall be effected pro rata among the German
Revolving Lenders and German Term Lenders in accordance with the amounts of
their respective German Revolving Commitments and German Term Loans at the time
of the Conversion Event. In the event the accrued and unpaid interest on the
principal amounts of any Converted Loans and Tranche B Term Loans exchanged, at
par, through such participations is different, the Lender acquiring a
participation in the obligation with the greater amount of accrued interest will
pay the transferring Lender, in dollars, the amount of any such excess by wire
transfer of immediately available funds. Any reimbursed LC Disbursements which
are made in respect of German Letters of Credit after a Conversion Event shall
automatically be converted into a dollar reimbursement obligation of Holdings on
the date of such LC Disbursement based on the Exchange
77
71
Rate in effect on such date (and shall bear interest at the rate applicable to
past due ABR Borrowings). In the event any German Letters of Credit are
outstanding at the time of a Conversion Event, each Tranche B Lender will be
deemed to have purchased (on a pro rata basis from the German Revolving Lenders)
a participation therein, in accordance with the provisions of Section 2.05, in
the amount of its Conversion Percentage of the amount of such Letter of Credit;
PROVIDED, HOWEVER, that (i) payment of such Lender's Conversion Percentage of
any unreimbursed LC Disbursements in respect of such Letter of Credit shall be
made by transferring a participation in an equal principal amount of Tranche B
Term Loans or by wire transfer of dollars, if no such Loans are then held by the
Tranche B Lender, and (ii) to the extent an LC Disbursement in respect of such
Letter of Credit is reimbursed by the relevant Borrower prior to any purchase
pursuant to clause (i), the Issuing Bank will promptly purchase for dollars at
par a participation in the Tranche B Term Loans of such Lender in an amount
equal to such Lender's Conversion Percentage of the Dollar Equivalent of such
reimbursement on the date made. Each Lender, each person acquiring a
participation from any Lender as contemplated by this Section and each Loan
Party hereby consents and agrees to the foregoing provisions. For purposes
hereof, the "Conversion Percentage" of a Tranche B Lender shall mean a fraction,
expressed as a decimal, in which (i) the numerator is the aggregate principal
amount of the Tranche B Term Loans of such Lender immediately prior to a
Conversion Event and (ii) the denominator is an amount equal to the sum, at such
time, of (x) the aggregate principal amount of all outstanding Term Loans, (y)
the aggregate amount of U.S. Revolving Exposures and (z) the aggregate amount of
German Revolving Exposures. Promptly following any Conversion Event, the
Administrative Agent shall advise the Lenders of their respective interests in
the Converted Obligations and Tranche B Term Loans as a result thereof.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests (or would be entitled to request, after giving effect
to any designation of, or assignment to, one of its offices, branches or
Affiliates hereunder) compensation under Section 2.15, or if a Borrower is
required (or would be required) to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.17, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such other designation or such
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous in any material respect to such Lender. The Company hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
78
72
(b) If any Lender requests compensation under Section 2.15, or
if a Borrower is or would otherwise be required to pay any amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then
a Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) such Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the relevant Issuing Bank and the
relevant Swingline Lender), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or such Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling a Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of the Company and
its Subsidiaries is duly organized, validly existing and (in the case of the
Company and the U.S. Subsidiaries) in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to be so
qualified and in good standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions
to be entered into or effected by each Loan Party are within such Loan Party's
corporate
79
73
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by each Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of each Borrower
or such Loan Party (as the case may be), enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Company or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Company or any of
its Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by the Company or any of its Subsidiaries, except with
respect to indentures, agreements or other instruments governing Indebtedness
which will be permanently repaid in full, and all other amounts owing under
which will be paid in full, with the proceeds of, and substantially at the same
time as, the initial Borrowings hereunder, and (d) will not result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Company has heretofore furnished to the Lenders its consolidated balance
sheet and statements of operations and of cash flows and, in the case of clause
(i) below, of changes in common stockholders' equity, (i) as of and for the
fiscal year ended December 31, 1995, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended September 30, 1996, certified by its chief
financial officer (collectively, the "Historical Statements"). The Historical
Statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Company and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.
(b) The Company has heretofore furnished to the Lenders its
unaudited projected pro forma consolidating and consolidated balance sheets and
income
80
74
statements as of December 31, 1996 and for the year ended December 31, 1996,
giving effect to the Acquisitions as if they had occurred on January 1, 1996
(the "Pro Forma Financial Statements"), each of which is contained in the
Confidential Information Memorandum. Such Pro Forma Financial Statements have
been prepared in good faith by the Company, based on assumptions believed by the
management of the Company to be reasonable at the time made, accurately reflect
all adjustments required to be made to give effect to the Acquisitions and
present fairly on a pro forma basis the financial position and operations of the
Company and Subsidiaries assuming that the Acquisitions had actually occurred at
the beginning of the period covered thereby.
(c) Since December 31, 1995, there has been no material
adverse change in the business, assets, operations or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole.
SECTION 3.05. PROPERTIES. (a) Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
property material to its business (including its Mortgaged Properties) as set
forth on Schedule 3.05(a) and all personal property material to its business, in
each case except for Liens permitted pursuant to Section 6.02 and for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes.
(b) Each of the Company and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Company and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) As of the Effective Date, neither the Company nor any of
its Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase such Mortgaged Property or
interest therein.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could
81
75
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Except for
Disclosed Matters, each of the Company and its Subsidiaries is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property (including, without limitation, ERISA, regulations of the
Board and environmental laws and regulations) and all indentures, agreements and
other instruments binding upon it or its property, except where the failure to
so comply, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. No Default has occurred and is continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither
the Company nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. TAXES. Except as set forth in Schedule 3.09,
each of the Company and its Subsidiaries (a) has filed or caused to be filed all
Tax returns and reports required to have been filed, all such Tax returns and
reports being accurate in all material respects as and when filed, and (b) has
paid or caused to be paid all Taxes shown as due thereon; except in each case
for (x) filings or Taxes that are being contested in good faith by appropriate
proceedings and for which the Company or such Subsidiary, as applicable, has set
aside on its books adequate reserves, and (y) any failure to file or cause to be
filed such Tax returns or reports, or to pay or cause to be paid such Taxes, to
the extent that such failure could not reasonably be expected to result in a
Material Adverse Effect.
82
76
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $5,000,000 the fair market value of the assets
of all such underfunded Plans.
SECTION 3.11. DISCLOSURE. The Company has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
the Company or any of its Subsidiaries is subject, and all other matters known
to any of them, that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information contained in the Confidential
Information Memorandum or furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender pursuant to Section 5.01 (other than
paragraph (f) thereof), 5.02 or 5.03 of this Agreement (as modified or
supplemented by other information so furnished) contains any untrue statement of
a material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time and with
respect to assumptions utilized to compile pro forma historical financial
statements, the Company represents only that such assumptions were believed to
be reasonable at the time so utilized.
SECTION 3.12. SUBSIDIARIES. Schedule 3.12 sets forth as of the
Effective Date the name of, and the ownership interest of the Company in, each
Subsidiary of the Company and identifies each Subsidiary that is a Loan Party as
of the Effective Date.
SECTION 3.13. INSURANCE. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Company and its
Subsidiaries as of the Effective Date. All premiums in respect of such insurance
due and payable on or before the Effective Date have been paid.
SECTION 3.14. LABOR MATTERS. Except as described in Schedule
3.14, as of the date hereof and the Effective Date, there are no strikes,
lockouts or slowdowns against the Company or any Subsidiary pending or, to the
knowledge of the Company, threatened. The hours worked by and payments made to
employees of the Company and the Subsidiaries have not been in violation of the
Fair
83
77
Labor Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from the Company or any Subsidiary,
or for which any claim may be made against the Company or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the Company or such
Subsidiary. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Company or any Subsidiary is bound.
