Exhibit 99.A
XXXXXXXXX COMPANY
AND CERTAIN BORROWING SUBSIDIARIES
-------------------------
CREDIT AGREEMENT
dated as of September 3, 1997
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THE BANKS NAMED HEREIN
and
NBD BANK, as Agent
Article Page
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I. DEFINITIONS.................................... 1
1.1 Certain Definitions....................... 1
1.2 Other Definitions; Rules of Construction.. 14
II. THE COMMITMENTS, THE SWINGLINE FACILITY
AND THE ADVANCES............................... 14
2.1 Commitment of the Banks................... 14
2.2 Bid-Option Loans.......................... 16
2.3 Effect on Commitments..................... 19
2.4 Termination and Reduction of Commitments.. 19
2.5 Fees...................................... 20
2.6 Disbursement of Syndicated Advances....... 20
2.7 Conditions for First Disbursement......... 22
2.8 Further Conditions for Disbursement....... 23
2.9 Subsequent Elections as to Borrowings..... 24
2.10 Limitation of Requests and Elections...... 24
2.11 Minimum Amounts; Limitation on
Number of Borrowings..................... 25
III. PAYMENTS AND PREPAYMENTS....................... 25
3.1 Principal Payments........................ 25
3.2 Interest Payments......................... 26
3.3 Letter of Credit Reimbursement Payments... 27
3.4 Payment Method............................ 29
3.5 No Setoff or Deduction.................... 30
3.6 Payment on Non-Business Day;
Payment Computations...................... 30
3.7 Additional Costs.......................... 30
3.8 Illegality and Impossibility.............. 32
3.9 Indemnification........................... 32
IV. REPRESENTATIONS AND WARRANTIES................. 32
4.1 Corporate Existence and Power............. 32
4.2 Corporate Authority....................... 33
4.3 Binding Effect............................ 33
4.4 Subsidiaries.............................. 33
4.5 Litigation................................ 33
4.6 Financial Condition....................... 33
4.7 Use of Loans.............................. 34
4.8 Consents, Etc............................. 34
4.9 Taxes..................................... 34
4.10 Title to Properties....................... 34
4.11 ERISA..................................... 34
4.12 Environmental and Safety Matters.......... 35
4.13 Borrowing Base............................ 35
V. COVENANTS...................................... 35
5.1 Affirmative Covenants..................... 00
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(x) Xxxxxxxxxxxx xx Xxxxxxxxx Xxxxxxxxx, Xxx.. 00
(x) Compliance with Laws, Etc................. 36
(c) Maintenance of Properties; Insurance...... 36
(d) Reporting Requirements.................... 36
(e) Accounting; Access to Records, Books, Etc. 37
(f) Guaranties................................ 38
(g) Further Assurances........................ 38
5.2 Negative Covenants............................... 38
(a) Current Ratio and Working Capital......... 38
(b) Net Worth................................. 38
(c) Tangible Net Worth........................ 38
(d) Interest Coverage Ratio................... 38
(e) Funded Debt to Total Capitalization....... 39
(f) Funded Debt to Tangible Capitalization.... 39
(g) Liens..................................... 39
(h) Merger; Etc............................... 40
(i) Disposition of Assets, Etc................ 40
(j) Acquisitions.............................. 41
(k) Nature of Business........................ 41
(l) Investments, Loans and Advances........... 41
(m) Negative Pledge Limitation................ 41
(n) Payments and Modification of Debt......... 41
(o) Additional Covenants...................... 42
(p) Indebtedness and Contingent Liabilities... 42
(q) Transactions with Affiliates.............. 42
VI. DEFAULT............................................... 43
6.1 Events of Default................................ 43
6.2 Remedies......................................... 45
VII. THE AGENT AND THE BANKS............................... 45
7.1 Appointment and Authorization.................... 45
7.2 Agent and Affiliates............................. 46
7.3 Scope of Agent's Duties.......................... 46
7.4 Reliance by Agent................................ 46
7.5 Default.......................................... 46
7.6 Liability of Agent............................... 46
7.7 Nonreliance on Agent and Other Banks............. 47
7.8 Indemnification.................................. 47
7.9 Resignation of Agent............................. 47
7.10 Sharing of Payments.............................. 48
VIII. GUARANTY.............................................. 49
8.1 Guarantee of Obligations......................... 49
8.2 Nature of Guaranty............................... 49
8.3 Waivers and Other Agreements..................... 49
8.4 Obligations Absolute............................. 50
8.5 No Investigation by Banks or Agent............... 50
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8.6 Indemnity....................................... 50
8.7 Subordination, Subrogation, Etc................. 51
IX. MISCELLANEOUS........................................ 51
9.1 Amendments, Etc................................. 51
9.2 Notices......................................... 51
9.3 No Waiver By Conduct; Remedies Cumulative....... 52
9.4 Reliance on and Survival of Various Provisions.. 52
9.5 Expenses........................................ 52
9.6 Successors and Assigns.......................... 54
9.7 Counterparts.................................... 56
9.8 Governing Law; Consent to Jurisdiction.......... 56
9.9 Table of Contents and Headings.................. 56
9.10 Construction of Certain Provisions.............. 56
9.11 Integration and Severability.................... 56
9.12 Independence of Covenants....................... 56
9.13 Interest Rate Limitation........................ 57
9.14 Joint Obligations; Contribution Rights;
Savings Clause.................................. 57
9.15 Confidentiality................................. 59
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THIS CREDIT AGREEMENT, dated as of September 3, 1997 (as amended or
modified from time to time, this "Agreement"), is by and among Xxxxxxxxx
Company, a Michigan corporation (the "Company"), each of the Subsidiaries of the
Company designated in Section 1.1 as a Borrowing Subsidiary (individually, a
"Borrowing Subsidiary" and, collectively, the "Borrowing Subsidiaries") (the
Company and the Borrowing Subsidiaries may each be referred to as a "Borrower"
and, collectively, as the "Borrowers"), the lenders party hereto from time to
time, (the "Banks" and individually, a "Bank") and NBD Bank, a Michigan banking
corporation, as agent for the Banks (in such capacity, the "Agent").
INTRODUCTION
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The Borrowers desire to obtain a revolving credit facility, including
letters of credit, in the aggregate principal amount of $150,000,000 (or the
equivalent thereof in any other permitted currency), in order to provide funds
for their general corporate purposes, and the Banks are willing to establish
such a credit facility in favor of the Borrowers on the terms and conditions
herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
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1.1 Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Absolute Rate Bid-Option Loan" means a Loan which pursuant to the
applicable Notice of Bid-Option Loan is made at the Bid-Option Absolute Rate.
"Adjusted EBIT" of any person shall mean, for any period, the Net
Income of such person for such period plus, without duplication and to the
extent included in the computation of such Net Income (a) Net Interest Expense,
(b) federal, state and local income taxes and other equivalent taxes, and (c)
extraordinary items (net of any extraordinary gains) and special reserves, all
as determined in accordance with generally accepted accounting principles.
"Adjusted EBITDA" of any person shall mean, for any period, the
Adjusted EBIT for such period plus, to the extent included in the computation of
such Adjusted EBIT, depreciation and amortization expense, all as determined in
accordance with generally accepted accounting principles.
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Affiliate" when used with respect to any person shall mean any other
person which, directly or indirectly, controls or is controlled by or is under
common control with such person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
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"Applicable Facility Fee" shall mean, with respect to any Application
Period, the per annum rate set forth below based upon the Leverage Ratio for the
Determination Period, provided that the Applicable Facility Fee as of the
Effective Date is .275%:
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Leverage Ratio Applicable Facility Fee
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(less than) .50 .175%
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(greater than or equal to) .50 but (less than) 1.00 .200%
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(greater than or equal to) 1.00 but (less than) 1.50 .200%
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(greater than or equal to) 1.50 but (less than) 2.00 .250%
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(greater than or equal to) 2.00 but (less than) 2.50 .275%
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(greater than or equal to) 2.50 .300%
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"Applicable Lending Office" shall mean, with respect to any Advance
made by any Bank or with respect to such Bank's Commitment, the office of such
Bank or of any Affiliate of such Bank located at the address specified as the
applicable lending office for such Bank set forth next to the name of such Bank
in the signature pages hereof or any other office or Affiliate of such Bank or
of any Affiliate of such Bank hereafter selected and notified to the Company and
the Agent by such Bank.
"Applicable Margin" shall mean, with respect to any Application
Period, the per annum rate set forth below based upon the Leverage Ratio for the
Determination Period, provided that as of the Effective Date the Applicable
Margin shall be .875%:
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Eurocurrency Rate
Syndicated Loans and
Letter of Credit Fee
Leverage Ratio under Section 2.5(b)(i)
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(less than) .50 .325%
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(greater than or equal to) .50 but (less than) 1.00 .400%
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(greater than or equal to) 1.00 but (less than) 1.50 .500%
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(greater than or equal to) 1.50 but (less than) 2.00 .650%
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(greater than or equal to) 2.00 but (less than) 2.50 .875%
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(greater than or equal to) 2.50 1.200%
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"Application Period" shall mean a period commencing with and including
the 60th day after the end of the most recently completed fiscal quarter of the
Company to and including the 59th day after the end of the next following fiscal
quarter of the Company or the next succeeding Business Day.
"Bank Obligations" shall mean all indebtedness, obligations and
liabilities, whether now owing or hereafter arising, direct, indirect,
contingent or otherwise, of the Borrowers to the Agent or any Bank pursuant to
the Loan Documents.
"Bid-Option Absolute Rate" means, with respect to any Absolute Rate
Bid-Option Loan, the Bid-Option Absolute Rate, as defined in Section
2.2(d)(ii)(E), that is offered for such Loan.
"Bid-Option Auction" means a solicitation of Bid-Option Quotes setting
forth Bid-Option Absolute Rates or Bid-Option Eurocurrency Rate Margins, as the
case may be, pursuant to Section 2.2(b).
"Bid-Option Eurocurrency Rate" means the sum of (a) the Bid-Option
Eurocurrency Rate Margin plus (b) the Eurocurrency Base Rate.
"Bid-Option Eurocurrency Rate Margin" means, with respect to any
Eurocurrency Rate Bid-Option Loan, the Bid-Option Eurocurrency Rate Margin, as
defined in Section 2.2(d)(ii)(F), that is offered for such Loan.
"Bid-Option Interest Period" means (a) with respect to each
Eurocurrency Rate Bid-Option Borrowing, the Eurocurrency Rate Interest Period
applicable thereto, and (b) with respect to each Absolute Rate Bid-Option
Borrowing, the period commencing on the date of such Borrowing and ending on the
date elected by the Borrower in the applicable Notice of Borrowing, which date
shall be not less than 30 and not more than 360 days after the date of such Bid-
Option Loan; provided that:
(i) any such Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business day; and
(ii) no such Interest Period that would end after the Termination
Date shall be permitted.
"Bid-Option Loan" means a Loan which is made by a Bank pursuant to a
Bid-Option Auction.
"Bid-Option Note" means a promissory note of the Borrowers in
substantially the form of Exhibit A hereto evidencing the obligation of the
Borrowers to repay Bid-Option Loans, as amended or modified from time to time
and together with any promissory note or notes issued in exchange or replacement
therefor.
"Bid-Option Percentage" means, with respect to any Bank, the
percentage of the aggregate outstanding principal amount of the Bid-Option Loans
of all the Banks represented by the outstanding principal amount of the Bid-
Option Loans of such Bank.
"Bid-Option Quote" means an offer by a Bank to make a Bid-Option Loan
in accordance with Section 2.2(d).
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"Bid-Option Quote Request" shall have the meaning ascribed thereto in
Section 2.2(b).
"Borrowing" shall mean the aggregation of Advances made to any
Borrower, or continuations and conversions of such Advances, made pursuant to
Article II on a single date and for a single Interest Period. A Borrowing may
be referred to for purposes of this Agreement by reference to the type of Loan
comprising the relating Borrowing, e.g., a "Floating Rate Borrowing" if such
Loans are Floating Rate Loans, a "Eurocurrency Rate Syndicated Borrowing" if
such Loans are Eurocurrency Rate Syndicated Loans, an "Absolute Rate Bid-Option
Borrowing" if such Loans are Absolute Rate Bid-Option Loans, or a "Eurocurrency
Rate Bid-Option Borrowing" if such Loans are Eurocurrency Rate Bid-Option Loans.
Floating Rate Borrowings and Fixed Rate Syndicated Borrowings may be similarly
collectively referred to as "Syndicated Borrowings", and Absolute Rate Bid-
Option Borrowings and Eurocurrency Rate Bid-Option Borrowings may be
collectively referred to as "Bid-Option Borrowings".
"Borrowing Base" shall mean the sum of (a) as of any date in (i) the
fiscal month of December, an amount equal to 60% of Eligible Accounts
Receivable, (ii) the fiscal month of November, an amount equal to 65% of
Eligible Accounts Receivable and (iii) any fiscal month other than November or
December, an amount equal to 70% of Eligible Accounts Receivable, plus (b) as of
any date in the fiscal months of July, August, September, February and March,
$20,000,000.
"Borrowing Subsidiary" shall mean any subsidiary of the Company or any
other person upon request by the Company to the Agent for designation of such
subsidiary or person as a "Borrowing Subsidiary" hereunder so long as (a) the
Required Banks consent to such designation, (b) the Company guarantees the
obligations of such new Borrowing Subsidiary pursuant to the terms of Article
VIII hereof, (c) such new Borrowing Subsidiary delivers all corporate or
organizational documents and authorizing resolutions reasonably requested by the
Agent and (d) the Borrowers and such new Borrowing Subsidiary execute all
agreements and take such other action reasonably requested by Agent.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which (a) the Agent is not open to the public for carrying on
substantially all of its banking functions or (b) if such reference relates to
the date for payment or purchase of any amount denominated in any currency other
than Dollars, banks are not generally open to the public for carrying on
substantially all of their banking functions in the principal financial center
of the country issuing such currency.
"Capital Lease" of any person shall mean any lease which, in
accordance with generally accepted accounting principles, is or should be
capitalized on the books of such person.
"Capital Stock" shall include all capital stock and any securities
exchangeable for or convertible into capital stock and any warrants, rights,
restricted stock, employee stock options, or other options to purchase or
otherwise acquire capital stock or such securities or any other form of equity
securities.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations thereunder.
"Commitment" shall mean, with respect to each Bank, the commitment of
each such Bank to make Syndicated Loans and to participate in Letter of Credit
Advances made through the Agent pursuant to Section 2.1, in amounts not
exceeding in aggregate principal amount outstanding at any time the respective
commitment amount for each such Bank set forth for such Bank on Schedule 1
hereto or
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otherwise established pursuant to Section 9.6, as such amounts may be reduced
from time to time pursuant to Section 2.4.
"Consolidated" or "consolidated" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more persons
of the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with generally accepted accounting principles.
"Contingent Liabilities" of any person shall mean, as of any date, all
obligations of such person or of others for which such person is contingently
liable, as obligor, guarantor, surety or in any other capacity, or in respect
of which obligations such person assures a creditor against loss or agrees to
take any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such person in respect of
any letters of credit, surety bonds or similar obligations and all obligations
of such person to advance funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other person.
"Current Assets" and "Current Liabilities" of any person shall mean,
as of any date, all assets or liabilities, respectively, of such person which,
in accordance with generally accepted accounting principles, are (or, if the
balance sheet is qualified, should be) classified as current assets or current
liabilities, respectively, on a balance sheet of such person.
"Default" shall mean any of the events or conditions described in
Section 6.1 which might become an Event of Default with notice or lapse of time
or both.
"Determination Date" means, with respect to any Application Period,
the last day of the Determination Period for such Application Period.
"Determination Period" means, with respect to any Application Period,
the period of four consecutive fiscal quarters of the Company ending with the
fiscal quarter ending immediately preceding such Application Period.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date, those
accounts receivable owned by the Company, Xxxxxxxxx Company of Canada Limited,
Anchor Bay Entertainment, Inc., Sell through Entertainment, Inc., SOFSOURCE,
Inc., Madacy Entertainment Group Limited, Madacy Entertainment Group, Inc. and
any other Subsidiary of the Company approved in writing from time to time by the
Agent (the Company and all of the other foregoing entities collectively referred
to as the "Designated Entities", and the Company represents that all of the
Designated Entities other than the Company are Subsidiaries of the Company),
valued at the face amount thereof (based upon the Dollar amount thereof if
payable in Dollars and based upon the Dollar Equivalent if payable in any
currency other than Dollars) less sales, excise or similar taxes and less
returns actually made, discounts previously processed, and credits, but shall
not include any such account receivable (a) that is not a bona fide existing
obligation created by the sale and actual delivery of inventory, goods or other
property or the furnishing of services or other good and sufficient
consideration in the ordinary course of business, (b) that is 45 days or more
past due from the
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invoice due date for the 10 largest customers (as of the most recently ended
fiscal year) on a consolidated basis, (c) that has been classified by any
Designated Entity as doubtful or has otherwise failed to meet established or
customary credit standards of any Designated Entity, (d) that is payable by any
account debtor that is the subject of any proceeding of the type described in
Section 6.1(i) hereof, (e) which is evidenced by a promissory note or other
instrument, (f) that is payable by any Significant Trade Debtor (other than
Kmart Corporation or any of its Subsidiaries) if 15% or more (based on value,
such value to be determined based on the lower of cost or market in accordance
with generally accepted accounting principles) of the inventory of such
Significant Trade Debtor (other than Kmart Corporation or any of its
Subsidiaries) is subject to any Lien superior in priority to any Lien on such
assets in favor of the Company, (g) that is subject to any contra-account
(including without limitation amounts owed to any account debtor relating to the
purchase of store fixtures by any account debtor on behalf of any Designated
Entity), (h) that is due from (A) any Person that has been placed on cash
advance only status, (B) any Person that is no longer considered to be a
customer of such Designated Entity, (C) Creative Marketing or (D) any Affiliate
of any Designated Entity, (i) that is subordinate or junior in right or priority
of payment to any other obligation or claim, (j) that is a deferred account
receivable, (k) that arises from restocking or similar charges or relates to a
product returned but not yet processed, or (l) that for any other reason is at
any time reasonably deemed by the Agent in good faith to be ineligible;
provided, however, without limiting the types of accounts receivable that may be
deemed ineligible pursuant to the foregoing clause (l), it is acknowledged that
all accounts receivable of the type not reported in the chain date/due date
aging report (or in similar reports by Madacy Entertainment Group Limited and
Madacy Entertainment Group, Inc.) furnished by the Company to the Agent prior to
the Effective Date will be considered ineligible.
"Environmental Laws" at any date shall mean all provisions of law,
statute, ordinances, rules, regulations, judgments, writs, injunctions, decrees,
orders, awards and standards which are applicable to any Borrower or any
Significant Subsidiary and promulgated by the government of the United States of
America or any foreign government or by any state, province, municipality or
other political subdivision thereof or therein or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning the protection of, or regulating the discharge of substances into,
the environment.
"Equivalent" of an amount of one currency (the "first currency")
denominated in another currency (the "second currency"), as of any date of
determination, shall mean the amount of the second currency which could be
purchased with the amount of the first currency at the spot or other relevant
rate of exchange quoted by the Agent at approximately 11:00 a.m. on such date,
which rate shall be substantially representative of the market rate.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any person, any trade or
business (whether or not incorporated) which, together with such person or any
Subsidiary of such person, would be treated as a single employer under Section
414 of the Code.
"Eurocurrency Base Rate" applicable to any Eurocurrency Interest
Period means, the rate per annum obtained by dividing (a) the per annum rate of
interest at which deposits in the Permitted Currency in which such Eurocurrency
Rate Loan is to be denominated for such Eurocurrency Interest Period and in an
aggregate amount comparable to (i) in the case of Eurocurrency Rate Syndicated
Loans, the amount of the related Eurocurrency Rate Syndicated Loan to be made by
the Agent in its capacity as a Bank hereunder and (ii) in the case of
Eurocurrency Rate Bid-Option Loans, the aggregate amount of the Eurocurrency
Rate Bid-Option Borrowing set forth in the related Bid-Option Quote Request, are
offered to
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the Agent by other prime banks in the applicable interbank market selected by
the Agent in its reasonable discretion, at approximately 11:00 a.m. London time,
on the second Eurocurrency Business Day prior to the first day of such
Eurocurrency Interest Period by (b) an amount equal to one minus the stated
maximum rate (expressed as a decimal) of all reserve requirements including,
without limitation, any marginal, emergency, supplemental, special or other
reserves, that is specified on the first day of such Eurocurrency Interest
Period by the Board of Governors of the Federal Reserve System (or any successor
agency thereto) or any governmental authority (including any nation or
government, any political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government) having jurisdiction with respect thereto, for
determining the maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System;
all as conclusively determined by the Agent, absent manifest error, such sum to
be rounded up, if necessary, to the nearest whole multiple of one one-hundredth
of one percent (1/100 of 1%).
