EXHIBIT 10.2
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EXPORT CREDIT AGREEMENT
dated as of September 11, 2002
among
ADVANCED LIGHTING TECHNOLOGIES, INC.,
as U.S. Borrower,
and
VARIOUS FINANCIAL INSTITUTIONS,
as Banks,
and
PNC BANK, NATIONAL ASSOCIATION,
as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS............................................. 1
ARTICLE II. AMOUNT AND TERMS OF CREDIT ............................. 15
Section 2.1. AMOUNT AND NATURE OF CREDIT ........................ 15
Section 2.2. CONDITIONS TO EXIM LOANS ........................... 16
Section 2.3. PAYMENT ON NOTES, ETC .............................. 17
Section 2.4. PREPAYMENT ......................................... 18
Section 2.5. FACILITY AND OTHER FEES ............................ 19
Section 2.6. REDUCTION OF EXIM COMMITMENT ....................... 19
Section 2.7. COMPUTATION OF INTEREST AND FEES: DEFAULT
RATE ............................................... 19
Section 2.8. MANDATORY PAYMENT .................................. 20
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO EXIM
LOANS; INCREASED CAPITAL; TAXES ........................ 20
Section 3.1. TAX LAW, ETC ....................................... 20
Section 3.2. INDEMNITY; FUNDING: CAPITAL ADEQUACY ............... 21
ARTICLE IV. CONDITIONS PRECEDENT ................................... 21
Section 4.1. NOTE ............................................... 21
Section 4.2. GUARANTIES OF PAYMENT .............................. 21
Section 4.3. SECURITY AGREEMENTS ................................ 21
Section 4.4. COLLATERAL ASSIGNMENT AND SECURITY
AGREEMENTS ......................................... 22
Section 4.5. PLEDGE AGREEMENTS .................................. 22
Section 4.6. OFFICER'S CERTIFICATE, RESOLUTIONS,
ORGANIZATIONAL DOCUMENTS ........................... 22
Section 4.7. LEGAL OPINIONS ..................................... 22
Section 4.8. GOOD STANDING CERTIFICATES ......................... 22
Section 4.9. FINANCING STATEMENTS AND LIEN SEARCHES ............. 22
Section 4.10. AMENDMENT TO PRIMARY CREDIT AGREEMENT;
CONDITIONS SATISFIED ............................... 23
Section 4.11. INDENTURE .......................................... 23
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.12. [INTENTIONALLY OMITTED] ............................ 23
Section 4.13. INSURANCE CERTIFICATES ............................. 23
Section 4.14. INTEREST RATE PROTECTION ........................... 23
Section 4.15. LANDLORDS' AND MORTGAGEES' WAIVERS ................. 23
Section 4.16. COLLATERAL AUDIT AND EQUIPMENT APPRAISAL ........... 23
Section 4.17. CASH COLLATERAL AND OTHER ACCOUNTS ................. 23
Section 4.18. ASSIGNMENT OF LIFE INSURANCE POLICY ................ 23
Section 4.19. U.S. BORROWERS' CERTIFICATE ........................ 24
Section 4.20. MASTER GUARANTEE AGREEMENT AND BORROWER
AGREEMENT .......................................... 24
Section 4.21. MISCELLANEOUS ...................................... 24
ARTICLE V. COVENANTS .............................................. 24
Section 5.1. INSURANCE .......................................... 24
Section 5.2. MONEY OBLIGATIONS .................................. 25
Section 5.3. FINANCIAL STATEMENTS ............................... 25
Section 5.4. FINANCIAL RECORDS .................................. 27
Section 5.5. FRANCHISES ......................................... 28
Section 5.6. ERISA COMPLIANCE ................................... 28
Section 5.7. FIXED CHARGE COVERAGE RATIO ........................ 28
Section 5.8. BORROWING .......................................... 29
Section 5.9. LIENS .............................................. 29
Section 5.10. REGULATIONS U AND X ................................ 30
Section 5.11. INVESTMENTS AND EXIM LOANS ......................... 30
Section 5.12. MERGER AND SALE OF ASSETS .......................... 31
Section 5.13. ACQUISITIONS ....................................... 32
Section 5.14. NOTICE ............................................. 32
Section 5.15. ENVIRONMENTAL COMPLIANCE ........................... 32
Section 5.16. AFFILIATE TRANSACTIONS ............................. 33
Section 5.17. USE OF PROCEEDS .................................... 33
Section 5.18. CORPORATE NAMES .................................... 33
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TABLE OF CONTENTS
(continued)
PAGE
Section 5.19. AMENDMENT OF ORGANIZATIONAL DOCUMENTS .............. 33
Section 5.20. CAPITAL DISTRIBUTIONS .............................. 33
Section 5.21. INDENTURE PAYMENTS ................................. 33
Section 5.22. SUBSIDIARIES CREATED, ACQUIRED OR HELD
SUBSEQUENT TO ORIGINAL CLOSING DATE ................ 33
Section 5.23. INSPECTIONS ........................................ 34
ARTICLE VI. REPRESENTATIONS AND WARRANTIES .......................... 34
Section 6.1. CORPORATE EXISTENCE; FOREIGN QUALIFICATION;
SUBSIDIARIES ....................................... 34
Section 6.2. CORPORATE AUTHORITY ................................ 35
Section 6.3. COMPLIANCE WITH LAWS ............................... 35
Section 6.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS .......... 35
Section 6.5. LOCATION ........................................... 36
Section 6.6. TITLE TO ASSETS .................................... 36
Section 6.7. LIENS AND SECURITY INTERESTS ....................... 36
Section 6.8. TAX RETURNS ........................................ 36
Section 6.9. ENVIRONMENTAL LAWS ................................. 36
Section 6.10. CONTINUED BUSINESS ................................. 37
Section 6.11. EMPLOYEE BENEFITS PLANS ............................ 37
Section 6.12. CONSENTS OR APPROVALS .............................. 38
Section 6.13. SOLVENCY ........................................... 38
Section 6.14. FINANCIAL STATEMENTS ............................... 38
Section 6.15. REGULATIONS ........................................ 38
Section 6.16. MATERIAL AGREEMENTS ................................ 39
Section 6.17. INTELLECTUAL PROPERTY .............................. 39
Section 6.18. INSURANCE .......................................... 39
Section 6.19. ACCURATE AND COMPLETE STATEMENTS ................... 39
Section 6.20. INDENTURE .......................................... 39
Section 6.21. NEW CREDIT FACILITY ................................ 39
Section 6.22. DEFAULTS ........................................... 40
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VII. EVENTS OF DEFAULT ....................................... 40
Section 7.1. PAYMENTS ........................................... 40
Section 7.2. SPECIAL COVENANTS .................................. 40
Section 7.3. OTHER COVENANTS .................................... 40
Section 7.4. REPRESENTATIONS AND WARRANTIES ..................... 40
Section 7.5. CROSS DEFAULT ...................................... 40
Section 7.6. ERISA DEFAULT ...................................... 40
Section 7.7. CHANGE IN CONTROL .................................. 41
Section 7.8. MONEY JUDGMENT ..................................... 41
Section 7.9. MATERIAL ADVERSE CHANGE ............................ 41
Section 7.10. VALIDITY OF LOAN DOCUMENTS ......................... 41
Section 7.11. INDENTURE .......................................... 41
Section 7.12. SOLVENCY ........................................... 41
ARTICLE VIII. REMEDIES UPON DEFAULT ................................... 42
Section 8.1. OPTIONAL DEFAULTS ................................. 42
Section 8.2. AUTOMATIC DEFAULTS ................................ 42
Section 8.3. OFFSETS ........................................... 42
Section 8.4. EQUALIZATION PROVISION ............................ 43
ARTICLE IX. THE AGENT ............................................... 43
Section 9.1. APPOINTMENT AND AUTHORIZATION ..................... 43
Section 9.2. NOTE HOLDERS ...................................... 43
Section 9.3. CONSULTATION WITH COUNSEL ......................... 43
Section 9.4. DOCUMENTS ......................................... 43
Section 9.5. AGENT AND AFFILIATES .............................. 44
Section 9.6. KNOWLEDGE OF DEFAULT .............................. 44
Section 9.7. ACTION BY AGENT ................................... 44
Section 9.8. NOTICES, DEFAULT, ETC ............................. 44
Section 9.9. INDEMNIFICATION OF AGENT .......................... 44
Section 9.10. SUCCESSOR AGENT ................................... 44
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE X. MISCELLANEOUS .......................................... 45
Section 10.1. BANKS' INDEPENDENT INVESTIGATION .................. 45
Section 10.2. NO WAIVER; CUMULATIVE REMEDIES .................... 45
Section 10.3. AMENDMENTS, CONSENTS .............................. 45
Section 10.4. NOTICES ........................................... 46
Section 10.5. COSTS, EXPENSES AND TAXES ......................... 46
Section 10.6. INDEMNIFICATION ................................... 47
Section 10.7. OBLIGATIONS SEVERAL; NO FIDUCIARY
OBLIGATIONS ....................................... 47
Section 10.8. EXECUTION IN COUNTERPARTS ......................... 47
Section 10.9. BINDING EFFECT; BORROWERS' ASSIGNMENT ............. 47
Section 10.10. BANK ASSIGNMENTS/PARTICIPATIONS ................... 48
Section 10.11. SEVERABILITY OF PROVISIONS; CAPTIONS .............. 50
Section 10.12. ENTIRE AGREEMENT .................................. 50
Section 10.13. GOVERNING LAW; SUBMISSION TO JURISDICTION ......... 50
Section 10.14. LEGAL REPRESENTATION OF PARTIES ................... 51
Section 10.15. CONFLICTS; FURTHER ASSURANCES ..................... 51
Section 10.16. JURY TRIAL WAIVER ................................. 51
SCHEDULE 1 ........................................ 53
EXHIBIT A ......................................... 54
EXHIBIT E ......................................... 56
EXHIBIT F ......................................... 58
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This EXPORT CREDIT AGREEMENT (as it may from time to time be amended,
restated or otherwise modified, this "Agreement") is made effective as of the
11th day of September, 2002, among ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio
corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("U.S. Borrower"), the
financial institutions named in SCHEDULE 1 attached hereto and made a part
hereof (collectively, "Banks", and individually, "Bank") and PNC BANK, NATIONAL
ASSOCIATION, PNC Plaza, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as agent for
the Banks under this Agreement ("Agent").
WITNESSETH:
WHEREAS, U.S. Borrower and the Banks desire to contract for the
establishment of credits in the aggregate principal amounts hereinafter set
forth, to be made available to U.S. Borrower upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Acquisition" shall mean any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of any Person, or any
business or division of any Person, (b) the acquisition of in excess of fifty
percent (50%) of the stock (or other equity interest) of any Person, or (c) the
acquisition of another Person (other than a Company) by a merger or
consolidation or any other combination with such Person.
"Advantage" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Bank in respect of the Debt, if such payment results in that
Bank having less than its pro rata share (based upon its Applicable Commitment
Percentage or, in the case of an Equalization Event pursuant to the terms of
Section 8.5 hereof, based upon its Equalization Percentage, as defined in
Section 8.5 hereof) of the Debt then outstanding, than was the case immediately
before such payment.
"Affiliate" shall mean any Person, directly or indirectly, controlling,
controlled by or under common control with a Company and "control" (including
the correlative meanings, the terms "controlling", "controlled by" and "under
common control with") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Company, whether through the ownership of voting securities, by contract or
otherwise.
"Assignment Agreement" shall mean an Assignment and Acceptance
Agreement substantially in the form of EXHIBIT H to the Primary Credit Agreement
delivered on the Original Closing Date.
"Assignment of Life Insurance Policy" shall mean the Assignment of Life
Insurance Policy on the life of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, in form and substance
satisfactory to Agent and the Banks, executed and delivered on the Closing Date
by U.S. Borrower, as the same may be from time to time amended, restated or
otherwise modified.
"Base Rate" shall mean a rate per annum equal to the greater of (a) the
Prime Rate or (b) one-half of one percent (1/2%) in excess of the Federal Funds
Effective Rate. Any change in the Base Rate shall be effective immediately from
and after such change in the Base Rate.
"Base Rate Loan" shall mean a U.S. Base Rate Loan.
"Borrowers' Agreement" shall mean the Export Import Bank of the United
States Working Capital Guarantee Program Agreement between U.S. Borrower and
Agent and the lenders thereunder, dated as of even date herewith and attached
here to as EXHIBIT B.
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Cleveland, Ohio.
"Capital Distribution" shall mean a payment made, liability incurred
or other consideration given for the purchase, acquisition, redemption or
retirement of any capital stock or other equity interest of any Company or as a
dividend, return of capital or other distribution (other than any stock
dividend, stock split or other equity distribution payable only in capital stock
or other equity of the Company in question) in respect of any Company's capital
stock or other equity interest.
"Capital Expenditures" shall mean, for any period, the amount of
capital expenditures as determined on a Consolidated basis and in accordance
with GAAP
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or nonvoting) in equity of such Person, whether outstanding on
the Indenture Closing Date or the Original Closing Date or issued thereafter,
including, without limitation, all Common Stock and Preferred Stock.
"Cash Flow" shall mean, for any period, on a Consolidated basis and in
accordance with GAAP, the sum of (a) Earnings Before Interest and Taxes for such
period, plus (b) depreciation and amortization that were deducted in determining
Consolidated Net Income for such period, plus (c) non-cash charges (other than
depreciation and amortization, allowances for doubtful accounts and unpaid
accruals, and non-cash charges in cost of goods sold), minus (d) Capital
Expenditures less (i) proceeds from asset dispositions for such period, and (ii)
Capital Expenditures not funded from the proceeds of any Loan, minus (e) cash
taxes actually paid, minus (f) cash payments in respect of non-cash charges
accounted for prior to September 30, 2001.
"Change of Control" shall mean such time as:
(a) (i)(A) a "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Exchange Act) becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of more than
thirty-five percent (35%) of the total voting
2
power of the Voting Stock of U.S. Borrower on a fully diluted basis and (B) such
ownership represents a greater percentage of the total voting power of the
Voting Stock of U.S. Borrower, on a fully diluted basis, than may then be voted
by the Existing Stockholders on such date; or (ii) individuals who on the
Indenture Closing Date constituted the Board of Directors (together with any new
or successor directors whose election by the Board of Directors or whose
nomination by the Board of Directors for election by U.S. Borrower's
stockholders was approved by a vote of at least two-thirds of the members of the
Board of Directors on the date of their election or nomination) cease for any
reason to constitute a majority of the members of the Board of Directors then in
office;
(b) the full time active employment of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as chief
executive officer of U.S. Borrower shall be voluntarily terminated by U.S.
Borrower or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (other than by reason of death or disability),
unless a successor acceptable to the Required Banks shall have been appointed or
elected and actually taken office within three (3) months following any such
termination, in which case the name of such successor shall be substituted for
the name of the individual he or she replaces for purposes of this clause (b);
(c) the shareholders of U.S. Borrower approve (i) a merger or
consolidation of U.S. Borrower with any other Person, other than a merger or
consolidation that would result in the Voting Stock of U.S. Borrower outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted or exchanged for voting securities of the
surviving or resulting entity) more than seventy-five percent (75%) of the
combined voting power of the Voting Stock of U.S. Borrower or such surviving or
resulting entity outstanding after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a recapitalization of U.S.
Borrower (or similar transaction), other than any such transaction in which no
Person or group (as hereinabove defined) not excepted from the provisions of
clause (i) above acquires more than thirty-five (35%) of the voting power, on a
fully diluted basis, of U.S. Borrower's then outstanding Voting Stock; or
(d) the shareholders of U.S. Borrower approve a plan of complete
liquidation of U.S. Borrower or an agreement or agreements for the sale or
disposition by U.S. Borrower of all or substantially all of the assets of U.S.
Borrower.
"Closing Date" shall mean the effective date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Collateral Assignment and Security Agreement" shall mean a Collateral
Assignment and Security Agreement, in form and substance satisfactory to Agent
and the Banks, executed and delivered on or after the Original Closing Date by a
Company, wherein such Company has granted to Agent, for the benefit of the
applicable Banks, a security interest in and an assignment of all intellectual
property owned by such Company, as the same may be from time to time amended,
restated or otherwise modified.
3
"Commitment Percentage" shall mean, for each Bank, the percentage set
forth opposite such Bank's name under the applicable column headed "EXIM
Commitment Percentage" as described in SCHEDULE 1 hereto.
"Commitment Period" shall mean the period from the Original Closing
Date to July 1, 2004, or such earlier date on which the Commitment shall have
been terminated pursuant to Article VIII hereof.
"Common Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity, other than Preferred
Stock of such Person, whether outstanding on the Indenture Closing Date or the
Original Closing Date or issued thereafter, including, without limitation, all
series and classes of such common stock.
"Company" shall have the meaning given thereto in the Primary Credit
Agreement.
"Companies" shall have the meaning given thereto in the Primary Credit
Agreement.
"Compliance Certificate" shall mean a certificate, substantially in the
form of EXHIBIT G to the Primary Credit Agreement.
"Consolidated" shall mean the resultant consolidation of the financial
statements of U.S. Borrower and its Subsidiaries in accordance with GAAP,
including principles of consolidation consistent with those applied in
preparation of the consolidated financial statements referred to in Section 6.13
hereof.
"Consolidated Net Income" shall mean for any period, the net income (or
loss), without deduction for minority interests, of U.S. Borrower on a
Consolidated basis for such period taken as a single accounting period and
determined in conformity with GAAP, provided that there shall be excluded
therefrom (a) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with U.S. Borrower or any
of its Subsidiaries or on which its assets are acquired by U.S. Borrower or any
of its Subsidiaries, and (b) the income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"Controlled Group" shall mean a Company and each Person required to be
aggregated with a Company under Code Sections 414(b), (c), (m) or (o).
"Customer" shall mean the account debtor with respect to any Receivable
and/or the prospective purchaser of goods, services or both with respect to any
contract or contract right, and/or any Person that enters into or proposes to
enter into any contract or other arrangement with a Person, pursuant to which
such Person is to deliver any personal property or perform any services.
"Debt" shall mean, collectively, (a) all Indebtedness incurred by
Borrowers to Agent or the Banks pursuant to this Agreement and the Primary
Credit Agreement and includes the
4
principal of and interest on all Notes; (b) each extension, renewal or
refinancing thereof in whole or in part; (c) the facility fees, other fees and
any prepayment fees payable hereunder; and (d) all Indebtedness consisting of
Related Expenses.