SECTION 3.15. SOLVENCY. Immediately after the consummation of
the Transactions to occur on the date of the initial Borrowing hereunder and
immediately following the making of each Loan made on such date and after giving
effect to the application of the proceeds of such Loans, (a) the fair value of
the assets of (i) Holdings and its Subsidiaries, taken in the aggregate, and
(ii) each U.S. Loan Party, at a fair valuation, will exceed their or its debts
and liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of (i) Holdings and its Subsidiaries, taken in
the aggregate, and (ii) each U.S. Loan Party will be greater than the amount
that will be required to pay the probable liability on their or its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each of (i) Holdings and its
Subsidiaries, taken in the aggregate, and (ii) each U.S. Loan Party will be able
to pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) no U.S. Loan Party
will have and Holdings and its Subsidiaries, taken together, will not have
unreasonably small capital with which to conduct the business in which it is or
they are engaged as such business is now conducted and is proposed to be
conducted following the Effective Date.
ARTICLE IV
CONDITIONS
----------
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders
to make Loans and of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Syndication Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory
to the Syndication Agent (which
84
78
may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) The Syndication Agent shall have received favorable written
opinions (addressed to the Syndication Agent and the Lenders and dated
the Effective Date) of each of (i) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, U.S.
counsel for the Borrowers, substantially in the form of Exhibit L-1,
(ii) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, and Bose, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special
counsel to the Borrowers as to Mortgages, substantially in the form of
Exhibit L-2 and (iii) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, German counsel to
the Borrowers, substantially in the form of Exhibit L-3, and, in the
case of each such opinion required by this paragraph, covering such
other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request. The
Borrowers hereby request such counsel to deliver such opinions.
(c) The Syndication Agent shall have received such documents and
certificates as the Syndication Agent or its counsel may reasonably
request relating to the organization, existence and (in the case of
the Company and the U.S. Subsidiary Loan Parties) good standing of
each Loan Party, the authorization of the Transactions and any other
legal matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the
Syndication Agent and its counsel.
(d) The Syndication Agent shall have received a certificate,
dated the Effective Date and signed by a Financial Officer of the
Company, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
(e) The Syndication Agent shall have received, to the extent
invoiced, all fees and other amounts due and payable on or prior to
the Effective Date, including, to the extent invoiced, reimbursement
or payment of all out-of-pocket expenses required to be reimbursed or
paid by any Loan Party hereunder or under any other Loan Document.
(f) The Syndication Agent shall have received counterparts of (i)
the Company Guarantee signed on behalf of the Company, (ii) the U.S.
Subsidiary Guarantee Agreement signed on behalf of each U.S.
Subsidiary Loan Party, and (iii) the German Subsidiary Guarantee
signed on behalf of each German Group Member other than Holdings.
85
79
(g) The Collateral Agent shall have received (i) counterparts
of the (x) the Company Pledge Agreement signed on behalf of the
Company, (y) the Company Holdings Pledge Agreement signed and notarized
on behalf of the Company and (z) the U.S. Subsidiary Pledge Agreement
signed on behalf of each U.S. Subsidiary Loan Party, (ii) stock
certificates representing all the outstanding shares of capital stock
of each U.S. Subsidiary owned by or on behalf of the Company or any
U.S. Subsidiary Loan Party, (iii) promissory notes evidencing all
intercompany Indebtedness owed by any U.S. Subsidiary or the Company to
the Company or any U.S. Subsidiary Loan Party and (iv) stock powers and
instruments of transfer, endorsed in blank, with respect to such stock
certificates and promissory notes.
(h) The Collateral Agent shall have received (i) counterparts
of the Holdings Pledge Agreement signed and notarized on behalf of
Holdings and (ii) counterparts of the Holdings Assignment of Claims
signed on behalf of Holdings.
(i) The Collateral Agent shall have received (i) counterparts
of (x) the Company Security Agreement signed on behalf of the Company
and (y) the U.S. Subsidiary Security Agreement signed on behalf of each
U.S. Subsidiary Loan Party and (ii) all documents and instruments,
including Uniform Commercial Code financing statements, required by law
or reasonably requested by the Collateral Agent to be filed, registered
or recorded to create or perfect the Liens intended to be created under
the Security Agreements.
(j) The Collateral Agent shall have received (i) counterparts
of a Mortgage with respect to each Mortgaged Property signed on behalf
of the record owner of such Mortgaged Property, (ii) a policy or
policies of title insurance issued by a nationally recognized title
insurance company, insuring the Lien of each such Mortgage as a valid
first Lien on the Mortgaged Property described therein, free of any
other Liens except as permitted by Section 6.02, together with such
endorsements, coinsurance and reinsurance as the Collateral Agent or
the Required Lenders may reasonably request, and (iii) such surveys,
abstracts, appraisals and legal opinions as may be required pursuant to
such Mortgages or as the Collateral Agent or the Required Lenders may
reasonably request, including FIRREA appraisals to the extent required
by applicable law or regulation.
(k) The Collateral Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an
executive officer or Financial Officer of the Company, together with
all attachments contemplated thereby, including (i) the results of a
search of the Uniform Commercial Code
86
80
(or equivalent) filings made with respect to the Loan Parties in the
jurisdictions contemplated by the Perfection Certificate and (ii)
copies of the financing statements (or similar documents) disclosed by
such search and evidence reasonably satisfactory to the Collateral
Agent that the Liens indicated by such financing statements (or similar
documents) are permitted by Section 6.02 or have been released.
(l) The German Issuing Bank shall have issued a German Letter
of Credit to Deutsche Bank in the stated amount of DM 30,000,000 and
Deutsche Bank shall, in a manner reasonably satisfactory to the
Administrative Agent, have (i) released all Liens securing Deutsche
Bank's extensions of credit to any Subsidiary and (ii) agreed not to
take or perfect any such Liens while this Agreement is in effect,
except as otherwise permitted by Section 6.02.
(m) The Acquisitions shall have been consummated on or prior
to the Effective Date and the Lenders shall be satisfied with the
capitalization, structure and equity ownership of the Company and its
Subsidiaries after the Acquisitions to the extent any of the foregoing
varies in any material respect from the information with respect
thereto set forth in the Confidential Information Memorandum. The
aggregate fees and expenses in connection with the Acquisitions shall
not exceed $10,000,000. The Lenders shall have received a certificate
of a Financial Officer of the Company with respect to the foregoing
matters, in form and detail reasonably satisfactory to the Syndication
Agent.
(n) Except as permitted under Section 6.01(viii), all
Indebtedness of the Company and its Subsidiaries, including those
acquired in the Transactions (other than Indebtedness set forth on
Schedule 6.01), shall have been repaid in full, and all obligations
thereunder and security interests relating thereto shall have been
discharged, and the Syndication Agent shall have received satisfactory
evidence of such repayment and discharge.
(o) The Lenders shall have received the Historical Statements
and the Pro Forma Financial Statements, and the Lenders shall be
satisfied that the transactions in connection with the Acquisitions and
the financing arrangements contemplated hereby are consistent with the
sources and uses of funds shown on Schedule 4.01(o).
(p) The Lenders shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety
exposures to which the Company and its Subsidiaries may be subject and
the plans of the Company with respect thereto, and the Lenders shall
have received environ-
87
81
mental assessments (including Phase I reports) satisfactory to the
Lenders from an environmental consulting firm satisfactory to the
Syndication Agent.
(q) The Lenders shall be reasonably satisfied in all respects
with (i) the tax position and the contingent tax and other liabilities
of the Company, the Acquired Entities and their respective subsidiaries
and (ii) the arrangements of the Company, the Acquired Entities and
their respective subsidiaries for the repatriation of revenues from
foreign operations to the United States and, in each case, the plans of
the Company with respect thereto.
(r) The Lenders shall be reasonably satisfied with the
sufficiency of amounts available under the Revolving Facilities to meet
the ongoing working capital requirements of the Company and its
Subsidiaries following the Acquisitions and the consummation of the
Transactions.
(s) The consummation of the Transactions shall not (a) violate
any applicable law, statute, rule or regulation or (b) conflict with,
or result in a default or event of default under, (i) any indenture
relating to any Indebtedness of the Company, the Acquired Entities or
any of the their respective subsidiaries that is not being repaid,
repurchased or redeemed in connection with the Acquisitions or (ii) any
other material agreement of the Company, the Acquired Entities or any
of the their respective subsidiaries, and the Syndication Agent shall
have received one or more legal opinions to such effect (including, as
appropriate, those referred to in paragraph (b) above), satisfactory to
the Syndication Agent, from counsel to the Borrowers satisfactory to
the Syndication Agent.
