EXHIBIT 4(c)(12)
================================================================================
SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION
CREDIT AGREEMENT
DATED AS OF JUNE 9, 2003
COMERICA BANK, AS ADMINISTRATIVE AGENT
AND COLLATERAL AGENT
BANC OF AMERICA SECURITIES, LLC AS SOLE LEAD ARRANGER
AND SOLE BOOK MANAGER
================================================================================
TABLE OF CONTENTS
Page(s)
1. DEFINITIONS..............................................................................................1
1.2 Euro...........................................................................................40
1.3 Interest Act (Canada)..........................................................................41
2. REVOLVING CREDIT........................................................................................42
2.1 Commitment.....................................................................................42
2.2 Accrual of Interest and Maturity...............................................................42
2.3 Requests for and Refundings and Conversions of Advances........................................43
2.4 Disbursement of Advances.......................................................................45
2.5(a) Swing Line Advances............................................................................47
2.6 Prime-based Interest Payments..................................................................52
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest Payments.........................52
2.8 Interest Payments on Conversions...............................................................53
2.9 Interest on Default............................................................................53
2.10 Prepayment.....................................................................................54
2.11 Determination, Denomination and Redenomination of Alternative Currency Advances................55
2.12 Prime-based Advance in Absence of Election or Upon Default.....................................56
2.13 Revolving Credit Facility Fee..................................................................56
2.14 Currency Appreciation; Aggregate Sublimit; Mandatory Reduction of Indebtedness.................57
2.15 Optional Reduction or Termination of Revolving Credit Maximum Amount...........................58
2.16 Extension of Revolving Credit Maturity Date....................................................59
2.17 Optional Increase in Revolving Credit Maximum Amount...........................................60
2.18 Revolving Credit as Renewal; Application of Advances; Existing Advances........................62
3. LETTERS OF CREDIT.......................................................................................62
3.1 Letters of Credit..............................................................................62
3.2 Conditions to Issuance.........................................................................62
3.3 Notice.........................................................................................64
3.4 Letter of Credit Fees..........................................................................64
3.5 Issuance Fees..................................................................................65
3.6 Draws and Demands for Payment Under Letters of Credit..........................................65
3.7 Obligations Irrevocable........................................................................67
3.8 Risk Under Letters of Credit...................................................................68
3.9 Indemnification................................................................................69
3.10 Right of Reimbursement.........................................................................70
3.11 Existing Letters of Credit.....................................................................70
4. MARGIN ADJUSTMENTS......................................................................................70
i
4.1 Margin Adjustments.............................................................................71
4.2 Prospective Effect Only........................................................................71
4.3 Eurocurrency-based Advances....................................................................71
5. CONDITIONS..............................................................................................71
5.1 Execution of Notes, this Agreement and the other Loan Documents................................71
5.2 Corporate Authority............................................................................71
5.3 Representations and Warranties -- All Parties..................................................72
5.4 Compliance with Certain Documents and Agreements...............................................72
5.5 Company's Certificate and Opening Borrowing Base Certificate...................................72
5.6 Payment of Agent's and Other Fees..............................................................72
5.7 [Reserved].....................................................................................72
5.8 Other Documents and Instruments................................................................72
5.9 Continuing Conditions..........................................................................72
6. REPRESENTATIONS AND WARRANTIES..........................................................................73
6.1 Corporate Authority............................................................................73
6.2 Due Authorization -- Company...................................................................73
6.3 Due Authorization -- Permitted Borrowers.......................................................74
6.4 Title to Property..............................................................................74
6.5 Liens..........................................................................................74
6.6 Subsidiaries...................................................................................74
6.7 Taxes..........................................................................................74
6.8 No Defaults....................................................................................74
6.9 Enforceability of Agreement and Loan Documents -- Company......................................75
6.10 Enforceability of Domestic Guaranty -- Significant Domestic Subsidiaries.......................75
6.11 Enforceability of Loan Documents -- Permitted Borrowers........................................75
6.12 Non-contravention -- Company...................................................................75
6.13 Non-contravention -- Significant Domestic Subsidiaries.........................................75
6.14 Non-contravention -- Permitted Borrowers.......................................................76
6.15 No Litigation..................................................................................76
6.16 Consents, Approvals and Filings, Etc...........................................................76
6.17 Agreements Affecting Financial Condition.......................................................76
6.18 No Investment Company; No Margin Stock.........................................................76
6.19 ERISA..........................................................................................77
6.20 Environmental Matters and Safety Matters.......................................................77
6.21 Accuracy of Information........................................................................78
7. AFFIRMATIVE COVENANTS...................................................................................79
7.1 Preservation of Existence, Etc.................................................................79
7.2 Keeping of Books...............................................................................79
7.3 Reporting Requirements.........................................................................79
7.4 Maintain Asset Coverage Ratio..................................................................81
7.5 Maintain Total Liabilities Ratio Level.........................................................81
7.6 Minimum Tangible Net Worth.....................................................................81
7.7 Maintain Fixed Charge Coverage Ratio...........................................................81
7.8 Inspections....................................................................................82
ii
7.9 Taxes..........................................................................................82
7.10 Further Assurances.............................................................................82
7.11 Insurance......................................................................................82
7.12 Indemnification................................................................................83
7.13 Governmental and Other Approvals...............................................................83
7.14 Compliance with Contractual Obligations and Laws...............................................83
7.15 ERISA..........................................................................................84
7.16 Environmental Matters..........................................................................84
7.17 Installment Contract Standards.................................................................85
7.18 Financial Covenant Amendments..................................................................86
7.19 Subsidiaries; Guaranties.......................................................................86
7.20 Subsidiaries; Security Documents...............................................................87
7.21 Foreign Subsidiaries Security..................................................................87
7.22 Intentionally Reserved.........................................................................88
7.23 Intentionally Reserved.........................................................................88
8. NEGATIVE COVENANTS......................................................................................88
8.1 Redemptions....................................................................................88
8.2 Business Purposes..............................................................................88
8.3 Mergers or Dispositions........................................................................89
8.4 Guaranties.....................................................................................89
8.5 Debt...........................................................................................89
8.6 Liens..........................................................................................90
8.7 Acquisitions...................................................................................91
8.8 Investments....................................................................................91
8.9 Accounts Receivable and Other Financial Assets.................................................93
8.10 Transactions with Affiliates...................................................................94
8.11 No Further Negative Pledges....................................................................94
8.12 Prepayment of Debts............................................................................94
8.13 Amendment of Future Debt Documents.............................................................94
8.14 Amendment of Subordinated Debt Documents.......................................................95
8.15 Limitation on Dividends........................................................................95
8.16 Securitization Transaction; Amendments to Securitization Documents.............................95
8.17 Amendments to Titling Subsidiary Agreements....................................................96
8.18 Program Agreements.............................................................................96
9. DEFAULTS................................................................................................96
9.1 Events of Default..............................................................................96
9.2 Exercise of Remedies...........................................................................99
9.3 Rights Cumulative..............................................................................99
9.4 Waiver by Company and Permitted Borrowers of Certain Laws......................................99
9.5 Waiver of Defaults.............................................................................99
9.6 Cross-Default.................................................................................100
10. PAYMENTS, RECOVERIES AND COLLECTIONS...................................................................100
10.1 Payment Procedure.............................................................................100
10.2 Application of Proceeds.......................................................................102
iii
10.3 Pro-rata Recovery.............................................................................102
10.4 Deposits and Accounts.........................................................................102
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.......................................................102
11.1 Reimbursement of Prepayment Costs.............................................................102
11.2 Eurocurrency Lending Office...................................................................103
11.3 Availability of Alternative Currency..........................................................103
11.4 Refunding Advances in Same Currency...........................................................103
11.5 Circumstances Affecting Eurocurrency-based Rate Availability..................................104
11.6 Laws Affecting Eurocurrency-based Advance Availability........................................104
11.7 Increased Cost of Eurocurrency-based Advances.................................................105
11.8 Indemnity.....................................................................................106
11.9 Judgment Currency.............................................................................106
11.10 Other Increased Costs.........................................................................106
11.11 Right of Banks to Fund through Branches and Affiliates........................................107
12. AGENT..................................................................................................107
12.1 Appointment of Agent..........................................................................107
12.2 Deposit Account with Agent....................................................................108
12.3 Exculpatory Provisions........................................................................108
12.4 Successor Agents..............................................................................108
12.5 Loans by Agent................................................................................108
12.6 Credit Decisions..............................................................................109
12.7 Notices by Agent..............................................................................109
12.8 Agent's Fees..................................................................................109
12.9 Nature of Agency..............................................................................109
12.10 Authority of Agent to Enforce Notes and This Agreement........................................109
12.11 Indemnification...............................................................................109
12.12 Knowledge of Default..........................................................................110
12.13 Agent's Authorization; Action by Banks........................................................110
12.14 Enforcement Actions by the Agent..............................................................110
12.15 Lead Arranger.................................................................................111
12.16 Collateral Matters............................................................................111
13. MISCELLANEOUS..........................................................................................111
13.1 Accounting Principles.........................................................................111
13.2 Consent to Jurisdiction.......................................................................111
13.3 Law of Michigan...............................................................................112
13.4 Interest......................................................................................112
13.5 Closing Costs; Other Costs....................................................................113
13.6 Notices.......................................................................................113
13.7 Further Action................................................................................114
13.8 Successors and Assigns; Assignments and Participations........................................114
13.9 Indulgence....................................................................................117
13.10 Counterparts..................................................................................117
13.11 Amendment and Waiver..........................................................................117
13.12 Taxes and Fees................................................................................118
iv
13.13 Confidentiality...............................................................................118
13.14 Withholding Taxes.............................................................................119
13.15 Effective Upon Execution......................................................................120
13.16 Severability..................................................................................120
13.17 Table of Contents and Headings................................................................120
13.18 Construction of Certain Provisions............................................................120
13.19 Independence of Covenants.....................................................................120
13.20 Reliance on and Survival of Various Provisions................................................120
13.21 Complete Agreement; Amendment and Restatement.................................................121
13.22 Bank Act (Canada) Disclosure..................................................................121
v
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is made
as of the 9th day of June, 2003, 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"), Credit Acceptance Corporation, a Michigan corporation ("Company") and
Credit Acceptance Corporation UK Limited, a corporation organized under the laws
of England ("CAC UK"), CAC of Canada Limited, a corporation organized under the
laws of Canada ("CAC Canada") and Credit Acceptance Corporation Ireland Limited,
a corporation organized under the laws of the Republic of Ireland ("CAC
Ireland").
RECITALS
A. Company has requested that the Banks amend, renew and/or extend to
it and to the Permitted Borrowers (as defined below), credit in the aggregate
amount (subject to the Revolving Credit Optional Increase, as defined below) of
up to One Hundred Thirty Five Million Dollars ($135,000,000) consisting of (i)
the Revolving Credit (as defined below) previously extended to Company and the
Permitted Borrowers pursuant to that certain Amended and Restated Credit
Acceptance Corporation Credit Agreement dated as of June 11, 2001 (as amended,
the "Prior Credit Agreement") by and among Company, the Permitted Borrowers, 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, PERMITTED BORROWERS, 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 and/or any Permitted
Borrower) as named in an application to the Agent for the issuance of such
Letter of Credit.
"Additional Commitment Fee" shall mean the additional commitment fee
payable to Agent for distribution to the Banks pursuant to Section 2.13, hereof.
"Administrative Agency Agreement" is referred to in the definition of
Titling Subsidiary Agreements.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by Company or by a Permitted Borrower, and made by Banks under Section
2.1 or 4.1 of this Agreement, as the case may be, or requested by the Company or
by a Permitted Borrower 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, 2.5(c) or 4.4 hereof) and any advance in
respect of a Letter of Credit under Section 3.6 hereof (including without
limitation the unreimbursed amount of any draws under Letters of Credit), and
shall include, as applicable, a Eurocurrency-based Advance, a Quoted Rate
Advance, a Prime-based Advance and a Swing Line Advance.
"Advances to Dealers" shall mean, as of any applicable date of
determination, the Dollar Amount of advances in respect of Installment
Contracts, as such amount would appear in the footnotes to the financial
statements of the Company and its Subsidiaries prepared in accordance with GAAP
(and if such amount is not shown net of such reserves, then net of any reserves
established by the Company as an allowance for credit losses related to such
advances not expected to be recovered), provided that, for purposes of the
definition of Collateral determining the Borrowing Base and compliance with the
covenants under Section 7.4 through 7.7 and 7.17 hereof, Advances to Dealers
shall not include (a) any such advances (and the related Installment Contracts)
transferred or encumbered pursuant to a Permitted Securitization or assigned to
a Securitized Pool (whether or not attributable to the Company under GAAP),
unless and until such advances (and the related Installment Contracts) are
reassigned to the Company or a Subsidiary of the Company or such encumbrances
are discharged any such advances (and the related Installment Contracts, if any)
made to a Dealer in connection with a Program Contract or (b) Charged-Off
Advances, to the extent that such Charged-Off Advances exceed the portion of the
Company's allowance for credit losses related to reserves against such advances
not expected to be recovered, as such allowance would appear in the footnotes to
the financial statements of the Company and its Subsidiaries prepared in
accordance with GAAP at such time. For purposes of this definition, "Charged-Off
Advances" shall mean those Advances to Dealers which the Company or any of its
Subsidiaries has determined, based on the application of a static pool analysis
or otherwise, are completely or partially impaired, to the extent of such
impairment.
"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:
2
(a) for Advances in Sterling, Barclays Bank plc., London,
Great Britain;
(b) for Advances in C$, Bank of Nova Scotia, Toronto, or such
other bank or banks as Agent may from time to time designate by written
notice to Company, the Permitted Borrowers and the Lenders; and
(c) 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);
or at such other bank or banks as Agent may from time to time designate by
written notice to Company, the Permitted Borrowers 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.
"Aggregate Sublimit" shall mean, as of any applicable date of
determination, that amount equal to thirty percent (30%) of Company's
Consolidated Tangible Net Worth, 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, or (subject to the terms hereof)
determined on a monthly basis at the request of the Company based on monthly
financial statements to be delivered pursuant to Section 2.14(b) hereof, (and
giving effect to any changes in net worth shown in the applicable financial
statements on the required date of delivery thereof).
"Allowances for Credit Losses" shall mean those allowances or reserves
established by Company or its Subsidiaries in arriving at installment contracts
receivable, net or Leased Vehicles, as the case may be, on its Consolidated
balance sheets, as specifically identified in such financial statements or as
disclosed in the footnotes thereto; provided that Allowances for Credit Losses
shall not include allowances or reserves attributable to retail installment
contracts or leases which are not at such time "Installment Contracts" or
"Leases," as the case may be, due to the proviso in the definition of such terms
in this Agreement.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Alternative Currency" shall mean British Pounds Sterling ("Sterling"),
and Canadian Dollars ("C$"), and, subject to the prior written approval of Agent
and each of the Banks and to the terms and conditions of this Agreement, such
other freely convertible foreign currencies including (subject to the terms
hereof) the "Euro", as requested by the Company or a Permitted Borrower and
acceptable to Agent and the Banks, in their reasonable discretion. Any reference
to a National Currency Unit of a Participating Member State in this definition
of "Alternative Currency" shall be deemed to also include a reference to the
Euro Unit.
"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
3
by reference to the appropriate columns in the Pricing Matrix attached to this
Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean the Eurocurrency-based Rate, the
Prime-based Rate or, with respect to Swing Line Advances, the Quoted Rate, as
selected by Company or a Permitted Borrower from time to time subject to the
terms and conditions of this Agreement.
"Applicable Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as Schedule
1.1.
"Assignment Agreement" shall have the meaning ascribed to such term in
Section 13.8(c) hereof.
"Back-End Dealer Agreement(s)" shall mean Dealer Agreements referred to
in clause (i) of the definition of Dealer Agreements.
"Banks" shall mean the Banks signatory hereto (including the New Banks)
and any assignee which becomes a Bank pursuant to Section 13.8(c) hereof.
"Borrowing Base Certificate" shall mean a Borrowing Base Certificate,
substantially in the form of Exhibit O (and determining the amount of Advances
to Dealers and Leased Vehicles 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 the sum of (i) sixty-five percent (65%) of
Advances to Dealers and (ii) sixty-five percent (65%) of Leased Vehicles, 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.
"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 and if funds are to be paid or made available in any Alternative Currency,
on such day in the place where such funds are to be paid or made available and,
if the applicable Business Day relates to the borrowing or payment of a
Eurocurrency-based Advance denominated in Euros, on which banks and foreign
exchange markets are open for business in the city where disbursements of or
payments on such Advance are to be made which is a Trans-European Business Day.
"CAC Canada" is defined in the Preamble.
"CAC Ireland" is defined in the Preamble.
4
"CAC Leasing" shall mean CAC Leasing, Inc., a Michigan corporation and
a wholly-owned Subsidiary of Company.
"CAC Life" shall mean Credit Acceptance Corporation Life Insurance
Company, an Arizona corporation and a wholly-owned Subsidiary of Company.
"CAC South Dakota" shall mean Credit Acceptance Corporation of South
Dakota, Inc., a South Dakota corporation.
"CAC UK" is defined in the Preamble.
"Canadian BA Rate" shall mean, with respect to the relevant Advance of
C$ to CAC Canada, the rate per annum quoted by Agent's Correspondent as the
Agent's bid rate for C$ bankers' acceptances having a comparable face value as
the amount of such Advance and a tenor identical to the applicable
Eurocurrency-Interest Period as of 10:00 a.m. (Toronto time) on the first day of
such Interest Period.
"Canadian BA Period" shall mean, for Advances of C$ to CAC Canada, an
Interest Period of 30 days, 60 days, 90 days or with the consent of the Agent
180 days.
"Canadian Prime Rate" shall mean, for any day, the per annum rate of
interest in effect for such day as announced from time to time by the Agent's
Canadian Affiliate in Toronto, Ontario as its "prime rate." (The "prime rate" is
a rate set by such Canadian Affiliate based upon various factors including such
Canadian Affiliate's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such announced rate.) Any change in the prime
rate by such Canadian Affiliate shall take effect at the opening of business on
such day.
"Canadian 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 Canadian Prime Rate and (ii) an interest rate per annum equal to the
Canadian BA Rate in effect on such day, plus one percent (1%).
"Capital Assets" shall mean all assets of a Person other than
intangible assets (so classified in accordance with GAAP), inventories, accounts
receivable and Investments in and securities of any other Person.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) with respect to which the
discounted present value of the rental obligations of such Person as lessee
thereunder, in conformity with GAAP, is required to be capitalized on the
balance sheet of that Person.
"Cleanup Call(s)" shall mean:
(a) in the case of an optional cleanup call, a cleanup call to
be exercised at the option of the Company, the Titling Subsidiary 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
5
such option is exercised), in an amount not in excess of (i) Fifteen
Percent (15%) of the initial amount received by the Company, the
Titling Subsidiary 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, the Titling Subsidiary or a
Special Purpose Subsidiary, each such optional cleanup call to be
accompanied (x) by the repurchase of or release of encumbrances on
Advances to Dealers, Leased Vehicles, Installment Contracts (whether
assigned outright or related to Advances to Dealers) or Leases (whether
assigned outright or related to Leased Vehicles), 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, or (y) if such Leased Vehicles or Leases are held by the
Titling Subsidiary, by the reallocation of such Leases and Leased
Vehicles from the applicable Specified Interest to the Non-Specified
Interest in an amount equal to at least the amount of such clean-up
call; and
(b) in the case of a mandatory cleanup call, a mandatory
cleanup call to be exercised at the option of the investors under the
terms of the applicable Permitted Securitization, in an amount not in
excess of (i) Two and One-Half Percent (2 1/2%) of the aggregate amount
received by the Company, the Titling Subsidiary 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, the Titling Subsidiary or a
Special Purpose Subsidiary, each such mandatory Cleanup Call to be
accompanied (x) by the repurchase of or release of encumbrances on
Advances to Dealers, Leased Vehicles, Installment Contracts (whether
assigned outright or related to Advances to Dealers) or Leases (whether
assigned outright or related to Leased Vehicles), as the case may be,
previously transferred or encumbered pursuant to such Permitted
Securitization in an amount equal to at least the lesser of (A) the
amount of such cleanup call or (B) the book value at the time of such
cleanup call of the Advances to Dealers, Leased Vehicles, Installment
Contracts or Leases previously transferred or encumbered pursuant to
such Permitted Securitization, or (y) if such Leased Vehicles or Leases
are held by the Titling Subsidiary, by the reallocation of such Leases
and Leased Vehicles from the applicable Specified Interest to the
Non-Specified Interest in an amount equal to at least the lesser of (A)
the amount of such clean-up call or (B) the book value at the time of
such cleanup call of the Leased Vehicles and Leases currently held in
such Specified Interest.
"Collateral" shall mean (a) all right, title and interest of each of
the Company and each of its Significant Domestic Subsidiaries in, to and under
its accounts, inventory, machinery, equipment, contract rights, chattel paper,
general intangibles, including without limitation Advances to Dealers, Leased
Vehicles, Dealer Agreements (and any amounts advanced to or
6
liens granted by Dealers thereunder), Installment Contracts, Leases and related
financial property (such Dealer Agreements, Advances to Dealers and the
Installment Contracts, Leases, accounts, contract rights, chattel paper and
general intangibles relating to such Dealer Agreements, Advances to Dealers and
Leased Vehicles, being subject to the rights, if any, of Dealers under Dealer
Agreements) and all Program Agreements (but excluding any Program Contracts, it
being understood that the security interest in Program Agreements shall be
subject to the rights of the Program Participants under the Program Agreements),
Intercompany Notes and computer records and software relating thereto, whether
now owned or hereafter acquired by such Person, (b) with respect to Indebtedness
of the Permitted Borrowers and subject to Sections 7.20 and 7.22 hereof, all
right, title and interest of CAC UK, the English Special Purpose Subsidiary, CAC
Canada and CAC Ireland, as the case may be in, to and under its accounts,
inventory, contract rights, chattel paper, general intangibles, including
without limitation Advances to Dealers, Leased Vehicles, Dealer Agreements (and
any amounts advanced to or liens granted by Dealers thereunder), Installment
Contracts, Leases and related financial assets (such Dealer Agreements, Advances
to Dealers, and the Installment Contracts, Leases, accounts, contract rights,
chattel paper and general intangibles relating thereto) being subject to the
rights, if any, of Dealers under Dealer Agreements (and, computer records and
software relating thereto, whether now owned or hereafter acquired), (c) the
entire Non-Specified Interest at any time held by the Company or any Subsidiary,
(d) one hundred percent (100%) of the share capital of each Significant Domestic
Subsidiary of the Company (whether direct or indirect), (e) one hundred percent
(100%) of the share capital of T&C Subsidiary and of CAC South Dakota (whether
or not constituting a Significant Domestic Subsidiary), (f) not less than
sixty-five percent (65%) of the aggregate partnership interests of the Scottish
Partnership, and (g) all proceeds and products of the foregoing.
"Collateral Documents" shall mean (i) that certain Second Amended and
Restated Security Agreement dated as of June 11, 2001 and executed and delivered
by Company in favor of the Agent, as Collateral Agent pursuant to the
Intercreditor Agreement (as amended, the "Security Agreement"), and encumbering
the property described therein, (ii) an assignation executed and delivered by
Company in favor of the Agent, as Collateral Agent pursuant to the Intercreditor
Agreement, and encumbering the Collateral described in clause (f) of the
definition of Collateral, (iii) debentures executed and delivered by CAC UK and
by the English Special Purpose Subsidiary in favor of the Agent, for and on
behalf of the Banks (and not as Collateral Agent pursuant to the Intercreditor
Agreement) and encumbering the applicable property described in clause (b) of
the definition of Collateral, (iv) those certain lien, charge or other security
documents to be executed and delivered hereunder by CAC Canada and CAC Ireland
in favor of the Agent, for and on behalf of the Banks and not as Collateral
Agent pursuant to the Intercreditor Agreement and encumbering the applicable
Collateral described in clause (b) of the definition of Collateral, (v) 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 (or to be executed and
delivered) by the Company or any of its subsidiaries and delivered to the Agent,
as Collateral Agent (as aforesaid) and (vi) 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,
7
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.
"Company Guaranty" shall mean that certain amended and restated
guaranty of all of the Indebtedness outstanding from the Permitted Borrowers
executed and delivered by the Company to the Agent, on behalf of the Banks, as
of the date of the Prior Credit Agreement, as such guaranty may be amended from
time to time.
"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, 2002.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (a)
Consolidated Interest Expense for such period, plus (b) Operating Rentals
payable by the Company and its Subsidiaries in respect of such period under
Operating Leases, plus (c) the aggregate amount of all dividends on any
preferred stock of the Company declared during such period, determined after
eliminating intercompany transactions among the Company and its Subsidiaries.
"Consolidated Funded Debt" shall mean, as of any applicable date of
determination, all Debt of the Company and its Subsidiaries determined on a
Consolidated basis according to GAAP (but including the Debt of any Special
Purpose Subsidiary, whether or not includible under GAAP), plus without
duplication all letters of credit, guarantees and other Guarantee Obligations of
the Company and its Subsidiaries (but including any Special Purpose Subsidiary,
whether or not includible under GAAP) in respect of liabilities which would
constitute Debt, determined on a Consolidated basis according to GAAP.
"Consolidated Income Available for Fixed Charges" shall mean, for any
period, the sum of (a) Consolidated Net Income, plus (b) the aggregate amount of
income taxes, depreciation, amortization (including the amortization of any
excess servicing asset) and Consolidated Fixed Charges (to the extent, and only
to the extent, that such aggregate amount was reflected in the computation of
Consolidated Net Income for such period), determined on a Consolidated basis for
such Persons in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the amount
of interest charged or chargeable to the Consolidated Statement of Operations of
Company and its Subsidiaries in respect of such period, as determined in
accordance with GAAP.
8
"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; (ii) 75% of the aggregate amount of Advances to Dealers;
(iii) 70% of the aggregate amount of Leased Vehicles; (iv) 60% of the aggregate
amount of Floor Plan Receivables, net of the applicable reserve; and (v) 60% of
Notes Receivable, net of the applicable reserve, 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.
"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:
(a) net earnings (or loss) of any Subsidiary accrued prior to
the date it became a Subsidiary;
(b) any gain or loss (net of tax effects applicable thereto)
resulting from the sale, conversion or other disposition of Capital
Assets other than in the ordinary course of business;
(c) any extraordinary or non-recurring gains or losses
(including, without limitation, any gain on sale generated by a
Permitted Securitization, except to the extent the Company has received
a cash benefit therefrom in the applicable reporting period); and any
interest income generated by a Permitted Securitization, except to the
extent the Company has received a cash benefit therefrom in the
applicable reporting period;
(d) any gain arising from any reappraisal or write-up of
assets and the non-cash effect of stock option expense (whether
constituting a gain or a loss);
(e) any portion of the net earnings of any Subsidiary that for
any reason is unavailable for payment of dividends to the Company or
any other Subsidiary, provided that the net earnings of CAC Life that
are unavailable (due to regulatory requirements applicable to CAC Life)
for the payment of dividends to the Company may be included in the
determination of Consolidated Net Income, to the extent that such
unavailable net earnings do not exceed five percent (5%) of
Consolidated Net Income (determined without giving effect to this
proviso), and provided, further that so long as the net earnings of CAC
Life shall be included in Consolidated Net Income pursuant to the
preceding proviso, CAC Life shall not have outstanding any debt,
regardless of whether any other Subsidiary may be permitted to have
debt outstanding at such time by reason of a waiver of or an amendment
to this Agreement;
(f) any gain or loss (net of tax effects applicable thereto)
during such period resulting from the receipt of any proceeds of any
insurance policy;
(g) except as set forth herein, any earnings of any Person
acquired by Company or any Subsidiary through the purchase, merger or
consolidation or otherwise, or earnings of any Person substantially all
of the assets of which have been acquired by Company or any Subsidiary,
for any period prior to the date of acquisition;
9
(h) net earnings of any Person (other than a Subsidiary) in
which Company or any Subsidiary shall have an ownership interest unless
such net earnings shall actually have been received by the Company or
such Subsidiary in the form of cash distributions; and
(i) any restoration during such period to income of any
contingency reserve, except to the extent that provision for such
reserve
(i) was made during such period out of income accrued
during such period,
(ii) was made in connection with the Company's
program of financing Installment Contracts or Leases
(A) to provide for warranty claims for which
the Company may be responsible, or
(B) to cover credit losses in connection
with Advances to Dealers, Installment Contracts,
Leased Vehicles or Leases, or
(iii) is required by applicable law with respect to
reserve for claims related to the operation of CAC Life,
provided that the aggregate restoration to income during any period from
reserves described in clause (ii) and clause (iii) above shall not exceed ten
percent (10%) of Consolidated Net Income for such period, prior to giving effect
to such restoration.
"Consolidated Tangible Net Worth" shall mean the total preferred
shareholders' investment and common shareholders' investment (common stock, paid
in capital and retained earnings) as computed for the Company and its
Subsidiaries on a Consolidated basis under GAAP, less assets properly classified
as intangible assets according to GAAP, but excluding from the determination
thereof, without duplication, any excess servicing asset resulting from the
transfer, pursuant to a Permitted Securitization, of Advances to Dealers, Leased
Vehicles, Installment Contracts (whether assigned outright or related to
Advances to Dealers) or Leases (whether assigned outright or related to Leased
Vehicles) and less capitalized financing fees.
"Consolidated Total Liabilities" shall mean, as of any applicable date
of determination, the Consolidated total liabilities of the Company and its
Subsidiaries according to GAAP (but including the liabilities of any Special
Purpose Subsidiary whether or not includible under GAAP), plus without
duplication all contingent obligations, including without limitation all
Guarantee Obligations not otherwise reflected therein, minus Net Dealer
Holdbacks and Net Leased Vehicle Dealer Holdbacks and minus deferred income of
the Company and its Subsidiaries, determined on a Consolidated basis according
to GAAP, except as aforesaid.
"Covenant Compliance Report" shall mean the report to be furnished by
the Company to the Agent, in substantially the form attached to this Agreement
as Exhibit H and certified by the chief financial officer 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
10
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.
"Current Dollar Equivalent" shall mean, as of any applicable date of
determination, with respect to any Advance or Letter of Credit in an Alternative
Currency, the amount of Dollars which is equivalent to the then outstanding
principal amount of such Advance or Letter of Credit at the most favorable spot
exchange rate determined by the Agent to be available to it for the sale of
Dollars for such Alternative Currency for delivery at approximately 11:00 A.M.
(Detroit time) two (2) Business Days after such date. Alternative Currency
equivalents of Advances or Letters of Credit in Dollars (to the extent used
herein) shall be determined by Agent in a manner consistent herewith.
"Dealer(s)" shall mean a Person engaged in the business of the retail
sale or lease of new or used motor vehicles, including both businesses
exclusively selling or leasing used motor vehicles and businesses principally
selling or leasing 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 or
Leases for purposes of administration, servicing and collection and under which
the Company or its Subsidiary may make advances to such Dealers included in
Advances to Dealers or Leased Vehicles and (ii) accepts outright assignments of
Installments Contracts or Leases from Dealers or funds Installments Contracts or
Leases originated by such Dealer in the name of Company or any of its
Subsidiaries, in each case as such agreements may be in effect from time to
time.
"Debt" shall mean, with respect to any Person, without duplication, (a)
its liabilities for borrowed money (whether or not evidenced by a security), (b)
any liabilities secured by any Lien existing on property owned by such Person
(whether or not such liabilities have been assumed), (c) its liabilities in
respect of Capitalized Leases, (d) the present value of all payments due under
any arrangement for retention of title or any conditional sale agreement (other
than a Capitalized Lease) discounted at the implicit rate, if known, with
respect thereto or, if unknown, at eight and eighty-seven one-hundredths percent
(8.87%) per annum, and (e) its guaranties of any liabilities of another Person
constituting liabilities of a type set forth above; provided however that dealer
holdbacks shall not be considered Debt of the Company or its Subsidiaries; and
provided further that, solely for purposes of Section 8.5 hereof, "Debt" shall
also include reimbursement obligations (contingent or otherwise) in respect of
letters of credit, obligations in respect of bankers acceptances, and payment
obligations, if any, under interest rate protection agreements (including
without limitation interest rate swaps and similar agreements) and currency
swaps and xxxxxx and similar agreements.
"Debt Rating" shall mean the debt rating, if any, of Company's
long-term non-credit enhanced senior debt obtained by the Company, from time to
time, from an applicable credit rating agency of recognized national standing in
the United States of America.
11
"Default" shall mean any event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.
"Dollar Amount" shall mean (a) with respect to Dollars or an amount
denominated in Dollars, such amount and (b) with respect to an amount of any
other Alternative Currency or an amount denominated in such Alternative
Currency, the amount of Dollars that may be purchased with such amount of
Alternative Currency in the interbank foreign exchange market, at the most
favorable spot rate of exchange (including all related costs of conversion)
applicable to the relevant transaction determined by the Agent to be available
to it at or about 11:00 a.m. Detroit time (i) on the date on which such
calculation would be necessary for the delivery of Dollars on the applicable
date contemplated in this Agreement or (ii) for interest rate setting purposes
only, on the date which is two Business Days prior to the commencement of an
Interest Period (or such other number of days as shall be reasonably deemed
necessary by Agent, for purposes of this Agreement). Alternative Currency
amounts of Advances or Letters of Credit made, issued, carried or expressed in
Dollars (to the extent used herein) shall be determined by Agent in a manner
consistent herewith.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Advance" shall mean any Advance other than a
Eurocurrency-based Advance or any other Advance denominated in an Alternative
Currency.
"Domestic Guaranty" shall mean that certain guaranty of all
Indebtedness outstanding from the Company and the Permitted Borrowers dated as
of the date of the Prior Credit Agreement, executed and delivered (or to be
executed and delivered) by each of the Significant Domestic Subsidiaries
(whether by execution thereof, or by execution of the Joinder Agreement attached
as "Exhibit A" to the form of such Guaranty), to the Agent, on behalf of the
Banks, as amended from time to time.
"Domestic Subsidiary" shall mean those Subsidiaries of the Company
incorporated under the laws of the United States of America, or any state
thereof, other than the US LLC, so long as it is a Subsidiary of a Foreign
Subsidiary.
"Effective Date" shall mean June 9, 2003.
"EMU" shall mean Economic and Monetary Union as contemplated in the
Treaty on European Union.