"Default Rate" shall mean a rate per annum equal to two percent (2%) in
excess of the Base Rate from time to time in effect.
"Designated Lending Office" shall mean the main office of Agent.
"Disclosure Statement" shall mean the Disclosure Statement executed and
delivered by U.S. Borrower concurrently with the execution and delivery of the
Primary Credit Agreement, which Disclosure Statement shall be deemed to include
therein disclosure of any transaction entered into after the date thereof and
permitted under the Primary Credit Agreement or otherwise consented to by Agent
and/or Lenders in accordance with the terms of the Primary Credit Agreement or
included in preliminary financial statements delivered to the Agent prior to the
date of this Agreement (which financial statements reflect that for the period
ending June 30, 2002, U.S. Borrower was not in compliance with its fixed charge
coverage ratio covenant under the Primary Credit Agreement and this Agreement).
"Dollar" and the sign "$" shall mean lawful money of the United States
of America.
"Earnings Before Interest and Taxes" shall mean for any period the sum
of (a) Consolidated Net Income (or loss) for such period (excluding
extraordinary gains but not extraordinary losses), (b) Total Interest Expense,
and (c) provisions for Taxes (to the extent such provisions for Taxes are
greater than zero).
"Eligible Export Inventory" shall mean Inventory of U.S. Borrower,
other than Work-In-Process, that is deemed by Agent to be export-related
Inventory for purposes of this Agreement and in accordance with the terms of the
Borrower Agreement, valued at the lower of cost or market value, determined on a
first-in-first-out method; provided that Eligible Inventory shall not include
Inventory that (a) is in the possession of a bailee or third party or held by
such Company or a third party on consignment unless waivers from such bailee or
third party, and requisite filings, as may be required by Agent, have been
obtained and made, (b) is in Agent's opinion, damaged, obsolete, slow moving or
unmerchantable, (c) is not subject to a perfected, first priority security
interest in favor of Agent for the benefit of the Banks, (d) does not conform to
all material standards imposed by any governmental agency, division or
department thereof which has regulatory authority over such goods or the use or
sale thereof, or (e) Agent shall deem ineligible based on such considerations as
Agent may from time to time, in its sole discretion.
"Eligible Export Receivable" shall mean each Receivable of U.S.
Borrower arising in the ordinary course of such Company's business that is
deemed by Agent to be an export-related Receivable for purposes of this
Agreement and in accordance with the terms of the Borrower Agreement, and which
Agent, in its sole discretion, shall deem to be an Eligible Receivable, based on
such considerations as Agent may from time to time deem appropriate, including,
without limitation, whether the Receivable is subject to a perfected, first
priority security interest and no other Lien, except as permitted pursuant to
Section 5.9 hereof, and is evidenced by an
5
invoice or other documentary evidence satisfactory to Agent. In addition, no
Receivable shall be an Eligible Receivable if:
(a) it arises out of a sale made by such Company to an Affiliate of
such Company or to a Person controlled by an Affiliate of such Company;
(b) it is due or unpaid more than sixty (60) days after the due date,
not to exceed ninety (90) days after the original invoice date;
(c) fifty percent (50%) or more of the Receivables from such Customer
are not deemed Eligible Receivables hereunder; provided, that such percentage
may, in Agent's sole discretion, be increased or decreased from time to time;
(d) any covenant, representation or warranty contained in this
Agreement or in any other Loan Document with respect to such Receivable is
inaccurate in any material respect or otherwise has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (ii) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy laws or the
insolvency laws of any other country or jurisdiction (as now or hereafter in
effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy or insolvency laws, or
(viii) take any action for the purpose of effecting any of the foregoing;
(f) the sale to the Customer is on a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
(g) Agent believes, in its sole judgment, that collection of such
Receivable is insecure or that such Receivable may not be paid by reason of the
Customer's financial inability to pay;
(h) the Customer is (i) the United States, any state or any department,
agency or instrumentality of any of them, unless the applicable Company assigns
its right to payment of such Receivable to Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Subsection 3727 ET SEQ. and 41 U.S.C.
Sub-Section 15 ET SEQ.) or has otherwise complied with other applicable statutes
or ordinances, or (ii) any other government (or department, agency or
instrumentality thereof), unless the applicable Company assigns its right to
payment of such Receivable to Agent and provides to Agent a first priority
perfected Lien, or otherwise evidences that Agent has a first priority perfected
Lien, in such Receivable for the benefit of the Banks enforceable against the
Customer; provided, at Agent's sole discretion, up to fifty percent (50%) of all
Deposition Sciences, Inc. United States receivables outstanding as of the
Original Closing Date may be included without compliance with the foregoing
assignment provision;
6
(i) the goods giving rise to such Receivable have not been shipped and
delivered to and accepted by the Customer or the services giving rise to such
Receivable have not been performed by such Company and accepted by the Customer
or the Receivable otherwise does not represent a final sale;
(j) the Receivables of the Customer exceed a credit limit determined by
Agent, in its sole discretion, and communicated to U.S. Borrower, to the extent
such Receivable exceeds such limit;
(k) to the extent the Receivable is subject to any offset, deduction,
defense, dispute, or counterclaim, the Customer is also a creditor or supplier
of such Company or the Receivable is contingent in any respect or for any
reason; provided, at Agent's sole discretion, receivables of General Electric
Company subject to offset, deduction, defease, dispute or counterclaim may be
included in whole or in part without reduction;
(l) such Company has made an agreement with the Customer for a
deduction therefrom, but only to the amount of the deduction, except for
discounts or allowances made in the ordinary course of business for prompt
payment, all of which discounts or allowances are reflected in the calculation
of the face value of each respective invoice related thereto;
(m) any return, rejection or repossession of the merchandise has
occurred;
(n) such Receivable is not payable to such Company; or
(o) such Receivable is not otherwise satisfactory to Agent as
determined by Agent in the exercise of its sole discretion.
"Environmental Laws" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States or other jurisdiction or by any state or municipality
thereof or by any court, agency, instrumentality, regulatory authority or
commission of any of the foregoing concerning health, safety and protection of,
or regulation of the discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean, as to U.S. Borrower or any U.S. Guarantor:
(a) the existence of any condition or event with respect to an Plan that
presents a risk of the imposition of an excise tax or any other material
liability on a Company or of the imposition of a Lien on any material portion of
the assets of a Company; (b) a Controlled Group member has engaged in a
nonexempt "prohibited transaction" (as defined under ERISA Section 406 or Code
Section 4975) or a breach of a fiduciary duty under ERISA that could result in
material liability to a Company; (c) a Controlled Group member has applied for a
waiver from the minimum funding requirements of Code Section 412 or ERISA
Section 302 or a Controlled Group member is required to provide security under
Code Section 401(a)(29) or ERISA Section 307; (d) a Reportable Event has
occurred with respect to any Pension Plan as to which notice is required to be
provided to the PBGC; (e) a Controlled Group member has withdrawn from a
Multiemployer
7
Plan in a "complete withdrawal" or a "partial withdrawal" (as such terms are
defined in ERISA Sections 4203 and 4205, respectively); (f) a Multiemployer Plan
is in or is likely to be in reorganization under ERISA Section 4241; (g) a Plan
(and any related trust) which is intended to be qualified under Code Sections
401 and 501 fails to be so qualified or any "cash or deferred arrangement" under
any such Plan fails to meet the requirements of Code Section 401(k); (h) the
PBGC takes any steps to terminate a Pension Plan or appoint a trustee to
administer a Pension Plan, or a Controlled Group member takes steps to terminate
a Pension Plan; (i) a Controlled Group member or a Plan fails to satisfy any
requirements of law applicable to a Plan; (j) a material claim, action, suit,
audit or investigation is pending or threatened with respect to a Plan, other
than a routine claim for benefits; or (k) a Controlled Group member incurs or is
expected to incur any material liability for post-retirement benefits under any
Welfare Plan, other than as required by ERISA Section 601, ET SEQ. or Code
Section 4980B.
"Event of Default" shall mean an event or condition that constitutes
an event of default as defined in Article VII hereof.
"Excess Cash Flow" shall mean, on an annual basis as provided in
Section 2.10(f) hereof, on a Consolidated basis, Cash Flow less the sum of (a)
interest paid for such period, (b) scheduled maturities of Long-Term
Indebtedness for such period, (c) unfinanced Capital Expenditures for such
period, and (d) Taxes paid for such period.
"EXIM Bank" shall mean the Export Import Bank of the United States.
"EXIM Borrowing Base" shall mean an amount not in excess of the sum of
the following: (a) ninety percent (90%) of the aggregate amount due and owing on
Eligible Export Receivables of U.S. Borrower plus (b) seventy-five percent (75%)
of U.S. Borrower's Eligible Export Inventory; provided, however, that the amount
available under this subpoint (b) shall not exceed sixty percent (60%) of the
sum of the amounts available under subpoints (a) and (b) of this definition
taken together except as provided in the EXIM Bank's waiver letter dated July 2,
2002. The amount of the EXIM Borrowing Base may be decreased by Agent and the
Banks at any time and from time to time, in the exercise of their reasonable
discretion and U.S. Borrower consents to any such decreases and acknowledges
that decreasing the amount of the U.S. Borrowing Base or increasing the reserves
may limit or restrict Revolving EXIM Loans requested by U.S. Borrower.
"EXIM Commitment" shall mean the obligation hereunder of the Banks to
make EXIM Loans, pursuant to the Revolving EXIM Credit Commitments up to the
Maximum Revolving EXIM Commitment Amount, during the Commitment Period.
"EXIM Loan" or "EXIM Loans" shall mean the credit extended to U.S.
Borrower by the Banks in accordance with Section 2.1A or B hereof.
"EXIM Note" shall mean any Revolving EXIM Credit Note or any other note
delivered pursuant to this Agreement.
"Existing Stockholders" shall mean (a) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (b) any trust
to the extent that any member of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ family has "beneficial" (as
defined in Rule 13d-3 under the Exchange Act) ownership of the rest thereof, and
(c) any "group" (within the meaning
8
of Sections 13(d) and 14(d)(2) of the Exchange Act) that includes parties
specified in clauses (a) or (b) above if such parties "beneficially own" (within
the meaning of Rule 13d-3 under the Exchange Act) Voting Stock representing a
majority of the voting power of the Voting Stock owned by such group.
"Facility Fee Rate" shall mean three-eighths of one percent (3/8%).
"Federal Funds Effective Rate" shall mean, for any day, the rate per
annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of
1%)) announced by the Federal Reserve Bank of New York (or any successor) on
such day as being the weighted average of the rates on overnight federal fluids
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal Funds Effective
Rate" as of the Original Closing Date.
"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer or treasurer.
"Fixed Charge Coverage Ratio" shall mean, for any period, on a
Consolidated basis, the ratio of (a) Cash Flow to (b) Senior Debt Payments for
such period.
"Foreign Subsidiary" shall mean Ballastronix Incorporated, Parry Power
Systems Ltd. and any other Subsidiary of any Company incorporated or organized,
as the case may be, outside of the United States.
"GAAP" shall mean generally accepted accounting principles in the
United States as in effect from time to time, which shall include the
promulgated standards thereof by the Financial Accounting Standards Board,
applied by U.S. Borrower on a consistent basis.
"Guarantor" shall mean a Person that pledges its credit or property in
any manner for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or Person that
agrees conditionally or otherwise to make any purchase, loan or investment in
order thereby to enable another to prevent or correct a default of any kind.
"Guarantor of Payment" shall mean each U.S. Guarantor, or any other
Person that shall deliver a Guaranty of Payment to Agent subsequent to the
Original Closing Date.
"Guaranty of Payment" shall mean a Guaranty of Payment, Deed of
Guaranty and Indemnity Agreement or other similar document or instrument, in
form and substance satisfactory to Agent and the Banks, executed and delivered
on or after the Original Closing Date by U.S. Borrower or a Guarantor of
Payment, as the same may be from time to time amended, restated or otherwise
modified.
"Hedge Agreement" shall mean any hedge agreement, interest rate swap,
cap, collar or floor agreement, or other interest rate management device entered
into by a U.S. Borrower with Agent or any of the Banks in connection with the
obligations incurred under this Agreement.
9
"Indebtedness" shall mean (without duplication), for any Company
(excluding in all cases trade payables and accrued expenses, in each case
arising in the ordinary course of business by such Company), (a) all obligations
to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed,
(b) all obligations for the deferred purchase price of capital assets, (c) all
obligations under conditional sales or other title retention agreements, (d) all
obligations (contingent or otherwise) under any letter of credit, banker's
acceptance, currency swap agreement, interest rate swap, cap, collar or floor
agreement or other interest rate management device, (e) all synthetic leases,
(f) all capitalized leases in accordance with GAAP, (g) all obligations of such
Company with respect to asset securitization financing programs to the extent
that there is recourse against such Company or such Company is liable
(contingent or otherwise) under any such program, (h) all obligations to advance
funds to, or to purchase assets, property or services from, any other Person in
order to maintain the financial condition of such Person, and (i) any other
transaction (including forward sale or purchase agreements) having the
commercial effect of a borrowing of money entered into by such Company to
finance its operations or capital requirements.
"Indenture" shall mean that certain Indenture between Advanced Lighting
Technologies, Inc., as issuer, and The Bank of New York, as trustee, dated as of
March 18, 1998, as amended and as the same may, with the prior written consent
of Agent and the Required Banks (which shall not be unreasonably withheld), from
time to time be further amended, restated, supplemented or otherwise modified.
"Indenture Closing Date" shall mean March 18, 1998.
"Inventory" shall mean, with respect to any Person, all of such
Person's now owned or hereafter acquired goods, merchandise and other personal
property, wherever located, to be finished under any contract of service or held
for sale or lease, all raw materials, work-in-process, finished goods and
materials and supplies of any kind, nature or description, which are or might be
used or consumed in such Person's business or used in selling or furnishing such
goods, merchandise and other personal property, and all documents of title or
other documents representing them.
"Lien" shall mean any mortgage, security interest, lien, charge,
encumbrance on, pledge or deposit of, or conditional sale or other title
retention agreement with respect to any property (real or personal) or asset.
"Loan Documents" shall mean this Agreement, the Primary Credit
Agreement, the Notes, the EXIM Notes, each of the Guaranties of Payment, each
Security Document, and any other documents referenced in or relating to any of
the foregoing, as any of the foregoing may from time to time be amended,
restated or otherwise modified or replaced.
"Long-Term Indebtedness" shall mean Indebtedness of the Companies that,
in accordance with GAAP, would be classified upon the balance sheet of the
Companies as long-term liabilities.
10
"Master Guarantee Agreement": shall mean the Export Import Bank of the
United States Working Capital Program Master Guarantee Agreement between EXIM
Bank and PNC Bank, National Association.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) or
prospects of U.S. Borrower, (b) the business, operations, property, condition
(financial or otherwise) or prospects of any Company other than U.S. Borrower
that (i) has assets at such time comprising five percent (5%) or more of the
Consolidated assets of U.S. Borrower and its Subsidiaries, or (ii) whose
operations in the current fiscal year are expected to, or whose operations in
the most recent fiscal year did (or would have if such Company had been a
Subsidiary for the entire fiscal year), represent five percent (5%) or more of
the Consolidated earnings before interest, taxes, depreciation and amortization
of U.S. Borrower and its Subsidiaries for such fiscal year, or (c) the business,
operations, property, condition (financial or otherwise) or prospects of U.S.
Borrower and its Subsidiaries taken as a whole.
"Maximum EXIM Amount" shall mean, for each Bank, the amount set forth
opposite such Bank's name under the applicable column headed "Revolving Credit
Commitment Amount" as listed on SCHEDULE 1 hereto.
"Maximum Revolving EXIM Credit Commitment Amount" shall mean Four
Million Dollars ($4,000,000), or such lesser amounts as shall be determined
pursuant to Section 2.8 hereof.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
to such company.
"Multiemployer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Notice of Loan" shall mean a Notice of Loan in the form of EXHIBIT E
hereof.
"Obligor" shall mean (a) a Person whose credit or any of whose property
is pledged to the payment of the Debt and includes, without limitation, any
Guarantor, and (b) any signatory to a Related Writing.
"Original Closing Date" means May 21, 1999, the original closing date
under the Primary Credit Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
"Pension Plan" shall mean a Plan that is a "pension plan" (within the
meaning of ERISA Section 3(2)).
"Permitted Acquisition" shall mean one or more Acquisitions occurring
after June 12, 2001, the aggregate purchase price of which (including monies
paid or to be paid) do not exceed $5,000,000; provided, however, the aggregate
purchase price for Permitted Acquisitions and for Permitted Investments shall
not exceed in the aggregate $5,000,000.
11
"Permitted Disposition" shall mean the sale, lease, transfer or other
disposition of assets by any Borrower or any Subsidiary to any Person (other
than, for purposes of this definition, to Borrower or a Guarantor of Payment)
other than in the ordinary course of business so long as the aggregate amount of
all such assets sold, leased, transferred or otherwise disposed of by all
Borrowers and Subsidiaries does not exceed One Million Dollars ($1,000,000)
during any fiscal year of U.S. Borrower.
"Permitted Investment" shall mean investments of the type referenced in
Section 5.11 (a), (b) or (c) occurring after June 12, 2001, the aggregate
purchase price of which (including monies paid or to be paid) do not exceed
$5,000,000; provided, however, the aggregate purchase price for Permitted
Acquisitions and for Permitted Investments shall not exceed in the aggregate
$5,000,000.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, corporation, limited
liability company, institution, trust, estate, government or other agency or
political subdivision thereof or any other entity.
"Plan" shall mean an "employee benefit plan" (within the meaning of
ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation to
contribute to such plan,
"Pledge Agreement" shall mean a Pledge Agreement or Charge over Shares,
in form and substance satisfactory to Agent and the Banks, executed and
delivered to Agent and the Banks by a Company, on or after the Original Closing
Date, as the same may be from time to time amended, restated or otherwise
modified.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference equity,
whether outstanding on the Indenture Closing Date or the Original Closing Date
or issued thereafter, including, without limitation, all series and classes of
such preferred or preference stock.
