EXECUTION COPY
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FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION
CREDIT AGREEMENT
DATED AS OF FEBRUARY 7, 2006
COMERICA BANK, AS ADMINISTRATIVE AGENT
AND COLLATERAL AGENT
BANC OF AMERICA SECURITIES, LLC AS SOLE LEAD ARRANGER
AND SOLE BOOK MANAGER
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TABLE OF CONTENTS
Page(s)
1. DEFINITIONS......................................................................................... 1
2. REVOLVING CREDIT.................................................................................... 33
2.1 Commitment................................................................................. 33
2.2 Accrual of Interest and Maturity........................................................... 34
2.3 Requests for and Refundings and Conversions of Advances.................................... 34
2.4 Disbursement of Advances................................................................... 36
2.5 Swing Line................................................................................. 38
2.6 Prime-based Interest Payments.............................................................. 42
2.7 Eurodollar-based Interest Payments and Quoted Rate Interest Payments....................... 43
2.8 Interest Payments on Conversions........................................................... 43
2.9 Interest on Default........................................................................ 43
2.10 Prepayment................................................................................. 43
2.11 Intentionally Omitted...................................................................... 44
2.12 Prime-based Advance in Absence of Election or Upon Default................................. 44
2.13 Revolving Credit Facility Fee.............................................................. 44
2.14 Mandatory Reduction of Indebtedness........................................................ 45
2.15 Optional Reduction or Termination of Revolving Credit Maximum Amount....................... 46
2.16 Extension of Revolving Credit Maturity Date................................................ 47
2.17 Optional Increase in Revolving Credit Maximum Amount....................................... 47
2.18 Revolving Credit as Renewal; Application of Advances; Existing Advances.................... 49
3. LETTERS OF CREDIT................................................................................... 49
3.1 Letters of Credit.......................................................................... 49
3.2 Conditions to Issuance..................................................................... 50
3.3 Notice..................................................................................... 51
3.4 Letter of Credit Fees...................................................................... 52
3.5 Issuance Fees.............................................................................. 52
3.6 Draws and Demands for Payment Under Letters of Credit...................................... 53
3.7 Obligations Irrevocable.................................................................... 54
3.8 Risk Under Letters of Credit............................................................... 55
3.9 Indemnification............................................................................ 56
3.10 Right of Reimbursement..................................................................... 57
3.11 Existing Letters of Credit................................................................. 57
4. INTENTIONALLY OMITTED............................................................................... 58
5. CONDITIONS.......................................................................................... 58
5.1 Execution of Notes, this Agreement and the other Loan Documents............................ 58
5.2 Corporate Authority........................................................................ 58
5.3 Representations and Warranties -- All Parties.............................................. 58
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5.4 Compliance with Certain Documents and Agreements........................................... 59
5.5 Company's Certificate and Opening Borrowing Base Certificate............................... 59
5.6 Payment of Agent's and Other Fees.......................................................... 59
5.7 Opinions................................................................................... 59
5.8 Other Documents and Instruments............................................................ 59
5.9 Continuing Conditions...................................................................... 59
6. REPRESENTATIONS AND WARRANTIES...................................................................... 60
6.1 Corporate Authority........................................................................ 60
6.2 Due Authorization -- Company............................................................... 60
6.3 Title to Property.......................................................................... 60
6.4 Liens...................................................................................... 61
6.5 Subsidiaries............................................................................... 61
6.6 Taxes...................................................................................... 61
6.7 No Defaults................................................................................ 61
6.8 Enforceability of Agreement and Loan Documents -- Company.................................. 61
6.9 Enforceability of Loan Documents - - Significant Domestic Subsidiaries.................... 61
6.10 Non-contravention -- Company............................................................... 62
6.11 Non-contravention -- Significant Domestic Subsidiaries..................................... 62
6.12 No Litigation.............................................................................. 62
6.13 Consents, Approvals and Filings, Etc....................................................... 62
6.14 Agreements Affecting Financial Condition................................................... 62
6.15 No Investment Company; No Margin Stock..................................................... 62
6.16 ERISA...................................................................................... 63
6.17 Compliance with Laws....................................................................... 63
6.18 Accuracy of Information.................................................................... 64
7. AFFIRMATIVE COVENANTS............................................................................... 64
7.1 Preservation of Existence, Etc............................................................. 64
7.2 Keeping of Books; Write Off Policy......................................................... 64
7.3 Reporting Requirements..................................................................... 64
7.4 Maintain Asset Coverage Ratio.............................................................. 67
7.5 Maintain Funded Debt Ratio Level........................................................... 67
7.6 Minimum Tangible Net Worth................................................................. 67
7.7 Maintain Fixed Charge Coverage Ratio....................................................... 67
7.8 Inspections................................................................................ 67
7.9 Taxes...................................................................................... 68
7.10 Further Assurances......................................................................... 68
7.11 Insurance.................................................................................. 68
7.12 Indemnification............................................................................ 68
7.13 Governmental and Other Approvals........................................................... 69
7.14 Compliance with Contractual Obligations and Laws........................................... 69
7.15 ERISA...................................................................................... 69
7.16 Environmental Matters...................................................................... 70
7.17 Installment Contract Standards............................................................. 70
7.18 Financial Covenant Amendments.............................................................. 71
7.19 Subsidiaries; Guaranties................................................................... 72
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7.20 Subsidiaries; Security Documents........................................................... 72
8. NEGATIVE COVENANTS.................................................................................. 73
8.1 Redemptions................................................................................ 73
8.2 Business Purposes.......................................................................... 73
8.3 Mergers or Dispositions.................................................................... 73
8.4 Guaranties................................................................................. 73
8.5 Debt....................................................................................... 74
8.6 Liens...................................................................................... 75
8.7 Acquisitions............................................................................... 75
8.8 Investments................................................................................ 76
8.9 Accounts Receivable and Other Financial Assets............................................. 77
8.10 Transactions with Affiliates............................................................... 78
8.11 No Further Negative Pledges................................................................ 78
8.12 Prepayment of Debts........................................................................ 78
8.13 Amendment of Future Debt Documents......................................................... 78
8.14 Amendment of Subordinated Debt Documents................................................... 79
8.15 Limitation on Dividends.................................................................... 79
8.16 Securitization Transaction; Amendments to Securitization Documents......................... 79
9. DEFAULTS............................................................................................ 80
9.1 Events of Default.......................................................................... 80
9.2 Exercise of Remedies....................................................................... 82
9.3 Rights Cumulative.......................................................................... 83
9.4 Waiver by Company of Certain Laws.......................................................... 83
9.5 Waiver of Defaults......................................................................... 83
9.6 Cross-Default.............................................................................. 83
10. PAYMENTS, RECOVERIES AND COLLECTIONS................................................................ 83
10.1 Payment Procedure.......................................................................... 83
10.2 Application of Proceeds.................................................................... 85
10.3 Pro-rata Recovery.......................................................................... 85
10.4 Deposits and Accounts...................................................................... 86
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.................................................... 86
11.1 Reimbursement of Prepayment Costs.......................................................... 86
11.2 Eurodollar Lending Office.................................................................. 86
11.3 Circumstances Affecting Eurodollar-based Rate Availability................................. 87
11.4 Laws Affecting Eurodollar-based Advance Availability....................................... 87
11.5 Increased Cost of Eurodollar-based Advances................................................ 87
11.6 Indemnity.................................................................................. 88
11.7 Other Increased Costs...................................................................... 89
11.8 Right of Banks to Fund through Branches and Affiliates..................................... 89
12. AGENT............................................................................................... 90
12.1 Appointment of Agent....................................................................... 90
12.2 Deposit Account with Agent................................................................. 90
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12.3 Exculpatory Provisions..................................................................... 90
12.4 Successor Agents........................................................................... 91
12.5 Loans by Agent: Agent in its Individual Capacity........................................... 91
12.6 Credit Decisions........................................................................... 91
12.7 Notices by Agent........................................................................... 92
12.8 Agent's Fees............................................................................... 92
12.9 Nature of Agency........................................................................... 92
12.10 Authority of Agent to Enforce Notes and This Agreement..................................... 92
12.11 Indemnification............................................................................ 92
12.12 Knowledge of Default....................................................................... 93
12.13 Agent's Authorization; Action by Banks..................................................... 93
12.14 Enforcement Actions by the Agent........................................................... 94
12.15 Lead Arranger; Documentation Agent or other Titles......................................... 94
12.16 Collateral Matters......................................................................... 94
13. MISCELLANEOUS....................................................................................... 95
13.1 Accounting Principles...................................................................... 95
13.2 Consent to Jurisdiction.................................................................... 95
13.3 Law of Michigan............................................................................ 95
13.4 Interest................................................................................... 95
13.5 Closing Costs; Other Costs................................................................. 96
13.6 Notices.................................................................................... 96
13.7 Further Action............................................................................. 97
13.8 Successors and Assigns; Assignments and Participations..................................... 97
13.9 Indulgence................................................................................. 100
13.10 Counterparts............................................................................... 100
13.11 Amendment and Waiver....................................................................... 100
13.12 Taxes and Fees............................................................................. 101
13.13 Confidentiality............................................................................ 101
13.14 Withholding Taxes.......................................................................... 101
13.15 Effective Upon Execution................................................................... 102
13.16 Severability............................................................................... 102
13.17 Table of Contents and Headings............................................................. 102
13.18 Construction of Certain Provisions......................................................... 102
13.19 Independence of Covenants.................................................................. 102
13.20 Reliance on and Survival of Various Provisions............................................. 103
13.21 Complete Agreement; Amendment and Restatement.............................................. 103
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FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is made as
of the _____ day of February, 2006, by and among the Banks signatory hereto
(individually, "Bank", and collectively "Banks"), Comerica Bank, as
administrative agent and collateral agent for the Banks (in such capacity,
"Agent") and Credit Acceptance Corporation, a Michigan corporation ("Company").
RECITALS
A. Company has requested that the Banks amend, renew and/or extend to it,
credit in the aggregate amount (subject to the Revolving Credit Optional
Increase, as defined below) of up to One Hundred Thirty-Five Million Dollars
($135,000,000) consisting of (i) the Revolving Credit (as defined below)
previously extended to Company pursuant to that certain Third Amended and
Restated Credit Acceptance Corporation Credit Agreement dated as of June 9, 2004
(as amended, the "Prior Credit Agreement") by and among Company, the Banks
signatory thereto and Comerica Bank, individually and in its capacity as Agent,
and (ii) letters of credit all on the terms and conditions set forth herein.
B. The Banks are prepared to extend such credit as aforesaid by amendment
and renewal (but not in novation) of the Prior Credit Agreement, but only on the
terms and conditions set forth in this Agreement.
NOW THEREFORE, COMPANY, AGENT AND THE BANKS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account Party(ies)" shall mean, with respect to any Letter of Credit, the
account party or parties (which shall be Company or any Significant Domestic
Subsidiary, jointly and severally with Company) as named in an application to
the Agent for the issuance of such Letter of Credit.
"Additional Commitment Fee" shall mean the additional commitment fee
payable to Agent for distribution to the Banks pursuant to Section 2.13 hereof.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by Company, and made by Banks under Section 2.1 of this Agreement, as
the case may be, or requested by the Company and made by the Swing Line Bank
under Section 2.5 hereof (including without limitation any readvance, refunding
or conversion of such borrowing pursuant to Section 2.3 or 2.5(c) hereof) and
any advance in respect of a Letter of Credit under Section 3.6 hereof (including
without limitation the unreimbursed amount of any draws under Letters of
Credit), and shall include, as applicable, a Eurodollar-based Advance, a Quoted
Rate Advance, a Prime-based Advance and a Swing Line Advance.
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"Affiliate" shall mean, at any time, a Person (other than a Subsidiary)
(a) that directly or indirectly through one or more intermediaries Controls, or
is Controlled by, or is under common Control with, the Company; (b) that
beneficially owns or holds five percent (5%) or more of any class of the voting
stock of the Company; (c) five percent (5%) or more of the voting stock (or in
the case of a Person that is not a corporation, five percent (5%) or more of the
equity interest) of which is beneficially owned or held by the Company or a
Subsidiary; or (d) that is an officer or director (or a member of the immediate
family of an officer or director) of the Company or any Subsidiary; in each
case, at such time. As used in this definition, "Control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean Comerica Bank, a Michigan banking corporation, or any
successor appointed in accordance with Section 12.4 hereof.
"Agent's Correspondent" shall mean for Advances in Eurodollars, Agent's
Grand Cayman Branch (or for the account of said branch office, at Agent's main
office in Detroit, Michigan, United States of America), or at such other bank as
Agent may from time to time designate by written notice to Company and the
Banks.
"Agent's Fees" shall mean those fees and expenses required to be paid by
Company to Agent under Section 12.8 hereof.
"Aggregate Commitment" shall mean the Revolving Credit Maximum Amount, as
in effect from time to time.
"Alternate Base Rate" shall mean, for any day, an interest rate per annum
equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Anti-Terrorism Laws" is defined in Section 6.17(b) hereof.
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean the Eurodollar-based Rate, the
Prime-based Rate or, with respect to Swing Line Advances, the Quoted Rate, as
selected by Company from time to time subject to the terms and conditions of
this Agreement.
"Applicable Margin" shall mean, as of any date of determination thereof,
the applicable interest rate margin, determined by reference to the appropriate
columns in the Pricing Matrix attached to this Agreement as Schedule 1.1.
"Assignment Agreement" shall have the meaning ascribed to such term in
Section 13.8(c) hereof.
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"Back-End Dealer Agreement(s)" shall mean Dealer Agreements referred to in
clause (i) of the definition of Dealer Agreements.
"Banks" shall mean the Banks signatory hereto (including the New Banks)
and any assignee which becomes a Bank pursuant to Section 13.8(c) hereof.
"Borrowing Base Certificate" shall mean a Borrowing Base Certificate,
substantially in the form of Exhibit O (and determining the amount of Dealer
Loans Receivable as of the most recent quarter end, in the case of regular
borrowing base certificates delivered under Section 7.3(d) hereof, and as of the
most recent month-end, in the case of all other Borrowing Base Certificates
submitted hereunder), with appropriate insertions and executed by an authorized
officer of the Company and accompanied, when submitted in connection with a
Permitted Securitization or a sale of accounts under Section 8.9 hereof, by a
breakdown of the contemplated net securitization or sale proceeds to be received
(or actually received, as the case may be) from such transaction, and reasonable
supporting calculations.
"Borrowing Base Limitation" shall mean, as of any date of determination,
an amount equal to (i) seventy-five percent (75%) of Dealer Loans Receivable,
plus (ii) seventy -five percent (75%) of the Purchased Contract Balance, minus
(iii) the Hedging Reserve and minus (iv) the aggregate principal amount
outstanding from time to time of any Debt (other than the Indebtedness) secured
by any of the Collateral; provided, however, that, at any time, the portion of
the Borrowing Base Limitation derived from the Purchased Contract Balance under
clause (ii) of this definition shall not exceed a maximum of twenty-five percent
(25%) of the aggregate Borrowing Base Limitation; and provided, further, that
if, at any time, the advance rates under any Securitization Transaction set
forth in the related Securitization Documents ("Securitization Advance Rates")
are lower than the applicable advance rates expressed in clauses (i) or (ii) of
this definition ("Credit Agreement Advance Rates"), the applicable Credit
Agreement Advance Rates shall be deemed to be automatically reduced to the
lowest Securitization Advance Rates then in effect, such reduction to remain in
effect so long as the Securitization Advance Rates are lower than the Credit
Agreement Advance Rates set forth in this definition. At no time, however, shall
the Credit Agreement Advance Rates exceed seventy-five percent (75%).
"Business Day" shall mean any day on which commercial banks are open for
domestic and international business (including dealings in foreign exchange) in
Detroit, London (except with respect to any Prime-based Advances), and New York.
"CAC South Dakota" shall mean Credit Acceptance Corporation of South
Dakota, Inc., a South Dakota corporation.
"Capital Assets" shall mean all assets of a Person other than intangible
assets (so classified in accordance with GAAP), inventories, accounts receivable
and Investments in and securities of any other Person.
"Capitalized Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) with respect to which the discounted
present value of the rental
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obligations of such Person as lessee thereunder, in conformity with GAAP, is
required to be capitalized on the balance sheet of that Person.
"Cleanup Call(s)" shall mean:
(1) in the case of an optional cleanup call, a cleanup call to be
exercised at the option of the Company or a Special Purpose
Subsidiary under the terms of the applicable Permitted
Securitization (provided that, both before and after giving
effect thereto, no Default or Event of Default has occurred
and is continuing when such option is exercised), in an amount
not in excess of (i) Fifteen Percent (15%) of the initial
amount received by the Company or a Special Purpose Subsidiary
pursuant to such Permitted Securitization (before fees and
other deductions), it being understood that, for purposes of
the calculation under clause (a)(i) of this definition, each
tranche of a multi-tranche Permitted Securitization shall be
considered a separate Permitted Securitization or (ii) in the
case of any Securitization Transaction structured on a
revolving basis, fifteen percent (15%) of the maximum
aggregate availability at any time to Company or a Special
Purpose Subsidiary, each such optional cleanup call to be
accompanied by the repurchase of or release of encumbrances on
the Dealer Loan Pools or Purchased Contracts, as the case may
be, previously transferred or encumbered pursuant to such
Permitted Securitization in an amount equal to at least the
amount of such cleanup call; and
(2) in the case of a mandatory cleanup call, a mandatory cleanup
call to be exercised at the option of the investors under the
terms of the applicable Permitted Securitization, in an amount
not in excess of (i) Two and One-Half Percent (2-1/2%) of the
aggregate amount received by the Company or a Special Purpose
Subsidiary pursuant to the Permitted Securitization to which
such mandatory cleanup call relates (before fees and other
deductions), it being understood that, for purposes of the
calculation under clause (b)(i) of this definition, all
tranches of a multi-tranche Permitted Securitization shall be
considered one Permitted Securitization or (ii) in the case of
any Securitization Transaction structured on a revolving
basis, Two and One-Half Percent (2-1/2%) of the maximum
aggregate availability at any time to Company or a Special
Purpose Subsidiary, each such mandatory Cleanup Call to be
accompanied by the repurchase of or release of encumbrances on
Dealer Loan Pools or Purchased Contracts, as the case may be,
previously transferred or encumbered pursuant to such
Permitted Securitization in an amount equal to at least the
lesser of (A) the amount of such cleanup call or (B) the net
book value at the time of such cleanup call of the Dealer Loan
Pools or Purchased
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Contracts previously transferred or encumbered pursuant to
such Permitted Securitization.
"Collateral" shall mean (a) all right, title and interest of each of the
Company and each of its Significant Domestic Subsidiaries in, to and under its
accounts, inventory, machinery, equipment, contract rights, chattel paper,
general intangibles, including without limitation Dealer Loans, Dealer Loan
Pools, Dealer Agreements (and any amounts advanced to or liens granted by
Dealers thereunder), Installment Contracts, leases and related financial assets
(such Dealer Agreements, Dealer Loans, Dealer Loan Pools and the Installment
Contracts, accounts, contract rights, chattel paper, leases and general
intangibles relating to such Dealer Agreements, Dealer Loans, and Dealer Loan
Pools being subject to the rights, if any, of Dealers under Dealer Agreements),
Intercompany Notes and computer records and software relating thereto, whether
now owned or hereafter acquired by such Person, (b) one hundred percent (100%)
of the share capital of each Significant Domestic Subsidiary of the Company
(whether direct or indirect), (c) one hundred percent (100%) of the share
capital of T&C Subsidiary (subject to release upon dissolution of the T&C
Subsidiary in connection with the completion of the New Restructuring) and of
CAC South Dakota (whether or not constituting a Significant Domestic
Subsidiary), (d) not less than sixty-five percent (65%) of the aggregate
partnership interests of the Scottish Partnership, (e) all other property or
rights in which a security interest, mortgage, lien or other encumbrance for the
benefit of the Banks is or has been granted or arises or has arisen, under or in
connection with this Agreement, the Collateral Documents or any of the Other
Loan Documents, or otherwise, and (f) all proceeds and products of the
foregoing.
"Collateral Documents" shall mean (i) that certain Third Amended and
Restated Security Agreement dated as of February ____, 2006 and executed and
delivered by Company and the other Subsidiary debtors signatory thereto in favor
of the Agent, as Collateral Agent pursuant to the Intercreditor Agreement (as
amended, the "Security Agreement"), and encumbering the property described
therein, (ii) an assignation executed and delivered by Company in favor of the
Agent, as Collateral Agent pursuant to the Intercreditor Agreement, and
encumbering the Collateral described in clause (e) of the definition of
Collateral, (iii) those certain lien, charge or other security documents
executed and delivered, or to be executed and delivered hereunder in order to
encumber 100% of the share capital of the T&C Subsidiary, executed and delivered
by the Company or any of its subsidiaries and delivered to the Agent, as
Collateral Agent (as aforesaid), subject to release of such liens upon
dissolution of the T&C Subsidiary in compliance with the terms of the New
Restructuring, and (iv) all other security documents (including, without
limitation, financing statements, stock powers, acknowledgments, registrations,
joinders and the like) executed by the Company or any of its Subsidiaries and
delivered to the Agent, as Collateral Agent (as aforesaid), as of the date
thereof or, from time to time, subsequent thereto in connection with such
security documents, this Agreement or the other Loan Documents, as such security
documents may be in each case amended or further amended (subject to the
Intercreditor Agreement) from time to time.
"Commitment Fee" shall mean the commitment fee payable to Agent for
distribution to the Banks pursuant to Section 2.13, hereof.
"Company" is defined in the Preamble.
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"Consolidated" or "Consolidating" shall, when used with reference to any
financial information pertaining to (or when used as a part of any defined term
or statement pertaining to the financial condition of) Company and its
Subsidiaries, mean the accounts of Company and its Subsidiaries determined on a
consolidated or consolidating basis, as the case may be, all determined as to
principles of consolidation and, except as otherwise specifically required by
the definition of such term or by such statements, as to such accounts, in
accordance with GAAP applied on a consistent basis and consistent with the
financial statements as at and for the fiscal year ended December 31, 2004.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (a)
Consolidated Interest Expense for such period, plus (b) Operating Rentals
payable by the Company and its Subsidiaries in respect of such period under
Operating Leases, plus (c) the aggregate amount of all dividends on any
preferred stock of the Company declared during such period, determined after
eliminating intercompany transactions among the Company and its Subsidiaries.
"Consolidated Funded Debt" shall mean, as of any applicable date of
determination, all Funded Debt of the Company and its Subsidiaries determined on
a Consolidated basis according to GAAP, but including the Funded Debt of any
Special Purpose Subsidiary, whether or not includible under GAAP), but minus
Funded Debt of the Trusts to the extent such liabilities are Consolidated under
GAAP.
"Consolidated Income Available for Fixed Charges" shall mean, for any
period, the sum of (a) Consolidated Net Income, plus (b) the aggregate amount of
income taxes, depreciation, amortization (including the amortization of any
excess servicing asset) and Consolidated Fixed Charges (to the extent, and only
to the extent, that such aggregate amount was reflected in the computation of
Consolidated Net Income for such period), determined on a Consolidated basis for
such Persons in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the amount of
interest charged or chargeable to the Consolidated Statement of Operations of
Company and its Subsidiaries in respect of such period, as determined in
accordance with GAAP.
"Consolidated Net Assets" shall mean, as of any applicable date of
determination, the sum of (i) 100% of all cash and the value (at book) of all
Permitted Investments and (ii) 75% of the aggregate net book value of Dealer
Loans Receivable and Purchased Contracts; determined on a Consolidated basis for
the Company and its Subsidiaries according to GAAP, but including the amount of
any such assets held by a Special Purpose Subsidiary, whether or not includible
under GAAP, and excluding such assets of the Trusts to the extent such assets
are Consolidated under GAAP.
"Consolidated Net Income" shall mean, for any period, net earnings (or
loss) after income taxes of Company and its Subsidiaries, determined on a
Consolidated basis for such Persons, as defined according to GAAP, but
excluding:
(1) net earnings (or loss) of any Subsidiary accrued prior to the
date it became a Subsidiary;
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(2) any gain or loss (net of tax effects applicable thereto)
resulting from the sale, conversion or other disposition of
Capital Assets other than in the ordinary course of business;
(3) any extraordinary or non-recurring gains or losses (including,
without limitation, any gain on sale generated by a Permitted
Securitization, except to the extent the Company has received
a cash benefit therefrom in the applicable reporting period);
and any interest income generated by a Permitted
Securitization, except to the extent the Company has received
a cash benefit therefrom in the applicable reporting period;
(4) any gain (net of tax effects attributable thereto) arising
from any reappraisal or write-up of assets and any gain or
loss (net of tax effects attributable thereto) arising from
the non-cash effect of equity compensation expense;
(5) any portion of the net earnings of any Subsidiary that for any
reason is unavailable for payment of dividends to the Company
or any other Subsidiary;
(6) any gain or loss (net of tax effects applicable thereto)
during such period resulting from the receipt of any proceeds
of any insurance policy;
(7) except as set forth herein, any earnings of any Person
acquired by Company or any Subsidiary through the purchase,
merger or consolidation or otherwise, or earnings of any
Person substantially all of the assets of which have been
acquired by Company or any Subsidiary, for any period prior to
the date of acquisition;
(8) net earnings of any Person (other than a Subsidiary) in which
Company or any Subsidiary shall have an ownership interest
unless such net earnings shall actually have been received by
the Company or such Subsidiary in the form of cash
distributions; and
(9) any restoration during such period to income of any
contingency reserve, except to the extent that provision for
such reserve was made either
A. during such period out of income accrued during such period, or
B. in connection with the Company's program of financing Installment
Contracts (A) to provide for warranty claims for which the Company may be
responsible, or (B) to cover credit losses in connection with Dealer Loans
Receivable or Purchased Contracts.
"Consolidated Tangible Net Worth" shall mean the total preferred
shareholders' investment and common shareholders' investment (common stock, paid
in capital, retained
7
earnings and accumulated other comprehensive income, net of tax) as computed for
the Company and its Subsidiaries on a Consolidated basis under GAAP, less assets
properly classified as intangible assets according to GAAP, but excluding from
the determination thereof, without duplication, any excess servicing asset
resulting from the transfer, pursuant to a Permitted Securitization, of Dealer
Loan Pools or Purchased Contracts.
"Covenant Compliance Report" shall mean the report to be furnished by the
Company to the Agent, in substantially the form attached to this Agreement as
Exhibit H and certified by the chief financial officer or treasurer of the
Company pursuant to Section 7.3(c) hereof, as to whether the Company and its
Subsidiaries are in compliance with the financial covenants contained in
Sections 7.4 through 7.7, inclusive, of this Agreement for the applicable fiscal
quarter (or year-end) of the Company, as the case may be, in which report the
Company shall set forth its calculations and the resultant ratios or financial
tests determined thereunder, and certifying that no Default or Event of Default
has occurred and is continuing.
"Dealer(s)" shall mean a Person engaged in the business of the retail sale
of new or used motor vehicles, including both businesses exclusively selling
used motor vehicles and businesses principally selling new motor vehicles, but
having a used vehicle department, including any such Person which constitutes an
Affiliate of Company.
"Dealer Agreement(s)" shall mean the sales and/or servicing agreements
between the Company or its Subsidiaries and a participating Dealer which sets
forth the terms and conditions under which the Company or its Subsidiaries (i)
accepts, as nominee for such Dealer, the assignment of Installment Contracts for
purposes of administration, servicing and collection and under which the Company
or its Subsidiary may make loans or advances to such Dealers included in Dealer
Loans Receivable and (ii) accepts outright assignments of Installments Contracts
from Dealers or funds Installments Contracts originated by such Dealer in the
name of Company or any of its Subsidiaries, in each case as such agreements may
be in effect from time to time.
"Dealer Loan(s)" shall mean the advances of cash made by the Company or
any of its Subsidiaries to a Dealer at the time an Installment Contract is
approved, accepted by and assigned to the Company or any of its Subsidiaries
under a Dealer Agreement described in clause (i) of the definition of Dealer
Agreements, against anticipated future collections on Installment Contracts
serviced for such Dealer, as outstanding from time to time.
"Dealer Loan Pool(s)" shall mean a grouping on the books and records of
the Company or any of its Subsidiaries of Dealer Loans and bearing the same pool
identification number assigned by the Company's computer system, and to which
Dealer Loans and the related Installment Contracts were assigned in the ordinary
course of the Company's business in the order such Dealer Loans were made by the
Company and such Installment Contracts were originated by such Dealer without
the exercise of discretion by the Company (it being understood that the balance
of any Dealer Loan Pool is constantly adjusted to reflect increases due to
additional Dealer Loans made to the related Dealer, other amounts paid to such
Dealer pursuant to the related Dealer Agreement, and revenue accrued with
respect to such balance in accordance with the Company's accounting policies set
forth in its periodic reports filed with the Securities and Exchange Commission,
and to reflect decreases resulting from collections on the
8
related Installment Contracts and write offs of such Dealer Loans Receivable).
As used herein, (x) an "uncapped" Dealer Loan Pool shall mean a pool which is
not reflected on such books and records as capped and to which additional Dealer
Loans and related financial assets may be added and (y) a Dealer Loan Pool shall
be deemed "capped" when the number of the applicable financial assets in such
pool has reached the limit established from time to time between the relevant
Dealer and the Company or Subsidiary, as applicable, in the ordinary course of
business and consistent with the Company's normal customs and practices in
effect as of the date hereof, such that no further financial assets may be added
to such pool.
"Dealer Loans Receivable" shall mean, as of any applicable date of
determination, the amount of loans receivable, as such amount would appear in
the Consolidated financial statements of the Company and its Subsidiaries
prepared in accordance with GAAP (net of any reserves established by the Company
as an allowance for credit losses related to such dealer loans receivable,
provided that, for purposes of determining the Borrowing Base and compliance
with the covenants under Section 7.4 through 7.7 hereof, Dealer Loans Receivable
shall not include (a) the net book value of Dealer Loan Pools transferred or
encumbered pursuant to a Permitted Securitization (whether or not attributable
to the Company under GAAP), unless and until such Dealer Loan Pools are
reassigned to the Company or a Domestic Subsidiary of the Company or such
encumbrances are discharged or (b) Dealer Loans which are not secured by the
Installment Contracts relating thereto.
"Debt" shall mean, with respect to any Person, without duplication, (a)
its liabilities for borrowed money (whether or not evidenced by a security), (b)
any liabilities secured by any Lien existing on property owned by such Person
(whether or not such liabilities have been assumed), (c) its liabilities in
respect of Capitalized Leases, (d) the present value of all payments due under
any arrangement for retention of title or any conditional sale agreement (other
than a Capitalized Lease) discounted at the implicit rate, if known, with
respect thereto or, if unknown, at eight and eighty-seven one-hundredths percent
(8.87%) per annum, (e) reimbursement obligations (contingent or otherwise) in
respect of letters of credit, obligations in respect of bankers acceptances, and
(f) its guaranties of any liabilities of another Person constituting liabilities
of a type set forth in clauses (a) through (e), above; provided however that the
obligation of Company or any of its Subsidiaries (i) to remit monies to Dealers
under Dealer Agreements (including, without limitation, with respect to
Installment Contracts, claims or refunds under insurance policies or claims or
refunds under service contracts) or (ii) to make deposits in trust or otherwise
as required under re-insurance agreements and pursuant to state regulatory
requirements shall not be considered Debt of the Company or its Subsidiaries;
and provided further that "Debt" shall also include payment obligations, if any,
under interest rate protection agreements (including without limitation interest
rate swaps and similar agreements) and currency swaps and xxxxxx and similar
agreements.
"Debt Rating" shall mean the debt rating, if any, of Company's long-term
non-credit enhanced senior debt obtained by the Company, from time to time, from
an applicable credit rating agency of recognized national standing in the United
States of America.
"Default" shall mean any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.
9
"Dollars" and the sign "$" shall mean lawful money of the United States of
America.
"Domestic Advance" shall mean any Advance other than a Eurodollar-based
Advance.
"Domestic Guaranty" shall mean that certain guaranty of all Indebtedness
outstanding from the Company dated as of this Agreement, executed and delivered
(or to be executed and delivered) by each of the Significant Domestic
Subsidiaries (whether by execution thereof, or by execution of the Joinder
Agreement attached as "Exhibit A" to the form of such Guaranty), to the Agent,
on behalf of the Banks, as amended from time to time.
"Domestic Subsidiary" shall mean those Subsidiaries of the Company
incorporated under the laws of the United States of America, or any state
thereof, other than the US LLC, so long as it is a Subsidiary of a Foreign
Subsidiary.
"Effective Date" shall mean February ___, 2006.
"Equity Offering" shall mean the issuance and sale for cash, on or after
the Effective Date, by Company or any of its Subsidiaries of additional capital
stock or other equity interests, other than upon the issuance of stock or the
exercise of employee stock options granted pursuant to equity based compensation
plans maintained by the Company or its Subsidiaries in the ordinary course of
business and not in anticipation of any sale of capital stock or equity
interests to the general public.
"Equity Offering Adjustment" shall mean that amount to be added to the
minimum Consolidated Tangible Net Worth required to be maintained under Section
7.7 hereof consisting of an amount equal to one hundred percent (100%) of each
Equity Offering conducted by the Company or any of its Subsidiaries, net of
related costs of issuance payable to third parties, on and after the Effective
Date to the applicable date of determination, on a cumulative basis.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code, and the regulations in effect from time
to time thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
would be treated as a single employer under Section 414 of the Internal Revenue
Code, and any Domestic Subsidiary.
"Eurodollar-based Advance" shall mean any Advance (including a Swing Line
Advance) which bears interest at the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean a per annum interest rate which is
equal to the sum of the Applicable Margin (subject, if applicable, to adjustment
under Section 4 hereof), plus the quotient of:
(1) the per annum interest rate at which deposits in eurodollars are
offered to Agent's Eurodollar Lending Office by other prime banks in
the eurodollar market in an amount comparable to the relevant
Eurodollar-based Advance and for a period
10
equal to the relevant Eurodollar-Interest Period at approximately
11:00 a.m. Detroit time two (2) Business Days prior to the first day
of such Eurodollar-Interest Period, divided by
(2) a percentage equal to 100% minus the maximum rate on such date at
which Agent is required to maintain reserves on `Eurodollar
liabilities' as defined in and pursuant to Regulation D of the Board
of Governors of the Federal Reserve System or, if such regulation or
definition is modified, and as long as Agent is required to maintain
reserves against a category of liabilities which includes Eurodollar
deposits or includes a category of assets which includes Eurodollar
loans, the rate at which such reserves are required to be maintained
on such category,
such sum to be rounded upward, if necessary, to the nearest whole multiple
of 1/100th of 1%.
"Eurodollar-Interest Period" shall mean, for Swing Line Advances carried
at the Eurodollar-based Rate, an interest period of seven days, one month (or
any lesser number of days agreed to in advance by Company, Agent and the Swing
Line Bank), and for all other Eurodollar-based Advances, an interest period of
one, two, three or six months (or any lesser or greater number of days agreed to
in advance by Agent and the Banks), in each case as selected by Company, as
applicable, for a Eurodollar-based Advance pursuant to Section 2.3 or 2.5
hereof, as the case may be.
"Eurodollar Lending Office" shall mean, (a) with respect to the Agent,
Agent's office located at its Grand Caymans Branch or such other branch of
Agent, domestic or foreign, as it may hereafter designate as its Eurodollar
Lending Office by notice to Company and the Banks and (b) as to each of the
Banks, its office, branch or affiliate located at its address set forth on the
signature pages hereof (or identified thereon as its Eurodollar Lending Office),
or at such other office, branch or affiliate of such Bank as it may hereafter
designate as its Eurodollar Lending Office by notice to Company and Agent.
"Event of Default" shall mean any of the events specified in Section 9.1
hereof.
"Existing Advance(s)" shall mean Advances made under the Prior Credit
Agreement (as defined therein) which are outstanding on the Effective Date.
"Existing Letter of Credit" shall mean a letter of credit issued under the
Prior Credit Agreement which is outstanding on the Effective Date hereof as set
forth on Schedule 3.11 attached hereto.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it.
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"Fees" shall mean the Agent's Fees, the Revolving Credit Facility Fee, the
Commitment Fee, the Additional Commitment Fee and the Letter of Credit Fees.
"Fixed Charge Coverage Ratio" shall mean, as of any applicable date of
determination, the ratio of (a) Consolidated Income Available for Fixed Charges
for the period of four (4) consecutive fiscal quarters of the Company most
recently ended at such time to (b) Consolidated Fixed Charges for such period.
"Floor Plan Receivables" shall mean, as of any applicable date of
determination, the aggregate amount outstanding from Dealers pursuant to
financing extended to such Dealers by Company or any of its Subsidiaries for
used motor vehicle inventories, such financing to be secured by the related
motor vehicle inventories and any future cash collections owed by Company or its
Subsidiaries to the Dealer under the applicable Dealer Agreement.
"Foreign Subsidiaries" shall mean all of the Company's Subsidiaries other
than its Domestic Subsidiaries.
"Funded Debt" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services as of such date (other than operating leases and
trade liabilities and royalties payable incurred in the ordinary course of
business and payable in accordance with customary practices) or which is
evidenced by a note, bond, debenture or similar instrument, (b) the principal
component of all obligations of such Person under Capitalized Leases, (c) all
reimbursement obligations (actual, contingent or otherwise) of such Person in
respect of letters of credit (other than trade letters of credit), bankers
acceptances or similar obligations issued or created for the account of such
Person, (d) all liabilities of the type described in (a), (b) and (c) above that
are secured by any Liens on any property owned by such Person as of such date
even though such Person has not assumed or otherwise become liable for the
payment thereof, in the case of each of the items in clauses (a) through (d),
the amount of which is determined in accordance with GAAP; provided, however,
that so long as such Person is not personally liable for any such liability, the
amount of such liability shall be deemed to be the lesser of the fair market
value at such date of the property subject to the Lien securing such liability
and the amount of the liability secured, and (e) all Guarantee Obligations in
respect of any liability which constitutes Funded Debt; provided, however, that
Funded Debt shall not include any indebtedness under any Hedging Agreement prior
to the occurrence of a termination event with respect thereto.
