EXHIBIT E-1
CREDIT AGREEMENT
dated as of
November 30, 1998
among
STANDARD MOTOR PRODUCTS, INC.,
as Borrower,
THE LENDERS PARTY HERETO
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Documentation Agent
TABLE OF CONTENTS
PAGE
ARTICLE I.Definitions 1
SECTION 1.01 Defined Terms. 1
SECTION 1.02 Classification of Loans and Borrowings. 21
SECTION 1.03 Terms Generally 21
SECTION 1.04 Accounting Terms; GAAP. 21
ARTICLE II.The Credits 22
SECTION 2.01 Commitments. 22
SECTION 2.02 Loans and Borrowings. 22
SECTION 2.03 Requests for Revolving Borrowings 23
SECTION 2.04 Borrowing Base. 24
SECTION 2.05 Swingline Loans. 24
SECTION 2.06 Letters of Credit. 25
SECTION 2.07 Funding of Borrowings. 30
SECTION 2.08 Interest Elections. 31
SECTION 2.09 Termination and Reduction of Commitments 32
SECTION 2.10 Repayment of Loans; Evidence of Debt. 33
SECTION 2.11 Prepayment of Loans. 34
SECTION 2.12 Fees. 34
SECTION 2.13 Interest. 36
SECTION 2.14 Alternate Rate of Interest. 36
SECTION 2.15 Increased Costs 37
SECTION 2.16 Break Funding Payments. 38
SECTION 2.17 Taxes. 39
SECTION 2.18 Payments Generally; Pro Rata Treatment;
Sharing of Set-offs. 40
SECTION 2.19 Mitigation Obligations;
Replacement of Lenders. 42
ARTICLE III.Representations and Warranties 43
SECTION 3.01 Organization; Powers. 43
SECTION 3.02 Authorization; Enforceability. 43
SECTION 3.03 Governmental Approvals; No Conflicts. 43
SECTION 3.04 Financial Condition; No Material
Adverse Change. 44
SECTION 3.05 Properties. 44
SECTION 3.06 Litigation and Environmental Matters. 44
SECTION 3.07 Compliance with Laws and Agreements. 45
SECTION 3.08 Investment and Holding Company Status. 45
SECTION 3.09 Taxes. 45
SECTION 3.10 ERISA. 46
SECTION 3.11 Disclosure. 46
SECTION 3.12 Year 2000. 46
2
SECTION 3.13 Subsidiaries and Affiliates. 47
SECTION 3.14 Insurance. 47
SECTION 3.15 Labor Matters. 47
SECTION 3.16 Solvency. 48
SECTION 3.17 Use of Proceeds. 48
SECTION 3.18 Federal Reserve Regulations. 48
ARTICLE IV.Conditions 48
SECTION 4.01 Effective Date. 48
SECTION 4.02 Each Credit Event. 51
ARTICLE V.Affirmative Covenants 51
SECTION 5.01 Financial Statements and Other Information. 51
SECTION 5.02 Notices of Material Events. 53
SECTION 5.03 Existence; Conduct of Business. 54
SECTION 5.04 Payment of Obligations. 54
SECTION 5.05 Maintenance of Properties; Insurance. 54
SECTION 5.06 Books and Records; Inspection Rights. 54
SECTION 5.07 Compliance with Laws. 54
SECTION 5.08 Use of Proceeds and Letters of Credit. 55
SECTION 5.09 Notice of Discharge of Hazardous Material
or Environmental Complaint. 55
SECTION 5.10 Environmental Compliance. 55
SECTION 5.11 Additional Subsidiaries. 55
SECTION 5.12 Strategic Business Plan. 56
SECTION 5.13 Borrowing Base Certificate. 56
ARTICLE VI.Negative Covenants 56
SECTION 6.01 Indebtedness 56
SECTION 6.02 Liens. 58
SECTION 6.03 Fundamental Changes; Sales of Assets. 59
SECTION 6.04 Investments, Loans, Advances, Guarantees
and Acquisitions. 60
SECTION 6.05 Hedging Agreements. 61
SECTION 6.06 Restricted Payments. 61
SECTION 6.07 Transactions with Affiliates 62
SECTION 6.08 Restrictive Agreements. 63
SECTION 6.09 [This Section Intentionally Left Blank.] 63
SECTION 6.10 Amendment of Material Documents. 63
SECTION 6.11 Limitations on Sales and Leasebacks. 63
SECTION 6.12 Fiscal Year. 63
SECTION 6.13 Leverage Ratio. 64
SECTION 6.14 Capitalization Ratio. 64
SECTION 6.15 Consolidated Tangible Net Worth. 64
SECTION 6.16 Interest Coverage Ratio. 64
3
SECTION 6.17 Debt Service Coverage Ratio. 65
SECTION 6.18 Inventory Turnover Ratio. 65
SECTION 6.19 Capital Expenditures. 65
ARTICLE ▇▇▇.▇▇▇▇▇▇ of Default 66
ARTICLE VIII.The Administrative Agent 68
ARTICLE IX.Miscellaneous 71
SECTION 9.01 Notices. 71
SECTION 9.02 Waivers; Amendments. 71
SECTION 9.03 Expenses; Indemnity; Damage Waiver. 73
SECTION 9.04 Successors and Assigns. 74
SECTION 9.05 Survival. 77
SECTION 9.06 Counterparts; Integration; Effectiveness. 77
SECTION 9.07 Severability. 78
SECTION 9.08 Right of Setoff. 78
SECTION 9.09 Governing Law; Jurisdiction; Consent to
Service of Process. 78
SECTION 9.10 WAIVER OF JURY TRIAL. 79
SECTION 9.11 Headings. 79
SECTION 9.12 Confidentiality. 79
SECTION 9.13 Interest Rate Limitation. 80
SCHEDULES
Schedule 2.01 Lenders and Lenders'
Commitments
Schedule 3.06/3.15 Disclosed Matters
Schedule 3.13 Subsidiaries and Joint
Ventures
Schedule 6.01 Indebtedness Existing at
Closing Date
Schedule 6.02 Liens on Property or Assets
of Borrower
Schedule 6.04 Existing Investments
Schedule 6.08 Restrictions and Conditions
EXHIBITS
Exhibit A Form of Assignment and
Acceptance
Exhibit B Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇
Exhibit C Form of Subsidiary Guaranty
Exhibit D Form of Borrowing Base
Certificate
4
CREDIT AGREEMENT dated as of November 30, 1998, among STANDARD MOTOR
PRODUCTS, INC., a New York corporation (the "BORROWER"), the LENDERS party
hereto, THE CHASE MANHATTAN BANK ("CHASE"), as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the Lenders and CANADIAN IMPERIAL BANK
----------------------
OF COMMERCE, as documentation agent (in such capacity, the "DOCUMENTATION
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AGENT") for the Lenders.
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W I T NE S S E T H :
WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower a revolving credit facility in the principal amount of
$100,000,000, the proceeds of which are to be used as set forth herein; and
WHEREAS, the Lenders are willing to make such revolving credit loans
available to the Borrower upon the terms and conditions set forth herein.
NOW, THEREFORE, the Borrower, the Lenders, the Administrative Agent and
the Documentation Agent hereby agree as follows:
I.
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DEFINITIONS
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A. DEFINED TERMS. As used in this Agreement, the following terms have the
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meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ACCOUNT DEBTOR" shall mean any person who is or who may become
----------------
obligated to the Borrower or any of its Subsidiaries under, with respect to, or
on account of, an Account Receivable.
5
"ACCOUNTS RECEIVABLE" shall mean any and all rights of the Borrower or
---------------------
any of its Subsidiaries to payment for goods sold or leased, including any such
right evidenced by chattel paper, or services rendered, whether due or to become
due, whether or not it has been earned by performance, and whether now existing
or hereafter acquired or arising in the future, which Account Receivable arose
from the sale of goods and the rendering of services to unaffiliated parties in
the ordinary course of business of the Borrower or its Subsidiaries, and which,
to the best knowledge of the Borrower, is in full force and effect and
constitutes a legal, valid and binding obligation of the Account Debtor with
respect thereto enforceable in accordance with its terms.
"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 The Chase Manhattan Bank, in its capacity
----------------------
as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in
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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.
"AGREEMENT" means this Credit Agreement, as the same may be amended,
-----------
restated, supplemented or otherwise modified from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
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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 PERCENTAGE" means, with respect to any Lender, the
-----------------------
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
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"APPLICABLE RATE" means, for any day, with respect to any ABR Loan or
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Eurodollar Revolving Loan, or with respect to the commitment fees or Letter of
Credit Fees payable hereunder as the case may be, the applicable rate per annum
set forth below under the caption "ABR Spread," "Eurodollar Spread," "Commitment
Fee Rate," or "Letter of Credit Fee Rate" as the case may be, based upon the
Leverage Ratio applicable on such date:
------------------------- -------- ------------ --------------------- --------------------------
ABR EURODOLLAR COMMITMENT FEE RATE LETTER OF CREDIT FEE RATE
LEVERAGE RATIO SPREAD SPREAD
------------------------- -------- ------------ --------------------- --------------------------
Greater than 4.0 to 1.0 .50% 2.50% .50% 1.25%
------------------------- -------- ------------ --------------------- --------------------------
Greater than 3.5 to 1.0 .25% 2.25% .50% 1.00%
but Equal to or Less
than 4.0 to 1.0
------------------------- -------- ------------ --------------------- --------------------------
Greater than 3.0 to 1.0 0% 2.00% .50% .75%
but Equal to or Less
than 3.5 to 1.0
------------------------- -------- ------------ --------------------- --------------------------
Equal to or Less than 0% 1.75% .50% .75%
3.0 to 1.0
------------------------- -------- ------------ --------------------- --------------------------
For purposes of the foregoing, (i) the Leverage Ratio shall be deemed
to be in the second category listed above for the period from the Effective Date
through the date of delivery of the Borrower's financial statements in
accordance with Section 5.01(a) for the fiscal year ending December 31, 1998,
(ii) the Leverage Ratio shall be determined as of the end of each fiscal quarter
of the Borrower's fiscal year based upon the Borrower's consolidated financial
statements delivered pursuant to Section 5.01(a) or (b) and (iii) each change in
the Applicable Rate resulting from a change in the Leverage Ratio shall be
effective during the period (1) in the case of ABR Loans, commencing on and
including the date which is five Business Days following the date of delivery to
the Administrative Agent of such consolidated financial statements indicating
such change, and (2) in the case of each Eurodollar Loan, commencing on and
including the date which is the first day of the next succeeding Interest Period
following the date of delivery to the Administrative Agent of such consolidated
financial statements indicating such change, in each case ending on the date
immediately preceding the effective date of the next change; PROVIDED that the
Leverage Ratio shall be deemed to be in the first category listed above (A) at
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any time that an Event of Default has occurred and is continuing or (B) if the
Borrower fails to deliver the consolidated financial statements required to be
delivered by it pursuant to Section 5.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such consolidated financial
statements are delivered.
