EXHIBIT 4(d)
Execution Copy
▇▇▇▇▇▇▇▇ STORES INC.
CREDIT AGREEMENT
DATED AS OF DECEMBER 21, 1995
COMERICA BANK, AS AGENT
TABLE OF CONTENTS
Page
1. DEFINITIONS........................................................... 1
2. REVOLVING CREDIT...................................................... 18
2.1 Revolving Credit Commitment.................................... 18
2.2 Accrual of Interest and Maturity............................... 18
2.3 Requests for Advances and Requests for
Refundings and Conversions of Revolving
Credit Advances................................................ 18
2.4 Disbursement of Revolving Credit Advances...................... 20
2.5 Prime-based Advance in Absence of Election
or Upon Default................................................ 21
2.6 Revolving Credit Commitment Fee................................ 22
2.7 Facility Fee................................................... 22
2.8 Reduction of Indebtedness; Revolving Credit
Aggregate Commitment........................................... 22
2.9 Optional Reduction or Termination of
Revolving Credit Aggregate Commitment.......................... 23
2.10 Extension of Revolving Credit Maturity Date.................... 24
2.11 Use of Proceeds................................................ 25
3. LETTERS OF CREDIT..................................................... 25
3.1 Letters of Credit.............................................. 25
3.2 Conditions to Issuance......................................... 25
3.3 Notice......................................................... 27
3.4 Letter of Credit Fees.......................................... 27
3.5 Issuance Fees.................................................. 28
3.6 Draws and Demands for Payment Under Letters
of Credit...................................................... 29
3.7 Obligations Irrevocable........................................ 30
3.8 Risk Under Letters of Credit................................... 31
3.9 Indemnification................................................ 32
3.10 Right of Reimbursement......................................... 33
4. TERM CREDIT........................................................... 33
4.1 Commitment..................................................... 33
4.2 Disbursement of Loan........................................... 34
4.3 Payments of Principal and Interest............................. 34
4.4 Prepayments.................................................... 35
4.5 Use of Proceeds................................................ 36
5. SWING LINE CREDIT..................................................... 36
5.1 Swing Line Advances............................................ 36
5.2 Accrual of Interest; Margin Adjustments........................ 37
5.3 Requests for Swing Line Advances............................... 37
5.4 Disbursement of Swing Line Advances............................ 38
5.5 Refunding of or Participation Interest in
Swing Line Advances............................................ 39
6. INTEREST PAYMENTS/ADVANCES............................................ 40
6.1 Prime-based Interest Payments.................................. 40
6.2 Eurocurrency-based Interest Payments........................... 40
6.3 Quoted Rate Advance Interest Payments.......................... 41
6.4 Interest Payments on Conversions............................... 41
6.6 Interest on Default............................................ 41
6.7 Prepayment..................................................... 41
7. CONDITIONS............................................................ 41
7.1 Execution of Notes and this Agreement.......................... 42
7.2 Corporate Authority............................................ 42
7.3 Company Collateral Documents................................... 42
7.4 Guarantor Collateral Documents................................. 42
7.5 Licenses, Permits, Etc......................................... 43
7.6 Representations and Warranties................................. 43
7.7 Compliance with Certain Documents and
Agreements..................................................... 44
7.8 Opinion of Counsel............................................. 44
7.9 No Default..................................................... 44
7.10 Company's Certificate.......................................... 44
7.11 Payment of Fees................................................ 44
7.12 Termination of Existing Credit Facility........................ 44
7.13 Other Documents and Instruments................................ 44
7.14 Continuing Conditions.......................................... 44
8. REPRESENTATIONS AND WARRANTIES........................................ 45
8.1 Corporate Authority............................................ 45
8.2 Due Authorization Company...................................... 45
8.3 Due Authorization - Guarantors................................. 45
8.4 Title to Collateral - Company.................................. 46
8.5 Encumbrances................................................... 46
8.6 Capital Stock; Shareholders; Subsidiaries...................... 46
8.7 Taxes.......................................................... 46
8.8 No Defaults.................................................... 46
8.9 Enforceability of Agreement and Loan
Documents-Company.............................................. 47
8.10 Enforceability of Loan Documents --
Guarantors..................................................... 47
8.11 Compliance with Laws........................................... 47
8.12 Non-contravention-Company...................................... 47
8.13 Non-contravention -- Guarantors................................ 47
8.14 No Litigation -- Company....................................... 48
8.15 No Litigation -- Subsidiaries.................................. 48
8.16 Consents, Approvals and Filings, Etc........................... 49
8.17 Agreements Affecting Financial Condition....................... 49
8.18 No Investment Company or Margin Stock.......................... 49
8.19 ERISA.......................................................... 49
8.20 Conditions Affecting Business or Properties.................... 50
8.21 Environmental and Safety Matters............................... 50
8.22 Accuracy of Information........................................ 51
8.23 Accounts....................................................... 51
9. AFFIRMATIVE COVENANTS................................................. 52
9.1 Preservation of Existence, Etc................................. 52
9.2 Keeping of Books............................................... 52
9.3 Reporting Requirements......................................... 53
9.4 Maintain Consolidated Cash Flow Ratio.......................... 54
9.5 Maintain Funded Debt Ratio..................................... 55
9.6 Maintain Consolidated Tangible Net Worth....................... 55
9.7 Taxes.......................................................... 55
9.8 Inspections.................................................... 55
9.9 Indemnification................................................ 55
9.10 Governmental and Other Approvals............................... 56
9.11 Insurance...................................................... 56
9.12 Compliance with Laws........................................... 56
9.13 Compliance with ERISA.......................................... 57
9.14 ERISA Notices.................................................. 57
9.15 Use of Proceeds................................................ 57
9.16 Notice of Mergers and Related Events........................... 58
10. NEGATIVE COVENANTS.................................................... 58
10.1 Business Purposes.............................................. 58
10.2 Mergers or Dispositions........................................ 58
10.3 Guaranties..................................................... 59
10.4 Liens.......................................................... 59
10.5 Acquisitions................................................... 59
10.6 Investments.................................................... 59
10.7 Accounts Receivable............................................ 60
10.8 Transactions with Affiliates................................... 60
10.9 No Further Negative Pledges.................................... 60
10.10 Prepayment of Indebtedness..................................... 60
10.11 Amendment of Subordinated Debt................................. 60
11. DEFAULTS.............................................................. 60
11.1 Events of Default.............................................. 60
11.2 Exercise of Remedies........................................... 63
11.3 Rights Cumulative.............................................. 63
11.4 Waiver by Company of Certain Laws.............................. 63
11.5 Waiver of Defaults............................................. 64
11.6 Deposits and Accounts.......................................... 64
12. PAYMENTS, RECOVERIES AND COLLECTIONS.................................. 64
12.1 Payment Procedure.............................................. 64
12.2 Application of Proceeds........................................ 66
12.3 Pro-rata Recovery.............................................. 66
12.4 Deposits and Accounts.......................................... 67
13. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS...................... 67
13.1 Reimbursement of Prepayment Costs.............................. 67
13.2 Agent's Eurocurrency Lending Office............................ 68
13.3 Circumstances Affecting Eurocurrency-based
Rate Availability.............................................. 68
13.4 Laws Affecting Eurocurrency-based Advance
Availability................................................... 68
13.5 Increased Cost of Eurocurrency-based
Advances....................................................... 69
13.6 Indemnity...................................................... 70
13.7 Other Increased Costs.......................................... 70
14. AGENT................................................................. 71
14.1 Appointment of Agent........................................... 71
14.2 Deposit Account with Agent..................................... 71
14.3 Scope of Agent's Duties........................................ 71
14.4 Successor Agent................................................ 72
14.5 Loans by Agent................................................. 73
14.6 Credit Decisions............................................... 73
14.7 Agent's Fees................................................... 73
14.8 Authority of Agent to Enforce Notes and
This Agreement................................................. 73
14.9 Indemnification................................................ 73
14.10 Knowledge of Default........................................... 74
14.11 Agent's Authorization; Action by Banks......................... 74
14.12 Enforcement Actions by the Agent............................... 75
15. MISCELLANEOUS......................................................... 75
15.1 Accounting Principles.......................................... 75
15.2 Consent to Jurisdiction........................................ 75
15.3 Law of Michigan................................................ 76
15.4 Interest....................................................... 76
15.5 Closing Costs and Other Costs.................................. 76
15.6 Notices........................................................ 77
15.7 Further Action................................................. 77
15.8 Successors and Assigns; Participations;
Assignments.................................................... 77
15.9 Indulgence..................................................... 81
15.10 Counterparts................................................... 81
15.11 Amendment and Waiver........................................... 81
15.12 Taxes and Fees................................................. 82
15.13 Confidentiality................................................ 82
15.14 Withholding Taxes.............................................. 83
15.15 WAIVER OF JURY TRIAL........................................... 83
15.16 Complete Agreement; Conflicts.................................. 83
15.17 Severability................................................... 84
15.18 Table of Contents and Headings................................. 84
15.19 Construction of Certain Provisions............................. 84
15.20 Independence of Covenants...................................... 84
15.21 Reliance on and Survival of Various
Provisions..................................................... 84
15.22 Effective Upon Execution....................................... 84
EXHIBITS
A BORROWING BASE REPORT FORM
B FORM OF COVENANT COMPLIANCE REPORT
C PERCENTAGES
D FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
E FORM OF REQUEST FOR SWING LINE ADVANCE
F FORM OF REVOLVING CREDIT NOTE
G FORM OF SWING LINE NOTE
H FORM OF SWING LINE PARTICIPATION CERTIFICATE
I FORM OF ASSIGNMENT AGREEMENT
J LETTER OF CREDIT NOTICE
EXHIBITS (continued)
K FORM OF TERM NOTE
L SCHEDULE OF REAL ESTATE
SCHEDULES
1 Additional Permitted Liens
8.6 Shareholders of Subsidiaries
8.14 Litigation - Company
8.15 Litigation - Subsidiaries
8.19 Pension Plans
8.21 Environmental Matters
8.22 Contingent Obligations
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made as of the 21st day of
December, 1995, by and among Comerica Bank and the other financial
institutions from time to time parties hereto as lenders of the Revolving
Credit and as the issuer or participants in Letters of Credit (individually,
"Revolving Credit Bank", and collectively "Revolving Credit Banks") and the
Term Loan (individually, a Term Loan Bank, and collectively "Term Loan
Banks"), Comerica Bank, as lender of the Swing Line Credit ("Swing Line Bank"
and together with Revolving Credit Banks and the Term Loan Banks, collectively
referred to as the "Banks") Comerica Bank, as agent for the Banks (in such
capacity, "Agent"), and ▇▇▇▇▇▇▇▇ Stores Inc., a Michigan corporation
("Company").
COMPANY, AGENT AND BANKS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account(s)" shall mean Option Accounts and Thirty Day Accounts
referred to collectively.
"Account Debtor" shall mean the party who is obligated on or under
any Account.
"Advance(s)" shall mean Revolving Credit Advance(s) and Swing Line
Advance(s).
"Affiliate" shall mean, with respect to any Person, any other Person
or group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agent" shall mean Comerica Bank, in its capacity as agent hereunder,
or any successor agent appointed in accordance with Section 14.4 hereof.
"Agent's Fees" shall mean those agency fees and expenses required to
be paid by Company to Agent under Section 14.7 hereof.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus
one percent (1%).
"Applicable Increase" shall mean for any given fiscal year an amount
equal to the sum of (x) fifty percent (50%) of Consolidated Net Income for the
fiscal year ending on such date (but in any event not less than zero), (y) one
hundred percent (100%) of the net cash proceeds of the issuance of any Capital
Stock during such fiscal year and (z) one hundred percent (100%) of the
principal amount of securities (other than capital stock) converted into
capital stock of Company after the date of this Agreement during such fiscal
year.
"Applicable Interest Rate" shall mean (i) in respect of a Revolving
Credit Advance, the Eurocurrency-based Rate or the Prime-based Rate,
applicable to such Advance (in the case of a Eurocurrency-based Advance, for
the relevant Interest Period), and (ii) in respect of a Swing Line Advance,
the Prime-based Rate or the Quoted Rate, applicable to such Advance, for the
relevant Interest Period, as selected by Company from time to time subject to
the terms and conditions of this Agreement.
"Applicable L/C Fee Percentage" shall mean one and seven tenths
percent (1-7/10%) per annum with respect to standby Letters of Credit and one
half of one percent (1/2%) with respect to trade Letters of Credit.
"Banks" shall mean Comerica Bank ("Comerica") and such other
financial institutions from time to time parties hereto as lenders and shall
include the Revolving Credit Banks, the Term Loan Banks and the Swing Line
Bank and any assignee which becomes a Bank pursuant to Section 15.8 hereof.
"Billing Date" shall mean the date on which any Account is included
in a statement and rendered to the customer. In respect of any statement which
designates the Billing Date, the date so designated shall be conclusively
presumed to be the date on which such Account has been billed.
"Borrowing Base Limitation" shall mean, as of any date of
determination thereof, the sum, without duplication, of (i) ninety percent
(90%) of Eligible Accounts and (ii) the fifty five percent (55%) of Net
Eligible Inventory; provided, however, that the Borrowing Base Limitation
shall be determined on the basis of the most current Borrowing Base Report
required to be submitted by Company hereunder and provided, further, that the
amount of the Borrowing Base Limitation determined pursuant to the provisions
of subclause (ii) above shall not exceed the Inventory Reliance Cap.
"Borrowing Base Report(s)" shall mean the monthly reports to be
furnished by Company to Agent and the Banks pursuant to the provisions of
Section 9.3 hereof in the form attached hereto as Exhibit "A".
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business in Detroit and if the Business Day
relates to a Eurocurrency-based Advance, London and New York.
"Capitalized Lease" shall mean any lease of property (real, personal
or mixed) the obligation for rent with respect to which is required to be
capitalized on a balance sheet of the lessee in accordance with GAAP and
liability thereunder as so capitalized should be disclosed in a note to such
balance sheet.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, share capital, interests, participations, warrants, options or other
equivalents of capital stock of a corporation and any and all equivalent
ownership interests in a Person (other than a corporation).
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Banks is
or has been granted or arises or has arisen, under or in connection with this
Agreement or any of the Loan Documents.
"Collateral Documents" shall mean the Company Collateral Documents
and the Guarantor Collateral Documents.
"Company" shall mean ▇▇▇▇▇▇▇▇ Stores Inc., a Michigan corporation.
"Company Collateral Documents" shall mean the Company Security
Agreement and all other security documents executed and delivered by Company
to the Agent, in accordance with the terms and conditions of this Agreement,
as the same may be amended from time to time.
"Company Security Agreement" shall mean that certain security
agreement encumbering the Accounts now owned or hereafter acquired, executed
and delivered by Company to the Agent on the date hereof, as the same may be
amended from time to time.
"Consolidated Adjusted Tangible Net Worth" shall mean as of any date
of determination Consolidated Tangible Net Worth, plus Subordinated Debt.
"Consolidated Cash Flow" shall mean, as of any date of determination,
the Consolidated Net Income of Company and its Consolidated Subsidiaries for
the four preceding fiscal quarters, plus, to the extent deducted in the
computation of Consolidated Net Income, the amount of depreciation,
amortization, interest, rental and income tax expense and any LIFO adjustment
for Company and its Consolidated Subsidiaries for such period, and minus, to
the extent added in the computation of Consolidated Net Income, any LIFO
adjustment for Company and its Consolidated Subsidiaries all as determined in
accordance with GAAP.
"Consolidated Cash Flow Ratio" shall mean, as of any date of
determination, a ratio, the numerator of which is Consolidated Cash Flow and
the denominator of which is interest expense and cash rental expense for
Company and its Consolidated Subsidiaries for the four fiscal quarters
preceding such date of determination plus the current portion of all of
Company's and its Consolidated Subsidiaries' long-term indebtedness (excluding
the Excluded Term Debt Payment and including Capitalized Lease obligations) as
of such date of determination, all (except for cash rental expense) as
determined in accordance with GAAP; provided, however, in calculating the
Consolidated Cash Flow Ratio no effect shall be given to the restructuring
charge taken by Company in connection with its Permitted Store Closures to the
extent such charge does not exceed the amount set forth in the letter referred
to in the definition of Permitted Store Closures.
"Consolidated Net Income" shall mean for any period, the net income
from continuing operations (or the net deficit if expenses and charges exceed
revenues and other proper income credits) of Company and its Consolidated
Subsidiaries for such period taken as one accounting period, determined in
accordance with GAAP.
"Consolidated" or "Consolidating" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or
more Persons of the amounts signified by such term for all such Persons
determined on a consolidated or consolidating basis, as the case may be, in
accordance with GAAP. Unless otherwise specified herein, references to
Consolidated financial statements or data of Company includes consolidation
with its Subsidiaries in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean as of any date of
determination the excess of (x) the net book value of the assets of Company
and its Consolidated Subsidiaries (excluding from assets, however, any
investments and advances to unconsolidated Subsidiaries, and also excluding
any goodwill, patents, patent rights, trademarks, trade names, copyrights,
franchises, licenses, organizational expenses, and any other assets which, in
accordance with generally accepted accounting principles, should be classified
as intangible assets) after all appropriate deductions in accordance with
generally accepted accounting principles consistently applied (including,
without limitation, reserves for doubtful receivables, obsolescence,
depreciation, and amortization) over (y) all liabilities of Company and its
Consolidated Subsidiaries.
"Covenant Compliance Report" shall mean the report to be furnished by
Company to the Agent, in the form of attached Exhibit "B" and certified by the
chief financial officer of Company and pursuant to Section 9.3, hereof (or in
such officer's absence, a responsible senior officer), in which report Company
shall set forth, among other things, detailed calculations and the resultant
ratios or financial tests with respect to the financial covenants contained in
Sections 9.4, 9.5 and 9.6 of this Agreement.
"Defaulted Account" means a Thirty Day Account or an Option Account,
including any additional charges by way of additional purchases or otherwise,
on which less than twenty percent (20%) of the balance owing as of the Billing
Date has been paid within the sixty (60) day period subsequent to such Billing
Date.
The determination of a Defaulted Account shall be made as of the
Billing Date for each of the Accounts. Any of the Accounts determined to be in
default as of any Billing Date shall be regarded as Defaulted Accounts for the
purpose of this Agreement until the determination is again made at the next
succeeding Billing Date.
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the financial condition or businesses of the Company and its
Subsidiaries (taken as a whole) or on the ability of the Company and
Subsidiaries (taken as a whole) to pay their debts, as such debts become due.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Dollars" and the sign "$" shall mean lawful money of the United
States of America.
"Eligible Account(s)" shall mean as of any date of determination, the
aggregate amount of Accounts as of such date less the aggregate amount as of
such date of Defaulted Accounts.
"Eligible Inventory" shall mean Inventory which has been included in
a Borrowing Base Report to determine the Borrowing Base Limitation and as to
which Inventory the following is true and accurate as of the time it was
utilized to determine the Borrowing Base Limitation:
(a) such item of Inventory is of merchantable quality and is
usable or saleable by Company in the ordinary course of its business;
(b) such item of Inventory has not been sold, transferred or
otherwise assigned by Company to any other Person;
(c) such item of Inventory is (i) located within the
continental United States of America at such location or locations as
Company shall have represented in the Loan Documents, relating to
Inventory; and
(d) the value of each item of Inventory utilized to
determine the Borrowing Base Limitation was determined on a FIFO
basis in accordance with GAAP.
"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.
