EXHIBIT 10.36
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REVOLVING CREDIT AND GUARANTY AGREEMENT
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Among
▇▇▇▇▇ LEMMERZ INTERNATIONAL, INC.,
a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code,
as Borrower,
CERTAIN DIRECT AND INDIRECT SUBSIDIARIES OF ▇▇▇▇▇ LEMMERZ
INTERNATIONAL, INC.,
each a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code,
as Guarantors,
and
THE LENDERS PARTY HERETO,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
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Dated as of December 17, 2001
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of December 17, 2001
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of December 17, 2001,
among ▇▇▇▇▇ LEMMERZ INTERNATIONAL, INC., a Delaware corporation (the "BORROWER")
and a debtor and debtor-in-possession in a case pending under Chapter 11 of the
Bankruptcy Code, the direct and indirect Subsidiaries of the Borrower listed as
Guarantors on Schedule 3.5 hereof (each, a "GUARANTOR" and collectively, the
"GUARANTORS"), each of which is a debtor and debtor-in-possession in a case
pending under Chapter 11 of the Bankruptcy Code (the cases of the Borrower and
the Guarantors each a "CASE" and collectively, the "CASES"), the commercial
banks, finance companies, insurance companies or other financial institutions or
funds from time to time party hereto (the "LENDERS"), CIBC WORLD MARKETS CORP.,
as lead arranger, BANK OF AMERICA, N.A., and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC., as
co-arrangers, CIBC WORLD MARKETS CORP., BANK OF AMERICA, N.A., and ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, INC., as co-bookrunners, BANK OF AMERICA, N.A., and ▇▇▇▇▇▇▇ ▇▇▇▇▇
BARNEY, INC., as syndication agents, and CANADIAN IMPERIAL BANK OF COMMERCE, as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") for the
Lenders.
INTRODUCTORY STATEMENT
WHEREAS, on December 5, 2001, the Borrower, the Guarantors, the Mexican
Debtor (as hereinafter defined) and the Securitization Subsidiaries (as
hereinafter defined) filed voluntary petitions with the Bankruptcy Court
initiating the Cases and have continued in the possession of their assets and in
the management of their businesses pursuant to Section 1107 and 1108 of the
Bankruptcy Code; and
WHEREAS, the Borrower has applied to the Lenders for a revolving credit
and letter of credit facility in an aggregate principal amount not to exceed
$200,000,000 (subject to the terms and conditions of this Agreement), with (i) a
sublimit of $15,000,000 for standby Letters of Credit to be issued as set forth
herein, and (ii) a sublimit of $20,000,000 (subject to the terms and conditions
of this Agreement) for Loans to certain Foreign Subsidiaries as set forth
herein; and
WHEREAS, the proceeds of the Loans will be used for working capital and
other general corporate purposes of the Borrower, generally as set forth in the
Budget and as provided for herein.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.1 Defined Terms.
As used in this Agreement, the following terms shall have the
meanings specified below:
"ABR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Section 2.
"ACCOUNT" shall mean any right to payment for goods sold in
the ordinary course of business, regardless of how such right is evidenced and
whether or not it has been earned by performance.
"ACCOUNT DEBTOR" means, with respect to any Account, the
obligor with respect to such Account.
"ADDITIONAL CREDIT" shall have the meaning given such term in
Section 4.2(d).
"ADEQUATE PROTECTION OBLIGATIONS" shall have the meaning given
to such term in Section 4.1(b)(v).
"ADJUSTED LIBOR RATE" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the quotient of
(a) the LIBOR Rate in effect for such Interest Period divided by (b) a
percentage (expressed as a decimal) equal to 100% minus Statutory Reserves. For
purposes hereof, the term "LIBOR RATE" shall mean the rate (rounded upwards, if
necessary, to the next 1/16 of 1%) at which dollar deposits approximately equal
in principal amount to such Eurodollar Borrowing and for a maturity comparable
to such Interest Period are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Introduction.
"AFFECTED LENDER" shall have the meaning given such term in
Section 2.28.
"AFFILIATE" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, a Person (a
"CONTROLLED PERSON") shall be deemed to be "controlled by" another Person (a
"CONTROLLING PERSON") if the Controlling Person possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"AGREEMENT" shall mean this Revolving Credit and Guaranty
Agreement, as the same may from time to time be amended, restated, modified or
supplemented.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus l% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof, "PRIME RATE" shall mean the rate
of interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective on the date such change is publicly
announced. "BASE CD RATE" shall mean the sum of (a) the quotient of (i) the
Three-Month Secondary CD Rate divided by (ii) a percentage expressed as a
decimal equal to 100% minus Statutory Reserves and (b) the Assessment Rate.
"THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it. "FEDERAL
FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive absent
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manifest error) that it is unable to ascertain the Base CD Rate or the Federal
Funds Effective Rate or both for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"AMOUNTS" shall have the meaning given such term in Section
2.17(a).
"ASSESSMENT RATE" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most recently estimated
by the Administrative Agent as the then current net annual assessment rate that
will be employed in determining amounts payable by the Administrative Agent to
the Federal Deposit Insurance Corporation (or any successor) for insurance by
such Corporation (or any successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"ASSET SALE" shall mean a sale, lease or sub-lease (as lessor
or sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property or other assets with any Person
(other than the Borrower), in one transaction or series of transactions, of all
or any part of (i) the Borrower's or any of its Domestic Subsidiaries'
businesses, assets or properties of any kind, whether real, personal, or mixed
and whether tangible or intangible, whether now owned or hereafter acquired,
including, without limitation, the capital stock of the Borrower or its
Subsidiaries in each case other than (x) Inventory, including scrap or obsolete
Inventory, sold in the ordinary course of business and (y) sales of assets for
aggregate consideration of less than $1,000,000 with respect to any transaction
or series of related transactions.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and accepted by
the Administrative Agent, substantially in the form of Exhibit D.
"AVOIDANCE ACTION" shall mean any actions under Sections 541,
542, 543, 544, 545, 547, 548, 549, 550 and 553 of, or any other avoidance
actions under, the Bankruptcy Code or any similar provision of state law.
"B TERM LOAN AGREEMENT" shall mean that certain B Term Loan
Agreement, dated as of July 2, 2001, among the ▇▇▇▇▇ Lemmerz International,
Inc., the lenders parties thereto and the Pre-Petition Agent.
"BANKRUPTCY CODE" shall mean The Bankruptcy Reform Act of
1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Section 101
et seq.
"BANKRUPTCY COURT" shall mean the United States Bankruptcy
Court for the District of Delaware or any other court having jurisdiction over
the Cases from time to time.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWER" shall have the meaning set forth in the
Introduction.
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"BORROWING" shall mean the incurrence of Loans of a single
Type made from all the Lenders, on a single date and having, in the case of
Eurodollar Loans, a single Interest Period (with any ABR Loan made pursuant to
Section 2.5 being considered a part of the related Borrowing of Eurodollar
Loans).
"BORROWING BASE" shall mean, at the time of any determination,
an amount equal to (a) 85% of Eligible Accounts Receivable, minus (b) the
Carve-Out. The Borrowing Base at any time shall be determined by reference to
the most recent Borrowing Base Certificate delivered to the Administrative Agent
pursuant to Section 5.8 of the Agreement. Subject to the limitations and
requirements set forth in Section 10.10(a) of the Agreement, the Administrative
Agent, in its sole discretion after consultation with the Initial Lenders, may,
and at the direction of at least two of the Initial Lenders shall, adjust and
revise from time to time standards of eligibility, reserves and advance rates of
the Borrowing Base, with any changes in such standards, reserves and advance
rates to be effective three (3) Business Days after delivery of notice thereof
to the Borrower.
"BORROWING BASE ADDENDUM" shall mean an addendum to this
Agreement modifying certain existing terms and provisions and adding certain
additional provisions to establish a final Borrowing Base and related matters in
accordance with the terms set forth in the Commitment Letter, and such other
matters set forth herein, all in form and substance satisfactory to the Initial
Lenders.
"BORROWING BASE CERTIFICATE" shall mean a certificate
substantially in the form of Exhibit C hereto (with such changes therein as may
be required from time to time by the Administrative Agent in consultation with
the Initial Lenders (or at the direction of at least two of the Initial Lenders)
to reflect the components of and reserves against the Borrowing Base as provided
for hereunder from time to time), executed and certified as accurate and
complete by a Financial Officer of the Borrower, which shall include appropriate
exhibits, schedules and supporting documentation, and additional reports as (i)
outlined in Exhibit C, (ii) requested by the Administrative Agent after
consultation with the Initial Lenders (or at the direction of at least two of
the Initial Lenders), and (iii) provided in Section 5.8.
"BUDGET" shall have the meaning set forth in Section 4.1(i).
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or other day on which banks in the State of New York are required or
permitted to close (and, for a Letter of Credit, other than a day on which the
Fronting Bank issuing such Letter of Credit is required or permitted to close);
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits on the London interbank market.
"CANADIAN DOLLARS" shall mean the lawful currency of Canada.
"CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash and not theretofore accrued
subsequent to the date of this Agreement or accrued as liabilities during such
period and including that portion of Capitalized Leases which is capitalized on
the consolidated balance sheet of the Borrower and its Subsidiaries) by the
Borrower and its Subsidiaries during such period that, in conformity with GAAP,
are required to be included in or reflected by the property, plant, equipment or
intangibles or similar fixed asset accounts reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries (including all equipment
which is purchased simultaneously with the trade-in of existing equipment owned
by the Borrower or its Subsidiaries to the extent of the gross amount of such
purchase price less the book value of the equipment being traded in at such
time), but excluding expenditures made in respect of non-reimbursable production
tooling or made in connection with the replacement or restoration of assets, to
the extent reimbursed or financed from
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insurance proceeds paid on account of the loss of or the damage to the assets
being replaced or restored, or from awards of compensation arising from the
taking by condemnation or eminent domain of such assets being replaced.
"CAPITALIZED LEASE" shall mean, as applied to any Person, any
lease of property by such Person as lessee which would be capitalized on a
balance sheet of such Person prepared in accordance with GAAP.
"CARVE-OUT" shall have the meaning set forth in Section 2.22.
"CASES" shall have the meaning set forth in the Introduction.
"CASH MANAGEMENT AGREEMENTS" shall mean the documentation
evidencing the cash management arrangements contemplated by Section 5.7 and the
related Cash Management Obligations of the Borrower and the Guarantors with
Comerica Bank, Bank One, N.A., Bank of America, N.A. or any one or more Lenders
or Lender Affiliates as described in Section 5.7.
"CASH MANAGEMENT OBLIGATIONS" shall mean the due and punctual
payment of all obligations arising after the Filing Date of the Borrower or any
Guarantor to Comerica Bank, Bank One, N.A., Bank of America, N.A., any Lender or
any Lender Affiliate providing cash management services as contemplated by
Section 5.7 including, without limitation, obligations in respect of overdrafts,
uncollected funds, returned items and related liabilities arising from treasury,
depository and cash management services or in connection with any automated
clearing house transfers of funds.
"CASH MANAGEMENT ORDER" shall mean the Order under 11 U.S.C.
Sections 105, 363, 1107 and 1108 (I) Authorizing Continued Use of Existing (A)
Bank Accounts, (B) Business Forms and Checks, and (C) Cash Management System and
(II) Authorizing the Continuation of Intercompany Transactions among Debtors and
Non-Debtor Affiliates submitted for entry by the Bankruptcy Court on or about
December 7, 2001.
"CHANGE OF CONTROL" shall mean: (i) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof), of shares representing more than 25% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower;
or (ii) the occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Borrower, after the Filing Date, by Persons who
were neither (A) nominated by the board of directors of the Borrower nor (B)
appointed by the directors so nominated.
"CIBC" shall mean Canadian Imperial Bank of Commerce, a
Canadian chartered bank acting through its New York agency.
"CLOSING DATE" shall mean the date on which this Agreement has
been executed and the conditions precedent to the making of the initial Loans
set forth in Section 4.1 have been satisfied or waived, which date shall occur
as promptly as is practicable after the date of this Agreement, but in no event
later than ten (10) days following the entry of the Interim Order.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COLLATERAL" shall mean the Collateral described in the
Security and Pledge Agreement.
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"COMMITMENT" shall mean the Commitment of each Lender
hereunder to make Loans and to issue or participate in Letters of Credit in the
amount set forth opposite its name on Annex A hereto or as may subsequently be
set forth in the Register from time to time; and as the same may be reduced from
time to time pursuant to this Agreement.
"COMMITMENT LETTER" shall mean that certain Commitment Letter
dated December 5, 2001 among the Administrative Agent, the Initial Lenders and
the Borrower, together with all exhibits and attachments thereto, including the
outline of terms and conditions and the fee letter referred to therein.
"COMMITMENT PERCENTAGE" shall mean at any time, with respect
to each Lender, the percentage obtained by dividing its Commitment at such time
by the Total Commitment at such time.
"CONSOLIDATED EBITDA" shall mean, for any period, all as
determined in accordance with GAAP, the consolidated net income (or net loss) of
the Borrower and its Subsidiaries (foreign and domestic) for such period, plus,
without duplication and to the extent added to or deducted from revenues in
determining such consolidated net income (or net loss) for such period, (a) the
sum of (i) depreciation expense, (ii) amortization expense, (iii) other non-cash
charges, (iv) provision for LIFO adjustment for inventory valuation, (v) net
total Federal, foreign, state and local income tax expense, (vi) gross interest
expense for such period minus gross interest income for such period, (vii)
extraordinary losses, (viii) any non-recurring charge or restructuring charge
which in accordance with GAAP is charged against operating income, (ix) the
cumulative effect of any change in accounting principles, and all professional
fees, financing costs, and other costs, expenses and items directly related to
the Cases as reflected in the Borrowers' consolidated statement of income for
such period, including any administrative expense reflecting such costs,
expenses or other items and any severance costs, and (x) costs under employee
retention programs approved by the Bankruptcy Court (after notice and a hearing)
minus (b) extraordinary gains plus or minus (c) the non-cash effect, if any,
attributable to Minority Interests. For purposes of calculating compliance with
the Consolidated EBITDA requirements of Section 6.5 at the end of any month, the
amount of cash non-recurring charges permitted to be added into the calculation
of Consolidated EBITDA shall be limited to (a) for those calendar months
beginning with the month ending January 31, 2002 through and including the month
ending December 31, 2002, the sum of $10,000,000 plus the cumulative cash
non-recurring "one-time" charges commencing from January 1, 2002 and set forth
in the Budget for such month and (b) for those calendar months beginning with
the month ending January 31, 2003 through and including the month ending June
30, 2003, the sum of $10,000,000 plus the amount of cash non-recurring
"one-time" charges set forth in the Budget for the twelve-month period ended at
the end of such month.
"CONSUMMATION DATE" shall mean the date of the substantial
consummation (as defined in Section 1101 of the Bankruptcy Code and which for
purposes of this Agreement shall be no later than the effective date) of a
Reorganization Plan of the Debtors that is confirmed pursuant to an order of the
Bankruptcy Court in the Cases.
"CONTRA RESERVE" shall mean, at any date, a reserve determined
in the Administrative Agent's sole discretion after consultation with the
Initial Lenders, based upon the estimated amount of Accounts wherein the Account
Debtor (i) is a creditor of the Borrower or a Guarantor, (ii) may assert, has
asserted or is reasonably expected to assert a right of set-off against the
Borrower or a Guarantor or (iii) has disputed or is reasonably expected to
dispute its liability (whether by chargeback or otherwise) or has made, may make
or is reasonably expected to make any claim with respect to the Account or any
other Account of the Borrower or a Guarantor which has not been resolved, in
each case, without duplication, to the extent of the amount owed by the Borrower
or a Guarantor to the Account Debtor, the
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amount of such actual or asserted right of set-off, or the amount of such
dispute or claim, as the case may be.
"CRITICAL TRADE VENDORS" shall mean, at any time, those
vendors that provide materials, goods or services that are actually or
practically available only from such vendors in accordance with the Order under
U.S.C. Section 105(a) Authorizing Payment of Pre-Petition Claims of certain
Critical Vendors up to Certain Amounts and Granting Provisional Authority with
respect to Additional Amounts submitted for entry by the Bankruptcy Court on or
about December 7, 2001.
"DEBTOR" or "DEBTORS" shall mean, individually and
collectively, the Borrowers, the Guarantors, the Mexican Debtor and the
Securitization Subsidiaries.
"DOLLARS" and "$" shall mean lawful money of the United States
of America.
"DOMESTIC EBITDA" shall mean, for any period, all as
determined in accordance with GAAP, the consolidated net income (or net loss) of
the Borrower, its Domestic Subsidiaries, the Mexican Debtor, ▇▇▇▇▇ Lemmerz
International Frenos, S.A. de C.V. and ▇▇▇▇▇ Lemmerz Mexico, S.A. de C.V. only
(expressly excluding the income and expenses of or amounts related to
investments in all other Foreign Subsidiaries) for such period plus, without
duplication and to the extent added to or deducted from revenues in determining
such consolidated net income (or net loss) for such period, (a) the sum of (i)
depreciation expense, (ii) amortization expense, (iii) other non-cash charges,
(iv) provisions for LIFO adjustment for inventory valuation, (v) net total
Federal, state and local income tax expense, (vi) gross interest expense for
such period minus gross interest income for such period, (vii) extraordinary
losses, (viii) any non-recurring charge or restructuring charge which in
accordance with GAAP is charged against operating income, (ix) the cumulative
effect of any change in accounting principles, all professional fees, financing
costs, and other costs, expenses and items directly related to the Cases as
reflected in the Borrowers' consolidated statement of income for such period,
including any administrative expenses reflecting such costs, expenses or other
items and any severance costs, and (x) costs under employee retention programs
approved by the Bankruptcy Court (after notice and a hearing) minus (b)
extraordinary gains plus or minus (c) the non-cash effect, if any, attributable
to Minority Interests. For purposes of calculating compliance with the Domestic
EBITDA requirements of Section 6.5 at the end of any month, the amount of cash
non-recurring charges permitted to be added into the calculation of Domestic
EBITDA shall be limited to (a) for those calendar months beginning with the
month ending January 31, 2002 through and including the month ending December
31, 2002, the sum of $10,000,000 plus the cumulative cash non-recurring
"one-time" charges commencing from January 1, 2002 and set forth in the Budget
for such month and (b) for those calendar months beginning with the month ending
January 31, 2003 through and including the month ending June 30, 2003, the sum
of $10,000,000 plus the amount of cash non-recurring "one-time" charges set
forth in the Budget for the twelve-month period ended at the end of such month.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary incorporated,
organized or formed under the laws of any jurisdiction of the United States.
"ELIGIBLE ASSIGNEE" shall mean (i) a commercial bank having
total assets in excess of $1,000,000,000; (ii) a finance company, insurance
company or other financial institution or fund, in each case acceptable to the
Administrative Agent, which in the ordinary course of business extends credit of
the type contemplated herein and has total assets in excess of $200,000,000 and
whose becoming an assignee would not constitute a prohibited transaction under
Section 4975 of the Code; (iii) a Lender Affiliate; and (iv) any other financial
institution satisfactory to the Administrative Agent.
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"ELIGIBLE ACCOUNTS RECEIVABLE" means, at the time of any
determination thereof, each Account that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such
determination: such Account (i) has been invoiced to, and represents the bona
fide amounts due to the Borrower or the Guarantors from, the purchaser of goods
or services, in each case originated in the ordinary course of business of the
Borrower and the Guarantors and (ii) in each case is subject to the corporate
accounts receivable credit and collection policies, procedures and practices of
the Borrower and the Guarantors and (iii) is not ineligible for inclusion in the
calculation of the Borrowing Base pursuant to any of clauses (a) through (o)
below or otherwise deemed by the Administrative Agent, in the exercise of its
sole discretion after consultation with the Initial Lenders, or deemed by at
least two of the Initial Lenders, to be ineligible for inclusion in the
calculation of the Borrowing Base as described below. Eligible Accounts
Receivable shall exclude the Contra Reserve and the Rebate Reserve. Without
limiting the foregoing, to qualify as Eligible Accounts Receivable, an Account
shall indicate no person other than the Borrower or a Guarantor as payee or
remittance party. In determining the amount to be so included, the face amount
of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that the Borrower or a Guarantor, as applicable, may be obligated to rebate to a
customer pursuant to the terms of any agreement or understanding (written or
oral)), (ii) the aggregate amount of all limits and deductions provided for in
this definition and elsewhere in this Agreement and (iii) the aggregate amount
of all cash received in respect of such Account but not yet applied by the
Borrower or a Guarantor to reduce the amount of such Account. Unless otherwise
approved from time to time in writing by the Administrative Agent (subject to
the limitations and requirements set forth in Section 10.10(a)), no Account
shall be an Eligible Account Receivable if:
(a) the Borrower or the relevant Guarantor does not have sole
lawful and absolute title to such Account; or
(b) (i) it is unpaid more than ninety (90) days from the
original date of invoice or sixty (60) days from the original due date or (ii)
it has been written off the books of the Borrower or Guarantors or has been
otherwise designated on such books as uncollectible; or
(c) more than 50% in face amount of all Accounts of the same
Account Debtor are ineligible pursuant to clause (b) above; or
(d) the Account Debtor is insolvent or the subject of any
bankruptcy case or insolvency proceeding of any kind or is of uncertain credit
quality, as determined by the Administrative Agent in its sole discretion, after
consultation with the Initial Lenders, or as determined by at least two of the
Initial Lenders; or
(e) the Account is not payable in Dollars or Canadian Dollars
or the Account Debtor is either not organized under the laws of the United
States of America or Canada, any State or Province thereof, or the District of
Columbia or is located outside or has its principal place of business or
substantially all of its assets outside the United States or Canada, except to
the extent the Account is supported by an irrevocable letter of credit
satisfactory to the Administrative Agent (as to form, substance and issuer) and
assigned to and directly drawable by the Administrative Agent; or
(f) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower or the
relevant Guarantor duly assigns its rights to payment of such Account to the
Administrative Agent pursuant to the Assignment of Claims Act of 1940, as
amended, which assignment and related documents and filings shall be in form and
substance satisfactory to the Administrative Agent, after consultation with the
Initial Lenders; or
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(g) the Account is supported by a security deposit (to the
extent received from the applicable Account Debtor), progress payment, retainage
or other similar advance made by or for the benefit of the applicable Account
Debtor, in each case to the extent thereof; or
(h) (i) it is not subject to a valid and perfected first
priority Lien in favor of the Administrative Agent, subject to no other Liens or
(ii) it does not otherwise conform in all material respects to the
representations and warranties contained in the Loan Documents relating to
Accounts; or
(i) such Account was invoiced (i) in advance of goods or
services provided, or (ii) two or more times, or (iii) the associated income has
not been earned; or
(j) such Account is classified as a note receivable by the
Borrower or the relevant Guarantor in accordance with the current and historical
practices of the Borrower or such Guarantor; or
(k) the sale to the Account Debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, ship-and-return, sale on approval or
consignment or other similar basis or made pursuant to any other written
agreement providing for repurchase or return of any merchandise which has been
claimed to be defective or otherwise unsatisfactory; or
(l) the Account represents a progress-billing or otherwise
does not represent a completed sale; or
(m) the Account Debtor is an Affiliate of the Borrower or a
Guarantor; or
(n) such Account was not paid in full, and the Borrower or the
relevant Guarantor created a new receivable for the unpaid portion of the
Account, without the agreement of the customer, and other Accounts constituting
chargebacks, debit memos and other adjustments for unauthorized deductions; or
(o) the Account is created on cash on delivery terms.
Notwithstanding the foregoing all Accounts of any single Account Debtor and its
Affiliates which, in the aggregate exceed (i) 30% in respect of Account Debtors
whose securities are rated Investment Grade by any of Moody's or S&P or (ii) 20%
in respect of all other Account Debtors, of the total amount of all Eligible
Accounts Receivable at the time of any determination shall be deemed not to be
Eligible Accounts Receivable to the extent of such excess. In determining the
aggregate amount of Accounts from the same Account Debtor that are unpaid more
than ninety (90) days from the date of invoice or more than sixty (60) days from
the due date pursuant to clause (b) above, there shall be excluded the amount of
any net credit balances relating to Accounts with invoice dates more than ninety
(90) days prior to the date of determination or more than sixty (60) days from
the due date. Furthermore, no Account shall be an Eligible Account Receivable if
it is for goods that have been sold under a purchase order or pursuant to the
terms of a contract or other agreement or understanding (written or oral) that
indicates that any Person other than the Borrower or a Guarantor has or has had
or has purported to have or have had an ownership interest in such goods.
"ELIGIBLE FINISHED GOODS" shall mean, on any date, Eligible
Inventory composed of Finished Goods, manufactured by the Borrower or a
Guarantor pursuant to an order by an Account Debtor, for use in such Account
Debtor's manufacturing processes, or for resale by such Account Debtor that is a
retailer or distributor, as determined by the Administrative Agent in its sole
discretion after consultation with the Initial Lenders, or as determined by at
least two of the Initial Lenders, on such date
9
as shown on the perpetual inventory records of the Borrower or a Guarantor in
accordance with its current and historical accounting practices, minus Inventory
Reserves.