"Funding Conditions" shall mean those conditions required to be satisfied
prior to or concurrently with the funding of any Future Debt, as follows:
(1) Within a period of one hundred eighty (180) days prior to the
date any such Debt is incurred, Company shall have provided to
the Agent and the Banks a Consolidated plan and financial
projections meeting the requirements therefor as set forth in
Section 7.3(i) of this Agreement and demonstrating that the
Company would be in compliance with the financial covenants
set forth in Sections 7.4 through 7.7 hereof and the Borrowing
Base Limitation, if
12
applicable, were such Debt outstanding during the applicable
reporting periods;
(2) Both immediately before and immediately after such additional
Debt is incurred, no Default or Event of Default (whether or
not related to such additional Debt, and taking into account
the incurring of such additional Debt) has occurred and is
continuing;
(3) If such additional Future Debt shall be issued pursuant to
loan documents containing covenants which are more restrictive
than the covenants contained in this Agreement, Company shall,
upon the written request of the Majority Banks, enter into
amendments to this Agreement to extend the benefit of such
covenants to the Banks;
(4) Concurrently with the incurring of such additional Future
Debt, the proceeds of such Future Debt, net of third party
expenses incurred by the Company in connection with the
issuance of such Future Debt, shall first be applied to reduce
(i) the principal, interest and other amounts under other
Future Debt then outstanding or (ii) principal, interest and
other amounts owing under the Revolving Credit (to the extent
then outstanding, and including the aggregate amount of
drawings made under any Letter of Credit for which the Agent
has not received full payment), subject to the right to
reborrow in accordance with this Agreement; provided, however,
that to the extent that on the date any reduction of the
principal balance outstanding under the Revolving Credit shall
be required under this clause (d), the Indebtedness under the
Revolving Credit is being carried, in whole or in part, at the
Eurodollar-based Rate and no Default or Event of Default has
occurred and is continuing, the Company may, after prepaying
that portion of the Indebtedness then carried at the
Prime-based Rate, deposit the amount of such required
principal reductions in a cash collateral account to be held
by the Agent, for and on behalf of the Banks (which shall be
an interest-bearing account), on such terms and conditions as
are reasonably acceptable to Agent and the Majority Banks and,
subject to the terms and conditions of such cash collateral
account, sums on deposit therein shall be applied (until
exhausted) to reduce the principal balance of the Revolving
Credit on the last day of each Interest Period attributable to
the applicable Eurodollar-based Advances of the Revolving
Credit (subject to the right to reborrow, as aforesaid); and
provided further that Agent and the Banks acknowledge that any
proceeds of Future Debt remaining after the application of
such proceeds as required by this clause (d) may be held or
invested in Permitted Investments or otherwise invested or
applied in any manner not prohibited by this Agreement; and
13
(5) If such additional Future Debt is to be secured, the
applicable Lien shall arise only pursuant to the Security
Agreement and/or the other Collateral Documents and each of
the holders of such Future Debt shall become a party to the
Intercreditor Agreement and shall execute and deliver such
additional or related Loan Documents, as reasonably requested
by the Agent.
"Future Debt" shall mean Debt evidenced by Long Term Notes; provided that
the aggregate principal amount of all such Debt outstanding at any time from and
after the date hereof shall not exceed One Hundred Fifty Million Dollars
($150,000,000); and provided further that, at the time any such Debt is
incurred, the Funding Conditions have been satisfied. For the purposes of this
definition, "Long Term Notes" shall mean unsecured or secured non-revolving
promissory notes to be issued by the Company, which Debt shall have a term
extending at least beyond the Revolving Credit Maturity Date then in effect,
have an amortization schedule not greater than level amortization to maturity
(but with no principal payments required for a period of at least 12 months) and
have no requirement for mandatory early repayment except (x) upon default, (y)
following a change in control or (z) following the sale of any material portion
of the assets of the Company or any of its Subsidiaries, to the extent of the
proceeds of such sale.
"Future Debt Documents" shall mean the promissory note(s), guaranty(ies),
agreement(s) or other documents, instruments and certificates executed and
delivered, subject to the terms of this Agreement, to evidence or secure (or
otherwise relating to) Future Debt, as the same may be amended from time to time
and any and all other documents executed in exchange therefor or replacement or
renewal thereof.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect on the date hereof, consistently applied.
"Guarantee Obligation(s)" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was evidenced or induced by a reimbursement
agreement, counter-indemnity, endorsement or similar obligation issued by the
guaranteeing person, in either case guaranteeing or in effect guaranteeing any
Debt, leases, dividends or other obligations (the "primary obligations") of any
other third Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. To the extent not otherwise determinable, the
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation (as
14
outstanding on the applicable date of determination) in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by Company in good faith.
"Guaranty(ies)" shall mean the Domestic Guaranty and any other guaranty of
the Indebtedness entered into from time to time in accordance with the terms
hereof.
"Guarantor(s)" shall mean each Significant Subsidiary which is required by
the Banks to guarantee the obligations of the Company hereunder and under the
other Loan Documents.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and directives issued by any federal, state, local,
foreign or other governmental or quasi-governmental authority or body (or any
agency, instrumentality or political subdivision thereof) pertaining to
Hazardous Material on or about the Material Property or any portion thereof
including, without limitation, those relating to soil, surface, subsurface
ground water conditions and the condition of the ambient air; any so-called
"superfund" or "superlien" law; and any other federal, state, foreign or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material, as now or at any
time hereafter in effect. For the purposes of this definition "Material
Property" shall mean any property, whether personal or real, owned, leased or
otherwise used by the Company or any of the Subsidiaries which is material to
the operations of the Company and the Subsidiaries, taken as a whole.
"Hedging Agreement(s)" shall mean any Interest Rate Protection Agreements
and any foreign currency exchange agreements (including without limitation
foreign currency xxxxxx and swaps) or other foreign exchange transactions, or
any combination of such transactions or agreements or any option with respect to
any such transactions or agreements entered into by Company and/or any of its
Subsidiaries to manage existing or anticipated foreign exchange risk and not for
speculative purposes.
"Hedging Reserve" shall mean a reserve under the Borrowing Base Limitation
equal to the lesser of (i) One Million Dollars ($1,000,000) and (ii) the
aggregate amount of Net Hedging Obligations outstanding from time to time
(determined in the manner set forth herein) maintained by the Company for the
benefit of those Banks or their Affiliates which provide Hedging Agreements to
the Company or any Domestic Subsidiary under or in connection with this
Agreement, and allocated to such Banks or their Affiliates in the amounts so
determined and reported by the Company in its quarterly Borrowing Base
Certificates or any updated Borrowing Base Certificates from time to time
submitted by the Company hereunder; provided that the adequacy of the amounts
established by the Company for the applicable exposure under a
15
Hedging Agreement shall be subject to review and approval by the Majority Banks
and each affected Bank, from time to time at the request of such Banks.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement in its entirety and not to any particular paragraph or provision of
this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities, whether direct
or indirect, absolute or contingent, owing by Company or any Subsidiary to the
Banks (or any of them) or to the Agent, in any manner and at any time, under
this Agreement or the other Loan Documents, whether evidenced by the Notes, the
Guaranties, Letter of Credit Agreements or otherwise, due or hereafter to become
due, now owing or that may hereafter be incurred by the Company or any Account
Party to, or acquired by, the Banks or by Agent, and all Net Hedging Obligations
in respect of Hedging Agreements entered into between Company and/or any
Significant Domestic Subsidiary and a Bank or an Affiliate of a Bank (up to the
maximum amount of the Hedging Reserve, as determined and allocated hereunder)
and any judgments that may hereafter be rendered on such indebtedness or any
part thereof, with interest according to the rates and terms specified, or as
provided by law, and any and all consolidations, amendments, renewals,
replacements or extensions of any of the foregoing.
"Installment Contract(s)" shall mean retail installment contracts for the
sale of new or used motor vehicles purchased outright from Dealers by Company or
a Subsidiary of Company or written by Dealers in the name of the Company or a
Subsidiary of the Company (and funded by Company or such Subsidiary) or assigned
by Dealers to Company or a Subsidiary of Company, as nominee for the Dealer, for
administration, servicing, and collection, in each case pursuant to an
applicable Dealer Agreement; provided, however, that any Installment Contracts
transferred or encumbered pursuant to a Permitted Securitization or securing
Dealer Loan Pools transferred or encumbered pursuant to a Permitted
Securitization shall, from and after the date of such transfer or encumbrance,
cease to be considered Installment Contracts under this Agreement unless and
until such Installment Contracts or Dealer Loan Pools, as the case may be, are
reassigned to the Company or a Subsidiary of the Company or such encumbrances
are discharged.
"Intercompany Loans" shall mean any loan or advance in the nature of a
loan by the Company to any Subsidiary or by any Subsidiary to any other
Subsidiary or to the Company.
"Intercompany Loans, Advances and Investments" shall mean any Intercompany
Loan and any other advance or Investment by the Company to or in a Subsidiary or
by any Subsidiary to or in the Company or any other Subsidiary.
"Intercompany Note(s)" shall mean the promissory notes substantially in
the form of Exhibit N, attached hereto, issued or to be issued by the Company or
any Subsidiary to evidence an Intercompany Loan, and pledged to the Agent (in
its capacity as Collateral Agent under the Intercreditor Agreement and/or as
Agent hereunder.)
"Intercreditor Agreement" shall mean that certain Intercreditor Agreement
executed and delivered as of December 15, 1998 by and among the Banks, the
holders of certain other Debt and the Agent, as Collateral Agent thereunder, and
acknowledged and accepted by the Company
16
and certain of its Subsidiaries, as amended by First Amendment dated as of March
30, 2001 and Second Amendment dated as of June 10, 2002, and as further amended
from time to time.
"Interest Period" shall mean:
(1) with respect to a Eurodollar-based Advance, a
Eurodollar-Interest Period commencing on the day a
Eurodollar-based Advance is made, or on the effective date of
an election of the Eurodollar-based Rate made under Section
2.3 or hereof, as the case may be, and
(2) with respect to a Swing Line Advance, a period of one (1) to
thirty (30) days agreed to in advance by Company and the Swing
Line Bank as selected by Company pursuant to Section 2.5(c),
provided that (i) any Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day, except that
as to a Eurodollar-Interest Period, if the next succeeding Business Day falls in
another calendar month, such Eurodollar-Interest Period shall end on the next
preceding Business Day, and (ii) when a Eurodollar-Interest Period begins on a
day which has no numerically corresponding day in the calendar month during
which such Eurodollar-Interest Period is to end, it shall end on the last
Business Day of such calendar month, and (iii) no Interest Period shall extend
beyond the maturity date set forth in the Note to which such Interest Period is
to apply.
"Interest Rate Protection Agreement(s)" shall mean any interest rate,
swap, cap, floor, collar, forward rate agreement or other rate protection
transaction, or any combination of such transactions or agreements or any option
with respect to any such transactions or agreements now existing or hereafter
entered into by Company or any of its Subsidiaries to manage existing or
anticipated interest rate risk and not for speculative purposes.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, in respect of any Person, any loan, advance,
extension of credit, Guarantee Obligation or contribution of capital or any
investment in, or purchase or other acquisition of, stocks, notes, debentures or
other securities of such Person.
"Issuing Office" shall mean Agent's office located at One Detroit Center,
000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other office as Agent shall
designate as its Issuing Office.
"Joinder Agreement (Guaranty)" shall mean a joinder agreement in the form
attached as "Exhibit A" to the form of the Domestic Guaranty, to be executed and
delivered by any Person required to be a Guarantor pursuant to Section 7.19 of
this Agreement.
"Lead Arranger" shall mean Banc of America Securities, LLC, or such
successor lead arranger and sole book manager as appointed by the Company under
Section 12.15 hereof.
17
"Lenders" shall mean the Banks and the Future Debt Holders (as defined in
the Intercreditor Agreement).
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Agent of
an Account Party or Account Parties requesting Agent to issue such Letter of
Credit, as amended from time to time.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Maximum Amount" shall mean as of any date of
determination the lesser of: (a) Fifteen Million Dollars ($15,000,000); or (b)
the Revolving Credit Maximum Amount as of such date, minus the aggregate
principal amount of Advances outstanding as of such date under the Revolving
Credit Notes and the Swing Line Notes.
"Letter of Credit Obligation(s)" shall mean the obligation of an Account
Party or Account Parties under this Agreement and each Letter of Credit
Agreement to reimburse the Agent for each payment made by the Agent under the
Letter of Credit issued pursuant to such Letter of Credit Agreement, together
with all other sums, fees, charges and amounts which may be owing to the Agent
under such Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Agent in its capacity hereunder as issuer of a Letter of Credit as a
result of a draft or other demand for payment under any Letter of Credit.
"Letter(s) of Credit" shall mean any standby or documentary letters of
credit issued by Agent at the request of or for the account of an Account Party
or Account Parties pursuant to Article 3 hereof, including without limitation
any Existing Letters of Credit.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, or any other type
of lien, charge or encumbrance, whether based on common law, statute or
contract; provided that the term "Lien" shall not include any negative pledge
clauses in agreements relating to the borrowing of money or the obligation of
Company or any of its Subsidiaries (a) to remit monies to Dealers under Dealer
Agreements, claims or refunds under insurance policies or claims or refunds
under service contracts or (b) to make deposits in trust or otherwise as
required under re-insurance agreements and pursuant to state regulatory
requirements, unless the Company or any of its Subsidiaries, as the case may be,
has encumbered its interest in such monies or deposits or in other property of
the Company to secure such obligations.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Guaranties, the Letter of Credit Agreements, the Collateral Documents and any
other documents, instruments or agreements executed pursuant to or in connection
with any such document, or this Agreement, as such documents may be amended,
renewed, replaced or extended from time to time.
"Luxembourg Subsidiary" shall mean a wholly-owned direct or indirect
Subsidiary of the Company organized under the laws of Luxembourg.
18
"Majority Banks" shall mean at any time Banks holding 66-2/3% of the
aggregate principal amount of the Indebtedness then outstanding under the Notes
(provided that, for purposes of determining Majority Banks hereunder,
Indebtedness outstanding under the Swing Line Notes shall be allocated among the
Banks based on their respective Percentages of the Revolving Credit), or, if no
Indebtedness is then outstanding, Banks holding 66-2/3% of the Percentages.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business or financial condition of the Company and its Subsidiaries, taken as a
whole, (b) the ability of each of the Company and its Subsidiaries to perform
their material obligations under this Agreement, the Notes (if issued) or any
other Loan Document to which any of them is a party, as the case may be, or (c)
the validity or enforceability of any material provision of this Agreement, any
of the Notes (if issued) or any of the other Loan Documents (as determined by
Agent and the Majority Banks) or the rights or remedies of the Agent or the
Banks hereunder or thereunder.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., and its successors.
"Multiemployer Plan" shall mean any Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Hedging Obligation(s)" shall mean, in respect of any one or more
Hedging Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Agreements, (a) for any
date on or after the date such Hedging Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the xxxx to market value(s) for such Hedging Agreements,
as determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Hedging Agreements, which
may include any Bank or Affiliate of such Bank.
"New Bank" is defined in clause (b) of Section 2.17.
"New Bank Addendum" shall mean an addendum, substantially in the form of
Exhibit M hereto, to be executed and delivered by each Bank becoming a party to
this Agreement pursuant to Section 2.17 hereof.
"New Restructuring" shall mean a series of transfers, mergers,
amalgamations, dissolutions, liquidations and similar transactions involving
ownership interests (but not involving any transfers of Dealer Loans, Dealer
Loan Pools, Installment Contracts or other financial assets, other than to the
Company or a Significant Domestic Subsidiary) including without limitation the
transfer of the ownership of all of the Company's Foreign Subsidiaries
(including the US LLC) by the T&C Subsidiary to CAC South Dakota and the
liquidation of the T&C Subsidiary (including the release by the Banks of the T&C
Subsidiary from its obligations under the Guaranty and any Collateral Document,
and the release of the Lien over the equity interests of the T&C Subsidiary) and
the release of those debentures, liens or security agreements executed in favor
of the Agent by the Permitted Borrowers (as defined in the Prior Credit
Agreement), and the conversion of CAC Scotland from a "controlled foreign
corporation" (for
19
purposes of Section 956 of the Internal Revenue Code) to a branch of CAC South
Dakota (pursuant to a "check-the-box election"), such transactions resulting in
the restructuring of the ownership of the Company's foreign subsidiaries as
shown on Exhibit R to the Credit Agreement.
"Notes" shall mean the Revolving Credit Notes or the Swing Line Notes, or
any or all of the Revolving Credit Notes, and the Swing Line Notes as the
context indicates, and in the absence of such indication, all such notes.
"Notes Receivable" shall mean, as of any applicable date of determination,
the aggregate amount outstanding under promissory notes issued by Dealers to
Company or any of its Subsidiaries.
"Operating Lease" shall mean any lease under which the Company or any
Subsidiary is a lessee, other than a Capitalized Lease.
"Operating Rental" shall mean all rental payments that the Company or any
of its Subsidiaries, as lessee, is required to make under the terms of any
Operating Lease.
"Outright Dealer Agreement(s)" shall mean Dealer Agreements referred to in
clause (ii) of the definition of Dealer Agreements.
"PBGC" shall mean the Pension Benefit Guaranty Corporation under ERISA, or
any successor corporation.
"Pension Plan(s)" shall mean all employee pension benefit plans of Company
or any ERISA Affiliate, as defined in Section 3(2) of ERISA.
"Percentage" shall mean, with respect to any Bank, its percentage share,
as set forth on Exhibit D hereto (and stated as a percentage and/or a dollar
amount), of the Letters of Credit, and/or the Revolving Credit, as the context
indicates, as such Exhibit may be revised from time to time by Agent in
accordance with Section 13.8(d) hereof.
"Permitted Acquisition" shall mean any acquisition by the Company or any
of its Subsidiaries (other than any Special Purpose Subsidiary), including any
such acquisition conducted as a Permitted Merger, of assets, businesses or
business interests or shares of stock or other ownership interests of or in any
other Person conducted in accordance with the following requirements:
(1) not less than twenty (20) nor more than ninety (90) days prior
to the commencement of each such proposed acquisition, the
Company provides written notice thereof to Agent (with drafts
of all material documents pertaining to such proposed
acquisition to be furnished to Agent within not less than
twenty (20) days prior to such proposed acquisition);
(2) on the date of any such acquisition, all necessary or
appropriate governmental, quasi-governmental, agency,
regulatory or similar
20
approvals of applicable jurisdictions (or the respective
agencies, instrumentalities or political subdivisions, as
applicable, of such jurisdictions) and all necessary or
appropriate non-governmental and other third-party approvals
which, in each case, are material to such acquisition have
been obtained and are in effect, and the Company and its
Subsidiaries are in full compliance therewith, and all
necessary or appropriate declarations, registrations or other
filings with any court, governmental or regulatory authority,
securities exchange or any other person have been made;
(3) the aggregate value of all of such acquisitions, including the
value of any proposed new acquisition, conducted while this
Agreement remains in effect as Permitted Acquisitions (but
excluding any acquisition conducted with the specific written
approval of the Majority Banks, and not as a Permitted
Acquisition hereunder) computed on the basis of total
acquisition consideration paid or incurred, or to be paid or
incurred, by the Company or its Subsidiaries with respect
thereto, including, in the case of an acquisition of assets,
all indebtedness which is assumed or to which such assets are
subject and, in the case of the acquisition of stock or other
ownership interests, all indebtedness to which such stock or
other ownership interests, are subject, shall not exceed Ten
Million Dollars ($10,000,000), determined as of the date of
such acquisition;
(4) within thirty (30) days after any such acquisition has been
completed the Company shall deliver to the Agent executed
copies of all material documents pertaining to such
acquisition, and the Company, its Subsidiaries and any of the
corporate entities involved in such acquisition shall execute
or cause to be executed, and provide or cause to be provided
to Agent, for the Banks, such documents and instruments
(including without limitation, the Guaranties as required by
Section 7.19 hereof, and opinions of counsel, amendments,
acknowledgments, consents and evidence of approvals or
filings) as reasonably requested by Agent, if any; and
(5) both immediately before and after such acquisition, no Default
or Event of Default (whether or not related to such
acquisition), has occurred and is continuing.
"Permitted Dividends" shall mean those dividends and distributions (other
than dividends payable in capital stock of the Company) permitted under Section
8.15 hereof, it being understood that the amount of Permitted Dividends paid in
the form of property other than cash shall be determined by the Company in good
faith using the same methodology that the Company uses to account for dividends
in its periodic reports filed or to be filed with the Securities and Exchange
Commission.
21
"Permitted Guaranties" shall mean (i) any Guarantee Obligation provided by
the Company, for the benefit of a Subsidiary, covering the Debt or other
obligation or liability permitted to be incurred or entered into by such
Subsidiary, and any other Guarantee Obligation of the Company in the ordinary
course of business, (ii) any guaranties provided by a Significant Domestic
Subsidiary of the Company of the Debt outstanding to the Future Debt Holders,
provided that concurrently with the giving of any such guaranty, such Subsidiary
shall enter into a Guaranty on substantially similar terms and providing an
equal and ratable benefit to the Banks or (iii) any agreement or other
undertaking by the Company, as servicer or administrative agent of the Dealer
Loan Pools or Purchased Contracts covered by a Permitted Securitization, to
advance funds equal to the interest component of obligations issued as part of a
Permitted Securitization and payable from collections on the related Installment
Contracts, such payments to be repayable to Company on a priority basis from
such collections, sales or other dispositions, provided that the aggregate
amount of such advances under this clause (iii) at any time outstanding shall
not exceed $1,500,000 and (iv) other Guarantee Obligations of the Company or any
of the Subsidiaries in an aggregate amount not to exceed, at any time
outstanding, $1,000,000.
"Permitted Investments" shall mean:
(1) Investments in direct obligations of, or obligations
guarantied by, the United States of America or any agency of
the United States of America the obligations of which agency
carry the full faith and credit of the United States of
America, provided that such obligations mature within one (1)
year from the date of acquisition thereof;
(2) Investments in any obligation of any state or municipality
thereof that at the time of acquisition thereof have an
assigned rating of "A" or higher by S&P (or an equivalent or
higher rating by another credit rating agency of recognized
national standing in the United States of America), provided
that such obligations mature within one (1) year from the date
of acquisition thereof;
(3) Investments in negotiable certificates of deposit issued by
commercial banks organized under the laws of the United States
of America or any state thereof, having capital, surplus and
undivided profits aggregating at least Fifty Million Dollars
($50,000,000) and the long-term unsecured debt obligations of
which are rated "A" or higher by S&P (or an equivalent or
higher rating by another credit rating agency of recognized
national standing in the United States of America), provided
that such certificates of deposit mature within one (1) year
from the date of acquisition thereof;
(4) Investments in corporate debt obligations of corporations
organized under the laws of the United States of America or
any state thereof that at the time of acquisition thereof have
an assigned rating of "A" or higher by S&P (or an equivalent
or higher rating
22
by another credit rating agency of recognized national
standing in the United States of America); and
(5) Investments in preferred stock of corporations organized under
the laws of the United States of America or any state thereof
that have an assigned rating of "A" or higher by S&P (or an
equivalent or higher rating by another credit rating agency of
recognized national standing in the United States of America);
and
(6) Investments by any foreign subsidiary in obligations similar
in nature, term and credit quality to those enumerated in
paragraphs (a) through (e) above, except that the applicable
jurisdiction of formation or operation shall be substituted
for the United States of America in each case.
"Permitted Liens" shall mean, with respect to any Person:
(1) any Liens granted under or established by this Agreement or
the other Loan Documents;
(2) Liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently
pursued, provided that such provision for the payment of all
such taxes known to such Person has been made on the books of
such Person as may be required by GAAP;
(3) mechanics', materialmen's, banker's, carriers', warehousemen's
and similar Liens arising in the ordinary course of business
and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in
good faith by appropriate proceedings diligently pursued,
provided that in the case of any such contest (i) any
proceedings commenced for the enforcement of such liens and
encumbrances shall have been duly suspended; and (ii) such
provision for the payment of such liens and encumbrances has
been made on the books of such Person as may be required by
GAAP;
(4) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions (subject to the
applicable provisions of this Agreement) and social security
benefits which are not overdue or are being contested in good
faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings
commenced for the enforcement of such Liens shall have been
duly suspended; and (ii) such provision for the payment of
such Liens has been made on the books of such Person as may be
required by GAAP;
23
(5) (i) Liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in
connection with progress payments or advance payments due
under contracts with the United States or any foreign
government or any agency thereof entered into in the ordinary
course of business and (ii) liens incurred or deposits made in
the ordinary course of business to secure the performance of
statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations incurred in connection
with the borrowing of money, any lease-purchase arrangements
or the payment of the deferred purchase price of property),
provided that full provision for the payment of all such
obligations set forth in clauses (i) and (ii) has been made on
the books of such Person as may be required by GAAP;
(6) Liens in the nature of any minor imperfections of title,
including but not limited to easements, covenants,
rights-of-way or other similar restrictions, which, either
individually or in the aggregate, could not reasonably be
expected to materially adversely affect the present or future
use of the property to which they relate, or to have a
material adverse effect on the sale or lease of such property,
or (iii) render title thereto unmarketable;
(7) Liens (i) arising from judicial attachments and judgments,
(ii) securing appeal bonds or supersedeas bonds, and (iii)
arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit or any
other instrument serving a similar purpose), provided that (1)
the execution or other enforcement of such Liens is
effectively stayed, (2) the claims secured thereby are being
contested in good faith and by appropriate proceedings, (3)
adequate book reserves in accordance with GAAP shall have been
established and maintained and shall exist with respect
thereto, (4) such Liens do not in the aggregate detract from
the value of such property and (5) the title of the Company or
a Subsidiary, as the case may be, to, and its right to use,
such property, is not materially adversely affected thereby;
and
(8) those Liens of the Company or its Subsidiaries identified in
Schedule 8.6 hereto.
"Permitted Merger(s)" shall mean any merger of (i) any Subsidiary
(including, without limitation, a Guarantor, but excluding any Special Purpose
Subsidiary) or any Person which is being acquired pursuant to a Permitted
Acquisition into Company or (ii) the merger of any Subsidiary or any Person
which is being acquired pursuant to a Permitted Acquisition (other than a
Guarantor) into any other Subsidiary (excluding any Special Purpose Subsidiary)
or any Person
24
which is being acquired pursuant to a Permitted Acquisition, which, in each
case, satisfies and/or is conducted in accordance with the following
requirements:
(1) not less than twenty (20) nor more than ninety (90) days prior
to the commencement of such proposed merger, Company provides
written notice thereof to Agent (with drafts of all material
documents pertaining to such proposed merger to be furnished
to Agent not less than twenty (20) days prior to such proposed
merger);
(2) immediately following and as the direct result of any such
merger, the surviving or successor entity has succeeded by
operation of applicable law (as confirmed by an opinion(s) of
counsel in form and substance satisfactory to the Majority
Banks, if requested by Agent or the Majority Banks) to all of
the obligations of the non-surviving entity under this
Agreement and the other Loan Documents, and to all of the
property rights of such non-surviving entity subject to the
applicable Loan Documents;
(3) concurrently with such proposed merger, the surviving entity
involved in such merger shall execute or cause to be executed,
and provide or cause to be provided to Agent, for the Banks,
such documents and instruments (including without limitation
opinions of counsel, amendments, acknowledgments and
consents), if any, as reasonably requested by the Majority
Banks; and
(4) both immediately before and immediately after such merger, no
Default or Event of Default (whether or not related to such
merger), has occurred and is continuing.
"Permitted Prepayment" shall mean any prepayment of Future Debt (x) which
is funded solely with the proceeds of (i) new cash equity in the form of
nonconvertible common shares, (ii) Subordinated Debt, or (iii) substitute Debt
permitted hereunder which satisfies the following conditions:
(1) such Debt shall have a term extending at least beyond the
Revolving Credit Maturity Date then in effect, with an
amortization schedule not greater than level amortization to
maturity (but with no principal payments required for a period
of at least 12 months) and with no provision for mandatory
early repayment except (x) upon default, (y) following a
change in control or (z) following the sale of any material
portion of the assets of the Company or any of its
Subsidiaries, to the extent of the proceeds of such sale;
(2) such Debt shall be unsecured, or, subject to the Intercreditor
Agreement, secured;
25
(3) both immediately before and immediately after such additional
Debt is incurred, no Default or Event of Default (whether or
not related to such additional Debt, and taking into account
the incurring of such additional Debt) has occurred and is
continuing; and
(4) if such additional Debt shall be issued pursuant to loan
documents containing covenants which are more restrictive than
the covenants contained in this Agreement, Company shall, upon
the written request of the Majority Banks, enter into
amendments to this Agreement to extend the benefit of such
covenants to the Banks.
in each case, issued concurrently with such prepayment or (y) which has been
approved by the Majority Banks. Solely for purposes of the definition of
Permitted Prepayment, any Bank which fails, within fifteen (15) Business Days of
receipt of written notice from the Company of its intent to make such prepayment
(identifying the Debt to be prepaid, and the amount of any such prepayment,
captioned "notice of prepayment" and stating that approval is deemed to be given
if an objection is not made within fifteen (15) Business Days of receipt of such
notice), to object in writing to the Company's proposed prepayment shall be
deemed to have approved such prepayment.
"Permitted Repurchase" shall mean any purchases by the Company of its
capital stock during the period commencing on the Effective Date and ending on
the Revolving Credit Maturity Date then in effect; provided that at the time of
any such purchase, both before and after giving effect thereto, no Default or
Event of Default has occurred and is continuing.
"Permitted Securitization(s)" shall mean each transfer or encumbrance
(each a "disposition") of specific Dealer Loan Pools (and any interest in and
lien on the Installment Contracts, motor vehicles, and other rights and
financial assets relating thereto) or of specific Purchased Contracts (and any
interest in and lien on motor vehicles and other rights and financial assets
relating thereto), in each case by the Company or one or more of its
Subsidiaries to one or more Special Purpose Subsidiaries conducted in accordance
with the following requirements:
(1) Each disposition shall identify with reasonable certainty the
specific Dealer Loan Pools or Purchased Contracts, as
applicable, covered by such disposition; and (x) such Dealer
Loan Pools or Purchased Contracts shall have performance and
other characteristics so that the quality of such Dealer Loan
Pools or Purchased Contracts, as the case may be, is
comparable to, but not materially better than, the overall
quality of the Company's Dealer Loan Pools or Purchased
Contracts, as applicable, as determined in good faith by the
Company in its reasonable discretion or (y) with respect to
any such assets assigned to an uncapped Dealer Loan Pool
subsequent to such Dealer Loan Pool becoming a Securitized
Pool in conformity with the standards set forth in clause (x)
of this subparagraph (a), the assets covered by such
dispositions were assigned to such Dealer Loan Pool in the
order such assets were
26
originated and without the exercise of any discretion by the
Company;
(2) Both before and after giving effect to such disposition (and
taking into account any reduction in the Indebtedness with the
proceeds of such disposition as required hereunder), the
Company shall be in compliance with the Borrowing Base
Limitation, and, in the case of any disposition to an uncapped
Securitized Pool, none of the assets covered by such
disposition were included, prior to such disposition, in the
most recent Borrowing Base Certificate delivered to Agent
under Section 7.3(d);
(3) Each such Securitization Transaction shall be structured on
the basis of the issuance of Debt or other similar securities
by one or more Special Purpose Subsidiaries which Debt or
other securities shall be without recourse to Company and its
other Subsidiaries, except to the extent of normal and
customary representations and warranties given as of the date
of each such disposition, and not as continuing
representations and warranties, and otherwise on normal and
customary terms and conditions for comparable asset based
securitization transactions, which may include Cleanup Call
provisions (it being understood that, for purposes of this
subparagraph (c), the terms and conditions governing
Securitization Transactions made by the Company prior to the
date of this Agreement shall be deemed to have been made on
normal and customary terms and conditions);
(4) Concurrently with each such disposition (except for
dispositions to an uncapped Securitized Pool whether or not
pursuant to a revolving, expansion or relending feature
included in a Prior Securitization (for purposes of this
definition, a "Revolving Feature"), in each case to the extent
that no disposition proceeds are available as a result of such
dispositions for application hereunder), the net proceeds of
such disposition:
shall be applied to reduce the principal balance outstanding under the
Revolving Credit (to the extent then outstanding, and including the
aggregate amount of drawings made under any Letter of Credit for which the
Agent has not received full payment) by the amount of such net proceeds,
subject to the right to reborrow in accordance with this Agreement;
provided, however, that to the extent that, on the date any reduction of
the principal balance outstanding under the Revolving Credit shall be
required under this clause (d), the Indebtedness under the Revolving
Credit is being carried, in whole or in part, at the Eurodollar-based Rate
and no Default or Event of Default has occurred and is continuing, the
Company may, after prepaying that portion of the Indebtedness then carried
at the Prime-based Rate, deposit the amount of such
27
required principal reductions in a cash collateral account to be held by
the Agent, for and on behalf of the Banks (which shall be an
interest-bearing account), on such terms and conditions as are reasonably
acceptable to Agent and the Majority Banks and, subject to the terms and
conditions of such cash collateral account, sums on deposit therein shall
be applied (until exhausted) to reduce the principal balance of the
Revolving Credit on the last day of each Interest Period attributable to
the applicable Eurodollar-based Advances of the Revolving Credit; and
provided further that Agent and the Banks acknowledge that any proceeds of
any such Debt incurred pursuant to a Permitted Securitization remaining
after the application of such proceeds as required by this clause (d) may
be held or invested in Permitted Investments or otherwise invested or
applied in any manner not prohibited by this Agreement; and
(5) Both immediately before and after such disposition, no Default
or Event of Default (whether or not related to such
disposition) has occurred and is continuing.
In connection with each Permitted Securitization to be conducted hereunder, the
Company shall provide the following:
A. to the Agent, (x) not less than three (3) Business Days prior to the date
of consummation thereof (or such lesser period as approved by Agent) or
(y) solely in the case of dispositions to uncapped Securitized Pools
pursuant to a Revolving Feature, not less than three (3) Business Days
prior to the date of the release of the financial assets covered by such
disposition (or such lesser period as approved by Agent), (I) a
certification that, after giving effect to such disposition, it will be in
compliance with the Borrowing Base Limitation and that none of the assets
covered by such disposition were included in the most recent quarterly
Borrowing Base Certificate delivered to Agent under Section 7.3(d) hereof
prior to such disposition or (II) a new Borrowing Base Certificate (and
any supporting information reasonably required by the Agent) dated as of
the proposed date of the applicable disposition or release and, based on
projected information, giving effect to such disposition and confirming
compliance with the Borrowing Base Limitation;
B. to the Agent and the Banks (x) not less than five (5) Business Days prior
to the date of consummation thereof (or such lesser period as approved by
Agent), proposed drafts of the material Securitization Documents covering
the applicable Securitization Transaction (and the term sheet or
commitment relating thereto) and (y) within ten (10) Business Days
following the consummation thereof, executed copies of such Securitization
Documents, including, if applicable, a summary of any material changes
from the draft documents delivered to Agent and the Banks prior thereto,
except that if such Securitization Transaction consists solely of
dispositions pursuant to a Revolving Feature, the Company shall only be
required (I) under clause (x) of this subparagraph (ii), to deliver to
Agent, not less than three (3) Business Days prior to the consummation
thereof (or such lesser period as approved by Agent), a certification that
the applicable Securitization Documents remain in effect substantially in
the form previously furnished to Agent and the Banks (or identifying any
material changes, and attaching any proposed amendment, supplement or
other document delivered under such prior Securitization
28
Documents to effect such dispositions) and (II) under clause (y) of this
subparagraph (ii), to deliver to Agent executed copies of any such
amendment, supplement or other document;
C. except in the case of dispositions to uncapped Securitized Pools, to the
Agent, not less than three (3) Business Days prior to the date of
consummation thereof (or such lesser period as approved by Agent), (I) a
schedule substantially in the form delivered for Permitted Securitizations
under the Prior Credit Agreement identifying the specific Dealer Loan
Pools or Purchased Contracts, as applicable, proposed to be covered by
such transaction, accompanied by (II) a request that the Agent release
such assets from the Lien of the Security Agreement and a certification
that the proposed Securitization Transaction (and related dispositions)
constitutes a Permitted Securitization hereunder, whereupon the financial
assets covered by such dispositions which have been originated prior to
the date of such release shall be promptly released by Agent; and in the
case of a disposition to an uncapped Securitized Pool in a Prior
Securitization, all remaining financial assets assigned thereafter to the
applicable uncapped Securitized Pool in the ordinary course, whether
originated before or after the date of release, shall be so released and
the Lien of the Security Agreement shall be deemed not to attach to any
such assets when the Company or any of its Subsidiaries subsequently
acquires rights in, to or under such assets and such assets are assigned
to an uncapped Securitized Pool; and
D. only if the applicable Securitization Transaction is not related to a
Prior Securitization or involves the disposition or release of any assets
which were covered by the most recent quarterly Borrowing Base Certificate
delivered to Agent under Section 7.3(d) hereof and the aggregate net book
value of the Dealer Loan Pools (as included in Dealer Loans Receivable) or
Purchased Contracts, as applicable, covered by such dispositions (or
related series of dispositions) in any calendar month exceeds or would
exceed (after giving effect to any proposed disposition) Seven Million
Five Hundred Thousand Dollars ($7,500,000), collection information
regarding the Installment Contracts securing the Dealer Loan Pools or
Purchased Contracts of the Company and its Subsidiaries proposed to be
covered by such transaction (with evidence supporting its determination
under clause (x) of subparagraph (a) of this definition, if applicable,
including without limitation a "static pool analysis" comparable to the
static pool analysis required to be delivered under Section 7.3(c) hereof
with respect to such Dealer Loan Pools or Purchased Contracts).
"Permitted Transfer(s)" shall mean (i) any sale, assignment, transfer or
other disposition of inventory or worn-out or obsolete machinery, equipment or
other such personal property in the ordinary course of business, (ii) any
transfer of property by a Subsidiary to the Company or by the Company or any
Subsidiary to a Domestic Subsidiary (excluding any Special Purpose Subsidiary)
provided that in each case, immediately before and after such transfer, no
Default or Event of Default shall have occurred and be continuing, (iii) any
transfer of property by the Company or a Domestic Subsidiary to a Foreign
Subsidiary, pursuant to the New Restructuring; (iv) any transfer of the capital
stock of a Special Purpose Subsidiary to the Company or to any other Subsidiary
which is not a Special Purpose Subsidiary and (v) any transfer of funds or other
property paid as a dividend by a Subsidiary to the Company or any other
Subsidiary to the extent permitted by clause (i) of Section 8.15 hereof.
29
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated organization, joint
venture, joint stock company, or a government or any agency or political
subdivision thereof or other entity of any kind.
"Prime Rate" shall mean the per annum interest rate established by Agent
as its prime rate for its borrowers as such rate may vary from time to time,
which rate is not necessarily the lowest rate on loans made by Agent at any such
time.
"Prime-based Advance" shall mean an Advance (including a Swing Line
Advance) which bears interest at the Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which is
equal to the sum of the Applicable Margin plus the greater of (i) the Prime
Rate, and (ii) the Alternate Base Rate.
"Prior Credit Agreement" is defined in Recital A to this Agreement.
"Prior Securitization" shall mean a Permitted Securitization (and the
related Securitization Documents) consummated prior to the particular
disposition, release or other transaction then being considered.