"Eurocurrency-based Advance" shall mean a Revolving Credit Advance
which bears interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean, with respect to any
Eurocurrency-Interest Period, the per annum interest rate which is equal to
the sum of one and seven tenths percent (1-7/10%) plus the quotient of:
(A) the per annum interest rate at which deposits in
eurodollars are offered to Agent's Eurocurrency Lending
Office by other prime banks in the eurodollar market in
an amount comparable to the relevant Eurocurrency-based
Advance and for a period equal to the relevant
Eurocurrency-Interest Period at approximately 11:00
A.M. Detroit time two (2) Business Days prior to the
first day of such Eurocurrency-Interest Period, divided
by
(B) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements
(including, without limitation, any marginal,
emergency, supplemental, special or other reserves)
that is specified on the first day of such
Eurocurrency-Interest Period by the Board of Governors
of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve
requirement with respect to eurodollar funding
(currently referred to as "eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank
of such System,
all as conclusively determined (absent manifest error) by the Agent, such sum
to be rounded upward, if necessary, to the nearest whole multiple of 1/16th of
1%.
"Eurocurrency-Interest Period" shall mean the Interest
Period applicable to a Eurocurrency-based Advance.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at Grand Cayman, British West Indies or such
other branch or branches of Agent, domestic or foreign, as it may hereafter
designate as a Eurocurrency Lending Office by notice to Company and the Banks,
and (b) as to each of the Banks, its office, branch or affiliate located at
its address set forth on the signature pages hereof (or identified thereon as
a 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 each of the Events of Default specified
in Section 11.1 hereof.
"Excluded Term Debt Payment" shall mean the approximately $9,300,000
principal payment due September 1, 2001 under the promissory note dated August
29, 1986 by ▇▇▇▇▇▇▇▇ Stores Realty Company payable to First of America Bank -
Michigan, N.A.
"Facility Fee" shall mean the fees payable to Agent for distribution
to the Revolving Credit Banks pursuant to Section 2.7 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, all as conclusively determined by the
Agent, such sum to be rounded upward, if necessary, to the nearest whole
multiple of 1/16th of 1%.
"Fees" shall mean the Revolving Credit Commitment Fee, the Facility
Fee, the Letter of Credit Fees, the Agent's Fees, the Restructuring Fee and
the other fees and charges payable by Company to the Banks or Agent hereunder.
"Financial Statements" shall mean all those balance sheets, earnings
statements and other financial data (whether of the Company or otherwise)
which have been furnished to the Agent or the Banks for the purposes of, or in
connection with, this Agreement and the transactions contemplated hereby.
"Formula Debt" shall mean as of any date of determination thereof,
the sum of the aggregate principal amount of outstanding Advances, the
aggregate undrawn amount of outstanding Letters of Credit, the aggregate
amount of unreimbursed drawings under Letters of Credit and the outstanding
principal amount of the Term Loan.
"Funded Debt" shall mean, for any Person, as of any date, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
reimbursement obligations of such Person in respect of drawings and other
demands for payment under letters of credit, surety bonds or similar
obligations issued for the account of such Person, (c) all obligations of such
Person as lessee or user under any lease of real or personal property which,
in accordance with GAAP, are or should be capitalized on the books of the
lessee or user, and (d) all obligations of others similar in character to
those described in clauses (a) through (c) of this definition to the extent
such Person is liable, contingently or otherwise, as obligor, guarantor or in
any other capacity, or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent any such loss
(other than endorsements of negotiable instruments for collection in the
ordinary course of business) including without limitation all obligations of
such Person to advance funds to, or to purchase property or services from, any
other Person in order to maintain the financial condition of such other
Person, all to the extent such obligations are required to be disclosed on the
consolidated financial statements (including footnotes) of Company in
accordance with GAAP.
"Funded Debt Ratio" shall mean, as at the time any determination
thereof is to be made, a ratio, the numerator of which shall be Funded Debt of
Company and its Consolidated Subsidiaries as of such date less the outstanding
principal amount of Subordinated Debt as of such date and the denominator of
which shall be Consolidated Adjusted Tangible Net Worth as of such date.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof, consistently
applied.
"Governmental Obligations" means noncallable direct general
obligations of the United States of America or obligations the payment of
principal of and interest on which is unconditionally guaranteed by the United
States of America.
"Guarantor(s)" shall mean ▇▇▇▇▇▇▇▇ Stores Realty Company, a Michigan
corporation and ▇▇▇▇▇▇▇▇ Credit Corp., a Michigan corporation.
"Guarantor Collateral Documents" shall mean the Guaranty, the
Mortgages and any security documents executed by the Guarantors and delivered
to Agent, pursuant to or in accordance with the provisions of this Agreement
from time to time, as such collateral documents may be amended from time to
time.
"Guaranty" shall mean the Guaranty Agreement delivered by the
Guarantors to Agent as of the date hereof, for the benefit of the Banks and
Agent, as amended from time to time.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal,
state, provincial, 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 any facilities owned,
leased or operated by Company or any of its Subsidiaries, or any portion
thereof including, without limitation, those relating to soil, surface,
subsurface ground water conditions and the condition of the ambient air; and
any state and local laws and regulations pertaining to Hazardous Material
and/or asbestos; any so-called "superfund" or "superlien" law; and any other
federal, state, provincial, 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 material, as now
or at any time hereafter in effect.
"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 (including
without limitation interest, fees and other charges) arising under this
Agreement or any of the other Loan Documents, whether direct or indirect,
absolute or contingent, of Company to any of the Banks or to the Agent, in any
manner and at any time, whether evidenced by the Notes or any of the other
Loan Documents, due or hereafter to become due, now owing or that may
hereafter be incurred by Company to, or acquired by, any of the Banks or by
Agent, and any judgments that may hereafter be rendered on such indebtedness
or any part thereof, with interest according to the rates and terms specified,
or as provided by law, and any and all consolidations, amendments, renewals,
replacements, substitutions or extensions of any of the foregoing.
"Interest Period" shall mean (i) with respect to a Eurocurrency-based
Advance, one (1), two (2), three (3) or six (6) months (or any lesser or
greater number of days agreed to in advance by Company, Agent and the
Revolving Credit Banks) as selected by Company pursuant to Section 2.3,
provided, however, that any Eurocurrency-Interest Period which commences on
the last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month and (ii) with respect to a Swing Line Advance, shall mean 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 5.3. Each Interest Period
which would otherwise end on a day which is not a Business Day shall end on
the next succeeding Business Day or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day, and no Interest Period which would end after the Revolving Credit
Maturity Date shall be permitted with respect to any Advance.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Inventory Reliance Cap" shall mean as of any date of determination
Thirty Five Million Dollars ($35,000,000) except that for the period of time
between September 1 of a year and December 31 of the same year, Inventory
Reliance Cap shall mean Forty Million Dollars ($40,000,000).
"Investment" shall mean any loan or advance by Company or any of its
Subsidiaries to, or any other loan, advance or investment by Company or any of
its Subsidiaries in, any Person (excluding any Subsidiary of Company), without
offset, reduction or other adjustment, whether such loan, advance or
investment shall be in the nature of an investment in shares of stock or other
capital or securities, general or limited partnership or joint venture
interests, evidences of indebtedness or otherwise.
"Issuing Office" shall mean Agent's office located at One Detroit
Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or such other office
as Agent shall designate as its Issuing Office.
"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 the Company
pursuant to Article 3 hereof.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Agent,
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) Three Million Dollars ($3,000,000); or (b)
the Revolving Credit Aggregate Commitment as of such date, minus the aggregate
principal amount of Advances outstanding as of such date under the Revolving
Credit Notes and Swing Line Note.
"Letter of Credit Obligation(s)" shall mean the obligation of Company
under each Letter of Credit Agreement to reimburse the Agent for each payment
made by the Agent under the Letter of Credit issued pursuant to such Letter of
Credit Agreement, together with all other sums, fees, charges and amounts
which may be owing to the Agent under such Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to
be paid by the Agent in its capacity hereunder as issuer of a Letter of Credit
as a result of a draft or other demand for payment under any Letter of Credit.
"Lien" shall mean any pledge, hypothecation, mortgage, security
interest, option to purchase securities, conditional sale or title retaining
contract, lessee's interest under any Capitalized Lease, or any claim or right
to receive any of the foregoing, or any other type of lien, charge or
encumbrance, whether based on common law or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Security Agreement, the Letter of Credit Agreements, the Letters of
Credit, the Guaranty, and any other documents, certificates, instruments or
agreements executed pursuant to or in connection with any such document or
this Agreement, as such documents may be amended from time to time.
"Minimum Amount" shall mean $72,000,000 plus an amount equal to the
Applicable Increase for each fiscal year of Company ending after January 25,
1997.
"Mortgages" shall mean those certain continuing collateral mortgages
encumbering the real property described on attached Exhibit "L" executed and
delivered by Company or a Guarantor, as applicable, to Agent, on behalf of the
Banks, as of the date hereof, as the same may be amended from time to time.
"Net Eligible Inventory" shall mean as of any date of determination,
the amount obtained by subtracting from Eligible Inventory an amount equal to
all payables with respect to such Eligible Inventory.
"Notes" shall mean the Revolving Credit Notes, the Term Notes and the
Swing Line Note.
"Option Account" means a charge account arising out of the sale of
merchandise by Company at its retail outlets pursuant to a charge account
agreement by the terms of which the buyer agrees to pay the unpaid balance
together with a time price differential thereon in monthly installments. For
the purpose hereof, the term "Option Account" shall include any charge account
which meets the foregoing definition, regardless of its designation by
Company.
"Pension Plan(s)" shall mean all employee pension benefit plans of
Company or its Subsidiaries, as defined in Section 3(2) of ERISA.
"Percentage" shall mean, with respect to any Bank, its percentage
share, as set forth on Exhibit "C", hereto, of the Revolving Credit, of its
risk participation in Letters of Credit and of the Term Loan, as such Exhibit
may be revised from time to time by Agent in accordance with Section 15.8
hereof.
"Permitted Acquisitions" shall mean any acquisition by the Company or
any Subsidiary of all or substantially all of the assets of another Person, or
of a division or line of business of another Person or fifty one percent (51%)
or more of the shares of stock or other ownership interests of another Person
(including by merger with such Person) which satisfies and/or is conducted in
accordance with the following requirements:
(i) on the date of any such acquisition, all necessary
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 non-governmental and other
third-party approvals which, in each case, are material to such
acquisition have been obtained and are in effect, and Company and its
Subsidiaries are in full compliance thereunder, and all necessary
declarations, registrations or other filings with any court,
governmental or regulatory authority, securities exchange or any
other Person have been made;
(ii) if an acquisition of stock of an acquisition
target, the acquisition shall have been approved by the Board of
Directors or all of the shareholders whose stock is being acquired of
such acquisition target not later than the date any Request for
Advance is delivered to Agent in connection with an Advance to be
used to pay a portion of the acquisition consideration and as of such
date, no claim or challenge has been asserted or threatened by any
shareholder, director, officer or employee of the acquisition target
or by any other person which might reasonably be expected to have a
material adverse effect on Company and its Consolidated Subsidiaries;
(iii) not less than fifteen (15) days prior to the date
of such acquisition, if the total consideration for such acquisition
will exceed $2,000,000 (including, without limitation, assumption of
indebtedness, covenants not to compete and contingent liabilities),
the Company provides to Agent Pro Forma Combined Projected Financial
Information establishing that no Default or Event of Default will
occur as a result of the acquisition; and
(iv) 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 under this Agreement, or
any of the other Loan Documents as evidenced by a certificate of an
authorized officer of Company.
"Permitted Encumbrances" shall mean, with respect to any Person:
(a) the liens and encumbrances granted under or established
by this Agreement or the 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 and encumbrances 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 levy,
execution or other 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 (except for liens resulting
from a violation of the provisions of Section 9.13) and social
security benefits and similar statutory obligations 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 levy, execution or other enforcement of such liens
shall have been duly suspended; and (ii) such provision for the
payment of such liens has been made on the books of such Person as
may be required by GAAP;
(e)(i) liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts with
the United States or any foreign government or any agency thereof
entered into in the ordinary course of business and (ii) liens
incurred or deposits made in the ordinary course of business to
secure the performance of statutory obligations, bids, leases, fee
and expense arrangements with trustees and fiscal agents and other
similar obligations (exclusive of obligations incurred in connection
with the borrowing of money, any lease-purchase arrangements or the
payment of the deferred purchase price of property), provided that
full provision for the payment of all such obligations set forth in
clauses (i) and (ii) has been made on the books of such Person as may
be required by GAAP;
(f) those liens and encumbrances of the Company or its
Subsidiaries identified in Schedule 1, hereto.
(g) purchase money security interests in electronic data
processing equipment granted in connection with the purchase or lease
thereof;
(h) any lien or encumbrance on any fixed assets (including
machinery, equipment, land, buildings, fixtures and improvements)
purchased or leased in connection with and used in the operation of
any store, distribution facility or other facility acquired by
Company after the date of execution of this Agreement;
(i) any new liens or encumbrances or increases of existing
liens and encumbrances on properties which are encumbered as of the
date of execution of this Agreement; and
(j) any easements, restrictions, mineral, oil, gas and
mining rights and reservations and minor defects in title with
respect to real property which do not individually or in the
aggregate materially detract from the value of such real property.
For purposes of subsection (h) above, a facility leased by Company as
of the date of execution of this Agreement and subsequently purchased by
Company shall be deemed to be a facility acquired after the date of execution
of this Agreement.
"Permitted Store Closures" shall mean the closings of the stores
identified in the letter dated December 14, 1995 from Company to the Agent.
"Permitted Subordinated Debt Payments" shall mean the annual sinking
fund payments in the amount of $1,725,000 due December 15 of each year
(commencing December 15, 1996) with respect to Company's existing Subordinated
Debt.
"Person" shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock
company, or a government or any agency or political subdivision thereof or
other entity of any kind.
"Prime Rate" shall mean the per annum 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 Prime Rate shall change
simultaneously with any change in such announced rate.
"Prime-based Advance" shall mean an Advance which bears interest at
the Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest
which is equal to the greater of (i) the Prime Rate, or (ii) the Alternate
Base Rate.
"Pro Forma Combined Projected Financial Information" shall mean, as
to any acquisition, pro forma combined projected financial information for the
Company and its Consolidated Subsidiaries and the acquisition target,
consisting of projected balance sheets as at the effective date of the
acquisition and as at the end of at least the next succeeding two (2) fiscal
years of Company following the acquisition and projected statements of income
for each of those years, including sufficient detail to permit calculation of
the financial covenants set forth in Sections 9.4, 9.5 and 9.6, as projected
as of the effective date of the acquisition and for those years and
accompanied by (i) a statement setting forth a calculation of the financial
covenants set forth in Sections 9.4, 9.5 and 9.6, and (ii) a statement in
reasonable detail specifying all material assumptions underlying the
projections.
"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.
"Request for Revolving Credit Advance" shall mean a Request for
Revolving Credit Advance issued by Company under Section 2.3 of this Agreement
in the form annexed hereto as Exhibit "D".
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by Company under Section 5.3 of this Agreement in the form
attached hereto as Exhibit "E".
"Required Banks" shall mean at any time Banks holding not less than
sixty six and two thirds percent (66-2/3%) of the sum of the aggregate
principal amount of the Indebtedness then outstanding under the Revolving
Credit Notes and the Term Notes (or, if no Indebtedness is then outstanding,
Banks holding not less than sixty six and two thirds percent (66-2/3%) of the
Percentages).
"Restructuring Fee" shall mean a non-refundable restructuring fee in
the amount of Ninety Seven Thousand Five Hundred Dollars ($97,500) which fee
shall be deemed fully earned upon execution of this Agreement.
"Revolving Credit" shall mean the revolving credit loan to be
advanced to the Company by the Revolving Credit Banks pursuant to Article 2
hereof, in an aggregate amount (subject to the terms hereof), not to exceed,
at any one time outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by
Company and made by Revolving Credit Banks under Section 2.1 of this
Agreement, including without limitation any readvance, refunding or conversion
of such borrowing pursuant to Section 2.3 hereof, and shall include, as
applicable, a Eurocurrency-based Advance and/or Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean Forty Five Million
Dollars ($45,000,000) subject to reduction or termination under Section 2.9 or
11.2 hereof.
"Revolving Credit Banks" shall mean Comerica Bank, and such other
financial institutions from time to time parties hereto as lenders of the
Revolving Credit.
"Revolving Credit Commitment Fee" shall mean the fees payable to
Agent for distribution to the Revolving Credit Banks pursuant to Section 2.6
hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of
(i) June 30, 1998, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall be terminated pursuant to Section 2.9 or Section 11.2 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.1 hereof, made by Company to each of the Revolving
Credit Banks in the form annexed to this agreement as Exhibit "F", as such
notes may be amended or supplemented from time to time, and any other notes
issued in substitution, replacement or renewal thereof from time to time.
"Settlement Date" shall mean the twelfth day of each month during the
term of this Agreement. If such date shall fall on a day other than a Business
Day, the Settlement Date shall be the following Business Day.
"Subordinated Debt" shall mean all obligations of Company which are,
and remain at all times after incurrence thereof, subordinate and junior in
right and priority of payment to payment of the Indebtedness by the express
terms thereof or by written agreement, in each case satisfactory in form and
substance to the Required Banks.
"Subsidiary(ies)" shall mean any other corporation, association,
joint stock company, or business trust of which more than fifty percent (50%)
of the outstanding voting stock or share capital is owned either directly or
indirectly by any Person or one or more of its Subsidiaries, or the management
of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by any Person and/or its Subsidiaries. Unless
otherwise specified to the contrary herein, Subsidiary(ies) shall refer to the
Company's Subsidiary(ies).
"Swing Line Advance" shall mean a borrowing requested by Company and
made by the Swing Line Bank to Company pursuant to Section 5.1 hereof.
"Swing Line Bank" shall mean Comerica Bank, in its capacity as lender
under Article 5 of this Agreement, and its successors and assigns.
"Swing Line Note" shall mean the swing line note described in Section
5.1 hereof, made by Company to Swing Line Bank in the form annexed hereto as
Exhibit "G", as such Note may be amended or supplemented from time to time,
and any notes issued in substitution, replacement or renewal thereof from time
to time.
"Term Loan" shall mean the Twenty Million Dollars ($20,000,000) term
loan to be extended by the Term Loan Banks to Company pursuant to Section 4
hereof.
"Term Loan Banks" shall mean Comerica Bank and NBD Bank, and such
other financial institutions from time to time parties hereto as lenders of
the Term Loan.
"Term Loan Maturity Date" shall mean December 31, 2002.
"Term Notes" shall mean the term notes described in Section 4.1, made
by Company to each of the Term Loan Banks in the form annexed to this
Agreement as Exhibit "K".
"Thirty Day Account" means an open charge account arising out of the
sale of merchandise by Company at its retail outlets which is payable in full
within thirty (30) days from the Billing Date.
"UCC" shall mean the Uniform Commercial Code, as in effect from time
to time in the State of Michigan.
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock
(except shares required as directors' qualifying shares) shall be owned by the
Company and/or one or more of its Wholly-owned Subsidiaries.
2. REVOLVING CREDIT.
2.1 Revolving Credit Commitment. Subject to the terms and conditions
of this Agreement, each Revolving Credit Bank severally and for itself alone
agrees to make Advances of the Revolving Credit to Company from time to time
on any Business Day during the period from the effective date hereof until
(but excluding) the Revolving Credit Maturity Date in an aggregate amount not
to exceed at any one time outstanding each Revolving Credit Bank's Percentage
of the Revolving Credit Aggregate Commitment. All of such Advances hereunder
shall be evidenced by the Revolving Credit Notes, under which advances,
repayments and readvances may be made, subject to the terms and conditions of
this Agreement.