"ASSESSMENT RATE" means, for any day, the annual assessment rate in
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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
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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.
"AVAILABILITY PERIOD" means the period from and including the Effective
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Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"BANK GROUP INDEBTEDNESS" means the Indebtedness owing under the
-------------------------
Existing Bank Agreement.
"BASE CD RATE" means the sum of (a) the Three-Month Secondary CD Rate
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multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"BOARD" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"BORROWER" means Standard Motor Products, Inc., a New York corporation.
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"BORROWING" means (a) Revolving Loans of the same Type, made, converted
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or continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect or (b) a Swingline Loan.
8
"BORROWING BASE" means, on any day, an amount equal to (a) the sum of
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(i) 80% of the then Net Accounts Receivable PLUS (ii) 50% of the Net Inventory
PLUS (iii) 50% of Net PP&E PLUS (iv) 100% of the cash then held by the Borrower
and its Subsidiaries in accounts maintained in the continental United States and
the Commonwealth of Puerto Rico PLUS (v) 50% of up to $5,700,000 of any cash
investments maintained by Stanric, Inc. in Puerto Rico Investors Tax Free Funds
which are not subject to Liens, MINUS (b) the Borrowing Base Debt. The Borrowing
Base at any time shall be determined by reference to the most recent Borrowing
Base Certificate delivered pursuant to Section 4.02(c) and 5.13 and shall be
subject at all times to audit confirmation and review.
"BORROWING BASE CERTIFICATE" shall mean a certificate substantially in
----------------------------
the form of the Exhibit D (with such changes therein as may be required by the
Administrative Agent to reflect the components of, and reserves against, the
Borrowing Base as provided for hereunder from time to time), executed and
certified on behalf of the Borrower by a Financial Officer of the Borrower and
accompanied by appropriate supporting documentation that verifies the amounts
shown thereon.
"BORROWING BASE DEBT" shall mean, on any day, the sum of (i) the then
---------------------
outstanding principal amount of the ▇▇▇▇▇▇ Indebtedness, (ii) all long term debt
(including the current portion thereof) which is shown as "current portion of
long term debt" and "long term debt" on the Borrower's financial statement as of
the date of determination (including without limitation, the principal amount of
the Note Agreement Indebtedness) and (iii) the then outstanding principal amount
of the "working capital line" described on Schedule 6.01 under the heading
"Intermotor Holdings Limited".
"BORROWING REQUEST" means a request by the Borrower for a Revolving
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Borrowing in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
--------------
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "BUSINESS DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"CIBC" means Canadian Imperial Bank of Commerce.
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"CIBC GUARANTY" means that certain Guarantee executed by the Borrower
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in favor of CIBC in respect of the CIBC Loan Agreement.
9
"CIBC LOAN AGREEMENT" means that certain Committed Installment Loan
---------------------
Agreement dated March 31, 1998 between CIBC and SMP Ltd. as in effect on the
Effective Date.
"CAPITAL EXPENDITURES" means, for any period, without duplication, the
----------------------
aggregate amount of cash expenditures, not made with the proceeds of Capital
Lease Obligations or other Indebtedness (other than Revolving Loans or Swingline
Loans) in respect of the additions to property, plant and equipment and other
capital expenditures of the Borrower and its consolidated Subsidiaries that are
(or would be) set forth in a consolidated balance sheet of the Borrower for such
period prepared in accordance with GAAP, excluding, however, the amount of any
Capital Expenditures paid for with proceeds of casualty insurance as evidenced
in a writing submitted to the Administrative Agent.
"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 balance sheet of such Person under GAAP, and the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"CAPITALIZED LEASES" means leases which give rise to Capital Lease
--------------------
Obligations.
"CAPITALIZATION RATIO" means as of any date of determination, the ratio
----------------------
of (i) Consolidated Funded Debt on such date to (ii) the sum of (x) such
Consolidated Funded Debt PLUS (y) Consolidated Tangible Net Worth on such date.
"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
the Family Shareholders, of shares representing more than 30% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Borrower; (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated; or (c) if the Family Shareholders shall cease to own at
least 17% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower.
10
"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 the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the 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.
"CHASE" means The Chase Manhattan Bank.
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"CLASS", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
or Swingline Loans.
"CLIPPER RECEIVABLES FINANCING AGREEMENT" means, collectively, that
-----------------------------------------
certain Purchase and Sale Agreement dated as of March 19, 1997 between the
Borrower and SMP Credit Corp., that certain Receivables Purchase Agreement dated
as of March 19, 1997 among SMP Credit Corp., the Borrower, Clipper Receivables
Corporation, State Street Boston Capital Corporation and State Street Bank &
Trust Company and the other instruments and agreements executed and delivered in
connection therewith, as each may be amended or supplemented from time to time,
or restated, or replaced with the same or other provider of credit from time to
time on terms substantially similar to those contained in the Clipper
Receivables Financing Agreement and (ii) any other successor financing involving
the sale or transfer of the accounts receivable or other rights to payment of
the Borrower or any of its Subsidiaries to a special purpose entity in
connection with the issuance of asset-backed securities or other similar
transaction on terms reasonably satisfactory to the Agent.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
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time.
"COMMITMENT" means, with respect to each Lender, the commitment of such
------------
Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.09
11
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
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The initial aggregate amount of the Lenders' Commitments is $100,000,000.
"CONSOLIDATED EBITDA" means, for any period, operating income of the
---------------------
Borrower and its Subsidiaries for such period plus net income from joint
ventures to which the Borrower is a party which is included in the caption
"other income" in the Borrower's financial statements for such period,
determined on a consolidated basis in accordance with GAAP plus the sum of,
without duplication, depreciation, amortization and all other non-cash charges
for such period of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, each to the extent deducted in
determining such net income for such period and less the sum of non-cash gains
for such period to the extent included in determining such net income for such
period.
"CONSOLIDATED FUNDED DEBT" means as of the last day of a fiscal
--------------------------
quarter, without duplication, an amount equal to the average of the amounts of
all Indebtedness for Borrowed Money of the Borrower and its Subsidiaries on a
consolidated basis as of the last day of each of the preceding twelve fiscal
months (including the last month of the fiscal quarter ending on the date on
which such covenant is being tested).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
-------------------------------
expense of the Borrower and its Subsidiaries determined on a consolidated basis
in accordance with GAAP (after giving effect to all net payments made or
received under interest rate swap, cap, collar or other interest rate hedging
arrangements) in respect of such period.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date of determination,
---------------------------------
the sum of all amounts which would be included under shareholders' equity on a
consolidated balance sheet of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP as at such date, PLUS proceeds of a
high yield or convertible issue to the extent used to re-purchase stock of the
Borrower during fiscal year 1999 in an amount not to exceed $18,000,000 MINUS
all intangible assets of the Borrower and its Subsidiaries on a consolidated
basis as at of such date, including, without limitation, unamortized debt
discount and expense, unamortized deferred charges, goodwill, customer
acquisition costs, patents, trademarks, service marks, trade names, copyrights
and organization or developmental expenses.
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"CONTROL" means the possession, directly or indirectly, of the power to
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direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"▇▇▇▇▇▇ INDEBTEDNESS" means the Indebtedness owing under that certain
---------------------
Loan and Guaranty Agreement dated as of April 13, 1998 among the Borrower, the
Existing Guarantors and ▇▇▇▇▇▇ Finance, Inc.
"DEBT SERVICE COVERAGE RATIO" means, at the end of any fiscal quarter
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the ratio of (i) Consolidated EBITDA for the period of four consecutive fiscal
quarters then ended to (ii) the sum of (x) Consolidated Interest Expense for
such quarters PLUS (y) the aggregate amount of principal amortization required
to be made by the Borrower in respect of Indebtedness for Borrowed Money for the
succeeding period of four consecutive fiscal quarters following such date.
"DEFAULT" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"DOCUMENTATION AGENT" means Canadian Imperial Bank of Commerce, in its
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capacity as documentation agent for the Lenders hereunder.
"DOLLARS" or "$" refers to lawful money of the United States of
---------
America.
