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EXHIBIT 4
Execution Copy
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THE MONARCH MACHINE TOOL COMPANY
$20,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 9, 1995
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NBD BANK
STAR BANK, N.A.
and
NBD BANK, as Agent
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TABLE OF CONTENTS
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ARTICLE I.
DEFINITIONS................................................................................ 1
1.1 Certain Definitions................................................................. 1
1.2 Other Definitions; Rules of Construction............................................ 10
ARTICLE II.
THE COMMITMENTS AND THE LOANS.............................................................. 11
2.1 Commitments of the Banks............................................................ 11
(a) Revolving Credit Commitment................................................... 11
(b) Term Loan Commitment.......................................................... 11
2.2 Termination and Reduction of Revolving Credit
Commitments......................................................................... 11
2.3 Fees................................................................................ 11
(a) Commitment Fee................................................................ 11
(b) Closing Fee.................................................................. 12
(c) Agency Fee................................................................... 12
2.4 Disbursement of Loans............................................................... 12
(a) Domestic Loans............................................................... 12
(b) Foreign Loans................................................................ 12
(c) Pro Rata Shares.............................................................. 13
(d) The Notes.................................................................... 13
2.5 Conditions for First Disbursement................................................... 14
(a) Charter Documents............................................................ 14
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(b) ByLaws and Corporate Authorizations.......................................... 14
(c) Incumbency Certificate....................................................... 14
(d) Revolving Credit Notes....................................................... 14
(e) Legal Opinion................................................................ 14
(f) Consents, Approvals, Etc..................................................... 15
(g) Environmental Certificate.................................................... 15
(h) Termination of Star Bank Credit' Facility.................................... 15
(i) Other Loan Documents......................................................... 15
2.6 Further Conditions for Disbursement................................................. 15
2.7 Subsequent Elections as to Domestic Loans........................................... 16
2.8 Limitation of Requests and Elections................................................ 16
2.9 Minimum Amounts..................................................................... 17
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF LOANS.......................................................... 17
3.1 Principal Payments.................................................................. 17
3.2 Interest Payments .................................................................. 18
3.3 Payment Method...................................................................... 19
3.4 No Setoff or Deduction.............................................................. 19
3.5 Payment on Non-Business Day: Payment Computations................................... 20
3.6 Additional Costs.................................................................... 20
3.7 Illegality and Impossibility........................................................ 21
3.8 Indemnification..................................................................... 21
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES............................................................. 22
4.1 Corporate Existence and Power....................................................... 22
4.2 Corporate Authority................................................................. 22
4.3 Binding Effect...................................................................... 22
4.4 Subsidiaries........................................................................ 22
4.5 Litigation.......................................................................... 23
4.6 Financial Condition................................................................. 23
4.7 Use of Loans........................................................................ 23
4.8 Consents, Etc....................................................................... 24
4.9 Taxes............................................................................... 24
4.10 Title to Properties................................................................. 24
4.11 ERISA............................................................................... 24
4.12 Disclosure.......................................................................... 24
4.13 Environmental Certificate........................................................... 25
4.14 Borrowing Base...................................................................... 25
ARTICLE V.
COVENANTS.................................................................................. 25
5.1 Affirmative Covenants............................................................... 25
(a) Preservation of Corporate Existence, Etc...................................... 25
(b) Compliance with Laws, Etc..................................................... 25
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(c) Maintenance of Properties: Insurance.......................................... 26
(d) Reporting Requirements........................................................ 26
(e) Accounting: Access to Records, Books, Etc..................................... 28
(f) Taxes......................................................................... 28
5.2 Negative Covenants.................................................................. 28
(a) Current Ratio................................................................. 28
(b) Tangible Net Worth............................................................ 28
(c) Total Liabilities to Tangible Net Worth....................................... 28
(d) Liens......................................................................... 29
(e) Merger: Acquisitions: Etc..................................................... 29
(f) Disposition of Assets: Etc.................................................... 30
(g) Nature of Business............................................................ 30
(h) Dividends and Other Restricted Payments....................................... 30
(i) Capital Expenditures.......................................................... 30
(j) Transactions with Affiliates.................................................. 31
(k) Investments, Loans and Advances............................................... 31
(l) Contingent Liabilities........................................................ 31
(m) Negative Pledge Limitation.................................................... 31
(n) Restrictions on Payments by Subsidiaries...................................... 31
(o) Inconsistent Agreements....................................................... 32
(p) Fiscal Year................................................................... 32
ARTICLE VI.
DEFAULT .............................................................................. 32
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6.1 Events of Default................................................................... 32
(a) Nonpayment.................................................................... 32
(b) Misrepresentation............................................................. 32
(c) Certain Covenants............................................................. 32
(d) Other Defaults................................................................ 32
(e) Cross Default................................................................. 32
(f) Judgments..................................................................... 33
(g) ERISA......................................................................... 33
(h) Insolvency, Etc............................................................... 34
6.2 Remedies............................................................................ 34
ARTICLE VII.
THE AGENT AND THE BANKS.................................................................... 35
7.1 Appointment and Authorization....................................................... 35
7.2 Agent and Affiliates................................................................ 35
7.3 Scope of Agent's Duties............................................................. 35
7.4 Reliance by Agent................................................................... 36
7.5 Default............................................................................. 36
7.6 Liability of Agent.................................................................. 36
7.7 Nonreliance on Agent and Other Banks................................................ 36
7.8 Indemnification..................................................................... 37
7.9 Successor Agent..................................................................... 37
7.10 Sharing of Payments................................................................. 38
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ARTICLE VIII.
MISCELLANEOUS.............................................................................. 39
8.1 Amendments, Etc..................................................................... 39
8.2 Notices............................................................................. 39
8.3 No Waiver By Conduct: Remedies Cumulative........................................... 39
8.4 Reliance on and Survival of Various Provisions...................................... 40
8.5 Expenses and Indemnification........................................................ 40
8.6 Successors and Assigns.............................................................. 40
8.7 Counterparts........................................................................ 41
8.8 Governing Law....................................................................... 41
8.9 Currency Indemnity.................................................................. 41
8.10 Local Custom........................................................................ 42
8.11 Table of Contents and Headings...................................................... 42
8.12 Construction of Certain Provisions.................................................. 42
8.13 Integration and Severability........................................................ 42
8.14 Independence of Covenants........................................................... 42
8.15 Interest Rate Limitation............................................................ 42
8.16 Special Procedures for Disbursement of First Loans 43
8.17 WAIVER OF JURY TRIAL................................................................ 43
Exhibit A-1 - Revolving Credit Note
Exhibit A-2 - Term Note
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Exhibit B - Request for Domestic Loan
Exhibit C - Opinion of Borrower's Counsel
Exhibit D - Request for Continuation or Conversion of Domestic Loan
Exhibit E - Borrowing Base Certificate
SCHEDULES
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4.4 - Subsidiaries
4.5 - Litigation
5.2(d) - Liens
5.2(k) - Investments, Loans and Advances
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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 9,
1995 (this "Agreement"), is by and among THE MONARCH MACHINE TOOL COMPANY, INC.,
an Ohio corporation (the "Company"), the Banks set forth on the signature pages
hereof (collectively, the "Banks" and individually, a "Bank") and NBD BANK, a
Michigan banking corporation ("NBD"), as agent for the Banks (in such capacity,
the "Agent").
INTRODUCTION
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The Company and NBD Bank (formerly known as NBD Bank, N.A.)
entered into that certain Credit Agreement, dated as of May 5, 1992, as amended
by that certain First Amendment to Credit Agreement, dated as of May 28, 1993
(the "1992 Credit Agreement"), pursuant to which NBD Bank provides to the
Company a revolving credit facility in an aggregate principal amount the Dollar
Equivalent (as defined herein) of which is not to exceed $13,000,000, all on the
terms and conditions set forth therein.
The Company now desires to obtain a revolving credit facility,
including, in the Banks' sole discretion, loans in foreign currencies, in an
aggregate principal amount the Dollar Equivalent of which does not exceed
$20,000,000, in order to provide funds for its general corporate purposes, which
credit facility shall be convertible into a term loan, and the Banks are willing
to establish such a credit facility in favor of the Company on the terms and
conditions herein set forth.
In consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree, and hereby amend and restate the
1992 Credit Agreement, as follows:
ARTICLE I.
DEFINITIONS
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A. CERTAIN DEFINITIONS. As used herein the following terms shall
have the following respective meanings:
"AFFILIATE". when used with respect to any person, shall mean any
other person which, directly or indirectly, controls or is controlled by or is
under common control with such person. For purposes of this definition "control"
(including the correlative meanings of the terms controlled by" and "under
common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or
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otherwise.
"AGGREGATE CHANGE LIFO RESERVE ADJUSTMENT" shall mean, as of any
Determination Date (as defined in Section 5.2(b)), the difference [(which may be
positive or negative)] of (a) then current value of the Company's "Allowance to
Adjust the Carrying Value of Inventories to LIFO Basis" (which amount as of
December 31, 1994 was shown in footnote 3 of the Company's 1994 audit), minus
(b) $14,624,000.
"BORROWING BASE" shall mean, as of any date, the sum of (a) an
amount equal to 80% of the Eligible Accounts Receivable plus (b) an amount equal
to 50% of the Eligible Inventory.
"BORROWING BASE CERTIFICATE" or any date shall mean an
appropriately completed report as of such date in substantially the form of
Exhibit E hereto, certified as true and correct as of such date by the chief
financial officer of the Company.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or
other day on which the Agent is not open to the public for carrying on
substantially all of its banking functions, and if an applicable Business Day
relates to a Eurodollar Rate Loan or Eurodollar Interest Period or a Foreign
Loan, respectively, a day which is also a day on which dealings in Dollar
deposits or the relevant Foreign Currency, as the case may be, are carried out
in the relevant interbank market.
"CAPITAL LEASE" of any person shall mean any lease which, in
accordance with generally accepted accounting principles, is or should be
capitalized on the books of such person.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations thereunder.
"COMMITMENTS" shall mean the Revolving Credit Commitments and the
Term Loan Commitments; and "COMMITMENT" shall mean any one of such Commitments.
"CONSOLIDATED" or "CONSOLIDATED" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or more
persons of the amounts signified by such term for all such persons determined on
a consolidated basis in accordance with generally accepted accounting
principles.
"CONTINGENT LIABILITIES" of any person shall mean, as of any
date, all obligations of such person or of others for which such person is
contingently liable, as obligor, guarantor, surety or in any other capacity, or
in respect of which obligations such person assures a creditor against loss or
agrees to take any
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action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such person in respect of
any letters of credit, surety bonds or similar obligations and all obligations
of such person to advance funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other person.
"CUMULATIVE NET INCOME" of any person shall mean, as of any date
(the "Determination Date"), the net income of such person (after deduction for
income and other taxes of such person determined by reference to income or
profits of such person) for the period (the "Relevant Period") after the
specified date until the Determination Date (but without reduction for any net
loss incurred for any fiscal year or shorter period during the Relevant Period),
taken as one accounting period, all as determined in accordance with generally
accepted accounting principles.
"CURRENT ASSETS" and "CURRENT LIABILITIES" of any person shall
mean, as of any date, all assets or liabilities, respectively, of such person
which, in accordance with generally accepted accounting principles, should be
classified as current assets or current liabilities, respectively, on a balance
sheet of such person.
"DEFAULT" shall mean any of the events or conditions described in
Section 6.1 which might become an Event of Default with notice or lapse of time
or both.
"DOLLAR EQUIVALENT" shall mean on any date of determination
thereof, with respect to each Loan in Dollars, the amount thereof, and with
respect to each Loan in a Foreign Currency, the sum in Dollars resulting from
the conversion of the amount of such Loan from the Foreign Currency in which
such Loan is denominated into Dollars at the most favorable spot exchange rate
determined by the Banks to be available to them for the purchase of such Foreign
Currency with Dollars at 11:00 a.m. (local time for the relevant foreign
exchange market) on such date of determination.
"DOMESTIC LOAN" shall mean any Loan other than Foreign Loans.
"DOLLARS" and "$" shall mean the lawful money of the United
States of America.
"EFFECTIVE DATE" shall mean the effective date specified in the
final paragraph of this Agreement.
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"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean, as of any date, those
trade accounts receivable owned by the Company which are payable in Dollars
valued at the face amount thereof less sales, excise or similar taxes and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed, but shall not include
any such account receivable (a) that is not a bona fide existing obligation
created by the sale of inventory, goods or other property or the furnishing of
services or other good and sufficient consideration to customers of the Company
in the ordinary course of business, (b) that is more than 90 days past due or
that remains outstanding more than 90 days after the earlier of the date of the
invoice or the final shipment of the related inventory, goods or other property
at project completion or the furnishing of the related services or other
consideration, (c) to the extent that such receivable is subject to any dispute,
contra-account, defense, offset or counterclaim or any Lien, or the inventory,
goods, property, services or other consideration of which such account
receivable constitutes proceeds is subject to any such Lien, (d) in respect of
which the inventory, goods, property, services or other consideration have been
rejected or the amount is in dispute, (e) that is due from any Affiliate or
Subsidiary of the Company, (f) that has been classified by the Company as
doubtful or has otherwise failed to meet established or customary credit
standards of the Company, (g) that is payable by any person as to which 50% or
more of the aggregate amount of such accounts receivable payable by such person
to the Company do not otherwise constitute Eligible Accounts Receivable, (h)
that is payable by any person that is the subject of any proceeding seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief or protection of debtors or seeking the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property, or that is not generally paying its debts as they become due or
has admitted in writing its inability to pay its debts generally or has made a
general assignment for the benefit of creditors, (i) that is evidenced by a
promissory note or other instrument, (j) that is subordinate or junior in right
or priority of payment to any other obligation or claim, or (k) that for any
other reason is at any time reasonably deemed by the Agent to be ineligible.
"ELIGIBLE INVENTORY" shall mean, as of any date, that inventory
owned by the Company that constitutes raw materials, work-in-process or finished
goods, valued at the lower of cost or market on a FIFO basis, but shall not
include any such inventory
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(a) that does not constitute finished goods or raw materials readily salable or
usable in the business of the Company or work-in-process, (b) that is located
outside the United States (which shall not be deemed to include any territories
of the United States), (c) that is subject to, or any accounts or other proceeds
resulting from the sale or other disposition thereof will be subject to, any
Lien, including any sale on approval or sale or return transaction or any
consignment, (d) that is not in the possession of the Company, except for
inventory owned by the Company that is on consignment at independent dealer
locations and the book value of which on a FIFO basis does not exceed $2,000,000
in the aggregate, (e) that is held for lease or is the subject of any lease, (f)
that is subject to any trademark, trade name or licensing arrangement, or any
law, rule or regulation, that could limit or impair the ability of a person
holding a Lien on such inventory to promptly exercise all rights of such
lienholder, (g) if such inventory is located on premises not owned by the
Company, or (h) that for any other reason is at any time reasonably deemed by
the Agent to be ineligible.
"ENVIRONMENTAL CERTIFICATE" shall mean the Environmental
Certificate dated May 12, 1992 delivered by the Company to the Bank in
connection with the 1992 Credit Agreement.
"ENVIRONMENTAL LAWS" at any date shall mean all provisions of
law, statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any person, any
trade or business (whether or not incorporated) which, together with such person
or any Subsidiary of such person, would be treated as a single employer under
Section 414 of the Code.
"EURODOLLAR INTEREST PERIOD" shall mean, with respect to any
Eurodollar Rate Loan, the period commencing on the day such Eurodollar Rate Loan
is made or converted to a Eurodollar Rate Loan and ending on the date one, two
or three months thereafter, as the Company may elect under Article II, and, with
respect to any continuation of such Loan as a Eurodollar Rate Loan, each
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subsequent period commencing on the last day of the immediately preceding
Eurodollar Interest Period and ending on the date one, two or three months
thereafter, as the Company may elect under Article II, PROVIDED, HOWEVER, that
(a) any Eurodollar Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month, (b) each Eurodollar Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business Day,
and (c) no Eurodollar Interest Period which would end after the Maturity Date
(or the Termination Date with respect to any Revolving Credit Loans) shall be
permitted.
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar Rate
Loan and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) three quarters of one percent (.75%) per annum with respect
to any Revolving Credit Loan and one percent (1%) per annum with respect to the
Term Loan, plus
(b) the rate per annum obtained by dividing (i) the per annum
rate of the interest at which deposits in Dollars for such Eurodollar Interest
Period and ~n an aggregate amount comparable to the amount of such Eurodollar
Rate Loan are offered to the Agent by other prime banks in the London interbank
market, selected in the Agent's discretion, at approximately 11:00 a.m. London
time on the second Eurodollar Business Day prior to the first day of such
Eurodollar Interest Period by (ii) an amount equal to one minus the stated
maximum rate (expressed as a decimal) of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) that is specified on the first day of such Eurodollar Interest Period
by the Board of Governors of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities" n
Regulation D of such Board) maintained by a member bank of such System:
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"EURODOLLAR RATE LOAN" shall mean any Loan which bears interest
at the Eurodollar Rate.
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"EVENT OF DEFAULT" shall mean any of the events or conditions
described in Section 6.1.
"FEDERAL FUNDS RATE" shall mean the per annum rate established
and announced by the Agent from time to time as the opening federal funds rate
paid by the Agent in its regional federal funds market for overnight borrowings
from other banks, which Federal Funds Rate shall change simultaneously with any
change in such announced rate.
"FIXED RATE LOAN" shall mean any Eurodollar Rate Loan or
Negotiated Rate Loan.
"FLOATING RATE" shall mean the per annum rate equal to the sum of
(a) (i) zero percent (0%) per annum with respect to any Revolving Credit Loan
and (ii) one quarter of one percent (.25%) per annum with respect to the Term
Loan, plus (b) the greater of (i) the Prime Rate in effect from time to time and
(ii) the sum of one percent (1%) per annum plus the Federal Funds Rate in effect
from time to time; which Floating Rate shall change simultaneously with any
change in such Prime Rate or Federal Funds Rate, as the case may be.
"FLOATING RATE LOAN" shall mean any Loan which bears interest at
the Floating Rate.
"FOREIGN BRANCH" shall mean any branch office of the Agent at any
time and from time to time designated by the Agent to the Company in writing as
a Foreign Branch and, initially, for the purposes of this Agreement, shall mean
the Agent's branch office located in London, England.
"FOREIGN CURRENCY" shall mean any currency of a Western European
country freely convertible into Dollars, which the Banks determine to be
available from time to time, and which is acceptable to the Banks in their sole
discretion, provided that the currencies of the United Kingdom and Germany shall
be deemed acceptable to the Banks for so long as they are freely convertible
into Dollars.
"FOREIGN LOAN" shall mean any Revolving Credit Loan made in a
Foreign Currency.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally
accepted accounting principles applied on a basis consistent with that reflected
in the financial statements referred to in Section 4.6.
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"INDEBTEDNESS" of any person shall mean, as of any date, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such person whether or not the
obligation secured thereby shall have been assumed by such person, (d) the
unpaid purchase price for goods, property or services acquired by such person,
except for trade accounts payable arising in the ordinary course of business
that are not past due, (e) all obligations of such person to purchase goods,
property or services where payment therefor is required regardless of whether
delivery of such goods or property or the performance of such services is ever
made or tendered (generally referred to as "take or pay contracts"), (f) all
liabilities of such person in respect of Unfunded Benefit Liabilities under any
plan of such person or of any member of a controlled group (as that term is
defined in the Code) of which such person is a member, (g) all obligations of
such person in respect of any interest rate or currency swap, rate cap or other
similar transaction (valued in an amount equal to the highest termination
payment, if any, that would be payable by such person upon termination for any
reason on the date of determination), and (h) all obligations of others similar
in character to those described in clauses (a) through (g) of this definition
for which such person is contingently liable, as obligor, guarantor, surety or
in any other capacity, or in respect of which obligations such person assures a
creditor against loss or agrees to take any action to prevent any such loss
(other than endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all reimbursement
obligations of such person in respect of letters of credit, surety bonds or
similar obligations and all obligations of such person to advance funds to, or
to purchase assets, property or services from, any other person in order to
maintain the financial condition of such other person.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any Fixed
Rate Loan, the last day of each Interest Period with respect to such Fixed Rate
Loan and, in the case of any Interest Period exceeding three months or ninety
days, as the case may be, those days that occur during such Interest Period at
intervals of three months or ninety days, as the case may be, after the first
day of such Interest Period, and (b) in all other cases, the last Business Day
of each March, June, September and December occurring after the date hereof,
commencing with the first such Business Day occurring after the date of this
Agreement.