"Primary Credit Agreement" shall mean the Credit Agreement, dated as of
May 21, 1999, as amended from time to time, among Advanced Lighting
Technologies, Inc., Ballastronix Incorporated, Canadian Lighting Systems
Holding, Incorporated, Parry Power Systems Limited, Venture Lighting Europe
Ltd., various financial institutions parties thereto, and PNC Bank, National
Association, as Agent.
"Prime Rate" shall mean the interest rate established from time to time
by Agent as Agent's prime rate, whether or not such rate is publicly announced;
the Prime Rate may not be the lowest interest rate charged by Agent for
commercial or other extensions of credit. Each change in the Prime Rate shall be
effective immediately from and after such change.
"Receivable" shall mean an account, contract right, instrument,
document, chattel paper, general intangible relating to accounts, drafts and
acceptances, and all other forms of obligations owing to a Person arising out of
or in connection with the sale or lease of Inventory or the rendition of
services, all guarantees and other security therefor, whether secured or
unsecured, now existing or hereafter created.
12
"Related Expenses" shall mean any and all costs, liabilities, and
expenses (including, without limitation, losses, damages, penalties, claims,
actions, reasonable attorneys' fees, legal expenses, judgments, suits, and
disbursements) incurred by, imposed upon, or asserted against, Agent or the
Banks in any attempt by Agent or the Required Banks: (a) to obtain, preserve,
perfect, or enforce any security interest evidenced by this Agreement or any
Related Writing; (b) to obtain payment, performance, and observance of any and
all of the Debt; (c) to maintain, insure, audit, collect, preserve, repossess,
and dispose of any of the collateral securing the Debt or any thereof,
including, without limitation, costs and expenses for appraisals, assessments,
and audits of any Borrower or any such collateral; or (d) incidental or related
to (a) through (c) above, including, without limitation, interest thereupon from
the date incurred, imposed, or asserted until paid at the Default Rate.
"Related Writing" shall mean the Loan Documents and any other
assignment, mortgage, security agreement, guaranty agreement, subordination
agreement, financial statement, audit report or other writing furnished by
Borrowers, any Subsidiary or any Obligor, or any of their respective officers,
to Agent or the Banks pursuant to or otherwise in connection with this
Agreement.
"Reportable Event" shall mean a reportable event as that term is
defined in Title IV of ERISA, except actions of general applicability by the
Secretary of Labor under Section 110 of such Act.
"Required Banks" shall mean the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the EXIM Commitment, or, if there is any
borrowing hereunder, the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the aggregate amount of Dollars outstanding under the Notes;
provided, however that if one (1) Bank has at least sixty-six and two-thirds
percent (66 2/3%) but less than one hundred percent (100%) of the EXIM
Commitment or the amount outstanding, then Required Banks shall mean such Bank
and one (1) other Bank.
"Revolving EXIM Credit Commitment" shall mean the obligation hereunder,
during the applicable Commitment Period of (a) each Bank to participate in the
making of Revolving EXIM Loans up to an aggregate principal amount outstanding
at any time equal to the lesser of (a) the Maximum EXIM Revolving Credit
Commitment and (b) the EXIM Borrowing Base (or such lesser amount as shall be
determined pursuant to Section 2.8 hereof), up to an aggregate amount set forth
opposite such Bank's name under the applicable column headed "Revolving EXIM
Commitment Amount" as set forth on SCHEDULE 1 hereto.
"Revolving EXIM Credit Exposure" shall mean, at any time, the aggregate
balance of all outstanding Revolving EXIM Loans.
"Revolving EXIM Credit Note" shall mean the Revolving EXIM Credit Note
executed and delivered pursuant to subsection 1 of Section 2.1A hereof.
"Revolving EXIM Loan" shall mean a loan made to U.S. Borrower pursuant
to Section 2.1A hereof.
"SEC" shall mean the United States Securities and Exchange Commission.
13
"Security Agreement" shall mean a Security Agreement, mortgage
debenture or other similar document or instrument, in form and substance
satisfactory to Agent and the Banks, executed and delivered by a Company to
Agent on behalf of the Banks, on or after the Original Closing Date, as the same
may be from time to time amended, restated or otherwise modified.
"Security Documents" shall mean each of the Security Agreements, each
of the Pledge Agreements, each of the Collateral Assignment and Security
Agreements, the Assignment of Life Insurance Policy, each U.C.C. financing
statement or similar filing as to the United Kingdom or Canada executed in
connection herewith, and any other documents relating to any of the foregoing,
as any of the foregoing may from time to time be amended, restated or otherwise
modified or replaced.
"Senior Debt Payments" shall mean, for any period, on a Consolidated
basis, (a) Total Interest Expense, plus (b) an amount equal to the payments due
in accordance with the scheduled maturities of principal on the Term Loan, plus
(c) all cash paid with respect to any other Indebtedness, less (d) the payment
to Unison Fiber Optic Lighting Systems, LLC to the extent reserved against
availability under the Revolving Credit Commitment.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., or any successor to such company.
"Subsidiary" shall mean (a) a corporation more than fifty percent (50%)
of the Voting Stock (or voting power of all outstanding Voting Stock) of which
is owned, directly or indirectly, by U.S. Borrower or by one or more other
subsidiaries of U.S. Borrower or by U.S. Borrower and one or more subsidiaries
of Borrower, (b) a partnership or limited liability company of which U.S.
Borrower, one or more other subsidiaries of U.S. Borrower, or U.S. Borrower and
one or more subsidiaries of U.S. Borrower, directly or indirectly, is a general
partner or managing member, as the case may be, or otherwise has the power to
direct the policies, management and affairs thereof, or (c) any other Person
(other than a corporation) in which U.S. Borrower, one or more other
subsidiaries of U.S. Borrower or U.S. Borrower and one or more subsidiaries of
U.S. Borrower, directly or indirectly, has at least a majority ownership
interest or the power to direct the policies, management and affairs thereto.
"Taxes" shall mean all federal, state and local income taxes.
"Total Interest Expense" shall mean, for any period, (a) total interest
expense (including that which is attributable to capitalized leases, in
accordance with GAAP) of U.S. Borrower on a Consolidated basis with respect to
all outstanding Indebtedness of U.S. Borrower and its Subsidiaries including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and net costs under Hedge Agreements, but
excluding, however, any amortization of deferred financing costs, all as
determined in accordance with GAAP, minus (b) gross interest income of U.S.
Borrower on a Consolidated basis, all as determined in accordance with GAAP.
"Unmatured Event of Default" shall mean an event or condition that
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute, an Event of Default and that has not
been waived by the Required Banks in writing.
14
"U.S. Base Rate Loan" shall mean a Loan described in subsection 1 of
Section 2.1A hereof on which U.S. Borrower shall pay interest at a rate based on
the Base Rate.
"U.S. Borrowers' Certificate" shall mean a certificate, substantially
in the form of EXHIBIT F hereof.
"U.S. Guarantor" shall mean each of the Companies listed on SCHEDULE 2
to the Primary Credit Agreement and each other Domestic Subsidiary that shall
execute and deliver a Guaranty of Payment on or after the Closing Date.
"U.S. Revolving Exposure" shall have the meaning given thereto in the
Primary Credit Agreement.
"Voting Stock" shall mean with respect to any Person, Capital Stock of
any class or kind having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person (not
including, however, any Capital Stock having such right to vote only upon the
happening of certain events under limited circumstances).
"Welfare Plan" shall mean a Plan that is a "welfare plan" within the
meaning of ERISA Section 3 (1).
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company or other entity all of the securities or
other ownership interest, of which having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"Work-In-Process" shall mean that portion of Inventory comprised of
products and/or goods being manufactured and/or assembled by a Person but not
yet completed.
Any accounting term not specifically defined in this Article I shall
have the meaning ascribed thereto by GAAP.
The foregoing definitions shall be applicable to the singular and
plurals of the foregoing defined terms.
The use of the term "sole discretion" or "sole opinion" herein shall
mean the exercise of discretion other than in an arbitrary or capricious manner.
Capitalized terms used herein without definition have the meanings
given thereto in the Primary Credit Agreement.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
Section 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms
and conditions of this Agreement, each Bank shall participate to the extent
hereinafter provided in making EXIM Loans in such aggregate
15
amount as U.S. Borrower shall request pursuant to the EXIM Commitment; provided,
however, that in no event shall the aggregate principal amount of all EXIM Loans
outstanding under this Agreement be in excess of the Maximum Revolving EXIM
Credit Commitment Amount.
Each Bank, for itself and not one for any other, agrees to participate
in Revolving EXIM Loans during the Commitment Period on such basis that (a)
immediately after the completion of any Revolving EXIM Loan, the aggregate
principal amount then outstanding on the EXIM Notes issued to such Bank shall
not be in excess of the Maximum EXIM Amount for such Bank, and (b) such
aggregate principal amount outstanding on the EXIM Notes issued to such Bank
shall represent that percentage of the aggregate principal amount then
outstanding on all EXIM Notes held by all Banks which is such Bank's Applicable
Commitment Percentage.
Each borrowing from the Banks hereunder shall be made pro rata
according to the Banks' respective Applicable Commitment Percentages. The
Revolving EXIM Loans may be made as follows:
A. EXIM Revolving Credit.
1. Revolving EXIM Loans.
Subject to the terms and conditions of this Agreement, during the
Commitment Period, the Banks shall make a Revolving EXIM Loan to U.S. Borrower
in such amount or amounts as U.S. Borrower may from time to time request, but
not exceeding in aggregate principal amount at any time outstanding hereunder
the aggregate amount of the Revolving EXIM Credit Commitment. U.S. Borrower
shall have the option, subject to the terms and conditions set forth herein, to
borrow Revolving EXIM Loans, maturing on the last day of the Commitment Period,
by means of U.S. Base Rate Loans.
U.S. Borrower shall pay interest on the unpaid principal amount of U.S.
Base Rate Loans outstanding from time to time from the date thereof until paid
at the Base Rate from time to time in effect. Interest on such U.S. Base Rate
Loans shall be payable, commencing September 1, 2002, and on the 1st day of each
succeeding month thereafter, and at the maturity thereof.
The obligation of U.S. Borrower to repay the U.S. Base Rate Loans made
by each Bank and to pay interest thereon shall be evidenced by a Revolving EXIM
Credit Note in the form of EXHIBIT A hereto, dated the Closing Date, and payable
to the order of such Bank in the principal amount of its Revolving EXIM Credit
Commitment, or, if less, the aggregate unpaid principal amount of Revolving EXIM
Loans made hereunder by such Bank. Subject to the provisions of this Agreement,
U.S. Borrower shall be entitled under this subsection 1 of Section 2.1A to
borrow funds, repay the same in whole or in part and re-borrow hereunder at any
time and from time to time during the Commitment Period.
SECTION 2.2. CONDITIONS TO EXIM LOANS. The obligation of the
Banks to make, convert or continue any Loan, is conditioned, in the case of each
borrowing, conversion continuation hereunder, upon:
(a) all conditions precedent as listed in Article IV hereof shall have
been satisfied;
16
(b) with respect to any Revolving EXIM Loan, receipt by Agent of a
Notice of Loan from U.S. Borrower, such notice to be received by 11:00 A.M.
(Cleveland, Ohio time) on the proposed date of borrowing or conversion with
respect to a U.S. Base Rate Loan,. Agent shall notify each Bank of the date,
amount promptly upon the receipt of such notice, and, in any event, by 2:00 P.M.
(Cleveland, Ohio time) on the date such notice is received. On the date that any
such Loan is to be made, each Bank shall provide Agent at the Designated Lending
Office, not later than 3:00 P.M. (Cleveland, Ohio time), with the Dollar amount
in federal or other immediately available funds, required of it;
(c) each request of U.S. Borrower for a U.S. Base Rate Loan shall be in
an amount of not less than Five Hundred Thousand Dollars ($500,000), increased
by increments of One Hundred Thousand Dollars ($100,000);
(d) the fact that no Unmatured Event of Default or Event of Default
shall then exist or immediately after the making, conversion or continuation of
the Loan would exist; and
(e) the fact that each of the representations and warranties contained
in Article VI hereof shall be true and correct in all material respects with the
same force and effect as if made on and as of the date of the making, conversion
or continuation of the Loan, except to the extent that any thereof expressly
relate to an earlier date.
Each request by any U.S. Borrower for the making, conversion or
continuation of a Loan, shall be deemed to be a representation and warranty by
such U.S. Borrower of the date of such request as to the facts specified in (g)
and (h) above.
SECTION 2.3. PAYMENT ON NOTES, ETC.
(a) PAYMENTS IN DOLLARS. All payments of principal, interest and EXIM
Commitment and other fees shall be made to Agent in Dollars and in immediately
available funds for the account of the Banks. Payments must be received at the
Designated Lending Office not later than 11:00 A.M. (Cleveland, Ohio time) to be
deemed to have been made and received on that day.
(b) APPLICATION OF PAYMENTS. U.S. Borrower recognizes that the amounts
evidenced by checks, notes, drafts or any other items of payment relating to
and/or proceeds of certain collateral for the EXIM Loans hereunder may not be
collectible by Agent on the date received. In consideration of Agent's agreement
to conditionally credit U.S. Borrower's respective accounts as of the Business
Day on which Agent receives those items of payment in accordance with the time
periods set forth above, U.S. Borrower agrees that, in computing the amounts
payable under this Agreement, all items of payment shall be deemed applied by
Agent on account of the Debt one (1) Business Day after the Business Day that
Agent receives such payments via wire transfer or electronic depository check.
Agent is not, however, required to credit U.S. Borrower's account for the amount
of any item of payment that is unsatisfactory to Agent, and Agent may charge
U.S. Borrower's account for the amount of any item of payment credited to such
account that is returned to Agent unpaid.
(c) PAYMENTS NET OF TAXES.
17
(i) GENERAL PROVISIONS. All payments under this Agreement shall be
made absolutely net of, without deduction or offset for, and altogether
free and clear of, any and all present and future taxes, levies,
deductions, charges and withholdings and all liabilities with respect
thereto, under the laws of the United States of America or any foreign
jurisdiction (or any state or political subdivision thereof), excluding
income and franchise taxes imposed on any Bank (and withholding
relating thereto) under the laws of the United States of America or any
other foreign jurisdiction (or any state or political subdivision
thereof). If any U.S. Borrower is compelled by law to deduct any such
taxes or levies (other than such excluded taxes) or to make any such
other deductions, charges or withholdings, then such U.S. Borrower
shall pay such additional amounts as may be necessary in order that the
net payments after such deduction, and after giving effect to any
United States or foreign jurisdiction (or any state or political
subdivision thereof) income taxes required to be paid by the Banks in
respect of such additional amounts, shall equal the amount of interest
provided in Section 2.1 hereof for each Loan plus any principal then
due.
(d) PAYMENTS TO BANKS. Upon Agent's receipt of payments hereunder,
Agent shall immediately distribute, in immediately available funds, to each Bank
its ratable share, if any, of the amount of principal, interest, and facility
and other fees received by it for the account of such Bank. Each Bank shall
record any principal, interest or other payments, the principal amounts of the
EXIM Loans, all prepayments and the applicable dates with respect to the EXIM
Loans made and payments received by such Bank, by such method as such Bank may
generally employ; provided, however, that failure to make any such entry shall
in no way detract from the obligations of the U.S. Borrower under each such
Note. The aggregate unpaid amount of EXIM Loans with respect to such EXIM Loans
set forth on the records of Agent shall be rebuttably presumptive evidence of
the principal and interest owing and unpaid on each Note.
(e) TIMING OF PAYMENTS. Whenever any payment to be made hereunder,
including, without limitation, any payment to be made on any Note, shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall in each
case be included in the computation of the interest payable on such Note.
SECTION 2.4. PREPAYMENT.
(a) RIGHT TO PREPAY. Borrower shall have the right, at any time or from
time to time, to prepay, on a pro rata basis for all of the Banks, all or any
part of the principal amount of the Revolving EXIM Credit Notes then
outstanding, as designated by U.S. Borrower, plus interest accrued on the amount
so prepaid to the date of such prepayment and any prepayment fees payable in
connection therewith under subsection (b) hereof.
(b) PREPAYMENT FEES. If U.S. Borrower terminates the Revolving EXIM
Credit Commitment, then U.S. Borrower shall pay a prepayment fee to Agent for
the pro rata benefit of the Banks in an amount equal to one and one-half percent
(1.5%) of the total of the Maximum Revolving EXIM Credit Commitment Amount if
prepaid on or after July 1, 2002 through and including June 30, 2003; and one
percent (1%) of the total of the Maximum Revolving EXIM Credit Commitment Amount
if prepaid on or after July 1, 2003 through and including June 30,
18
2004; provided, however, that so long as Agent and the Banks remain the Agent
and lenders, respectively, under any replacement credit facility, the prepayment
fees set forth in this Section 2.6(b)(i) shall not apply;
(c) NOTICE OF PREPAYMENT. U.S. Borrower shall give Agent notice of
prepayment of any Base Rate Loan by not later than 11:00 A.M. (Cleveland, Ohio
time) on the Business Day such prepayment is to be made.
SECTION 2.5. FACILITY AND OTHER FEES.
(a) U.S. Borrower shall pay to Agent a facility fee and certain other
fees as provided in a certain fee agreement executed by U.S. Borrower and Agent
on the date hereof.
(b) To the extent the fees and expenses referenced in this Agreement or
included in the fee letter referenced in (a) above are paid under the terms of
the Primary Credit Agreement, no additional such fees and expenses shall be
required to be paid hereunder.
SECTION 2.6. REDUCTION OF EXIM COMMITMENT.
(a) U.S. Borrower may at any time or from time to time permanently
reduce in whole or ratably in part the U.S. Revolving Credit EXIM Commitment to
an amount not less than the U.S. Revolving Exposure, by giving Agent not fewer
than three (3) Business Days' notice. Agent shall promptly notify each Bank of
the date of each such reduction and such Bank's proportionate share thereof. If
required by Agent, the U.S. Borrower, the Banks and Agent shall execute an
amendment to this Agreement to make any conforming changes deemed necessary or
appropriate by Agent as a result of any such reduction of the U.S. Revolving
Credit Commitment. After each such reduction, the facility fees payable with
respect to the Revolving EXIM Credit Commitments shall be calculated upon the
Revolving EXIM Credit Commitments of the Banks as so reduced.