"Eurocurrency Business Day" shall mean, with respect to any
Eurocurrency Rate Loan, a day which is both a Business Day and a day on which
dealings in Dollar deposits or the relevant Permitted Currency are carried out
in the relevant interbank market.
"Eurocurrency Interest Period" shall mean, with respect to any
Eurocurrency Rate Syndicated Loan, the period commencing on the day such
Eurocurrency Rate Syndicated Loan is made or converted to a Eurocurrency Rate
Syndicated Loan and ending on the date one, two, three, six or twelve months
thereafter, as any Borrower may elect under Section 2.6 or 2.9, and each
subsequent period commencing on the last day of the immediately preceding
Eurocurrency Interest Period and ending on the date one, two, three, six or
twelve months thereafter, as any Borrower may elect under Section 2.6 or 2.9,
and with respect to any Eurocurrency Rate Bid-Option Loan, the period commencing
on the date of such Eurocurrency Rate Bid-Option Loan and ending on a date
between 30 days and twelve months thereafter, as any Borrower may elect in the
Notice of Bid-Option Loan, provided, however, that (a) any Eurocurrency Interest
Period which commences on the last Eurocurrency Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Eurocurrency
Business Day of the appropriate subsequent calendar month, (b) each Eurocurrency
Interest Period which would otherwise end on a day which is not a Eurocurrency
Business Day shall end on the next succeeding Eurocurrency Business Day or, if
such next succeeding Eurocurrency Business Day falls in the next succeeding
calendar month, on the next preceding Eurocurrency Business Day, and (c) no
Eurocurrency Interest Period which would end after the Termination Date shall be
permitted.
"Eurocurrency Rate Loan" shall mean any Eurocurrency Rate Bid-Option
Loan or Eurocurrency Rate Syndicated Loan.
"Eurocurrency Rate Bid-Option Loan" means a Loan which pursuant to the
applicable Notice of Bid-Option Loan is made at the Bid-Option Eurocurrency
Rate.
"Eurocurrency Rate Syndicated Loan" means any Syndicated Loan which
bears interest at the Syndicated Eurocurrency Rate.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
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"Federal Funds Rate" shall mean the per annum rate that is equal to
the per annum rate established and announced by the Agent from time to time as
the opening federal funds rate paid or payable by the Agent in its regional
federal funds market for overnight borrowings from other banks;
as conclusively determined by the Agent, absent manifest error, such rate to be
rounded up, if necessary, to the nearest whole multiple of one one-hundredth of
one percent (1/100 of 1%), which Federal Funds Rate shall change simultaneously
with any change in such announced rates.
"Fixed Rate Loan" shall mean any Fixed Rate Syndicated Loan or Bid-
Option Loan.
"Fixed Rate Syndicated Loan" means any Eurocurrency Rate Syndicated
Loan.
"Floating Rate" shall mean the per annum rate equal to the greater of
(i) the Prime Rate in effect from time to time, and (ii) the sum of five-eighths
of one percent (5/8 of 1%) per annum plus the Federal Funds Rate in effect from
time to time; which Floating Rate shall change simultaneously with any change in
such Prime Rate or Federal Funds Rate, as the case may be.
"Floating Rate Loan" shall mean any Syndicated Loan which bears
interest at the Floating Rate.
"Funded Debt" of any person shall mean all Indebtedness that would, in
accordance with generally accepted accounting principles, constitute long term
debt, including (a) any Indebtedness with a maturity of longer than one year
after the creation of such Indebtedness, (b) any Indebtedness outstanding under
a revolving credit or similar agreement (and any renewal or extension thereof)
providing for borrowings which constitute long term debt, (c) any Capital Lease
and (d) any guarantee with respect to Funded Debt of another person.
Notwithstanding the foregoing, (i) any portion of Funded Debt included in
Current Liabilities (other than the Advances, including without limitation all
Swingline Loans, which shall be considered Funded Debt subject to the following
clause (ii) of this sentence) shall be excluded from Funded Debt and (ii) only
the highest amount of the aggregate Advances outstanding under this Agreement
which have not been paid off for thirty consecutive days during the most recent
six month period ended as of any day Funded Debt is measured shall be Funded
Debt.
"generally accepted accounting principles" shall mean generally
accepted accounting principles in effect as of the Effective Date and applied on
a basis consistent with that reflected in the financial statements referred to
in Section 4.6.
"Guaranties" shall mean the guaranty entered into by the Company for
the benefit of the Agent and the Banks pursuant to Article VIII of this
Agreement and guaranties entered into by each of the Guarantors for the benefit
of the Agent and the Banks pursuant to Section 5.1(f) in substantially the form
of Exhibit B hereto, as amended or modified from time to time.
"Guarantor" shall mean each Significant Subsidiary of the Company and
each person otherwise becoming a Significant Subsidiary of the Company, or
otherwise entering into a Guaranty, from time to time (except as otherwise
provided in Section 5.1(f)).
"Indebtedness" of any person shall mean, as of any date, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) the unpaid purchase price for
goods, property or services acquired by such person, except for accounts payable
arising in the ordinary course of business, (d) all obligations of such person
to purchase goods, property or services
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where payment therefor is required regardless of whether delivery of such goods
or property or the performance of such services is ever made or tendered
(generally referred to as "take or pay contracts"), other than obligations
incurred in the ordinary course of business, (e) all obligations of such person
in respect of any interest rate or currency swap, rate cap or other similar
transaction (valued in an amount equal to the highest termination payment, if
any, that would be payable by such person upon termination for any reason on the
date of determination), and (f) all obligations of others similar in character
to those described in clauses (a) through (e) of this definition for which such
person is contingently liable, as obligor, guarantor, surety or in any other
capacity, or in respect of which obligations such person assures a creditor
against loss or agrees to take any action to prevent any such loss (other than
endorsements of negotiable instruments for collection in the ordinary course of
business), including without limitation all reimbursement obligations of such
person in respect of letters of credit, surety bonds or similar obligations and
all obligations of such person to advance funds to, or to purchase assets,
property or services from, any other person in order to maintain the financial
condition of such other person. Notwithstanding the foregoing, clause (f) shall
not include (i) obligations or guarantees owing or guaranteed by any Subsidiary
or the Company to or for the benefit of any other Subsidiary or the Company, or
(ii) Unfunded Benefit Liabilities.
"Interest Coverage Ratio" shall mean, as of any date, the ratio of
(a) Consolidated Adjusted EBIT for the Company and its Subsidiaries as
calculated for the four most recently ended consecutive fiscal quarters of the
Company to (b) Consolidated Net Interest Expense of the Company and its
Subsidiaries as calculated for the same four fiscal quarters.
"Interest Coverage Ratio Condition" shall be deemed to exist on the
Effective Date and at all times thereafter until such time as the following
conditions are satisfied (such conditions defined herein as "Release
Conditions"): the Interest Coverage Ratio is greater than or equal to 2.5 to
1.0 as calculated as of the last day of the two most recently ended fiscal
quarters of the Company and no Event of Default or Default exists.
Notwithstanding the foregoing, an Interest Coverage Ratio Condition shall be
deemed to exist if at any time after the Release Conditions are satisfied the
Interest Coverage Ratio is less than or equal to 2.5 to 1.0 as calculated as of
last day of the most recently ended fiscal quarter of the Company, subject to
subsequent release if thereafter the Release Conditions are satisfied.
"Interest Payment Date" shall mean (a) with respect to any
Eurocurrency Rate Loan or Bid-Option Loan, the last day of each Interest Period
with respect to such Eurocurrency Rate Loan or Bid-Option Loan and, in the case
of any Interest Period exceeding three months, those days that occur during such
Interest Period at intervals of three months after the first day of such
Interest Period, and (b) in all other cases, the last Business Day of each
March, June, September and December occurring after the date hereof, commencing
with the first such Business Day occurring after the date of this Agreement.
"Interest Period" shall mean any Eurocurrency Interest Period or Bid-
Option Interest Period.
"Invitation for Bid-Option Quotes" shall mean an invitation for Bid-
Option Quotes in the form referred to in Section 2.2(c).
"Letter of Credit" shall mean a standby letter of credit having a
stated expiry date not later than twelve months after the date of issuance and
not later than the fifth Business Day before the Termination Date issued by the
Agent on behalf of the Banks for the account of any Borrower under an
application and related documentation acceptable to the Agent requiring, among
other things, immediate
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reimbursement by such Borrower to the Agent in respect of all drafts or other
demand for payment honored thereunder and all expenses paid or incurred by the
Agent relative thereto.
"Letter of Credit Advance" shall mean any issuance of a Letter of
Credit under Section 2.6 made pursuant to Section 2.1 in which each Bank
acquires a pro rata risk participation pursuant to Section 2.6(d).
"Letter of Credit Documents" shall have the meaning ascribed thereto
in Section 3.3(b).
"Leverage Ratio" shall mean, as of any date, the ratio of (a) the sum
of the Consolidated Funded Debt of the Company and its Subsidiaries plus the
current portion of the Consolidated Funded Debt of the Company and its
Subsidiaries as of such date to (b) the Consolidated Adjusted EBITDA of the
Company and its Subsidiaries for the four most recently ended consecutive fiscal
quarters of the Company.
"Lien" shall mean any pledge, assignment, deed of trust,
hypothecation, mortgage, security interest, conditional sale or title retaining
contract, financing statement filing, or any other type of lien, charge,
encumbrance or other similar claim or right.
"Loan" shall mean any Syndicated Loan, Swingline Loan or any Bid-
Option Loan, as the context may require.
"Loan Documents" shall mean this Agreement, the Notes, the Letter of
Credit Documents, the Guaranties and any other agreement, instrument or document
executed at any time in connection with this Agreement.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Income" of any person shall mean, for any period, the net income
(or loss) of such person for such period taken as a single accounting period,
determined in accordance with generally accepted accounting principles.
"Net Interest Expense" of any person shall mean, for any period, all
interest paid or payable by such person during such period, net of any interest
income for such period.
"Net Worth" of any person shall mean, as of any date, the amount of
any preferred stock, paid in capital and similar equity accounts plus (or minus
in the case of a deficit) the capital surplus and retained earnings of such
person and the amount of any foreign currency translation adjustment account
shown as a capital account of such person.
"Notes" shall mean the Revolving Credit Notes, the Swingline Loan Note
and the Bid-Option Notes; "Note" shall mean any Revolving Credit Note or any
Bid-Option Note.
"Notice of Bid-Option Loan" shall have the meaning set forth in
Section 2.2(f).
"Optional Currency" shall mean any currency which is freely
transferable and convertible into Dollars and approved by the Agent; provided,
that, subject to the terms of this Agreement (including
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without limitation Section 3.8), the currencies of Canada, the United Kingdom,
France and Germany shall be deemed acceptable to the Agent.
"Original Dollar Amount" shall mean, with respect to any Loan, the
Equivalent in Dollars of the original principal amount of such Loan specified in
the related request therefor given by any Borrower pursuant to Section 2.6 (a)
as such amount is reduced by payments of principal made in respect of such Loan
in Dollars (or the Dollar Equivalent thereof in the case of a payment made in an
Optional Currency) and (b) as such amount is adjusted pursuant to Section
3.1(f).
"Overdue Rate" shall mean (a) in respect of principal of Floating Rate
Loans, a rate per annum that is equal to the sum of three percent (3%) per annum
plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans, a rate
per annum that is equal to the sum of three percent (3%) per annum plus the per
annum rate in effect thereon until the end of the then current Interest Period
for such Loan and, thereafter, a rate per annum that is equal to the sum of
three percent (3%) per annum plus the Floating Rate, and (c) in respect of other
amounts payable by any Borrower hereunder (other than interest), a per annum
rate that is equal to the sum of three percent (3%) per annum plus the Floating
Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Currency" shall mean Dollars and any Optional Currency.
"Permitted Liens" shall mean Liens permitted by Section 5.2(g) hereof.
"Person" or "person" shall include an individual, a corporation, a
limited liability company, an association, a partnership, a trust or estate, a
joint stock company, an unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or domestic) and
any agency or political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any person, any pension plan (other
than a Multiemployer Plan) subject to Title IV of ERISA or to the minimum
funding standards of Section 412 of the Code which has been established or
maintained by such person, any Subsidiary of such person or any ERISA Affiliate,
or by any other person if such person, any Subsidiary of such person or any
ERISA Affiliate could have liability with respect to such pension plan.
"Prime Rate" shall mean the per annum rate announced by the Agent from
time to time as its "prime rate" (it being acknowledged that such announced rate
may not necessarily be the lowest rate charged by the Agent to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
"Prohibited Transaction" shall mean any non-exempt transaction
involving any Plan which is proscribed by Section 406 of ERISA or Section 4975
of the Code.
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
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"Required Banks" shall mean Banks holding not less than 66% of the
aggregate principal amount of the Syndicated Advances then outstanding (or 66%
of the Commitments if no Syndicated Advances are then outstanding).
"Revolving Credit Advance" shall mean any Revolving Credit Loan and
any Letter of Credit Advance.
"Revolving Credit Loan" shall mean any borrowing under Section 2.6
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1.
"Revolving Credit Note" shall mean any promissory note of the
Borrowers evidencing the Revolving Credit Loans, in substantially the form
annexed hereto as Exhibit C, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Senior Debt" shall mean the sum, without duplication, of all Advances
and all consolidated unsecured Indebtedness of the Company and its Subsidiaries,
exclusive of any Subordinated Debt and any interest rate or currency swap, rate
cap or other similar transaction. All reimbursement obligations, guarantees and
other contingent liabilities constituting Senior Debt shall be valued at the
maximum amount possible for such liability.
"Senior Notes" shall mean the Twenty Million Dollars 7.81% series A
Senior Notes due April 21, 2000, the Fifty Five Million Dollars 8.26% Series B
Senior Notes due November 18, 2001 and the Twenty Five Million Dollar 8.59%
Series C Senior Notes due February 28, 2005 issued by the Company.
"Senior Note Documents" shall mean any indenture, notes or other
agreements, instruments or documents executed or issued in connection with the
Senior Notes.
"Significant Subsidiary" shall mean any Subsidiary which has total
assets which equal or exceed 10% of the consolidated total assets of the Company
and its Subsidiaries.
"Significant Trade Debtor" shall mean any account debtor of the
Company as to which the payments received from such account debtor accounted for
20% or more of the revenues of the Company and its Subsidiaries for the most
recently ended fiscal year of the Company.
"Subsidiary" of any person shall mean any other person (whether now
existing or hereafter organized or acquired) in which (other than directors'
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such person or by one or more of the other Subsidiaries of such
person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" shall mean a Subsidiary of the Company.
"Subordinated Debt" of any person shall mean, as of any date, that
Indebtedness of such person for borrowed money which is expressly subordinate
and junior in the right of payment to the Advances of such person to the Banks
in manner and by agreement satisfactory in form and substance to the Required
Banks, which consent and agreement may not be unreasonably withheld.
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"Swingline Facility" shall have the meaning specified in Section
2.1(b).
"Swingline Loan" shall mean any loan evidenced by a Swingline Note and
made by the Agent to the Company pursuant to Section 2.1(b).
"Swingline Note" shall mean any promissory note of the Company
evidencing the Swingline Loans in substantially the form of Exhibit D hereto, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"Syndicated Advance" shall mean any Syndicated Loan or any Letter of
Credit Advance.
"Syndicated Eurocurrency Rate" means, with respect to any Eurocurrency
Rate Syndicated Loan for any Eurocurrency Rate Interest Period or portion
thereof, the per annum rate that is equal to the sum of (a) the Applicable
Margin, plus (b) the Eurocurrency Base Rate; which Syndicated Eurocurrency Rate
shall change simultaneously with any change in such Applicable Margin.
"Syndicated Loan" shall mean any Revolving Credit Loan.
"Tangible Capital Funds" of any person shall mean the sum of Tangible
Net Worth of such person and Subordinated Debt of such person.
"Tangible Capitalization" of any person shall mean the sum of Tangible
Net Worth of such person and Funded Debt of such person.
"Tangible Net Worth" of any person shall mean, as of any date, (a) the
amount of any preferred stock, paid in capital and similar equity accounts plus
(or minus in the case of a deficit) the capital surplus and retained earnings of
such person and the amount of any foreign currency translation adjustment
account shown as a capital account of such person, less (b) the net book value
of all items of the following character which are included in the assets of such
person: (i) goodwill, including without limitation, the excess of cost over book
value of any asset, (ii) organization or experimental expenses, (iii)
unamortized debt discount and expense, (iv) patents, trademarks, trade names and
copyrights, (v) deferred taxes and deferred charges, (vi) franchises, licenses
and permits, and (vii) other assets which are deemed intangible assets under
generally accepted accounting principles other than (xx) licenses giving the
Company rights to manufacture and distribute certain video, music, books and
software products, and plus (c) the net book value of the items set forth in
clause (b) above in an amount not to exceed 15% of Consolidated Net Worth of the
Company.
"Termination Date" shall mean the earlier to occur of (a) September 3,
2002 and (b) the date on which the Commitment shall be terminated pursuant to
Section 2.4 or 6.2.
"Total Capitalization" of any person shall mean the sum of Net Worth
of such person and Funded Debt of such person.
"Total Liabilities" of any person shall mean, as of any date, all
obligations which, in accordance with generally accepted accounting principles,
are classified as liabilities on a balance sheet of such person.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan as
of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.
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"Working Capital" of any person shall mean, as of any date, the
amount, if any, by which the Current Assets of such person exceed the Current
Liabilities of such person.
1.2 Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Banks", "Company", "Borrowing Subsidiary", "Borrowing
Subsidiaries" and "this Agreement" shall have the respective meanings ascribed
thereto in the introductory paragraph of this Agreement. Such terms, together
with the other terms defined in Section 1.1, shall include both the singular and
the plural forms thereof and shall be construed accordingly. All computations
required hereunder and all financial terms used herein shall be made or
construed in accordance with generally accepted accounting principles unless
such principles are inconsistent with the express requirements of this
Agreement. Use of the terms "herein", "hereof", and "hereunder" shall be deemed
references to this Agreement in its entirety and not to the Section or clause in
which such term appears. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
ARTICLE II.
THE COMMITMENTS, THE SWINGLINE FACILITY AND THE ADVANCES
--------------------------------------------------------
2.1 Commitments of the Banks and the Swingline Facility. (a) Each
Bank agrees, for itself only, subject to the terms and conditions of this
Agreement, to make Revolving Credit Loans to the Borrowers pursuant to Section
2.6 and Section 3.3 and to participate in Letter of Credit Advances to the
Borrowers pursuant to Section 2.6 from time to time from and including the
Effective Date to but excluding the Termination Date not to exceed an aggregate
principal amount at any time outstanding the amount of its respective Commitment
as of the date any such Syndicated Advance is made; provided, however, that (i)
the aggregate principal amount of Letter of Credit Advances outstanding at any
time shall not exceed $50,000,000, (ii) at any time an Interest Coverage Ratio
Condition exists, the aggregate principal amount of all Senior Debt may not
exceed the Borrowing Base, (iii) the Equivalent in Dollars of the aggregate
principal amount of all Advances in Optional Currencies outstanding at any time
shall not exceed $50,000,000, and (iv) the Equivalent in Dollars of the
aggregate principal amount of all Advances outstanding at any time shall not
exceed the aggregate amount of the Commitments; and the Borrowers will not be
entitled to obtain any Advance if each such condition, in addition to other
conditions contained herein, is not satisfied both before and after giving
effect to such Advance. Notwithstanding anything herein to the contrary,
Advances may only be used for necessary working capital requirements of the
Borrowers, acquisitions and capital expenditures by the Borrowers to the extent
permitted hereunder and other expenditures by the Borrowers in the ordinary
course of business.