2.2 Accrual of Interest and Maturity. (a) 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 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 Revolving Credit
Advance, its Applicable Interest Rate, its Interest Period, if any, and the
amount and date of any repayment shall be noted on Agent's records, which
records will be conclusive evidence thereof, absent manifest error; provided,
however, that any failure by the Agent to record any such information shall
not relieve Company of its obligation to repay the outstanding principal
amount of such Advance, all interest accrued thereon and any amount payable
with respect thereto in accordance with the terms of this Agreement and the
Loan Documents.
2.3 Requests for Advances and Requests for Refundings and
Conversions of Revolving Credit Advances. Company may request a Revolving
Credit Advance, refund any Revolving Credit Advance in the same type of
Revolving Credit Advance or convert any Revolving Credit Advance to any other
type of Revolving Credit Advance only after delivery to Agent of a Request for
Revolving Credit Advance executed by an authorized officer of Company subject
to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set
forth the information required on the Request for Revolving Credit
Advance form annexed hereto as Exhibit "D", including without
limitation:
(i) the proposed date of such Revolving Credit
Advance, which must be a Business Day;
(ii) whether such Revolving Credit Advance is a
refunding or conversion of an outstanding
Revolving Credit Advance; and
(iii) whether such Revolving Credit Advance is to be a
Prime-based Advance or a Eurocurrency-based
Advance, and, except in the case of a Prime-based
Advance, the Interest Period applicable thereto;
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by 12:00 noon (Detroit time) three (3) Business
Days prior to the proposed date of Revolving Credit Advance, except
in the case of a Prime-based Advance, for which the Request for
Revolving Credit Advance must be delivered by 12:00 noon (Detroit
time) on such proposed date;
(c)(i) the principal amount of such requested Revolving
Credit Advance, plus the principal amount of all other Advances then
outstanding hereunder, plus the aggregate undrawn portion of any
Letters of Credit which shall be outstanding as of the date of the
requested Revolving Credit Advance and the aggregate face amount of
Letters of Credit requested but not yet issued, less the principal
amount of any outstanding Advance to be refunded by the requested
Revolving Credit Advance shall not exceed the then applicable
Revolving Credit Aggregate Commitment and (ii) the Formula Debt shall
not exceed the Borrowing Base Limitation (as determined from the most
recent Borrowing Base Report which Company is required to deliver to
Agent pursuant to the provisions of Section 9.3 hereof);
(d) the principal amount of such Revolving Credit Advance,
plus the amount of any other outstanding Indebtedness under this
Agreement to be then combined therewith having the same Applicable
Interest Rate and Interest Period, if any, shall be (i) in the case
of a Eurocurrency-based Advance, at least Two Million Dollars
($2,000,000) or a larger integral multiple of One Hundred Thousand
Dollars ($100,000), and (ii) in the case of a Prime-based Advance, at
least One Million Dollars ($1,000,000) or a larger integral multiple
of One Hundred Thousand Dollars ($100,000), and at any one time there
shall not be in effect more than seven (7) Interest Periods;
(e) each Request for Revolving Credit Advance, once
delivered to Agent, shall not be revocable by Company, and shall
constitute and include a certification by the Company as of the date
thereof that:
(i) both before and after the Revolving Credit Advance,
the obligations of the Company set forth in this
Agreement and the Loan Documents, as applicable,
are valid, binding and enforceable obligations of
such parties;
(ii) to the best knowledge of Company (both before and
after giving effect to such Advance) all conditions
to Advances of the Revolving Credit have been
satisfied;
(iii) both before and after such Advance, there is no
Default or Event of Default in existence; and
(iv) both before and after such Advance, the
representations and warranties contained in this
Agreement and the other Loan Documents are true and
correct in all material respects.
The Agent may advance funds under the Revolving Credit Notes upon
telephone request made by any one of those officers or agents of Company
authorized by resolution of Company's Board of Directors (or a committee
thereof) to make such requests. Any such telephone request shall satisfy the
time requirements set forth in Section 2.3(b) above. Company hereby authorizes
Agent and each Revolving Credit Bank to disburse pursuant to the instructions
of any officer or agent so identified. On the same day as such request for
Revolving Credit Advance is made, the officer or agent requesting the
Revolving Credit Advance shall mail to the Agent a Request for Revolving
Credit Advance in form similar to that attached as Exhibit "D", executed by an
authorized officer or agent of Company and, until such Request for Revolving
Credit Advance is received by Agent, the telephone request itself shall
constitute the requesting officer's certification of the matters set forth in
Section 2.3(e) above.
2.4 Disbursement of Revolving Credit Advances.
(a) Upon receiving any Request for Revolving Credit Advance
(or telephone request) from Company under Section 2.3 hereof, Agent
shall promptly notify each Revolving Credit Bank by wire, telecopy,
telex or telephone (confirmed by wire, telecopy or telex) of the
amount of such Revolving Credit Advance to be made and the date such
Advance is to be made by said Revolving Credit Bank pursuant to its
Percentage of such Revolving Credit Advance. Unless such Revolving
Credit Bank's commitment to make Revolving Credit Advances hereunder
shall have been suspended or terminated in accordance with this
Agreement, each Revolving Credit Bank shall send the amount of its
Percentage of Advance in same day funds in Dollars to Agent at the
office of Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ not later than 2:00 p.m. (Detroit time) on the date of
such Advance.
(b) Subject to submission of an executed Request for
Revolving Credit Advance by Company without exceptions noted in the
compliance certification therein and to the other terms and
conditions hereof, Agent shall make available to Company the
aggregate of the amounts so received by it from the Revolving Credit
Banks under this Section 2.4, in like funds, not later than 4:00 p.m.
(Detroit time) on the date of such Revolving Credit Advance by credit
to an account of Company maintained with Agent or to such other
account or third party as Company may reasonably direct.
(c) Unless Agent shall have been notified by any Revolving
Credit Bank prior to the date of any proposed Revolving Credit
Advance that such Revolving Credit Bank does not intend to make
available to Agent such Revolving Credit Bank's Percentage of such
Revolving Credit Advance, Agent may assume that such Revolving Credit
Bank has made such amount available to Agent on such date, as
aforesaid and may, in its sole discretion and without obligation to
do so, in reliance upon such assumption, make available to Company a
corresponding amount. If such amount is not in fact made available to
Agent by such Revolving Credit Bank in accordance with Section
2.4(a), as aforesaid, Agent shall be entitled to recover such amount
on demand from such Revolving Credit Bank. If such Revolving Credit
Bank does not pay such amount forthwith upon Agent's demand therefor,
the Agent shall promptly notify Company, and Company shall pay such
amount to Agent. Agent shall also be entitled to recover from such
Revolving Credit Bank or from Company, as the case may be, interest
on such amount in respect of each day from the date such amount was
made available by Agent to Company to the date such amount is
recovered by Agent, at a rate per annum equal to:
(i) in the case of such Revolving Credit Bank, the
Federal Funds Effective Rate; or
(ii) in the case of Company, the rate of interest then
applicable to the Revolving Credit Advance.
The obligation of any Revolving Credit Bank to make any Revolving
Credit Advance hereunder shall not be affected by the failure of any
other Revolving Credit Bank to make any Revolving Credit Advance
hereunder, and no Bank shall have any liability to the Company, the
Agent, any other Bank, or any other party for another Bank's failure
to make any loan or Revolving Credit Advance hereunder.
2.5 Prime-based Advance in Absence of Election or Upon Default. If,
as to any outstanding Eurocurrency-based Advance, Agent has not received
payment on the last day of the Interest Period applicable thereto, or does not
receive a timely Request for Revolving Credit Advance meeting the requirements
of Section 2.3 hereof with respect to the refunding or conversion of such
Advance, or, subject to Section 6.6 hereof, if on such day a Default or Event
of Default shall exist, the principal amount thereof which is not then prepaid
shall be converted automatically to a Prime-based Advance and the Agent shall
thereafter promptly notify Company of said action.
2.6 Revolving Credit Commitment Fee. From the date hereof to (but
excluding) the Revolving Credit Maturity Date, the Company shall pay to each
of the Revolving Credit Banks, a Revolving Credit Commitment Fee consisting of
twenty basis points per annum times the average daily amount by which such
Bank's Percentage of the Revolving Credit Aggregate Commitment then in effect
exceeds the sum of (i) such Bank's Percentage of the aggregate principal
amount of Revolving Credit Advances and Swing Line Advances outstanding from
time to time during such period, and (ii) such Bank's Percentage of the
aggregate daily undrawn amount of any standby Letters of Credit during such
period, calculated on a daily basis. The Revolving Credit Commitment Fee shall
be payable quarterly in arrears commencing April 1, 1996, and on the first day
of each calendar quarter thereafter and at 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 Commitment 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. Such Revolving Credit Commitment Fees shall be paid by Company
to the Agent. Upon receipt of such payment, Agent shall make prompt payment to
each Revolving Credit Bank of its share of the Revolving Credit Commitment
Fee. The Revolving Credit Commitment Fee shall not be refundable under any
circumstances.
2.7 Facility Fee. From the date hereof to the Revolving Credit
Maturity Date, the Company shall pay to the Agent, for distribution to the
Revolving Credit Banks pro rata, a Facility Fee equal to ten basis points
(.10%) per annum times the Revolving Credit Aggregate Commitment. The Facility
Fee shall be payable quarterly in arrears commencing April 1, 1996, 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 numbers of days elapsed. Whenever
any payment of the 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
Revolving Credit Bank of its share of the Facility Fee based upon its
respective Percentage. The Facility Fee shall not be refundable under any
circumstances.
2.8 Reduction of Indebtedness; Revolving Credit Aggregate
Commitment. If at any time and for any reason (a) the aggregate principal
amount of the Formula Debt shall exceed the then applicable Borrowing Base
Limitation or (b) the principal amount of Advances and the aggregate undrawn
amount of any Letters of Credit outstanding at such time shall exceed the
Revolving Credit Aggregate Commitment, Company shall immediately reduce any
pending request for an Advance on such day by the amount of such excess and,
to the extent any excess remains thereafter, immediately repay an amount of
the Indebtedness equal to such excess. Any prepayment required pursuant to the
provisions of this Section 2.8 shall be applied first to the outstanding
Advances, then to reduce Letter of Credit Obligations (which if contingent,
shall be by deposit of cash collateral with the Agent) and then to the
installments of principal under the Term Loan (in inverse order of their
respective maturities). Company acknowledges that, in connection with any
repayment required hereunder, it shall also be responsible for the
reimbursement of any prepayment or other costs required under Section 13.1 or
Section 4.4 hereof; provided, however, that Company shall, in order to reduce
any such prepayment costs and expenses, first prepay such portion of the
Indebtedness then carried as a Prime-based Advance, if any.
2.9 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. The Company may, upon at least five (5) Business Days' prior
written or telegraphic notice to Agent, permanently reduce the Revolving
Credit Aggregate Commitment 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 Aggregate Commitment shall be in an aggregate amount
equal to at least Five Million Dollars ($5,000,000) 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 Commitment Fee, if any,
accrued to the date of such reduction on the amount of the Revolving Credit
Aggregate Commitments so reduced; (iii) the Company shall prepay in accordance
with the terms hereof the amount, if any, by which the aggregate unpaid
principal amount of Swing Line Advances and Revolving Credit Advances, plus
the aggregate amount of outstanding Letters of Credit, exceeds the amount of
the Revolving Credit Aggregate Commitment, taking into account the aforesaid
reductions thereof, together with accrued but unpaid interest on the principal
amount of such prepaid Advances to the date of prepayment; (iv) if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurocurrency-based Advance or 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 Advance and (v) no reduction shall
reduce the amount of the Revolving Credit Aggregate Commitment to an amount
which is less than the sum of the aggregate undrawn amount of any Letters of
Credit outstanding at such time. Reductions of the Revolving Credit Aggregate
Commitment and any accompanying prepayments of the Revolving Credit Notes
shall be distributed by Agent to each Revolving Credit Bank in accordance with
such Bank's Percentage thereof, and will not be available for reinstatement by
or readvance to the Company and any accompanying prepayments of the Swing Line
Notes 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 Aggregate Commitment hereunder shall reduce each
Revolving Credit Bank's portion thereof proportionately (based upon 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
which bear interest at the Prime-based Rate, next to Quoted Rate Advances and
then to Eurocurrency-based Advances.
2.10 Extension of Revolving Credit Maturity Date. (a) Provided that
no Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent and each Revolving Credit Bank (which notice shall be
irrevocable and which shall not be deemed effective unless actually received
by Agent and each Bank) prior to March 31 but not before February 1, of each
year (commencing with calendar year 1996), request that the Revolving Credit
Banks extend the then applicable Revolving Credit Maturity Date to a date that
is one year later than the Revolving Credit Maturity Date then in effect (each
such request, a "Request"). Each Revolving Credit Bank shall, not later than
ninety (90) calendar days following the date of its receipt of the 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 Revolving
Credit Banks, then, effective upon the date of Agent's receipt of all such
written approvals from the Revolving Credit Banks, as aforesaid, the Revolving
Credit Maturity Date shall be so extended for an additional one year period,
the term Revolving Credit Maturity Date shall mean such extended date and
Agent shall promptly notify the Company that such extension has occurred.
(b) If (i) any Revolving Credit Bank gives the Agent written
notice that it is unwilling to extend the Revolving Credit Maturity Date as
requested or (ii) any Revolving Credit Bank fails to provide written approval
to Agent of such a Request within ninety (90) calendar days of the date of
Agent's receipt of the Request, then (w) the Banks shall be deemed to have
declined to extend the Revolving Credit Maturity Date, (x) 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 2.10),
and (y) the commitments of the Revolving Credit 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 thereof.
2.11 Use of Proceeds. Proceeds of Advances shall be used solely to
refinance certain existing indebtedness of Company to Comerica Bank and NBD
Bank and for general corporate purposes.
3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent shall through its 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 Company
accompanied by a duly executed Letter of Credit Agreement, and such other
documentation related to the requested Letter of Credit as the Agent may
reasonably require, issue standby or documentary Letters of Credit for the
account of Company, 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 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 three (3)
Business Days prior to the Revolving Credit Maturity Date in effect on the
date of issuance thereof. The submission of all applications and the issuance
of each Letter of Credit hereunder shall be subject in all respects to
applicable provisions of U.S. law and regulations, including without
limitation, the Trading With the Enemy Act, Export Administration Act,
International Emergency Economic Powers Act, and the Regulations of the Office
of Foreign Assets Control of the U.S. Department of the Treasury.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at
the request and for the account of Company unless, as of the date of issuance
of such Letter of Credit:
(a) (i) the face amount of the Letter of Credit
requested, plus the undrawn portion of all other
outstanding Letters of Credit and the aggregate
amount of all unpaid Letter of Credit Obligations,
does not exceed the Letter of Credit Maximum
Amount, (ii) the face amount of the Letter of
Credit requested, if a trade Letter of Credit,
together with the undrawn amount of all other
outstanding trade Letters of Credit does not
exceed Two Million Five Hundred Thousand Dollars
($2,500,000), and (iii) the face amount of the
Letter of Credit requested, if a standby Letter of
Credit, together with the undrawn amount of all
other standby Letters of Credit does not exceed
Five Hundred Thousand Dollars ($500,000);
(b) (i) the face amount of the Letter of Credit
requested, plus the aggregate principal amount of
all Advances outstanding under the Notes, plus the
aggregate undrawn portion of all other outstanding
Letters of Credit, do not exceed the then
applicable Revolving Credit Aggregate Commitment
and (ii) the Formula Debt, taking into account the
face amount of the Letter of Credit requested does
not exceed the then applicable Borrowing Base
Limitation;
(c) the obligations of Company set forth in this
Agreement and the Loan Documents are valid, binding
and enforceable obligations of Company and the
valid, binding and enforceable nature of this
Agreement and the Loan Documents has not been
disputed by Company;
(d) both immediately before and immediately after
issuance of the Letter of Credit requested, no
Default or Event of Default exists;
(e) the representations and warranties contained in
this Agreement and the Loan Documents are true in
all material respects as if made on such date;
(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
material contract, agreement or other borrowing of
Company;
(g) Company 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 reasonably
required pursuant to the terms thereof, and the
terms of the proposed Letter of Credit shall be
satisfactory to Agent and its Issuing Office in
the exercise of its reasonable discretion;
(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, or any Revolving
Credit Bank from taking an assignment of its
Percentage thereof pursuant to Section 3.6 hereof,
and no law, rule, regulation, or governmental
request or directive (whether or not having the
force of law) shall prohibit or request that Agent
refrain from issuing, or any Revolving Credit 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 enactment of or change in
the interpretation of any law or regulation that
would make it unlawful or unduly burdensome for
the Agent to issue the requested Letter of Credit,
no general suspension of 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 Company 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 the
extension of credit by banks; and
(j) Agent shall have received the issuance fee 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 of the matters set forth in this
Section 3.2 (a) through (f). 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 "J", to each Revolving Credit 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 Revolving Credit Banks in accordance with the Percentages,
Letter of Credit Fees as follows:
(a) a Letter of Credit Fee with respect to the undrawn amount of
each Letter of Credit issued pursuant hereto in the amount of the Applicable
L/C Fee Percentage, exclusive of the issuance fee of one-eighth of one
percentage point (1/8%) per annum on the face amount of any standby Letter of
Credit to be paid to Agent under Section 3.5 hereof; provided, that with
respect to trade Letters of Credit for which there is a draw, the Letter of
Credit Fee shall apply only to the amount drawn; and, provided further that
the minimum fee payable under this Section 3.4(a) with respect to a trade
Letter of Credit shall be One Hundred Dollars ($100.00).
(b) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or cause to be deemed applicable any reserve, special deposit,
limitation or similar requirement against letters of credit issued by, or
assets held by, or deposits in or for the account of, Agent or any of the
Banks or (ii) impose on Agent or any of the Banks 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 in an amount
deemed material by Agent or the Banks the cost or expense to Agent or the
Banks 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 Revolving Credit 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 Revolving
Credit 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 Revolving Credit Bank, as the case may
be, as a result of any event mentioned in clause (i) or (ii) above, shall be
promptly submitted to the Company and shall be conclusive, absent manifest
error, as to the amount thereof.
(c) All payments by the Company to the Agent or the Revolving
Credit Banks under this Section 3.4 shall be made in Dollars and in
immediately available funds at the Agent's Issuing Office or such other office
of the Agent as may be designated from time to time by written notice to the
Company by the Agent. The aforesaid fees shall be nonrefundable under all
circumstances and shall be calculated on the basis of a 360 day year and, in
the case of standby Letters of Credit, assessed for the actual number of days
from the date of the issuance thereof to the stated expiration thereof. The
fees with respect to standby Letters of Credit shall be payable in advance.
The fees with respect to each trade Letter of Credit shall be payable at the
time a draw or other demand for payment thereunder is presented to the Agent.
3.5 Issuance Fees. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees (including a standby letter of credit
issuance fee of one eighth percentage point (1/8%) to be retained by Agent for
its own account), the Company shall pay, for the sole account of the Agent,
standard documentation, administration and trade Letter of Credit issuance
fees assessed by Agent or its Issuing Office, at the times, in the amounts and
on the terms set forth in the fee schedule dated December 21, 1995 previously
provided by Agent to Company, as such schedule may be adjusted to reflect the
standard fee schedule of Agent's Issuing Office in effect from time to time;
provided, however, no adjustment shall become effective until sixty (60) days
after written notice of such change by Agent to Company.
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company agrees 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
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, and
the Company shall be deemed to have elected to substitute for its
reimbursement obligation, a Prime-based Advance from the Banks in an amount
equal to the amount so paid by the Agent in respect of such draft or other
demand under such Letter of Credit. Such Prime-based Advance shall be
disbursed notwithstanding any failure to satisfy any conditions for
disbursement of any Advance set forth in Article 2 hereof and, to the extent
of the Prime-based Advance so disbursed, the reimbursement obligation of the
Company to the Agent under this Section 3.6 shall be deemed satisfied.