"EFFECTIVE DATE" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"ELIGIBLE ASSIGNEES" means (i) a commercial bank having total assets in
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excess of $250,000,000 and subject to the regulations of the Board; (ii) a
finance company, insurance company or other financial institution or fund
acceptable to the Administrative Agent which in the ordinary course of business
extends credit of the type evidenced by this Agreement and has total assets in
excess of $100,000,000 and being subject to the regulations of the Board, and if
not so subject, acceptable to the Borrower, whose consent shall not be
unreasonably withheld, PROVIDED, that during the pendency of any Default or
13
Event of Default, the Borrower's consent shall not be required; and (iii) any
other financial institution satisfactory to both the Borrower and the
Administrative Agent; PROVIDED that no such entity that is organized under the
laws of a jurisdiction outside the United States shall be an Eligible Assignee
unless such entity shall, if legally able to do so, prior to the immediately
following due date of any payment by the Borrower hereunder, deliver to the
Borrower such certificates, documents or other evidence, as required by the Code
or Treasury Regulations issued pursuant thereto, including those described in
Section 2.17(e).
"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, release or threatened release of any Hazardous
Material or to health and safety matters and which are applicable to the
Borrower, any of its Subsidiaries, or their respective property.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
-------------------------
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower 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.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
-----------------
incorporated) that, together with the Borrower, 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
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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
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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 Borrower 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 Borrower 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
Borrower 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 Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower 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.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers
------------
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article
------------------
VII.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
----------------
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by any other jurisdiction with which such recipient has any
connection (other than a connection arising solely by virtue of the activities
of such recipient pursuant to this Agreement), (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"EXISTING BANK AGREEMENT" means that certain Revolving Credit and
-------------------------
Guaranty Agreement dated as of March 30, 1998 among the Borrower, the Existing
Guarantors, the Banks party thereto, Chase, as Administrative Agent, and The
Bank of New York, as Documentation Agent, as amended.
15
"EXISTING GUARANTORS" means, collectively, Reno Standard Incorporated,
---------------------
a Nevada corporation, Mardevco Credit Corp., a New York corporation and Stanric,
Inc., a Delaware corporation.
"FAMILY SHAREHOLDERS" means ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and any of
---------------------
their respective children, grandchildren, spouses or siblings, and any trusts
created for the benefit of any of the foregoing and charitable trusts with
respect to which any of the foregoing retain voting control.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
------------------------------
(rounded upwards, if necessary, to the next 1/16 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 1/16 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 the chief financial officer, principal
-------------------
accounting officer, treasurer or controller of the Borrower.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
----------------
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof, the District
of Columbia, and the Commonwealth of Puerto Rico shall be deemed to constitute a
single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
------
States of America.
"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
16
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other 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.
"GUARANTORS" means, collectively, the Existing Guarantors, Industrial &
------------
Automotive Associates, Inc., a California corporation, Marathon Auto Parts and
Products, Inc., a New York corporation, Motortronics, Inc., a New York
corporation and each domestic Subsidiary formed or acquired after the Effective
Date.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
---------------------
wastes and all hazardous or toxic 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 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.
"INDEBTEDNESS" means, as to any Person, without duplication, all (i)
--------------
Indebtedness for Borrowed Money, (ii) obligations with respect to any
conditional sale or title retention agreement, (iii) liabilities secured by any
lien on any property owned by such person even though such person has not
assumed or otherwise become liable for the payment thereof (other than
carriers', warehousemen's, repairmen's or other like nonconsensual statutory
liens arising in the ordinary course of business), (iv) all payments that such
Person would have to make in the event of a termination, on the date of
determination, of outstanding Hedging Agreements, after giving effect to all
netting arrangements, (v) obligations of such person in respect of capital stock
subject to mandatory redemption or redemption at the option of the holder
thereof, in whole or in part, and (vi) guaranties of such person in respect of
any of the foregoing.
17
"INDEBTEDNESS FOR BORROWED MONEY" means, as to any Person, without
---------------------------------
duplication, all (i) indebtedness for borrowed money, (ii) indebtedness in
respect of the deferred purchase price of property (other than trade payable
incurred in the ordinary course of business), (iii) indebtedness arising under
acceptance facilities and the amount available to be drawn under all letters of
credit issued for the account of such person and, without duplication, all
drafts drawn thereunder to the extent such person shall not have reimbursed the
issuer in respect of the issuer's payment thereof, (iv) Capital Lease
Obligations and (v) guaranties of such person in respect of any of the
foregoing.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
-------------------
"INFORMATION MEMORANDUM" means the Confidential Information Memorandum
------------------------
dated October 29, 1998 relating to the Borrower and the Transactions.
"INTEREST COVERAGE RATIO" means, at any date of determination, the
-------------------------
ratio of Consolidated EBITDA to Consolidated Interest Expense for the period of
four consecutive fiscal quarters ending on such date.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert
---------------------------
or continue a Revolving Borrowing in accordance with Section 2.08.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan (other
-----------------------
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of an Interest Period of more than three months' duration, each day that would
have been an Interest Payment Date had successive Interest Periods of three
months' duration been applicable to such Eurodollar Loan, and (c) with respect
to any Swingline Loan, the day that such Loan is required to be repaid.
"INTEREST PERIOD" means with respect to any Eurodollar Borrowing, the
-----------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one month or two, three or six
months thereafter, as the 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
18
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, in the case of
a Revolving Borrowing, thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"INVENTORY" shall mean all goods now owned or hereafter acquired by the
-----------
Borrower or any of its Subsidiaries (wherever located, whether in the possession
of the Borrower or any Subsidiary or of a bailee or other person for sale,
storage, transit, processing, use or otherwise) consisting of whole goods,
components, supplies, materials or consigned, returned or repossessed goods
which are held for sale or to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process, or materials
used or consumed in the Borrower's or its Subsidiaries' business or processed by
or on behalf of the Borrower or its Subsidiaries. The amount of Inventory shall
be based upon the Borrower's books and records, consistently applied in
accordance with the historical practices of the Borrower.
"INVENTORY TURNOVER RATIO" means, at the end of any fiscal year, the
--------------------------
ratio of (i) the cost of goods sold as set forth on the income statement of the
Borrower and its Subsidiaries for the fiscal year ending on such date, to (ii)
the value of all inventory (determined on a first in first out basis) of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP as at such date.
"ISSUING BANK" means The Chase Manhattan Bank, in its capacity as the
--------------
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.06(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC DISBURSEMENT" means a payment made by the Issuing Bank pursuant to
-----------------
a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn
-------------
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
19
"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 Lender.
"LETTER OF CREDIT" means any commercial letter of credit issued
------------------
pursuant to this Agreement.
"LEVERAGE RATIO" means, at any date of determination, the ratio of (i)
----------------
Consolidated Funded Debt on such date to Consolidated EBITDA for the period of
four consecutive fiscal quarters ending on 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 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 and 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, for delivery on the date of 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.
20
"LOAN DOCUMENTS" means this Agreement, the Subsidiary Guaranty and any
----------------
other instrument or agreement executed and delivered in connection herewith or
therewith, each as may be amended, restated, supplemented or otherwise modified
from time to time.
"MARGIN STOCK" means "Margin Stock" as that term is defined in
--------------
Regulation U of the Board.
"LOANS" means the loans made by the Lenders to the Borrower pursuant to
-------
this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
-------------------------
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or any other
Loan Document or (c) the validity or enforceability of this Agreement or any
other Loan Document or the rights of or benefits available to the Lenders under
this Agreement or any other Loan Document.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
-----------------------
Letters of Credit), of any one or more of the Borrower and its Subsidiaries in
an aggregate principal amount exceeding $2,000,000.
"MATURITY DATE" means November 30, 2001.
---------------
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
---------
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
--------------------
4001(a)(3) of ERISA.
"NET ACCOUNTS RECEIVABLE" means Accounts Receivable of the Borrower and
-------------------------
its Subsidiaries which are shown as "accounts receivable, net" on the Borrower's
financial statements as of the date of determination.
"NET INVENTORY" means Inventory of the Borrower and its Subsidiaries
---------------
which is shown as "inventories, net" on the Borrower's financial statements as
of the date of determination.
"NET PP&E" means PP&E of the Borrower and its Subsidiaries which is
----------
shown as "property, plant and equipment, net" on the Borrower's financial
statements as of the date of determination.
21
"NOTE AGREEMENT INDEBTEDNESS" means that Indebtedness owing under (i)
-----------------------------
that certain Note Purchase Agreement dated as of December 1, 1995 among the
Borrower and each of the purchasers listed therein pursuant to which notes in
the aggregate principal amount of $73,000,000 were issued, (ii) that certain
Note Agreement dated as of November 15, 1992 among the Borrower and each of the
purchasers listed therein pursuant to which notes in the aggregate principal
amount of $65,000,000 were issued and (iii) that certain Note Agreement dated as
of October 15, 1989 among the Borrower and each of the purchasers listed therein
pursuant to which notes in the aggregate principal amount of $30,000,000 were
issued, each as amended.
"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 hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
------
defined in ERISA and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" means:
------------------------
(1) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;
(1) 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;
(1) pledges and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance and other social security
laws or regulations;
(1) 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;
(1) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII; and
(1) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
22
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 Borrower 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 by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within six months from the
date of acquisition thereof and having, at such date of acquisition, a rating of
at least "P2" or the equivalent thereof from S&P or of at least "A2" or the
equivalent thereof from Moody's;
(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 domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;
(d) repurchase agreements with a term of not more than 90 days for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above; and
(e) investments in money market funds substantially all the assets of
which are comprised of securities of the types described in clauses (a) through
(d) above.
"PERSON" means any natural person, corporation, limited liability
--------
company, trust, 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
23
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.
"PP&E" shall mean property, plant and equipment as reported on the
Borrower's consolidated balance sheet net of depreciation and amortization.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"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 and agents
of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing at least 51% of the sum of the
total Revolving Credit Exposures 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 Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Borrower
or any option, warrant or other right to acquire any such shares of capital
stock of the Borrower.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans, its LC Exposure and Swingline Exposure at such time.