"INTEREST PERIOD" shall mean any Eurodollar Interest Period or
Negotiated Interest Period.
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"LIEN" shall mean any pledge, assignment, hypothecation,
mortgage, security interest, deposit arrangement, option, conditional sale or
title retaining contract, sale and leaseback transaction, financing statement
filing, lessor's or lessee's interest under any lease, subordination of any
claim or right, or any other type of lien, charge, encumbrance, preferential
arrangement or other similar claim or right.
"LOAN" shall mean any Revolving Credit Loan or the Term Loan or
any portion of any Revolving Credit Loan or the Term Loan. Any such Loan may
also be denominated as a Floating Rate Loan or a Fixed Rate Loan (which may be
further denominated as a Eurodollar Rate Loan or Negotiated Rate Loan) and such
Floating Rate Loans and Fixed Rate Loans (including such Eurodollar Rate Loans
and Negotiated Rate Loans) are referred to herein as "types" of Loans.
"LOCAL MARKET" shall mean, with respect to each Foreign Loan
hereunder and the Foreign Branch disbursing such Foreign Loan, the interbank
market in which deposits in the related Foreign Currency are available to such
Foreign Branch.
"MATURITY DATE" shall mean with respect to the Term Loan, the
third anniversary of the date the Term Loan is made, which in any event shall be
no later than April 30, 2001.
"MULTIEMPLOYER PLAN" shall mean any multi employer plan" as
defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NEGOTIATED RATE" shall mean, with respect to any Negotiated Rate
Loan, the rate per annum offered by the Banks in their sole discretion for such
Negotiated Rate Loan and accepted by the Company at the time such Negotiated
Rate Loan is made.
"NEGOTIATED INTEREST PERIOD" shall mean, with respect to any
Negotiated Rate Loan, the period commencing on the day such Negotiated Rate Loan
is made or converted to a Negotiated Rate Loan and ending on the date agreed
upon between the Company and the Banks at the time such Negotiated Rate Loan is
made, PROVIDED, HOWEVER, that no Negotiated Interest Period which would end
after the Maturity Date (or the Termination Date with respect to any Revolving
Credit Loans) shall be permitted.
"NEGOTIATED RATE LOAN" shall mean any Loan which bears interest
at the Negotiated Rate.
"NET INCOME" of any person shall mean the net income of such
person (after deduction for income and other taxes of such
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person determined by reference to income or profits of such person).
"NOTES" shall mean the Revolving Credit Notes and the Term Notes;
and "Note" shall mean any one of the Notes.
"OVERDUE RATE" shall mean (a) in respect of principal of Floating
Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans, a
rate per annum that is equal to the sum of three percent (3%) per annum plus the
per annum rate in effect thereon until the end of the then current Interest
Period for such Loan and, thereafter, a rate per annum that is equal to the sum
of three percent (3%) per annum plus the Floating Rate, and (c) in respect of
other amounts payable by the Company hereunder (other than interest), a per
annum rate that is equal to the sum of three percent (3%) per annum plus the
Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"PERMITTED LIENS" shall mean Liens permitted by Section 5.2(d)
hereof.
"PERSON" or PERSON" shall include an individual, a corporation,
an association, a partnership, a trust or estate, a joint stock company, an
unincorporated organization, a joint venture, a trade or business (whether or
not incorporated), a government (foreign or domestic) and any agency or
political subdivision thereof, or any other entity.
"PLAN" shall mean, with respect to any person, any pension plan
(other than a Multi employer Plan) subject to Title IV of ERISA or to the
minimum funding standards of Section 412 of the Code which has been established
or maintained by such person, any Subsidiary of such person or any ERISA
Affiliate, or by any other person if such person, any Subsidiary of such person
or any ERISA Affiliate could have liability with respect to such pension plan.
"PRIME RATE" shall mean the per annum rate announced by the Agent
from time to time as its "prime rate" (it being acknowledged that such announced
rate may not necessarily be the lowest rate charged by the Agent to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
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"PROHIBITED TRANSACTION" shall mean any transaction involving any
PI an which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"PRO RATA SHARE" shall mean, with respect to each Bank and any
amount, the portion of such amount that bears the same relation to the whole of
such amount as the amount of such Bank's outstanding Revolving Credit Loans
bears to the aggregate amount of the outstanding Revolving Credit Loans of all
the Banks (or, if no Revolving Credit Loans are outstanding, as the amount of
such Bank's Revolving Credit Commitment bears to the aggregate Revolving Credit
Commitment of all the Banks).
"REPORTABLE EVENT" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"REQUIRED BANKS" shall mean Banks holding not less than (i) one
hundred percent (100%) of the Loans then outstanding or (ii) one hundred percent
(100%) of the Revolving Credit Commitments if no Loans are then outstanding.
"REVOLVING CREDIT COMMITMENT" shall mean, with respect to each
Bank, the commitment of each such Bank to make Revolving Credit Loans to the
Company pursuant to Section 2.1(a) in amounts not exceeding in aggregate
principal amount outstanding at any time the respective commitment amount for
each such Bank set forth next to the name of each such Bank in the signature
pages hereof, as such amounts may be reduced from time to time pursuant to
Section 2.2.
"REVOLVING CREDIT LOAN" shall mean any borrowing under Section
2.4 other than the Term Loan.
"REVOLVING CREDIT NOTE" shall mean any promissory note of the
Company evidencing the Revolving Credit Loans, in substantially the form annexed
hereto as Exhibit A-1, as amended or modified from time to time and together
with any promissory note or notes issued in exchange or replacement therefor.
"STAR BANK" shall mean Star Bank, N.A., a national banking
association.
"SUBSIDIARY" of any person shall mean any other person (whether
now existing or hereafter organized or acquired) in which (other than directors
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than
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securities or other ownership interests which have such power or right only by
reason of the happening of a contingency), at the time as of which any
determination is being made, are owned, beneficially and of record, by such
person or by one or more of the other Subsidiaries of such person or by any
combination thereof. Unless otherwise specified, reference to "Subsidiary" shall
mean a Subsidiary of the Company.
"TANGIBLE NET WORTH" of any person shall mean, as of any date,
(a) the amount of any capital stock, paid in capital and similar equity accounts
plus (or minus in the case of a deficit) the capital surplus and retained
earnings of such person and the amount of any foreign currency translation
adjustment account shown as a capital account of such person, less (b) the net
book value of all items of the following character which are included in the
assets of such person: (i) goodwill, including without limitation, the excess of
cost over book value of any asset, (ii) organization or experimental expenses,
(iii) unamortized debt discount and expense, (iv) patents, trademarks, trade
names and copyrights, (v) treasury stock (to the extent not already deducted in
such equity accounts), (vi) deferred taxes and deferred charges, (vii)
franchises, licenses and permits, and (viii) other assets which are deemed
intangible assets under generally accepted accounting principles.
"TERM LOAN" shall mean the borrowing under Section 2.4 evidenced
by the Term Note.
"TERM LOAN COMMITMENT" shall mean, with respect to each Bank, the
commitment of each such Bank to make the Term Loan pursuant to Section 2.1(b).
"TERM NOTE" shall mean any promissory note of the Company
evidencing the Term Loan, in substantially the form annexed hereto as Exhibit
A-2, as amended or modified from time to time and together with any promissory
note or notes issued in exchange or replacement therefor.
"TERMINATION DATE" shall mean the earliest to occur of (a) April
30, 1998 and (b) the date on which the Commitments shall be terminated pursuant
to Section 2,2 or 6.2.
"TOTAL LIABILITIES" of any person shall mean, as of any date, all
obligations which, in accordance with generally accepted accounting principles,
are or should be classified as liabilities on a balance sheet of such person and
all Contingent Liabilities of such person.
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"UNFUNDED BENEFIT LIABILITIES" shall mean, with respect to any
Plan as of any date, the amount of the unfunded benefit liabilities determined
in accordance with Section 4001(a)(18) of ERISA.
1.2 OTHER DEFINITIONS: Rules of Construction. As used herein, the
terms "Agent", "Bank", "Banks", "Company", "NBD", "1992 Credit Agreement" and
"this Agreement" shall have the respective meanings ascribed thereto in the
introductory paragraphs of this Agreement. Such terms, together with the other
terms defined in Section 1.1, shall include both the singular and the plural
forms thereof and shall be construed accordingly. All computations required
hereunder and all financial terms used herein shall be made or construed in
accordance with generally accepted accounting principles unless such principles
are inconsistent with the express requirements of this Agreement. Use of the
terms "herein", "hereof", and "hereunder" shall be deemed references to this
Agreement in its entirety and not to the Section or clause in which such term
appears. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
ARTICLE II.
THE COMMITMENTS AND THE LOANS
-----------------------------
2.1 COMMITMENTS OF THE BANKS.
(a) REVOLVING CREDIT COMMITMENT. Each Bank agrees, for itself
only, subject to the terms and conditions of this Agreement, to lend to the
Company under Section 2.4, from time to time from the Effective Date to but
excluding the Termination Date, sums in immediately available funds in an
aggregate principal amount outstanding the Dollar Equivalent of which does not
exceed the lesser of (i) the amount of such Bank's Revolving Credit Commitment,
as such amount may be reduced from time to time pursuant to Section 2.2, and
(ii) such Bank's Pro Rata Share of the Borrowing Base; PROVIDED, that,
notwithstanding any provision of this Agreement to the contrary, no Bank shall
be obligated to make Foreign Loans and any Foreign Loan shall only be made in
the sole discretion of the Banks.
(b) TERM LOAN COMMITMENT. Each Bank, for itself only, further
agrees, subject to the terms and conditions of this Agreement, to make its Pro
Rata Share of a single Term Loan to the Company on the Termination Date in an
amount not exceeding the Dollar Equivalent of the aggregate principal amount of
the
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Revolving Credit Loans outstanding on the Termination Date.
2.2 TERMINATION AND REDUCTION OF REVOLVING CREDIT COMMITMENTS.
The Company shall have the right to terminate or reduce the Revolving Credit
Commitments at any time and from time to time at its option, provided that (i)
the Company shall give notice of such termination or reduction to the Agent
(with sufficient executed copies for each Bank) specifying the amount and
effective date thereof, (ii) each partial reduction of the Revolving Credit
Commitments shall be in a minimum amount of $1,000,000 and in an integral
multiple of $100,000 and shall reduce the Commitments of all of the Banks
proportionately in accordance with their Pro Rata Shares, (iii) no such
termination or reduction shall be permitted with respect to any portion of the
Revolving Credit Commitments as to which a request for a Revolving Credit Loan
pursuant to Section 2.4 is then pending, and (iv) the Revolving Credit
Commitments may not be terminated if any Revolving Credit Loans are then
outstanding and may not be reduced below the principal amount of the Revolving
Credit Loans then outstanding. The Revolving Credit Commitments or any portion
thereof terminated or reduced pursuant to this Section 2.2 may not be
reinstated.
2.3 FEES.
(a) COMMITMENT FEE. The Company agrees to pay to each Bank a
commitment fee on the daily average unused amount of such Bank's Revolving
Credit Commitment, for the period from the Effective Date to but excluding the
Termination Date, at a rate equal to three eighths of one percent (3/8 of 1%)
per annum. Accrued commitment fees shall be payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing on the
first such Business Day occurring after the date of this Agreement, and on the
Termination Date.
(b) CLOSING FEE. The Company further agrees to pay to the Banks a
closing fee in the amount of $5,000, such fee to be shared between the Banks in
accordance with their respective Pro Rata Shares.
(c) AGENCY FEE. The Company further agrees to pay to the Agent a
fee for its services as Agent under this Agreement in the amount of $10,000 per
annum, payable quarterly in arrears on the last Business Day of each March,
June, September an December, commencing on the first such day occurring after
the date of this Agreement.
2.4 DISBURSEMENT OF LOANS. Subject to the terms and conditions of
this Agreement, the Term Loan shall be in Dollars
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and each Revolving Credit Loan shall be in Dollars or, in the sole discretion of
the Banks, a Foreign Currency, Loans that are in Dollars shall bear interest at
the Eurodollar Rate, Floating Rate or Negotiated Rate. Foreign Loans, if made by
the Banks in their sole discretion, shall bear interest at the Negotiated Rate.
(a) DOMESTIC LOANS. The Company shall give the Agent notice of
its request for each Domestic Loan in substantially the form of Exhibit B hereto
not later than (i) 10:00 a.m. Detroit time three Business Days prior to the date
such Loan is requested to be made if such Loan is to be made as a Eurodollar
Rate Loan, (ii) 10:00 a.m. Detroit time one Business Day prior to the date such
Loan is requested to be made if such Loan is to be made as a Negotiated Rate
Loan, and (iii) 11:00 a.m. Detroit time on the date such Loan is requested to be
made if such Loan is to be made as a Floating Rate Loan, which notice shall
specify whether a Eurodollar Rate Loan, Negotiated Rate Loan or Floating Rate
Loan is requested and, in the case of each requested Fixed Rate Loan, the
Interest Period to be initially applicable to such Loan. The Agent shall
promptly provide notice of such requested Loan to each Bank. Subject to the
terms and conditions of this Agreement, the proceeds of each such requested Loan
shall be made available to the Company by depositing the proceeds thereof, in
immediately available funds, in an account maintained and designated by the
Company at the principal office of the Agent; PROVIDED, HOWEVER, that the
proceeds of the Term Loan shall be applied to the outstanding principal amount
of and accrued Interest on the Revolving Credit Loans.
(b) FOREIGN LOANS. Within a sufficient period of time in advance
of the date of any proposed Foreign Loan to accommodate customary settlement
procedures in the Local Market, but in any event not later than 10:00 a.m.
Detroit time four Business Days prior to the date such Foreign Loan is to be
made, the Company shall make or deliver to the Agent, at the main office of the
Agent at its address set forth on the signature pages hereof, a telephone,
written, telecopier or telegraphic request for such Foreign Loan referring to
this Agreement and identifying (i) the amount of such Foreign Loan (the Dollar
Equivalent of which shall be in the minimum principal amount of $1,000,000 and
in an integral multiple of $100,000), (ii) the date on which such Foreign Loan
is requested to be made, (iii) the Foreign Branch from which such Foreign Loan
is to be disbursed, (iv) the proposed Foreign Currency of such Foreign Loan, (v)
the Negotiated Rate and Negotiated Interest Period to be applicable to such
Foreign Loan, as previously offered by the Banks and accepted by the Company,
and (vi) the account into which the proceeds of such Foreign Loan are to be
disbursed. The Agent shall be entitled to rely on any
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such telephonic request without any duty to verify the authority of the person
making such request or the accuracy of the information identified therein, and
shall be indemnified and held harmless by the Company for any errors in any
information transmitted in such request or actions taken by the Agent in
connection with such request, to the full extent provided by Section 8.5. The
Agent shall promptly provide notice of such requested Loan to each Bank. Subject
to the terms and conditions of this Agreement, the proceeds of each such Foreign
Loan made by the Banks shall be made available to the Company by depositing the
proceeds thereof in immediately available funds (or other funds customary in the
Local Market) in the account maintained and designated by the Company at the
Foreign Branch from which such Foreign Loan is disbursed.
(c) PRO RATA SHARES. Each Bank, on the date any Loan is requested
to be made, shall make its Pro Rata Share of such Loan available in immediately
available, freely transferable, cleared funds for disbursement to the Company
pursuant to the terms and conditions of this Agreement, in the case of any Loan
denominated in Dollars, at the principal office of the Agent and, in all other
cases, to the account of the Agent at its Foreign Branch or correspondent bank
in the country issuing the Foreign Currency in which such Loan is denominated or
in such other place specified by the Agent. Unless the Agent shall have received
notice from any Bank prior to the date such Loan is requested to be made under
this Section 2.4 that such Bank will not make available to the Agent such Bank's
pro rata portion of such Loan, the Agent may assume that such Bank has made such
portion available to the Agent on the date such Loan is requested to be made in
accordance with this Section 2.4. If and to the extent such Bank shall not have
so made such pro rata portion available to the Agent, the Agent may (but shall
not be obligated to) make such amount available to the Company, and such Bank
and the Company severally agree to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date such amount is
made available to the Company by the Agent until the date such amount is repaid
to the Agent, at a rate per annum equal to the interest rate applicable to such
Loan during such period. If such Bank shall pay such amount to the Agent
together with interest, such amount so paid shall constitute a Loan by such Bank
as a part of such the related Loan for purposes of this Agreement, The failure
of any Bank to make its pro rata portion of any such Loan available to the Agent
shall not relieve any other Bank of its obligations to make available its pro
rata portion of such Loan on the date such Loan is requested to be made, but no
Bank shall be responsible for failure of any other Bank to make such pro rata
portion available to the Agent on the date of any such Loan.
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(d) THE NOTES. All Revolving Credit Loans made under this Section
2.4 shall be evidenced by the Revolving Credit Notes in the aggregate nominal
amount of $20,000,000 and, in the case of each Foreign Loan, such other
instruments and documents as may be requested by the Agent with respect to the
Local Market or in accordance with the customary practices of its Foreign Branch
disbursing such Foreign Loan, and the Term Loan made under this Section 2.4
shall be evidenced by the Term Notes, and all such Loans shall be due and
payable and bear interest as provided in Article III. Each Bank is hereby
authorized by the Company to record on the schedule attached to its Revolving
Credit Note and Term Note, or in its books and records, the date, and amount and
type of each Loan and the duration of the related Interest Period (if
applicable), the amount of each payment or prepayment of principal thereon, and
the other information provided for on such schedule, which schedule or books and
records, as the case may be, shall constitute prima facie evidence of the
information so recorded, PROVIDED, HOWEVER, that failure of any Bank to record,
or any error in recording, any such information shall not relieve the Company of
its obligation to repay the outstanding principal amount of the Loans, all
accrued interest thereon and other amounts payable with respect thereto in
accordance with the terms of the Notes and this Agreement. Subject to the terms
and conditions of this Agreement, the Company may borrow Revolving Credit Loans
under this Section 2.4, prepay Revolving Credit Loans and the Term Loan pursuant
to Section 3.1 and reborrow Revolving Credit Loans, but not the Term Loan, under
this Section 2.4.
2.5 CONDITIONS FOR FIRST DISBURSEMENT. The obligation of the
Banks to make the first Loan hereunder is subject to receipt by each Bank and
the Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Bank and the Agent:
(a) CHARTER DOCUMENTS. Certificates of recent date of the
appropriate authority or official of the Company's state of incorporation
listing all charter documents of the Company on file in that office and
certifying as to the good standing and corporate existence of the Company,
together with copies of such charter documents of the Company, certified as of a
recent date by such authority or official and certified as true and correct as
of the Effective Date by a duly authorized officer of the Company; or bring-down
certifications by such an officer with respect to such items previously
delivered by the Company to NBD;
(b) CODE OF REGULATIONS AND CORPORATE AUTHORIZATIONS. Copies of
the code of regulations of the Company together with all authorizing resolutions
and evidence of other corporate action taken by the Company to authorize the
execution, delivery and
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performance by the Company of this Agreement and the Notes and the consummation
by the Company of the transactions contemplated hereby, certified as true and
correct as of the Effective Date by a duly authorized officer of the Company; or
bring-down certifications by such officer with respect to such items previously
delivered by the Company to NBD;
(c) INCUMBENCY CERTIFICATE. A certificate of incumbency of the
Company containing, and attesting to the genuineness of, the signatures of those
officers authorized to act on behalf of the Company in connection with this
Agreement and the Notes and the consummation by the Company of the transactions
contemplated hereby, certified as true and correct as of the Effective Date by a
duly authorized officer of the Company:
(d) REVOLVING CREDIT NOTES. A Revolving Credit Note duly
completed and executed on behalf of the Company for each Bank:
(e) LEGAL OPINION. The favorable written opinion of ▇▇▇▇▇▇▇▇,
▇▇▇▇ and ▇▇▇▇▇, counsel for the Company, in substantially the form of Exhibit C
hereto;
(f) CONSENTS, APPROVALS, ETC. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of the Company in connection with the
execution, delivery and performance of this Agreement, the Notes, or the
transactions contemplated hereby or as a condition to the legality, validity or
enforceability of this Agreement or the Notes, certified as true and correct and
in full force and effect as of the Effective Date by a duly authorized officer
of the Company, or, if none is required, a certificate of such officer to that
effect;
(g) TERMINATION OF STAR BANK CREDIT FACILITY. All indebtedness,
obligations and liabilities of the Company to Star Bank, other than those under
the $5,000,000 uncommitted line of credit provided by Star Bank to the Company,
shall, prior to or contemporaneously with the making of the first Loan
hereunder, be paid in full and the related credit facilities shall be
terminated; and
(h) OTHER LOAN DOCUMENTS. Other instruments and documents, duly
executed by the Company, deemed necessary, customary or appropriate by the Agent
or its Foreign Branch, in its sole discretion, to properly document any Loans or
other obligations hereunder, including without limitation any Foreign Loans.