(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 on the date such draft or demand is honored, and to
each Revolving Credit Bank on such date unless the Company shall have
satisfied its reimbursement obligation under Section 3.6(a) by payment to the
Agent on such date. The Agent shall further use reasonable efforts to provide
notice to the Company 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 under Section 3.6(a) hereof.
(c) Upon issuance by the Agent of each Letter of Credit
hereunder, each Revolving Credit Bank shall automatically acquire a pro rata
risk participation interest in such Letter of Credit and related Letter of
Credit Payment based on its respective Percentage. Each Revolving Credit Bank,
on the date a draft or demand under any Letter of Credit is honored, shall
make its Percentage share of the amount paid by the Agent, and not reimbursed
by the Company by payment to the Agent on such day, available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Bank shall not have made such pro rata
portion available to the Agent, such Bank and the Company severally agree to
pay to the Agent forthwith on demand such amount together with interest
thereon, for each day from the date 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 disbursed
under Section 3.6(a) in respect of the reimbursement obligation of the
Company. If such Bank shall pay such amount to the Agent together with such
interest, such amount so paid shall constitute a Prime-based Advance by such
Bank disbursed in respect of the reimbursement obligation of the Company under
Section 3.6(a) for purposes of this Agreement, effective as of the date such
amount was paid by the Agent. The failure of any Revolving Credit Bank to make
its pro rata portion of any such amount paid by the Agent available to the
Agent shall not relieve any other Revolving Credit 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.
(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 to make
payments to Agent or the Revolving Credit 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 such 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 any of the Letter of Credit Documents;
(c) The existence of any claim, setoff, defense or other right
which the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the Agent or any Bank
or any other person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(d) Any draft or other statement or document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(e) Payment by the Agent to the beneficiary under any Letter of
Credit against presentation of documents which do not comply with the terms of
the 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 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.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to Company
against the Agent or any Bank. Nothing contained in this Section 3.7 shall be
deemed to prevent Company, after satisfaction in full of the absolute and
unconditional obligations of Company 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 assigning and the handling
of Letters of Credit and any security therefor, or any documents or
instruments given in connection therewith, Agent shall have the sole right to
take or refrain from taking any and all actions under or upon the Letters of
Credit.
(b) Subject to other terms and conditions of this Agreement,
Agent shall issue the Letters of Credit and shall hold the documents related
thereto in its own name and shall make all collections thereunder and
otherwise administer the Letters of Credit in accordance with Agent's
regularly established practices and procedures and, except pursuant to Section
14.3 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,
beneficiaries of Letters of Credit, or any other Person which Agent believes
to be authentic. Agent will, upon request, furnish the Banks with copies of
Letter of Credit Agreements, Letters of Credit and documents related thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Agent makes no representation
and shall, subject to Section 3.7 hereof, have no responsibility with respect
to (i) the obligations of Company or, the validity, sufficiency or
enforceability of any document or instrument given in connection therewith,
(ii) the financial condition of, any representations made by, or any act or
omission of Company 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 acknowledge that they have made and
will continue to make their own evaluations of Company's creditworthiness
without reliance on any representation of Agent or Agent's officers, agents
and employees.
(d) If at any time Agent shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent shall receive same for the pro rata
benefit of the Banks in accordance with their respective Percentage interests
therein and shall promptly deliver to each Revolving Credit 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 Revolving Credit
Bank shall receive from any source whatsoever any payment on any such
unreimbursed amount or interest thereon in excess of such Bank's Percentage
share 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 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 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 shall
not be required to indemnify the Banks and the Agent and such other persons,
and the Banks and Agent shall be liable to the Company to the extent, but only
to the extent, of any direct, as opposed to consequential or incidental,
damages suffered by Company which were caused by the Agent's gross negligence,
willful misconduct or wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand
for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit.
(b) It is understood that in making any payment under a Letter
of Credit, the Agent will rely on documents presented to it under such Letter
of Credit as to any and all matters set forth therein without further
investigation and regardless of any notice or information to the contrary. It
is further acknowledged and agreed that Company may have rights against the
beneficiary or others in connection with any Letter of Credit with respect to
which the Banks are alleged to be liable and it shall be a condition of the
assertion of any liability of the Banks under this Section that Company 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 Revolving Credit Bank agrees to
reimburse the Agent on demand, pro rata in accordance with their Percentages,
for (i) the out-of-pocket costs and expenses of the Agent to be reimbursed by
Company pursuant to any Letter of Credit Agreement or any Letter of Credit, to
the extent not reimbursed by Company or Account Party and (ii) any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, fees, 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, 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.
4. TERM CREDIT
4.1 Commitment. Subject to the terms and conditions of this
Agreement, each Term Loan Bank, severally and for itself alone, agrees to loan
to Company on the date of execution of this Agreement, an amount equal to its
Percentage of the Term Loan. At the time of the borrowing under this Section
4.1, Company agrees to execute a separate Term Note for each Term Loan Bank
with appropriate insertions (acceptable to the Banks in form and substance) as
evidence of the Indebtedness under this Section 4.1.
4.2 Disbursement of Loan. Unless such Bank's commitment to make the
Term Loan shall have been suspended or terminated in accordance with this
Agreement, each Term Loan Bank shall, not later than 2:00 p.m. (Detroit time)
on the date of execution of this Agreement, make available the amount of its
Percentage of the Term Loan in immediately available funds to Agent, at the
office of Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Agent
shall make available to Company not later than 4:00 p.m. (Detroit time) on
such date the aggregate of the amounts so received by it in like funds by
credit to an account of Company maintained with Agent or to such other account
or third party as Company may direct. Unless Agent shall have been notified by
any Term Loan Bank that such Bank does not intend to make available to Agent
such Bank's pro rata share of the Term Loan, Agent may assume that such Bank
has made such amount available to Agent on such date and may, in reliance upon
such assumption, make available to Company a corresponding amount. If such
amount is not in fact made available to Agent by such Bank, Agent shall be
entitled to recover such amount on demand from such Bank. If such Bank does
not pay such amount forthwith upon Agent's demand therefor, the Agent shall
promptly notify Company and Company shall pay such amount to Agent. Agent
shall also be entitled to recover from such Bank or Company, as the case may
be, interest on such amount in respect of each day from the date such amount
was made available by Agent to Company to the date such amount is recovered by
Agent, at a rate per annum equal to the highest rate of interest then
applicable to the Term Loan. The obligation of any Term Loan Bank to make any
advance of the Term Loan shall not be affected by the failure of any other
Term Loan Bank to make any advance of the Term Loan and no Term Loan Bank
shall have any liability to the Company, the Agent, or any other Term Loan
Bank for another Term Loan Bank's failure to make any advance of the Term Loan
hereunder.
4.3 Payments of Principal and Interest. The Term Loan shall be
payable (unless sooner accelerated pursuant to the terms of this Agreement) in
quarterly installments of principal each equal to One Million Dollars
($1,000,000) on the last day of each March, June, September, and December,
beginning March 31, 1998. All remaining outstanding principal and accrued but
unpaid interest shall be due and payable on the Term Loan Maturity Date. Each
Term Loan Bank's Term Note and the Term Loan shall bear interest from the date
thereof on the unpaid principal balance thereof from time to time outstanding,
at a rate per annual equal to seven and ninety nine one-hundredths percent
(7.99%), which interest shall be payable quarterly on the last day of each
March, June, September and December, beginning March 31, 1996. Notwithstanding
the foregoing, and unless waived in accordance with the provisions of Section
11.5 hereof, from and after the occurrence of any Event of Default and during
the continuation thereof, the principal outstanding under the Term Notes shall
bear interest payable on demand at a rate per annum equal to the greater of
ten and ninety nine one-hundredths percent (10.99%) and three percent (3%)
above the Prime Rate. Interest on the Term Loan shall be calculated on the
basis of a 360 day year for the actual number of day elapsed. Upon receipt by
the Agent of each principal and interest payment made by the Company under
this Section 4.3, the Agent shall promptly remit to each Bank such Bank's
Percentage thereof.
4.4 Prepayments.
(a) Agent and the Term Loan Banks shall not be required to accept any
prepayment of principal under the Term Notes except as described in this
Section 4.4 or as required under applicable law. The Company may prepay the
outstanding principal under the Term Notes in its entirety or, with respect to
partial payments, in increments of One Million Dollars ($1,000,000) at any
time and from time to time so long as the Agent is provided written notice of
prepayment at least three (3) Business Days prior to the date of prepayment.
The notice of prepayment shall contain the following information: (i) the date
of prepayment (the "Prepayment Date") and (ii) the amount of principal to be
prepaid. On the Prepayment Date, the Company will pay to the Agent for pro
rata distribution to each of the Term Loan Banks (in accordance with the
Percentages), in addition to the other amounts then due on the Term Notes, the
Prepayment Amount described below. Agent and the Term Loan Banks, in their
sole discretion, may accept any prepayment of principal even if not required
to do so under this Agreement and may deduct from the amount to be applied
against principal the other amounts required as part of the Prepayment Amount.
The Prepaid Principal Amount (as defined below) shall be applied to
the Term Notes in the inverse order of maturity, such that, as opposed to
prepaying the next principal payment due, the Prepaid Principal Amount will be
applied beginning with the final principal payment due on the Term Notes.
If the Agent and the Term Loan Banks exercise their right to
accelerate the payment of the Term Notes prior to maturity under Section 11.2
of this Agreement, the Company shall also be required to pay to each of the
Term Loan Banks, in addition to the other amounts then due on the Term Notes,
on the date specified by the Agent as the Prepayment Date, its Percentage of
the Prepayment Amount.
The Agent's determination of the Prepayment Amount will be conclusive
in the absence of demonstrable error. If requested in writing by the Company,
the Agent will provide the Company a written statement calculating the
Prepayment Amount.
As used herein, the "Prepayment Amount" shall mean the sum of: (w)
the amount of principal which the Company has elected to prepay or the amount
of principal which Agent and the Term Loan Banks have required the Company to
prepay because of acceleration, as the case may be (as used herein, the
"Prepaid Principal Amount"), (x) interest accruing on the Prepaid Principal
Amount up to, but not including, the Prepayment Date, plus (y) the present
value, discounted at the Reinvestment Rates (as defined below), of the
positive amount by which (A) the interest the Banks would have earned had the
Prepaid Principal Amount been paid according to the Term Loan's amortization
schedule at the fixed rate exceeds (B) the interest the Term Loan Banks would
earn by reinvesting the Prepaid Principal Amount at the Reinvestment Rates;
and
"Reinvestment Rates" shall mean the per annum rates of interest equal
to one half percent (1/2%) above the rates of interest reasonably determined
by the Agent to be in effect not more than two days prior to the Prepayment
Date in the secondary market for United States Treasury Obligations in
amount(s) and with maturity(ies) which correspond (as closely as possible) to
the principal installment amount(s) and the payment date(s) against which the
Prepaid Principal Amount will be applied.
(b) Each prepayment under this Section 4.4 shall be made to the
Agent, and promptly upon receipt thereof, the Agent shall remit to each Term
Loan Bank its pro rata share thereof (based upon the Percentages).
4.5 Use of Proceeds. The proceeds of the Term Loan shall be used
solely to refinance certain existing indebtedness of Company to Comerica Bank
and NBD Bank under the Term Loan Agreement dated November 20, 1992, as
amended.
5. SWING LINE CREDIT.
5.1 Swing Line Advances. The Swing Line Bank shall, on the terms and
subject to the conditions hereinafter set forth, make one or more advances
(each such advance being a "Swing Line Advance") to Company from time to time
on any Business Day during the period from the date hereof to (but excluding)
the Revolving Credit Maturity Date in an aggregate amount not to exceed Three
Million Dollars ($3,000,000) at any time outstanding; provided, however, that
after giving effect to all Swing Line Advances and all Revolving Credit
Advances requested to be made on such date, the aggregate principal amount of
all outstanding Advances and the undrawn portion of all outstanding Letters of
Credit shall not exceed the then applicable Revolving Credit Aggregate
Commitment. All Swing Line Advances shall be evidenced by the Swing Line Note,
under which advances, repayments and readvances may be made, subject to the
terms and conditions of this Agreement. Each Swing Line Advance shall mature
and the principal amount thereof shall be due and payable by Company on the
last day of the Interest Period applicable thereto. In no event whatsoever
shall any outstanding Swing Line Advance be deemed to reduce, modify or affect
any Bank's commitment to make Revolving Credit Advances based upon its
Percentage.
5.2 Accrual of Interest; Margin Adjustments. 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, and the amount and date of any
repayment shall be noted on Agent's records, which records will be conclusive
evidence thereof, absent manifest error; provided, however, that any failure
by the Agent to record any such information shall not relieve Company of its
obligation to repay the outstanding principal amount of such Advance, all
interest accrued thereon and any amount payable with respect thereto in
accordance with the terms of this Agreement and the Loan Documents.
5.3 Requests for Swing Line Advances. Company may request a Swing
Line Advance only after delivery to Swing Line Bank of a Request for Swing
Line Advance executed by an authorized officer of Company, subject to the
following and to the remaining provisions hereof:
(a) each such Request for Swing Line Advance shall set forth the
information required on the Request for Swing Line Advance form annexed hereto
as Exhibit "E", including without limitation:
(i) the proposed date of such Swing Line Advance, which must be
a Business Day;
(ii) whether such Swing Line Advance is to be a Prime-based
Advance or Quoted Rate Advance; and
(iii) the duration of the Interest Period applicable thereto;
(b) each such Request for Swing Line Advance shall be delivered
to Swing Line Bank by 12:00 noon (Detroit time) on the proposed date of the
Swing Line Advance;
(c) the principal amount of such requested Swing Line Advance,
plus the principal amount of all other Advances then outstanding hereunder,
plus the aggregate undrawn portion of any Letters of Credit which shall be
outstanding as of the date of the requested Swing Line Advance, plus the
aggregate face amount of Letters of Credit requested but not yet issued, shall
not exceed the then applicable Revolving Credit Aggregate Commitment;
(d) the principal amount of such Swing Line Advance *shall be at
least Two Hundred Fifty Thousand Dollars ($250,000);
(e) each Request for Swing Line Advance, once delivered to Swing
Line Bank, shall not be revocable by Company, and shall constitute and include
a certification by the Company as of the date thereof that:
(i) both before and after such Swing Line Advance, the
obligations of the Company set forth in this Agreement and the Loan
Documents, as applicable, are valid, binding and enforceable
obligations of such parties;
(ii) to the best knowledge of Company all conditions to such
Swing Line Advance have been satisfied (both before and after giving
effect to such Advance);
(iii) both before and after the making of such Advance, there is
no Default or Event of Default in existence; and
(iv) both before and after the Advance, the representations and
warranties contained in this Agreement and the Loan Documents are
true and correct in all material respects.
Swing Line Bank shall promptly deliver to Agent by telecopier a copy of any
Request for Swing Line Advance received.
The Swing Line Bank may advance funds under the Swing Line Note upon
telephone request made by any one of those officers or agents of Company
authorized by resolution of Company's Board of Directors (or any committee
thereof) to make such requests. Any such telephone request shall satisfy the
time requirements set forth in Section 5.3(b) above. Company hereby authorizes
Swing Line Bank to disburse pursuant to the instructions of any officer or
agent so identified. On the same day as such request for Swing Line Advance is
made, the officer or agent requesting the Swing Line Advance shall mail to the
Swing Line Bank a Request for Swing Line Advance in form similar to that
attached as Exhibit "E", executed by an authorized officer or agent of Company
and, until such Request for Swing Line Advance is received by Agent, the
telephone request itself shall constitute the requesting officer's
certification of the matters set forth in Section 5.3(e) above.
5.4 Disbursement of Swing Line Advances. Subject to submission of an
executed Request for Swing Line Advance by Company without exceptions noted in
the compliance certification therein and to the other terms and conditions
hereof, Swing Line Bank shall make available to Company the amount so
requested, in same day funds, not later than 4:00 p.m. (Detroit time) on the
date of such Swing Line Advance by credit to an account of Company maintained
with Swing Line Bank or to such other account or third party as Company may
reasonably direct. Swing Line Bank shall promptly notify Agent of any Swing
Line Advance by telephone, telex or telecopier.
5.5 Refunding of or Participation Interest in Swing Line Advances.
(a) The Agent, at any time in its sole and absolute discretion,
may (or, upon the request of the Swing Line Bank, shall) on behalf of the
Company (which hereby irrevocably directs the Agent to act on its behalf)
request each Revolving Credit Bank (including the Swing Line Bank in its
capacity as a Revolving Credit Bank) to make a Revolving Credit Advance in an
amount equal to such Revolving Credit Bank's Percentage of the principal
amount of the Swing Line Advances (the "Refunded Swing Line Advances")
outstanding on the date such notice is given; provided that (i) at any time as
there shall be a Swing Line Advance outstanding for more than thirty days, the
Agent shall, on behalf of the Company (which hereby irrevocably directs the
Agent to act on its behalf), promptly request each Revolving Credit Bank
(including the Swing Line Bank) to make a Revolving Credit Advance in an
amount equal to such Revolving Credit Bank's Percentage of the principal
amount of such outstanding Swing Line Advance and (ii) Swing Line Advances
shall be prepaid by the Company in accordance with the provisions of Section
6.7 hereof. In the case of each Refunded Swing Line Advance, the applicable
Advance of the Revolving Credit used to refund such Swing Line Advance shall
be a Prime-based Advance. Unless any of the events described in Section
11.1(j) shall have occurred (in which event the procedures of paragraph (b) of
this Section 5.5 shall apply) and regardless of whether the conditions
precedent set forth in this Agreement to the making of a Revolving Credit
Advance are then satisfied, each Revolving Credit Bank shall make the proceeds
of its Revolving Credit Advance available to the Agent for the ratable benefit
of the Swing Line Bank at the office of the Agent specified in Section 2.4(a)
prior to 11:00 a.m. Detroit time, in funds immediately available on the
Business Day next succeeding the date such notice is given. The proceeds of
such Revolving Credit Advances shall be immediately applied to repay the
Refunded Swing Line Advances.
(b) If, prior to the making of a Revolving Credit Advance
pursuant to paragraph (a) of this Section 5.5, one of the events described in
Section 11.1(j) shall have occurred, each Revolving Credit Bank will, on the
date such Revolving Credit Advance was to have been made, purchase from the
Swing Line Bank an undivided participating interest in the Refunded Swing Line
Advance in an amount equal to its Percentage of such Refunded Swing Line
Advance. Each Bank will immediately transfer to the Agent, in immediately
available funds, the amount of its participation and upon receipt thereof the
Agent will deliver to such Bank a Swing Line Bank Participation Certificate in
the form of Exhibit "H" dated the date of receipt of such funds and in such
amount.
(c) Each Bank's obligation to make Revolving Credit Advances and
to purchase participation interests in accordance with clauses (a) and (b)
above shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against Swing Line
Bank, the Company or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of any Default or Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Company or any
other Person; (iv) any breach of this Agreement by the Company or any other
Person; (v) any inability of the Company to satisfy the conditions precedent
to borrowing set forth in this Agreement on the date upon which such
participating interest is to be purchased or (vi) 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 (a) or (b) 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 the first two Business Days and at the
Alternate Base Rate thereafter.