"EMU Legislation" shall mean legislative measures of the European
Council (including European Council regulations) for the introduction of,
changeover to or operation of a single or unified European currency (whether
known as the euro or otherwise), being in part the implementation of the third
stage of EMU.
"English Special Purpose Subsidiary" shall mean CAC UK Funding Ltd., a
Special Purpose Subsidiary established by the Company, as part of the UK
Restructuring, under the laws of England.
12
"Equity Offering" shall mean the issuance and sale for cash, on or
after the Effective Date by Company or any of its Subsidiaries of additional
capital stock or other equity interests, other than upon the exercise of
employee and dealer stock options pursuant to stock option plans maintained or
offered by the Company or its Subsidiaries in the ordinary course of business
and not in anticipation of any sale of capital stock or equity interests to the
general public, and other than the creation or disposition of any interest in
the Titling Subsidiary.
"Equity Offering Adjustment" shall mean that amount to be added to the
minimum Consolidated Tangible Net Worth required to be maintained under Section
7.7 hereof consisting of an amount equal to one hundred percent (100%) of each
Equity Offering conducted by the Company or any of its subsidiaries, net of
related costs of issuance payable to third parties, on and after the Effective
Date, on a cumulative basis.
"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.
"Euro" or "Euro Unit" shall mean the currency unit of the euro as
defined in the EMU Legislation.
"Eurocurrency-based Advance" shall mean any Advance (including a Swing
Line Advance) which bears interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of (a) the Applicable Margin (subject, if applicable, to
adjustment under Section 11.11 hereof), plus
(b)(i) in the case of any Eurocurrency-based Advance
other than an Advance of C$ to CAC Canada described in clause
(b)(ii) below, the quotient of:
(A) the per annum interest rate at which
deposits in the relevant eurocurrency are offered to
Agent's Eurocurrency Lending Office by other prime
banks in the relevant eurocurrency market in an
amount comparable to the relevant Eurocurrency-based
Advance and for a period equal to the relevant
Eurocurrency-Interest Period at approximately 11:00
a.m. Detroit time two (2) Business Days (or, in the
case of a Eurocurrency-based Advance in Euros, on
such other date as is customary in the relevant
offshore interbank market) prior to the first day of
such Eurocurrency-Interest Period, divided by
(B) a percentage equal to 100% minus the
maximum rate on such date at which Agent is required
to maintain reserves on `eurocurrency liabilities' as
defined in and pursuant to Regulation D of the
13
Board of Governors of the Federal Reserve System or,
if such regulation or definition is modified, and as
long as Agent is required to maintain reserves
against a category of liabilities which includes
eurocurrency deposits or includes a category of
assets which includes eurocurrency loans, the rate at
which such reserves are required to be maintained on
such category,
such sum to be rounded upward, if necessary, to the nearest whole
multiple of 1/16th of 1%; or
(b)(ii) in the case of any Advances of C$ to CAC Canada, the greater of
the Eurocurrency-based Rate determined in the manner set forth in clause (A)
above and the Canadian BA Rate.
"Eurocurrency-Interest Period" shall mean, (a) for Swing Line Advances
carried at the Eurocurrency-based Rate, an interest period of seven days, one
month (or any lesser number of days agreed to in advance by Company or a
Permitted Borrower, Agent and the Swing Line Bank), (b) for Eurocurrency-based
Advances of C$ to CAC Canada, a Canadian BA Rate Period and (c) for all other
Eurocurrency-based Advances, an interest period of one, two, three or six months
(or any lesser or greater number of days agreed to in advance by Agent and the
Banks), in each case as selected by Company or such Permitted Borrower, as
applicable, for a Eurocurrency-based Advance pursuant to Section 2.3, 2.5, or
4.4 hereof, as the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at its Grand Caymans Branch or such other branch
of Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by notice to Company, the Permitted Borrowers 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
Eurocurrency Lending Office), or at such other office, branch or affiliate of
such Bank as it may hereafter designate as its Eurocurrency Lending Office by
notice to Company and Agent.
"Event of Default" shall mean any of the events specified in Section
9.1 hereof.
"Existing Advance(s)" shall mean Advances made under the Prior Credit
Agreement (as defined therein) which are outstanding on the Effective Date.
"Existing Letter of Credit" shall mean a letter of credit issued under
the Prior Credit Agreement which is outstanding on the Effective Date hereof.
"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.
14
"Fees" shall mean the Agent's Fees, the Revolving Credit Facility Fee,
the Commitment Fee, the Additional Commitment Fee and the Letter of Credit Fees.
"Fixed Charge Coverage Ratio" shall mean, as of any applicable date of
determination, the ratio of (a) Consolidated Income Available for Fixed Charges
for the period of four (4) consecutive fiscal quarters of the Company most
recently ended at such time to (b) Consolidated Fixed Charges for such period.
"Floor Plan Receivables" shall mean, as of any applicable date of
determination, the aggregate amount outstanding from Dealers pursuant to
financing extended to such Dealers by Company or any of its Subsidiaries for
used motor vehicle inventories, such financing to be secured by the related
motor vehicle inventories and any future cash collections owed by Company or its
Subsidiaries to the Dealer under the applicable Dealer Agreement in respect of
outstanding Advances to Dealers (and the related Installment Contracts) or
Leased Vehicles (and the related Leases)
"Foreign Guaranty" shall mean that certain guaranty of all Indebtedness
outstanding from the Permitted Borrowers dated as of the date of the Prior
Credit Agreement, executed and delivered (or to be executed and delivered) by
each of the Significant Foreign Subsidiaries, (whether by execution thereof, or
by execution of the Joinder Agreement attached as Exhibit "A" to such Guaranty)
to the Agent, on behalf of the Banks, as amended from time to time.
"Foreign Subsidiaries" shall mean all of the Company's Subsidiaries
other than its Domestic Subsidiaries.
"Funding Conditions" shall mean those conditions required to be
satisfied prior to or concurrently with the funding of any Future Debt, as
follows:
(a) Within a period of one hundred eighty (180) days prior to
the date any such Debt is incurred, Company shall have provided to the
Agent and the Banks a Consolidated plan and financial projections
meeting the requirements therefor as set forth in Section 7.3(i) of
this Agreement and demonstrating that the Company would be in
compliance with the financial covenants set forth in Sections 7.4
through 7.7 hereof and the Borrowing Base Limitation, if applicable,
were such Debt outstanding during the applicable reporting periods;
(b) Both immediately before and immediately after such
additional Debt is incurred, no Default or Event of Default (whether or
not related to such additional Debt, and taking into account the
incurring of such additional Debt) has occurred and is continuing;
(c) If such additional Debt shall be issued pursuant to loan
documents containing covenants which are more restrictive than the
covenants contained in this Agreement, Company shall, upon the written
request of the Majority Banks, enter into amendments to this Agreement
to extend the benefit of such covenants to the Banks;
(d) Concurrently with the incurring of such additional Debt,
the proceeds of such Debt, net of third party expenses incurred by the
Company in connection with the
15
issuance of such Debt, shall first be applied to reduce (i) the
principal, interest and other amounts under other Future Debt then
outstanding or (ii) principal, interest and other amounts owing under
the Revolving Credit (to the extent then outstanding, and including the
aggregate amount of drawings made under any Letter of Credit for which
the Agent has not received full payment), subject to the right to
reborrow in accordance with this Agreement; provided, however, that to
the extent that on the date any reduction of the principal balance
outstanding under the Revolving Credit shall be required under this
clause (d), the Indebtedness under the Revolving Credit is being
carried, in whole or in part, at the Eurocurrency-based Rate and no
Default or Event of Default has occurred and is continuing, the Company
may, after prepaying that portion of the Indebtedness then carried at
the Prime-based Rate, deposit the amount of such required principal
reductions in a cash collateral account to be held by the Agent, for
and on behalf of the Banks (which shall be an interest-bearing
account), on such terms and conditions as are reasonably acceptable to
Agent and the Majority Banks and, subject to the terms and conditions
of such cash collateral account, sums on deposit therein shall be
applied (until exhausted) to reduce the principal balance of the
Revolving Credit on the last day of each Interest Period attributable
to the applicable Eurocurrency-based Advances of the Revolving Credit
(subject to the right to reborrow, as aforesaid); and provided further
that Agent and the Banks acknowledge that any proceeds of Future Debt
remaining after the application of such proceeds as required by this
clause (d) may be held or invested in Permitted Investments or
otherwise invested or applied in any manner not prohibited by this
Agreement; and
(e) If such additional Debt is to be secured, the applicable
Lien shall arise only pursuant to the Security Agreement and/or the
other Collateral Documents and each of the holders of such Debt shall
become a party to the Intercreditor Agreement and shall execute and
deliver such additional or related Loan Documents, as reasonably
requested by the Agent.
"Future Debt" shall mean Debt evidenced by Long Term Notes; provided
that the aggregate principal amount of all such Debt outstanding at any time
from and after the date 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.
16
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date hereof, consistently applied.
"Gross Dealer Holdbacks" shall mean the aggregate amount, as of any
applicable date of determination, of dealer holdbacks under Dealer Agreements
relating to Installment Contracts utilized in arriving at Dealer holdbacks, net
on the Consolidated balance sheet of the Company and its Subsidiaries, as
disclosed in the footnotes thereto; provided that Gross Dealer Holdbacks shall
not include the amount of dealer holdbacks attributable to retail installment
contracts which are not at such time "Installment Contracts" due to the proviso
in the definition of such term in this Agreement.
"Guarantee Obligation(s)" shall mean as to any Person (the
"guaranteeing person") any obligation of the guaranteeing person in respect of
any obligation of another Person (including, without limitation, any bank under
any letter of credit), the creation of which was evidenced or induced by a
reimbursement agreement, counter-indemnity, endorsement or similar obligation
issued by the guaranteeing person, in either case guaranteeing or in effect
guaranteeing any Debt, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. To the extent not otherwise
determinable, the amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation (as outstanding on the applicable
date of determination) in respect of which such Guarantee Obligation is made and
(b) the maximum amount for which such guaranteeing person may be liable pursuant
to the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by Company in good faith.
"Guaranties" shall mean the Company Guaranty, the Domestic Guaranty and
the Foreign Guaranty.
"Guarantor(s)" shall mean each Significant Subsidiary which is required
by the Banks to guarantee the obligations of the Company and/or the Permitted
Borrowers 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.
17
"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, any Domestic Subsidiary or a Permitted Borrower under or in
connection with this Agreement, and allocated to such Banks or their Affiliates
in the amounts so determined and reported by the Company in its quarterly
Borrowing Base Certificates or any updated Borrowing Base Certificates from time
to time submitted by the Company hereunder; provided that the adequacy of the
amounts established by the Company for the applicable exposure under a Hedging
Agreement shall be subject to review and approval by the Majority Banks and each
affected Bank, from time to time at the request of such Banks.
"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 of the
Permitted Borrowers 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, any of the Permitted Borrowers 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, any Domestic
Subsidiary and/or a Permitted Borrower 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,
18
and any and all consolidations, amendments, renewals, replacements or extensions
of any of the foregoing.
"Installment Contract(s)" shall mean retail installment contracts for
the sale of new or used motor vehicles assigned outright by Dealers to Company
or a Subsidiary of Company or written by Dealers in the name of the Company or a
Subsidiary of the Company (and funded by Company or such Subsidiary) or assigned
by Dealers to Company or a Subsidiary of Company, as nominee for the Dealer, for
administration, servicing, and collection, in each case pursuant to an
applicable Dealer Agreement; provided, however, that to the extent the Company
or any Subsidiary transfers or encumbers its interest in any Installment
Contracts (or any Advances to Dealers related thereto) pursuant to a Permitted
Securitization, such Installment Contracts shall, from and after the date of
such transfer or encumbrance, cease to be considered Installment Contracts under
this Agreement (reducing the amount of Advances to Dealers by the outstanding
amount of such advances, if any, attributable to such Installment Contracts)
unless and until such installment contracts are reassigned to the Company or a
Subsidiary of the Company or such encumbrances are discharged.
"Intercompany Loans" shall mean any loan or advance in the nature of a
loan by the Company to any Subsidiary or by any Subsidiary to any other
Subsidiary or to the Company.
"Intercompany Loans, Advances and Investments" shall mean any
Intercompany Loan and any other advance or Investment by the Company to or in a
Subsidiary or by any Subsidiary to or in the Company or any other Subsidiary.
"Intercompany Note(s)" shall mean the promissory notes substantially in
the form of Exhibit N, attached hereto, issued or to be issued by the Company or
any Subsidiary to evidence an Intercompany Loan, and pledged to the Agent (in
its capacity as Collateral Agent under the Intercreditor Agreement and/or as
Agent hereunder.)
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement executed and delivered as of December 15, 1998 by and among the Banks,
the holders of certain other Debt and the Agent, as Collateral Agent thereunder,
and acknowledged and accepted by the Company and the Permitted Borrowers, 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:
(a) with respect to a Eurocurrency-based Advance, a
Eurocurrency-Interest Period commencing on the day a Eurocurrency-based
Advance is made, or on the effective date of an election of the
Eurocurrency-based Rate made under Section 2.3 or hereof, as the case
may be, and
(b) with respect to a Swing Line Advance, a period of one (1)
to thirty (30) days agreed to in advance by Company and the Swing Line
Bank as selected by Company pursuant to Section 2.5(c),
provided that (i) any Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day, except that
as to a Eurocurrency-Interest
19
Period, if the next succeeding Business Day falls in another calendar month,
such Eurocurrency-Interest Period shall end on the next preceding Business Day,
and (ii) when a Eurocurrency-Interest Period begins on a day which has no
numerically corresponding day in the calendar month during which such
Eurocurrency-Interest Period is to end, it shall end on the last Business Day of
such calendar month, and (iii) no Interest Period shall extend beyond the
maturity date set forth in the Note to which such Interest Period is to apply.
"Interest Rate Protection Agreement(s)" shall mean any interest rate,
swap, cap, floor, collar, forward rate agreement or other rate protection
transaction, or any combination of such transactions or agreements or any option
with respect to any such transactions or agreements now existing or hereafter
entered into by Company or any of its Subsidiaries to manage existing or
anticipated interest rate risk and not for speculative purposes.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, in respect of any Person, any loan, advance,
extension of credit, Guarantee Obligation or contribution of capital or any
investment in, or purchase or other acquisition of, stocks, notes, debentures or
other securities of such Person.
"Issuing Office" shall mean Agent's office located at One Detroit
Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other office as
Agent shall designate as its Issuing Office.
"Joinder Agreement (Guaranty)" shall mean a joinder agreement in the
form attached as "Exhibit A" to the form of the Domestic Guaranty and to the
form of the Foreign Guaranty, to be executed and delivered by any Person
required to be a Guarantor pursuant to Section 7.19 of this Agreement.
"Lead Arranger" shall mean Banc of America Securities, LLC, or such
successor lead arranger and sole book manager as appointed by the Company under
Section 12.15 hereof.
"Leased Vehicles" shall mean, as of any applicable date of
determination, the Dollar Amount of advances in respect of Leases, as such
amount would appear in the footnotes to the financial statements of the Company
and its Subsidiaries prepared in accordance with GAAP or, if specifically
identified, elsewhere in such financial statements, net of depreciation on the
motor vehicles which are covered by Leases with respect to which such Leased
Vehicles are attributable (and if such amount is not shown net of such reserves,
then net of any reserves established by the Company as an Allowance for Credit
Losses related to such advances not expected to be recovered), provided that for
purposes of the definition of Collateral determining the Borrowing Base and
compliance with the covenants under Section 7.4 through 7.7 and 7.17 hereof,
Leased Vehicles shall not include (a) the amount of any such advances
attributable to any Leases transferred or encumbered or reallocated from the
Non-Specified Interest to a Specified Interest pursuant to a Permitted
Securitization or assigned to a Securitized Pool (whether or not attributable to
the Company under GAAP) unless and until such advances (and the related Leases)
are either reassigned to the Company or a Subsidiary of the Company (other than
the Titling Subsidiary) or such encumbrances are discharged, or such advances
(and the related
20
Leases and vehicles) are reallocated from the applicable Specified Interest to
the Non-Specified Interest or (b) Charged-Off Advances, to the extent that such
Charged-Off Advances (i) exceed the portion of the Company's Allowance for
Credit Losses related to reserves against such advances not expected to be
recovered, as such allowance would appear in the footnotes to the financial
statements of the Company and its Subsidiaries prepared in accordance with GAAP
at such time or if specifically identified, elsewhere in such financial
statements and (ii) have not already been eliminated in the determination of
Leased Vehicles. For purposes of this definition, "Charged-off Advances" shall
mean those Leased Vehicles which the Company or any of its Subsidiaries has
determined, based on the application of a static pool or comparable analysis or
otherwise, are completely or partially impaired, to the extent of such
impairment.
"Lease(s)" shall mean the retail agreements for the lease of motor
vehicles assigned outright by Dealers to Company or a Subsidiary of Company or
written by a Dealer in the name of the Company or a Subsidiary of Company (and
funded by Company or such Subsidiary) or assigned by Dealers to Company or a
Subsidiary of Company, as nominee for the Dealer, for administration, servicing
and collection, in each case pursuant to an applicable Dealer Agreement;
provided, however, that to the extent the Company or any Subsidiary transfers or
encumbers its interest in any Leases or reallocates such Leases from the
Non-Specified Interest to a Specified Interest pursuant to a Permitted
Securitization, such Leases shall, from and after the date of such transfer or
encumbrance or such reallocation, cease to be considered Leases under this
Agreement (reducing the amount of Leased Vehicles by the outstanding amount of
Leased Vehicles attributable to such Leases) unless and until such Leases are
reassigned to Company or a Subsidiary of the Company (other than the Titling
Subsidiary) or such encumbrances have been discharged or such Leases are
reallocated from the applicable Specified Interest to the Non-Specified
Interest.
"Lenders" shall mean the Banks, the Noteholders 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.
21
"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 held by it in connection
with dealer holdbacks (including, without limitation, with respect to Leases or
Installment Contracts), claims or refunds under insurance policies or claims or
refunds under service contracts or (b) to make deposits in trust or otherwise as
required under re-insurance agreements and pursuant to state regulatory
requirements, unless the Company or any of its Subsidiaries, as the case may be,
has encumbered its interest in such monies or deposits or in other property of
the Company to secure such obligations.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Guaranties, the Letter of Credit Agreements, the Collateral Documents and
any other documents, instruments or agreements executed pursuant to or in
connection with any such document, or this Agreement, as such documents may be
amended, renewed, replaced or extended from time to time.
"Luxembourg Subsidiary" shall mean a wholly-owned direct or indirect
Subsidiary of the Company organized under the laws of Luxembourg.
"Majority Banks" shall mean at any time Banks holding 66-2/3% of the
aggregate principal amount of the Indebtedness then outstanding under the Notes
(provided that, for purposes of determining Majority Banks hereunder,
Indebtedness outstanding under the Swing Line Notes shall be allocated among the
Banks based on their respective Percentages of the Revolving Credit), or, if no
Indebtedness is then outstanding, Banks holding 66-2/3% of the Percentages.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business or financial condition of the Company and its Subsidiaries, taken
as a whole, (b) the ability of each of the Company and its Subsidiaries to
perform their material obligations under this Agreement, the Notes (if issued)
or any other Loan Document to which any of them is a party, as the case may be,
or (c) the validity or enforceability of any material provision of this
Agreement, any of the Notes (if issued) or any of the other Loan Documents (as
determined by Agent and the Majority Banks) or the rights or remedies of the
Agent or the Banks hereunder or thereunder.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., and its
successors.
"Multiemployer Plan" shall mean any Pension Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
22
"National Currency Unit" shall mean a fraction or multiple of one Euro
Unit expressed in units of the former national currency of a Participating
Member State.
"Net Dealer Holdbacks" shall mean, as of any applicable date of
determination, (a) Gross Dealer Holdbacks minus (b) Advances to Dealers.
"Net Hedging Obligation(s)" shall mean, in respect of any one or more
Hedging Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Agreements, (a) for any
date on or after the date such Hedging Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the xxxx to market value(s) for such Hedging Agreements,
as 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.
"Net Leased Vehicle Dealer Holdbacks" shall mean, as of any date of
determination thereof, with respect to Dealer Agreements relating to Leases,
amounts due to Dealers at such time from collections of Leased Vehicles by the
Company or any Subsidiary (other than with respect to Leases which have been
transferred or encumbered or reallocated from the Non-Specified Interest to a
Specified Interest pursuant to a Permitted Securitization and (x) have not been
reassigned to the Company or a Subsidiary of the Company or the encumbrances on
which have not been discharged or (y) have not been reallocated from the
applicable Specified Interest to the Non-Specified Interest) pursuant to the
applicable Dealer Agreements.
"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.
"Non-Specified Assets" is defined in the Titling Subsidiary Agreements.
"Non-Specified Interest" is defined in the Titling Subsidiary
Agreements.
"Notes" shall mean the Revolving Credit Notes or the Swing Line Notes,
or any or all of the Revolving Credit Notes, and the Swing Line Notes as the
context indicates, and in the absence of such indication, all such notes.
"Notes Receivable" shall mean, as of any applicable date of
determination, the aggregate amount outstanding under promissory notes issued by
Dealers to Company or its Subsidiaries to evidence working capital loans by
Company or any of its Subsidiaries to Dealers.
"Operating Lease" shall mean any lease other than a Capitalized Lease.
"Operating Rental" shall mean all rental payments that the Company or
any of its Subsidiaries, as lessee, is required to make under the terms of any
Operating Lease.
23
"Outright Dealer Agreement(s)" shall mean Dealer Agreements referred to
in clause (ii) of the definition of Dealer Agreements.
"Participating Member State" shall mean such country so described in
any EMU Legislation.
"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, any ERISA Affiliate or any Permitted Borrower, as defined in Section
3(2) of ERISA.
"Percentage" shall mean, with respect to any Bank, its percentage
share, as set forth on Exhibit D hereto (and stated as a percentage and/or a
Dollar amount), of the Letters of Credit, and/or the Revolving Credit, as the
context indicates, as such Exhibit may be revised from time to time by Agent in
accordance with Section 13.8(d) hereof.
"Permitted Acquisition" shall mean any acquisition by the Company or
any of its Subsidiaries (other than the Titling Subsidiary or any Special
Purpose Subsidiary), including any such acquisition conducted as a Permitted
Merger, of assets, businesses or business interests or shares of stock or other
ownership interests of or in any other Person conducted in accordance with the
following requirements:
(a) not less than twenty (20) nor more than ninety (90) days
prior to the commencement of each such proposed acquisition, the
Company provides written notice thereof to Agent (with drafts of all
material documents pertaining to such proposed acquisition to be
furnished to Agent within not less than twenty (20) days prior to such
proposed acquisition);
(b) on the date of any such acquisition, all necessary or
appropriate governmental, quasi-governmental, agency, regulatory or
similar approvals of applicable jurisdictions (or the respective
agencies, instrumentalities or political subdivisions, as applicable,
of such jurisdictions) and all necessary or appropriate
non-governmental and other third-party approvals which, in each case,
are material to such acquisition have been obtained and are in effect,
and the Company and its Subsidiaries are in full compliance therewith,
and all necessary or appropriate declarations, registrations or other
filings with any court, governmental or regulatory authority,
securities exchange or any other person have been made;
(c) the aggregate value of all of such acquisitions, including the
value of any proposed new acquisition, conducted while this Agreement
remains in effect as Permitted Acquisitions (but excluding any
acquisition conducted with the specific written approval of the
Majority Banks, and not as a Permitted Acquisition hereunder) computed
on the basis of total acquisition consideration paid or incurred, or to
be paid or incurred, by the Company or its Subsidiaries with respect
thereto, including, in the case of an acquisition of assets, all
indebtedness which is assumed or to which such assets are subject and,
in the case of the acquisition of stock or other ownership interests,
all indebtedness to which such stock or other ownership interests, are
subject, shall not exceed Ten Million Dollars
24
($10,000,000) (or the Alternative Currency equivalent thereof, if
applicable), determined as of the date of such acquisition;
(d) within thirty (30) days after any such acquisition has
been completed the Company shall deliver to the Agent executed copies
of all material documents pertaining to such acquisition, and the
Company, its Subsidiaries and any of the corporate entities involved in
such acquisition shall execute or cause to be executed, and provide or
cause to be provided to Agent, for the Banks, such documents and
instruments (including without limitation, the Guaranties as required
by Section 7.19 hereof, and opinions of counsel, amendments,
acknowledgments, consents and evidence of approvals or filings) as
reasonably requested by Agent, if any; and
(e) both immediately before and after such acquisition, no
Default or Event of Default (whether or not related to such
acquisition), has occurred and is continuing.
"Permitted Borrower Addendum" shall mean an addendum substantially in
the form attached hereto as Exhibit P, to be executed and delivered by each
Permitted Borrower which becomes a party to this Agreement after the Effective
Date, as such Exhibit may be amended from time to time.
"Permitted Borrower(s)" shall mean CAC UK, CAC Canada, CAC Ireland and
any other Foreign Subsidiary which is a 100% Subsidiary and which, after the
Effective Date and with the prior written consent of each of the Banks, becomes
a party to this Agreement pursuant to Section 2.1(a) hereof.
"Permitted CAC UK Debt" shall mean additional Debt of CAC UK issued as
part of any short term, working capital or overdraft loan facility denominated
in an Alternative Currency in an aggregate amount at any time outstanding
(determined on the date any such Debt is incurred) not to exceed the greater of
(a) twelve and one-half percent (12.5%) of Consolidated Tangible Net Worth or
(b) the equivalent of Ten Million Dollars ($10,000,000) in such Alternative
Currency, less the aggregate amount at any time outstanding of overdraft lines
of credit or similar credit facilities in the name of CAC UK permitted under
Section 8.5(e) hereof; provided that such Debt (i) is unsecured, except to
extent of any Lien granted by CAC UK which is permitted under Section 8.6(d)
hereof, (ii) is not guaranteed or otherwise supported by Company or any of its
other Subsidiaries, and (iii) 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.
"Permitted Currencies" shall mean Dollars or any Alternative Currency.
"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 Subsidiary of
the Company of the Debt outstanding to the Noteholders or the Future Debt
Holders, provided that concurrently with the giving of any such guaranty, such
Subsidiary shall
25
enter into a Guaranty on substantially similar terms and providing an equal and
ratable benefit to the Banks or (iii) any agreement or other undertaking by the
Company, as servicer or administrative agent of the Installment Contracts or
Leases covered by a Permitted Securitization or as administrative agent for the
Titling Subsidiary under the Titling Subsidiary Agreements, (A) to advance funds
equal to the interest component of obligations issued as part of a Permitted
Securitization and payable from collections on such Installment Contracts or
Leases or (B) to advance funds, upon the expiration or termination of a Lease
held by the Titling Subsidiary or a Lease included in a Permitted
Securitization, in the amount the Company and its Subsidiaries expect to receive
upon the sale or other disposition of the vehicle subject to such Lease or (C)
to advance funds equal to any portion of the "constant yield payment" (as
defined in the Administrative Agency Agreement or the applicable Securitization
Documents) due in any particular period which was not received with respect to a
Lease held by the Titling Subsidiary or a securitized Lease, such payments in
the case of each of subclauses (A), (B) and (C) of this clause (iii), 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
subclause (A), (B), and (C) of this clause (iii) at any time outstanding shall
not exceed $1,500,000 or (D) to transfer funds to the Titling Subsidiary to
reacquire Leases (and the related leased vehicles) as may be required from time
to time under the Administrative Agency Agreement, but only to the extent such
Leases (and leased vehicles) are allocated to a Specified Interest immediately
prior to the making of the related transfer and (iv) other Guarantee Obligations
of the Subsidiaries in an aggregate amount not to exceed, at any time
outstanding, $1,000,000 and (v) Guarantee Obligations arising out of terms of
any Program Agreement requiring the repurchase of a Program Contract with
respect to which there has been a breach of covenant or representation under the
Program Agreement.
"Permitted Investments" shall mean:
(a) Investments in direct obligations of, or obligations
guarantied by, the United States of America or any agency of the United
States of America the obligations of which agency carry the full faith
and credit of the United States of America, provided that such
obligations (other than Investments by CAC Life in such obligations
made to match liabilities incurred in the ordinary course of business)
mature within one (1) year from the date of acquisition thereof;
(b) Investments in any obligation of any state or municipality
thereof that at the time of acquisition thereof have an assigned rating
of "A" or higher by S&P (or an equivalent or higher rating by another
credit rating agency of recognized national standing in the United
States of America), provided that such obligations (other than
Investments by CAC Life in such obligations made to match liabilities
incurred in the ordinary course of business) mature within one (1) year
from the date of acquisition thereof;
(c) Investments in negotiable certificates of deposit issued
by commercial banks organized under the laws of the United States of
America or any state thereof, having capital, surplus and undivided
profits aggregating at least Fifty Million Dollars ($50,000,000) and
the long-term unsecured debt obligations of which are rated "A" or
higher by S&P (or an equivalent or higher rating by another credit
rating agency of
26
recognized national standing in the United States of America), provided
that such certificates of deposit (other than Investments by CAC Life
in such certificates of deposit made to match liabilities incurred in
the ordinary course of business) mature within one (1) year from the
date of acquisition thereof;
(d) Investments in corporate debt obligations of corporations
organized under the laws of the United States of America or any state
thereof that at the time of acquisition thereof have an assigned rating
of "A" or higher by S&P (or an equivalent or higher rating by another
credit rating agency of recognized national standing in the United
States of America); and
(e) Investments in preferred stock of corporations organized
under the laws of the United States of America or any state thereof
that have an assigned rating of "A" or higher by S&P (or an equivalent
or higher rating by another credit rating agency of recognized national
standing in the United States of America); and
(f) Investments by any foreign subsidiary in obligations
similar in nature, term and credit quality to those enumerated in
paragraphs (a) through (e) above, except that the applicable
jurisdiction of formation or operation shall be substituted for the
United States of America in each case.
"Permitted Liens" shall mean, with respect to any Person:
(a) any Liens granted under or established by this Agreement
or the other Loan Documents;
(b) Liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued,
provided that such provision for the payment of all such taxes known to
such Person has been made on the books of such Person as may be
required by GAAP;
(c) mechanics', materialmen's, banker's, carriers',
warehousemen's and similar Liens arising in the ordinary course of
business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the
enforcement of such liens and encumbrances shall have been duly
suspended; and (ii) such provision for the payment of such liens and
encumbrances has been made on the books of such Person as may be
required by GAAP;
(d) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions (subject to the applicable
provisions of this Agreement) and social security benefits which are
not overdue or are being contested in good faith by appropriate
proceedings diligently pursued, provided that in the case of any such
contest (i) any proceedings commenced for the enforcement of such Liens
shall have been duly suspended; and (ii) such provision for the payment
of such Liens has been made on the books of such Person as may be
required by GAAP;
27
(e) (i) Liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts with the
United States or any foreign government or any agency thereof entered
into in the ordinary course of business and (ii) liens incurred or
deposits made in the ordinary course of business to secure the
performance of statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations incurred in connection with the
borrowing of money, any lease-purchase arrangements or the payment of
the deferred purchase price of property), provided that full provision
for the payment of all such obligations set forth in clauses (i) and
(ii) has been made on the books of such Person as may be required by
GAAP;
(f) Liens in the nature of any minor imperfections of title,
including but not limited to easements, covenants, rights-of-way or
other similar restrictions, which, either individually or in the
aggregate, could not reasonably be expected to materially adversely
affect the present or future use of the property to which they relate,
or to have a material adverse effect on the sale or lease of such
property, or (iii) render title thereto unmarketable;
(g) Liens (i) arising from judicial attachments and judgments,
(ii) securing appeal bonds or supersedeas bonds, and (iii) arising in
connection with court proceedings (including, without limitation,
surety bonds and letters of credit or any other instrument serving a
similar purpose), provided that (1) the execution or other enforcement
of such Liens is effectively stayed, (2) the claims secured thereby are
being contested in good faith and by appropriate proceedings, (3)
adequate book reserves in accordance with GAAP shall have been
established and maintained and shall exist with respect thereto, (4)
such Liens do not in the aggregate detract from the value of such
property and (5) the title of the Company or a Subsidiary, as the case
may be, to, and its right to use, such property, is not materially
adversely affected thereby; and
(h) those Liens of the Company or its Subsidiaries identified
in Schedule 8.6 hereto.
"Permitted Merger(s)" shall mean any merger of (i) any Subsidiary
(including, without limitation, a Permitted Borrower or Guarantor, excluding any
Special Purpose Subsidiary) or any Person which is being acquired pursuant to a
Permitted Acquisition into Company or any Permitted Borrower or (ii) the merger
of any Subsidiary or any Person which is being acquired pursuant to a Permitted
Acquisition (other than a Permitted Borrower or Guarantor) into any other
Subsidiary (excluding any Special Purpose Subsidiary) or any Person which is
being acquired pursuant to a Permitted Acquisition, which, in each case,
satisfies and/or is conducted in accordance with the following requirements:
(a) not less than twenty (20) nor more than ninety (90) days
prior to the commencement of such proposed merger, Company provides
written notice thereof to Agent (with drafts of all material documents
pertaining to such proposed merger to be furnished to Agent not less
than twenty (20) days prior to such proposed merger);
28
(b) immediately following and as the direct result of any such
merger, the surviving or successor entity has succeeded by operation of
applicable law (as confirmed by an opinion(s) of counsel in form and
substance satisfactory to the Majority Banks, if requested by Agent or
the Majority Banks) to all of the obligations of the non-surviving
entity under this Agreement and the other Loan Documents, and to all of
the property rights of such non-surviving entity subject to the
applicable Loan Documents;
(c) concurrently with such proposed merger, the surviving
entity involved in such merger shall execute or cause to be executed,
and provide or cause to be provided to Agent, for the Banks, such
documents and instruments (including without limitation opinions of
counsel, amendments, acknowledgments and consents), if any, as
reasonably requested by the Majority Banks; and
(d) both immediately before and immediately after such merger,
no Default or Event of Default (whether or not related to such merger),
has occurred and is continuing.