2.6 FURTHER CONDITIONS FOR DISBURSEMENT. The obligation
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of the Banks to make any Loan (including the first Loan, or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof shall be true and correct on and as of the date such Loan is made or the
date of such continuation or conversion (both before and after such Loan is made
or such continuation or conversion is done) as if such representations and
warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Loan is made or the date of such
continuation or conversion (whether before or after such Loan is made or such
continuation or conversion is done); and
(c) In the case of the Term Loan, the Company shall have
delivered to each Bank a Term Note in the principal amount of such Bank's Pro
Rata Share of the Term Loan, appropriately completed and duly executed on behalf
of the Company. The Company shall be deemed to have made a representation and
warranty to the Banks at the time of the making of, and the continuation or
conversion of, each Loan to the effects set forth in clauses (a) and (b) of this
Section 2.6. For purposes of this Section 2.6, the representations and
warranties contained in Section 4.6 hereof shall be deemed made with respect to
both the financial statements referred to therein and the most recent financial
statements delivered pursuant to Section 5.1.
(d) The Agent shall have received the most recent Borrowing Base
Certificate required pursuant to Section 5.1(d)(iv).
2.7 SUBSEQUENT ELECTIONS AS TO DOMESTIC LOANS. Notwithstanding
any provision of this Agreement to the contrary, the Company may elect to
continue or convert any Negotiated Rate Loan only with the prior consent of each
Bank. Subject to the foregoing, the Company may elect (a) to continue a Fixed
Rate Loan of one type, or a portion thereof, as a Fixed Rate Loan of the then
existing type or (b) to convert a Fixed Rate Loan of one type, or a portion
thereof, to a Loan of another type or (c) to convert a Floating Rate Loan, or a
portion thereof, to a Fixed Rate Loan, in each case by giving notice thereof to
the Agent (with sufficient executed copies for each Bank) in substantially the
form of Exhibit D hereto not later than (i) 10:00 a.m. Detroit time three
Business Days prior to the date any such continuation of or conversion to a
Eurodollar Rate Loan is to be effective, (ii) 10:00 a.m. Detroit time one
Business Day prior to the date
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any such continuation of or conversion to a Negotiated Rate Loan is to be
effective and (iii) 2:00 p.m. Detroit time on the date any such continuation or
conversion is to be effective in all other cases; PROVIDED that an outstanding
Fixed Rate Loan may only be converted on the last day of the then current
Interest Period with respect to such Loan, and PROVIDED, FURTHER, if a
continuation of a Loan as, or a conversion of a Loan to, a Eurodollar Rate Loan
is requested, such notice shall also specify the Interest Period to be
applicable thereto upon such continuation or conversion. The Agent shall
promptly provide notice of such election to the Banks. If the Company shall not
timely deliver such a notice with respect to any outstanding Fixed Rate Loan
(other than a Foreign Loan), the Company shall be deemed to have elected to
convert such Fixed Rate Loan to a Floating Rate Loan on the last day of the then
current Interest Period with respect to such Loan.
2.8 LIMITATION OF REQUESTS AND ELECTIONS. (a) Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a request
for a Fixed Rate Loan pursuant to Section 2.4, or a request for a continuation
of a Fixed Rate Loan as a Fixed Rate Loan of the then existing type, or a
request for conversion of a Fixed Rate Loan of one type to a Fixed Rate Loan of
another type, or a request for a conversion of a Floating Rate Loan to a Fixed
Rate Loan pursuant to Section 2.7, (i) in the case of any Eurodollar Rate Loan,
deposits in Dollars for periods comparable to the Interest Period elected by the
Company are not available to any Bank in the relevant interbank market, or (ii)
the Eurodollar Rate will not adequately and fairly reflect the cost to any Bank
of making, funding or maintaining the related Eurodollar Rate Loan, or (iii) by
reason of national or international financial, political or economic conditions
or by reason of any applicable law, treaty, rule or regulation (whether domestic
or foreign) now or hereafter in effect, or the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank with any guideline, request or
directive of such authority (whether or not having the force of law), including
without limitation exchange controls, it is impracticable, unlawful or
impossible for any Bank (A) to make or fund the relevant Fixed Rate Loan or (B)
to continue such Fixed Rate Loan as a Fixed Rate Loan of the then existing type
or (C) to convert a Loan to such a Fixed Rate Loan, then the Company shall not
be entitled, so long as such circumstances continue, to request a Fixed Rate
Loan of the affected type pursuant to Section 2.4 or a continuation of or
conversion to a Fixed Rate Loan of the affected type pursuant to Section 2.7. In
the event that such circumstances no longer exist, the Banks shall again
consider requests or Fixed Rate Loans of the affected type
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pursuant to Section 2.4, and requests for continuations of and conversions to
Fixed Rate Loans of the affected type pursuant to Section 2.7.
(b) Notwithstanding any other provision of this Agreement to the
contrary and in order to give effect to the provisions of Section 3.1(b), the
Company shall make requests for Fixed Rate Loans pursuant to Section 2.4, and
requests for continuations of and conversions to Fixed Rate Loans pursuant to
Section 2.7, such that, on each date that any scheduled principal payment is due
with respect to the Term Loan pursuant to Section 3.1(a), either Floating Rate
Loans, or Fixed Rate Loans having an Interest Period ending on such date, or any
combination thereof, are outstanding on such date in an aggregate outstanding
principal amount not less than the amount of such principal payment.
2.9 MINIMUM AMOUNTS. Except for conversions or payments required
pursuant to Section 3.1(c) or 3.7, each Fixed Rate Loan and each continuation of
or conversion to a Fixed Rate Loan pursuant to Section 2.7 and each prepayment
thereof shall be in a minimum amount of $1,000,000 and in an integral multiple
of $100,000 (or, in the case of the Term Loan, in integral multiples of the
quarterly installments of, principal thereon).
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF LOANS
---------------------------------
3.1 PRINCIPAL PAYMENTS.
(a) Unless earlier payment is required under this Agreement (i)
the Company shall pay to the Banks the outstanding principal amount of each
Foreign Loan at the end of the Negotiated Interest Period applicable to each
such Foreign Loan, (ii) notwithstanding any provision of this Agreement to the
contrary with respect to Foreign Loans, the Company shall pay to the Banks on
the Termination Date the entire outstanding principal amount of all Revolving
Credit Loans (including any Foreign Loans then outstanding), and (iii) the
Company shall pay to the Banks the outstanding principal amount of the Term Loan
in 12 equal quarterly installments, each in the amount of one twelfth of the
original principal amount of the Term Loan, payable on the last day of each
March, June, September and December, commencing on the first such day occurring
after the date the Term Loan is made, to and including the Maturity Date, when
the entire outstanding principal amount of the Term Loan shall be due and
payable.
(b) The Company may at any time and from time to time
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prepay all or a portion of the Loans, without premium or penalty in the case of
the Revolving Credit Loans, PROVIDED that (i) the Company may not prepay any
portion of any Loan as to which an election for a continuation of or a
conversion to a Fixed Rate Loan is pending pursuant to Section 2.7, (ii) unless
earlier payment Is required under this Agreement, any Fixed Rate Loan may only
be prepaid on the last day of the then current Interest Period with respect to
such Loan, and (iii) such prepayment of the Term Loan shall only be permitted if
the Company shall have given not less than two Business Days' notice thereof
specifying the Term Loan or portion thereof to be so prepaid and shall have paid
to the Banks, together with such prepayment of principal, all accrued interest
to the date of payment on the Term Loan or portion thereof so prepaid and all
amounts owing,to the Banks under Section 3.8 in connection with such prepayment.
Upon the givIng of such notice, the aggregate principal amount of the Term Loan
or portion thereof so specified in such notice, together with such accrued
interest and other amounts, shall become due and payable on the specified
prepayment date.
(c) If at the end of any Interest Period the Dollar Equivalent of
the aggregate outstanding principal amount of the Loans shall exceed the then
applicable Commitments, the Company forthwith shall pay to the Banks the amount
of such excess in Dollars or, to the extent of the Foreign Loans then
outstanding, such Foreign Currency or Foreign Currencies as the Banks shall
reasonably request, for application to the outstanding principal amount of the
Loans (if practicable, to Loans that are Floating Rate Loans or Fixed Rate Loans
whose Interest Periods are then ending), as selected by the Banks in their sole
discretion. For purposes of this Section 3.1(c), the aggregate amount of the
Term Loan Commitments shall be deemed permanently reduced by the amount of each
principal payment made on the Term Loan, each such deemed reduction to be
effective immediately upon the making of each such payment.
(d) If at any time, including, without limitation, at the end of
any Interest Period, the Dollar Equivalent of the aggregate outstanding
principal amount of the Loans shall exceed the then Borrowing Base, the Company
shall forthwith pay to the Banks the amount of such excess in Dollars or, to the
extent of the Foreign Loans then outstanding, such Foreign Currency or Foreign
Currencies as the Banks shall reasonably request, for application to the
outstanding principal amount of the Loans (if practicable, to Loans that are
Floating Rate Loans or Fixed Rate Loans whose Interest Periods are then ending),
as selected by the Banks in their sole discretion.
(e) All prepayments of the Term Loan, whether optional or
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mandatory, shall be applied to installments of principal of the Term Loan in the
inverse order of their maturities and no partial prepayment of the Term Loan
shall reduce the amount or defer the date of the scheduled installments of
principal required to be paid thereon.
3.2 INTEREST PAYMENTS. The Company shall pay interest to the
Banks on the unpaid principal amount of each Loan, for the period commencing on
the date such Loan is made until such Loan is paid in full, on each Interest
Payment Date and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is a Floating Rate Loan,
the Floating Rate.
(b) During such periods that such Loan is a Eurodollar Rate Loan,
the Eurodollar Rate applicable to such Loan for each related Eurodollar Interest
Period.
(c) During such periods that such Loan is a Negotiated Rate Loan,
the Negotiated Rate applicable to such Loan for each related Negotiated Interest
Period.
Notwithstanding the foregoing paragraphs (a) through (c), the Company shall pay
interest on demand by the Agent at the Overdue Rate on the outstanding principal
amount of any Loan and any other amount payable by the Company hereunder (other
than interest) which is not paid in full when due (whether at stated maturity,
by acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full,
3.3 PAYMENT METHOD. (a) All payments to be made by the Company
hereunder, except with respect to Foreign Loans, will be made in Dollars and in
immediately available funds to the Agent for the account of the Banks at its
address set forth on the signature pages hereof not later than 1:00 p.m. Detroit
time on the date on which such payment shall become due. In the case of all
Foreign Loans, all payments to be made by the Company hereunder will be made in
the Foreign Currency in which such Loan was made and in immediately available
funds (or other funds customary in the Local Market) on the date such payment
shall become due to the Agent for the account of the Banks at the Foreign Branch
from which such Loan was disbursed, not later than 10:00 a.m. local time.
Payments received after 1:00 p.m. Detroit time or 10:00 am. local time, as the
case may be, shall be deemed to be payments made prior to 1:00 p.m. Detroit time
or 10:00 a.m. local time, as the case may be, on the next succeeding Business
Day. The Company hereby authorizes the Agent to charge its
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account with the Agent in order to cause timely payment of amounts due hereunder
to be made (subject to sufficient funds being available in such account for that
purpose).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Loan or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion to obligations of the Company to the Banks arising under this
'Agreement or otherwise.
(c) On the date such payments are deemed received, the Agent
shall remit to the Banks their Pro Rata Shares of such payments in immediately
available funds (or, in the case of Foreign Loans, other funds customary in the
Local Market), (i) in the case of principal and interest on any Loan denominated
in a Foreign Currency, at an account maintained and designated by each Bank at a
bank in the principal financial center of the country issuing the Foreign
Currency in which such Loan is denominated or in such other place specified by
the Agent, and (ii) in all other cases, to the Banks at their respective address
in the United States specified for notices on the signature pages hereof.
3.4 NO SETOFF OR DEDUCTION. All payments of principal of and
interest on the Loans and other amounts payable by the Company hereunder shall
be made by the Company without setoff or counterclaim, and free and clear of,
and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority.
3.5 PAYMENT ON NON-BUSINESS DAY: PAYMENT COMPUTATIONS. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension,
Computations of interest and other amounts due under this Agreement, including
without limitation the commitment fee under Section 2.3, shall be made on the
basis of a year of 360 days for the actual number of days elapsed, including the
first day but excluding the last day
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of the relevant period.
3.6 ADDITIONAL COSTS. In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank or
the Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), including any risk based capital
guidelines, (a) affects or would affect the amount of capital required or
expected to be maintained by such Bank or the Agent (or any corporation
controlling such Bank or the Agent) and such Bank or the Agent determines that
the amount of such capital is increased by or based upon the existence of such
Bank's or the Agent s obligations hereunder and such increase has the effect of
reducing the rate of return on such Bank's or the Agent's (or such controlling
corporation's) capital as a consequence of such obligations hereunder to a level
below that which such Bank or the Agent (or such controlling corporation) could
have achieved but for such circumstances (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Bank or the Agent
to be material, or (b) shall affect the basis of taxation of payments to such
Bank or the Agent of any amounts payable by the Company under this Agreement
(other than taxes imposed on the overall net income of such Bank or the Agent,
by the jurisdiction, or by such political subdivision or taxing authority of any
such jurisdiction, in which such Bank or the Agent has its principal office), or
(c) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by such Bank or the Agent, or (d) shall impose any other
condition with respect to this Agreement, the Commitments or the Notes, and,with
respect to any of the foregoing clauses (b), (c) and (d), the result is to
increase the cost to such Bank or the Agent, as the case may be, of making,
funding or maintaining any Fixed Rate Loan or to reduce the amount of any sum
receivable by such Bank or the Agent, as the case may be, thereon, then the
Company shall pay to such Bank or the Agent, as the case may be, from time to
time, upon request by such Bank (with a copy of such request to be provided to
the Agent) or the Agent, additional amounts sufficient to compensate such Bank
or the Agent, as the case may be, (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which such Bank or
the Agent reasonably determines to be allocable to the existence of such Bank's
or the Agent's obligations hereunder or for such increased cost or reduced sum
receivable to the extent, in the case of any Fixed Rate Loan, such Bank or the
Agent is not compensated therefor in the computation
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of the interest rate applicable to such Fixed Rate Loan. A statement as to the
amount of such compensation or increased cost or reduced sum receivable, as the
case may be, prepared in good faith and in reasonable detail by such Bank or the
Agent, as the case may be, and submitted by such Bank or the Agent, as the case
may be, to the Company, shall be, conclusive and binding for all purposes absent
manifest error in computation.
3.7 ILLEGALITY AND IMPOSSIBILITY. In the event that any
applicable law, treaty, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to any Bank, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, shall
make it unlawful or impossible for any Bank to maintain any Fixed Rate Loan
under this Agreement, the Company shall upon receipt of notice thereof from such
Bank, repay in full the then outstanding principal amount of each Fixed Rate
Loan so affected, together with all accrued interest thereon to the date of
payment and all amounts owing to such Bank under Section 3.8, (a) on the last
day of the then current Interest Period applicable to such Loan if such Bank may
lawfully continue to maintain such Loan to such day, or (b) immediately if such
Bank may not continue to maintain such Loan to such day.
3.8 INDEMNIFICATION. (a) If the Company makes any payment of
principal with respect to any Fixed Rate Loan on any other date than the last
day of an Interest Period applicable thereto (whether pursuant to Section
3.1(b). Section 3.1(c), 3.1(d), Section 3.7, Section 6.2 or otherwise), or if
the Company fails to borrow any Fixed Rate Loan after notice has been given to
the Banks in accordance with Section 2.4, or if the Company fails to make any
payment of principal or interest in respect of a Fixed Rate Loan when due, the
Company shall, in addition to any amounts that may be payable pursuant to
Section 3.8(b), reimburse each Bank on demand for any resulting loss or expense
incurred by each such Bank, including without limitation any loss incurred in
obtaining, liquidating or employing deposits from third parties, whether or not
such Bank shall have funded or committed to fund such Loan. A statement as to
the amount of such loss or expense, prepared in good faith and in reasonable
detail by such Bank and submitted by such Bank to the Company, shall be
conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to such Bank under this Section 3.8(a) shall
be made as though such Bank shall have actually funded or committed to fund the
relevant Fixed Rate Loan through the purchase of an underlying deposit in an
amount equal to the
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amount of such Loan and having a maturity comparable to the related Interest
Period and, in the case of any Eurodollar Rate Loan, through the transfer of
such deposit from an off shore office of such Bank to a domestic office of such
Bank in the United States of America; PROVIDED, HOWEVER, that such Bank may fund
any Fixed Rate Loan in any manner it sees fit and the foregoing assumption shall
be utilized only for the purpose of calculation of amounts payable under this
Section 3.8(a).
(b) In the event that the Company makes any prepayment of
principal with respect to the Term Loan (whether pursuant to Section 3.1(b).
Section 3.1(c), 3,1(d), Section 3.7, Section 6.2 or otherwise) the Company
shall pay to each Bank a prepayment premium on the principal amount prepaid,
computed for the period from the date of prepayment to the scheduled maturity
or maturities thereof at a per annum rate equal to the greater of (i) one
percent (1%) and (ii) the amount by which the interest rate on the principal
amount prepaid exceeds the yield, as of the date of prepayment, on United
States Treasury bills, notes or bonds, selected by the Agent in its discretion,
having a maturity or maturities comparable to the scheduled maturity or
maturities of the principal amount prepaid.
For purposes of this Section 3.8(b), the scheduled maturity or maturities of any
principal amount prepaid shall be determined by applying such prepayments to the
scheduled installments of principal in the inverse order of their maturities.
The Company agrees that all amounts payable pursuant to this Section 3.8(b) are
a reasonable pre-estimate of loss and not a penalty. Such amounts are payable as
liquidated damages for the loss of bargain and payment of such amounts shall not
in any way reduce, affect or impair any other obligations of the Company under
this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Banks and the Agent
that:
4.1 CORPORATE EXISTENCE AND POWER. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Ohio and is duly qualified to do business, and is in good standing, in
all additional jurisdictions where such qualification is necessary under
applicable law, except those jurisdictions in which the failure to qualify would
not have a material adverse effect on its business. The Company has all
requisite corporate power to own or lease the properties used in its business
and to carry on its business as now being conducted
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and as proposed to be conducted, and to execute and deliver this Agreement and
the Notes and to engage in the transactions contemplated by this Agreement.
4.2 CORPORATE AUTHORITY. The execution, delivery and performance
by the Company of this Agreement and the Notes have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or code of regulations, or of any contract or undertaking to which the
Company is a party or by which the Company or its property may be bound or
affected and will not result in the imposition of any Lien except for Permitted
Liens.
4.3 BINDING EFFECT. This Agreement is, and the Notes when
delivered hereunder will be, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity.
