EXHIBIT 4(c)(13)
EXECUTION COPY
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THIRD AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION
CREDIT AGREEMENT
DATED AS OF JUNE 9, 2004
COMERICA BANK, AS ADMINISTRATIVE AGENT
AND COLLATERAL AGENT
BANC OF AMERICA SECURITIES, LLC AS SOLE LEAD ARRANGER
AND SOLE BOOK MANAGER
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TABLE OF CONTENTS
Page(s)
1. DEFINITIONS .................................................................... 1
2. REVOLVING CREDIT ............................................................... 33
2.1 Commitment .............................................................. 33
2.2 Accrual of Interest and Maturity ........................................ 33
2.3 Requests for and Refundings and Conversions of Advances ................. 33
2.4 Disbursement of Advances. ............................................... 35
2.5(a) Swing Line Advances ..................................................... 36
2.6 Prime-based Interest Payments ........................................... 41
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments ................................................................ 41
2.8 Interest Payments on Conversions ........................................ 41
2.9 Interest on Default ..................................................... 41
2.10 Prepayment .............................................................. 42
2.11 Intentionally Omitted ................................................... 42
2.12 Prime-based Advance in Absence of Election or Upon Default .............. 42
2.13 Revolving Credit Facility Fee ........................................... 43
2.14 Mandatory Reduction of Indebtedness ..................................... 43
2.15 Optional Reduction or Termination of Revolving Credit Maximum
Amount .................................................................. 44
2.16 Extension of Revolving Credit Maturity Date ............................. 45
2.17 Optional Increase in Revolving Credit Maximum Amount .................... 45
2.18 Revolving Credit as Renewal; Application of Advances; Existing
Advances ................................................................ 47
3. LETTERS OF CREDIT .............................................................. 47
3.1 Letters of Credit ....................................................... 47
3.2 Conditions to Issuance .................................................. 48
3.3 Notice .................................................................. 49
3.4 Letter of Credit Fees ................................................... 49
3.5 Issuance Fees ........................................................... 50
3.6 Draws and Demands for Payment Under Letters of Credit. .................. 50
3.7 Obligations Irrevocable ................................................. 52
3.8 Risk Under Letters of Credit ............................................ 53
3.9 Indemnification ......................................................... 53
3.10 Right of Reimbursement .................................................. 54
3.11 Existing Letters of Credit .............................................. 55
4. INTENTIONALLY OMITTED ............................................................ 55
5. CONDITIONS ....................................................................... 55
5.1 Execution of Notes, this Agreement and the other Loan Documents ......... 55
5.2 Corporate Authority ..................................................... 55
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5.3 Representations and Warranties -- All Parties ............................ 56
5.4 Compliance with Certain Documents and Agreements ......................... 56
5.5 Company's Certificate and Opening Borrowing Base Certificate ............. 56
5.6 Payment of Agent's and Other Fees ........................................ 56
5.7 Opinions ................................................................. 56
5.8 Other Documents and Instruments .......................................... 56
5.9 Continuing Conditions .................................................... 56
6. REPRESENTATIONS AND WARRANTIES ................................................. 57
6.1 Corporate Authority ...................................................... 57
6.2 Due Authorization -- Company ............................................. 57
6.3 Title to Property ........................................................ 57
6.4 Liens .................................................................... 58
6.5 Subsidiaries ............................................................. 58
6.6 Taxes .................................................................... 58
6.7 No Defaults .............................................................. 58
6.8 Enforceability of Agreement and Loan Documents -- Company ................ 58
6.9 Enforceability of Loan Documents - - Significant Domestic Subsidiaries ... 58
6.10 Non-contravention -- Company ............................................. 59
6.11 Non-contravention -- Significant Domestic Subsidiaries ................... 59
6.12 No Litigation ............................................................ 59
6.13 Consents, Approvals and Filings, Etc ..................................... 59
6.14 Agreements Affecting Financial Condition ................................. 59
6.15 No Investment Company; No Margin Stock ................................... 60
6.16 ERISA .................................................................... 60
6.17 Environmental Matters and Safety Matters ................................. 60
6.18 Accuracy of Information .................................................. 61
7. AFFIRMATIVE COVENANTS .......................................................... 62
7.1 Preservation of Existence, Etc ........................................... 62
7.2 Keeping of Books ......................................................... 62
7.3 Reporting Requirements ................................................... 62
7.4 Maintain Asset Coverage Ratio ............................................ 64
7.5 Maintain Total Liabilities Ratio Level ................................... 64
7.6 Minimum Tangible Net Worth ............................................... 64
7.7 Maintain Fixed Charge Coverage Ratio ..................................... 65
7.8 Inspections .............................................................. 65
7.9 Taxes .................................................................... 65
7.10 Further Assurances ....................................................... 65
7.11 Insurance ................................................................ 65
7.12 Indemnification .......................................................... 66
7.13 Governmental and Other Approvals ......................................... 66
7.14 Compliance with Contractual Obligations and Laws. ........................ 66
7.15 ERISA .................................................................... 66
7.16 Environmental Matters .................................................... 67
7.17 Installment Contract Standards ........................................... 68
7.18 Financial Covenant Amendments ............................................ 69
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7.19 Subsidiaries; Guaranties ................................................. 69
7.20 Subsidiaries; Security Documents ......................................... 69
8. NEGATIVE COVENANTS ............................................................. 70
8.1 Redemptions .............................................................. 70
8.2 Business Purposes ........................................................ 70
8.3 Mergers or Dispositions .................................................. 71
8.4 Guaranties ............................................................... 71
8.5 Debt ..................................................................... 71
8.6 Liens .................................................................... 72
8.7 Acquisitions ............................................................. 73
8.8 Investments .............................................................. 73
8.9 Accounts Receivable and Other Financial Assets ........................... 75
8.10 Transactions with Affiliates ............................................. 75
8.11 No Further Negative Pledges .............................................. 75
8.12 Prepayment of Debts ...................................................... 76
8.13 Amendment of Future Debt Documents ....................................... 76
8.14 Amendment of Subordinated Debt Documents ................................. 76
8.15 Limitation on Dividends .................................................. 76
8.16 Securitization Transaction; Amendments to Securitization Documents ....... 77
8.17 Amendments to Titling Subsidiary Agreements .............................. 77
9. DEFAULTS ....................................................................... 77
9.1 Events of Default ........................................................ 77
9.2 Exercise of Remedies ..................................................... 79
9.3 Rights Cumulative ........................................................ 80
9.4 Waiver by Company of Certain Laws ........................................ 80
9.5 Waiver of Defaults ....................................................... 80
9.6 Cross-Default ............................................................ 80
10. PAYMENTS, RECOVERIES AND COLLECTIONS. .......................................... 81
10.1 Payment Procedure. ....................................................... 81
10.2 Application of Proceeds .................................................. 82
10.3 Pro-rata Recovery ........................................................ 82
10.4 Deposits and Accounts .................................................... 83
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS. .............................. 83
11.1 Reimbursement of Prepayment Costs ........................................ 83
11.2 Eurocurrency Lending Office .............................................. 83
11.3 Circumstances Affecting Eurocurrency-based Rate Availability ............. 84
11.4 Laws Affecting Eurocurrency-based Advance Availability ................... 84
11.5 Increased Cost of Eurocurrency-based Advances ............................ 84
11.6 Indemnity ................................................................ 85
11.7 Other Increased Costs .................................................... 86
11.8 Right of Banks to Fund through Branches and Affiliates ................... 86
12. AGENT .......................................................................... 87
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12.1 Appointment of Agent .................................................... 87
12.2 Deposit Account with Agent .............................................. 87
12.3 Exculpatory Provisions .................................................. 87
12.4 Successor Agents ........................................................ 87
12.5 Loans by Agent .......................................................... 88
12.6 Credit Decisions ........................................................ 88
12.7 Notices by Agent ........................................................ 88
12.8 Agent's Fees ............................................................ 88
12.9 Nature of Agency ........................................................ 88
12.10 Authority of Agent to Enforce Notes and This Agreement .................. 88
12.11 Indemnification ......................................................... 89
12.12 Knowledge of Default .................................................... 89
12.13 Agent's Authorization; Action by Banks .................................. 89
12.14 Enforcement Actions by the Agent ........................................ 90
12.15 Lead Arranger ........................................................... 90
12.16 Collateral Matters ...................................................... 90
13. MISCELLANEOUS .................................................................. 91
13.1 Accounting Principles ................................................... 91
13.2 Consent to Jurisdiction ................................................. 91
13.3 Law of Michigan ......................................................... 91
13.4 Interest ................................................................ 91
13.5 Closing Costs; Other Costs .............................................. 92
13.6 Notices ................................................................. 92
13.7 Further Action .......................................................... 92
13.8 Successors and Assigns; Assignments and Participations .................. 92
13.9 Indulgence .............................................................. 96
13.10 Counterparts ............................................................ 96
13.11 Amendment and Waiver .................................................... 96
13.12 Taxes and Fees .......................................................... 97
13.13 Confidentiality ......................................................... 97
13.14 Withholding Taxes ....................................................... 97
13.15 Effective Upon Execution ................................................ 98
13.16 Severability ............................................................ 98
13.17 Table of Contents and Headings .......................................... 98
13.18 Construction of Certain Provisions ...................................... 98
13.19 Independence of Covenants ............................................... 98
13.20 Reliance on and Survival of Various Provisions .......................... 98
13.21 Complete Agreement; Amendment and Restatement ........................... 99
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THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is made as
of the 9th day of June, 2004, by and among the Banks signatory hereto
(individually, "Bank", and collectively "Banks"), Comerica Bank, as
administrative agent and collateral agent for the Banks (in such capacity,
"Agent") and Credit Acceptance Corporation, a Michigan corporation ("Company").
RECITALS
A. Company has requested that the Banks amend, renew and/or extend to
it, credit in the aggregate amount (subject to the Revolving Credit Optional
Increase, as defined below) of up to One Hundred Thirty Five Million Dollars
($135,000,000) consisting of (i) the Revolving Credit (as defined below)
previously extended to Company and certain of its Subsidiaries pursuant to that
certain Amended and Restated Credit Acceptance Corporation Credit Agreement
dated as of June 9, 2003 (as amended, the "Prior Credit Agreement") by and among
Company, certain of its Subsidiaries, the Banks signatory thereto and Comerica
Bank, individually and in its capacity as Agent, and (ii) letters of credit all
on the terms and conditions set forth herein.
B. The Banks are prepared to extend such credit as aforesaid by
amendment and renewal (but not in novation) of the Prior Credit Agreement, but
only on the terms and conditions set forth in this Agreement.
NOW THEREFORE, COMPANY, AGENT AND THE BANKS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account Party(ies)" shall mean, with respect to any Letter of Credit, the
account party or parties (which shall be Company or any Significant Domestic
Subsidiary, jointly and severally with Company) as named in an application to
the Agent for the issuance of such Letter of Credit.
"Additional Commitment Fee" shall mean the additional commitment fee
payable to Agent for distribution to the Banks pursuant to Section 2.13, hereof.
"Administrative Agency Agreement" is referred to in the definition of
Titling Subsidiary Agreements.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by Company, and made by Banks under Section 2.1 of this Agreement, as
the case may be, or requested by the Company and made by the Swing Line Bank
under Section 2.5 hereof (including without limitation any readvance, refunding
or conversion of such borrowing pursuant to Section 2.3 or 2.5(c) hereof) and
any advance in respect of a Letter of Credit under Section 3.6
hereof (including without limitation the unreimbursed amount of any draws under
Letters of Credit), and shall include, as applicable, a Eurocurrency-based
Advance, a Quoted Rate Advance, a Prime-based Advance and a Swing Line Advance.
"Advances to Dealers" shall mean, as of any applicable date of
determination, the amount of advances in respect of Installment Contracts, as
such amount would appear in the footnotes to the financial statements of the
Company and its Subsidiaries prepared in accordance with GAAP (and if such
amount is not shown net of such reserves, then net of any reserves established
by the Company as an allowance for credit losses related to such advances not
expected to be recovered), provided that, for purposes of the definition of
Collateral determining the Borrowing Base and compliance with the covenants
under Section 7.4 through 7.7 and 7.17 hereof, Advances to Dealers shall not
include (a) any such advances (and the related Installment Contracts)
transferred or encumbered pursuant to a Permitted Securitization or assigned to
a Securitized Pool (whether or not attributable to the Company under GAAP),
unless and until such advances (and the related Installment Contracts) are
reassigned to the Company or a Domestic Subsidiary of the Company or such
encumbrances are discharged or (b) Charged-Off Advances. For purposes of this
definition, "Charged-Off Advances" shall mean those Advances to Dealers which
the Company or any of its Subsidiaries has written off consistent with the
Company's write off policy described in its periodic reports filed with the
Securities and Exchange Commission.
"Affiliate" shall mean, at any time, a Person (other than a Subsidiary)
(a) that directly or indirectly through one or more intermediaries Controls, or
is Controlled by, or is under common Control with, the Company; (b) that
beneficially owns or holds five percent (5%) or more of any class of the voting
stock of the Company; (c) five percent (5%) or more of the voting stock (or in
the case of a Person that is not a corporation, five percent (5%) or more of the
equity interest) of which is beneficially owned or held by the Company or a
Subsidiary; or (d) that is an officer or director (or a member of the immediate
family of an officer or director) of the Company or any Subsidiary; in each
case, at such time. As used in this definition, "Control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean Comerica Bank, a Michigan banking corporation, or any
successor appointed in accordance with Section 12.4 hereof.
"Agent's Correspondent" shall mean for Advances in Eurodollars, Agent's
Grand Cayman Branch (or for the account of said branch office, at Agent's main
office in Detroit, Michigan, United States of America), or at such other bank as
Agent may from time to time designate by written notice to Company and the
Banks.
"Agent's Fees" shall mean those fees and expenses required to be paid by
Company to Agent under Section 12.8 hereof.
"Aggregate Commitment" shall mean the Revolving Credit Maximum Amount, as
in effect from time to time.
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"Allowances for Credit Losses" shall mean those allowances or reserves
established by Company or its Subsidiaries in arriving at installment contracts
receivable, net, on its Consolidated balance sheets, as specifically identified
in such financial statements or as disclosed in the footnotes thereto; provided
that Allowances for Credit Losses shall not include allowances or reserves
attributable to retail installment contracts which are not at such time
"Installment Contracts", due to the proviso in the definition of such term in
this Agreement.
"Alternate Base Rate" shall mean, for any day, an interest rate per annum
equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean the Eurocurrency-based Rate, the
Prime-based Rate or, with respect to Swing Line Advances, the Quoted Rate, as
selected by Company from time to time subject to the terms and conditions of
this Agreement.
"Applicable Margin" shall mean, as of any date of determination thereof,
the applicable interest rate margin, determined by reference to the appropriate
columns in the Pricing Matrix attached to this Agreement as Schedule 1.1.
"Assignment Agreement" shall have the meaning ascribed to such term in
Section 13.8(c) hereof.
"Back-End Dealer Agreement(s)" shall mean Dealer Agreements referred to in
clause (i) of the definition of Dealer Agreements.
"Banks" shall mean the Banks signatory hereto (including the New Banks)
and any assignee which becomes a Bank pursuant to Section 13.8(c) hereof.
"Borrowing Base Certificate" shall mean a Borrowing Base Certificate,
substantially in the form of Exhibit O (and determining the amount of Advances
to Dealers as of the most recent quarter end, in the case of regular borrowing
base certificates delivered under Section 7.3(d) hereof, and as of the most
recent month-end, in the case of all other Borrowing Base Certificates submitted
hereunder), with appropriate insertions and executed by an authorized officer of
the Company and accompanied, when submitted in connection with a Permitted
Securitization or a sale of accounts under Section 8.9 hereof, by a breakdown of
the contemplated net securitization or sale proceeds to be received (or actually
received, as the case may be) from such transaction, and reasonable supporting
calculations.
"Borrowing Base Limitation" shall mean, as of any date of determination,
an amount equal to (i) sixty-five percent (65%) of Advances to Dealers, plus
(ii) the lesser of sixty-five percent (65%) of the Outright Contract Balance or
$13,000,000, minus (iii) the Hedging Reserve and minus (iv) the aggregate
principal amount outstanding from time to time of any Debt (other than the
Indebtedness) secured by any of the Collateral.
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"Business Day" shall mean any day on which commercial banks are open for
domestic and international business (including dealings in foreign exchange) in
Detroit, London (except with respect to any Prime-based Advances), and New York.
"CAC South Dakota" shall mean Credit Acceptance Corporation of South
Dakota, Inc., a South Dakota corporation.
"Capital Assets" shall mean all assets of a Person other than intangible
assets (so classified in accordance with GAAP), inventories, accounts receivable
and Investments in and securities of any other Person.
"Capitalized Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) with respect to which the discounted
present value of the rental obligations of such Person as lessee thereunder, in
conformity with GAAP, is required to be capitalized on the balance sheet of that
Person.
"Cleanup Call(s)" shall mean:
(a) in the case of an optional cleanup call, a cleanup call to be
exercised at the option of the Company or a Special Purpose Subsidiary
under the terms of the applicable Permitted Securitization (provided that,
both before and after giving effect thereto, no Default or Event of
Default has occurred and is continuing when such option is exercised), in
an amount not in excess of (i) Fifteen Percent (15%) of the initial amount
received by the Company or a Special Purpose Subsidiary pursuant to such
Permitted Securitization (before fees and other deductions), it being
understood that, for purposes of the calculation under clause (a)(i) of
this definition, each tranche of a multi-tranche Permitted Securitization
shall be considered a separate Permitted Securitization or (ii) in the
case of any Securitization Transaction structured on a revolving basis,
fifteen percent (15%) of the maximum aggregate availability at any time to
Company or a Special Purpose Subsidiary, each such optional cleanup call
to be accompanied by the repurchase of or release of encumbrances on
Advances to Dealers or Installment Contracts (whether assigned outright or
related to Advances to Dealers), as the case may be, previously
transferred or encumbered pursuant to such Permitted Securitization in an
amount equal to at least the amount of such cleanup call; and
(b) in the case of a mandatory cleanup call, a mandatory cleanup
call to be exercised at the option of the investors under the terms of the
applicable Permitted Securitization, in an amount not in excess of (i) Two
and One-Half Percent (2-1/2%) of the aggregate amount received by the
Company or a Special Purpose Subsidiary pursuant to the Permitted
Securitization to which such mandatory cleanup call relates (before fees
and other deductions), it being understood that, for purposes of the
calculation under clause (b)(i) of this definition, all tranches of a
multi-tranche Permitted Securitization shall be considered one Permitted
Securitization or (ii) in the case of any Securitization Transaction
structured on a revolving basis, Two and One-Half Percent (2-1/2%) of the
maximum aggregate availability at any time to Company or a Special Purpose
Subsidiary, each such mandatory Cleanup Call to be accompanied by the
repurchase of or release of encumbrances on Advances to Dealers or
Installment Contracts (whether
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assigned outright or related to Advances to Dealers), as the case may be,
previously transferred or encumbered pursuant to such Permitted
Securitization in an amount equal to at least the lesser of (A) the amount
of such cleanup call or (B) the book value at the time of such cleanup
call of the Advances to Dealers or Installment Contracts previously
transferred or encumbered pursuant to such Permitted Securitization.
"Collateral" shall mean (a) all right, title and interest of each of the
Company and each of its Significant Domestic Subsidiaries in, to and under its
accounts, inventory, machinery, equipment, contract rights, chattel paper,
general intangibles, including without limitation Advances to Dealers, Leased
Vehicles, Dealer Agreements (and any amounts advanced to or liens granted by
Dealers thereunder), Installment Contracts, Leases and related financial
property (such Dealer Agreements, Advances to Dealers and the Installment
Contracts, Leases, accounts, contract rights, chattel paper and general
intangibles relating to such Dealer Agreements, Advances to Dealers, and Leased
Vehicles, being subject to the rights, if any, of Dealers under Dealer
Agreements), Intercompany Notes and computer records and software relating
thereto, whether now owned or hereafter acquired by such Person, (b) one hundred
percent (100%) of the share capital of each Significant Domestic Subsidiary of
the Company (whether direct or indirect), (c) one hundred percent (100%) of the
share capital of T&C Subsidiary (subject to release upon dissolution of the T&C
Subsidiary in connection with the completion of the New Restructuring) and of
CAC South Dakota (whether or not constituting a Significant Domestic
Subsidiary), (d) not less than sixty-five percent (65%) of the aggregate
partnership interests of the Scottish Partnership, (e) all other property or
rights in which a security interest, mortgage, lien or other encumbrance for the
benefit of the Banks is or has been granted or arises or has arisen, under or in
connection with this Agreement, the Collateral Documents or any of the Other
Loan Documents, or otherwise, (f) the entire Non-Specified Interest at any time
held by the Company or any Subsidiary, and (g) all proceeds and products of the
foregoing.
"Collateral Documents" shall mean (i) that certain Second Amended and
Restated Security Agreement dated as of June 11, 2001 and executed and delivered
by Company in favor of the Agent, as Collateral Agent pursuant to the
Intercreditor Agreement (as amended, the "Security Agreement"), and encumbering
the property described therein, (ii) an assignation executed and delivered by
Company in favor of the Agent, as Collateral Agent pursuant to the Intercreditor
Agreement, and encumbering the Collateral described in clause (e) of the
definition of Collateral, (iii) those certain lien, charge or other security
documents executed and delivered, or to be executed and delivered hereunder in
order to encumber 100% of the share capital of the T&C Subsidiary, executed and
delivered by the Company or any of its subsidiaries and delivered to the Agent,
as Collateral Agent (as aforesaid), subject to release of such liens upon
dissolution of the T&C Subsidiary in compliance with the terms of the New
Restructuring, and (iv) all other security documents (including, without
limitation, financing statements, stock powers, acknowledgments, registrations,
joinders and the like) executed by the Company or any of its Subsidiaries and
delivered to the Agent, as Collateral Agent (as aforesaid), as of the date
thereof or, from time to time, subsequent thereto in connection with such
security documents, this Agreement or the other Loan Documents, as such security
documents may be in each case amended or further amended (subject to the
Intercreditor Agreement) from time to time.
"Commitment Fee" shall mean the commitment fee payable to Agent for
distribution to the Banks pursuant to Section 2.13, hereof.
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"Company" is defined in the Preamble.
"Consolidated" or "Consolidating" shall, when used with reference to any
financial information pertaining to (or when used as a part of any defined term
or statement pertaining to the financial condition of) Company and its
Subsidiaries, mean the accounts of Company and its Subsidiaries determined on a
consolidated or consolidating basis, as the case may be, all determined as to
principles of consolidation and, except as otherwise specifically required by
the definition of such term or by such statements, as to such accounts, in
accordance with GAAP applied on a consistent basis and consistent with the
financial statements as at and for the fiscal year ended December 31, 2003,
subject to the matters described in Note 2 to the Company's Form 10-Q for the
quarter ended March 31, 2004.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (a)
Consolidated Interest Expense for such period, plus (b) Operating Rentals
payable by the Company and its Subsidiaries in respect of such period under
Operating Leases, plus (c) the aggregate amount of all dividends on any
preferred stock of the Company declared during such period, determined after
eliminating intercompany transactions among the Company and its Subsidiaries.
"Consolidated Funded Debt" shall mean, as of any applicable date of
determination, all Debt of the Company and its Subsidiaries determined on a
Consolidated basis according to GAAP (but including the Debt of any Special
Purpose Subsidiary, whether or not includible under GAAP), plus without
duplication all letters of credit, guarantees and other Guarantee Obligations of
the Company and its Subsidiaries (but including any Special Purpose Subsidiary,
whether or not includible under GAAP) in respect of liabilities which would
constitute Debt, determined on a Consolidated basis according to GAAP.
"Consolidated Income Available for Fixed Charges" shall mean, for any
period, the sum of (a) Consolidated Net Income, plus (b) the aggregate amount of
income taxes, depreciation, amortization (including the amortization of any
excess servicing asset) and Consolidated Fixed Charges (to the extent, and only
to the extent, that such aggregate amount was reflected in the computation of
Consolidated Net Income for such period), determined on a Consolidated basis for
such Persons in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the amount of
interest charged or chargeable to the Consolidated Statement of Operations of
Company and its Subsidiaries in respect of such period, as determined in
accordance with GAAP.
"Consolidated Net Assets" shall mean, as of any applicable date of
determination, the sum of (i) 100% of all cash and the value (at book) of all
Permitted Investments and (ii) 75% of the aggregate amount of Advances to
Dealers; determined on a Consolidated basis for the Company and its Subsidiaries
according to GAAP, but including the amount of any such assets held by a Special
Purpose Subsidiary, whether or not includible under GAAP, and excluding such
assets of the Trusts to the extent such assets are Consolidated under GAAP.
"Consolidated Net Income" shall mean, for any period, net earnings (or
loss) after income taxes of Company and its Subsidiaries, determined on a
Consolidated basis for such Persons, as defined according to GAAP, but
excluding:
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(a) net earnings (or loss) of any Subsidiary accrued prior to the date
it became a Subsidiary;
(b) any gain or loss (net of tax effects applicable thereto) resulting
from the sale, conversion or other disposition of Capital Assets other than in
the ordinary course of business;
(c) any extraordinary or non-recurring gains or losses (including,
without limitation, any gain on sale generated by a Permitted Securitization,
except to the extent the Company has received a cash benefit therefrom in the
applicable reporting period); and any interest income generated by a Permitted
Securitization, except to the extent the Company has received a cash benefit
therefrom in the applicable reporting period;
(d) any gain arising from any reappraisal or write-up of assets and the
non-cash effect of stock option expense (whether constituting a gain or a loss);
(e) any portion of the net earnings of any Subsidiary that for any
reason is unavailable for payment of dividends to the Company or any other
Subsidiary;
(f) any gain or loss (net of tax effects applicable thereto) during such
period resulting from the receipt of any proceeds of any insurance policy;
(g) except as set forth herein, any earnings of any Person acquired by
Company or any Subsidiary through the purchase, merger or consolidation or
otherwise, or earnings of any Person substantially all of the assets of which
have been acquired by Company or any Subsidiary, for any period prior to the
date of acquisition;
(h) net earnings of any Person (other than a Subsidiary) in which
Company or any Subsidiary shall have an ownership interest unless such net
earnings shall actually have been received by the Company or such Subsidiary in
the form of cash distributions; and
(i) any restoration during such period to income of any contingency
reserve, except to the extent that provision for such reserve
(i) was made during such period out of income accrued during such
period,
(ii) was made in connection with the Company's program of financing
Installment Contracts or Leases
(A) to provide for warranty claims for which the Company may
be responsible, or
(B) to cover credit losses in connection with Advances to
Dealers, Installment Contracts, Leased Vehicles or Leases,
7
provided that the aggregate restoration to income during any period from
reserves described in clause (ii) and clause (iii) above shall not exceed ten
percent (10%) of Consolidated Net Income for such period, prior to giving effect
to such restoration.
"Consolidated Tangible Net Worth" shall mean the total preferred
shareholders' investment and common shareholders' investment (common stock, paid
in capital and retained earnings) as computed for the Company and its
Subsidiaries on a Consolidated basis under GAAP, less assets properly classified
as intangible assets according to GAAP, but excluding from the determination
thereof, without duplication, any excess servicing asset resulting from the
transfer, pursuant to a Permitted Securitization, of Advances to Dealers or
Installment Contracts (whether assigned outright or related to Advances to
Dealers) and less capitalized financing fees.
"Consolidated Total Liabilities" shall mean, as of any applicable date of
determination, the Consolidated total liabilities of the Company and its
Subsidiaries according to GAAP (but including the liabilities of any Special
Purpose Subsidiary whether or not includible under GAAP), plus without
duplication all contingent obligations, including without limitation all
Guarantee Obligations not otherwise reflected therein, minus Net Dealer
Holdbacks and minus deferred income of the Company and its Subsidiaries, and
minus such liabilities of the Trusts to the extent such liabilities are
Consolidated under GAAP, in each case determined on a Consolidated basis
according to GAAP, except as aforesaid.
"Covenant Compliance Report" shall mean the report to be furnished by the
Company to the Agent, in substantially the form attached to this Agreement as
Exhibit H and certified by the chief financial officer or treasurer of the
Company pursuant to Section 7.3(c) hereof, as to whether the Company and its
Subsidiaries are in compliance with the financial covenants contained in
Sections 7.4 through 7.7, inclusive, of this Agreement for the applicable fiscal
quarter (or year-end) of the Company, as the case may be, in which report the
Company shall set forth its calculations and the resultant ratios or financial
tests determined thereunder, and certifying that no Default or Event of Default
has occurred and is continuing.
"Dealer(s)" shall mean a Person engaged in the business of the retail sale
of new or used motor vehicles, including both businesses exclusively selling
used motor vehicles and businesses principally selling new motor vehicles, but
having a used vehicle department, including any such Person which constitutes an
Affiliate of Company.
"Dealer Agreement(s)" shall mean the sales and/or servicing agreements
between the Company or its Subsidiaries and a participating Dealer which sets
forth the terms and conditions under which the Company or its Subsidiaries (i)
accepts, as nominee for such Dealer, the assignment of Installment Contracts for
purposes of administration, servicing and collection and under which the Company
or its Subsidiary may make advances to such Dealers included in Advances to
Dealers and (ii) accepts outright assignments of Installments Contracts from
Dealers or funds Installments Contracts originated by such Dealer in the name of
Company or any of its Subsidiaries, in each case as such agreements may be in
effect from time to time.
"Debt" shall mean, with respect to any Person, without duplication, (a)
its liabilities for borrowed money (whether or not evidenced by a security), (b)
any liabilities secured by any Lien existing on property owned by such Person
(whether or not such liabilities have been assumed),
8
(c) its liabilities in respect of Capitalized Leases, (d) the present value of
all payments due under any arrangement for retention of title or any conditional
sale agreement (other than a Capitalized Lease) discounted at the implicit rate,
if known, with respect thereto or, if unknown, at eight and eighty-seven
one-hundredths percent (8.87%) per annum, and (e) its guaranties of any
liabilities of another Person constituting liabilities of a type set forth
above; provided however that dealer holdbacks shall not be considered Debt of
the Company or its Subsidiaries; and provided further that, solely for purposes
of Section 8.5 hereof, "Debt" shall also include reimbursement obligations
(contingent or otherwise) in respect of letters of credit, obligations in
respect of bankers acceptances, and payment obligations, if any, under interest
rate protection agreements (including without limitation interest rate swaps and
similar agreements) and currency swaps and xxxxxx and similar agreements.
"Debt Rating" shall mean the debt rating, if any, of Company's long-term
non-credit enhanced senior debt obtained by the Company, from time to time, from
an applicable credit rating agency of recognized national standing in the United
States of America.
"Default" shall mean any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.
"Dollars" and the sign "$" shall mean lawful money of the United States of
America.
"Domestic Advance" shall mean any Advance other than a Eurocurrency-based
Advance.
"Domestic Guaranty" shall mean that certain guaranty of all Indebtedness
outstanding from the Company dated as of this Agreement, executed and delivered
(or to be executed and delivered) by each of the Significant Domestic
Subsidiaries (whether by execution thereof, or by execution of the Joinder
Agreement attached as "Exhibit A" to the form of such Guaranty), to the Agent,
on behalf of the Banks, as amended from time to time.
"Domestic Subsidiary" shall mean those Subsidiaries of the Company
incorporated under the laws of the United States of America, or any state
thereof, other than the US LLC, so long as it is a Subsidiary of a Foreign
Subsidiary.
"Effective Date" shall mean June 9, 2004.
"Equity Offering" shall mean the issuance and sale for cash, on or after
the Effective Date by Company or any of its Subsidiaries of additional capital
stock or other equity interests, other than upon the exercise of employee and
dealer stock options pursuant to stock option plans maintained or offered by the
Company or its Subsidiaries in the ordinary course of business and not in
anticipation of any sale of capital stock or equity interests to the general
public.
"Equity Offering Adjustment" shall mean that amount to be added to the
minimum Consolidated Tangible Net Worth required to be maintained under Section
7.7 hereof consisting of an amount equal to one hundred percent (100%) of each
Equity Offering conducted by the Company or any of its subsidiaries, net of
related costs of issuance payable to third parties, on and after the Effective
Date, on a cumulative basis.
9
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code, and the regulations in effect from time
to time thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
would be treated as a single employer under Section 414 of the Internal Revenue
Code, and any Domestic Subsidiary.