(b) Swingline Loans. (i) The Company may request the Agent to make,
and the Agent may, in its sole discretion, make Swingline Loans to the Company
from time to time on any Business Day during the period from the Effective Date
until the Termination Date in an aggregate principal amount not to exceed at any
time the lesser of (A) $20,000,000 (the "Swingline Facility") and (B) the
aggregate amount of Syndicated Advances that could be but is not borrowed as of
such date. Each Bank's Commitment shall be deemed utilized by an amount equal
to such Bank's pro rata share (based on such Bank's Commitment) of each
Swingline Loan for purposes of determining the amount of Syndicated Advances
required to be made by such Bank. Swingline Loans shall bear interest at a rate
agreed to by the Agent and the Company, provided that Swingline Loans shall bear
interest at the rate applicable to Floating Rate Loans at any time the Swingline
Loans are refunded by Floating Rate Loans or the Banks are required to purchase
participations therein under Section 2.1(b)(iii). Within the limits
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of the Swingline Facility, so long as the Agent, in its sole discretion, elects
to make Swingline Loans, the Company may borrow and reborrow under this Section
2.1(b)(i).
(ii) The Agent may at any time in its sole and absolute
discretion require that any Swingline Loan be refunded by a Floating Rate
Borrowing from the Banks, and upon written notice thereof by the Agent to such
Banks and the Company, the Company shall be deemed to have requested a Floating
Rate Borrowing in an amount equal to the amount of such Swingline Loan, and such
Floating Rate Borrowing shall be made to refund such Swing Line Loan. Each such
Bank shall be absolutely and unconditionally obligated to fund its pro rata
share (based on such Bank's Commitment) of such Floating Rate Borrowing or, if
applicable, purchase a participating interest in the Swingline Loans pursuant to
Section 2.1(b)(iii) and such obligation shall not be affected by any
circumstance, including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such Bank has or may have against the
Agent, or the Company or any of its Subsidiaries or anyone else for any reason
whatsoever; (B) the occurrence or continuance of a Default or an Event of
Default, subject to Section 2.1(b)(iii); (C) any adverse change in the condition
(financial or otherwise) of the Company or any of its Subsidiaries; (D) any
breach of this Agreement or any other agreement by any other Bank, any Borrower
or any Guarantor; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing (including without limitation the
Company's failure to satisfy any conditions contained in Article II or any other
provision of this Agreement).
(iii) If Floating Rate Loans may not be made by the Banks as
described in Section 2.1(b)(ii) due to any Event of Default pursuant to Section
6.1(i) or if the Banks are otherwise legally prohibited from making Floating
Rate Loans, then effective on the date each such Floating Rate Loan would
otherwise have been made, each Bank severally agrees that it shall
unconditionally and irrevocably, without regard to the occurrence of any Default
or Event of Default or any other circumstances, in lieu of deemed disbursement
of Loans, to the extent of such Bank's Commitment, purchase a participating
interest in the Swingline Loans by paying its participation percentage thereof.
Each such Bank will immediately transfer to the Agent, in same day funds, the
amount of its participation. After such payment to the Agent, each Bank shall
share on a pro rata basis (calculated by reference to its Commitment) in any
interest which accrues thereon and in all repayments thereof. If and to the
extent that any such Bank shall not have so made the amount of such
participating interest available to the Agent, such Bank and the Company
severally agree to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date of demand by the Agent until
the date such amount is paid to the Agent, at (A) in the case of the Company,
the interest rate specified above and (B) in the case of such Bank, the Federal
Funds Rate for the first five days after the date of demand by the Agent and
thereafter at the interest rate specified above.
(c) Non-Pro Rata Loans. (i) Notwithstanding anything contained
herein to the contrary, each of the Borrowers, the Banks and the Agent agree,
subject to Section 2.1(c)(ii), that a Bank shall not fund its pro rata portion
of any Loan if such Bank cannot make such Loan free of withholding taxes so long
as one or more other Banks are able to make such Loan free of withholding taxes.
The non-pro rata funding of such Loans shall not affect the pro rata share of
the aggregate amount of Advances outstanding at any time.
(ii) Any funding Bank under Section 2.1(c)(i) above may at any
time in its sole discretion require that the non-funding Bank or Banks fund each
of their pro rata portions of the Loans herein described. Each non-funding Bank
shall be absolutely and unconditionally obligated to fund its pro rata share
(based on such Bank's Commitment or, if the Commitments have been terminated,
based on the amount of such Bank's Commitment immediately prior to such
termination) of such Loan
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and such obligation shall not be affected by any circumstance including, without
limitation (A) any set-off, counterclaim, recoupment, defense or other right
which such Bank or the Company or any of its Subsidiaries may have against the
Agent, any Borrower or any of their respective Subsidiaries or anyone else for
any reason whatsoever; (B) the occurrence or continuance of a Default or an
Event of Default; (C) any adverse change in the condition (financial or
otherwise) of any Borrower or any of its Subsidiaries; (D) any breach of this
Agreement by any Borrower or any of their respective Subsidiaries or any other
Bank or (E) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing (including any Borrower's failure to satisfy
any conditions contained in Article II or any other provision of this Agreement;
provided however, unless caused solely by currency fluctuations since the date
such Loan was made, no Bank shall be obligated to fund any such Loan which would
cause the aggregate amount of all Revolving Credit Loans made by such Bank plus
the aggregate amount of the participation of such Bank in all outstanding Letter
of Credit Advances to exceed the amount of such Bank's Commitment or, if the
Commitments have been terminated, the amount of such Bank's Commitment
immediately prior to such termination). Any Bank which requires payments from
any Borrower pursuant to Section 3.5 with respect to its making of any Loan
described in this Section 2.1(c)(ii) may be replaced by the Company in its sole
discretion.
2.2 Bid-Option Loans.
(a) The Bid-Option. From the Effective Date to but excluding the
Termination Date, any Borrower may, as set forth in this Section 2.2, request
the Banks to make offers to make Bid-Option Loans to such Borrower.
Notwithstanding anything herein to the contrary, no more than two requests for
Bid-Option Loans in the aggregate may be requested by the Borrowers in any
month. Each Bank may, but shall have no obligation to, make such offers and
such Borrower may, but shall have no obligation to, accept any such offers, in
the manner set forth in this Section 2.2; furthermore, each Bank may limit the
aggregate amount of Bid-Option Loans when quoting rates for more than one Bid-
Option Interest Period in any Bid-Option Quote, provided that such limitation
shall not be less than the minimum amounts required hereunder for Bid-Option
Loans and the Borrower may choose among the Bid-Option Loans if such limitation
is imposed; provided, that the aggregate outstanding principal amount of Bid-
Option Loans shall not at any time exceed the lesser of (i) the excess of (A)
the aggregate amount of the Commitments over (B) the sum of the aggregate
outstanding principal amount of Syndicated Advances and Swingline Loans and (ii)
sixty percent (60%) of the aggregate amount of the Commitments (as the same may
be reduced in accordance with the terms of this Agreement);
(b) Bid-Option Quote Request. When a Borrower wishes to request
offers to make Bid-Option Loans under this Section 2.2, it shall transmit to the
Agent by telex or telecopy a Bid-Option Quote Request substantially in the form
of Exhibit E hereto so as to be received no later than 11:00 a.m. Detroit time
(i) on the Business Day next preceding the date of the Loan proposed therein, in
the case of a Bid-Option Auction for Absolute Rate Bid-Option Loans, or (ii) the
fifth Business Day next preceding the date of the Loan proposed therein, in the
case of a Bid-Option Auction for Eurocurrency Rate Bid-Option Loans specifying:
(A) the proposed date of the Bid-Option Loan, which shall be
a Business Day;
(B) the aggregate amount of such Bid-Option Loan, which
shall be a minimum of $10,000,000 or a larger multiple of $5,000,000;
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(C) whether the Borrowing is to be an Absolute Rate Bid-
Option Borrowing or a Eurocurrency Rate Bid-Option Borrowing; and
(D) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period.
A Borrower may request offers to make Bid-Option Loans for more than one Bid-
Option Interest Period in a single Bid-Option Quote Request.
(c) Invitation for Bid-Option Quotes. Promptly upon receipt of a
Bid-Option Quote Request, the Agent shall send to the Banks by telecopy (or
telephone promptly confirmed by telecopy) an Invitation for Bid-Option Quotes
substantially in the form of Exhibit F hereto, which shall constitute an
invitation by a Borrower to each Bank to submit Bid-Option Quotes offering to
make the Bid-Option Loans to which such Bid-Option Quote Request relates in
accordance with this Section 2.2.
(d) Submission and Contents of Bid-Option Quotes. (i) Each Bank
may submit a Bid-Option Quote containing an offer or offers to make Bid-Option
Loans in response to any Invitation for Bid-Option Quotes. Each Bid-Option Quote
must comply with the requirements of this subsection (d) and must be submitted
to the Agent by telecopy (or by telephone promptly confirmed by telecopy) at its
office referred to in Section 9.2 not later than (A) 9:00 a.m. Detroit time on
the proposed date of the Borrowing, in the case of a Bid-Option Auction for
Absolute Rate Bid-Option Loans, or (B) 9:00 a.m. Detroit time on the fourth
Business Day prior to the proposed date of the Borrowing, in the case of a Bid-
Option Auction for Eurocurrency Rate Bid-Option Loans; provided that Bid-Option
Quotes submitted by the Agent (or any Affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the Agent or such
Affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (A) 8:45 a.m. Detroit time on the proposed date of such
Borrowing, in the case of a Bid-Option Auction for Absolute Rate Bid-Option
Loans or (B) 8:45 a.m. Detroit time on the fourth Business Day prior to the
proposed date of the Borrowing, in the case of a Bid-Option Auction for
Eurocurrency Rate Bid-Option Loans. Subject to Sections 3.2, 3.3 and Article VI,
any Bid-Option Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the Borrower.
(ii) Each Bid-Option Quote shall be in substantially the
form of Exhibit G hereto, but may be submitted to the Agent by telephone with
prompt confirmation by delivery to the Agent of such written Bid-Option Quote,
and shall in any case specify:
(A) the proposed date of the Borrowing;
(B) the principal amount of the Bid-Option Loan for
which each such offer is being made, which principal amount (x) must be in a
minimum of $5,000,000 or a larger multiple of $5,000,000, and (y) may not exceed
the principal amount of the Bid-Option Loans for which offers were requested;
(C) whether the Bid-Option Loans for which the offers
are made are Absolute Rate Bid-Option Loans or Eurocurrency Rate Bid-Option
Loans, which must match the type of Borrowing stated in the related Invitation
for Bid-Option Quotes;
(D) the Interest Period(s) for which each such Bid-
Option Absolute Rate or Bid-Option Eurocurrency Rate Margin, as the case may be,
is offered;
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(E) in the case of a Bid-Option Auction for Absolute
Rate Bid-Option Loans, the rate of interest per annum (rounded to the nearest
1/100 of 1%) (the "Bid-Option Absolute Rate") offered for each such Bid-Option
Loan;
(F) in the case of a Bid-Option Auction for
Eurocurrency Rate Bid-Option Loans, the applicable margin, which may be positive
or negative (the "Bid-Option Eurocurrency Rate Margin") expressed as a
percentage (rounded to the nearest 1/100 of 1%), offered for each such Bid-
Option Loan; and
(G) the identity of the quoting Bank.
(iii) Any Bid-Option Quote shall be disregarded if it:
(A) is not substantially in the form of Exhibit G
hereto (or submitted by telephone to the Agent with prompt written confirmation
to follow) or does not specify all of the information required by clause (ii) of
this subsection (d);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to those
set forth in the applicable Invitation for Bid-Option Quotes; or
(D) arrives after the time set forth in Section
2.2(d)(i);
provided that a Bid-Option Quote shall not be disregarded pursuant to clause (B)
or (C) above solely because it contains an indication that an allocation that
might otherwise be made to it pursuant to Section 2.2(g) would be unacceptable.
The Agent shall notify the Borrower of any disregarded Bid-Option Quote.
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms of any Bid-Option Quote submitted by a Bank that is in
accordance with Section 2.2(d). Any Bid-Option Quote not made in accordance with
Section 2.2(d) shall be disregarded by the Agent. The Agent's notice to the
Borrower shall specify (i) the aggregate principal amount of Bid-Option Loans
for which offers have been received for each Bid-Option Interest Period
specified in the related Bid-Option Quote Request, and (ii) the respective
principal amounts and respective Bid-Option Absolute Rates or Bid-Option
Eurocurrency Rate Margins, as the case may be, so offered.
(f) Acceptance and Notice by Borrower. Not later than 11:00 a.m.
Detroit time on (i) the proposed date of a Borrowing, in the case of a Bid-
Option Auction for Absolute Rate Bid-Option Loans or (ii) the third Business Day
prior to the proposed date of the Borrowing, in the case of a Bid-Option
Borrowing for Eurocurrency Rate Bid-Option Loans, the Borrower shall notify the
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e) of this Section and the Agent shall, promptly upon
receiving such notice from the Borrower, notify each Bank whose Bid-Option Quote
has been accepted. In the case of acceptance, such notice (a "Notice of Bid-
Option Loan") shall specify the aggregate principal amount of offers for the
applicable Interest Period(s) that have been accepted. The Borrower may accept
any Bid-Option Quote in whole or in part; provided that:
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(i) the aggregate principal amount of each Bid-Option Loan
may not exceed the applicable amount set forth in the related Bid-Option Quote
Request for the applicable Bid-Option Interest Period;
(ii) the principal amount of each Bid-Option Loan must be
$10,000,000 or a larger multiple of $5,000,000;
(iii) acceptance of offers may only be made on the basis of
ascending Bid-Option Absolute Rates or Bid-Option Eurocurrency Rate Margins, as
the case may be; and
(iv) the Borrower may not accept any offer that is described
in Section 2.2(d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Bid-Option Absolute Rates or Bid-Option Eurocurrency Rate Margins,
as the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Bid-Option Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as nearly as possible
(in such multiples, not greater than $100,000, as the Agent may deem
appropriate) in proportion to the aggregate principal amount of such offers.
Determinations by the Agent of the amounts of Bid-Option Loans shall be
conclusive in the absence of manifest error.
2.3 Effect on Commitments. Notwithstanding anything in this
Agreement to the contrary, the sum of the aggregate principal amount of all
Revolving Credit Loans plus all Letter of Credit Advances (being the maximum
amount available to be drawn under the related Letters of Credit plus the amount
of any draws under Letters of Credit that have not been reimbursed), all
Swingline Loans and all Bid-Option Loans shall not at any time exceed the
aggregate amount of the Commitments of all Banks and, at any time an Interest
Coverage Ratio Condition exists, the aggregate principal amount of all Senior
Debt may not exceed the Borrowing Base. Each Bank's obligation to make its pro
rata portion of any subsequently requested Revolving Credit Loan or Letter of
Credit Advance shall not be affected by the making by such Bank of a Bid-Option
Loan, and the Bank which has outstanding Bid-Option Loans may be obligated to
exceed its Commitment, provided that, as stated above, the aggregate principal
amount of all Revolving Credit Loans, all Letters of Credit Advances and all
Bid-Option Loans shall not at any time exceed the aggregate amount of the
Commitments of all Banks and, at any time an Interest Coverage Ratio Condition
exists, the aggregate principal amount of all Senior Debt may not exceed the
Borrowing Base.
.
2.4 Termination and Reduction of Commitments. (a) The Company shall
have the right to terminate or reduce the Commitments at any time and from time
to time at its option, provided that (i) the Company shall give five days' prior
written notice of such termination or reduction to the Agent (with sufficient
executed copies for each Bank) specifying the amount and effective date thereof,
(ii) each partial reduction of the Commitments shall be in a minimum amount of
$15,000,000 and in an integral multiple thereof and shall reduce the Commitments
of all of the Banks proportionately in accordance with the respective commitment
amounts for each such Bank set forth in the signature pages hereof next to the
name of each such Bank, (iii) no such termination or reduction shall be
permitted with respect to any portion of the Commitments as to which a request
for a Borrowing pursuant to Section 2.6 is then pending and (iv) the Commitments
may not be terminated if any Advances are then outstanding and may not be
reduced below the principal amount of Advances then outstanding.
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The Commitments or any portion thereof terminated or reduced pursuant
to this Section 2.4(a), whether optional or mandatory, may not be reinstated.
The Borrowers shall immediately prepay the Loans to the extent they exceed the
reduced aggregate Commitments pursuant hereto, and any reduction hereunder shall
reduce the Commitment amount of each Bank proportionately in accordance with
the respective Commitment amounts for each such Bank set forth on the signature
pages hereof next to the name of each such Bank.
(b) For purposes of this Agreement, a Letter of Credit Advance
(i) shall be deemed outstanding in an amount equal to the sum of the maximum
amount available to be drawn under the related Letter of Credit on or after the
date of determination and on or before the stated expiry date thereof plus the
amount of any draws under such Letter of Credit that have not been reimbursed as
provided in Section 3.3 and (ii) shall be deemed outstanding at all times on and
before such stated expiry date or such earlier date on which all amounts
available to be drawn under such Letter of Credit have been fully drawn, and
thereafter until all related reimbursement obligations have been paid pursuant
to Section 3.3. As provided in Section 3.3, upon each payment made by the Agent
in respect of any draft or other demand for payment under any Letter of Credit,
the amount of any Letter of Credit Advance outstanding immediately prior to such
payment shall be automatically reduced by the amount of each Revolving Credit
Loan deemed advanced in respect of the related reimbursement obligation of the
Borrower.
2.5 Fees. (a) The Borrowers agree to pay to the Banks a facility fee
on the amount of the Commitments, whether used or unused, for the period from
the Effective Date to but excluding the Termination Date, at a rate equal to the
Applicable Facility Fee. Accrued facility fees shall be payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing on the first such Business Day occurring after the date of this
Agreement, and on the Termination Date.
(b) On or before the date of issuance of any Letter of Credit,
the Borrowers agree (i) to pay to the Banks a fee at a rate equal to the
Applicable Margin per annum, of the maximum amount available to be drawn from
time to time under such Letter of Credit for the period from and including the
date of issuance of such Letter of Credit to and including the stated expiry
date of such Letter of Credit, which fees shall be payable quarterly in advance
(with the first such quarterly payment payable on the date of issuance of such
Letter of Credit and each three months thereafter) based upon the Applicable
Margin at the time each such quarterly installment is paid, and (ii) to pay an
additional fee to the Agent for its own account computed at the rate of 0.125%
per annum of such maximum amount for such period. Such fees are nonrefundable
and the Borrowers shall not be entitled to any rebate of any portion thereof if
such Letter of Credit does not remain outstanding through its stated expiry date
or for any other reason. The Borrowers further agree to pay to the Agent, on
demand, such other customary administrative fees, charges and expenses of the
Agent in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued. The Agent shall provide the Borrowers a schedule of all such customary
fees.
(c) The Borrowers agree to pay to the Agent an agency fee for its
services as Agent under this Agreement in such amounts as may from time to time
be agreed upon by the Borrowers and the Agent.
2.6 Disbursement of Syndicated Advances. (a) Any Borrower shall give
the Agent notice of its request for each Syndicated Advance in substantially the
form of Exhibit H hereto (with sufficient executed copies for each Bank) not
later than 10:00 a.m. Detroit time (i) three Eurocurrency Business Days prior to
the date such Advance is requested to be made if such Borrowing is to be made as
a
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Eurocurrency Rate Syndicated Loan denominated in Dollars and five Eurocurrency
Business Days prior to the date such Advance is requested to be made if such
Borrowing is to be made as a Eurocurrency Rate Syndicated Loan denominated in
any Optional Currency and (ii) five Business Days prior to the date any Letter
of Credit Advance is requested to be made and (iii) on the date such Syndicated
Loan is requested to be made in all other cases, which notice shall specify
whether a Eurocurrency Rate Syndicated Loan, Floating Rate Loan or a Letter of
Credit Advance is requested and, in the case of each requested Fixed Rate
Syndicated Loan, the Interest Period to be initially applicable to such Loan and
the Permitted Currency in which such Loan is to be denominated. The Company
shall give the Agent notice of its request for each Swingline Loan in such form
requested by the Agent not later than 10:00 a.m. Detroit time on the same
Business Day such Swingline Loan is requested to be made. The Agent, on the
same day any such notice is given, shall provide notice of each such requested
Syndicated Loan (excluding Swingline Loans) to each Bank. Subject to the terms
and conditions of this Agreement, the proceeds of each such requested Syndicated
Loan and Swingline Loan shall be made available to the Borrower requesting such
Loan by depositing the proceeds thereof, in immediately available funds, in the
case of any Syndicated Loan denominated in Dollars in an account maintained and
designated by such Borrower at the principal office of the Agent, and, in all
other cases, in an account maintained and designated by such Borrower at a bank
acceptable to the Agent in the principal financial center of the country issuing
the Optional Currency in which such Loan is denominated or in such other place
specified by the Agent. Subject to the terms and conditions of this Agreement,
the Agent shall, on the date any Letter of Credit Advance is requested to be
made, issue the related Letter of Credit on behalf of the Banks for the account
of the Borrower requesting such Letter of Credit. Notwithstanding anything
herein to the contrary, the Agent may decline to issue any requested Letter of
Credit on the basis that the beneficiary, the purpose of issuance or the terms
or the conditions of drawing are unacceptable to it based upon any legal or
ethical concerns in its reasonable discretion.