"ELIGIBLE INVENTORY" shall mean, on any date, the Inventory
Value of the Borrower and the Guarantors on such date deemed by the
Administrative Agent, in the exercise of its discretion after consultation with
the Initial Lenders, or determined by at least two of the Initial Lenders, to be
eligible for inclusion in the calculation of the Borrowing Base. Without
limiting the foregoing, to qualify as "Eligible Inventory", no Person other than
the Borrower and the Guarantors shall have any direct or indirect ownership
interest or title to such Inventory. Eligible Inventory shall exclude
remanufactured parts in excess of an amount to be determined by the Initial
Lenders. Unless otherwise from time to time approved in writing by the
Administrative Agent (after consultation with the Initial Lenders, or as
directed by at least two of the Initial Lenders, and subject to the limitations
and requirements set forth in Section 10.10(a)), no Inventory shall be deemed
Eligible Inventory if (and without duplication):
(a) it is not owned solely by the Borrower or a Guarantor, or
the Borrower or a Guarantor does not have sole and good, valid and unencumbered
title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned or leased by the
Borrower or a Guarantor or in a contract warehouse specified on a schedule
attached to the Security and Pledge Agreement and segregated or otherwise
separately identifiable from goods of all others, if any, stored on the
premises; or
(d) it is not subject to a valid and perfected first priority
Lien in favor of the Administrative Agent, except, with respect to Inventory
stored at sites described in clause (c) above, for Liens for unpaid rent or
normal and customary warehousing charges, in each case, not yet paid, to the
extent of such unpaid rent or charges; or
(e) it is goods returned or rejected due to quality issues by
the Borrower's or a Guarantor's customers or goods in transit to third parties
(other than to warehouse sites described in clause (c) above); or
(f) it is seconds or thirds or stale or is obsolete or slow
moving or unmerchantable, or does not otherwise conform to the representations
and warranties contained in the Loan Documents; or
(g) it is located at any operating facility that the Borrower
or a Guarantor plans to close, or at any operating facility that is closed,
within thirty (30) days from the date of determination of the most recent
Borrowing Base; or
(h) it is comprised of film, pallets, and/or other shipping
materials or supplies, repair parts, fuel, cartons used in production or other
containers, paint and any other such material not considered used for sale by
the Administrative Agent from time to time, in the Administrative Agent's sole
discretion after consultation with the Initial Lenders, or by at least two of
the Initial Lenders; or
(i) the Borrower or a Guarantor classifies such item as a
sample item on its perpetual inventory records, or the Borrower or a Guarantor
uses such item for display; or
(j) it is a discontinued product or any component thereof; or
(k) any portion of the Inventory Value thereof is attributable
to intercompany profit among the Borrower, the Guarantors or their Affiliates;
or
10
(l) any Inventory that is damaged or marked for return to
vendor.
"ELIGIBLE RAW MATERIALS" shall mean, on any date, Eligible
Inventory comprised of Raw Materials to be used in the production of finished
goods inventory for sale, as determined by the Administrative Agent in its sole
discretion after consultation with the Initial Lenders, or as determined by at
least two of the Initial Lenders, on such date as shown on the perpetual
inventory records of the Borrower or a Guarantor in accordance with current and
historical accounting practices, minus Inventory Reserves.
"ELIGIBLE WORK-IN-PROCESS" shall mean, on any date, Eligible
Inventory composed of Work-in-Process manufactured by the Borrower or a
Guarantor, as determined by the Administrative Agent in its sole discretion
after consultation with the Initial Lenders, or as determined by at least two of
the Initial Lenders, on such date as shown on the perpetual inventory records of
the Borrower or a Guarantor in accordance with its current and historical
accounting practices, minus Inventory Reserves.
"ENVIRONMENTAL LIEN" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under federal or state
environmental laws or regulations, or (ii) damages arising from or costs
incurred by such Governmental Authority in response to a release or threatened
release of a hazardous or toxic waste, substance or constituent, or other
substance into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" shall mean any trade or business (whether or
not incorporated) which is a member of a group of which the Borrower is a member
and which is under common control within the meaning of Section 414(b) or (c) of
the Code and the regulations promulgated and rulings issued thereunder.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned
thereto in Regulation D issued by the Board, as in effect from time to time.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
"EVENT OF DEFAULT" shall have the meaning given such term in
Section 7.
"EXCLUDED STOCK" shall mean 35% of the capital stock,
membership interests or other equity or ownership interests in each direct
Foreign Subsidiary of the Borrower and the Guarantors.
"EXISTING CREDIT AGREEMENT" shall mean that certain Third
Amended and Restated Credit Agreement, dated as of February 3, 1999, as amended,
modified or supplemented on or before the Filing Date, among the Borrower, the
several lenders from time to time parties thereto, the Pre-Petition Agent,
Credit Suisse First Boston, as syndication agent and co-lead arranger, ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital Corporation, as co-documentation agent and European swing line
administrator, together with all other loans and security documents entered into
in connection therewith including, without limitation, the B Term Loan
Agreement.
"FEES" shall collectively mean the Unused Commitment Fees,
Letter of Credit Fees and all other fees referred to in Sections 2.18, 2.19 and
2.20.
11
"FILING DATE" shall mean December 5, 2001.
"FINAL ORDER" shall have the meaning given such term in
Section 4.2(d).
"FINANCIAL OFFICER" shall mean the Chief Financial Officer,
Chief Accounting Officer, Controller or Treasurer of the Borrower.
"FINISHED GOODS" shall mean goods to be sold by the Borrower
or a Guarantor in the ordinary course of business.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary which is
incorporated or organized under the laws of a jurisdiction outside of the United
States.
"FRONTING BANK" shall mean CIBC or such other Lender or
Lenders as may agree to act in such capacity, which other Lenders shall be
reasonably satisfactory to the Borrower and the Administrative Agent.
"GAAP" shall mean accounting principles generally accepted in
the United States and applied in accordance with Section 1.2.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
"GUARANTEE AND COLLATERAL AGREEMENT" shall mean that certain
Third Amended and Restated Guarantee and Collateral Agreement, dated as of
February 3, 1999, among each of the grantors identified therein and CIBC, as
administrative agent under the Existing Credit Agreement, as the same has been
amended, amended and restated, modified or supplemented on or before the Filing
Date.
"GUARANTEED OBLIGATIONS" shall have the meaning set forth in
Section 9.1(a).
"GUARANTORS" shall have the meaning set forth in the
Introduction.
"INDEBTEDNESS" shall mean, at any time and with respect to any
Person, (i) all Indebtedness of such Person for borrowed money, (ii) all
Indebtedness of such Person for the deferred purchase price of property or
services (other than property, including inventory, and services purchased, and
expense accruals and deferred compensation items arising, in the ordinary course
of business), (iii) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business), (iv) all Indebtedness
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (v)
all obligations of such Person under Capitalized Leases and all obligations of
such Person under synthetic leases, (vi) all reimbursement, payment or similar
obligations of such Person, contingent or otherwise, under acceptance, letter of
credit or similar facilities and all obligations of such Person in respect of
(x) currency swap agreements, currency future or option contracts and other
similar agreements designed to hedge against fluctuations in foreign currency
exchange rates, (y) interest rate swap, cap or collar agreements and interest
rate future or option contracts and other similar agreements designed to hedge
against fluctuations in interest rates and (z) commodity swap agreements, future
or option contracts and other similar agreements designed to hedge against
fluctuations in commodities prices; (vii) all Indebtedness referred to in
clauses (i) through (vi) above guaranteed directly or indirectly by such Person,
or in effect
12
guaranteed directly or indirectly by such Person through an agreement (A) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss in respect of such Indebtedness, (C) to supply
funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (D) otherwise to assure a creditor against
loss in respect of such Indebtedness, and (viii) all Indebtedness referred to in
clauses (i) through (vii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness.
"INDEMNIFIED PARTY" shall have the meaning given such term in
Section 10.6.
"INDENTURES" shall mean, collectively, (i) the Indenture,
dated as of July 2, 1996, among ▇▇▇▇▇ Lemmerz International, Inc., the
guarantors named therein and First Trust, National Association (as successor to
Comerica Bank), as trustee, as amended by Amendment No. 1, dated as of July 29,
1996, and further amended by Amendment No. 2, dated as of June 27, 1997; (ii)
the Indenture, dated as of June 30, 1997, among ▇▇▇▇▇ Lemmerz International,
Inc., the guarantors named therein and The Bank of New York, as trustee; (iii)
the Indenture, dated as of July 15, 1997, among ▇▇▇▇▇ Lemmerz International,
Inc., the guarantors named therein and The Bank of New York, as trustee; (iv)
the Indenture, dated as of December 14, 1998, among ▇▇▇▇▇ Lemmerz International,
Inc., the guarantors named therein and The Bank of New York, as trustee; and (v)
the Indenture, dated as of June 15, 2001, among ▇▇▇▇▇ Lemmerz International,
Inc., the guarantors named therein and BNY Midwest Trust Company, as trustee,
each as subsequently amended, modified or supplemented in accordance with the
terms hereof and thereof.
"INITIAL LENDERS" shall mean Bank of America, N.A., CIBC,
Inc., and Citicorp USA, Inc.
"INITIAL PAYMENT" shall have the meaning set forth in Section
4.1(b).
"INITIAL PERIOD" shall have the meaning set forth in Section
2.1(c).
"INSUFFICIENCY" shall mean, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within the meaning of
Section 4001(a)(18) of ERISA.
"INTERCOMPANY INDEBTEDNESS" shall mean any claim of an
Affiliate of the Borrower against any other Affiliate of the Borrower, any claim
of the Borrower against any of its Affiliates, and any claim of any Affiliate of
the Borrower against the Borrower.
"INTERCOMPANY LOANS" shall mean Intercompany Indebtedness for
borrowed money.
"INTEREST RATE HEDGING AGREEMENTS" shall mean the
documentation evidencing the interest rate hedging arrangements and the related
Interest Rate Hedging Obligations of the Borrower with one or more Lenders or
Lender Affiliates hedging the Borrower's interest rate risk in respect of the
Loans.
"INTEREST RATE HEDGING OBLIGATIONS" shall mean the due and
punctual payment of all obligations of the Borrower to any Lender or Lender
Affiliate in connection with any interest rate swap, cap or collar agreements
and interest rate future or option contracts and other similar agreements
designed to hedge against the Borrower's interest rate risk in respect of the
Loans.
13
"INTERIM COMMITMENT" shall have the meaning set forth in
Section 2.1(c).
"INTERIM ORDER" shall have the meaning given such term in
Section 4.1(b).
"INTEREST PAYMENT DATE" shall mean (i) as to any Eurodollar
Loan, the last day of the applicable Interest Period, and (ii) as to all ABR
Loans, the last calendar day of each month and the date on which any ABR Loans
are refinanced with Eurodollar Loans pursuant to Section 2.11.
"INTEREST PERIOD" shall mean, as to any Borrowing of
Eurodollar Loans, the period commencing on the date of such Borrowing (including
as a result of a refinancing of ABR Loans) or on the last day of the preceding
Interest Period applicable to such Borrowing and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is one, two or three months thereafter, as the Borrower may
elect in the related notice delivered pursuant to Section 2.5(b) or Section
2.11; provided, however, that (i) if any Interest Period would end on a day
which shall not be a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (ii) no Interest Period shall end later than
the Termination Date.
"INVENTORY" shall mean all Raw Materials, Work-in-Process, and
Finished Goods held by the Borrower or the Guarantors in the normal course of
business.
"INVENTORY RESERVES" means the following, each as determined
from time to time by the Administrative Agent:
(a) a reserve for shrink, or discrepancies that arise
pertaining to inventory quantities on hand between the perpetual accounting
system of the Borrower and the Guarantors, and physical counts of the Inventory,
but not less than a percentage of the Eligible Inventory to be determined by the
Initial Lenders; or
(b) a reserve for slow move, obsolete or excess Inventory; or
(c) a reserve for favorable standard cost variances; or
(d) a reserve for amounts owing to landlords or warehousemen
for Inventory stored at leased facilities or public warehouses which are not the
subject of an access agreement acceptable to the Administrative Agent, in an
amount equal to (i) to the extent an average monthly rental expense can be
determined for such facility, the lesser of (x) three (3) times the average
monthly rental expense for such facility and (y) the Inventory Value of the
Inventory stored at such leased facilities or public warehouses and (ii) in all
other events, the Inventory Value of the Inventory stored at such leased
facilities or public warehouses; or
(e) a reserve for Inventory located at contractors' or
vendors' facilities in the amount of the Inventory Value of such Inventory; or
(f) any other reserve as deemed appropriate by the
Administrative Agent in its sole discretion, from time to time; or
(g) after consultation with the Initial Lenders, a reserve for
vendor rebates.
14
"INVENTORY VALUE" shall mean a dollar amount equal to the
lesser of (i) the actual cost of Inventory determined on a basis consistent with
GAAP and with the Borrower's and the Guarantors' current and historical
accounting practice or (ii) the market value of such Inventory.
"INVESTMENTS" shall have the meaning given such term in
Section 6.10.
"INVESTMENT GRADE" shall mean either (i) at least Baa3 by
Moody's (or the then equivalent) or (ii) at least BBB- by S&P (or the then
equivalent).
"LENDERS" shall have the meaning set forth in the
Introduction.
"LENDER AFFILIATE" shall mean, (a) with respect to any Lender,
(i) an Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in loans and similar extensions of credit in the ordinary
course of its business and is administered or managed by a Lender or an
Affiliate of such Lender and (b) with respect to any Lender that is a fund which
invests in loans and similar extensions of credit, any other fund that invests
in loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"LETTER OF CREDIT" shall mean any irrevocable letter of credit
issued pursuant to Section 2.2, which letter of credit shall be (i) a standby or
import documentary letter of credit, (ii) issued for purposes that are
consistent with the ordinary course of business of the Borrower and the
Guarantors or for such other purposes as are reasonably acceptable to the
Administrative Agent, (iii) denominated in Dollars and (iv) otherwise in such
form as may be reasonably approved from time to time by the Administrative Agent
and the applicable Fronting Bank.
"LETTER OF CREDIT ACCOUNT" shall mean the account established
by the Borrower under the sole and exclusive control of the Administrative Agent
maintained at the office of the Administrative Agent at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ designated as the "▇▇▇▇▇ Lemmerz Letter of
Credit Account" that shall be used solely for the purposes set forth in Sections
2.2(a) and 2.12.
"LETTER OF CREDIT FEES" shall mean the fees payable in respect
of Letters of Credit pursuant to Section 2.20.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the
sum of (i) the aggregate undrawn stated amount of all Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and
not then reimbursed.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, hypothecation, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement or any lease in the nature
thereof).
"LOAN" and "LOANS" shall have the meaning given to such terms
in Section 2.1(a).
"LOAN DOCUMENTS" shall mean this Agreement, the Letters of
Credit, the Security and Pledge Agreement and any other instrument or agreement
executed and delivered in connection with any of the foregoing.
"MATURITY DATE" shall mean the date which is eighteen (18)
months after the commencement of the Cases.
15
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the business, assets, operations, property, condition (financial or
otherwise) or prospects of the Borrower and the Guarantors, taken as a whole, or
the ability of the Borrower or the Guarantors to perform their respective
obligations under the Loan Documents or (b) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder; provided, that
a Material Adverse Effect shall not be deemed to have occurred solely on account
of those events which customarily occur leading up to and following the
commencement of a proceeding under Chapter 11 of the Bankruptcy Code.
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than
Loans made and Letters of Credit issued hereunder) of Foreign Subsidiaries in an
aggregate principal amount, under any one or more instruments, exceeding
$18,000,000.
"MEASUREMENT PERIOD" shall mean, at the time of any
determination, the period commencing on December 1, 2001, and ending on the last
day of the most recently ended fiscal quarter of the Borrower.
"MEXICAN DEBTOR" shall mean, Industrias Fronterizas HLI, S.A.
de C.V., a Foreign Subsidiary of the Borrower organized under the laws of
Mexico, and a debtor and debtor-in-possession in a case pending under Chapter 11
of the Bankruptcy Code.
"MINIMUM LIQUIDITY" shall mean, at the time of any
determination, an amount equal to the sum of (a) the lesser of (i) the Unused
Total Commitment and (ii) the Borrowing Base minus the sum of (x) the aggregate
outstanding principal amount of all Loans and (y) the aggregate Letter of Credit
Outstandings, plus (b) the aggregate amount of all cash and cash collateral of
the Borrower and the Guarantors at such time.
"MINORITY INTERESTS" shall mean any shares of stock of any
class of a Subsidiary of the Borrower (other than directors' qualifying shares
if required by law) that are not owned by the Borrower or one of its
Subsidiaries; Minority Interests shall be valued in accordance with GAAP.
"MINORITY LENDERS" shall have the meaning given such term in
Section 10.10(b).
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor to the rating agency business thereof.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean a Single Employer Plan,
which (i) is maintained for employees of the Borrower or an ERISA Affiliate and
at least one Person other than the Borrower and its ERISA Affiliates or (ii) was
so maintained and in respect of which the Borrower or an ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"NET PROCEEDS" shall mean, in respect of any Asset Sale, the
proceeds of such Asset Sale, after the payment of or reservation for expenses
that are directly related to the Asset Sale, including, but not limited to,
related severance costs, taxes payable, brokerage commissions, professional
expenses, other similar costs that are directly related thereto and the amount
secured by valid and perfected Liens, if
16
any, that are senior to the Liens on such property or other assets held by the
Administrative Agent on behalf of the Lenders.
"OBLIGATIONS" shall mean (a) the due and punctual payment of
principal of and interest on the Loans and the reimbursement of all amounts
drawn under Letters of Credit (including, without limitation, the Guaranteed
Obligations), (b) the due and punctual payment of all Cash Management
Obligations, (c) from and after the entry of the Final Order, the due and
punctual payment of all Interest Rate Hedging Obligations, and (d) the due and
punctual payment of the Fees and all other present and future, fixed or
contingent, obligations of the Borrower and the Guarantors to the Lenders and
the Administrative Agent under the Loan Documents.
"ORDERS" shall mean the Interim Order and the Final Order.
"ORGANIZATIONAL DOCUMENTS" shall mean (i) with respect to any
corporation, its certificate or articles of incorporation, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership or formation, as amended, and its partnership
agreement, as amended, (iii) with respect to any general partnership, its
partnership agreement, as amended, (iv) with respect to any limited liability
company, its certificate of formation or articles of organization, as amended,
and its operating agreement, as amended, and (v) with respect to any unlimited
liability company, its certificate of formation, as amended, and its memorandum
and articles of association, as amended. In the event any term or condition of
this Agreement or any other Loan Document requires any Organizational Document
to be certified by a secretary of state of similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"OTHER TAXES" shall have the meaning given such term in
Section 2.17.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor agency or entity performing substantially the same functions.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within twelve months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "A" or the equivalent thereof from S&P or of at least "A-2" or the
equivalent thereof from ▇▇▇▇▇'▇;
(c) investments in certificates of deposit; banker's
acceptances and time deposits (including Eurodollar time deposits) maturing
within six months from the date of acquisition thereof issued or guaranteed by
or placed with (i) any domestic office of the Administrative Agent or the bank
with whom the Borrower maintains its cash management system, provided that if
such bank is not a Lender hereunder, such bank shall have entered into an
agreement with the Administrative Agent pursuant to which such bank shall have
waived all rights of setoff and confirmed that such bank does not have, nor
shall it claim, a security interest therein or (ii) any domestic office of any
other commercial bank of recognized standing organized under the laws of the
United States of America or any State thereof that has a combined capital and
surplus and undivided profits of not less than $250,000,000 and is
17
the principal banking Subsidiary of a bank holding company having a long-term
unsecured debt rating of at least "A" or the equivalent thereof from S&P or at
least "A-2" or the equivalent thereof from ▇▇▇▇▇'▇;
(d) investments in commercial paper maturing within six months
from the date of acquisition thereof and issued by (i) the holding company of
the Administrative Agent or (ii) the holding company of any other commercial
bank of recognized standing organized under the laws of the United States of
America or any State thereof that has (A) a combined capital and surplus in
excess of $250,000,000 and (B) commercial paper rated at least "A" or the
equivalent thereof from S&P or of at least "A-2" or the equivalent thereof from
▇▇▇▇▇'▇;
(e) investments in repurchase obligations with a term of not
more than seven (7) days for underlying securities of the types described in
clause (a) above entered into with any office of a bank or trust company meeting
the qualifications specified in clause (c) above;
(f) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(a) through (e) above; and
(g) to the extent owned on the Filing Date, investments in the
capital stock or other ownership interests of any direct or indirect Subsidiary
of the Borrower as disclosed in Schedule 3.5.
"PERMITTED LIENS" shall mean (i) Liens in favor of the
Administrative Agent on behalf of itself and the other Secured Parties; (ii)
Liens imposed by law (other than Environmental Liens and any Lien imposed under
ERISA) for taxes, assessments or charges of any Governmental Authority for
claims not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; (iii) Liens of
landlords and Liens of statutory carriers, warehousemen, mechanics, materialmen
and other Liens (other than Environmental Liens and any Lien imposed under
ERISA) in existence on the Filing Date or thereafter imposed by law and created
in the ordinary course of business; (iv) Liens (other than any Lien imposed
under ERISA) incurred or deposits made (including, without limitation, surety
bonds and appeal bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits in each case in the
ordinary course of business, or to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of Indebtedness) statutory
obligations and other similar obligations incurred in the ordinary course of
business in an aggregate amount outstanding at any one time not in excess of
$5,000,000; (v) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not interfere with the ordinary conduct of the business of the
Borrower or any Guarantor, and which do not detract from the value of the
property to which they attach or materially impair the use thereof to the
Borrower or any Guarantor; (vi) purchase money Liens (including Capitalized
Leases) upon or in any property acquired or held in the ordinary course of
business to secure the purchase price of such property or to secure Indebtedness
permitted by Section 6.3(iii) solely for the purpose of financing the
acquisition of such property; (vii) Liens set forth on Schedule 3.6; (viii)
Liens on the assets of Foreign Subsidiaries granted to secure Intercompany Loans
from the Borrower permitted by Sections 2.29 and 6.10(iv) or to secure
Indebtedness of such Foreign Subsidiaries permitted pursuant to Section 6.3(vi);
(ix) Liens junior to the senior liens contemplated hereby that are granted by
the Interim Order or the Final Order as adequate protection to the Pre-Petition
Lenders, provided that the Interim Order and the Final Order provide that the
holders of such junior liens shall not be permitted to take any action to
enforce their rights with respect to such junior liens as long as any amounts
are outstanding under the Agreement or the Lenders have any Commitment
thereunder, (x) Liens arising with respect to the Borrower's insurance premium
financing arrangements described in the Premium Financing Order, and such other
premium financing arrangements of the Borrower approved by
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the Bankruptcy Court, securing an amount not in excess of $10,000,000 in the
aggregate at any one time outstanding for all such premium financing
arrangements, and (xi) Liens created in connection with extensions, renewals or
replacements, including replacement Liens granted by the Bankruptcy Court, of
any Lien referred to in clauses (i) through (x) above, provided that the
principal amount of the obligation secured thereby is not increased and that any
such extension, renewal or replacement is limited to the property originally
encumbered thereby.
"PERSON" shall mean any natural person, corporation, division
of a corporation, partnership, trust, joint venture, association, company,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"PLAN" shall mean a Single Employer Plan or a Multiemployer
Plan.
"PP&E COMPONENT" shall mean, at the time of any determination,
an amount equal to the lesser of (i) a percentage of (x) the orderly liquidation
value of certain machinery and equipment owned by the Borrower and the
Guarantors and (y) the market value of certain real property owned by the
Borrowers and the Guarantors, in each case as determined by the Initial Lenders,
(ii) an amount, in Dollars, to be determined by the Initial Lenders, or (iii)
20% of the Borrowing Base inclusive of the PP&E Component.
"PREMIUM FINANCING ORDER" shall mean the Interim and Final
Order pursuant to 11 U.S.C. Section 364(c)(2) Authorizing Debtors to Enter into
Insurance Premium Financing Agreements with AFCO Credit Corporation, entered by
the Bankruptcy Court.
"PREPAYMENT DATE" shall mean January 16, 2002 if the Final
Order has not been entered by the Bankruptcy Court on or prior to such date.
"PRE-PETITION AGENT" shall mean CIBC, as administrative agent
and collateral agent for the Pre-Petition Lenders.
"PRE-PETITION AGREEMENTS" shall mean, collectively, the
Existing Credit Agreement, the Guarantee and Collateral Agreement and all other
loan and security agreements executed in connection therewith.
"PRE-PETITION COLLATERAL" shall mean all of the collateral
(including cash collateral) in which the Borrower and the other parties to the
Pre-Petition Agreements granted Liens pursuant to the Pre-Petition Agreements to
secure the obligations under the Pre-Petition Agreements to the extent such
Liens are valid, perfected and nonavoidable on the Filing Date.
"PRE-PETITION LENDERS" shall mean, collectively, those certain
lenders under the Pre-Petition Agreements, together with any successors or
assigns thereof.
"PRE-PETITION OBLIGATIONS" shall mean all obligations owing to
the Pre-Petition Agent and the Pre-Petition Lenders under the Pre-Petition
Agreements.
"PRE-PETITION PAYMENT" shall mean a payment (by way of
adequate protection or otherwise) of principal or interest or otherwise on
account of any prepetition Indebtedness or trade payables or other prepetition
claims against the Borrower or any Guarantor, including, without limitation,
reclamation claims, materialmen's liens and prepetition claims of Critical Trade
Vendors.
"PRIMED LIENS" shall have the meaning set forth in Section
2.22.
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"RATE" shall mean the Adjusted LIBOR Rate and the Alternate
Base Rate.
"RAW MATERIALS" shall mean any raw materials or Supplies used
or consumed in the manufacture, packing or shipping of goods to be sold by the
Borrower or any Guarantor in the ordinary course of business.
"REBATE RESERVE" shall mean, at any time of determination and
without duplication of other reserves applicable to the determination of
Eligible Account Receivables, an amount owing or payable to Account Debtors
pursuant to incentive marketing programs or similar programs, as determined from
time to time by the Administrative Agent in its sole discretion, after
consultation with the Initial Lenders.
"REGISTER" shall have the meaning set forth in Section
10.3(d).
"REORGANIZATION PLAN" shall mean a plan of reorganization in
any of the Cases.
"REPLACEMENT LENDER" shall have the meaning set forth in
Section 2.28.
"REQUIRED LENDERS" shall mean Lenders representing more than
50% of the aggregate outstanding principal amount of the Loans; provided that if
no Loans are then outstanding, such term shall mean Lenders holding in excess of
50% of the Total Commitment.
"RESTATEMENT" shall have the meaning set forth in Section 3.3.
"S&P" shall mean Standard & Poor's Rating Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor to the rating agency
business thereof.
"SECURED PARTIES" shall have the meaning given such term in
the Security and Pledge Agreement.
"SECURITIZATION SUBSIDIARIES" shall mean ▇▇▇▇▇ Lemmerz Funding
Company, LLC and ▇▇▇▇▇ Lemmerz Funding Corporation.
"SECURITY AND PLEDGE AGREEMENT" shall have the meaning given
such term in Section 4.1(c).