"Eurocurrency-based Advance" shall mean any Advance (including a Swing
Line Advance) which bears interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of the Applicable Margin (subject, if applicable, to adjustment
under Section 4 hereof), plus the quotient of:
(C) the per annum interest rate at which deposits in
eurodollars are offered to Agent's Eurocurrency Lending Office
by other prime banks in the eurodollar market in an amount
comparable to the relevant Eurocurrency-based Advance and for
a period equal to the relevant Eurocurrency-Interest Period at
approximately 11:00 a.m. Detroit time two (2) Business Days
prior to the first day of such Eurocurrency-Interest Period,
divided by
(D) a percentage equal to 100% minus the maximum rate on
such date at which Agent is required to maintain reserves on
'eurocurrency liabilities' as defined in and pursuant to
Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and
as long as Agent is required to maintain reserves against a
category of liabilities which includes eurocurrency deposits
or includes a category of assets which includes eurocurrency
loans, the rate at which such reserves are required to be
maintained on such category,
such sum to be rounded upward, if necessary, to the nearest whole multiple
of 1/100th of 1%.
"Eurocurrency-Interest Period" shall mean, for Swing Line Advances carried
at the Eurocurrency-based Rate, an interest period of seven days, one month (or
any lesser number of days agreed to in advance by Company, Agent and the Swing
Line Bank), and for all other Eurocurrency-based Advances, an interest period of
one, two, three or six months (or any lesser or greater number of days agreed to
in advance by Agent and the Banks), in each case as selected by Company, as
applicable, for a Eurocurrency-based Advance pursuant to Section 2.3 or 2.5
hereof, as the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the Agent,
Agent's office located at its Grand Caymans Branch or such other branch of
Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by notice to Company and the Banks
10
and (b) as to each of the Banks, its office, branch or affiliate located at its
address set forth on the signature pages hereof (or identified thereon as its
Eurocurrency Lending Office), or at such other office, branch or affiliate of
such Bank as it may hereafter designate as its Eurocurrency Lending Office by
notice to Company and Agent.
"Event of Default" shall mean any of the events specified in Section 9.1
hereof.
"Existing Advance(s)" shall mean Advances made under the Prior Credit
Agreement (as defined therein) which are outstanding on the Effective Date.
"Existing Letter of Credit" shall mean a letter of credit issued under the
Prior Credit Agreement which is outstanding on the Effective Date hereof as set
forth on Schedule 3.11 attached hereto.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it.
"Fees" shall mean the Agent's Fees, the Revolving Credit Facility Fee, the
Commitment Fee, the Additional Commitment Fee and the Letter of Credit Fees.
"Fixed Charge Coverage Ratio" shall mean, as of any applicable date of
determination, the ratio of (a) Consolidated Income Available for Fixed Charges
for the period of four (4) consecutive fiscal quarters of the Company most
recently ended at such time to (b) Consolidated Fixed Charges for such period.
"Floor Plan Receivables" shall mean, as of any applicable date of
determination, the aggregate amount outstanding from Dealers pursuant to
financing extended to such Dealers by Company or any of its Subsidiaries for
used motor vehicle inventories, such financing to be secured by the related
motor vehicle inventories and any future cash collections owed by Company or its
Subsidiaries to the Dealer under the applicable Dealer Agreement in respect of
outstanding Advances to Dealers (and the related Installment Contracts) or
Leased Vehicles (and the related Leases).
"Foreign Subsidiaries" shall mean all of the Company's Subsidiaries other
than its Domestic Subsidiaries.
"Funding Conditions" shall mean those conditions required to be satisfied
prior to or concurrently with the funding of any Future Debt, as follows:
(a) Within a period of one hundred eighty (180) days prior to the
date any such Debt is incurred, Company shall have provided to the Agent
and the Banks a Consolidated plan and financial projections meeting the
requirements therefor as set forth in Section 7.3(i) of this Agreement and
demonstrating that the Company would be in
11
compliance with the financial covenants set forth in Sections 7.4 through
7.7 hereof and the Borrowing Base Limitation, if applicable, were such
Debt outstanding during the applicable reporting periods;
(b) Both immediately before and immediately after such additional
Debt is incurred, no Default or Event of Default (whether or not related
to such additional Debt, and taking into account the incurring of such
additional Debt) has occurred and is continuing;
(c) If such additional Debt shall be issued pursuant to loan
documents containing covenants which are more restrictive than the
covenants contained in this Agreement, Company shall, upon the written
request of the Majority Banks, enter into amendments to this Agreement to
extend the benefit of such covenants to the Banks;
(d) Concurrently with the incurring of such additional Debt, the
proceeds of such Debt, net of third party expenses incurred by the Company
in connection with the issuance of such Debt, shall first be applied to
reduce (i) the principal, interest and other amounts under other Future
Debt then outstanding or (ii) principal, interest and other amounts owing
under the Revolving Credit (to the extent then outstanding, and including
the aggregate amount of drawings made under any Letter of Credit for which
the Agent has not received full payment), subject to the right to reborrow
in accordance with this Agreement; provided, however, that to the extent
that on the date any reduction of the principal balance outstanding under
the Revolving Credit shall be required under this clause (d), the
Indebtedness under the Revolving Credit is being carried, in whole or in
part, at the Eurocurrency-based Rate and no Default or Event of Default
has occurred and is continuing, the Company may, after prepaying that
portion of the Indebtedness then carried at the Prime-based Rate, deposit
the amount of such required principal reductions in a cash collateral
account to be held by the Agent, for and on behalf of the Banks (which
shall be an interest-bearing account), on such terms and conditions as are
reasonably acceptable to Agent and the Majority Banks and, subject to the
terms and conditions of such cash collateral account, sums on deposit
therein shall be applied (until exhausted) to reduce the principal balance
of the Revolving Credit on the last day of each Interest Period
attributable to the applicable Eurocurrency-based Advances of the
Revolving Credit (subject to the right to reborrow, as aforesaid); and
provided further that Agent and the Banks acknowledge that any proceeds of
Future Debt remaining after the application of such proceeds as required
by this clause (d) may be held or invested in Permitted Investments or
otherwise invested or applied in any manner not prohibited by this
Agreement; and
(e) If such additional Debt is to be secured, the applicable Lien
shall arise only pursuant to the Security Agreement and/or the other
Collateral Documents and each of the holders of such Debt shall become a
party to the Intercreditor Agreement and shall execute and deliver such
additional or related Loan Documents, as reasonably requested by the
Agent.
"Future Debt" shall mean Debt evidenced by Long Term Notes; provided that
the aggregate principal amount of all such Debt outstanding at any time from and
after the date
12
hereof shall not exceed One Hundred Fifty Million Dollars ($150,000,000); and
provided further that, at the time any such Debt is incurred, the Funding
Conditions have been satisfied. For the purposes of this definition, "Long Term
Notes" shall mean unsecured or secured non-revolving promissory notes to be
issued by the Company, which Debt shall have a term extending at least beyond
the Revolving Credit Maturity Date then in effect, have an amortization schedule
not greater than level amortization to maturity (but with no principal payments
required for a period of at least 12 months) and have no requirement for
mandatory early repayment except (x) upon default, (y) following a change in
control or (z) following the sale of any material portion of the assets of the
Company or any of its Subsidiaries, to the extent of the proceeds of such sale.
"Future Debt Documents" shall mean the promissory note(s), guaranty(ies),
agreement(s) or other documents, instruments and certificates executed and
delivered, subject to the terms of this Agreement, to evidence or secure (or
otherwise relating to) Future Debt, as the same may be amended from time to time
and any and all other documents executed in exchange therefor or replacement or
renewal thereof.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect on the date hereof, consistently applied.
"Gross Dealer Holdbacks" shall mean the aggregate amount, as of any
applicable date of determination, of dealer holdbacks under Dealer Agreements
relating to Installment Contracts utilized in arriving at Dealer holdbacks, net
on the Consolidated balance sheet of the Company and its Subsidiaries, as
disclosed in the footnotes thereto; provided that Gross Dealer Holdbacks shall
not include the amount of dealer holdbacks attributable to retail installment
contracts which are not at such time "Installment Contracts" due to the proviso
in the definition of such term in this Agreement.
"Guarantee Obligation(s)" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was evidenced or induced by a reimbursement
agreement, counter-indemnity, endorsement or similar obligation issued by the
guaranteeing person, in either case guaranteeing or in effect guaranteeing any
Debt, leases, dividends or other obligations (the "primary obligations") of any
other third Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. To the extent not otherwise determinable, the
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation (as outstanding on the applicable date of determination) in
respect of which such Guarantee
13
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by
Company in good faith.
"Guaranties" shall mean the Domestic Guaranty and any other guaranty of
the Indebtedness entered into from time to time in accordance with the terms
hereof.
"Guarantor(s)" shall mean each Significant Subsidiary which is required by
the Banks to guarantee the obligations of the Company hereunder and under the
other Loan Documents.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and directives issued by any federal, state, local,
foreign or other governmental or quasi-governmental authority or body (or any
agency, instrumentality or political subdivision thereof) pertaining to
Hazardous Material on or about the Material Property or any portion thereof
including, without limitation, those relating to soil, surface, subsurface
ground water conditions and the condition of the ambient air; any so-called
"superfund" or "superlien" law; and any other federal, state, foreign or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material, as now or at any
time hereafter in effect. For the purposes of this definition "Material
Property" shall mean any property, whether personal or real, owned, leased or
otherwise used by the Company or any of the Subsidiaries which is material to
the operations of the Company and the Subsidiaries, taken as a whole.
"Hedging Agreement(s)" shall mean any Interest Rate Protection Agreements
and any foreign currency exchange agreements (including without limitation
foreign currency xxxxxx and swaps) or other foreign exchange transactions, or
any combination of such transactions or agreements or any option with respect to
any such transactions or agreements entered into by Company and/or any of its
Subsidiaries to manage existing or anticipated foreign exchange risk and not for
speculative purposes.
"Hedging Reserve" shall mean a reserve under the Borrowing Base Limitation
equal to the lesser of (i) One Million Dollars ($1,000,000) and (ii) the
aggregate amount of Net Hedging Obligations outstanding from time to time
(determined in the manner set forth herein) maintained by the Company for the
benefit of those Banks or their Affiliates which provide Hedging Agreements to
the Company or any Domestic Subsidiary under or in connection with this
Agreement, and allocated to such Banks or their Affiliates in the amounts so
determined and reported by the Company in its quarterly Borrowing Base
Certificates or any updated Borrowing Base Certificates from time to time
submitted by the Company hereunder; provided that the adequacy of the amounts
established by the Company for the applicable exposure under a Hedging Agreement
shall be subject to review and approval by the Majority Banks and each affected
Bank, from time to time at the request of such Banks.
14
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement in its entirety and not to any particular paragraph or provision of
this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities, whether direct
or indirect, absolute or contingent, owing by Company or any Subsidiary to the
Banks (or any of them) or to the Agent, in any manner and at any time, under
this Agreement or the other Loan Documents, whether evidenced by the Notes, the
Guaranties, Letter of Credit Agreements or otherwise, due or hereafter to become
due, now owing or that may hereafter be incurred by the Company or any Account
Party to, or acquired by, the Banks or by Agent, and all Net Hedging Obligations
in respect of Hedging Agreements entered into between Company and/or any
Significant Domestic Subsidiary and a Bank or an Affiliate of a Bank (up to the
maximum amount of the Hedging Reserve, as determined and allocated hereunder)
and any judgments that may hereafter be rendered on such indebtedness or any
part thereof, with interest according to the rates and terms specified, or as
provided by law, and any and all consolidations, amendments, renewals,
replacements or extensions of any of the foregoing.
"Installment Contract(s)" shall mean retail installment contracts for the
sale of new or used motor vehicles assigned outright by Dealers to Company or a
Subsidiary of Company or written by Dealers in the name of the Company or a
Subsidiary of the Company (and funded by Company or such Subsidiary) or assigned
by Dealers to Company or a Subsidiary of Company, as nominee for the Dealer, for
administration, servicing, and collection, in each case pursuant to an
applicable Dealer Agreement; provided, however, that to the extent the Company
or any Subsidiary transfers or encumbers its interest in any Installment
Contracts (or any Advances to Dealers related thereto) pursuant to a Permitted
Securitization, such Installment Contracts shall, from and after the date of
such transfer or encumbrance, cease to be considered Installment Contracts under
this Agreement (reducing the amount of Advances to Dealers by the outstanding
amount of such advances, if any, attributable to such Installment Contracts)
unless and until such installment contracts are reassigned to the Company or a
Subsidiary of the Company or such encumbrances are discharged.
"Intercompany Loans" shall mean any loan or advance in the nature of a
loan by the Company to any Subsidiary or by any Subsidiary to any other
Subsidiary or to the Company.
"Intercompany Loans, Advances and Investments" shall mean any Intercompany
Loan and any other advance or Investment by the Company to or in a Subsidiary or
by any Subsidiary to or in the Company or any other Subsidiary.
"Intercompany Note(s)" shall mean the promissory notes substantially in
the form of Exhibit N, attached hereto, issued or to be issued by the Company or
any Subsidiary to evidence an Intercompany Loan, and pledged to the Agent (in
its capacity as Collateral Agent under the Intercreditor Agreement and/or as
Agent hereunder.)
"Intercreditor Agreement" shall mean that certain Intercreditor Agreement
executed and delivered as of December 15, 1998 by and among the Banks, the
holders of certain other Debt and the Agent, as Collateral Agent thereunder, and
acknowledged and accepted by the Company and certain of its Subsidiaries, as
amended by First Amendment dated as of March 30, 2001 and Second Amendment dated
as of June 10, 2002, and as further amended from time to time.
15
"Interest Period" shall mean:
(a) with respect to a Eurocurrency-based Advance, a
Eurocurrency-Interest Period commencing on the day a Eurocurrency-based
Advance is made, or on the effective date of an election of the
Eurocurrency-based Rate made under Section 2.3 or hereof, as the case may
be, and
(b) with respect to a Swing Line Advance, a period of one (1) to
thirty (30) days agreed to in advance by Company and the Swing Line Bank
as selected by Company pursuant to Section 2.5(c),
provided that (i) any Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day, except that
as to a Eurocurrency-Interest Period, if the next succeeding Business Day falls
in another calendar month, such Eurocurrency-Interest Period shall end on the
next preceding Business Day, and (ii) when a Eurocurrency-Interest Period begins
on a day which has no numerically corresponding day in the calendar month during
which such Eurocurrency-Interest Period is to end, it shall end on the last
Business Day of such calendar month, and (iii) no Interest Period shall extend
beyond the maturity date set forth in the Note to which such Interest Period is
to apply.
"Interest Rate Protection Agreement(s)" shall mean any interest rate,
swap, cap, floor, collar, forward rate agreement or other rate protection
transaction, or any combination of such transactions or agreements or any option
with respect to any such transactions or agreements now existing or hereafter
entered into by Company or any of its Subsidiaries to manage existing or
anticipated interest rate risk and not for speculative purposes.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, in respect of any Person, any loan, advance,
extension of credit, Guarantee Obligation or contribution of capital or any
investment in, or purchase or other acquisition of, stocks, notes, debentures or
other securities of such Person.
"Issuing Office" shall mean Agent's office located at One Detroit Center,
000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other office as Agent shall
designate as its Issuing Office.
"Joinder Agreement (Guaranty)" shall mean a joinder agreement in the form
attached as "Exhibit A" to the form of the Domestic Guaranty, to be executed and
delivered by any Person required to be a Guarantor pursuant to Section 7.19 of
this Agreement.
"Lead Arranger" shall mean Banc of America Securities, LLC, or such
successor lead arranger and sole book manager as appointed by the Company under
Section 12.15 hereof.
"Leased Vehicles" shall mean, as of any applicable date of determination,
the amount of advances in respect of Leases, as such amount would appear in the
footnotes to the financial statements of the Company and its Subsidiaries
prepared in accordance with GAAP or, if specifically identified, elsewhere in
such financial statements, net of depreciation on the motor
16
vehicles which are covered by Leases with respect to which such Leased Vehicles
are attributable (and if such amount is not shown net of such reserves, then net
of any reserves established by the Company as an Allowance for Credit Losses
related to such advances not expected to be recovered).
"Lease(s)" shall mean the retail agreements for the lease of motor
vehicles assigned outright by Dealers to Company or a Subsidiary of Company or
written by a Dealer in the name of the Company or a Subsidiary of Company (and
funded by Company or such Subsidiary) or assigned by Dealers to Company or a
Subsidiary of Company, as nominee for the Dealer, for administration, servicing
and collection, in each case pursuant to an applicable Dealer Agreement;
provided, however, that to the extent the Company or any Subsidiary transfers or
encumbers its interest in any Leases, such Leases shall, from and after the date
of such transfer or encumbrance, cease to be considered Leases under this
Agreement (reducing the amount of Leased Vehicles by the outstanding amount of
Leased Vehicles attributable to such Leases) unless and until such Leases are
reassigned to Company or a Subsidiary of the Company or such encumbrances have
been discharged.
"Lenders" shall mean the Banks and the Future Debt Holders (as defined in
the Intercreditor Agreement).
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Agent of
an Account Party or Account Parties requesting Agent to issue such Letter of
Credit, as amended from time to time.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Maximum Amount" shall mean as of any date of
determination the lesser of: (a) Fifteen Million Dollars ($15,000,000); or (b)
the Revolving Credit Maximum Amount as of such date, minus the aggregate
principal amount of Advances outstanding as of such date under the Revolving
Credit Notes and the Swing Line Notes.
"Letter of Credit Obligation(s)" shall mean the obligation of an Account
Party or Account Parties under this Agreement and each Letter of Credit
Agreement to reimburse the Agent for each payment made by the Agent under the
Letter of Credit issued pursuant to such Letter of Credit Agreement, together
with all other sums, fees, charges and amounts which may be owing to the Agent
under such Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Agent in its capacity hereunder as issuer of a Letter of Credit as a
result of a draft or other demand for payment under any Letter of Credit.
"Letter(s) of Credit" shall mean any standby or documentary letters of
credit issued by Agent at the request of or for the account of an Account Party
or Account Parties pursuant to Article 3 hereof, including without limitation
any Existing Letters of Credit.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and
17
leaseback transaction, or any other type of lien, charge or encumbrance, whether
based on common law, statute or contract; provided that the term "Lien" shall
not include any negative pledge clauses in agreements relating to the borrowing
of money or the obligation of Company or any of its Subsidiaries (a) to remit
monies held by it in connection with dealer holdbacks (including, without
limitation, with respect to Installment Contracts), claims or refunds under
insurance policies or claims or refunds under service contracts or (b) to make
deposits in trust or otherwise as required under re-insurance agreements and
pursuant to state regulatory requirements, unless the Company or any of its
Subsidiaries, as the case may be, has encumbered its interest in such monies or
deposits or in other property of the Company to secure such obligations.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Guaranties, the Letter of Credit Agreements, the Collateral Documents and any
other documents, instruments or agreements executed pursuant to or in connection
with any such document, or this Agreement, as such documents may be amended,
renewed, replaced or extended from time to time.
"Luxembourg Subsidiary" shall mean a wholly-owned direct or indirect
Subsidiary of the Company organized under the laws of Luxembourg.
"Majority Banks" shall mean at any time Banks holding 66-2/3% of the
aggregate principal amount of the Indebtedness then outstanding under the Notes
(provided that, for purposes of determining Majority Banks hereunder,
Indebtedness outstanding under the Swing Line Notes shall be allocated among the
Banks based on their respective Percentages of the Revolving Credit), or, if no
Indebtedness is then outstanding, Banks holding 66-2/3% of the Percentages.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business or financial condition of the Company and its Subsidiaries, taken as a
whole, (b) the ability of each of the Company and its Subsidiaries to perform
their material obligations under this Agreement, the Notes (if issued) or any
other Loan Document to which any of them is a party, as the case may be, or (c)
the validity or enforceability of any material provision of this Agreement, any
of the Notes (if issued) or any of the other Loan Documents (as determined by
Agent and the Majority Banks) or the rights or remedies of the Agent or the
Banks hereunder or thereunder.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., and its successors.
"Multiemployer Plan" shall mean any Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Dealer Holdbacks" shall mean, as of any applicable date of
determination, (a) Gross Dealer Holdbacks minus (b) Advances to Dealers.
"Net Hedging Obligation(s)" shall mean, in respect of any one or more
Hedging Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Agreements, (a) for any
date on or after the date such Hedging Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the xxxx to market value(s) for such Hedging Agreements,
as
18
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Hedging Agreements, which
may include any Bank or Affiliate of such Bank.
"New Bank" is defined in clause (b) of Section 2.17.
"New Bank Addendum" shall mean an addendum, substantially in the form of
Exhibit M hereto, to be executed and delivered by each Bank becoming a party to
this Agreement pursuant to Section 2.17 hereof.
"New Restructuring" shall mean a series of transfers, mergers,
amalgamations, dissolutions, liquidations and similar transactions involving
ownership interests (but not involving any transfers of Advances to Dealers,
Installment Contracts or other financial assets, other than to the Company or a
Significant Domestic Subsidiary) including without limitation the transfer of
the ownership of all of the Company's Foreign Subsidiaries (including the US
LLC) by the T&C Subsidiary to CAC South Dakota and the liquidation of the T&C
Subsidiary (including the release by the Banks of the T&C Subsidiary from its
obligations under the Guaranty and any Collateral Document, and the release of
the Lien over the equity interests of the T&C Subsidiary) and the release of
those debentures, liens or security agreements executed in favor of the Agent by
the Permitted Borrowers (as defined in the Prior Credit Agreement), and the
conversion of CAC Scotland from a "controlled foreign corporation" (for purposes
of Section 956 of the Internal Revenue Code) to a branch of CAC South Dakota
(pursuant to a "check-the-box election"), such transactions resulting in the
restructuring of the ownership of the Company's foreign subsidiaries as shown on
Exhibit R to the Credit Agreement.
"Non-Specified Interest" is defined in the Titling Subsidiary Agreements.
"Notes" shall mean the Revolving Credit Notes or the Swing Line Notes, or
any or all of the Revolving Credit Notes, and the Swing Line Notes as the
context indicates, and in the absence of such indication, all such notes.
"Notes Receivable" shall mean, as of any applicable date of determination,
the aggregate amount outstanding under promissory notes issued by Dealers to
Company or any of its Subsidiaries.
"Operating Lease" shall mean any lease other than a Capitalized Lease.
"Operating Rental" shall mean all rental payments that the Company or any
of its Subsidiaries, as lessee, is required to make under the terms of any
Operating Lease.
"Outright Contract Balance" shall mean, as of any applicable date of
determination, (i) the balance owing in respect of Installment Contracts
purchased under Outright Dealer Agreements, minus (ii) unearned income with
respect to such Installment Contracts and the allowance for credit losses with
respect to such Installment Contracts, in each case as such amount would be
included in the financial statements and related footnotes of the Company and
its Subsidiaries prepared in accordance with GAAP and reported in the applicable
Borrowing Base Certificate, and if such amount is not shown net of such
reserves, then net of any reserves established by the Company as an allowance
for credit losses related to such Installment
19
Contracts not expected to be recovered, provided that, the Outright Contract
Balance shall not include (a) any Installment Contracts transferred or
encumbered pursuant to a Permitted Securitization or assigned to a Securitized
Pool (whether or not attributable to the Company under GAAP), unless and until
such Installment Contracts are reassigned to the Company or a domestic
Subsidiary of the Company or such encumbrances are discharged or (b) Charged-Off
Contracts. For purposes of this definition, "Charged-Off Contracts" shall mean
those Installment Contracts which the Company or any of its Subsidiaries has
written off consistent with the Company's write off policy described in its
periodic reports filed with the Security and Exchange Commission.
"Outright Dealer Agreement(s)" shall mean Dealer Agreements referred to in
clause (ii) of the definition of Dealer Agreements.
"PBGC" shall mean the Pension Benefit Guaranty Corporation under ERISA, or
any successor corporation.
"Pension Plan(s)" shall mean all employee pension benefit plans of Company
or any ERISA Affiliate, as defined in Section 3(2) of ERISA.
"Percentage" shall mean, with respect to any Bank, its percentage share,
as set forth on Exhibit D hereto (and stated as a percentage and/or a dollar
amount), of the Letters of Credit, and/or the Revolving Credit, as the context
indicates, as such Exhibit may be revised from time to time by Agent in
accordance with Section 13.8(d) hereof.
"Permitted Acquisition" shall mean any acquisition by the Company or any
of its Subsidiaries (other than the Titling Subsidiary or any Special Purpose
Subsidiary), including any such acquisition conducted as a Permitted Merger, of
assets, businesses or business interests or shares of stock or other ownership
interests of or in any other Person conducted in accordance with the following
requirements:
(a) not less than twenty (20) nor more than ninety (90) days prior
to the commencement of each such proposed acquisition, the Company
provides written notice thereof to Agent (with drafts of all material
documents pertaining to such proposed acquisition to be furnished to Agent
within not less than twenty (20) days prior to such proposed acquisition);
(b) on the date of any such acquisition, all necessary or
appropriate governmental, quasi-governmental, agency, regulatory or
similar approvals of applicable jurisdictions (or the respective agencies,
instrumentalities or political subdivisions, as applicable, of such
jurisdictions) and all necessary or appropriate non-governmental and other
third-party approvals which, in each case, are material to such
acquisition have been obtained and are in effect, and the Company and its
Subsidiaries are in full compliance therewith, and all necessary or
appropriate declarations, registrations or other filings with any court,
governmental or regulatory authority, securities exchange or any other
person have been made;
20
(c) the aggregate value of all of such acquisitions, including the
value of any proposed new acquisition, conducted while this Agreement
remains in effect as Permitted Acquisitions (but excluding any acquisition
conducted with the specific written approval of the Majority Banks, and
not as a Permitted Acquisition hereunder) computed on the basis of total
acquisition consideration paid or incurred, or to be paid or incurred, by
the Company or its Subsidiaries with respect thereto, including, in the
case of an acquisition of assets, all indebtedness which is assumed or to
which such assets are subject and, in the case of the acquisition of stock
or other ownership interests, all indebtedness to which such stock or
other ownership interests, are subject, shall not exceed Ten Million
Dollars ($10,000,000), determined as of the date of such acquisition;
(d) within thirty (30) days after any such acquisition has been
completed the Company shall deliver to the Agent executed copies of all
material documents pertaining to such acquisition, and the Company, its
Subsidiaries and any of the corporate entities involved in such
acquisition shall execute or cause to be executed, and provide or cause to
be provided to Agent, for the Banks, such documents and instruments
(including without limitation, the Guaranties as required by Section 7.19
hereof, and opinions of counsel, amendments, acknowledgments, consents and
evidence of approvals or filings) as reasonably requested by Agent, if
any; and
(e) both immediately before and after such acquisition, no Default
or Event of Default (whether or not related to such acquisition), has
occurred and is continuing.
"Permitted Guaranties" shall mean (i) any Guarantee Obligation provided by
the Company, for the benefit of a Subsidiary, covering the Debt or other
obligation or liability permitted to be incurred or entered into by such
Subsidiary, and any other Guarantee Obligation of the Company in the ordinary
course of business, (ii) any guaranties provided by a Significant Domestic
Subsidiary of the Company of the Debt outstanding to the Future Debt Holders,
provided that concurrently with the giving of any such guaranty, such Subsidiary
shall enter into a Guaranty on substantially similar terms and providing an
equal and ratable benefit to the Banks or (iii) any agreement or other
undertaking by the Company, as servicer or administrative agent of the
Installment Contracts covered by a Permitted Securitization, to advance funds
equal to the interest component of obligations issued as part of a Permitted
Securitization and payable from collections on such Installment Contracts, such
payments to be repayable to Company on a priority basis from such collections,
sales or other dispositions, provided that the aggregate amount of such advances
under this clause (iii) at any time outstanding shall not exceed $1,500,000 and
(iv) other Guarantee Obligations of the Company or any of the Subsidiaries in an
aggregate amount not to exceed, at any time outstanding, $1,000,000.
"Permitted Investments" shall mean:
(a) Investments in direct obligations of, or obligations
guarantied by, the United States of America or any agency of the United
States of America the obligations of which agency carry the full faith and
credit of the United States of America, provided that such obligations
mature within one (1) year from the date of acquisition thereof;
21
(b) Investments in any obligation of any state or municipality
thereof that at the time of acquisition thereof have an assigned rating of
"A" or higher by S&P (or an equivalent or higher rating by another credit
rating agency of recognized national standing in the United States of
America), provided that such obligations mature within one (1) year from
the date of acquisition thereof;
(c) Investments in negotiable certificates of deposit issued by
commercial banks organized under the laws of the United States of America
or any state thereof, having capital, surplus and undivided profits
aggregating at least Fifty Million Dollars ($50,000,000) and the long-term
unsecured debt obligations of which are rated "A" or higher by S&P (or an
equivalent or higher rating by another credit rating agency of recognized
national standing in the United States of America), provided that such
certificates of deposit mature within one (1) year from the date of
acquisition thereof;
(d) Investments in corporate debt obligations of corporations
organized under the laws of the United States of America or any state
thereof that at the time of acquisition thereof have an assigned rating of
"A" or higher by S&P (or an equivalent or higher rating by another credit
rating agency of recognized national standing in the United States of
America); and
(e) Investments in preferred stock of corporations organized under
the laws of the United States of America or any state thereof that have an
assigned rating of "A" or higher by S&P (or an equivalent or higher rating
by another credit rating agency of recognized national standing in the
United States of America); and
(f) Investments by any foreign subsidiary in obligations similar
in nature, term and credit quality to those enumerated in paragraphs (a)
through (e) above, except that the applicable jurisdiction of formation or
operation shall be substituted for the United States of America in each
case.
"Permitted Liens" shall mean, with respect to any Person:
(a) any Liens granted under or established by this Agreement or
the other Loan Documents;
(b) Liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued,
provided that such provision for the payment of all such taxes known to
such Person has been made on the books of such Person as may be required
by GAAP;
(c) mechanics', materialmen's, banker's, carriers', warehousemen's
and similar Liens arising in the ordinary course of business and securing
obligations of such Person that are not overdue for a period of more than
60 days or are being contested in good faith by appropriate proceedings
diligently pursued, provided that in the case of any such contest (i) any
proceedings commenced for the enforcement of such liens and encumbrances
shall have been duly suspended; and (ii) such provision for the payment of
such liens and encumbrances has been made on the books of such Person as
may be required by GAAP;
22
(d) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions (subject to the applicable
provisions of this Agreement) and social security benefits which are not
overdue or are being contested in good faith by appropriate proceedings
diligently pursued, provided that in the case of any such contest (i) any
proceedings commenced for the enforcement of such Liens shall have been
duly suspended; and (ii) such provision for the payment of such Liens has
been made on the books of such Person as may be required by GAAP;
(e) (i) Liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection with
progress payments or advance payments due under contracts with the United
States or any foreign government or any agency thereof entered into in the
ordinary course of business and (ii) liens incurred or deposits made in
the ordinary course of business to secure the performance of statutory
obligations, bids, leases, fee and expense arrangements with trustees and
fiscal agents and other similar obligations (exclusive of obligations
incurred in connection with the borrowing of money, any lease-purchase
arrangements or the payment of the deferred purchase price of property),
provided that full provision for the payment of all such obligations set
forth in clauses (i) and (ii) has been made on the books of such Person as
may be required by GAAP;
(f) Liens in the nature of any minor imperfections of title,
including but not limited to easements, covenants, rights-of-way or other
similar restrictions, which, either individually or in the aggregate,
could not reasonably be expected to materially adversely affect the
present or future use of the property to which they relate, or to have a
material adverse effect on the sale or lease of such property, or (iii)
render title thereto unmarketable;
(g) Liens (i) arising from judicial attachments and judgments,
(ii) securing appeal bonds or supersedeas bonds, and (iii) arising in
connection with court proceedings (including, without limitation, surety
bonds and letters of credit or any other instrument serving a similar
purpose), provided that (1) the execution or other enforcement of such
Liens is effectively stayed, (2) the claims secured thereby are being
contested in good faith and by appropriate proceedings, (3) adequate book
reserves in accordance with GAAP shall have been established and
maintained and shall exist with respect thereto, (4) such Liens do not in
the aggregate detract from the value of such property and (5) the title of
the Company or a Subsidiary, as the case may be, to, and its right to use,
such property, is not materially adversely affected thereby; and
(h) those Liens of the Company or its Subsidiaries identified in
Schedule 8.6 hereto.