(b) If U.S. Borrower reduces in whole the EXIM Commitment, on the
effective date of such reduction (U.S. Borrower having prepaid in full the
unpaid principal balance, if any, of the EXIM Notes, together with all interest
and facility and other fees accrued and unpaid), all of the EXIM Notes shall be
delivered to Agent marked "Canceled" and Agent shall redeliver such Notes to the
U.S. Borrower. Any partial reduction in the U.S. Revolving EXIM Credit
Commitment shall be effective during the remainder of the Commitment Period.
SECTION 2.7. COMPUTATION OF INTEREST AND FEES; DEFAULT RATE.
Interest on EXIM Loans and facility and other fees and charges hereunder shall
be computed on the basis of a year having three hundred sixty (360) days and
calculated for the actual number of days elapsed. Anything herein to the
contrary notwithstanding, if an Event of Default shall occur hereunder, the
principal of each EXIM Note and the unpaid interest thereon shall bear interest,
until paid, at the Default Rate. In no event shall the rate of interest
hereunder exceed the maximum rate allowable by law.
19
SECTION 2.8. MANDATORY PAYMENT.
(a) If the Revolving EXIM Credit Exposure at any time exceeds the
Maximum Revolving EXIM Credit Commitment Amount, U.S. Borrower shall, as
promptly as practicable, but in no event later than the next Business Day,
prepay an aggregate principal amount of Revolving EXIM Loans sufficient to bring
the Revolving Credit Exposure within the Maximum Revolving EXIM Credit
Commitment Amount.
(b) If the U.S. Revolving Exposure at any time exceeds the U.S.
Revolving EXIM Credit Commitment, U.S. Borrower shall, as promptly as
practicable, but in no event later than the next Business Day, prepay an
aggregate principal amount of Revolving EXIM Loans sufficient to bring the U.S.
Revolving Exposure within the aggregate amount of the U.S. Revolving EXIM Credit
Commitment.
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO EXIM LOANS; INCREASED CAPITAL;
TAXES.
SECTION 3.1. TAX LAW, ETC. In the event that by reason of any
law, regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of law, any Bank shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Bank) and if any such measures
or any other similar measure shall result in a reduction in the amount of
principal, interest or facility fee receivable by such Bank in respect thereof,
then such Bank shall promptly notify the appropriate U.S. Borrower stating the
reasons therefor. U.S. Borrower shall thereafter pay to such Bank, upon demand
from time to, as additional consideration hereunder, such additional amounts as
shall fully compensate such Bank for such increased cost or reduced amount. A
certificate as to any such increased cost or reduced amount, setting forth the
calculations therefor, shall be submitted by such Bank to U.S. Borrower and
shall, in the absence of manifest error, be conclusive and binding as to the
amount thereof.
If any Bank determines that such Bank has actually received or realized
any tax refund or any reduction of, or credit against, such Bank's tax
liabilities in or with respect to the taxable year in which the additional
amount is paid pursuant to this Section 3.2, such Bank shall pay to such U.S.
Borrower an amount that such Bank shall, in its sole discretion, determine is
equal to the net benefit, after tax, which was obtained by such Bank in such
year as a consequence of such tax benefit; provided, however, that any Bank may
determine in its sole discretion consistent with the policies of such Bank
whether to seek a tax benefit, and nothing in this Section 3.2 shall require a
Bank to disclose any confidential information to U.S. Borrower (including,
without limitation, its tax returns). If Bank later determines, based on an
audit or otherwise, that it was not entitled to the full amount of any refund
reimbursed to U.S. Borrower as aforesaid or that its net income taxes are not
reduced by a credit or deduction for the full amount of taxes reimbursed to
U.S. Borrower as aforesaid, such U.S. Borrower, upon demand of such Bank, shall
promptly pay to such Bank the amount so refunded to which such Bank was not
20
so entitled, or the amount by which the net income taxes of such Bank were not
so reduced, as the case may be.
SECTION 3.2. INDEMNITY; FUNDING; CAPITAL ADEQUACY. If any
Bank shall have determined, after the Closing Date, that the adoption of any
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Bank (or its lending office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital (or the capital of its
holding company) as a consequence of its obligations hereunder to a level below
that which such Bank (or its holding company) could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
or the policies of its holding company with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
fifteen (15) days after demand by such Bank (with a copy to Agent), U.S.
Borrower shall pay to such Bank such additional amount or amounts as shall
compensate such Bank (or its holding company) for such reduction. Each Bank
shall designate a different lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods. Failure on the part of any
Bank to demand compensation for any reduction in return on capital with respect
to any period shall not constitute a waiver of such Bank's rights to demand
compensation for any reduction in return on capital in such period or in any
other period. The protection of this Section shall be available to each Bank
regardless of any possible contention of the invalidity or inapplicability of
the law, regulation or other condition which shall have been imposed.
ARTICLE IV. CONDITIONS PRECEDENT
The obligation of the Banks to make the first EXIM Loan is subject to
U.S. Borrower satisfying each of the following conditions, certain of which have
been satisfied in connection with the Primary Credit Agreement:
SECTION 4.1. NOTE. U.S. Borrower shall have executed and
delivered to each Bank its Revolving EXIM Credit Note.
SECTION 4.2. GUARANTIES OF PAYMENT. Each U.S. Guarantor shall
have executed and delivered to Agent, for the benefit of the Banks, a Guaranty
of Payment.
SECTION 4.3. SECURITY AGREEMENTS. Each Borrower and each U.S.
Guarantor shall have executed and delivered to Agent, for the benefit of the
Banks, a Security Agreement and such other documents as may be required by Agent
to create or perfect
21
the Liens of Agent in the assets of each Borrower and each Guarantor of Payment,
for the benefit of the Banks.
SECTION 4.4. COLLATERAL ASSIGNMENT AND SECURITY
AGREEMENTS.Each Borrower and Guarantor of Payment, as requested, shall have
executed and delivered to Agent, for the benefit of the Banks, a Collateral
Assignment and Security Agreement.
SECTION 4.5. PLEDGE AGREEMENTS. U.S. Borrower shall have
executed and delivered to Agent, for the benefit of the Banks, the Pledge
Agreement with respect to the stock of the Companies listed on Schedule 4.5 of
the Disclosure Statement, together with delivery of the share certificates
referenced therein and the appropriate stock powers.
SECTION 4.6. OFFICER'S CERTIFICATE, RESOLUTIONS,
ORGANIZATIONAL DOCUMENTS. Each Borrower and U.S. Guarantor shall have delivered
to Agent an officer's certificate certifying the names of the officers of such
Borrower or U.S. Guarantor authorized to sign the Loan Documents to which such
Borrower or U.S. Guarantor, as the case may be, is a party, together with the
true signatures of such officers, and certified copies of (a) the resolutions of
the board of directors of each Borrower and U.S. Guarantor evidencing approval
of the execution and delivery of the Loan Documents and the execution of other
Related Writings to which such Borrower or U.S. Guarantor, as the case may be,
is a party, and (b) the Articles (or Certificate) of Incorporation and
Regulations (Bylaws) (or equivalent organizational or constitutional and
governing documents) and all amendments thereto of each Borrower and U.S.
Guarantor.
SECTION 4.7. LEGAL OPINIONS. Agent and each of the Banks shall
have received opinions of counsel for U.S. Borrower in form and substance
satisfactory to Agent and the Banks.
SECTION 4.8. GOOD STANDING CERTIFICATES. Agent and each of the
Banks shall have received a good standing certificate (or foreign equivalent)
for each Borrower and Guarantor of Payment, issued on or about the Original
Closing Date by the Secretary of State (or foreign equivalent) in the
jurisdiction where such Borrower or Guarantor of Payment is organized and in
each jurisdiction where such Borrower or such Guarantor of Payment conducts a
material amount of business.
SECTION 4.9. FINANCING STATEMENTS AND LIEN SEARCHES. With
respect to the property owned or leased by each Borrower and each U.S.
Guarantor, U.S. Borrower shall have caused to be delivered to Agent: (a) U.C.C.
and Personal Property Security Act financing and registration statements
satisfactory to Agent; (b) the results of U.C.C. and Personal Property Security
Act lien searches, satisfactory to Agent; (c) the results of federal and state
tax lien and judicial lien searches, satisfactory to Agent; and (d) U.C.C. and
Personal Property Security Act termination statements reflecting termination of
all financing and registration statements previously filed by any other party
having a security interest in any part of the collateral or any other property
securing the Debt.
22
SECTION 4.10. AMENDMENT TO PRIMARY CREDIT AGREEMENT;
CONDITIONS SATISFIED. U.S. Borrower shall have entered into an amendment to the
Primary Credit Agreement in form and substance satisfactory to Agent and the
Banks. All conditions to the making of advances under the Primary Credit
Agreement have been satisfied.
SECTION 4.11. INDENTURE. With respect to the Indenture, U.S.
Borrower shall have provided to Agent (a) a certificate to the effect that no
Default, as defined in the Indenture, exists under the Indenture, and (b) a copy
of the Indenture and all ancillary documents related thereto, certified by an
officer of U.S. Borrower as being true and complete.
SECTION 4.12. [INTENTIONALLY OMITTED].
SECTION 4.13. INSURANCE CERTIFICATES. U.S. Borrower and each
other Borrower, as appropriate, shall have delivered to Agent evidence of
insurance, in form and substance satisfactory to Agent, of adequate personal
property and liability insurance of each Borrower and each U.S. Guarantor, with
Agent listed as mortgagee, loss payee and additional insured for the benefit of
the Banks.
SECTION 4.14. INTEREST RATE PROTECTION. U.S. Borrower shall
have provided evidence that U.S. Borrower has entered into a Hedge Agreement, on
terms and conditions satisfactory to Agent, with respect to the Indebtedness
evidenced by the Term Notes.
SECTION 4.15. LANDLORDS' AND MORTGAGEES' WAIVERS. U.S.
Borrower shall have delivered a landlord's waiver and mortgagee's waiver, if
applicable, each in form and substance satisfactory to Agent, for each location
not owned by a Borrower or a Guarantor of Payment where any of the collateral or
other property securing any part of the Debt is located.
SECTION 4.16. COLLATERAL AUDIT AND EQUIPMENT APPRAISAL. Agent
shall have received the results of a collateral audit, equipment appraisal and
such other appraisals as Agent may deem necessary, results of which shall be
satisfactory to Agent.
SECTION 4.17. CASH COLLATERAL AND OTHER ACCOUNTS. Each U.S.
Borrower and each U.S. Guarantor shall have established such cash collateral and
other accounts as may be required by Agent and shall have executed and
delivered, or cause to be executed and delivered, such lockbox agreements and
blocked account agreements as Agent shall require.
SECTION 4.18. ASSIGNMENT OF LIFE INSURANCE POLICY.
U.S. Borrower shall have executed and delivered to Agent for the
benefit of the Banks the Assignment of Life Insurance Policy in an amount of not
less than Eight Million Dollars ($8,000,000).
23
SECTION 4.19. U.S. BORROWERS' CERTIFICATE.
Agent shall have received an initial U.S. Borrower Certificate, dated
as of the Closing Date.
SECTION 4.20. MASTER GUARANTEE AGREEMENT AND BORROWER
AGREEMENT.
Agent has received the Master Guarantee Agreement executed by EXIM
Bank in form and substance acceptable to Agent, together with all related
documents required by Agent. U.S. Borrower and the other parties thereto have
executed and delivered to Agent the Borrower Agreement.
SECTION 4.21. MISCELLANEOUS.
Each Borrower and each Guarantor shall have provided such other items
and shall have satisfied such other conditions as may be reasonably required by
Agent or the Banks.
ARTICLE V. COVENANTS
U.S. Borrower agrees that so long as the EXIM Commitment remains in
effect and thereafter until the principal of and interest on all Notes and all
other payments and fees due hereunder shall have been paid in full, U.S.
Borrower shall perform and observe, and shall cause each Subsidiary, as
applicable, to perform and observe, each of the following provisions:
SECTION 5.1. INSURANCE. Each Company shall at all times
maintain insurance upon all of its personal and real property in such form,
written by such companies, in such amounts, for such period, and against such
risks as may be acceptable to Agent, with provisions satisfactory to Agent, for
payment of all losses thereunder to Agent, for the benefit of the Banks, and
such Company as their interests may appear (loss payable endorsement in favor of
Agent, for the benefit of the Banks), and, if required by Agent, U.S. Borrower
shall deposit the policies with Agent. Any such policies of insurance shall
provide for no fewer than thirty (30) days prior written notice of cancellation
to Agent and the Banks. Any sums received by Agent, for the benefit of the
Banks, in payment of insurance losses, returns, or unearned premiums under the
policies may, at the option of Agent, be applied upon any applicable (as
determined by Agent) portion of the Debt, whether or not the same is then due
and payable, or may be delivered to the Company that owns the damaged property
for the purpose of replacing, repairing, or restoring the insured property.
Agent is hereby authorized to act as attorney-in-fact for each U.S. Borrower in
obtaining, adjusting, settling and canceling such insurance and indorsing any
drafts. In the event of failure to provide such insurance as herein provided,
Agent may, at its option, provide such insurance and U.S. Borrower shall pay to
Agent, upon demand, the cost thereof. Should U.S. Borrower fail to pay such sum
to Agent upon demand, interest shall accrue thereon, from the date of demand
until paid in full, at the Default Rate. Within ten (10) days of any Bank's
written request, the Company to which such request was delivered shall furnish
to such Bank such information about such Company's insurance as such Bank may
from
24
time to time reasonably request, which information shall be prepared in form and
detail satisfactory to such Bank and certified by a Financial Officer of such
Company.
SECTION 5.2. MONEY OBLIGATIONS. Each Company shall pay in full
(a) prior in each case to the date when penalties would attach, all taxes,
assessments and governmental charges and levies (except only those so long as
and to the extent that the same shall be contested in good faith by appropriate
and timely proceedings and for which adequate accruals have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject; (b) all of its wage obligations
to its employees in compliance with, as applicable, the Fair Labor Standards Act
(29 U.S.C. 206-207) and (c) all of its other obligations calling for the payment
of money (except only those so long as and to the extent that the same shall be
contested in good faith and for which adequate accruals have been established in
accordance with GAAP) before such payment becomes overdue.
SECTION 5.3. FINANCIAL STATEMENTS. U.S. Borrower shall furnish
to each Bank:
(a) Annual Financial Statements. As soon as available and in any event
within ninety (90) days after the close of each fiscal year of U.S. Borrower,
the Consolidated and consolidating balance sheets of U.S. Borrower and its
Subsidiaries as at the end of such fiscal year and the related Consolidated and
consolidating statements of income, of stockholder's equity and of cash flows
for such fiscal year, in each case setting forth comparative figures for the
preceding fiscal year, all in reasonable detail and accompanied by:
(i) the opinion with respect to such Consolidated financial
statements of independent public accountants of recognized national
standing selected by U.S. Borrower, and reasonably acceptable to Agent,
which opinion shall be unqualified and shall (A) state that such
accountants audited such Consolidated financial statements in
accordance with generally accepted auditing standards, that such
accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial
statements present fairly, in all material respects, the Consolidated
financial position of U.S. Borrower and its Subsidiaries as at the end
of such fiscal year and the Consolidated results of their operations
and cash flows for such fiscal year in conformity with GAAP, or (B)
contain such statements as are customarily included in unqualified
reports of independent accountants in conformity with the
recommendations and requirements of the American Institute of Certified
Public Accountants (or any successor organization); and
(ii) a certificate of or letter from such independent accountants
containing certified computations with respect to compliance with the
provisions of Section 5.7 of this Agreement and stating whether or not
their examination of such financial statements has disclosed the
existence, during the fiscal year covered by such financial statements,
of any condition or event which constitutes an Unmatured Event of
Default or Event of Default, and if their examination has disclosed any
such condition or event, specifying the nature and period of existence
thereof (which certificate or letter may contain such statements as are
customarily included in similar certifications of independent
25
accountants in conformity with the recommendations and requirements of
the American Institute of Certified Public Accountants (or any
successor organization));
(b) Quarterly Financial Statements. As soon as available and in any
event within forty-five (45) days after the close of each of the first three (3)
quarterly accounting periods in each fiscal year of U.S. Borrower, the unaudited
condensed Consolidated and consolidating balance sheets of U.S. Borrower and its
Subsidiaries as at the end of such quarterly period and the related unaudited
condensed Consolidated and consolidating statements of income and of cash flows
for such quarterly period, and setting forth, in the case of such unaudited
Consolidated statements of income and of cash flows, comparative figures for the
related periods in the prior fiscal year, and which Consolidated financial
statements shall be certified on behalf of U.S. Borrower by a Financial Officer
of U.S. Borrower, subject to changes resulting from normal year-end audit
adjustments.
(c) Officer's Compliance Certificates. At the time of the delivery of
the financial statements provided for in Sections 5.3(a) and (b) above, a
Compliance Certificate on behalf of U.S. Borrower signed by a Financial Officer
of U.S. Borrower to the effect that, to the best knowledge of U.S. Borrower, no
Unmatured Event of Default or Event of Default exists or, if any Unmatured Event
of Default or Event of Default does exist, specifying the nature and extent
thereof.
(d) Monthly Financial Statements. As soon as available and in any event
within thirty (30) days after the close of each month during each fiscal year of
U.S. Borrower, the unaudited Consolidated and consolidating balance sheets of
U.S. Borrower and its Subsidiaries as at the end of such month and the related
unaudited Consolidated and consolidating statements of income and of cash flows
for such month, and setting forth comparative figures for prior periods, in the
form customarily prepared by U.S. Borrower for internal review by senior
management.
(e) Budget. Not later than ninety (90) days after the commencement of
each fiscal year of U.S. Borrower and its Subsidiaries, a Consolidated budget in
reasonable detail as requested by Agent or the Required Banks, setting forth,
with appropriate discussion, the forecasted balance sheet, income statement,
operating cash flows and capital expenditures of U.S. Borrower and its
Subsidiaries for the period covered thereby, and the principal assumptions upon
which forecasts and budget are based.
(f) SEC Reports and Registration Statements. Promptly upon transmission
thereof or other filing with the SEC, copies of all registration statements
(other than the exhibits thereto and any registration statement on Form S-8 or
its equivalent) and annual, quarterly or current reports that U.S. Borrower or
any of its Subsidiaries files with the SEC.