6. INTEREST PAYMENTS/ADVANCES
6.1 Prime-based Interest Payments. Interest on the unpaid balance of
all Prime-based Advances from time to time outstanding shall accrue from the
date of such Advances until paid, at a per annum interest rate equal to the
Prime-based Rate, and shall be payable in immediately available funds monthly
commencing on the first day of the calendar month next succeeding the calendar
month during which the initial Advance is made and on the first day of each
calendar month thereafter. Interest accruing at the Prime-based Rate shall be
computed on the basis of a 360 day year and assessed for the actual number of
days elapsed, and in such computation effect shall be given to any change in
the interest rate resulting from a change in the Prime-based Rate on the date
of such change in the Prime-based Rate.
6.2 Eurocurrency-based Interest Payments. Interest on the unpaid
balance of each Eurocurrency-based Advance having a related
Eurocurrency-Interest Period of 3 months or less shall accrue at its
Eurocurrency-based Rate and shall be payable in immediately available funds on
the last day of the Interest Period applicable thereto. Interest shall be
payable in immediately available funds on the unpaid balance of each
Eurocurrency-based Advance outstanding from time to time having a
Eurocurrency-Interest Period of 6 months or longer, at intervals of 3 months
after the first day of the applicable Interest Period, and shall also be
payable on the last day of the Interest Period applicable thereto. Interest
accruing at the Eurocurrency-based Rate shall be computed on the basis of a
360 day year and assessed for the actual number of days elapsed from the first
day of the Interest Period applicable thereto to, but not including, the last
day thereof.
6.3 Quoted Rate Advance Interest Payments. Interest on the unpaid
balance of each Quoted Rate Advance shall accrue at its Quoted Rate and shall
be payable in immediately available funds on the last day of the Interest
Period applicable thereto. Interest accruing at the Quoted Rate shall be
computed on the basis of a 360 day year and assessed for the actual number of
days elapsed from the first day of the Interest Period applicable thereto to,
but not including the last day thereof.
6.4 Interest Payments on Conversions. Notwithstanding anything to the
contrary in Sections 6.1 and 6.2, all accrued and unpaid interest on any
Revolving Credit Advance refunded or converted pursuant to Section 2.3 hereof
shall be due and payable in full on the date such Advance is refunded or
converted.
6.6 Interest on Default. Notwithstanding anything to the contrary
set forth in Sections 6.1, 6.2 and 6.3, in the event and so long as any Event
of Default shall exist under this Agreement, interest shall be payable daily
on the principal amount of all Advances from time to time outstanding (and on
all other monetary obligations of Company hereunder and under the other Loan
Documents) at a per annum rate equal to in the case of Eurocurrency-based
Advances and Quoted Rate Advances, the Applicable Interest Rate plus three
percent (3%) per annum for the remainder of the then existing Interest Period,
if any, and at all other such times and for all Prime-based Advances, at a per
annum rate equal to the Prime-based Rate, plus three percent (3%).
6.7 Prepayment. Company may prepay all or part of the outstanding
balance of any Prime-based Advance(s) (subject to same day notice to Agent) at
any time, provided that the amount of any partial prepayment shall be at least
One Hundred Thousand Dollars ($100,000). Company may prepay all or part of any
Eurocurrency-based Advance (subject to not less than three (3) Business Days'
notice to Agent) only on the last day of the Interest Period applicable
thereto, provided that the amount of any such partial prepayment shall be at
least One Hundred Thousand Dollars ($100,000). Company may prepay Quoted Rate
Advances only on the last day of the Interest Period applicable thereto. 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 the Revolving Credit,
whether by acceleration, mandatory or required prepayment or otherwise, shall
be subject to Section 13.1 hereof, but otherwise without premium, penalty or
prejudice.
7. CONDITIONS.
The obligations of Banks to make Advances, the Term Loan or issue
Letters of Credit pursuant to this Agreement are subject to the following
conditions:
7.1 Execution of Notes and this Agreement. Company shall have
executed and delivered to Agent for the account of each Bank, the Revolving
Credit Notes, the Term Notes, the Swing Line Note and this Agreement
(including all schedules, exhibits, certificates, opinions, financial
statements and other documents to be delivered pursuant hereto), and such
Revolving Credit Notes, the Term Notes, Swing Line Note, the Loan Documents
and this Agreement shall be in full force and effect.
7.2 Corporate Authority. Agent shall have received, with a
counterpart thereof for each Bank: (i) certified copies of resolutions of the
Board of Directors of Company 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 and delivery thereof and the borrowing of
Advances hereunder and of the Boards of Directors of the Guarantors evidencing
approval of them entering into Guarantor Collateral Documents; and (ii) (A)
certified copies of Company's, and each Guarantor's 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 Company; and (B) a certificate of good standing from the
state or other jurisdictions of Company's and each Guarantor's incorporation,
and from every state or other jurisdiction in which Company or a Guarantor is
qualified to do business, if issued by such jurisdictions, subject to the
limitations (as to qualification and authorization to do business) contained
in Section 8.1 hereof.
7.3 Company Collateral Documents. As security for all Indebtedness
of Company to the Banks hereunder, Company shall have furnished, executed and
delivered to the Agent, or caused to be furnished, executed and delivered to
the Agent, prior to or concurrently with the initial borrowing hereunder, in
form and substance satisfactory to the Agent and the Banks and supported by
appropriate resolutions in certified form authorizing same, the Company
Collateral Documents. In addition, if required or advisable under applicable
law to perfect the liens granted thereby, the Agent shall have received,
concurrently with or prior to the making of Advances hereunder, appropriate
financing statements, collateral and other documents covering such Collateral
executed and delivered by the appropriate parties.
7.4 Guarantor Collateral Documents. As security for all Indebtedness
of Company to the Banks hereunder, each of the Guarantors shall have
furnished, executed, and delivered to the Agent, or caused to be furnished,
executed and delivered to the Agent, prior to or concurrently with the initial
borrowing hereunder, in form and substance satisfactory to Agent and the Banks
and supported by appropriate resolutions in certified form authorizing same,
the Guarantor Collateral Documents. In addition:
(a) Company shall have provided at Company's expense a
mortgagee's title insurance policy on each parcel of the real
property described in Exhibit "L" (each a "Store Site") in the amount
required by Agent. Each policy will be written on the American Land
Title Association Form of Mortgagee's Policy and will include a
zoning endorsement in form acceptable to the Agent and "Comprehensive
Endorsement No. 1 Coverage" provided by the title insurance policy
with respect to the each Store Site shall not be subject to the
standard exceptions as to rights of parties in possession and matters
which would be disclosed by survey, easements not shown by the public
records and mechanic's liens not shown by public records. The
coverage shall be subject to no exceptions other than (x) rights of
way, easements and use restrictions and encroachments disclosed by
survey which do not materially and adversely affect the value or
marketability of the Store Site or the usefulness of the Store Site
in the operations of Company or any Guarantor and (y) liens
acceptable to the Banks.
(b) Company shall have furnished to the Agent, at Company's
expense, a survey made based on the ALTA Minimum Standard Detail
Requirements for Land Title Surveys with respect to the each Store
Site with an ALTA Minimum Standard Detail Certificate certified to
the Agent as of a date no more than thirty (30) days prior to the
date hereof.
7.5 Licenses, Permits, Etc. The Agent shall have received, with a
counterpart for each Bank, copies of each authorization, license, permit,
consent, order or approval of, or registration, declaration or filing with,
any governmental authority or any securities exchange or other person
(including without limitation any securities holder) obtained or made by the
Company, any of its Subsidiaries, or any other Person (as of the relevant date
of Advance or loan hereunder) in connection with the transactions contemplated
by this Agreement or the Loan Documents.
7.6 Representations and Warranties. The representations and
warranties made by Company or any other party to any of the Loan Documents
(excluding the Agent and Banks) under this Agreement or any of the 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 date of the making of any Advance hereunder.
7.7 Compliance with Certain Documents and Agreements. The Company
and each of the Guarantors shall have each performed and complied with all
agreements and conditions contained in this Agreement, the Loan Documents, or
any agreement or other document executed thereunder and required to be
performed or complied by each of them (as of the applicable date) and none of
such parties be in default in the performance or compliance with any of the
terms or provisions hereof or thereof.
7.8 Opinion of Counsel. Company shall furnish Agent prior to the
initial Advance under this Agreement, and with signed copies for each Bank, an
opinion of counsel to the Company and the Guarantors, dated the date hereof,
and covering such matters as required by and otherwise satisfactory in form
and substance to the Agent and each of the Banks.
7.9 No Default. No Default or Event of Default shall have occurred
and be continuing, and there shall have been no material adverse change in the
financial condition, properties, business, prospects of, results or operations
of the Company and its Subsidiaries from October 28, 1995 to the date of the
making of the first borrowing hereunder.
7.10 Company's 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 on behalf of Company that to the best of his or her
knowledge after due inquiry, the conditions of paragraphs 7.1, 7.5 through
7.7, 7.9 and 7.12 hereof have been fully satisfied.
7.11 Payment of Fees. Company shall have paid to the Agent all fees,
costs and expenses required hereunder to be paid to Agent upon execution of
this Agreement and Company shall have paid to the Agent for pro rata
distribution to the Banks the Restructuring Fee.
7.12 Termination of Existing Credit Facility. Agent shall have
received evidence satisfactory to Agent of the termination of the existing
credit facilities, dated November 20, 1992, of ▇▇▇▇▇▇▇▇ Credit Corp. and
Company with Comerica and NBD Bank and payment in full by ▇▇▇▇▇▇▇▇ Credit
Corp. and Company of all of their obligations thereunder.
7.13 Other Documents and Instruments. The Agent shall have received,
with a photocopy for each Bank, such other instruments and documents as each
of the Required Banks may reasonably request in connection with the making of
loans hereunder, and all such instruments and documents shall be satisfactory
in form and substance to the Required Banks.
7.14 Continuing Conditions. The obligations of the Banks to make
Advances or loans under this Agreement shall be subject to the continuing
conditions that 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.
8. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and
warranties shall be deemed to be continuing representations and warranties
until the later of the Revolving Credit Maturity Date and the Term Loan
Maturity Date and thereafter until final payment in full of the Indebtedness
and the performance by Company of all other obligations under this Agreement:
8.1 Corporate Authority. Each of Company and its Subsidiaries is a
corporation duly organized and validly existing in good standing under the
laws of the applicable jurisdiction of organization, charter or incorporation;
it is duly qualified and authorized to do business as a corporation or foreign
corporation 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 impact on the Company or any of its Subsidiaries.
8.2 Due Authorization Company. Execution, delivery and performance
of this Agreement and any other documents and instruments required of Company
under or in connection with this Agreement or the other Loan Documents (or to
be so executed and delivered), and the issuance of the Notes by Company are
within its corporate powers, have been duly authorized by appropriate
corporate action, do not violate any law or the terms of Company's Articles of
Incorporation or Bylaws, and, except as have been previously obtained or as
referred to in Section 7.5, 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 not previously delivered under
Section 7.5 hereof.
8.3 Due Authorization - Guarantors. Execution, delivery and
performance of the Guarantor Collateral Documents and all other documents and
instruments required of Guarantors under or in connection with this Agreement
or the Loan Documents (or to be so executed and delivered) are within the
corporate powers of the Guarantors, have been duly authorized, do not violate
any law or the terms of the Guarantor's Articles of Incorporation or Bylaws,
and, except as have been previously obtained do not require the consent or
approval, material to the transactions contemplated by this Agreement, and the
Loan Documents, of any governmental body, agency or authority not previously
obtained and delivered to Agent under Section 7.5 hereof.
8.4 Title to Collateral - Company. Company has good and valid title
to the property pledged, mortgaged or otherwise encumbered or to be encumbered
under the Company Collateral Documents.
8.5 Encumbrances. There are no security interests in, liens,
mortgages, or other encumbrances on and no financing statements on file with
respect to any of the property owned by Company or any of its Subsidiaries
except for the Permitted Encumbrances.
8.6 Capital Stock; Shareholders; Subsidiaries. As of the date
hereof, (a) all present Subsidiaries of Company are set forth in the attached
Schedule 8.6, along with the percentage of the outstanding voting stock owned
by Company or by a Subsidiary of Company (and identifying that Subsidiary);
and (b) other than as disclosed on Schedule 8.6, there are no outstanding
options, warrants or rights to purchase, nor any agreement for the
subscription, purchase or acquisition of, any shares of the capital stock of
any of Company's Subsidiaries.
8.7 Taxes. Each of Company and its Subsidiaries 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 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 Company as may be required by GAAP.
8.8 No Defaults. There exists no payment default under any
instrument evidencing any indebtedness of the Company or any of its
Subsidiaries and there exists no other default under the provisions of any
instrument evidencing any indebtedness of the Company or any of its
Subsidiaries which is permitted hereunder or any Funded Debt connected with
any of the Permitted Encumbrances, or of any agreement relating thereto to the
extent such default with notice or the lapse of time or both, could result in
the acceleration of at least $1,000,000 of such indebtedness.
8.9 Enforceability of Agreement and Loan Documents-Company. This
Agreement, each of the Loan Documents to which 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 its duly authorized officers and constitute the valid and binding
obligations of 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.
8.10 Enforceability of Loan Documents -- Guarantors. The Loan
Documents to which each of the Guarantors is a party, and all certificates,
documents and agreements executed in connection therewith by the Guarantors
have each been duly executed and delivered by the respective duly authorized
officers of the Guarantors and constitute the valid and binding obligations of
Guarantors, 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.
8.11 Compliance with Laws. The Company and its Subsidiaries each has
complied with all applicable laws, including without limitation, Environmental
Laws, to the extent that failure to comply therewith would materially
interfere with the conduct of the business of the Company or any of its
Subsidiaries, or would have a material adverse effect upon Company or any of
its Subsidiaries, or upon any property (whether personal or real) owned by any
of them.
8.12 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 Company do not breach, or result in a default under, the terms of any
indenture, agreement or undertaking to which Company or any of its
Subsidiaries is a party or by which it or its properties are bound or
affected, to the extent such breach or default would materially adversely
affect the validity or enforceability of any of the Loan Documents.
8.13 Non-contravention -- Guarantors. The execution, delivery and
performance of those Loan Documents signed by the Guarantors, and any other
documents and instruments required under or in connection with this Agreement
by the Guarantors do not breach, or result in a default under, the terms of
any indenture, agreement or undertaking to which any Subsidiary or Company is
a party or by which it or its properties are bound or affected, to the extent
such breach or default would materially adversely affect the validity or
enforceability of any of the Loan Documents.
8.14 No Litigation -- Company. There is no suit, action, proceeding,
including, without limitation, any bankruptcy proceeding, or governmental
investigation pending against or affecting Company (other than any suit,
action or proceeding in which Company is the plaintiff and in which no
counterclaim or cross-claim against Company has been filed), nor has Company
or any of its officers or directors been subject to any suit, action,
proceeding or governmental investigation as a result of which any such officer
or director is or may be entitled to indemnification by Company, except in
each case as otherwise disclosed in Schedule 8.14 attached hereto and except
for suits, actions and proceedings (other than suits, actions or proceedings
commenced by any government or governmental authority) involving less than
$100,000 in the aggregate, which suits, if resolved adversely to Company,
would not in the aggregate have a material adverse effect on the Company and
its Subsidiaries (taken as a whole). Except as so disclosed, there is not
outstanding against Company any judgment, decree, injunction, rule, or order
of any court, government, department, commission, agency, instrumentality or
arbitrator nor is Company in violation of any applicable law, regulation,
ordinance, order, injunction, decree or requirement of any governmental body
or court where such violation would reasonably be expected to have a material
adverse effect on Company and its Subsidiaries (taken as a whole).
8.15 No Litigation -- Subsidiaries. There is no suit, action,
proceeding (other than any suit, action or proceeding in which any such party
is the plaintiff and in which no counterclaim or cross-claim against any such
party has been filed), including, without limitation, any bankruptcy
proceeding, or governmental investigation pending against or affecting any of
the Subsidiaries of Company, nor has any such party or any of its officers or
directors been subject to any suit, action, proceeding or governmental
investigation as a result of which any such officer or director is or may be
entitled to indemnification by such party, except as otherwise disclosed in
Schedule 8.15 attached hereto and except in each case for suits, actions and
proceedings (other than suits, actions or proceedings commenced by any
government or governmental authority) involving less than $100,000 in the
aggregate (for all such Subsidiaries), which suits, if resolved adversely to
any such Subsidiary, would not in the aggregate have a material adverse effect
on Company and its Subsidiaries (taken as a whole). Except as so disclosed,
there is not outstanding against any Subsidiary of Company any judgment,
decree, injunction, rule, or order of any court, government, department,
commission, agency, instrumentality or arbitrator nor is any such party in
violation of any applicable law, regulation, ordinance, order, injunction,
decree or requirement of any governmental body or court where such violation
would reasonably be expected to have a material adverse effect on Company and
its Subsidiaries (taken as a whole).
8.16 Consents, Approvals and Filings, Etc. Except as have been
previously obtained and except for filings required under the Securities
Exchange Act of 1934, as amended, no authorization, consent, approval,
license, qualification or formal exemption from, nor any filing, declaration
or registration with, any court, governmental agency or regulatory authority
or any securities exchange or any other person or party (whether or not
governmental) is required in connection with the execution, delivery and
performance by Company of this Agreement, any of the Loan Documents to which
it is a party, or any other documents or instruments to be executed and or
delivered by Company 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 Company threatened attack, (in any
material respect) by appeal or direct proceeding or otherwise.
8.17 Agreements Affecting Financial Condition. Neither the Company
nor any of its 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).
8.18 No Investment Company or Margin Stock. Neither the Company nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
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 proceeds of any of the
Advances will be used by the Company or any of its Subsidiaries to purchase or
carry margin stock or will be made available by the Company or any of its
Subsidiaries in any manner to any other Person to enable or assist such Person
in purchasing or carrying margin stock. Terms for which meanings are provided
in Regulation U of the Board of Governors of the Federal Reserve System or any
regulations substituted therefor, as from time to time in effect, are used in
this paragraph with such meanings.
8.19 ERISA. Neither Company nor any of its Subsidiaries maintains or
contributes to any Pension Plan subject to Title IV of ERISA, except as set
forth on Schedule 8.19 hereto; and there is no accumulated funding deficiency
within the meaning of ERISA, or any existing liability with respect to any of
the Pension Plans owed to the Pension Benefit Guaranty Corporation or any
successor thereto, and no "reportable event" or "prohibited transaction", as
defined in, and to the extent prohibited by, ERISA, has occurred with respect
to any Pension Plan, and all such Pension Plans are in material compliance
with the requirements of the Internal Revenue Code and ERISA.
8.20 Conditions Affecting Business or Properties. Neither the
respective businesses nor the properties of Company or any of its Subsidiaries
is affected by any fire, explosion, accident, strike, lockout or other
dispute, drought, storm, hail, earthquake, embargo, Act of God or other
casualty, which materially adversely affects, or if such event or condition
were to continue for more than ten (10) additional days would reasonably be
expected to materially adversely affect, any such businesses or properties of
Company and its Subsidiaries (taken as a whole).
8.21 Environmental and Safety Matters. (a) Each of the Company and
its Subsidiaries is in compliance in all material respects with all federal,
state and local laws, ordinances and regulations relating to safety and
industrial hygiene or to the environmental condition, including without
limitation all Hazardous Materials Laws in jurisdictions in which the Company
or its Subsidiaries owns or operates, or has owned or operated, a facility or
site, or arranges or has arranged for disposal or treatment of hazardous
substances, solid waste, or other wastes, accepts or has accepted for
transport any hazardous substances, solid wastes or other wastes or holds or
has held any interest in real property, except for De Minimis Matters or as
otherwise disclosed on Schedule 8.21 hereto, and as to such matters disclosed
on such Schedule, none will have a material adverse effect on the financial
condition or businesses of the Company and its Subsidiaries (taken as a
whole).
(b) No demand, claim, notice, suit, suit in equity, action,
administrative action, investigation or inquiry 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 knowledge of Company, after due investigation,
threatened against the Company or any of its Subsidiaries, any real property
in which the Company or any of its Subsidiaries holds or has held an interest
or any past or present operation of the Company or any of its Subsidiaries,
except as disclosed on Schedule 8.21 hereto, and as to such matters disclosed
on such Schedule, none is reasonably expected to have a material adverse
effect on the financial condition or business of the Company and its
Subsidiaries (taken as a whole).
(c) Neither the Company nor any of its Subsidiaries (i) is, to
the best knowledge of Company, after due investigation, 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, notice or violation, except as disclosed on Schedule 8.21
hereto, and as to such matters disclosed on such Schedule, none is reasonably
expected to have a material adverse effect on the financial condition or
business of Company and its Subsidiaries (taken as a whole).
(d) To the best knowledge of Company after due investigation, 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 on which
Company or any of its Subsidiaries performs any of its operations, in
violation of any Hazardous Material Law except as disclosed on Schedule 8.21
hereto, and as to such matters disclosed on such Schedule, none is reasonably
expected to have a material adverse effect on the financial condition or
business of the Company and its Subsidiaries (taken as a whole).
8.22 Accuracy of Information. Each of the Company's financial
statements previously furnished to Agent and the Banks by Company prior to the
date of this Agreement (other than projections), has been prepared in
accordance with GAAP (subject, in the case of interim financial statements to
year end audit adjustments, the lack of complete footnotes and other normal
deviations from GAAP for interim statements) and is complete and correct in
all material respects and fairly presents the financial condition of Company
and the results of its operations for the periods covered thereby; since the
date of the most recent financial statements furnished to the Agent there has
been no material adverse change in the financial condition of Company or any
of its Subsidiaries; to the best knowledge of Company, neither Company nor any
of its Subsidiaries has any contingent obligations (including any liability
for taxes) not disclosed by or reserved against in the most recent balance
sheets included in the financial statements furnished to the Agent, as
applicable, to the extent required by GAAP, except as set forth on Schedule
8.22 hereof, and at the present time there are no material unrealized or
anticipated losses from any present commitment of Company or any of its
Subsidiaries.
8.23 Accounts. As to the Accounts, the Company warrants and
represents that:
(a) Each of them arose out of a bona fide sale at
retail in the ordinary course of business.
(b) Company had unencumbered title to the property the
sale of which resulted in the Accounts, and that
such property has been delivered to the Account
Debtor exactly as represented to him.
(c) Each of them represents a claim which is valid and
enforceable according to the terms of such Account
against the Account Debtor, that the unpaid balance
thereof is not subject to any counterclaim, setoff,
credit, allowance or adjustment (except as
permitted pursuant to the terms of the Company
Security Agreement) and that there is no agreement
for any rebate, discount, concession, or release of
liability in whole or part.
(d) The granting to the Agent of a security interest in
the Accounts will vest in the Agent the entire
benefit of all of the Accounts according to their
terms.
(e) The transactions leading to the creation of the
Accounts comply with all applicable state and
federal laws and regulations.
(f) The Company has acquired and (as to future
Accounts) will continue to acquire its rights,
title and interest in the ordinary course of its
business.
9. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it
will cause each of its Subsidiaries, until the latter to occur of Revolving
Credit Maturity Date and the Term Loan Maturity Date and thereafter until
final payment in full of the Indebtedness and the performance by the Company
of all other obligations under this Agreement and the other Loan Documents,
unless the Required Banks shall otherwise consent in writing:
9.1 Preservation of Existence, Etc. Subject to the terms of this
Agreement: (i) preserve and maintain its corporate 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 conduct and
operate an apparel, accessories and gifts for the home retail business; (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, all to the extent material to its
business and operations; and (v) from time to time make, or cause to be made,
all repairs, replacements, betterments and improvements thereto it deems
appropriate such that the businesses carried on in connection therewith may be
properly and advantageously conducted at all times.
9.2 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.
9.3 Reporting Requirements. Furnish Agent with copies for each Bank:
(a) as soon as practicable, and in any event within ten days
after becoming aware of the occurrence of any Default or Event of
Default or any other event or occurrence which has or would
reasonably be expected to have a materially adverse effect upon the
business, property or financial condition of Company and its
Subsidiaries (taken as a whole), or upon Company's or any Guarantor's
ability to comply with its obligations hereunder or under any of the
other Loan Documents, a written statement of a responsible senior
officer of the Company setting forth details of such Default, Event
of Default or other event or occurrence and the action which the
Company has taken or has caused to be taken or proposes to take or
cause to be taken with respect thereto;
(b) as soon as available, and in any event within ninety (90)
days after the end of each of Company's fiscal years, beginning with
the fiscal year ending January 27, 1996, (i) audited consolidated
financial statements of the Company and its Consolidated Subsidiaries
containing the balance sheet of the Company and its Consolidated
Subsidiaries as of the close of each such fiscal year, consolidated
statements of income and retained earnings and a consolidated
statement of cash flows for each such fiscal year, and such other
comments and financial details as are usually included in similar
reports, such financial statements to be prepared in accordance with
GAAP and certified by independent certified public accountants of
recognized standing selected by Company and acceptable to the
Required Banks and containing unqualified opinions as to the fairness
of the statements therein contained; (ii) unaudited consolidating
financial statements of Company and its Consolidated Subsidiaries,
certified as correct by an appropriate officer of Company and (iii) a
Covenant Compliance Report;
(c) as soon as available, and in any event within forty five
(45) days after the end of each fiscal quarter of Company (excluding
the last quarter of each fiscal year), commencing with its quarter
ending April 27, 1996, (i) the balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such quarter and related
statements of income and cash flows for the portion of the fiscal
year through the end of such period, certified by a responsible
financial officer of Company as to the consistency with prior interim
financial reports, and as to accuracy and fairness of presentation,
subject to normal year-end adjustments and (ii) a Covenant Compliance
Report;
(d) promptly, and in any event within ten (10) calendar days
after becoming aware (i) of any material adverse change in the
financial condition of the Company and its Subsidiaries (taken as a
whole), a certificate of the chief financial officer of Company (or
in such officer's absence, a responsible senior officer) setting
forth the details of such change or (ii) of the taking by the
Internal Revenue Service of a tax position (verbal or written) which
could have a materially adverse effect upon the Company (or any tax
position taken by the Company) setting forth the details of such
position and the financial impact thereof; and
(e) as soon as practical after being filed with the Federal
Securities and Exchange Commission ("SEC"), the Company's 10-Q and
10-K Reports and other periodic reports filed with the SEC, and in
any event, with respect to the 10-Q Report, within sixty (60) days of
the end of each of the Company's first, second and third fiscal
quarters, and with respect to the 10-K Report, within one hundred
(100) days after the end of each of Company's fiscal years, and, as
soon as practical after filing with the SEC, copies of all other
documents filed by the Company with the SEC;
(f) promptly as issued, all press releases, notices to
shareholders and all other material communications transmitted to the
general public or generally to the trade or industry in which the
Company is engaged;
(g) (i) on each Settlement Date, a Borrowing Base Report as of
the last day of the preceding fiscal month certifying, with
supporting calculations, as of the last day of the preceding fiscal
month, the amount of (A) the aggregate Borrowing Base Limitation, (B)
Eligible Inventory, and (C) Eligible Accounts (with an aging of
Accounts) and (ii) from time to time, such additional schedules,
certificates and reports relating thereto, the items or amounts
received by the Company in full or partial payment thereof, and any
goods (the sale or lease of which shall have given rise to any of the
Eligible Accounts) possession of which has been obtained by the
Company, all to such extent as Agent may reasonably request, with
each such schedule, certificate or report to be certified as accurate
by a duly authorized officer of the Company and in such form and
detail as Agent may reasonably specify;
(h) promptly, and in form and substance reasonably satisfactory
to Agent and the requesting Banks, such other information as Agent or
the Required Banks (acting through Agent) may reasonably request from
time to time.
9.4 Maintain Consolidated Cash Flow Ratio. Maintain as of the end of
each fiscal quarter a Consolidated Cash Flow Ratio of not less than the
following amounts during the periods specified below:
July 30, 1995 through January 24, 1997 1.0 to 1.0
January 25, 1997 through January 30, 1998 1.1 to 1.0
January 31, 1998 and thereafter 1.2 to 1.0
9.5 Maintain Funded Debt Ratio. Maintain as of the end of each
fiscal quarter a Funded Debt Ratio of not more than 1.35 to 1.0.
9.6 Maintain Consolidated Tangible Net Worth. Maintain as of the end
of each fiscal quarter a Consolidated Tangible Net Worth of not less than the
following amounts specified below:
October 28, 1995 $76,000,000
January 27, 1996 $76,000,000
April 27, 1996 $76,000,000
July 27, 1996 $71,000,000
October 26, 1996 $68,000,000
January 25, 1997 $72,000,000
April 26, 1997 and each
fiscal quarter thereafter The Minimum Amount
9.7 Taxes. Pay and discharge all taxes and other governmental
charges within the time the same shall be payable without interest or penalty,
unless and to the extent only that such payment is being contested in good
faith by appropriate proceedings and is reserved for, to the extent required
by GAAP, on its balance sheet.
9.8 Inspections. Permit Agent and each Bank, through their
authorized attorneys, accountants and representatives to examine Company's and
each Subsidiaries' books, accounts, records, ledgers and assets and properties
of every kind and description wherever located at all reasonable times during
normal business hours, upon oral or written request of Agent or such Bank.
Such inspection rights are subject to reasonable limitations imposed by
Company with respect to safety and shall not extend to trade secrets of
Company or its Subsidiaries or to information within the attorney client
privilege.
9.9 Indemnification. Indemnify and save Agent and each of the Banks
harmless from all loss, cost, damage, liability or expenses, including
reasonable attorneys' fees and disbursements, incurred by Agent and the Banks
by reason of an Event of Default, or enforcing the obligations of Company
under this Agreement or any of 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 Loan Documents, excluding,
however, any loss, cost, damage, liability or expenses arising as a result of
the gross negligence or willful misconduct of the party seeking to be
indemnified under this Section 9.9.
9.10 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all 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 by Company, of this Agreement, the Loan Documents, or
any other documents or instruments to be executed and/or delivered by Company
in connection therewith or herewith.
9.11 Insurance. Maintain insurance coverage on its physical assets
and against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature, and in the event
of acquisition of additional property, real or personal, or of occurrence of
additional risks of any nature, increase such insurance coverage in such
manner and to such extent as prudent business judgment and then current
practice would dictate.
9.12 Compliance with Laws.
(a) Comply in all material respects with all applicable laws,
rules, regulations and orders of any governmental authority, whether federal,
state, local or foreign (including without limitation Hazardous Materials
Laws), in effect from time to time.
(b) 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
(c) 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 to the extent required by Hazardous Material Laws, (v) the
taking of necessary precautions to protect against the release of Hazardous
Materials on or affecting any premises owned by Company or any of its
Subsidiaries, (vi) complying with all Hazardous Material Laws and/or (vii) any
violation of Hazardous Material Laws, including without limitation, reasonable
attorneys and consultants fees, investigation and laboratory fees,
environmental studies required by Agent or any Bank in connection with the
violation of Hazardous Material Laws (whether before or after the occurrence
of any Default or Event of Default hereunder), court costs and litigation
expenses; and, if so requested by Agent or any Bank, Company shall execute
separate indemnities covering the foregoing matters. The obligations of
Company under this Section 9.12 shall be in addition to any and all other
obligations and liabilities the Company may have to Agent or any of the Banks
at common law or pursuant to any other agreement.
9.13 Compliance with ERISA. Comply in all material respects with all
requirements imposed by ERISA as presently in effect or hereafter promulgated
or the Internal Revenue Code, including, but not limited to, the minimum
funding requirements of any Pension Plan.
9.14 ERISA Notices. Promptly notify Agent, with a copy for each of
the 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;
(b) the appointment of a trustee by a United States District
Court to administer any Pension Plan;
(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 Subsidiary 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 Subsidiary from any
Pension Plan, including, without limitation, any multiemployer plan;
or
(f) the occurrence of a reportable event which is required to be
reported by the Company under the regulations, within the meaning of
Title IV of ERISA or a "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code)
which could have a material adverse effect on Company or any of its
Subsidiaries.
9.15 Use of Proceeds. The initial Advances made to the Company shall
be used by Company (i) to pay the costs and expenses of the transactions
contemplated by this Agreement which are due and payable on the closing date,
and (ii) for the payment of any monies due in connection with the termination
of the existing credit facilities, dated November 20, 1992, with Comerica and
NBD Bank; and the proceeds of any subsequent Advances made hereunder shall be
used by Company solely for the general corporate purposes, including working
capital purposes, of Company and its Subsidiaries. Company shall not use any
portion of the proceeds of any such advances for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulation G of the Board of
Governors of the Federal Reserve System) in any manner which violates the
provisions of Regulation G, T, U or X of said Board of Governors or for any
other purpose in violation of (x) any applicable statute or regulation or (y)
the terms and conditions of this Agreement.
9.16 Notice of Mergers and Related Events. As soon as practical, and
in any event within fifteen (15) days after execution of any preliminary
agreement with respect thereto, notify Agent and the Banks of any planned or
proposed merger or consolidation of Company or any of its Subsidiaries with or
into any other entity and of any planned or proposed sale, lease, transfer or
other disposition of all, substantially all, or any material part of the
assets of Company or any of its Subsidiaries.
10. NEGATIVE COVENANTS
Company covenants and agrees that, until the latter to occur of the
Revolving Credit Maturity Date and the Term Loan Maturity Date and thereafter
until final payment in full of the Indebtedness under this Agreement and the
other Loan Documents, without the prior written consent of the Required Banks
it will not, and will not permit its Subsidiaries to:
10.1 Business Purposes. Engage in any line of business in which it
is not currently engaged if as a result thereof the business of the Company
and its Subsidiaries, taken as a whole, would be substantially different from
what it was as of the date of execution of this Agreement, as described in the
Company's 1994 Form 10-K.
10.2 Mergers or Dispositions. Liquidate or dissolve, or consolidate
or merge with any other Person, or permit any other Person to consolidate or
merge with it, or sell, lease, transfer or otherwise dispose of any of its
assets required for the conduct of its business to any other Person (other
than in the ordinary course of business or in connection with Permitted Store
Closures), except that, subject to the last paragraph of this Section:
(a) any Subsidiary may consolidate with or merge with or into
the Company or any Wholly-Owned Subsidiary (if the Company or such
Wholly-Owned Subsidiary shall be the continuing or surviving
corporation);
(b) any Subsidiary may sell, lease, transfer or otherwise
dispose of its assets in their entirety to the Company, and may
thereafter liquidate and dissolve;
(c) the Company may merge with any other corporation, provided
that the Company shall be the continuing or surviving corporation;
(d) any Subsidiary may merge with any other corporation,
provided that the surviving corporation shall be a Wholly-Owned
Subsidiary.
No merger, consolidation, sale, lease, transfer or other disposition
under any of paragraphs (a) through (c) inclusive, above of this Section 10.2
shall be permitted if at the time thereof, or immediately after giving effect
thereto, any Default or Event of Default shall have occurred and be
continuing. No sale, lease, transfer or other disposition permitted by this
Section 10.2 shall in any event release the Company from any of its
obligations and liabilities under this Agreement or any of the Notes.
10.3 Guaranties. Guarantee, endorse, or otherwise become liable for
or upon the obligations of others (other than the Company and its
Subsidiaries), except (a) by endorsement of cash items for deposit in the
ordinary course of business or endorsement of negotiable instruments in the
ordinary course of business for collection, (b) guaranties if the liability of
Company and its Subsidiaries does not exceed One Million Dollars ($1,000,000)
in the aggregate at any time outstanding and (c) the Guaranty.
10.4 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 Permitted Encumbrances.
10.5 Acquisitions. Purchase or otherwise acquire or become obligated
for the purchase of all or substantially all or any material portion of the
assets of any Person, firm or corporation (except in the ordinary course of
business), 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 of another business, except for Permitted
Acquisitions.
10.6 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 (except to the Company or any of its Subsidiaries and sales on
open account and other transactions in the ordinary course of business), other
than Investments to the extent not exceeding Five Million Dollars ($5,000,000)
in the aggregate at any time outstanding, guarantees permitted by Section 10.3
and asset sales financed in whole or in part by the seller and permitted by
Section 10.2.
10.7 Accounts Receivable. Sell or assign any account, note or trade
acceptance receivable, except to Agent on behalf of the Banks.
10.8 Transactions with Affiliates. Enter into any transaction with
any of its or their stockholders, officers or Affiliates (other than the
Company and its Subsidiaries), 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.
10.9 No Further Negative Pledges. Enter into or become subject after
the date of this Agreement to any agreement (other than this Agreement or the
Loan Documents) (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.
10.10 Prepayment of Indebtedness. Make any payment with respect to
the Subordinated Debt except Permitted Subordinated Debt Payments or make any
payment or prepayment of principal of, or make any payment of interest on, any
Subordinated Debt which would violate the subordination provisions applicable
to such Subordinated Debt or redeem, purchase or defease any Subordinated
Debt.
10.11 Amendment of Subordinated Debt. Amend, modify or otherwise
alter (or suffer to be amended, modified or altered) any of the material terms
and conditions of any Subordinated Debt, or waive (or permit to be waived) any
provision thereof in any material respect, without the prior written approval
of the Agent and the Required Banks. For purposes of this Section, any change
in the repayment terms which would result in the advancement of the scheduled
date for payment of any principal of the Subordinated Debt, any change in the
definition of "senior indebtedness", any change in the default provisions
thereof and any other change in the subordination provisions thereof which
change shall be adverse to the interests of the Banks (as determined by the
Banks, in their reasonable judgment, after notice of any proposed change),
shall, without reducing the scope of this Section 10.11, be deemed to be
material.
11. DEFAULTS
11.1 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest under
any of the Notes issued hereunder in accordance with the terms
thereof, (ii) any reimbursement obligation under Section 3.6 hereof
or (iii) any Fees, and in the case of interest payments and Fees,
continuance thereof for ten (10) days;
(b) non-payment of any money by Company under this Agreement or
by Company or any Guarantor under any of the Loan Documents, other
than as set forth in subsection (a), above within ten (10) days after
notice from Agent that the same is due and payable;
(c) default in the observance or performance of any of the
conditions, covenants or agreements of Company set forth in Sections
2.7, 9.3(a), 9.3(d), 9.3(g), 9.4, 9.5, 9.6, 9.8, 9.14, 9.16, or 10.4
to the extent Company or any Subsidiary knowingly and voluntarily
creates or permits to exist any lien or encumbrance not permitted
under this Agreement, or any of the other Sections in Section 10;
(d) default in the observance or performance of any of the
conditions, covenants or agreements of Company set forth in Sections
9.3(b), 9.3(c), 9.3(e), 9.3(f), or 9.3(h), and continuation thereof
for fifteen calendar days after notice thereof to Company by Agent;
or default in the observance or performance of any of the other
conditions, covenants or agreements of Company set forth in this
Agreement by Company and continuance thereof for a period of thirty
(30) consecutive days after notice thereof to Company by Agent;
(e) any representation or warranty made by Company or any
Guarantor herein or in any instrument submitted pursuant hereto
proves untrue or misleading in any material adverse respect when
made;
(f) default in the observance or performance of or failure to
comply with any of the conditions, covenants or agreements of Company
or any Guarantor set forth in any of the other Loan Documents, and
the continuance thereof for a period of thirty (30) consecutive days
after notice thereof to Company by Agent;
(g) default in the payment of or failure to comply with the
terms of any other obligation of Company or any of its Subsidiaries
for Funded Debt of Company or any of its Subsidiaries in excess of
Ten Million Dollars ($10,000,000) in the aggregate which with the
giving of notice or passage of time or both would permit the holder
or holders thereto to accelerate such Funded Debt or terminate its
commitment thereunder;
(h) the rendering of any judgment(s) for the payment of money
in excess of the sum of One Hundred Thousand Dollars ($100,000)
individually or in the aggregate against Company or any of its
Subsidiaries, and such judgments shall remain unpaid, unvacated,
unbonded and unstayed by appeal or otherwise for a period of sixty
(60) consecutive days, except as covered by adequate insurance with a
reputable carrier or an action is pending in which an active defense
is being made with respect thereto;
(i) the occurrence of a "reportable event", as defined in
ERISA, which is determined to constitute grounds for termination by
the Pension Benefit Guaranty Corporation of any Pension Plan
maintained or contributed to by or on behalf of the Company or any of
its Subsidiaries for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a
trustee to administer such Pension Plan and such reportable event is
not corrected and such determination is not revoked within forty-five
(45) days after notice thereof has been given to the plan
administrator of such Pension Plan (without limiting any of Agent's
or any Bank's other rights or remedies hereunder), or the institution
of proceedings by the Pension Benefit Guaranty Corporation to
terminate any such Pension Plan or to appoint a trustee by the
appropriate United States District Court to administer any such
Pension Plan;
(j) the Company or any of its Subsidiaries shall be dissolved
or liquidated (or any judgment, order or decree therefor shall be
entered) or; if a creditors' committee shall have been appointed by
the Company or a court for the business of Company or any of its
Subsidiaries; or if Company or any of its Subsidiaries shall have
made a general assignment for the benefit of creditors or shall have
been adjudicated bankrupt, or shall have filed a voluntary petition
in bankruptcy or for reorganization or to effect a plan or
arrangement with creditors or shall fail to pay its debts generally
as such debts become due in the ordinary course of business (except
as contested in good faith and for which adequate reserves are made
in such party's financial statements to the extent required by GAAP);
or shall file an answer to a creditor's petition or other petition
filed against it, admitting the material allegations thereof for an
adjudication in bankruptcy or for reorganization; or shall have
applied for or permitted the appointment of a receiver or trustee or
custodian for any of its property or assets; or such receiver,
trustee or custodian shall have been appointed for any of its
property or assets (otherwise than upon application or consent of
Company or any of its Subsidiaries) and such receiver, trustee or
custodian so appointed shall not have been discharged within
forty-five (45) days after the date of his appointment, or if an
order shall be entered, and shall not be dismissed or stayed within
forty-five (45) days of its entry, approving any petition for
reorganization of Company or any of its Subsidiaries; or the Company
or any of its Subsidiaries shall take any action (corporate or other)
authorizing or in furtherance any of the actions described above in
this subsection;
(k) the revocation of the Guaranty by either Guarantor; or
(l) if any one Person or group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934) acquires or attains
beneficial ownership (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) of greater than fifty percent (50%)
of the voting power necessary for the election of directors of the
Board of Directors of Company (other than current Affiliates of the
Company);
11.2 Exercise of Remedies. If an Event of Default has occurred and
is continuing hereunder: (v) the Agent shall, upon being directed to do so by
the Required Banks, declare the Revolving Credit Aggregate Commitment,
terminated; (w) the Agent shall, upon being directed to do so by the Required
Banks, declare the entire unpaid principal Indebtedness, including the Notes,
immediately due and payable, without presentment, notice or demand, all of
which are hereby expressly waived by Company; (x) upon the occurrence of any
Event of Default specified in subsection 11.1(j), above, and notwithstanding
the lack of any declaration by Agent under preceding clause (w), the entire
unpaid principal Indebtedness, including the Notes, shall become automatically
and immediately due and payable, and the Revolving Credit Aggregate Commitment
shall be automatically and immediately terminated, (y) the Agent shall, upon
being directed to do so by the Required Banks, demand immediate delivery of
cash collateral, and the Company agrees to deliver such cash collateral on
demand, in an amount equal to the maximum amount that may be available to be
drawn at any time prior to the stated expiring date of all outstanding Letters
of Credit, and (z) the Agent shall, if directed to do so by the Required Banks
or the Banks, as applicable (subject to the terms hereof), exercise any remedy
permitted by this Agreement, the Loan Documents or law.
11.3 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 Agent and Banks under this Agreement are
cumulative and not exclusive of any right or remedies which Banks would
otherwise have.
11.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any
sale made under the judgment, order or decree of any court, on any claim for
interest on the Notes, or any security interest or mortgage contemplated by or
granted under or in connection with this Agreement. These waivers have been
voluntarily given, with full knowledge of the consequences thereof.
11.5 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 15.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude
other or further exercise of their rights by Agent or the Banks. No waiver of
any Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Banks in enforcing any of their
rights shall constitute a waiver of any of their rights. Company expressly
agrees that this Section may not be waived or modified by the Banks or Agent
by course of performance, estoppel or otherwise.
11.6 Deposits and Accounts.
Upon the occurrence and during the continuance of any Event of
Default, each Bank may at any time and from time to time, without notice to
the Company (any requirement for such notice being expressly waived by the
Company) set off and apply against any and all of the obligations of the
Company now or hereafter existing under this Agreement, whether owing to such
Bank or any other Bank or the Agent, any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Bank to or for the credit or the account of the
Company and any property of the Company from time to time in possession of
such Bank, irrespective of whether or not such deposits held or indebtedness
owing by such Bank may be contingent and unmatured and regardless of whether
any Collateral then held by Agent or any Bank is adequate to cover the
Indebtedness. Promptly following any such setoff, such Bank shall give written
notice to Agent and to Company of the occurrence thereof. The Company hereby
grants to the Banks and the Agent a lien on and security interest in all such
deposits, indebtedness and property as collateral security for the payment and
performance of all of the obligations of the Company under this Agreement. The
rights of each Bank under this Section 11.6 are in addition to the other
rights and remedies (including, without limitation, other rights of setoff)
which such Bank may have.
12. PAYMENTS, RECOVERIES AND COLLECTIONS.
12.1 Payment Procedure.
(a) All payments by Company of principal of, or interest on,
the Notes, or of 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 immediately available funds to Agent,
for the ratable account of the Banks, at Agent's office located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, (care of Agent's
Eurocurrency Lending Office, for Eurocurrency-based Advances). Upon
receipt by the Agent of each such payment, the Agent shall make
prompt payment in like funds received to each Bank as appropriate,
or, in respect of Eurocurrency-based Advances, to such Bank's
Eurocurrency Lending Office. Company shall have no liability to any
of the Banks in the event of failure by Agent to remit to the Banks
payments received from Company hereunder.
(b) Unless the Agent shall have been notified by Company prior
to the date on which any payment to be made by Company is due that
Company does not intend to remit such payment, the Agent may, in its
sole discretion and without obligation to do so, assume that the
Company has remitted such payment when so due and the Agent may, in
reliance upon such assumption, make available to each Bank on such
payment date an amount equal to such Bank's share of such assumed
payment. If Company has not in fact remitted such payment to the
Agent each Bank shall forthwith on demand repay to the Agent the
amount of such assumed payment made available or transferred to such
Bank, together with the interest thereon, in respect of each day from
and including the date such amount was made available by the Agent to
such Bank to the date such amount is repaid to the Agent at a rate
per annum equal to (i) for Prime-based Advances, the Federal Funds
Effective 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) Subject to the definition of Interest Period, whenever any
payment to be made hereunder 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.
(d) All payments to be made by the Company under this Agreement
or any of the Notes (including without limitation payments under the
Swing Line Note) shall be made without set-off or counterclaim, as
aforesaid, and without deduction for or on account of any present or
future withholding or other taxes of any nature imposed by any
governmental authority or of any political subdivision thereof or any
federation or organization of which such governmental authority may
at the time of payment be a member, unless Company is compelled by
law to make payment subject to such tax. In such event, Company
shall:
(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 Swing Line
Advances, pay to the Swing Line Bank which
funded such Advances) such additional amounts
as may be necessary to ensure that the Agent
and/or such Bank or Banks receive a net
amount equal to the full amount which would
have been receivable had payment not been
made subject to such tax; and
(ii) remit such tax to the relevant taxing
authorities according to applicable law, and
send to the Agent or the applicable Bank
(including the Swing Line Bank) or Banks, as
the case may be, such certificates or
certified copy receipts as the Agent or such
Bank or Banks shall reasonably require as
proof of the payment by the Company, of any
such taxes payable by the Company.
As used herein, the terms "tax", "taxes" and "taxation" include all
existing 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 by Company with respect to
the law regarding such tax, assessed as a result of or in connection with the
transactions hereunder, or the payment and or receipt of funds hereunder, or
the payment or delivery of funds into or out of any jurisdiction other than
the United States (whether assessed against Company, Agent or any of the
Banks).
12.2 Application of Proceeds. Notwithstanding anything to the
contrary in this Agreement, after an Event of Default, the proceeds of any
offsets or voluntary payments by Company or any Guarantor or others and any
other sums received or collected in respect of the Indebtedness, shall be
applied, first, to the Notes on a pro rata basis (or in such order and manner
as determined by the Required Banks; subject, however, to the applicable
Percentages of the loans held by each of the Banks), next, to any other
Indebtedness on a pro rata basis, and then, if there is any excess, to
Company. The application of such proceeds and other sums to the Revolving
Credit Notes shall be based on each Bank's Percentage of the aggregate of the
loans.
12.3 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 in
excess of its pro rata share of payments then or thereafter obtained by all
Banks upon principal of and interest on all Notes, such Bank shall purchase
from the other Banks such participations in the Notes 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 Percentage 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.
12.4 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 any
and all balances, credits, deposits, accounts or moneys of Company then or
thereafter with such Bank or other holder; provided, however, that any such
amount so applied by any Bank or other holder on any of the Notes owing to it
shall be subject to the provisions of Section 12.3, hereof.
13. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
13.1 Reimbursement of Prepayment Costs. If Company makes any payment
of principal with respect to any Eurocurrency-based Advance or Quoted Rate
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or converts or
refunds (attempts to convert or refund) any such Advance on any day other than
the last day of the applicable Interest Period, or if Company fails to borrow,
or refund or convert to, any Eurocurrency-based Advance or Quoted Rate Advance
after notice has been given by Company to Agent in accordance with the terms
hereof requesting such Advance, Company shall reimburse Agent and Banks, as
the case may be on demand for any resulting loss, cost or expense incurred by
Agent and Banks, as the case may be as a result thereof, including, without
limitation, any such loss, cost or expense incurred in obtaining, liquidating,
employing or redeploying deposits from third parties, whether or not Agent and
Banks, as the case may be shall have funded or committed to fund such Advance.
Such amount payable by Company to Agent and Banks, as the case may be may
include, without limitation, an amount equal to the excess, if any, of (a) the
amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last
day of the relevant Interest Period, at the applicable rate of interest for
said Advance(s) provided under this Agreement, over (b) the amount of interest
(as reasonably determined by Agent and Banks, as the case may be) which would
have accrued to Agent and Banks, as the case may be on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. Calculation of any amounts payable to any Bank
under this paragraph shall be made as though such Bank shall have actually
funded or committed to fund the relevant Advance through the purchase of an
underlying deposit in an amount equal to the amount of such Advance and having
a maturity comparable to the relevant Interest Period; provided, however, that
any Bank may fund any 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. 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.
13.2 Agent's Eurocurrency Lending Office. For any Advance to which
the Eurocurrency-based Rate is applicable, if Agent shall designate a
Eurocurrency Lending Office which maintains books separate from those of the
rest of Agent, Agent shall have the option of maintaining and carrying the
relevant Advance on the books of such Eurocurrency Lending Office.
13.3 Circumstances Affecting Eurocurrency-based Rate Availability.
If with respect to any Interest Period, Agent or the Banks (after consultation
with Agent) shall determine that, by reason of circumstances affecting the
interbank markets generally, deposits in eurodollars in the applicable amounts
are not being offered to the Agent for such Interest Period, then Agent shall
forthwith give notice thereof to the Company. Thereafter, until Agent notifies
Company that such circumstances no longer exist, the obligation of Banks to
make Eurocurrency-based Advances, and the right of Company to convert an
Advance to or refund an Advance as a Eurocurrency-based Advance shall be
suspended, and the Company shall repay in full (or cause to be repaid in full)
the then outstanding principal amount of each such Eurocurrency-based Advance
covered hereby together with accrued interest thereon, any amounts payable
under Section 13.1 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 or the time period provided in Section 2.3, if later,
such outstanding principal amount shall be converted to a Prime-based Advance
as of the last day of such Interest Period.
13.4 Laws Affecting Eurocurrency-based Advance Availability. In the
event that, after the date of this Agreement, the introduction of, or change
in, any applicable law, rule or regulation (whether domestic or foreign) or
any interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by
the 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) 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, Agent shall so notify Company and the right of
Company to convert an Advance or refund an Advance as a Eurocurrency-based
Advance, shall be suspended and thereafter Company may select as Applicable
Interest Rates only those which remain available and which are permitted to be
selected hereunder, and 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, Company shall immediately prepay such
Advance, together with interest to the date of payment, and any amounts
payable under Sections 13.1 or 13.6 with respect to such prepayment and the
applicable Advance shall immediately be converted to a Prime-based Advance and
the Prime-based Rate shall be applicable thereto.
13.5 Increased Cost of Eurocurrency-based Advances. In the event
that any applicable law, rule or regulation (whether domestic or foreign) now
or hereafter in effect and whether or not currently applicable to any Bank or
the Agent or any 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 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 change the basis of taxation of payments to the Agent
or any of the Banks 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 taxes on the overall net income or revenues of
the Agent or of any of the Banks imposed by the United States of
America or the jurisdiction, or any political subdivision or taxing
authority of any such jurisdiction, in which such Bank's or Agent's
principal executive 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 the Agent or any of the Banks or shall impose
on the Agent or any of the Banks or the 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 the Agent
or any of the Banks of making, funding or maintaining any part of the
Indebtedness hereunder as a Eurocurrency-based Advance or to reduce the amount
of any sum received or receivable by the Agent or any of the Banks under this
Agreement or under the Notes in respect of a Eurocurrency-based Advance then
Agent or Bank, as the case may be, shall promptly notify the Company of such
fact and demand compensation therefor and, within fifteen (15) days after such
notice, Company agrees to pay to Agent or such Bank such additional amount or
amounts as will compensate Agent or such Bank or Banks for such increased cost
or reduction to the extent such Bank or the Agent is not compensated therefor
in the computation of the interest rate applicable to such Indebtedness. A
certificate of Agent or such Bank 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.
13.6 Indemnity. The Company will indemnify Agent and each of the
Banks against any loss or expense which may arise or be attributable to the
Agent's and each Bank's obtaining, liquidating or employing deposits or other
funds acquired to effect, fund or maintain Eurocurrency-based Advances (a) as
a consequence of any failure by the Company to make any payment when due of
any amount due hereunder in connection with a Eurocurrency-based Advance, (b)
due to any failure of the Company to borrow, refund or convert on a date
specified therefor in a Request for Revolving Credit Advance for
Eurocurrency-based Advances or (c) due to any payment or prepayment or
conversion of any Eurocurrency-based Advance on a date other than the last day
of the Interest Period for such Revolving Credit Advance, whether required by
another provision of this Agreement or otherwise. 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.
13.7 Other Increased Costs. In the event that after the date hereof
the adoption of or any change in any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Bank or Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
or Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), including any risk based capital
guidelines, affects or would affect the amount of capital required or expected
to be maintained by such Bank or Agent (or any corporation controlling such
Bank or Agent) and such Bank or Agent, as the case may be, determines that the
amount of such capital is increased by or based upon the existence of such
Bank's or Agent's obligations or Advances hereunder and such increase has the
effect of reducing the rate of return on such Bank's or Agent's (or such
controlling corporation's) capital as a consequence of such obligations or
Advances hereunder to a level below that which such Bank or Agent (or such
controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by
an amount deemed by such Bank or Agent to be material, then the Company shall
pay to such Bank or Agent, as the case may be, from time to time, upon request
by such Bank or Agent, additional amounts sufficient to compensate such Bank
or Agent (or such controlling corporation) for any increase in the amount of
capital and reduced rate of return which such Bank or Agent reasonably
determines to be allocable to the existence of such Bank's or Agent's
obligations or Advances hereunder. A statement as to the amount of such
compensation, prepared in good faith and in reasonable detail by such Bank or
Agent, as the case may be, shall be submitted by such Bank or by Agent to the
Company, reasonably promptly after becoming aware of any event described in
this Section 13.7 and shall be conclusive, absent manifest error in
computation. Notwithstanding the foregoing contained in this Section 13.7, the
Agent, a Bank or such controlling corporation may not make a claim for
additional amounts from Company pursuant to this Section 13.7 unless not less
than 90 days before the commencement of the time period for which it claims
additional amounts (which time period shall commence on a Settlement Date),
the Agent, such Bank or such controlling corporation gives Company a written
notice ("Potential Additional Amount Notice") stating that it may assert a
claim for additional amounts pursuant to Section 13.7 in the future.
14. AGENT
14.1 Appointment of Agent. Each Bank and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or
holder under this Agreement and the Loan Documents and to exercise such powers
hereunder and thereunder as are specifically delegated to Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto, including without limitation the power to execute or authorize the
execution of financing or similar statements or notices, and other documents.
In performing its functions and duties under this Agreement, the Agent shall
act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company. 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 and
disbursements) incurred by Agent hereunder or in connection herewith or with
an Event of Default or in enforcing the obligations of Company under this
Agreement or the Loan Documents or any other instrument executed pursuant
hereto, and for which Agent is not reimbursed by Company, pro rata according
to such Bank's Percentage. Agent shall not be required to take any action
under the Loan Documents, or to prosecute or defend any suit in respect of the
Loan Documents, unless indemnified to its satisfaction by the Banks against
loss, costs, liability and expense. 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.
14.2 Deposit Account with Agent. Company hereby authorizes Agent, in
Agent's sole discretion, to charge its general deposit account(s), if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same become due and payable
under the terms of this Agreement or the Notes.
14.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). Neither Agent nor any of its directors,
officers, employees or agents shall be liable to any Bank for any action taken
or omitted to be taken by it under this Agreement or any document executed
pursuant hereto, or in connection herewith or therewith with the consent or at
the request of the Required Banks or in the absence of their own gross
negligence or wilful misconduct, nor be responsible for or have any duties to
ascertain, inquire into or verify (a) any recitals or warranties herein or
therein, (b) the effectiveness, enforceability, validity or due execution of
this Agreement or any document executed pursuant hereto or any security
thereunder, (c) the performance by Company of its obligations hereunder or
thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation the making of any Advance or the issuances of any
Letter of Credit. Agent shall be entitled to rely upon any certificate,
notice, document or other communication (including any cable, telegraph,
telex, facsimile transmission or oral communication) believed by it to be
genuine and correct and to have been sent or given by or on behalf of a proper
person. Agent may treat the payee of any Note as the holder thereof. Agent may
employ agents and may consult with legal counsel (who may be counsel for
Company), independent public accountants and other experts selected by it and
shall not be liable to the Banks (except as to money or property received by
them or their authorized agents), for the negligence or misconduct of any such
agent selected by it with reasonable care or for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
14.4 Successor Agent. 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, Required Banks shall, by written instrument, appoint successor
agent(s) satisfactory to such Required Banks, and, so long as no Default or
Event of Default has occurred and is continuing, to Company. Such successor
agent shall thereupon become the Agent hereunder, as applicable, and shall be
entitled to receive from the prior Agent such documents of transfer and
assignment as such successor Agent may reasonably request. Any such successor
Agent shall be a commercial bank organized under the laws of the United States
or any state thereof and shall have a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not accept such
appointment before the resigning Agent's resignation becomes effective, the
resigning Agent may appoint a temporary successor to act until such
appointment by the Required Banks is made and accepted or if no such temporary
successor is appointed as provided above by the resigning Agent, the Banks
shall thereafter perform all of the duties of the resigning Agent hereunder
until such appointment by the Required Banks is made and accepted. Such
successor Agent shall succeed to all of the rights and obligations of the
resigning Agent as if originally named. The resigning Agent shall duly assign,
transfer and deliver to such successor Agent all moneys at the time held by
the resigning Agent hereunder after deducting therefrom its expenses for which
it is entitled to be reimbursed. Upon such succession of any such successor
Agent, the provisions of this Article 14 shall continue in effect for the
benefit of the resigning Agent in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
14.5 Loans by Agent. Comerica and its successors and assigns, in its
capacity as a Bank hereunder, shall have the same rights and powers hereunder
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent. Comerica and its affiliates may (without having
to account therefor to any Bank) accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with Company (or the shareholders of Company) as if it were not
acting as Agent hereunder, and may accept fees and other consideration
therefor without having to account for the same to the Banks.
14.6 Credit Decisions. Each Bank acknowledges that it has,
independently of Agent and each other Bank and based on the financial
statements of Company and 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.
14.7 Agent's Fees. Company shall pay to Agent the annual agency fee
and such other fees and charges in the amounts and at the times set forth in
the letter agreement between Company and Agent dated December 21, 1995. The
Agent's Fees described in this Section 14.7 shall not be refundable under any
circumstances.
14.8 Authority of Agent to Enforce Notes and This Agreement. Each
Bank, subject to the terms and conditions of this Agreement, 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 Company, or any of its Subsidiaries, or their respective creditors or
affecting their respective 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 Loan Documents.
14.9 Indemnification. The Banks agree to indemnify the Agent (to the
extent not reimbursed by Company, but without limiting any obligation of
Company to make such reimbursement), ratably according to their respective
Percentages, from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement, any of the Loan Documents or the transactions
contemplated hereby or any action taken or omitted by the Agent under this
Agreement or any of the Loan Documents; provided, however, that no Bank shall
be liable for any portion of such claims, damages, losses, liabilities, costs
or expenses resulting from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the Loan Documents, to the
extent that the Agent is not reimbursed for such expenses by Company, but
without limiting the obligation of Company to make such reimbursement. Each
Bank agrees to reimburse the Agent promptly upon demand for its ratable share
of any amounts owing to the Agent by the Banks pursuant to this Section. If
the indemnity furnished to the Agent under this Section shall, in the judgment
of the Agent, be insufficient or become impaired, the Agent may call for
additional indemnity from the Banks and cease, or not commence, to take any
action until such additional indemnity is furnished.
14.10 Knowledge of Default. It is expressly understood and agreed
that the Agent shall be entitled to assume that no Event of Default has
occurred and is continuing, unless the officers of the Agent immediately
responsible for matters concerning this Agreement shall have been notified in
a writing specifying such Event of Default and stating that such notice is a
"notice of default" by a Bank or by Company. Upon receiving such a notice, the
Agent shall promptly notify each Bank of such Event of Default and provide
each Bank with a copy of such notice. Agent shall also furnish the Banks,
promptly upon receipt, with copies of all other notices or other information
required to be provided by Company hereunder.
14.11 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 Required Banks or the Banks, as applicable
hereunder. Action that may be taken by Required 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, 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.
14.12 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 Required Banks or all of the Banks, as the case may be (as provided for
hereunder), shall direct; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action
or omission may expose the Agent to personal liability or is contrary to this
Agreement, any of the Loan Documents or applicable law. 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.
15. MISCELLANEOUS
15.1 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, unless otherwise
specified herein, in accordance with GAAP. Furthermore, all financial
statements (other than projections) required to be delivered hereunder shall
be prepared in accordance with GAAP (subject in the case of interim
statements, to year end audit adjustments, the lack of complete footnotes and
other normal deviations from GAAP for interim statements).
15.2 Consent to Jurisdiction. Company, Agent and Banks hereby
irrevocably submit 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 Company and Banks hereby irrevocably agree that all claims in
respect of such action or proceeding may be heard and determined in any such
United States Federal or Michigan state court. Company, Agent and Banks
irrevocably consent 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 Company, Agent or any of the Banks, as
the case may be, at its address specified on the signature page hereto or by
certified mail directed to such address or such other address as may be
designated by Company, Agent or any of the Banks, as the case may be, in a
notice to the other parties that complies as to delivery with the terms of
Section 15.6. Nothing in this Section shall affect the right of the Company,
the Banks and the Agent to serve process in any other manner permitted by law
or limit the right of the Company, the Banks or the Agent (or any of them) to
bring any such action or proceeding against Company or any Guarantor, Agent or
any of the Banks, as the case may be, or any of its or their property in the
courts of any other jurisdiction. Company, Agent and Banks hereby irrevocably
waive any objection to the laying of venue of any such suit or proceeding in
the above described courts.
15.3 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 to the
extent that the Uniform Commercial Code, other personal property law or real
property law of a jurisdiction where Collateral is located is applicable and
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.
15.4 Interest. In the event the obligation of Company to pay
interest on the principal balance of the Notes is or becomes in excess of the
maximum interest rate which Company is permitted by law to contract or agree
to pay, giving due consideration to the execution date of this Agreement,
then, in that event, the rate of interest applicable with respect to such
Bank's Percentage 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.
15.5 Closing Costs and Other Costs. Company agrees to pay, or
reimburse the Agent for payment of, on demand (a) all reasonable closing costs
and expenses, including, by way of description and not limitation, outside
attorney fees and advances, appraisal and accounting fees, and lien search
fees incurred by Agent in connection with the commitment, consummation and
closing of the loans contemplated hereby or any amendment, refinancing or
restructuring of the credit arrangements provided under this Agreement, (b)
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing or recording of this Agreement
and the 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 fees, (c) all reasonable
costs and expenses of the Agent or any of the Banks (including reasonable fees
and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise) in connection with any Default or Event of Default
or the amendment, waiver or enforcement of this Agreement, or the Loan
Documents or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement, (d) all reasonable costs and
expenses of the Agent or any of the Banks (including reasonable fees and
expenses of counsel) in connection with any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Agent or any of the Bank from paying any amount under, or
otherwise relating in any way to, any Letter of Credit and any and all
reasonable costs and expenses which any of them may incur relative to any
payment under any Letter of Credit, except to the extent arising as a result
of the Agent's gross negligence or willful misconduct. All of said amounts
required to be paid by Company, may, at Agent's option, be charged by Agent as
a Prime-based Advance against the Indebtedness.
15.6 Notices. Except as expressly provided otherwise in this
Agreement, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall
be given by personal delivery, by mail, by reputable overnight courier, by
telex or by facsimile and addressed or delivered to it at its address set
forth on the signature pages hereof or at such other address as may be
designated by such party in a notice to the other parties that complies as to
delivery with the terms of this Section 15.6. Any notice, if personally
delivered or if mailed and properly addressed with postage prepaid and sent by
registered or certified mail, shall be deemed given when received or when
delivery is refused; any notice, if given to a reputable overnight courier and
properly addressed, shall be deemed given 2 Business Days after the date on
which it was sent, unless it is actually received sooner by the named
addressee; and any notice, if transmitted by telex or facsimile, shall be
deemed given when received (answerback confirmed in the case of telexes and
receipt confirmed in the case of telecopies). Agent may, but shall not be
required to, take any action on the basis of any notice given to it by
telephone, but the giver of any such notice shall promptly confirm such notice
in writing or by telex or facsimile, and such notice will not be deemed to
have been received until such confirmation is deemed received in accordance
with the provisions of this Section set forth above. If such telephonic notice
conflicts with any such confirmation, the terms of such telephonic notice
shall control.
15.7 Further Action. Company, from time to time, upon written
request of Agent will make, execute, acknowledge and deliver or cause to be
made, executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and
to provide for Advances under and payment of the Notes, according to the
intent and purpose herein and therein expressed.
15.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to the
benefit of Company, the Agent and the Banks, and their respective successors
and assigns.
(b) The foregoing shall not authorize any assignment by Company
of its rights or duties hereunder, and no such assignment shall be made (or
effective) without the prior written approval of the Banks.
(c) Each of the Banks may at any time and from time to time,
subject to the terms and conditions hereof, grant participations (but not
assignments, except as expressly permitted hereunder) 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, which
institution is approved in advance in writing by Agent and Company (provided,
however, the consent of Company shall not be required following the occurrence
and during the continuance of an Event of Default and the consent of Company
shall not unreasonably be withheld), 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 the grant of a participation by a Bank to its Affiliate, to any
other Bank or to any Federal Reserve Bank. The Company authorizes each Bank to
disclose to any prospective participant, once approved by Company and Agent
(if such approval is required), any and all financial information in such
Bank's possession concerning the Company which has been delivered to such Bank
pursuant to this Agreement; provided that each such prospective participant
shall execute a confidentiality agreement consistent with the terms of Section
15.13, hereof. A Bank shall not be permitted to assign or otherwise transfer,
sell or dispose of (except by participation according to the terms hereof) its
rights and obligations hereunder, except, (x) to an Affiliate of an assigning
Bank or to any Bank or (y) with the prior written consent of the Company and
the Agent which shall not be unreasonably withheld, to any other financial
institution; provided that any such assignment shall not be in an amount less
than $5,000,000;
(d) Each assignment by a Bank of any portion of its rights and
obligations hereunder and under the other Loan Documents shall be made
pursuant to an Assignment Agreement substantially (as determined by Agent) in
the form attached hereto as Exhibit "I" (with appropriate insertions
acceptable to Agent) and shall be subject to the terms and conditions hereof,
and to the following restrictions:
(i) each assignment shall cover all of the Notes
issued by Company hereunder, and shall be for
a fixed and not varying percentage thereof,
with the same percentage applicable to each
such Note;
(ii) each assignment shall be in a minimum amount
of Five Million Dollars ($5,000,000);
(iii) no assignment shall violate any "blue sky" or
other securities law of any jurisdiction or
shall require the Company or any other Person
to file a registration statement or similar
application with the United States Securities
and Exchange Commission (or similar state
regulatory body) or to qualify under the
"blue sky" or other securities laws of any
jurisdiction; and
(iv) no assignment shall be effective unless
Agent has received from the assignee (or
from the assigning Bank) an assignment fee
of $3,000 for each such assignment.
In connection with any assignment, Company and Agent shall be entitled to
continue to deal solely and directly with the assigning Bank in connection
with the interest so assigned until (x) the Agent shall have received a notice
of assignment duly executed by the assigning Bank and an Assignment Agreement
(with respect thereto) duly executed by the assigning Bank and each assignee;
and (y) the assigning Bank shall have delivered to the Agent the original of
each Note held by the assigning Bank under the Loan Agreements. From and after
the date on which the Agent shall notify Company and the assigning Bank that
the foregoing conditions shall have been satisfied and all consents (if any)
required shall have been given, the assignee thereunder shall be deemed to be
a party to this Agreement. To the extent that rights and obligations hereunder
shall have been assigned to such assignee as provided in such notice of
assignment (and Assignment Agreement), such assignee shall have the rights and
obligations of a Bank under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment). In addition, the assigning
Bank, to the extent that rights and obligations hereunder shall have been
assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released
from its obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement, Company shall, to the extent applicable,
execute and deliver to the Agent in exchange for any surrendered Note, new
Note(s) payable to the order of the assignee in an amount equal to the amount
assigned to it pursuant to such notice of assignment (and Assignment
Agreement), and with respect to the portion of the Indebtedness retained by
the assigning Bank, to the extent applicable, a new Note payable to the order
of the assigning Bank in an amount equal to the amount retained by such Bank
hereunder shall be executed and delivered by the Company. Agent, the Banks and
the Company acknowledge and agree that any such new Note(s) shall be given in
renewal and replacement of the surrendered Notes and shall not effect or
constitute a novation or discharge of the Indebtedness evidenced by any
surrendered Note, and each such new Note shall contain a provision confirming
such agreement. In addition, promptly following receipt of such Notes, Agent
shall prepare and distribute to Company and each of the Banks a revised
Exhibit "C" 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 15.8(e) with respect to rights of
setoff and the benefits of Article 11
hereof, a participant shall have no direct
rights or remedies hereunder;
(iii) a participant shall not reassign or transfer,
or grant any sub-participations in its
participation interest hereunder or any part
thereof; and
(iv) such Bank shall retain the sole right and
responsibility to enforce the obligations of
the Company relating to the Notes and 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, except for those
matters covered by Section 15.11(b), (c) and (e)
hereof (provided that a participant may exercise
approval rights over such matters only on an
indirect basis, acting through such Bank, and
Company, Agent and the other Banks may continue to
deal directly with such Bank in connection with such
Bank's rights and duties hereunder and provided
further that no participant shall have any approval
rights with respect to any release by the Banks of
any mortgage interest in the Store Site located in
Saginaw, Michigan), and shall otherwise be in form
satisfactory to Agent.
Company agrees that each participant shall be deemed to have the right of
setoff under Section 12.4 hereof, in respect of its participation interest in
amounts owing under this Agreement and the 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
12.3 hereof, and that each participant shall be entitled to the benefits of
Article 11 hereof. The amount, terms and conditions of any participation shall
be as set forth in the participation agreement between the issuing Bank and
the Person purchasing such participation, and none of the Company, the Agent
and the other Banks shall have any responsibility or obligation with respect
thereto, or to any Person to whom any such participation may be issued. No
such participation shall relieve any issuing Bank of any of its obligations
under this Agreement or any of the other Loan Documents, and all actions
hereunder shall be conducted as if no such participation had been granted.
(f) Nothing in this Agreement, the Loan Documents or the Notes,
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
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.
15.9 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 further exercise thereof, nor 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.
15.10 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.
15.11 Amendment and Waiver. No amendment or waiver of any provision
of this Agreement or any Loan Document, or consent to any departure by Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Banks (and, with respect to any amendments to this
Agreement or the other Loan Documents, by Company, if a signatory thereto) or,
if this Agreement expressly so requires with respect to the subject matter
thereof, by all Banks (and, with respect to any amendments to this Agreement
or the other Loan Documents, by Company), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Banks, do any of the following:
(a) subject the Banks to any additional obligations, (b) reduce the principal
of, or interest on, the Revolving Credit Notes or any Fees or other amounts
payable hereunder, (c) postpone any date fixed for any payment of principal
of, or interest on, the Revolving Credit Notes or any Fees or other amounts
payable hereunder, (d) waive any Event of Default specified in Sections
11.1(a) or (b) hereof, (e) release any Guarantor or terminate or modify any
indemnity provided to the Banks hereunder or under the Loan Documents or
release all, substantially all or any material part of the Collateral, except
as shall be otherwise expressly provided in this 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 Loan Document or (g) change the
definition of "Required Banks" or this Section 15.11; provided further, that
no amendment, waiver or consent shall, unless in writing signed by the Swing
Line Bank do any of the following: (x) reduce the principal of, or interest
on, the Swing Line Note or (y) postpone any date fixed for any payment of
principal of, or interest on, the Swing Line Note; and provided further,
however, that 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. All references in this
Agreement to "Banks" or "the Banks" shall refer to all Banks, unless expressly
stated to refer to Required Banks.
15.12 Taxes and Fees. Should any documentary, stamp or similar tax
(other than a tax based upon the net income of any Bank or Agent imposed by
the jurisdiction in which such Bank or Agent have their respective principal
executive offices), or recording or filing fee become payable in respect of
this Agreement or any of the Loan Documents (or the execution, filing or
recording thereof) or any amendment, modification or supplement hereof or
thereof, Company agrees to pay the same together with any interest or
penalties thereon and agrees to hold the Agent and the Banks harmless with
respect thereto.
15.13 Confidentiality. Each Bank agrees that it will not disclose
without the prior consent of Company (other than to its employees, its
Affiliates, to another Bank or to its auditors or counsel) any information
with respect to Company, which is furnished pursuant to this Agreement or any
of the other Loan Documents; provided that any Bank may disclose any such
information (a) as has become generally available to the public or has been
lawfully obtained by such Bank from any third party under no duty of
confidentiality to Company, (b) as may be required or appropriate in any
report, statement or testimony submitted to, or in respect to any inquiry, by,
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank, including the Board of Governors of the Federal
Reserve System of the United States, the Office of the Comptroller of the
Currency 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 to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Bank, and (e) to any permitted transferee or
assignee or to any approved participant of, or with respect to, the Notes, as
aforesaid. Any Bank required to disclose any confidential information pursuant
to clause (c) above shall use its best efforts to give Company prior notice of
any required disclosure of such information.
15.14 Withholding Taxes. If any Bank is not incorporated under the
laws of the United States or a state thereof, such Bank shall promptly deliver
to the Agent two executed copies of (i) Internal Revenue Service Form 1001
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 4224 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.
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.
15.15 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANKS, THE
AGENT, NOR COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE,
ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE
BANKS AND THE AGENT OR COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL
OF THEM.
15.16 Complete Agreement; Conflicts. This Agreement, the Notes, any
Requests for Revolving Credit Advance and Requests for Swing Line Advance
hereunder, and the Loan Documents contain the entire agreement of the parties
hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound
by anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
15.17 Severability. In case any one or more of the obligations of
Company under this Agreement, the Notes or any of the other Loan Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of Company shall not
in any way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality
or enforceability of the obligations of Company under this Agreement, the
Notes or any of the other Loan Documents in any other jurisdiction.
15.18 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.
15.19 Construction of Certain Provisions. If any provision of this
Agreement or any of the 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.
15.20 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.
15.21 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Company or any party
to any of the Loan Documents made herein or in any of the Loan Documents or in
any certificate, report, financial statement or other document furnished by or
on behalf of Company or any Guarantor in connection with this Agreement or any
of the 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 Company set forth
in Sections 9.9, 9.12(c), 13.1, 13.6, 13.7 and 15.4 hereof (together with any
other indemnities of Company contained elsewhere in this Agreement or in any
of the Loan Documents) and of Banks set forth in Section 15.12 hereof shall,
notwithstanding anything to the contrary contained herein, survive the
repayment in full of the Indebtedness and the termination of the Revolving
Credit Aggregate Commitment.
15.22 Effective Upon Execution. This Agreement shall become effective
upon the execution hereof by Banks, Agent and Company and the issuance by
Company of the Revolving Credit Notes and the Swing Line Note hereunder, and
shall remain effective until the Indebtedness has been repaid and discharged
in full, all Letters of Credit have expired and no commitment to extend any
credit hereunder or under any of the other Loan Documents, whether optional or
obligatory, remains outstanding.
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, ▇▇▇▇▇▇▇▇ STORES INC.
as Agent
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------ ------------------------
Its: Vice President Its: Vice President-Treasurer
One Detroit Center ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9th Floor MC 3268 Attn: Chief Financial Officer
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
REVOLVING CREDIT BANKS: COMERICA BANK
Eurocurrency Lending Office: By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Comerica Bank -----------------------
One Detroit Center Its: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. One Detroit Center
9th Floor MC 3268 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
NBD BANK
Eurocurrency Lending Office: By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
NBD Bank -----------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Second Vice President
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
SWING LINE BANK: COMERICA BANK
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Eurocurrency Lending Office: Its: Vice President
Comerica Bank ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