"REVOLVING LOAN" means a Loan made pursuant to Section 2.01.
"S&P" means Standard & Poor's Rating Group.
"STATUTORY RESERVE RATE" means 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 percentages (including any
24
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new nonpersonal time deposits in dollars of
over $100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and 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 such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SMP LTD." means SMP Motor Products, Ltd., a Canadian corporation.
"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 (a) 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, or (b) that is, as of such date,
otherwise Controlled, 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 Borrower other than the joint
ventures listed on Schedule 3.13.
"SUBSIDIARY GUARANTY" means the guaranty in substantially the form of
Exhibit C hereto executed by each of the Guarantors, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"SWINGLINE EXPOSURE" means, at any time, the aggregate principal amount
of all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"SWINGLINE LENDER" means The Chase Manhattan Bank, in its capacity as
lender of Swingline Loans hereunder.
25
"SWINGLINE LOAN" means a Loan made pursuant to Section 2.05.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"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.
"TRANSACTIONS" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
"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 or the Alternate
Base Rate.
"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.
A. 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").
26
A. 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 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.
A. 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 Borrower notifies
the Administrative Agent that the Borrower 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 Borrower 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.
I.
--
THE CREDITS
-----------
A. COMMITMENTS. Subject to the terms and conditions set forth herein, each
Lender agrees to make Revolving Loans to the Borrower from time to time during
27
the Availability Period in an aggregate principal amount that will not result in
(a) such Lender's Revolving Credit Exposure exceeding such Lender's Commitment
or (b) the total Revolving Credit Exposures exceeding the lesser of (i) the
total Commitments, as the same may be reduced from time to time pursuant to
Section 2.09 and (ii) the Borrowing Base. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans.
A. LOANS AND BORROWINGS. (a) Each Revolving Loan shall be made as part of a
Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. 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, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurodollar 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 the Borrower to repay such
Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving 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 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 and not less than $5,000,000;
PROVIDED that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple
of $500,000 and not less than $1,000,000. 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 eight Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not 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 Maturity Date.
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A. REQUESTS FOR REVOLVING BORROWINGS. To request a Revolving Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one
Business Day before the date of the proposed Borrowing; PROVIDED that any such
notice of an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e) may be given not later than
12:00 noon, New York City 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 Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(a) the aggregate amount of the requested Borrowing;
(b) the date of such Borrowing, which shall be a Business Day;
(c) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(d) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term "Interest Period"; and
(e) the location and number of the Borrower's account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly 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.
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A. BORROWING BASE. Notwithstanding any other provision of this Agreement to the
contrary, the aggregate Revolving Credit Exposure shall not at any time exceed
the Borrowing Base and no Loan shall be made or Letter of Credit issued in
violation of the foregoing.
A. SWINGLINE LOANS. (a) Subject to the terms and conditions set forth herein,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time during the Availability Period, in an aggregate principal amount at any
time outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $10,000,000 or (ii) the total Revolving
Credit Exposures exceeding the lesser of (x) the total Commitments, as the same
may be reduced from time to time pursuant to Section 2.09 and (y) the Borrowing
Base; PROVIDED that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed 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 Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
30
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each 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 Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower 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 Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
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 Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
A. LETTERS OF CREDIT. (a) GENERAL. Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of commercial Letters of Credit
for its own account, in a form reasonably acceptable to the Administrative Agent
and the Issuing Bank, at any time and from time to time during the Availability
Period. 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 credit
application or other agreement submitted by the Borrower to, or entered into by
the 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), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
31
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank 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, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), 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, 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. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the 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 Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $5,000,000
and (ii) the total Revolving Credit Exposures shall not exceed the lesser of (x)
the total Commitments, as the same may be reduced from time to time pursuant to
Section 2.09 and (y) the Borrowing Base.
(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 and (ii) the date that is five Business
Days prior to the Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the 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.
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(e) REIMBURSEMENT. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; PROVIDED that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.05 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower's obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable LC Disbursement, the payment
then due from the Borrower in respect thereof and such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice, each Lender
shall, pursuant to paragraph (d) of this Section, pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, MUTATIS MUTANDIS, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the 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 the
Borrower of its obligation to reimburse such LC Disbursement.
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(f) OBLIGATIONS ABSOLUTE. The 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 the 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, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, 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 the
Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the 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 the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
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, the
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.
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(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the 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 the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the 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 the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
PROVIDED that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be replaced
at any time by written agreement among the 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 the Issuing Bank. At
the time any such replacement shall become effective, the 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 the
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.
35
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 51% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the 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 the LC Exposure 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 deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrower
described in clause (h) or (i) of Article VII. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower 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 Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the 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 Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 51% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement. If the 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 the Borrower within three Business Days after
all Events of Default have been cured or waived.
A. 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 by 12:00 noon, New York City time, 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 2.05. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans
made to finance the reimbursement of an LC Disbursement as provided in Section
2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.
36
(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 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 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 the 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, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
A. INTEREST ELECTIONS. (a) Each Revolving Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Revolving Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The 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.
(b) To make an election pursuant to this Section, the 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 the 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
Borrower.
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(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:
(a) 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);
(b) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(c) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
(d) if the resulting Borrowing is a Eurodollar 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 Eurodollar 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 the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Revolving 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 shall be
converted to an ABR Borrowing. 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 Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
38
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto.
A. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless previously terminated,
the Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; PROVIDED that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11, the sum of the Revolving Credit Exposures would
exceed the lesser of (x) the total Commitments and (y) the Borrowing Base.
(c) The Borrower 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
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; PROVIDED that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (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 shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
(d) If at any time the aggregate principal amount of the outstanding
Loans exceeds the lesser of (x) the total Commitments and (y) the Borrowing
Base, the Borrower shall within one Business Day prepay the Loans in an amount
necessary to cause the aggregate principal amount of the outstanding Loans to be
equal to or less than the total Commitments and/or the Borrowing Base, as the
case may be.
A. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The 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 on the Maturity Date,
(ii) to the Swingline Lender the then unpaid principal amount of each Swingline
39
Loan on the earlier of the Maturity Date or the first date after such Swingline
Loan is made that is the fifth Business Day after such Swingline Loan is made;
PROVIDED that on each date that a Revolving Borrowing is made, the Borrower
shall repay all Swingline Loans then outstanding.
(b) During each twelve month period occurring during the Availability
Period, the Borrowers shall repay the aggregate principal amounts of all
Revolving Loans so as to reduce, and maintain for a period of 30 days, the
outstanding aggregate Loans at an amount not greater than $10,000,000.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type 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 the 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.
(e) The entries made in the accounts maintained pursuant to paragraph
(c) or (d) 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 or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory 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 approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
A. PREPAYMENT OF LOANS. (a) The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section.
40
(b) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 12:00 noon, New
York City time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 12:00 noon, New
York City time, one Business Day before the date of prepayment or (iii) in the
case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City
time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; PROVIDED that, if a notice of prepayment is given
in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.09. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the principal amount of the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13.
A. FEES. (a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at the Applicable
Rate on the daily amount of the unused Commitment of such Lender during the
period from and including the Effective Date to but excluding the date on which
such Commitment terminates; PROVIDED that, if such Lender continues to have any
Revolving Credit Exposure after its Commitment terminates, then such commitment
fee shall continue to accrue on the daily amount of such Lender's Revolving
Credit Exposure from and including the date on which its Commitment terminates
to but excluding the date on which such Lender ceases to have any Revolving
Credit Exposure. Accrued commitment 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 Commitments terminate, commencing on the first such date to occur after the
Effective Date; PROVIDED that any commitment fees accruing after the date on
which the Commitments terminate shall be payable on demand. All commitment 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).
41
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the Applicable Rate on the average
daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate or rates per annum separately agreed upon between the
Borrower and the Issuing Bank on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's 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 the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
PROVIDED that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting 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).
(c) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution. Fees paid shall not
be refundable under any circumstances.
A. INTEREST. (a) The Loans comprising each ABR Borrowing (including each
Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate.
42
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if an Event of Default occurs and
during the period such Event of Default is continuing, (i) the aggregate
principal amount of the Revolving Loans shall bear interest, payable on demand,
at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan
as provided in the preceding paragraphs of this Section and (ii) overdue
interest, fees and other amounts shall bear interest, payable on demand, at a
rate per annum equal to 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, upon termination of the Commitments;
PROVIDED that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on 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 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 Eurodollar Revolving 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.
(e) 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). In
each case interest shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
A. ALTERNATE RATE OF INTEREST. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:
(1) 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 the LIBO Rate, as applicable, for such
Interest Period; or
43
(2) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower 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 Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.
A. INCREASED COSTS. (a) If any Change in Law shall:
(a) 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 the Issuing Bank; or
(b) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement
or Eurodollar 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 Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
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 the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower 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 the 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 the Issuing Bank's capital or on the capital of
44
such Lender's or the 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 the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower 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 or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the 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 Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the 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 Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the 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 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
A. BREAK FUNDING PAYMENTS. In the event of (a) the payment of any principal of
any Eurodollar 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 Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.11(b) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.19, then, in any such event, the
45
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include 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 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 dollar deposits 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 Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
A. TAXES. (a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; PROVIDED that if the 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) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law; PROVIDED, FURTHER,
that the Borrower shall not be required to pay any amounts pursuant to clause
(i) of the immediately preceding proviso to any Foreign Lender or any Issuing
Bank or Agent not organized in the United States that has failed to comply with
paragraph (e) of this Section.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the 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,
46
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts 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. A certificate as to the amount of such
payment or liability delivered to the Borrower 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 the Borrower to a Governmental Authority, the 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) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the Borrower
and the Administrative Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form. Each such Lender also agrees to deliver to the Borrower and the
Administrative Agent two further copies of the said Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms or other manner of certification, as
the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or the
Administrative Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Such Lender shall certify (i) in the case
of a Form 1001 or 4224, that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States of America
federal income taxes and (ii) in the case of a Form W-8 or W-9, that it is
entitled to an exemption from United States of America backup withholding tax.