(g) Auditors' Internal Control Comment Letters, etc. Promptly upon
receipt thereof, a copy of each letter or memorandum commenting on internal
accounting controls, which is submitted to U.S. Borrower or any Subsidiary by
its independent accountants in connection with any annual or interim audit made
by them of the books of U.S. Borrower or any Subsidiary.
(h) Notice of Default, Litigation or Certain Matters Involving Major
Customers or Suppliers. Promptly, and in any event within three (3) Business
Days, in the case of clause (i)
26
below, or five (5) Business Days, in the case of clause (ii) or (iii) below,
after a U.S. Borrower or any Subsidiary obtains knowledge thereof, notice of:
(i) the occurrence of any event that constitutes an Unmatured
Event of Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action U.S.
Borrower proposes to take with respect thereto,
(ii) any litigation or governmental or regulatory proceeding
pending against U.S. Borrower or any of its Subsidiaries which is
likely to have a Material Adverse Effect or a Material Adverse Effect
on the ability of U.S. Borrower to perform its obligations hereunder or
under any other Loan Document, and
(iii) any significant adverse change (in a Borrower's
reasonable judgment) in a Borrower's or any Subsidiary's relationship
with, or any significant event or circumstance which is in such
Borrower's reasonable judgment likely to significantly and adversely
affect such Borrower's or any Subsidiary's relationship with, any
customer (or related group of customers) representing more than 10% of
such U.S. Borrower's or Subsidiary's consolidated revenues during its
most recent fiscal year (provided the same is not nominal or deminimis
considering the Companies taken as a whole), or (B) any supplier that
is significant to a Borrower and its Subsidiaries taken as a whole.
(i) Other Information. Within ten (10) days of Agent's or any Bank's
written request, such other information about the financial condition,
properties and operations of any Company as Agent or such Bank may from time to
time reasonably request, which information shall be submitted in form and detail
satisfactory to Agent or such Bank and certified by a Financial Officer of the
Company or Companies in question.
(j) U.S. Borrower's Certificate. As frequently as Agent may request,
but no less frequently than monthly, a U.S. Borrower's Certificate prepared by a
Financial Officer of U.S. Borrower.
(k) Accounts Aging and Inventory Report. Within twenty (20) days after
the end of each month, an accounts aging report and an inventory report of each
Company, in form and substance satisfactory to Agent and the Required Banks.
(l) Assignment of Sales. A weekly delivery of U.S. Borrower's
assignment of sales.
(m) Purchase Orders. At such intervals as Agent may require, copies of
buyer purchase orders in connection with export-related sales of U.S. Borrower
or a summary list of such purchase orders.
(n) Tax Statements. Copies of U.S. Borrower's and each Guarantor of
Payment's federal tax returns promptly, but in all events within thirty (30)
days, after the filing thereof with the Internal Revenue Service or similar
foreign taxing authority, if applicable, together with any amendments thereto or
extensions thereof.
SECTION 5.4. FINANCIAL RECORDS. Each Company shall at all
times maintain true and complete records and books of account including, without
limiting the
27
generality of the foregoing, appropriate accruals for possible losses and
liabilities and at all reasonable times (during normal business hours and upon
notice to such Company) permit Agent or any of the Banks to examine such
Company's books and records and to make excerpts therefrom and transcripts
thereof.
SECTION 5.5. FRANCHISES. Each Company shall preserve and
maintain at all times its existence, rights and franchises.
SECTION 5.6. ERISA COMPLIANCE. Neither U.S. Borrower nor any
U.S. Guarantor shall incur any material accumulated funding deficiency within
the meaning of ERISA, or any material liability to the PBGC, established
thereunder in connection with any Plan. U.S. Borrower shall furnish to the Banks
(a) as soon as possible and in any event within thirty (30) days after any
Company knows or has reason to know that, as applicable, any Reportable Event or
other violation or event requiring notice under applicable statutes or
regulations with respect to any Plan has occurred, a statement of the Financial
Officer of such Company, setting forth details as to such Reportable Event or
other violation or event requiring notice under applicable statutes or
regulations and the action that such Company proposes to take with respect
thereto, together with a copy of any notice given to the PBCG or other governing
authority, if a copy of such notice is available to such Company, and (b)
promptly after receipt thereof, a copy of any notice such Company, or any member
of the Controlled Group, as applicable, may receive from, as applicable, the
PBGC, the Internal Revenue Service or other governing authority with respect to
any Plan administered by such Company; provided, that this latter clause shall
not apply to notices of general application promulgated by the PBGC, the
Internal Revenue Service or other governing authority. U.S. Borrower shall
promptly notify the Banks of any material taxes assessed, proposed to be
assessed or which U.S. Borrower have reason to believe may be assessed against a
Company by the Internal Revenue Service or other governing authority with
respect to any Plan. As used in this Section "material" means the measure of a
matter of significance which shall be determined as being an amount equal to
five percent (5%) of the Consolidated Net Worth (as hereinafter defined) of the
Companies. As soon as practicable, and in any event within twenty (20) days,
after any Company becomes aware that, as applicable, an ERISA Event or event
which may cause a material liability to a Company has occurred, such Company
shall provide Agent and the Banks with notice of such ERISA Event or such other
event with a certificate by a Financial Officer of such Company setting forth
the details of the event and the action such Company or another Controlled Group
member proposes to take with respect thereto. U.S. Borrower shall, at the
request of Agent or any Bank, deliver or cause to be delivered to Agent or such
Bank, as the case may be, true and correct copies of any documents relating to
the Plan of any Company. As used herein, "Consolidated Net Worth" shall mean, at
any date, the Consolidated stockholders' equity of the Companies, determined as
of such date in accordance with GAAP.
SECTION 5.7. FIXED CHARGE COVERAGE RATIO. U.S. Borrower shall
maintain a Fixed Charge Coverage Ratio, based upon the Consolidated financial
statements of U.S. Borrower for the most recently completed four (4) fiscal
quarters (except as otherwise specified in (i), (ii) and (iii) hereof), to be:
(i) for the six (6) months ending September 30, 2002, not less than 1.00 to
1.00; (ii) for the nine (9) months ending December 31, 2002, not less than 1.00
to 1.00; and for each period ending March 31, 2003 (on a rolling four quarters
basis) and thereafter, not less than 1.00 or 1.00.
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SECTION 5.8. BORROWING. No Company shall, without the prior
written consent of Agent and the Required Banks, create, incur or have
outstanding any obligation for borrowed money or any Indebtedness of any kind;
provided, that this Section shall not apply to:
(a) the Loans and any other Indebtedness incurred to Agent or the Banks
pursuant to this Agreement and the Primary Credit Agreement;
(b) One Million Dollars ($1,000,000) of borrowings in the aggregate for
U.S. Borrower and U.S. Guarantors;
(c) any loans or capital leases to a Company for the purchase or lease
of assets, which loans or leases are secured by the assets being purchased or
leased, so long as the aggregate principal amount of all such loans or leases
does not exceed Eight Million Dollars ($8,000,000);
(d) the Indebtedness set forth in the Disclosure Statement;
(e) the Indebtedness incurred pursuant to the Indenture, so long as
there is no increase therein after the Original Closing Date;
(f) (i) loans, advances and guarantees to a Company from a Company so
long as each Company receiving such loans, advances or guarantees is a U.S.
Borrower or Guarantor of Payment or (ii) loans, advances and guarantees by a
Subsidiary which is not a U.S. Borrower or a Guarantor of Payment to a Wholly
Owned Subsidiary of the U.S. Borrower;
(g) Indebtedness under any Hedge Agreement; or
(h) Indebtedness of Foreign Subsidiaries (other than United Kingdom or
Canadian Subsidiaries, Ruud Australia LLC, Advanced Lighting Technologies,
Australia Inc. or Venture Lighting-India) in an aggregate amount at any time
outstanding, for all of the foregoing Subsidiaries, not in excess of One Million
Dollars ($1,000,000).
(i) Indebtedness incurred by DSI in an aggregate amount not to exceed
$11,000,000 in connection with the acquisition of property located in
California.
(j) Indebtedness in the form of leases or other long-term obligations,
provided that the outstanding principal balance of the Term Loan is concurrently
reduced by the amount of such Indebtedness.
SECTION 5.9. LIENS. No Company shall, without the prior
written consent of Agent and the Required Banks, create, assume or suffer to
exist any Lien upon any of its property or assets, whether now owned or
hereafter acquired; provided that this Section shall not apply to the following:
(a) Liens for taxes not yet due or that are being actively contested in
good faith by appropriate proceedings and for which adequate accruals have been
established in accordance with GAAP;
29
(b) other statutory Liens incidental to the conduct of its business or
the ownership of its property and assets that (i) were not incurred in
connection with the borrowing of money or the obtaining of advances or credit,
and (ii) do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of its
business;
(c) Liens on property or assets of a Subsidiary to secure obligations
of such Subsidiary to a Borrower or a Guarantor of Payment;
(d) the Liens set forth on the Disclosure Statement;
(e) Liens on fixed assets securing the loans or capital leases pursuant
to Section 5.7 (c) or (d) hereof, provided that such Lien only attaches to the
property being acquired or leased;
(f) any mortgage, security interest or Lien securing only Indebtedness
incurred to Agent, for the benefit of the Banks;
(g) easements, rights-of-way or other minor defects or irregularities
in title to real property owned by a Company not interfering in any material
respect with the use of such property in the business of any Company;
(h) Liens ratably securing Indenture obligations approved by the
Required Banks, in their sole discretion;
(i) Liens securing Indebtedness permitted by Sections 5.8(b), (h) and
(i) hereof; or
(j) Liens arising out of title retention provisions in a supplier's
standard conditions for supply of goods required in the order of the usual
course of trading.
No Company shall enter into any contract or agreement (other than the Indenture
and as set forth on the Disclosure Statement) that would prohibit Agent or the
Banks from acquiring a security interest, mortgage or other Lien on, or a
collateral assignment of, any of the property or assets of a Company.
SECTION 5.10. REGULATIONS U AND X. To the extent applicable,
no Company shall take any action that would result in any non-compliance of the
EXIM Loans with Regulations U and X of the Board of Governors of the Federal
Reserve System.
SECTION 5.11. INVESTMENTS AND EXIM LOANS. No Company shall,
without the prior written consent of Agent and the Required Banks, (a) create,
acquire or hold any Subsidiary, (b) make or hold any investment in any stocks,
bonds or securities of any kind, (c) be or become a party to any joint venture
or other partnership, (d) make or keep outstanding any advance or loan to any
Person, or (e) be or become a Guarantor of any kind, except guarantees securing
only Indebtedness of the Companies incurred or permitted pursuant to this
Agreement; provided, that this Section shall not apply to:
(i) any endorsement of a check or other medium of payment for deposit
or collection through normal banking channels or similar transaction in the
normal course of business;
30
(ii) any investment in direct obligations of the United States of
America or in certificates of deposit issued by a member bank of the Federal
Reserve System;
(iii) any investment in commercial paper or securities which at the
time of such investment is assigned the highest quality rating in accordance
with the rating systems employed by either ▇▇▇▇▇'▇ or Standard & Poor's;
(iv) investments, loans or guarantees listed on the Disclosure
Statement and the holding of Subsidiaries listed on the Disclosure Statement;
(v) (i) loans, investments, advances and guarantees to a Company from a
Company so long as each Company receiving such loans, investments, advances or
guarantees is a U.S. Borrower or Guarantor of Payment or (ii) loans, advances or
guarantees by a Subsidiary which is not a U.S. Borrower or a Guarantor of
Payment to a Wholly Owned Subsidiary of Borrower or investments by such a
Subsidiary in any Wholly Owned Subsidiary of U.S. Borrower.
(vi) any guaranty of the Indebtedness permitted pursuant to Section 5.8
hereof;
(vii) any advance or loan to an officer or employee of a U.S. Borrower
or a Subsidiary made in the ordinary course of such Company's business, so long
as all such advances and loans from all Companies aggregate not more than the
maximum principal sum of Four Million Dollars ($4,000,000) at any time
outstanding (excluding the loan to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ referred to in (viii)
below);
(viii) the loan from U.S. Borrower to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, outstanding on
the Closing Date in the principal amount as of June 30,2002, of $12,789,350;
(ix) other guarantees not exceeding Two Million Dollars ($2,000,000) in
the aggregate for all Companies at any time; provided that, immediately after
giving effect thereto, the Total Unused Credit Availability shall be at least
Ten Million Dollars ($10,000,000) thereafter;
(x) Permitted Investments; or
(xi) certain promissory notes in the aggregate principal amount not to
exceed Six Million Dollars ($6,000,000) issued by Ruud Lighting, Inc. and the
shareholders thereof in favor of U.S. Borrower.
SECTION 5.12. MERGER AND SALE OF ASSETS. No Company, without
the prior written consent of Agent and the Required Banks, shall merge,
amalgamate or consolidate with any other Person, or sell, lease or transfer or
otherwise dispose of any assets to any Person other than in the ordinary course
of business, except that this Section 5.12 shall not prohibit transactions
permitted under Section 5.11(v) and that if no Unmatured Event of Default or
Event of Default shall then exist or immediately thereafter shall begin to
exist:
(a) any Subsidiary (other than Borrower) may merge with (i) a Borrower
(provided that such Borrower shall be the continuing or surviving Person) or
(ii) any one or more Guarantors of Payment, provided that either (A) the
continuing or surviving Person shall be a Wholly-Owned Subsidiary that is a
Guarantor of Payment, or (B) after giving effect to any merger pursuant to
31
this sub-clause (ii), a Borrower and/or one or more Wholly-Owned Subsidiaries
that are Guarantors of Payment shall own not less than the same percentage of
the outstanding Voting Stock (or voting power of all outstanding Voting Stock)
of the continuing or surviving Person as such Borrower and/or one or more
Wholly-Owned Subsidiaries (which are Guarantors of Payment) owned of the merged
Subsidiary immediately prior to such merger;
(b) any Subsidiary (other than a Borrower) may sell, lease, transfer or
otherwise dispose of any of its assets to (i) a Borrower, (ii) any Wholly-Owned
Subsidiary that is a Guarantor of Payment, or (iii) any Guarantor of Payment, of
which a Borrower and/or one or more Wholly-Owned Subsidiaries, that are
Guarantors of Payment, shall own not less than the same percentage of Voting
Stock (or voting power of all outstanding Voting Stock) as a Borrower and/or one
or more Wholly-Owned Subsidiaries (which are Guarantors of Payment) then own of
the Subsidiary making such sale, lease, transfer or other disposition;
(c) any Company may effect a Permitted Disposition; and
(d) any Canadian Borrower may merge with another Canadian Borrower or
any UK Borrower may merge with another UK Borrower.
SECTION 5.13. ACQUISITIONS. After the Original Closing Date,
no U.S. Borrower or Subsidiary shall effect any Acquisition other than a
Permitted Acquisition or Permitted Investment; provided, however, that no
Permitted Acquisition or Permitted Investment shall be permitted unless, at the
time of, and after giving effect to, such Permitted Acquisition, the Total
Unused Credit Availability is at least $10,000,000.
SECTION 5.14. NOTICE. U.S. Borrower shall cause a Financial
Officer to promptly notify Agent and the Banks whenever any Unmatured Event of
Default or Event of Default may occur hereunder or any representation or
warranty made in Article VI hereof or elsewhere in this Agreement or in any
Related Writing may for any reason cease in any material respect to be true and
complete.
SECTION 5.15. ENVIRONMENTAL COMPLIANCE. Each Company shall
comply in all respects with any and all Environmental Laws applicable to it
including, without limitation, all Environmental Laws in jurisdictions in which
any Company owns or operates a facility or site, arranges for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts for
transport any hazardous substances, solid waste or other wastes or holds any
interest in real property or otherwise, except to the extent non-compliance will
not result in a Material Adverse Effect. Borrowers shall furnish to the Banks,
promptly after receipt thereof, a copy of any notice any Company may receive
from any governmental authority or private Person or otherwise that any material
litigation or proceeding pertaining to any environmental, health or safety
matter has been filed or is threatened against such Company, any real property
in which such Company holds any interest or any past or present operation of
such Company. No Company shall allow the release or disposal of hazardous waste,
solid waste or other wastes on, under or to any real property in which any
Company holds any interest or performs any of its operations, in violation of
any Environmental Law applicable to it to the extent the same may result in a
Material Adverse Effect. As used in this Section, "litigation or proceeding"
means any demand, claim, notice, suit, suit in equity action,
32
administrative action, investigation or inquiry whether brought by any
governmental authority or private Person or otherwise. Borrowers shall defend,
indemnify and hold Agent and the Banks harmless against all costs, expenses,
claims, damages, penalties and liabilities of every kind or nature whatsoever
(including attorneys fees) arising out of or resulting from the noncompliance of
any Company with any Environmental Law applicable to it.
SECTION 5.16. AFFILIATE TRANSACTIONS. No Company shall, or
shall permit any Subsidiary to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any Affiliate
of a Company on terms that are less favorable to such Company or such
Subsidiary, as the case may be, than those that might be obtained at the time in
a transaction with a non-Affiliate; provided, however, that the foregoing shall
not prohibit (a) the payment of customary and reasonable directors' fees to
directors who are not employees of a Company or any Affiliate of a Company, or
(b) any transaction between a Borrower or a U.S. Guarantor and an Affiliate (if
a Borrower or Guarantor of Payment) which such Borrower reasonably determines in
good faith is beneficial to such Borrower and its Affiliates as a whole and
which is not entered into for the purpose of hindering the exercise by Agent or
the Banks of their rights or remedies under this Agreement.
SECTION 5.17. USE OF PROCEEDS. U.S. Borrower's use of the
proceeds of the EXIM Loans shall be for working capital of U.S. Borrower and
their Subsidiaries, including to acquire inventory, finance receivables and
satisfy direct and indirect costs. All export sales supported by the EXIM Loans
made available under this Agreement must have U.S. content of more than 50% and
represent an export from the United States.
SECTION 5.18. CORPORATE NAMES. No Borrower or Guarantor of
Payment shall change its corporate name, unless, in each case, such Company
shall provide Agent with at least thirty (30) days prior written notice thereof.
SECTION 5.19. AMENDMENT OF ORGANIZATIONAL DOCUMENTS. No U.S.
Borrower or Guarantor of Payment shall amend its Articles of Incorporation, or
charter or constitutional or equivalent documents without the prior written
consent of Agent.