(b) Each Bank, on the date any Syndicated Loan is requested to be
made, shall make its pro rata share of such Syndicated Loan available in
immediately available funds for disbursement to the Borrower requesting such
Loan pursuant to the terms and conditions of this Agreement, in the case of any
Syndicated Loan denominated in Dollars, at the principal office of the Agent
and, in all other cases, to the account of the Agent at its designated branch or
correspondent bank in the country issuing such Permitted Currency in which such
Loan is denominated or at such other place specified by the Agent. Unless the
Agent shall have received notice from any Bank prior to the date such Syndicated
Loan is requested to be made under this Section 2.6 that such Bank will not make
available to the Agent such Bank's pro rata portion of such Loan, the Agent may
assume that such Bank has made such portion available to the Agent on the date
such Loan is requested to be made in accordance with this Section 2.6. If and to
the extent such Bank shall not have so made such pro rata portion available to
the Agent, the Agent may (but shall not be obligated to) make such amount
available to such Borrower, and such Bank agrees to pay to the Agent forthwith
on demand such amount together with interest thereon, for each day from the date
such amount is made available to such Borrower by the Agent until the date such
amount is repaid to the Agent, at a rate per annum equal to the Federal Funds
Rate then in effect. If such Bank shall pay such amount to the Agent together
with interest, such amount so paid shall constitute a Syndicated Loan by such
Bank as part of the related Borrowing for purposes of this Agreement. The
failure of any Bank to make its pro rata portion of any such Borrowing available
to the Agent shall not relieve any other Bank of its obligation to make
available its pro rata portion of such Loan on the date such Loan is requested
to be made, but no Bank shall be responsible for failure of any other Bank to
make such pro rata portion available to the Agent on the date of any such Loan.
(c) All Revolving Credit Loans shall be evidenced by the
Revolving Credit Notes and all Swingline Loans shall be evidenced by the
Swingline Note, and all such Loans shall be due
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and payable and bear interest as provided in Article III. Each Bank is hereby
authorized by the Borrowers to record on the schedule attached to the Notes, or
in its books and records, the date, amount and type of each Loan and the
duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal thereon, and the other information provided
for on such schedule, which schedule or books and records, as the case may be,
shall constitute prima facie evidence of the information so recorded, provided,
however, that failure of any Bank to record, or any error in recording, any such
information shall not relieve the Borrowers of their obligation to repay the
outstanding principal amount of the Loans, all accrued interest thereon and
other amounts payable with respect thereto in accordance with the terms of the
Notes and this Agreement. Subject to the terms and conditions of this Agreement,
each Borrower may borrow Revolving Credit Loans and Swingline Loans under this
Section 2.6 and under Section 3.3, prepay Revolving Credit Loans and Swingline
Loans pursuant to Section 3.1 and reborrow Revolving Credit Loans and Swingline
Loans under this Section 2.6 and under Section 3.3.
(d) All Bid-Option Loans shall be disbursed directly by the Bank
making such Bid-Option Loan to the Borrower by 1:30 p.m. Detroit time on the
date such Bid-Option Loan is requested to be made via wire transfer in
immediately available funds to NBD Bank, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, ABA Number 000000000, Reference: Xxxxxxxxx Company, confirm to Agency
Administration, Facsimile No. (000) 000-0000 or as otherwise directed by the
Borrowers.
(e) 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 has the sole obligation under this Agreement to issue Letters of Credit on
behalf of the Banks, and the Commitment of each Bank with respect to Letter of
Credit Advances is expressly conditioned upon the Agent's performance of such
obligations. Upon such issuance by the Agent, each Bank shall automatically
acquire a pro rata risk participation interest in such Letter of Credit Advance
based on the amount of its respective Commitment. 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 each Bank on the date such draft or
demand is honored unless a Borrower shall have satisfied its reimbursement
obligation under Section 3.3 by payment to the Agent on such date. Each Bank,
on such date, shall make its pro rata share of the amount paid by the Agent
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 and the Borrowers
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 Federal Funds Rate. If such Bank shall pay such amount to the Agent
together with such interest, such amount so paid shall constitute a Revolving
Credit Loan by such Bank as part of the Revolving Credit Borrowing disbursed in
respect of the reimbursement obligation of the Company under Section 3.3 for
purposes of this Agreement. 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.
2.7 Conditions for First Disbursement. The obligation of each Bank
to make its first Advance hereunder is subject to receipt by each Bank and the
Agent of the following documents and completion of the following matters, in
form and substance reasonably satisfactory to each Bank and the Agent; provided,
however, that, subject to the other terms and conditions of this Agreement, the
Banks shall be obligated to make Advances to the Company upon receipt of the
following documents and completion of the following matters with respect to the
Company and the Banks shall be obligated to make Advances to each other Borrower
upon delivery of such documents and completion of all such matters with respect
to such Borrower:
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(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of each Borrower's respective state of
incorporation listing all charter documents of each Borrower, on file in that
office and certifying as to the good standing and corporate existence of each
Borrower, together with copies of such charter documents of each Borrower,
certified as of a recent date by such authority or official and certified as
true and correct as of the Effective Date by a duly authorized officer of each
Borrower, respectively;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws
of each Borrower together with all authorizing resolutions and evidence of other
corporate action taken by each Borrower to authorize the execution, delivery and
performance by each Borrower of this Agreement and the Notes and the
consummation by each Borrower of the transactions contemplated hereby, certified
as true and correct as of the Effective Date by a duly authorized officer of
each Borrower, respectively;
(c) Incumbency Certificate. Certificates of incumbency of each
Borrower containing, and attesting to the genuineness of, the signatures of
those officers authorized to act on behalf of such Borrower in connection with
this Agreement and the Notes and the consummation by such Borrower of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of each Borrower;
(d) Notes. The Notes duly executed on behalf of the Borrowers;
(e) Legal Opinion. The favorable written opinion of Xxxxxxxx
Xxxxxx Xxxxxxxx and Xxxx, counsel for the Borrowers in the form of Exhibit I
attached hereto;
(f) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of any Borrower or Guarantor in
connection with the execution, delivery and performance of the Loan Documents or
the transactions contemplated hereby or as a condition to the legality, validity
or enforceability of the Loan Documents, certified as true and correct and in
full force and effect as of the Effective Date by a duly authorized officer of
each Borrower or Guarantor, or, if none are required, a certificate of such
officer to that effect;
(g) Existing Credit Agreement. The Company shall pay in full all
indebtedness, obligations and other liabilities owing pursuant to the Credit
Agreement dated July 12, 1994, as amended, among the Company, certain
Subsidiaries of the Company, the banks party thereto, and NBD Bank, as agent
(the "Existing Credit Agreement"), and shall terminate any commitments to make
advances thereunder; and
(h) Closing Fee. The Company shall pay a closing fee of 0.075% of
the Commitments, payable to the Agent for the pro rata benefit of the Banks.
2.8 Further Conditions for Disbursement. The obligation of each Bank
to make any Advance (including its first Advance), or any continuation or
conversion under Section 2.9, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof and in any other Loan Document shall be true and correct in all material
respects on and as of the date such Advance is made, continued or converted
(both before and after such Advance is made, continued or converted) as if such
representations and warranties were made on and as of such date; and
-23-
(b) No Event of Default and no Default shall exist or shall have
occurred and be continuing on the date such Advance is made, continued or
converted (whether before or after such Advance is made, continued or
converted);
(c) In the case of any Letter of Credit Advance, the Borrower
requesting such Letter of Credit Advance shall have delivered to the Agent an
application for the related Letter of Credit and other related documentation
requested by and acceptable to the Agent appropriately completed and duly
executed on behalf of such Borrower.
Each Borrower shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Advance to the effects set forth in clauses (a) and (b) of this Section 2.8.
For purposes of this Section 2.8, the representations and warranties contained
in Section 4.6 hereof shall be deemed made with respect to the most recent
financial statements delivered pursuant to Section 5.1(d)(iii).
2.9 Subsequent Elections as to Borrowings. Any Borrower may elect
(a) to continue a Fixed Rate Syndicated Borrowing of one type, or a portion
thereof, as a Fixed Rate Syndicated Borrowing of the then existing type, or (b)
may elect to convert a Fixed Rate Syndicated Borrowing, or a portion thereof, to
a Borrowing of another type or (c) elect to convert a Floating Rate Borrowing,
or a portion thereof, to a Fixed Rate Syndicated Borrowing, in each case by
giving notice thereof to the Agent (with sufficient executed copies for each
Bank) in substantially the form of Exhibit J hereto not later than 10:00 a.m.
Detroit time (i) three Eurocurrency Business Days prior to the date any such
continuation of or conversion to a Eurocurrency Rate Syndicated Borrowing is to
be effective, and (ii) the date such continuation or conversion is to be
effective in all other cases, provided that an outstanding Fixed Rate Syndicated
Borrowing may only be converted on the last day of the then current Interest
Period with respect to such Borrowing, and provided, further, if a continuation
of a Borrowing as, or a conversion of a Borrowing to, a Fixed Rate Syndicated
Borrowing is requested, such notice shall also specify the Interest Period to be
applicable thereto upon such continuation or conversion and provided, further,
that Loans may not be converted from one Permitted Currency to a different
Permitted Currency. The Agent, on the day any such notice is given, shall
provide notice of such election to the Banks. If any Borrower shall not timely
deliver such a notice with respect to any outstanding Fixed Rate Syndicated
Borrowing, the Borrower shall be deemed to have elected to convert such Fixed
Rate Syndicated Borrowing to a Floating Rate Borrowing on the last day of the
then current Interest Period with respect to such Borrowing.
2.10 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Fixed Rate Syndicated Borrowing pursuant to Section 2.6, or a request for a
continuation of a Fixed Rate Syndicated Borrowing as a Fixed Rate Syndicated
Borrowing of the then existing type, or a request for conversion of a Fixed Rate
Syndicated Borrowing of one type to a Fixed Rate Syndicated Borrowing of another
type, or a request for a conversion of a Floating Rate Borrowing to a Fixed Rate
Syndicated Borrowing pursuant to Section 2.9, (a) in the case of any
Eurocurrency Rate Syndicated Borrowing, deposits in the relevant Permitted
Currency for periods comparable to the Interest Period elected by the Borrower
are not available to any Bank in the relevant interbank or secondary market and
such Bank has provided to the Agent and the Borrowers a certificate prepared in
good faith to that effect, or (b) any Bank reasonably determines that the
Eurocurrency Base Rate will not adequately and fairly reflect the cost to such
Bank of making, funding or maintaining the related Eurocurrency Rate Syndicated
Loan and such Bank has provided to the Agent and the Borrowers a certificate
prepared in good faith to that effect, or (c) by reason of national or
international financial, political or economic conditions or by reason of any
applicable law, treaty, rule or regulation (whether
-24-
domestic or foreign) now or hereafter in effect, or the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank with any
directive of such authority (whether or not having the force of law), including
without limitation exchange controls, it is impracticable, unlawful or
impossible for any Bank (i) to make or fund the relevant Fixed Rate Syndicated
Borrowing or (ii) to continue such Fixed Rate Syndicated Borrowing as a Fixed
Rate Syndicated Borrowing of the then existing type or (iii) to convert a Loan
to such a Fixed Rate Syndicated Loan, and such Bank has provided to the Agent
and the Borrowers a certificate prepared in good faith to that effect, then the
Borrowers shall not be entitled, so long as such circumstances continue, to
request a Fixed Rate Syndicated Borrowing of the affected type pursuant to
Section 2.6 or a continuation of or conversion to a Fixed Rate Syndicated
Borrowing of the affected type pursuant to Section 2.9. In the event that such
circumstances no longer exist, the Banks shall again honor requests, subject to
this Agreement, for Fixed Rate Syndicated Borrowings of the affected type
pursuant to Section 2.6, and requests for continuations of and conversions to
Fixed Rate Syndicated Borrowings of the affected type pursuant to Section 2.9.
2.11 Minimum Amounts; Limitation on Number of Borrowings. Except for
(a) Borrowings and conversions thereof which exhaust the entire remaining amount
of the Commitments, and (b) conversions or payments required pursuant to Section
3.1(b) or Section 3.8, each Syndicated Loan and each continuation or conversion
pursuant to Section 2.9 and each prepayment thereof shall be in a minimum amount
of $1,000,000 and in an integral multiple thereof in the case of Floating Rate
Loans, shall be in the minimum amount of $1,000,000 in the case of Letter of
Credit Advances and shall be in the minimum amount of $5,000,000 and in integral
multiples of $1,000,000 in the case of Eurocurrency Rate Syndicated Loans or
such lesser amount agreed to by the Agent. Notwithstanding anything herein to
the contrary, the Borrowers shall not be permitted to request (a) that any
Syndicated Loan be denominated in any currency other than a Permitted Currency
or (b) that any Syndicated Loan other than a Eurocurrency Rate Loan be
denominated in a currency other than Dollars.
ARTICLE III.
PAYMENTS AND PREPAYMENTS
------------------------
3.1 Principal Payments. (a) Unless earlier payment is required under
this Agreement, the Borrowers shall pay to the Banks on the Termination Date the
entire outstanding principal amount of the Revolving Credit Loans.
(b) Unless earlier payment is required under this Agreement, the
Borrowers shall, on the maturity date of any Bid-Option Loan, pay to the Bank of
such Bid-Option Loan the outstanding principal amount of such Loan.
(c) In addition to all other payments required hereunder, as of
the last Business Day of each month and as of the date each Advance is made
hereunder, if the Equivalent in Dollars of the outstanding principal amount of
all Advances exceeds the aggregate amount of the Commitments, the Borrowers
shall prepay the Advances, in such order as determined by the Borrowers, in an
amount such that the Equivalent in Dollars of the outstanding principal amount
of all Advances does not exceed the aggregate amount of the Commitments as of
such date, together with all amounts owing to the Banks under Section 3.9 in
connection therewith, if any.
(d) In addition to all other payments required hereunder, as of
the last Business Day of each month and as of the date each Advance is made
hereunder, if the Equivalent in
-25-
Dollars of the outstanding principal amount of all Advances in Optional
Currencies exceeds $50,000,000, the Borrowers shall prepay the Advances, in such
order as determined by the Borrowers, in an amount such that the Equivalent in
Dollars of the outstanding principal amount of all Advances in Optional
Currencies does not exceed $50,000,000 as of such date, together with all
amounts owing to the Banks under Section 3.9 in connection therewith, if any.
(e) The Borrowers may at any time and from time to time prepay
all or a portion of the Loans without premium or penalty in the case of
Revolving Credit Loans, provided that (i) a Borrower may not prepay any portion
of any Loan as to which an election for continuation of or conversion to a Fixed
Rate Syndicated Loan is pending pursuant to Section 2.9, and (ii) unless earlier
payment is required under this Agreement or unless Borrower pays all amounts
required pursuant to Section 3.9, any Fixed Rate Syndicated Loan or Bid-Option
Loan may only be prepaid on the last day of the then current Interest Period
with respect to such Loan and (iii) such prepayment shall only be permitted if a
Borrower shall have given not less than one Business Days' notice thereof with
respect to prepayment of Floating Rate Loans and three Eurocurrency Business
Days' notice thereof with respect to prepayment of Eurocurrency Rate Loan, such
notice specifying the Loan or portion thereof to be so prepaid and shall have
paid to the Banks, together with such prepayment of principal, all accrued
interest to the date of payment on such Loan or portion thereof so prepaid and
all amounts owing to the Banks under Section 3.9 in connection with such
prepayment. Upon the giving of such notice, the aggregate principal amount of
such Loan or portion thereof so specified in such notice, together with such
accrued interest and other amounts, shall become due and payable on the
specified date.
(f) If, pursuant to Section 2.9, a Loan, or portion thereof, is
continued, such Loan or portion thereof shall be repaid on the last day of the
related Interest Period in the Permitted Currency in which such Loan is then
denominated and the Agent shall readvance to the Company the same amount of such
Permitted Currency as has been so repaid. For purposes of effecting the
repayment required by this Section 3.1(f), the Agent shall apply the proceeds of
such readvance toward the repayment of such Loan or portion thereof on the last
day of the related Interest Period. On the last day of such Interest Period, the
Original Dollar Amount of such Loan or portion thereof shall be adjusted to the
amount in Dollars resulting from the conversion of the amount of such Permitted
Currency so readvanced to Dollars determined as of the second Business Day
preceding such day. On the date of each such continuation, if the Dollar
Equivalent on such date of all Advances, including the Advances being continued,
exceeds the aggregate amount of the Commitments of the Banks, the Borrowers
shall prepay the Advances, in such order as determined by the Borrowers, in an
amount such that the Equivalent in Dollars of the outstanding principal amount
of all Advances does not exceed the aggregate amount of the Commitments as of
such date, together with all amounts owing to the Banks under Section 3.9 in
connection therewith, if any.
(g) In addition to all other prepayments required hereunder, at
any time an Interest Coverage Ratio Condition exists and the Senior Debt exceeds
the Borrowing Base, the Company shall immediately prepay the Advances by an
amount such that the aggregate principal amount of the Senior Debt is equal to
or less than the Borrowing Base. Prepayments required under this subsection
shall be applied in a manner to minimize any amounts, if any, that may be due
under Section 3.9 hereof.
3.2 Interest Payments. The Borrowers shall pay interest to the Banks
on the unpaid principal amount of each Loan (other than Bid-Option Loans, for
which the interest shall be payable directly to the Bank providing such Bid-
Option Loan as described in clauses (b) and (c) below), for the period
commencing on the date such Loan is made until such Loan is paid in full, on
each Interest Payment Date and at maturity (whether at stated maturity, by
acceleration or otherwise), and thereafter on demand, at the following rates per
annum:
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(a) With respect to Revolving Credit Loans:
(i) During such periods that such Loan is a Floating Rate
Loan, the Floating Rate.
(ii) During such periods that such Loan is a Eurocurrency
Rate Syndicated Loan, the Syndicated Eurocurrency Rate applicable to such Loan
for each related Eurocurrency Interest Period.
(b) With respect to Absolute Rate Bid-Option Loans, the Bid-
Option Absolute Rate quoted for such Loan by the Bank making such Loan.
(c) With respect to each Eurocurrency Rate Bid-Option Loan, the
Bid-Option Eurocurrency Rate.
(d) With respect to Swingline Loans, the rate agreed to by the
Agent and the Company, provided that Swingline Loans shall bear interest at the
rate applicable to Floating Rate Loans at any time the Swingline Loans are
refunded by Floating Rate Loans or the Banks are required to purchase
participations therein under Section 2.1(b)(iii).
Notwithstanding the foregoing paragraphs (a) through (d), the Borrowers shall
pay interest on demand at the Overdue Rate on the outstanding principal amount
of any Loan and any other amount payable by the Borrowers hereunder (other than
interest) on and after an Event of Default.
3.3 Letter of Credit Reimbursement Payments. (a)(i) The Borrowers
agree to pay to the Banks, 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 a Borrower shall have made such payment to the Banks
on such day, upon each such payment by the Agent, the Agent shall be deemed to
have disbursed to the Borrower for whose benefit the Letter of Credit was
issued, and such Borrower shall be deemed to have elected to satisfy its
reimbursement obligation by, a Revolving Credit Loan bearing interest at the
Floating Rate 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 Revolving Credit Loan shall be disbursed notwithstanding any
failure to satisfy any conditions for disbursement of any Loan set forth in
Article II hereof and, to the extent of the Revolving Credit Loan so disbursed,
the reimbursement obligation of the Borrowers under this Section 3.3 shall be
deemed satisfied; provided, however, that nothing in this Section 3.3 shall be
deemed to constitute a waiver of any Default or Event of Default caused by the
failure to the conditions for disbursement or otherwise.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to any Borrower
pursuant to Section 6.1(i)), Floating Rate Loans may not be made by the Banks as
described in Section 3.3(a)(i), then (A) the Borrowers agree that each
reimbursement amount not paid pursuant to the first sentence of Section
3.3(a)(i) shall bear interest, payable on demand by the Agent, at the interest
rate then applicable to Floating Rate Loans, and (B) effective on the date each
such Floating Rate Loan would otherwise have been made, each Bank severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement of
loans, to the extent of such Bank's Commitment, purchase a participating
interest in each reimbursement amount. Each Bank will immediately transfer to
the
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Agent, in same day funds, the amount of its participation. Each Bank shall share
on a pro rata basis (calculated by reference to its Commitment) in any interest
which accrues thereon and in all repayments thereof. If and to the extent that
any Bank shall not have so made the amount of such participating interest
available to the Agent, such Bank and the Borrowers severally agree to pay to
the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Agent until the date such amount is paid
to the Agent, at (x) in the case of the Borrowers, the interest rate then
applicable to Floating Rate Loans and (y) in the case of such Bank, the Federal
Funds Rate.