"Permitted Prepayment" shall mean any prepayment of Future Debt (x)
which is funded solely with the proceeds of (i) new cash equity in the form of
nonconvertible common shares, (ii) Subordinated Debt, or (iii) substitute Debt
permitted hereunder which satisfies the following conditions:
(a) such Debt shall have a term extending at least beyond the
Revolving Credit Maturity Date then in effect, with an amortization
schedule not greater than level amortization to maturity (but with no
principal payments required for a period of at least 12 months) and
with no provision for mandatory early repayment except (x) upon
default, (y) following a change in control or (z) following the sale of
any material portion of the assets of the Company or any of its
Subsidiaries, to the extent of the proceeds of such sale;
(b) such Debt shall be unsecured, or, subject to the
Intercreditor Agreement, secured;
(c) both immediately before and immediately after such
additional Debt is incurred, no Default or Event of Default (whether or
not related to such additional Debt, and taking into account the
incurring of such additional Debt) has occurred and is continuing; and
(d) if such additional Debt shall be issued pursuant to loan
documents containing covenants which are more restrictive than the
covenants contained in this 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
29
writing to the Company's proposed prepayment shall be deemed to have approved
such prepayment.
"Permitted Repurchase" shall mean any purchases by the Company of its
capital stock during the period commencing on the Effective Date and ending on
the Revolving Credit Maturity Date then in effect, in an aggregate amount for
all such purchases not to exceed $50,000,000; provided that at the time of any
such purchase no Default or Event of Default has occurred and is continuing or
would occur after giving effect thereto.
"Permitted Securitization(s)" shall mean each transfer or encumbrance
(each a "disposition") of specific Advances to Dealers or Leased Vehicles funded
under Back End Dealer Agreements (and any interest in and lien on the
Installment Contracts, Leases, motor vehicles, and other rights and financial
assets relating thereto) or of specific Installment Contracts or Leases (and any
interest in and lien on motor vehicles and other rights and financial assets
relating thereto) arising under Outright Dealer Agreements or (subject to the
terms hereof) of Pools of such financial assets and each transfer or encumbrance
(also, a "disposition") of a Specified Interest (and the reallocation of Leased
Vehicles, Leases and related financial assets from the Non Specified Interest to
such Specified Interest in connection therewith), in each case by the Company or
one or more of its Subsidiaries to one or more Special Purpose Subsidiaries
conducted in accordance with the following requirements:
(a) Each disposition shall identify with reasonable certainty
the specific Advances to Dealers, Leased Vehicles, Installment
Contracts or Leases covered by such disposition; and (x) such Advances
to Dealers or Leased Vehicles, and the Installment Contracts, Leases,
motor vehicles or other rights relating thereto shall have performance
and other characteristics so that the quality of such Advances to
Dealers, Leases Vehicles, Installment Contracts or Leases, as the case
may be, is comparable to, but not materially better than, the overall
quality of the Company's Advances to Dealers, Leased Vehicles,
Installment Contracts or Leases, as applicable, as determined in good
faith by the Company in its reasonable discretion or (y) with respect
to any such assets assigned to an uncapped Pool subsequent to such Pool
becoming a Securitized Pool in conformity with the standards set forth
in clause (x) of this subparagraph (a), the assets covered by such
dispositions were assigned to such Pool in the order such assets were
originated and without the exercise of any discretion by the Company;
(b) Both before and after giving effect to such disposition
(and taking into account any reduction in the Indebtedness with the
proceeds of such disposition as required hereunder), the Company shall
be in compliance with the Borrowing Base Limitation;
(c) Each such Securitization Transaction shall be structured
on the basis of the issuance of Debt or other similar securities by one
or more Special Purpose Subsidiaries which Debt or other securities
shall be without recourse to Company and its other Subsidiaries, except
to the extent of normal and customary representations and warranties
given as of the date of each such disposition, and not as continuing
representations and warranties, and otherwise on normal and customary
terms and conditions for comparable asset based securitization
transactions, which may include Cleanup Call provisions (it
30
being understood that, for purposes of this subparagraph (c), the terms
and conditions governing Securitization Transactions made by the
Company prior to January 1, 2003 shall be deemed to have been made on
normal and customary terms and conditions);
(d) Concurrently with each such disposition (except for
dispositions to an uncapped Securitized Pool (I) pursuant to a
revolving, expansion or relending feature included in a Prior
Securitization (for purposes of this definition, a "Revolving Feature")
after the expiration in the ordinary course, and not as a result of any
failure of a covenant or condition, early termination, default or
similar event, of the period during which additional loans or advances
are available under such Revolving Feature (for purposes of this
definition, a "Post-Revolving Period Disposition"), or (II) pursuant to
a Prior Securitization which does not have a Revolving Feature, but
which included a normal and customary portion of uncapped Securitized
Pools relative to the overall size of the Securitization Transaction
and otherwise satisfied the requirements for a Permitted
Securitization, 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 Euro Currency-based Rate and no
Default or Event of Default has occurred and is continuing,
the Company may, after prepaying that portion of the
Indebtedness then carried at the Prime-based Rate, deposit the
amount of such required principal reductions in a cash
collateral account to be held by the Agent, for and on behalf
of the Banks (which shall be an interest-bearing account), on
such terms and conditions as are reasonably acceptable to
Agent and the Majority Banks and, subject to the terms and
conditions of such cash collateral account, sums on deposit
therein shall be applied (until exhausted) to reduce the
principal balance of the Revolving Credit on the last day of
each Interest Period attributable to the applicable
Eurocurrency-based Advances of the Revolving Credit; and
provided further that Agent and the Banks acknowledge that any
proceeds of any such Debt incurred pursuant to a Permitted
Securitization remaining after the application of such
proceeds as required by this clause (d) may be held or
invested in Permitted Investments or otherwise invested or
applied in any manner not prohibited by this Agreement; and
(e) Both immediately before and after such disposition, no
Default or Event of Default (whether or not related to such
disposition) has occurred and is continuing.
31
In connection with each Permitted Securitization to be conducted hereunder, the
Company shall provide the following:
(i) to the Agent, (x) not less than three (3)
Business Days prior to the date of consummation thereof (or
such lesser period as approved by Agent) or (y) solely in the
case of dispositions to uncapped Securitized Pools pursuant to
a Revolving Feature, not less than three (3) Business Days
prior to the date of the release of the financial assets
covered by such disposition (or such lesser period as approved
by Agent), (I) a certification that, after giving effect to
such disposition, it will be in compliance with the Borrowing
Base Limitation and that none of the assets covered by such
disposition were included in the most recent quarterly
Borrowing Base Certificate delivered to Agent under Section
7.3(d) hereof prior to such disposition or (II) a new
Borrowing Base Certificate (and any supporting information
reasonably required by the Agent) dated as of the proposed
date of the applicable disposition or release and, based on
projected information, giving effect to such disposition and
confirming compliance with the Borrowing Base Limitation;
(ii) to the Agent and the Banks (x) not less than
five (5) Business Days prior to the date of consummation
thereof (or such lesser period as approved by Agent), proposed
drafts of the material Securitization Documents covering the
applicable Securitization Transaction (and the term sheet or
commitment relating thereto) and (y) within ten (10) Business
Days following the consummation thereof, executed copies of
such Securitization Documents, including, if applicable, a
summary of any material changes from the draft documents
delivered to Agent and the Banks prior thereto, except that if
such Securitization Transaction consists solely of
dispositions pursuant to a Revolving Feature, the Company
shall only be required (I) under clause (x) of this
subparagraph (ii), to deliver to Agent, not less than three
(3) Business Days prior to the consummation thereof (or such
lesser period as approved by Agent), a certification that the
applicable Securitization Documents remain in effect
substantially in the form previously furnished to Agent and
the Banks (or identifying any material changes, and attaching
any proposed amendment, supplement or other document delivered
under such prior Securitization Documents to effect such
dispositions) and (II) under clause (y) of this subparagraph
(ii), to deliver to Agent executed copies of any such
amendment, supplement or other document; and
(iii) 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 requested release of the financial
assets covered by such dispositions (or such lesser period as
approved by Agent), (I) a schedule substantially in the form
delivered for Permitted Securitizations under the Prior Credit
Agreement identifying the specific Advances to Dealers or
Leased Vehicles and the related Installment Contracts or
Leases proposed to be covered by such transaction, accompanied
by (II) a request that the Agent release such assets from the
Lien of
32
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, provided that in the case of a
Post-Revolving Period Disposition under subclause (I) of
clause (d) of this definition or a disposition to an uncapped
Securitized Pool in a Prior Securitization which does not have
a Revolving Feature under subclause (II) of clause (d) of this
definition, 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 not attach to any such assets when the Company
or any of its Subsidiaries subsequently acquires rights in, to
or under such assets; and
(iv) only if the applicable Securitization
Transaction is not related to a Prior Securitization or
involves the disposition or release of any assets which were
covered by the most recent quarterly Borrowing Base
Certificate delivered to Agent under Section 7.3(d) hereof and
the aggregate net book value of the Advances to Dealers or
Leased Vehicles 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 related Installment Contracts or
Leases proposed to be covered by such transaction (with
evidence supporting its determination under clause (x) of
subparagraph (a) of this definition, if applicable, including
without limitation a "static pool analysis" comparable to the
static pool analysis required to be delivered under Section
7.3(c) hereof with respect to such Installment Contracts or
Leases).
"Permitted Transfer(s)" shall mean (i) any sale, assignment, transfer
or other disposition of inventory or worn-out or obsolete machinery, equipment
or other such personal property in the ordinary course of business, (ii) any
transfer of property by a Subsidiary to the Company or by the Company or any
Subsidiary to a Domestic Subsidiary (excluding the Titling Company or any
Special Purpose Subsidiary) provided that in each case, immediately before and
after such transfer, no Default or Event of Default shall have occurred and be
continuing, (iii) any transfer of property by the Company or a Domestic
Subsidiary to a Significant Foreign Subsidiary, subject to compliance (both
before and after giving effect to such transfer) with the applicable limitations
contained in Section 8.8(d) hereof, provided that in each case, immediately
before and after such transfer, no Default or Event of Default shall have
occurred and be continuing; (iv) any transfer of the capital stock of a Special
Purpose Subsidiary to the Company or to any other Subsidiary which is not a
Special Purpose Subsidiary and (v) any transfer of funds or other property paid
as a dividend by a Subsidiary to the Company or any other Subsidiary to the
extent permitted by clause (i) of Section 8.15 hereof.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, incorporated or unincorporated organization, joint
venture, joint stock company, or a government or any agency or political
subdivision thereof or other entity of any kind.
33
"Pools" shall mean a grouping on the books and records of the Company
or any of its Subsidiaries of Advances to Dealers, Leased Vehicles, Installment
Contracts or Leases originated or to be originated with the Company or any of
its Subsidiaries by a Dealer and bearing the same pool identification number
assigned by the Company's computer system, with (x) an "uncapped" Pool being a
Pool which is not reflected on such books and records as capped and to which
additional Advances to Dealers, Leases and related financial assets may be added
and (y) a Pool being capped when the number of the applicable financial assets
in such Pool has reached the limit established from time to time by written
agreement between the relevant Dealer and the Company or Subsidiary, as
applicable, in the ordinary course of business, such that no further financial
assets may be added to such Pool.
"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 (i) with respect to any Advances in
Dollars, the U.S. Prime-based Rate and (ii) with respect to Swing Line Advances
in Canadian Dollars to CAC Canada, the Canadian Prime-based Rate.
"Prior Credit Agreement" is defined in Recital A to this Agreement.
"Prior Securitization" shall mean a Permitted Securitization (and the
related Securitization Documents) consummated under the Credit Agreement prior
to the particular disposition, release or other transaction then being
considered.
"Program Agreement" shall mean that certain Auto Finance Alliance
Program Agreement between the Company and a certain finance company dated as of
May 06, 2002, as previously approved by the requisite Banks (the "Existing
Agreement"), and each other agreement providing for the transfer to Program
Participants of eligible Installment Contracts satisfying the applicable credit
guidelines in effect under such agreement, on substantially the terms of the
Existing Agreement (as determined by the Agent, in its reasonable discretion),
as such agreements may be amended (subject to the terms hereof) from time to
time.
"Program Contract(s)" shall mean eligible Installment Contracts
satisfying basic credit guidelines applicable under a Program Agreement from
time to time in effect generated by the Company's Dealers and transferred to the
Company or a Subsidiary, for further transfer to a Program Participant.
"Program Participant" shall mean that certain finance company which is
a party to the Existing Finance Agreement (defined in the definition of "Program
Agreement") and such other Persons which contract with the Company or a
Subsidiary, from time to time, under a Program Agreement.
"Program Transfer" shall mean the transfer by the Company or a
Subsidiary to a Program Participant of a Program Contract.
34
"Prohibited Transaction" shall mean any transaction involving a Pension
Plan which constitutes a "prohibited transaction" under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest
at the Quoted Rate.
"Refunded Swing Line Advance" is defined in Section 2.5(e) hereof.
"Reportable Event" shall mean a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations promulgated thereunder, which is
material to the Company and its Subsidiaries, taken as a whole.
"Request for Advance" shall mean a Request for Advance of the Revolving
Credit issued by Company or by a Permitted Borrower 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 or a Permitted Borrower by the Banks pursuant to Section 2
hereof, in an amount not to exceed the Revolving Credit Maximum Amount.
"Revolving Credit Facility Fee" shall mean the facility fee payable to
Agent for distribution to the Banks pursuant to Section 2.13, hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
June 9, 2005, 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 2.18 of this Agreement, by an amount not to
exceed the Revolving Credit Optional Increase, and subject to any reductions or
termination of the Revolving Credit Maximum Amount under Sections 2.15 or 9.2 of
this Agreement.
"Revolving Credit Notes" shall mean the Notes described in Section 2.1,
hereof, made or to be made by Company or a Permitted Borrower to each of the
Banks in the form annexed to this Agreement as Exhibit C-1 or C-2, as the case
may be, 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.
35
"Scottish Partnership" shall mean a partnership established by the
Company under the law of Scotland pursuant to the UK Restructuring and which is
a wholly-owned Subsidiary of the Company.
"Securitization Documents" shall mean any note purchase agreement (and
any notes issued thereunder), transfer or security document, master trust or
other trust agreement, servicing agreement, indenture, pooling agreement,
contribution or sale agreement or other document, instruments and certificates
executed and delivered, subject to the terms of this Agreement, to evidence or
secure (or otherwise relating to) a Permitted Securitization, as the same may be
amended from time to time (subject to the terms hereof) and any and all other
documents executed in connection therewith or replacement or renewal thereof.
"Securitization Transaction" shall mean a transfer of, or grant of a
Lien on, Advances to Dealers, Leased Vehicles, Installment Contracts, Leases,
accounts receivable and/or other financial assets by the Company or any
Subsidiary to a Special Purpose Subsidiary or other special purpose or limited
purpose entity or the reallocation of Leases and Leased Vehicles (and related
financial assets) by the Company or any Subsidiary from the Non-Specified
Interest to a Specified Interest and the transfer of a Specified Interest to a
Special Purpose Subsidiary or other special purpose or limited purpose entity
and the issuance (whether by such Special Purpose Subsidiary or other special
purpose or limited purpose entity or any other Person) of Debt or of any
securities secured directly or indirectly by interests in, or of trust
certificates, Specified Interests or other securities directly or indirectly
evidencing interests in, such Advances to Dealers, Leased Vehicles, Installment
Contracts, Leases, accounts receivable and/or other financial assets.
"Securitized Pool(s)" shall mean a Pool, whether capped or uncapped,
which has been transferred to a Permitted Securitization, including a Prior
Securitization.
"Security Agreement" is defined in the definition of Collateral
Documents.
"Shares", "share capital", "capital stock", "stock" and words of
similar import shall mean and refer to the equity capital interest under
applicable law of any Person in a corporation, howsoever such interest is
created or arises, whether such capital consists of common stock, preferred
stock or preference shares, or other stock, and whether such capital is
evidenced by a certificate, share register entry or otherwise.
"Significant Subsidiary(ies)" shall mean, as of any date of
determination, any Subsidiary (i) which is a Permitted Borrower or (ii) which is
designated by the Company (in writing to Agent) as a Significant Subsidiary or
(iii) 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,
36
however, that none of the Titling Subsidiary, 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 6.6 hereto, and any Domestic
Subsidiaries which become Significant Subsidiaries subsequent to the date
hereof.
"Significant Foreign Subsidiaries" shall mean those Foreign
Subsidiaries identified as such on Schedule 6.6 hereto, and any Foreign
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, including the English
Special Purpose Subsidiary.
"Specified Assets" is defined in the Titling Subsidiary Agreements.
"Specified Interest" is defined in the Titling Subsidiary Agreements.
"Stapled Stock Restructuring" shall mean a series of transfers,
mergers, amalgamations and similar transactions involving ownership interests
(but not involving any transfers of Advances to Dealers, Installment Contracts
or other financial assets, or similar transactions) among the Company and its
Subsidiaries, including without limitation the formation of a new wholly-owned
Subsidiary under the laws of the Turks & Caicos Islands ("T&C Subsidiary"),
which will be "stapled" to the Company's existing Domestic Subsidiary, CAC South
Dakota (such that the shares of each stapled Subsidiary cannot be transferred
without the other), the formation of a limited liability company as a Subsidiary
of the T&C Subsidiary or CAC South Dakota and the transfer by the Company to CAC
Scotland (or its Subsidiaries) of all of the share capital of CAC Ireland and
CAC Canada, such transactions resulting in the restructuring of the ownership of
the Company's Foreign Subsidiaries as shown on Exhibit R to the Credit
Agreement.
"Subordinated Debt" shall mean any unsecured Debt subordinated to the
prior payment and discharge in full of the Indebtedness, on written terms and
conditions approved by and acceptable to each of the Banks, in their sole
discretion, and issued pursuant to documentation which is less restrictive (as
determined by Agent and the Banks in their reasonable discretion) than the
covenants contained in this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company, partnership (whether
general or limited) or any other business entity of which more than fifty
percent (50%) of the outstanding voting stock, share capital, membership or
other interests, as the case may be, is owned either directly or indirectly
37
by any Person or one or more of its Subsidiaries, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by any Person and/or its Subsidiaries. Unless otherwise
specified to the contrary herein or the context otherwise requires,
Subsidiary(ies) shall include the Titling Subsidiary and shall refer to each
Person which is a Subsidiary of the Company and "100% Subsidiary(ies) shall mean
any Subsidiary whose stock or partnership, membership or other equity interests
(other than directors' or qualifying shares or other interests to the extent
required under applicable law) are owned directly or indirectly entirely by the
Company and/or any of the Permitted Borrowers.
"Supermajority of the Banks" shall mean eighty percent (80%) of the
Banks, determined on the basis of the applicable Percentages, in the same manner
as the determination of Majority Banks hereunder.
"Swing Line" shall mean the revolving credit loan to be advanced to the
Company or a Permitted Borrower 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 or a Permitted Borrower 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 or a Permitted Borrower to Swing Line Bank in the
form annexed hereto as Exhibit E-1 or E-2, as the case may be, 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.
"Trans-European Business Day" shall mean a day when the Trans-European
Settlement System is open for business.
"Trans-European Settlement System" shall mean the Trans-European
Automated Real-time Gross Settlement Express Transfer System or any successor.
"Treaty on European Union" shall mean the Treaty of Rome of March 25,
1957, as amended by the Single Xxxxxxxx Xxx 0000 and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992 and came into force on
November 1, 1993), as amended from time to time.
"Titling Subsidiary" shall mean Auto Lease Services LLC, a Delaware
limited liability company controlled by the Company and a direct Subsidiary of
the Company.
38
"Titling Subsidiary Agreements" shall mean that certain Limited
Liability Company Agreement of the Titling Subsidiary, dated and effective as of
March 1, 2001 (and the related Certificate of Formation, as therein defined),
and that certain Administrative Agency Agreement, dated and effective as of
March 1, 2001 among the Company and the Titling Subsidiary, each as amended
(subject to the terms hereof) from time to time.
"T&C Subsidiary" is defined in the definition of Stapled Stock
Restructuring.
"Unearned Finance Charges" shall mean, as of any applicable date of
determination, the unearned finance charges utilized in deriving Installment
Contract receivables, net on the Consolidated balance sheet of the Company and
its Subsidiaries, as disclosed in the footnotes thereto; provided that Unearned
Finance Charges shall not include unearned finance charges attributable to
retail installment contracts which are not at such time "Installment Contracts",
due to the proviso in the definition of such term in this Agreement.
"UK Restructuring" shall mean (i) the creation by the Company of the
Scottish Partnership, the Luxembourg Subsidiary and the English Special Purpose
Subsidiary, (ii) the Company's capitalization of the Scottish Partnership with
CAC UK stock, (iii) Intercompany Loans from time to time from the Company to the
Scottish Partnership, directly, or indirectly through one or more holding
companies, in an amount substantially equivalent to the fair market value of
assets being transferred to the English Special Purpose Subsidiary at such time
by CAC UK, provided that such Intercompany Loans are substantially
contemporaneously repaid pursuant to clauses (ix) and (x) of this definition,
(iv) the contribution of a nominal amount of capital to the Luxembourg
Subsidiary, (v) the contributions to capital by the Scottish Partnership to the
English Special Purpose Subsidiary out of the proceeds of the Company's
contemporaneous loan to the Scottish Partnership under clause (iii) of this
definition, (vi) Intercompany Loans from time to time by the Scottish
Partnership to the Luxembourg Subsidiary out of the proceeds of the Company's
contemporaneous loan to the Scottish Partnership under clause (iii) of this
definition, (vii) Intercompany Loans from time to time by the Luxembourg
Subsidiary to the English Special Purpose Subsidiary substantially equal to the
contemporaneous loans made to the Luxembourg Subsidiary by the Scottish
Partnership, (viii) transfers from time to time of Advances to Dealers (and its
rights in the related Installment Contracts or Leases) by CAC UK to the English
Special Purpose Subsidiary for cash consideration in an amount substantially
equivalent to the fair market value of the assets being transferred to the
English Special Purpose Subsidiary at such time by CAC UK, (ix) dividends from
CAC UK to Scottish partnership in an amount substantially equal to the cash
received by CAC UK in exchange for the assets transferred at such time to the
English Special Purpose Subsidiary, and (x) repayments from time to time of the
Intercompany Loans (referred to in clause (iii) of this definition) by the
Scottish Partnership to the Company, directly or indirectly through one or more
holding companies.
"US LLC" shall mean that certain limited liability company chartered in
the United States and established as part of the Stapled Stock Restructuring.
"U.S. 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
U.S. Prime Rate, and (ii) the Alternate Base Rate.
39
"U.S. Prime Rate" shall mean the per annum rate of interest announced
by the Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which U.S. Prime Rate shall
change simultaneously with any change in such announced rate.
1.2 Euro.
(a) Redenomination of Eurocurrency-based Advances and
other Advances into Euro Units.
(i) Each obligation under this Agreement of a party
hereto which (A) was originally denominated in the former
national currency of a Participating Member State, or (B)
would otherwise have been denominated in such former national
currency prior to such date shall be denominated in, or
redenominated into, as applicable, the Euro Unit in accordance
with EMU Legislation and applicable state law, provided that,
if and to the extent that any EMU Legislation provides that
amounts denominated in the euro unit or the National Currency
Unit of a Participating Member State, that are payable by
crediting an account of the creditor within that country, may
be made in either Euro or National Currency Units, each party
to this Agreement shall be entitled to pay or repay any such
amounts in either the Euro Unit or such National Currency
Unit.
(ii) Subject to any EMU Legislation, references in
this Agreement to a minimum amount (or an integral multiple
thereof) in a National Currency Unit to be paid to or by a
party hereto shall be deemed to be a reference to such
reasonably comparable and convenient amount (or an integral
multiple thereof) in the Euro Unit as the Agent may from time
to time specify.
(b) Payments.
(i) All payments by any of the Company or a Permitted
Borrower or any Bank of amounts denominated in the Euro or a
National Currency Unit of a Participating Member State, shall
be made in immediately available, freely transferable, cleared
funds to the account of the Agent in the principal financial
center in such Participating Member State, as from time to
time designated by the Agent for such purpose.
(ii) All amounts payable by the Agent to any party
under this Agreement in the National Currency Unit of a
Participating Member State shall instead be paid in the Euro
Unit.
(iii) The Agent shall not be liable to any party to
this Agreement in any way whatsoever for any delay, or the
consequences of any delay, in the crediting to any account of
any amount denominated in the Euro or a National Currency Unit
of a Participating Member State.
(iv) All references herein to the London interbank or
other national market with respect to any National Currency
Unit of a Participating Member
40
State shall be deemed a reference to the applicable markets
and locations referred to in the definition of "Business Day"
in Section 1.1.
(c) If the basis of accrual of interest or fees expressed
in this Agreement with respect to the currency of any state that becomes a
Participating Member State shall be inconsistent with any convention or practice
in the London interbank market for the basis of accrual of interest or fees in
respect of Euros, such convention or practice shall replace such expressed basis
effective as of and from the date on which such state becomes a Participating
Member State; provided, that if any Advance in the currency of such state is
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Advance, at the end of the then current Interest Period.
(d) Increased Costs. The Company and the Permitted
Borrowers shall, from time to time upon demand of any Bank (with a copy to the
Agent), pay to such Bank the amount of any cost or increased cost incurred by,
or of any reduction in any amount payable to or in the effective return on its
capital to, or of interest or other return foregone by, such Bank or any holding
company of such Bank as a result of the introduction of, changeover to or
operation of the Euro in a Participating Member State, other than any such cost
or reduction or amount foregone reflected in any interest rate hereunder.
(e) Unavailability of Euro. If the Agent at any time
determines that: (i) the Euro has ceased to be utilized as the basic accounting
unit of the European Community; (ii) for reasons affecting the market in Euros
generally, Euros are not freely traded between banks internationally; or (iii)
it is illegal, impossible or impracticable for payments to be made hereunder in
Euro, then the Agent may, in its discretion declare (such declaration to be
binding on all the parties hereto) that any payment made or to be made
thereafter which, but for this provision, would have been payable in the Euro
shall be made in a component currency of the Euro or Dollars (as selected by the
Agent (the "Selected Currency") and the amount to be so paid shall be calculated
on the basis of the equivalent of the Euro in the Selected Currency).
(f) Additional Changes at Agent's Discretion. This
section and other provisions of this Agreement relating to Euros and the
National Currency Units of Participating Member States shall be subject to such
further changes (including changes in interpretation or construction) as the
Agent may from time to time in its reasonable discretion notify to the Company
and the Permitted Borrowers and the Banks to be necessary or appropriate to
reflect the changeover to the Euro in Participating Member States.
1.3 Interest Act (Canada). For the purposes of disclosure under the
Interest Act (Canada), if and to the extent applicable, whenever interest is to
be paid hereunder and such interest is to be calculated on the basis of a period
of less than a calendar year, the yearly rate of interest to which the rate
determined pursuant to such calculation is equivalent is the rate so determined
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and divided by the number of days in such period.
41
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Bank severally and for
itself alone agrees to make Advances of the Revolving Credit in any one or more
of the Permitted Currencies to the Company or to any of the Permitted Borrowers
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, based on the Dollar Amount of any Advances outstanding in Dollars and
the Current Dollar Equivalent of any Advances outstanding in Alternative
Currencies, not to exceed at any one time outstanding such Bank's Percentage of
the Revolving Credit Maximum Amount. Except as provided in Section 2.12 hereof,
for purposes of this Agreement, Advances in Alternative Currencies shall be
determined, denominated and redenominated as set forth in Section 2.11 hereof.
All of the Advances of the Revolving Credit hereunder shall be evidenced by
Revolving Credit Notes made by Company or the Permitted Borrowers to each of the
Banks in the form attached hereto as Exhibit C-1 or C-2, as the case may be,
subject to the terms and conditions of this Agreement. Advances of the Revolving
Credit shall be subject to the following additional conditions and limitations:
(a) A Permitted Borrower shall not be entitled to request
an Advance of the Revolving Credit or the Swing Line hereunder until (i) it has
become a party to this Agreement, either by execution and delivery of this
Agreement or of a Permitted Borrower Addendum and it has executed and delivered
to the Banks, as aforesaid, Revolving Credit Notes and to the Swing Line Bank,
as set forth in Section 2.5(a) hereof, a Swing Line Note, (ii) it has become a
party to the Foreign Guaranty, accompanied in each case by authority documents,
legal opinions and other supporting documents as required hereunder, and (iii)
all other applicable requirements contained in this Agreement with respect to
such Permitted Borrower (whether such requirements are applicable to the
Permitted Borrower or to Company or any other Subsidiary) have been satisfied.
(b) No Permitted Borrower shall be entitled to request or
maintain (or, in the case of any Eurocurrency-based Advance, maintain beyond any
applicable Interest Period then in effect) an Advance of the Revolving Credit
hereunder if it ceases to be a 100% Subsidiary of the Company.
(c) The maximum aggregate amount of Advances and Letters
of Credit including the unreimbursed amount of any draws under any Letters of
Credit) available to the Permitted Borrowers at any time hereunder, using the
Current Dollar Equivalent of any such Advances or Letters of Credit (or
unreimbursed draws thereunder) outstanding in any Alternative Currency
(determined and tested pursuant to and in accordance with Section 2.14 hereof),
shall not exceed the Aggregate Sublimit.
2.2 Accrual of Interest and Maturity. The Revolving Credit Notes, and
all principal and interest outstanding thereunder, shall mature and become due
and payable in full on the Revolving Credit Maturity Date, and each Advance of
Indebtedness evidenced by the Revolving Credit Notes from time to time
outstanding hereunder shall, from and after the date of such Advance, bear
interest at its Applicable Interest Rate. The amount and date of each Advance,
its Applicable Interest Rate, its Interest Period, if any, and the amount and
date of any repayment
42
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 or the applicable
Permitted Borrower of its obligation to repay the outstanding principal amount
of such Advance, all interest accrued thereon and any amount payable with
respect thereto in accordance with the terms of this Agreement and the other
Loan Documents.
2.3 Requests for and Refundings and Conversions of Advances. Company or
a Permitted Borrower (with the countersignature of Company hereunder) 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 or of such Permitted Borrower (with the
countersignature of an authorized officer of the Company), subject to the
following and to the remaining provisions hereof:
(a) each such Request for Advance shall set forth the
information required on the Request for Advance form annexed hereto as Exhibit
A, including without limitation:
(i) the proposed date of such Advance, which must be
a Business Day;
(ii) whether such Advance is a refunding or
conversion of an outstanding Advance;
(iii) whether such Advance is to be a Prime-based
Advance or a Eurocurrency-based Advance, and, except in the
case of a Prime-based Advance, the first Interest Period
applicable thereto; and
(iv) in the case of a Eurocurrency-based Advance, the
Permitted Currency in which such Advance is to be made.
(b) each such Request for Advance shall be delivered to
Agent by 12 noon (Detroit time) three (3) Business Days prior to the proposed
date of Advance, except in the case of a Prime-based Advance, for which the
Request for Advance must be delivered by 12:00 noon (Detroit time) on such
proposed date;
(c) without duplication, the principal amount (or Dollar
Amount of the principal amount, if such Advance of the Revolving Credit is being
initially funded in an Alternative Currency) of such requested Advance, plus the
principal amount (or Dollar Amount of the principal amount, if such other
Advance is being initially funded in an Alternative Currency) of any other
Advances of the Revolving Credit and of the Swing Line being requested on such
date, plus the principal amount of all other Advances of the Revolving Credit
and of the Swing Line then outstanding hereunder, in each case whether to
Company or the Permitted Borrowers (using the Current Dollar Equivalent of any
such Advances outstanding in any Alternative Currency, determined pursuant to
the terms hereof as of the date of such requested Advance), plus the aggregate
undrawn portion of any Letters of Credit which shall be outstanding as of the
date of the requested Advance (based on the Dollar Amount of the undrawn portion
of any Letters of Credit denominated in Dollars and the Current Dollar
Equivalent of the
43
undrawn portion of any Letters of Credit denominated in any Alternative
Currency), the aggregate face amount of Letters of Credit requested but not yet
issued (determined as aforesaid) 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 (using the Current Dollar
Equivalent thereof for any Letters of Credit denominated in any Alternative
Currency), shall not exceed the lesser of (i) the Revolving Credit Maximum
Amount and (ii) the Borrowing Base Limitation, in each case then applicable;
provided however, that, in the case of any Advance of the Revolving Credit being
applied to refund an outstanding Swing Line Advance, the aggregate principal
amount of Swing Line Advances to be refunded shall not be included for purposes
of calculating the limitation under this Section 2.3(c);
(d) without duplication, in the case of the Permitted
Borrowers, the principal amount of any Advances of the Revolving Credit and of
the Swing Line being requested by the Permitted Borrowers, (determined and
tested as aforesaid), on such date, plus the principal amount of any other
Advances of the Revolving Credit and all Advances of the Swing Line then
outstanding to the Permitted Borrowers hereunder (determined as aforesaid), plus
the undrawn portion of any Letters of Credit which shall be outstanding as of
the date of the requested Advance for the account of the Permitted Borrowers,
plus the aggregate undrawn amount of Letters of Credit requested but not yet
issued for the account of the Permitted Borrowers hereunder, (in each case
determined as aforesaid), plus the unreimbursed amount of any draws under any
Letters of Credit (using the Current Dollar Equivalent thereof for any Letters
of Credit denominated in any Alternative Currency) issued for the account of the
Permitted Borrowers, shall not exceed the lesser of (i) the Aggregate Sublimit
and (ii) the Borrowing Base Limitation, in each case then applicable;
(e) the principal amount of such Advance, plus the amount
of any other outstanding Advance of the Revolving Credit to be then combined
therewith having the same Applicable Interest Rate and Interest Period, if any,
shall be (i) in the case of a Prime-based Advance at least Two Million Five
Hundred Thousand Dollars ($2,500,000) and (ii) in the case of a
Eurocurrency-based Advance at least Two Million Five Hundred Thousand Dollars
($2,500,000) or the equivalent thereof in an Alternative Currency (or a larger
integral multiple of One Million Dollars ($1,000,000), or the equivalent thereof
in the Applicable Alternative Currency), and at any one time there shall not be
in effect more than (x) for Advances in Dollars, five (5) Applicable Interest
Rates and Interest Periods, and (y) for Advances in any Alternative Currency,
three (3) Applicable Interest Rates and Interest Periods for each such currency;
(f) a Request for Advance, once delivered to Agent, shall not
be revocable by Company or the Permitted Borrowers;
(g) each Request for Advance shall constitute and include
a certification by the Company and the applicable Permitted Borrower, if any, as
of the date thereof that:
(i) both before and after such Advance, the
obligations of the Company and the Permitted Borrowers set
forth in this Agreement and the other Loan Documents to which
such Persons are parties are valid, binding and enforceable
obligations of the Company and the Permitted Borrowers, as the
case may be;
44
(ii) all conditions to Advances of the Revolving
Credit have been satisfied, and shall remain satisfied to the
date of such Advance (both before and after giving effect to
such Advance);
(iii) there is no Default or Event of Default in
existence, and none will exist upon the making of such Advance
(both before and after giving effect to such Advance);
(iv) the representations and warranties contained in
this Agreement and the other Loan Documents are true and
correct in all material respects and shall be true and correct
in all material respects as of the making of such Advance,
except to the extent such representations and warranties
(other than Section 6.15 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
(v) the execution of such Request for Advance will
not violate the material terms and conditions of any material
contract, agreement or other borrowing of Company or the
Permitted Borrowers.
Agent, acting on behalf of the Banks, may, at its option, lend under
this Section 2 upon the telephone request of a person previously
authorized (in a writing delivered to the Agent) by the Company or a
Permitted Borrower to make such requests and, in the event Agent,
acting on behalf of the Banks, makes any such Advance upon a telephone
request, the requesting person shall fax to Agent, on the same day as
such telephone request, a Request for Advance. The Company and each of
the Permitted Borrowers hereby authorize Agent to disburse Advances
under this Section 2.3 pursuant to the telephone instructions of any
person purporting to be a person identified by name on a written list
of persons authorized by the Company or the applicable Permitted
Borrower and delivered to Agent prior to the date of such request to
make Requests for Advance on behalf of the Company or such Permitted
Borrower. Notwithstanding the foregoing, the Company and each of the
Permitted Borrowers acknowledge that the Company and each of the
Permitted Borrowers shall bear all risk of loss resulting from
disbursements made upon any telephone request. Each telephone request
for an Advance shall constitute a certification of the matters set
forth in the Request for Revolving Credit Advance form as of the date
of such requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Advance from Company
or a Permitted Borrower 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 and currency 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
45
Bank shall make available the amount of its Percentage of each Advance in
immediately available funds in the currency of such Advance to Agent, as
follows:
(i) for Domestic Advances, at the office of Agent
located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, not
later than 2:00 p.m. (Detroit time) on the date of such
Advance; and
(ii) for Eurocurrency-based Advances, at the Agent's
Correspondent for the account of the Eurocurrency Lending
Office of the Agent, not later than 12 noon (the time of the
Agent's Correspondent) on the date of such Advance.
(b) Subject to submission of an executed Request for
Advance by Company or a Permitted Borrower (with the countersignature of the
Company as aforesaid) without exceptions noted in the compliance certification
therein, Agent shall make available to Company or to the applicable Permitted
Borrower, as the case may be, the aggregate of the amounts so received by it
from the Banks in like funds and currencies:
(i) for Domestic Advances, not later than 4:00 p.m.
(Detroit time) on the date of such Advance by credit to an
account of Company or such Permitted Borrower maintained with
Agent or to such other account or third party as Company or
such Permitted Borrower may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than
4:00 p.m. (the time of the Agent's Correspondent) on the date
of such Advance, by credit to an account of Company or such
Permitted Borrower maintained with Agent's Correspondent or to
such other account or third party as Company or such Permitted
Borrower may reasonably direct.
(c) Agent shall deliver the documents and papers received by
it for the account of each Bank to such Bank or upon its order. Unless Agent
shall have been notified by any Bank prior to the date of any proposed Advance
that such Bank does not intend to make available to Agent such Bank's Percentage
of such Advance, Agent may assume that such Bank has made such amount available
to Agent on such date and in such currency, as aforesaid and may, in reliance
upon such assumption, make available to Company or to the applicable Permitted
Borrower, as the case may be, 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 or the applicable Permitted Borrower shall pay such amount
to Agent. Agent shall also be entitled to recover from such Bank or Company or
the applicable Permitted Borrower, 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 or such Permitted Borrower, as the case may
be, to the date such amount is recovered by Agent, at a rate per annum equal to:
(i) in the case of such Bank, with respect to
Domestic Advances, the Federal Funds Effective Rate, and with
respect to Eurocurrency-based Advances, Agent's aggregate
marginal cost (including the cost of maintaining any required
46
reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent
as a result of such failure to deliver funds hereunder) of
carrying such amount; and
(ii) in the case of Company or such Permitted
Borrower, the rate of interest then applicable to such Advance
of the Revolving Credit.
The obligation of any Bank to make any Advance of the Revolving Credit
hereunder shall not be affected by the failure of any other Bank to
make any Advance hereunder, and no Bank shall have any liability to the
Company or any of its Subsidiaries, the Agent, any other Bank, or any
other party for another Bank's failure to make any loan or Advance
hereunder.
2.5 (a) Swing Line Advances. The Swing Line Bank shall, on the terms
and subject to the conditions hereinafter set forth (including without
limitation Section 2.5(c) hereof), make one or more advances in Dollars or in
any Alternative Currency (each such advance being a "Swing Line Advance") to
Company or any of the Permitted Borrowers (provided that any such Permitted
Borrower has executed a Swing Line Note and Revolving Credit Notes in compliance
with this Agreement) 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, based on the Dollar Amount of any such Advances outstanding in
Dollars and the Current Dollar Equivalent of any such Advances outstanding in
Alternative Currencies, not to exceed at any time outstanding the Swing Line
Maximum Amount. All Swing Line Advances shall be evidenced by the Swing Line
Notes, under which advances, repayments and readvances may be made, subject to
the terms and conditions of this Agreement. Each Swing Line Advance shall mature
and the principal amount thereof shall be due and payable by Company or the
applicable Permitted Borrower 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.
(a) 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 or
the applicable Permitted Borrower 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.
(b) Requests for Swing Line Advances. Company or a
Permitted Borrower (with the countersignature of the 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 or such Permitted
Borrower, subject to the following and to the remaining provisions hereof:
47
(i) each such Request for Swing Line Advance shall
set forth the information required on the Request for Swing
Line Advance form annexed hereto as Exhibit F, including
without limitation:
(A) the proposed date of such Swing Line
Advance, which must be a Business Day;
(B) whether such Swing Line Advance is to be
a Prime-based Advance, a Eurocurrency-based Advance
or a Quoted Rate Advance;
(C) the duration of the Interest Period
applicable thereto; and
(D) the Permitted Currency in which such
Advance is to be made.
(ii) without duplication, the principal amount (or
Dollar Amount of the principal amount, if such Advance is
being funded in an Alternative Currency) 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) whether to Company or to any of the
Permitted Borrowers (using the Current Dollar Equivalent of
any such Advances outstanding in any Alternative Currency,
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 (based on the Dollar Amount
of the undrawn portion of any Letters of Credit denominated in
Dollars and the Current Dollar Equivalent of the undrawn
portion of any Letters of Credit denominated in any
Alternative Currency), plus the aggregate face amount of
Letters of Credit requested but not yet issued (determined as
aforesaid), plus the unreimbursed amount of any draws under
Letters of Credit (using the Current Dollar Equivalent thereof
for any Letters of Credit denominated in any Alternative
Currency) shall not exceed the lesser of (A) the Revolving
Credit Maximum Amount and (B) the Borrowing Base Limitation,
in each case then applicable;
(iii) without duplication, in the case of the
Permitted Borrowers, the principal amount of the requested
Swing Line Advance to the Permitted Borrowers (determined as
aforesaid), plus the aggregate principal amount of any other
Swing Line Advances and all other Advances then outstanding to
all of the Permitted Borrowers hereunder (including, without
duplication any Revolving Credit Advances or Swing Line
Advances requested to be made on such date) determined as
aforesaid, plus the aggregate undrawn portion of any Letters
of Credit which shall be outstanding as of the date of the
requested Swing Line Advance for the accounts of the Permitted
Borrowers hereunder, plus the aggregate undrawn amount of any
Letters of Credit requested but not yet issued for the
accounts of the Permitted Borrowers hereunder (in each case
determined as aforesaid), plus the unreimbursed amount of any
draws under any Letters of
48
Credit (using the Current Dollar Equivalent thereof for any
Letters of Credit denominated in any Alternative Currency)
issued for the account of the Permitted Borrowers shall not
exceed the lesser of (A) the Aggregate Sublimit and (B) the
Borrowing Base Limitation, in each case then applicable;
(iv) the principal amount of such Swing Line Advance,
plus the amount of any other outstanding Advance of the Swing
Line to be then combined therewith having the same Applicable
Interest Rate and Interest Period, if any, shall be (i) in the
case of a Prime-based Advance at least Three Hundred Thousand
Dollars ($300,000) and (ii) in the case of a Quoted Rate
Advance or a Eurocurrency-based Advance at least Three Hundred
Thousand Dollars ($300,000), or the equivalent thereof in an
Alternative Currency (or a larger integral multiple of One
Hundred Thousand Dollars ($100,000), or the equivalent thereof
in the applicable Alternative Currency), and at any one time
there shall not be in effect more than (x) for Advances in
Dollars, Five (5) Applicable Interest Rates and Interest
Periods, and (y) for Advances in any Alternative Currency
(other than eurodollars), two (2) Applicable Interest Rates
and Interest Periods for each such currency; and
(v) each such Request for Swing Line Advance shall be
delivered to the Swing Line Bank (x) for each Advance in
Dollars, by 12:00 noon (Detroit time) on the proposed date of
the Advance and (y) for each Advance in any Alternative
Currency, by 12:00 noon (Detroit time) two Business Days prior
to the proposed date of Advance;
(vi) each Request for Swing Line Advance, once
delivered to Swing Line Bank, shall not be revocable by
Company, and shall constitute and include a certification by
the Company as of the date thereof that:
(A) both before and after such Swing Line
Advance, the obligations of the Company set forth in
this Agreement and 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, except to
the extent such representations and warranties (other
than Section 6.15 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
49
therein) are not, by their terms, continuing
representations and warranties, but speak only as of
a specific date.
Swing Line Bank shall promptly deliver to Agent by telecopy a copy of any
Request for Swing Line Advance received hereunder.
(c) Disbursement of Swing Line Advances. Subject to
submission of an executed Request for Swing Line Advance by Company or a
Permitted Borrower without exceptions noted in the compliance certification
therein and to the other terms and conditions hereof, Swing Line Bank shall make
available to Company or the applicable Permitted Borrower the amount so
requested, in like funds and currencies, not later than:
(i) for Prime-based Advances or Quoted Rate Advances,
not later than 4:00 p.m. (Detroit time) on the date of such
Advance by credit to an account of Company or the applicable
Permitted Borrower maintained with Agent or to such other
account or third party as Company or the Permitted Borrower
may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than
4:00 p.m. (the time of the Agent's Correspondent) on the date
of such Advance, by credit to an account of Company or the
Permitted Borrower maintained with Agent's Correspondent or to
such other account or third party as Company or the applicable
Permitted Borrower may reasonably direct.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
(d) Refunding of or Participation Interest in Swing Line
Advances.
(i) The Agent, at any time in its sole and absolute
discretion, may (or, upon the request of the Swing Line Bank,
shall) on behalf of the Company or the applicable Permitted
Borrower (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 each of Company and the Permitted
Borrowers, for each Permitted Currency in which Swing Line
Advances are outstanding to such party, in an amount (in the
applicable Permitted Currency, determined in accordance with
Section 2.11(b) hereof) equal to such Bank's Percentage of the
principal amount of the aggregate Swing Line Advances
outstanding in each Permitted Currency 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 or the applicable
Permitted Borrower (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 outstanding in
Dollars, the applicable
50
Advance of the Revolving Credit used to refund such Swing Line
Advance shall be a Prime-based Advance. In the case of each
Refunded Swing Line Advance outstanding in any Alternative
Currency, the applicable Advance of the Revolving Credit used
to refund such Swing Line Advance shall be an Advance in the
applicable Alternative Currency, with an Interest Period of
one month (or any lesser number of days selected by Agent in
consultation with the Banks). 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 or the applicable Permitted Borrower 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 (for Domestic Advances) on
the Business Day next succeeding the date such notice is
given, and, in the case of any Eurocurrency-based Advance,
prior to 2:00 p.m. Detroit time on the third Business Day
following the date such notice is given, in each case in
immediately available funds in the applicable Permitted
Currency. The proceeds of such Advances of the Revolving
Credit shall be immediately applied to repay the Refunded
Swing Line Advances in accordance with the provisions of
Section 10.1 hereof.
(ii) If, prior to the making of an Advance of the
Revolving Credit pursuant to subparagraph (i) of this Section
2.5(e), one of the events described in Section 9.1(j) hereof
shall have occurred, each Bank will, on the date such Advance
of the Revolving Credit was to have been made, purchase from
the Swing Line Bank an undivided participating interest in
each Refunded Swing Line Advance in an amount equal to its
Percentage of such Refunded Swing Line Advance. Each Bank
within the time periods specified in Section 2.5(e)(i) hereof,
as applicable, shall immediately transfer to the Agent, in
immediately available funds in the applicable Permitted
Currency of such Swing Line Advance, the amount of its
participation and upon receipt thereof the Agent will deliver
to such Bank a participation certificate evidencing such
participation.
(iii) Each Bank's obligation to make Advances of the
Revolving Credit and to purchase participation interests in
accordance with clauses (i) and (ii) above shall, except in
respect of any Swing Line Advance made by the Swing Line Bank
after it has obtained actual knowledge that an Event of
Default has occurred and is continuing, be absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have
against Swing Line Bank, the Company, the Permitted Borrowers
or any other Person for any reason whatsoever; (B) the
occurrence or continuance of any
51
Default or Event of Default; (C) any adverse change in the
condition (financial or otherwise) of the Company, any
Permitted Borrower or any other Person; (D) any breach of this
Agreement by the Company, any Permitted Borrower or any other
Person; (E) any inability of the Company or the Permitted
Borrowers 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 in Dollars (other than
eurodollars) and for Eurocurrency-based Advances, the Agent's
marginal cost (including the cost of maintaining any required
reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent
as a result of such failure to deliver funds hereunder) of
carrying such amount.
Notwithstanding the foregoing however no Bank shall be required to make
any Advances of the Revolving Credit to refund a Swing Line Advance or to
purchase a participation in a Swing Line Advance if prior to the making of the
Swing Line Advance by the Swing Line Lender, the Agent had received written
notice from any Bank that a Default or Event of Default had occurred and was
continuing and directing that Swing Line Advances should be suspended based on
such occurrence and continuance of a Default or Event of Default; provided,
however that the obligation of the Banks to make such Advances of the Revolving
Credit (or purchase such participations) shall be reinstated upon the date on
which such Default or Event of Default has been cured, or has been waived by the
requisite Banks, as applicable.
2.6 Prime-based Interest Payments. Interest on the unpaid balance of
all Prime-based Advances of the Revolving Credit and all Swing Line Advances
carried at the Prime-based Rate from time to time outstanding shall accrue from
the date of such Advance to the Revolving Credit Maturity Date (and until paid),
at a per annum interest rate equal to the Prime-based Rate, and shall be payable
in immediately available funds (a) with respect to Swing Line Advances, monthly
commencing on the first day of the calendar month next succeeding the calendar
month during which the initial Swing Line Advance is made and on the first day
of each month thereafter, and (b) with respect to Advances of the Revolving
Credit, quarterly commencing on the first day of the calendar quarter next
succeeding the calendar month during which the initial Advance of the Revolving
Credit is made and on the first day of each calendar quarter thereafter.
Interest accruing at the U.S. Prime-based Rate shall be computed on the basis of
a 360 day year and assessed for the actual number of days elapsed, and in such
computation effect shall be given to any change in the interest rate resulting
from a change in the U.S. Prime-based Rate on the date of such change in the
U.S. Prime-based Rate. Subject to Section 1.3 hereof, interest accruing at the
Canadian Prime-based Rate shall be computed on the basis of a 365 day year and
assessed for the actual number of days elapsed, and in such computation effect
shall be given to any change in the interest rate resulting from a change in the
Canadian Prime-based Rate on the date of such change in the Canadian Prime-based
Rate.
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments.
52
(a) Interest on each Eurocurrency-based Advance of the
Revolving Credit and all Swing Line Advances carried at the Eurocurrency-based
Rate shall accrue at its Applicable Interest Rate and shall be payable in
immediately available funds on the last day of the Interest Period applicable
thereto (and, if any Interest Period shall exceed three months, then on the last
Business Day of the third month of such Interest Period, and at three month
intervals thereafter). Interest accruing at the Eurocurrency-based Rate shall be
computed on the basis of a 360 day year (except that any such Advances made in
Sterling or any other Alternative Currency with respect to which applicable law
or market custom so requires shall be calculated based on a 365 day year, or as
otherwise required under applicable law or market custom) 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. Interest due on a
Eurocurrency-based Advance made in an Alternative Currency shall be paid in such
Alternative Currency.
(b) Interest on each Quoted Rate Advance of the Swing
Line shall accrue at its Quoted Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable thereto.
Interest accruing at the Quoted Rate shall be computed on the basis of a 360 day
year (except that any such Advances made in Sterling, or any other Alternative
Currency, or in Canadian Dollars to CAC Canada with respect to which applicable
law or market custom so requires shall be calculated based on a 365 day year, or
as otherwise required under applicable law or market custom) 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.
(c) If the basis of accrual of interest or fees expressed
in this Agreement with respect to the National Currency Unit of a Participating
Member State shall be inconsistent with any convention or practice in the London
interbank market or other applicable interbank market, as the case may be, for
the basis of accrual of interest or fees with respect to the Euro, such
convention or practice shall replace such expressed basis, effective as of and
from the date on which such country becomes a Participating Member State;
provided that if any Eurocurrency-based Advance in the currency of such country
is outstanding immediately prior to such date, such replacement shall take
effect, with respect to such Advance, at the end of the then current Interest
Period.
2.8 Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
2.9 Interest on Default. (a) In the case of the Company or any
Permitted Borrower other than CAC Canada, in the event and so long as any Event
of Default shall exist, in the case of any Event of Default under Sections
9.1(a), 9.1(b) or 9.1(j), immediately upon the occurrence thereof, and in the
case of all other Events of Default, upon notice from the Majority Banks,
interest shall be payable daily on all Eurocurrency-based Advances of the
Revolving Credit, Swing Line Advances carried at the Eurocurrency-based Rate and
Quoted Rate Advances from time to time outstanding at a per annum rate equal to
the Applicable Interest Rate plus two percent (2%) for the remainder of the then
existing Interest Period, if any, and at all other such 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%); and, with respect to
Eurocurrency-based
53
Advances thereof in any Alternative Currency from time to time outstanding, (i)
at a per annum rate calculated by the Agent, whose determination shall be
conclusive absent manifest error, on a daily basis, equal to three percent (3%)
above the interest rate per annum at which one (1) day deposits (or, if such
amount due remains unpaid for more than three (3) Business Days, then for such
other period of time as the Agent may elect which shall in no event be longer
than six (6) months) in the relevant eurocurrency in the amount of such overdue
payment due to the Agent are offered by the Agent's Eurocurrency Lending Office
for the applicable period determined as provided above, or (ii) if at any such
time such deposits are not offered by Eurocurrency Lending Office, then at a
rate per annum equal to two percent (2%) above the rate determined by the Agent
to be its aggregate marginal cost (including the cost of maintaining any
required reserves or deposit insurance) of carrying the amount of such
Eurocurrency-based Advance.
(b) Subject to applicable Canadian law, in the case of CAC Canada, upon
a default by CAC Canada in the payment of interest or any other amount (other
than principal) due under this Agreement or any of the other Loan Documents to
which CAC Canada is a party, upon written notice of Majority Banks confirmed by
written notice from Agent to CAC Canada, CAC Canada shall pay interest on such
overdue amount, both before and after judgment, at a rate per annum equal to (i)
the rate of interest payable under this Section 2.9(b) on the principal amount
to which such overdue interest relates, in the case of overdue interest, (ii)
the Canadian Prime Rate plus two percent (2%), in the case of all such overdue
amounts denominated in Canadian Dollars, and (iii) the U.S. Prime Rate plus two
percent (2%), in the case of all such other overdue amounts denominated in
Dollars (all of which other overdue amounts, for greater certainty, shall not
include overdue principal or interest in any case), in each case, calculated on
a daily basis from the date such amount becomes overdue for so long as such
amount remains overdue and on the basis of the actual number of days elapsed in
a 360 day year in the case of amounts denominated in Dollars and a 365 day year
in the case of amounts denominated in Canadian Dollars. Such interest shall be
payable upon demand by Agent. From and after the occurrence of any Event of
Default that is continuing under Section 9.1(a) or 9.1(b) or so long as any
other Event of Default shall have occurred and be continuing and upon written
notice of Majority Banks confirmed by written notice from Agent to CAC Canada,
the Letter of Credit Fees shall be increased by two percent (2%) per annum.
2.10 Prepayment (a) Company or the Permitted Borrowers may prepay all
or part of the outstanding balance of any Prime-based Advance(s) under the
Revolving Credit Notes 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 or the Permitted Borrowers may
prepay all or part of any Eurocurrency-based Advance (subject to not less than
three (3) Business Days' notice to Agent) only on the last day of the Interest
Period therefor, provided that the amount of any such partial prepayment shall
be at least One Million Dollars ($1,000,000), or the equivalent thereof in an
Alternative Currency, 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) or the equivalent thereof in an Alternative Currency.
54
(a) Company may prepay all or part of the outstanding balance
of any Swing Line Advance carried at the Prime-based Rate at any time, provided
that the amount of any partial prepayment shall be at least One Hundred Thousand
Dollars ($100,000) and, after giving effect of any such partial prepayment, the
aggregate balance of such Swing Line Advances remaining outstanding, if any,
shall be at least One Hundred Thousand Dollars ($100,000). Company may prepay
all or part of any Swing Line Advances carried at the Eurocurrency-based Rate or
Quoted Rate (subject to not less than three (3) Business Days' notice to Swing
Line Bank and Agent) only on the last day of the Interest Period therefor,
provided that the amount of any such partial payment shall be at least One
Hundred Thousand Dollars ($100,000), after giving effect of any such partial
prepayment, and the unpaid portion of such Advance which is refunded or
converted under Section 2.5(c) hereof shall be at least One Hundred Thousand
Dollars ($100,000).
(b) Any prepayment made in accordance with this Section shall
be without premium, penalty or prejudice to the right to reborrow under the
terms of this Agreement. Any other prepayment of all or any portion of any
Advance of the Revolving Credit or any Swing Line Advance shall be subject to
Section 11.1 hereof, but otherwise without premium, penalty or prejudice.
2.11 Determination, Denomination and Redenomination of Alternative
Currency Advances. Whenever, pursuant to any provision of this Agreement:
(a) an Advance of the Revolving Credit or a Swing Line Advance
is initially funded, as opposed to any refunding or conversion thereof, in an
Alternative Currency, the amount to be advanced hereunder will be the equivalent
in such Alternative Currency of the Dollar Amount of such Advance;
(b) an existing Advance of the Revolving Credit or a Swing
Line Advance denominated in an Alternative Currency is to be refunded, in whole
or in part, with an Advance denominated in the same Alternative Currency, the
amount of the new Advance shall be continued in the amount of the Alternative
Currency so refunded;
(c) an existing Advance of the Revolving Credit denominated in
an Alternative Currency is to be converted, in whole or in part, to an Advance
denominated in another Alternative Currency, the amount of the new Advance shall
be that amount of the Alternative Currency of the new Advance which may be
purchased, using the most favorable spot exchange rate determined by Agent to be
available to it for the sale of Dollars for such other Alternative Currency at
approximately 11:00 a.m. (Detroit time) two (2) Business Days prior to the last
day of the Eurocurrency Interest Period applicable to the existing Advance, with
the Dollar Amount of the existing Advance, or portion thereof being converted;
and
(d) an existing Advance of the Revolving Credit denominated in
an Alternative Currency is to be converted, in whole or in part, to an Advance
denominated in Dollars, the amount of the new Advance shall be the Dollar Amount
of the existing Advance, or portion thereof being converted (determined as
aforesaid).
55
2.12 Prime-based Advance in Absence of Election or Upon Default. If,
(a) as to any outstanding Eurocurrency-based Advance of the Revolving Credit, or
any Swing Line Advance carried at the Eurocurrency-based Rate, Agent has not
received payment on the last day of the Interest Period applicable thereto, or
does not receive a timely Request for Advance meeting the requirements of
Section 2.3 or 2.5(c) hereof with respect to the refunding or conversion of such
Advance, or (b) if any Advance denominated in an Alternative Currency or any
deemed Advance under Section 3.6 hereof in respect of a Letter of Credit
denominated in an Alternative Currency cannot be refunded or made, as the case
may be, in such Alternative Currency by virtue of Section 11.3 hereof, or (c)
subject to Section 2.9 hereof, if on such day a Default or an Event of Default
shall have occurred and be continuing, then the principal amount thereof which
is not then prepaid in the case of a Eurocurrency-based Advance shall, absent a
contrary election of the Majority Banks, be converted automatically to a
Prime-based Advance and the Agent shall thereafter promptly notify Company of
said action. If a Eurocurrency-based Advance converted hereunder is payable in
an Alternative Currency, the Prime-based Advance shall be in an amount equal to
the Dollar Amount of such Eurocurrency-based Advance at such time and the Agent
and the Banks shall use said Prime-based Advance to fund payment of the
Alternative Currency obligation, all subject to the provisions of Section 2.14
hereof. The Company and the Permitted Borrowers, if applicable, shall reimburse
the Agent and the Banks on demand for any costs incurred by the Agent or any of
the Banks, as applicable, resulting from the conversion pursuant to this Section
2.12 of Eurocurrency-based Advances payable in an Alternative Currency to
Prime-based Advances.
2.13 Revolving Credit Facility Fee.
(a) Revolving Credit Facility Fee. From the date hereof to the
Revolving Credit Maturity Date, the Company shall pay to the Agent, for
distribution to the Banks (as set forth below), a Revolving Credit Facility Fee
determined by multiplying the Applicable Fee Percentage per annum times the
Revolving Credit Maximum Amount then applicable under Section 2.15 hereof
(whether used or unused), computed on a daily basis. The Revolving Credit
Facility Fee shall be payable quarterly in arrears commencing July 1, 2003 (in
respect of the prior calendar quarter or portion thereof), and on the first day
of each calendar quarter thereafter and on the Revolving Credit Maturity Date,
and shall be computed on the basis of a year of three hundred sixty (360) days
and assessed for the actual number of days elapsed. Whenever any payment of the
Revolving Credit Facility Fee shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next Business Day. Upon
receipt of such payment Agent shall make prompt payment to each Bank of its
share of the Revolving Credit Facility Fee based upon its respective Percentage.
(b) Commitment Fee. On the Effective Date, the Company shall
pay to the Agent, for distribution to the Banks in accordance with this clause
(b), a Commitment Fee, such Commitment Fee to be calculated as follows: (i) in
the case of a Bank which holds a Percentage of the Revolving Credit Maximum
Amount which is less than $20,000,000, the Commitment Fee shall be determined by
multiplying 60 basis points times an amount equal to such Bank's Percentage of
the Maximum Revolving Credit Amount (stated in Dollars), 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
56
points times an amount equal to such Bank's Percentage of the Revolving Credit
Maximum Amount (stated in Dollars).
(c) Additional Commitment Fee. If, at any time after the
Effective Date, the remaining maturity of the Revolving Credit shall be less
than 366 days, the Company shall be obligated to pay the Agent, for distribution
to the Banks in accordance with this clause (c), an Additional Commitment Fee,
such Additional Commitment Fee to be calculated as follows: (i) in the case of a
Bank which holds a Percentage of the Revolving Credit Maximum Amount which is
less than $20,000,000, the Additional Commitment Fee shall be determined by
multiplying 10 basis points times an amount equal to such Bank's Percentage of
the Revolving Credit Maximum Amount, and (ii) in the case of a Bank which holds
a Percentage of the Revolving Credit Maximum Amount which is greater than or
equal to $20,000,000, the Additional Commitment Fee shall be determined by
multiplying 20 basis points times an amount equal to such Bank's Percentage of
the Revolving Credit Maximum Amount. The Additional Commitment Fee, if
applicable, shall be due and payable 360 days prior to the Revolving Credit
Maturity Date then in effect.
2.14 Currency Appreciation; Aggregate Sublimit; Mandatory Reduction of
Indebtedness. (a) If at any time and for any reason, the aggregate principal
amount (tested in the manner set forth below and without duplication) of all
Advances of the Revolving Credit hereunder to the Company and to the Permitted
Borrowers made in Dollars and the aggregate Current Dollar Equivalent of all
Advances hereunder to the Company and to the Permitted Borrowers in any
Alternative Currency as of such time, plus the aggregate principal amount of
Swing Line Advances outstanding hereunder as of such time (determined as
aforesaid), plus the aggregate undrawn portion of any Letters of Credit which
shall be outstanding (based on the Dollar Amount of the undrawn portion of any
Letters of Credit denominated in Dollars and the Current Dollar Equivalent of
the undrawn portion of any Letters of Credit denominated in any Alternative
Currency), plus the undrawn amount of all Letters of Credit requested but not
yet issued (determined as aforesaid), plus the unreimbursed amount of any draws
under any Letters of Credit (using the Current Dollar Equivalent thereof for any
Letters of Credit denominated in any Alternative Currency), 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 in this clause
(a), the "Excess"), the Company and the Permitted Borrowers shall:
(i) immediately repay that portion of such
Indebtedness then carried as a Prime-based Advance, if any, by
the Dollar Amount of such Excess, and/or reduce any pending
request for an Advance in Dollars on such day by the Dollar
Amount of the Excess, to the extent thereof; and
(ii) on the last day of each Interest Period of any
Eurocurrency-based Advance outstanding as of such time, until
the necessary reductions of Indebtedness under this Section
2.14(a) have been fully made, repay the Indebtedness carried
in such Advances and/or reduce any requests for refunding or
conversion of such Advances submitted (or to be submitted) by
the Company or the applicable Permitted Borrower in respect of
such Advances, by the amount in Dollars or the applicable
Alternative Currency, as the case may be, of the Excess, to
the extent thereof.
57
Compliance with this Section 2.14(a) shall be tested on a daily or other basis
satisfactory to Agent in its sole discretion, provided that, so long as no
Default or Event of Default has occurred and is continuing, at any time while
the aggregate Advances of the Revolving Credit available to be borrowed
hereunder (based on the Revolving Credit Maximum Amount then in effect) equal or
exceed Five Million Dollars ($5,000,000), compliance with this Section 2.14(a)
shall be tested as of the last day of each calendar quarter. Notwithstanding the
foregoing, upon the occurrence and during the continuance of any Default or
Event of Default, or if any Excess remains after recalculating said Excess based
on ninety-five percent (95%) of the Current Dollar Equivalent of any Advances or
Letters of Credit denominated in Alternative Currencies (and one hundred percent
(100%) of any Advances or Letters of Credit denominated in Dollars), Company and
the Permitted Borrowers shall be obligated immediately to reduce the foregoing
Indebtedness hereunder by an amount sufficient to eliminate such Excess.
(b) If at any time and for any reason with respect to the
Permitted Borrowers, the aggregate principal amount (tested in the manner set
forth below and without duplication) of all Advances of the Revolving Credit and
of the Swing Line outstanding hereunder to the Permitted Borrowers, plus the
aggregate undrawn portion of any Letters of Credit, plus the undrawn amount of
any Letters of Credit requested but not yet issued, plus the unreimbursed amount
of any draws under any Letters of Credit to or for the account of the Permitted
Borrowers, which Advances and Letters of Credit are made or issued, or to be
made or issued, in Dollars and ninety percent (90%) of the aggregate Current
Dollar Equivalent of all such Advances and Letters of Credit (including
unreimbursed draws) hereunder for the account of the Permitted Borrowers in any
Alternative Currency as of such time, exceeds the lesser of (i) the Aggregate
Sublimit and (ii) the Borrowing Base Limitation, in each case then applicable,
then in each case, such Permitted Borrower shall (i) immediately repay that
portion of the Indebtedness outstanding to such Permitted Borrower then carried
as a Prime-based Advance, if any, by the Dollar Amount of such excess, and/or
reduce on such day any pending request for an Advance in Dollars submitted by
such Permitted Borrower by the Dollar Amount of such excess, to the extent
thereof; and (ii) on the last day of each Interest Period of any
Eurocurrency-based Advance outstanding to such Permitted Borrower as of such
time, until the necessary reductions of Indebtedness under this Section 2.14(b)
have been fully made, repay such Indebtedness carried in such Advances and/or
reduce any requests for refunding or conversion of such Advances submitted (or
to be submitted) by such Permitted Borrower in respect of such Advances, by the
amount in Dollars or the applicable Alternative Currency, as the case may be, of
such excess, to the extent thereof.
Provided that no Default or Event of Default has occurred and is continuing, the
Permitted Borrowers' compliance with this Section 2.14(b) shall be tested as of
the last day of each calendar quarter or, upon the written request of the
Company from time to time, as of the last day of each calendar month, provided
the Company furnishes Agent with current monthly financial statements complying
with the requirements set forth in subparagraphs (i) and (ii) of Section 7.3(c)
hereof. Upon the occurrence and during the continuance of any Default or Event
of Default, compliance with this Section 2.14(b) shall be tested on a daily or
other basis satisfactory to Agent in its sole discretion.
2.15 Optional Reduction or Termination of Revolving Credit Maximum
Amount. Provided that no Default or Event of Default has occurred and is
continuing, the Company may
58
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 or any Permitted Borrower, as applicable,
shall prepay in accordance with the terms hereof the amount, if any, by which
the aggregate unpaid principal amount of Advances (using the Current Dollar
Equivalent of any such Advance outstanding in any Alternative Currency) of the
Revolving Credit, plus the aggregate principal amount of Swing Line Advances
outstanding hereunder (using the Current Dollar Equivalent of any such Advance
outstanding in an Alternative Currency), plus without duplication the aggregate
undrawn amount of outstanding Letters of Credit (using the Current Dollar
Equivalent thereof for any Letters of Credit denominated in any Alternative
Currency), plus without duplication the unreimbursed amount of any draws under
any Letters of Credit (determined as aforesaid), exceeds the amount of the
Revolving Credit Maximum Amount as so reduced, together with interest thereon to
the date of prepayment; (iv) if the termination or reduction of the Revolving
Credit Maximum Amount requires the prepayment of a Eurocurrency-based Advance or
a Quoted Rate Advance, the termination or reduction may be made only on the last
Business Day of the then current Interest Period applicable to such
Eurocurrency-based Advance or such Quoted Rate Advance; and (v) no reduction
shall reduce the Revolving Credit Maximum Amount to an amount which is less than
the aggregate undrawn amount of any Letters of Credit outstanding at such time.
Reductions of the Revolving Credit Maximum Amount and any accompanying
prepayments of the Revolving Credit Notes shall be distributed by Agent to each
Bank in accordance with such Bank's Percentage thereof, and will not be
available for reinstatement by or readvance to the Company or any Permitted
Borrower, and any accompanying prepayments of the Swing Line Note shall be
distributed by Agent to the Swing Line Bank and will not be available for
reinstatement by or readvance to the Company. Any reductions of the Revolving
Credit Maximum Amount hereunder shall reduce each Bank's portion thereof
proportionately (based on the applicable Percentages), and shall be permanent
and irrevocable. Any payments made pursuant to this Section shall be applied
first to outstanding Prime-based Advances under the Revolving Credit, next to
Swing Line Advances carried at the Prime-based Rate, next to Eurocurrency-based
Advances of the Revolving Credit and then to Swing Line Advances carried at the
Eurocurrency-based Rate or the Quoted Rate.
2.16 Extension of Revolving Credit Maturity Date. Provided that no
Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent and each Bank (which notice shall be irrevocable and
which shall not be deemed effective unless actually received by Agent and each
Bank), prior to April 15, but not before March 15, of each year beginning in
2004 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
59
Revolving Credit Maturity Date (so long as no Default or Event of Default has
occurred and is continuing and none of the Banks has withdrawn its approval, in
writing, prior thereto), the Revolving Credit Maturity Date shall be so extended
for an additional period of 364 days, the term Revolving Credit Maturity Date
shall mean such extended date and Agent shall promptly notify the Company and
the Banks that such extension has occurred. If (i) any Bank gives the Agent
written notice that it is unwilling to extend the Revolving Credit Maturity Date
as requested or (ii) any Bank fails to provide written approval to Agent of the
Request within thirty (30) calendar days of the date of Agent's receipt of such
Request, or (iii) withdraws its approval in writing prior to the Revolving
Credit Maturity Date then in effect then (x) the Banks shall be deemed to have
declined to extend the Revolving Credit Maturity Date, (y) the then-current
Revolving Credit Maturity Date shall remain in effect (with no further right on
the part of Company, to request extensions thereof under this Section 2.16) and
(z) the commitments of the Banks to make Advances of the Revolving Credit
hereunder shall terminate on the Revolving Credit Maturity Date then in effect,
and Agent shall promptly notify Company and the Banks thereof.
2.17 Optional Increase in Revolving Credit Maximum Amount. Provided
that no Default or Event of Default has occurred and is continuing, and provided
that the Company has not previously elected to terminate the Revolving Credit
Maximum Amount under Section 2.15 hereof, the Company may request that the
Revolving Credit Maximum Amount be increased in an aggregate amount (for all
such Requests under this Section 2.17) not to exceed the Revolving Credit
Optional Increase, subject, in each case, to Section 11.1 hereof and to the
satisfaction concurrently with or prior to the date of each such request of the
following conditions:
(a) the Company shall have delivered to the Agent not less
than thirty (30) days prior to the Revolving Credit Maturity Date then in effect
a written request for such increase, specifying the amount of Revolving Credit
Optional Increase thereby requested (each such request, a "Request for
Increase"); provided, however that in the event the Company has previously
delivered a Request for Increase pursuant to this Section 2.17, the Company may
not deliver a subsequent Request for Increase until all the conditions to
effectiveness of such first Request for Increase have been fully satisfied
hereunder (or such Request for Increase has been withdrawn); and provided
further that the Company may make no more than two Requests for Increase in any
calendar year;
(b) a lender or lenders meeting the requirements of Section
13.8(c) hereof and acceptable to the Company and the Agent (including, for the
purposes of this Section 2.17, any existing Bank which agrees to increase its
commitment hereunder, the "New Bank(s)") shall have become a party to this
Agreement by executing and delivering a New Bank Addendum for a minimum amount
(including for the purposes of this Section 2.17, the existing commitment of any
existing Bank) for each such New Bank of Ten Million Dollars ($10,000,000) and
an aggregate amount for all such New Banks of that portion of the Revolving
Credit Optional Increase, taking into account the amount of any prior increase
in the Revolving Credit Maximum Amount (pursuant to this Section 2.17), covered
by the applicable Request, provided, however that each New Bank shall remit to
the Agent funds in an amount equal to its Percentage (after giving effect to
this Section 2.17) of all Advances of the Revolving Credit then outstanding,
such sums to be reallocated among and paid to the existing Banks based upon the
new Percentages as determined below;
60
(c) the Company (i) shall have paid to the Agent for
distribution to the existing Banks, as applicable, all interest, fees (including
the Revolving Credit Facility Fee and the Letter of Credit Fees) and other
amounts, if any, accrued to the effective date of such increase and any breakage
fees attributable to the reduction (prior to the last day of the applicable
Interest Period) of any outstanding Eurocurrency-based Advances, calculated on
the basis set forth in Section 11.1 hereof as though Company has prepaid such
Advances and (ii) shall have paid to each New Bank a special letter of credit
fee on the Letters of Credit outstanding on the effective date of such increase,
calculated on the basis of the Letter of Credit Fees which would be applicable
to such Letters of Credit if issued on the date of such increase, for the period
from the effective date of such increase to the expiration date of such Letters
of Credit;
(d) the Company and each of the Permitted Borrowers 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-1 or C-2 to the Credit Agreement, as applicable, and dated as of the effective
date of such increase (with appropriate insertions relevant to such Notes and
acceptable to the applicable Bank, including the New Banks);
(e) except to the extent such representations and warranties
(other than Section 6.15 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, the Permitted Borrower, 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
(f) such other amendments, acknowledgments, consents,
documents, instruments, any registrations, if any, shall have been executed and
delivered and/or obtained by Company as required by Agent or the Majority Banks,
in their reasonable discretion.
Promptly on or after the date on which all of the conditions to such
Request for Increase set forth above have been satisfied, Agent shall notify the
Company and each of the Banks of the amount of the Revolving Credit Maximum
Amount as increased pursuant this Section 2.17 and the date on which such
increase has become effective and shall prepare and distribute to Company and
each of the Banks (including the New Banks) a revised Exhibit D to the Credit
Agreement setting forth the applicable new Percentages of the Banks (including
the New Bank(s), taking into account such increase and assignments (if any).
61
2.18 Revolving Credit as Renewal; Application of Advances; Existing
Advances. (a) The Revolving Credit Notes issued by the Company and the Permitted
Borrowers 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
and the Permitted Borrowers.
(b) Each Existing Advance shall be deemed for all purposes of
this Agreement to be an Advance under this Agreement.
3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent may through the Issuing Office, at any time and from time to
time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Agent may
require, issue standby or documentary Letters of Credit for the account of such
Account Party, in an aggregate amount for all Letters of Credit issued hereunder
at any one time outstanding not to exceed the Letter of Credit Maximum Amount.
Each Letter of Credit shall be in a minimum face amount of One Hundred Thousand
Dollars ($100,000) and shall have an expiration date not later than one (1) year
from its date of issuance; provided that each Letter of Credit (including any
renewal thereof) shall expire not later than ten (10) Business Days prior to the
Revolving Credit Maturity Date in effect on the date of issuance thereof. The
submission of all applications in respect of and the issuance of each Letter of
Credit hereunder shall be subject in all respects to the Uniform Customs and
Practices for Documentary Credits of the International Chamber of Commerce, 1993
Revisions, ICC Publication No. 500 or, if applicable, ISP 98, and any successor
documentation thereto, as selected by the Issuing Lender. In the event of any
conflict between this Agreement and any Letter of Credit Document other than any
Letter of Credit, this Agreement shall control.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at
the request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
(a) without duplication, the face amount of the Letter of
Credit requested (based on the Dollar Amount of the undrawn portion of any
Letter of Credit denominated in Dollars and the Current Dollar Equivalent of the
undrawn portion of any Letter of Credit denominated in any Alternative
Currency), 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 (in each case, determined as aforesaid), does not exceed
the Letter of Credit Maximum Amount;
(b) without duplication, the undrawn amount of the Letter
of Credit requested, plus the undrawn amount of all other Letters of Credit of
all Account Parties requested on such
62
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 (in each case determined as aforesaid), 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 (determined on the basis of the Current Dollar Equivalent of
any Advances denominated in any Alternative Currency, and the Dollar Amount of
any Advances in Dollars), do not exceed the lesser of (i) the Revolving Credit
Maximum Amount and (ii) the Borrowing Base Limitation, in each case then
applicable;
(c) whenever the Account Party is a Permitted Borrower,
without duplication, the undrawn amount of the Letter of Credit requested by a
Permitted Borrower, plus the undrawn amount of all other Letters of Credit
requested by the other Permitted Borrowers on such date, plus the aggregate
undrawn portion of all other outstanding Letters of Credit issued for the
account of the Permitted Borrowers, (in each case determined as aforesaid), plus
the unreimbursed amount of any draws under Letters of Credit (using the Current
Dollar Equivalent thereof for any such Letters of Credit denominated in any
Alternative Currency) issued for the account of the Permitted Borrowers, plus
the aggregate outstanding principal amount of all Advances of the Revolving
Credit and of the Swing Line to the Permitted Borrowers, including any Advances
requested to be made on such date (in each case determined as aforesaid), do not
exceed the lesser of (i) the Aggregate Sublimit and (ii) the Borrowing Base
Limitation, in each case then applicable;
(d) the obligations of Company and the Permitted Borrowers set
forth in this Agreement and the other Loan Documents are valid, binding and
enforceable obligations of Company and Permitted Borrowers and the valid,
binding and enforceable nature of this Agreement and the other Loan Documents
has not been disputed by Company or the Permitted Borrowers;
(e) 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 6.15 hereof, which shall be deemed to be remade as of the
date of issuance of such Letter of Credit 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,
and both immediately before and immediately after issuance of the Letter of
Credit requested, no Default or Event of Default exists;
(f) 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 or the
Permitted Borrowers;
(g) 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
63
required pursuant to the terms thereof, and the terms of the proposed Letter of
Credit shall be satisfactory to Agent and its Issuing Office;
(h) 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;
(i) 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
(j) 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 (f) hereof. The Agent shall be entitled to
rely on such certification without any duty of inquiry.
3.3 Notice. Agent shall give notice, substantially in the form
attached as Exhibit I, to each Bank of the issuance of each Letter of Credit,
not later than three (3) Business Days after issuance of each Letter of Credit,
specifying the amount thereof and the amount of such Bank's Percentage thereof.
3.4 Letter of Credit Fees. Company shall pay to the Agent for
distribution to the Banks in accordance with their Percentages, Letter of Credit
Fees as follows:
(a) A per annum Letter of Credit Fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto (based on the
Dollar Amount of any Letters of Credit denominated in Dollars and the Current
Dollar Equivalent of any Letters of Credit denominated in any Alternative
Currency) in the amount of the Applicable Fee Percentage (determined with
reference to Schedule 1.1 to this Agreement), inclusive of the facing fee of
one-eighth of one percentage point (1/8%) per annum on the face amount thereof
to be retained by Agent under Section 3.5 hereof.
(b) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or cause
to be deemed applicable any reserve, special deposit,
64
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.
(c) All payments by the Company or the Permitted
Borrowers 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 and the Permitted Borrowers by the Agent. The fees described in
clause (a) above shall be nonrefundable under all circumstances, shall be
payable semi-annually in advance (or such lesser period, if applicable, for
Letters of Credit issued with stated expiration dates of less than six months)
upon the issuance of each such Letter of Credit, and shall be calculated on the
basis of a 360 day year and assessed for the actual number of days from the date
of the issuance thereof to the stated expiration thereof.
3.5 Issuance Fees. In connection with the Letters of Credit, and
in addition to the Letter of Credit Fees (including a letter of credit facing
fee of one-eighth of one percentage point (1/8%) to be retained by Agent for its
own account), the Company or the applicable Account Party shall pay, for the
sole account of the Agent, standard documentation, administration, payment and
cancellation charges assessed by Agent or the Issuing Office, at the times, in
the amounts and on the terms set forth or to be set forth from time to time in
the standard fee schedule of the Issuing Office in effect from time to time.
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company and each applicable Account Party agree to
pay to the Agent, on the day on which the Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit, an amount equal
to the amount paid by the Agent in respect of such draft or other demand under
such Letter of Credit and all expenses paid or incurred by the Agent relative
thereto. Unless the Company or the applicable Account Party shall have made such
payment to the Agent on such day, upon each such payment by the Agent, the Agent
shall be deemed to have disbursed to the Company or the applicable Account
Party, and the Company or the applicable Account Party shall be deemed to have
elected to substitute for its reimbursement obligation, with respect to Letters
of Credit denominated in Dollars, a Prime-based Advance of the Revolving Credit
and, with respect to Letters of Credit denominated in any
65
Alternative Currency, a Eurocurrency-based Advance of the Revolving Credit in
the applicable Alternative Currency with an Interest Period, commencing three
(3) Business Days following the date of Agent's payment pursuant to the
applicable Letter of Credit, of one month (or, if unavailable, such other
Interest Period as selected by Agent in its sole discretion), in each case 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 or Eurocurrency-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, provided that, with
respect to any such Eurocurrency-based Advance deemed to have been made
hereunder, Company or the applicable Permitted Borrower shall also be obligated
to pay to the Agent, for Agent's sole account, interest on the aggregate amount
paid by the Agent under the applicable draft or other demand for payment at
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 plus the Applicable Margin then in
effect for Eurocurrency-based Advances, from the date of Agent's payment
pursuant to any Letter of Credit to the date of the commencement of the Interest
Period for the applicable Eurocurrency-based Advance deemed to have been made,
as aforesaid, such interest (the "Gap Interest") to be due and payable on the
last day of the initial Interest Period established for such deemed Advance.
(b) If the Agent shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the Agent shall provide
notice thereof to the Company and the applicable Account Party on the date such
draft or demand is honored, and to each Bank on such date unless the Company or
applicable Account Party shall have satisfied its reimbursement obligation under
Section 3.6(a) hereof by payment to the Agent on such date. The Agent shall
further use reasonable efforts to provide notice to the Company and the
applicable Account Party prior to honoring any such draft or other demand for
payment, but such notice, or the failure to provide such notice, shall not
affect the rights or obligations of the Agent with respect to any Letter of
Credit or the rights and obligations of the parties hereto, including without
limitation the obligations of the Company or applicable Account Party under
Section 3.6(a) hereof.
(c) Upon issuance by the Agent of each Letter of Credit
hereunder (except in respect of any Letter of Credit issued after Agent has
obtained actual knowledge that an Event of Default has occurred and is
continuing), each Bank shall automatically acquire a pro rata participation
interest in such Letter of Credit and each related Letter of Credit Payment
based on its respective Percentage. Each Bank, on the date a draft or demand
under any Letter of Credit is honored (or the next succeeding Business Day if
the notice required to be given by Agent to the Banks under Section 3.6(b)
hereof is not given to the Banks prior to 2:00 p.m. (Detroit time) on such date
of draft or demand) or three (3) Business Days thereafter in respect of draws or
demands under Letters of Credit issued in any Alternative Currency, shall make
its Percentage of the amount paid by the Agent, and not reimbursed by the
Company or applicable Account Party on such day, available in the applicable
Permitted Currency and 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
66
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.
Furthermore, in the event of the failure by Company or the Permitted Borrowers
to pay the Gap Interest required under the proviso to Section 3.6(a) hereof,
each of the Banks shall pay to Agent, within one Business Day following receipt
from Agent of written request therefor, its pro rata portion of said Gap
Interest, excluding any portion thereof attributable to the Applicable Margin.
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.
(d) Nothing in this Agreement shall be construed to require or
authorize any Bank to issue any Letter of Credit, it being recognized that the
Agent shall be the sole issuer of Letters of Credit under this Agreement.
3.7 Obligations Irrevocable. The obligations of Company and any
Account Party to make payments to Agent or the Banks with respect to Letter of
Credit Obligations under Section 3.6 hereof, shall be unconditional and
irrevocable and not subject to any qualification or exception whatsoever,
including, without limitation:
(a) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to any Letter of Credit (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to or under any of the Letter of Credit
Documents;
(c) The existence of any claim, setoff, defense or other
right which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in
67
connection with any of the Letter of Credit Documents, the transactions
contemplated herein or therein or any unrelated transactions;
(d) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(e) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of such Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of the
Agent or any Bank or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Bank or any such party under this Agreement, any of the other Loan Documents
or any of the Letter of Credit Documents, or any other acts or omissions on the
part of the Agent, any Bank or any such party; or
(g) Any other event or circumstance that would, in the
absence of this Section 3.7, result in the release or discharge by operation of
law or otherwise of Company or any Account Party from the performance or
observance of any obligation, covenant or agreement contained in Section 3.6
hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may have
against the beneficiary of any Letter of Credit shall be available hereunder to
Company or any Account Party against the Agent or any Bank. Nothing contained in
this Section 3.7 shall be deemed to prevent Company or the Account Parties,
after satisfaction in full of the absolute and unconditional obligations of
Company and the Account Parties hereunder, from asserting in a separate action
any claim, defense, set off or other right which they (or any of them) may have
against Agent or any Bank.
3.8 Risk Under Letters of Credit. (a) In the administration and
handling of Letters of Credit and any security therefor, or any documents or
instruments given in connection therewith, Agent shall have the sole right to
take or refrain from taking any and all actions under or upon the Letters of
Credit.
(a) Subject to other terms and conditions of this
Agreement, Agent shall issue the Letters of Credit and shall hold the documents
related thereto in its own name and shall make all collections thereunder and
otherwise administer the Letters of Credit in accordance with Agent's regularly
established practices and procedures and, except pursuant to Section 12.3
hereof, Agent will have no further obligation with respect thereto. In the
administration of Letters of Credit, Agent shall not be liable for any action
taken or omitted on the advice of counsel, accountants, appraisers or other
experts selected by Agent with due care and Agent may rely upon any notice,
communication, certificate or other statement from Company, any Account Party,
beneficiaries of Letters of Credit, or any other Person which Agent believes to
be authentic. Agent will, upon request, furnish the Banks with copies of Letter
of Credit Agreements, Letters of Credit and documents related thereto.
68
(b) 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.
(c) If at any time Agent shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent shall receive same for the pro rata
benefit of the Banks in accordance with their respective Percentages and shall
promptly deliver to each Bank its share thereof, less such Bank's pro rata share
of the costs of such recovery, including court costs and attorney's fees. If at
any time any Bank shall receive from any source whatsoever any payment on any
such unreimbursed amount or interest thereon in excess of such Bank's Percentage
of such payment, such Bank will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.
3.9 Indemnification. (a) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and against any and
all claims, damages, losses, liabilities, costs or expenses of any kind or
nature whatsoever which the Banks or the Agent or any such person may incur or
which may be claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Bank nor the Agent or any of their respective
officers, directors, employees or agents shall be liable or responsible for: (i)
the use which may be made of any Letter of Credit or for any acts or omissions
of any beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of any Letter of Credit (unless such payment resulted from the gross
negligence or willful misconduct of the Agent), including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
(iv) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit; or (v) any other event or circumstance whatsoever arising in
connection with any Letter of Credit; provided, however, that Company and
Account Parties shall not be required to indemnify the Banks and the Agent and
such other persons, and the Agent shall be liable to the Company and the Account
Parties to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by Company and the Account Parties
which were caused by the Agent's gross negligence, willful misconduct or
wrongful dishonor of any Letter of Credit after the presentation to it by the
beneficiary thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions of such Letter of
Credit.
69
(a) It is understood that in making any payment under a
Letter of Credit the Agent will rely on documents presented to it under such
Letter of Credit as to any and all matters set forth therein without further
investigation and regardless of any notice or information to the contrary. It is
further acknowledged and agreed that Company or an Account Party may have rights
against the beneficiary or others in connection with any Letter of Credit with
respect to which Agent or the Banks are alleged to be liable and it shall be a
condition of the assertion of any liability of Agent or the Banks under this
Section that Company or the applicable Account Party shall contemporaneously
pursue all remedies in respect of the alleged loss against such beneficiary and
any other parties obligated or liable in connection with such Letter of Credit
and any related transactions.
3.10 Right of Reimbursement. Each Bank agrees to reimburse the
Agent on demand, pro rata in accordance with its respective Percentage, for (i)
the reasonable out-of-pocket costs and expenses of the Agent to be reimbursed by
Company or any Account Party pursuant to any Letter of Credit Agreement or any
Letter of Credit, to the extent not reimbursed by Company or any Account Party
and (ii) any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, fees, reasonable out-of-pocket expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Agent (in its capacity as issuer of any Letter
of Credit) in any way relating to or arising out of this Agreement, any Letter
of Credit, any documentation or any transaction relating thereto, or any Letter
of Credit Agreement, to the extent not reimbursed by Company or any Account
Party, except to the extent that such liabilities, losses, costs or expenses
were incurred by Agent solely as a result of Agent's gross negligence or willful
misconduct or by the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit.
3.11 Existing Letters of Credit. Each Existing Letter of Credit
shall be deemed for all purposes of this Agreement to be a Letter of Credit, and
each application submitted in connection with each Existing Letter of Credit
shall be deemed for all purposes of this Agreement to be a Letter of Credit
Agreement. On the date of execution of this Agreement, the Agent shall be deemed
automatically to have sold and transferred, and each other Bank shall be deemed
automatically, irrevocably, and unconditionally to have purchased and received
from the Agent, without recourse or warranty, an undivided interest and
participation (on the terms set forth herein), to the extent of such other
Bank's Percentage, in each Existing Letter of Credit and the applicable
reimbursement obligations with respect thereto and any security therefor or
guaranty pertaining thereto. Letter of Credit Fees paid under the Prior Credit
Agreement shall not be recalculated, redistributed or reallocated by Agent to
the Banks; provided that the Company shall pay to any new Banks becoming parties
hereto on the Effective Date (or any existing Bank increasing its Percentage on
such date) a special letter of credit fee on the Existing Letters of Credit,
calculated on the basis of the Letter of Credit Fees which would be applicable
to such Existing Letters of Credit if issued on the date hereof (but in the case
of any existing Bank, computed only to the extent of the applicable increase in
its Percentage) for the period from the Effective Date to the expiration date of
such Existing Letters of Credit.
4. MARGIN ADJUSTMENTS
70
4.1 Margin Adjustments. Adjustments to the Applicable Margin based
on Schedule 1.1 hereto (to the extent required in said Schedule), shall be
implemented in accordance with this Article 4.
4.2 Prospective Effect Only. Adjustments to the Applicable Margin
hereunder shall be given prospective effect only, effective (i) as to all
Prime-based Advances outstanding hereunder, immediately upon any change in the
Rating Level then in effect, and (ii) as to each Eurocurrency-based Advance
outstanding hereunder, effective upon the expiration of the applicable Interest
Period(s), if any, in effect on the date of the obtaining and/or any change in
the Rating Level in effect hereunder, in each case with no retroactivity or
claw-back.
4.3 Eurocurrency-based Advances. With respect to
Eurocurrency-based Advances outstanding hereunder, an adjustment hereunder,
after becoming effective, shall remain in effect only through the end of the
applicable Interest Period(s) for such Eurocurrency-based Advances if any;
provided, however, that upon any change in the Rating Level then in effect, as
aforesaid, or the occurrence of any other event which under the terms hereof
causes such adjustment no longer to be applicable, then any such subsequent
adjustment or no adjustment, as the case may be, shall be effective (and said
pricing shall thereby be adjusted up or down, as applicable) with the
commencement of each Interest Period following such change or event, all in
accordance with Section 4.2 hereof.
5. CONDITIONS
The obligations of Banks to make Advances or loans pursuant to this
Agreement are subject to the following conditions, provided however that
Sections 5.1 through 5.8 below shall only apply to the initial Advances or loans
hereunder:
5.1 Execution of Notes, this Agreement and the other Loan
Documents. The Company (on or before the date hereof) and the Permitted
Borrowers (prior to requesting any Advance hereunder), as applicable, 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), and amendments to or
reaffirmations of the Collateral Documents, the Guaranties and other Loan
Documents (or new documents), as required hereunder, and, as applicable, such
Revolving Credit Notes, the Swing Line Notes, this Agreement and the other Loan
Documents shall be in full force and effect.
5.2 Corporate Authority. Agent shall have received, with a
counterpart thereof for each Bank: (i) certified copies of resolutions of the
Board of Directors of the Company and each of the Permitted Borrowers 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 the borrowing of Advances hereunder; (ii) (A) certified
copies of the Company's and each of the Permitted Borrowers' articles of
incorporation and bylaws or other constitutional documents 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
71
from the state of the Company's incorporation and from the applicable state of
incorporation or other jurisdiction of incorporation of each of the Permitted
Borrowers.
5.3 Representations and Warranties -- All Parties. The
representations and warranties made by the Company, each of the Permitted
Borrowers or any other party to any of the Loan Documents under this Agreement
or any of the other Loan Documents (excluding the Agent and the Banks), and the
representations and warranties of any of the foregoing which are contained in
any certificate, document or financial or other statement furnished at any time
hereunder or thereunder or in connection herewith or therewith shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects on and as of the date of the making of the
initial Advance hereunder.
5.4 Compliance with Certain Documents and Agreements. The Company
and the Permitted Borrowers (and any of their respective Subsidiaries or
Affiliates) shall have each performed and complied with all agreements and
conditions contained in this Agreement, the other Loan Documents, or any
agreement or other document executed hereunder or thereunder and required to be
performed or complied with by each of them (as of the applicable date) and none
of such parties shall be in default in the performance or compliance with any of
the terms or provisions hereof or thereof.
5.5 Company's Certificate and Opening Borrowing Base Certificate.
The Agent shall have received, with a signed counterpart for each Bank, a
certificate of a responsible senior officer of Company, dated the date of the
making of the initial Advances hereunder, stating that the conditions set forth
in this Section 5 have been fully satisfied, accompanied by a Borrowing Base
Certificate dated as of the proposed Effective Date.
5.6 Payment of Agent's and Other Fees. Company shall have paid to
the Lead Arranger any arranger's fee under any fee letter in effect as of the
date hereof between Company and the Lead Arranger, to the Agent the Closing Fee
(for distribution to the Banks hereunder), and to the Agent, the Agent's Fees
and all costs and expenses required hereunder.
5.7 [Reserved].
5.8 Other Documents and Instruments. The Agent shall have
received, with a photocopy for each Bank, such other instruments and documents
as the Majority Banks may reasonably request in connection with the making of
Advances hereunder, and all such instruments and documents shall be satisfactory
in form and substance to the Majority Banks.
5.9 Continuing Conditions. The obligations of the Banks to make
any of the Advances or loans under this Agreement, including but not limited to
the initial Advances of the Revolving Credit or the Swing Line hereunder, shall
be subject to the following continuing conditions:
(a) No Default or Event of Default shall have occurred and be
continuing as of the making of the proposed Advance (both before and after
giving effect thereto);
(b) There shall have been no material adverse change in the
condition (financial or otherwise), properties, business, results of operations
of the Company or its
72
Subsidiaries, taken as a whole, from December 31, 2002, except changes in the
ordinary course of business, or any subsequent December 31st, if the Agent
determines, with the concurrence of the Majority Banks, based on the Company's
financial statements for such subsequent fiscal year that no material adverse
change has occurred during such year, such determination being made solely for
purposes of determining the applicable date under this paragraph to the date of
the proposed Advance hereunder;
(c) The representations and warranties contained in this
Agreement and the other Loan Documents are true and correct in all material
respects as of the making of the applicable Advance, except to the extent such
representations and warranties are not, by their terms, continuing
representations and warranties, but speak only as of a specific date; and
(d) All documents executed or submitted pursuant hereto shall
be satisfactory in form and substance (consistent with the terms hereof) to
Agent and its counsel and to each of the Banks; Agent and its counsel and each
of the Banks and their respective counsel shall have received all information,
and such counterpart originals or such certified or other copies of such
materials, as Agent or its counsel and each of the Banks and their respective
counsel may reasonably request; and all other legal matters relating to the
transactions contemplated by this Agreement (including, without limitation,
matters arising from time to time as a result of changes occurring with respect
to any statutory, regulatory or decisional law applicable hereto) shall be
satisfactory to counsel to Agent and counsel to each of the Banks.
6. REPRESENTATIONS AND WARRANTIES
Company and the Permitted Borrowers represent and warrant and such
representations and warranties shall be deemed to be continuing representations
and warranties during the entire life of this Agreement:
6.1 Corporate Authority. Each of the Company, the Subsidiaries and
each of the Permitted Borrowers 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, the Subsidiaries and each of the Permitted Borrowers is duly
qualified and authorized to do business as a corporation, limited liability
company or partnership (or comparable foreign entity) in each jurisdiction where
the character of its assets or the nature of its activities makes such
qualification necessary, except where such failure to qualify and be authorized
to do business will not have a Material Adverse Effect.
6.2 Due Authorization -- Company. Execution, delivery and
performance of this Agreement, the other Loan Documents, and any other documents
and instruments required under or in connection with this Agreement, and the
issuance of the Notes by and extensions of credit to the Company are within its
corporate powers, have been duly authorized, are not in contravention of law or
the terms of the Company's articles of incorporation or bylaws, and, except as
have been previously obtained or as referred to in Section 6.16, 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.
73
6.3 Due Authorization -- Permitted Borrowers. Execution, delivery
and performance of this Agreement, the Notes, the other Loan Documents, and any
other documents and instruments required under or in connection with this
Agreement by each of the Permitted Borrowers, and extensions of credit to the
Permitted Borrowers, are (or will be, on the applicable date of delivery of such
Loan Documents) within their respective corporate powers, have been (or will be,
as aforesaid) duly authorized, are not (or will not be, as aforesaid) in
contravention of law or the terms of articles of incorporation or bylaws or
other organic documents of the parties thereto, as applicable, and, except as
have been previously obtained (or as referred to in Section 6.16, below), do not
(or will not, as aforesaid) require the consent or approval, material to the
transactions contemplated by this Agreement, or the other Loan Documents, of any
governmental body, agency or authority.
6.4 Title to Property. Each of the Company, each of the Permitted
Borrowers 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.
6.5 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, any of the Permitted Borrowers or any of the Subsidiaries,
except for those Liens permitted under Section 8.6 hereof.
6.6 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 6.6, attached hereto.
6.7 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 6.7, attached hereto.
6.8 No Defaults. (a) There exists no default under the provisions
of any instrument evidencing any permitted Debt of the Company or its
Subsidiaries or connected with any of the permitted Liens, or of any agreement
relating thereto, except where such default could not reasonably be expected to
have a Material Adverse Effect and would not violate this Agreement or any of
the other Loan Documents according to the terms thereof.
(a) The Company and the Permitted Borrowers are in compliance
with the Borrowing Base Limitation.
74
6.9 Enforceability of Agreement and Loan Documents -- Company. This
Agreement, the Notes, each of the other Loan Documents to which the Company is a
party, and all other certificates, agreements and documents executed and
delivered by Company under or in connection herewith or therewith have each been
duly executed and delivered by duly authorized officers of the Company and
constitute the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditor's rights generally and by
general principles of equity (whether enforcement is sought in a proceeding in
equity or at law).
6.10 Enforceability of Domestic Guaranty -- Significant Domestic
Subsidiaries. The Domestic Guaranty, 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).
6.11 Enforceability of Loan Documents -- Permitted Borrowers. This
Agreement, the Notes, each of the other Loan Documents to which any of the
Permitted Borrowers is a party, and all certificates, documents and agreements
executed in connection herewith or therewith by the Permitted Borrowers have
each been duly executed and delivered by duly authorized officers of the
applicable Permitted Borrower and constitute the valid and binding obligations
of the Permitted Borrowers, 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 creditors' rights generally and by general principles of equity (whether
enforcement is sought in a proceeding in equity or at law).
6.12 Non-contravention -- Company. The execution, delivery and
performance of this Agreement and the other Loan Documents and any other
documents and instruments required under or in connection with this Agreement by
the Company are not in contravention of the terms of any indenture, material
agreement or material undertaking to which the Company is a party or by which it
or its properties are bound or affected, except to the extent such terms have
been waived or are not material to the transactions contemplated by this
Agreement and the other Loan Documents or to the financial performance of the
Company and its Subsidiaries, taken as a whole.
6.13 Non-contravention -- Significant Domestic Subsidiaries. The
execution, delivery and performance of the Domestic Guaranty 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
75
other Loan Documents or to the financial performance of the Company and its
Subsidiaries, taken as a whole.
6.14 Non-contravention -- Permitted Borrowers. The execution, delivery
and performance of this Agreement, those other Loan Documents signed by the
Permitted Borrowers, and any other documents and instruments required under or
in connection with this Agreement by the Permitted Borrowers are not in
contravention of the terms of any indenture, material agreement or material
undertaking to which any of the Permitted Borrowers 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 transaction contemplated by this Agreement and
the other Loan Documents or to the financial performance of the Company and its
Subsidiaries, taken as a whole.
6.15 No Litigation. Except as set forth in Schedule 6.15 annexed
hereto, as of the Effective Date, no litigation or other proceeding before any
court or administrative agency is pending, or to the knowledge of the officers
of Company is threatened against Company or any Subsidiary, the outcome of which
could reasonably be expected to have a Material Adverse Effect.
6.16 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: (i) by the Company, of
this Agreement, any of the other Loan Documents to which it is a party or any
other documents or instruments to be executed and/or delivered by the Company in
connection therewith or herewith; or (ii) by the Permitted Borrowers, of this
Agreement, the other Loan Documents to which it is a party or any other
documents or instruments to be executed and/or delivered by Permitted Borrowers
in connection therewith or herewith. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations which have previously been obtained or made, as the case may be,
are in full force and effect and are not the subject of any attack, or to the
knowledge of the Company, threatened attack (in any material respect) by appeal
or direct proceeding or otherwise.
6.17 Agreements Affecting Financial Condition. Neither the Company, the
Permitted Borrowers 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.
6.18 No Investment Company; No Margin Stock. None of the Company, any
of the Permitted Borrowers, nor any of the Subsidiaries is engaged principally,
or as one of its important activities, directly or indirectly, in the business
of extending credit for the purpose of purchasing or carrying margin stock. None
of the Letters of Credit and none of the proceeds of any of the Advances will be
used by the Company, any of the Permitted Borrowers or any of the Subsidiaries
to purchase or carry margin stock or will be made available by the Company, the
Permitted Borrower 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
76
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, any of the
Permitted Borrowers nor any of the Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
6.19 ERISA. Neither a Reportable Event which is material to the Company
and its Subsidiaries taken as a whole nor an accumulated funding deficiency (as
defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Pension Plan. Each
Pension Plan has complied and continues to comply in all material respects with
the applicable provisions of ERISA and the Internal Revenue Code and any
applicable regulations thereof (and, if applicable, any comparable foreign law
provisions), except to the extent that any noncompliance, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No termination of a Single Employer Plan has occurred, and no lien in favor of
the PBGC or a Pension Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan maintained by the
Company or any ERISA Affiliate did not, as of the last annual valuation date
prior to the date on which this representation is made or deemed made, exceed
the value of the assets of such Pension Plan allocable to such accrued benefits.
Neither the Company nor any ERISA Affiliate has had a complete or partial
withdrawal from any Multiemployer Plan within the five year period prior to the
date of this Agreement, nor does the Company or any ERISA Affiliate presently
intend to completely or partially withdraw from any Multiemployer Plan, and
neither the Company nor any ERISA Affiliate would become subject to fines,
penalties or any other liability under ERISA if the Company or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date of this Agreement. To the best of
Company's knowledge, no such Multiemployer Plan is in bankruptcy or
reorganization or insolvent. There is no pending or, to the best of Company's
knowledge, threatened litigation or investigation questioning the form or
operation of any Pension Plan, nor is there any basis for any such litigation or
investigation which if adversely determined could reasonably be expected to have
a Material Adverse Effect, as of the valuation date most closely preceding the
date of this Agreement.
6.20 Environmental Matters and Safety Matters. (a) The Company and each
Subsidiary is in compliance with all applicable federal, state, provincial and
local laws, ordinances and regulations relating to safety and industrial hygiene
or to the environmental condition, including without limitation all applicable
Hazardous Materials Laws in jurisdictions in which the Company or any such
Subsidiary owns or operates a facility or site, or arranges for disposal or
treatment of hazardous substances, solid waste, or other wastes, accepts for
transport any hazardous substances, solid wastes or other wastes or holds any
interest in real property or otherwise, except for matters which, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(a) All federal, state, provincial, local and foreign permits,
licenses and authorizations required for present or (to the best of the
Company's knowledge) past use of the facilities and other properties or
activities of the Company and each Subsidiary have been obtained and are
presently in effect, and there is and has been full compliance with all such
77
permits, licenses or authorizations, except, in all cases, where the failure to
comply with the foregoing could not reasonably be expected to have a Material
Adverse Effect.
(b) No demand, claim, notice, suit (in law or equity), action,
administrative action, investigation or inquiry (including, without limitation,
the listing of any property by any domestic or foreign governmental entity which
identifies sites for remedial, clean-up or investigatory action) whether brought
by any governmental authority, private person or entity or otherwise, arising
under, relating to or in connection with any applicable Hazardous Materials Laws
is pending or, to the best of the Company's knowledge, threatened against the
Company or any of its Subsidiaries, any real property in which the Company or
any such Subsidiary holds or, to the best of the Company's knowledge, has held
an interest or any present or, to the best of the Company's knowledge, past
operation of the Company or any such Subsidiary, except for such matters which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries,
whether with respect to present or, to the best of the Company's knowledge, past
operations or properties, (i) is, to the best of the Company's knowledge, the
subject of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic substances, radioactive
materials, hazardous wastes or related materials into the environment, (ii) has
received any notice of any toxic substances, radioactive materials, hazardous
waste or related materials in or upon any of its properties in violation of any
applicable Hazardous Materials Laws, or (iii) knows of any basis for any such
investigation or notice, or for the existence of such a violation, except for
such matters which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(d) No release, threatened release or disposal of hazardous
waste, solid waste or other wastes is occurring or has occurred on, under or to
any real property in which the Company or any of its Subsidiaries holds any
interest or performs any of its operations, in violation of any applicable
Hazardous Materials Laws, except for any such matters which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
6.21 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 December 31, 2002 there has
been no material adverse change in the financial condition of the Company or its
Subsidiaries, taken as a whole, except changes in the ordinary course of
business; neither the Company, nor any of its Subsidiaries has any contingent
obligations (including any liability for taxes) not disclosed by or reserved
against in the December 31, 2002 balance sheet which could reasonably be
expected to have a Material Adverse Effect.
78
7. AFFIRMATIVE COVENANTS
Company and each of the Permitted Borrowers 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 7.23 hereof, any
Special Purpose Subsidiary) to, so long as any of the Banks are committed to
make any Advances under this Agreement and thereafter so long as any
Indebtedness remains outstanding under this Agreement:
7.1 Preservation of Existence, Etc. Subject to the terms of this
Agreement: (i) preserve and maintain its existence and such of its rights,
licenses, and privileges as are material to the business and operations
conducted by it; (ii) qualify and remain qualified to do business in each
jurisdiction in which such qualification is material to its business and
operations or ownership of its properties; (iii) continue to engage only in
businesses as substantially now conducted by the Company and its Subsidiaries
and businesses reasonably related thereto; (iv) at all times maintain, preserve
and protect all of its franchises and trade names and preserve all the remainder
of its property and keep the same in good repair, working order and condition;
and (v) from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements, betterments and improvements thereto such
that the businesses carried on in connection therewith may be properly and
advantageously conducted at all times.
7.2 Keeping of Books. Keep proper books of record and account in which
full and correct entries shall be made of all of its financial transactions and
its assets and businesses so as to permit the presentation of financial
statements prepared in accordance with GAAP.
7.3 Reporting Requirements. Furnish Agent with:
(a) as soon as possible, and in any event within three
calendar days after becoming aware of the occurrence of each Default or Event of
Default, a written statement of the chief financial officer 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 or such Permitted
Borrower has taken or has caused to be taken or proposes to take or cause to be
taken with respect thereto;
(b) as soon as available, and in any event within one hundred
twenty (120) days after and as of the end of each of Company's fiscal years, (i)
a detailed Consolidated audit report of Company certified to by independent
certified public accountants satisfactory to Banks together with an unaudited
Consolidating report of Company and its Subsidiaries certified by an authorized
officer of Company as to consistency (with prior financial reports and
accounting periods), accuracy and fairness of presentation; and (ii) a Covenant
Compliance Report and (iii) a "static pool analysis" substantially in the form
delivered under the Prior Credit Agreement and in any event satisfactory in form
and substance to the Majority Banks, which analyzes the performance of Company's
and each Permitted Borrower's Installment Contracts (segregated between the
Company's North American operations and its UK operations) on a quarterly basis,
in each case certified by an authorized officer of the Company as to consistency
with prior such analyses, accuracy and fairness of presentation;
79
(c) as soon as available, and in any event within sixty (60)
days after and as of the end of each quarter, excluding the last quarter, of
each fiscal year, (i) a Consolidated and Consolidating balance sheet, income
statement and statement of cash flows of Company and its Subsidiaries certified
by an authorized officer of Company as to consistency (with prior financial
reports and accounting periods), accuracy and fairness of presentation; (ii) a
Covenant Compliance Report and (iii) a "static pool analysis" substantially in
the form delivered under the Prior Credit Agreement and in any event
satisfactory in form and substance to the Majority Banks, which analyzes the
performance of Company's and each Permitted Borrower's Installment Contracts
(segregated between the Company's North American operations and its UK
operations) on a quarterly basis, in each case certified by an authorized
officer of the Company as to consistency with prior such analyses, accuracy and
fairness of presentation;
(d) as soon as available, and in any event within twenty (20)
Business Days after and as of the end of each quarter, including the last
quarter, of each fiscal year, a Borrowing Base Certificate as of the end of such
quarter, certified by an authorized officer of the Company as to accuracy and
fairness of presentation;
(e) as soon as possible, and in any event within three (3)
Business Days after becoming aware (i) of any material adverse change in the
financial condition of the Company, any of its Subsidiaries or any of the
Permitted Borrowers, a certificate of the chief financial officer of Company (or
in his absence, a responsible senior officer) setting forth the details of such
change, or (ii) of the taking by the Internal Revenue Service or any foreign
taxing jurisdiction of a tax position (verbal or written) which could have a
materially adverse effect upon the Company, any of its Subsidiaries or any of
the Permitted Borrowers (or any such tax position taken by the Company or any of
its Subsidiaries or any of the Permitted Borrowers) setting forth the details of
such position and the financial impact thereof;
(f) as soon as available (and with copies for each of the
Banks), the Company's 8-K, 10-Q and 10-K Reports filed with the federal
Securities and Exchange Commission, and in any event, with respect to the 10-Q
Report, within sixty (60) days of the end of each of the first three fiscal
quarters of each of Company's fiscal years, and with respect to the 10-K Report,
within one hundred twenty (120) days after and as of the end of each of
Company's fiscal years; and as soon as available, copies of all filings, reports
or other documents filed by the Company or any of its Subsidiaries with the
federal Securities and Exchange Commission or other federal regulatory or taxing
agencies or authorities in the United States, or comparable agencies or
authorities in foreign jurisdictions, or any stock exchanges in such
jurisdictions;
(g) promptly as issued (and with copies for each of the
Banks), all press releases, notices to shareholders and all other material
communications transmitted by the Company or any of its Subsidiaries; and,
concurrently with each incurrence thereof written notice that new Future Debt
has been incurred, accompanied by copies of the material documents governing
such Debt and a certification that, both before and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing and the
Company is otherwise in compliance with this Agreement;
(h) from time to time at the request of Agent or any Bank, a
copy of the standard form of Company's Dealer Agreement then in effect for the
Company's operations in
80
the United States of America, England and each other material jurisdiction,
identifying any material changes from the form supplied to the Banks hereunder
for the preceding year;
(i) on or before ninety (90) days after the commencement of
each fiscal year, a Consolidated plan and financial projections and which shall
reflect any Future Debt or Permitted Securitizations contemplated to be incurred
or made for the succeeding two years of the Company and its Significant
Subsidiaries including, without limitation, a Consolidated and Consolidating
balance sheet and a Consolidated and Consolidating statement of projected income
and cash flow of the Company for each of the succeeding two fiscal years and
including a statement in reasonable detail specifying all material assumptions
underlying the projections;
(j) promptly upon the request of Agent or the Majority Banks
(acting through Agent) from time to time, a "static pool analysis" which
analyzes the performance of any Installment Contracts or Leases transferred,
encumbered, reallocated from the Non-Specified Interest to a Specified Interest
or otherwise disposed of pursuant to a Permitted Securitization comparable to
the static pool analysis required to be delivered pursuant to subparagraph (c)
of this Section 7.3; and
(k) on an annual basis, a report as to the Company's Debt
Rating, if then maintained by the Company, provided that the Company shall also
promptly report any changes in such Debt Rating;
(l) promptly, and in form to be satisfactory to Agent and the
requesting Bank or Banks, Borrowing Base Certificates and such other information
as Agent or any of the Banks (acting through Agent) may reasonably request from
time to time.
7.4 Maintain Asset Coverage Ratio. On a Consolidated basis, maintain at
all times, Consolidated Net Assets at a level greater than or equal to
Consolidated Funded Debt.
7.5 Maintain Total Liabilities Ratio Level. On a Consolidated basis,
maintain as of the end of each fiscal quarter a ratio of Consolidated Total
Liabilities (including in the calculation thereof, for purposes of this Section
7.5, all Debt incurred by a Special Purpose Subsidiary, whether or not included
therein under GAAP other than Debt represented by Intercompany Loans incurred by
the English Special Purpose Subsidiary pursuant to the UK Restructuring) to the
Company's Consolidated Tangible Net Worth equal to or less than 1.50 to 1.0.
7.6 Minimum Tangible Net Worth. On a Consolidated basis, maintain
Consolidated Tangible Net Worth of not less than Two Hundred Sixty-Five Million
Dollars ($265,000,000), plus the sum of (i) eighty percent (80%) of Consolidated
Net Income for each fiscal quarter of the Company (A) beginning on or after
Xxxxx 0, 0000, (X) ending on or before the applicable date of determination
thereof, and (C) for which Consolidated Net Income as determined above is a
positive amount and (ii) the Equity Offering Adjustment.
7.7 Maintain Fixed Charge Coverage Ratio. On a Consolidated basis,
maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of
not less than 2.75 to 1.0, unless the remaining maturity of the Revolving Credit
shall be less than 366 days, in which case such ratio shall be maintained at not
less than 3.50 to 1.00.
81
7.8 Inspections. Permit Agent and each Bank, through their authorized
attorneys, accountants and representatives to examine (and make copies of)
Company's and each of the Subsidiaries' books, accounts, records, ledgers and
assets and properties (including without limitation, any Collateral) of every
kind and description including, without limitation, all promissory notes,
security agreements, customer applications, vehicle title certificates, chattel
paper, Uniform Commercial Code filings, wherever located at all reasonable times
during normal business hours, upon oral or written request of Agent or such
Bank; and permit Agent and each Bank or their authorized representatives, at
reasonable times and intervals, to visit all of its offices, discuss its
financial matters with its officers and independent certified public
accountants, and by this provision Company authorizes such accountants to
discuss the finances and affairs of Company and its Subsidiaries (provided that
Company is given an opportunity to participate in such discussions) and examine
any of its or their books and other corporate records. An examination of the
records or properties of Company or any of its Subsidiaries may require
revealment of proprietary and/or confidential data and information, and the
Agent and each of the Banks agrees upon request of the inspected party to
execute a confidentiality agreement (satisfactory to Agent or the inspecting
Bank, as the case may be, and such party) on behalf of the Agent or such
inspecting Bank and all parties making such inspections or examinations under
its authorization; provided however that such confidentiality agreement shall
not prohibit Agent from revealing such information to Banks or prohibit the
inspecting Bank from revealing such information to Agent or another Bank.
Notwithstanding the foregoing, all information furnished to the Banks hereunder
shall be subject to the undertaking of the Banks set forth in Section 13.13
hereof.
7.9 Taxes. Pay and discharge all taxes and other governmental charges,
and all material contractual obligations calling for the payment of money,
before the same shall become overdue, unless and to the extent only that such
payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP on its balance sheet, or where the failure to
pay any such matter could not reasonably be expected to have a Material Adverse
Effect.
7.10 Further Assurances. Execute and deliver or cause to be executed
and delivered to Agent within a reasonable time following Agent's request, and
at the Company's and the Permitted Borrowers' expense, such other documents or
instruments as Agent may reasonably require to effectuate more fully the
purposes of this Agreement or the other Loan Documents, including without
limitation any Collateral Documents required under Section 7.20 hereof.
7.11 Insurance. Maintain, with financially sound and reputable
insurers, insurance with respect to its material property and business against
such casualties and contingencies, of such types (including, without limitation,
insurance with respect to losses arising out of such property 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
82
which, and in such amounts as, the Company in good faith determines to be
prudent and consistent with sound financial and business practice.
7.12 Indemnification. With respect to the Company, indemnify and save
Agent and each of the Banks harmless from all reasonable loss, cost, damage,
liability or expenses, including reasonable attorneys' fees and disbursements,
incurred by Agent and each of the Banks by reason of an Event of Default or
enforcing the obligations of the Company or the Permitted Borrowers 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; and, with respect to each of the Permitted Borrowers, 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 with respect to such Permitted Borrower
by reason of an Event of Default or enforcing the obligations of such Permitted
Borrower under this Agreement or the other Loan Documents or in the prosecution
or defense of any action or proceeding concerning any matter growing out of or
connected with this Agreement or any of the other Loan Documents, other than
resulting from the gross negligence or willful misconduct of Agent or such Bank
or Banks, as the case may be.
7.13 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all material authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations (whether with any court, governmental agency, regulatory
authority, securities exchange or otherwise) which are necessary in connection
with the execution, delivery and performance of this Agreement, the other Loan
Documents, or any other documents or instruments to be executed and/or delivered
by the Company or any of the Permitted Borrowers or Guarantors, as the case may
be, in connection therewith or herewith.
7.14 Compliance with Contractual Obligations and Laws.
(a) Comply in all material respects with all Contractual
Obligations, and with all applicable laws, rules, regulations and orders of any
governmental authority, whether federal, state, local or foreign (including
without limitation Hazardous Materials Laws and any consumer protection, truth
in lending, disclosure and other similar laws and regulations governing the
provision of financing to consumers), in effect from time to time, except to the
extent that failure to comply therewith could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(b) Comply in all material respects with all applicable
federal, state and/or foreign laws and regulations in effect from time to time
governing the due and proper creation of installment sales contracts, motor
vehicle leases or similar indebtedness or obligations and of the creation,
perfection and/or protection, as applicable, of first priority security
interests or lessor's interests in motor vehicles being financed and/or sold
and/or leased pursuant thereto, as applicable.
83
7.15 ERISA. Comply in all material respects with all requirements
imposed by ERISA as presently in effect or hereafter promulgated or the Internal
Revenue Code (or comparable laws in applicable jurisdictions outside the United
States of America relating to foreign Pension Plans) and promptly notify Banks
upon the occurrence of any of the following events:
(a) the termination of any Pension Plan pursuant to Subtitle C
of Title IV of ERISA or otherwise (other than any defined contribution plan not
subject to Section 412 of the Internal Revenue Code and any Multiemployer Plan);
(b) the appointment of a trustee by a United States District
Court to administer any Pension Plan pursuant to ERISA;
(c) the commencement by the PBGC, or any successor thereto, of
any proceeding to terminate any Pension Plan;
(d) the failure of the Company or any ERISA Affiliate to make
any payment in respect of any Pension Plan required under Section 412 of the
Internal Revenue Code;
(e) the withdrawal of the Company or any ERISA Affiliate from
any Multiemployer Plan;
(f) the occurrence of an accumulated funding deficiency (as
defined in Section 6.18 hereof) or a Reportable Event; or
(g) (g) the occurrence of a Prohibited Transaction which could
reasonably be expected to have a Material Adverse Effect.
7.16 Environmental Matters.
(a) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions necessary to clean up
and remove all Hazardous Materials on or affecting any premises owned or
occupied by Company or any of its Subsidiaries, whether resulting from conduct
of Company or any of its Subsidiaries or any other Person, if required by
Hazardous Material Laws, all such actions to be taken in accordance with such
laws, and the orders and directives of all applicable federal, state and local
governmental authorities; and
(b) Defend, indemnify and hold harmless Agent and each of the
Banks, and their respective employees, agents, officers and directors from and
against any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs or expenses of whatever kind or nature arising out of or related
to (i) the presence, disposal, release or threatened release of any Hazardous
Materials on, from or affecting any premises owned or occupied by Company or any
of its Subsidiaries, (ii) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Materials, (iii) any lawsuit or other proceeding brought or threatened,
settlement reached or governmental order or decree relating to such Hazardous
Materials, (iv) the cost of removal of all Hazardous Materials from all or any
portion of any premises owned by Company or its Subsidiaries, (v) the taking of
necessary precautions to protect against the release of Hazardous Materials on
or affecting any premises
84
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, and shall cause the
Permitted Borrowers to execute, separate indemnities covering the foregoing
matters. The obligations of Company and Permitted Borrowers under this Section
7.16 shall be in addition to any and all other obligations and liabilities the
Company or any of the Permitted Borrowers may have to Agent or any of the Banks
at common law or pursuant to any other agreement.
7.17 Installment Contract Standards. (a) Cause each Installment
Contract relating to Advances to Dealers or encumbered by the Collateral
Documents and each Lease purchased and/or entered into by or on behalf of
Company or any Subsidiary included in Leased Vehicles or encumbered by the
Collateral Documents to satisfy the following requirements:
(i) Such Installment Contract or Lease (and the
interest of Company or its Subsidiaries thereunder) has not
been sold, transferred or otherwise assigned or encumbered by
the Company or its Subsidiaries to any Person, other than to
the Lenders pursuant to the Collateral Documents;
(ii) The Installment Contract obligor or lessee under
such Lease thereunder is not an Affiliate of the Company; and
(iii) Such Installment Contract or Lease is owned by
Company or a Subsidiary, or Company or a Subsidiary has a
valid first priority perfected security interest therein
(provided that the failure of up to $2,500,000 in aggregate
amount of such financial assets, valued according to GAAP, to
satisfy the requirements of this clause (iii) shall not
constitute a violation of this Section 7.17); and
(b) Exercise its best efforts to enforce the provisions of its
Dealer Agreements relating to the eligibility criteria for Advances to Dealers
and for Leases, including without limitation:
(i) it has not been rescinded and it is a valid,
binding and enforceable obligation of the applicable
Installment Contract obligor or lessee under such Lease;
(ii) it is enforceable against the applicable
Installment Contract obligor or lessee under such Lease for
the amount shown as owing in the contract and in any related
records;
(iii) it complied at the time it was originated or
made, and is currently in compliance in all respects, with all
requirements of applicable federal, state and local laws, and
regulations thereunder, including, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the
Fair Debt Collection Practices Act, the Federal
85
Trade Commission Act, the Xxxxxxxx-Xxxx Warranty Act, Federal
Reserve Board Regulations B, M and Z, state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code
and any other consumer credit or equal opportunity disclosure;
(iv) it is not subject to any material offset,
credit, allowance or adjustment;
(v) the Company or a Subsidiary has a first and prior
perfected security interest or ownership interest (subject
only to the applicable Lease) (received directly or by
assignment) in the financed or leased vehicle securing the
performance of the applicable Installment Contract obligor or
lessee under such Lease;
(vi) the financed vehicle has been delivered to the
applicable Installment Contract obligor or lessee under such
Lease and, on the date of delivery, satisfied all warranties,
expressed or implied, made to such Installment Contract
obligor or lessee under such Lease; and
(vii) the applicable Installment Contract obligor or
lessee under such Lease owns or leases 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 or Lease.
7.18 Financial Covenant Amendments. In the event that, at any time
while this Agreement is in effect, the Company shall issue any indebtedness for
borrowed money which is not by its terms subordinate and junior to the
Indebtedness hereunder and such indebtedness shall include, or be issued
pursuant to a trust indenture or other agreement which includes, financial
covenants which are not substantially identical to the financial covenants set
forth in this Agreement, the Company shall so advise the Agent in writing. Such
notice shall be accompanied by a copy of the applicable agreement containing
such financial covenants. The Agent shall promptly furnish a copy of such notice
and the applicable agreement to each of the Banks. If the Majority Banks
determine in their sole discretion that some or all of the financial covenants
set forth in such agreement are more favorable to the lender thereunder than the
financial covenants set forth in this Agreement ("More Favorable Terms") and
that the Majority Banks desire that this Agreement be amended to incorporate the
More Favorable Terms, then the Agent shall give written notice of such
determination to the Company. Thereupon, and in any event within thirty (30)
days following the date of notice by Agent to the Company, Company and the Banks
shall enter into an amendment to this Agreement incorporating, on terms and
conditions acceptable to the Majority Banks, the More Favorable Terms.
7.19 Subsidiaries; Guaranties. With respect to each Person which
becomes a Significant 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 Subsidiary (but in any event, in
the case of a Permitted Borrower, prior to the time such Permitted Borrower
86
shall be entitled to request any Advances hereunder), cause such Subsidiary to
execute and deliver to Agent, for and on behalf of each of the Banks, a Joinder
Agreement whereby such Significant Subsidiary becomes obligated as a Guarantor
under the Domestic Guaranty or the Foreign Guaranty, as applicable, together
with such supporting documentation, including without limitation corporate
authority items, certificates and opinions of counsel, as reasonably required by
Agent, acting in its capacity as Collateral Agent, as aforesaid.
7.20 Subsidiaries; Security Documents. (a) Promptly upon the creation
or acquisition of any Significant Domestic Subsidiary, (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;
(a) promptly upon the creation or acquisition of any
Significant Foreign Subsidiary owned directly by the Company or a Domestic
Subsidiary subject to clause (c) of this Section 7.20), pledge to the Agent,
acting in its capacity as Collateral Agent under the Intercreditor Agreement,
sixty-five percent (65%) of the outstanding capital stock of such Significant
Foreign Subsidiary (determined on the basis of the total combined voting power
of all classes of stocks of such subsidiary) to the extent owned by Company or
its Subsidiaries, in a form reasonably satisfactory to the Agent (acting in its
capacity as Collateral Agent, as aforesaid), in each case as security for the
Indebtedness;
(b) intentionally reserved; and
(c) within thirty days following Agent's request (given at the
direction or with the concurrence of the Majority Banks) in the event of a
material change in any Dealer Agreement (or any related document) which, in the
reasonable discretion of Agent and the Majority Banks (supported by an opinion
of counsel) adversely affects any Collateral Document or which necessitates a
change in any Collateral Document in order to provide Agent and the Banks with
the full benefit thereof (and to extend such Collateral Documents to any
additional property rights or interests resulting from any such change in a
Dealer Agreement), enter into such amendments to the Collateral Documents so
affected, on terms and conditions as reasonably required by the Agent, acting in
its capacity as Collateral Agent, as aforesaid, or as Agent hereunder;
together in each case with such supporting documentation, including without
limitation corporate authority items, certificates and opinions of counsel, as
reasonably required by the Agent, acting in its capacity as Collateral Agent as
aforesaid.
7.21 Foreign Subsidiaries Security. If, following a change in the
relevant sections of the Internal Revenue Code or the regulations, rules,
rulings, notices or other official pronouncements issued or promulgated
thereunder, counsel for the Company and the Permitted Borrowers acceptable to
the Agent does not within 90 days after a request from the Agent (given
87
with the concurrence or at the direction of a Supermajority of the Banks)
deliver evidence, in form and substance mutually satisfactory to the Agent and
the Company, that, with respect to each Significant Foreign Subsidiary whose
entire share capital, to the extent owned, directly or indirectly, by the
Company has not been encumbered in favor of the Lenders (a) a pledge of 66-2/3 %
or more of the total combined voting power of all classes of capital stock of
such Foreign Subsidiary entitled to vote and (b) the entering into a guaranty in
substantially the form of the Domestic Guaranty by such Significant Foreign
Subsidiary, in either such case would cause the undistributed earnings of such
Significant Foreign Subsidiary as determined for Federal income tax purposes to
be treated as a deemed dividend to such Significant Foreign Subsidiary's United
States parent for Federal income tax purposes, then in the case of a failure to
deliver the evidence described in clause (a) above, that portion of such
Significant Foreign Subsidiary's outstanding capital stock so issued by such
Significant Foreign Subsidiary not theretofore pledged pursuant to the
Collateral Documents hereunder shall be promptly pledged to the Agent for the
benefit of the Lenders pursuant to the Security Agreement (or another pledge
agreement in substantially similar form, if needed) and, in the case of failure
to deliver the evidence described in clause (b) above, such Significant Foreign
Subsidiary shall promptly execute and deliver the Domestic Guaranty (or another
guaranty in substantially the same form, if needed), in each case to the extent
that entering into a pledge agreement or such Guaranty is permitted under the
laws of the respective foreign jurisdiction and all such documents (including
supporting documentation comparable to that required under Sections 7.19 and
7.20 hereof) delivered pursuant to this Section 7.21 shall be satisfactory to
the Majority Banks.
7.22 Intentionally Reserved.
7.23 Intentionally Reserved
8. NEGATIVE COVENANTS
Company and each of the Permitted Borrowers covenant and agree that, so
long as any of the Banks are committed to make any Advances under this Agreement
and thereafter so long as any Indebtedness remains outstanding, it will not, and
it will not allow its Subsidiaries (but excluding, for purposes of Sections
8.10, 8.13, 8.14 and 8.15 hereof, any Special Purpose Subsidiary), without the
prior written consent of the Majority Banks, to:
8.1 Redemptions. Purchase, acquire or redeem any of its capital stock,
except for a Permitted Repurchase.
8.2 Business Purposes. Engage in, or make any investment in any
business engaged in, the provision of property and casualty insurance unless the
Company or such Subsidiary shall maintain reinsurance of its underwriting risk
with a third party(ies) rated "A-" or better by S&P or "A3" or better by Xxxxx'x
for all of the Company's or such Subsidiary's exposure in excess of one hundred
percent (100%) of the premiums written by the Company or such Subsidiary; or
engage in any business if, after giving effect thereto, the general nature of
the businesses of the Company and its Subsidiaries, taken as a whole, would no
longer be the provision of financing programs for the purchase or lease of used
motor vehicles, motor vehicle service protection programs, credit life, accident
and health insurance programs and other programs related to the foregoing (it
being understood that, in the course of the provision of such programs, the
88
Company may be obligated to remit monies held by it in connection with dealer
holdbacks, claims or refunds under insurance policies, or claims or refunds
under service contracts, and to make deposits in trust or otherwise as required
under reinsurance agreements or pursuant to state regulatory requirements);
provided however that the Company and its Subsidiaries shall manage and operate
such businesses in substantially the same manner that they are managed and
operated as of the date hereof.
8.3 Mergers or Dispositions. Enter into any merger or consolidation,
except for any Permitted Merger or Permitted Transfer under clause (iv) of the
definition thereof, or sell, lease, transfer, relocate or dispose of all,
substantially all, or any material part of its assets, except for Permitted
Transfers and Permitted Securitization(s) and other transfers made pursuant to
the UK Restructuring and except for Program Transfers, provided that, both
before and after giving effect thereto (except in the case of Program
Transfers), no Default or Event of Default has occurred and is continuing.
8.4 Guaranties. Become or remain obligated under or in respect of a
Guarantee Obligation, except by endorsement of cash items for deposit in the
ordinary course of business and except for the Guaranties and the Permitted
Guaranties.
8.5 Debt. Become or remain obligated for any indebtedness for borrowed
money, or for any indebtedness incurred in connection with the acquisition of
any property, real or personal, tangible or intangible, or for any other Debt,
except for:
(a) Indebtedness to Banks hereunder;
(b) current unsecured trade, utility or non-extraordinary
accounts payable arising in the ordinary course of Company's or any Subsidiary's
businesses;
(c) the Future Debt;
(d) Subordinated Debt, provided, however, that on the date any
such Debt is incurred, clauses (a) and (c) of the Funding Conditions shall have
been satisfied;
(e) Permitted CAC UK Debt and overdraft lines of credit which
are unsecured or are secured solely by a guaranty and/or letter of credit
provided by Company or similar credit arrangements maintained by the Permitted
Borrowers in the ordinary course of business in the countries of their
formation, in an amount not to exceed, in the case of CAC UK, Pound
Sterling 4,000,000 and in the case of each of the other Permitted Borrowers,
$3,000,000, or the equivalent thereof in an Alternative Currency;
(f) such other Debt set forth in Schedule 8.5 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 any required amortization according to the terms
thereof) on substantially the same terms and otherwise in compliance with this
Agreement;
(g) (i) Intercompany Loans made pursuant to the UK
Restructuring, (ii) Intercompany Loans by the Company to any Domestic Subsidiary
or by any Domestic
89
Subsidiary to the Company or another Domestic Subsidiary (excluding the Titling
Subsidiary, any Special Purpose Subsidiary and any other Subsidiary excluded
from the definition of Significant Subsidiary by the proviso at the end of such
definition) made while no Default or Event of Default has occurred and is
continuing (both before and after giving effect thereto), provided, however,
that any such Intercompany Loan shall be evidenced by and funded under an
Intercompany Note which shall be pledged (pursuant to the Security Agreement) to
the Agent, in its capacity as Collateral Agent under the Intercreditor
Agreement, as security for the Indebtedness, (iii) Intercompany Loans made to
the Titling Subsidiary, subject to the limits set forth in Section 8.8(i) and
provided, however, that any such Intercompany Loan shall be evidenced by and
funded under an Intercompany Note which shall be pledged (pursuant to the
Security Agreement) to the Agent, in its capacity as Collateral Agent under the
Intercreditor Agreement, as security for the Indebtedness, (iv) Intercompany
Loans by the Company or any Domestic Subsidiary to a Foreign 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, and provided, further, that the
amount of Intercompany Loans under this clause (iv), when included (without
duplication) with Intercompany Loans, Advances and Investments permitted under
clause (iii) of Section 8.8(d) hereof, complies with such Section and (v)
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 the Titling Subsidiary, any Special Purpose
Subsidiary and any other Subsidiary excluded from the definition of Significant
Subsidiary by the proviso at the end of such definition;
(h) Debt incurred by a Special Purpose Subsidiary under, and
secured by assets transferred pursuant to, a Permitted Securitization, whether
or not attributable to the Company under GAAP;
(i) Debt arising under Hedging Agreements entered into by the
Company and/or a Permitted Borrower (copies of which shall be provided to the
Agent promptly following the execution thereof and Permitted Guaranties); and
(j) other Debt for borrowed money in an amount not to exceed
in the aggregate for the Company and its Subsidiaries at any time outstanding,
the sum of Five Million Dollars ($5,000,000) (or the Alternative Currency
equivalent thereof), which Debt shall be unsecured except to the extent of any
Lien permitted under Section 8.6(d) hereof.
8.6 Liens. Permit or suffer any Lien to exist on any of its properties,
real, personal or mixed, tangible or intangible, whether now owned or hereafter
acquired, except:
(a) in favor of Agent, as security for the Indebtedness and
any Liens granted to the holders, to the extent applicable (and subject to the
terms of this Agreement), Future Debt
90
pursuant to Collateral Documents, on an equal and ratable basis with comparable
Liens granted to Agent, for and on behalf of the Banks;
(b) purchase money mortgages or security interests in fixed
assets to secure purchase money Debt for fixed assets (including 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) (or the Alternative Currency equivalent
thereof) 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;
(c) Permitted Liens and any Lien encumbering property
interests, rights or proceeds which are the subject of a transfer or encumbrance
pursuant to a Permitted Securitization; and
(d) Liens on the property of Company or any of its
Subsidiaries other than Advances to Dealers, Leased Vehicles, Installment
Contracts, Leases or financial assets or other property related thereto, not
otherwise permitted under subparagraphs (a) through (c) of this Section 8.6 if
the obligations secured by such Liens do not exceed, in an aggregate amount from
time to time outstanding, One Million Dollars ($1,000,000).
8.7 Acquisitions. Other than (i) any Permitted Acquisition, (ii) any
transfer to the Company or any Subsidiary of any assets or business or ownership
interests by Company or any Subsidiary otherwise permitted by this Agreement or
(iii) any acquisition of any rights or property (including without limitation
Specified Interests and Non-Specified Interests) pursuant to a Permitted
Securitization or pursuant to the UK Restructuring or the Stapled Stock
Restructuring, purchase or otherwise acquire or become obligated for the
purchase of all or substantially all of the assets or business interests of any
Person, firm or corporation, or any shares of stock (or other ownership
interests) of any corporation, trusteeship or association, or any business or
going concern, or in any other manner effectuate or attempt to effectuate an
expansion of present business by acquisition.
8.8 Investments. Make or allow to remain outstanding any Investment in,
or any loans or advances to, any Person, firm, corporation or other entity or
association, other than:
(a) any loan or other advance by Company or a Subsidiary, as
the case may be, to any and all of its officers or employees, as the case may
be, in the normal course of business, so long as the aggregate of all such loans
or advances by the Company and its Subsidiaries does not exceed Three Million
Dollars ($3,000,000) (or the equivalent thereof in an Alternative Currency) at
any time outstanding, plus reasonable, reimbursable business and travel
expenses;
(b) Permitted Investments at any time outstanding or in
effect;
(c) Investments in Company's Subsidiaries existing as of the
date of this Agreement;
91
(d) (i) Intercompany Loans, Advances and Investments made
pursuant to the UK 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) pursuant to the
Stapled Stock Restructuring, as shown on Exhibit R hereto, and Intercompany
Loans, Advances and Investments made to the Company or another Subsidiary by a
Foreign Subsidiary pursuant to the Stapled Stock Restructuring, (ii)
Intercompany Loans, Advances and Investments to or in the Company or any
Domestic Subsidiary (excluding the Titling Company, any Special Purpose
Subsidiary and any other Subsidiary excluded from the definition of Significant
Subsidiary by the proviso at the end of such definition), or any Person that
concurrently with such Investment becomes a Domestic Subsidiary, made while no
Default or Event of Default has occurred and is continuing, and (iii)
Intercompany Loans, Advances and Investments from and after the date hereof to
or in any Foreign Subsidiaries while no Default or Event of Default has occurred
and is continuing (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) or any Person that concurrently with such
Investment becomes a Foreign 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), in an aggregate amount
for all such Intercompany Loans, Advances and Investments under this clause
(iii) (expressly excluding those made pursuant to the UK Restructuring or the
Stapled Stock Restructuring and Guarantee Obligations in favor of the Banks) at
any time outstanding, not to exceed in the aggregate thirty percent (30%) of
Company's Consolidated Tangible Net Worth;
(e) Floor Plan Receivables and Notes Receivable in the
ordinary course of business;
(f) Advances to Dealers, Leased Vehicles and, subject to the
limitation contained in subparagraph (e) of this Section 8.8, receivables
arising from the sale or lease of goods and services by the Company or its
Subsidiaries, in each case in the ordinary course of business of Company and its
Subsidiaries;
(g) Permitted Acquisition(s) and Permitted Merger(s), to the
extent any such acquisition or merger shall be deemed to constitute an
Investment or any Investment in Program Contracts which is not prohibited by
Section 8.18 hereof or in Installment Contracts required to be repurchased by
the Company or a Subsidiary under a Program Agreement;
(h) Those Investments set forth on the attached Schedule 8.8;
(i) Intercompany Loans, Advances and Investments by the
Company to or in the Titling Subsidiary, each such loan, advance or investment
being (x) allocated to the Non-Specified Interest and made by Company in the
ordinary course of conducting its leasing business through the Titling
Subsidiary, including without limitation any advances or investments made by the
Company (acting as administrative agent under the Titling Subsidiary Agreements)
to or in the Titling Subsidiary to reacquire Leases and the related leased
vehicles as may be required from time to time under the Administrative Agency
Agreement, but only to the extent such Leases (and leased vehicles) are
allocated to the Non-Specified Interest immediately prior to the making of the
related loan, advance or investment or (y) allocated to a Specified
92
Interest and made pursuant to a Permitted Guaranty under clauses (iii)(B), (C)
or (D) of the definition thereof;
(j) Investments in any Subsidiary (including, without
limitation, any Special Purpose Subsidiary) from and after the date hereof,
consisting of (w) dispositions made pursuant to a Permitted Securitization and
the resultant Debt issued by a Special Purpose Subsidiary to another Subsidiary
as part of a Permitted Securitization, in each case to the extent constituting
Investments hereunder; (x) advances by Company (as servicer or administrative
agent) which are permitted under the definition of Permitted Guaranties; (y) the
repurchase or replacement from and after the Effective Date hereof of an
aggregate amount not to exceed $5,000,000 in Advances to Dealers, Leased
Vehicles, Installment Contracts (whether assigned outright or related to
Advances to Dealers) or Leases (whether assigned outright or related to Leased
Vehicles) subsequently determined not to satisfy the eligibility standards
contained in the applicable Securitization Documents relating to a Permitted
Securitization or otherwise required to be repurchased by the applicable
Securitization Documents entered into in compliance with the terms of this
Agreement, so long as (i) such replacement is accompanied by the repurchase of
or release of encumbrances on such financial assets previously transferred or
encumbered pursuant to such securitization and in the amount thereof, (ii) any
replacement Advances to Dealers, Leased Vehicles, Installment Contracts (whether
assigned outright or related to Advances to Dealers) or Leases (whether assigned
outright or related to Leased Vehicles) 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; and
(k) Investments, other than those set forth in subparagraphs
(a) through (j) above, in an aggregate amount at any time outstanding not to
exceed Five Million Dollars ($5,000,000), or the equivalent thereof in an
Alternative Currency.
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.
8.9 Accounts Receivable and Other Financial Assets. Except (i) to
Agent, in its capacity as Agent for and on behalf of the Banks or in its
capacity as Collateral Agent under the Intercreditor Agreement or (ii) pursuant
to a Permitted Transfer or pursuant to or (iii) in connection with a Permitted
Securitization or a Program Transfer or (iv) pursuant to the UK Restructuring,
sell, transfer, or assign or reallocate from the Non-Specified Interest to a
Specified Interest any account, note, trade acceptance receivable, lease or
other financial asset, unless such sale, transfer, assignment or reallocation
has been made in the ordinary course of business or, if not in the ordinary
course of business, the sum of (x) the face value of the accounts, notes or
trade acceptance receivables, leases or other financial assets proposed to be
transferred, plus (y) the face value of the accounts, notes or trade acceptance
receivables, leases or other financial assets transferred by the Company and its
Subsidiaries, excluding the face value of accounts,
93
notes or trade acceptance receivables, leases and other financial assets
transferred pursuant to clauses (i), (ii), (iii) and (iv) above, since June 30th
of the preceding calendar year, does not exceed Fifteen Million Dollars
($15,000,000) or the equivalent thereof in any Alternative Currency; provided,
however, that in the case of all sales, transfers, assignments or reallocations
permitted under this Section 8.9, no Default or Event of Default shall have
occurred and be continuing (both before and after giving effect thereto) and
both before and after giving effect to such disposition (and taking into account
any reduction in the Indebtedness with the proceeds of such disposition as
required hereunder), the Company shall be in compliance with the Borrowing Base
Limitation, as confirmed by a Borrowing Base Certificate (and any supporting
information reasonably required by the Agent) submitted by the Company not less
than five (5) Business Days prior to the date of such disposition, and dated as
of the proposed date of such disposition, and by an updated Borrowing Base
Certificate (to be provided within 10 Business Days of the date of such
disposition).
8.10 Transactions with Affiliates. Enter into any transaction with any
of its stockholders or officers or its Affiliates (including without limitation
affiliated Dealers), except in the ordinary course of business and on terms not
materially less favorable than would be usual and customary in similar
transactions between Persons dealing at arm's length.
8.11 No Further Negative Pledges. Enter into or become subject to any
agreement (i) prohibiting the guaranteeing by the Company or any Subsidiary of
any obligations, (ii) prohibiting the creation or assumption of any lien or
encumbrance upon the properties or assets of the Company or any Subsidiary,
whether now owned or hereafter acquired, or (iii) requiring an obligation to
become secured (or further secured) if another obligation is secured or further
secured, other than (A) loan documents evidencing or otherwise related to the
Future Debt, the Permitted CAC UK 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 Program Agreement, but only to the extent of the Program
Contacts to be transferred to the Program Participant thereunder, and (C) 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.
8.12 Prepayment of Debts. Except for Permitted Prepayments and for
prepayments of Intercompany Loans made pursuant to the UK Restructuring or in
accordance with the form of Intercompany Note, attached hereto, prepay,
purchase, redeem or defease any Debt for money borrowed, excluding, subject to
the terms hereof, the Indebtedness, and excluding (i) paydowns from time to time
of permitted working capital facilities or other revolving debt, (ii) mandatory
payments, prepayments or redemptions of Future Debt and (iii) with respect only
to Permitted Securitizations, any payment pursuant to a Cleanup Call.
8.13 Amendment of Future Debt Documents. Except with the prior written
approval of Agent and the Majority Banks, amend, modify or otherwise alter (or
suffer to be amended,
94
modified or altered) or waive (or permit to be waived) in any material respect,
any documents or instruments evidencing or otherwise related to Future Debt so
as to shorten the original maturity date or amortization schedule thereof, or
amend, modify or otherwise alter (or suffer to be amended, modified or altered)
any documents or instruments evidencing or otherwise related to Future Debt to
include (or enter into any Future Debt Documents which include) any covenants or
other provisions that require, for the amendment of any term or provision of
this Agreement, or the waiver of any term or provision hereof, the approval or
consent of any other creditor of the Company; provided, however, that, solely
for purposes of this Section 8.13, any Bank which fails, within fifteen (15)
Business Days of receipt of a written notice from Company of its intent to make
such amendment, modification or alteration (or waiver) in respect of the Future
Debt, (accompanied by a summary, in reasonable detail, of the proposed terms and
conditions thereof, captioned "notice of intent to amend Future Debt" and
stating that approval is deemed to be given if an objection is not made within
fifteen (15) Business Days of receipt of such notice), to object in writing to
such action shall be deemed to have given its approval of such amendment,
modification, alteration or waiver.
8.14 Amendment of Subordinated Debt Documents. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) any of the
material terms and conditions of those documents or instruments evidencing or
otherwise related to Subordinated Debt (once approved by the requisite Banks) or
waive (or permit to be waived) any such provision thereof in any material
respect, without the prior written approval of Agent and the Majority Banks. For
purposes of those documents and instruments evidencing or otherwise related to
the Subordinated Debt, any increase in the original interest rate or principal
amount, any shortening of the original amortization, any change in any default,
remedial or other repayment terms, any change in or waiver of conditions
contained therein which are required under or necessary for compliance with this
Agreement or the other Loan Documents or any change in the subordination
provisions contained therein, shall (without reducing the scope of this Section
8.14) be deemed to be material.
8.15 Limitation on Dividends. Declare, make or otherwise set apart,
directly or indirectly, any funds or other property for, or incur any liability
to make any dividend or other distribution, direct or indirect and whether
payable in cash or property, on account of any capital stock or other equity
interest of the Company or any of its Subsidiaries, except to the extent that
any such dividend or distribution (i) is payable to the Company or any of its
Subsidiaries or (ii) is payable solely in capital stock or other equity
interests of the Company or any such Subsidiary (other than any Special Purpose
Subsidiary), unless, at the time of such action (and giving effect thereto) no
Default or Event of Default has occurred and is continuing.
8.16 Securitization Transaction; Amendments to Securitization
Documents. Engage in a Securitization Transaction, other than a Permitted
Securitization and, except in connection with a Permitted Securitization, assign
and transfer any financial assets to a Securitized Pool or allocate or
reallocate Leases, Leased Vehicles or other financial assets to a Specified
Interest, 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
95
be deemed solely those terms or conditions with respect to servicer fees,
servicer expenses, defaults, events of default, recourse to the Company or any
Subsidiary (other than a Special Purpose Subsidiary), Cleanup Calls or
conditions contained therein which are required under or necessary for
compliance with this Agreement.
8.17 Amendments to Titling Subsidiary Agreements. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) in any material
respect adverse to the Banks, any of the Titling Subsidiary Agreements or any
other documents or instruments relating to the establishment or operation of the
Titling Subsidiary. For purposes of such documents or instruments, any
amendments to or changes in the provisions relating to the creation or transfer
of Specified Interests and the allocation or reallocation of financial assets or
other property thereto, and any amendment, modification, resignation or removal
whereby the Company shall cease to be the founding member of or otherwise cease
to control the Titling Subsidiary or cease to be the administrative agent under
the Administrative Agency Agreement shall (without reducing the scope of this
Section 8.13) be deemed to be materially adverse to the Banks.
8.18 Program Agreements. (a) Amend, modify or otherwise alter (or
suffer to be amended, modified or altered), any Program Agreement or any other
document or instrument relating thereto unless (i) not less than three (3)
Business Days prior to the effective date of any such amendment or modification,
Company has provided written notice to Agent (accompanied by a copy of any such
proposed amendment or modification and reasonable supporting information) and
(ii) any such amendment, modification or alteration could not reasonably be
expected to have a Material Adverse Effect (as reasonably determined by the
Agent) or is approved by the Majority Banks; and
(a) make an Investment or otherwise provide funds,
directly or indirectly, in an aggregate amount at any time outstanding in excess
of $2,000,000 to Company's Dealers in connection with the origination of Program
Contracts or Program Transfers, except to the extent such funds are obtained, in
cash, from the applicable Program Participant prior to any such Investment or
other provision of funds, or make any commitment to a Program Participant to do
so.
9. DEFAULTS
9.1 Events of Default. Any of the following events is an "Event of
Default":
(a) non-payment of the principal or interest, when due,
under any of the Notes issued hereunder, or of any Letter of Credit Obligation
in accordance with the terms thereof;
(b) Default in the payment of any money by Company or the
Permitted Borrowers under this Agreement (other than as set forth in subsection
(a), above), within three (3) days of the date the same is due and payable;
(c) default in the observance or performance of any of
the other conditions, covenants or agreements set forth in this Agreement or any
of the other Loan Documents by any party thereto (provided that, with respect to
the covenants set forth in Sections 7.9, 7.11, 7.14, 7.15 and 7.16(a) hereof,
such event has continued for thirty (30) consecutive days) or the occurrence of
any other default or event of default, as the case may be, hereunder or
thereunder;
96
(d) any representation or warranty made or deemed made by
Company or a Permitted Borrower herein or in any instrument submitted pursuant
hereto or by any other party to the Loan Documents proves untrue in any material
adverse respect when made or deemed made;
(e) any provision of the Company Guaranty, the Domestic
Guaranty or the Foreign 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
Company Guaranty, the Domestic Guaranty or the Foreign Guaranty or any of the
Collateral Documents, as applicable, or the Company Guaranty, the Domestic
Guaranty or the Foreign Guaranty or any of the Collateral Documents shall be
terminated, invalidated, revoked or set aside or in any way cease to give or
provide to the Banks and the Agent the benefits purported to be created thereby;
(f) default in the payment of any other obligation of
Company, its Subsidiaries or any of the Permitted Borrowers for borrowed money
in an aggregate amount in excess of Five Million Dollars ($5,000,000), or the
equivalent thereof in an Alternative Currency; 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), or the equivalent thereof in an
Alternative Currency, sufficient to permit the holder thereof to accelerate the
maturity of such obligation or, with respect to the Securitization Documents,
(i) the occurrence (beyond any applicable period of grace or cure) of any
"servicer event of default" thereunder or (ii) the occurrence of any other
default (beyond any applicable period of grace or cure) by Company or any of its
Subsidiaries, including any Special Purpose Subsidiary, under the Securitization
Documents, which can be reasonably expected to result in recourse liability
against the Company or any of its Subsidiaries (other than a Special Purpose
Subsidiary) in an aggregate amount exceeding $5,000,000 or, with respect to the
Administrative Agency Agreement, the occurrence (beyond any applicable period of
grace or cure) of any "administrative agent event of default" thereunder
relating to or otherwise enforceable by the holder of a Specified Interest.
(g) a final judgment or final judgments for the payment of
money aggregating in excess of Five Million Dollars ($5,000,000), or the
equivalent thereof in an Alternative Currency, shall be outstanding against any
one or more of the Company and its Subsidiaries and any one of such judgments
shall have been outstanding for more than thirty (30) days from the date of its
entry, except to the extent that any such judgment is being contested in good
faith by appropriate proceedings which provide for a stay of any enforcement
action against the Company or such Subsidiary during the pendency of such
proceedings and for which adequate reserves have been established and where
nonpayment of such judgment could not reasonably be expected to have a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole;
(h) any Person shall engage in any Prohibited Transaction
involving any Pension Plan, (ii) any accumulated funding deficiency (as defined
in Section 6.18 hereof),
97
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;
(i) (a) Any Person or group of Persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended),
other than Xxxxxx Xxxx, his wife and children or trust(s) established for his or
their benefit, shall acquire beneficial ownership (within the meaning of Rule
13d-3 promulgated under such Act) of more than 50% of the outstanding securities
(on a fully diluted basis and taking into account any securities or contract
rights exercisable, exchangeable or convertible into equity securities) of the
Company having voting rights in the election of directors under normal
circumstances; or (b) a majority of the members of the Board of Directors of the
Company shall cease to be Continuing Members. For purposes of the foregoing;
"Continuing Member" means a member of the Board of Directors of the Company who
either (i) was a member of the Company's Board of Directors on the Effective
Date and has been such continuously thereafter or (ii) became a member of such
Board of Directors after the Effective Date and whose election or nomination for
election was approved by a vote of the majority of the Continuing Members who
are then members of the Company's Board of Directors; or (c) there shall occur a
"Change in Control" (or equivalent event thereunder) under the documents
relating to any Future Debt then outstanding; or
(j) a receiver, liquidator, custodian or trustee of the
Company or any Subsidiary, or of all or any part of the property of the Company
or any Subsidiary, shall be appointed by court order and such order shall remain
in effect for more than sixty (60) days, or an order for relief shall be entered
with respect to the Company or any Subsidiary, or the Company or any Subsidiary
shall be adjudicated a bankrupt or insolvent; or any of the property of the
Company or any Subsidiary shall be sequestered by court order and such order
shall remain in effect for more than sixty (60) days; or a petition shall be
filed against the Company or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, and
shall not be dismissed within sixty (60) days after such filing; or the Company
or any Subsidiary shall file a petition in voluntary bankruptcy or seeking
relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or shall consent to the filing
of any petition against it under any such law; or the Company or any Subsidiary
shall make an assignment for the benefit of its creditors, or shall admit in
writing its inability, or shall fail, to pay its debts generally as they become
due, or shall consent to the appointment of a receiver,
98
liquidator or trustee of the Company or any Subsidiary or of all or any part of
the property of the Company or any Subsidiary.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent shall, if directed to do so by the Majority
Banks, declare any commitment of the Banks to extend credit hereunder
immediately terminated; (b) the Agent shall, if directed to do so by the
Majority Banks, declare the entire unpaid Indebtedness, including the Notes,
immediately due and payable, without presentment, notice or demand, all of which
are hereby expressly waived by Company and the Permitted Borrowers; (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.
9.3 Rights Cumulative. No delay or failure of Agent and/or Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof, or the exercise of any other power, right
or privilege. The rights of Banks under this Agreement are cumulative and not
exclusive of any right or remedies which Banks would otherwise have.
9.4 Waiver by Company and Permitted Borrowers of Certain Laws. To the
extent permitted by applicable law, Company and each of the Permitted Borrowers
hereby agree to waive, and do 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 OR ANY OF THE PERMITTED
BORROWERS, ON THE OTHER HAND, ARE PARTIES, WHETHER OR NOT SUCH ACTIONS OR
PROCEEDINGS ARISE OUT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR
OTHERWISE. These waivers have been voluntarily given, with full knowledge of the
consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the
Banks except in a writing signed by an officer of the Agent in accordance with
Section 13.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude any
other or further exercise of the Banks' rights by Agent. No waiver of any Event
of Default shall extend to any other or further Event of Default. No forbearance
on the part
99
of the Agent in enforcing any of the Banks' rights shall constitute a waiver of
any of their rights. Company and the Permitted Borrowers expressly agree that
this Section may not be waived or modified by the Banks or Agent by course of
performance, estoppel or otherwise.
9.6 Cross-Default. In addition to the other Events of Default specified
herein, any failure to perform and discharge when due, after allowance for any
applicable cure period, any of the obligations, covenants and agreements
required to be performed under the provisions of any instruments securing any
other present and future borrowings of Company or the Permitted Borrowers 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.
10.1 Payment Procedure.
(a) All payments by Company and/or by any of the Permitted
Borrowers of principal of, or interest on the Revolving Credit Notes or the
Swing Line Notes or of Letter of Credit Obligations or Fees shall be made
without setoff or counterclaim on the date specified for payment under this
Agreement not later than 11:00 a.m. (Detroit time) in Dollars in immediately
available funds to Agent, for the ratable account of the Banks, at Agent's
office located at Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, in respect of
Domestic Advances or Fees payable in Dollars. Payments made in respect of any
Advance in any Alternative Currency or any Fees payable in any Alternative
Currency shall be made in such Alternative Currency in immediately available
funds for the account of Agent's Eurocurrency Lending Office, at the Agent's
Correspondent, for the ratable account of the Banks, not later than 11:00 a.m.
(the time of Agent's Correspondent). Upon receipt of each such payment, the
Agent shall make prompt payment to each Bank, or, in respect of
Eurocurrency-based Advances, such Bank's Eurocurrency Lending Office, in like
funds and currencies, of all amounts received by it for the account of such
Bank.
(b) Unless the Agent shall have been notified by the
Company prior to the date on which any payment to be made by the Company or any
of the Permitted Borrowers is due that the Company or such Permitted Borrower
does not intend to remit such payment, the Agent may, in its discretion, assume
that the Company or such Permitted Borrower 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 or any of the Permitted Borrowers has not in fact
remitted such payment to the Agent, each Bank shall forthwith on demand repay to
the Agent in the applicable currency 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
100
annum equal to (i) for Prime-based Advances, the federal funds rate (daily
average), as the same may vary from time to time, and (ii) with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost (including the cost
of maintaining any required reserves or deposit insurance and of any fees,
penalties, overdraft charges or other costs or expenses incurred by Agent) of
carrying such amount.
(c) Whenever any payment to be made hereunder (other than
payments in respect of any Eurocurrency-based Advance or a Quoted Rate Advance)
shall otherwise be due on a day which is not a Business Day, such payment shall
be made on the next succeeding Business Day and such extension of time shall be
included in computing interest, if any, in connection with such payment.
Whenever any payment of principal of, or interest on, a Eurocurrency-based
Advance or a Quoted Rate Advance shall be due on a day which is not a Business
Day the date of payment thereof shall be extended to the next succeeding
Business Day unless as a result thereof it would fall in the next calendar
month, in which case it shall be shortened to the next preceding Business Day
and, in the case of a payment of principal, interest thereon shall be payable
for such extended or shortened time, if any.
(d) All payments to be made by the Company or the
Permitted Borrowers 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 or any of the Permitted Borrowers, as the case may
be, is compelled by law to make payment subject to such tax. In such event,
Company and such Permitted Borrower shall:
(i) pay to the Agent for Agent's own account and/or,
as the case may be, for the account of the Banks (and, in the
case of any Swing Line Advances, pay to the Swing Line Bank
which funded such Advances) such additional amounts as may be
necessary to ensure that the Agent and/or such Bank or Banks
receive a net amount in the applicable Permitted Currency
equal to the full amount which would have been receivable had
payment not been made subject to such tax; and
(ii) remit such tax to the relevant taxing
authorities according to applicable law, and send to the Agent
or the applicable Bank (including the Swing Line Bank) or
Banks, as the case may be, such certificates or certified copy
receipts as the Agent or such Bank or Banks shall reasonably
require as proof of the payment by the Company or such
Permitted Borrower of any such taxes payable by the Company or
such Permitted Borrower.
As used herein, the terms "tax", "taxes" and "taxation" include all
taxes, levies, imposts, duties, charges, fees, deductions and withholdings and
any restrictions or conditions resulting in a charge together with interest
thereon and fines and penalties with respect thereto which may be imposed by
reason of any violation or default with respect to the law regarding such tax,
assessed as a result of or in connection with the transactions in any
Alternative Currency hereunder, or the payment and/or receipt of funds in any
Alternative Currency hereunder, or the
101
payment or delivery of funds into or out of any jurisdiction other than the
United States (whether assessed against Company, the Permitted Borrower, Agent
or any of the Banks).
10.2 Application of Proceeds. Notwithstanding anything to the contrary
in this Agreement, after an Event of Default, the proceeds of any offsets,
voluntary payments by the Company or the Permitted Borrowers or others, the
proceeds of any Collateral and any other sums received or collected in respect
of the Indebtedness (net of Agent's reasonable costs and expenses), shall be
applied, first, to Indebtedness evidenced by the Notes or under Hedging
Agreements in such order and manner as determined by the Majority Banks
(subject, however, to the applicable Percentages of the Revolving Credit held by
each of the Banks and provided, however, that the maximum amount of those
proceeds which may be applied to Indebtedness in respect of Hedging Agreements
shall not exceed the maximum amount of the Hedging Reserve stated in the
definition thereof), next, to any other Indebtedness on a pro rata basis, and
then, if there is any excess, to the Company or the Permitted Borrowers, as the
case may be. The application of such proceeds and other sums to the applicable
Indebtedness shall be based on each Bank's Percentage of such Indebtedness.
10.3 Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the Notes (or on account of
its participation in any Letter of Credit) in excess of its pro rata share of
payments then or thereafter obtained by all Banks upon principal of and interest
on all Notes (or such participation), such Bank shall purchase from the other
Banks such participations in the Notes (or subparticipations in the Letters of
Credit) held by them as shall be necessary to cause such purchasing Bank to
share the excess payment or other recovery ratably in accordance with the
Percentages of the Revolving Credit with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing holder, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
10.4 Deposits and Accounts. In addition to and not in limitation of any
rights of any Bank or other holder of any of the Notes under applicable law,
each Bank and each other such holder shall, upon acceleration of the
indebtedness under the Notes and without notice or demand of any kind, have the
right to appropriate and apply to the payment of the Notes owing to it (whether
or not then due) any and all balances, credits, deposits, accounts or moneys of
Company or the Permitted Borrowers then or thereafter with such Bank or other
holder; provided, however, that any such amount so applied by any Bank or other
holder on any of the Notes owing to it shall be subject to the provisions of
Section 10.3 hereof.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
11.1 Reimbursement of Prepayment Costs. If Company or any Permitted
Borrower makes any payment of principal with respect to any Eurocurrency-based
Advance or Quoted Rate Advance on any day other than the last day of the
Interest Period applicable thereto (whether voluntarily, by acceleration, or
otherwise), or converts or refunds (or attempts to convert or refund) any such
Advance; or if Company or any Permitted Borrower fails to borrow, refund or
convert into any Eurocurrency-based Advance or Quoted Rate Advance after notice
has been given by Company or such Permitted Borrower to Agent in accordance with
the terms
102
hereof requesting such Advance, or if Company or any Permitted Borrower fails to
make any payment of principal or interest in respect of a Eurocurrency-based
Advance or Quoted Rate Advance when due, Company shall reimburse Agent and
Banks, as the case may be, on demand for any resulting loss, cost or expense
incurred by Agent and Banks, as the case may be as a result thereof, including,
without limitation, any such loss, cost or expense incurred in obtaining,
liquidating, employing or redeploying deposits from third parties, whether or
not Agent and Banks, as the case may be, shall have funded or committed to fund
such Advance. Such amount payable by Company to Agent and Banks, as the case may
be may include, without limitation, an amount equal to the excess, if any, of
(a) the amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last day
of the relevant Interest Period, at the applicable rate of interest for said
Advance(s) provided under this Agreement, over (b) the amount of interest (as
reasonably determined by Agent and Banks, as the case may be) which would have
accrued to Agent and Banks, as the case may be, on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurocurrency market. Calculation of any amounts payable to any Bank under this
paragraph shall be made as though such Bank shall have actually funded or
committed to fund the relevant Advance through the purchase of an underlying
deposit in an amount equal to the amount of such Advance and having a maturity
comparable to the relevant Interest Period; provided, however, that any Bank may
fund any Eurocurrency-based Advance or Quoted Rate Advance, as the case may be,
in any manner it deems fit and the foregoing assumptions shall be utilized only
for the purpose of the calculation of amounts payable under this paragraph. Upon
the written request of Company, Agent and Banks shall deliver to Company a
certificate setting forth the basis for determining such losses, costs and
expenses, which certificate shall be conclusively presumed correct, absent
manifest error.
11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Bank, as applicable, shall
designate a Eurocurrency Lending Office which maintains books separate from
those of the rest of Agent or such Bank, Agent or such Bank, as the case may be,
shall have the option of maintaining and carrying the relevant Advance on the
books of such Eurocurrency Lending Office.
11.3 Availability of Alternative Currency. The Agent and the Banks
shall not be required to make any Advance in an Alternative Currency if, at any
time prior to making such Advance, the Agent or the Majority Banks (after
consultation with Agent) shall determine, in its or their sole discretion, that
(i) deposits in the applicable Alternative Currency in the amounts and
maturities required to fund such Advance will not be available to the Agent and
the Banks; (ii) a fundamental change has occurred in the foreign exchange or
interbank markets with respect to the applicable Alternative Currency
(including, without limitation, changes in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls); or (iii) it has become otherwise materially impractical for the Agent
or the Banks, as applicable, to make such Advance in the applicable Alternative
Currency. The Agent or the applicable Bank, as the case may be, shall promptly
notify the Company and Banks of any such determination.
11.4 Refunding Advances in Same Currency. If pursuant to any provisions
of this Agreement, the Company or any of the Permitted Borrowers repays one or
more Advances and
103
on the same day borrows an amount in the same currency, the Agent (or the Swing
Line Bank, in the case of a Swing Line Advance) shall apply the proceeds of such
new borrowing to repay the principal of the Advance or Advances being repaid and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be remitted by the Agent to the
Company or such Permitted Borrower, or by the Company or such Permitted Borrower
to the Agent, as the case may be.
11.5 Circumstances Affecting Eurocurrency-based Rate Availability. If
with respect to any Interest Period, Agent or the Majority Banks (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars or in any applicable Alternative Currency, 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
and the Permitted Borrowers. Thereafter, until Agent notifies Company and the
Permitted Borrowers that such circumstances no longer exist, (i) the obligation
of Banks to make Eurocurrency-based Advances (other than in any applicable
Alternative Currency with respect to which deposits are available, as required
hereunder), and the right of Company and the Permitted Borrowers to convert an
Advance to or refund an Advance as a Eurocurrency-based Advance, as the case may
be (other than in any applicable Alternative Currency with respect to which
deposits are available, as required hereunder), shall be suspended, and (ii) the
Company and the Permitted Borrowers shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such Eurocurrency-based
Advance covered hereby in the applicable Permitted Currency, together with
accrued interest thereon, any amounts payable under Sections 11.1 and 11.8
hereof, and all other amounts payable hereunder on the last day of the then
current Interest Period applicable to such Advance. Upon the date for repayment
as aforesaid and unless Company notifies Agent to the contrary within two (2)
Business Days after receiving a notice from Agent pursuant to this Section, such
outstanding principal amount shall be converted to a Prime-based Advance as of
the last day of such Interest Period.
11.6 Laws Affecting Eurocurrency-based Advance Availability. If, after
the date of this Agreement, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate, or in an Alternative Currency, such
Bank shall forthwith give notice thereof to Company and to Agent. Thereafter,
(a) the obligations of Banks to make Eurocurrency-based Advances or Advances in
any such Alternative Currency and the right of Company or any Permitted Borrower
to convert an Advance into or refund an Advance as a Eurocurrency-based Advance
or as an Advance in any such Alternative Currency shall be suspended and
thereafter Company and the Permitted Borrowers may select as Applicable Interest
Rates or as Alternative Currencies only those which remain available and which
are permitted to be selected hereunder, and (b) if any of the Banks may not
lawfully continue to maintain an Advance to the end of the then current Interest
Period applicable thereto as a Eurocurrency-based Advance or in such Alternative
Currency, the applicable Advance shall immediately be converted to a Prime-based
Advance (in the Dollar
104
Amount thereof) and the Prime-based Rate shall be applicable thereto for the
remainder of such Interest Period. For purposes of this Section, a change in
law, rule, regulation, interpretation or administration shall include, without
limitation, any change made or which becomes effective on the basis of a law,
rule, regulation, interpretation or administration presently in force, the
effective date of which change is delayed by the terms of such law, rule,
regulation, interpretation or administration.
11.7 Increased Cost of Eurocurrency-based Advances. If the adoption
after the date of this Agreement of, or any change after the date of this
Agreement in, any applicable law, rule or regulation of or in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Agent or any of the Banks (or any of their respective Eurocurrency
Lending Offices) with any request or directive (whether or not having the force
of law) made by any such authority, central bank or comparable agency after the
date hereof:
(a) shall subject any of the Banks (or any of their respective
Eurocurrency Lending Offices) to any tax, duty or other charge with respect to
any Advance or any Note or shall change the basis of taxation of payments to any
of the Banks (or any of their respective Eurocurrency Lending Offices) of the
principal of or interest on any Advance or any Note or any other amounts due
under this Agreement in respect thereof (except for changes in the rate of tax
on the overall net income of any of the Banks or any of their respective
Eurocurrency Lending Offices imposed by the jurisdiction in which such Bank's
principal executive office or Eurocurrency Lending Office is located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any of the Banks
(or any of their respective Eurocurrency Lending Offices) or shall impose on any
of the Banks (or any of their respective Eurocurrency Lending Offices) or the
foreign exchange and interbank markets any other condition affecting any Advance
or any of the Notes;
and the result of any of the foregoing is to increase the costs to any of the
Banks of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or as an Advance in any Alternative Currency or to
reduce the amount of any sum received or receivable by any of the Banks under
this Agreement or under the Notes in respect of a Eurocurrency-based Advance or
any Advance in an Alternative Currency, whether with respect to Advances to
Company or to any of the Permitted Borrowers, then such Bank shall promptly
notify Agent (or, in the case of a Swing Line Advance, shall notify Company and
the applicable Permitted Borrower directly, with a copy of such notice to
Agent), and Agent (or such Bank, as aforesaid) shall promptly notify Company and
Permitted Borrowers 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 and the
Permitted Borrowers of any event of which it has knowledge which will entitle
Banks to compensation pursuant to this Section, or which will cause Company or
Permitted Borrowers to incur additional liability under Sections 11.1 and 11.8
hereof, provided that Agent shall incur no liability whatsoever to the Banks,
Company or
105
Permitted Borrowers in the event it fails to do so. A certificate of Agent (or
such Bank, if applicable) setting forth the basis for determining such
additional amount or amounts necessary to compensate such Bank or Banks shall be
conclusively presumed to be correct save for manifest error. For purposes of
this Section, a change in law, rule, regulation, interpretation, administration,
request or directive shall include, without limitation, any change made or which
becomes effective on the basis of a law, rule, regulation, interpretation,
administration, request or directive presently in force, the effective date of
which change is delayed by the terms of such law, rule, regulation,
interpretation, administration, request or directive.
11.8 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 or any of the Permitted Borrowers to make any payment
when due of any amount due hereunder in connection with a Eurocurrency-based
Advance, (b) due to any failure of the Company or any Permitted Borrower 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 Eurocurrency-based Advance on a date other than the last day
of the Interest Period for such Advance. Such loss or expense shall be
calculated based upon the present value, as applicable, of payments due from the
Company or such Permitted Borrower with respect to a deposit obtained by the
Agent or any of the Banks in order to fund such Advance to the Company or to
such Permitted Borrower. The Agent's and each Bank's, as applicable,
calculations of any such loss or expense shall be furnished to the Company and
shall be conclusive, absent manifest error.
11.9 Judgment Currency. The obligation of the Company and Permitted
Borrowers to make payments of the principal of and interest on the Notes and any
other amounts payable hereunder in the currency specified for such payment
herein or in the Notes shall not be discharged or satisfied by any tender, or
any recovery pursuant to any judgment, which is expressed in or converted into
any other currency, except to the extent that such tender or recovery shall
result in the actual receipt by each of the Banks of the full amount of the
particular Permitted Currency expressed to be payable herein or in the Notes.
The Agent (or the Swing Line Bank, as applicable) shall, using all amounts
obtained or received from the Company and from Permitted Borrowers pursuant to
any such tender or recovery in payment of principal of and interest on the
Notes, promptly purchase the applicable Permitted Currency at the most favorable
spot exchange rate determined by the Agent to be available to it. The obligation
of the Company and the Permitted Borrowers to make payments in the applicable
Permitted Currency shall be enforceable as an alternative or additional cause of
action solely for the purpose of recovering in the applicable Permitted Currency
the amount, if any, by which such actual receipt shall fall short of the full
amount of the Permitted Currency expressed to be payable herein or in the Notes.
11.10 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 11.7
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
106
Banks or any corporation controlling such Banks, as the case may be (or shall
increase the amount of capital required under such law, as of the date hereof,
to be so maintained), the Agent, in consultation with the Banks, shall notify
the Company. The Company and the Agent shall thereafter negotiate in good faith
an agreement to increase the Revolving Credit Facility Fee, or other fees
payable to the Agent, for the benefit of the Banks under this Agreement, which
in the opinion of the Agent (in consultation with the Banks), will adequately
compensate the Banks for the costs associated with such change in law. If such
increase is approved in writing by the Company within thirty (30) days from the
date of the notice to the Company from the Agent, the Revolving Credit Facility
Fee or other fees (if applicable) payable by the Company under this Agreement
shall, effective from the date of such agreement, include the amount of such
agreed increase. If the Company and the Agent (in consultation with the Banks)
are unable to agree on such an increase within thirty (30) days from the date of
the notice to the Company, the Company shall have the option, exercised by
written notice to the Agent within forty-five (45) days from the date of the
aforesaid notice to the Company from the Agent, to terminate the Revolving
Credit and the Swing Line, as the case may be, or other commitments if
applicable, in which event, all sums then outstanding to Banks and to Agent
hereunder shall be due and payable in full. If (a) the Company and the Agent (in
consultation with the Banks) fail to agree on an increase in the Revolving
Credit Facility Fee or other fees (if applicable), and (b) the Company fails to
give timely notice that it has elected to exercise its option to terminate the
Revolving Credit or other commitments, if applicable, as set forth above, then
the Revolving Credit and the Swing Line, and such other commitments shall
automatically terminate as of the last day of the aforesaid forty-five (45) day
period, in which event all sums then outstanding to Banks and to Agent hereunder
shall be due and payable in full.
11.11 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 applicable
Borrower. Comerica Bank, in its capacity as a Bank and as Swing Line Bank,
hereby designates its Canadian Affiliate to make Advances hereunder in C$.
12. AGENT
12.1 Appointment of Agent. Each Bank and the holder of each Note
appoints and authorizes Agent to act on behalf of such Bank or holder under the
Loan Documents and to exercise such powers hereunder and thereunder as are
specifically delegated to or required of Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. Each Bank
agrees (which agreement shall survive any termination of this Agreement) to
reimburse Agent for all reasonable out-of-pocket expenses (including house and
outside attorneys' fees) incurred by Agent hereunder or in connection herewith
or with an Event of Default or in enforcing the obligations of Company or any of
the Permitted Borrowers under this Agreement or the other Loan Documents or any
other instrument executed pursuant hereto, and for which Agent is not reimbursed
by Company or such Permitted Borrower, pro rata according to such Bank's
Percentage, but excluding any such expenses resulting from Agent's gross
negligence or willful misconduct. Agent shall not be required to take any action
under the Loan Documents, or to prosecute or defend any suit in respect of the
Loan Documents, unless
107
indemnified to its satisfaction by the Banks against loss, costs, liability and
expense (excluding liability resulting from its gross negligence or willful
misconduct). If any indemnity furnished to Agent shall become impaired, it may
call for additional indemnity and cease to do the acts indemnified against until
such additional indemnity is given.
12.2 Deposit Account with Agent. Each of Company and the Permitted
Borrowers hereby authorizes Agent to charge its general deposit account, if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same becomes due and payable
under the terms of this Agreement or the Notes.
12.3 Exculpatory Provisions. Agent agrees to exercise its rights and
powers, and to perform its duties, as Agent hereunder and under the other Loan
Documents in accordance with its usual customs and practices in bank-agency
transactions, but only upon and subject to the express terms and conditions of
this Section 12 (and no implied covenants or other obligations shall be read
into this Agreement against the Agent); neither Agent nor any of its directors,
officers, employees or agents shall be liable to any Bank for any action taken
or omitted to be taken by it or them under this Agreement or any document
executed pursuant hereto, or in connection herewith or therewith, except for its
or their own willful misconduct or gross negligence, nor be responsible for any
recitals or warranties herein or therein, or for the effectiveness,
enforceability, validity or due execution of this Agreement or any document
executed pursuant hereto, or any security thereunder, or to make any inquiry
respecting the performance by Company, any of its Subsidiaries or any of the
Permitted Borrowers of its obligations hereunder or thereunder. Agent shall not
have, or be deemed to have, a fiduciary relationship with any Bank by reason of
this Agreement. Agent shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement or
writing which it believes to be genuine and to have been presented by a proper
person.
12.4 Successor Agents. Agent may resign as such at any time upon at
least 30 days prior notice to Company and all Banks. If Agent at any time shall
resign or if the office of Agent shall become vacant for any other reason,
Majority Banks shall, by written instrument, appoint a successor Agent
(consisting of the Syndication Agent, or of any other Bank or financial
institution satisfactory to such Majority Banks) which shall thereupon become
Agent hereunder and shall be entitled to receive from the prior Agent such
documents of transfer and assignment as such successor Agent may reasonably
request. Such successor Agent shall succeed to all of the rights and obligations
of the retiring Agent as if originally named. The retiring Agent shall duly
assign, transfer and deliver to such successor Agent all moneys at the time held
by the retiring Agent hereunder after deducting therefrom its expenses for which
it is entitled to be reimbursed. Upon such succession of any such successor
Agent, the retiring agent shall be discharged from its duties and obligations
hereunder, except for its gross negligence or willful misconduct arising prior
to its retirement hereunder, and the provisions of this Section 12 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
12.5 Loans by Agent. Agent shall have the same rights and powers with
respect to the credit extended by it and the Notes held by it as any Bank and
may exercise the same as if it were not Agent, and the term "Bank" and, when
appropriate, "holder" shall include Agent in its individual capacity.
108
12.6 Credit Decisions. Each Bank acknowledges that it has,
independently of Agent and each other Bank and based on the financial statements
of Company, the Permitted Borrowers and the Subsidiaries and such other
documents, information and investigations as it has deemed appropriate, made its
own credit decision to extend credit hereunder from time to time. Each Bank also
acknowledges that it will, independently of Agent and each other Bank and based
on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any document executed pursuant hereto.
12.7 Notices by Agent. Agent shall give prompt notice to each Bank of
its receipt of each notice or request required or permitted to be given to Agent
by Company or a Permitted Borrower 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 or any of the Permitted Borrowers under the terms
hereof, or other material information or documents received by Agent, in its
capacity as Agent, from the Company, its Subsidiaries or the Permitted
Borrowers.
12.8 Agent's Fees. Commencing on July 1, 2001 and on the first day of
each calendar quarter thereafter until the Indebtedness has been repaid and no
commitment to fund any loan hereunder is outstanding, the Company and the
Permitted Borrower, jointly and severally, shall pay to Agent an agency fee set
forth (or to be set forth from time to time) in a letter agreement between or
among Company, Permitted Borrowers and Agent. The Agent's Fees described in this
Section 12.8 shall not be refundable under any circumstances.
12.9 Nature of Agency. The appointment of Agent as agent is for the
convenience of Banks, Company and the Permitted Borrowers in making Advances of
the Revolving Credit or any other Indebtedness of Company or the Permitted
Borrowers hereunder, and collecting fees and principal and interest on the
Indebtedness. No Bank is purchasing any Indebtedness from Agent and this
Agreement is not intended to be a purchase or participation agreement.
12.10 Authority of Agent to Enforce Notes and This Agreement. Each
Bank, subject to the terms and conditions of this Agreement (including, without
limitation, any required approval or direction of the Majority Banks or the
Banks, as applicable, to be obtained by or given to the Agent hereunder),
authorizes the Agent with full power and authority as attorney-in-fact to
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, any of the Permitted Borrowers
or its creditors or affecting its properties, and to take such other actions
which Agent considers to be necessary or desirable for the protection,
collection and enforcement of the Notes, this Agreement or the other Loan
Documents, but in each case only to the extent of any required approval or
direction of the Majority Banks or the Banks, as applicable, obtained by or
given to the Agent hereunder.
12.11 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such, to the extent not reimbursed by the Company or the Permitted
Borrowers, 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
109
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any of the other Loan Documents or any action taken or omitted to
be taken or suffered in good faith by the Agent hereunder, provided that no Bank
shall be liable for any portion of any of the foregoing items resulting from the
gross negligence or willful misconduct of the Agent or any of its officers,
employees, directors or agents.
12.12 Knowledge of Default. It is expressly understood and agreed that
the Agent (whether in its capacity as issuing bank, Swing Line Bank or
otherwise) shall be entitled to assume that no Default or Event of Default has
occurred and is continuing, unless the officers of the Agent immediately
responsible for matters concerning this Agreement shall have actual (rather than
constructive) knowledge of such occurrence or shall have been notified in
writing by a Bank that such Bank considers that a Default or an Event of Default
has occurred and is continuing, and specifying the nature thereof. Upon
obtaining actual knowledge of any Default or Event of Default as described
above, the Agent shall promptly, but in any event within three (3) Business Days
after obtaining knowledge thereof, notify each Bank of such Default or Event of
Default and the action, if any, the Agent proposes be taken with respect
thereto.
12.13 Agent's Authorization; Action by Banks. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make any
request, or to take any other action, on behalf of the Banks (including without
limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice (subject to the requirement that amendments, waivers
or consents under Section 13.11 hereof be made in writing by the Majority Banks
or all the Banks, as applicable), or (ii) pursuant to the written consent of the
requisite Percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
12.14 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct. Except as otherwise expressly provided in any of the Loan Documents,
Agent will not (and will not be obligated to) take any action, assert any rights
or pursue any remedies under this Agreement or any of the other Loan Documents
in violation or contravention of any express direction or instruction of the
Majority Banks or all of the Banks, as the case may be (as provided for
hereunder). Agent may refuse (and will not be obligated) to take any action,
assert any rights or pursue any remedies under this Agreement or any of the
other Loan Documents in the absence of the express written direction and
instruction of the Majority Banks or all of the Banks, as the case may be (as
provided for hereunder). In the event Agent fails, within a commercially
reasonable time, to take such action, assert such rights, or pursue such
remedies as the Majority Banks or all of the Banks, as the case may be (as
provided for
110
hereunder), shall direct in conformity with this Agreement, the Majority Banks
or all of the Banks, as the case may be (as provided for hereunder), shall have
the right to take such action, to assert such rights, or pursue such remedies on
behalf of all of the Banks unless the terms hereof otherwise require the consent
of all the Banks to the taking of such actions (in which event all of the Banks
must join in such action). Except as expressly provided above or elsewhere in
this Agreement or the other Loan Documents, no Bank (other than the Agent,
acting in its capacity as Agent) shall be entitled to take any enforcement
action of any kind under any of the Loan Documents.
12.15 Lead Arranger. Banc of America Securities, LLC has been
designated by the Company as "Lead Arranger" (and sole book manager) under this
Agreement. Other than its rights and remedies as a Bank hereunder, if
applicable, the Lead Arranger shall have no administrative, collateral or other
rights or responsibilities, provided, however, that the Lead Arranger shall be
entitled to the benefits afforded to Agent under Sections 12.5, 12.6 and 12.11
hereof.
12.16 Collateral Matters. (a) The Agent is authorized on behalf of all
the Banks, without the necessity of any notice to or further consent from the
Banks (but subject to the Intercreditor Agreement), from time to time to take
any action with respect to any Collateral or the Collateral Documents which may
be necessary to perfect and maintain a perfected security interest in and Liens
upon the Collateral granted pursuant to the Loan Documents.
(a) The Banks irrevocably authorize the Agent, at its
option and in its discretion (but subject to the Intercreditor Agreement), to
release any Lien granted to or held by the Agent upon any Collateral (i) upon
termination of the Revolving Credit Maximum Amount and payment in full of all
Indebtedness payable under this Agreement and under any other Loan Document;
(ii) constituting property sold or to be sold or disposed of as part of or in
connection with any disposition not otherwise prohibited hereunder; (iii)
constituting property in which Company or any Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; or (iv) if approved,
authorized or ratified in writing by the Majority Banks, the Supermajority of
the Banks or all the Banks, as the case may be, as provided in Section 13.11.
Upon request by the Agent at any time, the Banks will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this Section 12.16(b).
13. MISCELLANEOUS
13.1 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done in accordance with GAAP.
13.2 Consent to Jurisdiction. Each of the Company and the Permitted
Borrowers 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 each of the Company and the Permitted Borrowers 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. Each of the
111
Permitted Borrowers irrevocably appoints the Company as its agent for service of
process. Each of the Company and the Permitted Borrowers 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 the Permitted
Borrowers or any of its or their property in the courts of any other
jurisdiction. Each of the Company and the Permitted Borrowers hereby irrevocably
waives any objection to the laying of venue of any such suit or proceeding in
the above described courts.
13.3 Law of Michigan. This Agreement and the Notes have been delivered
at Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan, except as and to the extent
expressed to the contrary in any of the Loan Documents. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
13.4 Interest. (a) In the case of any of the Company and the Permitted
Borrowers other than CAC Canada: in the event the obligation of the Company or
any of the Permitted Borrowers to pay interest on the principal balance of the
Notes is or becomes in excess of the maximum interest rate which the Company or
each Permitted Borrower 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 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.
(a) In the case of CAC Canada: If any provision of this
Agreement or any of the other Loan Documents would obligate CAC Canada to make
any payment of interest or other amount payable to any Bank in an amount or
calculated at a rate which would be prohibited by law or would result in a
receipt by that Bank of interest at a criminal rate (as such terms are construed
under the Criminal Code (Canada)) then, notwithstanding such provision, such
amount or rate shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by that Bank of interest at a
criminal rate, such adjustment to be effected, to the extent necessary, as
follows: (a) firstly, by reducing the amount or rate of interest required to be
paid to the affected Bank under this Agreement; and (b) thereafter, by reducing
any fees, commissions, premiums and other amounts required to be paid to the
affected Bank which would constitute interest for purposes of Section 347 of the
Criminal Code (Canada). Notwithstanding the foregoing, and after giving effect
to all adjustments contemplated thereby, if any Bank shall have received an
amount in excess of the maximum permitted by Section 347 of the Criminal Code
(Canada), then CAC Canada making such payment, shall be entitled, by notice in
writing to the affected Bank, to obtain reimbursement from that Bank in an
amount equal to such excess, and
112
pending such reimbursement, such amount shall be deemed to be an amount payable
by that Bank to CAC Canada. Any amount or rate of interest referred to in this
Agreement shall be determined in accordance with generally accepted actuarial
practices and principles as an effective annual rate of interest over the term
that any Advance remains outstanding on the assumption that any charges, fees or
expenses that fall within the meaning of "interest" (as defined in the Criminal
Code (Canada)) shall, if they relate to a specific period of time, be pro-rated
over that period of time and otherwise be pro-rated over the period from the
Effective Date to the Revolving Credit Maturity Date and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Agent shall be conclusive for the purposes of such determination.
13.5 Closing Costs; Other Costs. To the extent not restricted by any
financial assistance provisions of any applicable law, Company and each of the
Permitted Borrowers, jointly and severally, shall pay or reimburse (a) Agent for
payment of, on demand, all reasonable closing costs and expenses, including, by
way of description and not limitation, reasonable in-house and outside attorney
fees and advances, appraisal and accounting fees, lien search fees, and required
travel costs, incurred by Agent in connection with the commitment, consummation
and closing of the loans contemplated hereby, or in connection with any
refinancing or restructuring of the loans or Advances provided under this
Agreement or the other Loan Documents, or any amendment thereof requested by
Company or the Permitted Borrowers, and (b) Agent and each of the Banks, as the
case may be, for all stamp and other taxes and duties payable or determined to
be payable in connection with the execution, delivery, filing or recording of
this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby, and any and all liabilities with respect to or
resulting from any delay in paying or omitting to pay such taxes or duties.
Furthermore, all reasonable costs and expenses, including without limitation
attorney fees, incurred by Agent and, after the occurrence and during the
continuance of an Event of Default, by the Banks in revising, preserving,
protecting, exercising or enforcing any of its or any of the Banks' rights
against Company or the Permitted Borrowers, or otherwise incurred by Agent and
the Banks in connection with any Event of Default or the enforcement of the
loans (whether incurred through negotiations, legal proceedings or otherwise),
including by way of description and not limitation, such charges in any court or
bankruptcy proceedings or arising out of any claim or action by any person
against Agent or any Bank which would not have been asserted were it not for
Agent's or such Bank's relationship with Company and the Permitted Borrowers
hereunder or otherwise, shall also be paid by Company and the Permitted
Borrower. All of said amounts required to be paid by Company and Permitted
Borrowers hereunder and not paid forthwith upon demand, as aforesaid, shall bear
interest, from the date incurred to the date payment is received by Agent, at
the Prime-based Rate, plus two percent (2%).
13.6 Notices. Except as otherwise provided herein, all notices or
demand hereunder to the parties hereto shall be sufficient if made in writing
and delivered by messenger or deposited in the mail (certified or registered
mail (or the equivalent thereof), postage prepaid), and addressed to the parties
as set forth on Schedule 13.6 of this Agreement and to Permitted Borrowers 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. Any notice or demand given to the
Company hereunder shall be
113
deemed given to each of the Permitted Borrowers, whether or not said notice or
demand is addressed to or received by such Permitted Borrower.
13.7 Further Action. Company and the Permitted Borrowers, from time to
time, upon written request of Agent will make, execute, acknowledge and deliver
or cause to be made, executed, acknowledged and delivered, all such further and
additional instruments, and take all such further action, as may be required to
carry out the intent and purpose of this Agreement, and to provide for Advances
under and payment of the Notes, according to the intent and purpose herein and
therein expressed.
13.8 Successors and Assigns; Assignments and Participations.
(a) This Agreement shall be binding upon and shall inure
to the benefit of Company and the Permitted Borrowers and the Banks and their
respective successors and assigns.
(b) The foregoing shall not authorize any assignment by
Company or any of the Permitted Borrowers, of its rights or duties hereunder,
and no such assignment shall be made (or effective) without the prior written
approval of the Banks.
(c) The Company, Permitted Borrowers 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 and each of the Permitted Borrowers authorize
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 and such Permitted Borrower which has been
delivered to such Bank pursuant to this Agreement; provided that each such
prospective participant shall have executed a confidentiality agreement
consistent with the terms of Section 13.13 hereof.
(d) Each assignment by a Bank of any portion of its
rights and obligations hereunder and under the other Loan Documents, other than
assignments to such Bank's Affiliates under Section 13.8(f) hereof, shall be
made pursuant to an Assignment Agreement ("Assignment Agreement") substantially
(as determined by Agent), in the form attached hereto as Exhibit G (with
appropriate insertions acceptable to Agent) and shall be subject to the terms
and conditions hereof, and to the following restrictions:
(i) each assignment shall cover all of the Notes
issued by Company and the Permitted Borrowers hereunder to the
assigning Bank (and not any
114
particular Note or Notes), and shall be for a fixed and not
varying percentage thereof, with the same percentage
applicable to each such Note;
(ii) each assignment shall be in a minimum amount of
Five Million Dollars ($5,000,000);
(iii) no assignment shall violate any "blue sky" or
other securities law of any jurisdiction or shall require the
Company, any Permitted Borrower or any other Person to file a
registration statement or similar application with the United
States Securities and Exchange Commission (or similar state
regulatory body) or to qualify under the "blue sky" or other
securities laws of any jurisdiction; and
(iv) each assignment shall be accompanied by the
assignee's joinder to the Intercreditor Agreement, if then in
effect; and
(v) no assignment shall be effective unless Agent has
received from the assignee (or from the assigning Bank) an
assignment fee of $3,500 for each such assignment.
In connection with any assignment subject to this Section 13.8(d), Company, each
of the Permitted Borrowers 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 and the Permitted Borrowers 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 and the
Permitted Borrowers. Agent, the Banks and the Company and
115
the Permitted Borrowers 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, the Permitted Borrowers and each of the Banks
a revised Exhibit D to this Agreement setting forth the applicable new
Percentages of the Banks (including the assignee Bank), taking into account such
assignment.
(e) Each Bank agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be subject
to the following restrictions (which shall be set forth in the applicable
participation agreement):
(i) such Bank shall remain the holder of its Notes
hereunder, notwithstanding any such participation;
(ii) except as expressly set forth in this Section
13.8(e) with respect to rights of setoff and the benefits of
Section 11 hereof, a participant shall have no direct rights
or remedies hereunder;
(iii) a participant shall not reassign or transfer,
or grant any sub-participations in its participation interest
hereunder or any part thereof; and
(iv) such Bank shall retain the sole right and
responsibility to enforce the obligations of the Company and
Permitted Borrowers 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, Permitted Borrowers, Agent and
the other Banks may continue to deal directly with such Bank
in connection with such Bank's rights and duties hereunder).
Company and each of the Permitted Borrowers each 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, none of
the Permitted Borrowers, 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
116
limitation the Collateral Documents), and all actions hereunder shall be
conducted as if no such participation had been granted.
(f) Each assignment by a Bank to its Affiliates of all or
any portion of the Notes, or any Advances thereunder, may be made on such terms
and conditions as determined by such Bank (rather than pursuant to Section
13.8(d) hereof), provided however that (i) following each such assignment, the
assigning Bank shall remain responsible for the performance of its obligations
under this Agreement and the other Loan Documents (including without limitation
its obligations in respect of any Notes and Advances thereunder so assigned),
and each such Affiliate assignee shall not be deemed a "Bank" hereunder, (ii)
Company, the Permitted Borrowers and the Agent shall be entitled to continue to
deal solely and directly with such assigning Bank in connection with such Bank's
rights and obligations under this Agreement and the other Loan Documents, (iii)
such assigning Bank shall retain the sole right and responsibility to enforce
the obligations of Company and the Permitted Borrowers (including Company or the
applicable Permitted Borrower whose Notes or Advances thereunder have been so
assigned) under this Agreement and the other Loan Documents. In connection with
assignments to its Affiliates under this Section 13.8(f), an assigning Bank
shall act as agent for its Affiliates having received assignments hereunder, and
may appoint such Affiliates as such Bank's applicable Eurocurrency Lending
Office. Furthermore with respect to such assignments under this Section 13.8(f),
it is expressly acknowledged that the assignment fee provided for in Section
13.8(d)(iv) shall not apply.
(g) Nothing in this Agreement, the Notes or the other Loan
Documents, expressed or implied, is intended to or shall confer on any Person
other than the respective parties hereto and thereto and their successors and
assignees and participants permitted hereunder and thereunder any benefit or any
legal or equitable right, remedy or other claim under this Agreement, the Notes
or the other Loan Documents.
13.9 Indulgence. No delay or failure of Agent and the Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege nor shall any single or partial exercise thereof preclude any
other or further exercise thereof, or the exercise of any other right, power or
privilege. The rights of Agent and the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
13.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
13.11 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, or consent to any departure by the
Company or the Permitted Borrowers 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
117
the Banks), do any of the following: (a) increase the Revolving Credit Maximum
Amount, except in accordance with Section 2.18 hereof, (b) reduce the principal
of, or interest on, the Notes or any Fees or other amounts payable hereunder,
(c) postpone any date fixed for any payment of principal of, or interest on, the
Notes or any Fees or other amounts payable hereunder, (d) waive any Event of
Default specified in Section 9.1(a) or (b) hereof, (e) release or defer the
granting or perfecting of a lien or security interest in any collateral or
release any guaranty or similar undertaking provided by any Person, except as
shall be otherwise expressly provided in this Agreement, the Intercreditor
Agreement or any other Loan Document, (f) take any action which requires the
signing of all Banks pursuant to the terms of this Agreement or any other Loan
Document, (g) change the aggregate unpaid principal amount of the Notes which
shall be required for the Banks or any of them to take any action under this
Agreement or any other Loan Document, (h) change this Section 13.11, or (i)
change the definition of "Majority Banks," "Supermajority of the 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.
13.12 Taxes and Fees. Should any tax (other than a tax based upon the
net income of any Bank or Agent by any jurisdiction where a Bank or Agent is
located), recording or filing fee become payable in respect of this Agreement or
any of the other Loan Documents or any amendment, modification or supplement
hereof or thereof, the Company and each of the Permitted Borrowers, jointly and
severally, agrees to pay the same together with any interest or penalties
thereon and agrees to hold the Agent and the Banks harmless with respect
thereto.
13.13 Confidentiality. Agent and each Bank agrees that without the
prior consent of Company, it will not disclose (other than to its employees, to
another Bank or to its auditors or counsel) any information with respect to the
Company or any of its Subsidiaries or any of the Permitted Borrowers 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 or any of
the Permitted Borrowers 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 or such Permitted Borrower 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, (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, and (f) with respect to the "tax treatment" and "tax
118
structure," in each case, within the meaning of I.R.C. Regulation Section
1.6011-4, of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to Agent or such
Bank relating to such tax treatment and tax structure, to the extent required to
be disclosed pursuant to such regulation or the Internal Revenue Code,
generally, provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the transactions contemplated hereby, and any
related Advances or Letters of Credit.
13.14 Withholding Taxes. If any Bank is not a United States person
within the meaning of Section 7701(a)(30) of the Internal Revenue Code, such
Bank shall promptly (but in any event prior to the initial payment of interest
hereunder) deliver to the Agent two executed copies of (i) Internal Revenue
Service Form W-8BEN or any successor form specifying the applicable tax treaty
between the United States and the jurisdiction of such Bank's domicile which
provides for the exemption from withholding on interest payments to such Bank,
(ii) Internal Revenue Service Form W-8ECI or any successor form evidencing that
the income to be received by such Bank hereunder is effectively connected with
the conduct of a trade or business in the United States or (iii) other evidence
satisfactory to the Agent that such Bank is exempt from United States income tax
withholding with respect to such income; provided, however, that such Bank shall
not be required to deliver to Agent the aforesaid forms or other evidence with
respect to (i) Advances to any Foreign Subsidiary which is or becomes a
Permitted Borrower hereunder or (ii) with respect to Advances to the Company or
any Domestic Subsidiary which subsequently becomes a Permitted Borrower
hereunder, 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,
or any Domestic Subsidiary which subsequently becomes a Permitted Borrower
hereunder, 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 or the Permitted Borrowers, 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 or the
Permitted Borrowers with such forms, certificates or other documents as may be
reasonably necessary to allow the Company or the Permitted Borrowers, as
applicable, 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.
119
13.15 Effective Upon Execution. This Agreement shall become effective
upon the later of the Effective Date and the execution hereof by Banks, Agent,
the Company and the Permitted Borrowers signatory hereto, and the issuance by
the Company and such Permitted Borrowers, as applicable, 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. Those Permitted Borrowers not
signatories to this Agreement on the Effective Date shall become obligated
hereunder (and shall be deemed parties to this Agreement) upon their execution
and delivery, according to the terms hereof, of the aforesaid Notes.
13.16 Severability. In case any one or more of the obligations of the
Company or any of the Permitted Borrowers 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 or such Permitted Borrower 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 or such Permitted Borrower
under this Agreement, the Notes or any of the other Loan Documents in any other
jurisdiction.
13.17 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
13.18 Construction of Certain Provisions. If any provision of this
Agreement or any of the other Loan Documents refers to any action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision.
13.19 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or such condition exists.
13.20 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company or any
party to any of the Loan Documents made herein or in any of the other Loan
Documents or in any certificate, report, 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 and the Permitted Borrowers set forth in Section 11.8 hereof
(together with any other indemnities of the Company or the Permitted Borrowers
contained elsewhere in this Agreement or in any of the other Loan Documents,
including but not limited to Sections 7.14, 11.1, 11.7, 11.10, 13.5 and 13.12)
and of Banks set forth in Sections 12.1, 12.12 and 13.13 hereof shall,
notwithstanding
120
anything to the contrary contained in this Agreement, survive the repayment in
full of the Indebtedness and the termination of any commitments to make Advances
hereunder.
13.21 Complete Agreement; Amendment and Restatement. This Agreement,
the Notes, any Requests for Advance or Letters of Credit hereunder, the other
Loan Documents and any agreements, certificates, or other documents given to
secure the Indebtedness, contain the entire agreement of the parties hereto, and
none of the parties hereto shall be bound by anything not expressed in writing.
This Agreement constitutes an amendment and restatement of the Prior Credit
Agreement, which Prior Credit Agreement is fully superseded and amended and
restated in its entirety hereby; provided, however, that the Indebtedness
governed by the Prior Credit Agreement shall remain outstanding and in full
force and effect and provided further that this Agreement does not constitute a
novation of such Indebtedness.
13.22 Bank Act (Canada) Disclosure. CAC Canada confirms and discloses
the following:
(a) CAC Canada is not a member institution of Canada Deposit
Insurance Corporation;
(b) the liability incurred by CAC Canada through Advances
and under the Foreign Guaranty and the other Loan Documents to which CAC Canada
is a party is not a deposit; and
(c) CAC Canada is not regulated as a financial institution in
Canada.
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
121
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 Xxxx
--------------------------------- ---------------------------------
Its: Chief Financial Officer Its: Assistant Vice President
-------------------------------- --------------------------------
PERMITTED BORROWERS:
CREDIT ACCEPTANCE CORPORATION
UK LIMITED
By: /S/ Xxxxxxx X. Xxxx
---------------------------------
Its: Director
--------------------------------
CAC OF CANADA LIMITED
By: /S/ Xxxxxxx X. Xxxx
---------------------------------
Its: Chief Financial Officer
--------------------------------
CREDIT ACCEPTANCE CORPORATION
IRELAND LIMITED
By: /S/ Xxxxxxx X. Xxxx
---------------------------------
Its: Director
--------------------------------
122
BANKS:
COMERICA BANK
By: /S/ Xxxxx Xxxx
---------------------------------
Its: Assistant Vice President
--------------------------------
SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
000
XXXX XX XXXXXXX, N.A.
By: /S/ Xxxx Xxx Xxxxxxx
---------------------------------
Its: Managing Director
--------------------------------
SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
124
LASALLE BANK NATIONAL
ASSOCIATION
By: /S/ Xxxxx X. Xxxxxxx
---------------------------------
Its: Senior Vice President
--------------------------------
SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
125
XXXXXX TRUST AND SAVINGS BANK
By:/S/ Xxxxxxx Xxxxxxx
---------------------------------
Its:Vice President
--------------------------------
SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
126
FIFTH THIRD BANK
(EASTERN MICHIGAN)
By:/S/ Xxxxxxx Xxxxxx
---------------------------------
Its:Vice President
--------------------------------
SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
000
XXXXXXXX XXXX XXXX XX
XXXXXXXX/XXXXXXXX
By:/S/ Xxxxx X. Light
---------------------------------
Its:Vice President
--------------------------------
SIGNATURE PAGE FOR SECOND AMENDED AND RESTATED
CREDIT ACCEPTANCE CORPORATION CREDIT AGREEMENT
128
4(c)(12)
Attachment 1
SCHEDULE 1.11 (1)
-----------------
PRICING MATRIX
THE APPLICABLE MARGIN FOR APPLICABLE FEE PERCENTAGE FOR
---------------------------------------- ------------------------------------------
ADVANCES OF THE
REVOLVING CREDIT
NOTWITHSTANDING THE ADVANCES AT THE CARRIED AT THE
COMPANY'S RATING PRIME-BASED RATE EUROCURRENCY-BASED REVOLVING CREDIT LETTER OF CREDIT
LEVEL: SHALL BE RATE SHALL BE FACILITY FEE FEE
------------------- ---------------- ------------------ ---------------- ----------------
0% 1.40% .6000% 1.525%
(inclusive of facing fee)
---------------
(1) All terms as defined in the Agreement.