"Permitted Merger(s)" shall mean any merger of (i) any Subsidiary
(including, without limitation, a Guarantor, but excluding any Special Purpose
Subsidiary) or any Person which is being acquired pursuant to a Permitted
Acquisition into Company or (ii) the merger of any Subsidiary or any Person
which is being acquired pursuant to a Permitted Acquisition (other than a
Guarantor) into any other Subsidiary (excluding any Special Purpose Subsidiary)
or any Person
23
which is being acquired pursuant to a Permitted Acquisition, which, in each
case, satisfies and/or is conducted in accordance with the following
requirements:
(a) not less than twenty (20) nor more than ninety (90) days prior
to the commencement of such proposed merger, Company provides written
notice thereof to Agent (with drafts of all material documents pertaining
to such proposed merger to be furnished to Agent not less than twenty (20)
days prior to such proposed merger);
(b) immediately following and as the direct result of any such
merger, the surviving or successor entity has succeeded by operation of
applicable law (as confirmed by an opinion(s) of counsel in form and
substance satisfactory to the Majority Banks, if requested by Agent or the
Majority Banks) to all of the obligations of the non-surviving entity
under this Agreement and the other Loan Documents, and to all of the
property rights of such non-surviving entity subject to the applicable
Loan Documents;
(c) concurrently with such proposed merger, the surviving entity
involved in such merger shall execute or cause to be executed, and provide
or cause to be provided to Agent, for the Banks, such documents and
instruments (including without limitation opinions of counsel, amendments,
acknowledgments and consents), if any, as reasonably requested by the
Majority Banks; and
(d) both immediately before and immediately after such merger, no
Default or Event of Default (whether or not related to such merger), has
occurred and is continuing.
"Permitted Prepayment" shall mean any prepayment of Future Debt (x) which
is funded solely with the proceeds of (i) new cash equity in the form of
nonconvertible common shares, (ii) Subordinated Debt, or (iii) substitute Debt
permitted hereunder which satisfies the following conditions:
(a) such Debt shall have a term extending at least beyond the
Revolving Credit Maturity Date then in effect, with an amortization
schedule not greater than level amortization to maturity (but with no
principal payments required for a period of at least 12 months) and with
no provision for mandatory early repayment except (x) upon default, (y)
following a change in control or (z) following the sale of any material
portion of the assets of the Company or any of its Subsidiaries, to the
extent of the proceeds of such sale;
(b) such Debt shall be unsecured, or, subject to the Intercreditor
Agreement, secured;
(c) both immediately before and immediately after such additional
Debt is incurred, no Default or Event of Default (whether or not related
to such additional Debt, and taking into account the incurring of such
additional Debt) has occurred and is continuing; and
(d) if such additional Debt shall be issued pursuant to loan
documents containing covenants which are more restrictive than the
covenants contained in this
24
Agreement, Company shall, upon the written request of the Majority Banks,
enter into amendments to this Agreement to extend the benefit of such
covenants to the Banks.
in each case, issued concurrently with such prepayment or (y) which has been
approved by the Majority Banks. Solely for purposes of the definition of
Permitted Prepayment, any Bank which fails, within fifteen (15) Business Days of
receipt of written notice from the Company of its intent to make such prepayment
(identifying the Debt to be prepaid, and the amount of any such prepayment,
captioned "notice of prepayment" and stating that approval is deemed to be given
if an objection is not made within fifteen (15) Business Days of receipt of such
notice), to object in writing to the Company's proposed prepayment shall be
deemed to have approved such prepayment.
"Permitted Repurchase" shall mean any purchases by the Company of its
capital stock during the period commencing on the Effective Date and ending on
the Revolving Credit Maturity Date then in effect, in an aggregate amount for
all such purchases not to exceed $100,000,000; provided that at the time of any
such purchase no Default or Event of Default has occurred and is continuing or
would occur after giving effect thereto.
"Permitted Securitization(s)" shall mean each transfer or encumbrance
(each a "disposition") of specific Advances to Dealers (and any interest in and
lien on the Installment Contracts, motor vehicles, and other rights and
financial assets relating thereto) or of specific Installment Contracts (and any
interest in and lien on motor vehicles and other rights and financial assets
relating thereto) arising under Outright Dealer Agreements or (subject to the
terms hereof) of Pools of such financial assets, in each case by the Company or
one or more of its Subsidiaries to one or more Special Purpose Subsidiaries
conducted in accordance with the following requirements:
(a) Each disposition shall identify with reasonable certainty the
specific Advances to Dealers or Installment Contracts covered by such
disposition; and (x) such Advances to Dealers, and the Installment
Contracts, motor vehicles or other rights relating thereto shall have
performance and other characteristics so that the quality of such Advances
to Dealers, Installment Contracts, as the case may be, is comparable to,
but not materially better than, the overall quality of the Company's
Advances to Dealers or Installment Contracts, as applicable, as determined
in good faith by the Company in its reasonable discretion or (y) with
respect to any such assets assigned to an uncapped Pool subsequent to such
Pool becoming a Securitized Pool in conformity with the standards set
forth in clause (x) of this subparagraph (a), the assets covered by such
dispositions were assigned to such Pool in the order such assets were
originated and without the exercise of any discretion by the Company;
(b) Both before and after giving effect to such disposition (and
taking into account any reduction in the Indebtedness with the proceeds of
such disposition as required hereunder), the Company shall be in
compliance with the Borrowing Base Limitation, and, in the case of any
disposition to an uncapped Securitized Pool, none of the assets covered by
such disposition were included, prior to such disposition, in the most
recent Borrowing Base Certificate delivered to Agent under Section 7.3(d);
25
(c) Each such Securitization Transaction shall be structured on
the basis of the issuance of Debt or other similar securities by one or
more Special Purpose Subsidiaries which Debt or other securities shall be
without recourse to Company and its other Subsidiaries, except to the
extent of normal and customary representations and warranties given as of
the date of each such disposition, and not as continuing representations
and warranties, and otherwise on normal and customary terms and conditions
for comparable asset based securitization transactions, which may include
Cleanup Call provisions (it being understood that, for purposes of this
subparagraph (c), the terms and conditions governing Securitization
Transactions made by the Company prior to January 1, 2004 shall be deemed
to have been made on normal and customary terms and conditions);
(d) Concurrently with each such disposition (except for
dispositions to an uncapped Securitized Pool whether or not pursuant to a
revolving, expansion or relending feature included in a Prior
Securitization (for purposes of this definition, a "Revolving Feature"),
in each case to the extent that no disposition proceeds are available as a
result of such dispositions for application hereunder), the net proceeds
of such disposition:
shall be applied to reduce the principal balance outstanding under
the Revolving Credit (to the extent then outstanding, and including
the aggregate amount of drawings made under any Letter of Credit for
which the Agent has not received full payment) by the amount of such
net proceeds, subject to the right to reborrow in accordance with
this Agreement;
provided, however, that to the extent that, on the date any
reduction of the principal balance outstanding under the Revolving
Credit shall be required under this clause (d), the Indebtedness
under the Revolving Credit is being carried, in whole or in part, at
the Eurocurrency-based Rate and no Default or Event of Default has
occurred and is continuing, the Company may, after prepaying that
portion of the Indebtedness then carried at the Prime-based Rate,
deposit the amount of such required principal reductions in a cash
collateral account to be held by the Agent, for and on behalf of the
Banks (which shall be an interest-bearing account), on such terms
and conditions as are reasonably acceptable to Agent and the
Majority Banks and, subject to the terms and conditions of such cash
collateral account, sums on deposit therein shall be applied (until
exhausted) to reduce the principal balance of the Revolving Credit
on the last day of each Interest Period attributable to the
applicable Eurocurrency-based Advances of the Revolving Credit; and
provided further that Agent and the Banks acknowledge that any
proceeds of any such Debt incurred pursuant to a Permitted
Securitization remaining after the application of such proceeds as
required by this clause (d) may be held or invested in Permitted
Investments or otherwise invested or applied in any manner not
prohibited by this Agreement; and
(e) Both immediately before and after such disposition, no Default
or Event of Default (whether or not related to such disposition) has
occurred and is continuing.
In connection with each Permitted Securitization to be conducted hereunder, the
Company shall provide the following:
26
(i) to the Agent, (x) not less than three (3) Business Days
prior to the date of consummation thereof (or such lesser period as
approved by Agent) or (y) solely in the case of dispositions to
uncapped Securitized Pools pursuant to a Revolving Feature, not less
than three (3) Business Days prior to the date of the release of the
financial assets covered by such disposition (or such lesser period
as approved by Agent), (I) a certification that, after giving effect
to such disposition, it will be in compliance with the Borrowing
Base Limitation and that none of the assets covered by such
disposition were included in the most recent quarterly Borrowing
Base Certificate delivered to Agent under Section 7.3(d) hereof
prior to such disposition or (II) a new Borrowing Base Certificate
(and any supporting information reasonably required by the Agent)
dated as of the proposed date of the applicable disposition or
release and, based on projected information, giving effect to such
disposition and confirming compliance with the Borrowing Base
Limitation;
(ii) to the Agent and the Banks (x) not less than five (5)
Business Days prior to the date of consummation thereof (or such
lesser period as approved by Agent), proposed drafts of the material
Securitization Documents covering the applicable Securitization
Transaction (and the term sheet or commitment relating thereto) and
(y) within ten (10) Business Days following the consummation
thereof, executed copies of such Securitization Documents,
including, if applicable, a summary of any material changes from the
draft documents delivered to Agent and the Banks prior thereto,
except that if such Securitization Transaction consists solely of
dispositions pursuant to a Revolving Feature, the Company shall only
be required (I) under clause (x) of this subparagraph (ii), to
deliver to Agent, not less than three (3) Business Days prior to the
consummation thereof (or such lesser period as approved by Agent), a
certification that the applicable Securitization Documents remain in
effect substantially in the form previously furnished to Agent and
the Banks (or identifying any material changes, and attaching any
proposed amendment, supplement or other document delivered under
such prior Securitization Documents to effect such dispositions) and
(II) under clause (y) of this subparagraph (ii), to deliver to Agent
executed copies of any such amendment, supplement or other document;
(iii) except in the case of dispositions to uncapped
Securitized Pools, to the Agent, not less than three (3) Business
Days prior to the date of consummation thereof (or such lesser
period as approved by Agent), (I) a schedule substantially in the
form delivered for Permitted Securitizations under the Prior Credit
Agreement identifying the specific Advances to Dealers and the
Installment Contracts proposed to be covered by such transaction,
accompanied by (II) a request that the Agent release such assets
from the Lien of the Security Agreement and a certification that the
proposed Securitization Transaction (and related dispositions)
constitutes a Permitted Securitization hereunder, whereupon the
financial assets covered by such dispositions which have been
originated prior to the date of such release shall be promptly
released by Agent; and in the case of a disposition to an uncapped
Securitized Pool in a Prior Securitization, all remaining financial
assets assigned thereafter to the applicable uncapped
27
Securitized Pool in the ordinary course, whether originated before
or after the date of release, shall be so released and the Lien of
the Security Agreement shall be deemed not to attach to any such
assets when the Company or any of its Subsidiaries subsequently
acquires rights in, to or under such assets and such assets are
assigned to an uncapped Securitized Pool; and
(iv) only if the applicable Securitization Transaction is not
related to a Prior Securitization or involves the disposition or
release of any assets which were covered by the most recent
quarterly Borrowing Base Certificate delivered to Agent under
Section 7.3(d) hereof and the aggregate net book value of the
Advances to Dealers or Installment Contracts covered by such
dispositions (or related series of dispositions) in any calendar
month exceeds or would exceed (after giving effect to any proposed
disposition) Seven Million Five Hundred Thousand Dollars
($7,500,000), collection information regarding the Installment
Contracts proposed to be covered by such transaction (with evidence
supporting its determination under clause (x) of subparagraph (a) of
this definition, if applicable, including without limitation a
"static pool analysis" comparable to the static pool analysis
required to be delivered under Section 7.3(c) hereof with respect to
such Installment Contracts).
"Permitted Transfer(s)" shall mean (i) any sale, assignment, transfer or
other disposition of inventory or worn-out or obsolete machinery, equipment or
other such personal property in the ordinary course of business, (ii) any
transfer of property by a Subsidiary to the Company or by the Company or any
Subsidiary to a Domestic Subsidiary (excluding the Titling Subsidiary or any
Special Purpose Subsidiary) provided that in each case, immediately before and
after such transfer, no Default or Event of Default shall have occurred and be
continuing, (iii) any transfer of property by the Company or a Domestic
Subsidiary to a Foreign Subsidiary, pursuant to the New Restructuring; (iv) any
transfer of the capital stock of a Special Purpose Subsidiary to the Company or
to any other Subsidiary which is not a Special Purpose Subsidiary and (v) any
transfer of funds or other property paid as a dividend by a Subsidiary to the
Company or any other Subsidiary to the extent permitted by clause (i) of Section
8.15 hereof.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated organization, joint
venture, joint stock company, or a government or any agency or political
subdivision thereof or other entity of any kind.
"Pools" shall mean a grouping on the books and records of the Company or
any of its Subsidiaries of Advances to Dealers or Installment Contracts
originated or to be originated with the Company or any of its Subsidiaries by a
Dealer and bearing the same pool identification number assigned by the Company's
computer system, with (x) an "uncapped" Pool being a Pool which is not reflected
on such books and records as capped and to which additional Advances to Dealers
and related financial assets may be added and (y) a Pool being capped when the
number of the applicable financial assets in such Pool has reached the limit
established from time to time between the relevant Dealer and the Company or
Subsidiary, as applicable, in the ordinary course of business and consistent
with the Company's normal customs and practices in effect as of the date hereof,
such that no further financial assets may be added to such Pool.
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"Prime Rate" shall mean the per annum interest rate established by Agent
as its prime rate for its borrowers as such rate may vary from time to time,
which rate is not necessarily the lowest rate on loans made by Agent at any such
time.
"Prime-based Advance" shall mean an Advance (including a Swing Line
Advance) which bears interest at the Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which is
equal to the sum of the Applicable Margin plus the greater of (i) the Prime
Rate, and (ii) the Alternate Base Rate.
"Prior Credit Agreement" is defined in Recital A to this Agreement.
"Prior Securitization" shall mean a Permitted Securitization (and the
related Securitization Documents) consummated under the Credit Agreement prior
to the particular disposition, release or other transaction then being
considered.
"Prohibited Transaction" shall mean any transaction involving a Pension
Plan which constitutes a "prohibited transaction" under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest at
the Quoted Rate.
"Refunded Swing Line Advance" is defined in Section 2.5(e) hereof.
"Reportable Event" shall mean a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations promulgated thereunder, which is
material to the Company and its Subsidiaries, taken as a whole.
"Request for Advance" shall mean a Request for Advance of the Revolving
Credit issued by Company and countersigned by the Company under Section 2.3 of
this Agreement in the form annexed hereto as Exhibit A.
"Revolving Credit" shall mean the revolving credit loan to be advanced to
the Company by the Banks pursuant to Section 2 hereof, in an amount not to
exceed the Revolving Credit Maximum Amount.
"Revolving Credit Facility Fee" shall mean the facility fee payable to
Agent for distribution to the Banks pursuant to Section 2.13, hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
June 9, 2006, as such date may be extended from time to time pursuant to Section
2.16 hereof, and (ii) the date on which the Revolving Credit Maximum Amount
shall be terminated pursuant to Section 2.15 or 9.2 hereof.
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"Revolving Credit Maximum Amount" shall mean One Hundred Thirty Five
Million Dollars ($135,000,000), subject to any increases in the Revolving Credit
Maximum Amount pursuant to Section 2.18 of this Agreement, by an amount not to
exceed the Revolving Credit Optional Increase, and subject to any reductions or
termination of the Revolving Credit Maximum Amount under Sections 2.15 or 9.2 of
this Agreement.
"Revolving Credit Notes" shall mean the Notes described in Section 2.1,
hereof, made or to be made by Company to each of the Banks in the form annexed
to this Agreement as Exhibit C, as such Notes may be amended, renewed, replaced
or extended from time to time.
"Revolving Credit Optional Increase" shall mean an amount up to Forty
Million Dollars ($40,000,000), minus the portions thereof applied from time to
time after the Effective Date under Section 2.17 hereof to increase the
Revolving Credit Maximum Amount.
"Scottish Partnership" shall mean CAC Scotland, a partnership established
by the Company under the law of Scotland and which is a wholly-owned Subsidiary
of the Company.
"Securitization Documents" shall mean any note purchase agreement (and any
notes issued thereunder), transfer or security document, master trust or other
trust agreement, servicing agreement, indenture, pooling agreement, contribution
or sale agreement or other document, instruments and certificates executed and
delivered, subject to the terms of this Agreement, to evidence or secure (or
otherwise relating to) a Permitted Securitization, as the same may be amended
from time to time (subject to the terms hereof) and any and all other documents
executed in connection therewith or replacement or renewal thereof.
"Securitization Transaction" shall mean a transfer of, or grant of a Lien
on, Advances to Dealers, Installment Contracts, accounts receivable and/or other
financial assets by the Company or any Subsidiary to a Special Purpose
Subsidiary or other special purpose or limited purpose entity and the issuance
(whether by such Special Purpose Subsidiary or other special purpose or limited
purpose entity or any other Person) of Debt or of any securities secured
directly or indirectly by interests in, or of trust certificates, or other
securities directly or indirectly evidencing interests in, such Advances to
Dealers, Installment Contracts, accounts receivable and/or other financial
assets.
"Securitized Pool(s)" shall mean a Pool, whether capped or uncapped, which
has been transferred to a Permitted Securitization, including a Prior
Securitization.
"Security Agreement" is defined in the definition of Collateral Documents.
"Shares", "share capital", "capital stock", "stock" and words of similar
import shall mean and refer to the equity capital interest under applicable law
of any Person in a corporation, howsoever such interest is created or arises,
whether such capital consists of common stock, preferred stock or preference
shares, or other stock, and whether such capital is evidenced by a certificate,
share register entry or otherwise.
"Significant Subsidiary(ies)" shall mean, as of any date of determination,
any Subsidiary (i) which is designated by the Company (in writing to Agent) as a
Significant Subsidiary or (ii) which has total assets (but excluding in the
calculation of total assets, for any Subsidiary, any
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assets which constitute Intercompany Loans, Advances and Investments by such
Subsidiary to Company outstanding from time to time and any assets which are
acquired or arise pursuant to a Permitted Securitization, including any equity
interest in a Special Purpose Subsidiary) in excess of one percent (1%) of
Company's Consolidated Tangible Net Worth (or five percent (5%) in the case of
CAC Reinsurance, Ltd.), determined as of the end of each fiscal quarter based
upon the financial statements required to be delivered under Section 7.3(b) or
7.3(c) hereof, as the case may be (and giving effect to any changes in net worth
shown in such financial statements on the required date of delivery thereof);
provided, however, that none of any Special Purpose Subsidiary, the Titling
Subsidiary, the Scottish Partnership, the US LLC (so long as it is considered a
Foreign Subsidiary hereunder) or the Luxembourg Subsidiary shall be a
Significant Subsidiary, whether or not it satisfies the aforesaid net worth
test.
"Significant Domestic Subsidiaries" shall mean those Domestic Subsidiaries
identified as such on Schedule 6.5 hereto, and any Domestic Subsidiaries which
become Significant Subsidiaries subsequent to the date hereof.
"Single Employer Plan" shall mean any Pension Plan which does not
constitute a Multiemployer Plan.
"Special Purpose Subsidiary(ies)" shall mean any wholly-owned direct or
indirect Subsidiary of the Company established for the sole purpose of
conducting one or more Permitted Securitizations and otherwise established and
operated in accordance with customary industry practices.
"Specified Interest" is defined in the Titling Subsidiary Agreements.
"Subordinated Debt" shall mean any unsecured Debt subordinated to the
prior payment and discharge in full of the Indebtedness, on written terms and
conditions approved by and acceptable to each of the Banks, in their sole
discretion, and issued pursuant to documentation which is less restrictive (as
determined by Agent and the Banks in their reasonable discretion) than the
covenants contained in this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company, partnership (whether
general or limited) or any other business entity of which more than fifty
percent (50%) of the outstanding voting stock, share capital, membership or
other interests, as the case may be, is owned either directly or indirectly by
any Person or one or more of its Subsidiaries, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by any Person and/or its Subsidiaries. Unless otherwise
specified to the contrary herein or the context otherwise requires,
Subsidiary(ies) shall include the Titling Subsidiary and shall refer to each
Person which is a Subsidiary of the Company and "100% Subsidiary(ies) shall mean
any Subsidiary whose stock or partnership, membership or other equity interests
(other than directors' or qualifying shares or other interests to the extent
required under applicable law) are owned directly or indirectly entirely by the
Company.
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"Swing Line" shall mean the revolving credit loan to be advanced to the
Company by the Swing Line Bank pursuant to Section 2.5 hereof, in an aggregate
amount (subject to the terms hereof) not to exceed, at any one time outstanding,
the Swing Line Maximum Amount.
"Swing Line Advance" shall mean an Advance made by Swing Line Bank to
Company pursuant to Section 2.5 hereof.
"Swing Line Bank" shall mean Comerica Bank, in its capacity as lender
under Section 2.5 of this Agreement, and its successors and assigns.
"Swing Line Maximum Amount" shall mean Fifteen Million Dollars
($15,000,000).
"Swing Line Notes" shall mean the swing line notes described in Section
2.5 hereof, made by Company to Swing Line Bank in the form annexed hereto as
Exhibit E, as such Notes may be amended or supplemented from time to time, and
any notes issued in substitution, replacement or renewal thereof from time to
time.
"S&P" shall mean Standard & Poor's Ratings Group, and its successors.
"Titling Subsidiary" shall mean Auto Lease Services LLC, a Delaware
limited liability company controlled by the Company and a direct Subsidiary of
the Company.
"Titling Subsidiary Agreements" shall mean that certain Limited Liability
Company Agreement of the Titling Subsidiary, dated and effective as of March 1,
2001 (and the related Certificate of Formation, as therein defined), and that
certain Administrative Agency Agreement, dated and effective as of March 1, 2001
among the Company and the Titling Subsidiary, each as amended (subject to the
terms hereof) from time to time.
"Trusts" shall mean the trusts established in connection with the
Company's vehicle service contract business or other ancillary product business
and required to be Consolidated with the Company and its Subsidiaries under GAAP
pursuant to FIN 46/46R.
"T&C Subsidiary" shall mean CAC (TCI) Ltd., a wholly-owned Subsidiary of
the Company existing under the laws of the Turks & Caicos Islands.
"Unearned Finance Charges" shall mean, as of any applicable date of
determination, the unearned finance charges utilized in deriving Installment
Contract receivables, net on the Consolidated balance sheet of the Company and
its Subsidiaries, as disclosed in the footnotes thereto; provided that Unearned
Finance Charges shall not include unearned finance charges attributable to
retail installment contracts which are not at such time "Installment Contracts",
due to the proviso in the definition of such term in this Agreement.
"US LLC" shall mean that certain limited liability company chartered in
the United States and established as wholly-owned Subsidiary of Company.
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2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Bank severally and for
itself alone agrees to make Advances of the Revolving Credit to the Company from
time to time on any Business Day during the period from the Effective Date
hereof until (but excluding) the Revolving Credit Maturity Date in an aggregate
amount, in Dollars, not to exceed at any one time outstanding such Bank's
Percentage of the Revolving Credit Maximum Amount. All of the Advances of the
Revolving Credit hereunder shall be evidenced by Revolving Credit Notes made by
Company to each of the Banks in the form attached hereto as Exhibit C, subject
to the terms and conditions of this Agreement.
2.2 Accrual of Interest and Maturity. The Revolving Credit Notes, and
all principal and interest outstanding thereunder, shall mature and become due
and payable in full on the Revolving Credit Maturity Date, and each Advance of
Indebtedness evidenced by the Revolving Credit Notes from time to time
outstanding hereunder shall, from and after the date of such Advance, bear
interest at its Applicable Interest Rate. The amount and date of each Advance,
its Applicable Interest Rate, its Interest Period, if any, and the amount and
date of any repayment shall be noted on Agent's records, which records will be
conclusive evidence thereof, absent manifest error; provided, however, that any
failure by the Agent to record any such information shall not relieve the
Company of its obligation to repay the outstanding principal amount of such
Advance, all interest accrued thereon and any amount payable with respect
thereto in accordance with the terms of this Agreement and the other Loan
Documents.
2.3 Requests for and Refundings and Conversions of Advances. Company may
request an Advance of the Revolving Credit, refund any such Advance in the same
type of Advance or convert any such Advance to any other type of Advance of the
Revolving Credit only after delivery to Agent of a Request for Advance executed
by an authorized officer of Company, subject to the following and to the
remaining provisions hereof:
(a) each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as Exhibit A, including
without limitation:
(i) the proposed date of such Advance, which must be a
Business Day;
(ii) whether such Advance is a refunding or conversion of an
outstanding Advance; and
(iii) whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a Prime-based
Advance, the first Interest Period applicable thereto.
(b) each such Request for Advance shall be delivered to Agent by
12 noon (Detroit time) three (3) Business Days prior to the proposed date of
Advance, except in the case of a Prime-based Advance, for which the Request for
Advance must be delivered by 12:00 noon (Detroit time) on such proposed date;
33
(c) without duplication, the principal amount of such requested
Advance, plus the principal amount of any other Advances of the Revolving Credit
and of the Swing Line being requested on such date, plus the principal amount of
all other Advances of the Revolving Credit and of the Swing Line then
outstanding hereunder, plus the aggregate undrawn portion of any Letters of
Credit which shall be outstanding as of the date of the requested Advance, the
aggregate face amount of Letters of Credit requested but not yet issued and the
aggregate amount of all drawings made under any Letter of Credit for which the
Agent has not received full reimbursement from the applicable Account Party,
shall not exceed the lesser of (i) the Revolving Credit Maximum Amount and (ii)
the Borrowing Base Limitation, in each case then applicable; provided however,
that, in the case of any Advance of the Revolving Credit being applied to refund
an outstanding Swing Line Advance, the aggregate principal amount of Swing Line
Advances to be refunded shall not be included for purposes of calculating the
limitation under this Section 2.3(c);
(d) the principal amount of such Advance, plus the amount of any
other outstanding Advance of the Revolving Credit to be then combined therewith
having the same Applicable Interest Rate and Interest Period, if any, shall be
(i) in the case of a Prime-based Advance at least Two Million Five Hundred
Thousand Dollars ($2,500,000) and (ii) in the case of a Eurocurrency-based
Advance at least Two Million Five Hundred Thousand Dollars ($2,500,000) (or a
larger integral multiple of One Million Dollars ($1,000,000)), and at any one
time there shall not be in effect more than five (5) Applicable Interest Rates
and Interest Periods;
(e) a Request for Advance, once delivered to Agent, shall not be
revocable by Company;
(f) each Request for Advance shall constitute and include a
certification by the Company as of the date thereof that:
(i) both before and after such Advance, the obligations of
the Company set forth in this Agreement and of Company and its
Subsidiaries in the other Loan Documents to which such Persons are
parties are valid, binding and enforceable obligations of such
Persons;
(ii) all conditions to Advances of the Revolving Credit have
been satisfied, and shall remain satisfied to the date of such
Advance (both before and after giving effect to such Advance);
(iii) there is no Default or Event of Default in existence,
and none will exist upon the making of such Advance (both before and
after giving effect to such Advance);
(iv) the representations and warranties contained in this
Agreement and the other Loan Documents are true and correct in all
material respects and shall be true and correct in all material
respects as of the making of such Advance, except to the extent such
representations and warranties (other than Section 6.12 hereof,
which shall be deemed to be remade as of the date of such Request
for purposes of this clause (iv), notwithstanding the limitation
contained therein) are not, by
34
their terms, continuing representations and warranties, but speak
only as of a specific date (both before and after giving effect to
such Advance); and
(v) the execution of such Request for Advance will not
violate the material terms and conditions of any material contract,
agreement or other borrowing of Company.
Agent, acting on behalf of the Banks, may, at its option, lend under this
Section 2 upon the telephone or e-mail request of a person previously
authorized (in a writing delivered to the Agent) by the Company to make
such requests and, in the event Agent, acting on behalf of the Banks,
makes any such Advance upon a telephone or email request, the requesting
person shall fax or deliver by electronic file to Agent, promptly
following such telephone or email request, a Request for Advance. The
Company hereby authorizes Agent to disburse Advances under this Section
2.3 pursuant to the telephone or e-mail instructions of any person
purporting to be a person identified by name on a written list of persons
authorized by the Company and delivered to Agent prior to the date of such
request to make Requests for Advance on behalf of the Company.
Notwithstanding the foregoing, the Company acknowledges that it shall bear
all risk of loss resulting from disbursements made upon any telephone or
email request. Each telephone or email request for an Advance shall
constitute a certification of the matters set forth in the Request for
Revolving Credit Advance form as of the date of such requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Advance from Company under
Section 2.3 hereof, Agent shall promptly notify each Bank by wire, telex or
telephone (confirmed by wire, telecopy or telex) of the amount of such Advance
to be made and the date such Advance is to be made by said Bank pursuant to its
Percentage of such Advance. Unless such Bank's commitment to make Advances of
the Revolving Credit hereunder shall have been suspended or terminated in
accordance with this Agreement, each Bank shall make available the amount of its
Percentage of each Advance in immediately available funds to Agent, as follows:
(i) for Domestic Advances, at the office of Agent located at
Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, not later than 2:00
p.m. (Detroit time) on the date of such Advance; and
(ii) for Eurocurrency-based Advances, at the Agent's
Correspondent for the account of the Eurocurrency Lending Office of
the Agent, not later than 12 noon (the time of the Agent's
Correspondent) on the date of such Advance.
(b) Subject to submission of an executed Request for Advance by
Company without exceptions noted in the compliance certification therein, Agent
shall make available to Company the aggregate of the amounts so received by it
from the Banks:
(i) for Domestic Advances, not later than 4:00 p.m. (Detroit
time) on the date of such Advance by credit to an account of Company
maintained with Agent or to such other account or third party as
Company may reasonably direct; and
35
(ii) for Eurocurrency-based Advances, not later than 4:00
p.m. (the time of the Agent's Correspondent) on the date of such
Advance, by credit to an account of Company maintained with Agent's
Correspondent or to such other account or third party as Company may
reasonably direct.
(c) Agent shall deliver the documents and papers received by it
for the account of each Bank to such Bank or upon its order. Unless Agent shall
have been notified by any Bank prior to the date of any proposed Advance that
such Bank does not intend to make available to Agent such Bank's Percentage of
such Advance, Agent may assume that such Bank has made such amount available to
Agent on such date, as aforesaid and may, in reliance upon such assumption, make
available to Company a corresponding amount. If such amount is not in fact made
available to Agent by such Bank, as aforesaid, Agent shall be entitled to
recover such amount on demand from such Bank. If such Bank does not pay such
amount forthwith upon Agent's demand therefor, the Agent shall promptly notify
Company and Company shall pay such amount to Agent. Agent shall also be entitled
to recover from such Bank or Company, as the case may be, but without
duplication, interest on such amount in respect of each day from the date such
amount was made available by Agent to Company to the date such amount is
recovered by Agent, at a rate per annum equal to:
(i) in the case of such Bank, with respect to Domestic
Advances, the Federal Funds Effective Rate, and with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or deposit
insurance and of any fees, penalties, overdraft charges or other
costs or expenses incurred by Agent as a result of such failure to
deliver funds hereunder) of carrying such amount; and
(ii) in the case of Company, the rate of interest then
applicable to such Advance of the Revolving Credit.
The obligation of any Bank to make any Advance of the Revolving Credit
hereunder shall not be affected by the failure of any other Bank to make
any Advance hereunder, and no Bank shall have any liability to the Company
or any of its Subsidiaries, the Agent, any other Bank, or any other party
for another Bank's failure to make any loan or Advance hereunder.
2.5 (a) Swing Line Advances. The Swing Line Bank shall, on the terms and
subject to the conditions hereinafter set forth (including without limitation
Section 2.5(c) hereof), make one or more advances (each such advance being a
"Swing Line Advance") to Company from time to time on any Business Day during
the period from the date hereof to (but excluding) the Revolving Credit Maturity
Date in an aggregate amount, in Dollars, not to exceed at any time outstanding
the Swing Line Maximum Amount. All Swing Line Advances shall be evidenced by the
Swing Line Notes, under which advances, repayments and readvances may be made,
subject to the terms and conditions of this Agreement. Each Swing Line Advance
shall mature and the principal amount thereof shall be due and payable by
Company on the last day of the Interest Period applicable thereto. In no event
whatsoever shall any outstanding Swing Line Advance be deemed to reduce, modify
or affect any Bank's commitment to make Revolving Credit Advances based upon its
Percentage.
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(b) Accrual of Interest. Each Swing Line Advance shall, from time
to time after the date of such Advance, bear interest at its Applicable Interest
Rate. The amount and date of each Swing Line Advance, its Applicable Interest
Rate, its Interest Period, if any, and the amount and date of any repayment
shall be noted on Agent's records, which records will be conclusive evidence
thereof, absent manifest error; provided, however, that any failure by the Agent
to record any such information shall not relieve Company of its obligation to
repay the outstanding principal amount of such Advance, all interest accrued
thereon and any amount payable with respect thereto in accordance with the terms
of this Agreement and the other Loan Documents.
(c) Requests for Swing Line Advances. Company may request a Swing
Line Advance only after delivery to Swing Line Bank of a Request for Swing Line
Advance executed by an authorized officer of Company, subject to the following
and to the remaining provisions hereof:
(i) each such Request for Swing Line Advance shall set forth
the information required on the Request for Swing Line Advance form
annexed hereto as Exhibit F, including without limitation:
(A) the proposed date of such Swing Line Advance,
which must be a Business Day;
(B) whether such Swing Line Advance is to be a
Prime-based Advance, a Eurocurrency-based Advance or a Quoted
Rate Advance; and
(C) the duration of the Interest Period applicable
thereto.
(ii) without duplication, the principal amount of such
requested Swing Line Advance, plus the aggregate principal amount of
all other Swing Line Advances and all Advances of the Revolving
Credit then outstanding hereunder (including any Revolving Credit
Advances or other Swing Line Advances requested to be made on such
date), determined pursuant to the terms hereof as of the date of
such requested Advance), and the aggregate undrawn portion of any
Letters of Credit which shall be outstanding as of the date of the
requested Swing Line Advance, plus the aggregate face amount of
Letters of Credit requested but not yet issued, plus the
unreimbursed amount of any draws under Letters of Credit shall not
exceed the lesser of (A) the Revolving Credit Maximum Amount and (B)
the Borrowing Base Limitation, in each case then applicable;
(iii) the principal amount of such Swing Line Advance, plus
the amount of any other outstanding Advance of the Swing Line to be
then combined therewith having the same Applicable Interest Rate and
Interest Period, if any, shall be (i) in the case of a Prime-based
Advance at least Three Hundred Thousand Dollars ($300,000) and (ii)
in the case of a Quoted Rate Advance or a Eurocurrency-based Advance
at least Three Hundred Thousand Dollars ($300,000) (or a larger
integral multiple of One Hundred Thousand Dollars
37
($100,000)), and at any one time there shall not be in effect more
than Five (5) Applicable Interest Rates and Interest Periods;
(iv) each such Request for Swing Line Advance shall be
delivered to the Swing Line Bank, by 12:00 noon (Detroit time) on
the proposed date of the Advance; and
(v) each Request for Swing Line Advance, once delivered to
Swing Line Bank, shall not be revocable by Company, and shall
constitute and include a certification by the Company as of the date
thereof that:
(A) both before and after such Swing Line Advance, the
obligations of the Company set forth in this Agreement and of
the Company and its Subsidiaries in the Loan Documents, are
valid, binding and enforceable obligations of such Persons;
(B) all conditions to the making of Swing Line
Advances have been satisfied (both before and after giving
effect to such Advance);
(C) both before and after the making of such Swing
Line Advance, there is no Default or Event of Default in
existence; and
(D) both before and after such Swing Line Advance, the
representations and warranties contained in this Agreement and
the other Loan Documents are true and correct in all material
respects, except to the extent such representations and
warranties (other than Section 6.12 hereof, which shall be
deemed to be remade as of the date of such Request for
purposes of this clause (D), notwithstanding the limitation
contained therein) are not, by their terms, continuing
representations and warranties, but speak only as of a
specific date.
Swing Line Bank, may, at its option, lend under this Section 2.5(c) upon
the telephone or email request of a person previously authorized (in a writing
delivered to the Agent) by Company to make such requests and, in the event Swing
Line Bank makes any such Advance upon a telephone or email request, the
requesting person shall fax or deliver by electronic file to Swing Line Bank,
promptly following such telephone or email request, a Request for Swing Line
Advance. Company hereby authorizes Swing Line Bank to disburse Advances under
this Section 2.5(c) pursuant to the telephone or e-mail instructions of any
person purporting to be a person identified by name on a written list of persons
authorized by the Company to make Requests for Advance on behalf of the Company.
Notwithstanding the foregoing, the Company acknowledges that Company shall bear
all risk of loss resulting from disbursements made upon any telephone or e-mail
request. Each telephone or e-mail request for an Advance shall constitute a
certification of the matters set forth in the Request for Swing Line Advance
form as of the date of such requested Advance. Swing Line Bank shall promptly
deliver to Administrative Agent by telecopy or by electronic file a copy of any
Request for Advance received hereunder.
(d) Disbursement of Swing Line Advances. Subject to submission of
an executed Request for Swing Line Advance by Company without exceptions noted
in the
38
compliance certification therein and to the other terms and conditions hereof,
Swing Line Bank shall make available to Company the amount so requested not
later than:
(i) for Prime-based Advances or Quoted Rate Advances, not
later than 4:00 p.m. (Detroit time) on the date of such Advance by
credit to an account of Company maintained with Agent or to such
other account or third party as Company may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than 4:00
p.m. (the time of the Agent's Correspondent) on the date of such
Advance, by credit to an account of Company or to such other account
or third party as Company may reasonably direct.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
(e) Refunding of or Participation Interest in Swing Line Advances.
(i) The Agent, at any time in its sole and absolute
discretion, may (or, upon the request of the Swing Line Bank, shall)
on behalf of the Company (which hereby irrevocably directs the Agent
to act on its behalf) request each of the Banks (including the Swing
Line Bank in its capacity as a Bank) to make an Advance of the
Revolving Credit to Company, in an amount equal to such Bank's
Percentage of the principal amount of the aggregate Swing Line
Advances outstanding to each such party on the date such notice is
given (the "Refunded Swing Line Advances"); provided that at any
time as there shall be a Swing Line Advance outstanding for more
than thirty days, the Agent shall, on behalf of the Company (which
hereby irrevocably directs the Agent to act on its behalf), promptly
request each Bank (including the Swing Line Bank) to make an Advance
of the Revolving Credit in an amount equal to such Bank's Percentage
of the principal amount of such outstanding Swing Line Advance. In
the case of each Refunded Swing Line Advance, the applicable Advance
of the Revolving Credit used to refund such Swing Line Advance shall
be a Prime-based Advance. In connection with the making of any such
Refunded Swing Line Advances or the purchase of a participation
interest in Swing Line Advances under Section 2.5(e)(ii) hereof, the
Swing Line Bank shall retain its claim against the Company for any
unpaid interest or fees in respect thereof. Unless any of the events
described in Section 9.1(j) hereof shall have occurred (in which
event the procedures of subparagraph (ii) of this Section 2.5(e)
shall apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of an Advance of the Revolving
Credit are then satisfied but subject to Section 2.5(e)(iii), each
Bank shall make the proceeds of its Advance of the Revolving Credit
available to the Agent for the benefit of the Swing Line Bank at the
office of the Agent specified in Section 2.4(a) hereof prior to
11:00 a.m. Detroit time on the Business Day next succeeding the date
such notice is given, except in the case of an Eurocurrency-based
Advance, in which case such proceeds shall be made available, prior
to 2:00 p.m. Detroit time on the third Business Day following the
39
date such notice is given. The proceeds of such Advances of the
Revolving Credit shall be immediately applied to repay the Refunded
Swing Line Advances in accordance with the provisions of Section
10.1 hereof.
(ii) If, prior to the making of an Advance of the Revolving
Credit pursuant to subparagraph (i) of this Section 2.5(e), one of
the events described in Section 9.1(j) hereof shall have occurred,
each Bank will, on the date such Advance of the Revolving Credit was
to have been made, purchase from the Swing Line Bank an undivided
participating interest in each Refunded Swing Line Advance in an
amount equal to its Percentage of such Refunded Swing Line Advance.
Each Bank within the time periods specified in Section 2.5(e)(i)
hereof, as applicable, shall immediately transfer to the Agent, in
immediately available funds, the amount of its participation and
upon receipt thereof the Agent will deliver to such Bank a
participation certificate evidencing such participation.
(iii) Each Bank's obligation to make Advances of the Revolving
Credit and to purchase participation interests in accordance with
clauses (i) and (ii) above shall, except in respect of any Swing
Line Advance made by the Swing Line Bank after it has obtained
actual knowledge that an Event of Default has occurred and is
continuing, be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Bank may
have against Swing Line Bank, the Company or any other Person for
any reason whatsoever; (B) the occurrence or continuance of any
Default or Event of Default; (C) any adverse change in the condition
(financial or otherwise) of the Company, or any other Person; (D)
any breach of this Agreement by the Company or any other Person; (E)
any inability of the Company to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such
participating interest is to be purchased or (F) any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing. If any Bank does not make available to the
Agent the amount required pursuant to clause (i) or (ii) above, as
the case may be, the Agent shall be entitled to recover such amount
on demand from such Bank, together with interest thereon for each
day from the date of non-payment until such amount is paid in full
at the Federal Funds Effective Rate for Advances (other than
Eurocurrency-based Advances) and for Eurocurrency-based Advances,
the Agent's marginal cost (including the cost of maintaining any
required reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent as a
result of such failure to deliver funds hereunder) of carrying such
amount.
Notwithstanding the foregoing however no Bank shall be required to make
any Advances of the Revolving Credit to refund a Swing Line Advance or to
purchase a participation in a Swing Line Advance if prior to the making of the
Swing Line Advance by the Swing Line Lender, the Agent had received written
notice from any Bank that a Default or Event of Default had occurred and was
continuing and directing that Swing Line Advances should be suspended based on
such occurrence and continuance of a Default or Event of Default; provided,
however that the obligation of the Banks to make such Advances of the Revolving
Credit (or purchase
40
such participations) shall be reinstated upon the date on which such Default or
Event of Default has been cured, or has been waived by the requisite Banks, as
applicable.
2.6 Prime-based Interest Payments. Interest on the unpaid balance of all
Prime-based Advances of the Revolving Credit and all Swing Line Advances carried
at the Prime-based Rate from time to time outstanding shall accrue from the date
of such Advance to the Revolving Credit Maturity Date (and until paid), at a per
annum interest rate equal to the Prime-based Rate, and shall be payable in
immediately available funds (a) with respect to Swing Line Advances, monthly
commencing on the first day of the calendar month next succeeding the calendar
month during which the initial Swing Line Advance is made and on the first day
of each month thereafter, and (b) with respect to Advances of the Revolving
Credit, quarterly commencing on the first day of the calendar quarter next
succeeding the calendar month during which the initial Advance of the Revolving
Credit is made and on the first day of each calendar quarter thereafter.
Interest accruing at the Prime-based Rate shall be computed on the basis of a
360 day year and assessed for the actual number of days elapsed, and in such
computation effect shall be given to any change in the interest rate resulting
from a change in the Prime-based Rate on the date of such change in the
Prime-based Rate.
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments.
(a) Interest on each Eurocurrency-based Advance of the Revolving
Credit and all Swing Line Advances carried at the Eurocurrency-based Rate shall
accrue at its Applicable Interest Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable thereto (and,
if any Interest Period shall exceed three months, then on the last Business Day
of the third month of such Interest Period, and at three month intervals
thereafter). Interest accruing at the Eurocurrency-based Rate shall be computed
on the basis of a 360 day year and assessed for the actual number of days
elapsed from the first day of the Interest Period applicable thereto to but not
including the last day thereof.
(b) Interest on each Quoted Rate Advance of the Swing Line shall
accrue at its Quoted Rate and shall be payable in immediately available funds on
the last day of the Interest Period applicable thereto. Interest accruing at the
Quoted Rate shall be computed on the basis of a 360 day year and assessed for
the actual number of days elapsed from the first day of the Interest Period
applicable thereto to, but not including the last day thereof.
2.8 Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
2.9 Interest on Default. In the event and so long as any Event of
Default shall exist, in the case of any Event of Default under Sections 9.1(a),
9.1(b) or 9.1(j), immediately upon the occurrence thereof, and in the case of
all other Events of Default, upon notice from the Majority Banks, interest shall
be payable daily on all Eurocurrency-based Advances of the Revolving Credit,
Swing Line Advances carried at the Eurocurrency-based Rate and Quoted Rate
Advances from time to time outstanding at a per annum rate equal to the
Applicable Interest Rate plus two percent (2%) for the remainder of the then
existing Interest Period, if any, and at all other such
41
times, with respect to Prime-based Advances from time to time outstanding, at a
per annum rate equal to the Prime-based Rate plus two percent (2%).
2.10 Prepayment. (a) Company may prepay all or part of the outstanding
balance of any Prime-based Advance(s) under the Revolving Credit Note at any
time, provided that the amount of any partial prepayment shall be at least One
Million Dollars ($1,000,000) and, after giving effect to any such partial
prepayment, the aggregate balance of Prime-based Advance(s) of the Revolving
Credit remaining outstanding, if any, shall be at least One Million Dollars
($1,000,000). Company may prepay all or part of any Eurocurrency-based Advance
(subject to not less than three (3) Business Days' notice to Agent) only on the
last day of the Interest Period therefor, provided that the amount of any such
partial prepayment shall be at least One Million Dollars ($1,000,000), and,
after giving effect of any such partial prepayment, the unpaid portion of such
Advance which is refunded or converted under Section 2.3 hereof shall be at
least Two Million Five Hundred Thousand Dollars ($2,500,000).
(b) Company may prepay all or part of the outstanding balance of
any Swing Line Advance carried at the Prime-based Rate at any time, provided
that the amount of any partial prepayment shall be at least One Hundred Thousand
Dollars ($100,000) and, after giving effect of any such partial prepayment, the
aggregate balance of such Swing Line Advances remaining outstanding, if any,
shall be at least One Hundred Thousand Dollars ($100,000). Company may prepay
all or part of any Swing Line Advances carried at the Eurocurrency-based Rate or
Quoted Rate (subject to not less than three (3) Business Days' notice to Swing
Line Bank and Agent) only on the last day of the Interest Period therefor,
provided that the amount of any such partial payment shall be at least One
Hundred Thousand Dollars ($100,000), after giving effect of any such partial
prepayment, and the unpaid portion of such Advance which is refunded or
converted under Section 2.5(c) hereof shall be at least One Hundred Thousand
Dollars ($100,000).
(c) Any prepayment made in accordance with this Section shall be
without premium, penalty or prejudice to the right to reborrow under the terms
of this Agreement. Any other prepayment of all or any portion of any Advance of
the Revolving Credit or any Swing Line Advance shall be subject to Section 11.1
hereof, but otherwise without premium, penalty or prejudice.
2.11 Intentionally Omitted.
2.12 Prime-based Advance in Absence of Election or Upon Default. If, (a)
as to any outstanding Eurocurrency-based Advance of the Revolving Credit, or any
Swing Line Advance carried at the Eurocurrency-based Rate, Agent has not
received payment on the last day of the Interest Period applicable thereto, or
does not receive a timely Request for Advance meeting the requirements of
Section 2.3 or 2.5(c) hereof with respect to the refunding or conversion of such
Advance, or (b) subject to Section 2.9 hereof, if on such day a Default or an
Event of Default shall have occurred and be continuing, then the principal
amount thereof which is not then prepaid in the case of a Eurocurrency-based
Advance shall, absent a contrary election of the Majority Banks, be converted
automatically to a Prime-based Advance and the Agent shall thereafter promptly
notify Company of said action.
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2.13 Revolving Credit Facility Fee.
(a) Revolving Credit Facility Fee. From the date hereof to the
Revolving Credit Maturity Date, the Company shall pay to the Agent, for
distribution to the Banks (as set forth below), a Revolving Credit Facility Fee
determined by multiplying the Applicable Fee Percentage per annum times the
Revolving Credit Maximum Amount then applicable under Section 2.15 hereof
(whether used or unused), computed on a daily basis. The Revolving Credit
Facility Fee shall be payable quarterly in arrears commencing July 1, 2004 (in
respect of the prior calendar quarter or portion thereof), and on the first day
of each calendar quarter thereafter and on the Revolving Credit Maturity Date,
and shall be computed on the basis of a year of three hundred sixty (360) days
and assessed for the actual number of days elapsed. Whenever any payment of the
Revolving Credit Facility Fee shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next Business Day. Upon
receipt of such payment Agent shall make prompt payment to each Bank of its
share of the Revolving Credit Facility Fee based upon its respective Percentage.
(b) Commitment Fee. On the Effective Date, the Company shall pay
to the Agent, for distribution to the Banks in accordance with this clause (b),
a Commitment Fee, such Commitment Fee to be calculated as follows: (i) in the
case of a Bank which holds a Percentage of the Revolving Credit Maximum Amount
which is less than $20,000,000, the Commitment Fee shall be determined by
multiplying 60 basis points times an amount equal to such Bank's Percentage of
the Maximum Revolving Credit Amount, and (ii) in the case of a Bank which holds
a Percentage of the Revolving Credit Maximum Amount which is greater than or
equal to $20,000,000, the Commitment Fee shall be determined by multiplying 75
basis points times an amount equal to such Bank's Percentage of the Revolving
Credit Maximum Amount.
(c) Additional Commitment Fee. If, at any time after the Effective
Date, the remaining maturity of the Revolving Credit shall be less than 366
days, the Company shall be obligated to pay the Agent, for distribution to the
Banks in accordance with this clause (c), an Additional Commitment Fee, such
Additional Commitment Fee to be calculated as follows: (i) in the case of a Bank
which holds a Percentage of the Revolving Credit Maximum Amount which is less
than $20,000,000, the Additional Commitment Fee shall be determined by
multiplying 10 basis points times an amount equal to such Bank's Percentage of
the Revolving Credit Maximum Amount, and (ii) in the case of a Bank which holds
a Percentage of the Revolving Credit Maximum Amount which is greater than or
equal to $20,000,000, the Additional Commitment Fee shall be determined by
multiplying 20 basis points times an amount equal to such Bank's Percentage of
the Revolving Credit Maximum Amount. The Additional Commitment Fee, if
applicable, shall be due and payable 360 days prior to the Revolving Credit
Maturity Date then in effect.
2.14 Mandatory Reduction of Indebtedness. If at any time and for any
reason, the aggregate principal amount (without duplication) of all Advances of
the Revolving Credit hereunder to the Company, plus the aggregate principal
amount of Swing Line Advances outstanding hereunder as of such time, plus the
aggregate undrawn portion of any Letters of Credit which shall be outstanding,
plus the undrawn amount of all Letters of Credit requested but not yet issued,
plus the unreimbursed amount of any draws under any Letters of Credit, as of
such time exceeds the lesser of (x) the Revolving Credit Maximum Amount and (y)
the
43
Borrowing Base Limitation, in each case then applicable, (as used herein, the
"Excess"), the Company shall immediately repay the Indebtedness by the amount of
such Excess, and/or reduce any pending request for an Advance on such day by the
amount of the Excess, to the extent thereof;
Compliance with this Section 2.14 shall be tested on a daily or other
basis satisfactory to Agent in its sole discretion. To the extent that, on the
date any mandatory repayment under this Section 2.14 is due, the Indebtedness
under the Revolving Credit or any other Indebtedness to be prepaid is being
carried, in whole or in part, at the Eurocurrency-based Rate and no Default or
Event of Default has occurred and is continuing, Company may deposit the amount
of such mandatory prepayment in a cash collateral account to be held by the
Agent, for and on behalf of the Banks (which shall be an interest-bearing
account), on such terms and conditions as are reasonably acceptable to Agent and
upon such deposit the obligation of Company to make such mandatory prepayment
shall be deemed satisfied. Subject to the terms and conditions of said cash
collateral account, sums on deposit in said cash collateral account shall be
applied (until exhausted) to reduce the principal balance of the Revolving
Credit on the last day of each Interest Period attributable to the
Eurocurrency-based Advances, thereby avoiding breakage costs.
2.15 Optional Reduction or Termination of Revolving Credit Maximum
Amount. Provided that no Default or Event of Default has occurred and is
continuing, the Company may upon at least five Business Days' prior written
notice to the Agent, permanently reduce the Revolving Credit Maximum Amount in
whole at any time, or in part from time to time, without premium or penalty,
provided that: (i) each partial reduction of the Revolving Credit Maximum Amount
shall be in an aggregate amount equal to Ten Million Dollars ($10,000,000) or a
larger integral multiple of One Million Dollars ($1,000,000); (ii) each
reduction shall be accompanied by the payment of the Revolving Credit Facility
Fee, if any, accrued to the date of such reduction; (iii) the Company shall
prepay in accordance with the terms hereof the amount, if any, by which the
aggregate unpaid principal amount of Advances of the Revolving Credit, plus the
aggregate principal amount of Swing Line Advances outstanding hereunder, plus
without duplication the aggregate undrawn amount of outstanding Letters of
Credit, plus without duplication the unreimbursed amount of any draws under any
Letters of Credit, exceeds the amount of the Revolving Credit Maximum Amount as
so reduced, together with interest thereon to the date of prepayment; (iv) if
the termination or reduction of the Revolving Credit Maximum Amount requires the
prepayment of a Eurocurrency-based Advance or a Quoted Rate Advance, the
termination or reduction may be made only on the last Business Day of the then
current Interest Period applicable to such Eurocurrency-based Advance or such
Quoted Rate Advance; and (v) no reduction shall reduce the Revolving Credit
Maximum Amount to an amount which is less than the aggregate undrawn amount of
any Letters of Credit outstanding at such time. Reductions of the Revolving
Credit Maximum Amount and any accompanying prepayments of the Revolving Credit
Notes shall be distributed by Agent to each Bank in accordance with such Bank's
Percentage thereof, and will not be available for reinstatement by or readvance
to the Company, and any accompanying prepayments of the Swing Line Note shall be
distributed by Agent to the Swing Line Bank and will not be available for
reinstatement by or readvance to the Company. Any reductions of the Revolving
Credit Maximum Amount hereunder shall reduce each Bank's portion thereof
proportionately (based on the applicable Percentages), and shall be permanent
and irrevocable. Any payments made pursuant to this Section shall be applied
first to
44
outstanding Prime-based Advances under the Revolving Credit, next to Swing Line
Advances carried at the Prime-based Rate, next to Eurocurrency-based Advances of
the Revolving Credit and then to Swing Line Advances carried at the
Eurocurrency-based Rate or the Quoted Rate.
2.16 Extension of Revolving Credit Maturity Date. Provided that no
Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent and each Bank (which notice shall be irrevocable and
which shall not be deemed effective unless actually received by Agent and each
Bank), prior to April 15, but not before March 15, of each year beginning in
2005 request that the Banks extend the then applicable Revolving Credit Maturity
Date to a date that is 364 days later than the Revolving Credit Maturity Date
then in effect (each such request, a "Request").
Each Bank shall, not later than thirty (30) calendar days following the
date of its receipt of a Request, give written notice to the Agent stating
whether such Bank is willing to extend the Revolving Credit Maturity Date as
requested. If Agent has received the aforesaid written approvals of such Request
from each of the Banks, then, effective on (but not before) such Revolving
Credit Maturity Date (so long as no Default or Event of Default has occurred and
is continuing and none of the Banks has withdrawn its approval, in writing,
prior thereto), the Revolving Credit Maturity Date shall be so extended for an
additional period of 364 days, the term Revolving Credit Maturity Date shall
mean such extended date and Agent shall promptly notify the Company and the
Banks that such extension has occurred. If (i) any Bank gives the Agent written
notice that it is unwilling to extend the Revolving Credit Maturity Date as
requested or (ii) any Bank fails to provide written approval to Agent of the
Request within thirty (30) calendar days of the date of Agent's receipt of such
Request, or (iii) withdraws its approval in writing prior to the Revolving
Credit Maturity Date then in effect then (x) the Banks shall be deemed to have
declined to extend the Revolving Credit Maturity Date, (y) the then-current
Revolving Credit Maturity Date shall remain in effect (with no further right on
the part of Company, to request extensions thereof under this Section 2.16) and
(z) the commitments of the Banks to make Advances of the Revolving Credit
hereunder shall terminate on the Revolving Credit Maturity Date then in effect,
and Agent shall promptly notify Company and the Banks thereof.
2.17 Optional Increase in Revolving Credit Maximum Amount. Provided that
no Default or Event of Default has occurred and is continuing, and provided that
the Company has not previously elected to terminate the Revolving Credit Maximum
Amount under Section 2.15 hereof, the Company may request that the Revolving
Credit Maximum Amount be increased in an aggregate amount (for all such Requests
under this Section 2.17) not to exceed the Revolving Credit Optional Increase,
subject, in each case, to Section 11.1 hereof and to the satisfaction
concurrently with or prior to the date of each such request of the following
conditions:
(a) the Company shall have delivered to the Agent not less than
thirty (30) days prior to the Revolving Credit Maturity Date then in effect a
written request for such increase, specifying the amount of Revolving Credit
Optional Increase thereby requested (each such request, a "Request for
Increase"); provided, however that in the event the Company has previously
delivered a Request for Increase pursuant to this Section 2.17, the Company may
not deliver a subsequent Request for Increase until all the conditions to
effectiveness of such first Request for Increase have been fully satisfied
hereunder (or such Request for Increase has been
45
withdrawn); and provided further that the Company may make no more than two
Requests for Increase in any calendar year;
(b) a lender or lenders meeting the requirements of Section
13.8(c) hereof and acceptable to the Company and the Agent (including, for the
purposes of this Section 2.17, any existing Bank which agrees to increase its
commitment hereunder, the "New Bank(s)") shall have become a party to this
Agreement by executing and delivering a New Bank Addendum for a minimum amount
(including for the purposes of this Section 2.17, the existing commitment of any
existing Bank) for each such New Bank of Ten Million Dollars ($10,000,000) and
an aggregate amount for all such New Banks of that portion of the Revolving
Credit Optional Increase, taking into account the amount of any prior increase
in the Revolving Credit Maximum Amount (pursuant to this Section 2.17), covered
by the applicable Request, provided, however that each New Bank shall remit to
the Agent funds in an amount equal to its Percentage (after giving effect to
this Section 2.17) of all Advances of the Revolving Credit then outstanding,
such sums to be reallocated among and paid to the existing Banks based upon the
new Percentages as determined below;
(c) the Company (i) shall have paid to the Agent for distribution
to the existing Banks, as applicable, all interest, fees (including the
Revolving Credit Facility Fee and the Letter of Credit Fees) and other amounts,
if any, accrued to the effective date of such increase and any breakage fees
attributable to the reduction (prior to the last day of the applicable Interest
Period) of any outstanding Eurocurrency-based Advances, calculated on the basis
set forth in Section 11.1 hereof as though Company has prepaid such Advances and
(ii) shall have paid to each New Bank a special letter of credit fee on the
Letters of Credit outstanding on the effective date of such increase, calculated
on the basis of the Letter of Credit Fees which would be applicable to such
Letters of Credit if issued on the date of such increase, for the period from
the effective date of such increase to the expiration date of such Letters of
Credit;
(d) the Company shall have executed and delivered to the Agent new
Revolving Credit Notes payable to each of the New Banks in the face amount of
each such New Bank's Percentage of the Revolving Credit Maximum Amount (after
giving effect to this Section 2.17) and, if applicable, renewal and replacement
Revolving Credit Notes payable to each of the existing Banks in the face amount
of each such Bank's Percentage of the Revolving Credit Maximum Amount (after
giving effect to this Section 2.17), each of such Revolving Credit Notes to be
substantially in the form of Exhibit C to the Credit Agreement, as applicable,
and dated as of the effective date of such increase (with appropriate insertions
relevant to such Notes and acceptable to the applicable Bank, including the New
Banks);
(e) except to the extent such representations and warranties
(other than Section 6.12 hereof which shall be deemed to be remade as of such
date for purposes of this clause (e), notwithstanding the limitation contained
therein) are not, by their terms, continuing representations and warranties, but
speak only as of a specific date, the representations and warranties made by
Company, each Guarantor or any other party to any of the Loan Documents
(excluding the Agent and Banks) in this Agreement or any of the other Loan
Documents, and the representations and warranties of any of the foregoing which
are contained in any certificate, document or financial or other statement
furnished at any time hereunder or thereunder or in connection herewith or
therewith shall have been true and correct in all material respects when
46
made and shall be true and correct in all material respects on and as of the
effective date of such increase; and (ii) no Default or Event of Default shall
have occurred and be continuing as of such date; and
(f) such other amendments, acknowledgments, consents, documents,
instruments, any registrations, if any, shall have been executed and delivered
and/or obtained by Company as required by Agent or the Majority Banks, in their
reasonable discretion.
Promptly on or after the date on which all of the conditions to such
Request for Increase set forth above have been satisfied, Agent shall notify the
Company and each of the Banks of the amount of the Revolving Credit Maximum
Amount as increased pursuant this Section 2.17 and the date on which such
increase has become effective and shall prepare and distribute to Company and
each of the Banks (including the New Banks) a revised Exhibit D to the Credit
Agreement setting forth the applicable new Percentages of the Banks (including
the New Bank(s), taking into account such increase and assignments (if any).
2.18 Revolving Credit as Renewal; Application of Advances; Existing
Advances. (a) The Revolving Credit Notes issued by the Company hereunder shall
constitute renewal and replacement evidence of all present Indebtedness of such
parties outstanding under the Revolving Credit Notes issued under the Prior
Credit Agreement. Advances of the Revolving Credit (including Swing Line
Advances) shall be available, subject to the terms hereof, to fund working
capital needs or other general corporate purposes of the Company.
(b) Each Existing Advance shall be deemed for all purposes of this
Agreement to be an Advance under this Agreement.
3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent may through the Issuing Office, at any time and from time to
time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Agent may
require, issue standby or documentary Letters of Credit (denominated in Dollars)
for the account of such Account Party, in an aggregate amount for all Letters of
Credit issued hereunder at any one time outstanding not to exceed the Letter of
Credit Maximum Amount. Each Letter of Credit shall be in a minimum face amount
of One Hundred Thousand Dollars ($100,000) and shall have an expiration date not
later than one (1) year from its date of issuance; provided that each Letter of
Credit (including any renewal thereof) shall expire not later than ten (10)
Business Days prior to the Revolving Credit Maturity Date in effect on the date
of issuance thereof. The submission of all applications in respect of and the
issuance of each Letter of Credit hereunder shall be subject in all respects to
the Uniform Customs and Practices for Documentary Credits of the International
Chamber of Commerce, 1993 Revisions, ICC Publication No. 500 or, if applicable,
ISP 98, and any successor documentation thereto, as selected by the Issuing
Lender. In the event of any conflict between this Agreement and any Letter of
Credit Document other than any Letter of Credit, this Agreement shall control.
47
3.2 Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
(a) without duplication, the face amount of the Letter of Credit
requested, plus the face amount of all other Letters of Credit of all Account
Parties requested on such date, plus the aggregate undrawn portion of all other
Letters of Credit of all Account Parties as of such date, plus the face amount
of all Letters of Credit of all Account Parties requested but not yet issued as
of such date, plus the unreimbursed amount of any draws under Letters of Credit
of all Account Parties, does not exceed the Letter of Credit Maximum Amount;
(b) without duplication, the undrawn amount of the Letter of
Credit requested, plus the undrawn amount of all other Letters of Credit of all
Account Parties requested on such date, plus the aggregate undrawn portion of
all other Letters of Credit of all Account Parties as of such date, plus the
undrawn amount of all Letters of Credit of all Account Parties requested but not
yet issued as of such date, plus the unreimbursed amount of any draws under
Letters of Credit of all Account Parties as of such date, plus the aggregate
principal amount of all Advances outstanding under the Revolving Credit Notes
and the Swing Line Notes, including any Advances requested to be made on such
date, do not exceed the lesser of (i) the Revolving Credit Maximum Amount and
(ii) the Borrowing Base Limitation, in each case then applicable;
(c) the obligations of Company set forth in this Agreement and the
other Loan Documents are valid, binding and enforceable obligations of Company
and the valid, binding and enforceable nature of this Agreement and the other
Loan Documents has not been disputed by Company;
(d) the representations and warranties contained in this Agreement
and the other Loan Documents are true in all material respects as if made on
such date, except to the extent such representations and warranties (other than
Section 6.12 hereof, which shall be deemed to be remade as of the date of
issuance of such Letter of Credit for purposes of this clause (d),
notwithstanding the limitation contained therein) are not, by their terms,
continuing representations and warranties, but speak only as of a specific date,
and both immediately before and immediately after issuance of the Letter of
Credit requested, no Default or Event of Default exists;
(e) the execution of the Letter of Credit Agreement with respect
to the Letter of Credit requested will not violate the terms and conditions of
any contract, agreement or other borrowing of Company;
(f) the Account Party requesting the Letter of Credit shall have
delivered to Agent at its Issuing Office, not less than five (5) Business Days
prior to the requested date for issuance (or such shorter time as the Agent, in
its sole discretion, may permit), the Letter of Credit Agreement related
thereto, together with such other documents and materials as may be required
pursuant to the terms thereof, and the terms of the proposed Letter of Credit
shall be satisfactory to Agent and its Issuing Office;
(g) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain Agent
from issuing the Letter of Credit
48
requested, or any Bank from taking an assignment of its Percentage thereof
pursuant to Section 3.6 hereof, and no law, rule, regulation, request or
directive (whether or not having the force of law) shall prohibit or request
that Agent refrain from issuing, or any Bank refrain from taking an assignment
of its Percentage of, the Letter of Credit requested or letters of credit
generally;
(h) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or unduly
burdensome for the Agent to issue or any Bank to take an assignment of its
Percentage of the requested Letter of Credit (as determined in the sole
discretion of Agent or such Bank, as the case may be), no suspension of or
material limitation on trading on the New York Stock Exchange or any other
national securities exchange, no declaration of a general banking moratorium by
banking authorities in the United States, Michigan or the respective
jurisdictions in which the Banks, the applicable Account Party and the
beneficiary of the requested Letter of Credit are located, and no establishment
of any new restrictions on transactions involving letters of credit or on banks
materially affecting (as determined by Agent) the extension of credit by banks;
and
(i) Agent shall have received the issuance fees required in
connection with the issuance of such Letter of Credit pursuant to Section 3.5
hereof.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by the Company and the Account Party of the matters
set forth in Section 3.2 (a) through (e) hereof. The Agent shall be entitled to
rely on such certification without any duty of inquiry.