(t) All requisite material Governmental Authorities and third
parties shall have approved or consented to the Acquisitions and the
Transactions to the extent required, all applicable appeal periods
shall have expired and there shall be no governmental or judicial
action, actual or threatened, that could reasonably be expected to
restrain, prevent or impose burdensome conditions on the Acquisitions
or the other Transactions.
(u) The Syndication Agent shall have received evidence
reasonably satisfactory to it that the Company has, and has caused each
of its Subsidiaries to have, with financially sound and reputable
insurance companies, insurance (or, to the extent customary for similar
companies engaged in the same or similar businesses, self insurance) in
such amounts and against such risks (including fire and other risks
insured by extended coverage) as are customarily maintained by similar
companies engaged in the same or similar businesses operating in the
same or similar locations, including public liability
88
82
insurance against claims for personal injury, death or property damage
occurring upon, about or in connection with the use of any properties
owned, occupied or controlled by it as well as such other insurance as
may be required by law.
The Syndication Agent shall notify the Company and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the Commitments of the Lenders shall terminate and the obligations of
the Issuing Banks to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., Detroit time, on January 31,
1997.
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of an Issuing Bank to
issue, amend, renew or extend any Letter of Credit (any of the foregoing, a
"CREDIT EVENT"), is (except as otherwise specifically provided in Section 2.04)
subject to the satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct in all material
respects on and as of the date of such Credit Event.
(b) At the time of and immediately after giving effect to such
Credit Event, no Default shall have occurred and be continuing.
(c) In the event such Loan is to be made to a Subsidiary
Borrower, the German Borrower Condition shall have been satisfied with
respect to such Subsidiary Borrower at or prior to the time of such
Borrowing.
Each Credit Event shall be deemed to constitute a representation and warranty by
the Company and the relevant Borrower on the date thereof as to the matters
specified in paragraphs (a) and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all
89
83
LC Disbursements shall have been reimbursed, each Borrower covenants and agrees
with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Company will furnish to the Administrative Agent and each Lender:
(a) within 105 days after the end of each fiscal year of the
Company, its audited consolidated balance sheet and related statements
of operations, changes in stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, its consolidated
and, solely with respect to the consolidation of the Company and
Holdings, consolidating balance sheet and related statements of
operations and of cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the
end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Company (i) certifying as to whether a Default has occurred and, if
a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.11, 6.12, 6.13 and 6.14 and setting forth reasonably detailed
calculations of Excess Cash Flow for the periods covered thereby, (iii)
stating whether any change in GAAP or in the application thereof has
occurred since the date of the Company's audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying
90
84
such certificate and (iv) as applicable, certifying as to the
information required under Section 5.03(b);
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported
on such financial statements stating whether they obtained knowledge
during the course of their examination of such financial statements of
any Default (which certificate may be limited to the extent required
by accounting rules or guidelines and the preparation of which shall
not require special procedures beyond those ordinarily employed in
connection with such an examination conducted in accordance with
generally accepted auditing standards);
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Company or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any
or all of the functions of said Commission, or with any national
securities exchange, or distributed by the Company to its shareholders
generally, as the case may be; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Company or any Subsidiary, or compliance with the
terms of any Loan Document, as either Agent or any Lender may
reasonably request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Company will
furnish to the Administrative Agent and each Lender prompt written notice,
within three Business Days of obtaining knowledge thereof, of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Company or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Company and its Subsidiaries in
an aggregate amount exceeding $5,000,000; and
(d) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.
91
85
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. INFORMATION REGARDING COLLATERAL. (a) The
Company will furnish to the Collateral Agent prompt written notice of any change
(i) in any U.S. Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any U.S. Loan Party's chief executive
office, its principal place of business, any office in which it maintains books
or records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new
office or facility), (iii) in any U.S. Loan Party's identity or corporate
structure or (iv) in any U.S. Loan Party's Federal Taxpayer Identification
Number. The Company agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral. The Company also agrees
promptly to notify the Collateral Agent if any material portion of the
Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Company shall deliver to the Collateral Agent a certificate of
a Financial Officer of the Company (i) setting forth the information required
pursuant to the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section and (ii) certifying that all Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Security Agreements for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period).
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS. The Company
will, and will cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; PROVIDED that the foregoing shall not prohibit
any merger, consolidation, liquidation or
92
86
dissolution permitted under Section 6.03 or any transaction permitted by
Section 6.04(b).
SECTION 5.05. PAYMENT OF OBLIGATIONS. The Company will, and
will cause each of its Subsidiaries to, pay its Indebtedness and other
obligations, including Tax liabilities, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Company or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) such contest effectively suspends collection of the
contested obligation and the enforcement of any Lien securing such obligation.
SECTION 5.06. MAINTENANCE OF PROPERTIES. The Company will, and
will cause each of its Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
SECTION 5.07. INSURANCE. (a) The Company will, and will cause
each of its Subsidiaries to, maintain, with financially sound and reputable
insurance companies, insurance (or, to the extent customary for similar
companies engaged in the same or similar businesses, self insurance) in such
amounts and against such risks (including fire and other risks insured by
extended coverage) as are customarily maintained by similar companies engaged in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury, death
or property damage occurring upon, about or in connection with the use of any
properties owned, occupied or controlled by it as well as such other insurance
as may be required by law.
(b) All polices of casualty insurance maintained by or for the
benefit of any U.S. Loan Party shall be endorsed or otherwise amended to include
a "standard" or "New York" lender's loss payable endorsement, in favor of and
satisfactory to the Collateral Agent, which endorsement shall provide that if
the insurance carrier shall have received written notice from the Administrative
Agent or the Collateral Agent of the occurrence of an Event of Default, or if
the proceeds, payable thereunder are in an amount exceeding $1,000,000, then the
insurance carrier shall pay all proceeds otherwise payable to any U.S. Loan
Party under such policies directly to the Collateral Agent. All such policies
also shall provide that neither the Company, the Administrative Agent, the
Collateral Agent nor any other party shall be a coinsurer thereunder and shall
contain a "Replacement Cost Endorsement", without any deduction for
depreciation, "mortgagee's interest"/"breach of warranty coverage" and such
other provisions as the Administrative Agent or the Collateral Agent may
reasonably require from time to time to protect the interests of the Lenders.
Each
93
87
such policy also shall provide that it shall not be canceled, modified or not
renewed (i) by reason of nonpayment of premium except upon not less than 10
days' prior written notice thereof by the insurer to the Administrative Agent
and the Collateral Agent (giving the Administrative Agent and the Collateral
Agent the right to cure defaults in the payment of premiums) or (ii) for any
other reason except upon not less than 30 days' prior written notice thereof by
the insurer to the Administrative Agent and the Collateral Agent. The Company
shall deliver to the Administrative Agent and the Collateral Agent, prior to the
cancellation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent and the Collateral Agent)
together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor to the extent due and
payable.
(c) If at any time the area in which any Mortgaged Property is
located is designated (i) a "flood hazard area" in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
the Company shall obtain flood insurance in such total amount as the
Administrative Agent, the Collateral Agent or the Required Lenders may from time
to time require, and otherwise comply with the National Flood Insurance Program
as set forth in the Flood Disaster Protection Act of 1973, as amended from time
to time.
(d) With respect to any Mortgaged Property, the Company shall
carry and maintain comprehensive general liability insurance including the
"broad form CGL endorsement" and coverage on an occurrence basis against claims
made for personal injury (including bodily injury, death and property damage)
and umbrella liability insurance against any and all claims, with a customary
combined single limit, naming the Collateral Agent as an additional insured, on
forms satisfactory to the Collateral Agent.
(e) The Company shall notify the Administrative Agent and the
Collateral Agent immediately whenever any separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section is taken out by any U.S. Loan Party; and shall promptly deliver to
the Administrative Agent and the Collateral Agent a duplicate original copy of
such policy or policies.
SECTION 5.08. BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS.