SECTION 5.20. CAPITAL DISTRIBUTIONS. U.S. Borrower shall not
pay or commit itself to pay Capital Distributions at any time.
SECTION 5.21. INDENTURE PAYMENTS.
U.S. Borrower shall not make any prepayment, redemption, defeasance
or covenant defeasance of any kind with respect to the Indebtedness evidence by
the Indenture; PROVIDED, HOWEVER, that so long as there does not exist, nor
immediately thereafter shall begin to exist, an Unmatured Event of Default or an
Event of Default, U.S. Borrower may make payments of interest required by the
terms and conditions of the Indenture.
SECTION 5.22. SUBSIDIARIES CREATED, ACQUIRED OR HELD
SUBSEQUENT TO ORIGINAL CLOSING DATE.
33
(a) Subject to Section 5.22(b) hereof, each Subsidiary created,
acquired or held subsequent to the Original Closing Date (i) shall immediately
execute and deliver to Agent for the benefit of the Banks a Guaranty of Payment
and such Security Documents as Agent shall require and shall deliver to Agent
and the Banks such corporate governance and authorization documents and an
opinion of counsel as may be deemed necessary or advisable by Agent; provided,
however, that no Foreign Subsidiary shall be required to execute or deliver any
Guaranty of Payment or Security Document so long as the execution thereof will
cause or result in an adverse tax consequence to any Company; and (ii) U.S.
Borrower or the appropriate Borrower or Guarantor of Payment shall deliver to
Agent, for the benefit of the Banks, the share certificates, or other evidence
of equity interest, of such Subsidiary pursuant to the terms of the Pledge
Agreement executed by such Borrower or such Guarantor of Payment; provided
however, that no Company shall be required to pledge more than sixty-five (65%)
of the outstanding shares of stock or other equity interest of any Foreign
Subsidiary as security for the obligations of U.S. Borrower or the U.S.
Guarantors under this Agreement so long as the pledge thereof will cause or
result in an adverse tax consequence to any Company.
(b) Notwithstanding anything in subsection (a) hereof to the contrary,
a Subsidiary shall not be required to comply with the requirements of such
subsection so long as (i) the total assets of such Subsidiary are less than the
amount of One Hundred Thousand Dollars ($100,000), and (ii) the aggregate of the
total assets of all such Subsidiaries with total asset values of less than One
Hundred Thousand Dollars ($100,000) does not exceed the aggregate amount of Two
Hundred Fifty Thousand Dollars ($250,000); provided, that in the event that the
total assets of any Subsidiary which has not complied with the requirements of
subsection (a) above are at any time equal to or greater than One Hundred
Thousand Dollars ($100,000), Borrowers shall provide Agent and the Banks with
prompt written notice of such asset value.
SECTION 5.23. INSPECTIONS. At all reasonable times and upon
reasonable notice Agent and each Bank shall have access to and the right to
audit, check, inspect and make abstracts and copies from U.S. Borrower's books,
records, audits, correspondence and all other papers relating to collateral
securing U.S. Borrower's obligations hereunder and under the EXIM Note and the
operation of U.S. Borrower's business. Agent, any Bank and their agents may
enter upon Borrower's premises, wherever located, at any time during business
hours and at any other reasonable time, and from time to time, for the purpose
of inspecting such collateral and any and all records pertaining thereto and the
operation of U.S. Borrower's business. Without limiting the foregoing, Agent and
each Bank shall have the right to conduct any such inspection on no less than a
semiannual basis.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
U.S. Borrower represents and warrants that the statements set forth in
this Article VI are true, correct and complete.
SECTION 6.1. CORPORATE EXISTENCE; FOREIGN QUALIFICATION;
SUBSIDIARIES.
34
(a) U.S. Borrower is an entity duly organized, validly existing and in
good standing under the laws of its state or other jurisdiction of organization
and is duly qualified and authorized to do business and is in good standing as a
foreign entity in each jurisdiction where the character of its property or its
business activities makes such qualification necessary, except where the failure
to so qualify would not have a Material Adverse Effect.
(b) The Disclosure Statement sets forth (i) the state (or other
jurisdiction) of organization of each Borrower, and (ii) each state (or other
jurisdiction) in which each U.S. Borrower is qualified to do business.
(c) The Disclosure Statement sets forth (i) each Company, (ii) such
Company's state (or other jurisdiction) of organization, and (iii) the direct or
indirect ownership of U.S. Borrower in such Company.
SECTION 6.2. CORPORATE AUTHORITY. U.S. Borrower has the right
and power and is duly authorized and empowered to enter into, execute and
deliver the Loan Documents to which it is a party and to perform and observe the
provisions of the Loan Documents. The Loan Documents to which U.S. Borrower is a
party have been duly authorized and approved by U.S. Borrower's Board of
Directors (or other governing body) and are the valid and binding obligations of
such Company, enforceable against such Company in accordance with their
respective terms. The execution, delivery and performance of the Loan Documents
will not conflict with nor result in any breach in any of the provisions of, or
constitute a default under, or result in the creation of any Lien (other than
Liens permitted under Section 5.9 of this Agreement) upon any assets or property
of U.S. Borrower and Guarantor of Payment under the provisions of U.S.
Borrower's Articles of Incorporation or Bylaws (or equivalent organizational,
constitutional, as applicable to it, and governing documents) or any agreement
to which such Company is a party or by which its assets are subject or bound,
except to the extent such conflict or breach would not have a Material Adverse
Effect.
SECTION 6.3. COMPLIANCE WITH LAWS. U.S. Borrower:
(a) holds permits, certificates, licenses, orders, registrations,
franchises, authorizations, and other approvals from federal, state, provincial,
local, and foreign governmental and regulatory bodies necessary for the conduct
of its business and is in compliance with all applicable laws applicable to it
relating thereto, except to the extent the failure to do so would not have a
Material Adverse Effect;
(b) is in compliance with all federal, state, provincial, local, or
foreign applicable statutes, rules, regulations, and orders applicable to it
including, without limitation, those relating to environmental protection,
occupational safety and health, and equal employment practices, except to the
extent the failure to do so would not have a Material Adverse Effect; and
(c) is not in violation of or in default under any agreement to which
it is a party or by which its assets are subject or bound, except to the extent
such violation or default would not have a Material Adverse Effect.
SECTION 6.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. Except
as disclosed on the Disclosure Statement, as to any of which, if
35
determined adversely, would involve in excess of Two Hundred Fifty Thousand
Dollars ($250,000) individually or in the aggregate respecting the assets,
property, business, operations or condition (financial or otherwise) of any
Company, there are (a) no lawsuits, actions, investigations, or other
proceedings pending or threatened against any Company, or in respect of which
any Company may have any liability, in any court or before any governmental
authority, arbitration board, or other tribunal, (b) no orders, writs,
injunctions, judgments, or decrees of any court or government agency or
instrumentality to which any Company is a party or by which the property or
assets of any Company are bound, and (c) no grievances, disputes, or
controversies outstanding with any union or other organization of the employees
of any Company, or threats of work stoppage, strike, or pending demands for
collective bargaining.
SECTION 6.5. LOCATION. The Disclosure Statement sets forth (a)
the location of the chief executive office and the principal place of business
of U.S. Borrower, (b) each location where U.S. Borrower has places of business
or maintains inventory, equipment or records concerning such Company's accounts,
and (c) each state or other location where U.S. Borrower owns any real property.
SECTION 6.6. TITLE TO ASSETS. U.S. Borrower of Payment has
good title to and ownership of all property it purports to own, which property
is free and clear of all Liens, except those permitted under Section 5.7 hereto
or under the Primary Credit Agreement.
SECTION 6.7. LIENS AND SECURITY INTERESTS. On and after the
Original Closing Date, except for Liens permitted pursuant to Section 5.7 hereof
or under the Primary Credit Agreement, (a) there is no financing statement or
other evidence of a Lien outstanding covering any property (real or personal) of
any U.S. Borrower or Guarantor of Payment other than a financing statement in
favor of Agent, on behalf of the Banks; (b) there is no mortgage outstanding
covering any real property of any U.S. Borrower or Guarantor of Payment; and (c)
no real or personal property of any U.S. Borrower or Guarantor of Payment is
subject to any security interest or Lien of any kind other than any security
interest or Lien which may be granted to Agent, on behalf of the Banks. Except
as set forth on the Disclosure Statement, no U.S. Borrower or Guarantor of
Payment has entered into any contract or agreement which exists on or after the
Original Closing Date that would prohibit Agent or the Banks from acquiring a
security interest, mortgage or other Lien on, or a collateral assignment of, any
of the property (real or personal) or assets of any U.S. Borrower or Guarantor
of Payment.
SECTION 6.8. TAX RETURNS. All federal, state, provincial,
local and, if applicable, foreign tax returns and other reports required by law
to be filed in respect of the income, business, properties and employees of each
Company have been filed and all taxes, assessments, fees and other governmental
charges which are due and payable have been paid, except as otherwise permitted
herein or the failure to do so does not and will not cause or result in a
Material Adverse Effect. The provision for taxes on the books of each Company
(including the Consolidated and individual accruals, as the case may be) is
adequate for all years not closed by applicable statutes and for the current
fiscal year.
SECTION 6.9. ENVIRONMENTAL LAWS. Each Company is in compliance
with any and all Environmental Laws applicable to it, including, without
limitation,
36
all Environmental Laws in all jurisdictions in which any Company owns or
operates, or has owned or operated, a facility or site, arranges or has arranged
for disposal or treatment of hazardous substances, solid waste or other wastes,
accepts or has accepted for transport any hazardous substances, solid waste or
other wastes or holds or has held any interest in real property or otherwise,
except to the extent failure to comply would not have a Material Adverse Effect.
No litigation or proceeding arising under, relating to or in connection with any
Environmental Law applicable to it is pending or, to the best knowledge of each
Company, threatened, against any Company, any real property in which any Company
holds or has held an interest or any past or present operation of any Company.
No release, threatened release or disposal of hazardous waste, solid waste or
other wastes is occurring, or has occurred (other than those that are currently
being cleaned up in accordance with Environmental Laws applicable to it), on,
under or to any real property in which any Company holds any interest or
performs any of its operations, in violation of any Environmental Law applicable
to it, except to the extent the same would not have a Material Adverse Effect.
As used in this Section, "litigation or proceeding" means any demand, claim,
notice, suit, suit in equity, action, administrative action, investigation or
inquiry whether brought by any governmental authority or private Person or
otherwise.
SECTION 6.10. CONTINUED BUSINESS. There exists no actual,
pending, or, to U.S. Borrower's knowledge, any threatened termination,
cancellation or limitation of, or any modification or change in the business
relationship of any U.S. Borrower or Guarantor of Payment and any customer or
supplier, or any group of customers or suppliers, whose purchases or supplies,
individually or in the aggregate, are material to the business of any U.S.
Borrower or Guarantor of Payment, and there exists no present condition or state
of facts or circumstances which would affect any Company in any respect or
prevent a Company from conducting such business or the transactions in
substantially the same manner in which it was previously conducted, except to
the extent the same would not cause a Material Adverse Effect.
SECTION 6.11. EMPLOYEE BENEFITS PLANS.
(a) As to U.S. Borrower, the Disclosure Statement identifies each Plan. No
ERISA Event has occurred or is expected to occur with respect to a U.S. Plan.
Full payment has been made of all amounts which a Controlled Group member is
required, under applicable law or under the governing documents, to have been
paid as a contribution to or a benefit under each Plan. The liability of each
Controlled Group member with respect to each Plan has been fully funded based
upon reasonable and proper actuarial assumptions, has been fully insured, or
has been fully reserved for on its financial statements. No changes have
occurred or are expected to occur that would cause a material increase in the
cost of providing benefits under the Plan. With respect to each Plan that is
intended to be qualified under Code Section 401(a): (a) the Plan and any
associated trust operationally comply in all material respects with the
applicable requirements of Code Section 401(a), (b) the Plan and any associated
trust have been amended to comply with all such requirements as currently in
effect, other than those requirements for which a retroactive amendment can be
made within the "remedial amendment period" available under Code Section 401(b)
(as extended under Treasury Regulations and other Treasury pronouncements upon
which taxpayers may rely), (c) the Plan and any associated trust have received
a favorable determination letter or will file for and subsequently receive a
favorable determination letter, from the Internal Revenue Service stating that
the Plan qualifies under Code
37
Section 401(a), that the associated trust qualifies under Code Section
501(a) and, if applicable, that any cash or deferred arrangement under the Plan
qualifies under Code Section 401(k), unless the Plan was first adopted at a
time for which the above-described "remedial amendment period" has not yet
expired, (d) the Plan currently satisfies the requirements of Code Section
410(b), without regard to any retroactive amendment that may be made within the
above-described "remedial amendment period", and (e) no contribution made to
the Plan is subject to an excise tax under Code Section 4972. With respect to
any Pension Plan, the "accumulated benefit obligation" of Controlled Group
members with respect to the Pension Plan (as determined in accordance with
Statement of Accounting Standards No. 87, "Employers' Accounting for Pensions")
does not exceed the fair market value of Pension Plan assets. The aggregate
potential amount of liability that would result if all Controlled Group members
withdrew from all Multiemployer Plans in a "complete withdrawal" (within in the
meaning of ERISA Section 4203) would not exceed Two Hundred Fifty Thousand
Dollars ($250,000).
SECTION 6.12. CONSENTS OR APPROVALS. No consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority or any other Person is required to be obtained or
completed by any U.S. Borrower in connection with the execution, delivery or
performance of any of the Loan Documents, which has not already been obtained or
completed.
SECTION 6.13. SOLVENCY. U.S. Borrower has received
consideration which is the reasonable equivalent value of the obligations and
liabilities that U.S. Borrower has incurred to the banks. U.S. Borrower is not
insolvent as defined in any applicable state or federal statute, nor will U.S.
Borrower be rendered insolvent by the execution and delivery of the loan
documents to agent and the banks. U.S. Borrower is not engaged or about to
engage in any business or transaction for which the assets retained by it are or
will be an unreasonably small amount of capital, taking into consideration the
obligations to agent and the banks incurred hereunder. U.S. Borrower does not
intend to, nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature.
SECTION 6.14. FINANCIAL STATEMENTS. The Consolidated financial
statements of U.S. Borrower for the fiscal year ended June 30, 2001 and the
interim financial statements for the fiscal quarter ended March 31, 2002,
furnished to Agent and the Banks, are true and complete, have been prepared in
accordance with GAAP, and fairly present the financial condition of U.S.
Borrower and its Subsidiaries as of the dates of such financial statements and
the results of their operations for the periods then ended. Since the dates of
those statements, except as set forth on the Disclosure Statement, there has
been no material adverse change in any Company's financial condition, properties
or business.
SECTION 6.15. REGULATIONS. U.S. Borrower is not engaged
principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
of the United States of America). Neither the granting of any Loan (or any
conversion thereof) nor the use of the proceeds of any Loan will violate, or be
inconsistent with, the provisions of Regulation U or X of said Board of
Governors.
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SECTION 6.16. MATERIAL AGREEMENTS. Except as disclosed on
Disclosure Statement hereto, no U.S. Borrower or Guarantor of Payment is a party
to any (a) debt instrument; (b) lease (capital, operating or otherwise), whether
as lessee or lessor thereunder; (c) contract, EXIM Commitment, agreement, or
other arrangement involving the purchase or sale of any inventory by it, or the
license of any right to or by it; (d) contract, EXIM Commitment, agreement, or
other arrangement with any of its "Affiliates" (as such term is defined in the
Securities Exchange Act of 1934, as amended); (e) management or employment
contract or contract for personal services with any of its Affiliates which is
not otherwise terminable at will or on less than ninety (90) days' notice
without liability; (f) collective bargaining agreement; or (g) other contract,
agreement, understanding, or arrangement which, as to subsections (a) through
(f), above, if violated, breached, or terminated for any reason, would have or
would be reasonably expected to have a Material Adverse Effect.
SECTION 6.17. INTELLECTUAL PROPERTY. Each U.S. Borrower and
Guarantor of Payment owns, possesses, or has the right to use all of the
patents, patent applications, trademarks, service marks, copyrights, licenses,
and rights with respect to the foregoing necessary for the conduct of its
business without any known conflict with the rights of others except to the
extent the failure to have any such licenses or rights would not have a Material
Adverse Effect. The Disclosure Statement sets forth all intellectual property
owned by each U.S. Borrower and Guarantor of Payment, setting forth in detail a
description of such intellectual property and the owner thereof.
SECTION 6.18. INSURANCE. Each U.S. Borrower and Guarantor of
Payment maintains with financially sound and reputable insurers insurance with
coverage and limits as required by law and as is customary with persons engaged
in the same businesses as the Companies. The Disclosure Statement sets forth all
insurance carried by each U.S. Borrower and Guarantor of Payment, setting forth
in detail the amount and type of such insurance.
SECTION 6.19. ACCURATE AND COMPLETE STATEMENTS. Neither the
Loan Documents nor any written statement made by any Company in connection with
any of the Loan Documents contains any untrue statement of a material fact or
omits a material fact necessary to make the statements contained therein or in
the Loan Documents not misleading. After due inquiry by U.S. Borrower, there is
no known fact that any Company has not disclosed to Agent and the Banks which
has or would have a Material Adverse Effect.
SECTION 6.20. INDENTURE. (a) No Event of Default (as defined
in the Indenture) or Default (as defined in the Indenture) exists, nor will any
such Event of Default or Default exist immediately after the granting of any
Loan, under the Indenture or any agreement executed by U.S. Borrower in
connection therewith; and (b) this Agreement is the "Credit Facility" as defined
in the Indenture or is otherwise permitted under Section 4.03(a)(ix) of the
Indenture.
SECTION 6.21. NEW CREDIT FACILITY. This Agreement (a) shall
constitute a portion of the "Credit Facility" (as defined in the Indenture) and
(b) is a subfacility under the Primary Credit Agreement.
39
SECTION 6.22. DEFAULTS. No Unmatured Event of Default or Event
of Default exists hereunder, nor will any begin to exist immediately after the
execution and delivery hereof.
ARTICLE VII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
SECTION 7.1. PAYMENTS. If the principal of or interest on any
Note or any facility or other fee shall not be paid in full punctually when due
and payable.