3.3 Notice. Agent shall give notice, substantially in the form attached
as Exhibit I, to each Bank of the issuance of each Letter of Credit, not later
than three (3) Business Days after issuance of each Letter of Credit, specifying
the amount thereof and the amount of such Bank's Percentage thereof.
3.4 Letter of Credit Fees. Company shall pay to the Agent for
distribution to the Banks in accordance with their Percentages, Letter of Credit
Fees as follows:
(a) A per annum Letter of Credit Fee with respect to the undrawn
amount of each Letter of Credit issued pursuant hereto in the amount of the
Applicable Fee Percentage (determined with reference to Schedule 1.1 to this
Agreement), inclusive of the facing fee of one-eighth of one percentage point
(1/8%) per annum on the face amount thereof to be retained by Agent under
Section 3.5 hereof.
(b) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or cause
to be deemed applicable any reserve, special deposit, limitation or similar
requirement against letters of credit issued or participated in by, or assets
held by, or deposits in or for the account of, Agent or any Bank or (ii) impose
on Agent or any Bank any other condition regarding this Agreement or the Letters
of Credit, and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost or expense to Agent or such Bank of issuing or
maintaining or participating in any of the Letters of Credit (which increase in
cost or expense shall be determined by the Agent's or such Bank's reasonable
49
allocation of the aggregate of such cost increases and expense resulting from
such events), then, upon demand by the Agent or such Bank, as the case may be,
the Company shall, within ten days following demand for payment, pay to Agent or
such Bank, as the case may be, from time to time as specified by the Agent or
such Bank, additional amounts which shall be sufficient to compensate the Agent
or such Bank for such increased cost and expense, together with interest on each
such amount from ten days after the date demanded until payment in full thereof
at the Prime-based Rate. A certificate as to such increased cost or expense
incurred by the Agent or such Bank, as the case may be, as a result of any event
mentioned in clause (i) or (ii) above, submitted to the Company, shall be
conclusive evidence, absent manifest error, as to the amount thereof.
(c) All payments by the Company to the Agent or the Banks under
this Section 3.4 shall be made in Dollars and in immediately available funds at
the Issuing Office or such other office of the Agent as may be designated from
time to time by written notice to the Company by the Agent. The fees described
in clause (a) above shall be nonrefundable under all circumstances, shall be
payable semi-annually in advance (or such lesser period, if applicable, for
Letters of Credit issued with stated expiration dates of less than six months)
upon the issuance of each such Letter of Credit, and shall be calculated on the
basis of a 360 day year and assessed for the actual number of days from the date
of the issuance thereof to the stated expiration thereof.
3.5 Issuance Fees. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees (including a letter of credit facing fee
of one-eighth of one percentage point (1/8%) to be retained by Agent for its own
account), the Company or the applicable Account Party shall pay, for the sole
account of the Agent, standard documentation, administration, payment and
cancellation charges assessed by Agent or the Issuing Office, at the times, in
the amounts and on the terms set forth or to be set forth from time to time in
the standard fee schedule of the Issuing Office in effect from time to time.
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company and each applicable Account Party agree to pay to
the Agent, on the day on which the Agent shall honor a draft or other demand for
payment presented or made under any Letter of Credit, an amount equal to the
amount paid by the Agent in respect of such draft or other demand under such
Letter of Credit and all expenses paid or incurred by the Agent relative
thereto. Unless the Company or the applicable Account Party shall have made such
payment to the Agent on such day, upon each such payment by the Agent, the Agent
shall be deemed to have disbursed to the Company or the applicable Account
Party, and the Company or the applicable Account Party shall be deemed to have
elected to substitute for its reimbursement obligation a Prime-based Advance of
the Revolving Credit for the account of the Banks in an amount equal to the
amount so paid by the Agent in respect of such draft or other demand under such
Letter of Credit. Such Prime-based Advance shall be deemed disbursed
notwithstanding any failure to satisfy any conditions for disbursement of any
Advance set forth in Section 3 hereof and, to the extent of the Advances so
disbursed, the reimbursement obligation of the Company or the applicable Account
Party under this Section 3.6 shall be deemed satisfied.
50
(b) If the Agent shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Agent shall provide notice
thereof to the Company and the applicable Account Party on the date such draft
or demand is honored, and to each Bank on such date unless the Company or
applicable Account Party shall have satisfied its reimbursement obligation under
Section 3.6(a) hereof by payment to the Agent on such date. The Agent shall
further use reasonable efforts to provide notice to the Company and the
applicable Account Party prior to honoring any such draft or other demand for
payment, but such notice, or the failure to provide such notice, shall not
affect the rights or obligations of the Agent with respect to any Letter of
Credit or the rights and obligations of the parties hereto, including without
limitation the obligations of the Company or applicable Account Party under
Section 3.6(a) hereof.
(c) Upon issuance by the Agent of each Letter of Credit hereunder
(except in respect of any Letter of Credit issued after Agent has obtained
actual knowledge that an Event of Default has occurred and is continuing), each
Bank shall automatically acquire a pro rata participation interest in such
Letter of Credit and each related Letter of Credit Payment based on its
respective Percentage. Each Bank, on the date a draft or demand under any Letter
of Credit is honored (or the next succeeding Business Day if the notice required
to be given by Agent to the Banks under Section 3.6(b) hereof is not given to
the Banks prior to 2:00 p.m. (Detroit time) on such date of draft or demand),
shall make its Percentage of the amount paid by the Agent, and not reimbursed by
the Company or applicable Account Party on such day, available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Bank shall not have made such pro rata portion
available to the Agent, such Bank, the Company and the applicable Account Party
severally agree to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount was paid by the
Agent until such amount is so made available to the Agent at a per annum rate
equal to the interest rate applicable during such period to the related Advance
deemed to have been disbursed under Section 3.6(a) in respect of the
reimbursement obligation of the Company and the applicable Account Party, as set
forth in Section 2.4(c)(i) or 2.4(c)(ii) hereof, as the case may be. If such
Bank shall pay such amount to the Agent together with such interest, such amount
so paid shall be deemed to constitute an Advance by such Bank disbursed in
respect of the reimbursement obligation of the Company or applicable Account
Party under Section 3.6(a) hereof for purposes of this Agreement, effective as
of the dates applicable under said Section 3.6(a). The failure of any Bank to
make its pro rata portion of any such amount paid by the Agent available to the
Agent shall not relieve any other Bank of its obligation to make available its
pro rata portion of such amount, but no Bank shall be responsible for failure of
any other Bank to make such pro rata portion available to the Agent.
Notwithstanding the foregoing, however, no Bank shall be deemed to have
acquired a participation in a Letter of Credit if, prior to the issuance of the
Letter of Credit by the Agent, the Agent had received written notice from any
Bank that a Default or an Event of Default had occurred and was continuing and
directing the Agent to suspend the issuance of Letters of Credit; provided,
however that the Banks shall be deemed to have acquired such a participation
upon the date of which such Default or Event of Default has been cured or has
been waived by the requisite Revolving Credit Banks, as applicable.
51
(d) Nothing in this Agreement shall be construed to require or
authorize any Bank to issue any Letter of Credit, it being recognized that the
Agent shall be the sole issuer of Letters of Credit under this Agreement.
3.7 Obligations Irrevocable. The obligations of Company and any Account
Party to make payments to Agent or the Banks with respect to Letter of Credit
Obligations under Section 3.6 hereof, shall be unconditional and irrevocable and
not subject to any qualification or exception whatsoever, including, without
limitation:
(a) Any lack of validity or enforceability of any Letter of Credit
or any documentation relating to any Letter of Credit or to any transaction
related in any way to any Letter of Credit (the "Letter of Credit Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to or under any of the Letter of Credit
Documents;
(c) The existence of any claim, setoff, defense or other right
which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in connection with
any of the Letter of Credit Documents, the transactions contemplated herein or
therein or any unrelated transactions;
(d) Any draft or other statement or document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(e) Payment by the Agent to the beneficiary under any Letter of
Credit against presentation of documents which do not comply with the terms of
such Letter of Credit, including failure of any documents to bear any reference
or adequate reference to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of the Agent
or any Bank or any party to any of the Letter of Credit Documents to enforce,
assert or exercise any right, power or remedy conferred upon the Agent, any Bank
or any such party under this Agreement, any of the other Loan Documents or any
of the Letter of Credit Documents, or any other acts or omissions on the part of
the Agent, any Bank or any such party; or
(g) Any other event or circumstance that would, in the absence of
this Section 3.7, result in the release or discharge by operation of law or
otherwise of Company or any Account Party from the performance or observance of
any obligation, covenant or agreement contained in Section 3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may have
against the beneficiary of any Letter of Credit shall be available hereunder to
Company or any Account Party against the Agent or any Bank. Nothing contained in
this Section 3.7 shall be deemed to prevent Company or the
52
Account Parties, after satisfaction in full of the absolute and unconditional
obligations of Company and the Account Parties hereunder, from asserting in a
separate action any claim, defense, set off or other right which they (or any of
them) may have against Agent or any Bank.
3.8 Risk Under Letters of Credit. (a) In the administration and handling
of Letters of Credit and any security therefor, or any documents or instruments
given in connection therewith, Agent shall have the sole right to take or
refrain from taking any and all actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this Agreement, Agent
shall issue the Letters of Credit and shall hold the documents related thereto
in its own name and shall make all collections thereunder and otherwise
administer the Letters of Credit in accordance with Agent's regularly
established practices and procedures and, except pursuant to Section 12.3
hereof, Agent will have no further obligation with respect thereto. In the
administration of Letters of Credit, Agent shall not be liable for any action
taken or omitted on the advice of counsel, accountants, appraisers or other
experts selected by Agent with due care and Agent may rely upon any notice,
communication, certificate or other statement from Company, any Account Party,
beneficiaries of Letters of Credit, or any other Person which Agent believes to
be authentic. Agent will, upon request, furnish the Banks with copies of Letter
of Credit Agreements, Letters of Credit and documents related thereto.
(c) In connection with the issuance and administration of Letters
of Credit and the assignments hereunder, Agent makes no representation and shall
have no responsibility with respect to (i) the obligations of Company or any
Account Party or the validity, sufficiency or enforceability of any document or
instrument given in connection therewith, or the taking of any action with
respect to same, (ii) the financial condition of, any representations made by,
or any act or omission of, Company, the applicable Account Party or any other
Person, or (iii) any failure or delay in exercising any rights or powers
possessed by Agent in its capacity as issuer of Letters of Credit in the absence
of its gross negligence or willful misconduct. Each of the Banks expressly
acknowledges that they have made and will continue to make their own evaluations
of Company's and the Account Parties' creditworthiness without reliance on any
representation of Agent or Agent's officers, agents and employees.
(d) If at any time Agent shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent shall receive same for the pro rata
benefit of the Banks in accordance with their respective Percentages and shall
promptly deliver to each Bank its share thereof, less such Bank's pro rata share
of the costs of such recovery, including court costs and attorney's fees. If at
any time any Bank shall receive from any source whatsoever any payment on any
such unreimbursed amount or interest thereon in excess of such Bank's Percentage
of such payment, such Bank will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.
3.9 Indemnification. (a) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and against any and
all claims, damages, losses, liabilities, costs or expenses of any kind or
nature whatsoever which the Banks or the Agent or any such person may incur or
which may be claimed against any of them by reason of or in connection with any
Letter
53
of Credit, and neither any Bank nor the Agent or any of their respective
officers, directors, employees or agents shall be liable or responsible for: (i)
the use which may be made of any Letter of Credit or for any acts or omissions
of any beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of any Letter of Credit (unless such payment resulted from the gross
negligence or willful misconduct of the Agent), including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
(iv) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit; or (v) any other event or circumstance whatsoever arising in
connection with any Letter of Credit; provided, however, that Company and
Account Parties shall not be required to indemnify the Banks and the Agent and
such other persons, and the Agent shall be liable to the Company and the Account
Parties to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by Company and the Account Parties
which were caused by the Agent's gross negligence, willful misconduct or
wrongful dishonor of any Letter of Credit after the presentation to it by the
beneficiary thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions of such Letter of
Credit.
(b) It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further investigation
and regardless of any notice or information to the contrary. It is further
acknowledged and agreed that Company or an Account Party may have rights against
the beneficiary or others in connection with any Letter of Credit with respect
to which Agent or the Banks are alleged to be liable and it shall be a condition
of the assertion of any liability of Agent or the Banks under this Section that
Company or the applicable Account Party shall contemporaneously pursue all
remedies in respect of the alleged loss against such beneficiary and any other
parties obligated or liable in connection with such Letter of Credit and any
related transactions.
3.10 Right of Reimbursement. Each Bank agrees to reimburse the Agent on
demand, pro rata in accordance with its respective Percentage, for (i) the
reasonable out-of-pocket costs and expenses of the Agent to be reimbursed by
Company or any Account Party pursuant to any Letter of Credit Agreement or any
Letter of Credit, to the extent not reimbursed by Company or any Account Party
and (ii) any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, fees, reasonable out-of-pocket expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Agent (in its capacity as issuer of any Letter
of Credit) in any way relating to or arising out of this Agreement, any Letter
of Credit, any documentation or any transaction relating thereto, or any Letter
of Credit Agreement, to the extent not reimbursed by Company or any Account
Party, except to the extent that such liabilities, losses, costs or expenses
were incurred by Agent solely as a result of Agent's gross negligence or willful
misconduct or by the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit.
54
3.11 Existing Letters of Credit. Each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit, and each
application submitted in connection with each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit Agreement. On
the date of execution of this Agreement, the Agent shall be deemed automatically
to have sold and transferred, and each other Bank shall be deemed automatically,
irrevocably, and unconditionally to have purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation (on the
terms set forth herein), to the extent of such other Bank's Percentage, in each
Existing Letter of Credit and the applicable reimbursement obligations with
respect thereto and any security therefor or guaranty pertaining thereto. Letter
of Credit Fees paid under the Prior Credit Agreement shall not be recalculated,
redistributed or reallocated by Agent to the Banks; provided that the Company
shall pay to any new Banks becoming parties hereto on the Effective Date (or any
existing Bank increasing its Percentage on such date) a special letter of credit
fee on the Existing Letters of Credit, calculated on the basis of the Letter of
Credit Fees which would be applicable to such Existing Letters of Credit if
issued on the date hereof (but in the case of any existing Bank, computed only
to the extent of the applicable increase in its Percentage) for the period from
the Effective Date to the expiration date of such Existing Letters of Credit.
4. INTENTIONALLY OMITTED
5. CONDITIONS
The obligations of Banks to make Advances or loans pursuant to this
Agreement are subject to the following conditions, provided however that
Sections 5.1 through 5.8 below shall only apply to the initial Advances or loans
hereunder:
5.1 Execution of Notes, this Agreement and the other Loan Documents. The
Company (on or before the date hereof) shall have executed and delivered to the
Agent for the account of each Bank, the Revolving Credit Notes if requested by
the Banks, the Swing Line Notes if requested by the Swing Line Bank (solely for
the account of the Swing Line Bank), this Agreement (including all schedules,
exhibits, certificates, opinions, financial statements and other documents to be
delivered pursuant hereto), an amended and restated Guaranty, a Release and
Fourth Amendment to Security Agreement and amendments to or reaffirmations of
the Collateral Documents and other Loan Documents (or new documents), as
required hereunder, and, as applicable, such Revolving Credit Notes, the Swing
Line Notes, this Agreement and the other Loan Documents shall be in full force
and effect.
5.2 Corporate Authority. Agent shall have received, with a counterpart
thereof for each Bank: (i) certified copies of resolutions of the Board of
Directors of the Company and each Guarantor evidencing approval of the form of
this Agreement, the Notes and the other Loan Documents to which such Person is a
party and authorizing the execution, delivery and performance thereof and, in
the case of the Company, the borrowing of Advances hereunder; (ii) (A) certified
copies of the Company's and each Guarantor's (which is incorporated or formed in
the United States) articles of incorporation and bylaws or other constitutional
documents, as applicable, certified as true and complete as of a recent date by
the appropriate official of the jurisdiction of incorporation of each such
entity (or, if unavailable in such jurisdiction, by a responsible officer of
such entity); and (B) a certificate of good standing from the state of the
55
Company's or such Guarantor's (which is incorporated or formed in the United
States) incorporation or formation, as applicable.
5.3 Representations and Warranties -- All Parties. The representations
and warranties made by the Company or any other party to any of the Loan
Documents under this Agreement or any of the other Loan Documents (excluding the
Agent and the Banks), and the representations and warranties of any of the
foregoing which are contained in any certificate, document or financial or other
statement furnished at any time hereunder or thereunder or in connection
herewith or therewith shall have been true and correct in all material respects
when made and shall be true and correct in all material respects on and as of
the date of the making of the initial Advance hereunder.
5.4 Compliance with Certain Documents and Agreements. The Company (and
any of its Subsidiaries or Affiliates) shall have each performed and complied
with all agreements and conditions contained in this Agreement, the other Loan
Documents, or any agreement or other document executed hereunder or thereunder
and required to be performed or complied with by each of them (as of the
applicable date) and none of such parties shall be in default in the performance
or compliance with any of the terms or provisions hereof or thereof.
5.5 Company's Certificate and Opening Borrowing Base Certificate. The
Agent shall have received, with a signed counterpart for each Bank, a
certificate of a responsible senior officer of Company, dated the date of the
making of the initial Advances hereunder, stating that the conditions set forth
in this Section 5 have been fully satisfied, accompanied by a Borrowing Base
Certificate dated as of the proposed Effective Date.
5.6 Payment of Agent's and Other Fees. Company shall have paid to the
Lead Arranger any arranger's fee under any fee letter in effect as of the date
hereof between Company and the Lead Arranger, to the Agent the Closing Fee (for
distribution to the Banks hereunder), and to the Agent, the Agent's Fees and all
costs and expenses required hereunder.
5.7 Opinions. The Agent shall have received an opinion of counsel to
Company and the Guarantors, in form and substance acceptable to the Agent.
5.8 Other Documents and Instruments. The Agent shall have received, with
a photocopy for each Bank, such other instruments and documents as the Majority
Banks may reasonably request in connection with the making of Advances
hereunder, and all such instruments and documents shall be satisfactory in form
and substance to the Majority Banks.
5.9 Continuing Conditions. The obligations of the Banks to make any of
the Advances or loans under this Agreement, including but not limited to the
initial Advances of the Revolving Credit or the Swing Line hereunder, shall be
subject to the following continuing conditions:
(a) No Default or Event of Default shall have occurred and be
continuing as of the making of the proposed Advance (both before and after
giving effect thereto);
(b) There shall have been no material adverse change in the
condition (financial or otherwise), properties, business, results of operations
of the Company or its
56
Subsidiaries, taken as a whole, from December 31, 2003, except changes in the
ordinary course of business, or any subsequent December 31st, if the Agent
determines, with the concurrence of the Majority Banks, based on the Company's
financial statements for such subsequent fiscal year that no material adverse
change has occurred during such year, such determination being made solely for
purposes of determining the applicable date under this paragraph to the date of
the proposed Advance hereunder;
(c) The representations and warranties contained in this Agreement
and the other Loan Documents are true and correct in all material respects as of
the making of the applicable Advance, except to the extent such representations
and warranties are not, by their terms, continuing representations and
warranties, but speak only as of a specific date; and
(d) All documents executed or submitted pursuant hereto shall be
satisfactory in form and substance (consistent with the terms hereof) to Agent
and its counsel and to each of the Banks; Agent and its counsel and each of the
Banks and their respective counsel shall have received all information, and such
counterpart originals or such certified or other copies of such materials, as
Agent or its counsel and each of the Banks and their respective counsel may
reasonably request; and all other legal matters relating to the transactions
contemplated by this Agreement (including, without limitation, matters arising
from time to time as a result of changes occurring with respect to any
statutory, regulatory or decisional law applicable hereto) shall be satisfactory
to counsel to Agent and counsel to each of the Banks.
6. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement:
6.1 Corporate Authority. Each of the Company and the Subsidiaries is a
corporation, limited liability company or partnership duly organized and validly
existing in good standing under the laws of the applicable jurisdiction of
organization, charter or incorporation; each of the Company and the Subsidiaries
is duly qualified and authorized to do business as a corporation, limited
liability company or partnership (or comparable foreign entity) in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary, except where such failure to qualify and be
authorized to do business will not have a Material Adverse Effect.
6.2 Due Authorization -- Company. Execution, delivery and performance of
this Agreement, the other Loan Documents, and any other documents and
instruments required under or in connection with this Agreement, and the
issuance of the Notes by and extensions of credit to the Company are within its
corporate powers, have been duly authorized, are not in contravention of law or
the terms of the Company's articles of incorporation or bylaws, and, except as
have been previously obtained or as referred to in Section 6.13, below, do not
require the consent or approval, material to the transactions contemplated by
this Agreement, or the Loan Documents, of any governmental body, agency or
authority.
6.3 Title to Property. The Company and each of the Subsidiaries has good
and valid title to the property owned by it, which property (individually or in
the aggregate) is material to
57
the business or operations of the Company and its Subsidiaries, taken as a
whole, excluding imperfections in title not material to the ownership, use
and/or enjoyment of any such property.
6.4 Liens. There are no security interests in, Liens, mortgages or other
encumbrances on and no financing statements on file with respect to any property
of Company or any of the Subsidiaries, except for those Liens permitted under
Section 8.6 hereof.
6.5 Subsidiaries. As of the date of this Agreement, there are no
directly or indirectly owned Subsidiaries of the Company, except for those
Subsidiaries identified in Schedule 6.5, attached hereto.
6.6 Taxes. The Company and its Subsidiaries each has filed on or before
their respective due dates, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all taxes which have become due pursuant to those returns or pursuant
to any assessments received by any such party, as the case may be, to the extent
such taxes have become due, except to the extent (i) such tax payments are being
actively contested in good faith by appropriate proceedings and with respect to
which adequate provision has been made on the books of the Company or its
Subsidiaries, as applicable, as may be required by GAAP, or (ii) disclosed on
Schedule 6.6, attached hereto.
6.7 No Defaults. (a) There exists no default under the provisions of any
instrument evidencing any permitted Debt of the Company or its Subsidiaries or
connected with any of the permitted Liens, or of any agreement relating thereto,
except where such default could not reasonably be expected to have a Material
Adverse Effect and would not violate this Agreement or any of the other Loan
Documents according to the terms thereof.
(b) The Company is in compliance with the Borrowing Base
Limitation.
6.8 Enforceability of Agreement and Loan Documents -- Company. This
Agreement, the Notes, each of the other Loan Documents to which the Company is a
party, and all other certificates, agreements and documents executed and
delivered by Company under or in connection herewith or therewith have each been
duly executed and delivered by duly authorized officers of the Company and
constitute the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditor's rights generally and by
general principles of equity (whether enforcement is sought in a proceeding in
equity or at law).
6.9 Enforceability of Loan Documents - - Significant Domestic
Subsidiaries. The Domestic Guaranty, the Security Agreement and all other
certificates, agreements and documents executed and delivered by each
Significant Domestic Subsidiary under or in connection with this Agreement will,
upon execution and delivery thereof, have each been duly executed and delivered
by duly authorized officers of each such Significant Domestic Subsidiary and
constitute the valid and binding obligations of each such Significant Domestic
Subsidiary, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws
58
affecting the enforcement of creditor's rights generally and by general
principles of equity (whether enforcement is sought in a proceeding in equity or
at law).
6.10 Non-contravention -- Company. The execution, delivery and
performance of this Agreement and the other Loan Documents and any other
documents and instruments required under or in connection with this Agreement by
the Company are not in contravention of the terms of any indenture, material
agreement or material undertaking to which the Company is a party or by which it
or its properties are bound or affected, except to the extent such terms have
been waived or are not material to the transactions contemplated by this
Agreement and the other Loan Documents or to the financial performance of the
Company and its Subsidiaries, taken as a whole.
6.11 Non-contravention -- Significant Domestic Subsidiaries. The
execution, delivery and performance of the Domestic Guaranty, the Security
Agreement and any other documents and instruments required under or in
connection with this Agreement by each Significant Domestic Subsidiary (upon
execution and delivery thereof) will not be in contravention of the terms of any
indenture, material agreement or material undertaking to which each such
Significant Domestic Subsidiary is a party or by which it or its properties are
bound or affected, except to the extent such terms have been waived or are not
material to the transactions contemplated by this Agreement and the other Loan
Documents or to the financial performance of the Company and its Subsidiaries,
taken as a whole.
6.12 No Litigation. Except as set forth in Schedule 6.12 annexed hereto,
as of the Effective Date, no litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of the officers of Company
is threatened against Company or any Subsidiary, the outcome of which could
reasonably be expected to have a Material Adverse Effect.
6.13 Consents, Approvals and Filings, Etc. Except as have been previously
obtained no authorization, consent, approval, license, qualification or formal
exemption from, nor any filing, declaration or registration with, any court,
governmental agency or regulatory authority or any securities exchange or any
other person or party (whether or not governmental) is required in connection
with the execution, delivery and performance by the Company or any of the
Subsidiaries, of this Agreement, any of the other Loan Documents to which such
Person is a party or any other documents or instruments to be executed and/or
delivered by the Company or any Subsidiaries in connection therewith or
herewith. All such authorizations, consents, approvals, licenses,
qualifications, exemptions, filings, declarations and registrations which have
previously been obtained or made, as the case may be, are in full force and
effect and are not the subject of any attack, or to the knowledge of the
Company, threatened attack (in any material respect) by appeal or direct
proceeding or otherwise.
6.14 Agreements Affecting Financial Condition. Neither the Company nor
any of the Subsidiaries is party to any agreement or instrument or subject to
any charter or other corporate restriction which materially adversely affects
the financial condition or operations of the Company and its Subsidiaries, taken
as a whole.
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6.15 No Investment Company; No Margin Stock. None of the Company nor any
of the Subsidiaries is engaged principally, or as one of its important
activities, directly or indirectly, in the business of extending credit for the
purpose of purchasing or carrying margin stock. None of the Letters of Credit
and none of the proceeds of any of the Advances will be used by the Company or
any of the Subsidiaries to purchase or carry margin stock or will be made
available by the Company or any of the Subsidiaries in any manner to any other
Person to enable or assist such Person in purchasing or carrying margin stock.
Terms for which meanings are provided in Regulation U of the Board of Governors
of the Federal Reserve System or any regulations substituted therefor, as from
time to time in effect, are used in this paragraph with such meanings. None of
the Company nor any of the Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
6.16 ERISA. Neither a Reportable Event which is material to the Company
and its Subsidiaries taken as a whole nor an accumulated funding deficiency (as
defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Pension Plan. Each
Pension Plan has complied and continues to comply in all material respects with
the applicable provisions of ERISA and the Internal Revenue Code and any
applicable regulations thereof (and, if applicable, any comparable foreign law
provisions), except to the extent that any noncompliance, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No termination of a Single Employer Plan has occurred, and no lien in favor of
the PBGC or a Pension Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan maintained by the
Company or any ERISA Affiliate did not, as of the last annual valuation date
prior to the date on which this representation is made or deemed made, exceed
the value of the assets of such Pension Plan allocable to such accrued benefits.
Neither the Company nor any ERISA Affiliate has had a complete or partial
withdrawal from any Multiemployer Plan within the five year period prior to the
date of this Agreement, nor does the Company or any ERISA Affiliate presently
intend to completely or partially withdraw from any Multiemployer Plan, and
neither the Company nor any ERISA Affiliate would become subject to fines,
penalties or any other liability under ERISA if the Company or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date of this Agreement. To the best of
Company's knowledge, no such Multiemployer Plan is in bankruptcy or
reorganization or insolvent. There is no pending or, to the best of Company's
knowledge, threatened litigation or investigation questioning the form or
operation of any Pension Plan, nor is there any basis for any such litigation or
investigation which if adversely determined could reasonably be expected to have
a Material Adverse Effect, as of the valuation date most closely preceding the
date of this Agreement.
6.17 Environmental Matters and Safety Matters. (a) The Company and each
Subsidiary is in compliance with all applicable federal, state, provincial and
local laws, ordinances and regulations relating to safety and industrial hygiene
or to the environmental condition, including without limitation all applicable
Hazardous Materials Laws in jurisdictions in which the Company or any such
Subsidiary owns or operates a facility or site, or arranges for disposal or
treatment of hazardous substances, solid waste, or other wastes, accepts for
transport any hazardous substances, solid wastes or other wastes or holds any
interest in real property or
60
otherwise, except for matters which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(b) All federal, state, provincial, local and foreign permits,
licenses and authorizations required for present or (to the best of the
Company's knowledge) past use of the facilities and other properties or
activities of the Company and each Subsidiary have been obtained and are
presently in effect, and there is and has been full compliance with all such
permits, licenses or authorizations, except, in all cases, where the failure to
comply with the foregoing could not reasonably be expected to have a Material
Adverse Effect.
(c) No demand, claim, notice, suit (in law or equity), action,
administrative action, investigation or inquiry (including, without limitation,
the listing of any property by any domestic or foreign governmental entity which
identifies sites for remedial, clean-up or investigatory action) whether brought
by any governmental authority, private person or entity or otherwise, arising
under, relating to or in connection with any applicable Hazardous Materials Laws
is pending or, to the best of the Company's knowledge, threatened against the
Company or any of its Subsidiaries, any real property in which the Company or
any such Subsidiary holds or, to the best of the Company's knowledge, has held
an interest or any present or, to the best of the Company's knowledge, past
operation of the Company or any such Subsidiary, except for such matters which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(d) Neither the Company nor any of its Subsidiaries, whether with
respect to present or, to the best of the Company's knowledge, past operations
or properties, (i) is, to the best of the Company's knowledge, the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic substances, radioactive materials,
hazardous wastes or related materials into the environment, (ii) has received
any notice of any toxic substances, radioactive materials, hazardous waste or
related materials in or upon any of its properties in violation of any
applicable Hazardous Materials Laws, or (iii) knows of any basis for any such
investigation or notice, or for the existence of such a violation, except for
such matters which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(e) No release, threatened release or disposal of hazardous waste,
solid waste or other wastes is occurring or has occurred on, under or to any
real property in which the Company or any of its Subsidiaries holds any interest
or performs any of its operations, in violation of any applicable Hazardous
Materials Laws, except for any such matters which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.18 Accuracy of Information. Each of the Company's audited or unaudited
financial statements previously furnished to Agent and the Banks by the Company
prior to the date of this Agreement, is complete and correct in all material
respects and fairly presents the financial condition of the Company and its
Subsidiaries, taken as a whole, and the results of their operations for the
periods covered thereby; any projections of operations for future years
previously furnished by Company to Agent and the Banks have been prepared as the
Company's good faith estimate of such future operations, taking into account all
relevant facts and matters
61
known to Company; since December 31, 2003 there has been no material adverse
change in the financial condition of the Company or its Subsidiaries, taken as a
whole, except changes in the ordinary course of business; neither the Company,
nor any of its Subsidiaries has any contingent obligations (including any
liability for taxes) not disclosed by or reserved against in the December 31,
2003 balance sheet which could reasonably be expected to have a Material Adverse
Effect.
7. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it will
cause its Subsidiaries (but excluding, for purposes of Sections 7.3 through 7.8,
7.17 and 7.18 through 7.20 hereof, any Special Purpose Subsidiary) to, so long
as any of the Banks are committed to make any Advances under this Agreement and
thereafter so long as any Indebtedness remains outstanding under this Agreement:
7.1 Preservation of Existence, Etc. Subject to the terms of this
Agreement, and except as otherwise contemplated by the New Restructuring: (i)
preserve and maintain its existence and such of its rights, licenses, and
privileges as are material to the business and operations conducted by it; (ii)
qualify and remain qualified to do business in each jurisdiction in which such
qualification is material to its business and operations or ownership of its
properties; (iii) continue to engage only in businesses as substantially now
conducted by the Company and its Subsidiaries and businesses reasonably related
thereto; (iv) at all times maintain, preserve and protect all of its franchises
and trade names and preserve all the remainder of its property and keep the same
in good repair, working order and condition; and (v) from time to time make, or
cause to be made, all necessary or appropriate repairs, replacements,
betterments and improvements thereto such that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times.
7.2 Keeping of Books. Keep proper books of record and account in which
full and correct entries shall be made of all of its financial transactions and
its assets and businesses so as to permit the presentation of financial
statements prepared in accordance with GAAP.
7.3 Reporting Requirements. Furnish Agent with:
(a) as soon as possible, and in any event within three calendar
days after becoming aware of the occurrence of each Default or Event of Default,
a written statement of the chief financial officer or treasurer of the Company
(or in his absence, a responsible senior officer) setting forth details of such
Default or Event of Default and the action which the Company has taken or has
caused to be taken or proposes to take or cause to be taken with respect
thereto;
(b) as soon as available, and in any event within one hundred
twenty (120) days after and as of the end of each of Company's fiscal years, (i)
a detailed Consolidated audit report of Company certified to by independent
certified public accountants satisfactory to Banks together with an unaudited
Consolidating report of Company and its Subsidiaries certified by an authorized
officer of Company as to consistency (with prior financial reports and
accounting periods), accuracy and fairness of presentation; and (ii) a Covenant
Compliance Report and (iii)
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a "static pool analysis" substantially in the form delivered under the Prior
Credit Agreement and in any event satisfactory in form and substance to the
Majority Banks, which analyzes the performance of Installment Contracts of the
Company and its Subsidiaries derived from their United States operations on a
quarterly basis for the fourth quarter of such fiscal year, in each case
certified by an authorized officer of the Company as to consistency with prior
such analyses, accuracy and fairness of presentation;
(c) as soon as available, and in any event within sixty (60) days
after and as of the end of each quarter, excluding the last quarter, of each
fiscal year, (i) a Consolidated and Consolidating balance sheet, income
statement and statement of cash flows of Company and its Subsidiaries certified
by an authorized officer of Company as to consistency (with prior financial
reports and accounting periods), accuracy and fairness of presentation; (ii) a
Covenant Compliance Report and (iii) a "static pool analysis" substantially in
the form delivered under the Prior Credit Agreement and in any event
satisfactory in form and substance to the Majority Banks, which analyzes the
performance of Company's and its Subsidiaries' Installment Contracts derived
from their United States operations on a quarterly basis for the applicable
quarter, in each case certified by an authorized officer of the Company as to
consistency with prior such analyses, accuracy and fairness of presentation;
(d) as soon as available, and in any event within twenty (20)
Business Days after and as of the end of each quarter, including the last
quarter, of each fiscal year, a Borrowing Base Certificate as of the end of such
quarter, certified by an authorized officer of the Company as to accuracy and
fairness of presentation;
(e) as soon as possible, and in any event within three (3)
Business Days after becoming aware (i) of any change in the financial condition
of the Company, or any of its Subsidiaries which has a Material Adverse Effect,
a certificate of the chief financial officer or treasurer of Company (or in his
absence, a responsible senior officer) setting forth the details of such change,
or (ii) of the taking by the Internal Revenue Service or any foreign taxing
jurisdiction of a tax position (verbal or written) which has or could reasonably
be expected to have a Material Adverse Effect (or have a material adverse effect
on any such tax position taken by the Company or any of its Subsidiaries)
setting forth the details of such position and the financial impact thereof;
(f) as soon as available (and with copies for each of the Banks),
the Company's 8-K, 10-Q and 10-K Reports filed with the federal Securities and
Exchange Commission, and in any event, with respect to the 10-Q Report, within
sixty (60) days of the end of each of the first three fiscal quarters of each of
Company's fiscal years, and with respect to the 10-K Report, within one hundred
twenty (120) days after and as of the end of each of Company's fiscal years; and
as soon as available, copies of all filings, reports or other documents filed by
the Company or any of its Subsidiaries with the federal Securities and Exchange
Commission or other federal regulatory or taxing agencies or authorities in the
United States, or comparable agencies or authorities in foreign jurisdictions,
or any stock exchanges in such jurisdictions;
(g) promptly as issued (and with copies for each of the Banks),
all press releases, notices to shareholders and all other material
communications transmitted by the Company or any of its Subsidiaries; and,
concurrently with each incurrence thereof written
63
notice that new Future Debt has been incurred, accompanied by copies of the
material documents governing such Debt and a certification that, both before and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing and the Company is otherwise in compliance with this
Agreement;
(h) from time to time at the request of Agent or any Bank, a copy
of the standard form of Company's Dealer Agreement then in effect for the
Company's operations in the United States of America, and each other material
jurisdiction, if any, identifying any material changes from the form supplied to
the Banks hereunder for the preceding year;
(i) on or before ninety (90) days after the commencement of each
fiscal year, a Consolidated plan and financial projections and which shall
reflect any Future Debt or Permitted Securitizations contemplated to be incurred
or made for the succeeding two years of the Company and its Significant
Subsidiaries including, without limitation, a Consolidated and Consolidating
balance sheet and a Consolidated and Consolidating statement of projected income
and cash flow of the Company for each of the succeeding two fiscal years and
including a statement in reasonable detail specifying all material assumptions
underlying the projections;
(j) promptly upon the request of Agent or the Majority Banks
(acting through Agent) from time to time, a "static pool analysis" which
analyzes the performance of any Installment Contracts transferred, encumbered,
or otherwise disposed of pursuant to a Permitted Securitization comparable to
the static pool analysis required to be delivered pursuant to subparagraph (c)
of this Section 7.3; and
(k) on an annual basis, a report as to the Company's Debt Rating,
if then maintained by the Company, provided that the Company shall also promptly
report any changes in such Debt Rating;
(l) promptly upon the formulation thereof, notice of any material
revisions to the Company's write off policy as in effect on the Effective Date;
(m) promptly, and in form to be satisfactory to Agent and the
requesting Bank or Banks, Borrowing Base Certificates and such other information
as Agent or any of the Banks (acting through Agent) may reasonably request from
time to time.
7.4 Maintain Asset Coverage Ratio. On a Consolidated basis, maintain at
all times, Consolidated Net Assets at a level greater than or equal to
Consolidated Funded Debt.
7.5 Maintain Total Liabilities Ratio Level. On a Consolidated basis,
maintain as of the end of each fiscal quarter a ratio of Consolidated Total
Liabilities (including in the calculation thereof, for purposes of this Section
7.5, all Debt incurred by a Special Purpose Subsidiary, whether or not included
therein under GAAP) to the Company's Consolidated Tangible Net Worth equal to or
less than 1.50 to 1.0.
7.6 Minimum Tangible Net Worth. On a Consolidated basis, maintain
Consolidated Tangible Net Worth of not less than Two Hundred Forty Million
Dollars ($240,000,000), plus the sum of (i) eighty percent (80%) of Consolidated
Net Income for each fiscal quarter of the Company (A) beginning on or after
Xxxxx 0, 0000, (X) ending on or before the applicable date of
64
determination thereof, and (C) for which Consolidated Net Income as determined
above is a positive amount and (ii) the Equity Offering Adjustment.
7.7 Maintain Fixed Charge Coverage Ratio. On a Consolidated basis,
maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of
not less than 2.75 to 1.0, unless the remaining maturity of the Revolving Credit
shall be less than 366 days, in which case such ratio shall be maintained at not
less than 3.50 to 1.00.
7.8 Inspections. Permit Agent and each Bank, through their authorized
attorneys, accountants and representatives to examine (and make copies of)
Company's and each of the Subsidiaries' books, accounts, records, ledgers and
assets and properties (including without limitation, any Collateral) of every
kind and description including, without limitation, all promissory notes,
security agreements, customer applications, vehicle title certificates, chattel
paper, Uniform Commercial Code filings, wherever located at all reasonable times
during normal business hours, upon oral or written request of Agent or such
Bank; and permit Agent and each Bank or their authorized representatives, at
reasonable times and intervals, to visit all of its offices, discuss its
financial matters with its officers and independent certified public
accountants, and by this provision Company authorizes such accountants to
discuss the finances and affairs of Company and its Subsidiaries (provided that
Company is given an opportunity to participate in such discussions) and examine
any of its or their books and other corporate records. An examination of the
records or properties of Company or any of its Subsidiaries may require
revealment of proprietary and/or confidential data and information, and the
Agent and each of the Banks agrees upon request of the inspected party to
execute a confidentiality agreement (satisfactory to Agent or the inspecting
Bank, as the case may be, and such party) on behalf of the Agent or such
inspecting Bank and all parties making such inspections or examinations under
its authorization; provided however that such confidentiality agreement shall
not prohibit Agent from revealing such information to Banks or prohibit the
inspecting Bank from revealing such information to Agent or another Bank.
Notwithstanding the foregoing, all information furnished to the Banks hereunder
shall be subject to the undertaking of the Banks set forth in Section 13.13
hereof.
7.9 Taxes. Pay and discharge all taxes and other governmental charges,
and all material contractual obligations calling for the payment of money,
before the same shall become overdue, unless and to the extent only that such
payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP on its balance sheet, or where the failure to
pay any such matter could not reasonably be expected to have a Material Adverse
Effect.
7.10 Further Assurances. Execute and deliver or cause to be executed and
delivered to Agent within a reasonable time following Agent's request, and at
the Company's expense, such other documents or instruments as Agent may
reasonably require to effectuate more fully the purposes of this Agreement or
the other Loan Documents, including without limitation any Collateral Documents
required under Section 7.20 hereof.
7.11 Insurance. Maintain, with financially sound and reputable insurers,
insurance with respect to its material property and business against such
casualties and contingencies, of such types (including, without limitation,
insurance with respect to losses arising out of such property
65
loss or damage, public liability, business interruption, larceny, workers'
compensation, embezzlement or other criminal misappropriation) and in such
amounts as is customary in the case of corporations of established reputations
engaged in the same or similar business and similarly situated (and including
such lender loss payee clauses and/or endorsements as Agent or the Majority
Banks may request following the delivery of the Collateral Documents under
Section 7.20 hereof), provided that such insurance is commercially available, it
being understood that the Company and its Subsidiaries may self-insure against
hazards and risks with respect to which, and in such amounts as, the Company in
good faith determines to be prudent and consistent with sound financial and
business practice.
7.12 Indemnification. With respect to the Company, indemnify and save
Agent and each of the Banks harmless from all reasonable loss, cost, damage,
liability or expenses, including reasonable attorneys' fees and disbursements,
incurred by Agent and each of the Banks by reason of an Event of Default or
enforcing the obligations of the Company under this Agreement or the other Loan
Documents, or in the prosecution or defense of any action or proceeding
concerning any matter growing out of or connected with this Agreement or any of
the other Loan Documents other than resulting from the gross negligence or
willful misconduct of Agent or such Bank or Banks, as the case may be.
7.13 Governmental and Other Approvals. Apply for, obtain and/or maintain
in effect, as applicable, all material authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance of this Agreement, the other Loan Documents, or any
other documents or instruments to be executed and/or delivered by the Company or
Guarantors, as the case may be, in connection therewith or herewith.
7.14 Compliance with Contractual Obligations and Laws.
(a) Comply in all material respects with all Contractual
Obligations, and with all applicable laws, rules, regulations and orders of any
governmental authority, whether federal, state, local or foreign (including
without limitation Hazardous Materials Laws and any consumer protection, truth
in lending, disclosure and other similar laws and regulations governing the
provision of financing to consumers), in effect from time to time, except to the
extent that failure to comply therewith could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(b) Comply in all material respects with all applicable federal,
state and/or foreign laws and regulations in effect from time to time governing
the due and proper creation of installment sales contracts, motor vehicle leases
or similar indebtedness or obligations and of the creation, perfection and/or
protection, as applicable, of first priority security interests or lessor's
interests in motor vehicles being financed and/or sold and/or leased pursuant
thereto, as applicable.
7.15 ERISA. Comply in all material respects with all requirements imposed
by ERISA as presently in effect or hereafter promulgated or the Internal Revenue
Code (or comparable laws
66
in applicable jurisdictions outside the United States of America relating to
foreign Pension Plans) and promptly notify Banks upon the occurrence of any of
the following events:
(a) the termination of any Pension Plan pursuant to Subtitle C of
Title IV of ERISA or otherwise (other than any defined contribution plan not
subject to Section 412 of the Internal Revenue Code and any Multiemployer Plan);
(b) the appointment of a trustee by a United States District Court
to administer any Pension Plan pursuant to ERISA;
(c) the commencement by the PBGC, or any successor thereto, of any
proceeding to terminate any Pension Plan;
(d) the failure of the Company or any ERISA Affiliate to make any
payment in respect of any Pension Plan required under Section 412 of the
Internal Revenue Code;
(e) the withdrawal of the Company or any ERISA Affiliate from any
Multiemployer Plan;
(f) the occurrence of an accumulated funding deficiency (as
defined in Section 6.16 hereof) or a Reportable Event; or
(g) (g) the occurrence of a Prohibited Transaction which could
reasonably be expected to have a Material Adverse Effect.
7.16 Environmental Matters.
(a) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions necessary to clean up and
remove all Hazardous Materials on or affecting any premises owned or occupied by
Company or any of its Subsidiaries, whether resulting from conduct of Company or
any of its Subsidiaries or any other Person, if required by Hazardous Material
Laws, all such actions to be taken in accordance with such laws, and the orders
and directives of all applicable federal, state and local governmental
authorities; and
(b) Defend, indemnify and hold harmless Agent and each of the
Banks, and their respective employees, agents, officers and directors from and
against any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs or expenses of whatever kind or nature arising out of or related
to (i) the presence, disposal, release or threatened release of any Hazardous
Materials on, from or affecting any premises owned or occupied by Company or any
of its Subsidiaries, (ii) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Materials, (iii) any lawsuit or other proceeding brought or threatened,
settlement reached or governmental order or decree relating to such Hazardous
Materials, (iv) the cost of removal of all Hazardous Materials from all or any
portion of any premises owned by Company or its Subsidiaries, (v) the taking of
necessary precautions to protect against the release of Hazardous Materials on
or affecting any premises owned by Company or any of its Subsidiaries, (vi)
complying with all Hazardous Material Laws and/or (vii) any violation by Company
or any of its Subsidiaries of Hazardous Material Laws,
67
including without limitation, reasonable attorneys and consultants fees,
investigation and laboratory fees, environmental studies required by Agent or
any Bank (whether before or after the occurrence of any Default or Event of
Default), court costs and litigation expenses; and, if so requested by Agent or
any Bank, Company shall execute separate indemnities covering the foregoing
matters. The obligations of Company under this Section 7.16 shall be in addition
to any and all other obligations and liabilities the Company may have to Agent
or any of the Banks at common law or pursuant to any other agreement.
7.17 Installment Contract Standards. (a) Cause each Installment Contract
relating to Advances to Dealers or encumbered by the Collateral Documents to
satisfy the following requirements:
(i) Such Installment Contract (and the interest of Company
or its Subsidiaries thereunder) has not been sold, transferred or
otherwise assigned or encumbered by the Company or its Subsidiaries
to any Person, other than to the Lenders pursuant to the Collateral
Documents;
(ii) The Installment Contract obligor thereunder is not an
Affiliate of the Company; and
(iii) Such Installment Contract is owned by Company or a
Subsidiary, or Company or a Subsidiary has a valid first priority
perfected security interest therein (provided that the failure of up
to $2,500,000 in aggregate amount of such financial assets, valued
according to GAAP, to satisfy the requirements of this clause (iii)
shall not constitute a violation of this Section 7.17); and
(b) Exercise its best efforts to enforce the provisions of its
Dealer Agreements relating to the eligibility criteria for Advances to Dealers,
including without limitation:
(i) it has not been rescinded and it is a valid, binding and
enforceable obligation of the applicable Installment Contract
obligor;
(ii) it is enforceable against the applicable Installment
Contract obligor for the amount shown as owing in the contract and
in any related records;
(iii) it complied at the time it was originated or made, and
is currently in compliance in all respects, with all requirements of
applicable federal, state and local laws, and regulations
thereunder, including, usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Billing Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act,
the Federal Trade Commission Act, the Xxxxxxxx-Xxxx Warranty Act,
Federal Reserve Board Regulations B, M and Z, state adaptations of
the National Consumer Act and of the Uniform Consumer Credit Code
and any other consumer credit or equal opportunity disclosure;
(iv) it is not subject to any material offset, credit,
allowance or adjustment;
68
(v) the Company or a Subsidiary has a first and prior
perfected security interest or ownership interest (received directly
or by assignment) in the financed vehicle securing the performance
of the applicable Installment Contract obligor;
(vi) the financed vehicle has been delivered to the
applicable Installment Contract obligor and, on the date of
delivery, satisfied all warranties, expressed or implied, made to
such Installment Contract obligor; and
(vii) the applicable Installment Contract obligor owns the
motor vehicle free of all liens or encumbrances, except the security
interest granted to Company or a Subsidiary or the lessor's interest
held by Company or a Subsidiary (received in each case directly or
by assignment) in the applicable Installment Contract.
7.18 Financial Covenant Amendments. In the event that, at any time while
this Agreement is in effect, the Company shall issue any indebtedness for
borrowed money which is not by its terms subordinate and junior to the
Indebtedness hereunder and such indebtedness shall include, or be issued
pursuant to a trust indenture or other agreement which includes, financial
covenants which are not substantially identical to the financial covenants set
forth in this Agreement, the Company shall so advise the Agent in writing. Such
notice shall be accompanied by a copy of the applicable agreement containing
such financial covenants. The Agent shall promptly furnish a copy of such notice
and the applicable agreement to each of the Banks. If the Majority Banks
determine in their sole discretion that some or all of the financial covenants
set forth in such agreement are more favorable to the lender thereunder than the
financial covenants set forth in this Agreement ("More Favorable Terms") and
that the Majority Banks desire that this Agreement be amended to incorporate the
More Favorable Terms, then the Agent shall give written notice of such
determination to the Company. Thereupon, and in any event within thirty (30)
days following the date of notice by Agent to the Company, Company and the Banks
shall enter into an amendment to this Agreement incorporating, on terms and
conditions acceptable to the Majority Banks, the More Favorable Terms.
7.19 Subsidiaries; Guaranties. With respect to each Person which becomes
a Significant Domestic Subsidiary of the Company subsequent to the Effective
Date hereof, within thirty (30) days of the date of Company's delivery of the
financial statements required under Section 7.3(b) or 7.3(c) which establish
that such Person is or has become a Significant Domestic Subsidiary, cause such
Subsidiary to execute and deliver to Agent, for and on behalf of each of the
Banks, a Joinder Agreement whereby such Significant Domestic Subsidiary becomes
obligated as a Guarantor under the Domestic Guaranty, together with such
supporting documentation, including without limitation corporate authority
items, certificates and opinions of counsel, as reasonably required by Agent,
acting in its capacity as Collateral Agent, as aforesaid.
7.20 Subsidiaries; Security Documents. (a) With respect to each existing
Subsidiary which becomes a Significant Domestic Subsidiary of the Company
subsequent to the Effective Date hereof, within thirty (30) days of the date of
the Company's delivery of the financial statements required under Section 7.3(b)
or 7.3(c) which establish that such Person is or has become a Significant
Domestic Subsidiary, and in the case of any newly acquired or created
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Significant Domestic Subsidiary, promptly following acquisition or creation, (i)
grant (or cause to be granted) a security interest and lien to the Agent, acting
in its capacity as Collateral Agent under the Intercreditor Agreement, in the
Collateral owned by such Significant Domestic Subsidiary substantially on the
terms provided in the Security Agreement and (ii) pledge (or cause to be
pledged) to the Agent, acting in its capacity as Collateral Agent under the
Intercreditor Agreement, all of the outstanding capital Stock of such
Significant Domestic Subsidiary which is owned by the Company or its
Subsidiaries substantially on the terms provided in the Security Agreement, in
each case, as security for the Indebtedness; and
(b) within thirty days following Agent's request (given at the
direction or with the concurrence of the Majority Banks) in the event of a
material change in any Dealer Agreement (or any related document) which, in the
reasonable discretion of Agent and the Majority Banks (supported by an opinion
of counsel) adversely affects any Collateral Document or which necessitates a
change in any Collateral Document in order to provide Agent and the Banks with
the full benefit thereof (and to extend such Collateral Documents to any
additional property rights or interests resulting from any such change in a
Dealer Agreement), enter into such amendments to the Collateral Documents so
affected, on terms and conditions as reasonably required by the Agent, acting in
its capacity as Collateral Agent, as aforesaid, or as Agent hereunder;
together in each case with such supporting documentation, including without
limitation corporate authority items, certificates and opinions of counsel, as
reasonably required by the Agent, acting in its capacity as Collateral Agent as
aforesaid.
8. NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Banks are
committed to make any Advances under this Agreement and thereafter so long as
any Indebtedness remains outstanding, it will not, and it will not allow its
Subsidiaries (but excluding, for purposes of Sections 8.10, 8.13, 8.14 and 8.15
hereof, any Special Purpose Subsidiary), without the prior written consent of
the Majority Banks, to:
8.1 Redemptions. Purchase, acquire or redeem any of its capital stock,
except for a Permitted Repurchase.
8.2 Business Purposes. Engage in, or make any investment in any business
engaged in, the provision of property and casualty insurance unless the Company
or such Subsidiary shall maintain reinsurance of its underwriting risk with a
third party(ies) rated "A-" or better by S&P or "A3" or better by Xxxxx'x for
all of the Company's or such Subsidiary's exposure in excess of one hundred
percent (100%) of the premiums written by the Company or such Subsidiary; or
engage in any business if, after giving effect thereto, the general nature of
the businesses of the Company and its Subsidiaries, taken as a whole, would no
longer be the provision of financing programs for the purchase or lease of used
motor vehicles, motor vehicle service protection programs, credit life, accident
and health insurance programs and other programs related to the foregoing (it
being understood that, in the course of the provision of such programs, the
Company may be obligated to remit monies held by it in connection with dealer
holdbacks, claims or refunds under insurance policies, or claims or refunds
under service contracts, and to
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make deposits in trust or otherwise as required under reinsurance agreements or
pursuant to state regulatory requirements); provided however that the Company
and its Subsidiaries shall manage and operate such businesses in substantially
the same manner that they are managed and operated as of the date hereof.
8.3 Mergers or Dispositions. Enter into any merger or consolidation,
except for any Permitted Merger or Permitted Transfer under clause (iv) of the
definition thereof, or sell, lease, transfer, relocate or dispose of all,
substantially all, or any material part of its assets, except for Permitted
Transfers and Permitted Securitization(s) and other transfers made pursuant to
the New Restructuring, provided that, both before and after giving effect
thereto, no Default or Event of Default has occurred and is continuing.
8.4 Guaranties. Become or remain obligated under or in respect of a
Guarantee Obligation, except by endorsement of cash items for deposit in the
ordinary course of business and except for the Guaranties and the Permitted
Guaranties.
8.5 Debt. Become or remain obligated for any indebtedness for borrowed
money, or for any indebtedness incurred in connection with the acquisition of
any property, real or personal, tangible or intangible, or for any other Debt,
except for:
(a) Indebtedness to Banks hereunder;
(b) current unsecured trade, utility or non-extraordinary accounts
payable arising in the ordinary course of Company's or any Subsidiary's
businesses;
(c) the Future Debt;
(d) Subordinated Debt, provided, however, that on the date any
such Debt is incurred, clauses (a) and (c) of the Funding Conditions shall have
been satisfied;
(e) Debt secured by Liens permitted under Section 8.6(b), not to
exceed an aggregate amount of Ten Million Dollars ($10,000,000) at any time
outstanding;
(f) such other Debt set forth in Schedule 8.5A and Schedule 8.5B
attached hereto, if any (in addition to any other matters set forth in this
Section 8.5), and any renewals or refinancing of such indebtedness in amounts
not exceeding the scheduled amounts (less, in the case of the Debt set forth in
Schedule 8.5A, any required amortization according to the terms thereof) on
substantially the same terms and otherwise in compliance with this Agreement;
(g) (i) Intercompany Loans by the Company to any Domestic
Subsidiary or by any Domestic Subsidiary to the Company or another Domestic
Subsidiary (excluding the Titling Subsidiary, any Special Purpose Subsidiary and
any other Subsidiary excluded from the definition of Significant Subsidiary by
the proviso at the end of such definition) made while no Default or Event of
Default has occurred and is continuing (both before and after giving effect
thereto), provided, however, that any such Intercompany Loan shall be evidenced
by and funded under an Intercompany Note which shall be pledged (pursuant to the
Security Agreement) to the Agent, in its capacity as Collateral Agent under the
Intercreditor Agreement, as security for the Indebtedness, (ii) Intercompany
Loans made to the Titling Subsidiary, subject to the limits set
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forth in Section 8.8(i) and provided, however, that any such Intercompany Loan
shall be evidenced by and funded under an Intercompany Note which shall be
pledged (pursuant to the Security Agreement) to the Agent, in its capacity as
Collateral Agent under the Intercreditor Agreement, as security for the
Indebtedness, (iii) Intercompany Loans by the Company or any Domestic Subsidiary
to a Foreign Subsidiary existing immediately prior to the Effective Date and
disclosed on Schedule 8.8 hereto and evidenced by an Intercompany Note pledged
(pursuant to the Security Agreement) to the Agent, in its capacity as Collateral
Agent under the Intercreditor Agreement, as security for the Indebtedness, and
(iv) Intercompany Loans (on a subordinated basis in relation to the Indebtedness
on substantially the basis set forth in the form of Intercompany Note, attached
hereto) by any Foreign Subsidiary to the Company, another Foreign Subsidiary or
a Domestic Subsidiary excluding any Special Purpose Subsidiary and any other
Subsidiary excluded from the definition of Significant Subsidiary by the proviso
at the end of such definition;
(h) Debt incurred by a Special Purpose Subsidiary under, and
secured by assets transferred pursuant to, a Permitted Securitization, whether
or not attributable to the Company under GAAP;
(i) Debt arising under Hedging Agreements entered into by the
Company (copies of which shall be provided to the Agent promptly following the
execution thereof and Permitted Guaranties); and
(j) other Debt for borrowed money in an amount not to exceed in
the aggregate for the Company and its Subsidiaries at any time outstanding, the
sum of Five Million Dollars ($5,000,000), which Debt shall be unsecured except
to the extent of any Lien permitted under Section 8.6(d) hereof.
8.6 Liens. Permit or suffer any Lien to exist on any of its properties,
real, personal or mixed, tangible or intangible, whether now owned or hereafter
acquired, except:
(a) in favor of Agent, as security for the Indebtedness and any
Liens granted to the holders, to the extent applicable (and subject to the terms
of this Agreement), Future Debt pursuant to Collateral Documents, on an equal
and ratable basis with comparable Liens granted to Agent, for and on behalf of
the Banks;
(b) purchase money mortgages or security interests in fixed assets
to secure purchase money Debt for fixed assets (including refinancing of such
mortgages or security interests and Capitalized Leases or other non-cancelable
leases having a term of twelve months or longer) not to exceed an aggregate
amount, for the Company and its Subsidiaries, incurred while in compliance with
this Agreement and the other Loan Documents, of Ten Million Dollars
($10,000,000) at any one time outstanding, provided that each such security
interest is created substantially contemporaneously with the acquisition of such
fixed assets and does not extend to any property other than the fixed asset so
financed, and any renewal or refinancing (subject to the foregoing) of such
Debt;
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(c) Permitted Liens and any Lien encumbering property interests,
rights or proceeds which are the subject of a transfer or encumbrance pursuant
to a Permitted Securitization; and
(d) Liens on the property of Company or any of its Subsidiaries
other than Advances to Dealers, Leased Vehicles, Installment Contracts, Leases
or financial assets or other property related thereto, not otherwise permitted
under subparagraphs (a) through (c) of this Section 8.6 if the obligations
secured by such Liens do not exceed, in an aggregate amount from time to time
outstanding, Two Million Five Hundred Thousand Dollars ($2,500,000).
8.7 Acquisitions. Other than (i) any Permitted Acquisition, (ii) any
transfer to the Company or any Subsidiary of any assets or business or ownership
interests by Company or any Subsidiary otherwise permitted by this Agreement or
(iii) any acquisition of any rights or property pursuant to a Permitted
Securitization or pursuant to the New Restructuring, purchase or otherwise
acquire or become obligated for the purchase of all or substantially all of the
assets or business interests of any Person, firm or corporation, or any shares
of stock (or other ownership interests) of any corporation, trusteeship or
association, or any business or going concern, or in any other manner effectuate
or attempt to effectuate an expansion of present business by acquisition.
8.8 Investments. Make or allow to remain outstanding any Investment in,
or any loans or advances to, any Person, firm, corporation or other entity or
association, other than:
(a) any loan or other advance by Company or a Subsidiary, as the
case may be, to any and all of its officers or employees, as the case may be, in
the normal course of business, so long as the aggregate of all such loans or
advances by the Company and its Subsidiaries does not exceed Three Million
Dollars ($3,000,000) at any time outstanding, plus reasonable, reimbursable
business and travel expenses;
(b) Permitted Investments at any time outstanding or in effect;
(c) Investments existing as of the date of this Agreement in
Company's Domestic Subsidiaries;
(d) (i) Intercompany Loans, Advances and Investments made pursuant
to the New Restructuring or the restructuring of the ownership of the Company's
Subsidiaries (but without the transfer of any cash or other property other than
to the extent necessary, upon formation, to meet minimum capitalization
requirements, if any, under applicable law), (ii) Intercompany Loans, Advances
and Investments by the Company or any Domestic Subsidiary (excluding the Titling
Subsidiary, any Special Purpose Subsidiary and any other Subsidiary excluded
from the definition of Significant Subsidiary by the proviso at the end of such
definition) to or in any other such Domestic Subsidiary, or any Person that
concurrently with such Investment becomes such a Domestic Subsidiary, made while
no Default or Event of Default has occurred and is continuing, and (iii)
Intercompany Loans, Advances and Investments existing immediately prior to the
Effective Date to or in any Foreign Subsidiaries and disclosed on Schedule 8.8
hereof;
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(e) Floor Plan Receivables and Notes Receivable in the ordinary
course of business;
(f) Advances to Dealers, Leased Vehicles and, subject to the
limitation contained in subparagraph (e) of this Section 8.8, receivables
arising from the sale or lease of goods and services by the Company or its
Subsidiaries, in each case in the ordinary course of business of Company and its
Subsidiaries;
(g) Permitted Acquisition(s) and Permitted Merger(s), to the
extent any such acquisition or merger shall be deemed to constitute an
Investment;
(h) Those Investments set forth on the attached Schedule 8.8;
(i) Intercompany Loans, Advances and Investments by the Company to
or in the Titling Subsidiary existing immediately prior to the Effective Date;
(j) Investments in any Subsidiary (including, without limitation,
any Special Purpose Subsidiary) from and after the date hereof, consisting of
(w) dispositions made pursuant to a Permitted Securitization and the resultant
Debt issued by a Special Purpose Subsidiary to another Subsidiary as part of a
Permitted Securitization, in each case to the extent constituting Investments
hereunder; (x) advances by Company (as servicer or administrative agent) which
are permitted under the definition of Permitted Guaranties; (y) the repurchase
or replacement from and after the Effective Date hereof of an aggregate amount
not to exceed $5,000,000 in Advances to Dealers, Installment Contracts (whether
assigned outright or related to Advances to Dealers) subsequently determined not
to satisfy the eligibility standards contained in the applicable Securitization
Documents relating to a Permitted Securitization or otherwise required to be
repurchased by the applicable Securitization Documents entered into in
compliance with the terms of this Agreement, so long as (i) such replacement is
accompanied by the repurchase of or release of encumbrances on such financial
assets previously transferred or encumbered pursuant to such securitization and
in the amount thereof, (ii) any replacement Advances to Dealers or Installment
Contracts (whether assigned outright or related to Advances to Dealers) which
are selected by Company according to the requirements set forth in clause (a) of
the definition of Permitted Securitization and (iii) such replacements are made
at a time when (both before and after giving effect thereto) no Default or Event
of Default has occurred and is continuing; (z) amounts required to fund any
Cleanup Call under the terms of such Permitted Securitization, and (zz) the
disposition to the Company or any Subsidiary (other than a Special Purpose
Subsidiary) of the capital stock of any Special Purpose Subsidiary;
(k) Investments in foreign currencies outstanding for no more than
fourteen (14) days that are necessary to fulfill foreign exchange contracts
entered into by the Company or any of its Subsidiaries for hedging purposes; and
(l) Investments, other than those set forth in subparagraphs (a)
through (k) above, in an aggregate amount at any time outstanding not to exceed
Five Million Dollars $5,000,000).
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.8 (except as otherwise expressly provided herein), such
Investment shall be taken at the
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original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation, but less any amount repaid or recovered on account
of capital or principal.
8.9 Accounts Receivable and Other Financial Assets. Except (i) to Agent,
in its capacity as Agent for and on behalf of the Banks or in its capacity as
Collateral Agent under the Intercreditor Agreement or (ii) pursuant to a
Permitted Transfer or (iii) in connection with a Permitted Securitization or
(iv) pursuant to the New Restructuring, sell, transfer, or assign or reallocate
from the Non-Specified Interest to a Specified Interest any account, note, trade
acceptance receivable, lease or other financial asset, unless such sale,
transfer, assignment or reallocation has been made in the ordinary course of
business or, if not in the ordinary course of business, the sum of (x) the face
value of the accounts, notes or trade acceptance receivables, leases or other
financial assets proposed to be transferred, plus (y) the face value of the
accounts, notes or trade acceptance receivables, leases or other financial
assets transferred by the Company and its Subsidiaries, excluding the face value
of accounts, notes or trade acceptance receivables, leases and other financial
assets transferred pursuant to clauses (i), (ii), and (iii) above, since June
30th of the preceding calendar year, does not exceed Fifteen Million Dollars
($15,000,000); provided, however, that in the case of all sales, transfers,
assignments or reallocations permitted under this Section 8.9, no Default or
Event of Default shall have occurred and be continuing (both before and after
giving effect thereto) and both before and after giving effect to such
disposition (and taking into account any reduction in the Indebtedness with the
proceeds of such disposition as required hereunder), the Company shall be in
compliance with the Borrowing Base Limitation, as confirmed by a Borrowing Base
Certificate (and any supporting information reasonably required by the Agent)
submitted by the Company not less than five (5) Business Days prior to the date
of such disposition, and dated as of the proposed date of such disposition, and
by an updated Borrowing Base Certificate (to be provided within 10 Business Days
of the date of such disposition).
8.10 Transactions with Affiliates. Enter into any transaction with any of
its stockholders or officers or its Affiliates (including without limitation
affiliated Dealers), except in the ordinary course of business and on terms not
materially less favorable than would be usual and customary in similar
transactions between Persons dealing at arm's length.
8.11 No Further Negative Pledges. Enter into or become subject to any
agreement (i) prohibiting the guaranteeing by the Company or any Subsidiary of
any obligations, (ii) prohibiting the creation or assumption of any lien or
encumbrance upon the properties or assets of the Company or any Subsidiary,
whether now owned or hereafter acquired, or (iii) requiring an obligation to
become secured (or further secured) if another obligation is secured or further
secured, other than (A) loan documents evidencing or otherwise related to the
Future Debt or unsecured overdraft lines of credit or similar credit
arrangements maintained by the Subsidiaries in the ordinary course of business
(but limited to the applicable Subsidiary or the property and assets of the
applicable Subsidiary), or any purchase money Debt permitted under this
Agreement or the other Loan Documents, but only to the extent of the property
acquired with the proceeds of such purchase money Debt, and (B) other than
pursuant to any of the Securitization Documents, but as to any prohibition on
the creation or assumption of any lien or encumbrance, only to the extent of the
financial assets and the other rights and property transferred or encumbered or
otherwise disposed of in connection with the Permitted Securitization covered by
such Securitization Documents.
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8.12 Prepayment of Debts. Except for Permitted Prepayments and for
prepayments of Intercompany Loans made pursuant to the New Restructuring or in
accordance with the form of Intercompany Note, attached hereto, prepay,
purchase, redeem or defease any Debt for money borrowed, excluding, subject to
the terms hereof, the Indebtedness, and excluding (i) paydowns from time to time
of permitted working capital facilities or other revolving debt, (ii) mandatory
payments, prepayments or redemptions of Future Debt and (iii) with respect only
to Permitted Securitizations, any payment pursuant to a Cleanup Call.
8.13 Amendment of Future Debt Documents. Except with the prior written
approval of Agent and the Majority Banks, amend, modify or otherwise alter (or
suffer to be amended, modified or altered) or waive (or permit to be waived) in
any material respect, any documents or instruments evidencing or otherwise
related to Future Debt so as to shorten the original maturity date or
amortization schedule thereof, or amend, modify or otherwise alter (or suffer to
be amended, modified or altered) any documents or instruments evidencing or
otherwise related to Future Debt to include (or enter into any Future Debt
Documents which include) any covenants or other provisions that require, for the
amendment of any term or provision of this Agreement, or the waiver of any term
or provision hereof, the approval or consent of any other creditor of the
Company; provided, however, that, solely for purposes of this Section 8.13, any
Bank which fails, within fifteen (15) Business Days of receipt of a written
notice from Company of its intent to make such amendment, modification or
alteration (or waiver) in respect of the Future Debt, (accompanied by a summary,
in reasonable detail, of the proposed terms and conditions thereof, captioned
"notice of intent to amend Future Debt" and stating that approval is deemed to
be given if an objection is not made within fifteen (15) Business Days of
receipt of such notice), to object in writing to such action shall be deemed to
have given its approval of such amendment, modification, alteration or waiver.
8.14 Amendment of Subordinated Debt Documents. Amend, modify or otherwise
alter (or suffer to be amended, modified or altered) any of the material terms
and conditions of those documents or instruments evidencing or otherwise related
to Subordinated Debt (once approved by the requisite Banks) or waive (or permit
to be waived) any such provision thereof in any material respect, without the
prior written approval of Agent and the Majority Banks. For purposes of those
documents and instruments evidencing or otherwise related to the Subordinated
Debt, any increase in the original interest rate or principal amount, any
shortening of the original amortization, any change in any default, remedial or
other repayment terms, any change in or waiver of conditions contained therein
which are required under or necessary for compliance with this Agreement or the
other Loan Documents or any change in the subordination provisions contained
therein, shall (without reducing the scope of this Section 8.14) be deemed to be
material.
8.15 Limitation on Dividends. Declare, make or otherwise set apart,
directly or indirectly, any funds or other property for, or incur any liability
to make any dividend or other distribution, direct or indirect and whether
payable in cash or property, on account of any capital stock or other equity
interest of the Company or any of its Subsidiaries, except to the extent that
any such dividend or distribution (i) is payable to the Company or any of its
Subsidiaries or (ii) is payable solely in capital stock or other equity
interests of the Company or any such Subsidiary (other than any Special Purpose
Subsidiary), unless, at the time of such action (and giving effect thereto) no
Default or Event of Default has occurred and is continuing.
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8.16 Securitization Transaction; Amendments to Securitization Documents.
Engage in a Securitization Transaction, other than a Permitted Securitization
and, except in connection with a Permitted Securitization, assign and transfer
any financial assets to a Securitized Pool, and once executed and delivered
pursuant to a Permitted Securitization, amend, modify or otherwise alter any of
the material terms and conditions of any Securitization Documents or waive (or
permit to be waived) any such provision thereof in any material respect, adverse
to the Company or any Subsidiary, without the prior written approval of Agent
and the Majority Banks. For purposes of the Securitization Documents, the
"material terms and conditions" thereof shall be deemed solely those terms or
conditions with respect to servicer fees, servicer expenses, defaults, events of
default, recourse to the Company or any Subsidiary (other than a Special Purpose
Subsidiary), Cleanup Calls or conditions contained therein which are required
under or necessary for compliance with this Agreement.
8.17 Amendments to Titling Subsidiary Agreements. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) in any material
respect adverse to the Banks, any of the Titling Subsidiary Agreements or any
other documents or instruments relating to the establishment or operation of the
Titling Subsidiary. For purposes of such documents or instruments, any
amendments to or changes in the provisions relating to the creation or transfer
of Specified Interests and the allocation or reallocation of financial assets or
other property thereto, and any amendment, modification, resignation or removal
whereby the Company shall cease to be the founding member of or otherwise cease
to control the Titling Subsidiary or cease to be the administrative agent under
the Administrative Agency Agreement shall (without reducing the scope of this
Section 8.17) be deemed to be materially adverse to the Banks.
9. DEFAULTS
9.1 Events of Default. Any of the following events is an "Event of
Default":
(a) non-payment of the principal or interest, when due, under any
of the Notes issued hereunder, or of any Letter of Credit Obligation in
accordance with the terms thereof;
(b) Default in the payment of any money by Company under this
Agreement (other than as set forth in subsection (a), above), within three (3)
days of the date the same is due and payable;
(c) default in the observance or performance of any of the other
conditions, covenants or agreements set forth in this Agreement or any of the
other Loan Documents by any party thereto (provided that, with respect to the
covenants set forth in Sections 7.9, 7.11, 7.14, 7.15 and 7.16(a) hereof, such
event has continued for thirty (30) consecutive days) or the occurrence of any
other default or event of default, as the case may be, hereunder or thereunder;
(d) any representation or warranty made or deemed made by Company
herein or in any instrument submitted pursuant hereto or by any other party to
the Loan Documents proves untrue in any material adverse respect when made or
deemed made;
(e) any provision of the Domestic Guaranty or any of the
Collateral Documents shall at any time for any reason (other than in accordance
with its terms or the terms of this Agreement) cease to be valid and binding and
enforceable against the Company, or any
77
Significant Subsidiary which is a party thereto, as applicable, or the validity,
binding effect or enforceability thereof shall be contested by any Person, or
the Company, or any Significant Subsidiary which is a party thereto shall deny
that it has any or further liability or obligation under the Domestic Guaranty
or any of the Collateral Documents, as applicable, or the Domestic Guaranty or
any of the Collateral Documents shall be terminated, invalidated, revoked or set
aside or in any way cease to give or provide to the Banks and the Agent the
benefits purported to be created thereby;
(f) default in the payment of any other obligation of Company or
any of its Subsidiaries for borrowed money in an aggregate amount in excess of
Five Million Dollars ($5,000,000); or default in the observance or performance
of any conditions, covenants or agreements related or given with respect to any
other obligations for borrowed money in an aggregate amount in excess of Five
Million Dollars ($5,000,000), sufficient to permit the holder thereof to
accelerate the maturity of such obligation or, with respect to the
Securitization Documents, (i) the occurrence (beyond any applicable period of
grace or cure) of any "servicer event of default" thereunder or (ii) the
occurrence of any other default (beyond any applicable period of grace or cure)
by Company or any of its Subsidiaries, including any Special Purpose Subsidiary,
under the Securitization Documents, which can be reasonably expected to result
in recourse liability against the Company or any of its Subsidiaries (other than
a Special Purpose Subsidiary) in an aggregate amount exceeding $5,000,000;
(g) a final judgment or final judgments for the payment of money
aggregating in excess of Five Million Dollars ($5,000,000), shall be outstanding
against any one or more of the Company and its Subsidiaries and any one of such
judgments shall have been outstanding for more than thirty (30) days from the
date of its entry, except to the extent that any such judgment is being
contested in good faith by appropriate proceedings which provide for a stay of
any enforcement action against the Company or such Subsidiary during the
pendency of such proceedings and for which adequate reserves have been
established and where nonpayment of such judgment could not reasonably be
expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole;
(h) any Person shall engage in any Prohibited Transaction
involving any Pension Plan, (ii) any accumulated funding deficiency (as defined
in Section 6.16 hereof), whether or not waived, shall exist with respect to any
Pension Plan or any Lien in favor of the PBGC or a Pension Plan shall arise on
the assets of the Company or any ERISA Affiliate, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee appointed
or a trustee shall be appointed to administer, or to terminate, any Single
Employer Plan, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA or (v) the Company or any ERISA Affiliate shall, or in the
reasonable opinion of the Majority Banks is likely to, incur any liability in
connection with a withdrawal from, or the insolvency, bankruptcy or
reorganization of, a Multiemployer Plan and in each case in clauses (i) through
(v) above, (x) a period of sixty (60) days, or more, has elapsed from the
occurrence of such event or condition and (y) such event or condition, together
with all other such events or conditions, if any, could reasonably be expected
to subject the Company or any of its Subsidiaries to any tax, penalty or other
liabilities in the aggregate material in relation to the business, operations,
property or financial or other condition of the Company and its Subsidiaries
taken as a whole;
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(i) (a) Any Person or group of Persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended), other than
Xxxxxx Xxxx, his wife and children or trust(s) established for his or their
benefit, shall acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of the outstanding securities (on a
fully diluted basis and taking into account any securities or contract rights
exercisable, exchangeable or convertible into equity securities) of the Company
having voting rights in the election of directors under normal circumstances; or
(b) a majority of the members of the Board of Directors of the Company shall
cease to be Continuing Members. For purposes of the foregoing; "Continuing
Member" means a member of the Board of Directors of the Company who either (i)
was a member of the Company's Board of Directors on the Effective Date and has
been such continuously thereafter or (ii) became a member of such Board of
Directors after the Effective Date and whose election or nomination for election
was approved by a vote of the majority of the Continuing Members who are then
members of the Company's Board of Directors; or (c) there shall occur a "Change
in Control" (or equivalent event thereunder) under the documents relating to any
Future Debt then outstanding; or
(j) a receiver, liquidator, custodian or trustee of the Company or
any Subsidiary, or of all or any part of the property of the Company or any
Subsidiary, shall be appointed by court order and such order shall remain in
effect for more than sixty (60) days, or an order for relief shall be entered
with respect to the Company or any Subsidiary, or the Company or any Subsidiary
shall be adjudicated a bankrupt or insolvent; or any of the property of the
Company or any Subsidiary shall be sequestered by court order and such order
shall remain in effect for more than sixty (60) days; or a petition shall be
filed against the Company or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, and
shall not be dismissed within sixty (60) days after such filing; or the Company
or any Subsidiary shall file a petition in voluntary bankruptcy or seeking
relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or shall consent to the filing
of any petition against it under any such law; or the Company or any Subsidiary
shall make an assignment for the benefit of its creditors, or shall admit in
writing its inability, or shall fail, to pay its debts generally as they become
due, or shall consent to the appointment of a receiver, liquidator or trustee of
the Company or any Subsidiary or of all or any part of the property of the
Company or any Subsidiary.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent shall, if directed to do so by the Majority
Banks, declare any commitment of the Banks to extend credit hereunder
immediately terminated; (b) the Agent shall, if directed to do so by the
Majority Banks, declare the entire unpaid Indebtedness, including the Notes,
immediately due and payable, without presentment, notice or demand, all of which
are hereby expressly waived by Company; (c) upon the occurrence of any Event of
Default specified in Section 9.1(j) above, and notwithstanding the lack of any
declaration by Agent under the preceding clause (a) or (b), the Banks'
commitments to extend credit hereunder shall immediately and automatically
terminate and the entire unpaid Indebtedness, including the Notes, shall become
automatically due and payable without presentment, notice or demand; (d) the
Agent shall, upon being directed to do so by the Majority Banks, demand
immediate delivery of cash collateral, and the Company and each Account Party
agree to deliver such cash collateral
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upon demand, in an amount equal to the maximum amount that may be available to
be drawn at any time prior to the stated expiry of all outstanding Letters of
Credit, and (e) the Agent shall, if directed to do so by the Majority Banks or
the Banks, as applicable (subject to the terms hereof), exercise any remedy
permitted by this Agreement, the other Loan Documents, including without
limitation any of the Collateral Documents.
9.3 Rights Cumulative. No delay or failure of Agent and/or Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof, or the exercise of any other power, right
or privilege. The rights of Banks under this Agreement are cumulative and not
exclusive of any right or remedies which Banks would otherwise have.
9.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, AND FURTHER HEREBY IRREVOCABLY AGREE TO WAIVE THE RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY AND ALL ACTIONS OR PROCEEDINGS IN WHICH AGENT OR THE
BANKS (OR ANY OF THEM), ON THE ONE HAND, AND THE COMPANY, ON THE OTHER HAND, ARE
PARTIES, WHETHER OR NOT SUCH ACTIONS OR PROCEEDINGS ARISE OUT OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS, OR OTHERWISE. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the Banks
except in a writing signed by an officer of the Agent in accordance with Section
13.11 hereof. No single or partial exercise of any right, power or privilege
hereunder, nor any delay in the exercise thereof, shall preclude any other or
further exercise of the Banks' rights by Agent. No waiver of any Event of
Default shall extend to any other or further Event of Default. No forbearance on
the part of the Agent in enforcing any of the Banks' rights shall constitute a
waiver of any of their rights. Company expressly agrees that this Section may
not be waived or modified by the Banks or Agent by course of performance,
estoppel or otherwise.
9.6 Cross-Default. In addition to the other Events of Default specified
herein, any failure to perform and discharge when due, after allowance for any
applicable cure period, any of the obligations, covenants and agreements
required to be performed under the provisions of any instruments securing any
other present and future borrowings of Company from the Banks (or from Agent) in
renewal or extension of, or related to, this Agreement or any of the other Loan
Documents, or any security agreements in relation thereto, shall be an Event of
Default under the provisions of this Agreement entitling Agent, at the direction
or with the concurrence of the Majority Banks (without notice or any cure period
except as expressly provided herein or therein), to exercise any and all rights
and remedies provided hereby. Any Event of Default shall also constitute a
default under all other instruments securing this or any other present or future
borrowings, or any agreements in relation thereto, entitling Agent and the Banks
to exercise any and all rights and remedies provided therein.
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10. PAYMENTS, RECOVERIES AND COLLECTIONS.
10.1 Payment Procedure.
(a) All payments by Company of principal of, or interest on the
Revolving Credit Notes or the Swing Line Notes or of Letter of Credit
Obligations or Fees shall be made without setoff or counterclaim on the date
specified for payment under this Agreement not later than 11:00 a.m. (Detroit
time) in Dollars in immediately available funds to Agent, for the ratable
account of the Banks, at Agent's office located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, in respect of Domestic Advances or Fees payable in Dollars. Upon
receipt of each such payment, the Agent shall make prompt payment to each Bank,
in like funds of all amounts received by it for the account of such Bank.
(b) Unless the Agent shall have been notified by the Company prior
to the date on which any payment to be made by the Company is due that the
Company does not intend to remit such payment, the Agent may, in its discretion,
assume that the Company has remitted such payment when so due and the Agent may,
in reliance upon such assumption, make available to each Bank on such payment
date an amount equal to such Bank's share of such assumed payment. If the
Company has not in fact remitted such payment to the Agent, each Bank shall
forthwith on demand repay to the Agent the amount of such assumed payment made
available to such Bank, together with the interest thereon, in respect of each
day from and including the date such amount was made available by the Agent to
such Bank to the date such amount is repaid to the Agent at a rate per annum
equal to (i) for Prime-based Advances, the federal funds rate (daily average),
as the same may vary from time to time, and (ii) with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost (including the cost
of maintaining any required reserves or deposit insurance and of any fees,
penalties, overdraft charges or other costs or expenses incurred by Agent) of
carrying such amount.
(c) Whenever any payment to be made hereunder (other than payments
in respect of any Eurocurrency-based Advance or a Quoted Rate Advance) shall
otherwise be due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in computing interest, if any, in connection with such payment.
Whenever any payment of principal of, or interest on, a Eurocurrency-based
Advance or a Quoted Rate Advance shall be due on a day which is not a Business
Day the date of payment thereof shall be extended to the next succeeding
Business Day unless as a result thereof it would fall in the next calendar
month, in which case it shall be shortened to the next preceding Business Day
and, in the case of a payment of principal, interest thereon shall be payable
for such extended or shortened time, if any.
(d) All payments to be made by the Company under this Agreement or
any of the Notes (including without limitation payments under the Swing Line
Notes) shall be made without set-off or counterclaim, as aforesaid, and without
deduction for or on account of any present or future withholding or other taxes
of any nature imposed by any governmental authority or of any political
subdivision thereof or any federation or organization of which such governmental
authority may at the time of payment be a member, unless Company is compelled by
law to make payment subject to such tax. In such event, Company shall:
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(i) pay to the Agent for Agent's own account and/or, as the
case may be, for the account of the Banks (and, in the case of any
Swing Line Advances, pay to the Swing Line Bank which funded such
Advances) such additional amounts as may be necessary to ensure that
the Agent and/or such Bank or Banks receive a net amount equal to
the full amount which would have been receivable had payment not
been made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities
according to applicable law, and send to the Agent or the applicable
Bank (including the Swing Line Bank) or Banks, as the case may be,
such certificates or certified copy receipts as the Agent or such
Bank or Banks shall reasonably require as proof of the payment by
the Company of any such taxes payable by the Company.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes,
levies, imposts, duties, charges, fees, deductions and withholdings and any
restrictions or conditions resulting in a charge together with interest thereon
and fines and penalties with respect thereto which may be imposed by reason of
any violation or default with respect to the law regarding such tax, assessed as
a result of or in connection with the payment or delivery of funds into or out
of any jurisdiction other than the United States (whether assessed against
Company, the Agent or any of the Banks). The Company shall be reimbursed by the
applicable Lender for any payment made by the Company under this Section 10.1(d)
if the applicable Lender is not in compliance with its obligations under Section
13.14.
10.2 Application of Proceeds. Notwithstanding anything to the contrary in
this Agreement, after an Event of Default, the proceeds of any offsets,
voluntary payments by the Company or others, the proceeds of any Collateral and
any other sums received or collected in respect of the Indebtedness (net of
Agent's reasonable costs and expenses), shall be applied, first, to Indebtedness
evidenced by the Notes or under Hedging Agreements in such order and manner as
determined by the Majority Banks (subject, however, to the applicable
Percentages of the Revolving Credit held by each of the Banks and provided,
however, that the maximum amount of those proceeds which may be applied to
Indebtedness in respect of Hedging Agreements shall not exceed the maximum
amount of the Hedging Reserve stated in the definition thereof), next, to any
other Indebtedness on a pro rata basis, and then, if there is any excess, to the
Company. The application of such proceeds and other sums to the applicable
Indebtedness shall be based on each Bank's Percentage of such Indebtedness.
10.3 Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the Notes (or on account of
its participation in any Letter of Credit) in excess of its pro rata share of
payments then or thereafter obtained by all Banks upon principal of and interest
on all Notes (or such participation), such Bank shall purchase from the other
Banks such participations in the Notes (or subparticipations in the Letters of
Credit) held by them as shall be necessary to cause such purchasing Bank to
share the excess payment or other recovery ratably in accordance with the
Percentages of the Revolving Credit with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing holder, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
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10.4 Deposits and Accounts. In addition to and not in limitation of any
rights of any Bank or other holder of any of the Notes under applicable law,
each Bank and each other such holder shall, upon acceleration of the
indebtedness under the Notes and without notice or demand of any kind, have the
right to appropriate and apply to the payment of the Notes owing to it (whether
or not then due) any and all balances, credits, deposits, accounts or moneys of
Company then or thereafter with such Bank or other holder; provided, however,
that any such amount so applied by any Bank or other holder on any of the Notes
owing to it shall be subject to the provisions of Section 10.3 hereof.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
11.1 Reimbursement of Prepayment Costs. If Company makes any payment of
principal with respect to any Eurocurrency-based Advance or Quoted Rate Advance
on any day other than the last day of the Interest Period applicable thereto
(whether voluntarily, by acceleration, or otherwise), or converts or refunds (or
attempts to convert or refund) any such Advance; or if Company fails to borrow,
refund or convert into any Eurocurrency-based Advance or Quoted Rate Advance
after notice has been given by Company to Agent in accordance with the terms
hereof requesting such Advance, or if Company fails to make any payment of
principal or interest in respect of a Eurocurrency-based Advance or Quoted Rate
Advance when due, Company shall reimburse Agent and Banks, as the case may be,
on demand for any resulting loss, cost or expense incurred by Agent and Banks,
as the case may be as a result thereof, including, without limitation, any such
loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Banks, as the
case may be, shall have funded or committed to fund such Advance. Such amount
payable by Company to Agent and Banks, as the case may be may include, without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert, through the last day of the relevant Interest
Period, at the applicable rate of interest for said Advance(s) provided under
this Agreement, over (b) the amount of interest (as reasonably determined by
Agent and Banks, as the case may be) which would have accrued to Agent and
Banks, as the case may be, on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurocurrency market.
Calculation of any amounts payable to any Bank under this paragraph shall be
made as though such Bank shall have actually funded or committed to fund the
relevant Advance through the purchase of an underlying deposit in an amount
equal to the amount of such Advance and having a maturity comparable to the
relevant Interest Period; provided, however, that any Bank may fund any
Eurocurrency-based Advance or Quoted Rate Advance, as the case may be, in any
manner it deems fit and the foregoing assumptions shall be utilized only for the
purpose of the calculation of amounts payable under this paragraph. Upon the
written request of Company, Agent and Banks shall deliver to Company a
certificate setting forth the basis for determining such losses, costs and
expenses, which certificate shall be conclusively presumed correct, absent
manifest error.
11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Bank, as applicable, shall
designate a Eurocurrency Lending Office which maintains books separate from
those of the rest of Agent or such Bank, Agent or
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such Bank, as the case may be, shall have the option of maintaining and carrying
the relevant Advance on the books of such Eurocurrency Lending Office.
11.3 Circumstances Affecting Eurocurrency-based Rate Availability. If
with respect to any Interest Period, Agent or the Majority Banks (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally or deposits in
eurodollars, as the case may be, in the applicable amounts are not being offered
to the Agent or such Banks for such Interest Period, then Agent shall forthwith
give notice thereof to the Company. Thereafter, until Agent notifies Company
that such circumstances no longer exist, (i) the obligation of Banks to make
Eurocurrency-based Advances, and the right of Company to convert an Advance to
or refund an Advance as a Eurocurrency-based Advance, as the case may be, shall
be suspended, and (ii) the Company shall repay in full (or cause to be repaid in
full) the then outstanding principal amount of each such Eurocurrency-based
Advance covered hereby, together with accrued interest thereon, any amounts
payable under Sections 11.1 and 11.8 hereof, and all other amounts payable
hereunder on the last day of the then current Interest Period applicable to such
Advance. Upon the date for repayment as aforesaid and unless Company notifies
Agent to the contrary within two (2) Business Days after receiving a notice from
Agent pursuant to this Section, such outstanding principal amount shall be
converted to a Prime-based Advance as of the last day of such Interest Period.
11.4 Laws Affecting Eurocurrency-based Advance Availability. If, after
the date of this Agreement, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate such Bank shall forthwith give notice
thereof to Company and to Agent. Thereafter, (a) the obligations of Banks to
make Eurocurrency-based Advances and the right of Company to convert an Advance
into or refund an Advance as a Eurocurrency-based Advance shall be suspended and
thereafter Company may select as Applicable Interest Rates only those which
remain available and which are permitted to be selected hereunder, and (b) if
any of the Banks may not lawfully continue to maintain an Advance to the end of
the then current Interest Period applicable thereto as a Eurocurrency-based
Advance, the applicable Advance shall immediately be converted to a Prime-based
Advance and the Prime-based Rate shall be applicable thereto for the remainder
of such Interest Period. For purposes of this Section, a change in law, rule,
regulation, interpretation or administration shall include, without limitation,
any change made or which becomes effective on the basis of a law, rule,
regulation, interpretation or administration presently in force, the effective
date of which change is delayed by the terms of such law, rule, regulation,
interpretation or administration.
11.5 Increased Cost of Eurocurrency-based Advances. If the adoption after
the date of this Agreement of, or any change after the date of this Agreement
in, any applicable law, rule or regulation of or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any of the Banks (or any of their respective Eurocurrency Lending
84
Offices) with any request or directive (whether or not having the force of law)
made by any such authority, central bank or comparable agency after the date
hereof:
(a) shall subject any of the Banks (or any of their respective
Eurocurrency Lending Offices) to any tax, duty or other charge with respect to
any Advance or any Note or shall change the basis of taxation of payments to any
of the Banks (or any of their respective Eurocurrency Lending Offices) of the
principal of or interest on any Advance or any Note or any other amounts due
under this Agreement in respect thereof (except for changes in the rate of tax
on the overall net income of any of the Banks or any of their respective
Eurocurrency Lending Offices imposed by the jurisdiction in which such Bank's
principal executive office or Eurocurrency Lending Office is located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any of the Banks
(or any of their respective Eurocurrency Lending Offices) or shall impose on any
of the Banks (or any of their respective Eurocurrency Lending Offices) or the
foreign exchange and interbank markets any other condition affecting any Advance
or any of the Notes;
and the result of any of the foregoing is to increase the costs to any of the
Banks of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or to reduce the amount of any sum received or
receivable by any of the Banks under this Agreement or under the Notes in
respect of a Eurocurrency-based Advance, then such Bank shall promptly notify
Agent (or, in the case of a Swing Line Advance, shall notify Company directly,
with a copy of such notice to Agent), and Agent (or such Bank, as aforesaid)
shall promptly notify Company of such fact and demand compensation therefor and,
within fifteen (15) days after such notice, Company agrees to pay to such Bank
such additional amount or amounts as will compensate such Bank or Banks for such
increased cost or reduction. Agent will promptly notify Company of any event of
which it has knowledge which will entitle Banks to compensation pursuant to this
Section, or which will cause Company to incur additional liability under
Sections 11.1 and 11.6 hereof, provided that Agent shall incur no liability
whatsoever to the Banks or Company in the event it fails to do so. A certificate
of Agent (or such Bank, if applicable) setting forth the basis for determining
such additional amount or amounts necessary to compensate such Bank or Banks
shall be conclusively presumed to be correct save for manifest error. For
purposes of this Section, a change in law, rule, regulation, interpretation,
administration, request or directive shall include, without limitation, any
change made or which becomes effective on the basis of a law, rule, regulation,
interpretation, administration, request or directive presently in force, the
effective date of which change is delayed by the terms of such law, rule,
regulation, interpretation, administration, request or directive.
11.6 Indemnity. The Company will indemnify Agent and each of the Banks
against any loss or expense which may arise or be attributable to the Agent's
and each Bank's obtaining, liquidating or employing deposits or other funds
acquired to effect, fund or maintain the Advances (a) as a consequence of any
failure by the Company to make any payment when due of any amount due hereunder
in connection with a Eurocurrency-based Advance, (b) due to any failure of the
Company to borrow, refund or convert on a date specified therefor in a Request
for
85
Advance or request for Swing Line Advance or (c) due to any payment, prepayment
or conversion of any Eurocurrency-based Advance on a date other than the last
day of the Interest Period for such Advance. Such loss or expense shall be
calculated based upon the present value, as applicable, of payments due from the
Company with respect to a deposit obtained by the Agent or any of the Banks in
order to fund such Advance to the Company. The Agent's and each Bank's, as
applicable, calculations of any such loss or expense shall be furnished to the
Company and shall be conclusive, absent manifest error.