"SINGLE EMPLOYER PLAN" shall mean a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of
the Borrower or an ERISA Affiliate or (ii) was so maintained and in respect of
which the Borrower could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.
"STATUTORY RESERVES" shall mean on any date the percentage
(expressed as a decimal) established by the Board and any other banking
authority which is (i) for purposes of the definition of Base CD Rate, the then
stated maximum rate of all reserves (including but not limited to, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City, for new three month negotiable
nonpersonal time deposits in dollars of $100,000 or more or (ii) for purposes of
the definition of Adjusted LIBOR Rate, the then stated maximum rate for all
reserves (including but not limited to any emergency, supplemental or other
marginal reserve requirements) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency Liabilities (or any successor category
of liabilities under Regulation D issued by the Board, as in effect from time to
time). Such reserve percentages shall include, without limitation, those imposed
pursuant to
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said Regulation. The Statutory Reserves shall be adjusted automatically on and
as of the effective date of any change in such percentage.
"SUBORDINATE SYNTHETIC LEASE LIEN" shall mean the subordinate
lien encumbering the assets and property securing the Pre-Petition Obligations
and granted in favor of the credit providers parties to the Synthetic Lease
Documents.
"SUBSIDIARY" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, association or other business
entity (whether now existing or hereafter organized) of which at least a
majority of the securities or other ownership interests having ordinary voting
power for the election of directors is, at the time as of which any
determination is being made, owned or controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"SUPER-MAJORITY LENDERS" shall have the meaning given such
term in Section 10.10(b).
"SUPERPRIORITY CLAIM" shall mean a claim against the Borrower
or any Guarantor in any of the Cases which is a superpriority administrative
expense claim having priority over any or all administrative expenses of the
kind specified in Sections 503(b) or 507(b) of the Bankruptcy Code.
"SUPPLIES" shall mean film, packaging and/or shipping supplies
or materials not otherwise directly used in the production of Finished Goods.
"SYNTHETIC LEASE DOCUMENTS" shall mean, collectively, (i) the
Participation Agreement dated as of April 8, 1999, among ▇▇▇▇▇ Lemmerz
International, Inc., BMO Global Capital Solutions, Inc., the subsidiary
guarantors parties thereto and Bank of Montreal, and (ii) the Participation
Agreement dated as of October 1, 1998, among ▇▇▇▇▇ Lemmerz International, Inc.,
BMO Global Capital Solutions, Inc., the subsidiary guarantors parties thereto
and Bank of Montreal, together with in each case all related leases, mortgages,
loan agreements, guarantees, guarantee and collateral agreements, intercreditor
and subordination agreements and all other related loan, lease and security
documents executed and delivered in connection therewith, as the same have been
amended, restated, modified or supplemented from time to time.
"TAXES" shall have the meaning given such term in Section
2.17.
"TERMINATION DATE" shall mean the earliest to occur of (i) the
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date, and (iv)
the acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.
"TERMINATION EVENT" shall mean (i) a "reportable event", as
such term is described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "reportable event" not subject to the provision for
30-day notice to the PBGC under Section 4043 of ERISA or such regulations) or an
event described in Section 4068 of ERISA excluding events described in Section
4043(c)(9) of ERISA or 29 CFR Sections 2615.21 or 2615.23, or (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a "substantial employer", as such term is
defined in Section 4001(a) of ERISA, or the incurrence of liability by the
Borrower or any ERISA Affiliate under Section 4064 of ERISA upon the termination
of a Multiple Employer Plan, or (iii) providing notice of intent to terminate a
Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan amendment
as a termination under Section 4041 of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or (v)
any other event or condition (other than the commencement of the Cases and the
failure to have made any contribution accrued as of the
21
Filing Date but not paid) which would reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the imposition of any liability under
Title IV of ERISA (other than for the payment of premiums to the PBGC).
"TOTAL COMMITMENT" shall mean, at any time, the sum of the
Commitments at such time.
"TOTAL USAGE" shall mean, at any time, the sum of the
outstanding aggregate principal amount of the Loans, plus the aggregate Letter
of Credit Outstandings.
"TRANSFEREE" shall have the meaning given such term in Section
2.17.
"TREASURY REGULATIONS" shall mean all final and temporary
regulations promulgated under the Code, as amended.
"TYPE" when used in respect of any Loan or Borrowing shall
refer to the Rate of interest by reference to which interest on such Loan or on
the Loans comprising such Borrowing is determined.
"UNUSED COMMITMENT FEE" shall have the meaning set forth in
Section 2.19.
"UNUSED TOTAL COMMITMENT" shall mean, at any time, (i) the
Total Commitment minus (ii) the sum of (x) the aggregate outstanding principal
amount of all Loans and (y) the aggregate Letter of Credit Outstandings.
"WITHDRAWAL LIABILITY" shall have the meaning given such term
under Part I of Subtitle E of Title IV of ERISA.
"WORK-IN-PROCESS" shall mean goods to be sold by the Borrower
or a Guarantor in the ordinary course of business, which are currently in the
process of being manufactured.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references herein to Sections, Exhibits and
Schedules shall be deemed references to Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that for purposes of determining compliance with any
covenant set forth in Section 6, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in the Borrower's audited financial
statements referred to in Section 3.4.
SECTION 2. AMOUNT AND TERMS OF CREDIT
SECTION 2.1 Commitment of the Lenders.
(a) Each Lender severally and not jointly with the other
Lenders agrees, upon the terms and subject to the conditions herein set forth,
to make revolving credit loans (each a "LOAN" and collectively, the "LOANS") to
the Borrower at any time and from time to time during the period commencing on
the date hereof and ending on the Termination Date (or the earlier date of
termination of the Total Commitment) in an aggregate principal amount not to
exceed, when added to such Lender's Commitment Percentage of the then aggregate
Letter of Credit Outstandings, the Commitment of such
22
Lender, which Loans may be repaid and reborrowed in accordance with the
provisions of this Agreement. At no time shall the sum of the then outstanding
aggregate principal amount of the Loans plus the then aggregate Letter of Credit
Outstandings exceed the Total Commitment of $200,000,000, as the same may be
reduced from time to time pursuant the terms of this Agreement.
(b) Each Borrowing shall be made by the Lenders pro rata in
accordance with their respective Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve the other
Lenders of their obligations to lend.
(c) Subject to the terms and conditions hereof, from the
Filing Date until the earlier of (i) January 16, 2002, and (ii) the date of the
entry of the Final Order (the "INITIAL PERIOD"), $45,000,000 of the Total
Commitment (the "INTERIM COMMITMENT") shall be available to the Borrower.
(d) Notwithstanding any of the provisions of this Agreement to
the contrary, the Total Usage shall not at any time exceed: (i) prior to the
expiration of the Initial Period, the lesser of (x) the Interim Commitment and
(y) the Borrowing Base; and (ii) from and after the expiration of the Initial
Period, the lesser of (x) the Total Commitment and (y) the Borrowing Base, and
no Loan shall be made or Letter of Credit issued in violation of the foregoing.
SECTION 2.2 Letters of Credit.
(a) Upon the terms and subject to the conditions herein set
forth, the Borrower may request a Fronting Bank, at any time and from time to
time after the date hereof and prior to the Termination Date, to issue, and,
subject to the terms and conditions contained herein, such Fronting Bank shall
issue, for the account of the Borrower one or more Letters of Credit in support
of obligations of the Borrower or one or more Foreign Subsidiaries that are
acceptable to the Administrative Agent, provided that no Letter of Credit shall
be issued if after giving effect to such issuance (i) the aggregate Letter of
Credit Outstandings would exceed $15,000,000, and (ii) the Total Usage would
exceed (A) prior to the expiration of the Initial Period, the lesser of (x) the
Interim Commitment and (y) the Borrowing Base, and (B) from and after the
expiration of the Initial Period, the lesser of (x) the Total Commitment and (y)
the Borrowing Base, and provided further that no Letter of Credit shall be
issued if the Fronting Bank shall have received notice from the Administrative
Agent or the Required Lenders that the conditions to such issuance have not been
met.
(b) No Letter of Credit shall expire later than the earlier of
(i) one year from the issuance thereof, and (ii) five (5) days before the
Maturity Date, provided that if the Termination Date shall occur prior to the
expiration of any Letter of Credit, the Borrower shall, at or prior to the
Termination Date, except as the Administrative Agent may otherwise agree in
writing, (i) cause all Letters of Credit which expire after the Termination Date
to be returned to the Fronting Bank undrawn and marked "canceled" or (ii) if the
Borrower is unable to do so in whole or in part, either (x) provide a
"back-to-back" letter of credit to one or more Fronting Banks in a form
satisfactory to such Fronting Bank and the Administrative Agent (in their sole
discretion), issued by a bank satisfactory to such Fronting Bank and the
Administrative Agent (in their sole discretion), in an amount equal to the
greater of (A) an amount, as determined by the Fronting Bank and the
Administrative Agent, equal to the face amount of all outstanding Letters of
Credit plus the sum of all projected contractual obligations to the
Administrative Agent, the Fronting Bank and the Lenders of the Borrower
thereunder through the expiration date(s) of such Letters of Credit, and (B)
105% of the then undrawn stated amount of all outstanding Letters of Credit
issued by such Fronting Banks and/or (y) deposit cash in the Letter of Credit
Account in an amount which, together with any amounts then held in the Letter of
Credit Account, is equal to the greater of (A) an amount, as determined by the
Fronting Bank and the Administrative Agent, equal to the face amount of all
outstanding Letters of Credit plus the sum of all projected contractual
obligations to the
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Administrative Agent, the Fronting Bank and the Lenders of the Borrower
thereunder and (B) 105% of the then undrawn stated amount of all Letter of
Credit Outstandings as collateral security for the Borrower's reimbursement
obligations in connection therewith, such cash to be remitted to the Borrower
upon the expiration, cancellation or other termination or satisfaction of such
reimbursement obligations with respect to each such Letter of Credit in an
amount equal to the cash held by the Administrative Agent in respect of such
Letter of Credit.
(c) The Borrower shall pay to each Fronting Bank, in addition
to such other fees and charges as are specifically provided for in Section 2.20
hereof, such fees and charges in connection with the issuance and processing of
the Letters of Credit issued by such Fronting Bank as are customarily imposed by
such Fronting Bank from time to time in connection with letter of credit
transactions.
(d) Drafts drawn under each Letter of Credit shall be
reimbursed by the Borrower in Dollars not later than the first Business Day
following the date of draw and shall bear interest from the date of draw until
the first Business Day following the date of draw at a rate per annum equal to
the Alternate Base Rate plus 2.25% and thereafter until reimbursed in full at a
rate per annum equal to the Alternate Base Rate plus 4.25% (computed on the
basis of the actual number of days elapsed over a year of 360 days). The
Borrower shall effect such reimbursement (x) if such draw occurs prior to the
Termination Date (or the earlier date of termination of the Total Commitment),
in cash or through a Borrowing of Loans without the satisfaction of the
conditions precedent set forth in Section 4.2 or (y) if such draw occurs on or
after the Termination Date (or the earlier date of termination of the Total
Commitment), in cash. Each Lender agrees to make the Loans described in clause
(x) of the preceding sentence notwithstanding a failure to satisfy the
applicable lending conditions thereto or the provisions of Section 2.28.
(e) Immediately upon the issuance of any Letter of Credit by
any Fronting Bank, such Fronting Bank shall be deemed to have sold to each
Lender other than such Fronting Bank and each such other Lender shall be deemed
unconditionally and irrevocably to have purchased from such Fronting Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Lender's Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrower under this Agreement with
respect thereto. Upon any change in the Commitments pursuant to Section 10.3, it
is hereby agreed that with respect to all Letter of Credit Outstandings, there
shall be an automatic adjustment to the participations hereby created to reflect
the new Commitment Percentages of the assigning and assignee Lenders. Any action
taken or omitted by a Fronting Bank under or in connection with a Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct (as determined by the final judgment of a court of competent
jurisdiction), shall not create for such Fronting Bank any resulting liability
to any other Lender.
(f) In the event that a Fronting Bank makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed such amount in
full to such Fronting Bank pursuant to this Section, the Fronting Bank shall
promptly notify the Administrative Agent, which shall promptly notify each
Lender of such failure, and each Lender shall promptly and unconditionally pay
to the Administrative Agent for the account of the Fronting Bank the amount of
such Lender's Commitment Percentage of such unreimbursed payment in Dollars and
in same day funds. If the Fronting Bank so notifies the Administrative Agent,
and the Administrative Agent so notifies the Lenders prior to 11:00 a.m. (New
York City time) on any Business Day, such Lenders shall make available to the
Fronting Bank such Lender's Commitment Percentage of the amount of such payment
on such Business Day in same day funds. If and to the extent such Lender shall
not have so made its Commitment Percentage of the amount of such payment
available to the Fronting Bank, such Lender agrees to pay to such Fronting Bank,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Administrative Agent
for the account of such Fronting Bank at the
24
Federal Funds Effective Rate. The failure of any Lender to make available to the
Fronting Bank its Commitment Percentage of any payment under any Letter of
Credit shall not relieve any other Lender of its obligation hereunder to make
available to the Fronting Bank its Commitment Percentage of any payment under
any Letter of Credit on the date required, as specified above, but no Lender
shall be responsible for the failure of any other Lender to make available to
such Fronting Bank such other Lender's Commitment Percentage of any such
payment. Whenever a Fronting Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Lenders pursuant to
this paragraph, such Fronting Bank shall pay to each Lender which has paid its
Commitment Percentage thereof, in Dollars and in same day funds, an amount equal
to such Lender's Commitment Percentage thereof.
SECTION 2.3 Issuance. Whenever the Borrower desires a Fronting Bank to
issue a Letter of Credit, a Financial Officer of the Borrower shall give to such
Fronting Bank and the Administrative Agent at least three (3) Business Days'
prior written (including telegraphic, telex, facsimile or cable communication)
notice (or such shorter period as may be agreed upon by the Administrative
Agent, the Borrower and the Fronting Bank) specifying the date on which the
proposed Letter of Credit is to be issued (which shall be a Business Day), the
stated amount of the Letter of Credit so requested, the expiration date of such
Letter of Credit and the name and address of the beneficiary thereof.
SECTION 2.4 Nature of Letter of Credit Obligations Absolute. The
obligation of the Borrower to reimburse the Lenders for drawings made under any
Letter of Credit shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation: (i) any lack of validity or enforceability of any
Letter of Credit; (ii) the existence of any claim, setoff, defense or other
right which the Borrower or any Guarantor may have at any time against a
beneficiary of any Letter of Credit or against any of the Lenders, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction; (iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by a Fronting Bank of any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit; (v) any other
circumstance or happening whatsoever, which is similar to any of the foregoing;
or (vi) the fact that any Event of Default shall have occurred and be
continuing.
SECTION 2.5 Making of Loans.
(a) Except as contemplated by Section 2.10, Loans shall be
either ABR Loans or Eurodollar Loans as the Borrower may request subject to and
in accordance with this Section, provided that all Loans made pursuant to the
same Borrowing shall, unless otherwise specifically provided herein, be Loans of
the same Type. Each Lender may fulfill its Commitment with respect to any
Eurodollar Loan or ABR Loan by causing any lending office of such Lender to make
such Loan; provided that any such use of a lending office shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Each Lender shall, subject to its overall policy considerations,
use reasonable efforts (but shall not be obligated) to select a lending office
which will minimize or not result in the payment of increased costs by the
Borrower pursuant to Sections 2.14 or 2.17. Subject to the other provisions of
this Section and the provisions of Section 2.11, Borrowings of Loans of more
than one Type may be incurred at the same time, provided that no more than seven
(7) Borrowings of Eurodollar Loans may be outstanding at any time.
(b) A Financial Officer of the Borrower shall give the
Administrative Agent prior written, telex, facsimile or telephonic (confirmed
promptly in writing) prior notice of each Borrowing hereunder at least three (3)
Business Days for Eurodollar Loans and one (1) Business Day for ABR
25
Loans; such notice shall be irrevocable and shall specify the amount of the
proposed Borrowing (which shall not be less than $1,000,000 in the case of ABR
Loans, or $5,000,000 in the case of Eurodollar Loans, and any integral multiple
of $100,000 in excess thereof) and the date thereof (which shall be a Business
Day) and shall contain disbursement instructions. Such notice, to be effective,
must be received by the Administrative Agent not later than 1:00 p.m., New York
City time, on the third Business Day in the case of Eurodollar Loans and 12:00
noon, New York City time, on the first Business Day in the case of ABR Loans,
preceding the date on which such Borrowing is to be made. Such notice shall
specify whether the Borrowing then being requested is to be a Borrowing of ABR
Loans or Eurodollar Loans. If no election is made as to the Type of Loan, such
notice shall be deemed a request for Borrowing of ABR Loans. The Administrative
Agent shall promptly notify each Lender of its proportionate share of such
Borrowing, the date of such Borrowing, the Type of Borrowing being requested and
the Interest Period or Interest Periods applicable thereto, as appropriate. On
the Borrowing date specified in such notice, each Lender shall make its share of
the Borrowing available at the office of the Administrative Agent at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, no later than 12:00 noon, New York
City time, in immediately available funds. Upon receipt of the funds made
available by the Lenders to fund any Borrowing hereunder, the Administrative
Agent shall disburse such funds in the manner specified in the notice of
Borrowing delivered by the Borrower. The Lenders shall make Borrowings of ABR
Loans in an aggregate amount up to $20,000,000 (or any lesser amount not below
$1,000,000) available to the Borrower by 4:00 p.m. New York City time, on the
same Business Day that the Borrower gives notice to the Administrative Agent of
such Borrowing; provided, that a Financial Officer of the Borrower delivers such
notice to the Administrative Agent not later than 1:00 p.m., New York City time.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be, and be deemed to be, a representation
and warranty by the Borrower that all of the conditions to such extension of
credit set forth in Section 4 hereof have been satisfied.
SECTION 2.6 Repayment of Loans and Unreimbursed Draws; Evidence of
Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan and each unreimbursed draw under all Letters of Credit as
set forth herein.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender or participation in
each Letter of Credit in which such Lender is participating, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the Obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans or Letter of Credit Outstandings in accordance with the terms
of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event the Borrower shall execute and deliver to
such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in a
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form furnished by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.3) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.7 Interest on Loans.
(a) Subject to the provisions of Section 2.8, each ABR Loan
shall bear interest (computed, for ABR Loans wherein the Alternate Base Rate is
determined by reference to the Base CD Rate or the Federal Funds Effective Rate,
on the basis of the actual number of days elapsed over a year of 360 days, and
otherwise computed on the basis of the actual number of days elapsed over a year
of 365 days) at a rate per annum equal to the Alternate Base Rate plus 2.25%.
(b) Subject to the provisions of Section 2.8, each Eurodollar
Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal, during each Interest
Period applicable thereto, to the Adjusted LIBOR Rate for such Interest Period
in effect for such Borrowing plus 3.75%.
(c) Accrued interest on all Loans shall be payable in arrears
on each Interest Payment Date applicable thereto, at maturity (whether by
acceleration or otherwise), after such maturity on demand and (with respect to
Eurodollar Loans) upon any repayment or prepayment thereof (on the amount
prepaid).
SECTION 2.8 Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or in the payment of any
other amount becoming due hereunder (including, without limitation, the
reimbursement pursuant to Section 2.2(d) of any draft drawn under a Letter of
Credit), whether at stated maturity, by acceleration or otherwise, the Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
on such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360) days equal to 2% above the
then applicable rate.
SECTION 2.9 Optional Termination or Reduction of Commitment. Upon at
least two (2) Business Days' prior written notice to the Administrative Agent,
the Borrower may at any time in whole permanently terminate, or from time to
time in part permanently reduce, the Unused Total Commitment. Each such
reduction or termination, as applicable, of the Unused Total Commitment shall be
in the principal amount of $5,000,000 or any integral multiple of $1,000,000 in
excess thereof. Any reduction or termination, as applicable, pursuant to this
Section shall be deemed to be a reduction or termination, as applicable, in the
amount of such reduction or termination of the Total Commitment and shall be
applied pro rata to reduce the applicable Commitment of each Lender.
Simultaneously with each reduction or termination, as applicable, of the Unused
Total Commitment, the Borrower shall pay to the Administrative Agent for the
account of each Lender the Commitment Fee accrued on the amount of the
Commitment of such Lender so terminated or reduced through the date thereof.
SECTION 2.10 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two (2) Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower absent manifest error) that reasonable means do not exist for
ascertaining the applicable Adjusted LIBOR Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telegraphic notice of such
determination to the Borrower and the Lenders, and any request by the Borrower
for a Borrowing of Eurodollar Loans (including pursuant to a refinancing with
Eurodollar Loans) pursuant to Section 2.5 or 2.11 shall be deemed a request for
a Borrowing of ABR Loans. After
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such notice shall have been given and until the circumstances giving rise to
such notice no longer exist, each request for a Borrowing of Eurodollar Loans
shall be deemed to be a request for a Borrowing of ABR Loans.
SECTION 2.11 Refinancing of Loans. The Borrower shall have the right,
at any time, on three (3) Business Days' prior irrevocable notice to the
Administrative Agent (which notice, to be effective, must be received by the
Administrative Agent not later than l:00 p.m., New York City time, on the third
Business Day preceding the date of any refinancing), (x) to refinance (without
the satisfaction of the conditions set forth in Section 4.2 as a condition to
such refinancing) any outstanding Borrowing or Borrowings of Loans of one Type
(or a portion thereof) with a Borrowing of Loans of the other Type or (y) to
continue an outstanding Borrowing of Eurodollar Loans for an additional Interest
Period, subject to the following:
(a) as a condition to the refinancing of ABR Loans with
Eurodollar Loans and to the continuation of Eurodollar Loans for an additional
Interest Period, no Event of Default shall have occurred and be continuing at
the time of such refinancing;
(b) if less than a full Borrowing of Loans shall be
refinanced, such refinancing shall be made pro rata among the Lenders in
accordance with the respective principal amounts of the Loans comprising such
Borrowing held by the Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being refinanced
shall be at least $5,000,000 and any integral multiple of $1,000,000 in excess
thereof, provided that no partial refinancing of a Borrowing of Eurodollar Loans
shall result in the Eurodollar Loans remaining outstanding pursuant to such
Borrowing being less than $5,000,000 in aggregate principal amount;
(d) each Lender shall effect each refinancing by applying the
proceeds of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan
being refinanced;
(e) the Interest Period with respect to a Borrowing of
Eurodollar Loans effected by a refinancing or in respect to the Borrowing of
Eurodollar Loans being continued as Eurodollar Loans shall commence on the date
of refinancing or the expiration of the current Interest Period applicable to
such continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only on
the last day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of
Eurodollar Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month.
In the event that the Borrower shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Administrative Agent shall, after it receives notice from the
Borrower, promptly give each Lender notice of any refinancing, in whole or part,
of any Loan made by such Lender.
SECTION 2.12 Mandatory Prepayment; Commitment Termination.
(a) If at any time the aggregate principal amount of the
outstanding Loans plus the aggregate Letter of Credit Outstandings exceeds (A)
prior to the expiration of the Initial Period, the lesser
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of (x) the Interim Commitment and (y) the Borrowing Base, and (B) from and after
the expiration of the Initial Period, the lesser of (x) the Total Commitment and
(y) the Borrowing Base, the Borrower will within one (1) Business Day (i) prepay
the Loans in an amount necessary to cause the aggregate principal amount of the
outstanding Loans plus the aggregate Letter of Credit Outstandings to be equal
to or less than (A) prior to the expiration of the Initial Period, the lesser of
(x) the Interim Commitment and (y) the Borrowing Base, and (B) from and after
the expiration of the Initial Period, the lesser of (x) the Total Commitment and
(y) the Borrowing Base, and (ii) if, after giving effect to the prepayment in
full of the Loans, the aggregate Letter of Credit Outstandings in excess of the
amount of cash held in the Letter of Credit Account exceeds (A) prior to the
expiration of the Initial Period, the lesser of (x) the Interim Commitment and
(y) the Borrowing Base, and (B) from and after the expiration of the Initial
Period, the lesser of (x) the Total Commitment and (y) the Borrowing Base,
deposit into the Letter of Credit Account an amount equal to the greater of (A)
an amount, as determined by the Fronting Bank and the Administrative Agent,
equal to the face amount of all outstanding Letters of Credit plus the sum of
all projected contractual obligations to the Administrative Agent, the Fronting
Bank and the Lenders of the Borrower thereunder through the expiration date(s)
of such Letters of Credit and, (B) 105% of the amount by which the aggregate
Letter of Credit Outstandings in excess of the amount of cash held in the Letter
of Credit Account so exceeds (A) prior to the expiration of the Initial Period,
the lesser of (x) the Interim Commitment and (y) the Borrowing Base, and (B)
from and after the expiration of the Initial Period, the lesser of (x) the Total
Commitment and (y) the Borrowing Base.
(b) The Borrower shall, upon the receipt of the Net Proceeds
by the Borrower or any Domestic Subsidiary from any Asset Sales after the Filing
Date, apply, or cause to be applied, such Net Proceeds as follows: first, to
repay the then outstanding Loans; and second, to deposit an amount in the Letter
of Credit Account up to the greater of (A) an amount, as determined by the
Fronting Bank and the Administrative Agent, equal to the face amount of all
outstanding Letters of Credit plus the sum of all projected contractual
obligations to the Administrative Agent, the Fronting Bank and the Lenders of
the Borrower thereunder through the expiration date(s) of such Letters of
Credit, and (B) 105% of the then Letter of Credit Outstandings. Prepayments of
the Loans pursuant to the foregoing shall be effected as follows: (i) the
Commitments shall be reduced permanently on a pro rata basis by an aggregate
amount equal to the Net Proceeds of the subject Asset Sale (except with respect
to the first $5,000,000, in the aggregate of Net Proceeds received by the
Borrower and the Guarantors, collectively, after the Filing Date, which shall
not reduce the Total Commitment); and (ii) the Loans shall be prepaid in an
amount equal to the amount of such Net Proceeds. The Borrower shall apply, or
cause to be applied, all Net Proceeds from any Asset Sales by a Foreign
Subsidiary (except with respect to the first $15,000,000 in the aggregate of Net
Proceeds received by one or more Foreign Subsidiaries after the Filing Date) as
follows: first, to repay the then outstanding Intercompany Loans, if any, made
to such Foreign Subsidiary pursuant to Section 2.29, second, to deposit an
amount in the Letter of Credit Account up to the greater of (A) an amount, as
determined by the Fronting Bank and the Administrative Agent, equal to the face
amount of all outstanding Letters of Credit issued in support of the operations
or obligations of such Foreign Subsidiary plus the sum of all projected
contractual obligations to the Administrative Agent, the Fronting Bank and the
Lenders of the Borrower thereunder through the expiration date(s) of such
Letters of Credit and (B) 105% of the then Letter of Credit Outstanding in
respect of such Letters of Credit, third, to repay all other outstanding
Intercompany Loans owing by such Foreign Subsidiary to the Borrower or any
Domestic Subsidiary, fourth, to repay other Indebtedness of such Foreign
Subsidiary and thereafter for the general corporate purposes of such Foreign
Subsidiary.