SECTION 7.2. SPECIAL COVENANTS. If any Company (to the extent
applicable) shall (a) fail or omit to perform and observe Sections 5.1 or 5.5 to
the extent material to the Companies taken as a whole, or (b) fail or omit to
perform and observe in any respect Sections 5.6, 5.7, 5.8, 5.10, 5.11, 5.12,
5.17, 5.19, 5.20 or 5.21 hereof.
SECTION 7.3. OTHER COVENANTS. If any Company shall fail or
omit to perform and observe any agreement or other provision (other than those
referred to in Sections 7.1 or 7.2 hereof) contained or referred to in this
Agreement or any Related Writing that is on such Company's part, as the case may
be, to be complied with, and that Unmatured Event of Default shall not have been
fully corrected within twenty (20) days after the giving of written notice
thereof to U.S. Borrower or such Company by Agent or any Bank that the specified
Unmatured Event of Default is to be remedied.
SECTION 7.4. REPRESENTATIONS AND WARRANTIES. If any
representation, warranty or statement made in or pursuant to this Agreement or
any Related Writing or any other material information furnished by any Company
to the Banks or any thereof or any other holder of any Note, shall be false or
erroneous in any material respect.
SECTION 7.5. CROSS DEFAULT. If there shall be an "Event of
Default" under the Primary Credit Agreement (as "Event of Default" is defined
therein) or if any Company shall (a) default in the payment of principal or
interest due and owing upon any other obligation for borrowed money beyond any
period of grace provided with respect thereto or in the performance or
observance of any other agreement, term or condition contained in any agreement
under which such obligation is created, if the effect of such default is to
allow the acceleration of the maturity of such Indebtedness or to permit the
holder thereof to cause such Indebtedness to become due prior to its stated
maturity, or (b) otherwise be obligated to prepay, repay, redeem, defease or
otherwise offer to prepay or repay prior to the stated maturity date thereof any
such obligations including, without limitation, obligations under the Indenture
or the notes issued pursuant thereto, provided the aggregate of all such
obligations under (a) and (b) above for all Companies equals or exceeds Two
Hundred Fifty Thousand Dollars ($250,000).
SECTION 7.6. ERISA DEFAULT. The occurrence of one or more
ERISA Events which (a) the Required Banks determine could have a Material
Adverse Effect, or (b) results in a Lien on any of the assets of U.S. Borrower
or any U.S. Guarantor.
40
SECTION 7.7. CHANGE IN CONTROL. If any Change in Control shall
occur.
SECTION 7.8. MONEY JUDGMENT. A final judgment or order for the
payment of money shall be rendered against any Company by a court of competent
jurisdiction, which remains unpaid or unstayed and undischarged for a period
(during which execution shall not be effectively stayed) of thirty (30) days
after the date on which the right to appeal has expired, provided that the
aggregate of all such judgments, for all such Companies, shall exceed Two
Hundred Fifty Thousand Dollars ($250,000).
SECTION 7.9. MATERIAL ADVERSE CHANGE. (a) The forced
liquidation value of the collateral for the Debt, considered as an entirety,
shall in the reasonable written opinion of Agent or the Required Banks delivered
to U.S. Borrower substantially decline or (b) any other objective event or
circumstance shall occur or exist after the Original Closing Date which, in the
reasonable opinion of Agent or the Required Banks, (i) casts reasonable and
substantial doubt upon any Borrower's ability to (A) repay all or any part of
the Debt in accordance with its terms or (B) refinance the Debt, or (ii) has
resulted in a Material Adverse Effect based upon (A) the most recent financial
statements delivered pursuant to Section 5.3 hereof or (B) any other objective
and verifiable event or circumstance.
SECTION 7.10. VALIDITY OF LOAN DOCUMENTS. (a) Any material
provision, in the sole opinion of Agent, of any Loan Document shall at any time
for any reason cease to be valid, binding and enforceable against U.S. Borrower;
(b) the validity, binding effect or enforceability of any Loan Document against
U.S. Borrower or Guarantor of Payment shall be contested by any Company or any
other Obligor; (c) U.S. Borrower or Guarantor of Payment shall deny that it has
any or further liability or obligation thereunder; or (d) any Loan Document
shall be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to Agent and the Banks the
benefits purported to be created thereby.
SECTION 7.11. INDENTURE. If (a) an Event of Default (as
defined in the Indenture) or Default (as defined in the Indenture) shall occur
under the Indenture or any agreement executed by U.S. Borrower in connection
therewith; or (b) this Agreement shall cease to be deemed the "Credit Facility"
as defined in the Indenture or the facilities hereunder not be permitted under
Section 4.03(a)(ix) of the Indenture.
SECTION 7.12. SOLVENCY. If any Company shall (a) discontinue
business, (b) generally not pay its debts as such debts become due, (c) make a
general assignment for the benefit of creditors, (d) apply for or consent to the
appointment of a receiver, a custodian, a trustee, an interim trustee or
liquidator of all or a substantial part of its assets, (e) be adjudicated a
debtor or have entered against it an order for relief under Title 11 of the
United States Code, as the same may be amended from time to time, or other
applicable statute for jurisdictions outside of the United States, as the case
may be, (f) file a voluntary petition in bankruptcy or file a petition or an
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage of any other law (whether federal, state or, if applicable, other
jurisdiction) relating to relief of debtors, or admit (by answer, by default or
otherwise) the material allegations of a petition filed against it in any
bankruptcy, reorganization, insolvency or other proceeding (whether federal,
state or, if applicable, other jurisdiction) relating to relief of
41
debtors, (g) suffer or permit to continue unstayed and in effect for
thirty (30) consecutive days any judgment, decree or order entered by a
court of competent jurisdiction, which approves a petition seeking its
reorganization or appoints a receiver, custodian, trustee, interim trustee or
liquidator of all or a substantial part of its assets, or (h) take, or omit to
take, any action in order thereby to effect any of the foregoing.
ARTICLE VIII. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or
elsewhere,
SECTION 8.1. OPTIONAL DEFAULTS. If any Event of Default
referred to in Section 7.1, 7.2., 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10 or
7.11 hereof shall occur, the Required Banks shall have the right, in their
discretion, by directing Agent, on behalf of the Banks, to give written notice
to U.S. Borrower, to:
(a) terminate the EXIM Commitment and the credits hereby established,
if not previously terminated, and, immediately upon such election, the
obligations of Banks, and each thereof, to make any further Loan hereunder
immediately shall be terminated, and/or
(b) accelerate the maturity of all of the Debt (if the Debt is not
already due and payable), whereupon all of the Debt shall become and thereafter
be immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby waived
by U.S. Borrower.
SECTION 8.2. AUTOMATIC DEFAULTS. If any Event of Default
referred to in Section 7.12 hereof shall occur:
(a) all of the EXIM Commitment and the credits hereby established shall
automatically and immediately terminate, if not previously terminated, and no
Bank thereafter shall be under any obligation to grant any further Loan,
hereunder, and
(b) the principal of and interest then outstanding on all Notes, and
all of the Debt shall thereupon become and thereafter be immediately due and
payable in full (if the Debt is not already due and payable), all without any
presentment, demand or notice of any kind, which are hereby waived by U.S.
Borrower.
SECTION 8.3. OFFSETS. If there shall occur or exist any Event
of Default referred to in Section 7.12 hereof or if the maturity of the Notes is
accelerated pursuant to Section 8.1 or 8.2 hereof, each Bank shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Debt then owing by U.S. Borrower to that Bank
(including, without limitation, any participation purchased or to be purchased
pursuant to Section 8.4 hereof), whether or not the same shall then have
matured, any and all deposit balances and all other indebtedness then held or
owing by that Bank to or for the credit or account of U.S. Borrower, all without
notice to or demand upon U.S. Borrower or any other Person, all such notices and
demands being hereby expressly waived by U.S. Borrower.
42
SECTION 8.4. EQUALIZATION PROVISION.
(a) Each Bank agrees with the other Banks that if it, at any time,
shall obtain any Advantage over the other Banks, or any thereof, in respect of
the Debt, it shall purchase from such other Banks, for cash and at par, such
additional participation in the Debt as shall be necessary to nullify the
Advantage.
(b) Each Bank further agrees with the other Banks that if it any time
shall receive any payment for or on behalf of U.S. Borrower or any Indebtedness
owing by U.S. Borrower to that Bank by reason of offset of any deposit or other
Indebtedness, it will apply such payment first to any and all Indebtedness owing
by U.S. Borrower to that Bank pursuant to this Agreement (including, without
limitation, any participation purchased or to be purchased pursuant to this
Section or any other Section of this Agreement). U.S. Borrower agrees that any
Bank so purchasing a participation from the other Banks or any thereof pursuant
to this Section may exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank was a
direct creditor of U.S. Borrower in the amount of such participation.
ARTICLE IX. THE AGENT
The Banks authorize PNC Bank, National Association and PNC Bank,
National Association hereby agrees to act as agent for the Banks in respect of
this Agreement upon the terms and conditions set forth elsewhere in this
Agreement, and upon the following terms and conditions:
SECTION 9.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably appoints and authorizes Agent to take such action, as agent on its
behalf and to exercise such powers hereunder as are delegated to Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
Neither Agent nor any of its directors, officers, attorneys or employees shall
be liable for any action taken or omitted to be taken by it or them hereunder or
in connection herewith, except for its or their own gross negligence or willful
misconduct.
SECTION 9.2. NOTE HOLDERS. Agent may treat the payee of any
Note as the holder thereof until written notice of transfer shall have been
filed with it, signed by such payee and in form satisfactory to Agent.
SECTION 9.3. CONSULTATION WITH COUNSEL. Agent may consult with
legal counsel selected by it and shall not be liable for any action taken or
suffered in good faith by it in accordance with the opinion of such counsel.
SECTION 9.4. DOCUMENTS. Agent shall not be under any duty to
examine into or pass upon the validity, effectiveness, genuineness or value of
any Loan Documents or any other Related Writing furnished pursuant hereto or in
connection herewith or the value of any collateral obtained hereunder, and Agent
shall be entitled to assume that the same are valid, effective and genuine and
what they purport to be.
43
SECTION 9.5. AGENT AND AFFILIATES. With respect to the EXIM
Loans, Agent shall have the same rights and powers hereunder as any other Bank
and may exercise the same as though it were not Agent, and Agent and its
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Company or any affiliate thereof.
SECTION 9.6. KNOWLEDGE OF DEFAULT. It is expressly understood
and agreed that Agent shall be entitled to assume that no Unmatured Event of
Default or Event of Default has occurred and is continuing, unless Agent has
been notified by a Bank in writing that such Bank believes that an Unmatured
Event of Default or Event of Default has occurred and is continuing and
specifying the nature thereof.
SECTION 9.7. ACTION BY AGENT. So long as Agent shall be
entitled, pursuant to Section 9.6 hereof, to assume that no Unmatured Event of
Default or Event of Default shall have occurred and be continuing, Agent shall
be entitled to use its discretion with respect to exercising or refraining from
exercising any rights which may be vested in it by, or with respect to taking or
refraining from taking any action or actions which it may be able to take under
or in respect of, this Agreement. Agent shall incur no liability under or in
respect of this Agreement by acting upon any notice, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties, or with respect to anything which it may
do or refrain from doing in the reasonable exercise of its judgment, or which
may seem to it to be necessary or desirable in the premises.
SECTION 9.8. NOTICES, DEFAULT, ETC. In the event that Agent
shall have acquired actual knowledge of any Unmatured Event of Default or Event
of Default, Agent shall promptly notify the Banks and shall take such action and
assert such rights under this Agreement as the Required Banks shall direct and
Agent shall inform the other Banks in writing of the action taken. Agent may
take such action and assert such rights as it deems to be advisable, in its
discretion, for the protection of the interests of the holders of the Notes.
SECTION 9.9. INDEMNIFICATION OF AGENT. The Banks agree to
indemnify Agent (to the extent not reimbursed by U.S. Borrower), ratably
according to their respective Applicable Commitment Percentages from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Agent in its
capacity as agent in any way relating to or arising out of this Agreement or any
Loan Document or any action taken or omitted by Agent with respect to this
Agreement or any Loan Document, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorney fees) or disbursements
resulting from Agent's gross negligence, willful misconduct or from any action
taken or omitted by Agent in any capacity other than as agent under this
Agreement.
SECTION 9.10. SUCCESSOR AGENT. Agent may resign as agent
hereunder by giving not fewer than thirty (30) days' prior written notice to
U.S. Borrower and the Banks. If Agent shall resign under this Agreement, then
either (a) the Required Banks shall appoint from among the Banks a successor
agent for the Banks (with the consent of U.S.
44
Borrower so long as an Event of Default has not occurred and which consent shall
not be unreasonably withheld), or (b) if a successor agent shall not be so
appointed and approved within the thirty (30) day period following Agent's
notice to the Banks of its resignation, then Agent shall appoint a successor
agent who shall serve as agent until such time as the Required Banks appoint a
successor agent. Upon its appointment, such successor agent shall succeed to the
rights, powers and duties as agent, and the term "Agent" shall mean such
successor effective upon its appointment, and the former agent's rights, powers
and duties as agent shall be terminated without any other or further act or deed
on the part of such former agent or any of the parties to this Agreement.
ARTICLE X. MISCELLANEOUS
SECTION 10.1. BANKS' INDEPENDENT INVESTIGATION. Each Bank, by
its signature to this Agreement, acknowledges and agrees that Agent has made no
representation or warranty, express or implied, with respect to the
creditworthiness, financial condition, or any other condition of any Company or
with respect to the statements contained in any information memorandum furnished
in connection herewith or in any other oral or written communication between
Agent and such Bank. Each Bank represents that it has made and shall continue to
make its own independent investigation of the creditworthiness, financial
condition and affairs of the Companies in connection with the extension of
credit hereunder, and agrees that Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto (other than such notices as may be expressly
required to be given by Agent to the Banks hereunder), whether coming into its
possession before the granting of the first EXIM Loans hereunder or at any time
or times thereafter.
SECTION 10.2. NO WAIVER; CUMULATIVE REMEDIES. No omission or
course of dealing on the part of Agent, any Bank or the holder of any Note in
exercising any right, power or remedy hereunder or under any of the Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder
or under any of the Loan Documents. The remedies herein provided are cumulative
and in addition to any other rights, powers or privileges held by operation of
law, by contract or otherwise.
SECTION 10.3. AMENDMENTS, CONSENTS.
(a) No amendment, modification, termination, or waiver of any provision
of any Loan Document nor consent to any variance therefrom, shall be effective
unless the same shall be in writing and signed by the Required Banks and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. Anything herein to the contrary
notwithstanding, in the event of such an amendment, modification, termination or
waiver of any provision of any Loan Document or consent to any variance
therefrom, the effect of which is included in any of items (i) through (vi)
below, unanimous consent of the Banks shall be required to (i) increase the EXIM
Commitment hereunder, (ii) extend the maturity of the Notes, the payment date of
principal and interest thereunder, or the payment of facility or other fees or
amounts payable hereunder, (iii) reduce the rate of interest on the Notes or any
amount of
45
principal or interest due on any Note or any facility or other fees hereunder or
change the manner of pro rata application of payments made by U.S. Borrower to
the Banks hereunder, (iv) change any percentage voting requirement, voting
rights, or the definition of "Required Banks" in this Agreement, (v) release any
Guarantor of Payment or any collateral securing any part of the Debt (other than
any such release of collateral pursuant to a Permitted Disposition), or (vi)
make any amendment to this Section 10.3 or Section 8.4 hereof. Notice of
amendments or consents ratified by the Banks hereunder shall immediately be
forwarded by U.S. Borrower to all Banks. Each Bank or other holder of a Note
shall be bound by any amendment, waiver or consent obtained as authorized by
this Section, regardless of its failure to agree thereto. Any amendment to this
Agreement or any other Loan Document shall further require the consent of any
U.S. Borrower that is a party thereto. Further, no Guarantor of Payment or
collateral securing any part of the Debt shall be released other than as
permitted in (v) above without the prior written consent of EXIM Bank.
(b) In the event that Agent requests the consent of a Bank pursuant to
this Section 10.3 and such Bank shall not respond or reply to Agent in writing
within ten (10) days of delivery of such request, such Bank shall be deemed to
have consented to matter that was the subject of the request. In the event that
Agent requests the consent of a Bank pursuant to this Section 10.3 and such
consent is denied, then Agent may, at its option, require such Bank to assign
its interest in the EXIM Loans to any other Bank or Banks so designated by Agent
or to any other Person designated by Agent (the "Designated Bank"), for a price
equal to the then outstanding principal amount thereof plus accrued and unpaid
interest and fees due such Bank, which interest and fees shall be paid when
collected from U.S. Borrower. In the event Agent elects to require the Bank to
assign its interest to a Designated Bank, Agent or the Designated Bank will so
notify such Bank in writing within forty-five (45) days following such Bank's
denial, and such Bank will assign its interest to the Designated Bank no later
than five (5) days following receipt of such notice pursuant to a Commitment
Transfer Supplement executed by such Bank, the Designated Lender and Agent.
SECTION 10.4. NOTICES. All notices, requests, demands and
other communications provided for hereunder shall be in writing and, if to U.S.
Borrower, mailed or delivered to it, addressed to it at the address specified on
the signature pages of this Agreement, if to a Bank, mailed or delivered to it,
addressed to the address of such Bank specified on the signature pages of this
Agreement, or, as to each party, at such other address as shall be designated by
such party in a written notice to each of the other parties. All notices,
statements, requests, demands and other communications provided for hereunder
shall be deemed to be given or made when delivered or forty-eight (48) hours
after being deposited in the mails with postage prepaid by registered or
certified mail, addressed as aforesaid, or sent by facsimile with telephonic
confirmation of receipt.
SECTION 10.5. COSTS, EXPENSES AND TAXES. U.S. Borrower agrees
to pay on demand all costs and expenses of Agent, including but not limited to,
(a) administration, travel and out-of-pocket expenses, including but not limited
to attorneys' fees and expenses, of Agent in connection with the preparation,
negotiation and closing of the Loan Documents and the administration of the Loan
Documents, the collection and disbursement of all funds hereunder and the other
instruments and documents to be delivered hereunder, (b) extraordinary expenses
of Agent in connection with the administration of the Loan Documents
46
and the other instruments and documents to be delivered hereunder, (c) the
reasonable fees and out-of-pocket expenses of special counsel for the Banks,
with respect to the foregoing, and of local counsel, if any, who may be retained
by said special counsel with respect thereto, and (d) all costs and expenses of
Agent and the Banks, including reasonable attorneys' fees, in connection with
the restructuring or enforcement of the Debt, the Loan Documents or any Related
Writing. U.S. Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution and
delivery of the Loan Documents, and the other instruments and documents to be
delivered hereunder, and agrees to hold Agent and each Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes or fees.