"Prohibited Transaction" shall mean any transaction involving a Pension
Plan which constitutes a "prohibited transaction" under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.
"Purchased Contract Balance" shall mean, as of any applicable date of
determination, (i) the balance owing in respect of Purchased Contracts, minus
(ii) unearned income with respect to such Installment Contracts and the
allowance for credit losses with respect to such Installment Contracts, in each
case as such amount would be included in the financial statements and related
footnotes of the Company and its Subsidiaries prepared in accordance with GAAP
and reported in the applicable Borrowing Base Certificate, and if such amount is
not shown net of such items, then net of any reserves established by the Company
as an allowance for credit losses related to such Installment Contracts,
provided that, the Purchased Contract Balance shall not include any Purchased
Contracts transferred or encumbered pursuant to a Permitted Securitization
(whether or not attributable to the Company under GAAP), unless and until such
Purchased Contracts are reassigned to the Company or a Domestic Subsidiary of
the Company or such encumbrances are discharged.
"Purchased Contracts" shall mean Installment Contracts purchased by the
Company or any of its Subsidiaries under Outright Dealer Agreements.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest at
the Quoted Rate.
"Refunded Swing Line Advance" is defined in Section 2.5(e) hereof.
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"Reportable Event" shall mean a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations promulgated thereunder, which is
material to the Company and its Subsidiaries, taken as a whole.
"Request for Advance" shall mean a Request for Advance of the Revolving
Credit issued by Company and countersigned by the Company under Section 2.3 of
this Agreement in the form annexed hereto as Exhibit A.
"Revolving Credit" shall mean the revolving credit loan to be advanced to
the Company by the Banks pursuant to Section 2 hereof, in an amount not to
exceed the Revolving Credit Maximum Amount.
"Revolving Credit Facility Fee" shall mean the facility fee payable to
Agent for distribution to the Banks pursuant to Section 2.13, hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
June 20, 2008, as such date may be extended from time to time pursuant to
Section 2.16 hereof, and (ii) the date on which the Revolving Credit Maximum
Amount shall be terminated pursuant to Section 2.15 or 9.2 hereof.
"Revolving Credit Maximum Amount" shall mean One Hundred Thirty-Five
Million Dollars ($135,000,000), subject to any increases in the Revolving Credit
Maximum Amount pursuant to Section 2.17 of this Agreement, by an amount not to
exceed the Revolving Credit Optional Increase, and subject to any reductions or
termination of the Revolving Credit Maximum Amount under Sections 2.15 or 9.2 of
this Agreement.
"Revolving Credit Notes" shall mean the Notes described in Section 2.1
hereof, made or to be made by Company to each of the Banks in the form annexed
to this Agreement as Exhibit C, as such Notes may be amended, renewed, replaced
or extended from time to time.
"Revolving Credit Optional Increase" shall mean an amount up to Forty
Million Dollars ($40,000,000), minus the portions thereof applied from time to
time after the Effective Date under Section 2.17 hereof to increase the
Revolving Credit Maximum Amount.
"Scottish Partnership" shall mean CAC Scotland, a partnership established
by the Company under the law of Scotland and which is a wholly-owned Subsidiary
of the Company.
"Securitization Documents" shall mean any note purchase agreement (and any
notes issued thereunder), transfer or security document, master trust or other
trust agreement, servicing agreement, indenture, pooling agreement, contribution
or sale agreement or other document, instruments and certificates executed and
delivered, subject to the terms of this Agreement, to evidence or secure (or
otherwise relating to) a Permitted Securitization, as the same may be amended
from time to time (subject to the terms hereof) and any and all other documents
executed in connection therewith or replacement or renewal thereof.
"Securitization Transaction" shall mean a transfer of, or grant of a Lien
on, Dealer Loan Pools, Purchased Contracts, accounts receivable and/or other
financial assets, and any related pools thereof, by the Company or any
Subsidiary to a Special Purpose Subsidiary or other special
31
purpose or limited purpose entity and the issuance (whether by such Special
Purpose Subsidiary or other special purpose or limited purpose entity or any
other Person) of Debt or of any securities secured directly or indirectly by
interests in, or of trust certificates, or other securities directly or
indirectly evidencing interests in, such Dealer Loan Pools, Purchased Contracts,
accounts receivable and/or other financial assets and any related pools thereof.
"Securitized Pool(s)" shall mean a Dealer Loan Pool, whether capped or
uncapped, which has been transferred to a Permitted Securitization, including a
Prior Securitization.
"Security Agreement" is defined in the definition of Collateral Documents.
"Shares", "share capital", "capital stock", "stock" and words of similar
import shall mean and refer to the equity capital interest under applicable law
of any Person in a corporation, howsoever such interest is created or arises,
whether such capital consists of common stock, preferred stock or preference
shares, or other stock, and whether such capital is evidenced by a certificate,
share register entry or otherwise.
"Significant Subsidiary(ies)" shall mean, as of any date of determination,
any Subsidiary (i) which is designated by the Company (in writing to Agent) as a
Significant Subsidiary or (ii) which has total assets (but excluding in the
calculation of total assets, for any Subsidiary, any assets which constitute
Intercompany Loans, Advances and Investments by such Subsidiary to Company
outstanding from time to time and any assets which are acquired or arise
pursuant to a Permitted Securitization, including any equity interest in a
Special Purpose Subsidiary) in excess of one percent (1%) of Company's
Consolidated Tangible Net Worth (or five percent (5%) in the case of CAC
Reinsurance, Ltd.), determined as of the end of each fiscal quarter based upon
the financial statements required to be delivered under Section 7.3(b) or 7.3(c)
hereof, as the case may be (and giving effect to any changes in net worth shown
in such financial statements on the required date of delivery thereof);
provided, however, that none of any Special Purpose Subsidiary, the Scottish
Partnership, the US LLC (so long as it is considered a Foreign Subsidiary
hereunder) or the Luxembourg Subsidiary shall be a Significant Subsidiary,
whether or not it satisfies the aforesaid net worth test.
"Significant Domestic Subsidiaries" shall mean those Domestic Subsidiaries
identified as such on Schedule 6.5 hereto, and any Domestic Subsidiaries which
become Significant Subsidiaries subsequent to the date hereof.
"Single Employer Plan" shall mean any Pension Plan which does not
constitute a Multiemployer Plan.
"Special Purpose Subsidiary(ies)" shall mean any wholly-owned direct or
indirect Subsidiary of the Company established for the sole purpose of
conducting one or more Permitted Securitizations and otherwise established and
operated in accordance with customary industry practices.
"Subordinated Debt" shall mean any unsecured Debt subordinated to the
prior payment and discharge in full of the Indebtedness, on written terms and
conditions approved by and acceptable to each of the Banks, in their sole
discretion, and issued pursuant to documentation
32
which is less restrictive (as determined by Agent and the Banks in their
reasonable discretion) than the covenants contained in this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company, partnership (whether
general or limited) or any other business entity of which more than fifty
percent (50%) of the outstanding voting stock, share capital, membership or
other interests, as the case may be, is owned either directly or indirectly by
any Person or one or more of its Subsidiaries, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by any Person and/or its Subsidiaries. Unless otherwise
specified to the contrary herein or the context otherwise requires,
Subsidiary(ies) shall refer to each Person which is a Subsidiary of the Company
and "100% Subsidiary(ies) shall mean any Subsidiary whose stock or partnership,
membership or other equity interests (other than directors' or qualifying shares
or other interests to the extent required under applicable law) are owned
directly or indirectly entirely by the Company.
"Swing Line" shall mean the revolving credit loan to be advanced to the
Company by the Swing Line Bank pursuant to Section 2.5 hereof, in an aggregate
amount (subject to the terms hereof) not to exceed, at any one time outstanding,
the Swing Line Maximum Amount.
"Swing Line Advance" shall mean an Advance made by Swing Line Bank to
Company pursuant to Section 2.5 hereof.
"Swing Line Bank" shall mean Comerica Bank, in its capacity as lender
under Section 2.5 of this Agreement, and its successors and assigns.
"Swing Line Maximum Amount" shall mean Fifteen Million Dollars
($15,000,000).
"Swing Line Notes" shall mean the swing line notes described in Section
2.5 hereof, made by Company to Swing Line Bank in the form annexed hereto as
Exhibit E, as such Notes may be amended or supplemented from time to time, and
any notes issued in substitution, replacement or renewal thereof from time to
time.
"S&P" shall mean Standard & Poor's Ratings Group, and its successors.
"Trusts" shall mean the trusts established in connection with the
Company's vehicle service contract business or other ancillary product business
and required to be Consolidated with the Company and its Subsidiaries under GAAP
pursuant to FIN 46/46R.
"T&C Subsidiary" shall mean CAC (TCI) Ltd., a wholly-owned Subsidiary of
the Company existing under the laws of the Turks & Caicos Islands.
"US LLC" shall mean that certain limited liability company chartered in
the United States and established as wholly-owned Subsidiary of Company.
2. REVOLVING CREDIT
(a) Commitment(1) . Subject to the terms and conditions of this
Agreement (including without limitation Section 2.3 hereof), each
Bank severally and for itself alone
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agrees to make Advances of the Revolving Credit to the Company from
time to time on any Business Day during the period from the
Effective Date hereof until (but excluding) the Revolving Credit
Maturity Date in an aggregate amount, in Dollars, not to exceed at
any one time outstanding such Bank's Percentage of the Revolving
Credit Maximum Amount. All of the Advances of the Revolving Credit
hereunder shall be evidenced by Revolving Credit Notes made by
Company to each of the Banks in the form attached hereto as Exhibit
C, subject to the terms and conditions of this Agreement.
(b) Accrual of Interest and Maturity. The Revolving Credit Notes, and all
principal and interest outstanding thereunder, shall mature and become due and
payable in full on the Revolving Credit Maturity Date, and each Advance of
Indebtedness evidenced by the Revolving Credit Notes from time to time
outstanding hereunder shall, from and after the date of such Advance, bear
interest at its Applicable Interest Rate. The amount and date of each Advance,
its Applicable Interest Rate, its Interest Period, if any, and the amount and
date of any repayment shall be noted on Agent's records, which records will be
conclusive evidence thereof, absent manifest error; provided, however, that any
failure by the Agent to record any such information shall not relieve the
Company of its obligation to repay the outstanding principal amount of such
Advance, all interest accrued thereon and any amount payable with respect
thereto in accordance with the terms of this Agreement and the other Loan
Documents.
(c) Requests for and Refundings and Conversions of Advances. Company may
request an Advance of the Revolving Credit, refund any such Advance in the same
type of Advance or convert any such Advance to any other type of Advance of the
Revolving Credit only after delivery to Agent of a Request for Advance executed
by an authorized officer of Company, subject to the following and to the
remaining provisions hereof:
(1) each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as Exhibit
A, including without limitation:
A. the proposed date of such Advance, which must be a Business Day;
B. whether such Advance is a refunding or conversion of an outstanding
Advance; and
C. whether such Advance is to be a Prime-based Advance or a Eurodollar-based
Advance, and, except in the case of a Prime-based Advance, the first
Interest Period applicable thereto.
(2) each such Request for Advance shall be delivered to Agent by 12 noon
(Detroit time) three (3) Business Days prior to the proposed date of
Advance, except in the case of a Prime-based Advance, for which the
Request for Advance must be delivered by 12:00 noon (Detroit time)
on such proposed date;
(3) without duplication, the principal amount of such requested Advance,
plus the principal amount of any other Advances of the Revolving
Credit and of the Swing Line being requested on such date, plus the
principal amount of all other Advances of the Revolving Credit and
of the Swing Line then outstanding
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hereunder, plus the aggregate undrawn portion of any Letters of
Credit which shall be outstanding as of the date of the requested
Advance, the aggregate face amount of Letters of Credit requested
but not yet issued and the aggregate amount of all drawings made
under any Letter of Credit for which the Agent has not received full
reimbursement from the applicable Account Party, shall not exceed
the lesser of (i) the Revolving Credit Maximum Amount and (ii) the
Borrowing Base Limitation, in each case then applicable; provided
however, that, in the case of any Advance of the Revolving Credit
being applied to refund an outstanding Swing Line Advance, the
aggregate principal amount of Swing Line Advances to be refunded
shall not be included for purposes of calculating the limitation
under this Section 2.3(c);
(4) the principal amount of such Advance, plus the amount of any other
outstanding Advance of the Revolving Credit to be then combined
therewith having the same Applicable Interest Rate and Interest
Period, if any, shall be (i) in the case of a Prime-based Advance at
least Two Million Five Hundred Thousand Dollars ($2,500,000) and
(ii) in the case of a Eurodollar-based Advance at least Two Million
Five Hundred Thousand Dollars ($2,500,000) (or a larger integral
multiple of One Million Dollars ($1,000,000)), and at any one time
there shall not be in effect more than five (5) Applicable Interest
Rates and Interest Periods;
(5) a Request for Advance, once delivered to Agent, shall not be
revocable by Company;
(6) each Request for Advance shall constitute and include a
certification by the Company as of the date thereof that:
A. both before and after such Advance, the obligations of the Company set
forth in this Agreement and of Company and its Subsidiaries in the other
Loan Documents to which such Persons are parties are valid, binding and
enforceable obligations of such Persons;
B. all conditions to Advances of the Revolving Credit have been satisfied,
and shall remain satisfied to the date of such Advance (both before and
after giving effect to such Advance);
C. there is no Default or Event of Default in existence, and none will exist
upon the making of such Advance (both before and after giving effect to
such Advance);
D. the representations and warranties contained in this Agreement and the
other Loan Documents are true and correct in all material respects and
shall be true and correct in all material respects as of the making of
such Advance, except to the extent such representations and warranties
(other than Section 6.12 hereof, which shall be deemed to be remade as of
the date of such Request for purposes of this clause (iv), notwithstanding
the limitation contained therein) are not, by their terms, continuing
representations and warranties, but speak only as of a specific date (both
before and after giving effect to such Advance); and
35
E. the execution of such Request for Advance will not violate the material
terms and conditions of any material contract, agreement or other
borrowing of Company.
Agent, acting on behalf of the Banks, may, at its option, lend under this
Section 2 upon the telephone or e-mail request of a person previously
authorized (in a writing delivered to the Agent) by the Company to make
such requests and, in the event Agent, acting on behalf of the Banks,
makes any such Advance upon a telephone or email request, the requesting
person shall fax or deliver by electronic file to Agent, promptly
following such telephone or email request, a Request for Advance. The
Company hereby authorizes Agent to disburse Advances under this Section
2.3 pursuant to the telephone or e-mail instructions of any person
purporting to be a person identified by name on a written list of persons
authorized by the Company and delivered to Agent prior to the date of such
request to make Requests for Advance on behalf of the Company.
Notwithstanding the foregoing, the Company acknowledges that it shall bear
all risk of loss resulting from disbursements made upon any telephone or
email request. Each telephone or email request for an Advance shall
constitute a certification of the matters set forth in the Request for
Revolving Credit Advance form as of the date of such requested Advance.
(d) Disbursement of Advances.
(1) Upon receiving any Request for Advance from Company under Section
2.3 hereof, Agent shall promptly notify each Bank by wire, telex or
telephone (confirmed by wire, telecopy or telex) of the amount of
such Advance to be made and the date such Advance is to be made by
said Bank pursuant to its Percentage of such Advance. Unless such
Bank's commitment to make Advances of the Revolving Credit hereunder
shall have been suspended or terminated in accordance with this
Agreement, each Bank shall make available the amount of its
Percentage of each Advance in immediately available funds to Agent,
as follows:
A. for Domestic Advances, at the office of Agent located at Xxx Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, not later than 2:00 p.m. (Detroit time)
on the date of such Advance; and
B. for Eurodollar-based Advances, at the Agent's Correspondent for the
account of the Eurodollar Lending Office of the Agent, not later than 12
noon (the time of the Agent's Correspondent) on the date of such Advance.
(2) Subject to submission of an executed Request for Advance by Company
without exceptions noted in the compliance certification therein,
Agent shall make available to Company the aggregate of the amounts
so received by it from the Banks:
A. for Domestic Advances, not later than 4:00 p.m. (Detroit time) on the date
of such Advance by credit to an account of Company maintained with Agent
or to such other account or third party as Company may reasonably direct;
and
B. for Eurodollar-based Advances, not later than 4:00 p.m. (the time of the
Agent's Correspondent) on the date of such Advance, by credit to an
account of Company
36
maintained with Agent's Correspondent or to such other account or third
party as Company may reasonably direct.
(3) Agent shall deliver the documents and papers received by it for the
account of each Bank to such Bank or upon its order. Unless Agent
shall have been notified by any Bank prior to the date of any
proposed Advance that such Bank does not intend to make available to
Agent such Bank's Percentage of such Advance, Agent may assume that
such Bank has made such amount available to Agent on such date, as
aforesaid and may, in reliance upon such assumption, make available
to Company a corresponding amount. If such amount is not in fact
made available to Agent by such Bank, as aforesaid, Agent shall be
entitled to recover such amount on demand from such Bank. If such
Bank does not pay such amount forthwith upon Agent's demand
therefor, the Agent shall promptly notify Company and Company shall
pay such amount to Agent, if such notice is delivered to Company
prior to 1:00 p.m. (Detroit time) on a Business Day, on the day such
notice is received, and otherwise on the next Business Day, and such
amount paid by Company shall be applied as a prepayment of the
Revolving Credit (without any corresponding reduction in the
Revolving Credit Maximum Amount), reimbursing Agent for having
funded said amounts on behalf of such Bank . The Company shall
retain its claim against such Bank with respect to the amounts
repaid by it to Agent and, if such Bank subsequently makes such
amounts available to Agent, Agent shall promptly make such amounts
available to the Company as an Advance of the Revolving Credit.
Agent shall also be entitled to recover from such Bank or Company,
as the case may be, but without duplication, interest on such amount
in respect of each day from the date such amount was made available
by Agent to Company to the date such amount is recovered by Agent,
at a rate per annum equal to:
A. in the case of such Bank, with respect to Domestic Advances, the Federal
Funds Effective Rate, and with respect to Eurodollar-based Advances,
Agent's aggregate marginal cost (including the cost of maintaining any
required reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent as a result
of such failure to deliver funds hereunder) of carrying such amount; and
B. in the case of Company, the rate of interest then applicable to such
Advance of the Revolving Credit.
The obligation of any Bank to make any Advance of the Revolving Credit hereunder
shall not be affected by the failure of any other Bank to make any Advance
hereunder, and no Bank shall have any liability to the Company or any of its
Subsidiaries, the Agent, any other Bank, or any other party for another Bank's
failure to make any loan or Advance hereunder. In the event any Bank shall fail
to advance any amounts required to be advanced in accordance with the terms of
this Article 2 (a "Defaulting Bank"), the Agent shall promptly provide written
notice thereof to the Company and to each other Bank (each such other Bank being
referred to in this Section as a "Non-Defaulting Bank"). Each Non-Defaulting
Bank shall have ten (10) Business Days from receipt of said notice to exercise
its option to agree to enter into an agreement pursuant to which the
Non-Defaulting Bank shall assume the Defaulting Bank's rights and obligations
under this
37
Agreement, its Notes and the other Loan Documents. The Non-Defaulting Bank shall
exercise such option by providing written notice of same to the Defaulting Bank
(and if there is more than one Non-Defaulting Bank, the assignment agreement
shall be entered into with the Non-Defaulting Bank who first notifies the
Defaulting Bank of its decision to exercise said option) and to Company. If no
Non-Defaulting Bank shall exercise the above-described option within the said
ten (10) Business Day period and if Company shall, subject to Section 13.8(c)
hereof, within thirty (30) days of delivering the notice described above, advise
such Defaulting Bank of another bank or financial institution to which
assignments are permitted pursuant to Section 13.8(c) hereof and which is
willing to assume such Defaulting Bank's rights and obligations under this
Agreement, its Notes and the other Loan Documents (each such bank or financial
institution being hereinafter referred to as a "Potential Financial
Institution"), such Defaulting Bank shall, subject to Section 13.8(c), assign
its said rights and obligations to the Potential Financial Institution; provided
however that any such assignment shall not alter Company's rights or remedies
vis-a-vis the Defaulting Bank.
(e) Swing Line.
(1) Advances. The Swing Line Bank shall, on the terms and subject to the
conditions hereinafter set forth (including without limitation
Section 2.5(c) hereof), make one or more advances (each such advance
being a "Swing Line Advance") to Company from time to time on any
Business Day during the period from the date hereof to (but
excluding) the Revolving Credit Maturity Date in an aggregate
amount, in Dollars, not to exceed at any time outstanding the Swing
Line Maximum Amount. The amount and dates of each Swing Line
Advance, its applicable Interest Rate, its Interest Period, if any,
and the amount and date of any repayment shall be noted on the
Agent's records, which records will be conclusive evidence thereof,
absent manifest error. All Swing Line Advances shall be evidenced by
the Swing Line Notes, under which advances, repayments and
readvances may be made, subject to the terms and conditions of this
Agreement. Each Swing Line Advance shall mature and the principal
amount thereof shall be due and payable by Company on the last day
of the Interest Period applicable thereto. In no event whatsoever
shall any outstanding Swing Line Advance be deemed to reduce, modify
or affect any Bank's commitment to make Revolving Credit Advances
based upon its Percentage. The obligation of the Swing Line Bank to
make Advances of the Swing Line hereunder may be terminated at any
time by Swing Line Bank upon written notice to Company and Agent
concurrently with such termination, provided that a Default or Event
of Default exists at the time such notice is given.
(2) Accrual of Interest. Each Swing Line Advance shall, from time to
time after the date of such Advance, bear interest at its Applicable
Interest Rate. The amount and date of each Swing Line Advance, its
Applicable Interest Rate, its Interest Period, if any, and the
amount and date of any repayment shall be noted on Agent's records,
which records will be conclusive evidence thereof, absent manifest
error; provided, however, that any failure by the Agent to record
any such information shall not relieve Company of its obligation to
repay the outstanding principal amount of such Advance, all interest
accrued thereon and
38
any amount payable with respect thereto in accordance with the terms
of this Agreement and the other Loan Documents.
(3) Requests for Swing Line Advances. Company may request a Swing Line
Advance only after delivery to Swing Line Bank of a Request for
Swing Line Advance executed by an authorized officer of Company,
subject to the following and to the remaining provisions hereof:
A. each such Request for Swing Line Advance shall set forth the information
required on the Request for Swing Line Advance form annexed hereto as
Exhibit F, including without limitation:
(1) the proposed date of such Swing Line Advance, which must be a
Business Day;
(2) whether such Swing Line Advance is to be a Prime-based Advance, a
Eurodollar-based Advance or a Quoted Rate Advance; and
(3) the duration of the Interest Period applicable thereto.
B. without duplication, the principal amount of such requested Swing Line
Advance, plus the aggregate principal amount of all other Swing Line
Advances and all Advances of the Revolving Credit then outstanding
hereunder (including any Revolving Credit Advances or other Swing Line
Advances requested to be made on such date), determined pursuant to the
terms hereof as of the date of such requested Advance), and the aggregate
undrawn portion of any Letters of Credit which shall be outstanding as of
the date of the requested Swing Line Advance, plus the aggregate face
amount of Letters of Credit requested but not yet issued, plus the
unreimbursed amount of any draws under Letters of Credit shall not exceed
the lesser of (A) the Revolving Credit Maximum Amount and (B) the
Borrowing Base Limitation, in each case then applicable;
C. the principal amount of such Swing Line Advance, plus the amount of any
other outstanding Advance of the Swing Line to be then combined therewith
having the same Applicable Interest Rate and Interest Period, if any,
shall be (i) in the case of a Prime-based Advance at least Three Hundred
Thousand Dollars ($300,000) and (ii) in the case of a Quoted Rate Advance
or a Eurodollar-based Advance at least Three Hundred Thousand Dollars
($300,000) (or a larger integral multiple of One Hundred Thousand Dollars
($100,000)), and at any one time there shall not be in effect more than
Five (5) Applicable Interest Rates and Interest Periods;
D. each such Request for Swing Line Advance shall be delivered to the Swing
Line Bank, by 12:00 noon (Detroit time) on the proposed date of the
Advance; and
E. each Request for Swing Line Advance, once delivered to Swing Line Bank,
shall not be revocable by Company, and shall constitute and include a
certification by the Company as of the date thereof that:
39
(1) both before and after such Swing Line Advance, the obligations of
the Company set forth in this Agreement and of the Company and its
Subsidiaries in the Loan Documents, are valid, binding and
enforceable obligations of such Persons;
(2) all conditions to the making of Swing Line Advances have been
satisfied (both before and after giving effect to such Advance);
(3) both before and after the making of such Swing Line Advance, there
is no Default or Event of Default in existence; and
(4) both before and after such Swing Line Advance, the representations
and warranties contained in this Agreement and the other Loan
Documents are true and correct in all material respects, except to
the extent such representations and warranties (other than Section
6.12 hereof, which shall be deemed to be remade as of the date of
such Request for purposes of this clause (D), notwithstanding the
limitation contained therein) are not, by their terms, continuing
representations and warranties, but speak only as of a specific
date.
Swing Line Bank, may, at its option, lend under this Section 2.5(c) upon
the telephone or email request of a person previously authorized (in a writing
delivered to the Agent) by Company to make such requests and, in the event Swing
Line Bank makes any such Advance upon a telephone or email request, the
requesting person shall fax or deliver by electronic file to Swing Line Bank,
promptly following such telephone or email request, a Request for Swing Line
Advance. Company hereby authorizes Swing Line Bank to disburse Advances under
this Section 2.5(c) pursuant to the telephone or e-mail instructions of any
person purporting to be a person identified by name on a written list of persons
authorized by the Company to make Requests for Advance on behalf of the Company.
Notwithstanding the foregoing, the Company acknowledges that Company shall bear
all risk of loss resulting from disbursements made upon any telephone or e-mail
request. Each telephone or e-mail request for an Advance shall constitute a
certification of the matters set forth in the Request for Swing Line Advance
form as of the date of such requested Advance. Swing Line Bank shall promptly
deliver to Administrative Agent by telecopy or by electronic file a copy of any
Request for Advance received hereunder.
(4) Disbursement of Swing Line Advances. Subject to submission of an
executed Request for Swing Line Advance by Company without
exceptions noted in the compliance certification therein and to the
other terms and conditions hereof, Swing Line Bank shall make
available to Company the amount so requested not later than:
A. for Prime-based Advances or Quoted Rate Advances, not later than 4:00 p.m.
(Detroit time) on the date of such Advance by credit to an account of
Company maintained with Agent or to such other account or third party as
Company may reasonably direct; and
B. for Eurodollar-based Advances, not later than 4:00 p.m. (the time of the
Agent's Correspondent) on the date of such Advance, by credit to an
account of Company or to such other account or third party as Company may
reasonably direct.
40
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
(5) Refunding of or Participation Interest in Swing Line Advances.
A. The Agent, at any time in its sole and absolute discretion, may (or, upon
the request of the Swing Line Bank, shall) on behalf of the Company (which
hereby irrevocably directs the Agent to act on its behalf) request each of
the Banks (including the Swing Line Bank in its capacity as a Bank) to
make an Advance of the Revolving Credit to Company, in an amount equal to
such Bank's Percentage of the principal amount of the aggregate Swing Line
Advances outstanding to each such party on the date such notice is given
(the "Refunded Swing Line Advances"); provided that at any time as there
shall be a Swing Line Advance outstanding for more than thirty days, the
Agent shall, on behalf of the Company (which hereby irrevocably directs
the Agent to act on its behalf), promptly request each Bank (including the
Swing Line Bank) to make an Advance of the Revolving Credit in an amount
equal to such Bank's Percentage of the principal amount of such
outstanding Swing Line Advance. In the case of each Refunded Swing Line
Advance, the applicable Advance of the Revolving Credit used to refund
such Swing Line Advance shall be a Prime-based Advance. In connection with
the making of any such Refunded Swing Line Advances or the purchase of a
participation interest in Swing Line Advances under Section 2.5(e)(ii)
hereof, the Swing Line Bank shall retain its claim against the Company for
any unpaid interest or fees in respect thereof. Unless any of the events
described in Section 9.1(j) hereof shall have occurred (in which event the
procedures of subparagraph (ii) of this Section 2.5(e) shall apply) and
regardless of whether the conditions precedent set forth in this Agreement
to the making of an Advance of the Revolving Credit are then satisfied but
subject to Section 2.5(e)(iii), each Bank shall make the proceeds of its
Advance of the Revolving Credit available to the Agent for the benefit of
the Swing Line Bank at the office of the Agent specified in Section 2.4(a)
hereof prior to 11:00 a.m. Detroit time on the Business Day next
succeeding the date such notice is given, except in the case of an
Eurodollar-based Advance, in which case such proceeds shall be made
available, prior to 2:00 p.m. Detroit time on the third Business Day
following the date such notice is given. The proceeds of such Advances of
the Revolving Credit shall be immediately applied to repay the Refunded
Swing Line Advances in accordance with the provisions of Section 10.1
hereof.
B. If, prior to the making of an Advance of the Revolving Credit pursuant to
subparagraph (i) of this Section 2.5(e), one of the events described in
Section 9.1(j) hereof shall have occurred, each Bank will, on the date
such Advance of the Revolving Credit was to have been made, purchase from
the Swing Line Bank an undivided participating interest in each Refunded
Swing Line Advance in an amount equal to its Percentage of such Refunded
Swing Line Advance. Each Bank within the time periods specified in Section
2.5(e)(i) hereof, as applicable, shall immediately transfer to the Agent,
in immediately available funds, the amount of its participation and upon
receipt thereof the Agent will deliver to such Bank a participation
certificate evidencing such participation.
41
C. Each Bank's obligation to make Advances of the Revolving Credit and to
purchase participation interests in accordance with clauses (i) and (ii)
above shall, except in respect of any Swing Line Advance made by the Swing
Line Bank more than one (1) Business Day after it has received written
notice to suspend Swing Line Advances in accordance with the last
paragraph of this Section 2.5(d)(iii), be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation,
(A) any set-off, counterclaim, recoupment, defense or other right which
such Bank may have against Swing Line Bank, the Company or any other
Person for any reason whatsoever; (B) the occurrence or continuance of any
Default or Event of Default; (C) any adverse change in the condition
(financial or otherwise) of the Company, or any other Person; (D) any
breach of this Agreement by the Company or any other Person; (E) any
inability of the Company to satisfy the conditions precedent to borrowing
set forth in this Agreement on the date upon which such participating
interest is to be purchased or (F) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. If any
Bank does not make available to the Agent the amount required pursuant to
clause (i) or (ii) above, as the case may be, the Agent shall be entitled
to recover such amount on demand from such Bank, together with interest
thereon for each day from the date of non-payment until such amount is
paid in full at the Federal Funds Effective Rate for Advances (other than
Eurodollar-based Advances) and for Eurodollar-based Advances, the Agent's
marginal cost (including the cost of maintaining any required reserves or
deposit insurance and of any fees, penalties, overdraft charges or other
costs or expenses incurred by Agent as a result of such failure to deliver
funds hereunder) of carrying such amount.
Notwithstanding the foregoing, however, no Bank shall be required to make
any Advances of the Revolving Credit to refund a Swing Line Advance or to
purchase a participation in a Swing Line Advance if more than one (1) Business
Day prior to the making of the applicable Swing Line Advance by the Swing Line
Bank, the Agent had received written notice from any Bank that a Default or
Event of Default had occurred and was continuing and directing that Swing Line
Advances should be suspended based on such occurrence and continuance of a
Default or Event of Default; provided, however that the obligation of the Banks
to make such Advances of the Revolving Credit (or purchase such participations)
shall be reinstated upon the date on which such Default or Event of Default has
been cured, or has been waived by the requisite Banks, as applicable.
(f) Prime-based Interest Payments. Interest on the unpaid balance of all
Prime-based Advances of the Revolving Credit and all Swing Line Advances carried
at the Prime-based Rate from time to time outstanding shall accrue from the date
of such Advance to the Revolving Credit Maturity Date (and until paid), at a per
annum interest rate equal to the Prime-based Rate, and shall be payable in
immediately available funds (a) with respect to Swing Line Advances, monthly
commencing on the first day of the calendar month next succeeding the calendar
month during which the initial Swing Line Advance is made and on the first day
of each month thereafter, and (b) with respect to Advances of the Revolving
Credit, quarterly commencing on the first day of the calendar quarter next
succeeding the calendar month during which the initial Advance of the Revolving
Credit is made and on the first day of each calendar quarter thereafter.
Interest accruing at the Prime-based Rate shall be computed on the basis of a
360 day year and assessed for the actual number of days elapsed, and in such
computation effect shall be given to
42
any change in the interest rate resulting from a change in the Prime-based Rate
on the date of such change in the Prime-based Rate.
(g) Eurodollar-based Interest Payments and Quoted Rate Interest Payments.
(1) Interest on each Eurodollar-based Advance of the Revolving Credit
and all Swing Line Advances carried at the Eurodollar-based Rate
shall accrue at its Applicable Interest Rate and shall be payable in
immediately available funds on the last day of the Interest Period
applicable thereto (and, if any Interest Period shall exceed three
months, then on the last Business Day of the third month of such
Interest Period, and at three month intervals thereafter). Interest
accruing at the Eurodollar-based Rate shall be computed on the basis
of a 360 day year and assessed for the actual number of days elapsed
from the first day of the Interest Period applicable thereto to but
not including the last day thereof.
(2) Interest on each Quoted Rate Advance of the Swing Line shall accrue
at its Quoted Rate and shall be payable in immediately available
funds on the last day of the Interest Period applicable thereto.
Interest accruing at the Quoted Rate shall be computed on the basis
of a 360 day year and assessed for the actual number of days elapsed
from the first day of the Interest Period applicable thereto to, but
not including the last day thereof.
(h) Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
(i) Interest on Default. In the event and so long as any Event of Default
shall exist, in the case of any Event of Default under Sections 9.1(a), 9.1(b)
or 9.1(j), immediately upon the occurrence thereof, and in the case of all other
Events of Default, upon notice from the Majority Banks, interest shall be
payable daily on all Eurodollar-based Advances of the Revolving Credit, Swing
Line Advances carried at the Eurodollar-based Rate and Quoted Rate Advances from
time to time outstanding at a per annum rate equal to the Applicable Interest
Rate plus two percent (2%) for the remainder of the then existing Interest
Period, if any, and at all other such times, with respect to Prime-based
Advances from time to time outstanding, at a per annum rate equal to the
Prime-based Rate plus two percent (2%).
(j) Prepayment. (1) Company may prepay all or part of the outstanding
balance of any Prime-based Advance(s) under the Revolving Credit Note at any
time, provided that the amount of any partial prepayment shall be at least One
Million Dollars ($1,000,000) and, after giving effect to any such partial
prepayment, the aggregate balance of Prime-based Advance(s) of the Revolving
Credit remaining outstanding, if any, shall be at least One Million Dollars
($1,000,000). Company may prepay all or part of any Eurodollar-based Advance
(subject to not less than three (3) Business Days' notice to Agent) only on the
last day of the Interest Period therefor, provided that the amount of any such
partial prepayment shall be at least One Million Dollars ($1,000,000), and,
after giving effect of any such partial prepayment, the unpaid portion of such
Advance which is refunded or converted under Section 2.3 hereof shall be at
least Two Million Five Hundred Thousand Dollars ($2,500,000).
43
(1) Company may prepay all or part of the outstanding balance of any
Swing Line Advance carried at the Prime-based Rate at any time,
provided that the amount of any partial prepayment shall be at least
One Hundred Thousand Dollars ($100,000) and, after giving effect of
any such partial prepayment, the aggregate balance of such Swing
Line Advances remaining outstanding, if any, shall be at least One
Hundred Thousand Dollars ($100,000). Company may prepay all or part
of any Swing Line Advances carried at the Eurodollar-based Rate or
Quoted Rate (subject to not less than three (3) Business Days'
notice to Swing Line Bank and Agent) only on the last day of the
Interest Period therefor, provided that the amount of any such
partial payment shall be at least One Hundred Thousand Dollars
($100,000), after giving effect of any such partial prepayment, and
the unpaid portion of such Advance which is refunded or converted
under Section 2.5(c) hereof shall be at least One Hundred Thousand
Dollars ($100,000).
(2) Any prepayment made in accordance with this Section shall be without
premium, penalty or prejudice to the right to reborrow under the
terms of this Agreement. Any other prepayment of all or any portion
of any Advance of the Revolving Credit or any Swing Line Advance
shall be subject to Section 11.1 hereof, but otherwise without
premium, penalty or prejudice.
(k) Intentionally Omitted.
(l) Prime-based Advance in Absence of Election or Upon Default. If, (1) as
to any outstanding Eurodollar-based Advance of the Revolving Credit, or any
Swing Line Advance carried at the Eurodollar-based Rate, Agent has not received
payment on the last day of the Interest Period applicable thereto, or does not
receive a timely Request for Advance meeting the requirements of Section 2.3 or
2.5(c) hereof with respect to the refunding or conversion of such Advance, or
(b) subject to Section 2.9 hereof, if on such day a Default or an Event of
Default shall have occurred and be continuing, then the principal amount thereof
which is not then prepaid in the case of a Eurodollar-based Advance shall,
absent a contrary election of the Majority Banks, be converted automatically to
a Prime-based Advance and the Agent shall thereafter promptly notify Company of
said action.
(m) Revolving Credit Facility Fee.
(1) Revolving Credit Facility Fee. From the date hereof to the Revolving
Credit Maturity Date, the Company shall pay to the Agent, for
distribution to the Banks (as set forth below), a Revolving Credit
Facility Fee determined by multiplying the Applicable Fee Percentage
per annum times the Revolving Credit Maximum Amount then applicable
under Section 2.15 hereof (whether used or unused), computed on a
daily basis. The Revolving Credit Facility Fee shall be payable
quarterly in arrears commencing April 1, 2006 (in respect of the
prior calendar quarter or portion thereof), and on the first day of
each calendar quarter thereafter and on the Revolving Credit
Maturity Date, and shall be computed on the basis of a year of three
hundred sixty (360) days and assessed for the actual number of days
elapsed. Whenever any payment of the Revolving Credit Facility Fee
shall be due on a day which is not a Business Day, the date for
payment thereof shall be
44
extended to the next Business Day. Upon receipt of such payment
Agent shall make prompt payment to each Bank of its share of the
Revolving Credit Facility Fee based upon its respective Percentage.