The Company will, and will cause each of its Subsidiaries to, keep proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities to the
extent necessary to maintain financial records in accordance with GAAP. The
Company will, and will cause each of its Subsidiaries to, permit any
representatives designated by either Agent or any
94
88
Lender, upon reasonable prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
SECTION 5.09. COMPLIANCE WITH LAWS. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.10. USE OF PROCEEDS AND LETTERS OF CREDIT. The
proceeds of the Term Loans and the Revolving Loans being made on the date of the
initial Borrowing hereunder will be used only (a) to pay the purchase price (and
related fees and expenses) in connection with the Acquisitions and (b) to repay
Indebtedness of the Borrower and its Subsidiaries on such date. The proceeds of
the Revolving Loans and Swingline Loans will be used only for general corporate
purposes and not for any transaction that has not been approved or recommended
by the board of directors, general partner or equivalent body of the Person to
be acquired. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations G, U and X. Letters of Credit
will be limited to standby letters of credit, as opposed to trade letters of
credit, and will be issued for general corporate purposes, including supporting
industrial revenue bond obligations of the Company.
SECTION 5.11. SUBSIDIARIES. (a) If any additional Subsidiary
is formed or acquired after the date hereof, the Company will notify the
Administrative Agent and the Lenders thereof and (i) if such Subsidiary is a
U.S. Subsidiary Loan Party, the Company will cause such Subsidiary to become a
party to the U.S. Subsidiary Guarantee, the U.S. Subsidiary Pledge Agreement and
the U.S. Subsidiary Security Agreement within three Business Days after such
Subsidiary is formed or acquired and promptly take such actions to create and
perfect Liens on such Subsidiary's assets to secure the Obligations of such
Subsidiary as the Collateral Agent or the Required Lenders shall reasonably
request, (ii) if such Subsidiary is a subsidiary of Holdings and a German Group
Member, Holdings will (x) cause such Subsidiary to become a party to the German
Subsidiary Guarantee and (y) execute and deliver to the Collateral Agent a
Holdings Assignment of Claims with respect to inter-company Indebtedness of such
Subsidiary owed to Holdings, and (z) if such Subsidiary is a directly owned
Subsidiary of Holdings, pledge its shares of such Subsidiary pursuant to the
Holdings Pledge Agreement, in each case within three Business Days after such
Subsidiary is formed or acquired and (iii) if any shares of capital stock or
Indebtedness of such Subsidiary are owned by or on behalf of any
95
89
U.S. Loan Party, the Company will cause such shares and promissory notes
evidencing such Indebtedness to be pledged pursuant to a Pledge Agreement within
three Business Days after such Subsidiary is formed or acquired. Any shares of
common stock of a Foreign Subsidiary to be pledged pursuant to the Company
Pledge Agreement, the U.S. Subsidiary Pledge Agreement or any similar security
document shall be limited to 65% of the outstanding shares of common stock of
such Subsidiary).
(b) Holdings will continue to own, directly or indirectly, at
least 51% of the capital stock of each of the German Loan Parties other than
Holdings.
SECTION 5.12. FURTHER ASSURANCES. (a) The Company will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which either Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. The Company also agrees
to provide to either Agent, upon request, lien searches reasonably satisfactory
to such Agent relating to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Company or any
U.S. Subsidiary Loan Party after the Effective Date or if Holdings acquires any
stock in any additional direct Subsidiary of Holdings after the Effective Date
(in each case, other than assets constituting Collateral under the Pledge
Agreements or the U.S. Security Agreements), the Company will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Company will cause such assets
or stock to be subjected to a Lien securing the Obligations (or in the case of
Holdings, the Obligations secured under the Holdings Pledge Agreement) and will
take, and cause the Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Collateral Agent to grant and perfect such Liens,
including actions described in paragraph (a) of this Section, all at the expense
of the Loan Parties.
SECTION 5.13. CASUALTY AND CONDEMNATION. (a) The Company will
furnish to the Agents and the Lenders prompt written notice of any significant
casualty or other insured damage to any portion of any Mortgaged Property or the
commencement of any action or proceeding for the taking of any Mortgaged
Property
96
90
or any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds, condemnation
award or otherwise), the Collateral Agent is authorized to collect such Net
Proceeds and, if received by the Company or any Subsidiary, such Net Proceeds
shall be paid over to the Collateral Agent; PROVIDED that if the aggregate Net
Proceeds in respect of such event are less than $750,000, such Net Proceeds
shall be paid over to the Company unless a Default has occurred and is
continuing. All such Net Proceeds retained by or paid over to the Collateral
Agent shall be held by the Collateral Agent and released from time to time to
pay the costs of repairing, restoring or replacing the affected property in
accordance with the terms of the applicable Mortgage, subject to the provisions
of the applicable Mortgage regarding application of such Net Proceeds during a
Default.
(c) If any Net Proceeds retained by or paid over to the
Collateral Agent as provided above continue to be held by the Collateral Agent
on the date that is 270 days after the occurrence of the event resulting in such
Net Proceeds, then such Net Proceeds shall be applied to prepay Term Borrowings
as provided in Section 2.11(c).
SECTION 5.14. RATE PROTECTION ARRANGEMENTS. On or prior to
June 30, 1997, the Company and Holdings, respectively, will enter into, and
thereafter maintain in effect, one or more Rate Protection Agreements (which, to
the extent entered into with a Lender will be secured in the same manner as the
Company's Obligations or Holdings' Obligations, as the case may be, but
otherwise shall be unsecured), the effect of which shall be to limit at all
times the interest payable in connection with a notional principal amount of
Indebtedness not less than 50% of the principal amount of the Term Loans of the
Company or of Holdings, as the case may be, outstanding hereunder from time to
time to a maximum rate and on terms and conditions reasonably acceptable, taking
into account current market conditions, to the Administrative Agent.
SECTION 5.15. FISCAL YEAR. The Company will, and will cause
each of its Subsidiaries to, at all times maintain a fiscal year ending on
December 31.
97
91
ARTICLE VI
NEGATIVE COVENANTS
------------------
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each Borrower covenants and agrees
with the Lenders that:
SECTION 6.01. INDEBTEDNESS. The Company will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(iii) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary; PROVIDED that
Indebtedness of any Subsidiary that is not a Loan Party to the Company
or any U.S. Subsidiary Loan Party shall be subject to Section 6.04;
(iv) Guarantees by the Company of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Company or any other
Subsidiary; PROVIDED that Guarantees by the Company or any Subsidiary
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party
shall be subject to Section 6.04;
(v) Indebtedness of the Company or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof; PROVIDED that (A) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause (v) shall not exceed $5,000,000
at any time outstanding and (C) the aggregate principal amount of all
Basket Indebtedness at any time outstanding shall not exceed
$15,000,000;
98
92
(vi) Indebtedness of any Person that becomes a Subsidiary after
the date hereof and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof, PROVIDED that (A) such Indebtedness (other than any such
renewal or replacement Indebtedness) exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary, (B) the aggregate
principal amount of Indebtedness permitted by this clause (vi) shall
not exceed $10,000,000 at any time outstanding and (C) the aggregate
principal amount of all Basket Indebtedness at any time outstanding
shall not exceed $15,000,000;
(vii) Indebtedness of the Company or any Subsidiary as an account
party in respect of trade letters of credit;
(viii) until the Deutsche Bank Termination Date, but not
thereafter, Indebtedness of Holdings or any Subsidiary of Holdings
under a revolving line of credit from Deutsche Bank in an aggregate
principal amount at any time outstanding not in excess of DM
30,000,000, which Indebtedness is supported by a German Letter of
Credit issued by the German Issuing Bank in the maximum stated amount
of DM 30,000,000 but is otherwise unsecured; and
(ix) other unsecured Indebtedness in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding; PROVIDED that
the aggregate principal amount of Basket Indebtedness shall not exceed
$15,000,000 at any time outstanding.