(c) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrower shall pay the Loans in full and, if any
Letter of Credit remains outstanding, comply with Section 2.2(b).
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(d) From and after the establishment of a cash management
system pursuant to Section 5.7 hereof, amounts held in the collection account of
the Borrower and the Guarantors shall be applied daily by the financial
institution providing such cash management services and maintaining such
collection account (i) to prepay the Loans in an amount equal to the amount
collected and available in such collection account on each such day, and (ii)
if, after giving effect to the prepayment in full of the Loans, the aggregate
Letter of Credit Outstandings exceeds the amount of cash held in the Letter of
Credit Account, to deposit into the Letter of Credit Account an amount equal to
the greater of (A) an amount, as determined by the Fronting Bank and the
Administrative Agent, equal to the face amount of all outstanding Letters of
Credit plus the sum of all projected contractual obligations to the
Administrative Agent, the Fronting Bank and the Lenders of the Borrower
thereunder through the expiration date(s) of such Letters of Credit, and (B)
105% of the amount by which the aggregate Letter of Credit Outstandings exceeds
the amount of cash held in the Letter of Credit Account.
SECTION 2.13 Optional Prepayment of Loans; Reimbursement of Lenders.
(a) Notwithstanding the daily application of collected amounts
against outstanding Loans as provided for in Section 2.12(d) above, the Borrower
shall have the right at any time and from time to time to prepay any Loans
without penalty (except for any breakage costs associated with Eurodollar
Loans), in whole or in part, (x) with respect to Eurodollar Loans, upon at least
three (3) Business Days' prior written, telex, facsimile or telephonic
(confirmed promptly in writing) notice to the Administrative Agent and (y) with
respect to ABR Loans on the same Business Day if written, telex, facsimile or
telephonic (confirmed promptly in writing) notice is received by the
Administrative Agent prior to 12:00 noon, New York City time, and thereafter
upon at least one (1) Business Day's prior written, telex, facsimile or
telephonic (confirmed promptly in writing) notice to the Administrative Agent;
provided, however, that (i) each such partial prepayment shall be in integral
multiples of $100,000, (ii) no prepayment of Eurodollar Loans shall be permitted
pursuant to this Section 2.13(a) other than on the last day of an Interest
Period applicable thereto unless such prepayment is accompanied by the payment
of the amounts described in clause (i) of the first sentence of Section 2.13(b),
and (iii) no partial prepayment of a Borrowing of Eurodollar Loans shall result
in the aggregate principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000. Each notice of prepayment
shall specify the prepayment date, the principal amount of the Loans to be
prepaid and, in the case of Eurodollar Loans, the Borrowing or Borrowings
pursuant to which such Loans were made, shall be irrevocable and shall commit
the Borrower to prepay such Loan by the amount and on the date stated therein.
The Administrative Agent shall, promptly after receiving notice from the
Borrower hereunder, notify each Lender of the principal amount of the Loans held
by such Lender which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
(b) The Borrower shall reimburse each Lender on demand for any
loss incurred or to be incurred by it in the reemployment of the funds released
(i) resulting from any prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan or (ii) in the event that after the
Borrower delivers a notice of Borrowing under Section 2.5 in respect of
Eurodollar Loans, such Loans are not made on the first day of the Interest
Period specified in such notice of Borrowing for any reason other than a breach
by such Lender of its obligations hereunder. Such loss shall be the amount as
reasonably determined by such Lender as the excess, if any, of (A) the amount of
interest which would have accrued to such Lender on the amount so paid or not
borrowed at a rate of interest equal to the Adjusted LIBOR Rate for such Loan,
for the period from the date of such payment or failure to borrow to the last
day (x) in the case of a payment or refinancing with ABR Loans other than on the
last day of the Interest Period for such Loan, of the then current Interest
Period for such Loan, or (y) in the case of such failure to borrow, of the
Interest Period for such Loan which would have commenced on the date of such
failure to borrow, over (B) the amount of
30
interest which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the London
interbank market. Each Lender shall deliver to the Borrower from time to time
one or more certificates setting forth the amount of such loss as determined by
such Lender, which determination shall be deemed conclusive absent manifest
error on the part of such Lender.
(c) In the event the Borrower fails to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to Section 2.13(a),
the Borrower on demand by any Lender shall pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any loss incurred by such Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment, but without duplication
of any amounts paid under Section 2.13(b). Each Lender shall deliver to the
Borrower from time to time one or more certificates setting forth the amount of
such loss as determined by such Lender, which determination shall be deemed
conclusive absent manifest error on the part of such Lender.
(d) Any partial prepayment of the Loans by the Borrower
pursuant to Sections 2.12 or 2.13 shall be applied as specified by the Borrower
or, in the absence of such specification, as determined by the Administrative
Agent, provided that in the latter case no Eurodollar Loans shall be prepaid
pursuant to Section 2.12 to the extent that such Loan has an Interest Period
ending after the required date of prepayment unless and until all outstanding
ABR Loans and Eurodollar Loans with Interest Periods ending on such date have
been repaid in full.
SECTION 2.14 Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan made by such Lender or any
fees or other amounts payable hereunder (other than changes in respect of Taxes,
Other Taxes and taxes imposed on, or measured by, the net income or overall
gross receipts or franchise taxes of such Lender by the jurisdiction in which
such Lender has its principal office or in which the applicable lending office
for such Eurodollar Loan is located or by any political subdivision or taxing
authority therein, or by any other jurisdiction or by any political subdivision
or taxing authority therein other than a jurisdiction in which such Lender would
not be subject to tax but for the execution and performance of this Agreement),
or 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 Lender (except any such reserve requirement which is
reflected in the Adjusted LIBOR Rate) or shall impose on such Lender or the
London interbank market any other condition affecting this Agreement or the
Eurodollar Loans made by such Lender, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any
Eurodollar Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender
in accordance with paragraph (c) below such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption or
effectiveness after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with
31
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement, the Loans made by such Lender pursuant hereto,
such Lender's Commitment hereunder or the issuance of, or participation in, any
Letter of Credit by such Lender to a level below that which such Lender or such
Lender's holding company could have achieved but for such adoption, change or
compliance (taking into account Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay each Lender the amount shown as due on any such certificate
delivered to it within ten (10) days after its receipt of the same. Any Lender
receiving any such payment shall promptly make a refund thereof to the Borrower
if the law, regulation, guideline or change in circumstances giving rise to such
payment is subsequently deemed or held to be invalid or inapplicable.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall not constitute a
waiver of such Lender's right to demand compensation with respect to such period
or any other period. The protection of this Section shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
SECTION 2.15 Change in Legality.
(a) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (x) any change after the date of this Agreement
in any law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration thereof shall make it unlawful for a
Lender to make or maintain a Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to a Eurodollar Loan or (y) at
any time any Lender determines that the making or continuance of any of its
Eurodollar Loans has become impracticable as a result of a contingency occurring
after the date hereof which adversely affects the London interbank market or the
position of such Lender in such market, then, by written notice to the Borrower
such Lender may (i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn; and (ii) require that
all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Lender shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the
Borrower by any Lender pursuant to paragraph (a) above shall, if any Eurodollar
Loans are then outstanding, be effective on the last day of the then-current
Interest Period, or if no Eurodollar Loans are then outstanding, such notice
shall be effective on the date of receipt by the Borrower.
32
SECTION 2.16 Pro Rata Treatment etc. All payments and repayments of
principal and interest in respect of the Loans (except as provided in Sections
2.14 and 2.15) shall be made pro rata among the Lenders in accordance with the
then outstanding principal amount of the Loans and/or participations in Letter
of Credit Outstandings hereunder and all payments of Commitment Fees and Letter
of Credit Fees (other than those payable to a Fronting Bank) shall be made pro
rata among the Lenders in accordance with their Commitments. All payments by the
Borrower hereunder shall be (i) except as otherwise provided in Section 2.17 net
of any tax applicable to the Borrower and (ii) made in Dollars in immediately
available funds, without defense, setoff or counterclaim and free of any
restriction or condition, at the office of the Administrative Agent by 12:00
noon, New York City time, on the date on which such payment shall be due.
Interest in respect of any Loan hereunder shall accrue from and including the
date of such Loan to but excluding the date on which such Loan is paid in full
or converted to a Loan of a different Type.
SECTION 2.17 Taxes.
(a) Except as otherwise provided in this Section 2.17, any and
all payments by the Borrower hereunder shall be made free and clear of and
without deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (i) taxes imposed on or measured by the net income, net profit or
overall gross receipts of the Administrative Agent or any Lender (or any
transferee or assignee thereof, including a participation holder, subject to the
provisions of Section 10.3(a) (any such entity being called a "TRANSFEREE")) and
franchise taxes imposed on the Administrative Agent or any Lender (or
Transferee) by the United States or any jurisdiction under the laws of which the
Administrative Agent or any such Lender (or Transferee) is organized or in which
the applicable lending office of any such Lender (or Transferee) or applicable
office of the Administrative Agent is located or any political subdivision
thereof or by any other jurisdiction or by any political subdivision or taxing
authority therein other than a jurisdiction in which the Administrative Agent or
such Lender (or Transferee) would not be subject to tax but for the execution
and performance of this Agreement and (ii) taxes, levies, imposts, deductions,
charges or withholdings with respect to payments hereunder to a Lender (or
Transferee) or the Administrative Agent in accordance with laws in effect on the
later of the date of this Agreement and the date such Lender (or Transferee) or
the Administrative Agent becomes a Lender (or Transferee or Administrative
Agent, as the case may be) ("AMOUNTS") but not excluding, with respect to such
Lender (or Transferee) or the Administrative Agent, any increase in such Amounts
solely as a result of any change in such laws occurring after such later date or
any Amounts that would not have been imposed but for actions (other than actions
contemplated by this Agreement) taken by the Borrower after such later date (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders (or any Transferee) or the Administrative Agent, (i)
the sum payable shall be increased by the amount necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) such Lender (or Transferee) or the Administrative
Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay, subject to the
provisions of Section 10.3(a), any current or future stamp or documentary taxes
or any other excise or property taxes, charges, assessments or similar levies
that arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document (hereinafter referred to as "OTHER TAXES").
33
(c) The Borrower will indemnify each Lender (or, subject to
the provisions of Section 10.3(a), Transferee) and the Administrative Agent for
the full amount of Taxes and Other Taxes paid by such Lender (or Transferee) or
the Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within thirty (30) days after the date any Lender
(or Transferee) or the Administrative Agent, as the case may be, makes written
demand therefor. Such written demand shall set forth in reasonable detail the
amount of such indemnification and the calculation of such amount and shall be
presumed to be correct in the absence of manifest error. If a Lender (or
Transferee) or the Administrative Agent shall become aware that it is entitled
to receive a refund in respect of Taxes or Other Taxes paid by the Borrower or
as to which it has been indemnified by the Borrower pursuant to this Section, it
shall promptly notify the Borrower of the availability of such refund and shall,
within thirty (30) days after receipt of a request by the Borrower, apply for
such refund at the Borrower's expense. If any Lender (or Transferee) or the
Administrative Agent actually receives a refund in respect of any Taxes or Other
Taxes paid by the Borrower or as to which it has been indemnified by the
Borrower pursuant to this Section, it shall promptly notify the Borrower of such
refund and shall, within thirty (30) days after receipt of a request by the
Borrower (or promptly upon receipt, if the Borrower has requested application
for such refund pursuant hereto), repay such refund to the Borrower (to the
extent of amounts that have been paid by the Borrower under this Section with
respect to such refund plus interest that is received by the Lender (or
Transferee) or the Administrative Agent as part of the refund), net of all
out-of-pocket expenses of such Lender (or Transferee) or the Administrative
Agent and without additional interest thereon; provided that the Borrower, upon
the request of such Lender (or Transferee) or the Administrative Agent, agrees
to return such refund (plus penalties, interest or other charges) to such Lender
(or Transferee) or the Administrative Agent in the event such Lender (or
Transferee) or the Administrative Agent is required to repay such refund.
Nothing contained in this paragraph (c) shall require any Lender (or Transferee)
or the Administrative Agent to make available any of its tax returns (or any
other information relating to its taxes that it deems to be confidential).
(d) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes withheld by the Borrower in respect of any payment to any
Lender (or Transferee) or the Administrative Agent, the Borrower will furnish to
the Administrative Agent, at its address referred to on the signature pages
hereof, the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of such payment reasonably satisfactory to such
Lender (or Transferee) and the Administrative Agent.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder and the Termination of the Total Commitment.
(f) Each Lender (and Transferee) and the Administrative Agent
shall, if not a United States Person (as such term is defined in Section
770l(a)(30) of the Code), on or prior to the Closing Date (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or on or prior
to the date of the Assignment and Acceptance pursuant to which it becomes a
Lender (in the case of each other Lender), deliver to the Borrower and the
Administrative Agent such certificates, documents and other evidence, as
required by the Code or Treasury Regulations issued pursuant thereto, including
two original copies of Internal Revenue Service Forms, W-8BEN or W-8ECI or
successor applicable forms and any other certificate or statement of exemption
required by Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any
subsequent version thereof or successors thereto, properly completed and duly
executed by such Lender (or Transferee) or the Administrative Agent to establish
that such payment is (i) not subject to United States Federal withholding tax
under the Code because such payment is effectively connected with the conduct by
such Lender (or Transferee) or the Administrative Agent of a trade or
34
business in the United States or (ii) totally exempt from United States Federal
withholding tax or subject to a reduced rate of such tax under a provision of an
applicable tax treaty. Unless the Borrower and the Administrative Agent have
received forms or other documents satisfactory to them indicating that such
payments hereunder are not subject to United States Federal withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Administrative Agent shall withhold taxes from such payments at
the applicable statutory rate.
(g) The Borrower shall not be required to pay any additional
amounts to any Lender (or Transferee) or the Administrative Agent in respect of
United States withholding tax pursuant to paragraph (a) above if the obligation
to pay such additional amounts would not have arisen but for a failure by such
Lender (or Transferee) or the Administrative Agent to comply with the provisions
of paragraph (f) above.
(h) Any Lender (or Transferee) or the Administrative Agent
claiming any additional amounts payable pursuant to this Section 2.17 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole determination of
such Lender (or Transferee) or the Administrative Agent, be otherwise materially
disadvantageous to such Lender (or Transferee) or the Administrative Agent.
SECTION 2.18 Certain Fees. The Borrower shall pay to the Administrative
Agent, for the respective accounts of the Administrative Agent and the other
financial institutions party thereto, the fees set forth in that certain fee
letter dated December 5, 2001 among the Administrative Agent, the other
financial institutions party thereto and the Borrower at the times set forth
therein.
SECTION 2.19 Unused Commitment Fee. The Borrower shall pay to the
Lenders a commitment fee (the "UNUSED COMMITMENT FEE") for the period commencing
on December 5, 2001 to the Termination Date (or the earlier date of termination
of the Total Commitment) calculated (on the basis of the actual number of days
elapsed over a year of 360 days) at a rate equal to 0.75 of 1% per annum on the
average daily Unused Total Commitment during the preceding calendar month. The
issuance of Letters of Credit shall be treated as usage of the Total Commitment.
Such Commitment Fee, to the extent then accrued, shall be payable (x) monthly,
in arrears, on the last calendar day of each month, (y) on the Termination Date
and (z) as provided in Section 2.9 hereof, upon any reduction or termination in
whole or in part of the Total Commitment.
SECTION 2.20 Letter of Credit Fees. The Borrower shall pay with respect
to each Letter of Credit (i) to the Administrative Agent on behalf of the
Lenders a fee calculated (on the basis of the actual number of days elapsed over
a year of 360 days) at a rate equal to 3.75% per annum on the undrawn stated
amount thereof, and (ii) to the Fronting Bank such Fronting Bank's customary
fees for issuance, amendments and processing referred to in Section 2.2. In
addition, the Borrower agrees to pay each Fronting Bank for its account a
fronting fee in respect of each Letter of Credit issued by such Fronting Bank,
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination of such Letter of Credit, computed at a
rate equal to 0.25 of 1% per annum. Accrued fees described in clause (i) of the
first sentence of this paragraph, in respect of each Letter of Credit shall be
due and payable monthly in arrears on the last calendar day of each month and on
the Termination Date, or such earlier date as the Total Commitment is
terminated. Accrued fees described in clause (ii) of the first sentence of this
paragraph in respect of each Letter of Credit shall be payable at times to be
determined by the Fronting Bank, the Borrower and the Administrative Agent.
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SECTION 2.21 Nature of Fees. All Fees shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for the respective
accounts of the Administrative Agent, the Fronting Bank and the Lenders, as
provided herein and in the letter described in Section 2.18. Once paid, none of
the Fees shall be refundable under any circumstances.
SECTION 2.22 Priority and Liens.
(a) The Borrower and each Guarantor hereby covenants,
represents and warrants that, upon entry of the Interim Order, the Obligations
of the Borrower and each Guarantor hereunder and with respect to the other Loan
Documents, the Cash Management Obligations and, from and after the entry of the
Final Order, the Interest Rate Hedging Obligations: (i) pursuant to Section
364(c)(1) of the Bankruptcy Code, shall at all times constitute an allowed
Superpriority Claim in the Cases (which Superpriority Claim shall be payable
from and have recourse to all pre- and post-petition property of the Borrower
and the Guarantors including, without limitation, (x) all proceeds, dividends,
distributions and other amounts received or realized in respect of the Excluded
Stock and (y) to the extent permitted by the Bankruptcy Court in the Final
Order, any amounts that are recovered or otherwise received by the Borrower or
any of the Guarantors in respect of Avoidance Actions); (ii) pursuant to Section
364(c)(2) of the Bankruptcy Code, shall at all times be secured by a perfected
first priority Lien on all unencumbered pre- and post-petition property of the
Borrower and the Guarantors (other than (x) the Excluded Stock and (y) any
amounts that are recovered or otherwise received by the Borrower or any of the
Guarantors in respect of Avoidance Actions) wherever located, including all cash
maintained in the Letter of Credit Account and any direct investments of the
funds contained therein, provided that amounts in the Letter of Credit Account
shall not be subject to the Carve-Out from and after the Termination Date; (iii)
pursuant to Section 364(c)(3) of the Bankruptcy Code, shall be secured by a
perfected junior Lien upon all property of the Borrower and the Guarantors that
is subject to valid and perfected Liens in existence on the Filing Date or that
is subject to valid Liens in existence on the Filing Date that are perfected
subsequent to the Filing Date as permitted by Section 546(b) of the Bankruptcy
Code (other than certain property that is subject to the existing Liens that
secure obligations under the Pre-Petition Agreements and all Liens subordinated
thereto, (including the Subordinate Synthetic Lease Lien), which Liens shall be
primed by the liens to be granted to the Administrative Agent described in the
following clause (iv)); and in addition, (iv) pursuant to Section 364(d)(1) of
the Bankruptcy Code, be secured by a perfected first priority, senior priming
Lien on all of the property of the Borrower and the Guarantors (including,
without limitation, inventory, receivables, equipment, machinery, intellectual
property, general intangibles, real property, capital stock of subsidiaries and
membership interests in limited liability companies) that is encumbered by the
existing liens which secure the Pre-Petition Obligations (all such existing
liens, together with all Liens subordinated to such existing liens (including
the Subordinate Synthetic Lease Lien) collectively the "PRIMED LIENS"), all of
which Primed Liens shall be primed by and made subject and subordinate to the
perfected first priority senior Liens to be granted to the Administrative Agent,
which senior priming Liens in favor of the Administrative Agent shall also prime
any Liens granted after the commencement of the Cases to provide adequate
protection in respect of any of the Primed Liens, subject in each case only to
(x) in the event of the occurrence and during the continuance of an Event of
Default, the payment of unpaid professional fees and disbursements incurred by
the Borrower and any statutory committees appointed in the Cases, in each case
to the extent allowed by the Bankruptcy Court, in an aggregate amount not to
exceed all accrued and unpaid professional fees owing as of the date of the
Event of Default (whether allowed as of such date or subsequent thereto) plus
$2,500,000, and (y) the payment of fees pursuant to 28 U.S.C. Section 1930 to
the Clerk of the Bankruptcy Court (the amounts described in clauses (x) and (y),
collectively, the "CARVE-OUT"); provided that no portion of the Carve-Out shall
be utilized for the payment of professional fees and disbursements incurred in
connection with any challenge to the amount, extent, priority, validity,
perfection or enforcement of the Indebtedness of, or other claims against, the
Borrower or the Guarantors owed with respect to the parties primed by the
priming Liens or to the collateral securing such Indebtedness, or the
perfection, priority or validity of the Liens granted in
36
favor of such primed parties, or any other action against such parties. By
execution hereof, the Borrower and the Guarantors hereby consent to the priming
Liens referenced in clause (iv) above. Notwithstanding the foregoing, so long as
no Event of Default shall have occurred and be continuing, the Borrower shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under 11 U.S.C. Section 330 and 11 U.S.C. Section 331, as the same may be due
and payable, and any compensation and expenses previously paid, or accrued but
unpaid, prior to the occurrence of such Event of Default shall not reduce the
Carve-Out.
(b) As to all real property the title to which is held by the
Borrower or a Guarantor or the possession of which is held by the Borrower or a
Guarantor pursuant to leasehold interest, the Borrower and the Guarantors hereby
assign and convey as security, grant a security interest in, hypothecate,
mortgage, pledge and set over unto the Administrative Agent on behalf of the
Lenders all of the right, title and interest of the Borrower and the Guarantors
in all of such owned real property and in all such leasehold interests, together
in each case with all of the right, title and interest of the Borrower and the
Guarantors in and to all buildings, improvements, and fixtures related thereto,
any lease or sublease thereof, all general intangibles relating thereto and all
proceeds thereof. The Borrower and the Guarantors acknowledge that, pursuant to
the Interim Order (or the Final Order, as applicable), the Liens in favor of the
Administrative Agent on behalf of the Lenders in all of such real property and
leasehold instruments of the Borrower and the Guarantors shall be perfected
without the recordation of any instruments of mortgage or assignment. The
Borrower and the Guarantors further agree that, upon the request of the
Administrative Agent, in the exercise of its business judgment, the Borrower and
the Guarantors shall enter into separate fee and leasehold mortgages in
recordable form with respect to such properties on terms satisfactory to the
Administrative Agent.
SECTION 2.23 Use of Cash Collateral. Notwithstanding anything to the
contrary contained herein, the Borrower shall not be permitted to request a
Borrowing under Section 2.5 or request the issuance of a Letter of Credit under
Section 2.2 unless (i) the Bankruptcy Court shall have entered the Interim Order
or the Final Order, as applicable, (ii) the Borrower shall at that time have the
use of all cash collateral subject to the Orders for the purposes described in
Section 3.10, and (iii) the Borrower shall at that time have used for the
purposes described in Section 3.10 all cash on hand and cash collateral in
excess of $5,000,000 (exclusive of the $13,517,334.92 (together with all
earnings thereon) maintained by the Borrower in a segregated money market
account with Zurich ▇▇▇▇▇▇▇ Investments, Inc.).
SECTION 2.24 Right of Set-Off. Subject to the provisions of Section
7.1, upon the occurrence and during the continuance of any Event of Default, the
Administrative Agent and each Lender is hereby authorized at any tine and from
time to time, to the fullest extent permitted by law and without further order
of or application to the Bankruptcy Court, to set off and apply 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 the Administrative Agent and
each such Lender, or any of its Affiliates, to or for the credit or the account
of the Borrower or any Guarantor against any and all of the obligations of the
Borrower or such Guarantor now or hereafter existing under the Loan Documents,
irrespective of whether or not such Lender shall have made any demand under any
Loan Document and although such obligations may not have been accelerated. Each
Lender and the Administrative Agent agrees promptly to notify the Borrower or
applicable Guarantor after any such set-off and application made by such Lender
or by the Administrative Agent, as the case may be, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and the Administrative Agent under this Section are in
addition to other rights and remedies, which such Lender and the Administrative
Agent may have upon the occurrence, and during the continuance of any Event of
Default.
SECTION 2.25 Security Interest in Letter of Credit Account. Pursuant to
Section 364(c)(2) of the Bankruptcy Code, the Borrower hereby assigns and
pledges to the Administrative Agent, for its
37
benefit and for the ratable benefit of the Lenders, and hereby grants to the
Administrative Agent, for its benefit and for the ratable benefit of the
Lenders, a first priority security interest, senior to all other Liens, if any,
in all of the Borrower's right, title and interest in and to the Letter of
Credit Account and any direct investment of the funds contained therein. Cash
held in the Letter of Credit Account shall not be available for use by the
Borrower, whether pursuant to Section 363 of the Bankruptcy Code or otherwise.
SECTION 2.26 Payment of Obligations. Subject to the provisions of
Section 7.1, upon the maturity (whether by acceleration or otherwise) of any of
the Obligations, the Lenders shall be entitled to immediate payment of such
Obligations without further application to or order of the Bankruptcy Court.
SECTION 2.27 No Discharge; Survival of Claims. The Debtors agree that
(i) their Obligations shall not be discharged by the entry of an order
confirming a Reorganization Plan (and each of the Debtors, pursuant to Section
1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge) and (ii)
the Superpriority Claims granted to the Administrative Agent and the Lenders
pursuant to the Orders and described in Section 2.22 shall not be affected in
any manner by the entry of an order confirming a Plan of Reorganization.