SECTION 10.6. INDEMNIFICATION.
(a) U.S. Borrower agrees to defend, indemnify and hold harmless Agent
and the Banks from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
attorney fees) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent or any Bank in connection with
any investigative, administrative or judicial proceeding (whether or not such
Bank or Agent shall be designated a party thereto) or any other claim by any
Person relating to or arising out of any EXIM Loan Document or any actual or
proposed use of proceeds of the EXIM Loans or any of the Debt, or any activities
of any Company or Obligor or any of their respective affiliates; provided that
no Bank nor Agent shall have the right to be indemnified under this Section for
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction. All obligations provided for in this Section 10.6 shall
survive any termination of this Agreement.
SECTION 10.7. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS.
The obligations of the Banks hereunder are several and not joint. Nothing
contained in this Agreement and no action taken by Agent or the Banks pursuant
hereto shall be deemed to constitute the Banks a partnership, association, joint
venture or other entity. No default by any Bank hereunder shall excuse the other
Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among U.S. Borrower and the Banks with respect to the EXIM Loan
Documents and the Related Writings is and shall be solely that of debtors and
creditors, respectively, and neither Agent nor any Bank has any fiduciary
obligation toward any U.S. Borrower with respect to any such documents or the
transactions contemplated thereby.
SECTION 10.8. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
SECTION 10.9. BINDING EFFECT; BORROWERS' ASSIGNMENT. This
Agreement shall become effective when it shall have been executed by U.S.
Borrower, Agent and each Bank and thereafter shall be binding upon and inure to
the benefit of U.S. Borrower, Agent and each of the Banks and their respective
successors and assigns, except that
47
no U.S. Borrower shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of Agent and all of the Banks.
SECTION 10.10. BANK ASSIGNMENTS/PARTICIPATIONS.
A. Assignments of EXIM Commitments. Each Bank shall have the right at
any time or times to assign to another financial institution, without recourse,
all or a percentage of all of the following: (a) that Bank's EXIM Commitment,
(b) all EXIM Loans made by that Bank, (c) that Bank's Notes, and (d) that Bank's
interest in any participation purchased pursuant to subsection 4 of Section 2.1A
or 8.4 hereof; In the case of each assignment under this Agreement after the
initial syndication of the EXIM Commitment, the assignor and the assignee shall
comply with the following requirements:
(i) Prior Consent. No assignment may be consummated pursuant to this
Section 10.10 without the prior written consent of U.S. Borrower and
Agent (other than an assignment by any Bank to any affiliate of such
Bank which affiliate is either wholly-owned by such Bank or is
wholly-owned by a Person that wholly owns, either directly or
indirectly, such Bank), which consent of U.S. Borrower and Agent shall
not be unreasonably withheld; provided, however, that, U.S. Borrower's
consent shall not be required if, at the time of the proposed
assignment, any Unmatured Event of Default or Event of Default shall
then exist. Anything herein to the contrary notwithstanding, any Bank
may at any time make a collateral assignment of all or any portion of
its rights under the Loan Documents to a Federal Reserve Bank, and no
such assignment shall release such assigning Bank from its obligations
hereunder;
(ii) Minimum Amount. Each such assignment shall be in a minimum
amount of the lesser of One Million Dollars ($1,000,000) of the
assignor's EXIM Commitment and interest herein or the entire amount of
the assignor's EXIM Commitment and interest herein and shall otherwise
comply with the requirements of the Primary Credit Agreement;
(iii) Assignment Fee; Assignment Agreement. Unless the assignment
shall be to an affiliate of the assignor or the assignment shall be due
to merger of the assignor or for regulatory purposes, either the
assignor or the assignee shall remit to Agent, for its own account, an
administrative fee of Two Thousand Five Hundred Dollars ($2,500).
Unless the assignment shall be due to merger of the assignor or a
collateral assignment for regulatory purposes, the assignor shall (A)
cause the assignee to execute and deliver to U.S. Borrower and Agent an
Assignment Agreement, and (B) execute and deliver, or cause the
assignee to execute and deliver, as the case may be, to Agent such
additional amendments, assurances and other writings as Agent may
reasonably require; and
(iv) Non-U.S. Assignee. If the assignment is to be made to an
assignee which is organized under the laws of any jurisdiction other
than the United States or any state thereof, the assignor Bank shall
cause such assignee, at least five (5) Business Days prior to the
effective date of such assignment, (A) to represent to the assignor
Bank (for the benefit of the assignor Bank, Agent and U.S. Borrower)
that under applicable law and treaties no taxes will be required to be
withheld by Agent, U.S. Borrower or the assignor
48
with respect to any payments to be made to such assignee in respect of
the EXIM Loans hereunder, (B) to furnish to the assignor (and, in the
case of any assignee registered in the Register (as defined below),
Agent and U.S. Borrower) either (1) U.S. Internal Revenue Service Form
4224 or U.S. Internal Revenue Service Form 1001 or (2) United States
Internal Revenue Service Form W-8 or W-9, as applicable (wherein such
assignee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder), and (C) to agree
(for the benefit of the assignor, Agent and U.S. Borrower) to provide
the assignor Bank (and, in the case of any assignee registered in the
Register, Agent and U.S. Borrower) a new Form 4224 or Form 1001 or Form
W-8 or W-9, as applicable, upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and
completed by such assignee, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding
tax exemption.
Upon satisfaction of the requirements specified in clauses (i) through
(iv) above, U.S. Borrower shall execute and deliver (A) to Agent, the assignor
and the assignee, any consent or release (of all or a portion of the obligations
of the assignor) required to be delivered by U.S. Borrower in connection with
the Assignment Agreement, and (B) to the assignee, an appropriate Note or Notes.
After delivery of the new Note or Notes, the assignor's Note or Notes being
replaced shall be returned to U.S. Borrower marked "replaced".
Upon satisfaction of the requirements set forth in (i) through (iv),
and any other condition contained in this Section 10.10A, (A) the assignee shall
become and thereafter be deemed to be a "Bank" for the purposes of this
Agreement, (B) in the event that the assignor's entire interest has been
assigned, the assignor shall cease to be and thereafter shall no longer be
deemed to be a "Bank" and (C) the signature pages hereto and SCHEDULE 1 hereof
shall be automatically amended, without further action, to reflect the result of
any such assignment.
Agent shall maintain at its address referred to in Section 10.4 hereof
a copy of each Assignment Agreement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Banks and the
EXIM Commitment of, and principal amount of the EXIM Loans owing to, each Bank
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and U.S. Borrower, Agent and the Banks may treat each
financial institution whose name is recorded in the Register as the owner of the
EXIM Loan recorded therein for all purposes of this Agreement. The Register
shall be available for inspection by any U.S. Borrower or Bank at any reasonable
time and from time to time upon reasonable prior notice.
Notwithstanding anything to the contrary contained herein, Agent and
the Banks may at any time without U.S. Borrower's consent transfer all or part
of the interests herein to EXIM Bank.
B. Sale of Participations. Each Bank shall have the right at any time
or times, without the consent of Agent or any U.S. Borrower, to sell one or more
participations or sub-participations to a financial institution, as the case may
be, in all or any part of (a) that Bank's EXIM Commitment, (b) that Bank's
Applicable EXIM Commitment Percentage, (c) any EXIM
49
Loan made by that Bank, (d) any EXIM Note delivered to that Bank pursuant to
this Agreement, and (e) that Bank's interest in any participation, if any,
purchased pursuant to Section 2.1A or 8.4 hereof or this Section l0.l0B.
The provisions of Article III and Section 10.6 shall inure to the
benefit of each purchaser of a participation or sub-participation and Agent
shall continue to distribute payments pursuant to this Agreement as if no
participation has been sold.
If any Bank shall sell any participation or sub-participation, that
Bank shall, as between itself and the purchaser, retain all of its rights
(including, without limitation, rights to enforce against U.S. Borrower the Loan
Documents and the Related Writings) and duties pursuant to the Loan Documents
and the Related Writings, including, without limitation, that Bank's right to
approve any waiver, consent or amendment pursuant to Section 10.3, except if and
to the extent that any such waiver, consent or amendment would:
(i) reduce any fee or commission allocated to the
participation or sub-participation, as the case may be,
(ii) reduce the amount of any principal payment on any Loan
allocated to the participation or sub-participation, as the
case may be, or reduce the principal amount of any Loan so
allocated or the rate of interest payable thereon, or
(iii) extend the time for payment of any amount allocated to
the participation or subparticipation, as the case may be.
No participation or sub-participation shall operate as a delegation of
any duty of the seller thereof. Under no circumstance shall any participation or
sub-participation be deemed a novation in respect of all or any part of the
seller's obligations pursuant to this Agreement.
SECTION 10.11. SEVERABILITY OF PROVISIONS; CAPTIONS. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. The several captions to Sections and subsections
herein are inserted for convenience only and shall be ignored in interpreting
the provisions of this Agreement.
SECTION 10.12. ENTIRE AGREEMENT. This Agreement, any EXIM Note
and any other EXIM Loan Document or other agreement, document or instrument
attached hereto or executed on or as of the Original Closing Date integrate all
the terms and conditions mentioned herein or incidental hereto and supersede all
oral representations and negotiations and prior writings with respect to the
subject matter hereof.
SECTION 10.13. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement, each of the Notes and any Related Writing shall be governed by and
construed in accordance with the laws of the State of Ohio (except as to the
filing of financing statements or their equivalent outside of the State of Ohio,
in which case the laws of the filing jurisdiction shall apply) and the
respective rights and obligations of U.S. Borrower and the Banks shall be
50
governed by Ohio law, without regard to principles of conflict of laws. Each
U.S. Borrower hereby irrevocably submits to the non-exclusive jurisdiction of
any Ohio state or federal court sitting in Cleveland, Ohio, over any action or
proceeding arising out of or relating to this Agreement, the Debt or any Related
Writing, and each U.S. Borrower hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such Ohio
state or federal court. U.S. Borrower, on behalf of itself and its Subsidiaries,
hereby irrevocably waives, to the fullest extent permitted by law, any objection
it may now or hereafter have to the laying of venue in any action or proceeding
in any such court as well as any right it may now or hereafter have to remove
such action or proceeding, once commenced, to another court on the grounds of
FORUM NON CONVENIENS or otherwise. Each U.S. Borrower agrees that a final,
nonappealable judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
SECTION 10.14. LEGAL REPRESENTATION OF PARTIES. The EXIM Loan
Documents were negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring this Agreement or any other Loan Document to be construed or
interpreted against any party shall not apply to any construction or
interpretation hereof or thereof.
SECTION 10.15. CONFLICTS; FURTHER ASSURANCES.
In the event of a conflict between this Agreement and the Borrower
Agreement or the Master Guarantee Agreement, the Borrower Agreement or the
Master Guarantee Agreement, respectively, shall control. In the event any
modification of this Agreement is requested to ensure compliance with Agent's
agreements with EXIM Bank, with EXIM Bank's requirements, or with Agent's
standard policies and procedures for EXIM Bank guaranteed loans, or to address
or eliminate a conflict between this Agreement and any Related Writing or the
Master Guarantee Agreement, U.S. Borrower agrees to reasonably cooperate with
Agent, including executing any document or instrument necessary to comply with
Agent's request.
SECTION 10.16. JURY TRIAL WAIVER.
EACH U.S. BORROWER, AGENT AND EACH OF THE BANKS WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE, AMONG U.S. BORROWER, AGENT AND THE BANKS, OR ANY THEREOF,
ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT'S OR ANY BANK'S ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG U.S.
BORROWER, AGENT AND THE BANKS, OR ANY THEREOF.
51
U.S. BORROWER:
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ADVANCED LIGHTING
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ TECHNOLOGIES, INC.
Attention: Chief Financial Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Chief Financial Officer
---------------------------
AGENT AND THE BANKS:
Address: PNC Bank, National Association PNC BANK, NATIONAL
2 PNC Plaza ASSOCIATION, as Agent and
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ as a Bank
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Vice President
---------------------------
SOVEREIGN BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------
Title: Vice President
---------------------------
NATIONAL CITY COMMERCIAL FINANCE,
INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Vice President
---------------------------
52
SCHEDULE I
----------------------------------------------------------------------------
EXIM
Revolving
Credit
Financial Commitment Commitment
Institution Percentage Amount
----------------------------------- ------------------ ---------------------
PNC Bank, National Association 50% $2,000,000
----------------------------------- ------------------ ---------------------
National City Commercial Finance, 25% $1,000,000
Inc.
----------------------------------- ------------------ ---------------------
Sovereign Bank 25% $1,000,000
----------------------------------- ------------------ ---------------------
Total 100% $4,000,000
----------------------------------- ------------------ ---------------------
Maximum EXIM Revolving Credit $4,000,000
Commitment Amount
----------------------------------- ------------------ ---------------------
53
EXHIBIT A
REVOLVING EXIM CREDIT NOTE
$_________ Cleveland, Ohio
As of ____________, 2002
FOR VALUE RECEIVED, the undersigned, ADVANCED LIGHTING TECHNOLOGIES,
INC. ("U.S. Borrower") promises to pay on the last day of the Commitment Period,
as defined in the Credit Agreement (as hereinafter defined), to the order of
______________________ ("Bank") at the Main Office of PNC BANK, NATIONAL
ASSOCIATION, as Agent, 2 PNC Plaza, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
the principal sum of
.............................................................. DOLLARS
or the aggregate unpaid principal amount of all Revolving EXIM Loans made by
Bank to U.S. Borrower pursuant to subsection 1 of Section 2.1A of the Export
Credit Agreement, whichever is less, in lawful money of the United States of
America. As used herein, "Export Credit Agreement" means the Export Credit
Agreement dated as of _____________, 2002, among U.S. Borrower, the banks named
therein and PNC Bank, National Association, as Agent, as amended as of the date
hereof and as amended, restated, supplemented or otherwise modified from time to
time hereafter. Capitalized terms used herein shall have the meanings ascribed
to them in the Export Credit Agreement.
U.S. Borrower also promises to pay interest on the unpaid principal
amount of each Revolving EXIM Loan from time to time outstanding, from the date
of such Revolving EXIM Loan until the payment in full thereof, at the rates per
annum which shall be determined in accordance with the provisions of subsection
1 of Section 2.1A of the Credit Agreement. Such interest shall be payable on
each date provided for in such subsection 1 of Section 2.1A; provided, however,
that interest on any principal portion which is not paid when due shall be
payable on demand.
The principal sum of U.S. Base Rate Loans under the Export Credit
Agreement, and payments of principal of any thereof, shall be shown on the
records of Bank by such method as Bank may generally employ; provided, however,
that failure to make any such entry shall in no way detract from U.S. Borrower's
obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Export Credit Agreement, the principal
hereof and the unpaid interest thereon shall bear interest, until paid, at a
rate per annum equal to the Default Rate. All payments of principal of and
interest on this Note shall be made in immediately available funds.
This Note is one of the Revolving EXIM Credit Notes referred to in the
Export Credit Agreement. Reference is made to the Export Credit Agreement for a
description of the right of the undersigned to anticipate payments hereof, the
right of the holder hereof to declare this Note due prior to its stated
maturity, and other terms and conditions upon which this Note is issued. The
Export Credit Agreement is a subfacility of the Primary Credit Agreement (as
defined in the Export Credit Agreement).
Except as expressly provided in the Export Credit Agreement, U.S.
Borrower expressly waives presentment, demand, protest and notice of any kind.
54
The undersigned authorizes any attorney at law at any time or times
after the maturity hereof (whether maturity occurs by lapse of time or by
acceleration) to appear in any state or federal court of record in the United
States of America, to waive the issuance and service of process, to admit the
maturity of this Note and the nonpayment thereof when due, to confess judgment
against the undersigned in favor of the holder of this Note for the amount then
appearing due, together with interest and costs of suit, and thereupon to
release all errors and to waive all rights of appeal and stay of execution. The
foregoing warrant of attorney shall survive any judgment, and if any judgment be
vacated for any reason, the holder hereof nevertheless may thereafter use the
foregoing warrant of attorney to obtain an additional judgment or judgments
against the undersigned. The undersigned agrees that Agent or the Banks'
attorney may confess judgment pursuant to the foregoing warrant of attorney. The
undersigned further agrees that the attorney confessing judgment pursuant to the
foregoing warrant of attorney may receive a legal fee or other compensation from
Agent or the Banks.
ADVANCED LIGHTING TECHNOLOGIES,
INC.
By:
-----------------------------------------
Title:
--------------------------------------
================================================================================
"WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE."
================================================================================
55
EXHIBIT E
NOTICE OF LOAN
______________________________, 20__
PNC Bank, National Association
2 PNC Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:__________________
Ladies and Gentlemen:
The undersigned, Advanced Lighting Technologies, Inc. ("U.S.
Borrower"), refers to the Export Credit Agreement, dated as of ______, 2002
("Credit Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, the Banks, as defined in the Credit Agreement,
and PNC Bank, National Association, as Agent, and hereby gives you notice,
pursuant to Section 2.1 of the Credit Agreement that the undersigned hereby
requests a EXIM Loan under the Export Credit Agreement, and in connection
therewith sets forth below the information relating to the EXIM Loan (the
"Proposed Loan") as required by Section 2.1 of the Credit Agreement:
(a) The Business Day of the Proposed Loan is ________________,
2002.
(b) The amount of the Proposed Loan is $______________________.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Loan:
(i) the representations and warranties contained in
each Loan Document are correct in all material respects, before and
after giving effect to the Proposed Loan and the application of the
proceeds therefrom, as though made on and as of such date;
(ii) no event has occurred and is continuing, or
would result from such Proposed Loan, or the application of proceeds
therefrom, which constitutes an Unmatured Event of Default or Event of
Default; and
56
(iii) the conditions set forth in Section 2.2 and
Article IV of the Credit Agreement have been satisfied.
Very truly yours,
ADVANCED LIGHTING TECHNOLOGIES, INC.
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
57
EXHIBIT F
U.S. BORROWERS' CERTIFICATE
[TO BE PROVIDED BY BANK]
58