(b) The reimbursement obligation of the Borrowers under this
Section 3.3 shall be absolute, unconditional and irrevocable and shall remain in
full force and effect until all obligations of the Borrowers to the Banks
hereunder shall have been satisfied, and such obligations of the Borrowers shall
not be affected, modified or impaired upon the happening of any event, including
without limitation, any of the following, whether or not with notice to, or the
consent of, the Borrowers:
(i) 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 such Letter of Credit (the "Letter of Credit
Documents");
(ii) 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 any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other
right which any Borrower 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;
(iv) 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;
(v) Payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply with the terms
of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) 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 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;
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of law
or otherwise of any Borrower from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which any Borrower has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to any Borrower
against the Agent or any Bank.
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Nothing in this Section 3.3 shall limit the liability, if any, of the
Banks to the Borrower pursuant to Section 9.5.
3.4 Payment Method. (a) All payments to be made by the Borrowers
hereunder will be made to the Agent for the account of the Banks (i) in the case
of principal and interest on any Loan, in the Permitted Currency in which such
Loan is denominated and (ii) in all other cases, in the otherwise specified or
relevant currency, and in all cases in immediately available, freely
transferable, cleared funds not later than 1:00 p.m. at the place for payment on
the date on which such payment shall be come due (x) in the case of principal
and interest on any Loan denominated in a Permitted Currency other than Dollars,
by credit to the account of the Agent at its designated branch or correspondent
bank in the country issuing the relevant Permitted Currency or in such other
place specified by the Agent with respect to such Loan pursuant to Section
2.6(b), and (y) in all other cases to the Agent at the address of its principal
office specified in Section 9.2. Payments received after 1:00 p.m. at the place
for payment shall be deemed to be payments made prior to 1:00 p.m. at the place
for payment on the next succeeding Business Day. Each Borrower hereby
authorizes the Agent to charge its account with the Agent in order to cause
timely payment of amounts due hereunder to be made (subject to sufficient funds
being available in such account for that purpose).
(b) At the time of making each such payment, a Borrower shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Borrowing or other obligation of the Borrowers hereunder to which
such payment is to be applied. In the event that a Borrower fails to so specify
the relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion to obligations of the Borrowers to the Banks arising under this
Agreement.
(c) On the day such payments are deemed received, the Agent shall
remit to the Banks their pro rata shares of such payments in immediately
available funds, (i) in the case of payments of principal and interest on any
Borrowing denominated in a Permitted Currency other than Dollars, at an account
maintained and designated by each Bank at a bank in the principal financial
center of the country issuing the Permitted Currency in which such Borrowing is
denominated or in such other place specified by the Agent and (ii) in all other
cases, to the Banks at their respective address in the United States specified
for notices pursuant to Section 9.2. Such pro rata shares shall be determined
with respect to each such Bank, (ii) in the case of payments of principal and
interest on any Borrowing, by the ratio which the outstanding principal balance
of its Loan included in such Borrowing bears to the outstanding principal
balance of the Loans of all of the Banks included in such Borrowing and (ii) in
the case of fees paid pursuant to Section 2.5 and other amounts payable
hereunder (other than the Agent's fees payable pursuant to Section 2.5(d) and
amounts payable to any Bank under Section 2.6 or 3.7) by the ratio which the
Commitment of such Bank bears to the Commitments of all the Banks.
(d) This Agreement arises in the context of an international
transaction, and the specification of payment in a specific currency at a
specific place pursuant to this Agreement is of the essence. Such specified
currency shall be the currency of account and payment under this Agreement. The
obligations of the Borrowers hereunder shall not be discharged by an amount paid
in any other currency or at another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid, on prompt conversion into the
applicable currency and transfer to the Banks under normal banking procedure,
does not yield the amount of such currency due under this Agreement. In the
event that any payment, whether pursuant to a judgment or otherwise, upon
conversion and transfer, does not result in payment of
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the amount of such currency due under this Agreement, the Banks shall have an
independent cause of action against the Borrowers for the currency deficit.
(e) If for purposes of obtaining judgment in any court it becomes
necessary to convert any currency due hereunder into any other currency, the
Borrowers will pay such additional amount, if any, as may be necessary to ensure
that the amount paid in respect of such judgment is the amount in such other
currency which, when converted at the Agent's spot rate of exchange prevailing
on the date of payment, would yield the same amount of the currency due
hereunder. Any amount due from the Borrowers under this Section 3.4(e) will be
due as a separate debt and shall not be affected by judgment being obtained for
any other sum due under or in respect of this Agreement.
3.5 No Setoff or Deduction. All payments of principal of and
interest on the Loans and other amounts payable by any Borrower hereunder shall
be made by such Borrower without setoff or counterclaim, and free and clear of,
and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority, unless required by
applicable laws. If any such taxes, levies, imposts, duties, fees, assessments,
or other charges are required to be withheld from any amounts payable hereunder
with respect to any Advance in any Optional Currency, the amounts so payable
shall be increased to the extent necessary to yield to the payee thereof the
interest or any such other amounts payable hereunder at the rates and in the
amounts specified in this Agreement.
3.6 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period.
3.7 Additional Costs. (a) In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank or
the Agent with any directive of any such authority (whether or not having the
force of law), shall (i) affect the basis of taxation of payments to any Bank or
the Agent of any amounts payable by any Borrower under this Agreement (other
than taxes imposed on the overall net income of the Bank or the Agent, by the
jurisdiction, or by any political subdivision or taxing authority of any such
jurisdiction, in which any Bank or the Agent, as the case may be, has its
principal office), or (ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by any Bank or the Agent, as the case may be,
or (iii) shall impose any other condition with respect to this Agreement, the
Commitments, the Notes or the Advances, and the result of any of the foregoing
is to increase the cost to any Bank or the Agent, as the case may be, of making,
funding or maintaining any Fixed Rate Loan or to reduce the amount of any sum
receivable by any Bank or the Agent, thereon, then the Borrowers shall pay to
such Bank or the Agent, as the case may be, from time to time, upon request by
such Bank (with a copy of such request to be provided to the Agent) or the
Agent, additional amounts sufficient to compensate such Bank or the Agent, as
the case may be, for such increased cost or reduced sum receivable to the
extent, in the case of any Fixed Rate Loan, such Bank or the Agent, as the case
may be, is
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not compensated therefor in the computation of the interest rate applicable to
such Fixed Rate Loan. Each Bank or the Agent, as the case may be, seeking
compensation hereunder shall deliver to the Borrowers a statement setting forth
(i) such increased cost or reduced sum receivable as such Bank or the Agent, as
the case may be, has calculated in good faith, (ii) a description of the event
giving rise thereto, (iii) a calculation in reasonable detail of the amounts
requested and (iv) a statement that such Bank or the Agent, as the case may be,
has not allocated to its Commitment, Borrowings or outstanding Loans a
proportionately greater amount than is attributable to each of its other credit
extensions that are affected similarly by compliance by such Bank or the Agent,
as the case may be, whether or not such Bank or the Agent, as the case may be,
allocates any portion of such amount to such other commitments or credit
extensions. Before delivery of such statement each Bank or the Agent, as the
case may be, shall use reasonable efforts in accordance with its normal
practices and procedures to reduce amounts payable under this Section 3.7(a).
Such statement as to the amount of such increased cost or reduced sum
receivable, prepared in good faith and in reasonable detail by such Bank or the
Agent, as the case may be, and submitted by such Bank or the Agent, as the case
may be, to the Borrowers, shall be conclusive and binding for all purposes
absent manifest error in computation.
(b) In the event that any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether
or not presently applicable to any Bank or the Agent, but applicable to banks or
financial institutions generally, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank or the Agent with any
directive of any such authority (whether or not having the force of law),
including any risk-based capital guidelines, affects the amount of capital
required or expected to be maintained by such Bank or the Agent (or any
corporation controlling such Bank or the Agent) and such Bank or the Agent, as
the case may be, determines that the amount of such capital is increased by or
based upon the existence of such Bank's or the Agent's obligations hereunder and
such increase has the effect of reducing the rate of return on such Bank's or
the Agent's (or such controlling corporation's) capital as a consequence of such
obligations hereunder to a level below that which such Bank or the Agent (or
such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank or the Agent to be material, then the Borrowers shall
pay to such Bank or the Agent, as the case may be, from time to time, upon
request by such Bank (with a copy of such request to be provided to the Agent)
or the Agent, additional amounts sufficient to compensate such Bank or the Agent
(or such controlling corporation) for any reduced rate of return which such Bank
or the Agent reasonably determines to be allocable to the existence of such
Bank's or the Agent's obligations hereunder. Each Bank or the Agent, as the case
may be, seeking compensation hereunder shall deliver to the Borrowers a
statement setting forth (i) such increased cost or reduced sum receivable as
such Bank or the Agent, as the case may be, has calculated in good faith, (ii) a
description of the event giving rise thereto, (iii) a calculation in reasonable
detail of the amounts requested and (iv) a statement that such Bank or the
Agent, as the case may be, has not allocated to its Commitment, Borrowings or
outstanding Loans a proportionately greater amount than is attributable to each
of its other credit extensions that are affected similarly by compliance by such
Bank or the Agent, as the case may be, whether or not such Bank or the Agent, as
the case may be, allocates any portion of such amount to such other commitments
or credit extensions. Before delivery of such statement each Bank or the Agent,
as the case may be, shall use reasonable efforts in accordance with its normal
practices and procedures to reduce amounts payable under this Section 3.7(b).
Such statement as to the amount of such compensation, prepared in good faith and
in reasonable detail by such Bank or the Agent, as the case may be, and
submitted by such Bank or the Agent to the Borrowers, shall be conclusive and
binding for all purposes absent manifest error in computation.
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3.8 Illegality and Impossibility. In the event that any applicable
law, treaty, rule or regulation (whether domestic or foreign) now or hereafter
in effect and whether or not presently applicable to any Bank, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any directive of such authority (whether or not having the force of law),
including without limitation exchange controls, shall make it unlawful or
impossible for any Bank to maintain any Fixed Rate Loan under this Agreement or
shall make it impracticable, unlawful or impossible for, or shall in any way
limit or impair the ability of, any Borrower to make or any Bank to receive any
payment under this Agreement at the place specified for payment hereunder, or to
freely convert any amount paid into Dollars at market rates of exchange or to
transfer any amount paid or so converted to the address of its principal office
specified in Section 9.2, the Borrowers shall upon receipt of notice thereof
from such Bank, repay in full the then outstanding principal amount of each
Fixed Rate Loan so affected, together with all accrued interest thereon to the
date of payment and all amounts owing to such Bank under Section 3.9, (a) on the
last day of the then current Interest Period applicable to such Loan if such
Bank may lawfully continue to maintain such Loan to such day, or (b) immediately
if such Bank may not continue to maintain such Loan to such day.
3.9 Indemnification. If any Borrower makes any payment of principal
with respect to any Fixed Rate Loan on any other date than the last day of an
Interest Period applicable thereto (whether pursuant to Section 3.8 or Section
6.2 or otherwise), or if any Borrower fails to borrow any Fixed Rate Loan after
notice has been given to the Banks in accordance with Section 2.6, the Borrowers
shall reimburse each Bank on demand for any resulting net loss or expense
incurred by each such Bank after giving credit for any earnings or other
quantifiable financial benefit to such Bank from such Bank's investment or other
amounts prepaid or not reborrowed, including without limitation any loss
incurred in obtaining, liquidating or employing deposits from third parties,
whether or not such Bank shall have funded or committed to fund such Loan. A
statement as to the amount of such loss or expense, prepared in good faith and
in reasonable detail by such Bank and submitted by such Bank to the Borrowers,
shall be conclusive and binding for all purposes absent manifest error in
computation, provided that before delivery of such statement, each Bank shall
use reasonable efforts in accordance with its normal practices and procedures to
reduce amounts payable under this Section. Calculation of all amounts payable to
such Bank under this Section 3.9 shall be made as though such Bank shall have
actually funded or committed to fund the relevant Fixed Rate Loan through the
purchase of an underlying deposit in an amount equal to the amount of such Loan
and having a maturity comparable to the related Interest Period; provided,
however, that such Bank may fund any Fixed Rate Loan in any manner it sees fit
and the foregoing assumption shall be utilized only for the purpose of
calculation of amounts payable under this Section 3.9.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Borrower represents and warrants to the Agent and the Banks that:
4.1 Corporate Existence and Power. Each Borrower is a Person duly
organized, validly existing and in good standing under the laws of the state or
other political subdivision of its jurisdiction of incorporation or
organization, as the case may be, and is duly qualified to do business, and is
in good standing, in all additional jurisdictions where such qualification is
necessary under applicable law, except where the failure to be so qualified
would not have a material adverse effect on the business and financial condition
of the Company and its Subsidiaries taken as a whole. Each Borrower has all
requisite corporate power to own or lease the properties used in its business
and to carry on its business as now being
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conducted and as proposed to be conducted, and to execute and deliver this
Agreement and the Notes and to engage in the transactions contemplated by this
Agreement.
4.2 Corporate Authority. The execution, delivery and performance by
each Borrower of this Agreement and the Notes have been duly authorized by all
necessary corporate action and are not in contravention of any material law,
rule or regulation, or any judgment, decree, writ, injunction, order or award of
any arbitrator, court or governmental authority, or of the terms of such
Borrower's charter or by-laws, or of any material contract or undertaking to
which the Borrower is a party or by which the Borrower or its property is bound
or affected and do not result in the imposition of any Lien except for Permitted
Liens.
4.3 Binding Effect. This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of each Borrower
enforceable against each Borrower in accordance with their respective terms;
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
and except that the remedy of specific performance and injunctive and other
forms of equitable relief are subject to equitable defenses and to the
discretion of the court before which any proceedings may be brought.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Significant
Subsidiary of each Borrower. Each Significant Subsidiary and each corporation
becoming a Subsidiary of any Borrower after the date hereof is and will be a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and is and will be duly qualified to do
business in each additional jurisdiction where such qualification is or may be
necessary under applicable law, except where the failure to be so qualified
would not have a material adverse effect on the business or financial condition
of the Company and its Subsidiaries taken as a whole. Each Subsidiary of any
Borrower has and will have all requisite corporate power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted. All outstanding shares of capital
stock of each class of each Subsidiary of any Borrower have been and will be
validly issued and are and will be fully paid and nonassessable and, except as
otherwise indicated in Schedule 4.4 hereto or disclosed in writing to the Agent
from time to time, are and will be owned, beneficially and of record, by a
Borrower or another Subsidiary of a Borrower free and clear of any Liens. As of
the Effective Date, North Coast Entertainment, Inc. is the only Significant
Subsidiary of the Company.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of each Borrower's
knowledge, threatened against or affecting any Borrower or any of their
respective Subsidiaries before or by any court, governmental authority or
arbitrator, which if adversely decided would result, either individually or
collectively, in any material adverse change in the business, properties,
operations or financial condition of the Company and its Subsidiaries taken as a
whole or in any material adverse effect on the legality, validity or
enforceability of any Loan Document and, to the best of the Company's knowledge,
there is no basis for any such action, suit or proceeding.
4.6 Financial Condition. The consolidated balance sheet of the
Company and its Subsidiaries and the consolidated statements of income and cash
flow of the Company and its Subsidiaries for the fiscal year ended May 3, 1997
and reported on by Coopers & Xxxxxxx, L.L.P. independent certified public
accountants, copies of which have been furnished to the Banks, fairly present,
and the financial statements of the Company and its Subsidiaries delivered
pursuant to Section 5.1(d) will fairly present the consolidated financial
position of the Company and its Subsidiaries as at the respective dates thereof,
and
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the consolidated results of operations of the Company and its Subsidiaries for
the respective periods indicated, all in accordance with generally accepted
accounting principles consistently applied (subject, in the case of said interim
statements, to year-end audit adjustments). There has been no material adverse
change in the business, properties, operations or financial condition of the
Company and its Subsidiaries taken as a whole since May 3, 1997. There is no
material Contingent Liability of the Company that is not reflected in such
financial statements or in the notes thereto.
4.7 Use of Loans. Each Borrower will use the proceeds of the Loans
for its general corporate purposes, including repayment of certain senior notes.
No Borrower nor any of their respective Subsidiaries extends or maintains, in
the ordinary course of business, credit for the purpose, whether immediate,
incidental, or ultimate, of buying or carrying margin stock (within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System), and no
part of the proceeds of any Loan will be used for the purpose, whether
immediate, incidental, or ultimate, of buying or carrying any such margin stock
or maintaining or extending credit to others for such purpose. After applying
the proceeds of each Loan, such margin stock will not constitute more than 25%
of the value of the assets (either of any Borrower alone or of the Borrowers and
their respective Subsidiaries on a consolidated basis) that are subject to any
provisions of this Agreement that may cause the Loans to be deemed secured,
directly or indirectly, by margin stock.
4.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the
Borrowers pursuant to Section 2.7(f), if any, each of which is in full force and
effect, no consent, approval or authorization of or declaration, registration or
filing with any governmental authority or any nongovernmental person, including
without limitation any creditor, lessor or stockholder of any Borrower or
Guarantor, is required on the part of any Borrower or Guarantor in connection
with the execution, delivery and performance of the Loan Documents, or the
transactions contemplated hereby or as a condition to the legality, validity or
enforceability of the Loan Documents. The Company and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties if failure to comply
therewith could reasonably be expected to have a material adverse effect on the
business, properties, operations or financial condition of the Company and its
Subsidiaries taken as a whole since May 3, 1997.
4.9 Taxes. The Company and its Subsidiaries have filed all material
tax returns (federal, state and local) required to be filed and have paid all
taxes shown thereon to be due, including interest and penalties, or have
established adequate financial reserves on their respective books and records
for payment thereof except where the failure to file such returns, pay such
taxes or establish such reserves would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
4.10 Title to Properties. Except as otherwise disclosed in the
latest balance sheet delivered pursuant to this Agreement, the Company or one or
more of its Subsidiaries have good and marketable fee simple title to all of the
real property, and a valid and indefeasible ownership interest in all of the
other properties and assets reflected in said balance sheet or subsequently
acquired by the Company or any such Subsidiary material to the business or
financial condition of the Company and its Subsidiaries taken as a whole, except
for title defects that do not have a material adverse effect. All of such
properties and assets are free and clear of any Lien, except for Permitted
Liens.
4.11 ERISA. The Borrowers, their respective Subsidiaries, their
ERISA Affiliates and their respective Plans are in substantial compliance in all
material respects with those provisions of ERISA
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and of the Code which are applicable with respect to any Plan. No Prohibited
Transaction and no Reportable Event has occurred with respect to any such Plan
which would cause an Event of Default. No Borrower, any of their respective
Subsidiaries nor any of their ERISA Affiliates is an employer with respect to
any Multiemployer Plan. The Borrowers, their respective Subsidiaries and their
ERISA Affiliates have met the minimum funding requirements under ERISA and the
Code with respect to each of their respective Plans, if any, and have not
incurred any liability to the PBGC, other than premiums which are not yet due
and payable. The execution, delivery and performance of this Agreement and the
Notes does not constitute a Prohibited Transaction. There is no material
unfunded benefit liability, determined in accordance with Section 4001(a)(18) of
ERISA, with respect to any Plan of any Borrower, their respective Subsidiaries
or their ERISA Affiliates.
4.12 Environmental and Safety Matters. Except as disclosed on
Schedule 4.12, each Borrower and each Subsidiary of each Borrower is in
substantial compliance with all material federal, state and local laws,
ordinances and regulations relating to safety and industrial hygiene or to the
environmental condition, including without limitation all material Environmental
Laws in jurisdictions in which any Borrower or any such Subsidiary owns or
operates, or has owned or operated, a facility or site, or arranges or has
arranged for disposal or treatment of hazardous substances, solid waste, or
other wastes, accepts or has accepted for transport any hazardous substances,
solid wastes or other wastes or holds or has held any interest in real property
or otherwise. Except as disclosed on Schedule 4.12, no written demand, claim,
notice, suit, suit in equity, action, administrative action, investigation or
inquiry whether brought by any governmental authority, private person or
otherwise, arising under, relating to or in connection with any Environmental
Laws is pending or, to the best of each Borrower's knowledge, threatened against
any Borrower or any such Subsidiary, any real property in which any Borrower or
any such Subsidiary holds or has held an interest or any past or present
operation of any Borrower or any such Subsidiary which would have a material
adverse effect on the Company and its Subsidiaries, taken as a whole. Neither
any Borrower nor any Subsidiary of any Borrower (a) is 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, or (b) 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
Environmental Laws. As to such matters disclosed on Schedule 4.12, none will
have an adverse material effect on the financial condition or business of the
Company and its Subsidiaries taken as a whole. Except as set forth on Schedule
4.12, to the best of each Borrower's knowledge, 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 any Borrower or any of their
respective Subsidiaries holds any interest or performs any of its operations, in
violation of any Environmental Law.
4.13 Borrowing Base. If an Interest Coverage Ratio Condition exists,
the Senior Debt is equal to or less than the Borrowing Base.
ARTICLE V.
COVENANTS
---------
5.1 Affirmative Covenants. Each Borrower covenants and agrees that,
until the Termination Date and thereafter until irrevocable payment in full of
the principal of and accrued interest on the Notes and the performance of all
other obligations of the Borrowers under this Agreement, unless the Required
Banks shall otherwise consent in writing, it shall, and shall cause each of its
Subsidiaries to:
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(a) Preservation of Corporate Existence, Etc. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except to the extent permitted by Section 5.2(h), and its
qualification as a foreign corporation in good standing in each jurisdiction in
which such qualification is necessary under applicable law, other than where
failure to so qualify will not have a material adverse effect on the Company and
its Subsidiaries taken as a whole.
(b) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to time;
and pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income, revenues or property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
give rise to Liens upon such properties or any portion thereof, except to the
extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings, and except where failure to comply would
not have a material adverse effect on the Company and its Subsidiaries taken as
a whole.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of any
Borrower or any of their respective Significant Subsidiaries and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times in
accordance with customary and prudent business practices for similar businesses;
and, maintain in full force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such terms and covering
such risks, as is usually carried by companies engaged in similar businesses and
owning similar properties similarly situated and maintain in full force and
effect public liability insurance, insurance against claims for personal injury
or death or property damage occurring in connection with any of its activities
or any properties owned, occupied or controlled by it, in such amount as it
shall reasonably deem necessary.
(d) Reporting Requirements. Furnish to the Banks and the Agent
the following:
(i) Promptly and in any event within three calendar days
after becoming aware of the occurrence of (A) any Event of Default or Default,
(B) the commencement of any material litigation against, by or affecting any
Borrower or any of their respective Significant Subsidiaries, and any material
developments therein, or (C) entering into any material contract or undertaking
that is not entered into in the ordinary course of business if such contract or
undertaking is publicly disclosed, a statement of the chief financial officer of
the Company setting forth details of such Event of Default or Default or such
litigation and the action which such Borrower or such Significant Subsidiary, as
the case may be, has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 50 days
after the end of each fiscal quarter of the Company, the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such quarter, and the
related consolidated statements of income and cash flow for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding date or period of the preceding fiscal year, all
in reasonable detail and duly certified (subject to year-end audit adjustments)
by the chief financial officer of the Company as having been prepared in
accordance with generally accepted
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accounting principles, together with a certificate of the chief financial
officer of the Company stating (A) that no Event of Default or Default has
occurred and is continuing or, if an Event of Default or Default has occurred
and is continuing, a statement setting forth the details thereof and the action
which the Company has taken and proposes to take with respect thereto, and (B)
that a computation (which computation shall accompany such certificate and shall
be in reasonable detail) showing compliance with Section 5.2(a), (b), (c), (d),
(e), (f) and (g) hereof is in conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 100 days
after the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flow of the
Company and its Subsidiaries for such fiscal year, with a customary audit report
of Coopers & Xxxxxxx, L.L.P. or other independent certified public accountants
selected by the Company and acceptable to the Required Banks, without
qualifications unacceptable to the Required Banks, together with a certificate
of such accountants stating (A) that they have reviewed this Agreement and
stating further whether, in the course of their review of such financial
statements, they have become aware of any Event of Default or Default and if an
Event of Default or Default then exists and is continuing, a statement setting
forth the nature and status thereof, and (B) that a computation by the Company
(which computation shall accompany such certificate and shall be in reasonable
detail) showing compliance with Section 5.2 (a), (b), (c), (d), (e), (f) and (g)
hereof is in conformity with the terms of this Agreement;
(iv) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements which the Company sends
to or files with any of their respective security holders or any securities
exchange or the Securities and Exchange Commission or any successor agency
thereof;
(v) Promptly and in any event within 10 calendar days after
receiving or becoming aware thereof (A) a copy of any notice of intent to
terminate any Plan of any Borrower, their respective Significant Subsidiaries or
any ERISA Affiliate filed with the PBGC, (B) a statement of the chief financial
officer of such Borrower setting forth the details of the occurrence of any
Reportable Event with respect to any such Plan, (C) a copy of any notice that
any Borrower, any of their respective Significant Subsidiaries or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any such Plan or to appoint a trustee to administer any such Plan, or
(D) a copy of any notice of failure to make a required installment or other
payment within the meaning of Section 412(n) of the Code or Section 302(f) of
ERISA with respect to any such Plan; and
(vi) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of any
Borrower or any of their respective Subsidiaries as any Bank or the Agent may
from time to time reasonably request; and
(vii) If an Interest Coverage Ratio Condition exists, within
20 calendar days of the end of the second week of each fiscal month and the end
of each fiscal month, a Borrowing Base compliance certificate calculated as of
the dates noted above, and in form satisfactory to the Agent.
(e) Accounting; Access to Records, Books, Etc. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
generally accepted accounting principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time with prior
notice to the Company, permit any Bank or the Agent or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrowers
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and their respective Significant Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrowers and their respective Significant
Subsidiaries with their respective directors, officers, employees and
independent auditors, provided that representatives of the Company selected by
the Company are present during any such visit or discussion, and by this
provision the Company does hereby authorize such persons to discuss such
affairs, finances and accounts with any Bank or the Agent subject to the above
terms and conditions.
(f) Guaranties. Cause each person (other than a person organized
under the laws of a jurisdiction other than the United States or any political
subdivision thereof) that is or becomes a Significant Subsidiary of any Borrower
from time to time to execute and deliver a Guaranty to the Banks in each case
together with the other documentation relating to such Guaranty similar to that
required to be delivered by or on behalf of the Borrowers under Section 2.7 (a),
(b), (c), (e) and (f).
(g) Further Assurances. Will, and will cause each Guarantor to,
execute and deliver within 30 days after request therefor by the Required Banks
or the Agent, all further instruments and documents and take all further action
that may be necessary or desirable, in order to give effect to, and to aid in
the exercise and enforcement of the rights and remedies of the Banks and the
Agent under, this Agreement and the Notes. In addition, the Company agrees to
deliver to the Agent and the Banks from time to time upon the acquisition or
creation of any Subsidiary not listed in Schedule 4.4 hereto supplements to
Schedule 4.4 such that such Schedule, together with such supplements, shall at
all times accurately reflect the information provided for thereon.
5.2 Negative Covenants. Until the Termination Date and thereafter
until irrevocable payment in full of the principal of and accrued interest on
the Notes and the performance of all other obligations of each Borrower under
this Agreement, each Borrower agrees that, unless the Required Banks shall
otherwise consent in writing it shall not, and shall not permit any of its
Subsidiaries to:
(a) Current Ratio and Working Capital. Permit or suffer (i) the
ratio of Consolidated Current Assets of the Company and its Subsidiaries to
Consolidated Current Liabilities of the Company and its Subsidiaries to be less
than 1.50 to 1.00 at any time and (ii) the Consolidated Working Capital of the
Company and its Subsidiaries to be less than $125,000,000 at any time.
(b) Net Worth. Permit or suffer Consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than $265,000,000 plus 50%
of Consolidated Net Income of the Company and its Subsidiaries for each fiscal
year of the Company ending after May 3, 1997, provided that if such Consolidated
Net Income is negative for such fiscal year, the amount added for such fiscal
year shall be zero and it shall not reduce the amount added for any other fiscal
year.
(c) Tangible Net Worth. Permit or suffer the Consolidated
Tangible Net Worth of the Company and its Subsidiaries at any time to be less
than $240,000,000 plus 50% of Consolidated Net Income for each fiscal year of
the Company ending after May 3, 1997, provided that if such Consolidated Net
Income is negative for such fiscal year, the amount added for such fiscal year
shall be zero and it shall not reduce the amount added for any other fiscal
year.
(d) Interest Coverage Ratio. Permit or suffer the Interest
Coverage Ratio to be less than (i) 2.0 to 1.0 as of the end of any fiscal
quarter, commencing with the fiscal quarter ending after the Effective Date up
to but excluding the fiscal quarter ending May 3, 1999, or (ii) 3.0 to 1.0 as of
the end of each fiscal quarter thereafter.
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(e) Funded Debt to Total Capitalization. Permit or suffer the
ratio the ratio of the Consolidated Funded Debt of the Company and its
Subsidiaries to the Consolidated Total Capitalization of the Company and its
Subsidiaries to exceed 0.50 to 1.0.
(f) Funded Debt to Tangible Capitalization. Permit or suffer the
ratio the ratio of the Consolidated Funded Debt of the Company and its
Subsidiaries to the Consolidated Tangible Capitalization of the Company and its
Subsidiaries to exceed 0.55 to 1.0.
Notwithstanding the foregoing, the covenants contained in Sections 5.2(a), (b)
and (f) shall be eliminated if (i) the Senior Notes are paid in full (and such
payment is allowed hereunder) or if such covenants are eliminated from the
Senior Note Documents and no comparable or other covenant or default is
substituted in place thereof or other consideration paid for such elimination,
as determined by the Agent, and (ii) no Event of Default or Default exists at
such time.
(g) Liens. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created
and maintained in the ordinary course of business which are not material in the
aggregate, and which would not have a material adverse effect on the business or
operations of the Company and its Subsidiaries taken as a whole and which
constitute (A) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good faith deposits in
connection with bids, tenders, contracts or leases to which the Company or any
of its Subsidiaries is a party for a purpose other than borrowing money or
obtaining credit, including rent security deposits, (C) liens imposed by law,
such as those of carriers, warehousemen and mechanics, if payment of the
obligation secured thereby is not yet due, (D) Liens securing taxes, assessments
or other governmental charges or levies not yet subject to penalties for
nonpayment, and (E) pledges or deposits to secure public or statutory
obligations of the Company or any of its Subsidiaries, or surety, customs or
appeal bonds to which the Company or any of its Subsidiaries is a party;
(iii) Liens affecting real property which constitute minor
survey exceptions or defects or irregularities in title, minor encumbrances,
easements or reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real property, provided that
all of the foregoing, in the aggregate, do not at any time materially detract
from the value of said properties or materially impair their use in the
operation of the businesses of the Company and its Subsidiaries taken as a
whole;
(iv) Each Lien described in Schedule 5.2 hereto may be
suffered to exist upon the same terms as those existing on the date hereof,
including extensions, renewals and replacements thereof so long as such
extension, renewal or replacement does not increase the principal amount of the
Funded Debt secured or extend such Lien to any other property, assets, rights or
revenues;
(v) (A) any Lien in property or in rights relating thereto
to secure any rights granted with respect to such property in connection with
the provision of all or a part of the
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purchase price or cost of the construction of such property created
contemporaneously with, or within 360 days after such acquisition or the
completion of such construction, or (B) any Lien in property existing in such
property at the time of acquisition thereof, whether or not the debt secured
thereby is assumed by the Company or a Subsidiary, or (C) any Lien existing in
the property of a corporation at the time such corporation is merged into or
consolidated with the Company or a Subsidiary or at the time of a sale, lease,
or other disposition of the properties of a corporation or firm as an entirety
or substantially as an entirety to the Company or a Subsidiary; provided, in the
case of (A), (B) and (C), no such Liens shall exceed 100% of the fair market
value of the related property and not more than one such Lien shall encumber
such property at any one time;
(vi) Liens granted by any Subsidiary in favor of the Company
or any other Subsidiary; and
(vii) The interest or title of a lessor under any lease
otherwise permitted under this Agreement with respect to the property subject to
such lease to the extent performance of the obligations of the Company or its
Subsidiary thereunder is not delinquent.
Notwithstanding the foregoing paragraphs (i) through (vii), and in addition to
the Liens permitted thereby, the Company and its Subsidiaries may create, issue,
incur or assume Liens in an aggregate amount at any time outstanding not
exceeding 15% of consolidated Tangible Net Worth of the Company and its
Subsidiaries.
(h) Merger; Etc. Merge or consolidate or amalgamate with any
other person or take any other action having a similar effect, provided,
however, (i) a Subsidiary of the Company may merge with the Company, provided
that the Company shall be the surviving corporation, (ii) a Subsidiary of the
Company may merge or consolidate with another Subsidiary of the Company and
(iii) this Section 5.2(i) shall not prohibit any merger if the surviving or
continuing corporation is incorporated in the United States and, immediately
after such merger, no Default or Event of Default shall exist or shall have
occurred and be continuing and, prior to the consummation of such merger, the
Company shall have provided to the Banks an express written assumption by such
surviving or continuing corporation in form and substance satisfactory to the
Required Banks of all obligations of the Company hereunder and under the Notes
and an opinion of counsel and a certificate of the chief financial officer of
the Company (attaching computations to demonstrate compliance with all financial
covenants hereunder), each stating that such merger complies with this Section
5.2(h) and that any other conditions under this Agreement relating to such
transaction have been satisfied.
(i) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or a substantial portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales of
scrap or obsolete material or equipment, provided, however, that this Section
5.2(i) shall not prohibit any such sale, lease, license, transfer, assignment or
other disposition if the aggregate book value (disregarding any write-downs of
such book value other than ordinary depreciation and amortization) of all of the
business, assets, rights, revenues and property disposed of after the date of
this Agreement shall be less than 10% percent of such aggregate book value of
the Consolidated total assets of the Company and its Subsidiaries as of the most
recently ended fiscal year, and if immediately after such transaction, no
Default or Event of Default shall exist or shall have occurred and be
continuing. Notwithstanding the foregoing, (i) any Subsidiary may sell, lease,
transfer or otherwise dispose of its assets to the Company or any other
Subsidiary, and (ii) the Company or any Subsidiary may sell, lease, transfer or
otherwise dispose of its assets in excess of the limitation set forth
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above so long as the proceeds of such sale are used (x) to purchase or committed
to purchase other property of a similar nature of at least equivalent value
within twelve (12) months of such sale or (y) to prepay Loans.
(j) Acquisitions. Acquire all or any substantial portion of the
assets or securities of any person if the total cash or cash equivalent
consideration, including promissory notes but excluding stock or other
consideration that is not cash or the equivalent of cash, and other acquisition
costs would exceed $50,000,000 in the aggregate in any twelve month period.
(k) Nature of Business. Make or suffer any substantial change in
the nature of its business from that engaged in on the date hereof or engage in
any other businesses other than those in which it is engaged on the date hereof
or which are directly related to the businesses in which it is engaged in on the
date hereof.
(l) Investments, Loans and Advances. Purchase or otherwise
acquire any Capital Stock of or other ownership interest in, or debt securities
of or other evidences of Indebtedness of, any other person; nor acquire all or
any material portion of the assets of any person; nor make any loan or advance
of any of its funds or property or make any other extension of credit to, or
make any investment or acquire any interest whatsoever in, any other person; nor
permit any Subsidiary to do any of the foregoing; other than (i) extensions of
trade credit made in the ordinary course of business on customary credit terms
and commission, travel, relocation and similar advances made to officers and
employees in the ordinary course of business, (ii) other investments consistent
with the investment policy of the Company in effect as of the Effective Date,
(iii) acquisitions and investments permitted pursuant to Section 5.2(j), (iv)
advances in the ordinary course of business for proprietary products and (v)
investments, loans and advances in and to any Subsidiary or existing Affiliate
of the Company.
(m) Negative Pledge Limitation. Enter into any agreement with any
person other than the Agent and the Banks pursuant hereto which prohibits or
limits the ability of any Borrower to create, incur, assume or suffer to exist
any Lien upon any of its assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, whether now owned or hereafter acquired.
(n) Payments and Modification of Debt. (i) Amend or otherwise
modify the Senior Note Documents or any other instrument or agreement under
which any of the Borrowers' or any of their Subsidiaries' Indebtedness is issued
or created or otherwise related thereto, except for any amendment which does not
(A) increase the interest rate, fees or other amounts payable thereon, (B)
change to any earlier dates any dates upon which any payments of principal,
interest or other amounts are due thereon, (C) change any event of default or
condition to an event of default with respect thereto (other than to eliminate
any such existing event of default or make it more favorable to the applicable
Borrower), (D) change any affirmative or negative covenant in any significant
respect (other than to eliminate such covenant or make it more favorable to the
applicable Borrower), (E) change the redemption, prepayment or defeasance
provisions thereof (other than any change which would make such provisions more
favorable to the applicable Borrower)or (F) make any other amendment or
modification which, together with all other amendments or modifications made,
would increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Indebtedness which would be adverse
to any Borrower or Guarantor or to the Agent or any Banks, or, (ii) other than
the Indebtedness to the Banks and the Agent pursuant hereto, make, or permit any
Subsidiary to make, any optional payment, prepayment or redemption of any of its
or any of its Subsidiaries' Indebtedness or enter into any agreement or
arrangement providing for the defeasance of any of such Indebtedness, provided
that any such existing Indebtedness may be refinanced and extended provided that
such refinancing does not decrease the amount of or allow any
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payment on such Indebtedness other than those currently required, shorten the
maturity of any such Indebtedness, including any installments due on such
Indebtedness, or impose any more restrictive covenants or defaults than imposed
by such existing Indebtedness.
(o) Additional Covenants. If at any time any Borrower shall enter
into or be a party to any instrument or agreement, including all such
instruments or agreements in existence as of the date hereof and all such
instruments or agreements entered into after the date hereof, relating to or
amending any provisions applicable to any of its Indebtedness which includes
covenants or defaults not substantially provided for in this Agreement or more
favorable to the lender or lenders thereunder than those provided for in this
Agreement, then the Borrowers shall promptly so advise the Agent and the Banks.
Thereupon, if the Agent or the Required Banks shall request, upon notice to the
Borrowers, the Agents and the Banks shall enter into an amendment to this
Agreement or an additional agreement (as the Agent may request), providing for
substantially the same covenants and defaults as those provided for in such
instrument or agreement to the extent required and as may be selected by the
Agents. In addition to the foregoing, any covenants or defaults in any existing
agreements or other documents evidencing or relating to any Indebtedness of any
Borrower not substantially provided for in this Agreement or more favorable to
the holders of such Indebtedness, are hereby incorporated by reference into this
Agreement to the same extent as if set forth fully herein, and no subsequent
amendment, waiver or modification thereof shall effect any such covenants or
defaults as incorporated herein, except to the extent set forth in Sections
5.2(e) and (f).
(p) Indebtedness and Contingent Liabilities. Create, incur,
assume or in any manner become liable in respect of or suffer to exist, any
Indebtedness or Contingent Liabilities other than:
(i) the Bank Obligations;
(ii) The Indebtedness and Contingent Liabilities described
on Schedule 5.2 hereto and refinancings thereof and the Indebtedness under the
Senior Notes, but in each case no increase in the amount thereof (as such amount
is reduced from time to time) and no modification of the terms thereof which are
less favorable to the Company or any of its Subsidiaries or more restrictive on
the Company or any of its Subsidiaries in any material manner shall be
permitted;
(iii) Indebtedness of the Company or any Guarantor owing to
the Company or to any other Guarantor;
(iv) Purchase money Indebtedness incurred to provide a
portion of the purchase price of any tangible fixed asset acquired by the
Company or any of its Subsidiaries after the date hereof; and
(v) Other Indebtedness and Contingent Liabilities not
exceeding an aggregate outstanding amount equal to twenty percent (20%) of the
Consolidated Tangible Net Worth of the Company and its Subsidiaries at any time.
(q) Transactions with Affiliates. Enter into, become a party to,
or become liable in respect of, any contract or undertaking with any Affiliate
except in the ordinary course of business and on terms not less favorable to the
Company or such Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a person other than an
Affiliate.
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ARTICLE VI.
DEFAULT
-------
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived by the Required Banks pursuant to Section 9.1:
(a) Nonpayment of Principal. Any Borrower shall fail to pay when
due any principal of the Notes or any reimbursement obligation under Section 3.3
(whether by deemed disbursement of a Revolving Credit Loan or otherwise); or
(b) Nonpayment of Interest. Any Borrower shall fail to pay when
due any interest or any fees or any other amount payable hereunder and such
failure shall remain unremedied for three Business Days; or
(c) Misrepresentation. Any representation or warranty made by any
Borrower or any Guarantor in Article IV hereof, any other Loan Document or any
other certificate, report, financial statement or other document furnished by or
on behalf of any Borrower or any Guarantor in connection with this Agreement
shall prove to have been incorrect in any material respect when made or deemed
made; or
(d) Certain Covenants. Any Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section 5.2(h),(i), (j),
(k) or (l) hereof; or
(e) Other Defaults. Any Borrower or any Guarantor shall fail to
perform or observe any other term, covenant or agreement contained in this
Agreement or any other Loan Document, and any such failure shall remain
unremedied for 10 calendar days after notice thereof shall have been given to
such Borrower or such Guarantor, as the case may be, by the Agent; or
(f) Cross Default. Any Borrower or any of their respective
Significant Subsidiaries shall fail to pay any part of the principal of, the
premium, if any, or the interest on, or any other payment of money due under any
of its Indebtedness (other than Indebtedness hereunder), beyond any period of
grace provided with respect thereto, which individually or together with other
such Indebtedness as to which any such failure exists has an aggregate
outstanding principal amount in excess of $10,000,000; or if any Borrower or any
of their respective Significant Subsidiaries fails to perform or observe any
other term, covenant or agreement contained in any agreement, document or
instrument evidencing or securing any such Indebtedness having such aggregate
outstanding principal amount, or under which any such Indebtedness was issued or
created, beyond any period of grace, if any, provided with respect thereto and
such Borrower or such Significant Subsidiary has been notified by the creditor
of such default; or
(g) Judgments. One or more judgments or orders for the payment
of money in an aggregate amount of $25,000,000 shall be rendered against any
Borrower or any of their respective Significant Subsidiaries, or any other
judgment or order (whether or not for the payment of money) shall be rendered
against or shall affect any Borrower or any of their respective Significant
Subsidiaries which causes or could cause a material adverse change in the
business, properties, operations or financial condition of the Company and its
Subsidiaries taken as a whole or which does or could have a material adverse
effect on the legality, validity or enforceability of this Agreement or the
Notes or any Guaranty, and either (i) such judgment or order shall have remained
unsatisfied or uninsured for a period of 21 days and such Borrower or such
Significant Subsidiary shall not have taken action necessary to stay enforcement
thereof by reason
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of pending appeal or otherwise, prior to the expiration of the applicable period
of limitations for taking such action or, if such action shall have been taken,
a final order denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order; or
(h) ERISA. The occurrence of a Reportable Event that results in
or could result in liability of any Borrower, any Significant Subsidiary of any
Borrower or their ERISA Affiliates to the PBGC or to any Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the occurrence of any Reportable Event which could constitute
grounds for termination of any Plan of any Borrower, their respective
Significant Subsidiaries or their ERISA Affiliates by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer any such Plan and such Reportable Event is not corrected within
thirty (30) days after the occurrence thereof; or the filing by any Borrower,
any Significant Subsidiary of any Borrower or any of their ERISA Affiliates of a
notice of intent to terminate a Plan or the institution of other proceedings to
terminate a Plan; or any Borrower, any Significant Subsidiary of any Borrower or
any of their ERISA Affiliates shall fail to pay when due any liability to the
PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate,
or to cause a trustee to be appointed to administer, any Plan of any Borrower,
their respective Significant Subsidiaries or their ERISA Affiliates; or any
person engages in a Prohibited Transaction with respect to any Plan which
results in or could result in liability of the any Borrower, any Significant
Subsidiary of any Borrower, any of their ERISA Affiliates, any Plan of any
Borrower, their respective Significant Subsidiaries or their ERISA Affiliates or
fiduciary of any such Plan; or failure by any Borrower, any Significant
Subsidiary of any Borrower or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of any Borrower, any Significant Subsidiary of any Borrower or any of their
ERISA Affiliates to the PBGC or any Plan; or the withdrawal of any Borrower, any
of their respective Significant Subsidiaries or any of their ERISA Affiliates
from a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(9a)(2) of ERISA; or any Borrower, any of their
respective Significant Subsidiaries or any of their ERISA Affiliates becomes an
employer with respect to any Multiemployer Plan without the prior written
consent of the Required Banks; provided, however, that this Section 6.1(h) shall
apply only to events or occurrences which, when aggregated with all other events
and occurrences described in this Section 6.1(h), could result in liability to
the Borrowers or their respective Significant Subsidiaries greater than
$25,000,000; or
(i) Insolvency, Etc. Any Borrower or any of their respective
Significant Subsidiaries shall be dissolved or liquidated (or any judgment,
order or decree therefor shall be entered), or shall generally not pay its debts
as they become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors, or
shall institute, or there shall be instituted against any Borrower or any of
their respective Significant Subsidiaries, any proceeding or case seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief or protection of debtors or seeking the entry of an order for relief,
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its assets, rights, revenues or property,
and, if such proceeding is instituted against such Borrower or such Significant
Subsidiary and is being contested by such Borrower or such Significant
Subsidiary, as the case may be, in good faith by appropriate proceedings, such
proceeding shall remain undismissed or unstayed for a period of 60 days; or such
Borrower or such Significant Subsidiary shall take any action (corporate or
other) to authorize or further any of the actions described above in this
subsection; or
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(j) Change of Control. The Company shall experience a Change of
Control. For purposes of this Section 6.1(j), a "Change of Control" shall occur
if during any twelve-month period (i) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule 13D-3
promulgated by the Securities and Exchange Commission under said Act) of 50% or
more in voting power of the voting shares of the Company that were outstanding
as of the date of this Agreement and (ii) a majority of the board of directors
of the Company shall cease for any reason to consist of individuals who as of a
date twelve months prior to any date compliance herewith is determined were
directors of the Company.
6.2 Remedies. (a) Upon the occurrence and during the continuance of
any Event of Default, the Agent may and, upon being directed to do so by the
Required Banks, shall by notice to the Company (i) terminate the Commitments or
(ii) declare the outstanding principal of, and accrued interest on, the Notes
and all other amounts owing under this Agreement to be immediately due and
payable, or (iii) demand immediate delivery of cash collateral, and the
Borrowers agree to deliver such cash collateral upon demand, in an amount equal
to the maximum amount that may be available to be drawn at any time prior to the
stated expiry of all outstanding Letters of Credit, or any one or more of the
foregoing, whereupon the Commitments shall terminate forthwith and all such
amounts, including cash collateral, shall become immediately due and payable,
provided that in the case of any event or condition described in Section 6.1(i)
with respect to any Borrower, the Commitments shall automatically terminate
forthwith and all such amounts, including cash collateral, shall automatically
become immediately due and payable without notice; in all cases without demand,
presentment, protest, diligence, notice of dishonor or other formality, all of
which are hereby expressly waived. Such cash collateral delivered in respect of
outstanding Letters of Credit shall be deposited in a special cash collateral
account to be held by the Agent as collateral security for the payment and
performance of the Borrowers' obligations under this Agreement to the Banks and
the Agent.
(b) The Agent may and, upon being directed to do so by the
Required Banks, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it or
the Banks, whether arising under this Agreement, the Notes or under applicable
law, in any manner deemed appropriate by the Agent, including suit in equity,
action at law, or other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or agreement
contained in this Agreement or in the Notes or in aid of the exercise of any
power granted in this Agreement or the Notes.
(c) Upon the occurrence and during the continuance of any Event
of Default, each Bank may at any time and from time to time exercise any of its
rights of set off or bankers lien that it may possess by common law or statute
without prior notice to the Borrowers, provided that each Bank may also set off
against any deposit whether or not it is then matured. Each Bank agrees to
promptly notify the Company after any such setoff and application, provided that
the failure to give such notice shall not effect the validity of such setoff and
application. The rights of such Bank under this Section 6.2(c) are in addition
to other rights and remedies which such Bank may have.
ARTICLE VII.
THE AGENT AND THE BANKS
-----------------------
7.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this
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Agreement and the Notes as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto. The
provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrowers shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement, the Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Borrowers.
7.2 Agent and Affiliates. NBD Bank in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent. NBD Bank and its affiliates may (without having to account therefor to
any Bank) accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with any Borrower or any
Subsidiary of any Borrower as if it were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Banks.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes), the Agent shall
not be required to exercise any discretion or take any action, but the Agent
shall take such action or omit to take any action pursuant to the written
instructions of the Required Banks and may request instructions from the
Required Banks. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, pursuant to the written instructions of the Required
Banks, which instructions and any action or omission pursuant thereto shall be
binding upon all of the Banks; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action or
omission may expose the Agent to personal liability or is contrary to this
Agreement, the Notes or applicable law.
7.4 Reliance by Agent. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The Agent
may employ agents (including without limitation collateral agents) and may
consult with legal counsel (who may be counsel for the Borrowers), independent
public accountants and other experts selected by it and shall not be liable to
the Banks, except as to money or property received by it or its authorized
agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.5 Default. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or a Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice, the Agent shall give written notice
thereof to the Banks.
7.6 Liability of Agent. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Banks for any action taken
or not taken by it or them in connection herewith with the consent or at the
request of the Required Banks or in the absence of its or their own gross
negli-
-46-
gence or willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any recital, statement, warranty or
representation contained in this Agreement or any Note or any Guaranty, or in
any certificate, report, financial statement or other document furnished in
connection with this Agreement, (ii) the performance or observance of any of the
covenants or agreements of any Borrower or any Guarantor, (iii) the satisfaction
of any condition specified in Article II hereof, or (iv) the validity,
effectiveness, legal enforceability, value or genuineness of this Agreement or
the Notes or any collateral subject thereto or any other instrument or document
furnished in connection herewith.
7.7 Nonreliance on Agent and Other Banks. Each Bank acknowledges and
agrees that it has, independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Borrowers and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decision in
taking or not taking action under this Agreement. The Agent shall not be
required to keep itself informed as to the performance or observance by any
Borrower or any Guarantor of this Agreement, the Notes or any other documents
referred to or provided for herein or to inspect the properties or books of any
Borrower or any Guarantor and, except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any information concerning the affairs, financial condition or
business of the Borrowers or any of their respective Subsidiaries which may come
into the possession of the Agent or any of its affiliates.
7.8 Indemnification. The Banks agree to indemnify the Agent (to the
extent not reimbursed by the Borrowers, but without limiting any obligation of
the Borrowers to make such reimbursement), ratably according to the respective
principal amounts of the Advances then outstanding made by each of them (or if
no Advances are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or the transactions contemplated hereby or any
action taken or omitted by the Agent under this Agreement, provided, however,
that no Bank shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including without limitation fees and expenses of counsel)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrowers, but without limiting the
obligation of the Borrowers to make such reimbursement. Each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any amounts
owing to the Agent by the Banks pursuant to this Section. If the indemnity
furnished to the Agent under this Section shall, in the judgment of the Agent,
be insufficient or become impaired, the Agent may call for additional indemnity
from the Banks and cease, or not commence, to take any action until such
additional indemnity is furnished.
7.9 Resignation of Agent. The Agent may resign as such at any time
upon thirty days' prior written notice to the Borrowers and the Banks. In the
event of any such resignation, the Required Banks shall, by an instrument in
writing delivered to the Borrowers and the Agent, appoint a successor, which
shall be a Bank or any other commercial bank organized under the laws of the
United States or any
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State thereof and having a combined capital and surplus of at least
$500,000,000. The Agent shall consult with the Borrowers and keep the Borrowers
informed regarding the appointment of a successor Agent. If a successor is not
so appointed or does not accept such appointment before the Agent's resignation
becomes effective, the resigning Agent may appoint a temporary successor to act
until such appointment by the Required Banks is made and accepted or if no such
temporary successor is appointed as provided above by the resigning Agent, the
Required Banks shall thereafter perform all the duties of the Agent hereunder
until such appointment by the Required Banks is made and accepted. Any successor
to the Agent shall execute and deliver to the Borrowers and the Banks an
instrument accepting such appointment and thereupon such successor Agent,
without further act, deed, conveyance or transfer shall become vested with all
of the properties, rights, interests, powers, authorities and obligations of its
predecessor hereunder with like effect as if originally named as Agent
hereunder. Upon request of such successor Agent, the Borrowers and the resigning
Agent shall execute and deliver such instruments of conveyance, assignment and
further assurance and do such other things as may reasonably be required for
more fully and certainly vesting and confirming in such successor Agent all such
properties, rights, interests, powers, authorities and obligations. The
provisions of this Article VII shall thereafter remain effective for such
resigning Agent with respect to any actions taken or omitted to be taken by such
Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Banks agree among themselves that, in
the event that any Bank shall obtain payment in respect of any Advance or any
other obligation owing to the Banks under this Agreement through the exercise of
a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Banks on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Bank shall
promptly purchase from the other Banks participations in such Advances and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all of the Banks share such payment in
accordance with such ratable shares. The Banks further agree among themselves
that if payment to a Bank obtained by such Bank through the exercise of a right
of set-off, banker's lien, counterclaim or otherwise as aforesaid shall be
rescinded or must otherwise be restored, each Bank which shall have shared the
benefit of such payment shall, by repurchase of participations theretofore sold,
return its share of that benefit to each Bank whose payment shall have been
rescinded or otherwise restored. The Borrowers agree that any Bank so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such participation as fully as if such Bank were a
holder of such Advance or other obligation in the amount of such participation.
The Banks further agree among themselves that, in the event that amounts
received by the Banks and the Agent hereunder are insufficient to pay all such
obligations or insufficient to pay all such obligations when due, the fees and
other amounts owing to the Agent in such capacity shall be paid therefrom before
payment of obligations owing to the Banks under this Agreement, other than
agency fees payable pursuant to Section 2.5(d) of this Agreement which shall be
paid on a pro rata basis with amounts owing to the Banks. Except as otherwise
expressly provided in this Agreement, if any Bank or the Agent shall fail to
remit to the Agent or any other Bank an amount payable by such Bank or the Agent
to the Agent or such other Bank pursuant to this Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Agent or such other Bank at a rate per annum equal to the rate at which
borrowings are available to the payee in its overnight federal funds market. It
is further understood and agreed among the Banks and the Agent that if the Agent
or any Bank shall engage in any other transactions with any Borrower and shall
have the benefit of any collateral or security therefor which does not expressly
secure the obligations arising under this Agreement except by virtue of a so-
called dragnet clause or comparable provision, the Agent or such Bank shall be
entitled to apply any proceeds of such collateral or security first in respect
of the obligations arising in connection with such other transaction before
application to the obligations arising under this Agreement.
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ARTICLE VIII.
GUARANTY
--------
As an inducement to the Banks and the Agent to enter into the
transactions contemplated by this Agreement, the Company agrees with the Banks
and the Agent as follows:
8.1 Guarantee of Obligations. (a) The Company hereby (i) guarantees,
as principal obligor and not as surety only, to the Banks the prompt payment of
the principal of and any and all accrued and unpaid interest (including interest
which otherwise may cease to accrue by operation of any insolvency law, rule,
regulation or interpretation thereof) on the Advances and all other obligations
of the Borrowing Subsidiaries to the Banks and the Agent under this Agreement
when due, whether by scheduled maturity, acceleration or otherwise, all in
accordance with the terms of this Agreement and the Notes, including, without
limitation, default interest, indemnification payments and all reasonable costs
and expenses incurred by the Banks and the Agent in connection with enforcing
any obligations of the Borrowing Subsidiaries hereunder, including without
limitation the reasonable fees and disbursements of counsel, (ii) guarantees the
prompt and punctual performance and observance of each and every term, covenant
or agreement contained in this Agreement and the Notes to be performed or
observed on the part of the Borrowing Subsidiaries and (iii) agrees to make
prompt payment, on demand, of any and all reasonable costs and expenses incurred
by the Banks or the Agent in connection with enforcing the obligations of the
Company hereunder, including, without limitation, the reasonable fees and
disbursements of counsel (all of the foregoing being collectively referred to as
the "Guaranteed Obligations").
(b) If for any reason any duty, agreement or obligation of any
Borrowing Subsidiary contained in this Agreement shall not be performed or
observed by any Borrowing Subsidiary as provided therein, or if any amount
payable under or in connection with this Agreement shall not be paid in full
when the same becomes due and payable, the Company undertakes to perform or
cause to be performed promptly each of such duties, agreements and obligations
and to pay forthwith each such amount to the Agent for the account of the Banks
regardless of any defense or setoff or counterclaim which any Borrowing
Subsidiary may have or assert, and regardless of any other condition or
contingency.
8.2 Nature of Guaranty. The obligations of the Company hereunder
constitute an absolute and unconditional and irrevocable guaranty of payment and
not a guaranty of collection and are wholly independent of and in addition to
other rights and remedies of the Banks and the Agent and are not contingent upon
the pursuit by the Banks and the Agent of any such rights and remedies, such
pursuit being hereby waived by the Company.
8.3 Waivers and Other Agreements. The Company hereby unconditionally
(a) waives any requirement that the Banks or the Agent, upon the occurrence of
an Event of Default first make demand upon, or seek to enforce remedies against
any Borrowing Subsidiary before demanding payment under or seeking to enforce
the obligations of the Company hereunder, (b) covenants that the obligations of
the Company hereunder will not be discharged except by complete performance of
all obligations of the Borrowing Subsidiary contained in this Agreement and the
Notes, (c) agrees that the obligations of the Company hereunder shall remain in
full force and effect without regard to, and shall not be affected or impaired,
without limitation, by any invalidity, irregularity or unenforceability in whole
or in part of this Agreement or the Notes, or any limitation on the liability of
the Borrowing Subsidiaries thereunder, or any limitation on the method or terms
of payment thereunder which may or hereafter be caused or imposed in any manner
whatsoever (including, without limitation, usury laws), (d) waives diligence,
presentment and
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protest with respect to, and any notice of default or dishonor in the payment of
any amount at any time payable by the Borrowing Subsidiaries under or in
connection with this Agreement or the Notes, and further waives any requirement
of notice of acceptance of, or other formality relating to, the obligations of
the Company hereunder and (e) agrees that the Guaranteed Obligations shall
include any amounts paid by the Borrowing Subsidiaries to the Banks or the Agent
which may be required to be returned to the Borrowing Subsidiaries or to its
representative or to a trustee, custodian or receiver for any Borrowers.
8.4 Obligations Absolute. The obligations, covenants, agreements and
duties of the Company under this Agreement shall not be released, affected or
impaired by any of the following whether or not undertaken with notice to or
consent of the Company: (a) an assignment or transfer, in whole or in part, of
the Advances made to the Borrowing Subsidiary or of this Agreement or any Note
although made without notice to or consent of the Company, or (b) any waiver by
any Bank or the Agent or by any other person, of the performance or observance
by any Borrowing Subsidiary of any of the agreements, covenants, terms or
conditions contained in this Agreement or in the other Loan Documents, or (c)
any indulgence in or the extension of the time for payment by any Borrowing
Subsidiary of any amounts payable under or in connection with this Agreement or
any other Loan Document, or of the time for performance by any Borrowing
Subsidiary of any other obligations under or arising out of this Agreement or
any other Loan Document, or the extension or renewal thereof, or (d) the
modification, amendment or waiver (whether material or otherwise) of any duty,
agreement or obligation of any Borrowing Subsidiary set forth in this Agreement
or any other Loan Document (the modification, amendment or waiver from time to
time of this Agreement and the other Loan Documents being expressly authorized
without further notice to or consent of the Company), or (e) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of any Borrowing Subsidiary or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings, affecting any
Borrowing Subsidiary or any of its assets, or (f) the merger or consolidation of
any Borrowing Subsidiary or the Company with any other person, or (g) the
release of discharge of any Borrowing Subsidiary or the Company from the
performance or observance of any agreement, covenant, term or condition
contained in this Agreement or any other Loan Document, by operation of law, or
(h) any other cause whether similar or dissimilar to the foregoing which would
release, affect or impair the obligations, covenants, agreements or duties of
the Company hereunder.
8.5 No Investigation by Banks or Agent. The Company hereby waives
unconditionally any obligation which, in absence of such provision, the Banks or
the Agent might otherwise have to investigate or to assure that there has been
compliance with the law of any jurisdiction with respect to the Guaranteed
Obligations recognizing that, to save both time and expense, the Company has
requested that the Banks and the Agent not undertake such investigation. The
Company hereby expressly confirms that the obligations of the Company hereunder
shall remain in full force and effect without regard to compliance or
noncompliance with any such law and irrespective of any investigation or
knowledge of any Bank or the Agent of any such law.
8.6 Indemnity. As a separate, additional and continuing obligation,
the Company unconditionally and irrevocably undertakes and agrees with the Banks
and the Agent that, should the Guaranteed Obligations not be recoverable from
the Company under Section 8.1 for any reason whatsoever (including, without
limitation, by reason of any provision of this Agreement or the Notes or any
other agreement or instrument executed in connection herewith being or becoming
void, unenforceable, or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Bank or the Agent at any time, the
Company as sole, original and independent obligor, upon demand by the Agent,
will make payment to the Agent for the account of the Banks and the Agent of the
Guaranteed Obligations by way of a full indemnity in such currency and otherwise
in such manner as is provided in this Agreement and the Notes.
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8.7 Subordination, Subrogation, Etc. The Company agrees that any
present or future indebtedness, obligations or liabilities of any Borrowing
Subsidiary to Company shall be fully subordinate and junior in right and
priority of payment to any present or future indebtedness, obligations or
liabilities of the Borrowing Subsidiaries to the Banks and the Agent. The
Company waives any right of subrogation to the rights of any Bank or the Agent
against any Borrowing Subsidiary or any other person obligated for payment of
the Guaranteed Obligations and any right of reimbursement or indemnity
whatsoever arising or accruing out of any payment which the Company may make
pursuant to this Agreement and the Notes, and any right of recourse to security
for the debts and obligations of each Borrowing Subsidiary, unless and until the
entire principal balance of and interest on the Guaranteed Obligations shall
have been paid in full, and to the extent the Company is an "insider" as defined
in Section 101(2) of the United States Bankruptcy Code, such waiver shall be
permanent and shall not be revoked or terminated in any event, including payment
in full of the principal and interest of the Guaranteed Obligations.
ARTICLE IX.
MISCELLANEOUS
-------------
9.1 Amendments, Etc. (a) No amendment, modification, termination or
waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Borrowers and the Required Banks and, to the extent any rights or duties of
the Agent may be affected thereby, the Agent, provided, however, that no such
amendment, modification, termination, waiver or consent shall, without the
consent of the Agent and all of the Banks, (i) authorize or permit the extension
of time for, or any reduction of the amount of, any payment of the principal of,
or interest on, the Notes or any Letter of Credit reimbursement obligation, or
any fees or other amount payable hereunder, (ii) amend or terminate the
respective Commitment of any Bank set forth on the signature pages hereof or
modify the provisions of this Section regarding the taking of any action under
this Section or the provisions of Section 9.10 or the definition of Required
Banks, or (iii) provide for the discharge of any Guarantor.
(b) Any such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Bank that
is in default of any of its obligations, covenants or agreements under this
Agreement shall be entitled to vote (whether to consent or to withhold its
consent) with respect to any amendment, modification, termination or waiver of
any provision of this Agreement or any departure therefrom or any direction from
the Banks to the Agent, and, for purposes of determining the Required Banks at
any time when any Bank is in default under this Agreement, the Commitments and
Advances of such defaulting Banks shall be disregarded.
9.2 Notices. (a) Except as otherwise provided in Section 9.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Borrowers at 000 Xxxxx Xxxx., Xxxx, Xxxxxxxx
00000, Attention: Xxxxxxx Xxxxx Facsimile No. (000) 000-0000, and to the Agent
and the Banks at the respective addresses and numbers for notices set forth on
the signatures pages hereof, or to such other address as may be designated by
any Borrower, the Agent or any Bank by notice to the other parties hereto. All
notices and other communications shall be deemed to have been given at the
time of actual delivery thereof to such address, or if sent by certified or
registered mail, postage prepaid, to such address, on the third day after the
date of mailing, or if deposited prepaid with Federal Express or other
nationally recognized overnight delivery service prior to the deadline for next
day delivery, on the Business
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Day next following such deposit, provided, however, that notices to the Agent
shall not be effective until received.
(b) Notices by a Borrower to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.4, requests
for Advances pursuant to Section 2.6, requests for continuations or conversions
of Loans pursuant to Section 2.9 and notices of prepayment pursuant to Section
3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by a Borrower to the Agent pursuant to
Sections 2.6 or 2.9 and any notice to be given by the Agent or any Bank
hereunder, may be given by telephone, and all such notices given by a Borrower
must be immediately confirmed in writing in the manner provided in Section
9.2(a). Any such notice given by telephone shall be deemed effective upon
receipt thereof by the party to whom such notice is to be given.
9.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing
on the part of the Agent or any Bank, nor any delay or failure on the part of
the Agent or any Bank in exercising any right, power or privilege hereunder
shall operate as a waiver of such right, power or privilege or otherwise
prejudice the Agent's or such Bank's rights and remedies hereunder; nor shall
any single or partial exercise thereof preclude any further exercise thereof or
the exercise of any other right, power or privilege. No right or remedy
conferred upon or reserved to the Agent or any Bank under this Agreement or the
Notes or any Guaranty is intended to be exclusive of any other right or remedy,
and every right and remedy shall be cumulative, except as limited by this
Agreement, and in addition to every other right or remedy granted thereunder or
now or hereafter existing under any applicable law. Every right and remedy
granted by this Agreement or the Notes or any Guaranty or by applicable law to
the Agent or any Bank may be exercised from time to time and as often as may be
deemed expedient by the Agent or any Bank and, unless contrary to the express
provisions of this Agreement or the Notes or such Guaranty, irrespective of the
occurrence or continuance of any Default or Event of Default.
9.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of any Borrower or any
Guarantor made herein, in any Guaranty or in any certificate, report, financial
statement or other document furnished by or on behalf of any Borrower or any
Guarantor in connection with this Agreement shall be deemed to be material and
to have been relied upon by the Banks, notwithstanding any investigation
heretofore or hereafter made by any Bank or on such Bank's behalf, and those
covenants and agreements of the Borrowers set forth in Sections 3.7, 3.9 and 9.5
hereof shall survive the repayment in full of the Advances and the termination
of the Commitments for a period of one year from such repayment or termination.
9.5 Expenses. (a) The Borrowers agree to pay, or reimburse the Agent
for the payment of, on demand, (i) the reasonable fees and expenses of counsel
to the Agent, including without limitation the fees and expenses of Dickinson,
Wright, Moon, Van Dusen & Xxxxxxx in connection with the preparation, execution,
delivery and administration of this Agreement, the Notes and the consummation of
the transactions contemplated hereby, and in connection with advising the Agent
as to its rights and responsibilities with respect thereto, and in connection
with any amendments, waivers or consents in connection therewith, and (ii) all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing or recording of this Agreement, the Notes
and the consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting to
pay such taxes or fees, and (iii) all reasonable costs and expenses of the Agent
and any Bank (including without limitation reasonable fees and expenses of
counsel, including without limitation counsel who are employees of the Agent or
any Bank, and whether incurred
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through negotiations, legal proceedings or otherwise) in connection with any
Default or Event of Default or the enforcement of, or the exercise or
preservation of any rights under, this Agreement or the Notes or any Guaranty or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement and (iv) all reasonable costs and expenses of the
Agent and the Banks (including reasonable fees and expenses of counsel) in
connection with any action or proceeding relating to a court order, injunction
or other process or decree restraining or seeking to restrain the Agent from
paying any amount under, or otherwise relating in any way to, any Letter of
Credit and any and all costs and expenses which any of them may incur relative
to any payment under any Letter of Credit.
(b) Each Borrower hereby indemnifies and agrees to hold harmless
the Banks and the Agent, and their respective officers, directors, employees and
agents, harmless 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 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, 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 the Borrowers shall not be required to indemnify the
Banks and the Agent and such other persons, and the Agent shall be liable to the
Borrowers to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by the Borrowers which were caused
by (A) 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, or (B) the Agent's payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of Credit to the extent, but only to
the extent, that such payment constitutes gross negligence or willful misconduct
of the Agent. 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, and such reliance
and payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or willful
misconduct of the Agent in connection with such payment.
(c) Each Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee at any time
in connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of the Loan Documents, any actual or
proposed use of proceeds of the Advances, any transactions relating to any of
the foregoing, any act or omission of any Borrower or any Guarantor or any
environmental liability of any Borrower or any Guarantor; provided that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction.
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9.6 Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that no Borrower may, without the prior consent of the
Banks, assign its rights or obligations hereunder or under the Notes and the
Banks shall not be obligated to make any Loan hereunder to any entity other than
the Borrowers.
(b) Any Bank may sell to any financial institution or
institutions, and such financial institution or institutions may further sell, a
participation interest (undivided or divided) in, the Loans and such Bank's
rights and benefits under this Agreement and the Notes, and to the extent of
that participation interest such participant or participants shall have the same
rights and benefits against the Borrowers under Section 3.7, 3.9 and 6.2(c) as
it or they would have had if such participant or participants were the Bank
making the Loans to the Borrowers hereunder, provided, however, that (i) such
Bank's obligations under this Agreement shall remain unmodified and fully
effective and enforceable against such Bank, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of its Notes for all purposes of this
Agreement, (iv) the Borrowers, the Agent and the other Banks shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement, and (v) such Bank shall not grant to its
participant any rights to consent or withhold consent to any action taken by
such Bank or the Agent under this Agreement other than action requiring the
consent of all of the Banks hereunder.
(c) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement and
the transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under this Agreement, the Notes or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. Each Borrower hereby consents
to the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(d) Each Bank may, with the prior consent of the Company (which
consent may not be unreasonably withheld and may not be withheld during the
continuance of any Event of Default) and the Agent, assign to one or more banks
or other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Loans owing to it and the Note or Notes held by it); provided, however, that
(i) each such assignment shall be of a uniform, and not a varying, percentage of
all rights and obligations, (ii) except in the case of an assignment of all of a
Bank's rights and obligations under this Agreement, (A) the amount of the
Commitment of the assigning Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000, and in integral multiples
of $1,000,000 thereafter, or such lesser amount as the Company and the Agent may
consent to and (B) after giving effect to each such assignment, the amount of
the Commitment of the assigning Bank shall in no event be less than $3,000,000,
(iii) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance in the form of Exhibit L hereto (an "Assignment and Acceptance"),
together with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,000, and (iv) any Bank may without the consent of the
Company or the Agent, and without paying any fee, assign or sell a participation
interest to any Affiliate of such Bank that is a bank or financial institution
all or a portion of its rights and obligations under this Agreement. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and
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Acceptance, have the rights and obligations of a Bank hereunder and (y) the Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(e) By executing and delivering an Assignment and Acceptance, the
Bank assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.6 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Bank or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Bank.
(f) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
Company, the Borrowing Subsidiaries, the Agent and the Banks may treat each
person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment hereunder, a new Note to the order of the assigning Bank in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit L hereto.
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(h) No Borrower shall be liable for any costs or expenses of any
Bank in effectuating any participation or assignment under this Section 9.6.
(i) The Banks may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.6, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Borrowers.
(j) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Loans owing to it and the Note or Notes held by it) in favor of
any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Bank from its obligations
under this Agreement.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
9.8 Governing Law; Consent to Jurisdiction. This Agreement is a
contract made under, and shall be governed by and construed in accordance with,
the law of the State of Michigan applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of law
principles of such State. Each Borrower further agrees that any legal action or
proceeding with respect to this Agreement or the Notes or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and each Borrower
hereby irrevocably submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its person and property.
9.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
9.10 Construction of Certain Provisions. If any provision of this
Agreement 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.
9.11 Integration and Severability. This Agreement and the Notes
embody the entire agreement and understanding between the Borrowers and the
Agent and the Banks, and supersede all prior agreements and understandings,
relating to the subject matter hereof. In case any one or more of the
obligations of any Borrower under this Agreement or the Notes shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining obligations of such Borrower and the other
Borrowers 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 Borrowers
under this Agreement or the Notes in any other jurisdiction.
9.12 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, 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.
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9.13 Interest Rate Limitation. Notwithstanding any provisions of
this Agreement or the Notes, in no event shall the amount of interest paid or
agreed to be paid by any Borrower exceed an amount computed at the highest rate
of interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or the Notes at the
time performance of such provision shall be due, shall involve exceeding the
interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be
fulfilled shall be reduced to an amount computed at the highest rate of interest
permissible under applicable law, and if for any reason whatsoever any Bank
shall ever receive as interest an amount which would be deemed unlawful under
such applicable law such interest shall be automatically applied to the payment
of principal of such Bank's Advances outstanding hereunder (whether or not then
due and payable) and not to the payment of interest, or shall be refunded to the
Borrowers if such principal and all other obligations of the Borrowers to such
Bank have been paid in full.
9.14 Joint Obligations; Contribution Rights; Savings Clause. (a)
Notwithstanding anything to the contrary set forth herein or in any Note, the
obligations of the Borrowers hereunder and under the Notes are joint.
(b) If any Borrower makes a payment in respect of the Bank
Obligations it shall have the rights of contribution set forth below against the
other Borrowers; provided that such Borrower shall not exercise its right of
contribution until all the Bank Obligations shall have been paid in full. If any
Borrower makes a payment in respect of the Bank Obligations that is smaller in
proportion to its Payment Share (as hereinafter defined) than such payments made
by the other Borrowers are in proportion to the amounts of their respective
Payment Shares, the Borrower making such proportionately smaller payment shall,
when permitted by the preceding sentence, pay to the other Borrowers an amount
such that the net payments made by the Borrower in respect of the Bank
Obligations shall be shared among the Borrowers pro rata in proportion to their
respective Payment Shares. If any Borrower receives any payment that is greater
in proportion to the amount of its Payment Shares than the payments received by
the other Borrowers are in proportion to the amounts of their respective Payment
Shares, the Borrower receiving such proportionately greater payment shall, when
permitted by the second preceding sentence, pay to the other Borrowers an amount
such that the payments received by the Borrowers shall be shared among the
Borrowers pro rata in proportion to their respective Payment Shares.
Notwithstanding anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of any Borrower that shall accrue pursuant
to this paragraph shall be paid nor shall it be deemed owed pursuant to this
paragraph until all of the Bank Obligations shall be paid in full.
For purposes hereof, the "Payment Share" of each Borrower shall be the
sum of (a) the aggregate proceeds of the Bank Obligations received by such
Borrower (and, if received subject to a repayment obligation remaining unpaid on
the Obligation Date, as hereinafter defined), plus (b) the product of (i) the
aggregate Bank Obligations remaining unpaid on the date such Bank Obligations
become due and payable in full, whether by stated maturity, acceleration, or
otherwise (the "Obligation Date") reduced by the amount of such Bank Obligations
attributed to Borrowers pursuant to clause (a) above, times (ii) a fraction, the
numerator of which is such Borrower's net worth on the effective date of this
Agreement (determined as of the end of the immediately preceding fiscal
reporting period of the Borrower), and the denominator of which is the aggregate
net worth of all Borrowers on such effective date.
(c) It is the intent of each Borrower, the Agent and the Banks
that each Borrower's maximum Bank Obligations shall be in, but not in excess of:
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(i) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code on or within one year from the date on which
any of the Bank Obligations are incurred, the maximum amount that would not
otherwise cause the Bank Obligations (or any other obligations of such Borrower
to the Agent and the Banks) to be avoidable or unenforceable against such
Borrower under (A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such case
or proceeding by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code subsequent to one year from the date on which
any of the Bank Obligations are incurred, the maximum amount that would not
otherwise cause the Bank Obligations (or any other obligations of such Borrower
to the Agent and the Banks) to be avoidable or unenforceable against such
Borrower under any state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding by virtue of Section 544 of the
Bankruptcy Code;
(iii) in a case or proceeding commenced by or against such
Borrower under any law, statute or regulation other than the Bankruptcy Code
(including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution, liquidation or
similar debtor relief laws), the maximum amount that would not otherwise cause
the Bank Obligations (or any other obligations of such Borrower to the Agent and
the Banks) to be avoidable or unenforceable against such Borrower under such
law, statute or regulation including, without limitation, any state fraudulent
transfer or fraudulent conveyance act or statute applied in any such case or
proceeding.
(d) The Borrowers acknowledge and agree that they have requested
that the Banks make credit available to the Borrowers with each Borrowing
Subsidiary expecting to derive benefit, directly and indirectly, from the loans
and other credit extended by the Banks to the Borrowers.
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9.15 Confidentiality. The Banks and the Agent shall hold all
confidential information obtained pursuant to the requirements of this Agreement
which has been identified as such by the Company in accordance with their
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to its examiners, affiliates, outside auditors, counsel and other
professional advisors in connection with this Agreement or as reasonably
required by any bona fide transferee or participant in connection with the
contemplated transfer of any Note or participation therein or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process. Without limiting the foregoing, it is expressly understood that
such confidential information shall not include information which, at the time
of disclosure is in the public domain or, which after disclosure, becomes part
of the public domain or information which is obtained by any Bank or the Agent
prior to the time of disclosure and identification by the Company under this
Section, or information received by any Bank or the Agent from a third party.
Nothing in this Section or otherwise shall prohibit any Bank or the Agent from
disclosing any confidential information to the other Banks or the Agent or
render any of them liable in connection with any such disclosure.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
XXXXXXXXX COMPANY
By: /s/ Xxx X. Xxxxxx
-----------------------------
Its: Vice President/Treasurer
----------------------------
Address for Notices: NBD BANK, as a Bank and as Agent
/s/ Xxxxxxx X. Xxxxxxxxxxxx
000 Xxxxxxxx Xxxxxx By: _____________________________
Xxxxxxx, Xxxxxxxx 00000 FVP
Attention: Xxxxxxx X. Xxxxxxxxxxxx Its: ____________________________
First Vice President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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Address for Notices: COMERICA BANK
/s/ Xxxxx X. Xxxx
000 Xxxxxxxx Xxxxxx By: _____________________________
MC 3268 Vice President
Xxxxxxx, Xxxxxxxx 00000 Its: ____________________________
Attention: Xxxxx Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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Address for Notices: KEYBANK NATIONAL ASSOCIATION
/s/ Xxxxxx Xxxxxxxx
MC OH 01 27 0606 By: _____________________________
127 Public Square Vice President
Xxxxxxxxx, Xx 00000-0000 Its: ____________________________
Attention: Xxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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Address for Notices: MICHIGAN NATIONAL BANK
/s/ Xxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxx By: _____________________________
Xxxxxxxxxx Xxxxx, XX 00000 Relationship Manager
Attention: Xxxxxx X. Xxxxxxxx Its: ____________________________
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
-63-
Address for Notices: THE FIFTH THIRD BANK
/s/ Xxxxxx Xxxxx
Department #00752 By: _____________________________
00 Xxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000 Its: ____________________________
Attention: Xxx Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
-64-
Address for Notices: THE BANK OF NEW YORK
/s/ Xxxxxxx Xxxxxx, Xx.
One Wall Street By: _____________________________
Xxx Xxxx, Xxx Xxxx 00000 Vice President
Attention: Xxxxxxx Xxxxxx, Xx. Its: ____________________________
Facsimile No.: (000) 000-0000
Telephone No.: (000 000-0000
-65-
Address for Notices: THE FUJI BANK, LIMITED
/s/ Xxxxx X. Xxxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000 By: _____________________________
Xxxxxxx, Xxxxxxxx 00000 Xxxxx X. Xxxxxxxx
Attention: Xxxxxx Xxxxxxxx Its: ____________________________
Facsimile No.: (000) 000-0000 Joint General Manager
Telephone No.: (000) 000-0000
-00-
XXXXX XXXXX ENTERTAINMENT, INC., as a
Borrowing Subsidiary
By: /s/ Xxx X. Xxxxxx
-----------------------------
Its: Vice President/Treasurer
----------------------------
-67-