SECTION 2.28 Replacement of Certain Lenders. In the event a Lender
("AFFECTED LENDER") shall have: (i) failed to fund its Commitment Percentage of
any Loan requested by the Borrower or to fund its Commitment Percentage of any
unreimbursed payment made by the Fronting Bank, which such Lender is obligated
to fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under Section 2.14 with respect to
increased costs or capital or under Section 2.17 to recover Taxes, Other Taxes
or other additional costs incurred by such Lender which, in any case, are not
being incurred generally by the other Lenders, or (iii) delivered a notice
pursuant to Section 2.15 claiming that such Lender is unable to extend
Eurodollar Loans to the Borrower for reasons not generally applicable to the
other Lenders, then, in any case, the Borrower or the Administrative Agent may
make written demand on such Affected Lender (with a copy to the Administrative
Agent in the case of a demand by the Borrower and a copy to the Borrower in the
case of a demand by the Administrative Agent) for the Affected Lender to assign,
and such Affected Lender shall assign pursuant to one or more duly executed
Assignments and Acceptances within five (5) Business Days after the date on
which a Replacement Lender has been identified to the Affected Lender, to one or
more Eligible Assignees, which the Borrower or the Administrative Agent, as the
case may be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all of
such Affected Lender's rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, its Commitment, all Loans owing
to it, all of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with Section 10.3. The Administrative Agent agrees, upon the
occurrence of such events with respect to an Affected Lender and upon the
written request of the Borrower, to use its reasonable efforts to obtain a
Commitment from one or more financial institutions to act as a Replacement
Lender. The Administrative Agent is authorized to execute one or more of such
Assignments and Acceptances as attorney-in-fact for any Affected Lender failing
to execute and deliver the same within five (5) Business Days after the date of
such demand. Further, with respect to such assignment, the Affected Lender shall
have concurrently received, in cash, all amounts due and owing to the Affected
Lender hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the Loans owed to such
Lender, together with accrued interest thereon through the date of such
assignment, amounts payable under Section 2.14 with respect to such Affected
Lender and compensation under Section 2.19 in the event of any replacement of
any Affected Lender under clause (ii) or clause (iii) of this Section 2.28;
provided that upon such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 10.5 and 10.6, as well as to any fees accrued for its
account hereunder and not yet paid, and shall continue to be obligated under
Section 8.6 with respect to losses,
38
obligations, liabilities, damages, penalties, actions, judgments, costs,
expenses or disbursements for matters which occurred prior to the date the
Affected Lender is replaced.
SECTION 2.29 Loans to Certain Foreign Subsidiaries. Subject to the
terms and conditions hereof and provided that after giving effect to any such
Intercompany Loan to be made pursuant to this Section 2.29 the Minimum Liquidity
is greater than or equal to $10,000,000, the Borrower may make Intercompany
Loans in an aggregate principal amount up to, but at any one time outstanding
not to exceed (a) prior to the expiration of the Interim Period $10,000,000 and
(b) from and after the expiration of the Interim Period, $20,000,000, to Foreign
Subsidiaries located in Germany and Mexico, the proceeds of which shall be used
to fund Capital Expenditures, required joint venture obligations, rebate
exposure of such Foreign Subsidiaries or costs incurred in connection with plant
closures, restructuring or the sale or termination of businesses of Foreign
Subsidiaries in Germany including, without limitation, ▇▇▇▇▇ Lemmerz ▇▇▇▇▇▇
GmbH, ▇▇▇▇▇ Lemmerz System Service GmbH, ▇▇▇▇▇ Lemmerz System Services, N.V. and
▇▇▇▇▇ Lemmerz Systems Services CR, s.r.o. Intercompany Loans to Foreign
Subsidiaries in Germany may be made by making such loans to ▇▇▇▇▇ Lemmerz
Fabricated Holdings, B.V. for the sole purpose of loaning the proceeds of such
Intercompany Loan to a Foreign Subsidiary in Germany for one of the permitted
uses of proceeds of Intercompany Loans described in this Section 2.29. Such
Intercompany Loans may be funded with cash on hand or cash collateral of the
Borrower or with the proceeds of a Loan borrowed pursuant to this Agreement and
shall be evidenced by promissory notes, which notes will be pledged and endorsed
by the Borrower to the Administrative Agent as security for the Obligations
under this Agreement. Each such Foreign Subsidiary receiving such an
Intercompany Loan shall execute and deliver to the Administrative Agent a
guarantee and security agreement in form and substance satisfactory to the
Administrative Agent, which shall (i) guarantee the Obligations, up to the
amount of such Intercompany Loan, and (ii) shall grant a security interest in
its property and assets in favor of the Administrative Agent to secure its
guarantee obligations, in each of cases (i) and (ii) to the extent not
prohibited by applicable law or by its existing local financing arrangements.
Letters of Credit issued to support the operations or obligations of such
Foreign Subsidiaries shall constitute Intercompany Loans made subject to this
Section 2.29. In addition, Intercompany Loans to the Mexican Debtor made
pursuant to the Borrower's and Guarantors' cash management system shall
constitute Intercompany Loans subject to this Section 2.29; provided that the
Mexican Debtor may use the proceeds of such Intercompany Loans for general
corporate purposes.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to make Loans and to issue and/or
participate in Letters of Credit hereunder, the Borrower and each of the
Guarantors, jointly and severally, represents and warrants as follows:
SECTION 3.1 Organization and Authority. The Borrower and each of the
Guarantors (i) is duly organized, validly existing and in good standing under
the law of its jurisdiction of organization; (ii) is duly qualified to do
business and in good standing in each jurisdiction in which the failure to do so
qualify would have a Material Adverse Effect; (iii) subject to the entry by the
Bankruptcy Court of the Interim Order (or the Final Order, as applicable), has
the requisite power and authority to effect the transactions contemplated
hereby, and by the other Loan Documents to which it is a party, and (iv) subject
to the entry by the Bankruptcy Court of the Interim Order (or the Final Order,
as applicable), has all requisite power and authority and the legal right to own
and operate its properties, and to conduct its business as now or currently
proposed to be conducted.
SECTION 3.2 Due Execution. Upon the entry by the Bankruptcy Court of
the Interim Order (or the Final Order, as applicable), the execution, delivery
and performance by the Borrower and each of the Guarantors of each of the Loan
Documents to which it is a party, including, without limitation, the
39
grant and pledge by the Borrower of the security interests granted by the
Security and Pledge Agreement, (i) are within the respective powers of the
Borrower and the Guarantors, have been duly authorized by all necessary action,
including the consent of shareholders, partners or members, where required, and
do not (A) contravene the Organizational Documents of the Borrower or any of the
Guarantors, (B) violate any law (including, without limitation, the Securities
Exchange Act of 1934) or regulation (including, without limitation, Regulations
T, U or X of the Board), or any order or decree of any court or Governmental
Authority, (C) conflict with or result in a breach of, or constitute a default
under, any indenture, mortgage or deed of trust entered into after the Filing
Date or any lease, agreement or other instrument entered into after the Filing
Date binding on the Borrower, the Guarantors or any of their respective
properties, or (D) result in or require the creation or imposition of any Lien
upon any of the property of the Borrower or any of the Guarantors other than
Liens granted pursuant to this Agreement; and (ii) do not require the consent,
authorization by or approval of or notice to or filing or registration with any
Governmental Authority other than the entry of the Interim Order (or the Final
Order, as applicable). Except for the entry of the Interim Order (or the Final
Order, as applicable), no authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body is
required for the perfection of the security interests or the exercise by the
Administrative Agent or the Lenders of their respective rights and remedies
under the Loan Documents. Upon the entry by the Bankruptcy Court of the Interim
Order (or the Final Order, as applicable), this Agreement shall have been duly
executed and delivered by the Borrower and each of the Guarantors. Upon the
entry by the Bankruptcy Court of the Interim Order (or the Final Order, as
applicable), this Agreement, and each of the other Loan Documents to which the
Borrower and the Guarantors are or will be a party, when delivered hereunder or
thereunder, will be, a legal, valid and binding obligation of the Borrower and
each Guarantor, enforceable against the Borrower and the Guarantors in
accordance with its terms and the Orders.
SECTION 3.3 Statements Made. Subject to a one-time restatement of the
consolidated financial statements of the Borrower and its Subsidiaries for
certain fiscal periods ending on or prior to April 30, 2001 (the "RESTATEMENT"),
and provided such Restatement reflects a financial condition and results of
operations for the fiscal periods covered thereby that are no worse than has
previously been disclosed in the Borrower's press release dated December 13,
2001, the information that has been delivered in writing by the Borrower to the
Administrative Agent, the Lenders or to the Bankruptcy Court in connection with
any Loan Document, and any financial statement delivered pursuant hereto or
thereto (other than to the extent that any such statements constitute
projections), taken as a whole and in light of the circumstances in which made,
contains no untrue statement of a material fact and does not omit to state a
material fact necessary to make such statements not misleading; and, to the
extent that any such information constitutes projections, such projections were
prepared in good faith on the basis of assumptions, methods, data, tests and
information believed by the Borrower and the Guarantors to be reasonable at the
time such projections were furnished.
SECTION 3.4 Financial Statements. The Borrower has furnished the
Lenders with copies of (i) the audited consolidated financial statement and
schedules of the Borrower and its Subsidiaries for the fiscal year ended January
31, 2001 and (ii) the unaudited consolidated financial statements and schedules
of the Borrower and its Subsidiaries for the fiscal quarter ended on April 30,
2001. Subject to the Restatement (provided such Restatement reflects a financial
condition and results of operations for the fiscal periods covered thereby that
are no worse than has previously been disclosed in the Borrower's press release
dated December 13, 2001), such financial statements present fairly the financial
condition and results of operations of the Borrower and its Subsidiaries on a
consolidated basis as of such dates and for such periods; such balance sheets
and the notes thereto disclose all liabilities, direct or contingent, of the
Borrower and its Subsidiaries as of the dates thereof required to be disclosed
by GAAP and such financial statements were prepared in a manner consistent with
GAAP, subject (in the case of the statements and schedules for the fiscal
quarter ended on April 30, 2001) to normal year end adjustments and the absence
of footnotes. Subject to the Restatement (provided such Restatement reflects a
financial
40
condition and results of operations for the fiscal periods covered thereby that
are no worse than has previously been disclosed in the Borrower's press release
dated December 13, 2001), no Material Adverse Effect, has occurred from that set
forth in consolidated financial statements and schedules for the Borrower and
its Subsidiaries for the fiscal quarter ended April 30, 2001 other than those
which customarily occur as a result of events leading up to and following the
commencement of a proceeding under Chapter 11 of the Bankruptcy Code, the
commencement of the Cases and the inclusion of a going concern qualification in
the auditor's report of the Borrower.
SECTION 3.5 Ownership. Each of the Persons listed on Schedule 3.5 is a
direct or indirect Subsidiary of the Borrower and Schedule 3.5 correctly sets
forth the ownership interest of the Borrower in its respective Subsidiaries, in
each case as of the Closing Date. The Borrower does not own any other
Subsidiaries, whether directly or indirectly, other than as set forth on
Schedule 3.5.
SECTION 3.6 Liens. There are no Liens of any nature whatsoever on any
assets of any of the Borrower or its Subsidiaries other than Permitted Liens.
Neither the Borrower nor any of its Subsidiaries are parties to any contract,
agreement, lease or instrument the performance of which, either unconditionally
or upon the happening of an event, will result in or require the creation of a
Lien on any assets of the Borrower or any of its Subsidiaries or otherwise
result in a violation of this Agreement other than the Liens granted to the
Administrative Agent and the Lenders as provided for in this Agreement.
SECTION 3.7 Compliance with Law.
(a) (i) The operations of the Borrower and its Subsidiaries
comply in all material respects with all applicable environmental, health and
safety statutes and regulations, including, without limitation, regulations
promulgated under the Resource Conservation and Recovery Act (42 U.S.C. Sections
6901 et seq.); (ii) none of the operations of the Borrower or its Subsidiaries
is the subject of any Federal or state investigation evaluating whether any
remedial action involving an expenditure by the Borrower is needed to respond to
a release of any Hazardous Waste or Hazardous Substance (as such terms are
defined in any applicable state or Federal environmental law or regulations)
into the environment where such investigation, if adversely determined, could
reasonably be expected to have a Material Adverse Effect; and (iii) the Borrower
and its Subsidiaries do not have any contingent liability in connection with any
release of any Hazardous Waste or Hazardous Substance into the environment,
which could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority the violation
of which, or a default with respect to which, would have a Material Adverse
Effect.
SECTION 3.8 Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower and its Subsidiaries, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers' compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect and are of a nature and provide such coverage as is
customarily carried by companies of the size and character of the Borrower and
its Subsidiaries.
SECTION 3.9 The Orders. On the date of the making of the initial Loans
or the issuance of the initial Letters of Credit hereunder, whichever first
occurs, the Interim Order will have been entered and will not have been stayed,
amended, vacated, reversed or rescinded except as approved
by the Administrative Agent, in its sole discretion. On the date of
the making of any Loan or the issuance of any Letter of Credit, the Interim
Order or the Final Order, as the case may be, shall have been entered and
41
shall not have been amended, stayed, vacated or rescinded except as approved by
the Administrative Agent, in its sole discretion. Upon the maturity (whether by
the acceleration or otherwise) of any of the Obligations of the Borrower, the
Lenders shall, subject to the provisions of Section 7.1, be entitled to
immediate payment of such Obligations, and to enforce the remedies provided for
hereunder, without further application to or order by the Bankruptcy Court.
SECTION 3.10 Use of Proceeds. The proceeds of the Loans shall be used
for working capital and other general corporate purposes of the Borrower and its
Subsidiaries, generally as set forth in the Budget and for such other purposes
permitted by this Agreement and an order of the Bankruptcy Court. The Letters of
Credit shall be issued in support of obligations of the Borrower, the Guarantors
or the Foreign Subsidiaries that are consistent with past practices of the
Borrower, the Guarantors or the Foreign Subsidiaries, as the case may be, as
disclosed to the Administrative Agent, and that are acceptable to the
Administrative Agent.
SECTION 3.11 Litigation. Except as set forth on Schedule 3.11, there
are no unstayed actions, suits or proceedings pending or, to the best knowledge
of the Borrower and its Subsidiaries, threatened against or affecting the
Borrower or any of its Subsidiaries or any of their respective properties,
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, that are reasonably likely to have a
Material Adverse Effect.
SECTION 3.12 Labor Controversies. Except as set forth on Schedule 3.12,
there are no labor controversies pending or threatened against the Borrower or
any of the Guarantors that could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.13 ERISA. Each Plan is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA and the Code and any other applicable law, rule
or regulation, and no event or condition has occurred as to which the Borrower
or any of its Subsidiaries would be under an obligation to furnish a report to
the Lenders under Section 5.5, and no termination of a Single Employer Plan has
occurred and no Lien in favor of the PBGC or a plan has arisen. The present
value of all benefits accrued under each Single Employer Plan maintained by the
Borrower, its Subsidiaries or any ERISA Affiliate (based on those assumptions
used to fund such plan) did not, as of the last annual valuation date, exceed
the value of the assets of each such plan. Neither the Borrower, its
Subsidiaries or any ERISA Affiliate is, or has been, a party to or subject to
any Multiemployer Plan.
SECTION 4. CONDITIONS OF LENDING
SECTION 4.1 Conditions Precedent to Initial Loan and Initial Letter of
Credit. The obligation of the Lenders to make the initial Loan or the Fronting
Bank to issue the initial Letter of Credit, whichever may occur first, is
subject to the following conditions precedent:
(a) Supporting Documents. The Administrative Agent shall have
received for the Borrower and each of the Guarantors:
(i) a copy of each Organizational Document of the
Borrower and each Guarantor, and, to the extent applicable, certified as of a
recent date by the applicable Governmental Authority; provided that the
Administrative Agent may, in its discretion, accept Organizational Documents of
the Borrower and each Guarantor certified by a Secretary or Assistant Secretary
of the Borrower or such Guarantor, as applicable, in lieu of certification by
Governmental Authorities (subject to receipt of an undertaking from the Borrower
to effect delivery of such documents certified by Governmental Authorities on a
post-Closing Date basis);
42
(ii) signature and incumbency certificates of the
officers of the Borrower and each Guarantor executing the Loan Documents to
which it is a party, dated as of the Closing Date;
(iii) duly adopted resolutions of the board of
directors or similar governing body of the Borrower and each Guarantor approving
and authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party or by which it or its assets may
be bound as of the Closing Date, certified as of the Closing Date by its
secretary or assistant secretary as being in full force and effect without
modification or amendment;
(iv) a good standing certificate from the applicable
Governmental Authority of the Borrower's and each Guarantor's jurisdiction of
incorporation, organization or formation and in each jurisdiction in which such
entity is required to be qualified as a foreign corporation or other entity to
do business, each dated a recent date prior to the Closing Date; and
(v) such other documents as the Administrative Agent
may reasonably request.
(b) Interim Order. Not later than ten (10) days following the
Filing Date, the Administrative Agent and the Lenders shall have received a
certified copy of an order of the Bankruptcy Court in substantially the form of
Exhibit A-l (the "INTERIM ORDER") granting the Superpriority Claim status and
senior priming and other Liens described in Section 2.22 which Interim Order (i)
shall have been entered upon an application or motion of the Debtors reasonably
satisfactory in form and substance to the Administrative Agent and on such prior
notice to such parties as may be satisfactory to the Administrative Agent, (ii)
shall authorize extensions of credit in amounts satisfactory to the
Administrative Agent, (iii) shall approve the payment by the Borrower of all of
the Fees set forth in Sections 2.18, 2.19 and 2.20, (iv) shall be in full force
and effect, (v) shall have authorized as adequate protection for and to the
extent of any diminution in value of the Pre-Petition Lenders' interest in the
Pre-Petition Collateral after the Filing Date: (A) subject to the entry of the
Final Order, payments in respect of unpaid interest, letter of credit fees and
other fees and payments (including the payment on the Closing Date of any such
interest and fees that are accrued and unpaid as of the Filing Date) at the
applicable non-default rates (including LIBOR pricing options) provided for
pursuant to the Pre-Petition Agreements (the payments described in this clause
to be without prejudice to the rights of any Pre-Petition Lender to assert a
claim in the Cases for the payment of additional interest calculated at any
other applicable rates of interest, or on any other basis, set forth in the
Pre-Petition Agreements) as follows: (1) provided that the Borrower shall then
be in compliance with the Consolidated EBITDA and Domestic EBITDA covenants set
forth in Section 6.5 in respect of the prior calendar month, on July 1, 2002 and
on the first Business Day of each calendar quarter thereafter, a payment (each,
an "INITIAL PAYMENT") in respect of such accrued and unpaid interest, letter of
credit and other fees and payments; provided that no such Initial Payment shall
be made to the extent that on the last Business Day of the immediately preceding
calendar quarter, after giving effect to such Initial Payment, Minimum Liquidity
is less than $50,000,000; provided, further, that the sum of all Initial
Payments shall not exceed $10,000,000, or such greater amount, not in excess of
$20,000,000, as determined by the Initial Lenders and set forth in the Borrowing
Base Addendum, (2) on October 1, 2002 and the first Business Day of each
calendar quarter thereafter a payment in respect of all such accrued and unpaid
interest and fees, each in an amount (the "PERMITTED PAYMENT AMOUNT") up to the
amount which, when added to the sum of all prior Permitted Payment Amounts paid
hereunder (such prior payments, collectively, but excluding all Initial
Payments, the "AGGREGATE PRIOR PAYMENT AMOUNT"), would cause the ratio of (1)
the difference between (a) cumulative Domestic EBITDA for the current
Measurement Period minus (b) cumulative Capital Expenditures for such
Measurement Period, to (2) the sum of the current Permitted Payment Amount
proposed to be made and the Aggregate Prior Payment Amount, to be equal to
1.05:1.0; provided that no
43
such payment shall be made to the extent that (i) such payment would cause such
ratio to be less than 1.05:1.00 or (ii) on such last Business Day of the
immediately preceding calendar quarter, after giving effect to the payment of
such Permitted Payment Amount, the Minimum Liquidity is less than $50,000,000,
and (3) on February 1, 2002 and on the first Business Day of each fiscal quarter
thereafter a payment in respect of all such accrued and unpaid interest and
fees, each in an amount up to the aggregate amount of payments received by the
Borrower or any Guarantor from one or more Foreign Subsidiaries (in the form of
dividends, distributions, loan payments, repayments, prepayments or otherwise)
during the immediately preceding fiscal quarter (less the amount of such
payments received from Foreign Subsidiaries in Germany or from ▇▇▇▇▇ Lemmerz
Fabricated Holdings, B.V. which payments shall be applied to repay the then
outstanding Intercompany Loans to Foreign Subsidiaries in Germany or to ▇▇▇▇▇
Lemmerz Fabricated Holdings, B.V. made pursuant to Section 2.29); provided, that
no such payment shall be made to the extent that on the last Business Day of the
immediately preceding fiscal quarter, after giving effect to the proposed
payment to be made, the Minimum Liquidity is less than $50,000,000; (B) a
Superpriority Claim (which claim shall be payable from and have recourse to all
pre-and post-petition property of the Borrower and the Guarantors including,
without limitation, all proceeds, dividends, distributions and other amounts
received or realized in respect of the Excluded Stock) contemplated by Section
507(b) of the Bankruptcy Code having a priority over all administrative expenses
of the kind specified in Sections 503(b) and 507(b) of the Code, junior only to
the claims under Section 364(c)(1) of the Bankruptcy Code held by the
Administrative Agent and the Lenders in respect of the Obligations; (C) a second
priority adequate protection lien on the property of the Borrower and the
Guarantors which adequate protection lien shall have a priority immediately
junior to the priming and other liens granted in favor of the Administrative
Agent and the Lenders in respect of the Obligations; and (D) the payment on a
current basis of the reasonable fees and expenses (including, but not limited
to, the reasonable fees and disbursements of external counsel and third-party
consultants, including financial consultants, and auditors) incurred by the
Pre-Petition Agent and the Pre-Petition Lenders, to the extent provided in the
Pre-Petition Agreement, (including any unpaid pre-petition professional fees and
expenses); (clauses (A), (B), (C) and (D) being collectively referred to herein
as the "ADEQUATE PROTECTION OBLIGATIONS"), (vi) shall not have been stayed,
reversed, modified or amended in any respect, except as approved by the
Administrative Agent, in its sole discretion, and (vii) shall be entered with
the consent or non-objection of a preponderance (as determined by the
Administrative Agent in its sole discretion) of both (A) the Pre-Petition
Lenders and (B) the lenders party to the Synthetic Lease Documents (solely with
respect to the Subordinate Synthetic Lease Lien), taken as a whole; and, if the
Interim Order is the subject of a pending appeal in any respect, neither the
making of such Loan nor the issuance of such Letter of Credit nor the
performance by the Borrower or any Guarantor of any of their respective
obligations hereunder or under the other Loan Documents or under any other
instrument or agreement referred to herein shall be the subject of a presently
effective stay pending appeal. No other claim having a priority superior to or
pari passu with those granted by the Interim Order (i) to the Administrative
Agent and the Lenders and (ii) to the Pre-Petition Agent and the Pre-Petition
Lenders, respectively, shall be granted while any portion of the Loans or the
Total Commitment hereunder remains outstanding or any Adequate Protection
Obligations remain outstanding. The claims and liens described in clauses (A),
(B) and (C) in the definition of "Adequate Protection Obligations" above shall
be subject to the Carve-Out.
(c) Security and Pledge Agreement. The Borrower and the
Guarantors shall have duly executed and delivered to the Administrative Agent a
Security and Pledge Agreement in substantially the form of Exhibit B (the
"SECURITY AND PLEDGE AGREEMENT").
(d) First Day Orders. All of the "first day orders" entered by
the Bankruptcy Court at or about the time of the commencement of the Cases shall
be reasonably satisfactory in form and substance to the Administrative Agent.
44
(e) Opinion of Counsel. The Administrative Agent and the
Lenders shall have received the favorable written opinion of counsel to the
Borrower, acceptable to the Administrative Agent.
(f) Payment of Fees. The Borrower shall have paid to the
Administrative Agent the then unpaid balance of all accrued and unpaid Fees due
under and pursuant to this Agreement and the letter referred to in Section 2.18.
(g) Corporate and Judicial Proceedings. All corporate and
judicial proceedings and all instruments and agreements in connection with the
transactions among the Borrower, the Guarantors, the Administrative Agent and
the Lenders contemplated by this Agreement shall be satisfactory in form and
substance to the Administrative Agent, and the Administrative Agent shall have
received all information and copies of all documents and papers, including
records of corporate and judicial proceedings, which the Administrative Agent
may have requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate, governmental or judicial
authorities.
(h) Information. The Administrative Agent shall have received
such information (financial or otherwise) as may be reasonably requested by the
Administrative Agent and shall have discussed such information with the
Borrower's management and shall be satisfied with the nature and substance of
such discussions.
(i) Budget. The Administrative Agent and the Initial Lenders
shall have received a business plan and budget (the "BUDGET") of the Borrower
and its subsidiaries, which business plan shall include a financial forecast
through January 31, 2004 and a timetable for the implementation of the
strategies set forth therein together with a balance sheet, income statement and
statement of cash flows, each on a monthly basis and in each case for both (i)
the Borrower and its Subsidiaries and (ii) the Borrower, its Domestic
Subsidiaries, the Mexican Debtor, ▇▇▇▇▇ Lemmerz International Frenos, S.A. de
C.V. and ▇▇▇▇▇ Lemmerz Mexico, S.A. de C.V., in form and substance reasonably
satisfactory to the Administrative Agent.
(j) Compliance with Laws. The Borrower shall have granted the
Administrative Agent access to and the right to inspect all reports, audits and
other internal information of the Borrower relating to environmental matters and
any third party verification of certain matters relating to compliance with
environmental laws and regulations requested by the Administrative Agent, and
the Administrative Agent shall be reasonably satisfied that the Borrower is in
compliance in all material respects with all applicable environmental laws and
regulations and be satisfied with the costs of maintaining such compliance.