4.4 SUBSIDIARIES. SCHEDULE 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Subsidiary
of the Company. Each such Subsidiary and each corporation becoming a Subsidiary
of the Company after the date hereof is and will be a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is and will be duly qualified to do business
in each additional jurisdiction where such qualification is or may be necessary
under applicable law, except those jurisdictions in which the failure to qualify
would not have a material adverse effect on its business. Each Subsidiary of the
Company has and will have all requisite corporate power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted. All outstanding shares of capital
stock of each class of each Subsidiary of the Company have been and will be
validly issued and are and will be fully paid and nonassessable and, except as
otherwise indicated in SCHEDULE 4.4 hereto or disclosed in writing to the Agent
and the Banks from time to time, are and will be owned, beneficially and of
record, by the Company or another Subsidiary of the Company free and clear of
any Liens. The corporations described in SCHEDULE 4.4 hereto constitute all
persons in which the Company or any of its Subsidiaries has an ownership
interest.
4.5 LITIGATION. Except as set forth in SCHEDULE 4.5 hereto, there
is no action, suit or proceeding pending or, to the
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best of the Company's knowledge, threatened against or affecting the Company or
any of its Subsidiaries before or by any court, governmental authority or
arbitrator, which if adversely decided might result in any material adverse
change in the business, properties, operations or condition, financial or
otherwise, of the Company or of, in the aggregate, any of its Subsidiaries or in
any material adverse effect on the legality, validity or enforceability of this
Agreement or the Notes.
4.6 FINANCIAL CONDITION. The consolidated balance sheet of the
Company and its Subsidiaries and the consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for the fiscal year
ended December 31, 1994 and reported on by Coopers & ▇▇▇▇▇▇▇, independent,
certified public accountants, copies of which have been furnished to the Banks,
fairly present, and the financial statements of the Company and its Subsidiaries
delivered pursuant to Section 5.1(d) will fairly present, the consolidated
financial position of the Company and its Subsidiaries as at the respective
dates thereof, and the consolidated results of operations of the Company and its
Subsidiaries for the respective periods indicated, all in accordance with
generally accepted accounting principles consistently applied (subject, in the
case of said interim statements, to year-end audit adjustments). There has been
no material adverse change in the business, properties, operations or condition,
financial or otherwise, of the Company or any of its Subsidiaries since December
31, 1994. There is no material Contingent Liability of the Company that is not
reflected in such financial statements or in the notes thereto.
4.7 USE OF LOANS. The Company will use the proceeds of the Loans
for its general corporate purposes. Neither the Company nor any of its
Subsidiaries extends or maintains, in the ordinary course of business, credit
for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan will be used for the purpose, whether immediate, incidental, or ultimate,
of buying or carrying any such margin stock or maintaining or extending credit
to others for such purpose. After applying the proceeds of each Loan, such
margin stock will not constitute more than 25% of the value of the assets
(either of the Company alone or of the Company and its Subsidiaries on a
consolidated basis) that are subject to any provisions of this Agreement that
may cause the Loans to be deemed secured, directly or indirectly, by margin
stock.
4.8 CONSENTS, ETC. No consent, approval or authorization of or
declaration, registration or filing with any governmental
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authority or any nongovernmental person or entity, including without limitation
any creditor, lessor or stockholder of the Company or any of its Subsidiaries,
is required on the part of the Company in connection with the execution,
delivery and performance of this Agreement, the Notes or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Agreement or the Notes.
4.9 TAXES. The Company and its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and have paid all taxes
shown thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof, Neither the Company nor any of its Subsidiaries knows of any actual or
proposed tax assessment or any basis therefor, and no extension of time for the
assessment of deficiencies in any federal or state tax has been granted by the
Company or any Subsidiary.
4.10 TITLE TO PROPERTIES. Except as otherwise disclosed in the
latest balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this
Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets,
reflected in said balance sheet or subsequently acquired by the Company or any
Subsidiary. All of such properties and assets are free and clear of any Lien,
except for Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, their ERISA Affiliates
and their respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any such Plan. None of the Company, any of its Subsidiaries or any of
their ERISA Affiliates is an employer with respect to any Multiemployer Plan,
The Company, its Subsidiaries and their ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC or any
Plan. The execution, delivery and performance of this Agreement and the Notes
does not constitute a Prohibited Transaction. There is no material unfunded
benefit liability, determined in accordance with Section 4001(a)(18) of ERISA,
with respect to any Plan of the Company, its subsidiaries or their ERISA
Affiliates.
4.12 DISCLOSURE. No report or other information furnished in
writing or on behalf of the Company to the Bank in connection
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with the negotiation or administration of this Agreement contains any material
misstatement of fact or omits to state any material fact or any fact necessary
to make the statements contained therein not misleading. Neither this Agreement
or the Notes, nor any other document, certificate, or report or statement or
other information furnished to the Bank by or on behalf of the Company in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact in order to make
the statements contained herein and therein not misleading. There is no fact
known to the Company which materially and adversely affects, or which in the
future may (so far as the Company can now foresee) materially and adversely
affect, the business, properties, operations or condition, financial or
otherwise, of the Company or any Subsidiary, which has not been set forth in
this Agreement or in the other documents, certificates, statements, reports and
other information furnished in writing to the Bank by or on behalf of the
Company in connection with the transactions contemplated hereby.
4.13 ENVIRONMENTAL CERTIFICATE. The representations and
warranties contained in the Environmental Certificate are true and correct as of
the Effective Date and the Company hereby acknowledges and confirms the
continuing effect of its covenants, agreements and obligations thereunder.
4.14 BORROWING BASE. All trade accounts receivable and inventory
of the Company represented or reported by the Company to be, or are otherwise
included in, Eligible Accounts Receivable and Eligible Inventory comply in all
respects with the requirements therefor set forth in the definition thereof, and
the computation of the Borrowing Base set forth in each Borrowing Base
Certificate is true and correct.
ARTICLE V.
COVENANTS
---------
5.1 AFFIRMATIVE COVENANTS. The Company covenants and agrees that,
until the Termination Date and thereafter until payment in full of the principal
of and accrued interest on the Notes and the performance of all other
obligations, of the Company under this Agreement, unless the Bank shall
otherwise consent in writing, it shall, and shall cause each of its Subsidiaries
to:
(a) PRESERVATION OF CORPORATE EXISTENCE, ETC. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and its qualification as a foreign corporation in good
standing in each jurisdiction in
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which such qualification is necessary under applicable law, except those
jurisdictions in which the failure to qualify would not have a material adverse
effect on its business, and the rights, licenses, permits (including those
required under Environmental Laws), franchises, patents, copyrights, trademarks
and trade names material to the conduct of its businesses; and defend all of the
foregoing against all claims, actions, demands, suits or proceedings at law or
in equity or by or before any governmental instrumentality or other agency or
regulatory authority.
(b) COMPLIANCE WITH LAWS, ETC. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to time;
and pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income, revenues or property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
give rise to Liens upon such properties or any portion thereof, except to the
extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the Company
or such Subsidiary.
(c) MAINTENANCE OF PROPERTIES: INSURANCE. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in working order and
from time to time make, or cause to be made all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times in accordance with customary and prudent business practices for
similar businesses; and maintain in full force and effect insurance with
responsible and reputable insurance companies or associations in such amounts,
on such terms and covering such risks, including fire and other risks insured
against by extended coverage, as is usually carried by companies engaged in
similar businesses and owning similar properties similarly situated and maintain
in full force and effect public liability insurance, insurance against claims
for personal injury or death or property damage occurring in connection with any
of its activities or any of any properties owned, occupied or controlled by it,
in such amount as it shall reasonably deem necessary, and maintain such other
insurance as may be required by law or as may be reasonably requested by the
Required Banks for purposes of assuring compliance with this Section 5.1(c).
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(d) REPORTING REQUIREMENTS. Furnish to the Banks and the Agent
the following:
(i) Promptly and in any event within three Business Days
after becoming aware of the occurrence of (A) any Event of Default or any event
or condition which, with notice or lapse of time, or both, would constitute an
Event of Default, (B) the commencement of any material litigation against, by or
affecting the Company or any of its Subsidiaries, and any material developments
therein, (C) entering into any material contract or undertaking that is not
entered into in the ordinary course of business or (D) any development in the
business or affairs of the Company or any of its Subsidiaries which has resulted
in or which is likely in the reasonable judgment of the Company, to result in a
material adverse change in the business, properties, operations or condition,
financial or otherwise of the Company or any of its Subsidiaries, a statement of
the chief financial officer of the Company setting forth details of such Event
of Default or such event or condition or such litigation and the action which
the Company or such Subsidiary, as the case may be, has taken and proposes to
take with respect thereto;
(ii) As soon as available and in any event within 60 days
after the end of each fiscal quarter of the Company, the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such quarter, and the
related period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Company as having been
prepared in accordance with generally accepted accounting principles, together
with a certificate of the chief financial officer of the Company stating (A)
that no Event of Default or event or condition which, with notice or lapse of
time, or both, would constitute an Event of Default, has occurred and is
continuing or, if an Event of Default or such an event or condition has occurred
and is continuing, a statement setting forth the details thereof and the action
which the Company has taken and proposes to take with respect thereto, and (B)
that a computation (which computation shall accompany such certificate and shall
be in reasonable detail) showing compliance with Section 5.2(a), (b) and (c)
hereof is in conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 120
days after the end of each fiscal year of the Company, a copy of the
consolidated and consolidating balance sheet of the Company and its Subsidiaries
as of the end of such fiscal year and the
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related consolidated and consolidating statements of income, retained earnings
and cash flows of the Company and its Subsidiaries for such fiscal year, with a
customary audit report of Coopers & ▇▇▇▇▇▇▇ or other independent certified
public accountants selected by the Company and acceptable to the Required Banks
(which acceptance will not unreasonably be withheld), without qualifications
unacceptable to the Required Banks, together with a certificate of such
accountants stating (A) that they have reviewed this Agreement and stating
further whether, in the course of their review of such financial statements,
they have become aware of any Event of Default or any event or condition which,
with notice or lapse of time, or both, would constitute an Event of Default,
and, if such an Event of Default or such an event or condition then exists and
is continuing, a statement setting forth the nature and status thereof, and (B)
that a computation by the Company (which computation shall accompany such
certificate and shall be in reasonable detail) showing compliance with Section
5.2 (a), (b) and (c) hereof is in conformity with the germs of this Agreement;
(iv) No later than the 30th calendar day following the end
of each fiscal quarter of the Company, a Borrowing Base Certificate prepared as
of the close of business on the last day of each such fiscal quarter, together
with supporting schedules, in form and detail satisfactory to the Agent, setting
forth such information as the Agent may request with respect to the aging,
value, location and other information relating to the computation of the
Borrowing Base and the eligibility of any property or assets included in such
computation, certified as true an correct by the chief financial officer of the
Company;
(v) Promptly after the sending or filing thereof, copies
of all reports, proxy statements and financial statements which the Company or
any of its Subsidiaries sends to or files with any of their respective security
holders or any securities exchange or the Securities and Exchange Commission or
any successor agency thereof;
(vi) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of its Subsidiaries as the Agent or any Bank may from time to
time reasonably request.
(e) ACCOUNTING: ACCESS TO RECORDS, BOOKS, ETC. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
generally accepted accounting principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time, (i) permit any
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Bank or the Agent or any agents or representatives thereof to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with their respective
directors, officers, employees and independent auditors, and by this provision
the Company does hereby authorize such persons to discuss such affairs, finances
and accounts with any Bank or the Agent, and (ii) permit any Bank or the Agent
or any of its agents or representatives to conduct a comprehensive field audit
of its books, records, properties and assets.
(f) TAXES. Pay in full, except to the extent being contested in
good faith by appropriate proceedings and as to which adequate financial
reserves have been established on the Company's or such Subsidiary's, as the
case may be, books and records, (i) in each case prior to the date when
penalties for the nonpayment thereof would attach, all taxes, assessments and
governmental charges and levies for which it may be or become subject and all
lawful claims which, if unpaid, might become a lien or charge upon its property,
and (ii) all stamp taxes and similar taxes, if any, including interest and
penalties, if any, payable in respect of any Loans or the Notes. The efficacy of
this subsection 5.1(f) shall survive the payment in full of the Notes.
5.2 NEGATIVE COVENANTS. Until the Termination Date and thereafter
until payment in full of the principal of and accrued interest on the Notes and
the performance of all other obligations of the Company under this Agreement,
the Company agrees that, unless the Required Banks shall otherwise consent in
writing it shall not, and shall not permit any of its Subsidiaries to:
(a) CURRENT RATIO. Permit or suffer the ratio of Consolidated
Current Assets of the Company and its Subsidiaries to Consolidated Current
Liabilities of the Company and its Subsidiaries to be less than 1.75 to 1.0 at
any time.
(b) TANGIBLE NET WORTH. Permit or suffer (i) the sum of (A)
Consolidated Tangible Net Worth of the Company and its Subsidiaries plus (B)
unrealized foreign currency losses of the Company and its Subsidiaries that do
not exceed $5,000,000 in the aggregate plus (C) the Aggregate Change LIFO
Reserve Adjustment to on any date (the "Determination Date") be less than (ii)
the sum of (A) $45,500,000 plus (B) 50% of Consolidated Cumulative Net Income of
the Company and its Subsidiaries after December 31, 1994 until the Determination
Date.
(c) TOTAL LIABILITIES TO TANGIBLE NET WORTH. Permit or
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suffer the ratio of Consolidated Total Liabilities of the Company and its
Subsidiaries to Consolidated Tangible Net Worth of the Company and its
Subsidiaries to be greater than 1.0 to 1.0 at any time.
(d) LIENS. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created
and maintained in the ordinary course of business which are not material in the
aggregate, and which would not have a material adverse effect on the business or
operations of the Company or any of its Subsidiaries and which constitute (A)
pledges or deposits under worker's compensation laws, unemployment insurance
laws or similar legislation, (B) good faith deposits in connection with bids,
tenders, contracts or leases to which the Company or any of its Subsidiaries is
a party for a purpose other than borrowing money or obtaining credit, including
rent security deposits, (C) liens imposed by law, such as those of carriers,
warehousemen and mechanics, if payment of the obligation secured thereby is not
yet due, (D) Liens securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment, and (E) pledges or deposits
to secure public or statutory obligations of the Company or any of its
Subsidiaries, or surety, customs or appeal bonds to which the Company or any of
its Subsidiaries is a party;
(iii) Each Lien described in SCHEDULE 5.2(d) hereto, which
may be suffered to exist upon the same terms as those existing on the date
hereof, but no extension or renewal thereof shall be permitted:
(iv) Any Lien created to secure payment of a portion of
the purchase price of any tangible fixed asset acquired by the Company or any of
its Subsidiaries may be created or suffered to exist upon such fixed asset if
the outstanding principal amount of the indebtedness secured by such Lien does
not at any time exceed ninety percent of the purchase price paid by the Company
or such Subsidiary for such fixed asset and the aggregate principal amount of
all indebtedness secured by all such Liens does not exceed $5,000,000, PROVIDED
that such Lien does not encumber any other asset at any time owned by the
Company or such Subsidiary, and PROVIDED, FURTHER, that not more than one such
Lien shall encumber
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such fixed asset at any one time; and
(v) The interest or title of a lessor under any lease
otherwise permitted under this Agreement with respect to the property subject to
such lease to the extent performance of the obligations of the Company or its
Subsidiary thereunder are not delinquent.
(e) MERGER: ACQUISITIONS; ETC. Purchase or otherwise acquire,
whether in one or a series of transactions, all or a substantial portion of the
business assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, of any person, or all or a substantial portion of the capital
stock of or other ownership interest in any other person, provided that this
Section 5.2(e) shall not prohibit any such purchase or acquisition if the
aggregate consideration paid by the Company for all such purchases and
acquisitions after the Effective Date shall be less than $5,000,000; nor merge
or consolidate or amalgamate with any other person or take any other action
having a similar effect, nor enter into any joint venture or similar arrangement
with any other person in which the Company is required to make an equity
contribution having a similar effect.
(f) DISPOSITION OF ASSETS: Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or a substantial portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales of
scrap or obsolete material or equipment, PROVIDED, HOWEVER, that this Section
5.2(f) shall not prohibit any such sale, lease, license, transfer, assignment or
other disposition if the aggregate book value (disregarding any write downs of
such book value other than ordinary depreciation and amortization) of all of the
business, assets, rights, revenues and property disposed of after the date of
this Agreement is not greater than $1,000,000 in the aggregate during any
12-month period and if, immediately after such transaction, no Default or Event
of Default shall exist or shall have occurred and be continuing.
(g) NATURE OF BUSINESS. Make any material change in the nature of
its business from that engaged in on the date of this Agreement or engage in any
other businesses other than those in which it is engaged on the date of this
Agreement.
(h) DIVIDENDS AND OTHER RESTRICTED PAYMENTS. Make, pay, declare
or authorize any dividend, payment or other distribution in respect of any class
of its capital stock or any dividend, payment or distribution in connection with
the redemption,
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purchase, retirement or other acquisition, directly or indirectly, of any shares
of its capital stock other than such dividends, payments or other distributions
to the extent payable solely in shares of the capital stock of the Company,
PROVIDED, HOWEVER, that, if no Default or Event of Default shall exist or shall
have occurred and be continuing, (i) any Subsidiary of the Company may make,
pay, declare or authorize dividends, payments and other such distributions
collectively, "Distributions") to the Company, and (ii) the Company may make
Distributions during each fiscal year ending after the Effective' Date which,
together with all other Distributions made during any such fiscal year, in the
aggregate do not exceed the sum of (A) Net Income of the Company for such fiscal
year plus (B) the difference of (1) $3,750,000 minus (2) the aggregate amount of
Excess Distributions for all previous fiscal years since December 31, 1994. For
purposes of this Section 5.2(h), (i) "capital stock" shall include capital stock
and any securities exchangeable for or convertible into capital stock and any
warrants, rights or other options to purchase or otherwise acquire capital stock
or such securities, and (ii) "Excess Distributions" shall mean, with respect to
any fiscal year of the Company, the portion of the aggregate amount of
Distributions made by the Company during such fiscal year that exceeds the Net
Income of the Company for such fiscal year.
(i) CAPITAL EXPENDITURES. Acquire any fixed asset or make any
other capital expenditure (collectively, "Capital Expenditures") if the
aggregate purchase price and other acquisition costs of all such Capital
Expenditures made by the Company or any of its Subsidiaries during any fiscal
year of the Company ending after the Effective Date would exceed, on a
consolidated basis, an amount equal to the sum of (i) the consolidated
depreciation expense relating to fixed assets ("Depreciation Expense") of the
Company and its Subsidiaries for such fiscal year plus (ii) the difference of
(A) $10,000,000 minus (B) the aggregate amount of Excess Capital Expenditures
for all previous fiscal years since December 31, 1994. For purposes of this
Section 5.2(i), "Excess Capital Expenditures" shall mean, with respect to any
fiscal year of the Company, the portion of the aggregate amount of consolidated
Capital Expenditures of the Company and its Subsidiaries made during such fiscal
year that exceeds the consolidated Depreciation Expense of the Company and its
Subsidiaries for such fiscal year.
(j) TRANSACTIONS WITH AFFILIATES. Enter into, become a party to,
or become liable in respect of, any contract or undertaking with any Affiliate
except in the ordinary course of business and on terms not less favorable to the
Company or such Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a person other
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than an Affiliate.
(k) INVESTMENTS, LOANS AND ADVANCES. Purchase or otherwise
acquire any capital stock of or other ownership interest in, or debt securities
of or other evidences of indebtedness of, any other person; nor make any loan or
advance of any of its funds or property or make any other extension of credit
to, or make any investment or acquire any interest whatsoever in, any other
person; nor incur any Contingent Liability; other than (i) extensions of trade
credit made in the ordinary course of business on customary credit terms and
commission, travel and similar advances made to officers and employees in the
ordinary course of business, and (ii) commercial paper of any United States
issuer having the highest rating then given by ▇▇▇▇▇'▇ Investors Service, Inc.,
or Standard & Poor's Corporation, direct obligations of and obligations fully
guaranteed by the United States of America or certificates of deposit of any
commercial bank which is a member of the Federal Reserve System and which has
capital, surplus and undivided profit (as shown on its most recently published
statement of condition) aggregating not less than $100,000,000, PROVIDED,
HOWEVER, that each of the foregoing investments has a maturity date not later
than 180 days after the acquisition thereof by the Company or any of its
Subsidiaries, (iii) investments permitted by Section 5.2(e), and (iv) those
investments, loans, advances and other transactions described in SCHEDULE 5.2
(k) hereto, having the same terms as existing on the date of this Agreement, but
no extension or renewal thereof shall be permitted.