SECTION 6.02. LIENS; SALE AND LEASE-BACK TRANSACTIONS. (a) The
Company will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
PROVIDED that (i) such Lien shall not apply to any other property or
asset of the Company or any Subsidiary and (ii) such Lien shall secure
only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
99
93
(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary;
PROVIDED that (A) such Lien does not secure any Indebtedness which is
not permitted by Section 6.01, (B) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, as the case may be, (C) such Lien shall not
apply to any other property or assets of the Company or any Subsidiary
and (D) such Lien shall secure only those obligations which it secures
on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal
amount thereof;
(v) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary; PROVIDED that (A) such
security interests secure Indebtedness permitted by clause (v) of
Section 6.01, (B) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement (except in the
case of any extension, renewal or replacement Indebtedness permitted by
Section 6.01(v) and Liens securing the same), (C) the Indebtedness
secured thereby (other than Capital Lease Obligations) does not exceed
90% of the cost of acquiring, constructing or improving such fixed or
capital assets and (D) such security interests shall not apply to any
other property or assets of the Company or any Subsidiary;
(vi) Liens in favor of the Company or any Subsidiary;
(vii) any interest of a lessor in the property subject to any
capital lease or operating lease not prohibited by the other provisions
of this Agreement;
(viii) any option or other agreement to purchase any asset of the
Company or any Subsidiary the purchase, sale or other disposition of
which is not otherwise prohibited under this Agreement or any other
Loan Document;
(ix) any interest or title of any consignor of goods consigned
to, or of any creditor of any consignor in goods consigned to such
consignee by, the Company or any Subsidiary;
(x) judgment Liens in respect of any judgment to the extent
that the failure to discharge which, or the existence of which, does
not constitute an Event of Default and as to which no foreclosure
action has been taken;
100
94
(xi) rights of setoff and other interests and claims in favor of
any financial institution with which the Company or any Subsidiary
maintains a lockbox or other deposit account;
(xii) leases or subleases granted to others that do not
materially interfere with the intended use of the relevant property by
the Company or its Subsidiaries;
(xiii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by the Company or any of its Subsidiaries in the ordinary course of
business of the Company or any of its Subsidiaries and, to the extent
such arrangements constitute Indebtedness, securing Indebtedness
permitted by Section 6.01(v) or (vi); and
(xiv) Liens on any proceeds (including, without limitation,
insurance, condemnation, eminent domain and analogous proceeds) of any
property subject to a Lien permitted pursuant to the foregoing
provisions of this Section, and Liens on a product or mass which
includes goods subject to a Lien permitted by the foregoing provisions
of this Section, to the extent contemplated by Section 9-315 of the
Uniform Commercial Code of the State of New York.
(b) The Company will not, and will not permit any Subsidiary
to, enter into any arrangement, directly or indirectly, with any Person whereby
it shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred.
SECTION 6.03. FUNDAMENTAL CHANGES. (a) The Company will not,
and will not permit any of its Subsidiaries to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing (i) any Subsidiary may merge into the Company in
a transaction in which the Company is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving
entity is a Subsidiary, (iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Company or to another Subsidiary and (iv)
any Subsidiary may liquidate or dissolve if the Company determines in good faith
101
95
that such liquidation or dissolution is in the best interests of the Company and
is not materially disadvantageous to the Lenders; PROVIDED that (x) any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by the
provisions of Section 6.04 (other than Section 6.04(b)(ii)(y), which shall not
provide the basis for any such merger being permissible under this Section) and
(y) a Subsidiary that is a Borrower may not merge, consolidate, liquidate or
dissolve unless, in addition to the foregoing conditions, the surviving entity,
or the entity into which such Subsidiary liquidates or dissolves, is a Borrower
and assumes all Obligations of such Subsidiary in a manner satisfactory to the
Administrative Agent.
(b) The Company will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the date
of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; ASSET SALES. (a) The Company will not, and will not permit any of
its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of any other
Person make or permit to exist any loans or advances to any other Person,
Guarantee any obligations of any other Person, pay any Invested Entity Expenses,
or make or permit to exist any investment or any other interest in any other
Person or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit (all
the foregoing, collectively, "INVESTMENTS"), except:
(i) Permitted Investments;
(ii) Investments existing on the date hereof in Subsidiaries
and Invested Entities and Investments received as dividends or
distributions in respect thereof or in exchange therefor, provided in
each case that any transaction giving rise thereto is not otherwise
prohibited by this Agreement or any other Loan Document;
(iii) Investments by the Company and its wholly owned
Subsidiaries in the capital stock of their wholly owned Subsidiaries
(or of Persons that, after giving effect to such Investment, will
become wholly owned Subsidiaries) or in assets of any other Person
constituting a business unit; PROVIDED that any such shares of capital
stock held by a U.S. Loan Party or held directly by Holdings, and the
shares of capital stock of any Subsidiary (to the extent held by the
102
96
Company or any U.S. Subsidiary or directly by Holdings) acquiring
assets constituting a business unit shall, in each case, be pledged
pursuant to the applicable Pledge Agreement (subject to the
limitations applicable to common stock of a Foreign Subsidiary
referred to in Section 5.11);
(iv) loans or advances made by the Company to any wholly owned
Subsidiary and made by any Subsidiary to the Company or any wholly
owned Subsidiary; PROVIDED that any such loans and advances made by
(x) a U.S. Loan Party shall be pledged pursuant to the applicable
Pledge Agreement and evidenced by a promissory note so pledged and (y)
Holdings shall be assigned to the Lenders pursuant to a Holdings
Assignment of Claims delivered to the Collateral Agent;
(v) Guarantees constituting Indebtedness permitted by Section
6.01;
(vi) Investments acquired in exchange for or in satisfaction of
any payment claim against another Person in connection with a workout
or reorganization of, or bankruptcy or insolvency proceeding relating
to, or a claim settlement with, such Person;
(vii) Hedging Agreements, to the extent permitted by Section 6.05
and covered by this Section 6.04;
(viii) Investments made after the date hereof by the Company or
any Subsidiary in Invested Entities or non-wholly owned Subsidiaries,
provided the aggregate amount of all such Investments outstanding from
time to time does not exceed $5,000,000;
(ix) other Investments, provided that the amount thereof on the
date when made, when added to the sum of (x) the aggregate amount of
then outstanding Investments theretofore made pursuant to this clause
(ix) and that will be outstanding immediately after giving effect to
the proposed investment and (y) the aggregate amount of Restricted
Payments theretofore made (or declared but not yet paid) pursuant to
Section 6.06(a)(iv), does not exceed an amount equal to (I) 25% of the
aggregate amount of Excess Cash Flow for each fiscal year ended on or
after December 31, 1997 and prior to such date in which Excess Cash
Flow is positive MINUS (II) 100% of Excess Cash Flow for any such
fiscal year in which Excess Cash Flow is negative.
103
97
(b) The Company will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any capital stock (but excluding payments or transfers of cash in
connection with transactions not otherwise prohibited hereby or by any other
Loan Document), except:
(i) sales of inventory, used or surplus property and sales of
Permitted Investments, in each case in the ordinary course of
business;
(ii) (x) transfers of the purchase price of Investments permitted
by paragraph (a) of this Section, transfers constituting Restricted
Payments permitted by Section 6.06, (y) transfers consisting of Liens
permitted by Section 6.02 and transfers and other dispositions
permitted by Section 6.03(a);
(iii) sales, transfers, leases and dispositions to the Company or
a Subsidiary; PROVIDED that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.07; and
(iv) the sale or disposition of the capital stock or assets of
Sintermetallwerk Lubeck GmbH and of Pressmetall Krebsoege GmbH,
provided that the Net Proceeds thereof are applied in accordance with
Section 2.11(b);
PROVIDED that all sales, transfers, leases and other dispositions permitted by
clauses (i) and (iv) above shall be made for fair value and solely for cash
consideration (or for Investments permitted by Section 6.04(a)(vi) in the
circumstances described therein).
SECTION 6.05. HEDGING AGREEMENTS. The Company will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than (i) Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which the Company or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities and
(ii) Rate Protection Agreements entered into pursuant to Section 5.14.