(k) Closing Documents. The Administrative Agent shall have
received all documents required by this Agreement satisfactory in form and
substance to the Administrative Agent.
(l) Lien Searches. The Administrative Agent shall have
received lien searches conducted in the jurisdictions in which the Borrower and
the Guarantors conduct business, satisfactory to the Administrative Agent (dated
as of a date reasonably satisfactory to the Agent), reflecting the absence of
Liens and encumbrances on the assets of the Borrower other than Permitted Liens.
(m) Field Examinations. The Administrative Agent shall have
caused to be conducted, and the Administrative Agent and the Initial Lenders
shall be satisfied with the results of, field examinations, audits and
appraisals of the Borrower's and the Guarantors' accounts receivable, inventory,
plant and equipment.
45
(n) Insurance. The Administrative Agent and the Initial
Lenders shall be satisfied in all respects with the amount, types, terms and
conditions of all insurance maintained by the Borrower and its Subsidiaries.
(o) Agreement. The Borrower and each of the Guarantors shall
have duly executed and delivered to the Administrative Agent an originally
executed copy of this Agreement, with sufficient originally executed copies for
each Initial Lender and its counsel.
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of
Credit. The obligation of the Lenders to make each Loan and of the Fronting Bank
to issue each Letter of Credit, including the initial Loan and the initial
Letter of Credit, is subject to the following conditions precedent:
(a) Notice. The Administrative Agent shall have received a
notice with respect to each Borrowing or the issuance of each Letter of Credit,
as the case may be, as required by Section 2.
(b) Representations and Warranties. All representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date.
(c) No Default. On the date of each Borrowing or the issuance
of each Letter of Credit hereunder, no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default shall have
occurred and be continuing.
(d) Orders. The Interim Order or the Final Order (as defined
below), as the case may be, shall be in full force and effect and shall not have
been stayed, reversed, modified or amended in any respect without the prior
written consent of the Administrative Agent; provided that, at the time of the
making of any Loan or the issuance of any Letter of Credit, the aggregate amount
of which, when added to the sum of the principal amount of all Loans then
outstanding and the Letter of Credit Outstandings, would exceed the amount
authorized by the Interim Order (collectively, the "ADDITIONAL CREDIT"), the
Administrative Agent and each of the Lenders shall have received a certified
copy of an order of the Bankruptcy Court in substantially the form set forth as
Exhibit A-2 which order shall provide for, among other things, the Adequate
Protection Obligations set forth in Section 4.1(b) (such order, the "FINAL
ORDER"), which, in any event, shall have been entered by the Bankruptcy Court on
or before January 16, 2002, and at the time of the extension of any Additional
Credit the Final Order shall be in full force and effect, and shall not have
been stayed, reversed, modified or amended in any respect without the prior
written consent of the Administrative Agent; and, if either the Interim Order or
the Final Order is the subject of a pending appeal in any respect, neither the
making of the Loans nor the issuance of any Letter of Credit nor the performance
by the Borrower or any Guarantor of any of its obligations under any of the Loan
Documents or under any other instrument or agreement referred to herein shall be
the subject of a presently effective stay pending appeal.
(e) Payment of Fees. The Borrower shall have paid to the
Administrative Agent the then unpaid balance of all accrued and unpaid Fees then
due and payable under and pursuant to this Agreement and the letter referred to
in Section 2.18.
(f) Borrowing Base Certificate. The Administrative Agent shall
have received a Borrowing Base Certificate dated no more than seven (7) days
prior to each Borrowing or the issuance of each Letter of Credit, which
Borrowing Base Certificate shall include supporting schedules as required by the
Administrative Agent, after consultation with the Initial Lenders, or as
required by at least two of the
46
Initial Lenders; provided that with respect to any Borrowing or issuance of a
Letter of Credit requested by the Borrower during the calendar week in which
December 25, 2001 occurs, the Administrative Agent shall have received a
Borrowing Base Certificate dated no more than fourteen (14) days prior to such
Borrowing or issuance of a Letter of Credit.
(g) Usage. The uses of each Borrowing or each Letter of Credit
shall be consistent with the Budget, as updated from time to time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall
be in effect or any Letter of Credit shall remain outstanding (in a face amount
in excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.2(b)), or any amount shall remain outstanding or
unpaid under this Agreement or any other Loan Documents, the Borrower and each
Guarantor that is a party hereto agree that, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and will cause each of its
Subsidiaries to:
SECTION 5.1 Financial Statements, Reports, etc. Deliver to the
Administrative Agent and each of the Lenders:
(a) within ninety (90) days after the end of each fiscal year,
(i) consolidated balance sheets and related statements of income, (ii)
consolidated statements of stockholders' equity and (iii) consolidated
statements of cash flows, showing the financial conditions of (A) the Borrower
and its Subsidiaries, and (B) the Borrower, its Domestic Subsidiaries, the
Mexican Debtor, ▇▇▇▇▇ Lemmerz International Frenos, S.A. de C.V. and ▇▇▇▇▇
Lemmerz Mexico, S.A. de C.V., in each case on a consolidated basis (except as
otherwise specified) as of the close of such fiscal year and the results of
their respective operations during such year, setting forth in each case in
comparative form the corresponding consolidated figures for the preceding fiscal
year, which consolidated statements shall be audited for such entities by their
current independent auditors or other independent public accountants of
recognized national standing acceptable to the Required Lenders and accompanied
by an opinion of such accountants (which opinion shall not be qualified other
than with respect to the Cases or a going concern qualification) and shall be
certified by a Financial Officer of the Borrower to the effect that such
consolidated financial statements fairly present the financial conditions and
results of operations of such entities, in each case on a consolidated basis, in
accordance with GAAP;
(b) within forty-five (45) days after the end of each of the
first three fiscal quarters and within ninety (90) days after the end of the
fourth fiscal quarter of each fiscal year, (i) consolidated balance sheets and
related statements of income, (ii) consolidated statement of stockholders'
equity, and (iii) consolidated statements of cash flows, showing the financial
condition of (A) the Borrower and its Subsidiaries, and (B) the Borrower, its
Domestic Subsidiaries, the Mexican Debtor, ▇▇▇▇▇ Lemmerz International Frenos,
S.A. de C.V. and ▇▇▇▇▇ Lemmerz Mexico, S.A. de C.V., in each case on a
consolidated basis (except as otherwise specified) as of the close of such
fiscal quarter and the results of their operations during such fiscal quarter
and the then elapsed portion of the fiscal year, setting for the in each case in
comparative form the corresponding consolidated figures for the corresponding
periods in the prior fiscal year, each certified by a Financial Officer of
Borrower as fairly presenting the financial conditions and results of operations
such entities, in each case on a consolidated basis, in accordance with GAAP,
subject to normal year-end audit adjustments; other than with respect to the
Cases and a going concern qualification provided that the financial statements
and related certificates required in this clause (b) of Section 5.1 in respect
of the fiscal quarter ended October 31, 2001 shall be delivered to the
Administrative Agent and the Lenders on or before December 31, 2001;
47
(c) concurrently with any delivery of financial statements
under (a) or (b) above as applicable, (i) a certificate of a Financial Officer
of the Borrower (A) certifying that no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default has
occurred, or, if such an Event of Default or event has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (B) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating compliance with
the provisions of Sections 6.3, 6.4, 6.5 and 6.10 and (ii) a certificate of such
accountants accompanying the audited consolidated financial statements delivered
under (a) above certifying that, in the course of the regular audit of the
business of the Borrower and its Subsidiaries, such accountants have obtained no
knowledge that an Event of Default has occurred and is continuing, or if, in the
opinion of such accountants, an Event of Default has occurred and is continuing,
specifying the nature thereof and all relevant facts with respect thereto;
(d) as soon as available, but no more than thirty (30) days
after the end of each month, (i) unaudited monthly balance sheets and related
statements of income and cash flows, showing the financial conditions of (A) the
Borrower and its Subsidiaries, and (B) the Borrower, its Domestic Subsidiary,
the Mexican Debtor, ▇▇▇▇▇ Lemmerz International Frenos, S.A. de C.V. and ▇▇▇▇▇
Lemmerz Mexico, S.A. de C.V., in each case on a consolidated basis as of the
close of such fiscal month and the results of their operations during such
fiscal period and the then elapsed portion of the fiscal year, each certified by
a Financial Officer of the Borrower as fairly presenting the financial condition
and results of operations of such entities, in each case on a consolidated basis
in accordance with GAAP, subject to normal year-end audit adjustments and other
than with respect to the Cases and a going concern qualification, together with
a certificate of a Financial Officer of the Borrower setting forth computations
in reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the provisions of Section 6.5.
(e) as soon as possible, and in any event within forty-five
(45) days of the Closing Date, a consolidated pro forma balance sheet of the
Borrower's financial condition as of the Filing Date;
(f) no later than thirty (30) days after the end of each month
(forty-five days after the end of each month which is also the end of a fiscal
quarter), a summary of the results of the Borrower's business operations for the
preceding period as compared to the corresponding period in the Budget,
including a discussion of significant variances, which summary shall describe
results on the basis of (i) the Borrower and its Subsidiaries, and (ii) the
Borrower, its Domestic Subsidiaries, the Mexican Debtor, ▇▇▇▇▇ Lemmerz Frenos,
S.A. de C.V. and ▇▇▇▇▇ Lemmerz Mexico, S.A. de C.V., each on a consolidated
basis.
(g) no later than the second Business Day of each calendar
week, a 13-week cash flow projection commencing with such calendar week,
together with a comparison of actual cash flows to the projected cash flows and
a variance analysis for the calendar week ended immediately prior to the most
recently completed calendar week, in each case in form satisfactory to the
Administrative Agent;
(h) on the last Business Day of each calendar quarter
commencing with the calendar quarter ending June 30, 2002, a certificate of the
Borrower showing in reasonable detail (i) the calculation of the Minimum
Liquidity as of the last Business Day of such calendar quarter, (ii) the amount
of the adequate protection payment proposed to be made on the first Business Day
of the ensuing calendar quarter, and (iii) the calculation of the related
earnings ratio set forth in Section 4.1(b) as of the last day of the Measurement
Period then ended;
(i) deliver an updated Budget on or before January 31, 2003 in
respect of the two year period commencing on such date;
48
(j) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by
it with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be;
(k) promptly upon receipt thereof, copies of all management
letters received by the Borrower or any Subsidiary from their accountants,
together with copies of all written responses thereto from management within
five (5) Business Days after the date such responses are sent;
(l) as soon as available and in any event (A) within thirty
(30) days after the Borrower, or any of its ERISA Affiliates knows or has reason
to know that any Termination Event described in clause (i) of the definition of
Termination Event with respect to any Single Employer Plan of the Borrower or
such ERISA Affiliate has occurred and (B) within ten (10) days after any of the
Borrower or any of its ERISA Affiliates knows or has reason to know that any
other Termination Event with respect to any such Plan has occurred, a statement
of a Financial Officer of the Borrower or such ERISA Affiliate describing such
Termination Event and the action, if any, which the Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(m) promptly and in any event within ten (10) days after
receipt thereof by any of the Borrower or any of its ERISA Affiliates from the
PBGC copies of each notice received by the Borrower or any such ERISA Affiliate
of the PBGC's intention to terminate any Single Employer Plan of the Borrower or
such ERISA Affiliate or to have a trustee appointed to administer any such Plan;
(n) if requested by the Administrative Agent, promptly and in
any event within thirty (30) days after the filing thereof with the Internal
Revenue Service, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Single Employer Plan of the
Borrower or any of its ERISA Affiliates;
(o) within ten (10) days after notice is given or required to
be given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of the
Borrower or any of its ERISA Affiliates to make timely payments to a Plan, a
copy of any such notice filed and a statement of a Financial Officer of the
Borrower or such ERISA Affiliate setting forth (A) sufficient information
necessary to determine the amount of the Lien under Section 302(f)(3) of ERISA,
(B) the reason for the failure to make the required payments and (C) the action,
if any, which the Borrower or any of its ERISA Affiliates proposed to take with
respect thereto;
(p) promptly and in any event within ten (10) days after
receipt thereof by any of the Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor, a copy of each notice received by the Borrower or
any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability by a
Multiemployer Plan, (B) the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of ERISA, (C)
the termination of a Multiemployer Plan with the meaning of Title IV of ERISA,
or (D) the amount of liability incurred, or which may be incurred, by the
Borrower or any ERISA Affiliate in connection with any event described in clause
(A), (B) or (C) above;
(q) promptly notify the Administrative Agent of any existing
or threatened strike, slowdown, work stoppage or other material labor disruption
by any of the employees of the Borrower or any of the Guarantors, or of any
material existing or threatened claim against the Borrower or any of the
Guarantors relating to labor union matters;
49
(r) promptly, from time to time, such other information
(including, without limitation, projections) regarding the operations, business
affairs and financial condition of the Borrower or any of its Subsidiaries, or
compliance with the terms of any material loan or financing agreements as the
Administrative Agent, at the request of any Lender, may reasonably request;
(s) promptly after the same is available, copies of all
pleadings, motions, applications, judicial information, financial information
and other documents filed by or on behalf of any of the Debtors with the
Bankruptcy Court in the Cases, or distributed by or on behalf of any of the
Debtors to any official committee appointed in any of the Cases; and providing
copies of same to counsel for the Administrative Agent;
(t) on or before January 31, 2002, copies of all of the
restated consolidated financial statements of the Borrower and its Subsidiaries
that have been made subject to the Restatement, as described in the Borrower's
press release dated December 13, 2001;
(u) not less than seven (7) Business Days prior to the use
thereof, written notice to the Administrative Agent of the Borrower's intent to
use all or any part of the $13,517,334.92 (together with all earnings thereon)
maintained by the Borrower in a segregated money market account with Zurich
▇▇▇▇▇▇▇ Investments, Inc., together with a description of the intended uses
thereof;
(v) on or before January 7, 2002, a revised Schedule 5 to the
Security and Pledge Agreement, together with a certificate of the Borrower, in
form satisfactory to the Administrative Agent, restating without qualification
the representations set forth in Section 5.9 of the Security and Pledge
Agreement and certifying the accuracy of such revised schedule; and
(w) on the last Business Day of each fiscal quarter commencing
with the fiscal quarter ending January 31, 2002, a certificate of the Borrower
showing in reasonable detail (i) the calculation of the aggregate amount of all
dividends, distributions, loan payments, repayments, prepayments or other
amounts received by the Borrower and the Guarantors from Foreign Subsidiaries
during such fiscal quarter, together with a specific calculation of all such
funds received from Foreign Subsidiaries in Germany and from ▇▇▇▇▇ Lemmerz
Fabricated Holdings B.V. during such fiscal quarter, (ii) the amount of the then
outstanding Intercompany Loans to Foreign Subsidiaries in Germany or to ▇▇▇▇▇
Lemmerz Fabricated Holdings B.V. made pursuant to Section 2.29, (iii) the
calculation of the Minimum Liquidity as of the last Business Day of such fiscal
quarter, and (iv) the amount of the adequate protection payment proposed to be
made on the first Business Day of the ensuing fiscal quarter.
SECTION 5.2 Existence. Preserve and maintain in full force and effect
all governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its businesses except
(i) (A) if in the reasonable business judgment of the Borrower it is in its best
economic interest not to preserve and maintain such rights, privileges,
qualifications, permits, licenses and franchises, and (B) such failure to
preserve the same could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (ii) as otherwise permitted in connection with
sales of assets permitted by Section 6.11.
SECTION 5.3 Insurance. (a) Keep its insurable properties insured at all
times, against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses; and maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower in such amounts and with such
deductibles as are customary with companies of the same or similar size in
50
the same or similar businesses and in the same geographic area; and (b) maintain
such other insurance or self insurance as may be required by law.
SECTION 5.4 Obligations and Taxes. With respect to the Borrower and
each Guarantor, pay all its material obligations arising after the Filing Date
promptly and in accordance with their terms and pay and discharge promptly all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits in respect of its property arising after the
Filing Date, before the same shall become in default, as well as all material
lawful claims for labor, materials and supplies or otherwise arising after the
Filing Date which, if unpaid, would become a Lien or charge upon such properties
or any part thereof, provided, however, that the Borrower or such Guarantor
shall not be required to pay and discharge or to cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings (if
the Borrower or such Guarantor shall have set aside on its books adequate
reserves therefor).
SECTION 5.5 Notice of Event of Default, etc. Promptly give to the
Administrative Agent notice in writing of:
(a) any Event of Default or the occurrence of any event or
circumstance which with the passage of time or giving of notice or both would
constitute an Event of Default; and
(b) any litigation, proceedings or material investigations
which may exist at any time between the Borrower or any Guarantor and any
Governmental Authority, or any violations of any requirements of law with
respect thereto.
SECTION 5.6 Access to Books and Records.
(a) Maintain or cause to be maintained at all times true and
complete books and records in accordance with GAAP of the financial operations
of the Borrower and its respective Subsidiaries; and provide the Administrative
Agent, the Initial Lenders and their respective representatives access to all
such books and records during regular business hours, in order that the
Administrative Agent may examine and make abstracts from such books, accounts,
records and other papers for the purpose of verifying the accuracy of the
various reports delivered by the Borrower to the Administrative Agent or the
Lenders pursuant to this Agreement or the other Loan Documents or for otherwise
ascertaining compliance with this Agreement. The Borrower will permit (and will
cause its Subsidiaries to permit) any representatives designated by the
Administrative Agent or the Initial Lenders to discuss its affairs, financial
condition and the Budget with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested. Without limiting the
generality of the foregoing, the Borrower will arrange for representatives of
the Borrower and of its independent accountants to meet with representatives of
the Administrative Agent, the Initial Lenders and the financial advisor to
Administrative Agent on or prior to December 31, 2001.
(b) The Borrower will permit any representatives designated by
the Administrative Agent (including any consultants, accountants, lawyers and
appraisers retained by the Administrative Agent or its counsel) and
representatives, appraisers, auditors and field examiners of the Initial Lenders
to conduct evaluations and appraisals of the Borrower's computation of the
Borrowing Base and the assets included in the Borrowing Base and such other
assets and properties of the Borrower or its Subsidiaries as
required by the Administrative Agent, in consultation with the Initial
Lenders, or as required by at least two of the Initial Lenders, in each case as
required in Section 5.8 below and at such other reasonable times and as often as
reasonably requested. The Borrower shall pay the reasonable fees (including
customary internally allocated fees of employees of the Administrative Agent or
the Initial Lenders as to
51
which invoices have been furnished) and expenses of any such representatives
retained by the Administrative Agent as to which invoices have been furnished to
conduct any such evaluation or appraisal, including the reasonable fees and
expenses associated with collateral monitoring services performed by the
Administrative Agent or any Initial Lender. To the extent required by the
Administrative Agent, in consultation with the Initial Lenders or as required by
at least two of the Initial Lenders, as a result of any such evaluation,
appraisal or monitoring, the Borrowing Base shall be modified and the
computation of the Borrowing Base shall be adjusted (which modification or
adjustment may include maintaining additional reserves, modifying the advance
rates or modifying the eligibility criteria for the components of the Borrowing
Base).
(c) In the event that historical accounting practices, systems
or reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Borrower
agrees to maintain additional reserves (for purposes of computing the Borrowing
Base) with respect to the components of the Borrowing Base and make other
adjustments to its parameters so as to include such components of the Borrowing
Base as the Administrative Agent shall reasonably require based upon such
modifications.
(d) The Borrower will grant the Administrative Agent access to
and the right to inspect all reports, audits and other information relating to
environmental matters upon reasonable notice, and to obtain any third party
verification of matters relating to compliance with environmental laws and
regulations requested by the Administrative Agent, at any time and from time to
time, in its sole judgment, reasonably exercised.
SECTION 5.7 Maintenance of Cash Management System. To the extent a cash
management system acceptable to the Administrative Agent is not in place, the
Borrower and Guarantors shall within sixty (60) days after the Closing Date
implement and maintain a cash management system in form and substance
satisfactory to the Administrative Agent with any financial institution
satisfactory to the Administrative Agent (and which is a Lender under this
Agreement), which cash management system shall provide for, among other things,
the prohibition of any cross-border application of cash from operations (other
than as expressly provided in Section 2.29 and in the Cash Management Order),
the prohibition of the closing of any accounts without prior written consent of
the Administrative Agent, require weekly updates of all accounts and activities
and balances in such accounts, the requirement for deposits into a concentration
account in a manner satisfactory to the Administrative Agent, the dominion over
the cash and receipts of the Borrower and the Guarantors by such financial
institution, and the daily application of funds in the collection account
against outstanding Loans.
SECTION 5.8 Borrowing Base Certificate. Furnish to the Administrative
Agent, no later than (i) four (4) Business Days after the end of each week
(other than during the calendar week in which the 25th day of December occurs),
a completed Borrowing Base Certificate as of the last day of the immediately
preceding one week period, and (ii) if requested by the Administrative Agent,
after consultation with the Initial Lenders or at the direction of at least two
of the Initial Lenders, at any other time when the Administrative Agent,
reasonably believes that the then existing Borrowing Base Certificate is
materially inaccurate, as soon as reasonably available but in no event later
than seven (7) Business Days after such request, a completed Borrowing Base
Certificate showing the Borrowing Base as of the date so requested, in each case
with supporting documentation and additional reports with respect to the
Borrowing Base as the Administrative Agent, after consultation with the Initial
Lenders, may reasonably request or as required by at least two of the Initial
Lenders. From and after the execution of the Borrowing Base Addendum, the PP&E
Component of the Borrowing Base shall be updated (i) from time to time upon
receipt of periodic valuation updates received from the financial advisors to
the Administrative Agent's counsel or representatives of the Initial Lenders,
(ii) concurrent with the sale of any assets constituting part of the PP&E
Component, (iii) in the event such assets are idled for any reason
52
other than routine maintenance or repairs for a period in excess of twenty-one
(21) consecutive days or, following any such closure, in the event any such
idled assets resume operations for a period in excess of ten (10) consecutive
days, or (iv) the value of such assets is otherwise impaired, in the
Administrative Agent's sole discretion, after consultation with the Initial
Lenders, or as determined by at least two of the Initial Lenders. From and after
the execution of the Borrowing Base Addendum, the components of the Borrowing
Base consisting of inventory and receivables shall be subject to a quarterly
audit by the financial advisors to the Administrative Agent's counsel or by
representatives of an Initial Lender, if required by the Administrative Agent,
after consultation with the Initial Lenders or if required by at least two of
the Initial Lenders. The components of the Borrowing Base consisting of (x)
inventory shall be updated monthly as of the close of business on the last
Business Day of each month, from and after the execution of delivery of the
Borrowing Base Addendum, and (y) receivables shall be updated weekly as of the
close of business on the last Business Day of each week.
SECTION 5.9 Restructuring Advisor. ▇▇▇ ▇▇▇▇ and Associates or another
financial advisor reasonably satisfactory to the Administrative Agent shall at
all times remain as the Chief Financial Officer or as the Chief Restructuring
Officer of the Borrower.
SECTION 5.10 Compliance with Laws. Comply in all material respects with
all applicable laws, rules, regulations, judgments, units, injunctions, decrees
or other requirements of any Governmental Authority, the violation of which, or
a default with respect to which, would have a Material Adverse Effect.
SECTION 5.11 Final Order Opinion. The Borrower shall deliver or cause
to be delivered to the Administrative Agent and the Lenders, on the date of the
entry of the Final Order, the favorable written opinion of counsel to the
Borrower, acceptable to the Administrative Agent.
SECTION 5.12 Repatriation of Funds from Foreign Subsidiaries. The
Borrower shall, and shall cause its Subsidiaries to, use all commercially
reasonable efforts to pay, transfer, distribute or repatriate funds from Foreign
Subsidiaries to the Borrower or the Guarantors. All such funds received by the
Borrower and the Guarantors (in the form of dividends, distributions, loan
payments, repayments or prepayments or otherwise) shall be separately accounted
for during each fiscal quarter in order to calculate the payment to be made in
respect of the Adequate Protection Obligations set forth in Section
4.1(b)(v)(A)(3); provided that any funds so received from Foreign Subsidiaries
in Germany or from ▇▇▇▇▇ Lemmerz Fabricated Holding B.V. shall be applied first
in reduction of any then outstanding Intercompany Loans made to such Foreign
Subsidiaries in accordance with Section 2.29.
SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall
be in effect or any Letter of Credit shall remain outstanding (in a face amount
in excess of the amount of cash then held in the Letter of Credit Account, or in
excess of the face amount of back-to-back letters of credit delivered, in each
case pursuant to Section 2.2(b)) or any amount shall remain outstanding or
unpaid under this Agreement, the Borrower and each Guarantor that is a party
hereto agree that, unless the Required Lenders shall otherwise consent in
writing, the Borrower will not (and will not apply to the Bankruptcy Court for
authority to), and will cause each of its Subsidiaries not to:
SECTION 6.1 Liens. Incur, create, assume or suffer to exist any Lien on
any asset of the Borrower now owned or hereafter acquired by the Borrower or any
Guarantor other than Permitted Liens.
SECTION 6.2 Merger, etc. Consolidate or merge with or into another
Person, except that: (i) Domestic Subsidiaries of the Borrower shall be
permitted to merge with or into the Borrower
53
(provided the Borrower is the surviving entity of such consolidation or merger)
or other Domestic Subsidiaries of the Borrower; and (ii) Foreign Subsidiaries of
the Borrower shall be permitted to merge with or into other Foreign Subsidiaries
of the Borrower.