(l) CONTINGENT LIABILITIES. Create, incur, assume, or in any
manner become liable in respect of, or suffer to exist, Contingent Liabilities
in excess of $5,000,000 for the Company and its Subsidiaries on a consolidated
basis.
(m) NEGATIVE PLEDGE LIMITATION. Enter into any Agreement, with
any person other than the Banks pursuant hereto, which prohibits or limits the
ability of the Company or any Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, whether now owned or hereafter
acquired.
(n) RESTRICTIONS ON PAYMENTS BY SUBSIDIARIES. Enter into any
agreement, contract or arrangement restricting the ability of any Subsidiary of
the Company to pay dividends or make cash advances or other payments of any
nature to the Company or to any Subsidiary of the Company of which such
Subsidiary is also a Subsidiary.
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(o) INCONSISTENT AGREEMENTS. Enter into any agreement containing
any provision which would be violated or breached by this Agreement or any of
the transactions contemplated hereby or by performance by the Company or any of
its Subsidiaries of its obligations in connection therewith.
(p) FISCAL YEAR. Change its fiscal year from beginning January 1
and ending December 31.
ARTICLE VI.
DEFAULT
-------
6.1 EVENTS OF DEFAULT. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived by the Bank pursuant to Section 7.1:
(a) NONPAYMENT. The Company shall fail to pay when due any
principal of the Notes or the Company shall fail to pay within 10 days of the
due date thereof any interest on the Notes or any fees or any other amount
payable hereunder; or
(b) MISREPRESENTATION. Any representation or warranty made by the
Company in Article IV hereof or in any other certificate, report, financial
statement or other document furnished by or on behalf of the Company in
connection with this Agreement, shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) CERTAIN COVENANTS. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V hereof; or
(d) OTHER DEFAULTS. The Company shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement, and any such
failure shall remain unremedied for 30 calendar days after notice thereof shall
have been given to the Company by the Agent; or
(e) CROSS DEFAULT. (i) Any default or event of default shall
occur under any other agreement, instrument or document evidencing or otherwise
relating to any indebtedness (other than indebtedness hereunder) of the Company
or any of its Subsidiaries to any Bank; or (ii) The Company or any of its
Subsidiaries shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
indebtedness (other than indebtedness hereunder or described
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in clause (i) above), beyond any period of grace provided with respect thereto,
which individually or together with other such indebtedness as to which any such
failure exists has an aggregate outstanding principal amount in excess of
$100,000; or (iii) The Company or any of its Subsidiaries shall fail to perform
or observe any other term, covenant or agreement contained in any agreement,
document or instrument evidencing or securing any indebtedness (other than
indebtedness hereunder or described in clause (i) above) having such aggregate
outstanding principal amount, or under which any such indebtedness was issued or
created, beyond any period of grace, if any, provided with respect thereto if
the effect of such failure is either (A) to cause, or permit the holders of such
Indebtedness (or a trustee on behalf of such holders) to cause, any payment in
respect of such Indebtedness to become due prior to its due date or (ii) to
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to elect a majority of the board of directors of the Company; or
(f) JUDGMENTS. One or more judgments or orders for the payment of
money in an aggregate amount of $1,000,000 or more shall be rendered against the
Company or any of its Subsidiaries, or any other judgment or order (whether or
not for the payment of money) shall be rendered against or shall affect the
Company or any of its Subsidiaries which causes or could cause a material
adverse change in the business, properties, operations or condition, financial
or otherwise, of the Company or any of its Subsidiaries or which does or could
have a material adverse effect on the legality, validity or enforceability of
this Agreement or the Notes, and either (i) such judgment or order shall have
remained unsatisfied and the Company or such Subsidiary shall not have taken
action necessary to stay enforcement thereof, by reason of pending appeal or
otherwise, prior to the expiration of the applicable period of limitations for
taking such action or, if such action shall have been taken, a final order
denying such stay shall have been rendered, or (ii) enforcement proceedings
shall have been commenced by any creditor upon any such judgment or order; or
(g) ERISA. The occurrence of a Reportable Event that results in
or there is a reasonable possibility that it could result in material liability
of the Company, any Subsidiary of the Company or their ERISA Affiliates to the
PBGC or to any Plan and such Reportable Event is not corrected within thirty
(30) days after the occurrence thereof; or the occurrence of any Reportable
Event which there is a reasonable possibility could constitute grounds for
termination of any Plan of the Company, its Subsidiaries or their ERISA
Affiliates by the PBGC or for the appointment by the appropriate United States
District Court of a
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trustee to administer any such Plan and such Reportable Event is not corrected
within thirty (30) days after the occurrence thereof; or the filing by the
Company, any Subsidiary of the Company or any of their ERISA Affiliates of a
notice of intent to terminate a Plan or the institution of other proceedings to
terminate a Plan; or the Company, any Subsidiary of the Company or any of their
ERISA Affiliates shall fail to pay when due any material liability to the PBGC
or to a Plan; or the PBGC shall have instituted proceedings to terminate, or to
cause a trustee to be appointed to administer, any Plan of the Company, its
Subsidiaries or their ERISA Affiliates; or any person engages in a Prohibited
Transaction with respect to any Plan which results in or there is a reasonable
possibility could result in material liability of the Company, any Subsidiary of
the Company, any of their ERISA Affiliates, any Plan of the Company, its
Subsidiaries or their ERISA Affiliates or fiduciary of any such Plan; or failure
by the Company, any Subsidiary of the Company or any of their ERISA Affiliates
to make a required installment or other payment to any Plan within the meaning
of Section 302(f) of ERISA or Section 412(n) of the Code that results in or
there is a reasonable possibility could result in liability of the Company, any
Subsidiary of the Company or any of their ERISA Affiliates to the PBGC or any
Plan; or the withdrawal of the Company, any of its Subsidiaries or any of their
ERISA Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001 (9a) (2) of ERISA; or the Company, any of
its Subsidiaries or any of their ERISA Affiliates becomes an employer with
respect to any Multiemployer Plan without the prior written consent of the Bank;
or
(h) INSOLVENCY, ETC. The Company or any of its Subsidiaries shall
be dissolved or liquidated (or any judgment, order or decree therefor shall be
entered), or shall generally not pay its debts as they become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against the Company or any of its Subsidiaries, any
proceeding or case seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
entry of an order for relief, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
assets, rights, revenues or property, and, if such proceeding is instituted
against the Company or such Subsidiary and is being contested by the Company or
such Subsidiary, as the case may be, in good faith by appropriate
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proceedings, such proceeding shall remain undismissed or unstayed for a period
of 60 days; or the Company or such Subsidiary shall take any action (corporate
or other) to authorize or further any of the actions described above in this
subsection.
6.2 REMEDIES.
(a) Upon the occurrence and during the continuance of any Event
of Default, the Agent may and, upon being directed to do so by the Required
Banks, shall by notice to the Company (i) terminate the Commitments or (ii)
declare the outstanding principal of, and accrued interest on, the Notes and all
other amounts owing under this Agreement to be immediately due and payable, or
both, whereupon the Commitments shall terminate forthwith and all such amounts
shall become immediately due and payable, PROVIDED that in the case of any event
or condition described in Section 6.1(h) with respect to the Company, the
Commitments shall automatically terminate forthwith and all such amounts shall
automatically become immediately due and payable without notice; in all cases
without demand, presentment, protest, diligence, notice of dishonor or other
formality, all of which are hereby expressly waived.
(b) The Agent may and, upon being directed to do so by the
Required Banks, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it or
the Banks, whether arising under this Agreement, the Notes or under applicable
law, in any manner deemed appropriate by the Agent, including suit in equity,
action at law, or other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or agreement
contained in this Agreement or in the Notes or in aid of the exercise of any
power granted in this Agreement or the Notes.
(c) Upon the occurrence and during the continuance of any Event
of Default, each Bank may at any time and from time to time, without notice to
the Company (any requirement for such notice being expressly waived by the
Company) set off and apply against any and all of the obligations of the Company
now or hereafter existing under this Agreement, whether owing to such Bank or
any other Bank or the Agent, any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Bank to or for the credit or the account of the Company and
any property of the Company from time to time in possession of such Bank,
irrespective of whether or not such Bank shall have made any demand hereunder
and although such obligations may be contingent and unmatured. The Company
hereby grants to such Bank a lien on and security interest in all such deposits,
indebtedness and property as collateral security for the payment and performance
of the obligations of the Company
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under this Agreement. The rights of each Bank under this Section 6.2(c) are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Banks may have.
(d) In addition to other amounts payable pursuant to this
Agreement, the Company confirms that it shall further pay, together with any
payment of the Term Loan hereunder after the occurrence and during the
continuance of any Event of Default, all amounts required to be paid pursuant to
Section 3.8.
ARTICLE VII.
THE AGENT AND THE BANKS
-----------------------
7.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. The provisions of this Article VII are solely for
the benefit of the Agent and the Banks, and the Company shall not have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
the Company.
7.2 AGENT AND AFFILIATES. NBD Bank in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent, NBD Bank and its Affiliates may (without having to account therefor to
any Bank) accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with the Company or any
of its Subsidiaries as if it were not acting as Agent hereunder, and may accept
fees and other consideration therefor without having to account for the same to
the Banks.
7.3 SCOPE OF AGENT'S DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actioned under the Notes), the Agent
shall not be required to
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exercise any discretion or take any action, but the Agent shall take such action
or omit to take any action pursuant to the reasonable written instructions of
the Required Banks and may request instructions from the Required Banks. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, pursuant to the written instructions of the Required Banks, which
instructions and any action or omission pursuant thereto shall be binding upon
all of the Banks; PROVIDED, HOWEVER, that the Agent shall not be required to act
or omit to act if, in the judgment of the Agent, such action or omission may
expose the Agent to personal liability or is contrary to this Agreement or the
Notes or applicable law.
7.4 RELIANCE BY AGENT. The Agent shall be entitled to rely upon
any certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto, The Agent
may employ agents (including without limitation collateral agents) and may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable to
the Banks, except as to money or property received by it or its authorized
agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.5 DEFAULT. The Agent shall not be deemed to have knowledge of
the occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or the Company specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice, the Agent shall give written notice thereto to
the Banks.
7.6 LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable to the Banks for any
action taken or not taken by it or them in connection herewith with the consent
or at the request of the Required Banks or in the absence of its or their own
gross negligence or willful misconduct. Neither the Agent nor any of
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its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any recital, statement,
warranty or representation contained in this Agreement or any Note, or in any
certificate, report, financial statement or other document furnished in
connection with this Agreement, (ii) the performance or observance of any of the
covenants or agreements of the Company, (iii) the satisfaction of any condition
specified in Article II hereof, or (iv) the validity, effectiveness, legal
enforceability, value or genuineness of this Agreement, the Notes or any other
instrument or document furnished in connection herewith.
7.7 NONRELIANCE ON AGENT AND OTHER BANKS. Each Bank acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decision in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of this Agreement, the Notes or any other documents referred to or
provided for herein or to inspect the properties or books of the Company and,
except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any information
concerning the affairs, financial condition or business of the Company or any of
its Subsidiaries which may come into the possession of the Agent or any of its
Affiliates.
7.8 INDEMNIFICATION. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Company, but without limiting any obligation of
the Company to make such reimbursement), ratably according to their Pro Rata
Shares, from and against any and all claims, damages, losses, liabilities, costs
or expenses of any kind or nature whatsoever (including, without limitation,
fees and disbursements of counsel) which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or the transactions contemplated hereby or any action taken or omitted
by the Agent under this Agreement, PROVIDED, HOWEVER, that no Bank shall be
liable for any portion of such claims, damages, losses, liabilities, costs or
expenses resulting from the Agent's gross negligence or willful misconduct,
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
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(including, without limitation, fees and expenses of counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Company, but without limiting the obligation
of the Company to make such reimbursement. Each Bank agrees to reimburse the
Agent promptly upon demand for its ratable share of any amounts owing to the
Agent by the Banks pursuant to this Section. If the indemnity furnished to the
Agent under this Section shall, in the judgment of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity from the Banks and
cease, or not commence; to take any action until such additional indemnity is
furnished.
7.9 SUCCESSOR AGENT. The Agent may resign as such at any time
upon ten days' prior written notice to the Company and the Banks. In the event
of any such resignation, the Required Banks shall, by an instrument in writing
delivered to the Company and the Agent, appoint a successor, which shall be -a
commercial bank organized under the laws of the United States or any State
thereof and having a combined capital and surplus of at least $500,000,000. If a
successor is not so appointed or does not accept such appointment before the
Agent's resignation becomes effective, the retiring Agent may appoint a
temporary successor to act until such appointment by the Required Banks is made
and accepted or if no such temporary successor is appointed as provided above by
the retiring Agent, the Required Banks shall thereafter perform all the duties
of the Agent hereunder until such appointment by the Required Banks is made and
accepted. Any successor to the Agent shall execute and deliver to the Company
and the Banks an instrument accepting such appointment and thereupon such
successor Agent, without further act, deed, conveyance or transfer shall become
vested with all of the properties, rights, interests, powers, authorities and
obligations of its predecessor hereunder with like effect as if originally named
as Agent hereunder. Upon request of such successor Agent, the Company and the
retiring Agent shall execute and deliver such instrument of conveyance,
assignment and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Agent all such properties, rights, interest, powers, authorities and
obligations, The provisions of this Article VII shall thereafter remain
effective for such retiring Agent with respect to any actions taken or omitted
to be taken by such Agent while acting as the Agent hereunder.
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7.10 SHARING OF PAYMENTS. The Banks agree among themselves that,
in the event that any Bank shall obtain payment in respect of any Loan or any
other obligation owing to the Banks under this Agreement through the exercise of
a right of set-off, banker's lien, counterclaim or otherwise in excess of its
Pro Rata Share of payments received by all of the Banks on account of the Loans
and other obligations, such Bank shall promptly purchase from the other Banks
participation in such Loans and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
of the Banks share such payment in accordance with their Pro Rata Shares. The
Banks further agree among themselves that if payment to a Bank obtained by such
Bank through the exercise of a right of set-off, banker's lien, counterclaim or
otherwise as aforesaid shall be rescinded or must otherwise be restored, each
Bank which shall have shared the benefit of such payment shall, by repurchase of
participation theretofore sold, return its share of that benefit to each Bank
whose payment shall have been rescinded or otherwise restored, The Company
agrees that any Bank so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim with respect to such Loan or other obligation in
the amount of such participation. The Banks further agree among themselves that,
in the event that amounts received by the Banks and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Banks under this Agreement. Except as otherwise expressly provided in this
Agreement. if any Bank or the Agent shall fail to remit to the Agent or
any,other Bank an amount payable by such Bank or the Agent to the Agent or such
other Bank pursuant to this Agreement on the date when such amount is due, such
payment shall be made together with interest thereon for each date from the date
such amount is due until the date such amount is paid to the Agent or such other
Bank at a rate per annum equal to the rate at which borrowings are available to
the payee in its overnight federal funds market. It is further understood and
agreed among the Banks and the Agent that if the Agent shall engage in any other
transactions with the Company and shall have the benefit of any collateral or
security therefor which does not expressly secure the obligations arising under
this Agreement except by virtue of a so-called dragnet clause or comparable
provision, the Agent shall be entitled to apply any proceeds of such collateral
or security first in respect of the obligations arising in connection with such
other transaction before application to the obligations arising under this
Agreement.
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ARTICLE VIII.
MISCELLANEOUS
-------------
8.1 AMENDMENTS, ETC. (a) No amendment, modification, termination
or waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Required Banks and, to the extent any rights or duties of the Agent may be
affected thereby, the Agent, Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) Notwithstanding anything herein to the contrary, no Bank that
is in default of any of its obligations, covenants or agreements under this
Agreement shall be entitled to vote (whether to consent or to withhold its
consent) with respect to any amendment, modification, termination or waiver of
any provision of this Agreement or any departure therefrom or any direction from
the Banks to the Agent, and, for purposes of determining the Required Banks at
any time when any Bank is in default under this Agreement, the Commitments and
Loans of such defaulting Banks shall be disregarded.
8.2 NOTICES. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Company at ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇. Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Treasurer, Facsimile No. (513)
492-7958, and to the Agent and the Banks at their respective addresses for
notices set forth on the signature pages hereof, or to such other address as may
be designated by the Company, the Agent or any Bank by notice to the other
parties hereto. All notices and other communications shall be deemed to have
been given at the time of actual delivery thereof to such address, or if sent by
certified or registered mail, postage prepaid, to such address, on the third day
after the date of mailing, or in the case of telex notice, upon receipt of the
appropriate answerback, PROVIDED, HOWEVER, that notices to the Agent shall not
be effective until received.
(b) Notices by the Company to the Agent with respect to
terminations or reductions of the Revolving Credit Commitment pursuant to
Section 2.2, requests for Loans pursuant to Section 2.4, requests for
continuations or conversions of Loans pursuant to Section 2.7 and notices of
prepayment pursuant to Section 3.1 shall be irrevocable and binding on the
Company.
(c) Any notice to be given by the Company to the Agent pursuant
to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Bank
hereunder, may be given by telephone, and
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all such notices given by the Company must be immediately confirmed in writing
in the manner provided in Section 8.2(a), Any such notice given by telephone
shall be deemed effective upon receipt thereof by the party to whom such notice
is to be given.
8.3 NO WAIVER BY CONDUCT: REMEDIES CUMULATIVE. No course of
dealing on the part of the Agent or any Bank, nor any delay or failure on the
part of the Agent or any Bank in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the Agent's or any Bank's rights and remedies hereunder; nor
shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege, No right or
remedy conferred upon or reserved to the Agent or any Bank under this Agreement
or the Notes is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or
remedy granted thereunder or now or hereafter existing under any applicable law.
Every right and remedy granted by this Agreement or the Notes or by applicable
law to the Agent or any Bank may be exercised from time to time and as often as
may be deemed expedient by the Agent or any Bank and, unless contrary to the
express provisions of this Agreement or the Notes, irrespective of the
occurrence or continuance of any Default or Event of Default.
8.4 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms,
covenants, agreements, representations and warranties of the Company made herein
or in any certificate, report, financial statement or other document furnished
by or on behalf of the Company in connection with this Agreement shall be deemed
to be material and to have been relied upon by the Banks, notwithstanding any
investigation heretofore or hereafter made by any Bank or on such Bank's behalf,
and those covenants and agreements of the Company set forth in Section 3.6. 3,7.
3.8, 3.9 and 8.5 hereof shall survive the repayment in full of the Loans and the
termination of the Commitments.
8.5 EXPENSES AND INDEMNIFICATION. (a) The Company agrees to pay,
or reimburse the Agent for the payment of, on demand, (i) the reasonable fees
and expenses of counsel to the Agent, including without limitation the fees and
expenses of Messrs. Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇ in connection
with the preparation, execution, delivery and administration of this Agreement
and the Notes and the consummation of the transactions contemplated hereby, and
in connection with advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers or consents in
connection therewith, and (ii) all reasonable costs and expenses of the Agent
and the Banks (including reasonable fees and expenses of counsel
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59
and whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, this Agreement or the Notes or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement.
(b) The Company agrees to indemnify and hold harmless the Banks
and the Agent, and their respective officers, directors, employees and agents,
and each person who controls any of them, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
which the Banks or the Agent or any such person may incur or which may be
claimed against any of them with respect to or in connection with the execution,
delivery, enforcement, performance and administration of this Agreement or the
Notes or the Company s use or proposed use of the proceeds of any Loan.
8.6 SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, PROVIDED that the Company may not, without the prior
consent of the Banks, assign its rights or obligations hereunder or under the
Notes and the Banks shall not be obligated to make any Loan hereunder to any
entity other than the Company.
(b) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement and
the transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under this Agreement, the Notes or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Company provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. The Company hereby consents to
the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself. No Bank may assign or sell any of its rights or obligations under this
Agreement or the Notes without the prior written consent of the Company and each
of the other Banks.