SECTION 6.06. RESTRICTED PAYMENTS; PREPAYMENT OF DEBT. (a) The
Company will not, and will not permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except (i)
the Company may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock, (ii) subject to Section
5.04, Subsidiaries may declare and pay dividends or make other distributions
ratably with respect to their capital stock, (iii) the Company may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Company and its
Subsidiaries and (iv) the Company
104
98
may, provided no Default is continuing or would result therefrom, pay cash
dividends with respect to its capital stock in any fiscal year, not earlier than
the date of delivery of financial statements under Section 5.01(a) in respect of
the immediately preceding fiscal year and not later than June 30 of the current
fiscal year, in an aggregate amount not in excess of 25% of Excess Cash Flow, if
positive, for such immediately preceding fiscal year MINUS any portion of such
Excess Cash Flow theretofore relied upon to make Investments under Section
6.04(a)(ix).
(b) The Company will not, and will not permit any Subsidiary
to, repay, prepay or purchase any Indebtedness for borrowed money of the Company
or any Subsidiary (other than intercompany Indebtedness owed by the Company or a
Subsidiary to the Company or a Subsidiary), except:
(i) the Indebtedness under the Loan Documents;
(ii) payments of Indebtedness permitted under Section 6.01 in
conformity with the regularly scheduled maturity thereof or mandatory
payment provisions thereof;
(iii) if no Default has occurred and is continuing or would
result therefrom, refinancings permitted by Section 6.01;
(iv) the Indebtedness described in clause (viii) of Section 6.01;
and
(v) Indebtedness under the Company's Swedish credit facility in
an aggregate principal amount not to exceed SEK 13,500,000.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. The Company will
not, and will not permit any Subsidiary to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business at prices
and on terms and conditions not less favorable to the Company or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Company and direct or indirect wholly
owned Subsidiaries of the Company not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.06 and (d) as set forth on Schedule
6.07(d).
SECTION 6.08. RESTRICTIVE AGREEMENTS. The Company will not,
and will not permit any Subsidiary to, directly or indirectly, enter into, incur
or permit to exist any agreement or other consensual arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Company or any
Subsidiary to
105
99
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or to Guarantee Indebtedness of the
Company or any other Subsidiary; PROVIDED that (i) the foregoing shall not apply
to restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.08 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary (or any assets of any Subsidiary) pending such sale, provided such
restrictions and conditions apply only to the Subsidiary (or the assets) to be
sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing
shall not apply to restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness
(including in the case of Capital Lease Obligations, the assets subject thereto)
and (v) clause (a) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof or to restrictions
on Liens on assets transferred to the Company on a consignment basis.
SECTION 6.09. CAPITAL EXPENDITURES. The Company will not, and
will not permit any of its Subsidiaries to, make cash Capital Expenditures in
any fiscal year set forth below to the extent that the aggregate amount thereof
for the Company and all its Subsidiaries would exceed the sum of (i) the amount
set forth opposite such fiscal year in the table below PLUS (ii) the lesser of
(x) the excess, if any, of the amount of Capital Expenditures set forth in the
table below in respect of the immediately prior fiscal year over the aggregate
cash Capital Expenditures made in such prior fiscal year and (y) 25% of the
amount of Capital Expenditures set forth in the table below in respect of the
immediately prior fiscal year, PROVIDED that Capital Expenditures constituting
the application of cash held by the trustee under the Richton IRB for Capital
Expenditures relating to the Richton Park facility shall not constitute Capital
Expenditures for purposes of this Section:
106
100
FISCAL YEAR CAPITAL EXPENDITURE AMOUNT
----------- --------------------------
1996 $25,000,000
1997 23,000,000
1998 22,000,000
1999 22,000,000
2000 22,000,000
2001 24,500,000
2002 26,500,000
2003 and thereafter 28,500,000
SECTION 6.10. OTHER ARRANGEMENTS. The Company will not and
will not permit any of its Subsidiaries to, directly or indirectly terminate,
amend, waive or permit to be terminated, amended or waived any agreement
governing Indebtedness or any other material agreement in a manner adverse in
any material respect to the interests of the Lenders.
SECTION 6.11. DEBT TO CONSOLIDATED EBITDA. The Company will
not (i) permit the ratio of Total Debt to 400% of Consolidated EBITDA for the
fiscal quarter ending March 31, 1997, to be greater than 4.25 to 1.00 on any
date from March 31, 1997 through June 29, 1997, (ii) permit the ratio of Total
Debt to 200% of Consolidated EBITDA for the six month period ending June 30,
1997, to be greater than 4.25 to 1.00 on any date from June 30, 1997 through
September 29, 1997, (iii) permit the ratio of Total Debt to 133 1/3% of
Consolidated EBITDA for the nine month period ending September 30, 1997, to be
greater than 4.25 to 1.00 on any date from September 30, 1997 through December
30, 1997 and (iv) on any date on or after December 31, 1997, permit the ratio of
Total Debt to Consolidated EBITDA for the period of four consecutive fiscal
quarters most recently ended on or prior to such date to be greater than the
ratio set forth below in respect of the relevant period that includes the last
day of such period of four consecutive fiscal quarters:
107
101
LAST DAY OF FOUR FISCAL
-----------------------
QUARTERS OCCURRING RATIO
------------------ -----
On or after December 31, 1997 and
on or prior to June 30, 1998 4.25 to 1.00
After June 30, 1998, and on or
prior to December 31, 1999 3.75 to 1.00
After December 31, 1999 and on or
prior to December 31, 2000 3.00 to 1.00
After December 31, 2000 2.50 to 1.00
SECTION 6.12. FIXED CHARGE COVERAGE RATIO. The Company will
not permit the Fixed Charge Coverage Ratio (i) for any of the periods of one,
two, three or four fiscal quarters ending March 31, 1997, June 30, 1997,
September 30, 1997, or December 31, 1997, respectively, to be less than 1.00 to
1.00, (ii) for any period of four fiscal quarters ending March 31, 1998 and June
30, 1998 to be less than 1.00 to 1.00, (iii) for any period of four fiscal
quarters ending on or after September 30, 1998, and on or before December 31,
1999 to be less than 1.05 to 1.00 or (iv) for any period of four consecutive
fiscal quarters ending on or after March 31, 2000 to be less than 1.10 to 1.00.
SECTION 6.13. INTEREST COVERAGE RATIO. The Company will not
permit the ratio of Consolidated EBITDA to Consolidated Interest Expense for any
of the periods of one, two, three or four fiscal quarters ended March 31, 1997,
June 30, 1997, September 30, 1997, or December 31, 1997, respectively, to be
less than 3.00 to 1.00, or for any period of four consecutive fiscal quarters
ending on or after March 31, 1998 to be less than the ratio set forth below
opposite the period which includes the last day of such period of four
consecutive quarters:
PERIOD RATIO
------ -----
Through June 30, 1998 3.25 to 1.00
From July 1, 1998 through December 31, 1998 3.50 to 1.00
From January 1, 1999 through December 31, 1999 3.75 to 1.00
From January 1, 2000 through June 30, 2000 4.00 to 1.00
Thereafter 4.50 to 1.00
SECTION 6.14. NET WORTH. The Company will not permit its
Consolidated Net Worth on any date (i) through and including December 30, 1996,
to be less than $48,500,000, and (ii) on or after December 31, 1996, to be less
than (x) the greater of $48,500,000 and 90% of the Company's Consolidated Net
Worth as
108
102
reported in its audited financial statements for the year ending December 31,
1996, plus (y) 50% of Consolidated Net Income of the Company, if positive, for
each fiscal year ending after December 31, 1996, plus (z) if such date is not
the last day of a fiscal year, 50% of Consolidated Net Income of the Company, if
positive, for the period consisting of any fiscal quarters of the then current
fiscal year that have ended on or before such date.