SECTION 6.3 Indebtedness. Contract, create, incur, assume or suffer to
exist any Indebtedness, except for (i) Indebtedness under this Agreement; (ii)
Indebtedness (inclusive of Intercompany Indebtedness) incurred prior to the
Filing Date (including existing Capitalized Leases) of the Borrower and, with
respect to the Foreign Subsidiaries of the Borrower, listed on Schedule 6.3;
(iii) Indebtedness incurred subsequent to the Filing Date secured by purchase
money Liens (including Capitalized Leases) in an aggregate amount not in excess
of $2,000,000 to the extent permitted by Section 6.4; (iv) Indebtedness allowed
under Sections 2.29, 6.6 and 6.10 (without duplication); (v) Indebtedness of the
Borrower or any Guarantor in respect of Cash Management Obligations; (vi)
Indebtedness for borrowed money, for purchase money financings or for
Capitalized Leases of Foreign Subsidiaries of the Borrower (other than the
Mexican Debtor) in an aggregate amount (being the sum of Indebtedness in
existence on the Filing Date (exclusive of Intercompany Loans incurred prior to
the Filing Date) and any Indebtedness incurred thereafter), including, without
limitation, Intercompany Loans made after the Filing Date, not in excess of
$175,000,000 at any one time outstanding, (vii) Indebtedness incurred in
connection with the Borrower's insurance premium financing arrangements in
accordance with the Premium Financing Order and in connection with such other
premium financing arrangements of the Borrower approved by the Bankruptcy Court,
in an aggregate amount not exceeding $10,000,000 at any one time outstanding for
all such premium financing arrangements; and (viii) from and after the entry of
the Final Order, Indebtedness of the Borrower in respect of Interest Rate
Hedging Obligations; and (ix) from and after the entry of the Final Order,
Indebtedness of the Borrower in respect of (A) currency swap agreements,
currency future or option contracts and other similar agreements designed to
hedge against fluctuations in foreign currency exchange rates entered into with
a Lender in the ordinary course of the Borrower's business consistent with past
practice (and not for speculative purposes) and in any event having contract
periods not in excess of twelve months and having an aggregate notional amount
not in excess of $50,000,000 at any one time outstanding for all such foreign
currency hedging arrangements or (B) swap agreements, future or option contracts
and other similar agreements designed to hedge against fluctuations in
commodities prices entered into with a commodity supplier of the Borrower or a
Guarantor and in the ordinary course of the Borrower's business consistent with
past practice (and not for speculative purposes).
SECTION 6.4 Capital Expenditures. Make, or cause or permit to be made,
Capital Expenditures and non-reimbursable production tooling expenditures during
each period set forth below in aggregate amounts in excess of: (i) the amount
set forth in the columns entitled "Domestic Capital Expenditure Limit" and
"Domestic Tooling Limit" for such period with respect to the Borrower, its
Domestic Subsidiaries, the Mexican Debtor, ▇▇▇▇▇ Lemmerz International Frenos,
S.A. de C.V. and ▇▇▇▇▇ Lemmerz Mexico, S.A. de C.V.; and (ii) the amounts set
forth in the columns entitled "Foreign Capital Expenditure Limit" and "Foreign
Tooling Limit" for such period with respect to all Foreign Subsidiaries of the
Borrower (other than its Mexican Subsidiaries):
DOMESTIC FOREIGN
CAPITAL CAPITAL DOMESTIC FOREIGN
EXPENDITURE EXPENDITURE TOOLING TOOLING FLEX
TIME PERIOD LIMIT LIMIT LIMIT LIMIT AMOUNT
----------- ----------- ----------- -------- -------- ------
November 1, 2001 to $11,400,000 $16,300,000 $5,000,000 $2,000,000 $2,500,000
January 31, 2002
54
DOMESTIC FOREIGN
CAPITAL CAPITAL DOMESTIC FOREIGN
EXPENDITURE EXPENDITURE TOOLING TOOLING FLEX
TIME PERIOD LIMIT LIMIT LIMIT LIMIT AMOUNT
----------- ----------- ----------- -------- -------- ------
February 1, 2002 to $58,700,000 $57,400,000 $15,000,000 $10,000,000 10,000,000
January 31, 2003 0
February 1, 2003 to $30,000,000 $26,000,000 $7,500,000 $5,000,000 5,000,000
June 30, 2003
; provided, however, that the aggregate amount of Capital Expenditures and
non-reimbursable production tooling expenditures permitted during any time
period may be exceeded by the amount set forth with respect to such time period
in the column entitled "Flex Amount" (which amount may be applied by the
Borrower to its domestic or foreign operations or to its Capital Expenditures or
non-reimbursable production tooling expenditures, as it may elect); provided,
further, that any such amount of permitted Capital Expenditures or permitted
non-reimbursable production tooling expenditures during the period from February
1, 2002 to January 31, 2003 set forth above and not expended during such period,
may be carried over for expenditure in the period commencing February 1, 2003 to
June 30, 2003.
SECTION 6.5 EBITDA.
(a) As of the end of each fiscal month of the Borrower during
the period commencing with the fiscal month ending January 31, 2002, through and
including the fiscal month ending December 31, 2002, permit either Consolidated
EBITDA or Domestic EBITDA, on a cumulative basis commencing January 1, 2002, to
be less than the respective amounts set forth below for each such fiscal month:
FISCAL MONTH CONSOLIDATED EBITDA DOMESTIC EBITDA
------------ ------------------- ---------------
(Thousands) (Thousands)
January 31, 2002 $10,451 $5,928
February 28, 2002 $17,508 $6,641
March 31, 2002 $27,659 $9,102
April 30, 2002 $39,967 $12,933
May 31, 2002 $55,312 $19,499
June 30, 2002 $70,120 $25,397
July 31, 2002 $79,241 $25,557
August 31, 2002 $97,165 $34,137
September 30, 2002 $111,863 $41,195
October 31, 2002 $131,635 $50,872
November 30, 2002 $149,578 $57,460
December 31, 2002 $161,477 $58,965
(b) As of the end of each fiscal month of the Borrower, during
the period commencing with the fiscal month ending January 31, 2003, through and
including the fiscal month ending June 30, 2003, permit either Consolidated
EBITDA or Domestic EBITDA for the twelve (12)
55
month period then ended to be less than the respective amounts set forth below
for each such fiscal month:
FISCAL MONTH CONSOLIDATED EBITDA DOMESTIC EBITDA
------------ ------------------- ---------------
(Thousands) (Thousands)
January 31, 2003 $166,852 $62,145
February 28, 2003 $173,278 $66,868
March 31, 2003 $178,547 $71,652
April 30, 2003 $182,576 $75,120
May 31, 2003 $184,192 $76,541
June 30, 2003 $184,471 $76,678
SECTION 6.6 Guarantees and Other Liabilities. Purchase or repurchase
(or agree, contingently or otherwise, to do so directly or indirectly) the
Indebtedness of, or assume, guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance of any
obligation or capability of so doing, or otherwise), endorse or otherwise become
liable, directly or indirectly, for the obligations, stock or dividends of any
Person, except (i) for any guarantee of Indebtedness or other obligations (or
otherwise becoming liable for any of the obligations) of the Borrower in the
ordinary course of business and consistent with the past business practices with
trade vendors if such Indebtedness or the obligations are permitted by this
Agreement, (ii) by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business; and (iii) as expressly set forth
herein (including without limitation the guarantee by Foreign Subsidiaries of
the Obligations to the extent set forth in Section 2.29) or as otherwise agreed
in writing by the Administrative Agent.
SECTION 6.7 Chapter 11 Claims. Incur, create, assume, suffer to exist
or permit any other Superpriority Claim which is pari passu with or senior to
the claims of the Administrative Agent and the Lenders against the Borrower with
respect to this Agreement and the other Loan Documents, except for the
Carve-Out.
SECTION 6.8 Dividends; Capital Stock. Except for distributions or
payments by the Borrower or a Guarantor to the Borrower or a Guarantor, or from
any Foreign Subsidiary to another Foreign Subsidiary, to the Borrower or to a
Guarantor, declare or pay, directly or indirectly, any dividends or make any
other distribution or payment, whether in property, securities or a combination
thereof, with respect to (whether by reduction of capital or otherwise) any
shares of capital stock (or any options, warrants, rights or other equity
securities or agreements relating to any capital stock), or set apart any sum
for the aforesaid purposes on anything other than an arm's-length basis.
SECTION 6.9 Transactions with Affiliates. Sell or transfer any property
or assets to, or otherwise engage in or permit to exist any other material
transactions with, any of its non-Debtor Affiliates other than in the ordinary
course of the Borrower's and Guarantors' business in good faith, consistent with
past practice, at commercially reasonable prices and on commercially reasonable
terms and conditions not less favorable to the Borrower and the Guarantors than
could be obtained on an arm's-length basis from a non-Affiliate.
SECTION 6.10 Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of Indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment in, any other Person (all of the foregoing, "INVESTMENTS"), except
for (i) Permitted Investments and investments by Foreign Subsidiaries in the
ordinary course of
56
business and consistent with past practice; (ii) Intercompany Indebtedness owing
from the Borrower or a Guarantor to the Borrower or a Guarantor incurred in the
ordinary course of business consistent with past practice; (iii) existing
Intercompany Indebtedness listed on Schedule 6.3 (which describes all
Intercompany Loans from the Borrower and the Guarantors to the Foreign
Subsidiaries as of the date hereof); and (iv) Intercompany Loans to Foreign
Subsidiaries in Germany and Mexico in accordance with Section 2.29. Neither the
Borrower nor any Guarantor may (x) make any additional Investments in its
Foreign Subsidiaries except as permitted hereunder nor (y) transfer any assets
or the proceeds of any Loans to any jurisdiction outside of the United States of
America, except for the collection and disbursement in the ordinary course of
business and consistent with past practice of payments owing to Borlem S.A.
Empreendimentos Industriais, purchases of Inventory by the Borrower or a
Guarantor from Foreign Subsidiaries in the ordinary course of business and
consistent with past practices or as otherwise expressly permitted hereunder.
All post-petition Intercompany Loans from the Borrower or any Guarantor to any
Foreign Subsidiary shall be made in accordance with Section 2.29 and shall be
secured by liens on assets of such Foreign Subsidiary to the extent set forth in
Section 2.29.
SECTION 6.11 Disposition of Assets. Sell or otherwise dispose of any
assets (including without limitation, the capital stock of any Subsidiary of the
Borrower) except for (i) sales of Inventory, fixtures and equipment in the
ordinary course of business, and (ii) sales of assets set forth on Schedule
6.11.
SECTION 6.12 Nature of Business. Modify or alter in any material manner
the nature and type of its business as conducted at or prior to the Filing Date
or the manner in which such business is conducted (except as required by the
Bankruptcy Code).
SECTION 6.13 Limitation on Certain Restrictions. Except to the extent
existing on the Filing Date and disclosed on Schedule 6.13, permit, place or
agree to permit or place any restrictions on the payment of dividends or other
distributions in respect of equity or ownership interests among the Borrower or
its Subsidiaries or Affiliates or the making of advances or any other cash
payments among the Borrower or its Subsidiaries (other than Foreign
Subsidiaries) or Affiliates (other than contractual restrictions of the Foreign
Subsidiaries set forth in the debt facilities and Indebtedness of such Foreign
Subsidiaries).
SECTION 6.14 Right of Subrogation among Borrower and Guarantors. Assert
any right of subrogation against the Borrower or any Guarantor until all
Obligations are indefeasibly paid in cash in full and the Total Commitment is
terminated.
SECTION 6.15 Securitization Subsidiary. Hold, keep or maintain with or
in, or sell, assign or transfer to either Securitization Subsidiary any property
or asset, or conduct any transaction with, or cause or permit any Securitization
Subsidiary to enter into any agreements or create or incur any obligations
whatsoever, it being understood that each such Securitization Subsidiary shall
at all times remain a dormant entity with no assets or liabilities.
SECTION 7. EVENTS OF DEFAULT
SECTION 7.1 Events of Default. In the case of the happening of any of
the following events and the continuance thereof beyond the applicable period of
grace (if any) set forth below (each, an "EVENT OF DEFAULT"):
(a) default shall be made in the payment of any fees or
interest on the Loans, principal of the Loans or other amounts payable by the
Borrower hereunder (including without limitation, reimbursement obligations or
cash collateralization in respect of Letters of Credit), when and as the same
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shall become due and payable, whether at the due date thereof (including the
Prepayment Date) or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
(b) default shall be made by the Borrower or any of its
Subsidiaries in the due observance or performance of any covenants, conditions
or agreements contained in Section 3.10, Section 5.9 or Section 6 hereof; or
(c) the Borrower shall fail to deliver a certified Borrowing
Base Certificate when due and such default shall continue unremedied for more
than three (3) Business Days; or
(d) any representation or warranty made by the Borrower or any
of its Subsidiaries in this Agreement or in any other Loan Document or in
connection with this Agreement or the credit extensions hereunder or any
statement or representation made in any report, financial statement, certificate
or other document furnished by the Borrower or any Guarantor to the
Administrative Agent or any Lender under or in connection with this Agreement,
shall prove to have been false or misleading in any material respect when made
or delivered; or
(e) default shall be made by the Borrower or any of its
Subsidiaries in the due observance or performance of any covenant, condition or
agreement (other than the covenants, conditions or agreements contained in
Section 3.10, Sections 5.9 or Section 6 hereof) to be observed or performed
pursuant to the terms of this Agreement or any of the other Loan Documents and
such default shall continue unremedied for more than ten (10) days; or
(f) any of the Cases shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code or any Debtor shall file a motion or
other pleading seeking the dismissal of any of the Cases under Section 1112 of
the Bankruptcy Code or otherwise; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code, a responsible officer or an examiner with enlarged powers
relating to the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) the
Bankruptcy Code shall be appointed in any of the Cases; the order appointing
such trustee, responsible officer or examiner shall not be reversed or vacated
within thirty (30) days after the entry thereof; an application shall be filed
by any Debtor for the approval of any other Superpriority Claim (other than the
Carve-Out) or lien in any of the Cases which is pari passu with or senior to the
claims or liens of the Administrative Agent and Lenders against any Debtor
hereunder, or there shall arise or be granted any such pari passu senior
Superpriority Claim or lien; or the Bankruptcy Court shall enter an order
terminating the use of cash collateral; or
(g) any Debtor shall make any Pre-Petition Payment (whether by
way of adequate protection or otherwise) of principal or interest or otherwise
on account of any prepetition Indebtedness or payables (including, without
limitation, reclamation claims) other than as set forth in Sections 2.22 and
4.1(b), and any Prepetition Payments authorized by the Bankruptcy Court in
respect of: (i) accrued payroll and other related employee benefits and expenses
as of the Filing Date, leases, (ii) pre-petition claims of Critical Vendors (or
advances or deposits or other credit support in lieu thereof), in an aggregate
amount not to exceed $20,000,000 (pursuant to a payment program for such items
acceptable to the Administrative Agent, in its sole discretion), (iii) payments
in respect of pre-petition claims of customers or advances or deposits or other
credit support in lieu thereof (pursuant to a payment program for such items
acceptable to the Administrative Agent, in its sole discretion), in an aggregate
amount not to exceed $9,000,000, (iv) payments in respect of sales and use tax,
shipping charges and custom duties in amounts, and for purposes, reasonably
satisfactory to the Administrative Agent, (v) payment in respect of
prepetition claims of mechanics liens in an aggregate amount not to exceed
$9,000,000 (pursuant to a payment program for such items acceptable to the
Administrative Agent, in its sole discretion) and (vi) payments in respect of
prepetition claims of creditors with executory contracts or unexpired leases
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that are assumed by order of the Bankruptcy Court, which assumption shall be
reasonably satisfactory to the Administrative Agent; or
(h) the Bankruptcy Court shall enter an order or orders
granting relief from the automatic stay applicable under Section 362 of the
Bankruptcy Code to the holder or holders of any security interest to permit
foreclosure (or the granting of a deed in lieu of foreclosure or the like) on
any assets of any of the Debtors which have a value in excess of $1,000,000 in
the aggregate for all such Debtors; or
(i) a Change of Control shall occur; or
(j) any material provision of any Loan Document or either of
the Orders shall, for any reason, cease to be valid and binding on the Borrower
or any of the Guarantors, or any of the Borrower or Guarantors shall so assert
in any pleading filed in any court; or
(k) an order of the Bankruptcy Court shall be entered
reversing, amending, supplementing, staying, vacating or otherwise modifying
either of the Orders; or
(l) any judgment or order as to any post-petition obligation
in excess of $1,000,000 shall be rendered against the Borrower or any Guarantor
and the enforcement thereof shall not have been stayed (by court-ordered stay or
by consent of the party litigants); or
(m) any non-monetary judgment or order with respect to
post-petition event shall be rendered against the Borrower or any Subsidiary
which does or could reasonably be expected to cause a Material Adverse Effect
and there shall be any period of ten (10) consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(n) there shall have occurred any strike, slowdown, work
stoppage or other material labor disruption by any of the employees of the
Borrower or any of the Guarantors (except as set forth on Schedule 3.12) that
could reasonably be expected to have a Material Adverse Effect; or
(o) the Debtors shall have failed to file with the Bankruptcy
Court a plan of reorganization and disclosure statement in form and substance
satisfactory to the Administrative Agent and the Initial Lenders within two
hundred seventy (270) days after the filing of the Cases; or
(p) the Bankruptcy Court shall have failed to approve a
disclosure statement filed by the Debtors within thirteen (13) months after the
filing of the Cases; or
(q) any Termination Event described in clauses (iii) or (iv)
of the definition of such term shall have occurred and shall continue unremedied
for more than ten (10) days and the sum (determined as of the date of occurrence
of such Termination Event) of the Insufficiency of the Plan in respect of which
such Termination Event shall have occurred and be continuing and the
Insufficiency of any and all other Plans with respect to which such a
Termination Event (described in such clauses (iii) or (iv)) shall have occurred
and then exist is equal to or greater than $1,000,000; or
(r) (i) the Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability with respect to such Multiemployer Plan, (ii) the Borrower
or such ERISA Affiliate does not have reasonable grounds to contest such
Withdrawal Liability and is not in fact contesting such Withdrawal Liability in
a timely and appropriate manner, and (iii) the amount of such Withdrawal
Liability specified in such notice, when
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aggregated with all other amount required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date of such
notification), exceeds $1,000,000 allocable to post-petition obligations or
requires payments exceeding $1,000,000 per annum in excess of the annual
payments made with respect to such Multiemployer Plans by the Borrower or such
ERISA Affiliate for the plan year immediately preceding the plan year in which
such notification is received; or
(s) the Borrower or any ERISA Affiliate thereof shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the plan years that include the date hereof by an amount exceeding
$1,000,000; or
(t) the Borrower or any ERISA Affiliate thereof shall have
committed a failure described in Section 302(f) of ERISA (other than the failure
to make any contribution accrued and unpaid as of the Filing Date) and the
amount determined under Section 302(f)(3) of ERISA is equal to or greater than
$1,000,000; or
(u) it shall be determined (whether by the Bankruptcy Court or
by any other judicial or administrative forum) that the Borrower is liable for
the payment of claims arising out of any failure to comply (or to have complied)
with applicable environmental laws or regulations, the payment of which could
reasonably be expected to have a Material Adverse Effect, and the enforcement
thereof shall not have been stayed; or
(v) any event or condition occurs that (i) results in any
Material Indebtedness becoming due prior to its scheduled maturity or (ii)
enables or permits (with or without the giving of notice or the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity and such event or condition described in this clause (ii)
is not cured or waived within forty-five days after the occurrence thereof;
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Administrative Agent may, and at the request of the Required Lenders,
shall, take one or more of the following actions without further order of or
application to the Court, provided that with respect to item (iv) below and the
enforcement of liens or other remedies with respect to Collateral referred to in
item (v) below, the Administrative Agent shall provide the Borrower (with a copy
to counsel for the Official Creditors' Committee appointed in any of the Cases
and to the United States Trustee for the Bankruptcy Court's District) with three
(3) business days' prior written notice (the "DEFAULT NOTICE"): (i) terminate
forthwith the Total Commitment; (ii) declare the Loans then outstanding to be
forthwith due an payable, whereupon the principal of the Loans together with
accrued interest thereon and any unpaid Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower and
the Guarantors, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower and the Guarantors upon
demand to forthwith deposit in the Letter of Credit Account cash in an amount
which, together with any amounts then held in the Letter of Credit Account, is
equal to the sum of 105% of the then Letter of Credit Outstandings or to cause
to be issued to the Fronting Bank back-to-back letters of credit having a stated
amount equal to the greater of (a) an amount, as determined by the
Administrative Agent and the Fronting Bank, equal to the
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face amount of all such Letters of Credit plus the sum of all projected
contractual obligations to the Administrative Agent and the Fronting Bank and
the Lenders of the Borrower thereunder through the expiration dates of such
Letters of Credit and (b) 105% of the outstanding amount of such Letters of
Credit, each in form and substance and issued by an issuer satisfactory in all
respects to the Administrative Agent and the Fronting Bank (and to the extent
the Borrower and the Guarantors shall fail to furnish such funds as demanded by
the Administrative Agent, the Administrative Agent shall be authorized to debit
the accounts of the Borrower and the Guarantors maintained with the
Administrative Agent in such amount three (3) Business Days after the giving of
the notice referred to above (the "DEFAULT NOTICE PERIOD")); (iv) set-off
amounts in the Letter of Credit Account or any other accounts maintained with
the Administrative Agent or any other Lender or their Affiliates and apply such
amounts to the Obligations of the Borrower and the Guarantors hereunder and in
the other Loan Documents; and/or (v) exercise any and all remedies under the
Orders, the Loan Documents, the Cash Management Agreements, the Interest Rate
Hedging Agreements and under applicable law available to the Administrative
Agent and the Lenders.
SECTION 7.2 Application of Funds. From and after the occurrence of an
Event of Default, the proceeds of the Collateral, or any part thereof, and all
other payments received under any of the Loan Documents (including as a result
of or in connection with the Cases or any other proceeding under the Bankruptcy
Code or any other similar state laws proceeding involving any Grantor) shall be
applied by the Administrative Agent, to the extent actually received in cash, to
the indefeasible payment in full in cash of the Obligations in the following
order:
first, to the payment of all unreimbursed costs and expenses of the
Administrative Agent and the other Secured Parties (including, without
limitation, under Section 10.5) which are payable by the Borrower or the
Guarantors pursuant to this Agreement and the other Loan Documents;
second, to the payment of all accrued but unpaid Unused Commitment
Fees, Letter of Credit Fees, and other Fees under any of the other Loan
Documents owing to the Secured Parties on a pro rata basis in accordance with
amounts owing in respect of the foregoing;
third, to the provision of cash collateral for all Obligations relating
to Letter of Credit Outstandings in an amount and as provided in the last
paragraph of Section 7.1 above;
fourth, to the payment of the accrued and unpaid interest on the Loans
ratably among the Lenders in accordance with each Lender's Commitment
Percentage;
fifth, ratably, to the payment of (i) the principal outstanding balance
of the Loans ratably among the Lenders in accordance with each Lender's
Commitment Percentage, (ii) all Cash Management Obligations and (iii) all
outstanding Interest Rate Obligations;
sixth, to the payment of the remainder of the Obligations then due
under any of the Loan Documents; and
seventh, the balance, if any, after all of the Obligations have been
indefeasibly paid in full in cash, shall be returned to the Borrower or, if
relevant, the Guarantors or paid over to such other Person as may be required by
law.
SECTION 8. THE ADMINISTRATIVE AGENT
SECTION 8.1 Administration by Administrative Agent. The general
administration of the Loan Documents shall be performed by the Administrative
Agent. Each Lender hereby irrevocably
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authorizes the Administrative Agent, at its discretion, to take or refrain from
taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under Loan Documents as are delegated by the terms hereof
or thereof, as appropriate, together with all powers reasonably incidental
thereto (including the release of Collateral in connection with any transaction
that is expressly permitted by the Loan Documents). The Administrative Agent
shall have no duties or responsibilities except as set forth in this Agreement
and the other Loan Documents.
SECTION 8.2 Advances and Payments.
(a) On the date of each Loan, the Administrative Agent shall
be authorized (but not obligated) to advance, for the account of each of the
Lenders, the amount of the Loan to be made by it in accordance with its
Commitment hereunder. Should the Administrative Agent do so, each of the Lenders
agrees forthwith to reimburse the Administrative Agent in immediately available
funds for the amount so advanced on its behalf by the Administrative Agent,
together with interest at the Federal Funds Effective Rate if not so reimbursed
on the date due from and including such date but not including the date of
reimbursement.
(b) Any amounts received by the Administrative Agent in
connection with this Agreement (other than amounts to which the Administrative
Agent is entitled pursuant to Sections 2.18, 8.6, 10.5 and 10.6), the
application of which is not otherwise provided for in this Agreement or any
other Loan Document, shall be applied, first, in accordance with each Lender's
Commitment Percentage to pay accrued but unpaid Commitment Fees or Letter of
Credit Fees, and second, in accordance with each Lender's Commitment Percentage
to pay accrued but unpaid interest and the principal balance of the Loans
outstanding and all unreimbursed Letter of Credit drawings. All amounts to be
paid to a Lender by the Administrative Agent shall be credited to that Lender,
after collection by the Administrative Agent, in immediately available funds
either by wire transfer or deposit in that Lender's correspondent account with
the Administrative Agent, as such Lender and the Administrative Agent shall from
time to time agree.
SECTION 8.3 Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, including, but not limited to, a secured claim or other security
or interest arising from, or in lieu of, such claim and received by such Lender
under any applicable bankruptcy, insolvency or other similar law, or otherwise,
obtain payment in respect of its Loans as a result of which the unpaid portion
of its Loans is proportionately less than the unpaid portion of the Loans of any
other Lender (a) it shall promptly purchase at par (and shall be deemed
thereupon to have purchased) from such other Lender a participation in the Loans
of such other Lender, so that the aggregate unpaid principal amount of each
Lender's Loans and its participation in Loans of the other Lenders shall be in
the same proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to the obtaining of such
payment and (b) such other adjustments shall be made from time to time as shall
be equitable to ensure that the Lenders share such payment pro rata; provided
that if any such non pro rata payment is thereafter recovered or otherwise set
aside; such purchase of participations shall be rescinded (without interest).
The Borrower expressly consents to the foregoing arrangements and agrees that
any Lender holding (or deemed to be holding) a participation in a Loan may
exercise any and all rights of banker's lien, setoff (in each case, subject to
the same notice requirements as pertain to clause (iv) of the remedial
provisions of Section 7.1) or counterclaim with respect to any and all moneys
owing by the Borrower to such Lender as fully as if such Lender held a Note and
was the original obligee thereon, in the amount of such participation.