8.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 GOVERNING LAW. This Agreement is a contract made
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under, and shall be governed by and construed in accordance with, the law of the
State of Michigan applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State. Each of the Company and the Banks further agrees that any legal action or
proceeding with respect to this Agreement, the Notes or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and each of the
Company and the Banks hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property, and irrevocably consents to the service of process in connection with
any such action or proceeding by personal delivery to the Company or by the
mailing thereof by registered or certified mail, postage prepaid to the Company
at its address set forth in Section 8.2 or in the signature pages hereof.
Nothing in this paragraph shall affect the right of the Banks and the Agent to
serve process in any other manner permitted by law or limit the right of the
Banks or the Agent to bring any such action or proceeding against the Company or
property in the courts of any other jurisdiction. Each of the Company and the
Banks hereby irrevocably waives any objection to the laying of venue of any such
suit or proceeding in the above described courts.
8.9 CURRENCY INDEMNITY. If for the purposes of obtaining judgment
in any court it becomes necessary to convert into any other currency any Foreign
Currency due hereunder, then the conversion shall be made at the rate of
exchange prevailing on the day before the day on which the judgment is given.
For this purpose, "rate of exchange" means the rate at which the Agent is able
on the relevant date to purchase the Foreign Currency for such other currency.
In the event that there is a change in the rate of exchange prevailing, between
the day before the day on which the judgment is given and date of payment, the
Company will pay such additional amount (if any) as may be necessary to ensure
that the amount paid on such date is the amount in such other Foreign Currency
which when converted at the rate of exchange prevailing for commercial
transactions on the date of payment is the amount then due on the relevant Loan
or other obligation, Any amount due from the Company under this paragraph will
be due as a separate debt and shall not be affected by judgment being obtained
for any other sum due under or in respect of this Agreement.
8.10 LOCAL CUSTOM. Notwithstanding anything herein to the
contrary, all Foreign Loans made hereunder shall be made in compliance with
Local Market custom and legal practice as determined solely by the Agent whether
or not such custom and legal practices have the force of law. The Agent shall
promptly notify the Company of any change in custom or legal practice which
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61
will affect any outstanding Foreign Loan.
8.11 TABLE OF CONTENTS AND HEADINGS. The table of contents and
the headings of the various subdivisions hereof are for the convenience of
reference only and shall in no way modify any of the terms or provisions hereof.
8.12 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
8.13 INTEGRATION AND SEVERABILITY. This Agreement embodies the
entire agreement and understanding between the Company and the Agent and the
Banks, and supersedes all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of the Company
under this Agreement or the Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations of the
Company under this Agreement or the Notes in any other jurisdiction.
8.14 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or could be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default or any event
or condition which with notice or lapse of time, or both, could become such a
Default or an Event of Default if such action is taken or such condition exists.
8.15 INTEREST RATE LIMITATION. Notwithstanding any provisions of
this Agreement or the Notes, in no event shall the amount of interest paid or
agreed to be paid by the Company exceed an amount computed at the highest rate
of interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or the Notes, at the
time performance of such provision shall be due, shall involve exceeding the
interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, IPSO FACTO, the obligations to be
fulfilled shall be reduced to an amount computed at the highest rate of interest
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62
permissible under applicable law, and if for any reason whatsoever any Bank
shall ever receive as interest an amount which would be deemed unlawful under
such applicable law such interest shall be automatically applied to the payment
of principal of the Loans outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to the Banks have
been paid in full
8.16 SPECIAL PROCEDURES FOR DISBURSEMENT OF FIRST LOANS. The
Revolving Credit Notes of the Banks are being issued in substitution and
replacement for the revolving credit note previously issued by the Company to
NBD under the 1992 Credit Agreement (the "Replaced Revolving Credit Note"). On
the Effective Date, the principal balance of the Replaced Revolving Credit Note,
as well as all other information which has been endorsed on the schedule
attached to the Replaced Revolving Credit Note or elsewhere on the books and
records of NBD with respect to the Replaced Revolving Credit Note, shall be
endorsed on the schedules attached to the Revolving Credit Notes or elsewhere on
the books and records of the Banks with respect to the Revolving Credit Notes,
in accordance with the Banks' Pro Rata Shares. The execution and delivery by the
Company of the Revolving Credit Notes shall not in any circumstances be deemed a
novation or to have terminated, extinguished or discharged the Company's
indebtedness evidenced by the Replaced Revolving Credit Note, all of which
indebtedness shall continue under and be evidenced and governed by the Revolving
Credit Notes and this Agreement. On the Effective Date, Star Bank shall
contribute its portion of the indebtedness transferred from the Replaced
Revolving Credit to the Revolving Credit Notes by paying directly to NBD Star
Bank's Pro Rata Share of such indebtedness. Thereafter, each Bank shall
contribute its Pro Rata Share of each new Loan under this Agreement, including,
without limitation, any such additional Loans made on the Effective Date, in
accordance with the terms of this Agreement,
8.17 WAIVER OF JURY TRIAL. THE BANKS AND THE AGENT AND THE
COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER THE BANKS, THE AGENT NOR THE COMPANY
SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
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SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY
EITHER THE BANKS, THE AGENT OR THE COMPANY EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL OF THEM.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
THE MONARCH MACHINE TOOL COMPANY
By:_________________________________
Its: ____________________________
Address for Notices: NBD BANK, as a Bank and as the Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Midwest Banking Division By: _________________________________
Facsimile: 313/225-3269
Commitment Amount: $13,000,000 Its: ____________________________
Address for Notices: STAR BANK, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Commercial Lending By: _________________________________
Facsimile: 513/632-2068
Commitment Amount: $7,000,000 Its: ____________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
___________________________________________________
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SECOND AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
-----------------------------
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of July 31, 1996 (this "Amendment"), is by and among MONARCH MACHINE TOOL
COMPANY, an Ohio corporation (the "Company"), the BANKS identified on the
signature pages hereof (collectively the "Banks" and individually a "Bank"), and
NBD BANK, a Michigan banking corporation, as agent (in such capacity, the
"Agent") for the Banks.
INTRODUCTION
------------
The Company, the Banks and the Agent are parties to the Amended and
Restated Credit Agreement, dated as of June 9, 1995, as amended by the First
Amendment to Amended and Restated Credit Agreement, dated as of July 11, 1995
(the "Credit Agreement"). The parties now desire to amend the Credit Agreement
on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:
ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT
-----------------------------------------
Effective upon the date that the conditions precedent set forth in
Article 2 of this Amendment are satisfied, which date (the "Amendment Date")
shall be determined by the Agent in its sole discretion, the Credit Agreement
hereby is amended retroactively as of June 30, 1996, as follows:
1.1 Clause (a) of the definition of the term "Eurodollar Rate" in
Section 1.1 is amended to read in full as follows:
(a) the Applicable Eurodollar Rate Margin, plus
1.2 The following definition of the term "Applicable Eurodollar Rate
Margin" is added to Section 1.1 in alphabetical order:
"APPLICABLE EURODOLLAR RATE MARGIN" shall be, for purposes of
determining the Eurodollar Rate applicable to any Eurodollar
Rate Loan, whether a Revolving Credit Loan or the Term Loan,
outstanding at any time during any calendar month (the
"Application Month"), the percent set forth under the heading
66
"Applicable Eurodollar Rate Margin for Revolving Credit
Loans" and "Applicable Eurodollar Rate Margin for the Term
Loan", respectively, below in the row corresponding to the
range into which falls the ratio (the "Ratio") of the
Consolidated Total Liabilities of the Company and its
Subsidiaries to the Consolidated Tangible Net Worth of the
Company and its Subsidiaries as of the end of the last
fiscal quarter (the "Determination Quarter") preceding such
Application Month for which financial statements have been
delivered to the Banks under Section 5.1(d)(ii):
Applicable Eurodollar Applicable Eurodollar
Rate Margin for Rate Margin for
Ratio Revolving Credit Loans the Term Loan
Less than or equal
to 0.75 to 1.00 0.75% 1.00%
Greater than
0.75 to 1.00 1.00% 1.25%
Each change in the Applicable Eurodollar Rate Margin in accordance
with this definition, as finally determined upon the Bank's
receipt of the Company's financial statements for any
Determination Quarter pursuant to Section 5.1(d)(ii), shall be
effective as of the first day of the corresponding Application
Month following such Determination Quarter.
1.3 The definition of the term "Tangible Net Worth" in Section 1.1
is amended to read in full as follows:
"TANGIBLE NET WORTH" of any person shall mean, as of any
date, (a) the amount of any capital stock, paid in capital
and similar equity accounts plus (or minus in the case of a
deficit) the capital
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[Second Amendment to Amended and Restated Credit Agreement]
67
surplus and retained earnings of such person and the amount
of any foreign currency translation adjustment account shown
as a capital account of such person, less (b) the net book
value of all items of the following character which are
included in the assets of such person: (i) goodwill,
including without limitation, the excess of cost over book
value of any asset, (ii) organization or experimental
expenses, (iii) unamortized debt discount and expense, (iv)
patents, trademarks, trade names and copyrights, (v)
treasury stock (to the extent not already deducted in such
equity accounts), (vi) franchises, licenses and permits, and
(vii) other assets which are deemed intangible assets under
generally accepted accounting principles.
1.4 Section 5.2(c) is amended to read in full as follows:
(c) TOTAL LIABILITIES TO TANGIBLE NET WORTH. Permit or
suffer the ratio of Consolidated Total Liabilities of the
Company and its Subsidiaries to Consolidated Tangible Net
Worth of the Company and its Subsidiaries to be greater
than 1.15 to 1.00 at any time.
ARTICLE 2. CONDITIONS PRECEDENT TO AMENDMENTS
----------------------------------------------
As conditions precedent to the effectiveness of the amendments to
the Credit Agreement set forth in Article 1 of this Amendment, the Agent and the
Banks shall receive the following documents and the following matters shall be
completed, all in form and substance satisfactory to the Agent and the Banks:
2.1 An incumbency certificate of the Company and a certified copy
of the resolutions of the board of directors of the Company authorizing the
Company's execution, delivery and performance of this Amendment and the
transactions contemplated hereby.
2.2 Payment by the Company to the Agent of an amendment fee in the
amount of $10,000 for the pro rata account of the Banks.
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[Second Amendment to Amended and Restated Credit Agreement]
68
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
-----------------------------------------
In order to induce the Agent and the Banks to enter into this
Amendment, the Company represents and warrants that:
3.1 The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or by-laws, or of any contract or undertaking to which the Company is a
party or by which the Company or its property is or may be bound or affected.
3.2 This Amendment is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
3.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor or stockholder of
the Company, is required on the part of the Company in connection with the
execution, delivery and performance of this Amendment or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Amendment.
3.4 After giving effect to the amendments contained in Article 1
of this Amendment, the representations and warranties contained in Article IV of
the Credit Agreement are true on and as of the date hereof with the same force
and effect as if made on and as of the date hereof.
ARTICLE 4. WAIVER OF CERTAIN DEFAULTS
-------------------------------------
4.1 The Company has advised the Agent and the Banks that prior to,
and as of, March 31, 1996, the Company failed to comply with certain covenants
set forth in Sections 5.1 and 5.2 of the Credit Agreement, and the Company has
asked the Banks to waive any Event of Default caused by such failure. Based upon
such request, the Banks hereby waive any such Event of Default; provided that
(a) such waiver shall be limited to those Events of Default caused by such
covenant compliance failures occurring on or before March 31, 1996 that are
known to the Banks as of the date of this Amendment, and (b) such waiver shall
not be deemed to (i) be a waiver of or consent or agreement to any other action
or omission in violation of the Credit Agreement or any other instrument,
-4-
[Second Amendment to Amended and Restated Credit Agreement]
69
agreement or document referred to therein or executed in connection therewith,
(ii) be a waiver or modification of any provision of the Credit Agreement or of
any instrument, agreement or document referred to therein or executed in
connection therewith, or (iii) prejudice any other right or rights which the
Banks may now have or have in the future under or in connection with the Credit
Agreement or any instrument, agreement or document referred to therein or
executed in connection therewith.
ARTICLE 5. MISCELLANEOUS
------------------------
5.1 If the Company shall fail to perform or observe any term,
covenant or agreement in this Amendment, or any representation or warranty made
by the Company in this Amendment shall prove to have been incorrect in any
material respect when made, such occurrence shall be deemed to constitute an
Event of Default.
5.2 All references to the Credit Agreement in any other document,
instrument or certificate referred to in the Credit Agreement or delivered in
connection with or pursuant thereto, hereafter shall be deemed references to the
Credit Agreement, as amended hereby.
5.3 Subject to the amendments herein provided, the Credit
Agreement shall in all respects continue in full force and effect.
5.4 Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
5.5 This Amendment shall be governed by and construed in
accordance with the laws of the State of Michigan.
5.6 The Company agrees to pay the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, counsel for the Agent, in
connection with the negotiation and preparation of this Amendment and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto.
5.7 The Company and the Banks hereby consent (which consent shall
be deemed to satisfy the consent requirements of Section 8.6 of the Credit
Agreement) to the assignment by NBD Bank, a Michigan banking corporation
("NBD-Detroit"), at any time, of all of its rights and obligations, individually
and as Agent, under the Credit Agreement and the Notes to NBD Bank, N.A., a
national banking association of Indianapolis, Indiana ("NBD-Indiana"), the
assumption by NBD-Indiana of all such rights and
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[Second Amendment to Amended and Restated Credit Agreement]
70
obligations, and the release of NBD-Detroit from all such obligations. Each of
the Company and the Banks further hereby agrees to execute and deliver such
documents as NBD-Detroit or NBD-Indiana may consider to be necessary or
desirable in order to reflect or take into account such assignment and
assumption.
5.8 This Amendment may be executed upon any number of counterparts
with the same effect as if the signatures thereto were upon the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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[Second Amendment to Amended and Restated Credit Agreement]
71
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered as of the day and year first-above written.
THE MONARCH MACHINE TOOL COMPANY
By: _________________________________
Its: ____________________________
NBD BANK, as a Bank and as the Agent
By: _________________________________
Its: ____________________________
STAR BANK, N.A.
By: _________________________________
Its: ____________________________
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[Second Amendment to Amended and Restated Credit Agreement]
72
-8-
[Third Amendment to Amended and Restated Credit Agreement]
73
THIRD AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
-----------------------------
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of March 19, 1997 (this "Amendment"), is by and among MONARCH MACHINE TOOL
COMPANY, an Ohio corporation (the "Company"), the BANKS identified on the
signature pages hereof (collectively the "Banks" and individually a "Bank"), and
NBD BANK, N.A., a national banking association, as successor by assignment to
NBD Bank, a Michigan banking corporation, as agent (in such capacity, the
"Agent") for the Banks.
INTRODUCTION
------------
The Company, the Banks and the Agent are parties to the Amended and
Restated Credit Agreement, dated as of June 9, 1995, as amended by the First
Amendment to Amended and Restated Credit Agreement, dated as of July 11, 1995,
and the Second Amendment to Amended and Restated Credit Agreement, dated as of
July 31, 1996 (the "Credit Agreement"). NBD Bank, N.A. purchased and assumed all
of NBD Bank's rights and obligations under the Credit Agreement, including NBD
Bank's rights and obligations as a Bank and as the Agent, pursuant to the
Assignment and Assumption Agreement dated February 20, 1997 between them (the
"Assignment"). The Company and the Banks previously consented to the Assignment
under Section 5.7 of the above-referenced Second Amendment. The parties now
desire to amend the Credit Agreement on the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:
ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT
-----------------------------------------
Effective upon the date that the conditions precedent set forth in
Article 2 of this Amendment are satisfied, which date (the "Amendment Date")
shall be determined by the Agent in its sole discretion, the Credit Agreement
hereby is amended as follows:
1.1 The definition of the term "Applicable Eurodollar Rate Margin" set
forth in Section 1.1 is amended to read in full as follows:
"APPLICABLE EURODOLLAR RATE MARGIN" shall be, for purposes of
determining the Eurodollar Rate applicable to any Eurodollar
Rate Loan, whether a Revolving Credit Loan or the Term Loan,
outstanding at any time during any calendar month (the
"Application Month"), the percent set forth under the heading
"Applicable Eurodollar Rate Margin for Revolving Credit Loans"
and "Applicable Eurodollar Rate Margin for the Term Loan",
74
respectively, below in the row corresponding to the range into
which falls the ratio (the "Ratio") of the Consolidated Total
Liabilities of the Company and its Subsidiaries to the
Consolidated Tangible Net Worth of the Company and its
Subsidiaries as of the end of the last fiscal quarter (the
"Determination Quarter") preceding such Application Month for
which financial statements have been delivered to the Banks
under Section 5.1(d)(ii):
Applicable Eurodollar Applicable Eurodollar
Rate Margin for Rate Margin for
Ratio Revolving Credit Loans the Term Loan
----- ---------------------- -------------
Less than or equal
to 0.75 to 1.00 0.75% 1.00%
Greater than
0.75 to 1.0
but less than or
equal to 1.15
to 1.00 1.00% 1.25%
Greater than
1.15 to 1.00 1.50% 1.75%
Each change in the Applicable Eurodollar Rate Margin in accordance
with this definition, as finally determined upon the Bank's
receipt of the Company's financial statements for any
Determination Quarter pursuant to Section 5.1(d)(ii), shall be
effective as of the first day of the corresponding Application
Month following such Determination Quarter.
1.2 Subpart (vi) of Section 5.1(d) is relabeled as subpart (vii),
and a new subpart (vi) is added to Section 5.1(d) as follows:
(vi) As soon as available and in any event within 30 days
after the end of each month (other than those months which
correspond to fiscal quarter ends of the Company, which
are covered by subpart (ii) above), the consolidated
balance sheet of the Company and its Subsidiaries as of
the end of such month, and the related consolidated
statements of income, retained
-2-
[Third Amendment to Amended and Restated Credit Agreement]
75
earnings and cash flow of the Company and its Subsidiaries
for the period commencing at the end of the previous fiscal
year and ending with the end of such month, setting forth in
each case in comparative form the corresponding figures for
the corresponding date or period of the preceding fiscal
year, all in reasonable detail; and
1.3 Subpart (iv) of Section 5.1(d) is amended to read in full as
follows:
(iv) No later than the 30th calendar day following the end
of each month, a Borrowing Base Certificate prepared as of
the close of business on the last day of each such month,
together with supporting schedules, in form and detail
satisfactory to the Agent, setting forth such information as
the Agent may request with respect to the aging, value,
location and other information relating to the computation
of the Borrowing Base and the eligibility of any property or
assets included in such computation, certified as true and
correct by the chief financial officer of the Company;
1.4 Section 5.2(b) is amended to read in full as follows:
(b) TANGIBLE NET WORTH. Permit or suffer (i) the sum of (A)
Consolidated Tangible Net Worth of the Company and its
Subsidiaries plus (B) unrealized foreign currency losses of
the Company and its Subsidiaries that do not exceed
$5,000,000 in the aggregate plus (C) the Aggregate Change
LIFO Reserve Adjustment to be less than (ii) the sum of (A)
$44,000,000 plus (B) 50% of Consolidated Cumulative Net
Income of the Company and its Subsidiaries after December
31, 1996 plus (C) for each fiscal year end of the Company,
the amount if any by which $500,000 exceeds the aggregate
amount added pursuant to the foregoing clause (B)
attributable to each such fiscal year; such covenant to be
tested as of the end of each fiscal quarter of the Company.
1.5 Section 5.2(c) is amended to read in full as follows:
(c) TOTAL LIABILITIES TO TANGIBLE NET WORTH. Permit or
suffer the ratio of Consolidated Total Liabilities of the
Company and its Subsidiaries to Consolidated Tangible Net
-3-
[Third Amendment to Amended and Restated Credit Agreement]
76
Worth of the Company and its Subsidiaries to be greater than
1.25 to 1.00 at any time.
1.6 In recognition of the Assignment, (a) all references to the
"Agent", or to NBD Bank in its capacity as the Agent, in the Credit Agreement
and all other related instruments, agreements and documents (collectively, the
"Loan Documents") shall be deemed to refer to NBD Bank, N.A. in its capacity as
the Agent, and (b) all references in the Loan Documents to NBD Bank in its
capacity as a Bank shall be deemed to refer to NBD Bank, N.A. in its capacity as
a Bank.
1.7 All references in the Loan Documents to any address for
notices to NBD Bank or the Agent shall be amended to read: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇."