SECTION 6.15. EBITDA. The Company will not permit Consolidated
EBITDA of the Company and its Subsidiaries for the fiscal quarter ending March
31, 1997, to be less than $15,000,000, for the period of two fiscal quarters
ending June 30, 1997 to be less than $30,000,000, for the period of three fiscal
quarters ending September 30, 1997 to be less than $40,000,000 and for any
period of four consecutive fiscal quarters ended on or after December 31, 1997
to be less than the amount set forth below opposite the period which includes
the last day of such period of four fiscal quarters:
PERIOD AMOUNT
------ ------
Through December 31, 1997 $55,000,000
From January 1, 1998 through September 30, 1998 60,000,000
From October 1, 1998 through December 31, 1998 65,000,000
From January 1, 1999 through September 30, 1999 67,500,000
From October 1, 1999 through December 31, 1999 72,500,000
From January 1, 2000 through September 30, 2000 75,000,000
From October 1, 2000 through December 31, 2000 80,000,000
On and after January 1, 2001 85,000,000
ARTICLE VII
EVENTS OF DEFAULT
-----------------
If any of the following events ("EVENTS OF DEFAULT") shall
occur:
(a) any Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation of such Borrower in respect of any LC
Disbursement when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or
otherwise;
(b) any Borrower shall fail to pay any interest on any Loan of
such Borrower or any fee or any other amount (other than an amount
referred to in
109
103
clause (a) of this Article) payable by such Borrower under this
Agreement, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of any Borrower or any Subsidiary in or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or
deemed made;
(d) any Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 or
5.10 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Company (which
notice will be given at the request of any Lender);
(f) the Company or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable or within any period of grace applicable thereto;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that at
the time enables or permits the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf with the
giving of notice (after giving effect to any applicable period of
grace) to cause any Material Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; PROVIDED that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of, or casualty, condemnation or other involuntary
occurrence with respect to, the property or assets securing such
Indebtedness (including assets subject to Capital Lease Obligations);
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in
110
104
respect of the Company or any other Loan Party or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any
other Loan Party or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) the Company or any other Loan Party shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any other Loan party
or for a substantial part of its assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Company or any other Loan Party shall become unable,
admit in writing its inability, or fail generally, to pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 (or the Dollar Equivalent
thereof) shall be rendered against the Company, any other Loan Party or
any combination thereof and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Company or any other
Loan Party to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except (i) as a result of
the sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or
111
105
(ii) as a result of the Collateral Agent's failure to maintain
possession of any stock certificates, promissory notes or other
instruments delivered to it under any Pledge Agreement;
(n) any of the Guarantee Agreements or Security Agreements
shall for whatever reason be terminated or cease to be in full force
and effect, or the enforceability thereof shall be contested by any
Loan Party; or
(o) a Change in Control shall occur;
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Company, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Borrower; and in case of any
event with respect to any Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrowers accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower.
ARTICLE VIII
THE AGENTS
----------
Each of the Lenders and each Issuing Bank hereby irrevocably
appoints each Agent as its agent, including, without limitation, to accept, as
Collateral Agent on behalf of each Lender, the pledge of shares in any
Subsidiary as security for the Obligations of any Loan Party, and authorizes
each Agent to take such actions on its behalf and to exercise such powers as are
delegated to the such Agent by the terms of the Loan Documents, together with
such actions and powers as are reasonably incidental thereto.
112
106
Any bank serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Company or any Subsidiary or other Affiliate thereof
as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the generality
of the foregoing, (a) neither Agent shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) neither Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents,
neither Agent shall have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its Affiliates in any capacity. Neither Agent shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or wilful misconduct. Each Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Company or a Lender, in which case the
Administrative Agent shall promptly give notice to the Lenders of the receipt of
such notice of Default, and neither Agent shall be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with
113
107
legal counsel (who may be counsel for the Borrowers), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.
Each Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by such
Agent. Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent. NBD
Bank has appointed its Affiliate, The First National Bank of Chicago, to act as
a sub-agent in respect of the German Loan Parties and Loans and payments to be
made hereunder in Deutschemarks.
Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, an Agent may resign at any time by notifying the
Lenders, the Issuing Banks and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Banks, appoint a successor Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor. After an Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its subagents and their respective Related Parties in respect of
any actions taken or omitted to be taken by any of them while it was acting as
Agent.
Each Lender acknowledges that it has, independently and
without reliance upon either Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon either Agent
or any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this
114
108
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
Each Lender hereby (i) appoints the Collateral Agent the
attorney-in-fact of such Lender to execute and deliver, on behalf of and in the
name of such Lender, any pledge agreement, guarantee or assignment of claims of
any subsidiary of the Company or Holdings in favor of such Lender, (ii)
authorizes the Collateral Agent to appoint any further agents or attorneys to
execute and deliver, or otherwise to act, on behalf of and in the name of the
Collateral Agent for any such purpose and (iii) approves, pursuant to Section
185 of the German Civil Code, the acts performed and declarations made by ▇▇▇▇▇
▇▇▇▇▇▇ before Notary ▇▇. ▇▇▇▇▇▇ in Frankfurt am Main, Germany on December 17,
1996 in connection with the pledge to the Lenders of shares in Holdings
(Notary's Document No. 529/96), Krebsoege Sinterholding Gmbh (Notary's Document
No. 530/96) and Metallwerk Langensalza Gmbh (Notary's Document No. 531/96). The
Lenders hereby relieve ▇▇▇▇▇ ▇▇▇▇▇▇ from the self-dealing restrictions imposed
by Section 181 of the German Civil Code.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Company, to it at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇),
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy, which shall not constitute notice, to
▇▇▇▇▇ ▇▇▇▇▇▇, Esq., ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to any German Borrower, to it (in care of Holdings) at ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇), ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy, which
shall not constitute notice to Jurgen Reemers, Esq., ▇▇▇▇▇, Day,
▇▇▇▇▇▇ & ▇▇▇▇▇, Bockenheimer ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇,
▇▇▇▇▇▇▇;
(c) if to the Administrative Agent, to NBD Bank, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Agency Administrators
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) or, in the case of notices relating to
German
115
109
Swingline Borrowings, to The First National Bank of Chicago, Frankfurt
Branch, at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, Attention
of ▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No. 011-49-69-299876-80);
(d) if to the Collateral Agent, to it at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Agency Administrators (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(e) if to the German Issuing Bank, to First National Bank of
Chicago, Frankfurt Branch, at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇,
▇▇▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No. 011-49-69-299876-80);
(f) if to the U.S. Issuing Bank, to NBD Bank, at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Agency Administrators,
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(g) if to the German Swingline Lender, to First National Bank of
Chicago, Frankfurt Branch, at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇▇,
▇▇▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No. 011-49-69-299876-80);
(h) if to the U.S. Swingline Lender, to NBD Bank at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Agency Administrators
(Telecopy No. (▇▇▇)-▇▇▇-▇▇▇▇); and
(i) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by
either Agent, either Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Banks and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be
116
110
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether an Agent, any Lender
or any Issuing Bank may have had notice or knowledge of such Default at the
time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the applicable Agent thereunder and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
PROVIDED that no such agreement shall (i) increase the Commitment of any Lender
or increase the express obligations of any Lender hereunder (it being agreed
that waivers, amendments or other modifications relating to Defaults, Events of
Default, representations, warranties, conditions to borrowing, or covenants or
other obligations of any Loan Party that otherwise may be approved by the
Required Lenders shall be deemed not to increase an obligation of any Lender
hereunder) without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment,
waive any mandatory prepayment required by Section 2.11, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the definition of "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release the
Company or any Subsidiary Loan Party from its Guarantee under the relevant
Guarantee Agreement (except as expressly provided in such Guarantee Agreement),
or limit its liability in respect of such Guarantee, without the written consent
of each Lender affected thereby, (vii) release any substantial portion of the
Collateral from the Liens of the Security Documents, except as expressly
provided in such Security Document, without the written consent of each Lender
affected thereby, (viii) waive any of the conditions in Section 4.01, without
the written consent of each Lender affected thereby, (ix) modify the terms
affecting any
117
111
issued and outstanding Letter of Credit without the consent of the relevant
Issuing Bank or (x) change any provisions of any Loan Document in a manner that
by its terms adversely affects the rights in respect of payments due to Lenders
holding Loans of any Class differently than those holding Loans of any other
Class, without the written consent of Lenders holding a majority in interest of
the outstanding Loans and unused Commitments of each affected Class; PROVIDED
FURTHER that no such agreement shall amend, modify or otherwise affect the
rights or duties of either Agent, either Issuing Bank or the Swingline Lender
hereunder without the prior written consent of such Agent, Issuing Bank or the
Swingline Lender, as the case may be. The foregoing shall not affect the ability
of the Administrative Agent or the Collateral Agent pursuant to Section 9.15 to
terminate Liens and security interests created by the Loan Documents without the
consent of the Lenders affected thereby.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Company shall pay (i) all reasonable out-of-pocket expenses incurred by each
Agent, the Syndication Agent and their respective Affiliates, (x) in connection
with the syndication of the credit facilities provided for herein, the
preparation and ordinary administration of the Loan Documents, including the
reasonable fees, charges and disbursements of a single overall counsel, and
appropriate local counsel, including German counsel, for the Agents and (y) in
connection with any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), including the reasonable fees, charges and disbursements of
counsel for the Agents, (ii) all reasonable out-of-pocket expenses incurred by
either Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and (iii)
all out-of-pocket expenses incurred by the either Agent, either Issuing Bank or
any Lender, including the fees, charges and disbursements of any counsel for
either Agent, the Syndication Agent, either Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit, PROVIDED that the
Lenders shall bear the cost and expense of any visit or inspection pursuant to
Section 5.08 unless a Default shall have occurred and be continuing.