(2) Commitment Fee. On the Effective Date, the Company shall pay to the
Agent, for distribution to the Banks in accordance with this clause
(b), a Commitment Fee, such Commitment Fee to be calculated as
follows: (i) in the case of a Bank which holds a Percentage of the
Revolving Credit Maximum Amount which is less than $20,000,000, the
Commitment Fee shall be determined by multiplying 60 basis points
times an amount equal to such Bank's Percentage of the Maximum
Revolving Credit Amount, and (ii) in the case of a Bank which holds
a Percentage of the Revolving Credit Maximum Amount which is greater
than or equal to $20,000,000, the Commitment Fee shall be determined
by multiplying 75 basis points times an amount equal to such Bank's
Percentage of the Revolving Credit Maximum Amount.
(3) Additional Commitment Fee. If, at any time after the Effective Date,
the remaining maturity of the Revolving Credit shall be less than
366 days, the Company shall be obligated to pay the Agent, for
distribution to the Banks in accordance with this clause (c), an
Additional Commitment Fee, such Additional Commitment Fee to be
calculated as follows: (i) in the case of a Bank which holds a
Percentage of the Revolving Credit Maximum Amount which is less than
$20,000,000, the Additional Commitment Fee shall be determined by
multiplying 10 basis points times an amount equal to such Bank's
Percentage of the Revolving Credit Maximum Amount, and (ii) in the
case of a Bank which holds a Percentage of the Revolving Credit
Maximum Amount which is greater than or equal to $20,000,000, the
Additional Commitment Fee shall be determined by multiplying 20
basis points times an amount equal to such Bank's Percentage of the
Revolving Credit Maximum Amount. The Additional Commitment Fee, if
applicable, shall be due and payable 360 days prior to the Revolving
Credit Maturity Date then in effect.
(n) Mandatory Reduction of Indebtedness. If at any time and for any
reason, the aggregate principal amount (without duplication) of all Advances of
the Revolving Credit hereunder to the Company, plus the aggregate principal
amount of Swing Line Advances outstanding hereunder as of such time, plus the
aggregate undrawn portion of any Letters of Credit which shall be outstanding,
plus the undrawn amount of all Letters of Credit requested but not yet issued,
plus the unreimbursed amount of any draws under any Letters of Credit, as of
such time exceeds the lesser of (x) the Revolving Credit Maximum Amount and (y)
the Borrowing Base Limitation, in each case then applicable, (as used herein,
the "Excess"), the Company shall immediately reduce any pending request for an
Advance on such day by the amount of the Excess, to the extent thereof and, to
the extent any Excess remains thereafter, repay any Advances of the Revolving
Credit or Swing Line Advances in an amount equal to the lesser of the
outstanding amount of such Advances and the amount of such remaining Excess,
with such amounts to be applied between the Advances of the Revolving Credit and
the Swing Line Advances as determined by the Agent and then, to the extent that
any Excess remains after payment in full of all Advances of the Revolving Credit
and Swing Line Advances, to provide
45
cash collateral in support of any outstanding Letter of Credit Obligations in an
amount equal to the lesser of the amount of such Letter of Credit Obligations
and the amount of such remaining Excess, with such cash collateral to be
provided on the basis set forth in Section 9.2 hereof. Company acknowledges
that, in connection with any repayment required hereunder, it shall also be
responsible for the reimbursement of any prepayment or other costs required
under Section 11.1 hereof; provided, however, that Company shall, in order to
reduce any such prepayment costs and expenses, first prepay such portion of the
Indebtedness then carried as a Prime-based Advance, if any.
Compliance with this Section 2.14 shall be tested on a daily or other
basis satisfactory to Agent in its sole discretion. To the extent that, on the
date any mandatory repayment under this Section 2.14 is due, the Indebtedness
under the Revolving Credit or any other Indebtedness to be prepaid is being
carried, in whole or in part, at the Eurodollar-based Rate and no Default or
Event of Default has occurred and is continuing, Company may deposit the amount
of such mandatory prepayment in a cash collateral account to be held by the
Agent, for and on behalf of the Banks (which shall be an interest-bearing
account), on such terms and conditions as are reasonably acceptable to Agent and
upon such deposit the obligation of Company to make such mandatory prepayment
shall be deemed satisfied. Subject to the terms and conditions of said cash
collateral account, sums on deposit in said cash collateral account shall be
applied (until exhausted) to reduce the principal balance of the Revolving
Credit on the last day of each Interest Period attributable to the
Eurodollar-based Advances, thereby avoiding breakage costs.
(o) Optional Reduction or Termination of Revolving Credit Maximum Amount.
Provided that no Default or Event of Default has occurred and is continuing, the
Company may upon at least five Business Days' prior written notice to the Agent,
permanently reduce the Revolving Credit Maximum Amount in whole at any time, or
in part from time to time, without premium or penalty, provided that: (i) each
partial reduction of the Revolving Credit Maximum Amount shall be in an
aggregate amount equal to Ten Million Dollars ($10,000,000) or a larger integral
multiple of One Million Dollars ($1,000,000); (ii) each reduction shall be
accompanied by the payment of the Revolving Credit Facility Fee, if any, accrued
to the date of such reduction; (iii) the Company shall prepay in accordance with
the terms hereof the amount, if any, by which the aggregate unpaid principal
amount of Advances of the Revolving Credit, plus the aggregate principal amount
of Swing Line Advances outstanding hereunder, plus without duplication the
aggregate undrawn amount of outstanding Letters of Credit, plus without
duplication the unreimbursed amount of any draws under any Letters of Credit,
exceeds the amount of the Revolving Credit Maximum Amount as so reduced,
together with interest thereon to the date of prepayment; (iv) if the
termination or reduction of the Revolving Credit Maximum Amount requires the
prepayment of a Eurodollar-based Advance or a Quoted Rate Advance, the
termination or reduction may be made only on the last Business Day of the then
current Interest Period applicable to such Eurodollar-based Advance or such
Quoted Rate Advance; and (v) no reduction shall reduce the Revolving Credit
Maximum Amount to an amount which is less than the aggregate undrawn amount of
any Letters of Credit outstanding at such time. Reductions of the Revolving
Credit Maximum Amount and any accompanying prepayments of the Revolving Credit
Notes shall be distributed by Agent to each Bank in accordance with such Bank's
Percentage thereof, and will not be available for reinstatement by or readvance
to the Company, and any accompanying prepayments of the Swing Line Note shall be
distributed by Agent to the Swing Line Bank and will not be available for
reinstatement by or readvance to the Company.
46
Any reductions of the Revolving Credit Maximum Amount hereunder shall reduce
each Bank's portion thereof proportionately (based on the applicable
Percentages), and shall be permanent and irrevocable. Any payments made pursuant
to this Section shall be applied first to outstanding Prime-based Advances under
the Revolving Credit, next to Swing Line Advances carried at the Prime-based
Rate, next to Eurodollar-based Advances of the Revolving Credit and then to
Swing Line Advances carried at the Eurodollar-based Rate or the Quoted Rate.
(p) Extension of Revolving Credit Maturity Date. Provided that no Default
or Event of Default has occurred and is continuing, Company may, by written
notice to Agent and each Bank (which notice shall be irrevocable and which shall
not be deemed effective unless actually received by Agent and each Bank), prior
to April 15, but not before March 15, of each year beginning in 2007 request
that the Banks extend the then applicable Revolving Credit Maturity Date to a
date that is 364 days later than the Revolving Credit Maturity Date then in
effect (each such request, a "Request").
Each Bank shall, not later than thirty (30) calendar days following the
date of its receipt of a Request, give written notice to the Agent stating
whether such Bank is willing to extend the Revolving Credit Maturity Date as
requested. If Agent has received the aforesaid written approvals of such Request
from each of the Banks, then, effective on (but not before) such Revolving
Credit Maturity Date (so long as no Default or Event of Default has occurred and
is continuing and none of the Banks has withdrawn its approval, in writing,
prior thereto), the Revolving Credit Maturity Date shall be so extended for an
additional period of 364 days, the term Revolving Credit Maturity Date shall
mean such extended date and Agent shall promptly notify the Company and the
Banks that such extension has occurred. If (i) any Bank gives the Agent written
notice that it is unwilling to extend the Revolving Credit Maturity Date as
requested or (ii) any Bank fails to provide written approval to Agent of the
Request within thirty (30) calendar days of the date of Agent's receipt of such
Request, or (iii) withdraws its approval in writing prior to the Revolving
Credit Maturity Date then in effect then (x) the Banks shall be deemed to have
declined to extend the Revolving Credit Maturity Date, (y) the then-current
Revolving Credit Maturity Date shall remain in effect (with no further right on
the part of Company, to request extensions thereof under this Section 2.16) and
(z) the commitments of the Banks to make Advances of the Revolving Credit
hereunder shall terminate on the Revolving Credit Maturity Date then in effect,
and Agent shall promptly notify Company and the Banks thereof.
(q) Optional Increase in Revolving Credit Maximum Amount. Provided that no
Default or Event of Default has occurred and is continuing, and provided that
the Company has not previously elected to terminate the Revolving Credit Maximum
Amount under Section 2.15 hereof, the Company may request that the Revolving
Credit Maximum Amount be increased in an aggregate amount (for all such Requests
under this Section 2.17) not to exceed the Revolving Credit Optional Increase,
subject, in each case, to Section 11.1 hereof and to the satisfaction
concurrently with or prior to the date of each such request of the following
conditions:
(1) the Company shall have delivered to the Agent not less than thirty
(30) days prior to the Revolving Credit Maturity Date then in effect
a written request for such increase, specifying the amount of
Revolving Credit Optional Increase thereby requested (each such
request, a "Request for Increase"); provided, however that in
47
the event the Company has previously delivered a Request for
Increase pursuant to this Section 2.17, the Company may not deliver
a subsequent Request for Increase until all the conditions to
effectiveness of such first Request for Increase have been fully
satisfied hereunder (or such Request for Increase has been
withdrawn); and provided further that the Company may make no more
than two Requests for Increase in any calendar year;
(2) a lender or lenders meeting the requirements of Section 13.8(c)
hereof and acceptable to the Company and the Agent (including, for
the purposes of this Section 2.17, any existing Bank which agrees to
increase its commitment hereunder, the "New Bank(s)") shall have
become a party to this Agreement by executing and delivering a New
Bank Addendum for a minimum amount (including for the purposes of
this Section 2.17, the existing commitment of any existing Bank) for
each such New Bank of Ten Million Dollars ($10,000,000) and an
aggregate amount for all such New Banks of that portion of the
Revolving Credit Optional Increase, taking into account the amount
of any prior increase in the Revolving Credit Maximum Amount
(pursuant to this Section 2.17), covered by the applicable Request,
provided, however that each New Bank shall remit to the Agent funds
in an amount equal to its Percentage (after giving effect to this
Section 2.17) of all Advances of the Revolving Credit then
outstanding, such sums to be reallocated among and paid to the
existing Banks based upon the new Percentages as determined below;
(3) the Company (i) shall have paid to the Agent for distribution to the
existing Banks, as applicable, all interest, fees (including the
Revolving Credit Facility Fee and the Letter of Credit Fees) and
other amounts, if any, accrued to the effective date of such
increase and any breakage fees attributable to the reduction (prior
to the last day of the applicable Interest Period) of any
outstanding Eurodollar-based Advances, calculated on the basis set
forth in Section 11.1 hereof as though Company has prepaid such
Advances and (ii) shall have paid to each New Bank a special letter
of credit fee on the Letters of Credit outstanding on the effective
date of such increase, calculated on the basis of the Letter of
Credit Fees which would be applicable to such Letters of Credit if
issued on the date of such increase, for the period from the
effective date of such increase to the expiration date of such
Letters of Credit;
(4) the Company shall have executed and delivered to the Agent new
Revolving Credit Notes payable to each of the New Banks in the face
amount of each such New Bank's Percentage of the Revolving Credit
Maximum Amount (after giving effect to this Section 2.17) and, if
applicable, renewal and replacement Revolving Credit Notes payable
to each of the existing Banks in the face amount of each such Bank's
Percentage of the Revolving Credit Maximum Amount (after giving
effect to this Section 2.17), each of such Revolving Credit Notes to
be substantially in the form of Exhibit C to the Credit Agreement,
as applicable, and dated as of the effective date of such increase
(with appropriate insertions relevant to such Notes and acceptable
to the applicable Bank, including the New Banks);
48
(5) except to the extent such representations and warranties (other than
Section 6.12 hereof which shall be deemed to be remade as of such
date for purposes of this clause (e), notwithstanding the limitation
contained therein) are not, by their terms, continuing
representations and warranties, but speak only as of a specific
date, the representations and warranties made by Company, each
Guarantor or any other party to any of the Loan Documents (excluding
the Agent and Banks) in this Agreement or any of the other Loan
Documents, and the representations and warranties of any of the
foregoing which are contained in any certificate, document or
financial or other statement furnished at any time hereunder or
thereunder or in connection herewith or therewith shall have been
true and correct in all material respects when made and shall be
true and correct in all material respects on and as of the effective
date of such increase; and (ii) no Default or Event of Default shall
have occurred and be continuing as of such date; and
(6) such other amendments, acknowledgments, consents, documents,
instruments, any registrations, if any, shall have been executed and
delivered and/or obtained by Company as required by Agent or the
Majority Banks, in their reasonable discretion.
Promptly on or after the date on which all of the conditions to such
Request for Increase set forth above have been satisfied, Agent shall notify the
Company and each of the Banks of the amount of the Revolving Credit Maximum
Amount as increased pursuant this Section 2.17 and the date on which such
increase has become effective and shall prepare and distribute to Company and
each of the Banks (including the New Banks) a revised Exhibit D to the Credit
Agreement setting forth the applicable new Percentages of the Banks (including
the New Bank(s), taking into account such increase and assignments (if any).
(r) Revolving Credit as Renewal; Application of Advances; Existing
Advances. (a) The Revolving Credit Notes issued by the Company hereunder shall
constitute renewal and replacement evidence of all present Indebtedness of such
parties outstanding under the Revolving Credit Notes issued under the Prior
Credit Agreement. Advances of the Revolving Credit (including Swing Line
Advances) shall be available, subject to the terms hereof, to fund working
capital needs or other general corporate purposes of the Company.
(b) Each Existing Advance shall be deemed for all purposes of this
Agreement to be an Advance under this Agreement.
3. LETTERS OF CREDIT.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent may through the Issuing Office, at any time and from time to
time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Agent may
require, issue standby or documentary Letters of Credit (denominated in Dollars)
for the account of such Account Party, in an aggregate amount for all Letters of
Credit issued hereunder at any one time outstanding not to exceed the Letter of
Credit Maximum Amount. Each Letter of Credit shall be
49
in a minimum face amount of One Hundred Thousand Dollars ($100,000) and shall
have an expiration date not later than one (1) year from its date of issuance;
provided that each Letter of Credit (including any renewal thereof) shall expire
not later than ten (10) Business Days prior to the Revolving Credit Maturity
Date in effect on the date of issuance thereof. The submission of all
applications in respect of and the issuance of each Letter of Credit hereunder
shall be subject in all respects to the Uniform Customs and Practices for
Documentary Credits of the International Chamber of Commerce, 1993 Revisions,
ICC Publication No. 500 or, if applicable, ISP 98, and any successor
documentation thereto, as selected by the Agent. In the event of any conflict
between this Agreement and any Letter of Credit Document other than any Letter
of Credit, this Agreement shall control.
(b) Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
(1) without duplication, the face amount of the Letter of Credit
requested, plus the face amount of all other Letters of Credit of
all Account Parties requested on such date, plus the aggregate
undrawn portion of all other Letters of Credit of all Account
Parties as of such date, plus the face amount of all Letters of
Credit of all Account Parties requested but not yet issued as of
such date, plus the unreimbursed amount of any draws under Letters
of Credit of all Account Parties, does not exceed the Letter of
Credit Maximum Amount;
(2) without duplication, the undrawn amount of the Letter of Credit
requested, plus the undrawn amount of all other Letters of Credit of
all Account Parties requested on such date, plus the aggregate
undrawn portion of all other Letters of Credit of all Account
Parties as of such date, plus the undrawn amount of all Letters of
Credit of all Account Parties requested but not yet issued as of
such date, plus the unreimbursed amount of any draws under Letters
of Credit of all Account Parties as of such date, plus the aggregate
principal amount of all Advances outstanding under the Revolving
Credit Notes and the Swing Line Notes, including any Advances
requested to be made on such date, do not exceed the lesser of (i)
the Revolving Credit Maximum Amount and (ii) the Borrowing Base
Limitation, in each case then applicable;
(3) the obligations of Company set forth in this Agreement and the other
Loan Documents are valid, binding and enforceable obligations of
Company and the valid, binding and enforceable nature of this
Agreement and the other Loan Documents has not been disputed by
Company;
(4) the representations and warranties contained in this Agreement and
the other Loan Documents are true in all material respects as if
made on such date, except to the extent such representations and
warranties (other than Section 6.12 hereof, which shall be deemed to
be remade as of the date of issuance of such Letter of Credit for
purposes of this clause (d), notwithstanding the limitation
contained therein) are not, by their terms, continuing
representations and warranties, but speak only as of a specific
date, and both immediately before and immediately after issuance of
the Letter of Credit requested, no Default or Event of Default
exists;
50
(5) the execution of the Letter of Credit Agreement with respect to the
Letter of Credit requested will not violate the terms and conditions
of any contract, agreement or other borrowing of Company;
(6) the Account Party requesting the Letter of Credit shall have
delivered to Agent at its Issuing Office, not less than five (5)
Business Days prior to the requested date for issuance (or such
shorter time as the Agent, in its sole discretion, may permit), the
Letter of Credit Agreement related thereto, together with such other
documents and materials as may be required pursuant to the terms
thereof, and the terms of the proposed Letter of Credit shall be
satisfactory to Agent and its Issuing Office;
(7) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or
restrain Agent from issuing the Letter of Credit requested, or any
Bank from taking an assignment of its Percentage thereof pursuant to
Section 3.6 hereof, and no law, rule, regulation, request or
directive (whether or not having the force of law) shall prohibit or
request that Agent refrain from issuing, or any Bank refrain from
taking an assignment of its Percentage of, the Letter of Credit
requested or letters of credit generally;
(8) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful
or unduly burdensome for the Agent to issue or any Bank to take an
assignment of its Percentage of the requested Letter of Credit (as
determined in the sole discretion of Agent or such Bank, as the case
may be), no suspension of or material limitation on trading on the
New York Stock Exchange or any other national securities exchange,
no declaration of a general banking moratorium by banking
authorities in the United States, Michigan or the respective
jurisdictions in which the Banks, the applicable Account Party and
the beneficiary of the requested Letter of Credit are located, and
no establishment of any new restrictions on transactions involving
letters of credit or on banks materially affecting (as determined by
Agent) the extension of credit by banks; and
(9) Agent shall have received the issuance fees required in connection
with the issuance of such Letter of Credit pursuant to Section 3.5
hereof.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by the Company and the Account Party of the matters
set forth in Section 3.2 (a) through (e) hereof. The Agent shall be entitled to
rely on such certification without any duty of inquiry.
(c) Notice. Agent shall give notice, substantially in the form attached as
Exhibit I, to each Bank of the issuance of each Letter of Credit, not later than
three (3) Business Days after issuance of each Letter of Credit, specifying the
amount thereof and the amount of such Bank's Percentage thereof.
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(d) Letter of Credit Fees. Company shall pay to the Agent for distribution
to the Banks in accordance with their Percentages, Letter of Credit Fees as
follows:
(1) A per annum Letter of Credit Fee with respect to the undrawn amount
of each Letter of Credit issued pursuant hereto in the amount of the
Applicable Fee Percentage (determined with reference to Schedule 1.1
to this Agreement), inclusive of the facing fee of one-eighth of one
percentage point (1/8%) per annum on the face amount thereof to be
retained by Agent under Section 3.5 hereof.
(2) If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose,
modify or cause to be deemed applicable any reserve, special
deposit, limitation or similar requirement against letters of credit
issued or participated in by, or assets held by, or deposits in or
for the account of, Agent or any Bank or (ii) impose on Agent or any
Bank any other condition regarding this Agreement or the Letters of
Credit, and the result of any event referred to in clause (i) or
(ii) above shall be to increase the cost or expense to Agent or such
Bank of issuing or maintaining or participating in any of the
Letters of Credit (which increase in cost or expense shall be
determined by the Agent's or such Bank's reasonable allocation of
the aggregate of such cost increases and expense resulting from such
events), then, upon demand by the Agent or such Bank, as the case
may be, the Company shall, within ten days following demand for
payment, pay to Agent or such Bank, as the case may be, from time to
time as specified by the Agent or such Bank, additional amounts
which shall be sufficient to compensate the Agent or such Bank for
such increased cost and expense, together with interest on each such
amount from ten days after the date demanded until payment in full
thereof at the Prime-based Rate. A certificate as to such increased
cost or expense incurred by the Agent or such Bank, as the case may
be, as a result of any event mentioned in clause (i) or (ii) above,
submitted to the Company, shall be conclusive evidence, absent
manifest error, as to the amount thereof.
(3) All payments by the Company to the Agent or the Banks under this
Section 3.4 shall be made in Dollars and in immediately available
funds at the Issuing Office or such other office of the Agent as may
be designated from time to time by written notice to the Company by
the Agent. The fees described in clause (a) above shall be
nonrefundable under all circumstances, shall be payable
semi-annually in advance (or such lesser period, if applicable, for
Letters of Credit issued with stated expiration dates of less than
six months) upon the issuance of each such Letter of Credit, and
shall be calculated on the basis of a 360 day year and assessed for
the actual number of days from the date of the issuance thereof to
the stated expiration thereof.
(e) Issuance Fees. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees (including a letter of credit facing fee
of one-eighth of one percentage point (1/8%) to be retained by Agent for its own
account), the Company or the applicable Account
52
Party shall pay, for the sole account of the Agent, standard documentation,
administration, payment and cancellation charges assessed by Agent or the
Issuing Office, at the times, in the amounts and on the terms set forth or to be
set forth from time to time in the standard fee schedule of the Issuing Office
in effect from time to time.
(f) Draws and Demands for Payment Under Letters of Credit.
(1) The Company and each applicable Account Party agree to pay to the
Agent, on the day on which the Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit, an
amount equal to the amount paid by the Agent in respect of such
draft or other demand under such Letter of Credit and all expenses
paid or incurred by the Agent relative thereto. Unless the Company
or the applicable Account Party shall have made such payment to the
Agent on such day, upon each such payment by the Agent, the Agent
shall be deemed to have disbursed to the Company or the applicable
Account Party, and the Company or the applicable Account Party shall
be deemed to have elected to substitute for its reimbursement
obligation a Prime-based Advance of the Revolving Credit for the
account of the Banks in an amount equal to the amount so paid by the
Agent in respect of such draft or other demand under such Letter of
Credit. Such Prime-based Advance shall be deemed disbursed
notwithstanding any failure to satisfy any conditions for
disbursement of any Advance set forth in Section 3 hereof and, to
the extent of the Advances so disbursed, the reimbursement
obligation of the Company or the applicable Account Party under this
Section 3.6 shall be deemed satisfied.
(2) If the Agent shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Agent shall
provide notice thereof to the Company and the applicable Account
Party on the date such draft or demand is honored, and to each Bank
on such date unless the Company or applicable Account Party shall
have satisfied its reimbursement obligation under Section 3.6(a)
hereof by payment to the Agent on such date. The Agent shall further
use reasonable efforts to provide notice to the Company and the
applicable Account Party prior to honoring any such draft or other
demand for payment, but such notice, or the failure to provide such
notice, shall not affect the rights or obligations of the Agent with
respect to any Letter of Credit or the rights and obligations of the
parties hereto, including without limitation the obligations of the
Company or applicable Account Party under Section 3.6(a) hereof.
(3) Upon issuance by the Agent of each Letter of Credit hereunder
(except in respect of any Letter of Credit issued after Agent has
obtained actual knowledge that an Event of Default has occurred and
is continuing), each Bank shall automatically acquire a pro rata
participation interest in such Letter of Credit and each related
Letter of Credit Payment based on its respective Percentage. Each
Bank, on the date a draft or demand under any Letter of Credit is
honored (or the next succeeding Business Day if the notice required
to be given by Agent to the Banks under Section 3.6(b) hereof is not
given to the Banks prior to 2:00 p.m. (Detroit time) on such date of
draft or demand), shall make its Percentage of the amount
53
paid by the Agent, and not reimbursed by the Company or applicable
Account Party on such day, available in immediately available funds
at the principal office of the Agent for the account of the Agent.
If and to the extent such Bank shall not have made such pro rata
portion available to the Agent, such Bank, the Company and the
applicable Account Party severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for
each day from the date such amount was paid by the Agent until such
amount is so made available to the Agent at a per annum rate equal
to the interest rate applicable during such period to the related
Advance deemed to have been disbursed under Section 3.6(a) in
respect of the reimbursement obligation of the Company and the
applicable Account Party, as set forth in Section 2.4(c)(i) or
2.4(c)(ii) hereof, as the case may be. If such Bank shall pay such
amount to the Agent together with such interest, such amount so paid
shall be deemed to constitute an Advance by such Bank disbursed in
respect of the reimbursement obligation of the Company or applicable
Account Party under Section 3.6(a) hereof for purposes of this
Agreement, effective as of the dates applicable under said Section
3.6(a). The failure of any Bank to make its pro rata portion of any
such amount paid by the Agent available to the Agent shall not
relieve any other Bank of its obligation to make available its pro
rata portion of such amount, but no Bank shall be responsible for
failure of any other Bank to make such pro rata portion available to
the Agent.
Notwithstanding the foregoing, however, no Bank shall be deemed to have
acquired a participation in a Letter of Credit if, prior to the issuance of the
Letter of Credit by the Agent, the Agent had received written notice from any
Bank that a Default or an Event of Default had occurred and was continuing and
directing the Agent to suspend the issuance of Letters of Credit; provided,
however that the Banks shall be deemed to have acquired such a participation
upon the date of which such Default or Event of Default has been cured or has
been waived by the requisite Revolving Credit Banks, as applicable.
(4) Nothing in this Agreement shall be construed to require or authorize
any Bank to issue any Letter of Credit, it being recognized that the
Agent shall be the sole issuer of Letters of Credit under this
Agreement.
(g) Obligations Irrevocable. The obligations of Company and any Account
Party to make payments to Agent or the Banks with respect to Letter of Credit
Obligations under Section 3.6 hereof, shall be unconditional and irrevocable and
not subject to any qualification or exception whatsoever, including, without
limitation:
(1) Any lack of validity or enforceability of any Letter of Credit or
any documentation relating to any Letter of Credit or to any
transaction related in any way to any Letter of Credit (the "Letter
of Credit Documents");
(2) Any amendment, modification, waiver, consent, or any substitution,
exchange or release of or failure to perfect any interest in
collateral or security, with respect to or under any of the Letter
of Credit Documents;
54
(3) The existence of any claim, setoff, defense or other right which the
Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent or any Bank or any other person
or entity, whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(4) 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;
(5) Payment by the Agent to the beneficiary under any Letter of Credit
against presentation of documents which do not comply with the terms
of such Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit;
(6) Any failure, omission, delay or lack on the part of the Agent or any
Bank or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred
upon the Agent, any Bank or any such party under this Agreement, any
of the other Loan Documents or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent,
any Bank or any such party; or
(7) Any other event or circumstance that would, in the absence of this
Section 3.7, result in the release or discharge by operation of law
or otherwise of Company or any Account Party from the performance or
observance of any obligation, covenant or agreement contained in
Section 3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may have
against the beneficiary of any Letter of Credit shall be available hereunder to
Company or any Account Party against the Agent or any Bank. Nothing contained in
this Section 3.7 shall be deemed to prevent Company or the Account Parties,
after satisfaction in full of the absolute and unconditional obligations of
Company and the Account Parties hereunder, from asserting in a separate action
any claim, defense, set off or other right which they (or any of them) may have
against Agent or any Bank.
(h) Risk Under Letters of Credit. (1) In the administration and handling
of Letters of Credit and any security therefor, or any documents or instruments
given in connection therewith, Agent shall have the sole right to take or
refrain from taking any and all actions under or upon the Letters of Credit.
(1) Subject to other terms and conditions of this Agreement, Agent shall
issue the Letters of Credit and shall hold the documents related
thereto in its own name and shall make all collections thereunder
and otherwise administer the Letters of Credit in accordance with
Agent's regularly established practices and procedures and, except
pursuant to Section 12.3 hereof, Agent will have no further
obligation with respect thereto. In the administration of Letters of
Credit, Agent shall not be
55
liable for any action taken or omitted on the advice of counsel,
accountants, appraisers or other experts selected by Agent with due
care and Agent may rely upon any notice, communication, certificate
or other statement from Company, any Account Party, beneficiaries of
Letters of Credit, or any other Person which Agent believes to be
authentic. Agent will, upon request, furnish the Banks with copies
of Letter of Credit Agreements, Letters of Credit and documents
related thereto.
(2) In connection with the issuance and administration of Letters of
Credit and the assignments hereunder, Agent makes no representation
and shall have no responsibility with respect to (i) the obligations
of Company or any Account Party or the validity, sufficiency or
enforceability of any document or instrument given in connection
therewith, or the taking of any action with respect to same, (ii)
the financial condition of, any representations made by, or any act
or omission of, Company, the applicable Account Party or any other
Person, or (iii) any failure or delay in exercising any rights or
powers possessed by Agent in its capacity as issuer of Letters of
Credit in the absence of its gross negligence or willful misconduct.
Each of the Banks expressly acknowledges that they have made and
will continue to make their own evaluations of Company's and the
Account Parties' creditworthiness without reliance on any
representation of Agent or Agent's officers, agents and employees.
(3) If at any time Agent shall recover any part of any unreimbursed
amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent shall receive same for the
pro rata benefit of the Banks in accordance with their respective
Percentages and shall promptly deliver to each Bank its share
thereof, less such Bank's pro rata share of the costs of such
recovery, including court costs and attorney's fees. If at any time
any Bank shall receive from any source whatsoever any payment on any
such unreimbursed amount or interest thereon in excess of such
Bank's Percentage of such payment, such Bank will promptly pay over
such excess to Agent, for redistribution in accordance with this
Agreement.
(i) Indemnification. (1) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and against any and
all claims, damages, losses, liabilities, costs or expenses of any kind or
nature whatsoever which the Banks or the Agent or any such person may incur or
which may be claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Bank nor the Agent or any of their respective
officers, directors, employees or agents shall be liable or responsible for: (i)
the use which may be made of any Letter of Credit or for any acts or omissions
of any beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of any Letter of Credit (unless such payment resulted from the gross
negligence or willful misconduct of the Agent), including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
56
(iv) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit; or (v) any other event or circumstance whatsoever arising in
connection with any Letter of Credit; provided, however, that Company and
Account Parties shall not be required to indemnify the Banks and the Agent and
such other persons, and the Agent shall be liable to the Company and the Account
Parties to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by Company and the Account Parties
which were caused by the Agent's gross negligence, willful misconduct or
wrongful dishonor of any Letter of Credit after the presentation to it by the
beneficiary thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions of such Letter of
Credit.
(1) It is understood that in making any payment under a Letter of Credit
the Agent will rely on documents presented to it under such Letter
of Credit as to any and all matters set forth therein without
further investigation and regardless of any notice or information to
the contrary. It is further acknowledged and agreed that Company or
an Account Party may have rights against the beneficiary or others
in connection with any Letter of Credit with respect to which Agent
or the Banks are alleged to be liable and it shall be a condition of
the assertion of any liability of Agent or the Banks under this
Section that Company or the applicable Account Party shall
contemporaneously pursue all remedies in respect of the alleged loss
against such beneficiary and any other parties obligated or liable
in connection with such Letter of Credit and any related
transactions.
(j) Right of Reimbursement. Each Bank agrees to reimburse the Agent on
demand, pro rata in accordance with its respective Percentage, for (i) the
reasonable out-of-pocket costs and expenses of the Agent to be reimbursed by
Company or any Account Party pursuant to any Letter of Credit Agreement or any
Letter of Credit, to the extent not reimbursed by Company or any Account Party
and (ii) any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, fees, reasonable out-of-pocket expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Agent (in its capacity as issuer of any Letter
of Credit) in any way relating to or arising out of this Agreement, any Letter
of Credit, any documentation or any transaction relating thereto, or any Letter
of Credit Agreement, to the extent not reimbursed by Company or any Account
Party, except to the extent that such liabilities, losses, costs or expenses
were incurred by Agent solely as a result of Agent's gross negligence or willful
misconduct or by the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit.
(k) Existing Letters of Credit. Each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit, and each
application submitted in connection with each Existing Letter of Credit shall be
deemed for all purposes of this Agreement to be a Letter of Credit Agreement. On
the date of execution of this Agreement, the Agent shall be deemed automatically
to have sold and transferred, and each other Bank shall be deemed automatically,
irrevocably, and unconditionally to have purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation (on the
terms set forth herein), to the extent of such other Bank's Percentage, in each
Existing Letter of Credit and the
57
applicable reimbursement obligations with respect thereto and any security
therefor or guaranty pertaining thereto. Letter of Credit Fees paid under the
Prior Credit Agreement shall not be recalculated, redistributed or reallocated
by Agent to the Banks; provided that the Company shall pay to any new Banks
becoming parties hereto on the Effective Date (or any existing Bank increasing
its Percentage on such date) a special letter of credit fee on the Existing
Letters of Credit, calculated on the basis of the Letter of Credit Fees which
would be applicable to such Existing Letters of Credit if issued on the date
hereof (but in the case of any existing Bank, computed only to the extent of the
applicable increase in its Percentage) for the period from the Effective Date to
the expiration date of such Existing Letters of Credit.
4. INTENTIONALLY OMITTED
5. CONDITIONS
The obligations of Banks to make Advances or loans pursuant to this
Agreement are subject to the following conditions, provided however that
Sections 5.1 through 5.8 below shall only apply to the initial Advances or loans
hereunder:
(a) Execution of Notes, this Agreement and the other Loan Documents. The
Company (on or before the date hereof) shall have executed and delivered to the
Agent for the account of each Bank, the Revolving Credit Notes if requested by
the Banks, the Swing Line Notes if requested by the Swing Line Bank (solely for
the account of the Swing Line Bank), this Agreement (including all schedules,
exhibits, certificates, opinions, financial statements and other documents to be
delivered pursuant hereto), an amended and restated Domestic Guaranty, an
amended and restated Security Agreement and amendments to or reaffirmations of
the Collateral Documents and other Loan Documents (or new documents), as
required hereunder, and, as applicable, such Revolving Credit Notes, the Swing
Line Notes, this Agreement and the other Loan Documents shall be in full force
and effect.
(b) Corporate Authority. Agent shall have received, with a counterpart
thereof for each Bank: (i) certified copies of resolutions of the Board of
Directors of the Company and each Guarantor evidencing approval of the form of
this Agreement, the Notes and the other Loan Documents to which such Person is a
party and authorizing the execution, delivery and performance thereof and, in
the case of the Company, the borrowing of Advances hereunder; (ii) (A) certified
copies of the Company's and each Guarantor's (which is incorporated or formed in
the United States) articles of incorporation and bylaws or other constitutional
documents, as applicable, certified as true and complete as of a recent date by
the appropriate official of the jurisdiction of incorporation of each such
entity (or, if unavailable in such jurisdiction, by a responsible officer of
such entity); and (B) a certificate of good standing from the state of the
Company's or such Guarantor's (which is incorporated or formed in the United
States) incorporation or formation, as applicable.
(c) Representations and Warranties -- All Parties. The representations and
warranties made by the Company or any other party to any of the Loan Documents
under this Agreement or any of the other Loan Documents (excluding the Agent and
the Banks), and the representations and warranties of any of the foregoing which
are contained in any certificate, document or financial or other statement
furnished at any time hereunder or thereunder or in connection
58
herewith or therewith shall have been true and correct in all material respects
when made and shall be true and correct in all material respects on and as of
the date of the making of the initial Advance hereunder.
(d) Compliance with Certain Documents and Agreements. The Company (and any
of its Subsidiaries or Affiliates) shall have each performed and complied with
all agreements and conditions contained in this Agreement, the other Loan
Documents, or any agreement or other document executed hereunder or thereunder
and required to be performed or complied with by each of them (as of the
applicable date) and none of such parties shall be in default in the performance
or compliance with any of the terms or provisions hereof or thereof.
(e) Company's Certificate and Opening Borrowing Base Certificate. The
Agent shall have received, with a signed counterpart for each Bank, a
certificate of a responsible senior officer of Company, dated the date of the
making of the initial Advances hereunder, stating that the conditions set forth
in this Section 5 have been fully satisfied, accompanied by a Borrowing Base
Certificate dated as of the proposed Effective Date.
(f) Payment of Agent's and Other Fees. Company shall have paid to the Lead
Arranger any arranger's fee under any fee letter in effect as of the date hereof
between Company and the Lead Arranger, to the Agent the Closing Fee (for
distribution to the Banks hereunder), and to the Agent, the Agent's Fees and all
costs and expenses required hereunder.
(g) Opinions. The Agent shall have received an opinion of counsel to
Company and the Guarantors, in form and substance acceptable to the Agent.
(h) Other Documents and Instruments. The Agent shall have received, with a
photocopy for each Bank, such other instruments and documents as the Majority
Banks may reasonably request in connection with the making of Advances
hereunder, and all such instruments and documents shall be satisfactory in form
and substance to the Majority Banks.
(i) Continuing Conditions. The obligations of the Banks to make any of the
Advances or loans under this Agreement, including but not limited to the initial
Advances of the Revolving Credit or the Swing Line hereunder, shall be subject
to the following continuing conditions:
(1) No Default or Event of Default shall have occurred and be continuing
as of the making of the proposed Advance (both before and after
giving effect thereto);
(2) There shall have been no material adverse change in the condition
(financial or otherwise), properties, business, results of
operations of the Company or its Subsidiaries, taken as a whole,
from September 30, 2005, or any subsequent December 31st, except
changes in the ordinary course of business unless the Agent
determines, with the concurrence of the Majority Banks, based on the
Company's financial statements for such subsequent fiscal year (or
portion thereof) that a material adverse change has occurred during
such year, such determination being made solely for purposes of
determining the applicable date under this paragraph to the date of
the proposed Advance hereunder;
59
(3) The representations and warranties contained in this Agreement and
the other Loan Documents are true and correct in all material
respects as of the making of the applicable Advance, except to the
extent such representations and warranties are not, by their terms,
continuing representations and warranties, but speak only as of a
specific date; and
(4) All documents executed or submitted pursuant hereto shall be
satisfactory in form and substance (consistent with the terms
hereof) to Agent and its counsel and to each of the Banks; Agent and
its counsel and each of the Banks and their respective counsel shall
have received all information, and such counterpart originals or
such certified or other copies of such materials, as Agent or its
counsel and each of the Banks and their respective counsel may
reasonably request; and all other legal matters relating to the
transactions contemplated by this Agreement (including, without
limitation, matters arising from time to time as a result of changes
occurring with respect to any statutory, regulatory or decisional
law applicable hereto) shall be satisfactory to counsel to Agent and
counsel to each of the Banks.
6. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement:
(a) Corporate Authority. Each of the Company and the Subsidiaries is a
corporation, limited liability company or partnership duly organized and validly
existing in good standing under the laws of the applicable jurisdiction of
organization, charter or incorporation; each of the Company and the Subsidiaries
is duly qualified and authorized to do business as a corporation, limited
liability company or partnership (or comparable foreign entity) in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary, except where such failure to qualify and be
authorized to do business will not have a Material Adverse Effect.
(b) Due Authorization -- Company. Execution, delivery and performance of
this Agreement, the other Loan Documents, and any other documents and
instruments required under or in connection with this Agreement, and the
issuance of the Notes by and extensions of credit to the Company are within its
corporate powers, have been duly authorized, are not in contravention of law or
the terms of the Company's articles of incorporation or bylaws, and, except as
have been previously obtained or as referred to in Section 6.13, below, do not
require the consent or approval, material to the transactions contemplated by
this Agreement, or the Loan Documents, of any governmental body, agency or
authority.
(c) Title to Property. The Company and each of the Subsidiaries has good
and valid title to the property owned by it, which property (individually or in
the aggregate) is material to the business or operations of the Company and its
Subsidiaries, taken as a whole, excluding imperfections in title not material to
the ownership, use and/or enjoyment of any such property.
60
(d) Liens. There are no security interests in, Liens, mortgages or other
encumbrances on and no financing statements on file with respect to any property
of Company or any of the Subsidiaries, except for those Liens permitted under
Section 8.6 hereof.
(e) Subsidiaries. As of the date of this Agreement, there are no directly
or indirectly owned Subsidiaries of the Company, except for those Subsidiaries
identified in Schedule 6.5, attached hereto.
(f) Taxes. The Company and its Subsidiaries each has filed on or before
their respective due dates, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all taxes which have become due pursuant to those returns or pursuant
to any assessments received by any such party, as the case may be, to the extent
such taxes have become due, except to the extent (i) such tax payments are being
actively contested in good faith by appropriate proceedings and with respect to
which adequate provision has been made on the books of the Company or its
Subsidiaries, as applicable, as may be required by GAAP, or (ii) disclosed on
Schedule 6.6, attached hereto.
(g) No Defaults. (1) There exists no default under the provisions of any
instrument evidencing any permitted Debt of the Company or its Subsidiaries or
connected with any of the permitted Liens, or of any agreement relating thereto,
except where such default could not reasonably be expected to have a Material
Adverse Effect and would not violate this Agreement or any of the other Loan
Documents according to the terms thereof.
(1) The Company is in compliance with the Borrowing Base Limitation.
(h) Enforceability of Agreement and Loan Documents -- Company. This
Agreement, the Notes, each of the other Loan Documents to which the Company is a
party, and all other certificates, agreements and documents executed and
delivered by Company under or in connection herewith or therewith have each been
duly executed and delivered by duly authorized officers of the Company and
constitute the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditor's rights generally and by
general principles of equity (whether enforcement is sought in a proceeding in
equity or at law).
(i) Enforceability of Loan Documents - - Significant Domestic
Subsidiaries. The Domestic Guaranty, the Security Agreement and all other
certificates, agreements and documents executed and delivered by each
Significant Domestic Subsidiary under or in connection with this Agreement will,
upon execution and delivery thereof, have each been duly executed and delivered
by duly authorized officers of each such Significant Domestic Subsidiary and
constitute the valid and binding obligations of each such Significant Domestic
Subsidiary, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting the enforcement of creditor's
rights generally and by general principles of equity (whether enforcement is
sought in a proceeding in equity or at law).
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(j) Non-contravention -- Company. The execution, delivery and performance
of this Agreement and the other Loan Documents and any other documents and
instruments required under or in connection with this Agreement by the Company
are not in contravention of the terms of any indenture, material agreement or
material undertaking to which the Company is a party or by which it or its
properties are bound or affected, except to the extent such terms have been
waived or are not material to the transactions contemplated by this Agreement
and the other Loan Documents or to the financial performance of the Company and
its Subsidiaries, taken as a whole.
(k) Non-contravention -- Significant Domestic Subsidiaries. The execution,
delivery and performance of the Domestic Guaranty, the Security Agreement and
any other documents and instruments required under or in connection with this
Agreement by each Significant Domestic Subsidiary (upon execution and delivery
thereof) will not be in contravention of the terms of any indenture, material
agreement or material undertaking to which each such Significant Domestic
Subsidiary is a party or by which it or its properties are bound or affected,
except to the extent such terms have been waived or are not material to the
transactions contemplated by this Agreement and the other Loan Documents or to
the financial performance of the Company and its Subsidiaries, taken as a whole.
(l) No Litigation. Except as set forth in Schedule 6.12 annexed hereto, as
of the Effective Date, no litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of the officers of Company
is threatened against Company or any Subsidiary, the outcome of which could
reasonably be expected to have a Material Adverse Effect.
(m) Consents, Approvals and Filings, Etc. Except as have been previously
obtained no authorization, consent, approval, license, qualification or formal
exemption from, nor any filing, declaration or registration with, any court,
governmental agency or regulatory authority or any securities exchange or any
other person or party (whether or not governmental) is required in connection
with the execution, delivery and performance by the Company or any of the
Subsidiaries, of this Agreement, any of the other Loan Documents to which such
Person is a party or any other documents or instruments to be executed and/or
delivered by the Company or any Subsidiaries in connection therewith or
herewith. All such authorizations, consents, approvals, licenses,
qualifications, exemptions, filings, declarations and registrations which have
previously been obtained or made, as the case may be, are in full force and
effect and are not the subject of any attack, or to the knowledge of the
Company, threatened attack (in any material respect) by appeal or direct
proceeding or otherwise.
(n) Agreements Affecting Financial Condition. Neither the Company nor any
of the Subsidiaries is party to any agreement or instrument or subject to any
charter or other corporate restriction which materially adversely affects the
financial condition or operations of the Company and its Subsidiaries, taken as
a whole.
(o) No Investment Company; No Margin Stock. None of the Company nor any of
the Subsidiaries is engaged principally, or as one of its important activities,
directly or indirectly, in the business of extending credit for the purpose of
purchasing or carrying margin stock. None of the Letters of Credit and none of
the proceeds of any of the Advances will be used by the
62
Company or any of the Subsidiaries to purchase or carry margin stock or will be
made available by the Company or any of the Subsidiaries in any manner to any
other Person to enable or assist such Person in purchasing or carrying margin
stock. Terms for which meanings are provided in Regulation U of the Board of
Governors of the Federal Reserve System or any regulations substituted therefor,
as from time to time in effect, are used in this paragraph with such meanings.
None of the Company nor any of the Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(p) ERISA. Neither a Reportable Event which is material to the Company and
its Subsidiaries taken as a whole nor an accumulated funding deficiency (as
defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Pension Plan. Each
Pension Plan has complied and continues to comply in all material respects with
the applicable provisions of ERISA and the Internal Revenue Code and any
applicable regulations thereof (and, if applicable, any comparable foreign law
provisions), except to the extent that any noncompliance, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No termination of a Single Employer Plan has occurred, and no lien in favor of
the PBGC or a Pension Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan maintained by the
Company or any ERISA Affiliate did not, as of the last annual valuation date
prior to the date on which this representation is made or deemed made, exceed
the value of the assets of such Pension Plan allocable to such accrued benefits.
Neither the Company nor any ERISA Affiliate has had a complete or partial
withdrawal from any Multiemployer Plan within the five year period prior to the
date of this Agreement, nor does the Company or any ERISA Affiliate presently
intend to completely or partially withdraw from any Multiemployer Plan, and
neither the Company nor any ERISA Affiliate would become subject to fines,
penalties or any other liability under ERISA if the Company or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date of this Agreement. To the best of
Company's knowledge, no such Multiemployer Plan is in bankruptcy or
reorganization or insolvent. There is no pending or, to the best of Company's
knowledge, threatened litigation or investigation questioning the form or
operation of any Pension Plan, nor is there any basis for any such litigation or
investigation which if adversely determined could reasonably be expected to have
a Material Adverse Effect, as of the valuation date most closely preceding the
date of this Agreement.
(q) Compliance with Laws Except as disclosed on Schedule 6.17, (a) the
Company and each of its Subsidiaries has complied with all applicable federal,
state and local laws, ordinances, codes, rules and regulations (including
consent decrees and administrative orders) including but not limited to
Hazardous Material Laws, and is in compliance with any such requirement of law,
except to the extent that failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect; and (b) the extension of credit made
pursuant to this Agreement will not violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto, or The United and Strengthening
America by providing appropriate Tools Required to Intercept and Obstruct
Terrorism ("USA Patriot Act" and together with the other anti-terrorism measures
referenced to herein, each as amended from time to time, the "Anti-Terrorism
Laws") Act of 2001, Public Law
63
10756, October 26, 2001 or Executive Order 13224 of September 23, 2001 issued by
the President of the United States (66 Fed. Reg. 49049 (2001)).
(r) Accuracy of Information. Each of the Company's audited or unaudited
financial statements previously furnished to Agent and the Banks by the Company
prior to the date of this Agreement, is complete and correct in all material
respects and fairly presents the financial condition of the Company and its
Subsidiaries, taken as a whole, and the results of their operations for the
periods covered thereby; any projections of operations for future years
previously furnished by Company to Agent and the Banks have been prepared as the
Company's good faith estimate of such future operations, taking into account all
relevant facts and matters known to Company; since September 30, 2005 there has
been no material adverse change in the financial condition of the Company or its
Subsidiaries, taken as a whole, except changes in the ordinary course of
business; neither the Company, nor any of its Subsidiaries has any contingent
obligations (including any liability for taxes) not disclosed by or reserved
against in the September 30, 2005 balance sheet which could reasonably be
expected to have a Material Adverse Effect.
7. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it will
cause its Subsidiaries (but excluding, for purposes of Sections 7.3 through 7.8,
7.17 and 7.18 through 7.20 hereof, any Special Purpose Subsidiary) to, so long
as any of the Banks are committed to make any Advances under this Agreement and
thereafter so long as any Indebtedness remains outstanding under this Agreement:
(a) Preservation of Existence, Etc. Subject to the terms of this
Agreement, and except as otherwise contemplated by the New Restructuring: (i)
preserve and maintain its existence and such of its rights, licenses, and
privileges as are material to the business and operations conducted by it; (ii)
qualify and remain qualified to do business in each jurisdiction in which such
qualification is material to its business and operations or ownership of its
properties; (iii) continue to engage only in businesses as substantially now
conducted by the Company and its Subsidiaries and businesses reasonably related
thereto; (iv) at all times maintain, preserve and protect all of its franchises
and trade names and preserve all the remainder of its property and keep the same
in good repair, working order and condition; and (v) from time to time make, or
cause to be made, all necessary or appropriate repairs, replacements,
betterments and improvements thereto such that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times.
(b) Keeping of Books; Write Off Policy. Keep proper books of record and
account in which full and correct entries shall be made of all of its financial
transactions and its assets and businesses so as to permit the presentation of
financial statements prepared in accordance with GAAP and write off Dealer Loans
and Purchased Contracts in a manner consistent with the Company's write off
policy described in its periodic reports filed with the Securities and Exchange
Commission.
(c) Reporting Requirements. Furnish Agent with:
64
(1) as soon as possible, and in any event within three calendar days
after becoming aware of the occurrence of each Default or Event of
Default, a written statement of the chief financial officer or
treasurer of the Company (or in his absence, a responsible senior
officer) setting forth details of such Default or Event of Default
and the action which the Company has taken or has caused to be taken
or proposes to take or cause to be taken with respect thereto;
(2) as soon as available, and in any event within one hundred twenty
(120) days after and as of the end of each of Company's fiscal
years, (i) a detailed Consolidated audit report of Company certified
to by independent certified public accountants satisfactory to Banks
together with an unaudited Consolidating report of Company and its
Subsidiaries certified by an authorized officer of Company as to
consistency (with prior financial reports and accounting periods),
accuracy and fairness of presentation; and (ii) a Covenant
Compliance Report and (iii) a "static pool analysis" substantially
in the form delivered under the Prior Credit Agreement and in any
event satisfactory in form and substance to the Majority Banks,
which analyzes the performance of Installment Contracts of the
Company and its Subsidiaries securing Dealer Loan Pools or of
Purchased Contracts of the Company and its Subsidiaries derived from
their United States operations on a quarterly basis for the fourth
quarter of such fiscal year, in each case certified by an authorized
officer of the Company as to consistency with prior such analyses,
accuracy and fairness of presentation;
(3) as soon as available, and in any event within sixty (60) days after
and as of the end of each quarter, excluding the last quarter, of
each fiscal year, (i) a Consolidated and Consolidating balance
sheet, income statement and statement of cash flows of Company and
its Subsidiaries certified by an authorized officer of Company as to
consistency (with prior financial reports and accounting periods),
accuracy and fairness of presentation; (ii) a Covenant Compliance
Report and (iii) a "static pool analysis" substantially in the form
delivered under the Prior Credit Agreement and in any event
satisfactory in form and substance to the Majority Banks, which
analyzes the performance of Installment Contracts of the Company and
its Subsidiaries securing Dealer Loan Pools or of Purchased
Contracts of the Company and its Subsidiaries derived from their
United States operations on a quarterly basis for the applicable
quarter, in each case certified by an authorized officer of the
Company as to consistency with prior such analyses, accuracy and
fairness of presentation;
(4) as soon as available, and in any event within twenty (20) Business
Days after and as of the end of each quarter, including the last
quarter, of each fiscal year, a Borrowing Base Certificate as of the
end of such quarter, certified by an authorized officer of the
Company as to accuracy and fairness of presentation;
(5) as soon as possible, and in any event within three (3) Business Days
after becoming aware (i) of any change in the financial condition of
the Company, or any of its Subsidiaries which has a Material Adverse
Effect, a certificate of the chief financial officer or treasurer of
Company (or in his absence, a responsible
65
senior officer) setting forth the details of such change, or (ii) of
the taking by the Internal Revenue Service or any foreign taxing
jurisdiction of a tax position (verbal or written) which has or
could reasonably be expected to have a Material Adverse Effect (or
have a material adverse effect on any such tax position taken by the
Company or any of its Subsidiaries) setting forth the details of
such position and the financial impact thereof;
(6) as soon as available (and with copies for each of the Banks), the
Company's 8-K, 10-Q and 10-K Reports filed with the federal
Securities and Exchange Commission, and in any event, with respect
to the 10-Q Report, within sixty (60) days of the end of each of the
first three fiscal quarters of each of Company's fiscal years, and
with respect to the 10-K Report, within one hundred twenty (120)
days after and as of the end of each of Company's fiscal years; and
as soon as available, copies of all filings, reports or other
documents filed by the Company or any of its Subsidiaries with the
federal Securities and Exchange Commission or other federal
regulatory agency or authority in the United States, or comparable
agencies or authorities in foreign jurisdictions, or any stock
exchanges in such jurisdictions;
(7) promptly as issued (and with copies for each of the Banks), all
press releases, notices to shareholders and all other material
communications transmitted by the Company or any of its
Subsidiaries; and, concurrently with each incurrence thereof written
notice that new Future Debt has been incurred, accompanied by copies
of the material documents governing such Debt and a certification
that, both before and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing and the
Company is otherwise in compliance with this Agreement;
(8) from time to time at the request of Agent or any Bank, a copy of the
standard form of Company's Dealer Agreement then in effect for the
Company's operations in the United States of America, and each other
material jurisdiction, if any, identifying any material changes from
the form supplied to the Banks hereunder for the preceding year;
(9) not more than once during each fiscal year, promptly following the
written request of Agent, updated Consolidated financial projections
which shall reflect, among other things, any Future Debt or
Permitted Securitizations contemplated to be incurred or made for
the remaining portion of the then current fiscal year, and a
Consolidated balance sheet and a Consolidated statement of projected
income for each of the two succeeding fiscal years and including a
statement in reasonable detail specifying all material assumptions
underlying such projections;
(10) promptly upon the request of Agent or the Majority Banks (acting
through Agent) from time to time, a "static pool analysis" which
analyzes the performance of any Installment Contracts securing
Dealer Loan Pools or of Purchased Contracts of the Company and its
Subsidiaries transferred, encumbered, or otherwise disposed
66
of pursuant to a Permitted Securitization comparable to the static
pool analysis required to be delivered pursuant to subparagraph (c)
of this Section 7.3; and
(11) on an annual basis, a report as to the Company's Debt Rating, if
then maintained by the Company, provided that the Company shall also
promptly report any changes in such Debt Rating;
(12) promptly upon the formulation thereof, notice of any material
revisions to the Company's write off policy as in effect on the
Effective Date;
(13) promptly, and in form to be satisfactory to Agent and the requesting
Bank or Banks, Borrowing Base Certificates and such other
information as Agent or any of the Banks (acting through Agent) may
reasonably request from time to time.
(d) Maintain Asset Coverage Ratio. On a Consolidated basis, maintain at
all times, Consolidated Net Assets at a level greater than or equal to
Consolidated Funded Debt.
(e) Maintain Funded Debt Ratio Level. On a Consolidated basis, maintain as
of the end of each fiscal quarter a ratio of Consolidated Funded Debt (including
in the calculation thereof, for purposes of this Section 7.5, all Debt incurred
by a Special Purpose Subsidiary, whether or not included therein under GAAP) to
the Company's Consolidated Tangible Net Worth equal to or less than 3.0 to 1.0.
(f) Minimum Tangible Net Worth. On a Consolidated basis, maintain
Consolidated Tangible Net Worth of not less than Two Hundred Seventy Nine
Million Dollars ($279,000,000), PLUS the sum of (i) eighty percent (80%) of
Consolidated Net Income for each fiscal quarter of the Company (A) beginning on
or after October 1, 2005, (B) ending on or before the applicable date of
determination thereof, and (C) for which Consolidated Net Income as determined
above is a positive amount and (ii) the Equity Offering Adjustment, and MINUS
the lesser of (x) One Hundred Ninety-Nine Million Dollars ($199,000,000) and (y)
the aggregate amount of Permitted Repurchases and Permitted Dividends paid to
holders of the Company's capital stock on or after October 1, 2005 to the
applicable date of determination on a cumulative basis.
(g) Maintain Fixed Charge Coverage Ratio. On a Consolidated basis,
maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of
not less than 2.75 to 1.0, unless the remaining maturity of the Revolving Credit
shall be less than 366 days, in which case such ratio shall be maintained at not
less than 3.50 to 1.00.
(h) Inspections. Permit Agent and each Bank, through their authorized
attorneys, accountants and representatives to examine (and make copies of)
Company's and each of the Subsidiaries' books, accounts, records, ledgers and
assets and properties (including without limitation, any Collateral) of every
kind and description including, without limitation, all promissory notes,
security agreements, customer applications, vehicle title certificates, chattel
paper, Uniform Commercial Code filings, wherever located at all reasonable times
during normal business hours, upon oral or written request of Agent or such
Bank; and permit Agent and each Bank or their authorized representatives, at
reasonable times and intervals, to visit all of its offices, discuss its
financial matters with its officers and independent certified public
accountants, and by this provision Company authorizes such accountants to
discuss the finances
67
and affairs of Company and its Subsidiaries (provided that Company is given an
opportunity to participate in such discussions) and examine any of its or their
books and other corporate records. An examination of the records or properties
of Company or any of its Subsidiaries may require revealment of proprietary
and/or confidential data and information, and the Agent and each of the Banks
agrees upon request of the inspected party to execute a confidentiality
agreement (satisfactory to Agent or the inspecting Bank, as the case may be, and
such party) on behalf of the Agent or such inspecting Bank and all parties
making such inspections or examinations under its authorization; provided
however that such confidentiality agreement shall not prohibit Agent from
revealing such information to Banks or prohibit the inspecting Bank from
revealing such information to Agent or another Bank. Notwithstanding the
foregoing, all information furnished to the Banks hereunder shall be subject to
the undertaking of the Banks set forth in Section 13.13 hereof.
(i) Taxes. Pay and discharge all taxes and other governmental charges, and
all material contractual obligations calling for the payment of money, before
the same shall become overdue, unless and to the extent only that such payment
is being contested in good faith by appropriate proceedings and is reserved for,
as required by GAAP on its balance sheet, or where the failure to pay any such
matter could not reasonably be expected to have a Material Adverse Effect.
(j) Further Assurances. Execute and deliver or cause to be executed and
delivered to Agent within a reasonable time following Agent's request, and at
the Company's expense, such other documents or instruments as Agent may
reasonably require to effectuate more fully the purposes of this Agreement or
the other Loan Documents, including without limitation any Collateral Documents
required under Section 7.20 hereof.
(k) Insurance. Maintain, with financially sound and reputable insurers,
insurance with respect to its material property and business against such
casualties and contingencies, of such types (including, without limitation,
insurance with respect to losses arising out of such property loss or damage,
public liability, business interruption, larceny, workers' compensation,
embezzlement or other criminal misappropriation) and in such amounts as is
customary in the case of corporations of established reputations engaged in the
same or similar business and similarly situated (and including such lender loss
payee clauses and/or endorsements as Agent or the Majority Banks may request
following the delivery of the Collateral Documents under Section 7.20 hereof),
provided that such insurance is commercially available, it being understood that
the Company and its Subsidiaries may self-insure against hazards and risks with
respect to which, and in such amounts as, the Company in good faith determines
to be prudent and consistent with sound financial and business practice.
(l) Indemnification. With respect to the Company, indemnify and save Agent
and each of the Banks harmless from all reasonable loss, cost, damage, liability
or expenses, including reasonable attorneys' fees and disbursements, incurred by
Agent and each of the Banks by reason of an Event of Default or enforcing the
obligations of the Company under this Agreement or the other Loan Documents, or
in the prosecution or defense of any action or proceeding concerning any matter
growing out of or connected with this Agreement or any of the other Loan
Documents other than resulting from the gross negligence or willful misconduct
of Agent or such Bank or Banks, as the case may be.
68
(m) Governmental and Other Approvals. Apply for, obtain and/or maintain in
effect, as applicable, all material authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance of this Agreement, the other Loan Documents, or any
other documents or instruments to be executed and/or delivered by the Company or
Guarantors, as the case may be, in connection therewith or herewith.
(n) Compliance with Contractual Obligations and Laws.
(1) Comply in all material respects with all Contractual Obligations,
and with all applicable laws, rules, regulations and orders of any
governmental authority, whether federal, state, local or foreign
(including, without limitation, Hazardous Materials Laws,
Anti-Terrorism Laws and any consumer protection, truth in lending,
disclosure and other similar laws and regulations governing the
provision of financing to consumers), in effect from time to time,
except to the extent that failure to comply therewith could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(2) Comply in all material respects with all applicable federal, state
and/or foreign laws and regulations in effect from time to time
governing the due and proper creation of installment sales contracts
or similar indebtedness or obligations and of the creation,
perfection and/or protection, as applicable, of first priority
security interests or lessor's interests in motor vehicles being
financed and/or sold and/or leased pursuant thereto, as applicable.
(o) ERISA. Comply in all material respects with all requirements imposed
by ERISA as presently in effect or hereafter promulgated or the Internal Revenue
Code (or comparable laws in applicable jurisdictions outside the United States
of America relating to foreign Pension Plans) and promptly notify Banks upon the
occurrence of any of the following events:
(1) the termination of any Pension Plan pursuant to Subtitle C of Title
IV of ERISA or otherwise (other than any defined contribution plan
not subject to Section 412 of the Internal Revenue Code and any
Multiemployer Plan);
(2) the appointment of a trustee by a United States District Court to
administer any Pension Plan pursuant to ERISA;
(3) the commencement by the PBGC, or any successor thereto, of any
proceeding to terminate any Pension Plan;
(4) the failure of the Company or any ERISA Affiliate to make any
payment in respect of any Pension Plan required under Section 412 of
the Internal Revenue Code;
(5) the withdrawal of the Company or any ERISA Affiliate from any
Multiemployer Plan;
69
(6) the occurrence of an accumulated funding deficiency (as defined in
Section 6.16 hereof) or a Reportable Event; or
(7) the occurrence of a Prohibited Transaction which could reasonably be
expected to have a Material Adverse Effect.
(p) Environmental Matters.
(1) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions necessary to
clean up and remove all Hazardous Materials on or affecting any
premises owned or occupied by Company or any of its Subsidiaries,
whether resulting from conduct of Company or any of its Subsidiaries
or any other Person, if required by Hazardous Material Laws, all
such actions to be taken in accordance with such laws, and the
orders and directives of all applicable federal, state and local
governmental authorities; and
(2) Defend, indemnify and hold harmless Agent and each of the Banks, and
their respective employees, agents, officers and directors from and
against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses of whatever kind or nature
arising out of or related to (i) the presence, disposal, release or
threatened release of any Hazardous Materials on, from or affecting
any premises owned or occupied by Company or any of its
Subsidiaries, (ii) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such
Hazardous Materials, (iii) any lawsuit or other proceeding brought
or threatened, settlement reached or governmental order or decree
relating to such Hazardous Materials, (iv) the cost of removal of
all Hazardous Materials from all or any portion of any premises
owned by Company or its Subsidiaries, (v) the taking of necessary
precautions to protect against the release of Hazardous Materials on
or affecting any premises owned by Company or any of its
Subsidiaries, (vi) complying with all Hazardous Material Laws and/or
(vii) any violation by Company or any of its Subsidiaries of
Hazardous Material Laws, including without limitation, reasonable
attorneys and consultants fees, investigation and laboratory fees,
environmental studies required by Agent or any Bank (whether before
or after the occurrence of any Default or Event of Default), court
costs and litigation expenses; and, if so requested by Agent or any
Bank, Company shall execute separate indemnities covering the
foregoing matters. The obligations of Company under this Section
7.16 shall be in addition to any and all other obligations and
liabilities the Company may have to Agent or any of the Banks at
common law or pursuant to any other agreement.
(q) Installment Contract Standards. (1) Cause each Installment Contract
securing Dealer Loans or Dealer Loan Pools included in Dealer Loans Receivable
or encumbered by the Collateral Documents to satisfy the following requirements:
A. Such Installment Contract (and the interest of Company or its Subsidiaries
thereunder) has not been sold, transferred or otherwise assigned or
encumbered by the Company or
70
its Subsidiaries to any Person, other than to the Lenders pursuant to the
Collateral Documents;
B. The Installment Contract obligor thereunder is not an Affiliate of the
Company; and
C. Such Installment Contract is owned by Company or a Subsidiary, or Company
or a Subsidiary has a valid first priority perfected security interest
therein (provided that the failure of up to $2,500,000 in aggregate amount
of such financial assets, valued according to GAAP, to satisfy the
requirements of this clause (iii) shall not constitute a violation of this
Section 7.17); and
(2) Exercise its best efforts to enforce the provisions of its Dealer
Agreements relating to the eligibility criteria for Purchased
Contracts or Installment Contracts relating to Dealer Loans, as
applicable, including without limitation:
A. it has not been rescinded and it is a valid, binding and enforceable
obligation of the applicable Installment Contract obligor;
B. it is enforceable against the applicable Installment Contract obligor for
the amount shown as owing in the contract and in any related records;
C. it complied at the time it was originated or made, and is currently in
compliance in all respects, with all requirements of applicable federal,
state and local laws, and regulations thereunder, including, usury laws,
the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, Federal Reserve Board Regulations B, M and Z,
state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code and any other consumer credit or equal opportunity disclosure;
D. it is not subject to any material offset, credit, allowance or adjustment;
E. the Company or a Subsidiary has a first and prior perfected security
interest or ownership interest (received directly or by assignment) in the
financed vehicle securing the performance of the applicable Installment
Contract obligor;
F. the financed vehicle has been delivered to the applicable Installment
Contract obligor and, on the date of delivery, satisfied all warranties,
expressed or implied, made to such Installment Contract obligor; and
G. the applicable Installment Contract obligor owns the motor vehicle free of
all liens or encumbrances, except the security interest granted to Company
or a Subsidiary or the lessor's interest held by Company or a Subsidiary
(received in each case directly or by assignment) in the applicable
Installment Contract.
(r) Financial Covenant Amendments. In the event that, at any time while
this Agreement is in effect, the Company shall issue any indebtedness for
borrowed money which is not by its terms subordinate and junior to the
Indebtedness hereunder and such indebtedness shall
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include, or be issued pursuant to a trust indenture or other agreement which
includes, financial covenants which are not substantially identical to the
financial covenants set forth in this Agreement, the Company shall so advise the
Agent in writing. Such notice shall be accompanied by a copy of the applicable
agreement containing such financial covenants. The Agent shall promptly furnish
a copy of such notice and the applicable agreement to each of the Banks. If the
Majority Banks determine in their sole discretion that some or all of the
financial covenants set forth in such agreement are more favorable to the lender
thereunder than the financial covenants set forth in this Agreement ("More
Favorable Terms") and that the Majority Banks desire that this Agreement be
amended to incorporate the More Favorable Terms, then the Agent shall give
written notice of such determination to the Company. Thereupon, and in any event
within thirty (30) days following the date of notice by Agent to the Company,
Company and the Banks shall enter into an amendment to this Agreement
incorporating, on terms and conditions acceptable to the Majority Banks, the
More Favorable Terms.
(s) Subsidiaries; Guaranties. With respect to each Person which becomes a
Significant Domestic Subsidiary of the Company subsequent to the Effective Date
hereof, within thirty (30) days of the date of Company's delivery of the
financial statements required under Section 7.3(b) or 7.3(c) which establish
that such Person is or has become a Significant Domestic Subsidiary, cause such
Subsidiary to execute and deliver to Agent, for and on behalf of each of the
Banks, a Joinder Agreement whereby such Significant Domestic Subsidiary becomes
obligated as a Guarantor under the Domestic Guaranty, together with such
supporting documentation, including without limitation corporate authority
items, certificates and opinions of counsel, as reasonably required by Agent,
acting in its capacity as Collateral Agent, as aforesaid.
(t) Subsidiaries; Security Documents. (1) With respect to each existing
Subsidiary which becomes a Significant Domestic Subsidiary of the Company
subsequent to the Effective Date hereof, within thirty (30) days of the date of
the Company's delivery of the financial statements required under Section 7.3(b)
or 7.3(c) which establish that such Person is or has become a Significant
Domestic Subsidiary, and in the case of any newly acquired or created
Significant Domestic Subsidiary, promptly following acquisition or creation, (i)
grant (or cause to be granted) a security interest and lien to the Agent, acting
in its capacity as Collateral Agent under the Intercreditor Agreement, in the
Collateral owned by such Significant Domestic Subsidiary substantially on the
terms provided in the Security Agreement and (ii) pledge (or cause to be
pledged) to the Agent, acting in its capacity as Collateral Agent under the
Intercreditor Agreement, all of the outstanding capital Stock of such
Significant Domestic Subsidiary which is owned by the Company or its
Subsidiaries substantially on the terms provided in the Security Agreement, in
each case, as security for the Indebtedness; and
(1) within thirty days following Agent's request (given at the direction
or with the concurrence of the Majority Banks) in the event of a
material change in any Dealer Agreement (or any related document)
which, in the reasonable discretion of Agent and the Majority Banks
(supported by an opinion of counsel) adversely affects any
Collateral Document or which necessitates a change in any Collateral
Document in order to provide Agent and the Banks with the full
benefit thereof (and to extend such Collateral Documents to any
additional property rights or interests resulting from any such
change in a Dealer Agreement), enter into such
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amendments to the Collateral Documents so affected, on terms and
conditions as reasonably required by the Agent, acting in its
capacity as Collateral Agent, as aforesaid, or as Agent hereunder;
together in each case with such supporting documentation, including without
limitation corporate authority items, certificates and opinions of counsel, as
reasonably required by the Agent, acting in its capacity as Collateral Agent as
aforesaid.
8. NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Banks are
committed to make any Advances under this Agreement and thereafter so long as
any Indebtedness remains outstanding, it will not, and it will not allow its
Subsidiaries (but excluding, for purposes of Sections 8.10, 8.13, 8.14 and 8.15
hereof, any Special Purpose Subsidiary), without the prior written consent of
the Majority Banks, to:
(a) Redemptions. Purchase, acquire or redeem any of its capital stock,
except for a Permitted Repurchase.
(b) Business Purposes. Engage in, or make any investment in any business
engaged in, the provision of property and casualty insurance unless the Company
or such Subsidiary shall maintain reinsurance of its underwriting risk with a
third party(ies) rated "A-" or better by S&P or "A3" or better by Xxxxx'x for
all of the Company's or such Subsidiary's exposure in excess of one hundred
percent (100%) of the premiums written by the Company or such Subsidiary; or
engage in any business if, after giving effect thereto, the general nature of
the businesses of the Company and its Subsidiaries, taken as a whole, would no
longer be the provision of financing programs for the purchase of used motor
vehicles, motor vehicle service protection programs, credit life, accident and
health insurance programs, guaranteed asset protection program and other
programs related to the foregoing (it being understood that, in the course of
the provision of such programs, the Company may be obligated to remit monies to
Dealers under Dealer Agreements (including, without limitation, with respect to
Installment Contracts, claims or refunds under insurance policies, or claims or
refunds under service contracts, and to make deposits in trust or otherwise as
required under reinsurance agreements or pursuant to state regulatory
requirements); provided however that the Company and its Subsidiaries shall
manage and operate such businesses in substantially the same manner that they
are managed and operated as of the date hereof.
(c) Mergers or Dispositions. Enter into any merger or consolidation,
except for any Permitted Merger or Permitted Transfer under clause (iv) of the
definition thereof, or sell, lease, transfer, relocate or dispose of all,
substantially all, or any material part of its assets, except for Permitted
Transfers and Permitted Securitization(s) and other transfers made pursuant to
the New Restructuring, provided that, both before and after giving effect
thereto, no Default or Event of Default has occurred and is continuing.
(d) Guaranties. Become or remain obligated under or in respect of a
Guarantee Obligation, except by endorsement of cash items for deposit in the
ordinary course of business and except for the Guaranties and the Permitted
Guaranties.
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(e) Debt. Become or remain obligated for any indebtedness for borrowed
money, or for any indebtedness incurred in connection with the acquisition of
any property, real or personal, tangible or intangible, or for any other Debt,
except for:
(1) Indebtedness to Banks hereunder;
(2) current unsecured trade, utility or non-extraordinary accounts
payable arising in the ordinary course of Company's or any
Subsidiary's businesses;
(3) the Future Debt;
(4) Subordinated Debt, provided, however, that on the date any such Debt
is incurred, clauses (a) and (c) of the Funding Conditions shall
have been satisfied;
(5) Debt secured by Liens permitted under Section 8.6(b), not to exceed
an aggregate amount of Ten Million Dollars ($10,000,000) at any time
outstanding;
(6) such other Debt set forth in Schedule 8.5A and Schedule 8.5B
attached hereto, if any (in addition to any other matters set forth
in this Section 8.5), and any renewals or refinancing of such
indebtedness in amounts not exceeding the scheduled amounts (less,
in the case of the Debt set forth in Schedule 8.5A, any required
amortization according to the terms thereof) on substantially the
same terms and otherwise in compliance with this Agreement;
(7) (i) Intercompany Loans by the Company to any Domestic Subsidiary or
by any Domestic Subsidiary to the Company or another Domestic
Subsidiary (excluding any Special Purpose Subsidiary and any other
Subsidiary excluded from the definition of Significant Subsidiary by
the proviso at the end of such definition) made while no Default or
Event of Default has occurred and is continuing (both before and
after giving effect thereto), provided, however, that any such
Intercompany Loan shall be evidenced by and funded under an
Intercompany Note which shall be pledged (pursuant to the Security
Agreement) to the Agent, in its capacity as Collateral Agent under
the Intercreditor Agreement, as security for the Indebtedness, (ii)
Intercompany Loans by the Company or any Domestic Subsidiary to a
Foreign Subsidiary existing immediately prior to the Effective Date
and disclosed on Schedule 8.8 hereto and evidenced by an
Intercompany Note pledged (pursuant to the Security Agreement) to
the Agent, in its capacity as Collateral Agent under the
Intercreditor Agreement, as security for the Indebtedness, and (iii)
Intercompany Loans (on a subordinated basis in relation to the
Indebtedness on substantially the basis set forth in the form of
Intercompany Note, attached hereto) by any Foreign Subsidiary to the
Company, another Foreign Subsidiary or a Domestic Subsidiary
excluding any Special Purpose Subsidiary and any other Subsidiary
excluded from the definition of Significant Subsidiary by the
proviso at the end of such definition;
(8) Debt incurred by a Special Purpose Subsidiary under, and secured by
assets transferred pursuant to, a Permitted Securitization, whether
or not attributable to the Company under GAAP;
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(9) Debt arising under Hedging Agreements entered into by the Company
(copies of which shall be provided to the Agent promptly following
the execution thereof) and Permitted Guaranties; and
(10) other Debt for borrowed money in an amount not to exceed in the
aggregate for the Company and its Subsidiaries at any time
outstanding, the sum of Five Million Dollars ($5,000,000), which
Debt shall be unsecured except to the extent of any Lien permitted
under Section 8.6(d) hereof.
(f) Liens. Permit or suffer any Lien to exist on any of its properties,
real, personal or mixed, tangible or intangible, whether now owned or hereafter
acquired, except:
(1) in favor of Agent, as security for the Indebtedness and any Liens
granted to the holders, to the extent applicable (and subject to the
terms of this Agreement), Future Debt pursuant to Collateral
Documents, on an equal and ratable basis with comparable Liens
granted to Agent, for and on behalf of the Banks;
(2) purchase money mortgages or security interests in fixed assets to
secure purchase money Debt for fixed assets (including refinancing
of such mortgages or security interests and Capitalized Leases or
other non-cancelable leases having a term of twelve months or
longer) not to exceed an aggregate amount, for the Company and its
Subsidiaries, incurred while in compliance with this Agreement and
the other Loan Documents, of Ten Million Dollars ($10,000,000) at
any one time outstanding, provided that each such security interest
is created substantially contemporaneously with the acquisition of
such fixed assets and does not extend to any property other than the
fixed asset so financed, and any renewal or refinancing (subject to
the foregoing) of such Debt;
(3) Permitted Liens and any Lien encumbering property interests, rights
or proceeds which are the subject of a transfer or encumbrance
pursuant to a Permitted Securitization; and
(4) Liens on the property of Company or any of its Subsidiaries other
than Dealer Loans, Dealer Loan Pools, Installment Contracts, leases
or other financial assets or other property related thereto, not
otherwise permitted under subparagraphs (a) through (c) of this
Section 8.6 if the obligations secured by such Liens do not exceed,
in an aggregate amount from time to time outstanding, Two Million
Five Hundred Thousand Dollars ($2,500,000).