ARTICLE 2. CONDITIONS PRECEDENT TO AMENDMENTS
---------------------------------------------
As conditions precedent to the effectiveness of the amendments to
the Credit Agreement set forth in Article 1 of this Amendment, the Agent and the
Banks shall receive the following documents and the following matters shall be
completed, all in form and substance satisfactory to the Agent and the Banks:
2.1 An incumbency certificate of the Company.
2.2 Payment by the Company to the Agent of an amendment fee in the
amount of $25,000 for the pro rata account of the Banks.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
-----------------------------------------
In order to induce the Agent and the Banks to enter into this
Amendment, the Company represents and warrants that:
3.1 The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or by-laws, or of any contract or undertaking to which the Company is a
party or by which the Company or its property is or may be bound or affected.
3.2 This Amendment is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
3.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without
-4-
[Third Amendment to Amended and Restated Credit Agreement]
77
limitation any creditor or stockholder of the Company, is required on the part
of the Company in connection with the execution, delivery and performance of
this Amendment or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Amendment.
3.4 After giving effect to the amendments contained in Article 1
of this Amendment, the representations and warranties contained in Article IV of
the Credit Agreement are true on and as of the date hereof with the same force
and effect as if made on and as of the date hereof.
ARTICLE 4. WAIVER OF CERTAIN DEFAULTS
-------------------------------------
4.1 The Company has advised the Agent and the Banks that for the
period from and including December 31, 1996 through the date of this Amendment
the Company failed to comply with the covenants set forth in Sections 5.2(b) and
(c) of the Credit Agreement, and the Company has asked the Banks to waive the
Events of Default caused by such failure. Based upon such request, the Banks
hereby waive each such Event of Default, including, without limitation, any such
Event of Default pursuant to Section 6.1(e) of the Credit Agreement caused by
the occurrence of an event of default under the Company's credit facilities with
The Fifth Third Bank due to the Company's failure to so comply with Sections
5.2(b) and (c) of the Credit Agreement (the "Fifth Third Cross Default");
provided that (a) such waiver shall be limited to those Events of Default,
including, without limitation, the Fifth Third Cross Default, caused by such
covenant compliance failures occurring during the period from and including
December 31, 1996 through the date of this Amendment that are known to the Banks
as of the date of this Amendment, and (b) such waiver shall not be deemed to (i)
be a waiver of or consent or agreement to any other action or omission in
violation of the Credit Agreement or any other instrument, agreement or document
referred to therein or executed in connection therewith, (ii) be a waiver or
modification of any provision of the Credit Agreement or of any instrument,
agreement or document referred to therein or executed in connection therewith,
or (iii) prejudice any other right or rights which the Banks may now have or
have in the future under or in connection with the Credit Agreement or any
instrument, agreement or document referred to therein or executed in connection
therewith.
ARTICLE 5. MISCELLANEOUS
------------------------
5.1 If the Company shall fail to perform or observe any term,
covenant or agreement in this Amendment, or any representation or warranty made
by the Company in this Amendment shall prove to have been incorrect in any
material respect when made, such occurrence shall be deemed to constitute an
Event of Default.
5.2 All references to the Credit Agreement in any other document,
instrument or certificate referred to in the Credit Agreement or delivered in
connection with or pursuant thereto, hereafter shall be deemed references to the
Credit Agreement, as amended hereby.
-5-
[Third Amendment to Amended and Restated Credit Agreement]
78
5.3 Subject to the amendments herein provided, the Credit
Agreement shall in all respects continue in full force and effect.
5.4 Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
5.5 This Amendment shall be governed by and construed in
accordance with the laws of the State of Michigan.
5.6 The Company agrees to pay the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, counsel for the Agent, in
connection with the negotiation and preparation of this Amendment and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto.
5.6 This Amendment may be executed upon any number of counterparts
with the same effect as if the signatures thereto were upon the same instrument.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
-6-
[Third Amendment to Amended and Restated Credit Agreement]
79
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered as of the day and year first-above written.
THE MONARCH MACHINE TOOL COMPANY
By: __________________________________________
Its: ________________________________
NBD BANK, N.A., as a Bank and as the Agent
By: __________________________________________
Its: ________________________________
STAR BANK, N.A., as a Bank
By: __________________________________________
Its: ________________________________
-7-
[Third Amendment to Amended and Restated Credit Agreement]
80
-8-
[Third Amendment to Amended and Restated Credit Agreement]
81
EXHIBIT E
BORROWING BASE CERTIFICATE
--------------------------
[Date]
NBD Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: Midwest Banking Division
Reference is made to the Amended and Restated Credit Agreement dated as
of June 9, 1995, as amended, supplemented, extended or otherwise modified from
time to time (the "Credit Agreement"), among The Monarch Machine Tool Company,
an Ohio corporation (the "Company"), the banks parties thereto (the "Banks") and
you as agent for the Banks (the "Agent"). Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the Credit
Agreement.
The Company hereby represents and warrants to the Agent and the Banks
that the following computations of the Borrowing Base, and the related
supporting schedules attached hereto, and of the mandatory prepayment required
pursuant to Section 3.1(d) of the Credit Agreement are true and correct as of
the close of business on __________, 19___ and are in conformity with the terms
and conditions of the Credit Agreement:
Borrowing Base
--------------
1. Accounts Receivable:
(a) Aggregate Accounts Receivable $_________
(b) Less: Ineligible Accounts Receivable $_________
(c) Eligible Accounts Receivable
82
$_________
(d) 80% of Eligible Accounts Receivable $_________
BORROWING BASE CERTIFICATE
83
2. Inventory:
(a) Aggregate Inventory $_________
(b) Less: Ineligible Inventory $_________
(c) Eligible Inventory $_________
(d) 50% of Eligible Inventory $_________
3. Borrowing Base (item 1(d) plus item 2(d))
$
==========
Determination of Mandatory Prepayment
-------------------------------------
1. Aggregate Borrowing Base (item 3 above)
$_________
2. Less: Dollar Equivalent of aggregate principal
amount of Loans outstanding
$_________
3. Excess (or deficiency) in Borrowing Base
(if deficiency, prepayment required in amount
of deficiency)
$_________
The Company hereby further represents and warrants to the Banks that as
of the close of business on ____________, 19___:
A. The representations and warranties contained in Article IV of the
Credit Agreement are true and correct on and as of such date, as if such
representations and warranties were made on and as of such date. For purposes of
this certificate the representations and warranties contained in Section 4.6 of
the Credit Agreement shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
delivered pursuant to Sections 5.1(d)(ii) and (iii) of the Credit Agreement.
B. No Event of Default and no Default has occurred and is continuing.
BORROWING BASE CERTIFICATE
-3-
84
THE MONARCH MACHINE TOOL COMPANY
By:_____________________________
Its:___________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________
-4-
BORROWING BASE CERTIFICATE
85
EXHIBIT E
BORROWING BASE CERTIFICATE
--------------------------
[Date]
NBD Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: Midwest Banking Division
Reference is made to the Amended and Restated Credit Agreement dated as
of June 9, 1995, as amended by the First Amendment to Amended and Restated
Credit Agreement dated as of July 11, 1995, and as further amended,
supplemented, extended or otherwise modified from time to time (the "Credit
Agreement"), among The Monarch Machine Tool Company, an Ohio corporation (the
"Company"), the banks parties thereto (the "Banks") and you as agent for the
Banks (the "Agent"). Capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Credit Agreement.
The Company hereby represents and warrants to the Agent and the Banks
that the following computations of the Borrowing Base, and the related
supporting schedules attached hereto, and of the mandatory prepayment required
pursuant to Section 3.1(d) of the Credit Agreement are true and correct as of
the close of business on __________, 19___ and are in conformity with the terms
and conditions of the Credit Agreement:
Borrowing Base
--------------
1. Accounts Receivable:
(a) Aggregate Accounts Receivable
$_________
(b) Less: Ineligible Accounts Receivable
$_________
86
(c) Eligible Accounts Receivable
$_________
(d) 80% of Eligible Accounts Receivable
$_________
2. Inventory:
(a) Aggregate Inventory $_________
(b) Less: Ineligible Inventory $_________
(c) Eligible Inventory $_________
(d) 50% of Eligible Inventory $_________
3. Aggregate principal amount of Indebtedness
of the Company to The Fifth Third Bank
$_________
4. Borrowing Base (item 1(d) plus item 2(d) minus item 3)
$
===========
Determination of Mandatory Prepayment
-------------------------------------
1. Aggregate Borrowing Base (item 4 above)
$_________
2. Less: Dollar Equivalent of aggregate principal
amount of Loans outstanding
$_________
3. Excess (or deficiency) in Borrowing Base
(if deficiency, prepayment required in amount
of deficiency)
$
=========
The Company hereby further represents and warrants to the Banks that as
of the close of business on ____________, 19___:
A. The representations and warranties contained in Article IV of the
Credit Agreement are true and correct on and as of such
BORROWING BASE CERTIFICATE
-2-
87
date, as if such representations and warranties were made on and as of such
date. For purposes of this certificate the representations and warranties
contained in Section 4.6 of the Credit Agreement shall be deemed made with
respect to both the financial statements referred to therein and the most recent
financial statements delivered pursuant to Sections 5.1(d)(ii) and (iii) of the
Credit Agreement.
B. No Event of Default and no Default has occurred and is continuing.
THE MONARCH MACHINE TOOL COMPANY
By:_____________________________
Its:___________________________
BORROWING BASE CERTIFICATE
-3-
88
CLOSING CERTIFICATE
OF THE MONARCH MACHINE TOOL COMPANY
NBD Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I hereby certify that I am the Secretary of The Monarch Machine Tool
Company, an Ohio corporation (the "Company"), and as such have access to the
Company's corporate records and am familiar with the matters therein contained
and herein certified, and that:
1. The Company is a corporation with a perpetual charter duly organized
and validly existing and in good standing under the laws of the State of Ohio.
2. Attached hereto as Annex 1 is a true and correct copy of
resolutions, and the preamble thereto, adopted at a meeting of the Board of
Directors of the Company duly called and held in Sidney, Ohio, on
__________________, 1996, at which meeting a quorum was present and acting
throughout, and such resolutions and preamble were duly adopted by said Board of
Directors and are in full force and effect on and as of the date hereof, not
having been in any way amended, altered or repealed.
3. No proceedings looking toward the dissolution or liquidation of the
Company have been commenced and no such proceedings are contemplated.
4. The following persons are now, and at all times subsequent to
January 1, 1995, have been, duly qualified and acting officers of the Company,
duly elected to the offices set forth opposite their respective names, and the
signature appearing opposite the name of each such officer is his authentic
signature:
Name Office Signature
---- ------ ---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President _____________________________
▇▇▇▇ ▇. ▇▇▇▇ Secretary _____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Treasurer _____________________________
89
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the Company this ______ day of August, 1996.
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Secretary
-2-
90
CLOSING CERTIFICATE
OF MONARCH MACHINE TOOL COMPANY
-------------------------------
NBD Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I hereby certify that I am the Secretary of Monarch Machine Tool
Company, an Ohio corporation (the "Company"), and as such have access to the
Company's corporate records and am familiar with the matters therein contained
and herein certified, and that:
1. The Company is a corporation with a perpetual charter duly organized
and validly existing and in good standing under the laws of the State of Ohio.
2. No proceedings looking toward the dissolution or liquidation of the
Company have been commenced and no such proceedings are contemplated.
3. Each person who, as an officer of the Company, signed, by facsimile
or otherwise, and delivered the Third Amendment to Amended and Restated Credit
Agreement dated as of March 19, 1997 was duly appointed, qualified and acting as
an officer of the Company at the respective times of such signing and delivery.
Such execution and delivery was duly authorized by all necessary corporate
action of the Company.
4. The following persons are now, and at all times subsequent to March
__, 1997, have been, duly qualified and acting officers of the Company, duly
elected to the offices set forth opposite their respective names, and the
signature appearing opposite the name of each such officer is his authentic
signature:
Name Office Signature
---- ------ ---------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President and _____________________________
Chief Executive
Officer
▇▇▇▇ ▇. ▇▇▇▇ Secretary _____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Treasurer _____________________________
and Chief
Financial Officer
91
IN WITNESS WHEREOF, I have hereunto set my hand as of the 19th day of
March, 1997.
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Secretary
-2-
92
SCHEDULE 4.4
SUBSIDIARIES
Stock Ownership
Name of Jurisdiction Percentage
Subsidiary of Incorporation Owned By: Owned:
---------- ---------------- --------- ------
1. Stamco (UK) Ltd. England The Company 100
2. Monarch Werkzeug Germany The Company 100
Machinen GmBH
3. Stamco Depiereux GmBH Germany The Company 100
4. Monarch ▇▇▇▇▇ Germany The Company 100
Machineinbau & Vertriebs
GmBH
5. Monarch International Barbados The Company 100*
* Foreign Sales Corporation
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_____________________________________________________________
93
FIRST AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
-----------------------------
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of July 11, 1995 (this "Amendment"), is by and among MONARCH MACHINE
TOOL COMPANY, an Ohio corporation (the "Company"), the BANKS identified on the
signature pages hereof (collectively the "Banks" and individually a "Bank") and
NBD BANK, a Michigan banking corporation, as agent (in such capacity, the
"Agent") for the Banks.
INTRODUCTION
------------
The Company, the Banks and the Agent have entered into the
Amended and Restated Credit Agreement, dated as of June 9, 1995 (the "Credit
Agreement"). The parties now desire to amend the Credit Agreement on the terms
and conditions herein set forth.
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein and in the Credit Agreement contained, the parties
hereto agree as follows:
ARTICLE 1.. AMENDMENTS TO CREDIT AGREEMENT
------------------------------------------
The definition of the term "Borrowing Base" in Section
1.1 of the Credit Agreement is amended to read in full as follows:
"BORROWING BASE" shall mean, as of any date, the sum of
(a) an amount equal to 80% of the Eligible Accounts Receivable
plus (b) an amount equal to 50% of the Eligible Inventory minus
(c) the Fifth Third Borrowings.
The following definition of the term "Fifth Third
Borrowings" is added to Section 1.1 of the Credit Agreement in its alphabetical
location:
"Fifth Third Borrowings" shall mean, as of any date, the
aggregate outstanding principal amount Indebtedness of the
Company to The Fifth Third Bank.
Subpart (vi) of Section 5.1(d) of the Credit Agreement is
relabeled as subpart (vii) and a new subpart (vi) of Section 5.1 is inserted
reading as follows:
94
(vi) On the same day, telephonic notice,
followed immediately by written
confirmation, of all borrowings from
time to time by the Company from The
Fifth Third Bank and all repayments
thereof from time to time.
Section 5.2(m) of the Credit Agreement is amended to
read in full as follows:
(m) NEGATIVE PLEDGE LIMITATION. Enter
into any agreement, with any person
other than the Banks pursuant
hereto, which prohibits or limits
the ability of the Company or any
Subsidiary to create, incur, assume
or suffer to exist any Lien upon
any of its assets, rights, revenues
or property, real, personal or
mixed, tangible or intangible,
whether now owned or hereafter
acquired; PROVIDED that this
Section 5.2(m) shall not prohibit
the Company from entering into such
an agreement with The Fifth Third
Bank, so long as the aggregate
principal amount of Indebtedness of
the Company to The Fifth Third Bank
does not at any time exceed
$7,500,000.
AMENDMENT OF EXHIBIT E. Exhibit E annexed to the
Credit Agreement is deleted in its entirety and Exhibit E annexed to this
Amendment shall be deemed substituted in place thereof.
ARTICLE 1.. REPRESENTATIONS AND WARRANTIES
------------------------------------------
In order to induce the Banks and the Agent to enter into this
Amendment, the Company represents and warrants that:
The execution, delivery and performance by the
Company of this Amendment are within its corporate powers, have been duly
authorized by all necessary corporate action and are not in contravention of any
law, rule or regulation, or any judgment, decree, writ, injunction, order or
award of any arbitrator, court or governmental authority, or of the terms of the
Company's charter or by-laws, or of any contract or undertaking to which the
Company is a party or by which the Company or its property is or may be bound or
affected.
This Amendment is a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor or stockholder of
the Company, is required on
2
95
the part of the Company in connection with the execution, delivery and
performance of this Amendment or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this Amendment.
After giving effect to the amendments contained in
Article 1 of this Amendment, the representations and warranties contained in
Article IV of the Credit Agreement are true on and as of the date hereof with
the same force and effect as if made on and as of the date hereof.
ARTICLE 1.. MISCELLANEOUS
-------------------------
If the Company shall fail to perform or observe any
term, covenant or agreement in this Amendment, or any representation or warranty
made by the Company in this Amendment shall prove to have been incorrect in any
material respect when made, such occurrence shall be deemed to constitute an
Event of Default.
All references to the Credit Agreement in any other
document, instrument or certificate referred to in the Credit Agreement or
delivered in connection with or pursuant thereto, hereafter shall be deemed
references to the Credit Agreement, as amended hereby.
Subject to the amendments herein provided, the
Credit Agreement shall in all respects continue in full force and effect.
Capitalized terms used but not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
This Amendment shall be governed by and construed
in accordance with the laws of the State of Michigan.
The Company agrees to pay the reasonable fees and
expenses of Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, counsel for the Agent,
in connection with the negotiation and preparation of this Amendment and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto.
This Amendment may be executed upon any number of
counterparts with the same effect as if the signatures thereto were upon the
same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
3
96
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered on the 11th day of July, 1995,
notwithstanding the day and year first-above written.
THE MONARCH MACHINE TOOL COMPANY
By: _____________________________
Its: ________________________
NBD BANK, as a Bank and as the Agent
By: _____________________________
Its: ________________________
STAR BANK, N.A.
By: _____________________________
Its: ___________________
4
97
[EXHBITS A THROUGH D TO THE FIRST AMENDMENT INTENTIONALLY OMITTED.]
-1-
98
SCHEDULE 5.2(K)
INVESTMENTS, LOANS AND ADVANCES
-------------------------------
Maturity
Amount Note # Date
------ ------ ----
Starbank - ▇▇▇▇▇▇ 1,000,000 7014096-1 7-1-95
Starbank - ▇▇▇▇▇▇ 1,500,000 7014096-2 6-5-95
99
SCHEDULE 5.2(d)
LIENS
-----
Indebtedness
Description Property Subject Lienholder Secured
----------- ---------------- ---------- -------
NONE
100
THIRD AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
-----------------------------
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of March 19, 1997 (this "Amendment"), is by and among MONARCH MACHINE TOOL
COMPANY, an Ohio corporation (the "Company"), the BANKS identified on the
signature pages hereof (collectively the "Banks" and individually a "Bank"),
and NBD BANK, N.A., a national banking association, as successor by assignment
to NBD Bank, a Michigan banking corporation, as agent (in such capacity, the
"Agent") for the Banks.
INTRODUCTION
------------
The Company, the Banks and the Agent are parties to the Amended and
Restated Credit Agreement, dated as of June 9, 1995, as amended by the First
Amendment to Amended and Restated Credit Agreement, dated as of July 11, 1995,
and the Second Amendment to Amended and Restated Credit Agreement, dated as of
July 31, 1996 (the "Credit Agreement"). NBD Bank, N.A. purchased and assumed
all of NBD Bank's rights and obligations under the Credit Agreement, including
NBD Bank's rights and obligations as a Bank and as the Agent, pursuant to the
Assignment and Assumption Agreement dated February 20, 1997 between them (the
"Assignment"). The Company and the Banks previously consented to the Assignment
under Section 5.7 of the above-referenced Second Amendment. The parties now
desire to amend the Credit Agreement on the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:
ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT
-----------------------------------------
Effective upon the date that the conditions precedent set forth in
Article 2 of this Amendment are satisfied, which date (the "Amendment Date")
shall be determined by the Agent in its sole discretion, the Credit Agreement
hereby is amended as follows:
1.1 The definition of the term "Applicable Eurodollar Rate Margin" set
forth in Section 1.1 is amended to read in full as follows:
"APPLICABLE EURODOLLAR RATE MARGIN" shall be, for purposes of
determining the Eurodollar Rate applicable to any Eurodollar
Rate Loan, whether a Revolving Credit Loan or the Term Loan,
outstanding at any time during any calendar month (the
"Application Month"), the percent set forth under the heading
"Applicable Eurodollar Rate Margin for Revolving Credit
Loans" and "Applicable Eurodollar Rate Margin for the Term
Loan",
101
respectively, below in the row corresponding to the range
into which falls the ratio (the "Ratio") of the Consolidated
Total Liabilities of the Company and its Subsidiaries to the
Consolidated Tangible Net Worth of the Company and its
Subsidiaries as of the end of the last fiscal quarter (the
"Determination Quarter") preceding such Application Month for
which financial statements have been delivered to the Banks
under Section 5.1(d)(ii):
Applicable Eurodollar Applicable Eurodollar
Rate Margin for Rate Margin for
Ratio Revolving Credit Loans the Term Loan
----- ---------------------- -------------
Less than or equal
to 0.75 to 1.00 0.75% 1.00%
Greater than
0.75 to 1.0
but less than or
equal to 1.15
to 1.00 1.00% 1.25%
Greater than
1.15 to 1.00 1.50% 1.75%
Each change in the Applicable Eurodollar Rate Margin in
accordance with this definition, as finally determined upon the
Bank's receipt of the Company's financial statements for any
Determination Quarter pursuant to Section 5.1(d)(ii), shall be
effective as of the first day of the corresponding Application
Month following such Determination Quarter.
1.2 Subpart (vi) of Section 5.1(d) is relabeled as subpart (vii),
and a new subpart (vi) is added to Section 5.1(d) as follows:
(vi) As soon as available and in any event within 30 days
after the end of each month (other than those months
which correspond to fiscal quarter ends of the Company,
which are covered by subpart (ii) above), the
consolidated balance sheet of the Company and its
Subsidiaries as of the end of such month, and the related
consolidated statements of income, retained
-2-
[Third Amendment to Amended and Restated Credit Agreement]
102
earnings and cash flow of the Company and its
Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such
month, setting forth in each case in comparative form the
corresponding figures for the corresponding date or
period of the preceding fiscal year, all in reasonable
detail; and
1.3 Subpart (iv) of Section 5.1(d) is amended to read in full
as follows:
(iv) No later than the 30th calendar day following the
end of each month, a Borrowing Base Certificate prepared
as of the close of business on the last day of each such
month, together with supporting schedules, in form and
detail satisfactory to the Agent, setting forth such
information as the Agent may request with respect to the
aging, value, location and other information relating to
the computation of the Borrowing Base and the eligibility
of any property or assets included in such computation,
certified as true and correct by the chief financial
officer of the Company;
1.4 Section 5.2(b) is amended to read in full as follows:
(b) TANGIBLE NET WORTH. Permit or suffer (i) the sum of
(A) Consolidated Tangible Net Worth of the Company and
its Subsidiaries plus (B) unrealized foreign currency
losses of the Company and its Subsidiaries that do not
exceed $5,000,000 in the aggregate plus (C) the Aggregate
Change LIFO Reserve Adjustment to be less than (ii) the
sum of (A) $44,000,000 plus (B) 50% of Consolidated
Cumulative Net Income of the Company and its Subsidiaries
after December 31, 1996 plus (C) for each fiscal year end
of the Company, the amount if any by which $500,000
exceeds the aggregate amount added pursuant to the
foregoing clause (B) attributable to each such fiscal
year; such covenant to be tested as of the end of each
fiscal quarter of the Company.
1.5 Section 5.2(c) is amended to read in full as follows:
(c) TOTAL LIABILITIES TO TANGIBLE NET WORTH. Permit or
suffer the ratio of Consolidated Total Liabilities of the
Company and its Subsidiaries to Consolidated Tangible Net
-3-
[Third Amendment to Amended and Restated Credit Agreement]
103
Worth of the Company and its Subsidiaries to be greater
than 1.25 to 1.00 at any time.
1.6 In recognition of the Assignment, (a) all references to the
"Agent", or to NBD Bank in its capacity as the Agent, in the Credit Agreement
and all other related instruments, agreements and documents (collectively, the
"Loan Documents") shall be deemed to refer to NBD Bank, N.A. in its capacity as
the Agent, and (b) all references in the Loan Documents to NBD Bank in its
capacity as a Bank shall be deemed to refer to NBD Bank, N.A. in its capacity
as a Bank.
1.7 All references in the Loan Documents to any address for
notices to NBD Bank or the Agent shall be amended to read: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
ARTICLE 2. CONDITIONS PRECEDENT TO AMENDMENTS
---------------------------------------------
As conditions precedent to the effectiveness of the amendments to
the Credit Agreement set forth in Article 1 of this Amendment, the Agent and
the Banks shall receive the following documents and the following matters shall
be completed, all in form and substance satisfactory to the Agent and the
Banks:
2.1 An incumbency certificate of the Company.
2.2 Payment by the Company to the Agent of an amendment fee in
the amount of $25,000 for the pro rata account of the Banks.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
-----------------------------------------
In order to induce the Agent and the Banks to enter into this
Amendment, the Company represents and warrants that:
3.1 The execution, delivery and performance by the Company of
this Amendment are within its corporate powers, have been duly authorized by
all necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or by-laws, or of any contract or undertaking to which the Company is a
party or by which the Company or its property is or may be bound or affected.
3.2 This Amendment is a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
3.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without
-4-
[Third Amendment to Amended and Restated Credit Agreement]
104
limitation any creditor or stockholder of the Company, is required on the part
of the Company in connection with the execution, delivery and performance of
this Amendment or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Amendment.
3.4 After giving effect to the amendments contained in Article 1
of this Amendment, the representations and warranties contained in Article IV
of the Credit Agreement are true on and as of the date hereof with the same
force and effect as if made on and as of the date hereof.
ARTICLE 4. WAIVER OF CERTAIN DEFAULTS
-------------------------------------
4.1 The Company has advised the Agent and the Banks that for the
period from and including December 31, 1996 through the date of this Amendment
the Company failed to comply with the covenants set forth in Sections 5.2(b)
and (c) of the Credit Agreement, and the Company has asked the Banks to waive
the Events of Default caused by such failure. Based upon such request, the
Banks hereby waive each such Event of Default, including, without limitation,
any such Event of Default pursuant to Section 6.1(e) of the Credit Agreement
caused by the occurrence of an event of default under the Company's credit
facilities with The Fifth Third Bank due to the Company's failure to so comply
with Sections 5.2(b) and (c) of the Credit Agreement (the "Fifth Third Cross
Default"); provided that (a) such waiver shall be limited to those Events of
Default, including, without limitation, the Fifth Third Cross Default, caused
by such covenant compliance failures occurring during the period from and
including December 31, 1996 through the date of this Amendment that are known
to the Banks as of the date of this Amendment, and (b) such waiver shall not be
deemed to (i) be a waiver of or consent or agreement to any other action or
omission in violation of the Credit Agreement or any other instrument,
agreement or document referred to therein or executed in connection therewith,
(ii) be a waiver or modification of any provision of the Credit Agreement or of
any instrument, agreement or document referred to therein or executed in
connection therewith, or (iii) prejudice any other right or rights which the
Banks may now have or have in the future under or in connection with the Credit
Agreement or any instrument, agreement or document referred to therein or
executed in connection therewith.
ARTICLE 5. MISCELLANEOUS
------------------------
5.1 If the Company shall fail to perform or observe any term,
covenant or agreement in this Amendment, or any representation or warranty made
by the Company in this Amendment shall prove to have been incorrect in any
material respect when made, such occurrence shall be deemed to constitute an
Event of Default.
5.2 All references to the Credit Agreement in any other document,
instrument or certificate referred to in the Credit Agreement or delivered in
connection with or pursuant thereto, hereafter shall be deemed references to
the Credit Agreement, as amended hereby.
-5-
[Third Amendment to Amended and Restated Credit Agreement]
105
5.3 Subject to the amendments herein provided, the Credit
Agreement shall in all respects continue in full force and effect.
5.4 Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
5.5 This Amendment shall be governed by and construed in
accordance with the laws of the State of Michigan.
5.6 The Company agrees to pay the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, counsel for the Agent, in
connection with the negotiation and preparation of this Amendment and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto.
5.6 This Amendment may be executed upon any number of
counterparts with the same effect as if the signatures thereto were upon the
same instrument.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
-6-
[Third Amendment to Amended and Restated Credit Agreement]
106
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered as of the day and year first-above written.
THE MONARCH MACHINE TOOL COMPANY
By: _______________________________________
Its: _____________________________
NBD BANK, N.A., as a Bank and as the Agent
By: _______________________________________
Its: _____________________________
STAR BANK, N.A., as a Bank
By: _______________________________________
Its: _____________________________
-7-
[Third Amendment to Amended and Restated Credit Agreement]
107
SCHEDULE 4.5
LITIGATION
----------
In September, 1988, the Company and several other corporations were
ordered by the Environmental Protection Agency (EPA) to take action to
secure a landfill in Cortland, New York and submit a work plan for
removal and disposal of containers, contaminated soils and other
materials. This landfill was used for many years by its owner to
dispose of wastes. The Company and other corporations had contracted
with this landfill owner to haul away and dispose of certain waste
materials. The extent and nature of contamination at the site,
insurance coverage available to the Company and participation by other
corporations in the clean-up are not known at this time. While the
results of these matters cannot be predicted with any certainty, based
upon the information presently available, management is of the opinion
that the ultimate resolution of this matter will not have a material
adverse effect on the Company's financial position. An estimated
reserve for potential liability has been recorded in the financial
statements.
108
EXHIBIT D
REQUEST FOR CONTINUATION OR
CONVERSION OF DOMESTIC LOAN
---------------------------
NBD Bank, as Agent for the Banks
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Midwest Banking Division
The Monarch Machine Tool Company, an Ohio corporation (the
"Company"), hereby requests that $____________ of the principal amount of the
[Revolving Credit][Term] Loan originally made on ____________, 19__, which
[Revolving Credit][Term] Loan is currently a _______________ [insert type of
Loan], be continued as or converted to, as the case may be, a
__________________ [insert type of Loan requested] on ______________, 19__. If
such Loan is requested to be converted to a Fixed Rate Loan, the Company hereby
elects an Interest Period for such Loan of ___________________ [insert
permitted Interest Period].
In support of this request, the Company hereby represents and
warrants to the Agent and the Banks that:
1. The representations and warranties contained in Article IV of
the Credit Agreement are true and correct in all material respects on and as of
the date hereof, and will be true and correct in all material respects on the
date such Loan is [continued][converted] (both before and after such Loan is
[continued][converted]), as if such representations and warranties were made on
and as of such dates.
2. No Event of Default or Default has occurred and is continuing
or will exist on the date such Loan is [continued][converted] (whether before
or after such Loan is [continued][converted]).
Acceptance of the proceeds of such [continued][converted] Loan by the Company
shall be deemed to be a further representation and warranty that the
representations and warranties made herein are true and correct in all material
respects at the time of such [continuation] [conversion].
Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Amended and Restated Credit
Agreement, dated as of June 9, 1995, as amended, supplemented, extended or
otherwise modified from time to time (the "Credit Agreement"), among the
Company, the banks named
109
therein and you as agent for the banks.
THE MONARCH MACHINE TOOL COMPANY
By: _____________________________________
Its: __________________________________
Dated: ________________, 19___
REQUEST FOR CONTINUATION OR
CONVERSION OF DOMESTIC LOAN
- 2 -
110
EXHIBIT B
REQUEST FOR DOMESTIC LOAN
-------------------------
NBD Bank, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Midwest Banking Division
The Monarch Machine Tool Company, an Ohio corporation (the
"Company") hereby requests a [Revolving Credit] [Term] Loan pursuant to Section
2.1 of the Amended and Restated Credit Agreement, dated as of June 9, 1995, as
amended, supplemented, extended or otherwise modified from time to time (the
"Credit Agreement"), among the Company, the Banks referenced therein and you,
as Agent for the Banks.
A [Term] [Revolving Credit] Loan is requested to be made in the
amount of $_________, to be made on ____________, 19___ and evidenced by the
Company's Revolving Credit Notes or Term Notes, as the case may be. Such Loan
shall be a _____________________ [insert Eurodollar Rate Loan, Negotiated Rate
Loan or Floating Rate Loan] and the initial Interest Period, if such requested
Loan is a Eurodollar Rate Loan or Negotiated Rate Loan, shall be
_________________ [insert permitted Interest Period] [and the interest rate
requested to be applicable thereto, if such requested Loan is a Negotiated Rate
Loan, shall be ___ percent (____%) per annum].
In support of this request, the Company hereby represents and
warrants to the Agent and the Banks that:
1. The representations and warranties contained in Article IV of
the Credit Agreement are true and correct in all material respects on and as of
the date hereof, and will be true and correct in all material respects on the
date such Loan is made (both before and after such Loan is made), as if such
representations and warranties were made on and as of such dates.
2. No Event of Default or Default has occurred and is continuing
or will exist on the date such Loan is made and such Loan shall not cause an
Event of Default or Default.
3. All trade accounts receivable and inventory of the Company
included in Eligible Accounts Receivable and Eligible Inventory comply in all
respects with the requirements therefor set forth in the definitions thereof,
and the computation of the Borrowing Base is true and correct as set forth in
the Borrowing Base Certificate prepared as of _________________, 19__ attached
hereto.
Acceptance of the proceeds of such Loan by the Company shall be deemed to be a
further representation and warranty that the representations and warranties
made herein are true and correct in
111
all material respects at the time such proceeds are disbursed.
Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Credit Agreement.
THE MONARCH MACHINE TOOL COMPANY
By: _____________________________
Its: __________________________
Dated: ________________, 19___
REQUEST FOR DOMESTIC LOAN
-2-
112
EXHIBIT A-1
REVOLVING CREDIT NOTE
---------------------
$__________ June 9, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, THE MONARCH MACHINE TOOL COMPANY, an Ohio
corporation (the "Company"), hereby promises to pay to the order of
_________________________, a ________________ (the "Bank"), at the principal
banking office of the Agent in lawful money of the United States of America and
in immediately available funds, the principal sum of
__________________________________________ Dollars ($___________), or such
lesser amount as is recorded on the schedule attached hereto, or in the books
and records of the Bank, on the Termination Date; and to pay interest on the
unpaid principal balance hereof from time to time outstanding, in like money
and funds, for the period from the date hereof until the Revolving Credit Loans
evidenced hereby shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement referred to below.
The Bank is hereby authorized by the Company to record on the
schedule attached to this Revolving Credit Note, or on its books and records,
the date, amount and type of each Revolving Credit Loan, the duration of the
related Interest Period (if applicable), the amount of each payment or
prepayment of principal thereon and the other information provided for on such
schedule, which schedule or such books and records, as the case may be, shall
constitute prima facie evidence of the information so recorded, PROVIDED,
HOWEVER, that any failure by the Bank to record any such information shall not
relieve the Company of its obligation to repay the outstanding principal amount
of such Revolving Credit Loans, all accrued interest thereon and any amount
payable with respect thereto in accordance with the terms of this Revolving
Credit Note and the Credit Agreement.
The Company and each endorser or guarantor hereof waives demand,
presentment, protest, diligence, notice of dishonor and any other formality in
connection with this Revolving Credit Note. Should the indebtedness evidenced
by this Revolving Credit Note or any part thereof be collected in any
proceeding or be placed in the hands of attorneys for collection, the Company
agrees to pay, in addition to the principal, interest and other sums due and
payable hereon, all costs of collecting this Revolving Credit Note, including
attorneys' fees and expenses.
This Revolving Credit Note evidences one or more Revolving Credit
Loans made under an Amended and Restated Credit Agreement, dated as of June 9,
1995, as amended, supplemented, extended or otherwise modified from time to
time (the "Credit Agreement"), by and among the Company, the banks (including
the
113
Bank) named therein and NBD Bank, as agent for the banks, to which reference is
hereby made for a statement of the circumstances under which this Revolving
Credit Note is subject to prepayment and under which its due date may be
accelerated and for a description of the collateral and security securing this
Revolving Credit Note. Capitalized terms used but not defined in this Revolving
Credit Note shall have the respective meanings assigned to them in the Credit
Agreement.
This Revolving Credit Note is made under, and shall be governed
by and construed in accordance with, the laws of the State of Michigan in the
same manner applicable to contracts made and to be performed entirely within
such State and without giving effect to choice of law principles of such State.
THE MONARCH MACHINE TOOL COMPANY
By:____________________________
Its:__________________________
REVOLVING CREDIT NOTE
---------------------
- 2 -
114
Schedule to Revolving Credit Note, dated
June 9, 1995, made by The Monarch Machine Tool Company
in favor of _____________________.
Principal
Amount
Trans- Principal Type Interest Paid, Pre- Principal
action Amount of of Interest Period (if paid or Balance Notation
Date Loan Loan* Rate applicable) Converted Outstanding Made by
------- --------- ---- -------- ----------- ---------- ----------- --------
-------------------------
* E - Eurodollar Rate
F - Floating Rate
N - Negotiated Rate
REVOLVING CREDIT NOTE
- 3 -
115
EXHIBIT A-2
TERM NOTE
---------
$_____________________ __________ __, 19__
Detroit, Michigan
FOR VALUE RECEIVED, THE MONARCH MACHINE TOOL COMPANY an Ohio
corporation (the "Company"), hereby promises to pay to the order of ___________
____________________________, a _________________________ (the "Bank"), at the
principal banking office of the Agent in lawful money of the United States of
America and in immediately available funds, the principal sum of
_________________________ Dollars ($______________), or such lesser amount as
is recorded on the schedule attached hereto or in the books and records of the
Bank in 12 equal quarterly installments in the amount of $___________ payable
on the last day of each March, June, September and December commencing on the
last day of _______________ to and including the Maturity Date when the entire
outstanding principal amount of the Term Loan evidenced hereby, and all accrued
interest thereon, shall be due and payable; and to pay interest on the unpaid
principal balance hereof from time to time outstanding, in like money and
funds, for the period from the date hereof until the Term Loan evidenced hereby
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement referred to below.
The Bank is hereby authorized by the Company to record on the
schedule attached to this Term Note, or on its books and records, the date and
the amount of the Term Loan, the applicable interest rate and type and the
duration of the related Interest Period (if applicable), the amount of each
payment or prepayment of principal thereon, and the other information provided
for on such schedule, which schedule or such books and records, as the case may
be, shall constitute prime facie evidence of the information so recorded,
provided, however, that any failure by the Bank to record any such notation
shall not relieve the Company of its obligation to repay the outstanding
principal amount of this Term Note, all accrued interest hereon and any amount
payable with respect hereto in accordance with the terms of this Term Note and
the Credit Agreement.
The Company and each endorser or guarantor hereof waives
presentment, protest, notice of dishonor and any other formality in connection
with this Term Note. Should the indebtedness evidenced by this Term Note or any
part thereof be collected in any proceeding or be placed in the hands of
attorneys for collection, the Company agrees to pay, in addition to the
principal, interest and other sums due and payable hereon, all costs of
collecting this Term Note, including attorneys' fees and expenses.
116
This Term Note evidences a Term Loan made under an Amended and
Restated Credit Agreement, dated as of June 9, 1995, as amended, supplemented,
extended or otherwise modified from time to time (the "Credit Agreement"), by
and among the Company, the banks (including the Bank) named therein and NBD
Bank, as agent for the banks, to which reference is hereby made for a statement
of the circumstances under which this Term Note is subject to prepayment and
under which its due date may be accelerated and a description of the collateral
and security securing this Term Note. Capitalized terms used but not defined in
this Term Note shall have the respective meanings assigned to them in the
Credit Agreement.
This Term Note is made under, and shall be governed by and
construed in accordance with, the laws of the State of Michigan in the same
manner applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State.
THE MONARCH MACHINE TOOL COMPANY
By: _____________________________
Its: __________________________
TERM NOTE
---------
- 2 -
117
Schedule to Revolving Credit Note, dated
June 9, 1995, made by The Monarch Machine Tool Company
in favor of _____________________.
Principal
Amount
Trans- Principal Type Interest Paid, Pre- Principal
action Amount of of Interest Period (if paid or Balance Notation
Date Loan Loan* Rate applicable) Converted Outstanding Made by
------- --------- ---- -------- ----------- ---------- ----------- -------
-------------------------
* E - Eurodollar Rate
F - Floating Rate
N - Negotiated Rate
________________________________________________________________________________________________________________________________
TERM NOTE
---------
- 3 -