11.7 Other Increased Costs. In the event that at any time after the date
of this Agreement any change in law such as described in Section 11.5 hereof,
shall, in the opinion of the Agent or any of the Banks (as certified to Agent in
writing by such Bank) require that the Revolving Credit, the Swing Line, or any
other Indebtedness or commitment under this Agreement or any of the other Loan
Documents be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by each of the
Banks or any corporation controlling such Banks, as the case may be (or shall
increase the amount of capital required under such law, as of the date hereof,
to be so maintained), the Agent, in consultation with the Banks, shall notify
the Company. The Company and the Agent shall thereafter negotiate in good faith
an agreement to increase the Revolving Credit Facility Fee, or other fees
payable to the Agent, for the benefit of the Banks under this Agreement, which
in the opinion of the Agent (in consultation with the Banks), will adequately
compensate the Banks for the costs associated with such change in law. If such
increase is approved in writing by the Company within thirty (30) days from the
date of the notice to the Company from the Agent, the Revolving Credit Facility
Fee or other fees (if applicable) payable by the Company under this Agreement
shall, effective from the date of such agreement, include the amount of such
agreed increase. If the Company and the Agent (in consultation with the Banks)
are unable to agree on such an increase within thirty (30) days from the date of
the notice to the Company, the Company shall have the option, exercised by
written notice to the Agent within forty-five (45) days from the date of the
aforesaid notice to the Company from the Agent, to terminate the Revolving
Credit and the Swing Line, as the case may be, or other commitments if
applicable, in which event, all sums then outstanding to Banks and to Agent
hereunder shall be due and payable in full. If (a) the Company and the Agent (in
consultation with the Banks) fail to agree on an increase in the Revolving
Credit Facility Fee or other fees (if applicable), and (b) the Company fails to
give timely notice that it has elected to exercise its option to terminate the
Revolving Credit or other commitments, if applicable, as set forth above, then
the Revolving Credit and the Swing Line, and such other commitments shall
automatically terminate as of the last day of the aforesaid forty-five (45) day
period, in which event all sums then outstanding to Banks and to Agent hereunder
shall be due and payable in full.
11.8 Right of Banks to Fund through Branches and Affiliates. Each Bank
(including without limitation the Swing Line Bank) may, if it so elects, fulfill
its commitment as to any Advance hereunder by designating a branch or Affiliate
of such Bank to make such Advance; provided that (a) such Bank shall remain
solely responsible for the performances of its obligations hereunder and (b) no
such designation shall result in any material increased costs to the Company.
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12. AGENT
12.1 Appointment of Agent. Each Bank and the holder of each Note appoints
and authorizes Agent to act on behalf of such Bank or holder under the Loan
Documents and to exercise such powers hereunder and thereunder as are
specifically delegated to or required of Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. Each Bank
agrees (which agreement shall survive any termination of this Agreement) to
reimburse Agent for all reasonable out-of-pocket expenses (including house and
outside attorneys' fees) incurred by Agent hereunder or in connection herewith
or with an Event of Default or in enforcing the obligations of Company under
this Agreement or the other Loan Documents or any other instrument executed
pursuant hereto, and for which Agent is not reimbursed by Company, pro rata
according to such Bank's Percentage, but excluding any such expenses resulting
from Agent's gross negligence or willful misconduct. Agent shall not be required
to take any action under the Loan Documents, or to prosecute or defend any suit
in respect of the Loan Documents, unless indemnified to its satisfaction by the
Banks against loss, costs, liability and expense (excluding liability resulting
from its gross negligence or willful misconduct). If any indemnity furnished to
Agent shall become impaired, it may call for additional indemnity and cease to
do the acts indemnified against until such additional indemnity is given.
12.2 Deposit Account with Agent. Company hereby authorizes Agent to
charge its general deposit account, if any, maintained with Agent for the amount
of any principal, interest, or other amounts or costs due under this Agreement
when the same becomes due and payable under the terms of this Agreement or the
Notes.
12.3 Exculpatory Provisions. Agent agrees to exercise its rights and
powers, and to perform its duties, as Agent hereunder and under the other Loan
Documents in accordance with its usual customs and practices in bank-agency
transactions, but only upon and subject to the express terms and conditions of
this Section 12 (and no implied covenants or other obligations shall be read
into this Agreement against the Agent); neither Agent nor any of its directors,
officers, employees or agents shall be liable to any Bank for any action taken
or omitted to be taken by it or them under this Agreement or any document
executed pursuant hereto, or in connection herewith or therewith, except for its
or their own willful misconduct or gross negligence, nor be responsible for any
recitals or warranties herein or therein, or for the effectiveness,
enforceability, validity or due execution of this Agreement or any document
executed pursuant hereto, or any security thereunder, or to make any inquiry
respecting the performance by Company or any of its Subsidiaries of its
obligations hereunder or thereunder. Agent shall not have, or be deemed to have,
a fiduciary relationship with any Bank by reason of this Agreement. Agent shall
be entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which it believes to be
genuine and to have been presented by a proper person.
12.4 Successor Agents. Agent may resign as such at any time upon at least
30 days prior notice to Company and all Banks. If Agent at any time shall resign
or if the office of Agent shall become vacant for any other reason, Majority
Banks shall, by written instrument, appoint a successor Agent (consisting of the
Syndication Agent, or of any other Bank or financial institution satisfactory to
such Majority Banks) which shall thereupon become Agent hereunder
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and shall be entitled to receive from the prior Agent such documents of transfer
and assignment as such successor Agent may reasonably request. Such successor
Agent shall succeed to all of the rights and obligations of the retiring Agent
as if originally named. The retiring Agent shall duly assign, transfer and
deliver to such successor Agent all moneys at the time held by the retiring
Agent hereunder after deducting therefrom its expenses for which it is entitled
to be reimbursed. Upon such succession of any such successor Agent, the retiring
agent shall be discharged from its duties and obligations hereunder, except for
its gross negligence or willful misconduct arising prior to its retirement
hereunder, and the provisions of this Section 12 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
12.5 Loans by Agent. Agent shall have the same rights and powers with
respect to the credit extended by it and the Notes held by it as any Bank and
may exercise the same as if it were not Agent, and the term "Bank" and, when
appropriate, "holder" shall include Agent in its individual capacity.
12.6 Credit Decisions. Each Bank acknowledges that it has, independently
of Agent and each other Bank and based on the financial statements of Company
and the Subsidiaries and such other documents, information and investigations as
it has deemed appropriate, made its own credit decision to extend credit
hereunder from time to time. Each Bank also acknowledges that it will,
independently of Agent and each other Bank and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this Agreement
or any document executed pursuant hereto.
12.7 Notices by Agent. Agent shall give prompt notice to each Bank of its
receipt of each notice or request required or permitted to be given to Agent by
Company pursuant to the terms of this Agreement and shall promptly distribute to
the Banks any reports received from the Company or any of its Subsidiaries under
the terms hereof, or other material information or documents received by Agent,
in its capacity as Agent, from the Company or its Subsidiaries.
12.8 Agent's Fees. Commencing on July 1, 2004 and on the first day of
each calendar quarter thereafter until the Indebtedness has been repaid and no
commitment to fund any loan hereunder is outstanding, the Company shall pay to
Agent an agency fee set forth (or to be set forth from time to time) in a letter
agreement between Company and Agent. The Agent's Fees described in this Section
12.8 shall not be refundable under any circumstances.
12.9 Nature of Agency. The appointment of Agent as agent is for the
convenience of Banks and Company in making Advances of the Revolving Credit or
any other Indebtedness of Company hereunder, and collecting fees and principal
and interest on the Indebtedness. No Bank is purchasing any Indebtedness from
Agent and this Agreement is not intended to be a purchase or participation
agreement.
12.10 Authority of Agent to Enforce Notes and This Agreement. Each Bank,
subject to the terms and conditions of this Agreement (including, without
limitation, any required approval or direction of the Majority Banks or the
Banks, as applicable, to be obtained by or given to the Agent hereunder),
authorizes the Agent with full power and authority as attorney-in-fact to
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institute and maintain actions, suits or proceedings for the collection and
enforcement of the Notes and to file such proofs of debt or other documents as
may be necessary to have the claims of the Banks allowed in any proceeding
relative to the Company, any of its Subsidiaries or its creditors or affecting
its properties, and to take such other actions which Agent considers to be
necessary or desirable for the protection, collection and enforcement of the
Notes, this Agreement or the other Loan Documents, but in each case only to the
extent of any required approval or direction of the Majority Banks or the Banks,
as applicable, obtained by or given to the Agent hereunder.
12.11 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such, to the extent not reimbursed by the Company, pro rata
according to their respective Percentages, from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, and reasonable out-of-pocket expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted to be taken or suffered in
good faith by the Agent hereunder, provided that no Bank shall be liable for any
portion of any of the foregoing items resulting from the gross negligence or
willful misconduct of the Agent or any of its officers, employees, directors or
agents.
12.12 Knowledge of Default. It is expressly understood and agreed that the
Agent (whether in its capacity as issuing bank, Swing Line Bank or otherwise)
shall be entitled to assume that no Default or Event of Default has occurred and
is continuing, unless the officers of the Agent immediately responsible for
matters concerning this Agreement shall have actual (rather than constructive)
knowledge of such occurrence or shall have been notified in writing by a Bank
that such Bank considers that a Default or an Event of Default has occurred and
is continuing, and specifying the nature thereof. Upon obtaining actual
knowledge of any Default or Event of Default as described above, the Agent shall
promptly, but in any event within three (3) Business Days after obtaining
knowledge thereof, notify each Bank of such Default or Event of Default and the
action, if any, the Agent proposes be taken with respect thereto.
12.13 Agent's Authorization; Action by Banks. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make any
request, or to take any other action, on behalf of the Banks (including without
limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice (subject to the requirement that amendments, waivers
or consents under Section 13.11 hereof be made in writing by the Majority Banks
or all the Banks, as applicable), or (ii) pursuant to the written consent of the
requisite Percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
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12.14 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct. Except as otherwise expressly provided in any of the Loan Documents,
Agent will not (and will not be obligated to) take any action, assert any rights
or pursue any remedies under this Agreement or any of the other Loan Documents
in violation or contravention of any express direction or instruction of the
Majority Banks or all of the Banks, as the case may be (as provided for
hereunder). Agent may refuse (and will not be obligated) to take any action,
assert any rights or pursue any remedies under this Agreement or any of the
other Loan Documents in the absence of the express written direction and
instruction of the Majority Banks or all of the Banks, as the case may be (as
provided for hereunder). In the event Agent fails, within a commercially
reasonable time, to take such action, assert such rights, or pursue such
remedies as the Majority Banks or all of the Banks, as the case may be (as
provided for hereunder), shall direct in conformity with this Agreement, the
Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), shall have the right to take such action, to assert such rights, or
pursue such remedies on behalf of all of the Banks unless the terms hereof
otherwise require the consent of all the Banks to the taking of such actions (in
which event all of the Banks must join in such action). Except as expressly
provided above or elsewhere in this Agreement or the other Loan Documents, no
Bank (other than the Agent, acting in its capacity as Agent) shall be entitled
to take any enforcement action of any kind under any of the Loan Documents.
12.15 Lead Arranger. Banc of America Securities, LLC has been designated
by the Company as "Lead Arranger" (and sole book manager) under this Agreement.
Other than its rights and remedies as a Bank hereunder, if applicable, the Lead
Arranger shall have no administrative, collateral or other rights or
responsibilities, provided, however, that the Lead Arranger shall be entitled to
the benefits afforded to Agent under Sections 12.5, 12.6 and 12.11 hereof.
12.16 Collateral Matters. (a) The Agent is authorized on behalf of all the
Banks, without the necessity of any notice to or further consent from the Banks
(but subject to the Intercreditor Agreement), from time to time to take any
action with respect to any Collateral or the Collateral Documents which may be
necessary to perfect and maintain a perfected security interest in and Liens
upon the Collateral granted pursuant to the Loan Documents.
(b) The Banks irrevocably authorize the Agent, at its option and
in its discretion (but subject to the Intercreditor Agreement), to release any
Lien granted to or held by the Agent upon any Collateral (i) upon termination of
the Revolving Credit Maximum Amount and payment in full of all Indebtedness
payable under this Agreement and under any other Loan Document; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition not otherwise prohibited hereunder; (iii)
constituting property in which Company or any Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; or (iv) if approved,
authorized or ratified in writing by the Majority Banks or all the Banks, as the
case may be, as provided in Section 13.11. The Banks consent to the dissolution
of Credit Acceptance Corporation Life Insurance Company ("CAC Life") which was
dissolved and liquidated into CAC Reinsurance Ltd., such consent being
retroactive to the date of such
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dissolution (the "CAC Life Restructuring"). The Banks further irrevocably
authorize the Agent, at its option and in its discretion, to release any Liens
granted to or held by the Agent (x) pursuant to any debentures executed and
delivered by Credit Acceptance Corporation UK Limited or CAC UK Funding Ltd. and
any lien, charge or other security documents executed and delivered by CAC of
Canada Limited or Credit Acceptance Corporation Ireland Limited, and (y) over
the assets of the T&C Subsidiary and CAC Life and over the equity interests of
the T&C Subsidiary and CAC Life, and the Banks further irrevocably authorize the
Agent, at its option and in its discretion, to grant such other releases as may
be necessary to effectuate the New Restructuring and the CAC Life Restructuring
(including the release of the T&C Subsidiary and CAC Life from their respective
obligations under the Guaranty. Upon request by the Agent at any time, the Banks
will confirm in writing the Agent's authority to release particular types or
items of Collateral pursuant to this Section 12.16(b).
13. MISCELLANEOUS
13.1 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with GAAP.
13.2 Consent to Jurisdiction. Company hereby irrevocably submits to the
non-exclusive jurisdiction of any United States Federal or Michigan state court
sitting in Detroit in any action or proceeding arising out of or relating to
this Agreement or any of the other Loan Documents and the Company hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in any such United States Federal or Michigan state
court. Company irrevocably consents to the service of any and all process in any
such action or proceeding brought in any court in or of the State of Michigan by
the delivery of copies of such process to the Company at its address specified
on the signature page hereto or by certified mail directed to such address.
Nothing in this Section shall affect the right of the Banks and the Agent to
serve process in any other manner permitted by law or limit the right of the
Banks or the Agent (or any of them) to bring any such action or proceeding
against the Company or any of its property in the courts of any other
jurisdiction. The Company hereby irrevocably waives any objection to the laying
of venue of any such suit or proceeding in the above described courts.
13.3 Law of Michigan. This Agreement and the Notes have been delivered at
Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan, except as and to the extent
expressed to the contrary in any of the Loan Documents. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
13.4 Interest. In the event the obligation of the Company to pay interest
on the principal balance of the Notes is or becomes in excess of the maximum
interest rate which the Company is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect
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to such Bank's Percentage of the Revolving Credit, shall be deemed to be
immediately reduced to such maximum rate and all previous payments in excess of
the maximum rate shall be deemed to have been payments in reduction of principal
and not of interest.
13.5 Closing Costs; Other Costs. To the extent not restricted by any
financial assistance provisions of any applicable law, Company shall pay or
reimburse (a) Agent for payment of, on demand, all reasonable closing costs and
expenses, including, by way of description and not limitation, reasonable
in-house and outside attorney fees and advances, appraisal and accounting fees,
lien search fees, and required travel costs, incurred by Agent in connection
with the commitment, consummation and closing of the loans contemplated hereby,
or in connection with any refinancing or restructuring of the loans or Advances
provided under this Agreement or the other Loan Documents, or any amendment
thereof requested by Company, and (b) Agent and each of the Banks, as the case
may be, for all stamp and other taxes and duties payable or determined to be
payable in connection with the execution, delivery, filing or recording of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or duties. Furthermore,
all reasonable costs and expenses, including without limitation attorney fees,
incurred by Agent and, after the occurrence and during the continuance of an
Event of Default, by the Banks in revising, preserving, protecting, exercising
or enforcing any of its or any of the Banks' rights against Company, or
otherwise incurred by Agent and the Banks in connection with any Event of
Default or the enforcement of the loans (whether incurred through negotiations,
legal proceedings or otherwise), including by way of description and not
limitation, such charges in any court or bankruptcy proceedings or arising out
of any claim or action by any person against Agent or any Bank which would not
have been asserted were it not for Agent's or such Bank's relationship with
Company hereunder or otherwise, shall also be paid by Company. All of said
amounts required to be paid by Company hereunder and not paid forthwith upon
demand, as aforesaid, shall bear interest, from the date incurred to the date
payment is received by Agent, at the Prime-based Rate, plus two percent (2%).
13.6 Notices. Except as otherwise provided herein, all notices or demand
hereunder to the parties hereto shall be sufficient if made in writing and
delivered by messenger or deposited in the mail (certified or registered mail
(or the equivalent thereof), postage prepaid), and addressed to the parties as
set forth on Schedule 13.6 of this Agreement at the Company's address as set
forth on Schedule 13.6 or at such other address as such party may, by written
notice received by the other parties hereto, have designated as its address for
such purpose.
13.7 Further Action. Company, from time to time, upon written request of
Agent will make, execute, acknowledge and deliver or cause to be made, executed,
acknowledged and delivered, all such further and additional instruments, and
take all such further action, as may be required to carry out the intent and
purpose of this Agreement, and to provide for Advances under and payment of the
Notes, according to the intent and purpose herein and therein expressed.
13.8 Successors and Assigns; Assignments and Participations.
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(a) This Agreement shall be binding upon and shall inure to the
benefit of Company and the Banks and their respective successors and assigns.
(b) The foregoing shall not authorize any assignment by Company,
of its rights or duties hereunder, and no such assignment shall be made (or
effective) without the prior written approval of the Banks.
(c) The Company and Agent acknowledge that each of the Banks may
at any time and from time to time, subject to the terms and conditions hereof,
assign or grant participations in such Bank's rights and obligations hereunder
and under the other Loan Documents to any commercial bank, savings and loan
association, insurance company, pension fund, mutual fund, commercial finance
company or other similar financial institution, the identity of which
institution is approved by Company and Agent, such approval not to be
unreasonably withheld or delayed; provided, however, that (i) the approval of
Company shall not be required upon the occurrence and during the continuance of
a Default or Event of Default and (ii) the approval of Company and Agent shall
not be required for any such sale, transfer, assignment or participation to the
Affiliate of an assigning Bank, any other Bank or any Federal Reserve Bank. The
Company authorizes each Bank to disclose to any prospective assignee or
participant, once approved by Company and Agent, any and all financial
information in such Bank's possession concerning the Company which has been
delivered to such Bank pursuant to this Agreement; provided that each such
prospective participant shall have executed a confidentiality agreement
consistent with the terms of Section 13.13 hereof.
(d) Each assignment by a Bank of any portion of its rights and
obligations hereunder and under the other Loan Documents, other than assignments
to such Bank's Affiliates under Section 13.8(f) hereof, shall be made pursuant
to an Assignment Agreement ("Assignment Agreement") substantially (as determined
by Agent), in the form attached hereto as Exhibit G (with appropriate insertions
acceptable to Agent) and shall be subject to the terms and conditions hereof,
and to the following restrictions:
(i) each assignment shall cover all of the Notes issued by
Company hereunder to the assigning Bank (and not any particular Note
or Notes), and shall be for a fixed and not varying percentage
thereof, with the same percentage applicable to each such Note;
(ii) each assignment shall be in a minimum amount of Five
Million Dollars ($5,000,000);
(iii) no assignment shall violate any "blue sky" or other
securities law of any jurisdiction or shall require the Company or
any other Person to file a registration statement or similar
application with the United States Securities and Exchange
Commission (or similar state regulatory body) or to qualify under
the "blue sky" or other securities laws of any jurisdiction; and
(iv) each assignment shall be accompanied by the assignee's
joinder to the Intercreditor Agreement, if then in effect; and
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(v) no assignment shall be effective unless Agent has
received from the assignee (or from the assigning Bank) an
assignment fee of $3,500 for each such assignment.
In connection with any assignment subject to this Section 13.8(d), Company and
Agent shall be entitled to continue to deal solely and directly with the
assigning Bank in connection with the interest so assigned until (x) the Agent
shall have received a notice of assignment duly executed by the assigning Bank
and an Assignment Agreement (with respect thereto) duly executed by the
assigning Bank and each assignee; and (y) the assigning Bank shall have
delivered to the Agent the original of each Note held by the assigning Bank
under this Agreement. From and after the date on which the Agent shall notify
Company and the Bank which has accepted an assignment subject to this Section
13.8(d) that the foregoing conditions shall have been satisfied and all consents
(if any) required shall have been given, the assignee thereunder shall be deemed
to be a party to this Agreement. To the extent that rights and obligations
hereunder shall have been assigned to such assignee as provided in such notice
of assignment (and Assignment Agreement), such assignee shall have the rights
and obligations of a Bank under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment). In addition, the assigning
Bank, to the extent that rights and obligations hereunder shall have been
assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement, Company shall, to the extent applicable, execute
and deliver to the Agent in exchange for any surrendered Note, new Note(s)
payable to the order of the assignee in an amount equal to the amount assigned
to it pursuant to such notice of assignment (and Assignment Agreement), and with
respect to the portion of the Indebtedness retained by the assigning Bank, to
the extent applicable, new Note(s) payable to the order of the assigning Bank in
an amount equal to the amount retained by such Bank hereunder shall be executed
and delivered by the Company. Agent, the Banks and the Company acknowledge and
agree that any such new Note(s) shall be given in renewal and replacement of the
surrendered Notes and shall not effect or constitute a novation or discharge of
the Indebtedness evidenced by any surrendered Note, and each such new Note may
contain a provision confirming such agreement. In addition, promptly following
receipt of such Notes, Agent shall prepare and distribute to Company, and each
of the Banks a revised Exhibit D to this Agreement setting forth the applicable
new Percentages of the Banks (including the assignee Bank), taking into account
such assignment.
(e) Each Bank agrees that any participation agreement permitted
hereunder shall comply with all applicable laws and shall be subject to the
following restrictions (which shall be set forth in the applicable participation
agreement):
(i) such Bank shall remain the holder of its Notes
hereunder, notwithstanding any such participation;
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(ii) except as expressly set forth in this Section 13.8(e)
with respect to rights of setoff and the benefits of Section 11
hereof, a participant shall have no direct rights or remedies
hereunder;
(iii) a participant shall not reassign or transfer, or grant
any sub-participations in its participation interest hereunder or
any part thereof; and
(iv) such Bank shall retain the sole right and responsibility
to enforce the obligations of the Company relating to the Notes and
the other Loan Documents, including, without limitation, the right
to proceed against any Guaranties, or cause Agent to do so (subject
to the terms and conditions hereof), and the right to approve any
amendment, modification or waiver of any provision of this Agreement
without the consent of the participant (other than a participant
which is an Affiliate of such Bank), except for those matters
covered by Section 13.11(a) through (e) and (h) hereof (provided
that a participant may exercise approval rights over such matters
only on an indirect basis, acting through such Bank, and Company,
Agent and the other Banks may continue to deal directly with such
Bank in connection with such Bank's rights and duties hereunder).
Company agrees that each participant shall be deemed to have the right of setoff
under Section 10.4 hereof in respect of its participation interest in amounts
owing under this Agreement and the other Loan Documents to the same extent as if
the Indebtedness were owing directly to it as a Bank under this Agreement, shall
be subject to the pro rata recovery provisions of Section 10.3 hereof and shall
be entitled to the benefits of Section 11 hereof. The amount, terms and
conditions of any participation shall be as set forth in the participation
agreement between the issuing Bank and the Person purchasing such participation,
and none of the Company, the Agent and the other Banks shall have any
responsibility or obligation with respect thereto, or to any Person to whom any
such participation may be issued. No such participation shall relieve any
issuing Bank of any of its obligations under this Agreement or any of the other
Loan Documents (including without limitation the Collateral Documents), and all
actions hereunder shall be conducted as if no such participation had been
granted.
(f) Each assignment by a Bank to its Affiliates of all or any
portion of the Notes, or any Advances thereunder, may be made on such terms and
conditions as determined by such Bank (rather than pursuant to Section 13.8(d)
hereof), provided however that (i) following each such assignment, the assigning
Bank shall remain responsible for the performance of its obligations under this
Agreement and the other Loan Documents (including without limitation its
obligations in respect of any Notes and Advances thereunder so assigned), and
each such Affiliate assignee shall not be deemed a "Bank" hereunder, (ii)
Company and the Agent shall be entitled to continue to deal solely and directly
with such assigning Bank in connection with such Bank's rights and obligations
under this Agreement and the other Loan Documents, (iii) such assigning Bank
shall retain the sole right and responsibility to enforce the obligations of
Company under this Agreement and the other Loan Documents. In connection with
assignments to its Affiliates under this Section 13.8(f), an assigning Bank
shall act as agent for its Affiliates having received assignments hereunder, and
may appoint such Affiliates as such Bank's applicable Eurocurrency Lending
Office. Furthermore with respect to such assignments under
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this Section 13.8(f), it is expressly acknowledged that the assignment fee
provided for in Section 13.8(d)(iv) shall not apply.
(g) Nothing in this Agreement, the Notes or the other Loan
Documents, expressed or implied, is intended to or shall confer on any Person
other than the respective parties hereto and thereto and their successors and
assignees and participants permitted hereunder and thereunder any benefit or any
legal or equitable right, remedy or other claim under this Agreement, the Notes
or the other Loan Documents.
13.9 Indulgence. No delay or failure of Agent and the Banks in exercising
any right, power or privilege hereunder shall affect such right, power or
privilege nor shall any single or partial exercise thereof preclude any other or
further exercise thereof, or the exercise of any other right, power or
privilege. The rights of Agent and the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
13.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
13.11 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, or consent to any departure by the
Company therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Banks (or signed by the Agent at the
direction of the Majority Banks), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, (X) that no amendment, waiver or consent shall
increase the Percentage or the stated commitment amounts applicable to any Bank
unless approved, in writing, by the affected Bank and (Y) that no amendment,
waiver or consent shall, unless in writing and signed by all the Banks (or
signed by Agent at the direction of all of the Banks), do any of the following:
(a) increase the Revolving Credit Maximum Amount, except in accordance with
Section 2.18 hereof, (b) reduce the principal of, or interest on, the Notes or
any Fees or other amounts payable hereunder, (c) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any Fees or other amounts
payable hereunder, (d) waive any Event of Default specified in Section 9.1(a) or
(b) hereof, (e) release or defer the granting or perfecting of a lien or
security interest in any collateral or release any guaranty or similar
undertaking provided by any Person, except as shall be otherwise expressly
provided in this Agreement, the Intercreditor Agreement or any other Loan
Document, (f) take any action which requires the signing of all Banks pursuant
to the terms of this Agreement or any other Loan Document, (g) change the
aggregate unpaid principal amount of the Notes which shall be required for the
Banks or any of them to take any action under this Agreement or any other Loan
Document, (h) change this Section 13.11, or (i) change the definition of
"Majority Banks," "Percentage" or "Borrowing Base Limitation," and provided
further, however, that (x) no amendment, waiver, or consent shall, unless in
writing and signed by the Agent in addition to all the Banks, affect the rights
or duties of the Agent under this Agreement or any other Loan Document, whether
in its capacity as Agent, issuing bank or Swing Line Bank and (y) no amendment,
waiver, or consent shall, unless in writing and signed by the Lead Arranger in
addition to all the Banks, affect the rights or duties of the Lead Arranger
under this Agreement or any other Loan Document. All references in this
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Agreement to "Banks" or "the Banks" shall refer to all Banks, unless expressly
stated to refer to Majority Banks.
13.12 Taxes and Fees. Should any tax (other than a tax based upon the net
income of any Bank or Agent by any jurisdiction where a Bank or Agent is
located), recording or filing fee become payable in respect of this Agreement or
any of the other Loan Documents or any amendment, modification or supplement
hereof or thereof, the Company agrees to pay the same together with any interest
or penalties thereon and agrees to hold the Agent and the Banks harmless with
respect thereto.
13.13 Confidentiality. Agent and each Bank agrees that without the prior
consent of Company, it will not disclose (other than to its employees, to
another Bank or to its auditors or counsel) any information with respect to the
Company or any of its Subsidiaries which is furnished pursuant to the terms and
conditions of this Agreement or any of the other Loan Documents or which is
designated (in writing) by Company to be confidential; provided that Agent or
any Bank may disclose any such information (a) as has become generally available
to the public or has been lawfully obtained by Agent or such Bank from any third
party under no duty of confidentiality to the Company known to Agent or such
Bank after reasonable inquiry, (b) as may be required or appropriate in any
report, statement or testimony submitted to, or in respect of any inquiry by,
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over Agent or such Bank, including the Board of Governors of the
Federal Reserve System of the United States or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in respect of any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to Agent or such Bank, and
(e) to any permitted transferee or assignee or to any approved participant of,
or with respect to, the Notes, as aforesaid, which has signed a confidentiality
agreement consistent with the terms of this Section 13.13 hereof.
13.14 Withholding Taxes. If any Bank is not a United States person within
the meaning of Section 7701(a)(30) of the Internal Revenue Code, such Bank shall
promptly (but in any event prior to the initial payment of interest hereunder)
deliver to the Agent two executed copies of (i) Internal Revenue Service Form
W-8BEN or any successor form specifying the applicable tax treaty between the
United States and the jurisdiction of such Bank's domicile which provides for
the exemption from withholding on interest payments to such Bank, (ii) Internal
Revenue Service Form W-8ECI or any successor form evidencing that the income to
be received by such Bank hereunder is effectively connected with the conduct of
a trade or business in the United States or (iii) other evidence satisfactory to
the Agent that such Bank is exempt from United States income tax withholding
with respect to such income; provided, however, that such Bank shall not be
required to deliver to Agent the aforesaid forms or other evidence with respect
to Advances to the Company, if such Bank has assigned its entire interest in the
Revolving Credit (including any outstanding Advances thereunder and
participations in Letters of Credit issued hereunder), Swing Line and any Notes
issued to it by the Company, to an Affiliate which is incorporated under the
laws of the United States or a state thereof, and so notifies the Agent. Such
Bank shall amend or supplement any such form or evidence as required to insure
that it is accurate, complete and non-misleading at all times. Promptly upon
notice from the Agent of any determination by the Internal Revenue Service that
any payments previously made to such Bank
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hereunder were subject to United States income tax withholding when made, such
Bank shall pay to the Agent the excess of the aggregate amount required to be
withheld from such payments over the aggregate amount actually withheld by the
Agent. In addition, from time to time upon the reasonable request and at the
sole expense of the Company, each Bank and the Agent shall (to the extent it is
able to do so based upon applicable facts and circumstances), complete and
provide the Company with such forms, certificates or other documents as may be
reasonably necessary to allow the Company to make any payment under this
Agreement or the other Loan Documents without any withholding for or on the
account of any tax under Section 10.1(d) hereof (or with such withholding at a
reduced rate), provided that the execution and delivery of such forms,
certificates or other documents does not adversely affect or otherwise restrict
the right and benefits (including without limitation economic benefits)
available to such Bank or the Agent, as the case may be, under this Agreement or
any of the other Loan Documents, or under or in connection with any transactions
not related to the transactions contemplated hereby.
13.15 Effective Upon Execution. This Agreement shall become effective upon
the later of the Effective Date and the execution hereof by Banks, Agent and the
Company, and the issuance by the Company of the Revolving Credit Notes and the
Swing Line Notes hereunder, and shall remain effective until the Indebtedness
has been repaid and discharged in full and no commitment to extend any credit
hereunder remains outstanding.
13.16 Severability. In case any one or more of the obligations of the
Company under this Agreement, the Notes or any of the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of the Company shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of the Company under this Agreement, the Notes
or any of the other Loan Documents in any other jurisdiction.
13.17 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
13.18 Construction of Certain Provisions. If any provision of this
Agreement or any of the other Loan Documents refers to any action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision.
13.19 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or such condition exists.
13.20 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company or any
party to any of the Loan Documents made herein or in any of the other Loan
Documents or in any certificate, report,
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financial statement or other document furnished by or on behalf of the Company,
any such party in connection with this Agreement or any of the other Loan
Documents shall be deemed to have been relied upon by the Banks, notwithstanding
any investigation heretofore or hereafter made by any Bank or on such Bank's
behalf, and those covenants and agreements of the Company set forth in Section
11.8 hereof (together with any other indemnities of the Company contained
elsewhere in this Agreement or in any of the other Loan Documents, including but
not limited to Sections 7.14, 11.1, 11.5, 11.7, 13.5 and 13.12) and of Banks set
forth in Sections 12.1, 12.12 and 13.13 hereof shall, notwithstanding anything
to the contrary contained in this Agreement, survive the repayment in full of
the Indebtedness and the termination of any commitments to make Advances
hereunder.
13.21 Complete Agreement; Amendment and Restatement. This Agreement, the
Notes, any Requests for Advance or Letters of Credit hereunder, the other Loan
Documents and any agreements, certificates, or other documents given to secure
the Indebtedness, contain the entire agreement of the parties hereto, and none
of the parties hereto shall be bound by anything not expressed in writing. This
Agreement constitutes an amendment and restatement of the Prior Credit
Agreement, which Prior Credit Agreement is fully superseded and amended and
restated in its entirety hereby; provided, however, that the Indebtedness
governed by the Prior Credit Agreement shall remain outstanding and in full
force and effect and provided further that this Agreement does not constitute a
novation of such Indebtedness.
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