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
47
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
A. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS. (a) The Borrower
shall make each payment required to be made by it hereunder (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) prior to 12:00 noon, New
York City time, on the date when due, in immediately available funds, without
set-off or counterclaim. 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 at its
offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, except payments to be made
directly to the Issuing Bank or 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. 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
hereunder 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, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.
(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 accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) 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 participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
48
proportion of the aggregate amount of its Revolving Loans 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 and participations in 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 and
participations in 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 Borrower 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 Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The 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 the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
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 the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the 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 the 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 and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b) or 2.18(d), then the
49
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.
A. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If any Lender requests
compensation under Section 2.15, or if the Borrower is 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 such designation or 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 to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional 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 the
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) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Bank and 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 the 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 the
Borrower to require such assignment and delegation cease to apply.
50
I.
--
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that:
A. ORGANIZATION; POWERS. Each of the Borrower and its Subsidiaries is duly
organized, validly existing and 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 do so 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.
A. AUTHORIZATION; ENFORCEABILITY. The Transactions are within the Borrower's
corporate powers and have been duly authorized by all necessary corporate and,
if required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes a legal, valid and binding obligation
of the Borrower, 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.
A. 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, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of the Borrower 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 Borrower or any of its Subsidiaries or its assets,
or give rise to a right thereunder to require any material payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
A. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The Borrower has
heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders' equity and cash flows (i) as of and for the
51
fiscal year ended December 31, 1997, reported on by KPMG Peat Marwick LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended September 30, 1998, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower 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) Since December 31, 1997, there has been no material adverse change
in the business, assets, property, operations, prospects or condition, financial
or otherwise, of the Borrower and its Subsidiaries, taken as a whole.
A. PROPERTIES. (a) Each of the Borrower and its Subsidiaries has good title to,
or valid leasehold interests in, all its real and personal property material to
its business, except 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 Borrower 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 Borrower 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.
A. 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 Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement 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 Borrower 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.
52
(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.
A. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon 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. Neither the Borrower nor any
subsidiary is (a) a party to any judgment, order, decree or any agreement or
instrument or subject to restrictions which could reasonably be likely to have a
Material Adverse Effect or to materially adversely affect the ability of the
Borrower to observe the covenants and agreements contained herein or any other
Loan, or (b) in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party, which default has, or if not remedied within
any applicable grace period could reasonably be likely to have, a Material
Adverse Effect.
B. INVESTMENT AND HOLDING COMPANY STATUS. Neither the Borrower 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.
C. TAXES. Each of the Borrower and its Subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except (a)
Taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves in accordance with GAAP or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect. Each of the Borrower and its Subsidiaries has provided adequate reserves
for the payment of, all material Federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
date hereof.
53
D. 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 under each Plan (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 $500,000 the fair market value of the assets of such Plan, and 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 $500,000 the fair market value of
the assets of all such underfunded Plans.
E. DISCLOSURE. The Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of 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 Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
F. YEAR 2000. Any reprogramming required to permit the proper functioning, in
and following the year 2000, of (i) the Borrower's computer systems and (ii)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which Borrower's systems interface) and the testing
of all such systems and equipment, as so reprogrammed, will be completed by June
30, 1999. The cost to the Borrower of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Borrower (including,
without limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Default or a Material Adverse Effect. Except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower and
its Subsidiaries are and, with material enhancements and ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower to conduct its business without Material
Adverse Effect.
54
G. SUBSIDIARIES AND AFFILIATES. Schedule 3.13 sets forth as of the Effective
Date the name of, and the ownership interest of the Borrower in, each Subsidiary
and each Affiliate of the Borrower (other than the Family Shareholders). The
outstanding shares or other equity interests of each such Subsidiary and each
Affiliate have been duly authorized and validly issued and are fully paid and
nonassessable; and the Borrower and each such subsidiary owns beneficially and
of record all the shares and other interests it is listed as owning in Schedule
3.13, free and clear of any Lien. Schedule 3.13 also sets forth a list of joint
ventures in which the Borrower or one or more of its Subsidiaries is a
participant.
H. INSURANCE. All policies of insurance of any kind or nature owned by or issued
to the Borrower and the Guarantors, including, without limitation, policies of
life, fire, theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation, employee health and welfare,
title, property and liability insurance, are in full force and effect and are of
a nature and provide such coverage as is sufficient and as is customarily
carried by companies of the same or similar size, engaged in the same or similar
businesses of the Borrower and the Guarantors.
I. LABOR MATTERS. As of the Effective Date, except for the Disclosed Matters,
none of the employees of the Borrower or any Subsidiary is subject to any
collective bargaining agreement and there are no strikes, lockouts or slowdowns
against the Borrower or any Subsidiary pending or, to the knowledge of the
Borrower, threatened that are reasonably likely to have a Material Adverse
Effect. The hours worked by and payments made to employees of the Borrower and
the Subsidiaries have not been in material violation of the Fair Labor Standards
Act or any other applicable Federal, state, local or foreign law dealing with
such matters except to the extent that any such violation could not reasonably
be expected to result in a Material Adverse Effect. All payments due from the
Borrower or any Subsidiary, or for which any claim may be made against the
Borrower 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 Borrower 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
Borrower or any Subsidiary is bound that is reasonably likely to have a Material
Adverse Effect.
55
J. SOLVENCY. Immediately after the consummation of the Transactions to occur on
the Effective Date and immediately following the making of each Loan made on the
Effective Date and after giving effect to the application of the proceeds of
such Loans, (a) the fair value of the assets of the Borrower, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of the Borrower
will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
the Borrower will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) the Borrower will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Effective Date.
K. USE OF PROCEEDS. The proceeds of the Loans shall be used for working capital
and for other general corporate purposes of the Borrower and its Subsidiaries.
L. FEDERAL RESERVE REGULATIONS. The Borrower is not engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock or any activities in violation of
Regulation U.
II.
---
CONDITIONS
----------
A. EFFECTIVE DATE. The obligations of the Lenders to make Loans and of the
Issuing Bank 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):
(1) The Administrative 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 Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.
(1) The Administrative Agent (or its counsel) shall have received a counterpart
of the Subsidiary Guaranty signed on behalf of each Guarantor.
56
(1) The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Borrower and Guarantors,
substantially in the form of Exhibit B, and covering such other matters relating
to the Borrower and Guarantors, this Agreement or the Transactions as the
Required Lenders shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion.
(1) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the Borrower, the authorization
of the Transactions and any other legal matters relating to the Borrower, this
Agreement or the Transactions, all in form and substance reasonably satisfactory
to the Administrative Agent and its counsel.
(1) The Administrative Agent shall have received a certificate of the Borrower,
dated the Effective Date and signed on its behalf by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(1) The Administrative Agent shall have received 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 the Borrower hereunder or under any other Loan Document.
(1) The Borrower and the Subsidiaries shall have granted the Agent access to and
the right to inspect all reports, audits and other internal information of the
Borrower and the Subsidiaries relating to environmental matters, and any third
party verification of certain matters relating to compliance with Environmental
Laws reasonably requested by the Agent, and the Agent shall be satisfied that
the Borrower and the Subsidiaries are in compliance in all material respects
with all applicable Environmental Laws and be satisfied with the costs of
maintaining such compliance.
(1) All consents and approvals required to be obtained from any Governmental
Authority or other Person as shall be required to consummate the transactions
contemplated hereby shall have been obtained and shall be in full force and
effect, and all applicable waiting periods and appeal periods shall have
expired, in each case without the imposition of any burdensome conditions.
57
(1) The Lenders shall have received and found satisfactory (i) audited
consolidated financial statements of the Borrower for the fiscal years ended
December 31, 1996 and December 31, 1997, and (ii) unaudited interim consolidated
financial statements of the Borrower for each fiscal month and quarterly period
ended subsequent to the date of the latest financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial statements
are available, including, without limitation, unaudited consolidated financial
statements for the fiscal month and fiscal quarter ended September 30, 1998.
(1) The Administrative Agent shall be satisfied with the nature and amount of
all Indebtedness of the Borrower and its Subsidiaries, including, without
limitation, the CIBC Guaranty and amounts owing under the Clipper Receivables
Financing Agreement, and the Borrower shall have provided to the Agent copies of
all operative documents in connection with the CIBC Guaranty and a detailed
summary of the Clipper Receivables Financing Agreement.
(1) All amounts outstanding under the Existing Bank Agreement shall have been
fully and finally paid and satisfied in full and all promissory notes, credit
agreements, reimbursement agreements and other documents executed in connection
therewith, have been cancelled or terminated, as appropriate.
(1) The Administrative Agent shall have received results of UCC-11 searches
satisfactory to the Lenders (in each case dated as of a date reasonably
satisfactory to the Lenders) reflecting the absence of Liens on the assets of
the Borrower and its Subsidiaries (other than Permitted Liens).
(1) The Administrative Agent shall have received a Borrowing Base Certificate
dated as of October 1998 demonstrating the ability of the Borrower to incur
Loans advanced on the Effective Date.
(1) The Administrative Agent shall have received such other documents,
instruments, certificates and opinions as are customary for transactions of this
type or as the Agent may reasonably request, and shall be satisfied with such
other conditions as it may reasonably require.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
58
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 3:00 p.m., New York City time, on November 30, 1998 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
A. EACH CREDIT EVENT. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(1) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable.
(2) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing. (3) The
Administrative Agent shall have received the timely delivery of the monthly
Borrowing Base Certificate required to be delivered pursuant to Section 5.13
demonstrating the Borrower's ability to incur Loans.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section and that after giving effect to such Borrowing or Letter of
Credit the outstanding Revolving Credit Exposure shall not exceed the Borrowing
Base.
I.
--
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 LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
A. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will furnish to the
Administrative Agent and each Lender:
59
(1) within 90 days after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet and related statements of operations,
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,
reported on by KPMG Peat Marwick 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);
(2) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, its unaudited consolidated balance sheet and
related statements of operations, stockholders' equity and 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, certified by one of the Borrower's
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of the Borrower 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;
(3) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer of the Borrower (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 6.13 through 6.19 and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of the 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 such certificate;
(4) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements verifying compliance with Sections 6.13 and 6.19;
(5) as soon as practicable and in any event within five (5) days after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Borrower 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 Borrower to its shareholders generally, as the
case may be;
60
(6) within 30 days after the end of each fiscal year of the Borrower, a
preliminary budget which will include projected balance sheets, projected
statements of operations and projected statements of cash flows for the
then-current fiscal year (which projections shall be on a quarterly basis),
which shall set forth, among other things, the Borrower's projected gross sales,
projected net sales and projected results of operations of each domestic
business segment and each foreign Subsidiary, for the Borrower and its
Subsidiaries in form and content consistent with Borrower's official plan as
presented to its Board of Directors;
(7) within 120 days after the end of each fiscal year of the Borrower,
projections on a quarterly basis for the upcoming two fiscal years setting forth
the items described in clause (f) above;
(8) promptly upon any revision of projections previously delivered to the Agent
or the projections referred to in clauses (f) and (g) above, such revised
projected balance sheets, projected statements of operations and projected
statements of cash flows with an explanation of all material variances to the
profit and loss statement from the projections as they existed prior to such
revision;
(9) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(1) the occurrence of any Default;
(2) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(3) 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 Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000; and
61
(4) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
A. EXISTENCE; CONDUCT OF BUSINESS. The Borrower 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 dissolution permitted under Section 6.03.
B. PAYMENT OF OBLIGATIONS. The Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, including Tax liabilities, that, if not
paid, could result in a Material Adverse Effect 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 Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP (c) such contest effectively suspends collection
of the contested obligation and the enforcement of any Lien securing such
obligation and (d) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
C. MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will, and will cause each
of its Subsidiaries to, (a) keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, and (b) maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.
D. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower 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. The Borrower will, and will cause each of its
62
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any 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 during normal business hours and as
often as reasonably requested.
E. COMPLIANCE WITH LAWS. The Borrower 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.
F. USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of the Loans and the
Letters of Credit will be used only for general working capital needs of the
Borrower and its Subsidiaries in the ordinary course of business. No part of the
proceeds of any Loan will be used, whether directly or indirectly, (i) for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X or (ii) to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or carrying Margin Stock
or to refund indebtedness originally incurred for such purpose.
G. NOTICE OF DISCHARGE OF HAZARDOUS MATERIAL OR ENVIRONMENTAL COMPLIANT. The
Borrower will, and will cause each of its Subsidiaries to, promptly provide to
the Agent true, accurate and complete copies of any and all notices, complaints,
orders, directives, claims, or citations received by the Borrower or any
Subsidiary relating to any (a) violation or alleged violation by the Borrower or
any Subsidiary of any applicable Environmental Laws; (b) release or threatened
release by the Borrower or any Subsidiary, or at any facility or property owned
or operated by the Borrower or any Subsidiary, of any Hazardous Material, except
where occurring legally; or (c) liability or alleged liability of the Borrower
or any Subsidiary for the costs of cleaning up, removing, remediating or
responding to a release of Hazardous Materials which, in each case, in the
reasonable judgment of senior officers of the Borrower could impose a liability
in excess of $50,000.
H. ENVIRONMENTAL COMPLIANCE. If the Borrower or any Subsidiary shall receive
letter, notice, complaint, order, directive, claim or citation alleging that the
Borrower or any Subsidiary has violated any Environmental Law or is liable for
the costs of cleaning up, removing, remediating or responding to a release of
Hazardous Materials, the Borrower shall, within the time period permitted by the
63
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability, except where the failure to do so is not reasonably likely to result
in a Material Adverse Effect or unless the applicability of the Environmental
Law, the fact of such violation or liability or what is required to remove or
remedy such violation is being contested by the Borrower or the applicable
Subsidiary by appropriate proceedings diligently conducted and all reserves with
respect thereto as may be required under GAAP, if any, have been made.
I. ADDITIONAL SUBSIDIARIES. If any additional Subsidiary is formed or acquired
after the Effective Date, the Borrower will notify the Administrative Agent and
the Lenders thereof and the Borrower will, to the extent such Subsidiary is
formed in the United States, cause such Subsidiary to become a guarantor of the
Loans and other obligations hereunder within ten Business Days after such
Subsidiary is formed or acquired.
J. STRATEGIC BUSINESS PLAN. The Borrower will furnish to the Administrative
Agent the Borrower's long-term strategic plan as soon as available, and in any
event on or before March 31, 1999, and make its senior officers available to
discuss same with the Administrative Agent. The Borrower will also furnish, as
soon as available, all material modifications thereto.
K. BORROWING BASE CERTIFICATE. The Borrower will furnish a Borrowing Base
Certificate to the Administrative Agent as soon as available and in any event
(i) on or before the 21st day after the end of each month for the fiscal months
of March through November; (ii) on or before the 21st day of March for the
combined fiscal months of January and February; and (iii) on or before the last
day of January for the previous fiscal month of December (on a good faith
estimated basis).
II.
---
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, the Borrower covenants and agrees with the Lenders
that:
A. INDEBTEDNESS. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:
64
(1) Indebtedness created hereunder;
(2) 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; provided that any extension,
renewal or replacement of the Indebtedness identified as "Note Purchase
Agreements" on Schedule 6.01 shall be on terms satisfactory to the Required
Lenders in their sole discretion; PROVIDED, that any determination of Required
Lenders for purposes of approving such terms shall include Chase and CIBC.
(3) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary; PROVIDED that such Indebtedness shall be
subject to Section 6.04;
(4) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary; PROVIDED
that such Indebtedness shall be subject to Section 6.04;
(5) Indebtedness of the Borrower 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 (i) such Indebtedness is incurred prior to or within 120
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (e) shall not exceed $3,000,000 at any time outstanding;
(6) trade payables in the ordinary course of business, endorsements for
collection or deposit in the ordinary course of business, surplus and retained
earnings, lease obligations (other than pursuant to Capitalized Leases),
reserves for deferred income taxes and investment credits, other deferred
credits and reserves, and deferred compensation obligations;
(7) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
PROVIDED that (i) such 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 and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (g) shall not exceed $1,000,000 at any
time outstanding;
65
(8) Indebtedness for Borrowed Money of Intermotor Holdings Limited or any of its
subsidiaries in an aggregate outstanding principal amount not to exceed
(pound)5,000,000 over the amount listed on Schedule 6.01;
(9) the ▇▇▇▇▇▇ Indebtedness;
(10) Indebtedness arising in connection with the purchase of foreign currency in
the ordinary course of business in an aggregate outstanding notional amount not
to exceed $2,000,000 at any time;
(11) Indebtedness owing in respect of overdrafts and related liabilities in the
ordinary course of business, PROVIDED that such Indebtedness is extinguished
within two Business Days after it is incurred;
(12) Indebtedness of the Borrower or any Subsidiary as an account party in
respect of trade letters of credit;
(13) Indebtedness of the Borrower arising under commercial letters of credit in
an aggregate outstanding amount not to exceed $2,000,000 over the amount allowed
under Sections 6.01(b); and
(14) Indebtedness under the CIBC Loan Agreement, PROVIDED that principal amounts
repaid under the CIBC Loan Agreement may not be reborrowed; and PROVIDED,
FURTHER, that the CIBC Loan Agreement may be amended, modified, extended or
refinanced so long as the principal amount outstanding on the date of such
amendment, modification, extension or refinancing is not increased and that no
security is granted for the obligor's obligations thereunder.
B. LIENS. The Borrower 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:
(1) Permitted Encumbrances;
66
(2) any Lien on any property or asset of the Borrower 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 Borrower 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;
(3) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower 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 (i) 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, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) 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;
(4) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; PROVIDED that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) the Indebtedness
secured thereby does not exceed 90% of the cost of acquiring, constructing or
improving such fixed or capital assets and (iii) such security interests shall
not apply to any other property or assets of the Borrower or any Subsidiary;
(5) Liens in respect of the Clipper Receivables Financing Agreement or any
replacement thereof; and
(6) Liens to secure Indebtedness of any Subsidiary organized outside of the
United States; provided, that such Indebtedness is permitted under Section 6.01
and such Liens attach only to property or assets of such Subsidiary;
(7) Liens arising in connection with the Borrower's obligations under its letter
of credit facility permitted under Section 6.01(b) and (m); PROVIDED, that such
Lien attaches only to the goods purchased with such letters of credit, the
documents relating thereto and insurance proceeds thereof which Liens are
possessory in nature and created by agreement with the issuing bank; and
(8) judgment Liens that are released, stayed or bonded (or the judgment secured
thereby discharged) within 45 days after the creation thereof.
67
C. FUNDAMENTAL CHANGES; SALES OF ASSETS. (a) The Borrower will not, and will not
permit any Subsidiary 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 any substantial part 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 Borrower in a
transaction in which the Borrower 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 Borrower or to another Subsidiary and
(iv) any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders; PROVIDED that 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 Section
6.04. It is agreed that the sale by the Borrower of its inventory in the
ordinary course of business and the conveyance of its receivables under the
Clipper Receivables Financing Agreement does not require the consent of any
Lender hereunder.
(b) The Borrower 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 Borrower and its Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.
A. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS. The Borrower 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, make or permit to exist any loans or advances to, Guarantee
any obligations of, 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, except:
68
(1) Permitted Investments;
(2) investments by the Borrower existing on the date hereof in the capital stock
of its Subsidiaries; (3) loans or advances made by the Borrower to, and equity
investments by the Borrower in, any domestic Subsidiary and loans or advances
made by any domestic Subsidiary to the Borrower or any other domestic
Subsidiary;
(4) each Subsidiary Guaranty;
(5) the CIBC Guaranty;
(6) acquisition of the balance of the stock of Intermotor Holdings Limited;
PROVIDED that such acquisition (or acquisitions) shall occur no earlier than
July 1, 1999 and the aggregate amounts expended for such acquisition do not
exceed $6,500,000.
(7) acquisitions of the Capital Stock or assets of other Persons in an aggregate
annual amount of up to $7,000,000 during each fiscal year; PROVIDED that any
portion of the $7,000,000 allocated to, but not expended during, any fiscal year
may be carried over and expended during the next succeeding year; PROVIDED,
FURTHER, that in any year in which amounts are carried over from the prior year,
amounts expended in such year will be deemed to be expended FIRST, from budgeted
amounts for such year and thereafter from any amounts carried forward from the
previous year;
(8) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts or disputes with, customers and suppliers,
in each case in the ordinary course of business;
(9) investments by any foreign, Subsidiary in any other foreign Subsidiary;
(10) loans and advances to employees for expenses incurred in the ordinary
course of business in an aggregate outstanding amount not to exceed $1,000,000
at any time;
(11) investments made on or after the date hereof in joint ventures and foreign
Subsidiaries in an aggregate amount at any one time not to exceed $2,000,000,
PROVIDED, that any investment made by the Borrower in SMP Ltd. for the purpose
of fulfilling its obligations under the CIBC Guaranty in accordance with the
provision set forth in Section 6.07(b) shall not be included in any calculation
of the $2,000,000 amount referred to in this Section 6.04;
69
(12) existing investments listed on Schedule 6.04; and (13) cash or cash
equivalents maintained in Canada in an amount not to exceed $5,000,000 Canadian
at any one time, which may, from time to time, be used by SMP Ltd. to fund its
working capital needs.
B. HEDGING AGREEMENTS. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Borrower or any Subsidiary is exposed in the conduct of its business
or the management of its liabilities in an aggregate notional amount not to
exceed $2,000,000.
C. RESTRICTED PAYMENTS. (a) The Borrower will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:
(a) the Borrower may declare and pay dividends with respect to its capital
stock payable solely in additional shares of its common stock,
(b) the Borrower may declare and pay dividends with respect to its capital
stock payable in cash in an aggregate amount not to exceed $4,500,000
during any twelve-month period,
(c) Subsidiaries may declare and pay dividends ratably with respect to
their capital stock, and
(d) the Borrower may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans (and in accordance with
prior practices approved by the Borrower's board of directors on a current
basis) for management or employees of the Borrower and its Subsidiaries.
(b) The Borrower will not, and will not permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
70
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of regularly scheduled interest and principal payments as and
when due in respect of any Indebtedness permitted hereunder;
(ii) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) one pre-payment during November 1999 in an amount not to exceed
$3,250,000 in respect of the $30,000,000 Note Agreement described in item
(iii) of the definition of "Note Agreement Indebtedness"; and
(iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness.
A. TRANSACTIONS WITH AFFILIATES. (a) The Borrower will not, and will not permit
any of its Subsidiaries 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 (i) in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (ii)
transactions between or among the Borrower and its Subsidiaries who are
Guarantors not involving any other Affiliate, (iii) any Restricted Payment
permitted by Section 6.06, and (iv) ordinary and reasonable salaries and other
compensation payable to employees who are Affiliates in amounts to be approved
by an independent committee of the Borrower's board of directors.
(b) In addition to the provisions set forth in Section 6.07(a)(ii)
above, the Borrower agrees that it shall not alter in any material way the
nature of the transactions presently conducted between the Borrower and SMP Ltd.
The Borrower shall be permitted to make payments under the CIBC Guaranty in
accordance with the terms in effect today under such Guaranty and the underlying
financing documents.
71
A. RESTRICTIVE AGREEMENTS. The Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any Subsidiary to 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
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; PROVIDED that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement or any other
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, renewal, 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 the
capital stock or assets of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is 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 and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
B. [THIS SECTION INTENTIONALLY LEFT BLANK.]
C. AMENDMENT OF MATERIAL DOCUMENTS. The Borrower will not, and will not permit
any Subsidiary to, amend, modify or waive any of its rights under its
certificate of incorporation, by-laws or other organizational documents if the
same is reasonably likely to have a Material Adverse Effect or would result in
an Event of Default under this Agreement or any other Loan Documents.
D. LIMITATIONS ON SALES AND LEASEBACKS. The Borrower will not, and will not
permit any Subsidiary to, enter into any arrangement with any Person providing
for the leasing by the Borrower or any Subsidiary of real or personal property
which has been or is to be sold or transferred by the Borrower or any Subsidiary
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of the Borrower or any Subsidiary, except where the lease of such property by
the Borrower or such Subsidiary constitutes Indebtedness permitted by Section
6.01(e).
72
E. FISCAL YEAR. The Borrower will not, and will not permit any Subsidiary to,
change its fiscal year.
F. LEVERAGE RATIO. The Borrower will not permit Leverage Ratio on the dates set
forth below to be greater than the amount specified opposite such dates:
----------------------------------------------------------- --------------------
FISCAL QUARTER ENDING LEVERAGE RATIO
----------------------------------------------------------- --------------------
December 31, 1998 4.25 to 1
March 31, 1999 4.00 to 1
June 30, 1999 through Maturity Date 3.50 to 1
----------------------------------------------------------- --------------------
A. CAPITALIZATION RATIO. The Borrower will not permit Capitalization Ratio on
the dates set forth below to be greater than the amount specified opposite such
dates:
----------------------------------------------------------- --------------------
FISCAL QUARTER ENDING CAPITALIZATION RATIO
----------------------------------------------------------- --------------------
December 31, 1998 65%
March 31, 1999 65%
June 30, 1999 65%
September 30, 1999 65%
December 31, 1999 65%
March 31, 2000 through the Maturity Date 60%
----------------------------------------------------------- --------------------
A. CONSOLIDATED TANGIBLE NET WORTH. The Borrower and its Subsidiaries will not
permit Consolidated Tangible Net Worth at any time to be less than $143,000,000,
PLUS (i) 50% of the Borrower's consolidated net income (but not net losses) for
each full fiscal year after the Effective Date, PLUS (ii) 100% of the aggregate
net proceeds received by the Borrower from the sale of its capital stock after
the Effective Date.
B. INTEREST COVERAGE RATIO. The Borrower will not permit Interest Coverage Ratio
on the dates set forth below to be less than the amount specified opposite such
dates:
73
----------------------------------------------------- --------------------------
FISCAL QUARTER ENDING INTEREST COVERAGE RATIO
----------------------------------------------------- --------------------------
December 31, 1998 3.0 to 1
March 31, 1999 3.0 to 1
June 30, 1999 3.0 to 1
September 30, 1999 3.0 to 1
December 31, 1999 3.0 to 1
March 31, 2000 through the Maturity Date 3.75 to 1
----------------------------------------------------- --------------------------
A. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit Debt Service
Coverage Ratio on the date set forth below to be less than the amount specified
opposite such dates:
----------------------------------------------- --------------------------------
FISCAL QUARTER ENDING DEBT SERVICE COVERAGE RATIO
----------------------------------------------- --------------------------------
December 31, 1998 1.1 to 1
March 31, 1999 1.1 to 1
September 30, 1999 through the Maturity Date
1.25 to 1
----------------------------------------------- --------------------------------
A. INVENTORY TURNOVER RATIO. The Borrower will not permit Inventory Turnover
Ratio on the dates forth below to be less than the amount specified opposite
such dates:
------------------------------------------------ -------------------------------
FISCAL YEAR ENDING INVENTORY TURNOVER RATIO
------------------------------------------------ -------------------------------
December 31, 1998 through the Maturity Date 2.7 to 1
------------------------------------------------ -------------------------------
A. CAPITAL EXPENDITURES. The Borrower will not permit Capital Expenditures for
the periods set forth below to exceed the amounts set forth opposite such dates;
PROVIDED, that the Borrower may carry forward to the next year up to 20% of any
budgeted amounts not used for Capital Expenditures in any fiscal year to the
next following year, PROVIDED, FURTHER, that in any year in which amounts are
carried over from the prior year, amounts expended in such year will be deemed
to be expended FIRST, from budgeted amounts for such year and thereafter from
any amounts carried forward from the previous year:
74
---------------------------------------------- ---------------------------------
PERIOD TOTAL AMOUNT
---------------------------------------------- ---------------------------------
Fiscal Year Ending December 31, 1998 $18,000,000
Fiscal Year Ending December 31, 1999 $22,000,000
Fiscal Year Ending December 31, 2000 $18,000,000
January 1, 2001 - Maturity Date $18,000,000
---------------------------------------------- ---------------------------------
I.