(g) Acquisitions. Other than (i) any Permitted Acquisition, (ii) any
transfer to the Company or any Subsidiary of any assets or business or ownership
interests by Company or any Subsidiary otherwise permitted by this Agreement or
(iii) any acquisition of any rights or property pursuant to a Permitted
Securitization or pursuant to the New Restructuring, purchase or otherwise
acquire or become obligated for the purchase of all or substantially all of the
assets or business interests of any Person, firm or corporation, or any shares
of stock (or other ownership interests) of any corporation, trusteeship or
association, or any business or going concern, or in
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any other manner effectuate or attempt to effectuate an expansion of present
business by acquisition.
(h) Investments. Make or allow to remain outstanding any Investment in, or
any loans or advances to, any Person, firm, corporation or other entity or
association, other than:
(1) any loan or other advance by Company or a Subsidiary, as the case
may be, to any and all of its officers or employees, as the case may
be, in the normal course of business, so long as the aggregate of
all such loans or advances by the Company and its Subsidiaries does
not exceed Three Million Dollars ($3,000,000) at any time
outstanding, plus reasonable, reimbursable business and travel
expenses;
(2) Permitted Investments at any time outstanding or in effect;
(3) Investments existing as of the date of this Agreement in Company's
Domestic Subsidiaries;
(4) (i) Intercompany Loans, Advances and Investments made pursuant to
the New Restructuring or the restructuring of the ownership of the
Company's Subsidiaries (but without the transfer of any cash or
other property other than to the extent necessary, upon formation,
to meet minimum capitalization requirements, if any, under
applicable law), (ii) Intercompany Loans, Advances and Investments
by the Company or any Domestic Subsidiary (excluding any Special
Purpose Subsidiary and any other Subsidiary excluded from the
definition of Significant Subsidiary by the proviso at the end of
such definition) to or in any other such Domestic Subsidiary, or any
Person that concurrently with such Investment becomes such a
Domestic Subsidiary, made while no Default or Event of Default has
occurred and is continuing, (iii) Intercompany Loans permitted under
Section 8.5(g) and (iv) Intercompany Loans, Advances and Investments
existing immediately prior to the Effective Date to or in any
Foreign Subsidiaries;
(5) Floor Plan Receivables and Notes Receivable in the ordinary course
of business;
(6) Dealer Loans, Dealer Loan Pools and Purchased Contracts;
(7) receivables arising from used vehicle leases in existence on the
date hereof and the sale of goods and services by the Company or its
Subsidiaries, in each case in the ordinary course of business of
Company and its Subsidiaries;
(8) Permitted Acquisition(s) and Permitted Merger(s), to the extent any
such acquisition or merger shall be deemed to constitute an
Investment;
(9) Those Investments set forth on the attached Schedule 8.8;
(10) Investments in any Subsidiary (including, without limitation, any
Special Purpose Subsidiary) from and after the date hereof,
consisting of (w) dispositions made pursuant to a Permitted
Securitization and the resultant Debt issued by a Special Purpose
Subsidiary to another Subsidiary as part of a Permitted
Securitization, in
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each case to the extent constituting Investments hereunder; (x)
advances by Company (as servicer or administrative agent) which are
permitted under the definition of Permitted Guaranties; (y) the
repurchase or replacement from and after the Effective Date hereof
of an aggregate amount (based on the net book value thereof) not to
exceed $5,000,000 in Dealer Loan Pools or Purchased Contracts or
related pools thereof subsequently determined not to satisfy the
eligibility standards contained in the applicable Securitization
Documents relating to a Permitted Securitization or otherwise
required to be repurchased by the applicable Securitization
Documents entered into in compliance with the terms of this
Agreement, so long as (i) such replacement is accompanied by the
repurchase of or release of encumbrances on such financial assets
previously transferred or encumbered pursuant to such securitization
and in the amount thereof, (ii) any replacement Dealer Loan Pools or
Purchased Contracts which are selected by Company according to the
requirements set forth in clause (a) of the definition of Permitted
Securitization and (iii) such replacements are made at a time when
(both before and after giving effect thereto) no Default or Event of
Default has occurred and is continuing; (z) amounts required to fund
any Cleanup Call under the terms of such Permitted Securitization,
and (zz) the disposition to the Company or any Subsidiary (other
than a Special Purpose Subsidiary) of the capital stock of any
Special Purpose Subsidiary;
(11) Investments in foreign currencies outstanding for no more than
fourteen (14) days that are necessary to fulfill foreign exchange
contracts entered into by the Company or any of its Subsidiaries for
hedging purposes and other hedging transactions under Hedging
Agreements; and
(12) Investments, other than those set forth in subparagraphs (a) through
(k) above, in an aggregate amount at any time outstanding not to
exceed Five Million Dollars ($5,000,000).
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.8 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
(i) Accounts Receivable and Other Financial Assets. Except (i) to Agent,
in its capacity as Agent for and on behalf of the Banks or in its capacity as
Collateral Agent under the Intercreditor Agreement or (ii) pursuant to a
Permitted Transfer or (iii) in connection with a Permitted Securitization or
(iv) pursuant to the New Restructuring, sell or transfer, any account, note,
trade acceptance receivable, lease or other financial asset, unless such sale,
transfer, assignment or reallocation has been made in the ordinary course of
business or, if not in the ordinary course of business, the sum of (x) the net
book value of the accounts, notes or trade acceptance receivables, leases or
other financial assets proposed to be transferred, plus (y) the net book value
of the accounts, notes or trade acceptance receivables, leases or other
financial assets transferred by the Company and its Subsidiaries, excluding the
net book value of accounts, notes or trade acceptance receivables, leases and
other financial assets transferred pursuant to clauses (i), (ii), and (iii)
above, since June 30th of the preceding calendar year, does not exceed Fifteen
77
Million Dollars ($15,000,000); provided, however, that in the case of all sales,
transfers, assignments or reallocations permitted under this Section 8.9, no
Default or Event of Default shall have occurred and be continuing (both before
and after giving effect thereto) and both before and after giving effect to such
disposition (and taking into account any reduction in the Indebtedness with the
proceeds of such disposition as required hereunder), the Company shall be in
compliance with the Borrowing Base Limitation, as confirmed by a Borrowing Base
Certificate (and any supporting information reasonably required by the Agent)
submitted by the Company not less than five (5) Business Days prior to the date
of such disposition, and dated as of the proposed date of such disposition, and
by an updated Borrowing Base Certificate (to be provided within 10 Business Days
of the date of such disposition).
(j) Transactions with Affiliates. Enter into any transaction with any of
its stockholders or officers or its Affiliates (including without limitation
affiliated Dealers), except in the ordinary course of business and on terms not
materially less favorable than would be usual and customary in similar
transactions between Persons dealing at arm's length.
(k) No Further Negative Pledges. Enter into or become subject to any
agreement (i) prohibiting the guaranteeing by the Company or any Subsidiary of
any obligations, (ii) prohibiting the creation or assumption of any lien or
encumbrance upon the properties or assets of the Company or any Subsidiary,
whether now owned or hereafter acquired, or (iii) requiring an obligation to
become secured (or further secured) if another obligation is secured or further
secured, other than (A) loan documents evidencing or otherwise related to the
Future Debt or unsecured overdraft lines of credit or similar credit
arrangements maintained by the Subsidiaries in the ordinary course of business
(but limited to the applicable Subsidiary or the property and assets of the
applicable Subsidiary), or any purchase money Debt permitted under this
Agreement or the other Loan Documents, but only to the extent of the property
acquired with the proceeds of such purchase money Debt, and (B) other than
pursuant to any of the Securitization Documents, but as to any prohibition on
the creation or assumption of any lien or encumbrance, only to the extent of the
financial assets and the other rights and property transferred or encumbered or
otherwise disposed of in connection with the Permitted Securitization covered by
such Securitization Documents.
(l) Prepayment of Debts. Except for Permitted Prepayments and for
prepayments of Intercompany Loans made pursuant to the New Restructuring or in
accordance with the form of Intercompany Note, attached hereto, prepay,
purchase, redeem or defease any Debt for money borrowed, excluding, subject to
the terms hereof, the Indebtedness, and excluding (i) paydowns from time to time
of permitted working capital facilities or other revolving debt, (ii) mandatory
payments, prepayments or redemptions of Future Debt and (iii) with respect only
to Permitted Securitizations, any payment pursuant to a Cleanup Call.
(m) Amendment of Future Debt Documents. Except with the prior written
approval of Agent and the Majority Banks, amend, modify or otherwise alter (or
suffer to be amended, modified or altered) or waive (or permit to be waived) in
any material respect, any documents or instruments evidencing or otherwise
related to Future Debt so as to shorten the original maturity date or
amortization schedule thereof, or amend, modify or otherwise alter (or suffer to
be amended, modified or altered) any documents or instruments evidencing or
otherwise related to Future Debt to include (or enter into any Future Debt
Documents which include) any covenants
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or other provisions that require, for the amendment of any term or provision of
this Agreement, or the waiver of any term or provision hereof, the approval or
consent of any other creditor of the Company; provided, however, that, solely
for purposes of this Section 8.13, any Bank which fails, within fifteen (15)
Business Days of receipt of a written notice from Company of its intent to make
such amendment, modification or alteration (or waiver) in respect of the Future
Debt, (accompanied by a summary, in reasonable detail, of the proposed terms and
conditions thereof, captioned "notice of intent to amend Future Debt" and
stating that approval is deemed to be given if an objection is not made within
fifteen (15) Business Days of receipt of such notice), to object in writing to
such action shall be deemed to have given its approval of such amendment,
modification, alteration or waiver.
(n) Amendment of Subordinated Debt Documents. Amend, modify or otherwise
alter (or suffer to be amended, modified or altered) any of the material terms
and conditions of those documents or instruments evidencing or otherwise related
to Subordinated Debt (once approved by the requisite Banks) or waive (or permit
to be waived) any such provision thereof in any material respect, without the
prior written approval of Agent and the Majority Banks. For purposes of those
documents and instruments evidencing or otherwise related to the Subordinated
Debt, any increase in the original interest rate or principal amount, any
shortening of the original amortization, any change in any default, remedial or
other repayment terms, any change in or waiver of conditions contained therein
which are required under or necessary for compliance with this Agreement or the
other Loan Documents or any change in the subordination provisions contained
therein, shall (without reducing the scope of this Section 8.14) be deemed to be
material.
(o) Limitation on Dividends. Except to the extent that any such dividend
or distribution (i) is payable to the Company or any of its Subsidiaries or (ii)
is payable solely in capital stock or other equity interests of the Company or
any such Subsidiary (other than any Special Purpose Subsidiary), declare, make
or otherwise set apart, directly or indirectly, any funds or other property for,
or incur any liability to make any dividend or other distribution, direct or
indirect and whether payable in cash or property, on account of any capital
stock or other equity interest of the Company or any of its Subsidiaries,
unless, at the time of such dividend or distribution (and giving effect thereto)
no Default or Event of Default has occurred and is continuing.
(p) Securitization Transaction; Amendments to Securitization Documents.
Engage in a Securitization Transaction, other than a Permitted Securitization
and, except in connection with a Permitted Securitization, assign and transfer
any financial assets to a Securitized Pool, and once executed and delivered
pursuant to a Permitted Securitization, amend, modify or otherwise alter any of
the material terms and conditions of any Securitization Documents or waive (or
permit to be waived) any such provision thereof in any material respect, adverse
to the Company or any Subsidiary, without the prior written approval of Agent
and the Majority Banks. For purposes of the Securitization Documents, the
"material terms and conditions" thereof shall be deemed solely those terms or
conditions with respect to servicer fees, servicer expenses, defaults, events of
default, recourse to the Company or any Subsidiary (other than a Special Purpose
Subsidiary), Cleanup Calls or conditions contained therein which are required
under or necessary for compliance with this Agreement.
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9. DEFAULTS
(a) Events of Default. Any of the following events is an "Event of
Default":
(1) non-payment of the principal or interest, when due, under any of the
Notes issued hereunder, or of any Letter of Credit Obligation in
accordance with the terms thereof;
(2) Default in the payment of any money by Company under this Agreement
(other than as set forth in subsection (a), above), within three (3)
days of the date the same is due and payable;
(3) default in the observance or performance of any of the other
conditions, covenants or agreements set forth in this Agreement or
any of the other Loan Documents by any party thereto (provided that,
with respect to the covenants set forth in Sections 7.9, 7.11, 7.14,
7.15 and 7.16(a) hereof, such event has continued for thirty (30)
consecutive days) or the occurrence of any other default or event of
default, as the case may be, hereunder or thereunder;
(4) any representation or warranty made or deemed made by Company herein
or in any instrument submitted pursuant hereto or by any other party
to the Loan Documents proves untrue in any material adverse respect
when made or deemed made;
(5) any provision of the Domestic Guaranty or any of the Collateral
Documents shall at any time for any reason (other than in accordance
with its terms or the terms of this Agreement) cease to be valid and
binding and enforceable against the Company, or any Significant
Subsidiary which is a party thereto, as applicable, or the validity,
binding effect or enforceability thereof shall be contested by any
Person, or the Company, or any Significant Subsidiary which is a
party thereto shall deny that it has any or further liability or
obligation under the Domestic Guaranty or any of the Collateral
Documents, as applicable, or the Domestic Guaranty or any of the
Collateral Documents shall be terminated, invalidated, revoked or
set aside or in any way cease to give or provide to the Banks and
the Agent the benefits purported to be created thereby;
(6) default in the payment of any other obligation of Company or any of
its Subsidiaries for borrowed money in an aggregate amount in excess
of Five Million Dollars ($5,000,000); or default in the observance
or performance of any conditions, covenants or agreements related or
given with respect to any other obligations for borrowed money in an
aggregate amount in excess of Five Million Dollars ($5,000,000),
sufficient to permit the holder thereof to accelerate the maturity
of such obligation or, with respect to the Securitization Documents,
(i) the occurrence (beyond any applicable period of grace or cure)
of any "servicer event of default" thereunder or (ii) the occurrence
of any other default (beyond any applicable period of grace or cure)
by Company or any of its Subsidiaries, including any Special Purpose
Subsidiary, under the Securitization Documents,
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which can be reasonably expected to result in recourse liability
against the Company or any of its Subsidiaries (other than a Special
Purpose Subsidiary) in an aggregate amount exceeding $5,000,000;
(7) a final judgment or final judgments for the payment of money
aggregating in excess of Five Million Dollars ($5,000,000), shall be
outstanding against any one or more of the Company and its
Subsidiaries and any one of such judgments shall have been
outstanding for more than thirty (30) days from the date of its
entry, except to the extent that any such judgment is being
contested in good faith by appropriate proceedings which provide for
a stay of any enforcement action against the Company or such
Subsidiary during the pendency of such proceedings and for which
adequate reserves have been established and where nonpayment of such
judgment could not reasonably be expected to have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole;
(8) any Person shall engage in any Prohibited Transaction involving any
Pension Plan, (ii) any accumulated funding deficiency (as defined in
Section 6.16 hereof), whether or not waived, shall exist with
respect to any Pension Plan or any Lien in favor of the PBGC or a
Pension Plan shall arise on the assets of the Company or any ERISA
Affiliate, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed or a trustee
shall be appointed to administer, or to terminate, any Single
Employer Plan, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA or (v) the Company or any ERISA
Affiliate shall, or in the reasonable opinion of the Majority Banks
is likely to, incur any liability in connection with a withdrawal
from, or the insolvency, bankruptcy or reorganization of, a
Multiemployer Plan and in each case in clauses (i) through (v)
above, (x) a period of sixty (60) days, or more, has elapsed from
the occurrence of such event or condition and (y) such event or
condition, together with all other such events or conditions, if
any, could reasonably be expected to subject the Company or any of
its Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property
or financial or other condition of the Company and its Subsidiaries
taken as a whole;
(9) (a) Any Person or group of Persons (within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as amended), other
than Xxxxxx Xxxx, his wife and children or trust(s) established for
his or their benefit, shall acquire beneficial ownership (within the
meaning of Rule 13d-3 promulgated under such Act) of more than 50%
of the outstanding securities (on a fully diluted basis and taking
into account any securities or contract rights exercisable,
exchangeable or convertible into equity securities) of the Company
having voting rights in the election of directors under normal
circumstances; or (b) a majority of the members of the Board of
Directors of the Company shall cease to be Continuing Members. For
purposes of the foregoing; "Continuing Member" means a member of the
Board of Directors of the Company who either (i) was a member of the
Company's Board of Directors on the Effective Date and has been such
continuously thereafter or (ii) became a member of such Board of
Directors after
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the Effective Date and whose election or nomination for election was
approved by a vote of the majority of the Continuing Members who are
then members of the Company's Board of Directors; or (c) there shall
occur a "Change in Control" (or equivalent event thereunder) under
the documents relating to any Future Debt then outstanding; or
(10) a receiver, liquidator, custodian or trustee of the Company or any
Subsidiary, or of all or any part of the property of the Company or
any Subsidiary, shall be appointed by court order and such order
shall remain in effect for more than sixty (60) days, or an order
for relief shall be entered with respect to the Company or any
Subsidiary, or the Company or any Subsidiary shall be adjudicated a
bankrupt or insolvent; or any of the property of the Company or any
Subsidiary shall be sequestered by court order and such order shall
remain in effect for more than sixty (60) days; or a petition shall
be filed against the Company or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, and shall not be dismissed within sixty (60)
days after such filing; or the Company or any Subsidiary shall file
a petition in voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, or shall
consent to the filing of any petition against it under any such law;
or the Company or any Subsidiary shall make an assignment for the
benefit of its creditors, or shall admit in writing its inability,
or shall fail, to pay its debts generally as they become due, or
shall consent to the appointment of a receiver, liquidator or
trustee of the Company or any Subsidiary or of all or any part of
the property of the Company or any Subsidiary.
(b) Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent shall, if directed to do so by the Majority
Banks, declare any commitment of the Banks to extend credit hereunder
immediately terminated; (b) the Agent shall, if directed to do so by the
Majority Banks, declare the entire unpaid Indebtedness, including the Notes,
immediately due and payable, without presentment, notice or demand, all of which
are hereby expressly waived by Company; (c) upon the occurrence of any Event of
Default specified in Section 9.1(j) above, and notwithstanding the lack of any
declaration by Agent under the preceding clause (a) or (b), the Banks'
commitments to extend credit hereunder shall immediately and automatically
terminate and the entire unpaid Indebtedness, including the Notes, shall become
automatically due and payable without presentment, notice or demand; (d) the
Agent shall, upon being directed to do so by the Majority Banks, demand
immediate delivery of cash collateral, and the Company and each Account Party
agree to deliver such cash collateral upon demand, in an amount equal to the
maximum amount that may be available to be drawn at any time prior to the stated
expiry of all outstanding Letters of Credit, and (e) the Agent shall, if
directed to do so by the Majority Banks or the Banks, as applicable (subject to
the terms hereof), exercise any remedy permitted by this Agreement, the other
Loan Documents, including without limitation any of the Collateral Documents.
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(c) Rights Cumulative. No delay or failure of Agent and/or Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof, or the exercise of any other power, right
or privilege. The rights of Banks under this Agreement are cumulative and not
exclusive of any right or remedies which Banks would otherwise have.
(d) Waiver by Company of Certain Laws. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, AND FURTHER HEREBY IRREVOCABLY AGREE TO WAIVE THE RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY AND ALL ACTIONS OR PROCEEDINGS IN WHICH AGENT OR THE
BANKS (OR ANY OF THEM), ON THE ONE HAND, AND THE COMPANY, ON THE OTHER HAND, ARE
PARTIES, WHETHER OR NOT SUCH ACTIONS OR PROCEEDINGS ARISE OUT OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS, OR OTHERWISE. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
(e) Waiver of Defaults. No Event of Default shall be waived by the Banks
except in a writing signed by an officer of the Agent in accordance with Section
13.11 hereof. No single or partial exercise of any right, power or privilege
hereunder, nor any delay in the exercise thereof, shall preclude any other or
further exercise of the Banks' rights by Agent. No waiver of any Event of
Default shall extend to any other or further Event of Default. No forbearance on
the part of the Agent in enforcing any of the Banks' rights shall constitute a
waiver of any of their rights. Company expressly agrees that this Section may
not be waived or modified by the Banks or Agent by course of performance,
estoppel or otherwise.
(f) Cross-Default. In addition to the other Events of Default specified
herein, any failure to perform and discharge when due, after allowance for any
applicable cure period, any of the obligations, covenants and agreements
required to be performed under the provisions of any instruments securing any
other present and future borrowings of Company from the Banks (or from Agent) in
renewal or extension of, or related to, this Agreement or any of the other Loan
Documents, or any security agreements in relation thereto, shall be an Event of
Default under the provisions of this Agreement entitling Agent, at the direction
or with the concurrence of the Majority Banks (without notice or any cure period
except as expressly provided herein or therein), to exercise any and all rights
and remedies provided hereby. Any Event of Default shall also constitute a
default under all other instruments securing this or any other present or future
borrowings, or any agreements in relation thereto, entitling Agent and the Banks
to exercise any and all rights and remedies provided therein.
10. PAYMENTS, RECOVERIES AND COLLECTIONS.
(a) Payment Procedure.
(1) All payments by Company of principal of, or interest on the
Revolving Credit Notes or the Swing Line Notes or of Letter of
Credit Obligations or Fees shall be
83
made without setoff or counterclaim on the date specified for
payment under this Agreement not later than 11:00 a.m. (Detroit
time) in Dollars in immediately available funds to Agent, for the
ratable account of the Banks, at Agent's office located at Xxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, in respect of Domestic
Advances or Fees payable in Dollars. Upon receipt of each such
payment, the Agent shall make prompt payment to each Bank, in like
funds of all amounts received by it for the account of such Bank.
(2) Unless the Agent shall have been notified by the Company prior to
the date on which any payment to be made by the Company is due that
the Company does not intend to remit such payment, the Agent may, in
its discretion, assume that the Company has remitted such payment
when so due and the Agent may, in reliance upon such assumption,
make available to each Bank on such payment date an amount equal to
such Bank's share of such assumed payment. If the Company has not in
fact remitted such payment to the Agent, each Bank shall forthwith
on demand repay to the Agent the amount of such assumed payment made
available to such Bank, together with the interest thereon, in
respect of each day from and including the date such amount was made
available by the Agent to such Bank to the date such amount is
repaid to the Agent at a rate per annum equal to (i) for Prime-based
Advances, the federal funds rate (daily average), as the same may
vary from time to time, and (ii) with respect to Eurodollar-based
Advances, Agent's aggregate marginal cost (including the cost of
maintaining any required reserves or deposit insurance and of any
fees, penalties, overdraft charges or other costs or expenses
incurred by Agent) of carrying such amount.
(3) Whenever any payment to be made hereunder (other than payments in
respect of any Eurodollar-based Advance or a Quoted Rate Advance)
shall otherwise be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and such
extension of time shall be included in computing interest, if any,
in connection with such payment. Whenever any payment of principal
of, or interest on, a Eurodollar-based Advance or a Quoted Rate
Advance shall be due on a day which is not a Business Day the date
of payment thereof shall be extended to the next succeeding Business
Day unless as a result thereof it would fall in the next calendar
month, in which case it shall be shortened to the next preceding
Business Day and, in the case of a payment of principal, interest
thereon shall be payable for such extended or shortened time, if
any.
(4) All payments to be made by the Company under this Agreement or any
of the Notes (including without limitation payments under the Swing
Line Notes) shall be made without set-off or counterclaim, as
aforesaid, and without deduction for or on account of any present or
future withholding or other taxes of any nature imposed by any
governmental authority or of any political subdivision thereof or
any federation or organization of which such governmental authority
may at the time of payment be a member, unless Company is compelled
by law to make payment subject to such tax. In such event, Company
shall:
84
A. pay to the Agent for Agent's own account and/or, as the case may be, for
the account of the Banks (and, in the case of any Swing Line Advances, pay
to the Swing Line Bank which funded such Advances) such additional amounts
as may be necessary to ensure that the Agent and/or such Bank or Banks
receive a net amount equal to the full amount which would have been
receivable had payment not been made subject to such tax; and
B. remit such tax to the relevant taxing authorities according to applicable
law, and send to the Agent or the applicable Bank (including the Swing
Line Bank) or Banks, as the case may be, such certificates or certified
copy receipts as the Agent or such Bank or Banks shall reasonably require
as proof of the payment by the Company of any such taxes payable by the
Company.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes,
levies, imposts, duties, charges, fees, deductions, withholdings and similar
charges, together with interest thereon and, any taxes, fines or penalties
payable upon amounts paid or payable pursuant to this Section 10.1 (whether
assessed against Company, the Agent or any of the Banks). The Company shall be
reimbursed by the applicable Bank for any payment made by the Company under this
Section 10.1(d) if the applicable Bank is not in compliance with its obligations
under Section 13.14, to the extent set forth therein.
(b) Application of Proceeds. Notwithstanding anything to the contrary in
this Agreement, following the occurrence and during the continuance of an Event
of Default, the proceeds of any offsets, voluntary payments by the Company or
others, the proceeds of any Collateral and any other sums received or collected
in respect of the Indebtedness (net of Agent's reasonable costs and expenses),
may, at the Agent's discretion, and shall, upon the direction of the Majority
Banks, be applied, first, to Indebtedness evidenced by the Notes or under
Hedging Agreements in such order and manner as determined by the Majority Banks
(subject, however, to the applicable Percentages of the Revolving Credit held by
each of the Banks and provided, however, that the maximum amount of those
proceeds which may be applied to Indebtedness in respect of Hedging Agreements
shall not exceed the maximum amount of the Hedging Reserve stated in the
definition thereof), next, to any other Indebtedness on a pro rata basis, and
then, if there is any excess, to the Company. The application of such proceeds
and other sums to the applicable Indebtedness shall be based on each Bank's
Percentage of such Indebtedness.
(c) Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the Notes (or on account of
its participation in any Letter of Credit) in excess of its pro rata share of
payments then or thereafter obtained by all Banks upon principal of and interest
on all Notes (or such participation), such Bank shall purchase from the other
Banks such participations in the Notes (or subparticipations in the Letters of
Credit) held by them as shall be necessary to cause such purchasing Bank to
share the excess payment or other recovery ratably in accordance with the
Percentages of the Revolving Credit with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing holder, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
85
(d) Deposits and Accounts. In addition to and not in limitation of any
rights of any Bank or other holder of any of the Notes under applicable law,
each Bank and each other such holder shall, upon acceleration of the
indebtedness under the Notes and without notice or demand of any kind, have the
right to appropriate and apply to the payment of the Notes owing to it (whether
or not then due) any and all balances, credits, deposits, accounts or moneys of
Company then or thereafter with such Bank or other holder; provided, however,
that any such amount so applied by any Bank or other holder on any of the Notes
owing to it shall be subject to the provisions of Section 10.3 hereof.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
(a) Reimbursement of Prepayment Costs. If Company makes any payment of
principal with respect to any Eurodollar-based Advance or Quoted Rate Advance on
any day other than the last day of the Interest Period applicable thereto
(whether voluntarily, by acceleration, or otherwise), or converts or refunds (or
attempts to convert or refund) any such Advance; or if Company fails to borrow,
refund or convert into any Eurodollar-based Advance or Quoted Rate Advance after
notice has been given by Company to Agent in accordance with the terms hereof
requesting such Advance, or if Company fails to make any payment of principal or
interest in respect of a Eurodollar-based Advance or Quoted Rate Advance when
due, Company shall reimburse Agent and Banks, as the case may be, on demand for
any resulting loss, cost or expense incurred by Agent and Banks, as the case may
be as a result thereof, including, without limitation, any such loss, cost or
expense incurred in obtaining, liquidating, employing or redeploying deposits
from third parties, whether or not Agent and Banks, as the case may be, shall
have funded or committed to fund such Advance. Such amount payable by Company to
Agent and Banks, as the case may be may include, without limitation, an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, refunded or converted, for
the period from the date of such prepayment or of such failure to borrow, refund
or convert, through the last day of the relevant Interest Period, at the
applicable rate of interest for said Advance(s) provided under this Agreement,
over (b) the amount of interest (as reasonably determined by Agent and Banks, as
the case may be) which would have accrued to Agent and Banks, as the case may
be, on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank Eurodollar market. Calculation of any
amounts payable to any Bank under this paragraph shall be made as though such
Bank shall have actually funded or committed to fund the relevant Advance
through the purchase of an underlying deposit in an amount equal to the amount
of such Advance and having a maturity comparable to the relevant Interest
Period; provided, however, that any Bank may fund any Eurodollar-based Advance
or Quoted Rate Advance, as the case may be, in any manner it deems fit and the
foregoing assumptions shall be utilized only for the purpose of the calculation
of amounts payable under this paragraph. Upon the written request of Company,
Agent and Banks shall deliver to Company a certificate setting forth the basis
for determining such losses, costs and expenses, which certificate shall be
conclusively presumed correct, absent manifest error.
(b) Eurodollar Lending Office. For any Advance to which the
Eurodollar-based Rate is applicable, if Agent or a Bank, as applicable, shall
designate a Eurodollar Lending Office which maintains books separate from those
of the rest of Agent or such Bank, Agent or such
86
Bank, as the case may be, shall have the option of maintaining and carrying the
relevant Advance on the books of such Eurodollar Lending Office.
(c) Circumstances Affecting Eurodollar-based Rate Availability. If with
respect to any Interest Period, Agent or the Majority Banks (after consultation
with Agent) shall determine that, by reason of circumstances affecting the
foreign exchange and interbank markets generally or deposits in eurodollars, as
the case may be, in the applicable amounts are not being offered to the Agent or
such Banks for such Interest Period, then Agent shall forthwith give notice
thereof to the Company. Thereafter, until Agent notifies Company that such
circumstances no longer exist, (i) the obligation of Banks to make
Eurodollar-based Advances, and the right of Company to convert an Advance to or
refund an Advance as a Eurodollar-based Advance, as the case may be, shall be
suspended, and (ii) the Company shall repay in full (or cause to be repaid in
full) the then outstanding principal amount of each such Eurodollar-based
Advance covered hereby, together with accrued interest thereon, any amounts
payable under Sections 11.1 and 11.8 hereof, and all other amounts payable
hereunder on the last day of the then current Interest Period applicable to such
Advance. Upon the date for repayment as aforesaid and unless Company notifies
Agent to the contrary within two (2) Business Days after receiving a notice from
Agent pursuant to this Section, such outstanding principal amount shall be
converted to a Prime-based Advance as of the last day of such Interest Period.
(d) Laws Affecting Eurodollar-based Advance Availability. If, after the
date of this Agreement, the introduction of, or any change in, any applicable
law, rule or regulation or in the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by any of the Banks (or any of their respective
Eurodollar Lending Offices) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for any of the Banks (or any of their respective Eurodollar Lending Offices) to
honor its obligations hereunder to make or maintain any Advance with interest at
the Eurodollar-based Rate such Bank shall forthwith give notice thereof to
Company and to Agent. Thereafter, (a) the obligations of Banks to make
Eurodollar-based Advances and the right of Company to convert an Advance into or
refund an Advance as a Eurodollar-based Advance shall be suspended and
thereafter Company may select as Applicable Interest Rates only those which
remain available and which are permitted to be selected hereunder, and (b) if
any of the Banks may not lawfully continue to maintain an Advance to the end of
the then current Interest Period applicable thereto as a Eurodollar-based
Advance, the applicable Advance shall immediately be converted to a Prime-based
Advance and the Prime-based Rate shall be applicable thereto for the remainder
of such Interest Period. For purposes of this Section, a change in law, rule,
regulation, interpretation or administration shall include, without limitation,
any change made or which becomes effective on the basis of a law, rule,
regulation, interpretation or administration presently in force, the effective
date of which change is delayed by the terms of such law, rule, regulation,
interpretation or administration.
(e) Increased Cost of Eurodollar-based Advances. If the adoption after the
date of this Agreement of, or any change after the date of this Agreement in,
any applicable law, rule or regulation of or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any of the Banks (or any of their respective Eurodollar Lending
Offices)
87
with any request or directive (whether or not having the force of law) made by
any such authority, central bank or comparable agency after the date hereof:
(1) shall subject any of the Banks (or any of their respective
Eurodollar Lending Offices) to any tax, duty or other charge with
respect to any Advance or any Note or shall change the basis of
taxation of payments to any of the Banks (or any of their respective
Eurodollar Lending Offices) of the principal of or interest on any
Advance or any Note or any other amounts due under this Agreement in
respect thereof (except for changes in the rate of tax on the
overall net income of any of the Banks or any of their respective
Eurodollar Lending Offices imposed by the jurisdiction in which such
Bank's principal executive office or Eurodollar Lending Office is
located); or
(2) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any of the Banks (or any of their respective Eurodollar
Lending Offices) or shall impose on any of the Banks (or any of
their respective Eurodollar Lending Offices) or the foreign exchange
and interbank markets any other condition affecting any Advance or
any of the Notes;
and the result of any of the foregoing is to increase the costs to any of the
Banks of maintaining any part of the Indebtedness hereunder as a
Eurodollar-based Advance or to reduce the amount of any sum received or
receivable by any of the Banks under this Agreement or under the Notes in
respect of a Eurodollar-based Advance, then such Bank shall promptly notify
Agent (or, in the case of a Swing Line Advance, shall notify Company directly,
with a copy of such notice to Agent), and Agent (or such Bank, as aforesaid)
shall promptly notify Company of such fact and demand compensation therefor and,
within fifteen (15) days after such notice, Company agrees to pay to such Bank
such additional amount or amounts as will compensate such Bank or Banks for such
increased cost or reduction. Agent will promptly notify Company of any event of
which it has knowledge which will entitle Banks to compensation pursuant to this
Section, or which will cause Company to incur additional liability under
Sections 11.1 and 11.6 hereof, provided that Agent shall incur no liability
whatsoever to the Banks or Company in the event it fails to do so. A certificate
of Agent (or such Bank, if applicable) setting forth the basis for determining
such additional amount or amounts necessary to compensate such Bank or Banks
shall be conclusively presumed to be correct save for manifest error. For
purposes of this Section, a change in law, rule, regulation, interpretation,
administration, request or directive shall include, without limitation, any
change made or which becomes effective on the basis of a law, rule, regulation,
interpretation, administration, request or directive presently in force, the
effective date of which change is delayed by the terms of such law, rule,
regulation, interpretation, administration, request or directive.
(f) Indemnity. The Company will indemnify Agent and each of the Banks
against any loss or expense which may arise or be attributable to the Agent's
and each Bank's obtaining, liquidating or employing deposits or other funds
acquired to effect, fund or maintain the Advances (a) as a consequence of any
failure by the Company to make any payment when due of any amount due hereunder
in connection with a Eurodollar-based Advance, (b) due to any failure
88
of the Company to borrow, refund or convert on a date specified therefor in a
Request for Advance or request for Swing Line Advance or (c) due to any payment,
prepayment or conversion of any Eurodollar-based Advance on a date other than
the last day of the Interest Period for such Advance. Such loss or expense shall
be calculated based upon the present value, as applicable, of payments due from
the Company with respect to a deposit obtained by the Agent or any of the Banks
in order to fund such Advance to the Company. The Agent's and each Bank's, as
applicable, calculations of any such loss or expense shall be furnished to the
Company and shall be conclusive, absent manifest error.
(g) Other Increased Costs. In the event that at any time after the date of
this Agreement any change in law such as described in Section 11.5 hereof,
shall, in the opinion of the Agent or any of the Banks (as certified to Agent in
writing by such Bank) require that the Revolving Credit, the Swing Line, or any
other Indebtedness or commitment under this Agreement or any of the other Loan
Documents be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by each of the
Banks or any corporation controlling such Banks, as the case may be (or shall
increase the amount of capital required under such law, as of the date hereof,
to be so maintained), the Agent, in consultation with the Banks, shall notify
the Company. The Company and the Agent shall thereafter negotiate in good faith
an agreement to increase the Revolving Credit Facility Fee, or other fees
payable to the Agent, for the benefit of the Banks under this Agreement, which
in the opinion of the Agent (in consultation with the Banks), will adequately
compensate the Banks for the costs associated with such change in law. If such
increase is approved in writing by the Company within thirty (30) days from the
date of the notice to the Company from the Agent, the Revolving Credit Facility
Fee or other fees (if applicable) payable by the Company under this Agreement
shall, effective from the date of such agreement, include the amount of such
agreed increase. If the Company and the Agent (in consultation with the Banks)
are unable to agree on such an increase within thirty (30) days from the date of
the notice to the Company, the Company shall have the option, exercised by
written notice to the Agent within forty-five (45) days from the date of the
aforesaid notice to the Company from the Agent, to terminate the Revolving
Credit and the Swing Line, as the case may be, or other commitments if
applicable, in which event, all sums then outstanding to Banks and to Agent
hereunder shall be due and payable in full. If (a) the Company and the Agent (in
consultation with the Banks) fail to agree on an increase in the Revolving
Credit Facility Fee or other fees (if applicable), and (b) the Company fails to
give timely notice that it has elected to exercise its option to terminate the
Revolving Credit or other commitments, if applicable, as set forth above, then
the Revolving Credit and the Swing Line, and such other commitments shall
automatically terminate as of the last day of the aforesaid forty-five (45) day
period, in which event all sums then outstanding to Banks and to Agent hereunder
shall be due and payable in full.
(h) Right of Banks to Fund through Branches and Affiliates. Each Bank
(including without limitation the Swing Line Bank) may, if it so elects, fulfill
its commitment as to any Advance hereunder by designating a branch or Affiliate
of such Bank to make such Advance; provided that (a) such Bank shall remain
solely responsible for the performances of its obligations hereunder and (b) no
such designation shall result in any material increased costs to the Company.
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12. AGENT
(a) Appointment of Agent. Each Bank and the holder of each Note appoints
and authorizes Agent to act on behalf of such Bank or holder under the Loan
Documents and to exercise such powers hereunder and thereunder as are
specifically delegated to or required of Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto, including
without limitation the power to execute or authorize the execution of financing
or similar statements or notices, and other documents. In performing its
functions and duties under this Agreement, the Agent shall act solely as agent
of the Banks and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Company or
any of its Subsidiaries. Each Bank agrees (which agreement shall survive any
termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees) incurred by
Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Company under this Agreement or the other Loan
Documents or any other instrument executed pursuant hereto, and for which Agent
is not reimbursed by Company, pro rata according to such Bank's Percentage, but
excluding any such expenses resulting from Agent's gross negligence or willful
misconduct. Any such amounts so paid by the Banks shall constitute additional
Indebtedness hereunder. Agent shall not be required to take any action under the
Loan Documents, or to prosecute or defend any suit in respect of the Loan
Documents, unless indemnified to its satisfaction by the Banks against loss,
costs, liability and expense (excluding liability resulting from its gross
negligence or willful misconduct). If any indemnity furnished to Agent shall
become impaired or Agent shall elect to have such indemnity confirmed by the
Banks (as to specific matters or otherwise), in each case as determined by Agent
in its reasonable judgment, Agent shall give notice thereof to each Bank and,
until such additional indemnity is provided or such existing indemnity is
confirmed, Agent may cease to do the acts to be indemnified against until such
additional indemnity is given or confirmed.
(b) Deposit Account with Agent. Company hereby authorizes Agent to charge
its general deposit account, if any, maintained with Agent for the amount of any
principal, interest, or other amounts or costs due under this Agreement when the
same becomes due and payable under the terms of this Agreement or the Notes.
(c) Exculpatory Provisions. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent); neither Agent nor any of its directors, officers,
employees or agents shall be liable to any Bank for any action taken or omitted
to be taken by it or them under this Agreement or any document executed pursuant
hereto, or in connection herewith or therewith, except for its or their own
willful misconduct or gross negligence, nor be responsible for or have any
duties to ascertain, inquire into or verify (a) any recitals or warranties
herein or therein, (b) the effectiveness, enforceability, validity or due
execution of this Agreement or any document executed pursuant hereto, or any
security thereunder, (c) the performance by Company or any of its Subsidiaries
of its obligations hereunder or thereunder, or (d) the satisfaction of any
condition hereunder or thereunder, including without limitation in connection
with the making of any Advance or the issuance of any Letter of Credit, other
than to confirm receipt of items expressly required to be delivered to Agent.
Agent shall be entitled to
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rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which it believes to be genuine and
to have been presented by a proper person. Agent may treat the payee of any Note
as the holder thereof. Agent may employ agents and may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable to the Banks (except as to money or property received by
them or their authorized agents), for the negligence or misconduct of any such
agent selected by it with reasonable care or for any action taken or omitted to
be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
(d) Successor Agents. Agent may resign as such at any time upon at least
30 days prior notice to Company and all Banks. If Agent at any time shall resign
or if the office of Agent shall become vacant for any other reason, Majority
Banks shall, by written instrument, appoint a successor Agent (consisting of any
other Bank or financial institution satisfactory to such Majority Banks) which
shall thereupon become Agent hereunder and shall be entitled to receive from the
prior Agent such documents of transfer and assignment as such successor Agent
may reasonably request. Any such successor Agent shall be a bank or a trust
company or other financial institution which maintains an office in the United
States or any state thereof, or an affiliate of such bank or trust company or
other financial institution which is engaged in the banking business, and shall
have a combined capital and surplus of at least $500,000,000. If a successor is
not so appointed or does not accept such an appointment before the retiring
Agent's resignation becomes effective, the retiring Agent may appoint a
temporary successor to act until such appointment by the Majority Banks is made
and accepted, or if no such temporary successor is appointed as provided above
by the retiring Agent, the Majority Banks shall thereafter perform all of the
duties of the retiring Agent hereunder until such appointment by the Majority
Banks is made and accepted. Such successor Agent shall succeed to all of the
rights and obligations of the retiring Agent as if originally named. The
retiring Agent shall duly assign, transfer and deliver to such successor Agent
all moneys at the time held by the retiring Agent hereunder after deducting
therefrom its expenses for which it is entitled to be reimbursed. Upon such
succession of any such successor Agent, the retiring agent shall be discharged
from its duties and obligations hereunder, except for its gross negligence or
willful misconduct arising prior to its retirement hereunder, and the provisions
of this Section 12 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
(e) Loans by Agent: Agent in its Individual Capacity. Agent shall have the
same rights and powers with respect to the credit extended by it and the Notes
held by it as any Bank and may exercise the same as if it were not Agent, and
the term "Bank" and, when appropriate, "holder" shall include Agent in its
individual capacity. Agent 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, investment, risk management
or other business with the Company or any of its Subsidiaries as if it were not
acting as the Agent hereunder, and may accept interest, fees and other
consideration therefor without having to account for the same to the Banks.
(f) Credit Decisions. Each Bank acknowledges that it has, independently of
Agent and each other Bank and based on the financial statements of Company and
the Subsidiaries and such other documents, information and investigations as it
has deemed appropriate, made its own
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credit decision to extend credit hereunder from time to time. Each Bank also
acknowledges that it will, independently of Agent and each other Bank and based
on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any document executed pursuant hereto.
(g) Notices by Agent. Agent shall give prompt notice to each Bank of its
receipt of each notice or request required or permitted to be given to Agent by
Company pursuant to the terms of this Agreement and shall promptly distribute to
the Banks any reports received from the Company or any of its Subsidiaries under
the terms hereof, or other material information or documents received by Agent,
in its capacity as Agent, from the Company or its Subsidiaries.
(h) Agent's Fees. From and after the Effective Date and thereafter until
the Indebtedness has been repaid and discharged in full, and no commitment to
fund any loan hereunder is outstanding, the Company shall pay to Agent and
discharge in full, agency and similar fees set forth (or to be set forth from
time to time) in a letter agreement between Company and Agent, such fees to be
payable on the terms set forth therein. The Agent's Fees described in this
Section 12.8 shall not be refundable under any circumstances.
(i) Nature of Agency. The appointment of Agent as agent is for the
convenience of Banks and Company in making Advances of the Revolving Credit or
any other Indebtedness of Company hereunder, and collecting fees and principal
and interest on the Indebtedness. No Bank is purchasing any Indebtedness from
Agent and this Agreement is not intended to be a purchase or participation
agreement.
(j) Authority of Agent to Enforce Notes and This Agreement. Each Bank,
subject to the terms and conditions of this Agreement (including, without
limitation, any required approval or direction of the Majority Banks or the
Banks, as applicable, to be obtained by or given to the Agent hereunder),
authorizes the Agent with full power and authority as attorney-in-fact to
institute and maintain actions, suits or proceedings for the collection and
enforcement of the Notes and to file such proofs of debt or other documents as
may be necessary to have the claims of the Banks allowed in any proceeding
relative to the Company, any of its Subsidiaries or its creditors or affecting
its properties, and to take such other actions which Agent considers to be
necessary or desirable for the protection, collection and enforcement of the
Notes, this Agreement or the other Loan Documents, but in each case only to the
extent of any required approval or direction of the Majority Banks or the Banks,
as applicable, obtained by or given to the Agent hereunder.
(k) Indemnification. The Banks agree to indemnify the Agent in its
capacity as such, to the extent not reimbursed by the Company, pro rata
according to their respective Percentages, from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, and reasonable out-of-pocket expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted to be taken or suffered in
good faith by the Agent hereunder, provided that no Bank shall be liable for any
portion of any of the foregoing items resulting from the gross negligence or
willful misconduct of the Agent or any of its officers, employees, directors or
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agents. Without limitation of the foregoing, each Bank agrees to reimburse the
Agent and its affiliates promptly upon demand for its ratable share of any
reasonable out-of-pocket expenses (including, without limitation, reasonable
fees and expenses of counsel) incurred by the Agent and its affiliates in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents, to
the extent that the Agent and its affiliates are not reimbursed for such
expenses by Company but without limiting the obligation of Company to make such
reimbursement. Each Bank agrees to reimburse the Agent and its affiliates
promptly upon demand for its ratable share of any amounts owing to the Agent and
its affiliates by the Banks pursuant to this Section, provided that, if the
Agent or its affiliates are subsequently reimbursed by Company for such amounts,
they shall refund to the Banks on a pro rata basis the amount of any excess
reimbursement. If the indemnity furnished to the Agent and its affiliates under
this Section shall, in the reasonable judgment of the Agent, be insufficient or
become impaired, Agent shall give notice thereof to each Bank and, until such
additional indemnity is provided or such existing indemnity is confirmed, the
Agent may call for additional indemnity from the Banks and cease, or not
commence, to take any action. Any amounts paid by the Banks hereunder to the
Agent or its affiliates shall be deemed to constitute part of the Indebtedness
hereunder.
(l) Knowledge of Default. It is expressly understood and agreed that the
Agent (whether in its capacity as issuing bank, Swing Line Bank or otherwise)
shall be entitled to assume that no Default or Event of Default has occurred and
is continuing, unless the officers of the Agent immediately responsible for
matters concerning this Agreement shall have actual (rather than constructive)
knowledge of such occurrence or shall have been notified in a writing specifying
such Default or Event of Default and stating that such notice is a "notice of
default" by a Bank or by Company. Upon receiving such a notice, the Agent shall
promptly notify each Bank of such Default or Event of Default and provide each
Bank with a copy of such notice and, shall endeavor to provide such notice to
the Banks within three (3) Business Days (but without any liability whatsoever
in the event of its failure to do so). The Agent shall also furnish the Banks,
promptly upon receipt, with copies of all other notices or other information
required to be provided by Company hereunder.
(m) Agent's Authorization; Action by Banks. Except as otherwise expressly
provided herein, whenever the Agent is authorized and empowered hereunder on
behalf of the Banks to give any approval or consent, or to make any request, or
to take any other action, on behalf of the Banks (including without limitation
the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice (subject to the requirement that amendments, waivers
or consents under Section 13.11 hereof be made in writing by the Majority Banks
or all the Banks, as applicable), or (ii) pursuant to the written consent of the
requisite Percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
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(n) Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct; provided however, that the Agent shall not be required to act or omit to
act if, in the reasonable judgment of the Agent, such action or omission may
expose the Agent to personal liability for which Agent has not been
satisfactorily indemnified hereunder or is contrary to this Agreement, any of
the Loan documents or applicable law. Except as otherwise expressly provided in
any of the Loan Documents, Agent will not (and will not be obligated to) take
any action, assert any rights or pursue any remedies under this Agreement or any
of the other Loan Documents in violation or contravention of any express
direction or instruction of the Majority Banks or all of the Banks, as the case
may be (as provided for hereunder). Agent may refuse (and will not be obligated)
to take any action, assert any rights or pursue any remedies under this
Agreement or any of the other Loan Documents in the absence of the express
written direction and instruction of the Majority Banks or all of the Banks, as
the case may be (as provided for hereunder). In the event Agent fails, within a
commercially reasonable time, to take such action, assert such rights, or pursue
such remedies as the Majority Banks or all of the Banks, as the case may be (as
provided for hereunder), shall direct in conformity with this Agreement, the
Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), shall have the right to take such action, to assert such rights, or
pursue such remedies on behalf of all of the Banks unless the terms hereof
otherwise require the consent of all the Banks to the taking of such actions (in
which event all of the Banks must join in such action). Except as expressly
provided above or elsewhere in this Agreement or the other Loan Documents, no
Bank (other than the Agent, acting in its capacity as Agent) shall be entitled
to take any enforcement action of any kind under any of the Loan Documents.
(o) Lead Arranger; Documentation Agent or other Titles. Any Bank
identified on the facing page or signature page of this Agreement or in any
amendment hereto or as designated with consent of the Agent in any assignment
agreement as Lead Arranger, Documentation Agent, Syndication Agent or any
similar titles, shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement as a result of such title other than
those applicable to the Banks as such; provided, however, that such identified
Banks shall be entitled to the benefits afforded to Agent under Sections 12.5,
12.6 and 12.11 hereof. Without limiting the foregoing, the Banks so identified
shall not have or be deemed to have any fiduciary relationship with any Bank as
a result of such title. Each Bank acknowledges that it has not relied, and will
not rely, on the Bank so identified in deciding to enter into this Agreement or
in taking or not taking action hereunder.
(p) Collateral Matters. (a) The Agent is authorized on behalf of all the
Banks, without the necessity of any notice to or further consent from the Banks
(but subject to the Intercreditor Agreement), from time to time to take any
action with respect to any Collateral or the Collateral Documents which may be
necessary to perfect and maintain a perfected security interest in and Liens
upon the Collateral granted pursuant to the Loan Documents. (b) The Banks
irrevocably authorize the Agent, at its option and in its discretion (but
subject to the Intercreditor Agreement), to release any Lien granted to or held
by the Agent upon any Collateral (i) upon termination of the Revolving Credit
Maximum Amount and payment in full of all Indebtedness payable under this
Agreement and under any other Loan Document; (ii)
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constituting property sold or to be sold or disposed of as part of or in
connection with any disposition not otherwise prohibited hereunder; (iii)
constituting property in which Company or any Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; or (iv) if approved,
authorized or ratified in writing by the Majority Banks or all the Banks, as the
case may be, as provided in Section 13.11. The Banks further irrevocably
authorize the Agent, at its option and in its discretion, to grant such other
releases as may be necessary to effectuate the New Restructuring (including the
release of Liens on the assets of the T&C Subsidiary and on the equity interests
in the T & C Subsidiary and the release of the T & C Subsidiary from its
obligations under the Guaranty). Upon request by the Agent at any time, the
Banks will confirm in writing the Agent's authority to release particular types
or items of Collateral pursuant to this Section 12.16(b).
13. MISCELLANEOUS
(a) Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with GAAP.
(b) Consent to Jurisdiction. Company hereby irrevocably submits to the
non-exclusive jurisdiction of any United States Federal or Michigan state court
sitting in Detroit in any action or proceeding arising out of or relating to
this Agreement or any of the other Loan Documents and the Company hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in any such United States Federal or Michigan state
court. Company irrevocably consents to the service of any and all process in any
such action or proceeding brought in any court in or of the State of Michigan by
the delivery of copies of such process to the Company at its address specified
on the signature page hereto or by certified mail directed to such address.
Nothing in this Section shall affect the right of the Banks and the Agent to
serve process in any other manner permitted by law or limit the right of the
Banks or the Agent (or any of them) to bring any such action or proceeding
against the Company or any of its property in the courts of any other
jurisdiction. The Company hereby irrevocably waives any objection to the laying
of venue of any such suit or proceeding in the above described courts.
(c) Law of Michigan. This Agreement and the Notes have been delivered at
Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan, except as and to the extent
expressed to the contrary in any of the Loan Documents. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
(d) Interest. In the event the obligation of the Company to pay interest
on the principal balance of the Notes is or becomes in excess of the maximum
interest rate which the Company is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect to such Bank's Percentage of
the Revolving Credit, shall be deemed to be immediately reduced
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to such maximum rate and all previous payments in excess of the maximum rate
shall be deemed to have been payments in reduction of principal and not of
interest.
(e) Closing Costs; Other Costs. To the extent not restricted by any
financial assistance provisions of any applicable law, Company shall pay or
reimburse (a) Agent and its affiliates for payment of, on demand, all reasonable
costs and expenses, including, by way of description and not limitation,
reasonable in-house and outside attorney fees and advances, appraisal and
accounting fees, lien search fees, and required travel costs, incurred by Agent
and its affiliates in connection with the commitment, consummation and closing
of the loans contemplated hereby, or in connection with the administration of
this Agreement or the Other Loan Documents (including the obtaining of legal
advice regarding the rights and responsibilities of the parties hereto) or any
refinancing or restructuring of the loans or Advances provided under this
Agreement or the other Loan Documents, or any amendment or modification thereof
requested by Company, and (b) Agent and its affiliates and each of the Banks, as
the case may be, for all stamp and other taxes and duties payable or determined
to be payable in connection with the execution, delivery, filing or recording of
this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby, and any and all liabilities with respect to or
resulting from any delay in paying or omitting to pay such taxes or duties.
Furthermore, all reasonable costs and expenses, including without limitation
attorney fees, incurred by Agent and its affiliates and, after the occurrence
and during the continuance of an Event of Default, by the Banks in revising,
preserving, protecting, exercising or enforcing any of its or any of the Banks'
rights against Company, or otherwise incurred by Agent and its affiliates and
the Banks in connection with any Event of Default or the enforcement of the
loans (whether incurred through negotiations, legal proceedings or otherwise),
including by way of description and not limitation, such charges in any court or
bankruptcy proceedings or arising out of any claim or action by any person
against Agent, its affiliates, or any Bank which would not have been asserted
were it not for Agent's or such affiliate's or Bank's relationship with Company
hereunder or otherwise, shall also be paid by Company. All of said amounts
required to be paid by Company hereunder and not paid forthwith upon demand, as
aforesaid, shall bear interest, from the date incurred to the date payment is
received by Agent, at the Prime-based Rate, plus two percent (2%).
(f) Notices. Except as otherwise provided herein, all notices or demand
hereunder to the parties hereto shall be sufficient if made in writing and
delivered by messenger or deposited in the mail (certified or registered mail
(or the equivalent thereof), postage prepaid), and addressed to the parties as
set forth on Schedule 13.6 of this Agreement at the Company's address as set
forth on Schedule 13.6 or at such other address as such party may, by written
notice received by the other parties hereto, have designated as its address for
such purpose. Furthermore, pursuant to Section 326 of the USA Patriot Act, the
Agent and the Banks hereby notify the Company that if it or any of its
Subsidiaries open an account, including any loan, deposit account, treasury
management account, or other extension of credit with Agent or any Bank, the
Agent or the applicable Bank will request the applicable Person's name, tax
identification number, business address and other information necessary to
identify such Person (and may request such Person's organizational documents or
other identifying documents) to the extent necessary for the Agent and the
applicable Bank to comply with the USA Patriot Act.
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(g) Further Action. Company, from time to time, upon written request of
Agent will make, execute, acknowledge and deliver or cause to be made, executed,
acknowledged and delivered, all such further and additional instruments, and
take all such further action, as may be required to carry out the intent and
purpose of this Agreement, and to provide for Advances under and payment of the
Notes, according to the intent and purpose herein and therein expressed.
(h) Successors and Assigns; Assignments and Participations.
(1) This Agreement shall be binding upon and shall inure to the benefit
of Company and the Banks and their respective successors and
assigns.
(2) The foregoing shall not authorize any assignment by Company, of its
rights or duties hereunder, and no such assignment shall be made (or
effective) without the prior written approval of the Banks.
(3) The Company and Agent acknowledge that each of the Banks may at any
time and from time to time, subject to the terms and conditions
hereof, assign or grant participations in such Bank's rights and
obligations hereunder and under the other Loan Documents to any
commercial bank, savings and loan association, insurance company,
pension fund, mutual fund, commercial finance company or other
similar financial institution, the identity of which institution is
approved by Company and Agent, such approval not to be unreasonably
withheld or delayed; provided, however, that (i) the approval of
Company shall not be required upon the occurrence and during the
continuance of a Default or Event of Default and (ii) the approval
of Company and Agent shall not be required for any such sale,
transfer, assignment or participation to the Affiliate of an
assigning Bank, any other Bank or any Federal Reserve Bank. The
Company authorizes each Bank to disclose to any prospective assignee
or participant, once approved by Company and Agent, any and all
financial information in such Bank's possession concerning the
Company which has been delivered to such Bank pursuant to this
Agreement; provided that each such prospective participant shall
have executed a confidentiality agreement consistent with the terms
of Section 13.13 hereof.
(4) Each assignment by a Bank of any portion of its rights and
obligations hereunder and under the other Loan Documents, other than
assignments to such Bank's Affiliates under Section 13.8(f) hereof,
shall be made pursuant to an Assignment Agreement ("Assignment
Agreement") substantially (as determined by Agent), in the form
attached hereto as Exhibit G (with appropriate insertions acceptable
to Agent) and shall be subject to the terms and conditions hereof,
and to the following restrictions:
A. each assignment shall cover all of the Notes issued by Company hereunder
to the assigning Bank (and not any particular Note or Notes), and shall be
for a fixed and not varying percentage thereof, with the same percentage
applicable to each such Note;
B. each assignment shall be in a minimum amount of Five Million Dollars
($5,000,000);
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C. no assignment shall violate any "blue sky" or other securities law of any
jurisdiction or shall require the Company or any other Person to file a
registration statement or similar application with the United States
Securities and Exchange Commission (or similar state regulatory body) or
to qualify under the "blue sky" or other securities laws of any
jurisdiction; and
D. each assignment shall be accompanied by the assignee's joinder to the
Intercreditor Agreement, if then in effect; and
E. no assignment shall be effective unless Agent has received from the
assignee (or from the assigning Bank) an assignment fee of $3,500 for each
such assignment.
In connection with any assignment subject to this Section 13.8(d), Company and
Agent shall be entitled to continue to deal solely and directly with the
assigning Bank in connection with the interest so assigned until (x) the Agent
shall have received a notice of assignment duly executed by the assigning Bank
and an Assignment Agreement (with respect thereto) duly executed by the
assigning Bank and each assignee; and (y) the assigning Bank shall have
delivered to the Agent the original of each Note held by the assigning Bank
under this Agreement. From and after the date on which the Agent shall notify
Company and the Bank which has accepted an assignment subject to this Section
13.8(d) that the foregoing conditions shall have been satisfied and all consents
(if any) required shall have been given, the assignee thereunder shall be deemed
to be a party to this Agreement. To the extent that rights and obligations
hereunder shall have been assigned to such assignee as provided in such notice
of assignment (and Assignment Agreement), such assignee shall have the rights
and obligations of a Bank under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment). In addition, the assigning
Bank, to the extent that rights and obligations hereunder shall have been
assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement, Company shall, to the extent applicable, execute
and deliver to the Agent in exchange for any surrendered Note, new Note(s)
payable to the order of the assignee in an amount equal to the amount assigned
to it pursuant to such notice of assignment (and Assignment Agreement), and with
respect to the portion of the Indebtedness retained by the assigning Bank, to
the extent applicable, new Note(s) payable to the order of the assigning Bank in
an amount equal to the amount retained by such Bank hereunder shall be executed
and delivered by the Company. Agent, the Banks and the Company acknowledge and
agree that any such new Note(s) shall be given in renewal and replacement of the
surrendered Notes and shall not effect or constitute a novation or discharge of
the Indebtedness evidenced by any surrendered Note, and each such new Note may
contain a provision confirming such agreement. In addition, promptly following
receipt of such Notes, Agent shall prepare and distribute to Company, and each
of the Banks a revised Exhibit D to this Agreement setting forth the applicable
new Percentages of the Banks (including the assignee Bank), taking into account
such assignment.
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(5) Each Bank agrees that any participation agreement permitted
hereunder shall comply with all applicable laws and shall be subject
to the following restrictions (which shall be set forth in the
applicable participation agreement):
A. such Bank shall remain the holder of its Notes hereunder, notwithstanding
any such participation;
B. except as expressly set forth in this Section 13.8(e) with respect to
rights of setoff and the benefits of Section 11 hereof, a participant
shall have no direct rights or remedies hereunder;
C. a participant shall not reassign or transfer, or grant any
sub-participations in its participation interest hereunder or any part
thereof; and
D. such Bank shall retain the sole right and responsibility to enforce the
obligations of the Company relating to the Notes and the other Loan
Documents, including, without limitation, the right to proceed against any
Guaranties, or cause Agent to do so (subject to the terms and conditions
hereof), and the right to approve any amendment, modification or waiver of
any provision of this Agreement without the consent of the participant
(other than a participant which is an Affiliate of such Bank), except for
those matters covered by Section 13.11(a) through (e) and (h) hereof
(provided that a participant may exercise approval rights over such
matters only on an indirect basis, acting through such Bank, and Company,
Agent and the other Banks may continue to deal directly with such Bank in
connection with such Bank's rights and duties hereunder).
Company agrees that each participant shall be deemed to have the right of setoff
under Section 10.4 hereof in respect of its participation interest in amounts
owing under this Agreement and the other Loan Documents to the same extent as if
the Indebtedness were owing directly to it as a Bank under this Agreement, shall
be subject to the pro rata recovery provisions of Section 10.3 hereof and shall
be entitled to the benefits of Section 11 hereof. The amount, terms and
conditions of any participation shall be as set forth in the participation
agreement between the issuing Bank and the Person purchasing such participation,
and none of the Company, the Agent and the other Banks shall have any
responsibility or obligation with respect thereto, or to any Person to whom any
such participation may be issued. No such participation shall relieve any
issuing Bank of any of its obligations under this Agreement or any of the other
Loan Documents (including without limitation the Collateral Documents), and all
actions hereunder shall be conducted as if no such participation had been
granted.
(6) Each assignment by a Bank to its Affiliates of all or any portion of
the Notes, or any Advances thereunder, may be made on such terms and
conditions as determined by such Bank (rather than pursuant to
Section 13.8(d) hereof), provided however that (i) following each
such assignment, the assigning Bank shall remain responsible for the
performance of its obligations under this Agreement and the other
Loan Documents (including without limitation its obligations in
respect of any Notes and Advances thereunder so assigned), and each
such Affiliate assignee shall not be deemed a "Bank" hereunder, (ii)
Company and the Agent shall be entitled to continue to deal solely
and directly
99
with such assigning Bank in connection with such Bank's rights and
obligations under this Agreement and the other Loan Documents, (iii)
such assigning Bank shall retain the sole right and responsibility
to enforce the obligations of Company under this Agreement and the
other Loan Documents. In connection with assignments to its
Affiliates under this Section 13.8(f), an assigning Bank shall act
as agent for its Affiliates having received assignments hereunder,
and may appoint such Affiliates as such Bank's applicable Eurodollar
Lending Office. Furthermore with respect to such assignments under
this Section 13.8(f), it is expressly acknowledged that the
assignment fee provided for in Section 13.8(d)(iv) shall not apply.
(7) Nothing in this Agreement, the Notes or the other Loan Documents,
expressed or implied, is intended to or shall confer on any Person
other than the respective parties hereto and thereto and their
successors and assignees and participants permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or
other claim under this Agreement, the Notes or the other Loan
Documents.
(i) Indulgence. No delay or failure of Agent and the Banks in exercising
any right, power or privilege hereunder shall affect such right, power or
privilege nor shall any single or partial exercise thereof preclude any other or
further exercise thereof, or the exercise of any other right, power or
privilege. The rights of Agent and the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
(j) Counterparts. This Agreement may be executed in several counterparts,
and each executed copy shall constitute an original instrument, but such
counterparts shall together constitute but one and the same instrument.
(k) Amendment and Waiver. No amendment or waiver of any provision of this
Agreement or any other Loan Document, or consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks (or signed by the Agent at the direction of the
Majority Banks), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, (X) that no amendment, waiver or consent shall increase the Percentage
or the stated commitment amounts applicable to any Bank unless approved, in
writing, by the affected Bank and (Y) that no amendment, waiver or consent
shall, unless in writing and signed by all the Banks (or signed by Agent at the
direction of all of the Banks), do any of the following: (a) increase the
Revolving Credit Maximum Amount, except in accordance with Section 2.18 hereof,
(b) reduce the principal of, or interest on, the Notes or any Fees or other
amounts payable hereunder, (c) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any Fees or other amounts payable
hereunder, (d) waive any Event of Default specified in Section 9.1(a) or (b)
hereof, (e) release or defer the granting or perfecting of a lien or security
interest in any collateral or release any guaranty or similar undertaking
provided by any Person, except as shall be otherwise expressly provided in this
Agreement, the Intercreditor Agreement or any other Loan Document, (f) take any
action which requires the signing of all Banks pursuant to the terms of this
Agreement or any other Loan Document, (g) change the aggregate unpaid principal
amount of the Notes which shall be required for the Banks
100
or any of them to take any action under this Agreement or any other Loan
Document, (h) change this Section 13.11, or (i) change the definition of
"Majority Banks," "Percentage" or "Borrowing Base Limitation," and provided
further, however, that (x) no amendment, waiver, or consent shall, unless in
writing and signed by the Agent in addition to all the Banks, affect the rights
or duties of the Agent under this Agreement or any other Loan Document, whether
in its capacity as Agent, issuing bank or Swing Line Bank and (y) no amendment,
waiver, or consent shall, unless in writing and signed by the Lead Arranger in
addition to all the Banks, affect the rights or duties of the Lead Arranger
under this Agreement or any other Loan Document. All references in this
Agreement to "Banks" or "the Banks" shall refer to all Banks, unless expressly
stated to refer to Majority Banks.
(l) Taxes and Fees. Should any tax (other than a tax based upon the net
income of any Bank or Agent by any jurisdiction where a Bank or Agent is
located), recording or filing fee become payable in respect of this Agreement or
any of the other Loan Documents or any amendment, modification or supplement
hereof or thereof, the Company agrees to pay the same together with any interest
or penalties thereon and agrees to hold the Agent and the Banks harmless with
respect thereto.
(m) Confidentiality. Agent and each Bank agrees that without the prior
consent of Company, it will not disclose (other than to its employees, to
another Bank or to its auditors or counsel) any information with respect to the
Company or any of its Subsidiaries which is furnished pursuant to the terms and
conditions of this Agreement or any of the other Loan Documents or which is
designated (in writing) by Company to be confidential; provided that Agent or
any Bank may disclose any such information (a) as has become generally available
to the public or has been lawfully obtained by Agent or such Bank from any third
party under no duty of confidentiality to the Company known to Agent or such
Bank after reasonable inquiry, (b) as may be required or appropriate in any
report, statement or testimony submitted to, or in respect of any inquiry by,
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over Agent or such Bank, including the Board of Governors of the
Federal Reserve System of the United States or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in respect of any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to Agent or such Bank, and
(e) to any permitted transferee or assignee or to any approved participant of,
or with respect to, the Notes, as aforesaid, which has signed a confidentiality
agreement consistent with the terms of this Section 13.13 hereof.
(n) Withholding Taxes. If any Bank is not a United States person within
the meaning of Section 7701(a)(30) of the Internal Revenue Code, such Bank shall
promptly (but in any event prior to the initial payment of interest hereunder)
deliver to the Agent two executed copies of (i) Internal Revenue Service Form
W-8BEN or any successor form specifying the applicable tax treaty between the
United States and the jurisdiction of such Bank's domicile which provides for
the exemption from withholding on interest payments to such Bank, (ii) Internal
Revenue Service Form W-8ECI or any successor form evidencing that the income to
be received by such Bank hereunder is effectively connected with the conduct of
a trade or business in the United States or (iii) other evidence satisfactory to
the Agent that such Bank is exempt from United States income tax withholding
with respect to such income; provided, however, that such Bank
101
shall not be required to deliver to Agent the aforesaid forms or other evidence
with respect to Advances to the Company, if such Bank has assigned its entire
interest in the Revolving Credit (including any outstanding Advances thereunder
and participations in Letters of Credit issued hereunder), Swing Line and any
Notes issued to it by the Company, to an Affiliate which is incorporated under
the laws of the United States or a state thereof, and so notifies the Agent.
Such Bank shall amend or supplement any such form or evidence as required to
insure that it is accurate, complete and non-misleading at all times. Promptly
upon notice from the Agent of any determination by the Internal Revenue Service
that any payments previously made to such Bank hereunder were subject to United
States income tax withholding when made, such Bank shall pay to the Agent the
excess of the aggregate amount required to be withheld from such payments over
the aggregate amount actually withheld by the Agent. In addition, from time to
time upon the reasonable request and at the sole expense of the Company, each
Bank and the Agent shall (to the extent it is able to do so based upon
applicable facts and circumstances), complete and provide the Company with such
forms, certificates or other documents as may be reasonably necessary to allow
the Company to make any payment under this Agreement or the other Loan Documents
without any withholding for or on the account of any tax under Section 10.1(d)
hereof (or with such withholding at a reduced rate), provided that the execution
and delivery of such forms, certificates or other documents does not adversely
affect or otherwise restrict the right and benefits (including without
limitation economic benefits) available to such Bank or the Agent, as the case
may be, under this Agreement or any of the other Loan Documents, or under or in
connection with any transactions not related to the transactions contemplated
hereby.
(o) Effective Upon Execution. This Agreement shall become effective upon
the later of the Effective Date and the execution hereof by Banks, Agent and the
Company, and the issuance by the Company of the Revolving Credit Notes and the
Swing Line Notes hereunder, and shall remain effective until the Indebtedness
has been repaid and discharged in full and no commitment to extend any credit
hereunder remains outstanding.
(p) Severability. In case any one or more of the obligations of the
Company under this Agreement, the Notes or any of the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of the Company shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of the Company under this Agreement, the Notes
or any of the other Loan Documents in any other jurisdiction.
(q) Table of Contents and Headings. The table of contents and the headings
of the various subdivisions hereof are for convenience of reference only and
shall in no way modify or affect any of the terms or provisions hereof.
(r) Construction of Certain Provisions. If any provision of this Agreement
or any of the other Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
(s) Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or
102
condition is not permitted by any such covenant (taking into account any such
stated exception), the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
such condition exists.
(t) Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Company or any party to any of
the Loan Documents made herein or in any of the other Loan Documents or in any
certificate, report, financial statement or other document furnished by or on
behalf of the Company, any such party in connection with this Agreement or any
of the other Loan Documents shall be deemed to have been relied upon by the
Banks, notwithstanding any investigation heretofore or hereafter made by any
Bank or on such Bank's behalf, and those covenants and agreements of the Company
set forth in Section 11.6 hereof (together with any other indemnities of the
Company contained elsewhere in this Agreement or in any of the other Loan
Documents, including but not limited to Sections 7.14, 11.1, 11.5, 11.7, 13.5
and 13.12) and of Banks set forth in Sections 12.1, 12.11, 12.12 and 13.13
hereof shall, notwithstanding anything to the contrary contained in this
Agreement, survive the repayment in full of the Indebtedness and the termination
of any commitments to make Advances hereunder.
(u) Complete Agreement; Amendment and Restatement. This Agreement, the
Notes, any Requests for Advance or Letters of Credit hereunder, the other Loan
Documents and any agreements, certificates, or other documents given to secure
the Indebtedness, contain the entire agreement of the parties hereto, and none
of the parties hereto shall be bound by anything not expressed in writing. This
Agreement constitutes an amendment and restatement of the Prior Credit
Agreement, which Prior Credit Agreement is fully superseded and amended and
restated in its entirety hereby; provided, however, that the Indebtedness
governed by the Prior Credit Agreement shall remain outstanding and in full
force and effect and provided further that this Agreement does not constitute a
novation of such Indebtedness.
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
103
WITNESS the due execution hereof as of the day and year first above
written.
COMPANY: AGENT:
CREDIT ACCEPTANCE COMERICA BANK, As Agent
CORPORATION
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxx X. Light
------------------------- ---------------------------------
Its: Treasurer Its: VP
104
BANKS:
COMERICA BANK
By: /s/ Xxxxx X. Light
---------------------------------
Its: VP
SIGNATURE PAGE FOR FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
000
XXXX XX XXXXXXX, N.A.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Its: Vice President
SIGNATURE PAGE FOR FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
106
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Its: SVP
SIGNATURE PAGE FOR FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
107
XXXXXX X.X.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Its: Vice President
SIGNATURE PAGE FOR FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
108
FIFTH THIRD BANK
(EASTERN MICHIGAN)
By: /s/ Xxxx Xxxxxxxxx
---------------------------------
Its: Vice President
SIGNATURE PAGE FOR FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
109
NATIONAL CITY BANK OF THE
MIDWEST FORMERLY KNOWN AS NATIONAL
CITY BANK OF MICHIGAN/ILLINOIS
By: /s/ Xxxxxxx Xxxx
---------------------------------
Its: Vice President_
SIGNATURE PAGE FOR FOURTH AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
110
Attachment 1
SCHEDULE 1.1(1)
PRICING MATRIX
THE APPLICABLE MARGIN FOR APPLICABLE FEE PERCENTAGE FOR
-------------------------------------- ---------------------------------------
ADVANCES OF THE
REVOLVING CREDIT
ADVANCES AT THE CARRIED AT THE
NOTWITHSTANDING THE PRIME-BASED RATE EURODOLLAR-BASED RATE REVOLVING CREDIT LETTER OF CREDIT
COMPANY'S RATING LEVEL: SHALL BE SHALL BE FACILITY FEE FEE
----------------------- ---------------- --------------------- ----------------- ---------------------
0% 1.30% .6000% 1.425%
(inclusive of
facing fee)
----
(1) All terms as defined in the Agreement.
111
SCHEDULE 3.11
EXISTING LETTERS OF CREDIT
LC NUMBER APPLICANT BENEFICIARY EXPIRATION DATE AMOUNT
--------- -------------------- --------------------- --------------- ----------
578094-03 CAC Reinsurance Ltd. Combined Insurance 5/26/06 $2,500,000
Company of America
565237-03 CAC Reinsurance Ltd. American Bankers Life 5/26/06 $ 50,000
Assurance Co. of
Florida
The Account Party for each Letter of Credit described in this Schedule is
CAC Reinsurance Ltd. solely, and not jointly and severally with the Company.
112
SCHEDULE 6.5
SUBSIDIARIES
See attached.
DATE
CREATED DOMESTIC
OR STATE/COUNTRY OF PERCENT OF NATURE OF OR
NAME OF SUBSIDIARY ACQUIRED INCORPORATION OWNERSHIP BUSINESS FOREIGN
--------------------- ---------- ------------------ ------------- ------------------- ----------
Provides auction
Services to sellers
Arlington Investment when selling
Company 5/7/1998 State of Michigan 100% automobiles Domestic
Finance Retail
Auto Funding America Installment
Inc. 1/18/2000 State of Michigan 100% Contracts Domestic
Finance Retail
Auto Funding America 7/26/2000 State of Nevada Installment Foreign
of Nevada Inc. 12/17/2003 State of Michigan 100% Contracts Domestic
Accept the
assignment of lease
Auto Lease Services agreements from
LLC 6/6/2000 State of Delaware 100% automotive dealers Foreign
AutoNet Finance Lease contracts of
Xxxxxxx.xxx, Inc. 6/2/1999 State of Michigan 100% used vehicles Domestic
Administrator of
Buyers Vehicle vehicle extended
Protection Plan, Inc. 6/18/1990 State of Michigan 100% service contracts Domestic
10%-CAC
Reinsurance,
Ltd.
90%-Credit
CAC (TCI), Ltd. 7/16/2002 Turks & Caicos Acceptance Holding Company Foreign
Special purpose
company limited to
facilitating asset
CAC Funding Corp. 6/23/1998 State of Nevada 100% backed transactions Foreign
CAC International 100%-CAC
Holdings, LLC 7/8/2002 Michigan (TCI) Ltd. Holding Company Domestic
Lease contracts on
CAC Leasing, Inc. 4/29/1996 State of Michigan 100% used vehicles Domestic
CAC Luxembourg 100%-CAC
S.a.r.l 3/30/2001 Luxembourg Scotland Lending Institution Foreign
Specialized
financing and
100%-CAC receivable
CAC of Canada Company 3/20/1996 Canada Scotland management in Canada Foreign
113
Special purpose
Credit Acceptance of company limited to
Nevada, Inc. 1/25/1993 State of Nevada 100% financing activities Foreign
Reinsurance company
Turks and Caicos for collision
CAC Reinsurance, Ltd. 1/30/1997 Islands 100% insurance Foreign
Investment
Business-provide
90%-TCI acquisition finance
10%- CAC and working capital Foreign
CAC Scotland 3/23/2001 Scotland International to companies in the Partnership
Holdings CAC Group
Private Limited
CAC UK Funding 100%-CAC Company
Limited 3/21/2001 England and Whales Scotland Lending Institution Foreign
CAC Warehouse
Funding Corp. 9/10/2002 Nevada 100% SPV Company Foreign
CAC Warehouse
Funding Corporation
II 9/25/2003 Nevada 100% SPV Company Foreign
100%-Credit
Credit Acceptance Acceptance
Auto Dealer Loan Funding
Trust 2003-1 6/6/2003 Delaware LLC-2003-1 Trust Company Foreign
100%-Credit
Credit Acceptance Acceptance
Auto Dealer Loan Funding
Trust 2004-1 8/11/2004 Delaware LLC-2004-1 Trust Company Foreign
Credit Acceptance
Funding LLC 2003-1 6/6/2003 Delaware 100% SPV Company Foreign
Credit Acceptance
Funding LLC 2004-1 8/9/2004 Delaware 100% SPV Company Foreign
Specialized
financing and
Credit Acceptance receivable
Corporation Ireland 100%-CAC management in
Limited 12/2/1996 Ireland Scotland Ireland Foreign
Credit Acceptance 90%-CAC Special purpose
Corporation of South State of South 10%-CAC company limited to
Dakota, Inc. 10/13/1994 Dakota Reinsurance financing activities Foreign
Specialized
financing and
Credit Acceptance receivable
Corporation UK 100%-CAC management in the
Limited 9/6/1994 England and Wales Scotland U.K. Foreign
Credit Acceptance
Motors, Inc. 3/30/2005 Michigan 100% Auto Dealership** Domestic
Provide on-line
market place for
its dealer partners
Credit Acceptance to puchase products
Wholesale Buyers from various
Club, Inc. 12/3/2001 State of Michigan 100% vendors. Domestic
Remarketing
services for
Vehicle Remarketing automobiles at
Services, Inc. 5/21/1997 State of Michigan 100% auctions Domestic
114
SCHEDULE 6.6
TAXES
None.
115
SCHEDULE 6.12
LITIGATION
1. Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx,
Xxxxxxxx X. Xxxxxxxx and Xxxxx Xxx, Plaintiffs v. Credit Acceptance Corporation
and Northeast Auto Credit, Inc., Defendants, in the United States District Court
for the Western District of Missouri, Western Division. The Company is currently
a defendant in a class action proceeding commenced on October 15, 1996 in the
Circuit Court of Xxxxxxx County, Missouri and removed to the United States
District Court for the Western District of Missouri. The complaint seeks
unspecified money damages for alleged violations of a number of state and
federal consumer protection laws. On October 9, 1997, the District Court
certified two classes on the claims brought against the Company, one relating to
alleged overcharges of official fees, the other relating to alleged overcharges
of post-maturity interest. On August 4, 1998, the District Court granted partial
summary judgment on liability in favor of the plaintiffs on the interest
overcharge claims based upon the District Court's finding of certain violations
but denied summary judgment on certain other claims. The District Court also
entered a number of permanent injunctions, which among other things, restrained
the Company from collecting on certain class accounts. The Court also ruled in
favor of the Company on certain claims raised by class plaintiffs. Because the
entry of an injunction is immediately appealable, the Company appealed the
summary judgment order to the United States Court of Appeals for the Eighth
Circuit. Oral argument on the appeals was heard on April 19, 1999. On September
1, 1999, the United States Court of Appeals for the Eighth Circuit overturned
the August 4, 1998 partial summary judgment order and injunctions against the
Company. The Court of Appeals held that the District Court lacked jurisdiction
over the interest overcharge claims and directed the District Court to sever
those claims and remand them to state court. On February 18, 2000, the District
Court entered an order remanding the post-maturity interest class to the Circuit
Court of Xxxxxxx County, Missouri while retaining jurisdiction on the official
fee class. The Company then filed a motion requesting that the District Court
reconsider that portion of its order of August 4, 1998, in which the District
Court had denied the Company's motion for summary judgment on the federal
Truth-In-Lending Act ("TILA") claim. On May 26, 2000, the District Court entered
summary judgment in favor of the Company on the TILA claim and directed the
Clerk of the Court to remand the remaining state law official fee claims to the
appropriate state court. On September 18, 2001, the Circuit Court of Xxxxxxx
County, Missouri mailed an order assigning this matter to a judge. On October
28, 2002, the plaintiffs filed a fourth amended complaint. The Company filed a
motion to dismiss the plaintiff's fourth amended complaint on November 4, 2002.
On November 18, 2002, the Company filed a memorandum urging the decertification
of the classes. On February 21, 2003, the plaintiffs filed a brief opposing the
Company's November 4, 2002 motion to dismiss the case. On May 19, 2004, the
court released an order, dated January 9, 2004, that denied the Company's motion
to dismiss. On November 16, 2005 the Court issued an order that, among other
things, adopted the District Court's order certifying classes. The Company will
continue its vigorous defense of all remaining claims. However, an adverse
ultimate disposition of this litigation could have a material negative impact on
the Company's financial position, liquidity and results of operations.
116
2. Due to the consumer-oriented nature of the industry in which the
Company operates, industry participants frequently are named as defendants in
litigation involving alleged violations of state, federal and foreign
truth-in-lending, credit availability, credit reporting, consumer protection,
warranty, debt collection, insurance and other consumer-oriented laws and
regulations, if applicable. Many of these cases are filed as purported class
actions and seek damages in large dollar amounts. Although the Company has been,
and is currently, involved in litigation of this type, the Company's experience
has been that such claims are often brought as counterclaims in response to
efforts by the Company to collect delinquent accounts and have not been
financially significant.
117
SCHEDULE 6.17
COMPLIANCE WITH LAWS
None.
118
SCHEDULE 8.5A
None.
119
SCHEDULE 8.5B
PERMITTED DEBT
The Company is indebted to Agent in an amount which shall not be in
excess of $7,539,000 pursuant to a Continuing Collateral Mortgage, dated April
28, 1994, as amended, secured by a first lien on the Silver Triangle Building,
00000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx.
120
SCHEDULE 8.6
LIENS
The Company is indebted to Agent in the amount of $7,539,000 pursuant to a
Continuing Collateral Mortgage, dated April 28, 1994, as amended, secured by a
first lien on the Silver Triangle Building, 00000 Xxxx Xxxxxx Xxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx.
121
SCHEDULE 8.8
PERMITTED INVESTMENTS
None.
122
SCHEDULE 13.6
NOTICES
For the Agent:
Metropolitan Loans F
One Detroit Center, 5th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.: 313/000-0000
Attention: Xxxxx X. Light
with a copy not constituting notice to:
Xxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx
Fax No.: 313/000-0000
Telephone No.: 313/000-0000
Attention: Xxxxxx X. Xxxxxxxx
For the Company:
Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 248/000-0000
Telephone No.: 248/000-0000
Attention: Xxxxxxx X. Xxxx
with a copy not constituting notice to:
Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.: 313/000-0000
Attention: Xxxx X. Xxxx
123
EXHIBIT A
REQUEST FOR ADVANCE
No.____________________ Dated:_____________________________
TO: Comerica Bank ("Agent")
RE: Fourth Amended and Restated Credit Acceptance Corporation Credit
Agreement dated as of February ___, 2006 by and among Company, the
Banks signatory thereto and Comerica Bank, as Agent (as amended,
restated or otherwise modified from time to time, the "Credit
Agreement") The Company pursuant to the Credit Agreement requests an
Advance from Banks, as follows:
A. Date of Advance:
B. Credit facility under which Advance is requested:
[ ] Revolving Credit
C. [ ] (check if applicable)
This Advance is or includes a whole or partial refunding/conversion of:
Advance No(s). _____________________________________
D. Type of Advance (check only one);
[ ] Prime-based Advance
[ ] Eurodollar-based Advance
E. Amount of Advance:
____________________________________________
F. Interest Period (not applicable to Prime-based Advances)
________ months (insert seven days, 1, 2, 3 or 6)
Interest on each 1 month, 2 month and 3 month Eurodollar-based Advance
shall be payable on the last day of the Applicable Interest Period. Interest on
each 6 month Eurodollar-
124
based Advance shall be payable at intervals of 3 months after the first day of
the applicable Interest Period and also on the last day of the Interest Period
applicable thereto.
G. Disbursement Instructions
[ ] Comerica Bank Account No. _________________
[ ] Other: ___________________________________
___________________________________
The Company certifies to the matters specified in Section 2.3(f) or
Sections 3.2(a) through (e) of the Credit Agreement, as the case may be.
* * *
Signatures on Following Page
125
Capitalized terms used herein, except as defined to the contrary, have the
meanings given them in the Credit Agreement.
CREDIT ACCEPTANCE CORPORATION
By: __________________________________________________
Its: _________________________________________________
Agent Approval: _________
EXHIBIT B
[RESERVED]
EXHIBIT C
REVOLVING CREDIT NOTE
(Credit Acceptance Corporation)
$_________________ ________________,______
On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED,
Credit Acceptance Corporation, a Michigan corporation ("Company"), promises to
pay to the order of [insert Bank] ("Bank") at Detroit, Michigan, care of Agent,
for the account of Bank's Eurodollar Lending Office with respect to any
Eurodollar-based Advances hereunder, in lawful money of the United States of
America, the Indebtedness or so much of the sum of [Insert Amount derived from
Percentages] Dollars ($_________), as may from time to time have been advanced
and then be outstanding hereunder pursuant to the Fourth Amended and Restated
Credit Acceptance Corporation Credit Agreement dated as of February ___, 2006,
made by and among the Company and certain banks signatory thereto, including the
Bank, and Comerica Bank, as Agent for such banks, as the same may be amended or
otherwise modified from time to time (the "Agreement"), together with interest
thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Capitalized terms used herein, except as defined to
the contrary, shall have the meanings given them in the Agreement.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
This note is given in [partial] replacement and renewal of the Revolving
Credit Note dated as of _____________________ previously issued by the Company
to Bank.]
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
CREDIT ACCEPTANCE CORPORATION
By: ___________________________________________
Its:___________________________________________
EXHIBIT D
PERCENTAGES
BANKS COMMITMENT PERCENTAGES
--------------------------------------- ------------ -----------
Comerica Bank $ 30,000,000 22.00000000%
Bank of America, N.A. $ 30,000,000 22.22222222%
LaSalle National Bank $ 20,000,000 14.81481481%
Xxxxxx, X.X. $ 20,000,000 14.81481481%
National City Bank of Michigan/Illinois $ 20,000,000 14.81481481%
Fifth Third Bank $ 15,000,000 11.1111111%
------------ -----------
TOTAL $135,000,000 100.00%
============ ===========
EXHIBIT E
SWING LINE NOTE
(Credit Acceptance Corporation)
$15,000,000 ___________, _____
On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED,
Credit Acceptance Corporation, a Michigan corporation ("Company"), promises to
pay to the order of Comerica Bank ("Bank") at Detroit, Michigan, for the account
of Bank's Eurodollar Lending Office with respect to any Eurodollar-based
Advances hereunder, in lawful money of the United States of America, so much of
the sum of Fifteen Million Dollars ($15,000,000), as may from time to time have
been advanced and then be outstanding hereunder pursuant to the Fourth Amended
and Restated Credit Acceptance Corporation Credit Agreement dated as of February
___, 2006, made by and among the Company and certain banks signatory thereto,
including the Bank, in its individual capacity and as Agent for such banks, as
the same may be amended or otherwise modified from time to time (the
"Agreement"), together with interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the Applicable
Interest Rate from time to time applicable thereto under the Agreement or as
otherwise determined thereunder, and interest shall be computed, assessed and
payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Capitalized terms used herein, except as defined to
the contrary, shall have the meanings given them in the Agreement.
This Note shall be interpreted and the rights of the parties shall be
determined under the laws of, and enforceable in, the State of Michigan.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
[This note is given in [partial] replacement and renewal of the Swing Line
Note dated as of _____________ _____ previously issued by the Company to Bank.]
Nothing herein shall limit any right granted Bank by any other instrument
or by law.
CREDIT ACCEPTANCE CORPORATION
By:_____________________________________________
Its:____________________________________________
EXHIBIT F
REQUEST FOR SWING LINE ADVANCE
No.____________________ Dated:___________________
TO: Comerica Bank ("Swing Line Bank")
RE: Fourth Amended and Restated Credit Acceptance Corporation Credit
Agreement dated as of February ___, 2006 by and among Company, the
Banks signatory thereto and Comerica Bank, as Agent (as amended,
restated or otherwise modified from time to time, the "Credit
Agreement")
The Company pursuant to the Credit Agreement requests an Advance from
the Swing Line Bank as follows:
A. Date of Advance:
B. [ ](check if applicable)
This Advance is or includes a whole or partial refund/conversion of:
Advance No(s).____________________________
C. Type of Advance (check only one);
[ ] Prime-based Advance
[ ] Eurodollar-based Advance
[ ] Quoted Rate Advance
D. Amount of Advance:
___________________________________
E. Interest Period (not applicable to Prime-based Advances)
[ ] One month
[ ] Other _____________________
F. Disbursement Instructions
[ ] Comerica Bank Account No. _____________________________________
[ ] Other: ___________________________________________________
__________________________________________________________
The Company certifies that, as of the date of this Request:
(A) both before and after such Swing Line Advance, the obligations
of the Company set forth in this Agreement and the Loan Documents, are valid,
binding and enforceable obligations of the Company.
(B) all conditions to the making of Swing Line Advances have been
satisfied (both before and after giving effect to such Advance);
(C) both before and after the making of such Swing Line advance,
there is no Default or Event of Default in existence; and
(D) both before and after such Swing Line Advance, the
representations and warranties contained in this Agreement and the other Loan
Documents are true and correct in all material respects.
Capitalized terms used herein, except as defined to the contrary,
have the meanings given them in the Credit Agreement.
CREDIT ACCEPTANCE CORPORATION
By:_________________________________________
Its:________________________________________
EXHIBIT G
FORM OF
ASSIGNMENT AGREEMENT
Date:__________
To: CREDIT ACCEPTANCE CORPORATION
and
COMERICA BANK ("Agent")
Re: Fourth Amended and Restated Credit Acceptance Corporation
Credit Agreement dated as of February ___, 2006 by and among
Company, the Banks signatory thereto and Comerica Bank, as
Agent (as amended, restated or otherwise modified from time to
time, the "Credit Agreement")
Ladies and Gentlemen:
Reference is made to Sections 13.8(c), (d) and (e) of the Credit
Agreement. Unless otherwise defined herein or the context otherwise requires,
all initially capitalized terms used herein without definition shall have the
meanings specified in the Credit Agreement.
This Agreement constitutes notice to each of you of the proposed
assignment and delegation by [insert assignor Bank] (the "Assignor") to [insert
proposed assignee] (the "Assignee"), and the Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, a ______________% undivided interest in each of Assignor's rights and
obligations under the Credit Agreement and the other Loan Documents such that,
after giving effect to the foregoing assignment and assumption, the Assignee's
interest in the [Revolving Credit (and participations in any outstanding Letters
of Credit)] shall equal $ _____________ and $_________ respectively and the
Assignee's Percentage shall equal ____%.
Assignor does hereby sell, assign and transfer to Assignee effective on
the "Effective Date" (as hereafter defined) _____% of Assignor's right, title
and interest in, to and under the Assignor's Notes, the Agreement and the other
Loan Documents. It is acknowledged that Assignor, immediately after this
Assignment, shall hold a _____ percentage (_____%) interest in each of
Assignor's Notes.
The Assignor hereby instructs the Agent to make all payments from and
including the Effective Date hereof in respect of the interest assigned hereby,
directly to the Assignee. The Assignor and the Assignee agree that all interest
and fees accrued up to, but not including, the Effective Date of the assignment
and delegation being made hereby are the property of the Assignor, and not the
Assignee. The Assignee agrees that, upon receipt of any such interest or fees
accrued up to the Effective Date, the Assignee will promptly remit the same to
the Assignor.
The Assignee hereby confirms that it has received a copy of the Credit
Agreement and the exhibits and schedules referred to therein, and all other Loan
Documents which it considers necessary, together with copies of the other
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the loans thereunder. The Assignee acknowledges and
agrees that it: (a) has made and will continue to make such inquiries and has
taken and will take such care on its own behalf as would have been the case had
its Percentage been granted and its loans been made directly by such Assignee to
the Company without the intervention of the Agent, the Assignor or any other
Bank; and (b) has made and will continue to make, independently and without
reliance upon the Agent, the Assignor or any other Bank, and based on such
documents and information as it has deemed appropriate, its own credit analysis
and decisions relating to the Credit Agreement. The Assignee further
acknowledges and agrees that neither the Agent, nor the Assignor has made any
representations or warranties about the creditworthiness of the Company or any
other party to the Credit Agreement or any other of the Loan Documents, or with
respect to the legality, validity, sufficiency or enforceability of the Credit
Agreement, or any other of the Loan Documents. This assignment shall be made
without recourse to or warranty by the Assignor, except as set forth herein.
Assignee represents and warrants that it is a Person to which assignments
are permitted pursuant to Section 13.8(c) of the Credit Agreement.
Except as otherwise provided in the Credit Agreement, effective as of the
Effective Date:
(a) the Assignee: (i) shall be deemed automatically to have become a party
to the Credit Agreement and the other Loan Documents, to have assumed all
of the Assignor's obligations thereunder to the extent of the Assignee's
percentage referred to in the second paragraph of this Assignment
Agreement, and to have all the rights and obligations of a party to the
Credit Agreement and the other Loan Documents, as if it were an original
signatory thereto to the extent specified in the second paragraph hereof;
and (ii) agrees to be bound by the terms and conditions set forth in the
Credit Agreement and the other Loan Documents as if it were an original
signatory thereto; and
(b) the Assignor's obligations under the Credit Agreement and the other
Loan Documents shall be reduced by the Percentage referred to in the
second paragraph of this Assignment Agreement.
As used herein, the term "Effective Date" means the date on which all of
the following have occurred or have been completed, as reasonably determined by
the Agent:
(1) the delivery to the Agent of an original of this Assignment
Agreement executed by the Assignor and the Assignee;
(2) the payment to the Agent, of all accrued fees, expenses and other
items for which reimbursement is then owing under the Credit
Agreement;
(3) the payment to the Agent of the $3,500.00 processing fee referred to
in Section 13.8(d) (v) of the Credit Agreement; and
(4) all other restrictions and items noted in Sections 13.8(c), (d) and
(e) of the Credit Agreement have been completed.
The Agent shall notify the Assignor and the Assignee, along with Company of the
Effective Date.
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned loans:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
(C) Proposed effective date of assignment.
The Assignee has delivered to the Agent (or is delivering to the Agent
concurrently herewith) the tax forms referred to in Section 13.14 of the Credit
Agreement, and other forms reasonably requested by the Agent. The Assignor has
delivered to the Agent (or is delivering to Agent concurrently herewith), the
original of each Note held by the Assignor under the Credit Agreement.
* * *
Signatures Follow on Succeeding Pages
Please evidence your consent to and acceptance of the proposed assignment
and delegation set forth herein by signing and returning counterparts hereof to
the Assignor and the Assignee.
[ASSIGNOR]
By:__________________________________________
Its:_________________________________________
[ASSIGNEE]
By:__________________________________________
Its:_________________________________________
ACCEPTED AND CONSENTED TO
this______day of___________, 200__
COMERICA BANK, Agent
By:_____________________________
Its:____________________________
CREDIT ACCEPTANCE CORPORATION
By:_____________________________
Its:____________________________
[This form of Assignment Agreement (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]
EXHIBIT H
COVENANT COMPLIANCE REPORT
To: Comerica Bank, as Agent
Re: Fourth Amended and Restated Credit Acceptance Corporation
Credit Agreement dated as of February ___, 2006 by and among
Company, the Banks signatory thereto and Comerica Bank, as
Agent (as amended, restated or otherwise modified from time to
time, the "Credit Agreement")
This Covenant Compliance Report ("Report") is furnished pursuant to
Section 7.3 of the Agreement and sets forth various information as __________of
, 200___ (the "Computation Date").
1. CONSOLIDATED ASSETS COVERAGE RATIO. On the Computation Date, the
Consolidated Assets Coverage Ratio, which requires Consolidated Net Assets to be
at a level greater than or equal to Consolidated Funded Debt, was $______ to
$______, as computed in the supporting documents attached hereto as Schedule 1.
2. CONSOLIDATED FUNDED DEBT RATIO LEVEL. On the Computation Date the
Consolidated Funded Debt Ratio which is the Ratio of Consolidated Funded Debt to
Company's Consolidated Tangible Net Worth and which is required to be equal to
or less than 3.0 to 1.0 was _____ to 1.0 as computed in the supporting documents
attached hereto as Schedule 2.
3. CONSOLIDATED TANGIBLE NET WORTH. On the Computation Date, the
Consolidated Tangible Net Worth, which is required to be not less than Two
Hundred Seventy-Nine Million Dollars ($279,000,000.00), plus the sum of (i)
eighty percent (80%) of Consolidated Net Income for each fiscal quarter of the
Company (A) beginning on or after October 1, 2005, (B) ending on or before the
applicable date of determination thereof, and (C) for which Consolidated Net
Income as determined above is a positive amount and (ii) the Equity Offering
Adjustment, and MINUS the lesser of (x) One Hundred Ninety-Nine Million Dollars
($199,000,000) and (y) the aggregate amount of Permitted Repurchases and
Permitted Dividends paid to holders of the Company's capital stock to the
applicable date of determination on a cumulative basis on or after October 1,
2005 was $______, as computed in the supporting documents attached hereto as
Schedule 3.
4. CONSOLIDATED FIXED CHARGE COVERAGE RATIO. On the Computation Date, the
Consolidated Fixed Charge Coverage Ratio, which is required to be not less than
2.75 to 1.0, unless the remaining maturity of the Revolving Credit shall be less
than 366 days, in which case such ratio shall be maintained at not less than
3.50 to 1.00, was ________ to 1.0 as computed in the supporting documents
attached hereto as Schedule 4.
The undersigned officer of Company hereby certifies that:
A. To the best of the undersigned officer's knowledge, all of the
information set forth in this Report (and in any Schedule attached hereto) is
true and correct in all material respects.
B. To the best of the undersigned officer's knowledge, as of the
Computation Date, the Company has observed and performed all of its covenants
and other agreements contained in the Credit Agreement and in the Notes and any
other Loan Documents to be observed, performed and satisfied by it.
C. I have reviewed the Agreement and this Report is based on an
examination sufficient to assure that this Report is accurate.
D. To the best of the undersigned officer's knowledge, except as stated in
Schedule 5 hereto (which shall describe any existing Default or Event of Default
and the notice and period of existence thereof and any action taken with respect
thereto or contemplated to be taken by Borrowers), no Default or Event of
Default has occurred and is continuing on the date of this Report.
Capitalized terms used in this Report and in the Schedules hereto, unless
specifically defined to the contrary, have the meanings given to them in the
Credit Agreement.
IN WITNESS WHEREOF, Company has caused this Report to be executed and
delivered by its duly authorized officer this ______ day of __________________,
____.
CREDIT ACCEPTANCE CORPORATION
By:________________________________________
Its:_______________________________________
EXHIBIT I
LETTER OF CREDIT NOTICE
TO: Members of the Bank Group
RE: Issuance of Letter of Credit pursuant to Article 3 of the
Fourth Amended and Restated Credit Acceptance Corporation
Credit Agreement dated as of February ___, 2006 by and among
Company, the Banks signatory thereto and Comerica Bank, as
Agent (as amended, restated or otherwise modified from time to
time, the "Credit Agreement").
On ________________ , 20__,(1) Agent, in accordance with Article 3 of the
Agreement, issued its Letter of Credit number____________ , in favor of
_________(2) for the account of [ ].(3) The face amount of
____________________________________ ____________________________ such Letter of
Credit is $. . The amount of each Bank's participation in such Letter of Credit
is as follows:(4)
____________[Bank] $____________
____________[Bank] $____________
____________[Bank] $____________
____________[Bank] $____________
____________[Bank] $____________
____________[Bank] $____________
This notification is delivered this _____ day of ____________, 20___ ,
pursuant to Section 3.3 of the Credit Agreement. Except as otherwise defined,
capitalized terms used herein have the meanings given them in the Credit
Agreement.
Signed:
COMERICA BANK
By:________________________________________
Its:_______________________________________
----
(1) Date of Issuance
(2) Beneficiary
(3) Account Party
(4) Amounts based on Percentages
[This form of Letter of Credit Notice (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]
EXHIBIT J
[RESERVED]
EXHIBIT K
[RESERVED]
EXHIBIT L
[RESERVED]
EXHIBIT M
FORM OF NEW BANK ADDENDUM
NEW BANK ADDENDUM, dated_____________________, to the Fourth Amended and
Restated Credit Acceptance Corporation Credit Agreement dated as of February
___, 2006 (as otherwise amended, restated or modified from time to time, the
"Credit Agreement"), by and among Credit Acceptance Corporation ("Company"),
each of the financial institutions parties thereto (collectively, the "Banks")
and Comerica Bank, as Agent for the Banks.
W I T N E S S E T H:
WHEREAS, the Credit Agreement provides in Section 2.17 thereof that a
financial institution, although not originally a party thereto, may become a
party to the Credit Agreement with the consent of the Company and the Agent by
executing and delivering to the Agent a New Bank Addendum to the Credit
Agreement in substantially the form of this new bank addendum; and
WHEREAS, the undersigned New Bank was not an original party to the Credit
Agreement but now desires to become a party thereto;
NOW, THEREFORE, the New Bank hereby agrees as follows:
The New Bank hereby confirms that it has received a copy of the Credit
Agreement and the exhibits and schedules referred to therein, and all other Loan
Documents which it considers necessary, together with copies of the other
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the loans thereunder. The New Bank acknowledges and
agrees that it: (a) has made and will continue to make such inquiries and has
taken and will take such care on its own behalf as would have been the case had
its commitment been granted and its loans been made directly by such New Bank to
the Company without the intervention of the Agent or any other Bank; and (b) has
made and will continue to make, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, its own credit analysis and decisions relating to the Credit
Agreement. The New Bank further acknowledges and agrees that the Agent has not
made any representations or warranties about the creditworthiness of the Company
or any other party to the Credit Agreement or any other of the Loan Documents,
or with respect to the legality, validity, sufficiency or enforceability of the
Credit Agreement, or any other of the Loan Documents.
New Bank represents and warrants that it is a Person to which assignments
are permitted pursuant to Sections 13.8(c) and (d) of the Credit Agreement.
Except as otherwise provided in the Credit Agreement, effective as of the
Effective Date (as defined below):
(a) the New Bank (i) shall be deemed automatically to have become a
party to the Credit Agreement and the other Loan Documents, and to
have all the rights and obligations of a party to the Credit
Agreement and the other Loan Documents, as if it were an original
signatory; and (ii) agrees to be bound by the terms and conditions
set forth in the Credit Agreement and the other Loan Documents as if
it were an original signatory thereto; and
(b) the New Bank shall be a Bank and its Percentage of the [Revolving
Credit (and its risk participation in Letters of Credit)] shall be
as set forth in the attached revised Exhibit D (Percentages);
provided any fees paid prior to the Effective Date, including any
Letter of Credit Fees, shall not be recalculated, redistributed or
reallocated by Company, Agent or the Banks.
As used herein, the term "Effective Date" means the date on which all of
the following have occurred or have been completed, as reasonably determined by
the Agent:
(1) the Company shall have paid to the Agent all interest, fees
(including the Revolving Credit Facility Fee) and other amounts, if
any, accrued to the Effective Date for which reimbursement is then
owing under the Credit Agreement;
(2) New Bank shall have remitted to the Agent funds in an amount equal
to its Percentage of all Advances of the Revolving Credit
outstanding as of the Effective Date; and
(3) the Company shall have executed and delivered to the Agent for the
New Bank, new Revolving Credit Notes payable to such New Bank in the
face amount of such New Bank's Percentage of the Revolving Credit
Maximum Amount (after giving effect to this New Bank Addendum, and
any other New Bank Addendum executed concurrently herewith).
The Agent shall notify the New Bank, along with Company, of the Effective
Date. The New Bank shall deliver herewith to the Agent administrative details
with respect to the funding and distribution of Advances (and Letters of Credit)
as requested by Agent.
Terms defined in the Credit Agreement and not otherwise defined herein
shall have their defined meanings when used herein.
IN WITNESS WHEREOF, the undersigned has caused this New Bank Addendum to
be executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF BANK]
By:________________________________________
Title:
Accepted this ___________ day of
__________________,________________.
CREDIT ACCEPTANCE CORPORATION
By:________________________________
Title:
Accepted this ____________day of
____________________,_____________.
COMERICA BANK, as Agent
By:________________________________
Title:
EXHIBIT N
FORM OF INTERCOMPANY NOTE
INTERCOMPANY NOTE
COMPANY OR GUARANTOR, AS MAKER
__________________,___________.
ON DEMAND, FOR VALUE RECEIVED, the undersigned ("MAKER") promises to pay
to the order of the entity or entities appearing on Schedule 1 hereto from which
it has received advances of credit ("Holder") such place as shall be designated
from time to time by each such Holder to Maker, in lawful money of the United
States of America or in such other currencies applicable to any particular
advance made hereunder (each an "Advance" and, collectively, the "Advances")
which may, from time to time, be outstanding hereunder, such sum as may from
time to time have been advanced by Holder to Maker and then be outstanding
hereunder, together with interest thereon as hereinafter set forth.
Each Advance may bear interest at Holder's cost of borrowing as certified
by Holder from time to time and in accordance with the Holder's customary
practices.
This Note is a note under which advances, repayments and readvances may be
made from time to time.
This Note shall be fully subordinated in all respects to the Indebtedness
(as defined in the Credit Agreement). Upon the occurrence and during the
continuance of an Event of Default under that certain Fourth Amended and
Restated Credit Acceptance Corporation Credit Agreement dated as of February
___, 2006 (as amended, restated or otherwise modified from time to time, the
"Credit Agreement") by and among the Company, the Banks which are named in and
from time to time signatories thereto (the "Banks") and Comerica Bank, as Agent
(the "Agent"), and following receipt of notice from the Agent, no payments may
be made of the principal of or interest on this Note, it being understood that
nothing in this Note shall be construed to prevent, limit or restrict the
payment of principal or interest under this Note at any other time.
As used herein, "Senior Creditors" shall refer to the Banks and the
holders of Future Debt and "Senior Indebtedness" shall refer to the Indebtedness
under the Credit Agreement and the Future Debt.
During the period when payments of interest hereon are not permitted by
the second preceding paragraph, interest shall accrue and be added to principal
on each interest payment date.
Maker agrees, and Holder by accepting this Note agrees, that: (A) the
obligations evidenced by this Note are subordinated in right of payment, to the
prior payment in full of all
the Senior Indebtedness; the subordination is for the benefit of the Senior
Creditors, and each Senior Creditor whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have acquired
Indebtedness in reliance upon the covenants and provisions contained in this
Note; (B) if Maker is prohibited by the terms of this Note from making any
payment of principal, interest or any other sum under or in respect of this Note
when due, and therefore the Maker shall fail to pay when due any such sum, such
failure shall not constitute a default or event of default under and in respect
of this Note (provided that interest shall continue to accrue as provided herein
and be added to principal as herein set forth); and (C) no revision to any
provision of this Note applicable or relevant to the subordination of this Note
to the Senior Indebtedness shall be made or become effective until approved in
writing by the Agent.
Upon any distribution (whether cash, securities or other property, by
setoff or otherwise) to creditors of Maker in a liquidation or dissolution of
Maker or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Maker or its property: (A) Senior Creditors shall be
entitled to payment in full of all obligations with respect to the Senior
Indebtedness (including interest after the commencement of any such proceeding
at the rates specified for the applicable Indebtedness) to the date of payment
of the Indebtedness before Holder shall be entitled to receive any payment of
any obligations with respect to this Note; and (B) until all obligations with
respect to the Senior Indebtedness are paid in full, any distribution to which
Holder would be entitled shall be made to Senior Creditors as their interests
may appear.
No right of any Senior Creditor to enforce the subordination of the
indebtedness evidenced by this Note shall be impaired by any act or failure to
act by the Maker or by its failure to comply with the terms and conditions of
this Note.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Maker hereby waives presentment for payment, demand, protest and notice of
dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
Terms not defined herein shall have the meanings set forth in the Credit
Agreement.
Nothing herein shall limit any right granted Holder by any other
instrument or by law.
[Company or Guarantor]
By: _______________________________________
Its:_______________________________________
Dated: _____________, _____
Pay to the order of Comerica Bank, as Agent
By: [Holder of Note]
By:________________________________________
Its:_______________________________________
EXHIBIT O
BORROWING BASE CERTIFICATE
================================================================================
This certificate submitted for the __________ [quarter or month] ending
_____________, as follows:
(A) Dealer Loans(1) $___________
times Advance Rate (75%)(2) $___________
(B) Purchased Contract-Balance(1) $___________
times Advance Rate (75%)(3) $___________ (cannot exceed 25%
of the aggregate
Borrowing Base
Limitation).
Total (A PLUS B) $__________
MINUS:
(C) Hedging Reserve(4) (see attached $__________
breakdown)
MINUS
(D) Other Debt Secured by the Collateral
(excluding Indebtedness under Credit
Agreement)(5)
(1) Future Debt $[0]
Subtotal $__________
Borrowing Base Limitation $__________
The undersigned authorized officer certifies the matters contained in
this Borrowing Base Certificate as correct, accurate and complete as of the date
set forth below.
CREDIT ACCEPTANCE CORPORATION
By:_______________________________
Its:______________________________
Date:_____________________________
----------
(1) Calculated as of the most recent quarter end for regular quarterly
certificates and as of the most recent month end for which financial
information is available for all other certificates.
(2) Subject to reduction under definition of Borrowing Base Limitation.
(3) Subject to reduction under definition of Borrowing Base Limitation.
(4) Calculated as of the most recent quarter end, and with disclosure of
additional Hedging Agreements not included in calculation. Adequacy of
reserve subject to review and approval of Majority Banks and affected
Banks, upon request.
(5) These amounts calculated as of the date of the certificate set forth in
the signature block.
Its:______________________________
Date:_____________________________
ATTACHMENT TO BORROWING BASE CERTIFICATE
(Breakdown of Hedging Reserve
for _______________ [month or quarter] ending __________)
A. HEDGING RESERVE AS ALLOCATED TO BANKS OR AFFILIATES BY CREDIT ACCEPTANCE
CORPORATION AS OF MOST RECENT QUARTER END:
1. Bank (or Affiliate) _______________ $__________
2. Bank (or Affiliate) _______________ $__________
3. Bank (or Affiliate) _______________ $__________
Subtotal $__________
Maximum: Hedging Reserve Cannot Exceed $1,000,000 $__________
B. HEDGING AGREEMENTS NOT INCLUDED IN HEDGING RESERVE CALCULATION (ENTERED
INTO AFTER MOST RECENT QUARTER END):
1. Bank (or affiliate) _______________ ___________________________________
___________________________________
2. Bank (or affiliate) _______________ ___________________________________
___________________________________
3. Bank (or affiliate) _______________ ___________________________________
___________________________________
[Brief description, including date,
nature of instrument, etc.]
EXHIBIT P
[RESERVED]
EXHIBIT Q
[RESERVED]
EXHIBIT R
RESTRUCTURING
[See Attached]
CREDIT ACCEPTANCE CORPORATION
INTERNATIONAL LOSS PLANNING
AND RESTRUCTURING
PRESENTLY, CAC'S FOREIGN ENTITIES' OWNERSHIP IS AS FOLLOWS:
[ORGANIZATIONAL CHART]
UNDER THE CURRENT STRUCTURE, CAC SCOTLAND HAS ELECTED TO BE TREATED AS A
CORPORATION FOR US INCOME TAX PURPOSES. BECAUSE CAC SCOTLAND IS FOREIGN AND A
CORPORATION, IT IS CONSIDERED A CONTROLLED FOREIGN CORPORATION (CFC) BY THE IRS.
ANY CURRENT INCOME OR LOSS OF CFCS IS NOT INCLUDED IN THE PARENT COMPANY'S US
TAX RETURN. HOWEVER, IF CASH IS REMITTED TO THE US, THE US COMPANY IS TAXED ON
THAT CASH TO THE EXTENT OF ACCUMULATED EARNINGS (E&P) IN THE CFC AND IS ALLOWED
A FOREIGN TAX CREDIT FOR TAXES PAID IN THE FOREIGN JURISDICTION. ANY CUMULATIVE
LOSSES GENERATED IN A CFC ARE TRAPPED AND NEVER MAKE THEIR WAY INTO THE US
RETURN.
DUE TO THE DECISION IN JUNE 2003 TO NO LONGER ORIGINATE BUSINESS IN THE UK, IT
WAS PROJECTED THAT THE LIQUIDATION OF THAT BUSINESS SEGMENT WOULD PRODUCE FUTURE
OPERATING LOSSES IN THE UK. CURRENTLY THE UK HAS REMITTED CASH TO THE US IN
EXCESS OF ITS ACCUMULATED EARNINGS AND THEREFORE, WOULD GENERATE A CUMULATIVE
OPERATING LOSS FOR THE REMAINDER OF THE LIQUIDATION AT CURRENT PROJECTIONS.
DELOITTE AND TOUCHE HAS PROPOSED AN INTERNATIONAL RESTRUCTURING WHICH WOULD
ALLOW THE LOSSES GENERATED IN THE UK, IF ANY, TO BE UTILIZED IN THE US. AS A
PART OF THIS RESTRUCTURING, CAC (TCI), LTD. WILL TRANSFER OWNERSHIP OF ALL OF
THE GROUP'S FOREIGN SUBSIDIARIES TO CREDIT ACCEPTANCE CORPORATION OF SOUTH
DAKOTA, INC. (CAC SD) AND WILL THEN LIQUIDATE FINAL OWNERSHIP WILL BE AS SHOWN
BELOW:
[REVISED ORGANIZATIONAL CHART]
AFTER THE MOVEMENT OF THE INTERNATIONAL OPERATIONS, A CHECK-THE-BOX ELECTION
WILL BE MADE ON CAC SCOTLAND FOR US TAX PURPOSES. THIS ELECTION WILL CHANGE CAC
SCOTLAND FROM A CFC TO A BRANCH OF CAC SD, ALLOWING ALL INCOME OR LOSS OF CAC
SCOTLAND TO FLOW INTO CAC SD, A MEMBER OF THE US CONSOLIDATED RETURN, FOR US TAX
PURPOSES.
ANY LOSSES GENERATED IN THE UK WILL THEN BE UTILIZABLE IN THE US AND WILL
GENERATE A TAX BENEFIT OF APPROXIMATELY 36.3% OF THOSE LOSSES.