(b) The Company shall indemnify each Agent, the Syndication
Agent, each Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "INDEMNITEE") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in
118
112
connection with, or as a result of any actual or prospective claim, litigation,
investigation or proceeding, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto, relating to or
arising in connection with (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by an Issuing Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit) or
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any Mortgaged Property or any other property owned or operated by the
Company or any of its Subsidiaries, or any Environmental Liability related in
any way to the Company or any of its Subsidiaries; PROVIDED that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to either Agent, the Syndication Agent, either Issuing
Bank or either Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to such Agent, the Syndication Agent, such
Issuing Bank or the Swingline Lender, as the case may be, such Lender's pro rata
share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; PROVIDED that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent, the
Syndication Agent, such Issuing Bank or the Swingline Lender in its capacity as
such. For purposes hereof, a Lender's "pro rata share" shall be determined based
upon its share of the sum of the total Revolving Exposures, outstanding Term
Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, no Borrower
shall assert, and each Borrower hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than three Business Days after written demand therefor.
119
113
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of an Issuing Bank that issues any Letter of Credit), except that
no Borrower may assign or otherwise transfer any of its rights or obligations
hereunder or under any other Loan Document without the prior written consent of
each Lender (and any attempted assignment or transfer by any Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of an Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agents,
Issuing Banks and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company (unless an Event of Default has occurred and is continuing)
and the Administrative Agent (and, in the case of an assignment of all or a
portion of a Revolving Commitment or any Lender's obligations in respect of its
LC Exposure or Swingline Exposure, the relevant Issuing Bank and the Swingline
Lender) must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld), (ii) except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Company and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, including the same proportionate part of the assignor's U.S.
Revolving Commitment, German Revolving Commitment and Tranche A Term Loans and
German Term Loans, (iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $4,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and PROVIDED FURTHER that any consent of the Company otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such
120
114
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, absent manifest error, and the Borrowers, the
Agents, the Issuing Banks and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Company, the Issuing Banks and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks, mutual funds or other entities (a
"PARTICIPANT") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); PROVIDED that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such
121
115
obligations and (iii) the Company, the Agents, the Issuing Banks and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; PROVIDED that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in clause (i), (ii), (iii) or (vii)
of the first proviso to Section 9.02(b) that affects such Participant. Subject
to paragraph (f) of this Section, each Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.15, 2.16 or 2.17 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15, 2.16 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrowers, to comply, and in
fact complies, with Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; PROVIDED that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that either Agent, either
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as
122
116
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17, 9.03 and 9.14 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Agents constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of any Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be
123
117
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
either Agent, either Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document
against, any Borrower or its properties in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01, and each
Loan Party organized outside the United States hereby irrevocably appoints the
Company as its agent for service of process of any of the courts mentioned in
this Section. Nothing in this Agreement or any other Loan Document will affect
the right of any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
124
118
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. Each of the Agents, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Company, (h) to the National Association
of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender's
investment portfolio in connection with ratings issued with respect to such
Lender, or (i) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
either Agent, either Issuing Bank or any Lender on a nonconfidential basis from
a source other than the Company. For the purposes of this Section, "INFORMATION"
means all information received from the Company relating to the Company or its
business, other than any such information that is available to either Agent,
either Issuing Bank or any Lender on a nonconfidential basis prior to disclosure
by Holdings or the Company; PROVIDED that, in the case of information received
from the Company after the date hereof, such information is
125
119
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "CHARGES"), shall
exceed the maximum lawful rate (the "MAXIMUM RATE") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.14. CONVERSION OF CURRENCIES. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum
owing hereunder in one currency into another currency, each party hereto agrees,
to the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Business Day immediately preceding the day on which final
judgment is given.
(b) The obligations of each Borrower in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of
126
120
the Borrowers contained in this Section 9.14 shall survive the termination of
this Agreement and the payment of all other amounts owing hereunder.
SECTION 9.15. RELEASE OF LIENS AND GUARANTEES. In the event
that any Loan Party conveys, sells, leases, assigns, transfers or otherwise
disposes of all or any portion of any of the capital stock, assets or property
of such Loan Party in a transaction not prohibited by this Agreement or any
other Loan Document, the Administrative Agent and the Collateral Agent shall
promptly (and the Lenders hereby authorize the Administrative Agent and the
Collateral Agent to) take such action and execute any such documents as may be
reasonably requested by such Loan Party and at such Loan Party's expense to
release (or to confirm and acknowledge the release of) any Liens created by any
Loan Document in respect of such capital stock, assets or property, and, in the
case of a disposition of all or substantially all the capital stock or assets of
any Subsidiary party to a Guarantee Agreement terminate such Subsidiary's
obligations under the relevant Guarantee Agreement and the other Security
Documents to which it is a party. In addition, the Administrative Agent and the
Collateral Agent agree to execute and deliver such documents and instruments
(not constituting amendments or waivers hereof) and to take such other actions
as are reasonably requested by such Loan Party and at such Loan Party's expense
to terminate the Liens and security interests created by the Loan Documents when
all the Obligations of such Loan Party are paid in full and all Letters of
Credit and Commitments are terminated.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SINTER METALS, INC.,
by
----------------------------
Name:
Title:
127
121
SINTER METALS, GMBH,
by
----------------------------
Name:
Title:
SALOMON BROTHERS INC, as
Syndication Agent,
by
----------------------------
Name:
Title:
SALOMON BROTHERS HOLDING
COMPANY INC,
by
----------------------------
Name:
Title:
NBD BANK, individually and as
Administrative Agent and Collateral
Agent,
by
----------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, Frankfurt Branch,
by
----------------------------
Name:
Title:
CITICORP USA, INC.,
by
----------------------------
Name:
Title:
128
CITIBANK, N.A., London,
by
----------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
by
----------------------------
Name:
Title:
BHF -- BANK Aktiengesellschaft,
by
----------------------------
Name:
Title:
BAYERISCHE VEREINSBANK AG,
New York Branch,
by
----------------------------
Name:
Title:
by
----------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
by
----------------------------
Name:
Title:
MELLON BANK N.A.,
by
----------------------------
Name:
Title:
129
SENIOR DEBT PORTFOLIO,
by BOSTON MANAGEMENT AND
RESEARCH, as Investment
Advisor,
by
----------------------------
Name:
Title:
ALLSTATE LIFE INSURANCE
COMPANY,
by
----------------------------
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE,
by
----------------------------
Name:
Title:
KZH HOLDING CORPORATION,
by
----------------------------
Name:
Title:
MEDICAL LIABILITY MUTUAL
INSURANCE COMPANY,
by
----------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
by
----------------------------
Name:
Title:
130
THE MITSUBISHI TRUST AND
BANKING CORPORATION,
by
----------------------------
Name:
Title:
BANKERS TRUST COMPANY,
by
----------------------------
Name:
Title:
PRIME INCOME TRUST,
by
----------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.,
by
----------------------------
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.
by TCW ASSET MANAGEMENT
COMPANY, its Investment
Manager,
by
----------------------------
Name:
Title:
KEYPORT LIFE INSURANCE
COMPANY,
by
----------------------------
Name:
Title:
