CREDIT AGREEMENT DATED AS OF APRIL 6, 2007 COMERICA BANK
Exhibit
4.1
DATED
AS OF APRIL 6, 2007
COMERICA
BANK
Execution
Copy
THIS CREDIT
AGREEMENT, made as of the 6th day of April, 2007, by and between
SUPERIOR MATERIALS, LLC, a Michigan limited liability company (“Superior”) and
BWB, LLC, a Michigan limited liability company (“BWB and together with Superior,
collectively, “Companies” and individually, a “Company”) and COMERICA BANK, a
Michigan banking corporation (herein called “Bank”).
RECITALS:
A. Companies
desires to obtain certain credit facilities from Bank.
B. Bank
is willing to extend such credit to Companies on the terms and conditions herein
set forth.
NOW,
THEREFORE, Bank and Companies agree as follows:
WITNESSETH:
1. DEFINITIONS
For the
purposes of this Agreement the following terms will have the following
meanings:
“Account”
shall have the meaning
assigned to it in the Michigan Uniform Commercial Code on
the date of this Agreement.
“Account
Debtor” shall mean the party who is obligated on or under any
Account.
“Advance”
shall mean a borrowing
requested by Companies and made by Bank under Section 2
of this Agreement, including any refunding or conversions of such borrowings
pursuant to Section 3.3 hereof, and shall include a Eurodollar-based Advance
and
a Prime-based Advance.
“Affiliate”
shall mean, with respect
to any Person, any other Person directly or indirectly
controlling (including but not limited to all directors and executive officers
of such Person), controlled by, or under direct or indirect common control
with
such Person. A Person shall be deemed to control a corporation for the purposes
of this definition if such Person possesses, directly or indirectly, the power
(i) to vote 10% or more of the securities having ordinary voting power for
the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
“Alternate
Base Rate” shall mean for any day a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) equal to the Federal
Funds Effective Rate in effect on such day plus one percent (1%).
“Applicable
Fee Percentage” shall mean, as of any date of determination thereof, the
applicable percentage used to calculate certain of the fees due and payable
hereunder, determined by reference to the appropriate columns in the Pricing
Matrix attached to this Agreement as Schedule 1.1.
“Applicable
Interest Rate” shall mean the Eurodollar-based Rate or the Prime-based Rate, as
selected by Companies from time to time subject to the terms and conditions
of
this Agreement.
“Applicable
L/C Commission Rate” shall mean as of any date of determination thereof, the
applicable Letter of Credit commission margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as Schedule
1.1.
“Applicable
Margin” shall mean, as of any date of determination thereof, the applicable
interest rate margin, determined by reference to the appropriate columns in
the
Pricing Matrix attached to this Agreement as Schedule 1.1.
“Assignment”
shall mean the Assignment
as Collateral Security dated March 30, 2007 by Holding
in favor of Bank, granting Bank a first priority security interest in all of
Holding’s rights under the Contribution Agreement and all documents and
agreements executed in connection with the Contribution Agreement and the
Transaction.
“Base Amount”
shall initially mean
seventy five percent (75%) of the Tangible Net Worth of
Companies as of December 31, 2007 as determined based on the December 31, 2007
internally prepared financial statements for Companies to be provided by
Companies to Bank under Section 7.1(b). On the last day of each fiscal quarter
of Companies (commencing March 31, 2008), Base Amount shall increase by an
amount equal to twenty percent (20%) of net income of Companies, as determined
in accordance with GAAP, for the period then ended. If net income for any fiscal
quarter is less than $0, it shall be deemed to be $0 for purposes of this
calculation.
“Borrowing
Base” shall mean as of any date of determination, the sum of (a) eighty five
percent (85%) of Eligible Accounts, plus (b) the lesser of (i) fifty percent
(50%) (subject to Bank approval in its sole and absolute discretion, but in
no
case less than forty percent (40%)) of Eligible Inventory and (ii) $5,000,000,
plus (c) the Overformula Amount; provided however, that the Borrowing
Base shall be determined on the basis of the most current borrowing base
certificate required to be submitted hereunder, provided, further, that the
amount determined as the Borrowing Base shall be subject to any reserves for
contras/offsets, potential offsets due to customer deposits, and such other
reserves as reasonably established by Bank in the exercise of its reasonable
credit judgment from time to time, including, without limitation any reserves
or
other adjustments established by Bank, in each case in the exercise of its
reasonable credit judgment on the basis of any collateral audits conducted
hereunder. In the event that Bank, at any time in the exercise of its
reasonable credit judgment, determines that the dollar amount of Eligible
Accounts collectable by a Company is reduced or diluted as a result of discounts
or rebates granted by the applicable Company to the respective Account
Debtor(s), returned or rejected Inventory or services, or such other reasons
or
factors as Bank deems applicable in the exercise of its reasonable credit
judgment, Bank may, in the exercise of its reasonable credit judgment, upon
five
(5) business days’ prior written notice to Companies, reduce or otherwise modify
the percentage of Eligible Accounts included within the Borrowing Base and/or
reduce the dollar amount of Eligible Accounts by an amount determined by Bank
in
its reasonable credit judgment.
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“Business
Day” shall mean any day on which commercial banks are open for domestic and
international business (including dealings in foreign exchange) in Detroit,
London and New York.
“Capital
Expenditure” shall mean, without duplication, any payment made directly or
indirectly for the purpose of acquiring or constructing fixed assets, real
property or equipment which in accordance with GAAP would be added as a debit
to
the fixed asset account of a Company, including, without limitation, amounts
paid or payable under any conditional sale or other title retention agreement
or
under any lease or other periodic payment arrangement which is of such a nature
that payment obligations of such Company or a Subsidiary, as applicable,
thereunder would be required by GAAP to be capitalized and shown as liabilities
on the balance sheet of Company and its consolidated Subsidiaries.
“Capital
Lease” shall mean any lease of any property (whether real, personal or mixed) by
a Company or any Subsidiary as lessee which, in conformity with GAAP, is, or
is
required to be accounted for as a capital lease on the balance sheet of such
Company and its consolidated Subsidiaries.
“Change of
Control” shall mean (i) if ▇▇▇. ▇. ▇▇▇▇ Co. and U.S. Concrete, Inc. no longer
own eighty percent (80%) of the Equity Interests of Holding, (ii) if Holding
ceases to own one hundred percent (100%) of the Equity Interests of any Company
or (iii) the occurrence of a Change of Control as defined in the Credit
Agreement dated September 29, 2006 by and among ▇▇▇. ▇. ▇▇▇▇ Co., Comerica
Bank,
as Agent and the other lenders party thereto and the occurrence a Change of
Control as defined in the Credit Agreement dated as of June 30, 2006 by and
among U.S. Concrete, Inc., the lenders party thereto, Citicorp North America,
Inc., as administrative agent and certain other parties.
“Collateral
Access Agreement” shall mean an agreement in form and substance reasonably
satisfactory to the Bank pursuant to which a mortgagee or lessor of real
property on which collateral is stored or otherwise located, or a warehouseman,
processor or other bailee of Inventory or other property owned by a Company,
that acknowledges the liens under the Loan Documents and subordinates or waives
any liens held by such Person on such property and, in the case of any such
agreement with a mortgagee or lessor, permits the Bank reasonable access to
and
the use of such real property during the continuance of an Event of Default
to
assemble, complete and sell any collateral stored or otherwise located
thereon.
“Combined” or
“Combining” 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 combined, as
applicable, basis in accordance with GAAP.
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“Contribution
Agreement” shall mean the Contribution Agreement dated March 26, 2007 by and
among BWB, Inc. of Michigan, Builders’ Redi-Mix, LLC, ▇▇▇▇▇ Gravel Company,
Superior Materials, Inc., USC Michigan, Inc., ▇▇▇. ▇. ▇▇▇▇ Co. and Holding,
as
amended or modified from time to time.
“Debt” shall
mean, as of any applicable date of determination, all items of indebtedness,
obligation or liability of Companies, whether matured or unmatured, liquidated
or unliquidated, direct or indirect, absolute or contingent, joint or several,
that should be classified as liabilities in accordance with GAAP, including,
without limitation, Capital Leases.
“EBITDA”
shall mean, as of
any date of determination, the sum of the net income of
Companies and their consolidated Subsidiaries, for the applicable measuring
period ending on such date of determination, plus, to the extent deducted
in computating such net income, (i) income taxes for that period, (ii) interest
expense for that period and (iii) depreciation, depletion and amortization
expense for that period, in each case determined in accordance with GAAP, and
(d) other non-cash charges and extraordinary items and minus, to the
extent included in the determination of net income, non-cash gains and other
extraordinary items. The applicable measuring period for any date of
determination occurring on or before December 31, 2007 shall be the period
beginning April 1, 2007 and ending on such date and thereafter shall be the
four
preceding fiscal quarters ending on such date of determination. Until the
determination date occurring March 31, 2008, for purposes of the calculation
of
the Funded Debt to EBITDA Ratio, EBITDA shall be determined on an annualized
basis.
“Eligible
Account” shall mean an Account (but shall not include interest and service
charges) arising in the ordinary course of a Company’s business which meets each
of the following requirements:
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(a)
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it is not
owing
more than one hundred twenty (120) days after the date of the original
invoice or other writing evidencing such Account;
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(b)
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it is not
owing by
an Account Debtor (as defined in the UCC) who has failed to pay fifty
percent (50%) or more of the aggregate amount of its Accounts owing
to the
applicable Company within one hundred twenty (120) days after the
date of
the respective invoices or other writings evidencing such
Accounts;
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(c)
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it arises
from the
sale or lease of goods and such goods have been shipped or delivered
to
the Account Debtor under such Account; or it arises from services
rendered
and such services have been performed;
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(d)
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it is evidenced
by
an invoice, dated not later than the date of shipment or performance,
rendered to such Account Debtor or some other evidence of billing
acceptable to Bank;
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(e)
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it is not
evidenced
by any note or other negotiable instrument or by any chattel
paper;
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(f)
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it is a
valid,
legally enforceable obligation of the Account Debtor thereunder,
and is
not subject to any offset, counterclaim or other defense on the part
of
such Account Debtor or to any claim on the part of such Account Debtor
denying liability thereunder in whole or in part; provided however
such
Account will not be an Eligible Account only to the extent of the
offset,
counterclaim, defense or claim;
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(g)
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it is not
subject
to any sale of accounts, any rights of offset, assignment, lien or
security interest whatsoever other than to Bank;
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(h)
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it is not
owing by
a Subsidiary or Affiliate of any Company, nor by an Account Debtor
which
(i) does not maintain its chief executive office in the United States
of
America, (ii) is not organized under the laws of the United States
of
America, or any state thereof, or (iii) is the government of any
foreign
country or sovereign state, or of any state, province, municipality
or
other instrumentality thereof;
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(i)
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it is not
an
account owing by the United States of America or any state or political
subdivision thereof, or by any department, agency, public body corporate
or other instrumentality of any of the foregoing, unless all necessary
steps are taken to comply with the Federal Assignment of Claims Act
of
1940, as amended, or with any comparable state law, if applicable,
and all
other necessary steps are taken to perfect Bank’s security interest in
such account;
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(j)
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it is not
owing by
an Account Debtor (other than an Account Debtor approved in writing
by
Bank and subject to such conditions and limitations as Bank may in
its
sole discretion establish as a condition of such approval) for which
the
applicable Company has received a notice of (i) the dissolution,
liquidation, termination of existence, insolvency or business failure
of
the Account Debtor, (ii) the appointment of a receiver for any part
of the
property of the Account Debtor, or (iii) an assignment for the benefit
of
creditors, the filing of a petition in bankruptcy, or the commencement
of
any proceeding under any bankruptcy or insolvency laws by or against
the
Account Debtor;
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(k)
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it is not
an
account billed in advance, payable on delivery, for consigned goods,
for
guaranteed sales, for unbilled sales, subject to a retainage or holdback
by the Account Debtor or insured by a surety company;
and
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(l)
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it is not
payable
at a future date in accordance with its terms, except in compliance
with
normal credit terms (e.g. 2% 10, net 30);
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(m)
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it is not
owing by
any Account Debtor whose obligations Bank (in its reasonable credit
judgment) shall have notified Companies are not deemed to constitute
Eligible Accounts.
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An Account which is
at
any time an Eligible Account, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be an Eligible
Account.
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“Eligible
Inventory” shall be valued at the lesser of cost or present market value in
accordance with GAAP, on a first in/first out basis, and shall mean all of
Companies’ Inventory which is in good and merchantable condition, is not
obsolete or discontinued, and which would properly be classified as “raw
materials” or “finished goods inventory” (including resale goods) under GAAP,
excluding (a) Companies’ work in process, consigned goods and inventory located
outside the United States of America, (b) Inventory not in the possession and
control of the applicable Company or not stored and held in facilities owned
by
a Company unless, if such facilities are not so owned, Bank is in possession
of
a Collateral Access Agreement or other acknowledgment agreements with respect
thereto, (c) inventory covered by or subject to a seller’s right to repurchase,
or any consensual or nonconsensual lien or security interest (including without
limitation purchase money security interests) other than in favor of Bank,
whether senior or junior to Bank’s security interest, and (d) Inventory that
Bank (in its reasonable credit judgment) after having notified Companies,
excludes. Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory.
“Eligible
Real Estate Collateral” shall mean real estate (including leasehold interests)
and improvements thereon with respect to which Bank has a first priority
mortgage lien (subject to no title exceptions which are not acceptable to Bank)
and with respect to which Bank obtained due diligence materials (including,
without limitation, appraisals, environmental assessments and surveys and,
in
the case of leasehold interests, landlord acknowledgments and agreements)
acceptable to Bank in the exercise of its sole discretion.
“Environmental
Laws” shall mean all federal, state and local laws including statutes,
regulations, ordinances, codes, rules, and other governmental restrictions
and
requirements, relating to environmental pollution, contamination or other
impairment of the environment or any hazardous or toxic substances of any
nature. These Environmental Laws shall include but not be limited to the Federal
Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean Water
Act, the Federal Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
and the Federal Superfund Amendments and Reauthorization Act of
1986.
“Equity
Interests” means, with respect to any Person, any and all shares, share capital,
interests, participations, warrants, options or other equivalents (however
designated) of capital stock of a corporation and any and all equivalent
ownership interests in a Person (other than a corporation).
“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended, or any
successor act or code.
“Eurodollar-based
Advance” shall mean an Advance which bears interest at the Eurodollar-based
Rate.
6
“Eurodollar-based
Rate” shall mean a per annum interest rate which is the Applicable Margin
plus the quotient of:
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(a)
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the per
annum
interest rate at which Bank’s Eurodollar Lending Office offers deposits to
prime banks in the eurodollar market in an amount comparable to the
relevant Eurodollar-based Advance and for a period equal to the relevant
Interest Period at approximately the time Companies request such
Advance
on the first day of such Interest Period; divided by
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(b)
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a percentage
equal
to 100% minus the maximum rate on such date at which Bank is required
to
maintain reserves on “Euro-currency Liabilities” as defined in and
pursuant to Regulation D of the Board of Governors of the Federal
Reserve
System or, if such regulation or definition is modified, and as long
as
Bank is required to maintain reserves against a category of liabilities
which includes eurodollar deposits or includes a category of assets
which
includes eurodollar loans, the rate at which such reserves are required
to
be maintained on such category;
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all as conclusively
determined by Bank, such sum to be rounded upward, if necessary, to the nearest
whole multiple of 1/100th of 1%.
“Eurodollar
Lending Office” shall mean Bank’s office located at Grand Cayman, British West
Indies or such other branch of Bank, domestic or foreign, as it may hereafter
designate as its Eurodollar Lending Office by notice to Companies.
“Event of
Default” shall mean any of the Events of Default specified in Section 10
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 Bank
from three Federal funds brokers of recognized standing selected by
it.
“Funded Debt”
shall mean for any
Person (a) all indebtedness of such Person for borrowed money
or for the deferred purchase price of property or services as of such date
(other than operating leases and trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices) or which
is evidenced by a note, bond, debenture or similar instrument, (b) the principal
component of all obligations of such Person under Capitalized Leases, (c) all
reimbursement obligations (actual, contingent or otherwise) of such Person
in
respect of letters of credit, acceptances or similar obligations issued or
created for the account of such Person, (d) all liabilities secured by any
liens
on any property owned by such Person as of such date even though such Person
has
not assumed or otherwise become liable for the payment thereof, in each case
determined in accordance with GAAP; provided however that so long as such Person
is not personally liable for such liabilities, the amount of such liability
shall be deemed to be the lesser of the fair market value at such date of the
property subject to the lien securing such liability and the amount of the
liability secured, and (e) all guaranty obligations in respect of any liability
which constitutes Funded Debt; provided, however that Funded Debt shall not
include any interest rate swap transaction, basis swap transaction, forward
rate
transaction, commodity swap transaction, equity transaction, equity index
transaction, foreign exchange transaction, cap transaction, floor transaction
(including any option with respect to any of these transactions and any
combination of any of the foregoing) entered into by such Person prior to the
occurrence of a termination event with respect thereto.
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“Funded Debt
to EBITDA Ratio” shall mean as of any date of determination, a ratio the
numerator of which is Funded Debt of Companies as of such date and the
denominator of which is EBITDA as of such date of determination, as determined
on a combined basis in accordance with GAAP.
“GAAP” shall
mean, as of any applicable date of determination, generally accepted accounting
principles consistently applied, as in effect on the date of this
Agreement.
“Guaranties”
shall mean the guaranties
from Holding and from each a Subsidiary of any
Company.
“Guarantors”
shall mean Holding
and each Subsidiary of any Company which is required to be a
Guarantor in accordance with the provisions of this Agreement.
“Holding”
shall mean Superior
Materials Holdings, LLC, a Michigan limited liability
company.
“Indebtedness”
shall mean all loans,
advances, indebtedness, obligations and liabilities of
Companies to Bank under this Agreement, together with all other indebtedness,
obligations and liabilities whatsoever of Companies to Bank arising under or
in
connection with this Agreement or otherwise, whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, joint
or
several, due or to become due, now existing or hereafter arising.
“Interest
Period” shall mean a period of one (1), two (2), three (3) or six (6) months as
selected by Companies pursuant to the provisions of this Agreement commencing
on
the day a Eurodollar-based Advance is made, or on the effective date of an
election of the Eurodollar-based Rate made under Section 3.1.
“Inventory”
shall have the meaning
assigned to it in the Michigan Uniform Commercial Code on
the date of this Agreement.
“Letter of
Credit” shall have the meaning set forth in Section 2.6.
“Letter of
Credit Reserve” shall mean as of any date of determination, an amount equal to
the aggregate principal amount of all undrawn Letters of Credit issued by Bank
for the account of Companies under and pursuant to this Agreement and the amount
of all draws under Letters of Credit paid by Bank and not reimbursed by
Companies.
“Loan
Documents” shall mean collectively, this Agreement, the Note, the Guaranties,
the Security Agreement, the Assignment, the Mortgages and any other instruments
or agreements executed at any time pursuant to or in connection with any such
documents.
“Mortgages”
shall mean the Continuing
Collateral Mortgages from Companies in favor of Bank
granting to Bank first mortgage liens on the property and improvements described
in attached Schedule 1.2.
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“Overformula
Amount” shall initially mean Five Million Dollars ($5,000,000). Beginning
August 6, 2007, the Overformula Amount shall mean the lesser of (i) Five Million
Dollars ($5,000,000) and (ii) fifty percent (50%) of the aggregate appraised
value of the Eligible Real Estate Collateral.
“Permitted
Acquisitions” shall mean any acquisition (including by way of merger) by a
Company of all or substantially all of the assets of another Person, or of
a
division or line of business of another Person, or shares of stock or other
ownership interests of another Person, which is conducted in accordance with
the
following requirements (and shall include the acquisitions, regardless of
compliance with the following requirements):
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(a)
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Such acquisition
is
of a business or Person engaged in a line of business reasonably
related
to that of the Companies;
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(b)
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If such
acquisition
is structured as a stock acquisition, then the Person so acquired
shall
either (X) become a wholly-owned Subsidiary of a Company or of a
Subsidiary and the Companies shall comply, or cause such Subsidiary
to
comply, with Section 7.14 hereof or (Y) such Person shall be merged
with and into a Company or a Subsidiary (with a Company or such Subsidiary
being the surviving entity);
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(c)
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If such
acquisition
is structured as the acquisition of assets, such assets shall be
acquired
by a Company or a Subsidiary;
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(d)
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The Company
shall
have delivered to Bank not less than fifteen (15) nor more than
ninety (90) days prior to the date of such acquisition, notice of
such
acquisition together with Pro Forma Projected Financial Information,
copies of all material documents relating to such acquisition, and
historical financial information (including income statements, balance
sheets and cash flows) covering at least two (2) complete fiscal
years of
the acquisition target prior to the effective date of the acquisition
or
the entire credit history of the acquisition target, whichever period
is
shorter, in each case in form and substance satisfactory to the
Bank;
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(e)
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Both immediately
before and after such acquisition no Event of Default shall have
occurred
and be continuing;
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(f)
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The board
of
directors (or other Person(s) exercising similar functions) of the
seller
of the assets or issuer of the shares of stock or other ownership
interests being acquired shall not have disapproved such transaction
or
recommended that such transaction be disapproved;
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(g)
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The purchase
price
of such proposed new acquisition (including all Funded Debt assumed
in
connection with such acquisition and all payments to be made under
employment agreements and non-compete agreements), shall not exceed
Five
Million Dollars ($5,000,000) and the aggregate amount of such purchase
price for all acquisitions consummated after the date of execution
of this
Agreement shall not exceed Fifteen Million Dollars
($15,000,000).
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“Permitted
Liens”
shall mean with respect to any Person:
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(a)
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liens for
taxes not
yet due and payable or which are being contested in good faith by
appropriate proceedings diligently pursued, provided that provision
for
the payment of all such taxes has been made on the books of such
Person as
may be required by generally accepted accounting principles, consistently
applied;
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(b)
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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
proceedings commenced for the enforcement of such liens and encumbrances
shall have been duly suspended; and (ii) such provision for the payment
of
such liens and encumbrances has been made on the books of such Person
as
may be required by generally accepted accounting principles, consistently
applied;
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(c)
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liens arising
in
connection with worker’s compensation, unemployment insurance, old age
pensions 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 proceedings commenced for the enforcement of such
liens
shall have been duly suspended; and (ii) such provision for the payment
of
such liens has been made on the books of such Person as may be required
by
generally accepted accounting principles, consistently
applied;
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(d)
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(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 government or
any
agency thereof entered into in the ordinary course of business, (ii)
lien
to secure bonds required to be obtained under the provisions of the
Security Agreement, (iii) 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), and (iv)
liens on
leased assets incurred in connection with leases permitted under
this
Agreement, provided that full provision for the payment of all such
obligations set forth in clauses (i), (ii), (iii) and (iv) has been
made
on the books of such Person as may be required by generally accepted
accounting principles, consistently applied;
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(e)
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minor survey
exceptions or minor encumbrances, easements or reservations, or rights
of
others for rights-of-way, utilities and other similar purposes, or
zoning
or other restrictions as to the use of real properties, which do
not
materially interfere with the business of such Person;
and
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(f)
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judgment
liens
securing judgments not constituting Events of Default under Section
10.2(f).
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“Person” or
“person” shall mean any individual,
corporation, partnership, joint venture,
limited liability company, association, trust, unincorporated association,
joint
stock company, government, municipality, political subdivision or agency, or
other entity.
“Prime Rate”
shall mean the per
annum interest rate established by Bank as its prime rate for
its borrowers as such rate may vary from time to time, which rate is not
necessarily the lowest rate on loans made by Bank at any such time.
“Prime-based
Advance” shall mean an Advance which bears interest at the Prime-based
Rate.
“Prime-based
Rate” shall mean for any day a per annum interest rate which is the greater of
(i) the Prime Rate plus or minus the Applicable Margin or (ii) the Alternate
Base Rate.
“Pro Forma
Projected Financial Information” shall mean, as to any proposed acquisition, a
statement executed by an officer of Companies (supported by reasonable detail)
setting forth the total consideration to be paid or incurred in connection
with
the proposed acquisition, and pro forma combined projected financial information
for the Companies and their consolidated Subsidiaries and the acquisition target
(if applicable), consisting of projected balance sheets as of the proposed
effective date of the acquisition or the closing date thereof and as of the
end
of at least the next succeeding three (3) fiscal years of the Companies
following the acquisition and projected statements of income and cash flows
for
each of those years, including sufficient detail to permit calculation of the
amounts and the ratios described in Sections 7.11 through 7.13 and 8.9 hereof,
as projected as of the effective date of the acquisition and for those fiscal
years and accompanied by (i) a statement setting forth a calculation of the
ratios and amounts so described, (ii) a statement in reasonable detail
specifying all material assumptions underlying the projections and (iii) such
other information as Bank shall reasonably request.
“Request for
Advance” shall mean a Request for Advance issued by Companies under this
Agreement in the form annexed to this Agreement as
Exhibit“A”.
“Responsible
Officer” shall mean the manager, chief executive officer, chief financial
officer, treasurer or the president of the Companies, or with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Companies or any other officer having substantially the same
authority and responsibility.
“Revolving
Credit Maturity Date” shall mean April 1, 2010.
“Revolving
Credit Note” or “Note” shall mean the Note described in Section 2.1 hereof made
by Companies to Bank in the form annexed to this Agreement as
Exhibit“B”.
“Security
Agreement” shall mean the Security Agreement(s) in the form and content of
Exhibit“C” to this Agreement pursuant to which Companies and each
Subsidiary grant to Bank a first priority security interest in all tangible
and
intangible personal property, wherever located and whether now owned or
hereafter acquired, together with all replacements thereof, substitutions
therefor, accessions thereto and all proceeds and products of all the
foregoing.
11
“Subsidiary”
shall mean a corporation
or other entity of which more than fifty percent (50%)
of the outstanding voting stock or equivalent equity interests are owned by
a
Company, either direct or indirectly, through one or more
intermediaries.
“Tangible Net
Worth” shall mean, as of any applicable date of determination, (i) the net book
value of all assets of Companies (other than receivables due from officers,
employees and other affiliated parties and patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, goodwill, deferred expenses,
covenants not to compete and similar intangible assets) after all appropriate
deductions in accordance with GAAP (including, without limitation, reserves
for
doubtful receivables, obsolescence, depreciation and amortization), minus (ii)
all Debt of Companies, all as would appear on a balance sheet on a combined
basis in accordance with GAAP.
“Transaction”
shall mean the acquisition
by Holding and Companies of certain of assets of ▇▇▇.
▇. ▇▇▇▇ Co. and certain Affiliates of US Concrete, Inc. pursuant to the
Transaction Documents.
“Transaction
Documents” shall mean the Contribution Agreement and any other related documents
or agreements arising from or entered into pursuant to the terms of the
Contribution Agreement, in each case as amended as permitted hereunder from
time
to time.
“Uniform
Commercial Code” or “UCC” shall mean the Uniform Commercial Code of any
applicable state and unless specified otherwise shall mean the Uniform
Commercial Code as in effect in the State of Michigan.
2. THE
INDEBTEDNESS: Revolving Credit
2.1 Bank
agrees to make Advances to Companies at any time and from time to time from
the
effective date hereof until the Revolving Credit Maturity Date, not to exceed
Twenty Five Million Dollars ($25,000,000) in aggregate principal amount at
any
one time outstanding. All of the Advances under this Section 2 shall be
evidenced by the Revolving Credit Note under which Advances, repayments and
readvances may be made, subject to the terms and conditions of this
Agreement.
2.2 The
Revolving Credit Note shall mature on the Revolving Credit Maturity Date and
each Advance from time to time outstanding thereunder shall bear interest at
its
Applicable Interest Rate. The amount and date of each Advance, its Applicable
Interest Rate, its Interest Period, if applicable, and the amount and date
of
any repayment shall be noted on Bank’s records, which records will be conclusive
evidence thereof absent demonstrable error.
2.3 Companies
may request an Advance under this Section 2 upon the delivery to Bank of a
Request for Advance executed by an authorized officer of Companies, subject
to
the following:
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(a)
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each such
Request
for Advance shall set forth the information required on the Request
for
Advance form annexed hereto as Exhibit“A”;
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(b)
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each such
Request
for Advance shall be delivered to Bank by 11:00 a.m. on the proposed
date
of Advance;
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(c)
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the principal
amount of such Advance, plus the amount of any outstanding indebtedness
to
be then combined therewith having the same Applicable Interest Rate
and
Interest Period, if any, shall be in the case of a Eurodollar-based
Advance at least $500,000 or any larger amount in $50,000
increments;
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(d)
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the principal
amount of such Advance, plus the sum of the amount of all other
outstanding Advances under this Section 2, and the Letter of Credit
Reserve shall not exceed the formula set forth in Section 2.5
below;
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(e)
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a Request
for
Advance, once delivered to Bank, shall not be revocable by
Companies.
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Bank may, at
its option, lend under this Section 2 upon the telephone request of an
authorized officer of Companies and, in the event Bank makes any such advance
upon a telephone request, the requesting officer shall, if so requested by
Bank,
mail to Bank, on the same day as such telephone request, a Request for Advance
in the form attached as Exhibit“A”. Companies hereby authorize Bank to
disburse Advances under this Section 2 pursuant to the telephone instructions
of
any person purporting to be an authorized officer of Companies and Companies
shall bear all risk of loss resulting from disbursements made upon any telephone
request. Each telephone request for an Advance shall constitute a certification
of the matters set forth in the Request for Advance form as of the date of
such
requested Advance.
2.4 Companies
may prepay all or part of the outstanding balance of the Prime-based Advance(s)
under the Revolving Credit Note at any time. Upon one (1) Business Day prior
notice to Bank, Companies may prepay all or part of any Eurodollar-based
Advance, provided that the amount of any such partial prepayment shall be at
least $250,000 and the unpaid portion of such Advance which is refunded or
converted under Section 4.3 shall be subject to the limitations of Section
2.3(c) hereof. Any prepayment of a Prime-based Advance or a Eurodollar-based
Advance on the last day of the Interest Period therefor made in accordance
with
this Section shall be without premium, penalty or prejudice to Companies’ right
to reborrow under the terms of this Agreement. Any other prepayment shall be
subject to the provisions of Section 5.1 hereof.
2.5 The
aggregate principal amount at any one time outstanding under the Revolving
Credit Note plus the Letter of Credit Reserve shall never exceed the Borrowing
Base. Companies shall immediately make all payments necessary to comply with
this provision. Any such payments shall be applied first to outstanding
Prime-based Advances and the remainder, if any, to outstanding Eurodollar-based
Advances.
13
2.6 In
addition to Advances under the Revolving Credit Note to be provided to Companies
by Bank under and pursuant to Section 2.1 of this Agreement, Bank further agrees
to issue, or commit to issue, from time to time, standby letters of credit
for
the account of Companies on a joint and several basis (herein individually
called a “Letter of Credit” and collectively “Letters of Credit”) in aggregate
undrawn amounts not to exceed Five Million Dollars ($5,000,000) at any one
time
outstanding; provided, however that the sum of the aggregate amount of Advances
outstanding under the Revolving Credit Note plus the Letter of Credit Reserve
shall not exceed, subject to Section 2.9, Twenty Five Million Dollars
($25,000,000) at any one time; and provided further that no Letter of Credit
shall, by its terms, have an expiration date which extends beyond the fifth
(5th) Business Day before the Revolving Credit Maturity Date or one
(1) year after issuance, whichever first occurs. In addition to the terms and
conditions of this Agreement, the issuance of any Letters of Credit shall also
be subject to the terms and conditions of any letter of credit applications
and
agreements executed and delivered by Companies to Bank with respect thereto.
Companies shall pay to Bank quarterly in arrears a per annum fee equal to the
Applicable L/C Commission Rate of the amount of each standby Letter of Credit,
which fee shall be payable on the first day of each July, October, January
and
April.
2.7 Companies
agree to pay to Bank a facility fee on the average daily balance of the
revolving credit commitment at the rate of the Applicable Fee Percentage per
annum, computed on the actual number of days elapsed using a year of 360 days.
The facility fee shall be payable quarterly in arrears on the first day of
each
July, October, January and April (commencing July 1, 2007) and on the Revolving
Credit Maturity Date.
2.8 Companies
may upon at least five (5) Business Days’ prior written notice to Bank (but not
more frequently than twice during any period of 12 consecutive months),
permanently reduce the revolving credit 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 commitment shall be in an aggregate
amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000) or a
larger integral multiple of One Hundred Thousand Dollars ($100,000); (ii)
Companies shall prepay in accordance with the terms hereof the amount, if any,
by which the aggregate unpaid principal amount of Advances outstanding
hereunder, plus the aggregate undrawn amount of outstanding Letters of Credit,
exceeds the amount of the then applicable revolving credit commitment as so
reduced, together with interest thereon to the date of prepayment; and (iii)
no
reduction shall reduce the revolving credit commitment to an amount which is
less than the aggregate undrawn amount of any Letters of Credit outstanding
at
such time. Reductions of the revolving credit commitment will not be available
for reinstatement by or readvance to the Companies.
2.9 Companies
may request that the revolving credit commitment be increased in an aggregate
amount (for all such requests under this Section 2.9) not to exceed Five Million
Dollars ($5,000,000), subject to the satisfaction concurrently with or prior
to
the date of each such request of the following conditions:
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(a)
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Companies
shall
have delivered to the Bank a written request for such increase, specifying
the amount of increase thereby requested (each such request, a “Request
for Increase”); provided, however, that in the event Companies have
previously delivered a Request for Increase pursuant to this Section
2.9,
Companies may not deliver a subsequent Request for Increase until
all the
conditions to effectiveness of such first Request for Increase have
been
fully satisfied (or such Request for Increase has been withdrawn);
and
provided further that Companies may make no more than two Requests
for
Increase;
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(b)
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Bank shall
have
consented to the increase in the revolving credit commitment (which
consent may be granted or withheld in the sole and absolute discretion
of
Bank);
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(c)
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If requested,
Companies shall have executed and delivered to Bank a new Revolving
Credit
Note payable to Bank in the face amount of the revolving credit commitment
(after giving effect to the Request for Increase);
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(d)
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no Event
of Default
(or event which with the giving of notice or the passage of time
or both
would constitute an Event of Default) shall have occurred and be
continuing; and
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(e)
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such other
amendments, acknowledgments, consents, documents, instruments, and
registrations, if any, shall have been executed and delivered and/or
obtained by Companies as required by Bank, in its reasonable
discretion.
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2.10 Proceeds
of Advances under the Revolving Credit Note shall be used solely for working
capital purposes and other general corporate purposes.
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3.
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INTEREST,
INTEREST PERIODS, CONVERSIONS,
PREPAYMENTS.
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3.1 The
Revolving Credit Note and the Advances thereunder shall bear interest from the
date thereof on the unpaid principal balance thereof from time to time
outstanding, at a rate per annum equal to the Prime-based Rate or the
Eurodollar-based Rate, as the Companies may elect subject to the provisions
of
this Agreement. Interest shall be payable monthly on the first Business Day
of
each month, commencing on the first Business Day following the month during
which such Advance is made, and at maturity. Notwithstanding the
foregoing, from and after the occurrence of any Event of Default and solely
during the continuation thereof, the Advances shall bear interest, payable
on
demand, at a rate per annum equal to: (i) in the case of Prime-based Advances,
two percent (2%) above the Prime-based Rate; and (ii) in the case of a
Eurodollar-based Advance, two percent (2%) above the rate which would otherwise
be applicable under this Section 3.1 until the earlier of (A) the waiver by
Bank
of the Event of Default and (B) the end of the then current Interest Period,
at
which time such Advance shall bear interest at the rate provided for in clause
(i) of this Section 3.1. Interest on all Advances shall be calculated on the
basis of a 360 day year for the actual number of days elapsed. The interest
rate
with respect to any Prime-based Advance shall change on the effective date
of
any change in the Prime-based Rate.
3.2 Each
Interest Period for a Eurodollar-based Advance shall commence on the date such
Eurodollar-based Advance is made or is converted from an Advance of another
type
pursuant to Section 3.3 hereof or on the last day of the immediately preceding
Interest Period for such Eurodollar-based Advance, and shall end on the date
one, two, three or six months thereafter, as the Companies may elect as set
forth below, subject to the following:
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(i)
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no Interest
Period
shall extend beyond the Revolving Credit Maturity Date;
and
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(ii)
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any Interest
Period
which would otherwise end on a day which is not a Business Day shall
be
extended to the next succeeding Business Day unless the next succeeding
Business Day falls in another calendar month, in which case, such
Interest
Period shall end on the immediately preceding Business Day and when
an
Interest Period begins on a day which has no numerically corresponding
day
in the calendar month during which such Interest Period is to end,
it
shall end on the last Business Day of such calendar
month.
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The Companies shall
elect
the initial Interest Period applicable to a Eurodollar-based Advance by its
Request for Advance given to the Bank pursuant to Section 2.3 or by its notice
of conversion given to the Bank pursuant to Section 3.3, as the case may be.
Provided that no Event of Default shall have occurred and be continuing, the
Companies may elect to continue an Advance as a Eurodollar-based Advance by
giving irrevocable written, telephonic or telegraphic notice thereof to the
Bank, before 11:00 a.m. on the last day of the then current Interest Period
applicable to such Eurodollar-based Advance, specifying the duration of the
succeeding Interest Period therefor. If the Bank does not receive timely notice
of the election and the Interest Period elected by the Companies, the Companies
shall be deemed to have elected to convert such Eurodollar-based Advance to
a
Prime-based Advance at the end of the then current Interest Period. No
more than three (3) Interest Periods shall be in effect at any one time with
respect to the Revolving Credit Note.
3.3 Provided
that no Event of Default shall have occurred and be continuing, the Companies
may, on any Business Day, convert any outstanding Advance into an Advance of
another type in the same aggregate principal amount, provided that any
conversion of a Eurodollar-based Advance shall be made only on the last Business
Day of the then current Interest Period applicable to such Advance. If the
Companies desire to convert an Advance, they shall give the Bank written,
telephonic or telegraphic notice, specifying the date of such conversion, the
Advances to be converted, the type of Advance elected and, if the conversion
is
into a Eurodollar-based Advance, the duration of the first Interest Period
therefor, which notice shall be given not later than 11:00 a.m. on the
applicable date of conversion.
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4.
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SPECIAL
PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD
PROTECTION.
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4.1 If
Companies make any payment of principal with respect to any Eurodollar-based
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Companies
fail to borrow any Eurodollar-based Advance after notice has been given by
Companies to Bank in accordance with the terms hereof requesting such Advance,
or if Companies fail to make any payment of principal or interest when due
in
respect of a Eurodollar-based Advance, Companies shall reimburse Bank on demand
for any resulting loss, cost or expense incurred by Bank 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 Bank shall have
16
funded or committed
to
fund such Advance. Such amount payable by Companies to Bank 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
Bank) which would have accrued to Bank 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 Bank under this paragraph shall
be
made as though Bank shall have actually funded or committed to fund the relevant
Eurodollar-based 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 Bank may fund any
Eurodollar-based Advance in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Companies, Bank shall
deliver to Companies a certificate setting forth the basis for determining
such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
4.2 For
any Interest Period for which the Applicable Interest Rate is the
Eurodollar-based Rate, if Bank shall designate a Eurodollar Lending Office
which
maintains books separate from those of the rest of Bank, Bank shall have the
option of maintaining and carrying the relevant Advance on the books of such
Eurodollar Lending Office.
4.3 If
with respect to any Interest Period Bank reasonably determines that, by reason
of circumstances affecting the foreign exchange and interbank markets generally,
deposits in Eurodollars in the applicable amounts are not being offered to
the
Bank for such Interest Period, then Bank shall forthwith give notice thereof
to
the Companies. Thereafter, until Bank notifies Companies that such circumstances
no longer exist, the obligation of Bank to make Eurodollar-based Advances,
and
the right of Companies to convert an Advance to or refund an Advance as a
Eurodollar-based Advance shall be suspended.
4.4 If,
after the date hereof, the introduction or implementation of, or any change
in,
any applicable law, rule or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for the Bank (or its Eurodollar Lending Office) to honor its obligations
hereunder to make or maintain any Advance with interest at the Eurodollar-based
Rate, Bank shall forthwith give notice thereof to Companies. Thereafter (a)
the
obligations of Bank to make Eurodollar-based Advances and the right of Companies
to convert an Advance or refund an Advance as a Eurodollar-based Advance shall
be suspended and thereafter Companies may select as Applicable Interest Rates
only those which remain available, and (b) if Bank may not lawfully continue
to
maintain an Advance to the end of the then current Interest Period applicable
thereto, the Prime-based Rate shall be the Applicable Interest Rate for the
remainder of such Interest Period.
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4.5 If
the adoption or implementation after the date hereof, or any change after the
date hereof in, any applicable law, rule or regulation of any governmental
authority, central bank or comparable agency charged with the interpretation
or
administration thereof, or compliance by Bank (or its Eurodollar Lending Office)
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:
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(a)
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shall subject
Bank
(or its Eurodollar Lending Office) to any tax, duty or other charge
with
respect to any Advance or any Note or shall change the basis of taxation
of payments to Bank (or its Eurodollar Lending Office) of the principal
of
or interest on any Advance or the Note or any other amounts due under
this
Agreement in respect thereof (except for changes in the rate of tax
on the
overall net income of Bank or its Eurodollar Lending Office imposed
by any
jurisdiction in which Bank is organized or engaged in business);
or
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(b)
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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 Bank (or its Eurodollar Lending
Office)
or shall impose on Bank (or its Eurodollar Lending Office) or the
foreign
exchange and interbank markets any other condition affecting any
Advance
or the Note;
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and the result of
any of
the foregoing is to increase the costs to Bank of maintaining any part of the
indebtedness hereunder or to reduce the amount of any sum received or receivable
by Bank under this Agreement or under the Note, by an amount deemed by the
Bank
to be material, then Bank shall promptly notify Companies of such fact and
demand compensation therefor and, within fifteen days after demand by Bank,
Companies agree to pay to Bank such additional amount or amounts as will
compensate Bank for such increased cost or reduction. Bank will promptly notify
Companies of any event of which it has knowledge which will entitle Bank to
compensation pursuant to this Section. A certificate of Bank setting forth
the
basis for determining such additional amount or amounts necessary to compensate
Bank shall be conclusively presumed to be correct save for manifest error.
Bank
agrees that, as promptly as practical after it becomes aware of the occurrence
of any event or the existence of a condition that will cause Bank to be entitled
to compensation under this Section, it will, to the extent not inconsistent
with
Bank’s internal policies, use reasonable efforts to make, fund or maintain any
affected Eurodollar-based Advance through another lending office of Bank if
as a
result thereof the additional monies which would otherwise be required to be
paid in respect of such Eurodollar-based Advance would be materially reduced
and
if, as determined by Bank, in its reasonable discretion, the making, funding
or
maintaining of such Eurodollar-based Advance through such other lending office
would not materially adversely affect such Advance or Bank. Companies shall
pay
all reasonable expenses incurred by Bank in utilizing another lending office
pursuant to this Section.
4.6 In
the event that at any time after the date of this Agreement any change in law
such as described in Section 4.5, hereof, shall, in the reasonable opinion
of
Bank require that the credit provided under Section 2 of this Agreement be
treated as an asset or otherwise be included for purposes of calculating the
appropriate amount of capital to be maintained by Bank or any corporation
controlling Bank and such change has or would have the effect of reducing the
rate of return on Bank’s or Bank’s parent’s capital or assets as a consequence
of the Bank’s obligations hereunder to a level below that which Bank or Bank’s
parent would have achieved but for such change, then Bank shall notify Companies
and demand compensation therefor and, within fifteen days after demand by Bank,
Companies agree to pay to Bank such additional amount or amounts as will
compensate Bank for such reduction. Bank will promptly notify Companies of
any
event of which it has knowledge which will entitle Bank to compensation pursuant
to this Section. A certificate of Bank setting forth the basis for determining
such additional amount or amounts necessary to compensate Bank shall be
conclusively presumed to be correct save for manifest error.
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4.7 [Reserved].
4.8 Adjustments
to the Applicable Margin based on Schedule 1.1 shall be implemented quarterly
as
follows:
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(a)
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Such adjustments
shall be given prospective effect only, effective as to all upon
the date
of delivery of the financial statements under Sections 7.1(a) and
7.1(b)
hereunder and the covenant compliance report under Section 7.10 hereof,
in
each case establishing applicability of the appropriate adjustment,
in
each case with no retroactivity or claw-back. In the event the
Companies fail timely to deliver such financial statements or the
covenant
compliance report, then (but without affecting the Event of Default
resulting therefrom) from the date delivery of such financial statements
and report was required until such financial statements and report
are
delivered, the margins shall be at the highest level (Level 3) on
the
Pricing Matrix attached to this Agreement as Schedule
1.1.
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(b)
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From the
date of
execution of this Agreement until the required date of delivery (or,
if
earlier, delivery) under Section 7.1(b) of the Companies’ financial
statements for the fiscal quarter ending December 31, 2007, the margins
shall be those set forth under the Level 2 column of the Pricing
Matrix
attached to this Agreement as Schedule 1.1. Thereafter, all margins
shall be based upon the Companies’ financial statements and covenant
compliance reports, subject to recalculation as provided in subsection
4.8(a) above.
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4.9 Neither
Company shall be required to compensate Bank pursuant to Sections 4.1,
4.4, 4.5 and 4.6 for any such increased cost, reduction incurred or other amount
more than 180 days prior to the date that Bank demands, or notifies Companies
of
its intention to demand, compensation, therefor; provided, that, if the
circumstance giving rise to such increased cost or reduction is retroactive,
then such 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.
5. CONDITIONS
5.1 Companies
agree to furnish Bank prior to the initial borrowing under this Agreement,
in
form and substance to be satisfactory to Bank, with (i) certified copies of
resolutions of the Board of Directors of Holding and each Company evidencing
approval of the borrowings and transactions contemplated hereunder; (ii) a
certificate of good standing from the state of Companies’ organization and from
the state(s) in which is required to be qualified to do business; (iii) an
opinion of Companies’ and Holding’s legal counsel; and (iv) such other documents
and instruments as Bank may reasonably require.
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5.2 As
security for all indebtedness of Companies to Bank hereunder, Companies agree
to
furnish, execute and deliver to Bank, or cause to be furnished, executed and
delivered to Bank, prior to or simultaneously with the initial borrowing
hereunder, in form to be satisfactory to Bank and supported by appropriate
resolution in certified form authorizing same, the following:
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(a)
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The Security
Agreements;
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(b)
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The
Mortgages;
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(c)
|
The
Guaranties;
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|
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|
(d)
|
The
Assignment;
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|
|
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|
(e)
|
Financing
Statements required or requested by Bank to perfect all security
interests
to be conferred upon Bank under this Agreement and to accord Bank
a
perfected first priority security position under the Uniform Commercial
Code (subject only to the encumbrances permitted
hereunder);
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(f)
|
Subject
to the
Post-Closing Letter, dated as of the date hereof, from Bank to Companies
(the “Post-Closing Letter”) which shall with respect to items (a) – (e)
above set forth the extent of Companies’ obligations with respect to
certain collateral matters, such other documents or agreements of
security
and appropriate assurances of validity and perfected first priority
of
lien or security interest as Bank may reasonably request at any
time.
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5.3
|
As a condition
to
the initial Advance:
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|
(a)
|
Bank shall
have
received copies of the executed Transaction Documents in effect on
the
date hereof, certified by a Responsible Officer as being true, correct
and
complete. The Transaction Documents shall be in form and substance
reasonably satisfactory to Bank and each of the Transaction Documents
shall have been duly authorized, executed and delivered by each of
the
parties thereto and shall be in full force and effect;
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|
(b)
|
Bank shall
have
received a certification from Companies that no term or provision
of the
Transaction Documents shall have been modified, and that no condition
to
consummation of the Transaction shall have been waived, in either
case in
a manner that, taken as a whole, is materially detrimental to Companies
or
Bank by any of the parties thereto, except as disclosed in writing
to
Bank; and
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(c)
|
Bank shall
have
received satisfactory evidence that the Transaction has been consummated
substantially in accordance with the terms of the Transaction Documents,
and that each of the Persons party thereto is in material compliance
therewith, to the extent
applicable.
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20
6. REPRESENTATIONS
AND WARRANTIES
Each Company
represents and warrants and such representations and warranties shall be deemed
to be given after giving effect to the Transaction and shall be deemed to be
continuing representations and warranties during the entire life of this
Agreement:
6.1 Each
Company is a limited liability company duly organized and existing in good
standing under the laws of the State of Michigan; each Company and each of
its
Subsidiaries is in good standing in each jurisdiction in which it is required
to
be qualified to do business, except where the failure to be so qualified would
not have a material adverse effect on the financial condition of Companies
and
their Subsidiaries or their ability to carry on their business; execution,
delivery and performance of this Agreement and other documents and instruments
required under this Agreement, and the issuance of the Note by Companies are
within their powers, have been duly authorized, are not in contravention of
law
or the terms of any Company’s Articles of Organization or Operating Agreement,
and do not require the consent or approval of any governmental body, agency
or
authority; and this Agreement and other documents and instruments required
under
this Agreement and Note, when issued and delivered, will be valid and binding
on
the Companies in accordance with their terms.
6.2 The
execution, delivery and performance of this Agreement and any other documents
and instruments required under this Agreement, and the issuance of the Note
by
Companies are not in contravention of the unwaived terms of any indenture,
agreement or undertaking to which any Company is a party or by which it is
bound.
6.3 No
litigation or other proceeding before any court or administrative agency is
pending, or to the knowledge of the officers of Companies is threatened against
any Company or any of its Subsidiaries, the outcome of which would reasonably
be
expected to materially impair any Company’s or any Subsidiary’s financial
condition or the ability of any Company or any Subsidiary to carry on its
business.
6.4 There
are no security interests in, liens, mortgages, or other encumbrances on any
of
any Company’s or any Subsidiary’s assets, except to Bank or as otherwise
permitted by this Agreement.
6.5 Neither
any Company nor any Subsidiary maintains or contributes to any employee pension
benefit plan subject to title IV of the “Employee Retirement Income Security Act
of 1974” (herein called “ERISA”), except for any contingent multi-employer plan
withdrawal liability with respect to the Teamsters Pension Plan. There was
no
unfunded past service liability of any pension plan maintained by the Companies
as of March 31, 2007, and there is no accumulated funding deficiency within
the
meaning of ERISA, or any existing material liability with respect to any pension
plan owed to the Pension Benefit Guaranty Corporation (“PBGC”) or any successor
thereto, except any funding deficiency for which an application to the PBGC
for
waiver is pending or for which a waiver has been granted by the
PBGC.
21
6.6 The
pro forma balance sheet of the Companies dated March 31, 2007, previously
furnished to Bank, fairly present in all material respects the financial
condition of the Companies and their consolidated Subsidiaries as of such date
in accordance with the assumptions stated in the pro forma balance sheet; since
said date there has been no material adverse change in the financial condition
of the Companies and their consolidated Subsidiaries; to the best of the
knowledge of any Company’s officers, Companies do not have any material
contingent obligations (including any liability for taxes) not disclosed by
or
reserved against in said balance sheet, and at the present time there are no
material unrealized or anticipated losses from any present commitment of any
Company or any of its Subsidiaries.
6.7 To
the best knowledge of Companies, the financial projections previously furnished
by Companies to Bank were as of the date thereof and are as of the date of
execution of this Agreement reasonable in all material respects taking into
account all facts and information known or reasonably available to Companies
it
being understood that projections are not facts.
6.8 All
tax returns and tax reports of Companies and their consolidated Subsidiaries
required by law to have been filed have been duly filed or extensions obtained,
and all taxes, assessments and other governmental charges or levies (other
than
those presently payable without penalty and those currently being contested
in
good faith for which adequate reserves have been established) upon Companies
and
their consolidated Subsidiaries (or any of its or their properties) which are
due and payable and for which the failure to pay would materially adversely
affect its business or the value of its property or assets have been paid.
The
charges, accruals and reserves on the books of Companies in respect of the
Federal income tax for all periods are adequate in the opinion of
Companies.
6.9 Except
as set forth in Schedule 6.9, there are no subsidiaries of any
Company.
6.10 Except
as set forth in Schedule 6.10:
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|
(a)
|
Each Company
and
each of its Subsidiaries, in the conduct of its business, is in compliance
in all material respects with all federal, state or local laws, statutes,
ordinances and regulations applicable to any of them, the enforcement
of
which, if such Person were not in compliance, would reasonably be
expected
to materially adversely affect its business or the value of its property
or assets. Companies and their Subsidiaries have all approvals,
authorizations, consents, licenses, orders and other permits of all
governmental agencies and authorities, whether federal, state or
local,
required to permit the operation of their business as presently conducted,
except such approvals, authorizations, consents, licenses, orders
and
other permits with respect to which the failure to have would not
reasonably be expected to materially adversely affect their business
or
the value of their property or assets (taken as a
whole).
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|
|
|
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|
(b)
|
Neither
any Company
nor any Subsidiary is a party to any litigation or administrative
proceeding, nor so far as is known by any Company is any litigation
or
administrative proceeding threatened against any Company or any
Subsidiary, the outcome of which would reasonably be expected to
have a
material adverse effect on any Company or any Subsidiary which in
either
case (i) asserts or alleges that any Company or any Subsidiary violated
Environmental Laws, (ii) asserts or alleges that any Company or any
Subsidiary is required to clean up, remove, or take remedial or other
response action due to the disposal, depositing, discharge, leaking
or
other release of any hazardous substances or materials, (iii) asserts
or
alleges that any Company or any Subsidiary is required to pay all
or a
portion of the cost of any past, present, or future cleanup, removal
or
remedial or other response action which arises out of or is related
to the
disposal, depositing, discharge, leaking or other release of any
hazardous
substances or materials by any Company or any
Subsidiary.
|
22
|
|
(c)
|
Neither
any Company
nor any Subsidiary is subject to any judgment, decree, order or citation
related to or arising out of applicable Environmental Laws which
would
reasonably be expected to materially adversely affect its business
or the
value of its property or assets and to the knowledge of the Companies,
neither any Company nor any Subsidiary has been named or listed as
a
potentially responsible party by any governmental body or agency
in a
matter arising under any applicable Environmental Laws which would
reasonably be expected to materially adversely affect its business
or the
value of its property or assets.
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|
|
|
|
|
|
(d)
|
To the Companies’
knowledge, Companies and their Subsidiaries have all permits, licenses
and
approvals required under applicable Environmental Laws, the failure
of
which to have would have a material adverse effect on the operation
of
their business as presently conducted and as proposed to be
conducted.
|
6.11 No
Company is an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. No Company 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, and none of
the
proceeds of any of the loans hereunder will be used, directly or indirectly,
for
any purpose which would violate the provisions of Regulation U or X of the
Board
of Governors of the Federal Reserve System. 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.
6.12 Companies
and their Subsidiaries have good and valid title to the property pledged,
mortgaged or otherwise encumbered or to be encumbered by them under the Security
Agreements.
6.13 Companies
have delivered to Bank a complete and correct copy of the Contribution
Agreement, including all schedules and exhibits thereto. The Contribution
Agreement sets forth the entire agreement and understanding of the parties
thereto relating to the subject matter thereof, and there are no other
agreements, arrangements or understandings, written or oral, relating to the
matters covered thereby. The execution, delivery and performance of the
Contribution Agreement has been duly authorized by all necessary action
(including, without limitation, the obtaining of any consent of stockholders
or
other holders of Equity Interests required by law or by any applicable corporate
or other organization documents) on the part of Companies. No
authorization or approval or other action by, and no notice to filing with
or
license from, any governmental authority is, to Companies’ knowledge, required
for such sale other than such as have been obtained on or prior to the effective
date of the Contribution Agreement. Each of the representations and
warranties contained in the Contribution Agreement made by Holding is true,
correct and complete and each of the representations and warranties contained
in
the Contribution Agreement made by Persons other than Holding is, to Companies’
knowledge, true, correct and complete .
23
6.14 To
the knowledge of Companies, all conditions precedent to the Contribution
Agreement have been fulfilled or (with the prior written consent of Bank)
waived, the Contribution Agreement has not been amended or otherwise modified,
and, to the knowledge of the Companies, there has been no breach of any material
term or condition of the Contribution Agreement.
7. AFFIRMATIVE
COVENANTS
Each Company
covenants and agrees that it will, so long as Bank may make any advance under
this Agreement and thereafter so long as any indebtedness remains outstanding
under this Agreement:
7.1 Furnish
Bank:
|
|
(a)
|
within one
hundred
twenty (120) days after and as of the end of each fiscal year of
Companies, a detailed combined review report of Companies certified
to by
independent certified public accountants satisfactory to
Bank;
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|
|
|
|
|
|
(b)
|
within forty
five
(45) days after and as of the end of each month, a balance sheet
and
statement of profit and loss of Companies and their consolidated
Subsidiaries certified by a Responsible Officer as being correct
and
accurate to the best of his knowledge;
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|
|
|
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|
(c)
|
within thirty
(30)
days after and as of the end of each month, including the last month
of
each fiscal year, (i) the monthly aging of Companies’ accounts (and a
schedule identifying each Eligible Account), and any such schedule
shall
be accompanied, if so requested by Bank, by a true and correct copy
of the
invoices evidencing Eligible Accounts, and by evidence of shipment
or
performance, (ii) a monthly aging of Companies’ accounts payable, (iii) an
inventory report in form satisfactory to Bank, and (iv) a borrowing
base
report, each in form acceptable to Bank;
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|
|
|
|
|
|
(d)
|
within thirty
(30)
days prior to February 1 of each year, financial projections for
the
Companies and their consolidated Subsidiaries in form satisfactory
to
Bank;
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|
|
|
|
|
|
(e)
|
such information
as
required by the terms and conditions of any security agreements referred
to in this Agreement;
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|
|
|
|
(f)
|
promptly,
and in
form to be satisfactory to Bank, such other information as Bank may
reasonably request from time to
time.
|
24
7.2 Pay
and discharge, and cause its Subsidiaries to pay and discharge, all taxes and
other governmental charges, and all contractual obligations calling for the
payment of money, before the same shall become overdue, unless and to the extent
only that such payment is being contested in good faith or the nonpayment of
which would not reasonably be expected to materially adversely affect its
business or the value of the property or assets.
7.3 Maintain,
and cause its Subsidiaries to maintain, insurance coverage on their 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 incurrence of
additional risks of any nature, increase such insurance coverage in such manner
and to such extent as prudent business judgment and present practice would
dictate; and in the case of all policies covering property mortgaged or pledged
to Bank or property in which Bank shall have a security interest of any kind
whatsoever, other than those policies protecting against casualty liabilities
to
strangers, all such insurance policies shall provide that the loss payable
thereunder shall be payable to Companies and Bank (as lender loss payee and
mortgagee) as their respective interests may appear, a certificate of insurance
with respect to all such policies (and within thirty days of written request
by
Bank, copies of such policies, including all endorsements thereon and those
required hereunder) to be deposited with Bank.
7.4 Permit
Bank, through its authorized attorneys, accountants and representatives, to
examine Companies’ and each Subsidiary’s books, accounts, records, ledgers and
assets of every kind and description at all reasonable times upon oral or
written request of Bank, which shall include but shall not be limited to
collateral audits of Companies conducted by Bank, at Companies’ own cost and
expense; provided that so long as no Event of Default has occurred and is
continuing, Companies shall not be obligated to reimburse Bank for the cost
of
more than one (1) audit during any period of twelve (12) consecutive
months.
7.5 Promptly
notify Bank of any condition or event which constitutes or with the running
of
time and/or the giving of notice would constitute an event of default under
this
Agreement, and promptly inform Bank of the existence or occurrence of any
condition or event (other than conditions having an effect on the economy in
general) which is reasonably expected to have a material adverse effect upon
Companies’ or any Subsidiary’s financial condition.
7.6 Maintain,
and cause its Subsidiaries to maintain, in good standing all material
licenses required by the State of Michigan or any agency thereof, or other
governmental authority that may be necessary or required for Companies and
their
Subsidiaries to carry on its general business objects and purposes, except
where
failure to maintain such licenses would not have a material adverse effect
on
the financial condition or operations of Companies.
7.7 Comply,
and cause its Subsidiaries to comply, with all material requirements imposed
by
ERISA as presently in effect or hereafter promulgated, including but not limited
to, the minimum funding requirements of any Pension Plan.
25
7.8 Promptly
notify Bank after the occurrence thereof in writing of any of the following
events:
|
|
(a)
|
the termination
of
a Pension Plan pursuant to Subtitle C of Title IV of ERISA or
otherwise;
|
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|
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|
(b)
|
the appointment
of
a trustee by a United States District Court to administer a Pension
Plan;
|
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|
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|
(c)
|
the commencement
by
the Pension Benefit Guaranty Corporation, or any successor thereto
of any
proceeding to terminate a Pension Plan;
|
|
|
|
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|
(d)
|
the failure
of a
Pension Plan to satisfy the minimum funding requirements for any
plan year
as established in Section 412 of the Internal Revenue Code of 1954,
as
amended or any similar provision under the Internal Revenue Code
of 1986,
as amended;
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|
|
|
|
|
|
(e)
|
the withdrawal
of
any Company or any Subsidiary from a Pension Plan; or
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|
|
|
|
|
|
(f)
|
a reportable
event,
within the meaning of Title IV of
ERISA.
|
7.9 Furnish
Bank, upon Bank’s request, in form reasonably satisfactory to Bank with pledges,
assignments, mortgages, lien instruments or other security instruments covering
any or all of Companies’ and each Subsidiary’s real and personal property, of
every nature and description, whether now owed or hereafter acquired, to the
extent that Bank may in its sole reasonable discretion require.
7.10 Furnish
to the Bank concurrently with the delivery of each of the financial statements
required by Section 8.1(a) and Section 8.1(b), a statement prepared and
certified by a Responsible Officer (a) setting forth all computations necessary
to show compliance by Companies with the financial covenants contained in
Sections 7.11, 7.12 and 7.13 hereof, (b) stating that as of the date thereof,
no
condition or event which constitutes an Event of Default hereunder or which
with
the running of time and/or the giving of notice would constitute an Event of
Default hereunder has occurred and is continuing, or if any such event or
condition has occurred and is continuing or exists, specifying in detail the
nature and period of existence thereof and any action with respect thereto
taken
or contemplated to be taken by Companies and (c) stating that the signer has
personally reviewed this Agreement and that such certificate is based on an
examination sufficient to assure that such certificate is accurate.
7.11 Commencing
December 31, 2007, maintain as of the end of each fiscal quarter of Companies,
a
Funded Debt to EBITDA Ratio of not more than 3.0 to 1.0.
7.12 Commencing
December 31, 2007, maintain as of the end of each fiscal quarter of Companies
a
Tangible Net Worth of not less than the Base Amount.
7.13 Maintain
as of the end of each fiscal quarter specified below, EBITDA of not less than
the amount specified below:
|
Fiscal
Quarter
ending
|
|
Amount
|
|
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|
|
|
|
|
|
|
June
30, 2007
|
|
$
|
2,000,000
|
|
|
September
30,
2007
|
|
$
|
4,750,000
|
|
|
December
31,
2007
|
|
$
|
6,000,000
|
|
26
7.14 Maintain
all cash collection, general disbursement and other bank accounts with Bank,
except for accounts maintained at locations where Bank does not have retail
branches which do not regularly contain more than $50,000 individually or
$250,000 in the aggregate; provided that if the available balance in such
account at any time exceeds $250,000 for a period of longer than three (3)
Business Days, Companies shall transfer within two (2) Business Days the
available amount in excess of $250,000 to an account maintained with Bank;
provided further that Companies are permitted to deposit their cash collections
into Holding’s bank account maintained with the Bank.
7.15 Cause
each person that is or becomes a Subsidiary of any Company from time to time
to
execute and deliver a Guaranty and Security Agreement to the Bank, together
with
appropriate authorizing resolutions, legal opinions and together with such
other
documentation as Bank may reasonable require to create or perfect liens in
favor
of Bank; provided further that Companies are premitted to deposit their cash
collections into Holding's bank account maintained with the Bank..
7.16 Provide
to Bank on or before July 1, 2007, phase I environmental assessments from
environmental engineers acceptable to Bank in the exercise of its sole
discretion.
8. NEGATIVE
COVENANTS
Each Company
covenants and agrees that, so long as Bank may make any Advances under this
Agreement and thereafter so long as any Indebtedness remains outstanding under
this Agreement, it will not, and will cause its Subsidiaries not to,
without the prior written consent of Bank:
8.1 Subject
to Section 8.8, Purchase, acquire or redeem any of its membership interests
or
make any material change in its capital structure.
8.2 Enter
into any merger or consolidation or sell, lease, transfer, or dispose of all,
substantially all, or any part of its assets, except (i) sales of inventory
in
the ordinary course of its business, (ii) disposition of assets which are
obsolete or not longer used or useful in the operation of its business and
(iii)
disposition of assets having a market value of not more than $500,000 during
any
single fiscal year of Companies (determined on a combined basis); provided
that
the limit shall be $1,000,000 for calendar year 2007.
8.3 Guarantee,
endorse, or otherwise become secondarily liable for or upon the obligations
of
others, except by endorsement for deposit in the ordinary course of business
and
guaranties in favor of Bank or permitted under Section 8.13.
8.4 Purchase
or otherwise acquire or become obligated for the purchase of all or
substantially all of the assets or business interests of any person, firm or
corporation or any shares of stock of any corporation, trusteeship or
association or in any other manner effectuate or attempt to effectuate an
expansion of present business by acquisition except for Permitted
Acquisitions.
8.5 Affirmatively
pledge or mortgage any of its assets, whether now owned or hereafter acquired,
or create, suffer or permit to exist any lien, security interest in, or
encumbrance thereon, except:
27
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|
(a)
|
to
Bank;
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|
(b)
|
the Permitted
Liens;
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|
(c)
|
liens described
in
attached Schedule 8.5, including renewals, extensions or
replacements that do not increase the amount of the debt secured
(other
than for the related refinancing costs) or extend to any other assets;
and
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|
(d)
|
liens and
security
interests upon fixed assets acquired by a Company after the date
of this
Agreement (including by virtue of a Capital Lease) provided that
(i) any
such lien or security interest is created solely for the purpose
of
securing indebtedness representing, or incurred to finance, the cost
of
the item of property subject thereto; (ii) the principal amount of
the
indebtedness secured by such lien does not exceed 100% of the fair
value
of the property at the time it was acquired, and (iii) the lien or
security interest does not cover any property other than such item
of
property and proceeds from the sale, disposition or replacement
thereof.
|
8.6 Sell,
assign, or transfer any account, contract, note, trade acceptance or other
receivable, except to Bank.
8.7 Materially
alter the character of its business from that conducted as of the date of this
Agreement.
8.8 Declare
or pay any dividends or distributions or make any other distribution upon its
membership interests except (i) dividends payable in the membership interests
of
a Company, (ii) Companies may make quarterly distributions to Holding in an
amount not greater than the quarterly estimated income tax payments (including
federal, state and local taxes) required to be made by Holding (or its members,
as applicable) based upon the income of such member arising in connection with
the income of Company, and (iii) after December 31, 2007, other dividends and
distributions so long as there is no Event of Default at the time of such
dividend or distribution and after giving effect to such dividend or
distribution no Event of Default (or event which with the giving of notice
or
the passage of time or both would constitute an Event of Default) shall have
occurred and be continuing.
8.9 Make
any Capital Expenditure during any fiscal year if after giving effect thereto
the aggregate amount of all Capital Expenditures (excluding Permitted
Acquisitions) made by Companies and its Subsidiaries (on a combined basis)
during such fiscal year would exceed the greater of (i) five percent (5%) of
revenue for such year and (ii) Seven Million Dollars ($7,000,000).
8.10 Enter
into any transaction or series of transactions (other than the Transaction)
with
any Affiliate other than on terms and conditions as favorable to a Company
as
would be obtainable in a comparable arms-length transaction with a Person other
than an Affiliate.
8.11 Make
or allow to remain outstanding any investment (whether such investment shall
be
of the character of investment in shares of stock, evidence of indebtedness
or
other securities or otherwise) in, or any loans or advances or extensions of
credit to, any person, firm, corporation or other entity or association,
except:
28
|
|
(a)
|
investments
of
surplus cash in cash equivalents;
|
|
|
|
|
|
|
(b)
|
sales on
open
account and other trade account and in the ordinary course of
business;
|
|
|
|
|
|
|
(c)
|
deposits
made in
the ordinary course of business in order to obtain goods or
services;
|
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|
(d)
|
other loans,
advances and investments not exceeding $100,000 in the aggregate
at any
time outstanding;
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|
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|
(e)
|
loans, advances
and
investments by one Company in and to another Company;
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|
(f)
|
loans and
advances
by Companies to Holding; and
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|
|
(g)
|
loans and
advances
to Subsidiaries which are Guarantors complying with Section
7.14.
|
8.12 Enter
into or become subject to any agreement (other than this Agreement) (i)
prohibiting the creation or assumption of any lien or encumbrance upon the
properties or assets of any Company or (ii) requiring an obligation to become
secured (or further secured) if another obligation is secured or further
secured, except
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|
(a)
|
pursuant
to the
Transaction Documents;
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|
(b)
|
pursuant
to
customary restrictions contained in any joint venture agreement entered
into in connection with an investment permitted under this
Agreement;
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|
(c)
|
customary
restrictions in sale agreements limiting the transfer of such property
pending the closing of such sale;
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|
(d)
|
customary
restrictions pertaining to subletting or assignment of leasehold
interests; and
|
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|
(e)
|
restrictions
contained in agreements evidencing indebtedness permitted by Section
8.13.
|
8.13 Become
or remain obligated for any Funded Debt, except:
|
|
(a)
|
indebtedness
to
Bank;
|
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(b)
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current
unsecured
trade payables and accrued liabilities arising in the ordinary course
of
Companies’ business (including, without limitation, obligations under
operating leases including obligations of the type secured by liens
described in subsection (d) of the definition of Permitted
Liens);
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(c)
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indebtedness
described in attached Schedule
8.13;
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(d)
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Capital
Leases or
purchase money indebtedness incurred in connection with the acquisition
of
fixed assets in an aggregate amount not exceeding $2,000,000 incurred
during any single fiscal year of Companies (determined on a combined
basis
for Companies);
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(e)
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assumed
debt in a
Permitted Acquisition subject to the limitations set forth in the
definition of Permitted
Acquisitions.
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8.14 Make,
permit or consent to any amendment or other modification to the constitutional
documents of any Company (including its articles of organization) or the
Transaction Documents, except to the extent that any such amendment (i) does
not
violate the terms and conditions of this Agreement or any of the other Loan
Documents, (ii) does not materially adversely affect the interest of Bank as
creditor under this Agreement, the other Loan Documents, the Transaction
Documents or any other document or instrument in any respect, or (iii) could
not
reasonably be expected to have a material adverse effect on
Companies.
9. ENVIRONMENTAL
PROVISIONS
9.1 Companies
shall comply, and shall cause their Subsidiaries to comply, with all
applicable Environmental Laws except for such non-compliance which would
reasonably not be expected to materially adversely affect its business or the
value of its property or assets.
9.2 Companies
shall provide to Bank, promptly upon receipt, copies of any correspondence,
notice, pleading, citation, indictment, complaint, order, decree, or other
document from any source asserting or alleging a circumstance or condition
which
requires or may require a financial contribution by any Company or any
Subsidiary to a cleanup, removal, remedial action, or other response by or
on
the part of any Company or any Subsidiary under applicable Environmental Laws
or
which seeks damages or civil, criminal or punitive penalties from any Company
for an alleged violation of Environmental Laws, where such contribution,
response or damages would reasonably be expected to materially adversely affect
its business or the value of its property or assets.
9.3 Companies
shall promptly notify Bank in writing as soon as Companies become aware of
the
occurrence or existence of any condition or circumstance which makes the
environmental warranties contained in this Agreement incomplete or inaccurate
in
any material respect as of any date.
9.4 In
the event of any condition or circumstance that makes any environmental
warranty, representation and/or agreement incomplete or inaccurate in any
material respect as of any date, Companies shall, at the reasonable request
of
Bank, at their sole expense, retain an environmental consultant, reasonably
acceptable to Bank, to conduct a thorough and complete investigation regarding
the changed condition and/or circumstance. A copy of the environmental
consultant’s report will be promptly delivered to both Bank and Companies upon
completion.
9.5 At
any time Companies, directly or indirectly through any environmental consultant
or other representative, determine to undertake an environmental audit,
assessment or investigation relating to any fact, event or condition which
would
reasonably be expected to materially adversely affect its business or the value
of its property or assets, Companies shall promptly provide Bank with written
notice of the initiation of the environmental audit, fully describing the
purpose and intended scope of the environmental audit. Upon receipt, Companies
will promptly provide to Bank copies of all final findings and conclusions
of
any such environmental investigation.
30
9.6 Companies
hereby indemnify, save and hold Bank and any of its past, present and future
officers, directors, shareholders, employees, representatives and consultants
harmless from any and all loss, damages, suits, penalties, costs, liabilities
and expenses (including but not limited to reasonable investigation,
environmental audit(s), and legal expenses) arising out of any claim, loss
or
damage to any property, injuries to or death of persons, contamination of or
adverse affects on the environment, caused by or in any way related to the
violation of any applicable Environmental Laws by any Company or its officers,
directors, shareholders, employees, consultants and/or representatives;
provided, however, that the foregoing indemnification shall not be applicable
when arising solely from events or conditions occurring while the Bank is in
sole possession (subject to the rights of any creditors of Companies) of such
property. In no event shall Companies be liable hereunder for any loss, damages,
suits, penalties, costs, liabilities or expenses arising from any act of gross
negligence or willful misconduct of Bank, or its agents or employees.
It is
expressly understood and agreed that the indemnifications granted herein are
intended to protect Bank, its past, present and future officers, directors,
shareholders, employees, consultants and representatives from any claims that
may arise by reason of the security interest, liens and/or mortgages granted
to
Bank, or under any other document or agreement given to secure repayment of
any
indebtedness from Companies, whether or not such claims arise before or after
Bank has foreclosed upon and/or otherwise become the owner of any such property.
All obligations of indemnity as provided hereunder shall be secured by the
collateral documents.
It is
expressly agreed and understood that the provisions hereof shall and are
intended to be continuing and shall survive the repayment of any indebtedness
from Companies to Bank.
9.7 Companies
shall maintain, and shall cause their Subsidiaries to maintain, all permits,
licenses and approvals required under applicable Environmental Laws except
such
permits, licenses and approvals the failure of which to have would reasonably
not be expected to materially adversely affect its business or the value of
their property or assets.
10. EVENTS
OF DEFAULT
10.1 Upon
non-payment of the principal or interest due under the terms of this Agreement
or on the Note when due in accordance with the terms thereof and continuance
for
five (5) calendar days after notice thereof given by bank to Companies, the
Note
shall automatically become immediately due and payable, and Bank’s commitment to
make further advances and to issue Letters of Credit under this Agreement shall
automatically terminate.
10.2 Upon
occurrence of any of the following events of default:
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(a)
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non-payment
of any
reimbursement obligation with respect to any Letter of Credit when
due;
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(b)
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non-payment
of any
outstanding Indebtedness (other than principal, interest or reimbursement
obligations) when due in accordance with the terms thereof and continuance
thereof for five (5) calendar days after notice from Bank that the
same is
due and payable;
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(c)
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(i) default
in the
observance or performance of any of the conditions, covenants or
agreements of Companies set forth in Section 7.1(c), 7.3, 7.4, 7.11,
7.12,
7.13, 7.14 or set forth in Section 8 and continuance thereof until
the
earlier to occur of (A) five (5) calendar days after written notice
by
Bank to Companies and (B) ten (10) calendar days (or such greater
number
of days as the Bank in its sole discretion, may approve in writing)
after
a Responsible Officer of Companies has knowledge of such default
or (ii)
default in the observance or performance of any of the conditions,
covenants or agreement of Companies set forth in Sections 7.1(a),
7.1(b)
or 7.10 and continuance thereof until the earlier to occur of (A)
ten (10)
calendar days after written notice to Companies by Bank and (B) five
(5)
calendar days (or such greater number of days as Bank in its sole
discretion, may approve in writing) after a Responsible Officer of
Companies has knowledge of such default;
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(d)
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default
in
observance or performance of any of the other conditions, covenants
or
agreements of Companies herein set forth, and continuance thereof
for
thirty (30) days after written notice to Company by
Bank;
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(e)
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any material
representation or warranty made by any Company or any other Person
herein
or in any instrument submitted pursuant hereto proves untrue in any
material respect when made or deemed made and continuance thereof
until
the earlier to occur of (i) five (5) calendar days after notice thereof
by
Bank to Companies and (ii) five (5) calendar days (or such greater
number
of days as the Bank in its sole discretion, may approve in writing)
after
a Responsible Officer of Companies has knowledge of such
fact;
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(f)
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default
in the
observance or performance of any of the conditions, covenants or
agreements of Companies or any other Person set forth in any collateral
document which may be given to secure the indebtedness hereunder
or in any
other collateral document related to or connected with this Agreement
or
the indebtedness hereunder and continuance for ten (10)
days;
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(g)
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default
in the
payment of any other obligation of any Company, any Subsidiary or
any
Guarantor for borrowed money in an aggregate amount in excess of
Five
Hundred Thousand Dollars ($500,000), or in the observance or performance
of any conditions, covenants or agreements related or given with
respect
to any obligations for borrowed money in an aggregate amount in excess
of
Five Hundred Thousand Dollars ($500,000) sufficient to permit the
holder
thereof to accelerate the maturity of such obligation;
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(h)
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judgments
for the
payment of money in excess of the sum of Five Hundred Thousand Dollars
($500,000) in the aggregate shall be rendered against any Company,
any
Subsidiary or any Guarantor and such judgments shall remain unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period
of
thirty (30) consecutive days from the date of its entry and such
judgment
is not covered by insurance from a solvent insurer who is defending
such
action without reservation of
rights;
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(i)
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the occurrence
of
any “reportable event”, as defined in the Employee Retirement Income
Security Act of 1974 and any amendments thereto, which is determined
to
constitute grounds for termination by the Pension Benefit Guaranty
Corporation of any employee pension benefit plan maintained by or
on
behalf of any Company or any Subsidiary 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 plan and is reasonably likely
that
the occurrence of such event would result in a material adverse effect
on
the applicable Company, and such reportable event is not corrected
and
such determination is not revoked within thirty (30) days after notice
thereof has been given to the plan administrator or the applicable
Company; or the institution of proceedings by the Pension Benefit
Guaranty
Corporation to terminate any such employee benefit pension plan or
to
appoint a trustee to administer such plan; or the appointment of
a trustee
by the appropriate United States District Court to administer any
such
employee benefit pension plan;
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(j)
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any uninsured
loss,
uninsured theft, uninsured substantial damage or uninsured destruction
to
or of any material part of the Collateral (as defined in the Security
Agreement);
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(k)
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if there
shall
occur a Change of Control;
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(l)
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if any of
the
Guaranties is revoked;
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then, or at any time
thereafter, unless such default is remedied, Bank may give notice to Companies
declaring all outstanding indebtedness hereunder and under the Note to be due
and payable, whereupon all Indebtedness then outstanding hereunder and under
the
Note and any Letters of Credit shall immediately become due and payable without
further notice and demand, and Bank shall not be obligated to make further
Advances or issue any Letter of Credit hereunder.
10.3 If
a creditors’ committee shall have been appointed for the business of any
Company, any Subsidiary or any Guarantor in connection with any bankruptcy
or
insolvency; or if any Company, any Subsidiary or any Guarantor 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
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 the applicable Company,
any Subsidiary or any Guarantor, as applicable), and such receiver, trustee
or
custodian so appointed shall not have been discharged within sixty (60) days
after the date of his appointment or if an order shall be entered and shall
not
be dismissed or stayed within sixty (60) days from its entry, approving any
petition for reorganization of any Company, any Subsidiary or any Guarantor,
then the Note and all Indebtedness then outstanding hereunder and under any
Letters of Credit shall automatically become immediately due and payable and
Bank shall not be obligated to make further Advances or issue any Letters of
Credit under this Agreement.
33
10.4 Upon
the occurrence and during the continuance of an Event of Default, unless all
of
the Indebtedness is then immediately fully paid, Bank shall have and may
exercise any one or more of the rights and remedies for which provision is
made
for a secured party under the UCC, under the Security Agreements or under any
other document contemplated hereby or for which provision is provided by law
or
in equity, including, without limitation, the right to take possession and
sell,
lease or otherwise dispose of any or all of the collateral and to set off
against the Indebtedness any amount owing by Bank to any Company and/or any
property of any Company in possession of Bank. Companies agree, upon
request of Bank, to assemble the collateral and make it available to Bank at
any
place designated by Bank which is reasonably convenient to Bank and
Companies.
10.5 All
of the Indebtedness shall constitute one loan secured by Bank’s security
interest in the collateral and by all other security interests, mortgages,
liens, claims, and encumbrances now and from time to time hereafter granted
from
Companies to Bank. Upon the occurrence and during the continuance of an
Event of Default which is not cured within the cure period, if any, provided
hereunder, Bank may in its sole discretion apply the collateral to any portion
of the Indebtedness. The proceeds of any sale or other disposition of the
Collateral authorized by this Agreement shall be applied by Bank, first upon
all
expenses authorized by the Michigan Uniform Commercial Code (or other applicable
law) or otherwise in connection with the sale and all reasonable attorneys’ fees
and legal expenses incurred by Bank; the balance of the proceeds of such sale
or
other disposition shall be applied in the payment of the Indebtedness, first
to
interest, then to principal, then to other Indebtedness and the surplus, if
any,
shall be paid over to Companies or to such other Person or Persons as may be
entitled thereto under applicable law. Companies shall remain liable for
any deficiency, which Companies shall pay to Bank immediately upon
demand.
10.6 The
remedies provided for herein are cumulative to the remedies for collection
of
the Indebtedness as provided by law, in equity or by any mortgage, security
agreement or other document contemplated hereby. Nothing herein contained
is intended, nor shall it be construed, to preclude Bank from pursuing any
other
remedy for the recovery of any other sum to which Bank may be or become entitled
for the breach of this Agreement by Companies.
10.7 Upon
the occurrence and during the continuance of any Event of Default, Companies
shall immediately upon demand by Bank deposit with Bank cash collateral in
the
amount equal to the maximum amount available to be drawn at any time under
any
Letter of Credit then outstanding.
34
11. MISCELLANEOUS
11.1 This
Agreement shall be binding upon and shall inure to the benefit of Companies
and
Bank and their respective successors and assigns, except that the credit
provided for under this Agreement and no part thereof and no obligation of
Bank
hereunder shall be assignable or otherwise transferable by any
Company.
11.2 Companies
shall pay all reasonable closing costs and expenses, including, by way of
description and not limitation, reasonable attorney fees, lien search fees,
appraisal fees and title policy fees incurred by Bank in connection with the
commitment, consummation and closing of this Agreement. All of said amounts
required to be paid by Companies may, at Bank’s option, be charged by Bank as an
advance against the proceeds of the Note. All reasonable costs, including
reasonable attorney fees incurred by Bank in protecting or enforcing any of
its
or any of the Bank’s rights against Companies or any collateral or in defending
Bank from any claims or liabilities by any party or otherwise incurred by Bank
in connection with an event of default or the enforcement of this Agreement
or
the related documents, including by way of description and not limitation,
such
charges in any court or bankruptcy proceedings or arising out of any claim
or
action by any person against Bank which would not have been asserted were it
not
for Bank’s relationship with Companies hereunder, shall also be paid by
Companies.
11.3 Where
the character or amount of any asset or liability or item of income or expense
is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, it shall
be done in accordance with GAAP.
11.4 No
delay or failure of Bank 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 further exercise thereof, or the exercise of
any
other power, right or privilege. The rights of Bank under this Agreement are
cumulative and not exclusive of any right or remedies which Bank would otherwise
have.
11.5 Except
as expressly provided otherwise in this Agreement, all notices and other
communications provided to any party hereto under this Agreement 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 below 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 11.5. 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; any notice, if given to a reputable
overnight courier and properly addressed, shall be deemed given two (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). Bank may, but shall not be
required to, take any action on the basis of any notice given to it by
telephone, but Companies 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.
35
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To
Companies:
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Pineview
Office
Park
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33▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention:
▇▇▇▇
▇▇▇▇▇
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Fax No.
(____)
__________
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To
Bank:
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50▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
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▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
▇▇▇▇▇
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Attention:
▇▇▇▇▇▇
▇. ▇▇▇▇▇
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Fax No.
(▇▇▇)
▇▇▇-▇▇▇▇
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11.6 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. 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.
11.7 No
amendments or waiver of any provisions of this Agreement nor consent to any
departure by Companies therefrom shall in any event be effective unless the
same
shall be in writing and signed by the Bank, and then such amendment, waiver
or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, waiver or consent with respect to any
provision of this Agreement shall affect any other provision of this
Agreement.
11.8 All
sums payable by Companies to Bank under this Agreement or the other documents
contemplated hereby shall be paid directly to Bank at its principal office
set
forth in Section 11.5 hereof in immediately available United States funds,
without set off, deduction or counterclaim. In its sole discretion, Bank
may charge any and all deposit or other accounts (including without limit an
account evidenced by a certificate of deposit) of Companies with Bank for all
or
a part of any Indebtedness then due; provided, however, that this authorization
shall not affect Companies’ obligation to pay, when due, any Indebtedness
whether or not account balances are sufficient to pay amounts due.
11.9 Any
payment of the Indebtedness made by mail will be deemed tendered and received
only upon actual receipt by Bank at the address designated for such payment,
whether or not Bank has authorized payment by mail or any other manner, and
shall not be deemed to have been made in a timely manner unless received on
the
date due for such payment, time being of the essence. Companies expressly
assume all risks of loss or liability resulting from non-delivery or delay
of
delivery of any item of payment transmitted by mail or in any other
manner. Acceptance by Bank of any payment in an amount less than the
amount then due shall be deemed an acceptance on account only, and the failure
to pay the entire amount then due shall be and continue to be an Event of
Default, and at any time thereafter and until the entire amount then due has
been paid, Bank shall be entitled to exercise any and all rights conferred
upon
it
36
herein upon the
occurrence of an Event of Default. Upon the occurrence and during the
continuance of an Event of Default, Companies waive the right to direct the
application of any and all payments at any time or times hereafter received
by
Bank from or on behalf of Companies. Upon the occurrence and during the
continuance of an Event of Default, Companies agree that Bank shall have the
continuing exclusive right to apply and to reapply any and all payments received
at any time or times hereafter against the Indebtedness in such manner as Bank
may deem advisable, notwithstanding any entry by Bank upon any of its books
and
records. Companies expressly agree that to the extent that Bank receives
any payment or benefit and such payment or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other party under
any
bankruptcy act, state or federal law, common law or equitable cause, then to
the
extent of such payment or benefit, the Indebtedness or part thereof intended
to
be satisfied shall be revived and continued in full force and effect as if
such
payment or benefit had not been made and, further, any such repayment by Bank,
to the extent that Bank did not directly receive a corresponding cash payment,
shall be added to and be additional Indebtedness payable upon demand by
Bank.
11.10 In
the event Companies’ obligation to pay interest on the principal balance of the
Note is or becomes in excess of the maximum interest rate which Companies are
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 shall be deemed to be immediately reduced to such maximum rate and
all previous payments in excess of such maximum rate shall be deemed to have
been payments in reduction of principal and not of interest.
11.11 COMPANIES
AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY,
AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT
OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, THIS AGREEMENT OR THE INDEBTEDNESS.
11.12 (a) The
obligations of the Companies under this Agreement and the other Loan Documents
are joint and several.
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(b)
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Each Company
acknowledges and agrees that it is the intent of the parties that
each
Company be primarily liable for the obligations as a joint and several
obligor (except as specifically set forth in this Section 12.12). It
is the intention of the parties that with respect to liability of
any
Company hereunder arising solely by reason of its being jointly and
severally liable for Indebtedness and other extensions of credit
taken by
other Companies, the obligations of such Company shall be absolute,
unconditional and irrevocable irrespective of:
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(i)
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any lack
of
validity, legality or enforceability of this Agreement or any Note
as to
any other Company;
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(ii)
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the failure
of Bank
or any holder of any Note:
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(A)
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to enforce
any
right or remedy against any Company or any other Person under the
provisions of this Agreement, any Note, or otherwise,
or
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(B)
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to exercise
any
right or remedy against any Person of, or collateral securing, any
obligations;
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(iii)
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any change
in the
time, manner or place of payment of, or in any other term of, all
or any
of the Indebtedness, or any other extension, compromise or renewal
of any
of the Indebtedness;
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(iv)
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any reduction,
limitation, impairment or termination of any of the Indebtedness
with
respect to any other Company for any reason, including any claim
of
waiver, release, surrender, alteration or compromise, and shall not
be
subject to (and each Company hereby waives any right to or claim
of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by
reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any of the Indebtedness with respect to any other
Company;
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(v)
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any addition,
exchange, release, surrender or nonperfection of any collateral,
or any
amendment to or waiver or release or addition of, or consent to departure
from, any guaranty, held by Bank or any holder of any Note securing
any of
the Indebtedness; or
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(vi)
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any other
circumstance which might otherwise constitute a defense available
to, or a
legal or equitable discharge of, any other Company, any surety or
any
guaranty.
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(c)
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Each Company
agrees
that its joint and several liability hereunder shall continue to
be
effective or be reinstated, as the case may be, if at any time any
payment
(in whole or in part) of any of the Indebtedness is rescinded or
must be
restored by Bank or any holder of any Note, upon the insolvency,
bankruptcy or reorganization of any Company as though such payment
had not
been made.
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(d)
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Each Company
hereby
expressly waives: (a) notice of the Bank’s acceptance of this Agreement;
(b) notice of the existence or creation or non payment of all or
any of
the Indebtedness; (c) presentment, demand, notice of dishonor, protest,
and all other notices whatsoever other than notices expressly provided
for
in this Agreement; and (d) all diligence in collection or protection
of or
realization upon the Indebtedness or any thereof, any obligation
hereunder, or any security for or guaranty of any of the
foregoing.
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38
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(e)
|
No delay
on the
Bank part in the exercise of any right or remedy shall operate as
a waiver
thereof, and no single or partial exercise by the Bank of any right
or
remedy shall preclude other or further exercise thereof or the exercise
of
any other right or remedy. No action of the Bank permitted hereunder
shall in any way affect or impair Bank’s rights or any Company’s
obligations under this Agreement.
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(f)
|
Each Company
hereby
represents and warrants to each of the other Companies that it now
has and
will continue to have independent means of obtaining information
concerning the other Companies’ affairs, financial condition and
business. Bank shall not have any duty or responsibility to provide
any Company with any credit or other information concerning the Companies’
affairs, financial condition or business which may come into the
Bank’s
possession.
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(g)
|
Each of
the
Companies (other than BWB) authorizes Superior with full power and
authority as attorney-in-fact, to execute and deliver requests for
advances, requests for issuance of Letters of Credit and each other
instrument, certificate and report to be delivered by the Companies
to the
Bank pursuant to this Agreement. Each of Companies agrees that it
shall be bound by any action taken by Superior on its behalf pursuant
to
such appointment.
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11.13 USA
PATRIOT ACT NOTIFICATION. The following notification is provided to
Companies pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C.
Section 5318; IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT. To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other extension of credit, or other financial services
product. What this means for Companies: When Companies, or any of
them, open an account, the Bank will ask for Company’s name, tax identification
number, business address, and other information that will allow the Bank to
identify such Companies. Bank may also ask to see each Company’s legal
organizational documents or other identifying documents.
11.14 This
Agreement shall become effective upon the execution hereof by Bank and
Companies.
39
WITNESS the
due execution hereof as of the day and year first above written.
|
COMERICA
BANK
|
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SUPERIOR
MATERIALS, LLC
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||
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By:
|
/s/
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
|
|
By:
|
/s/ ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
|
|
|
|
|
|
|
|
|
▇▇▇▇▇▇
▇.
▇▇▇▇▇
|
|
Its:
|
Vice President
and
General Manager
|
|
Its:
|
Vice
President
|
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BWB,
LLC
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By:
|
/s ▇▇▇▇▇
▇.
▇▇▇▇▇
|
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Its:
|
Secretary
&
Treasurer
|
40
SCHEDULE
1.1
|
Level
|
|
Funded
Debt
to EBITDA Ratio |
|
Eurodollar
Margin |
|
Prime
Margin |
|
Facility
Fee |
|
Letter
of
Credit Commission |
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
<
1.50 to 1.0
|
|
125
b.p.
|
|
-100
b.p.
|
|
25
b.p.
|
|
125
b.p.
|
|
2
|
|
>
1.50 to 1.0
and < 2.50 to 1.0 |
|
175
b.p.
|
|
-50
b.p.
|
|
25
b.p.
|
|
175
b.p.
|
|
3
|
|
>
2.50 to 1.0
|
|
225
b.p.
|
|
0
b.p.
|
|
25
b.p.
|
|
225
b.p.
|
EXHIBIT
“B”
REVOLVING
CREDIT NOTE
|
|
Detroit,
Michigan
|
|
$25,000,000
|
April 6,
2007
|
On or before
the Revolving Credit Maturity Date FOR VALUE RECEIVED, Superior Materials,
LLC
and BWB, LLC, each a Michigan limited liability company, (herein called
“Companies”) jointly and severally promise to pay to the order of COMERICA BANK,
a Michigan banking corporation (herein called “Bank”) at its Main Office at 50▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, in lawful money of the United States of
America the indebtedness or so much of the sum of Twenty Five Million Dollars
($25,000,000) as may from time to time have been advanced and then be
outstanding hereunder pursuant to the Credit Agreement dated as of April 6,
2007, made by and between Companies and Bank (as the same may be amended or
modified from time to time, herein called “Agreement”), together with interest
thereon as hereinafter set forth.
Each of the
Advances hereunder shall bear interest at the Applicable Interest Rate from
time
to time applicable thereto under the Agreement or as otherwise determined
thereunder, and interest shall be computed, assessed and payable as set forth
in
the Agreement.
This Note is
a note under which advances, repayments and readvances may be made from time
to
time, subject to the terms and conditions of the Agreement. This Note evidences
borrowing under, is subject to, is secured in accordance with, and may be
matured under, the terms of the Agreement, to which reference is hereby made.
As
additional security for this Note, Companies grant Bank a lien on all property
and assets including deposits and other credits of the Companies, at any time
in
possession or control of or owing by Bank for any purpose.
Companies
hereby waive presentment for payment, demand, protest and notice of dishonor
and
nonpayment of this Note and agree that no obligation hereunder shall be
discharged by reason of any extension, indulgence, or forbearance granted by
any
holder of this Note to any party now or hereafter liable hereon. Any transferees
of, or endorser, guarantor or surety paying this Note in full shall succeed
to
all rights of Bank, and Bank shall be under no further responsibility for the
exercise thereof or the loan evidenced hereby. Nothing herein shall limit any
right granted Bank by other instrument or by law.
All
capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Agreement.
|
|
SUPERIOR
MATERIALS, LLC
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
|
|
|
|
|
|
|
Its:
|
Vice President
and
General Manager
|