--
EVENTS OF DEFAULT
-----------------
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(1) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation 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;
(2) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement, when and as the same shall become due and payable;
(3) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
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 this Agreement or any other 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;
(4) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.03 (with respect to the Borrower's
existence) or 5.08 or in Article VI;
(5) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other 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 15 days;
75
(6) the Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Indebtedness,
when and as the same shall become due and payable;
(7) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf 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 the property or
assets securing such Indebtedness;
(8) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary 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 Borrower or any Subsidiary 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;
(9) the Borrower or any Subsidiary 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 Borrower or any Subsidiary 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;
(10) the Borrower or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
76
(11) one or more judgments for the payment of money in an aggregate amount in
excess of $2,000,000 shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
45 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 Borrower or any Subsidiary to enforce any such judgment;
(12) 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; or
(13) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the 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 Borrower, 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 Borrower 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 the Borrower; and in case of any
event with respect to the 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 Borrower 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 the Borrower.
I.
--
THE ADMINISTRATIVE AGENT
------------------------
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
77
The bank serving as the Administrative 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 the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative 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 herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not 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. The Administrative 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 Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative 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. The Administrative Agent
78
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. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), 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.
The Administrative 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 the Administrative Agent. The Administrative 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 the Administrative 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 Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, 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 Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative 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 Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents 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 Administrative
Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
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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 the
Administrative 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 Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
The Documentation Agent shall not have any rights or obligations under
this Agreement except as a "Lender" hereunder.
I.
--
MISCELLANEOUS
-------------
A. 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:
(1) if to the Borrower, to it at ▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of Chief Financial Officer and Treasurer (Telecopy No.
718-729-4549) with a copy to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇, Esq. (Telecopier No.
212-808-7897);
(2) if to the Administrative Agent, to The Chase Manhattan Bank, Loan and Agency
Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to The
Chase Manhattan Bank, ▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇/▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) and a copy to
▇▇▇▇▇▇, Rodin & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(3) if to the Issuing Bank, to it at The Chase Manhattan Bank, ▇▇▇-▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇/▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇);
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(4) if to the Swingline Lender, to it at The Chase Manhattan Bank, ▇▇▇-▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇/▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(5) 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.
A. WAIVERS; AMENDMENTS. (a) No failure or delay by the Administrative Agent, the
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 Administrative Agent, the Issuing Bank 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 this Agreement or consent to any departure by the Borrower
therefrom shall in any event be 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 the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement, any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the
Required Lenders; PROVIDED that no such agreement shall (i) increase the
Commitment of any Lender 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
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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, 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 hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender, (vi) release any Subsidiary (to the extent such Subsidiary is a
Guarantor hereunder) from its Subsidiary Guaranty, or limit its liability in
respect of such Subsidiary Guaranty, without the written consent of each Lender
and (vii) increase the aggregate Commitments to an amount in excess of
$110,000,000 without the written consent of each Lender; PROVIDED FURTHER that
no such agreement shall amend, modify or otherwise affect (a) the rights or
duties of the Administrative Agent, the Documentation Agent, the Issuing Bank or
the Swingline Lender hereunder without the prior written consent of the
Administrative Agent, the Documentation Agent, the Issuing Bank or the Swingline
Lender, as the case may be and (b) any provision of this Agreement relating to
the CIBC Loan Agreement or the CIBC Guaranty without the written consent of
CIBC.
A. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement, any other Loan Document or any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the 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 Administrative Agent, the
Documentation Agent, the Issuing Bank or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Bank
or any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or any
other Loan Document 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.
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(b) The Borrower shall indemnify the Administrative Agent, the 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 connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder and under the other Loan Documents or the consummation of
the Transactions or any other transactions contemplated hereby and thereby, (ii)
any Loan or Letter of Credit or the use of the proceeds therefrom (including any
refusal by the 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), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; 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 Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, the Documentation Agent, the Issuing
Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, the Documentation
Agent, the Issuing Bank or the Swingline Lender, as the case may be, such
Lender's Applicable Percentage (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 the Administrative Agent, the Documentation Agent, the Issuing Bank or
the Swingline Lender in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
83
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, the other Loan Documents 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 after written
demand therefor that is accompanied by reasonable written supporting
documentation of such amounts.
A. 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 the Issuing
Bank that issues any Letter of Credit), except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the 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 the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Documentation Agent, the
Issuing Bank 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 Eligible 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,
the Administrative Agent (and, in the case of an assignment of all or a portion
of a Commitment or any Lender's obligations in respect of its LC Exposure or
Swingline Exposure, the 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, the amount of the Commitment 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
84
Administrative Agent) shall not be less than $5,000,000 and, after giving effect
thereto, the assigning Lender shall retain Commitments and Loans aggregating at
least $5,000,000, in each case unless each of the Borrower and the
Administrative Agent otherwise consents, PROVIDED, that no such consent of the
Borrower is needed during the pendency of an Event of Default and that in all
events the consent of the Borrower shall not be unreasonably withheld, (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, (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 $3,500, and (v) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire. 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 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 Borrower, 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, and the Borrower, the Administrative Agent,
the Documentation Agent, the Issuing Bank 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 Borrower, the
Administrative Agent, the Issuing Bank 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
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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, and
shall notify the Borrower promptly of such acceptance. 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 the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks 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 obligations and (iii) the Borrower, the
Administrative Agent, the Documentation Agent the Issuing Bank 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 this
Agreement and the other Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement and the other 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 the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 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. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 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 Borrower'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 Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.
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(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.
A. SURVIVAL. All covenants, agreements, representations and warranties made by
the Borrower herein and in the other 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 this
Agreement 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 the Administrative Agent, the Issuing Bank, the
Documentation Agent 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 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 and 9.03 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.
B. 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
Administrative Agent 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. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
87
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.
D. 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 the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether such Lender shall
have made any demand under this Agreement and although such obligations may be
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.
E. 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) The 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 this
Agreement or any of the other Loan Documents, 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 the Administrative Agent, the Issuing Bank, or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any jurisdiction.
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(c) The 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. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
A. 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 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.
B. 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.
C. CONFIDENTIALITY. Each of the Administrative Agent, the Documentation Agent,
the Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
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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 Borrower or (h) 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 the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "INFORMATION" means all information received from or on behalf of
the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or its
business, other than any such information that is available to the
Administrative Agent, the Documentation Agent, the Issuing Bank or any Lender on
a nonconfidential basis prior to disclosure by the Borrower or such Subsidiary;
PROVIDED that, in the case of information received from the Borrower after the
date hereof, such information is 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.
D. 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.
[SIGNATURE ON FOLLOWING PAGE]
90
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.
STANDARD MOTOR PRODUCTS, INC.
By___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
Individually and as Administrative Agent
By_____________________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Documentation Agent
By______________________________________
Name:
Title:
BANKBOSTON, N.A.
By_____________________________________
Name:
Title:
BANK LEUMI USA
By:____________________________________
Name:
Title:
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
By:____________________________________
Name:
Title:
COMERICA BANK
By:____________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:____________________________________
Name:
Title:
92
SCHEDULE 2.01
COMMITMENTS
The Chase Manhattan Bank
$20,000,000
Canadian Imperial Bank of Commerce
15,000,000
Comerica Bank
15,000,000
Marine Midland Bank
15,000,000
First Union
National
Bank
15,000,000
BankBoston, N.A.
15,000,000
Bank Leumi USA
5,000,000
93
EXHIBIT A
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of [ ] (as amended
and in effect on the date hereof, the "Credit Agreement"), among Standard Motor
Products, Inc., the Lenders named therein (the "Lenders") and The Chase
Manhattan Bank, as Administrative Agent for the Lenders and Canadian Imperial
Bank of Commerce, as Documentation Agent for the Lenders. Terms defined in the
Credit Agreement are used herein with the same meanings.
The Assignor named on the reverse hereof hereby sells and assigns,
without recourse, to the Assignee named on the reverse hereof, and the Assignee
hereby purchases and assumes, without recourse, from the Assignor, effective as
of the Assignment Date set forth on the reverse hereof, the interests set forth
on the reverse hereof (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Commitment of the Assignor on
the Assignment Date and Revolving Loans owing to the Assignor which are
outstanding on the Assignment Date, together with the participations in Letters
of Credit, LC Disbursements and Swingline Loans held by the Assignor on the
Assignment Date, but excluding accrued interest and fees to and excluding the
Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest,
relinquish its rights and be released from its obligations under the Credit
Agreement.
This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.17(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor] shall pay the fee payable to the
Administrative Agent pursuant to Section 9.04(b) of the Credit Agreement.
94
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
---------------------------------------- ---------------------------------------
Percentage Assigned of Facility/
Commitment (set forth, to at least 8
decimals, as a percentage of the
Facility and the aggregate Commitments
Principal Amoung of all Lenders thereunder)
FACILITY Assigned
---------------------- ------------------ -------------------------------------
Commitment Assigned: $
%
---------------------- ------------------ -------------------------------------
Revolving Loans:
---------------------- ------------------ -------------------------------------
Swingline Loans
---------------------- ------------------ -------------------------------------
Letters of Credit:
---------------------- ------------------ -------------------------------------
The terms set forth above and on the reverse side hereof are hereby agreed to:
[Name of Assignor], as Assignor
By:_________________________
Name:
Title:
[Name of Assignee], as Assignee
By:________________________
Name:
Title:
95
THE CHASE MANHATTAN BANK,
Individually and as
Administrative Agent
By____________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE,
Individually and as
Documentation Agent
By__________________________
Name:
Title:
[OTHER LENDERS],
By___________________________
Name:
Title:
96
The undersigned hereby consent to the within assignment:(1)
[Name of Borrower],
The Chase Manhattan Bank,
as Administrative Agent
By___________________________ By:________________________
Name: Name:
Title: Title:
The Chase Manhattan Bank, as The Chase Manhattan Bank,
as Swingline Lender, As Issuing Bank
By:__________________________ By:______________________
Name: Name:
Title: Title:
--------
(1) Consent to be included to the extent required by Section 9.04(b) of the
Credit Agreement.
97