SECTION 8.4 Agreement of Required Lenders. Upon any occasion requiring
or permitting an approval, consent, waiver, election or other action on the part
of the Required Lenders, action shall be taken by the Administrative Agent for
and on behalf or for the benefit of all Lenders upon the direction of
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the Required Lenders, and any such action shall be binding on all Lenders. No
amendment, modification, consent, or waiver shall be effective except in
accordance with the provisions of Section 10.10.
SECTION 8.5 Liability of Administrative Agent.
(a) The Administrative Agent, when acting on behalf of the
Lenders, may execute any of its respective duties under this Agreement by or
through any of its respective officers, agents, and employees, and neither the
Administrative Agent nor its directors, officers, agents, employees or
Affiliates shall be liable to the Lenders or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders or to any of
them for the consequences of any oversight or error of judgment, or for any
loss, unless the same shall happen through its gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction. The Administrative Agent and its respective directors, officers,
agents, employees and Affiliates shall in no event be liable to the Lenders or
to any of them for any action taken or omitted to be taken by them pursuant to
instructions received by them from the Required Lenders or in reliance upon the
advice of counsel selected by it. Without limiting the foregoing neither, the
Administrative Agent, nor any of its respective directors, officers, employees,
agents or Affiliates shall be responsible to any Lender for the due execution,
validity, genuineness, effectiveness, sufficiency, or enforceability of, or for
any statement, warranty, or representation in, this Agreement, any Loan Document
or any related agreement, document or order, or shall be required to ascertain
or to make any inquiry concerning the performance or observance by the Borrower
of any of the terms, conditions, covenants or agreements of this Agreement or
any of the Loan Documents.
(b) Neither the Administrative Agent nor any of its respective
directors, officers, employees, agents or Affiliates shall have any
responsibility to the Borrower on account of the failure or delay in performance
or breach by any Lender or by the Borrower of any of its obligations under this
Agreement or any of the Loan Documents or in connection herewith or therewith.
(c) The Administrative Agent, in its capacity as
Administrative Agent hereunder, shall be entitled to rely on any communication,
instrument, or document reasonably believed by such person to be genuine or
correct and to have been signed or sent by a person or persons believed by such
person to be the proper person or persons, and such person shall be titled to
rely on advice of legal counsel, independent public accountants, and other
professional advisers and experts selected by such person.
SECTION 8.6 Reimbursement and Indemnification. Each Lender agrees (i)
to reimburse (x) the Administrative Agent for such Lender's Commitment
Percentage of any expenses and fees incurred for the benefit of the Lenders
under this Agreement and any of the Loan Documents, including, without
limitation, counsel fees and disbursements and compensation of agents and
employees paid for services rendered on behalf of the Administrative Agent or
the Lenders, and any other expense incurred in connection with the operations or
enforcement of the Loan Documents, in each case to the extent not reimbursed by
the Borrower or the Guarantors pursuant to Section 10.5 or otherwise and (ii) to
indemnify and hold harmless the Administrative Agent and any of its directors,
officers, employees, agents or Affiliates, on demand, in the amount of its
proportionate share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be posed on, incurred
by, or asserted against it or any of them in any way relating to or arising out
of this Agreement or any of the Loan Documents or any action taken or omitted by
it or any of them under Agreement or any of the Loan Documents to the extent not
reimbursed by the Borrower or the Guarantors (except such as shall result from
their respective gross negligence or willful misconduct, as determined by the
final judgment of a court of competent jurisdiction).
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SECTION 8.7 Rights of Administrative Agent. It is understood and agreed
that the Administrative Agent shall have the same rights and powers hereunder
(including the right to give such instructions) as the other Lenders and may
exercise such rights and powers, as well as its rights and powers under other
agreements and instruments to which it is or may be party, and engage in other
transactions with the Borrower, as though it were not the Administrative Agent
of the Lenders under this Agreement.
SECTION 8.8 Independent Lenders; Relations Among Lenders. Each Lender
acknowledges it has decided to enter into this Agreement and to make the Loans
hereunder based on its own analysis of the Transactions contemplated hereby and
of the creditworthiness of the Borrower and agrees that the Administrative Agent
shall bear no responsibility therefor. Each Lender in its capacity as a Lender
agrees that it will not take any legal action, nor institute any actions or
proceedings against the Borrower or the Guarantor or with respect to the
Collateral, it being understood and agreed that all such actions are to be taken
by the Administrative Agent on behalf of the Lenders. Without limiting the
generality of the foregoing, no Lender may unilaterally accelerate or otherwise
enforce or seek to enforce its portion of the Obligations.
SECTION 8.9 Notice of Transfer. The Administrative Agent may deem and
treat a Lender party to this Agreement as the owner of such Lender's portion of
the Loans for all purposes, unless and until a written notice of the assignment
or transfer thereof executed by such Lender shall have been received by the
Administrative Agent.
SECTION 8.10 Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent, which shall be reasonably
satisfactory to the Borrower. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment, within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation, the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States of America or of
any state thereof and having a combined capital and surplus of a least
$100,000,000, which shall be reasonably satisfactory to the Borrower. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Section 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
SECTION 9. GUARANTY
SECTION 9.1 Guaranty.
(a) Each of the Guarantors unconditionally and irrevocably
guarantees the due and punctual payment and performance by the Borrower of the
Obligations (collectively the "GUARANTEED OBLIGATIONS"). The Guarantors further
agree that the Guaranteed Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from them, and they will remain bound
upon this guaranty notwithstanding any extension or renewal of any of the
Guaranteed Obligations.
(b) Each of the Guarantors waives presentation to, demand for
payment from and protest to the Borrower or the Guarantors, and also waives
notice of protest for nonpayment. The
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Obligations of the Guarantors, as guarantors of the Guaranteed Obligations
hereunder, shall not be affected by (i) the failure of the Administrative Agent
or any Lender to assert any claim or demand or to enforce any right or remedy
against the Borrower or any of the Guarantors under the provisions of this
Agreement or any other Loan Document or otherwise; (ii) any extension or renewal
of any provision hereof or thereof; (iii) any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions of any
of the Loan Documents; (iv) the release, exchange, waiver or foreclosure of any
security held by the Administrative Agent for the Guaranteed Obligations or any
of them; (v) the failure of the Administrative Agent or any Lender to exercise
any right or remedy against any other Guarantor of the Guaranteed Obligations;
or (vi) the release or substitution of any other guarantor of the Guaranteed
Obligations.
(c) The Guarantors further agree that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the
Administrative Agent or a Lender to any security held for payment of the
Guaranteed Obligations or to any balance of any deposit, account or credit on
the books of the Administrative Agent or a Lender in favor of the Borrower or
the Guarantors, or to any other Person.
(d) The Guarantors hereby waive any defense that they might
have based on a failure to remain informed of the financial condition of the
Borrower or the Guarantors and any circumstances affecting the ability of the
Borrower or any Guarantor to perform under this Agreement.
(e) The Guarantors' guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations or any other instrument evidencing any Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral
therefor or by any other circumstance relating to the Guaranteed Obligations
which might otherwise constitute a defense to this guaranty. Neither the
Administrative Agent nor any of Lenders makes any representation or warranty in
respect to any such circumstances or shall have any duty or responsibility
whatsoever to the Borrower or the Guarantors in respect of the management and
maintenance of the Guaranteed Obligations.
(f) Subject to the provisions of Section 7.1, upon any of the
Guaranteed Obligations becoming due and payable (by acceleration or otherwise),
the Lenders shall be entitled to immediate payment of such Guaranteed
Obligations by the Guarantors upon written demand by the Administrative Agent,
without further application to or order of the Bankruptcy Court.
SECTION 9.2 No Impairment of Guaranty. The obligations of the
Guarantor, as guarantors of the Guaranteed Obligations hereunder, shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations. Without limiting
the generality of the foregoing, the obligations of the Guarantors or the
Borrower hereunder shall not be discharged or impaired or otherwise affected by
the failure of the Administrative Agent or a Lender to assert any claim or
demand or to enforce any remedy under this Agreement or any other agreement, by
any waiver or modification of any provision thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Guaranteed Obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of the
Guarantors, as guarantors of the Guaranteed Obligations, or would otherwise
operate as a discharge of the Guarantors, as guarantors of the Guaranteed
Obligations, a matter of law, unless and until the Guaranteed Obligations are
paid in full in cash.
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SECTION 9.3 Subrogation. Upon payment by the Guarantors, as guarantors
of the Guaranteed Obligations, of any sums to the Administrative Agent or a
Lender hereunder, all rights of the Guarantors against the Borrower or any of
its Foreign Subsidiaries or any other Guarantor arising as a result thereof by
way of right of subrogation or otherwise, shall in all respects be subordinate
and junior in right of payment to the prior final and indefeasible payment in
full in cash of all the Guaranteed Obligations. If any amount shall be paid to
the Guarantors, as guarantors of the Guaranteed Obligations, for the account of
any of its Foreign Subsidiaries or the Borrower or any other Guarantor, such
amount shall be held in trust for the benefit of the Administrative Agent and
the Lenders and shall forthwith be paid to the Administrative Agent and the
Lenders to be credited and applied to the Guaranteed Obligations, whether
matured or unmatured.
SECTION 10. MISCELLANEOUS
SECTION 10.1 Notices. Notices and other communications provided for
herein shall be in writing (including telegraphic, telex or facsimile
communication) and be mailed, telegraphed, telexed, transmitted or delivered to
the Borrower or the Administrative Agent as follows and to any of the other
parties hereto it at its address set forth on Annex A, or such other address as
such party may from time to time designate by giving written notice to the other
parties hereunder:
The Borrower:
▇▇▇▇▇ Lemmerz International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ Lemmerz International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent:
Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
fifth Business Day after the date when sent by registered or certified mail,
postage prepaid, return receipt requested, if by mail; or when receipt is
acknowledged, if by any telegraphic communications or facsimile equipment of the
sender; in each case addressed to such party as provided in this Section 10.1 or
in accordance with the latest unrevoked written direction from such party;
provided, however, that in the case of notices to the Administrative Agent
notices pursuant to the preceding sentence with respect to change of address and
pursuant to Section 2 shall be effective only when received by the
Administrative Agent.
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SECTION 10.2 Survival of Agreement, Representations and Warranties,
etc. All warranties, representations and covenants made by the Borrower and the
Guarantors herein or in any certificate or other instrument delivered by any of
them or on their behalf in connection with this Agreement shall be considered to
have been relied upon by the Lenders and shall survive the making of the Loans
and the issuance of Letters of Credit herein contemplated regardless of any
investigation made by any Lender or on its behalf and shall continue in full
force and effect so long as any amount due or to become due hereunder is
outstanding and unpaid and so long as the Commitments have not been terminated.
All statements in any such certificate or other instrument shall constitute
representations and warranties by the Borrower and the Guarantors hereunder with
respect to the Borrower.
SECTION 10.3 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Guarantors, the Administrative Agent and the
Lenders and their respective successors and assigns. Neither the Borrower nor
the Guarantors may assign nor transfer any of their rights or obligations
hereunder without the prior written consent of all of the Lenders. Each Lender
may sell participations to any Person in all or part of any Loan, or all or part
of its Commitment, in which event, without limiting the foregoing, the
provisions of Section 2.14 and 2.17 shall inure to the benefit of each purchaser
of a participation (provided that such participant shall look solely to the
seller of such participation for such benefits and the Borrower's liability, if
any, under Sections 2.14 and 2.17 shall not be increased as a result of the sale
of any such participation) and the pro rata treatment of payments, as described
in Section 2.16, shall be determined as if such Lender had not sold such
participation. In the event any Lender shall sell any participation, such Lender
shall retain the sole right and responsibility to enforce the obligations of the
Borrower relating to the Loans, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this Agreement
(provided that such Lender may grant its participant the right to consent to
such Lender's execution of amendments, modifications or waivers which (i) reduce
any Fees payable hereunder to the Lenders, (ii) reduce the amount of any
scheduled principal payment on any Loan or reduce the principal amount of any
Loan or the rate of interest payable hereunder or (iii) extend the maturity of
the Borrower's obligations hereunder). The sale of any such participation shall
not alter the rights and obligations of the Lender selling such participation
hereunder with respect to the Borrower.
(b) Each Lender may assign to one or more Lenders or Eligible
Assignees all or a portion of its interests, rights and obligations under this
Agreement (including, without limitation, all or a portion of its separate
Commitments and the same portion of the related Loans at the time owing to it),
provided, however, that (i) other than in the case of an assignment to any
Lender Affiliate or to a Person at least 50% owned by the assignor Lender, or by
a common parent of both, or to another Lender, the Administrative Agent and the
Fronting Bank must give their respective prior written consent to such
assignment, which consent will not be unreasonably withheld, (ii) the aggregate
amount of the Commitment and/or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall,
unless otherwise agreed to in writing by the Borrower and the Administrative
Agent, in no event be less than $5,000,000 or the remaining portion of such
Lender's Commitment and/or Loans, if less and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance with blanks appropriately completed, together with a processing and
recordation fee of $3,500 (for which the Borrower shall have no liability).
Notwithstanding the foregoing, no such $3,500 processing and recordation fee
shall be payable in respect of assignments made by an Initial Lender prior to
the completion of the initial syndication, which completion shall be determined
by the Administrative Agent, in its reasonable judgment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be within ten (10)
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Business Days after the execution thereof (unless otherwise agreed to in writing
by the Administrative Agent), (A) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (B) the assignor Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto.
(c) By executing and delivering an Assignment and Acceptance,
the assignor Lender thereunder and the assignee thereunder confirm to, and agree
with, each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the Guarantors or the performance
or observance by the Borrower or the Guarantors of any of their obligations
under this Agreement or any of the other Loan Documents or any other instrument
or document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
copies of the financial statements referred to in Section 3.4 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative Agent,
such Lender assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement (v) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms thereto, together with such
powers as are reasonably incidental hereof; and (vi) such assignee agrees that
it will perform in accordance with their terms all obligations that by the terms
of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its office a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person the name of which is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee thereunder together with the fee payable
in respect thereto, the Administrative Agent shall, if such Assignment and
Acceptance has been completed with blanks appropriately filled and consented to
by the Administrative Agent and the Fronting Bank (to the extent such consent is
required hereunder), (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt written
notice thereof to the Borrower (together with a copy thereof). No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
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(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or the Guarantors
furnished to such Lender by or on behalf of the Borrower or the Guarantors;
provided that prior to any such disclosure, each such assignee or participant or
proposed assignee or participant shall agree in writing to be bound by the
provisions of Section 10.4.
(g) The Borrower hereby agrees to assist and cooperate with
the Administrative Agent actively in the Administrative Agent's efforts to sell
participations herein (as described in Section 10.3(a)); or assignments to one
or more Lenders or Eligible Assignees of a portion of its interests, rights and
obligations under this Agreement (as set forth in Section 10.3(b)).
SECTION 10.4 Confidentiality. Each Lender agrees to keep any
information (whether oral or written) delivered or made available to it by the
Borrower confidential from anyone other than persons employed or retained by
such Lender who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
prevent any Lender from disclosing such information (i) to any of its Affiliates
or to any other Lender, provided such Affiliate agrees to keep such information
confidential to the same extent required by Lenders hereunder, (ii) upon the
order of any court or administrative agency, (iii) upon the request or demand of
any regulatory agency or authority, (iv) which has been publicly disclosed other
than as a result of a disclosure by the Administrative Agent or any Lender which
is not permitted by this Agreement (v) in connection with any litigation to
which the Administrative Agent, any Lender, or their respective Affiliates may
be a party to the extent reasonably required, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vii) to such
Lender's legal counsel, financial advisors and independent auditors, and (viii)
to any actual or proposed participant or assignee of all or part of its rights
hereunder subject to the proviso in Section 10.3(f). Each Lender shall notify
the Borrower of any required disclosure under clause (ii) of this Section;
provided, however, that the failure of any such Lender to provide such
notification shall not limit, alter or otherwise affect any of the Borrower's
obligations under this Agreement.
SECTION 10.5 Expenses. Whether or not the transactions hereby
contemplated shall be consummated, the Borrower agrees to pay all reasonable
expenses incurred by the Administrative Agent or the Initial Lenders (including,
without limitation, the fees and disbursements of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇
LLP, counsel for the Administrative Agent, any other counsel that the
Administrative Agent shall retain and any internal or third-party appraisers,
consultants and auditors advising the Administrative Agent and their counsel) in
connection with the preparation, execution, delivery and administration of this
Agreement and the other Loan Documents, the making of the Loans and the issuance
of the Letters of Credit, the perfection of the Liens contemplated hereby, the
syndication of the transactions contemplated hereby, the costs, fees and
expenses of the Administrative Agent and the Initial Lenders in connection with
monthly and other periodic field audits, monitoring of assets (including
reasonable and customary internal collateral monitoring fees) and publicity
expenses, and all expenses incurred by the Lenders and the Administrative Agent
in the enforcement or protection of the rights of any one or more of the Lenders
or the Administrative Agent in connection with this Agreement or the other Loan
Documents, including but not limited to the fees and disbursements of any
counsel for the Lenders or the Administrative Agent. Such payments by the
Borrower shall be made upon delivery of a statement setting forth such costs and
expenses. Whether or not the transactions hereby contemplated shall be
consummated, the Borrower agrees to reimburse the Administrative Agent for the
expenses set forth in the Commitment Letter and the reimbursement provisions
thereof are hereby incorporated herein by reference. The obligations of the
Borrower under this Section 10.5 shall survive the termination of this Agreement
and/or the payment of the Loans.
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SECTION 10.6 Indemnity. The Borrower agrees to indemnify and hold
harmless the Administrative Agent, and the Lenders and their directors,
officers, employees, agents, attorneys, accountants, financial advisors and
Affiliates (each an "INDEMNIFIED PARTY") from and against any and all expenses,
disbursements, judgments, suits, proceedings, losses, claims, damages and
liabilities incurred by such Indemnified Party arising out of claims made by any
Person in any way relating to this Agreement, the other Loan Documents or the
transactions contemplated hereunder and thereunder, including, without
limitation, attorneys' and consultants' fees and disbursements, except to the
extent that any of the foregoing are determined by the final judgment of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of the Borrower under this
Section 10.6 shall survive the termination of this Agreement and/or the payment
of the Loans.
SECTION 10.7 Choice of Law; Waivers. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES AND BY THE BANKRUPTCY CODE, AS APPLICABLE. THE BORROWER AND EACH OF
THE GUARANTORS HEREBY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING ARISING
OUT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREUNDER OR THEREUNDER ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
SECTION 10.8 No Waiver. No failure on the part of the Administrative
Agent or any of the Lenders to exercise, and no delay in exercising, any right,
power or remedy hereunder or any of the other Loan Documents shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. All remedies hereunder are cumulative and
are exclusive of any other remedies provided by law.
SECTION 10.9 Extension of Maturity. Except as provided herein, should
any payment of principal of or interest or any other amount due hereunder become
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of principal,
interest shall be payable thereon at the rate herein specified during such
extension.
SECTION 10.10 Amendments, etc.
(a) No modification, amendment or waiver of any provision of
this Agreement or the other Loan Documents, and no consent to any departure by
the Borrower or the Guarantors therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance for the
purpose for which given; provided, however, that no such modification or
amendment shall without the written consent of each Lender affected thereby (x)
increase the Commitment of a Lender (it being understood that a waiver of an
Event of Default shall not constitute an increase in the Commitment of a
Lender), or (y) reduce the principal amount of any Loan (or any unreimbursed
drawing with respect to a Letter of Credit) or the rate of interest payable
thereon, or extend any date for the payment of interest hereunder or reduce any
Fees payable hereunder or extend the final maturity of the Borrower's
obligations hereunder and, provided further, that no such modification or
amendment shall without the written consent of all of the Lenders (i) amend or
modify any provision of this Agreement which provides for the unanimous consent
or approval of the Lenders, (ii) amend this Section 10.10, the definition of
Required Lenders or the
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definition of Supermajority Lenders, (iii) amend or modify the Superpriority
Claim status of the Lenders or any of the claims in favor of the Administrative
Agent or the Lenders described in Section 2.22, (iv) alter the eligibility
standards used in determining the Borrowing Base in a manner which would
increase the amount of the Borrowing Base, (v) increase the advance rates in
calculation of the Borrowing Base, (vi) release all or substantially all of the
Collateral or (vii) release all or substantially all of the Guarantors from
their obligations under the Loan Documents. No such amendment or modification
may adversely affect the rights and obligations hereunder of the Administrative
Agent, any Fronting Bank or any cash management bank that is also a Lender in
the capacity referred to in Section 6.3(v) without its prior written consent.
Notwithstanding the foregoing, any release of an item of Collateral having a
value in excess of $5,000,000 (other than sales in the ordinary course of
business) shall require the affirmative vote of each of the Initial Lenders. No
notice to or demand on the Borrower shall entitle the Borrower to any other or
further notice or demand in the same, similar or other circumstances. Each
assignee under Section 10.3(b) shall be bound by any amendment, modification,
waiver, or consent authorized as provided herein, and any consent by a Lender
shall bind any Person subsequently acquiring an interest in the Loans held by
such Lender. No amendment to this Agreement shall be effective against the
Borrower unless in writing and signed by the Borrower.
(b) Notwithstanding anything to the contrary contained in
Section 10.10(a), in the event that the Borrower requests that this Agreement be
modified or amended in a manner which would require the unanimous consent of all
of the Lenders and such modification or amendment is agreed to by the
Super-majority Lenders (as hereinafter defined), then with the consent of the
Borrower and the Super-majority Lenders, the Borrower and the Super-majority
Lenders shall be permitted to amend the Agreement without the consent of the
Lender or Lenders which did not agree to the modification or amendment requested
by the Borrower (such Lender or Lenders, collectively the "MINORITY LENDERS") to
provide for (i) the termination of the Commitment of each of the Minority
Lenders, (ii) the addition to this Agreement of one or more other financial
institutions (each of which will be an Eligible Assignee), or an increase in the
Commitment of one or more of the Super-majority Lenders, so that the Total
Commitment after giving effect to such amendment shall be in the same amount as
the Total Commitment immediately before giving effect to such amendment, (iii)
if any Loans are outstanding at the time of such amendment, the making of such
additional Loans by such new financial institutions or Super-majority Lender or
Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans of the Minority Lenders immediately before giving effect to
such amendment, (iv) the payment in full by the Borrower of all other amounts
owing to such Lender, including all accrued and unpaid interest and fees, and
(v) such other modifications to this Agreement as may be appropriate. As used
herein, the term "SUPER-MAJORITY LENDERS" shall mean, at any time, Lenders
holding Loans representing at least 66-2/3% of the aggregate principal amount of
the Loans outstanding, or if no Loans are outstanding, Lenders having
Commitments representing at least 66-2/3% of the Total Commitment.
(c) Intentionally Omitted.
(d) Any Lender which has requested that it not receive
material, non-public information concerning the Borrower or any Guarantor and
which is therefore unable or unwilling to vote with respect to an issue arising
under this Agreement will agree to vote and will be deemed to have voted its
Loans or its Commitment under this Agreement pro rata in accordance with the
percentage of the Total Commitment voted by the other Lenders in favor of, and
the percentage of the Total Commitment voted by the other Lenders against, any
such issue under the Agreement.
SECTION 10.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
71
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 10.12 Headings. Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 10.13 Execution in Counterparts; Effectiveness. This Agreement
may be executed in any number of counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the same
instrument. This Agreement shall become effective when the Administrative Agent
shall have received counterparts hereof signed by all of the parties hereto and
when the conditions contained or referred to in Section 4.1 shall have been
satisfied or waived. Delivery of an executed counterpart of a signature page of
this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.14 Prior Agreements; Jointly Drafted. This Agreement
represents the entire agreement of the parties with regard to the subject matter
hereof and the terms of any letters and other documentation entered into between
the Borrower and any Lender or the Administrative Agent prior to the execution
of this Agreement which relate to Loans to be made hereunder shall be replaced
by the terms of this Agreement (except as otherwise expressly provided herein
with respect to the Commitment Letter and the fee letter referred to therein,
including without limitation the Borrower's agreement to assist the Initial
Lenders actively in the syndication of the transactions contemplated hereby
referred to in Section 10.3(g) and including also the provisions of Section
2.18). This Agreement shall be deemed to have been jointly drafted, and no
provisions of it shall be interpreted or construed for or against any party
hereto because such party purportedly prepared or requested such provision, any
other provision, or this Agreement as a whole.
SECTION 10.15 Further Assurances. Whenever and so often as reasonably
requested by the Administrative Agent, the Borrower will promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things as may be necessary and reasonably required in
order to further and more fully vest in the Administrative Agent all rights,
interests, powers, benefits; privileges and advantages conferred or intended to
be conferred by this Agreement and the other Loan Documents.
SECTION 10.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 10.17 Subordination of Intercompany Indebtedness. The Borrower
and each Guarantor agrees that any and all Intercompany Indebtedness owed to the
Borrower or any Guarantor shall be subordinate and subject in right of payment
to the prior indefeasible payment in full in cash of all Obligations.
Notwithstanding any right of the Borrower or any Guarantor to ask, demand, ▇▇▇
for, take or receive any payment in respect of any Intercompany Indebtedness
owed to the Borrower or such Guarantor any and all rights, liens and security
interests of the Borrower or such Guarantor, whether now or hereafter arising
and howsoever existing, in any assets of any other Subsidiary of the Borrower
(whether constituting part of Collateral given to the Administrative Agent for
the benefit of the Lenders to secure payment of all or any part of the
Obligations or otherwise) shall be and are subordinated to the rights of the
Administrative Agent and the Lenders in those assets. Neither the Borrower nor
any Guarantor shall have any right to possession of any such asset or
to foreclose upon any such asset, whether by judicial action or otherwise,
unless and until all of the Obligations (other than contingent indemnity
obligations) shall have been indefeasibly paid in full in cash and all financing
arrangements
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among the Borrower, the Guarantor and the Lenders have been terminated. So long
as any Event of Default shall have occurred and be continuing, then any payment
or distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
Intercompany Indebtedness owed by or to the Borrower or any Guarantor shall be
paid or delivered directly to the Administrative Agent for application on any of
the Obligations, due or to become due, until such Obligations (other than
contingent indemnity obligations) shall have first been indefeasibly paid in
full in cash. The Borrower irrevocably authorizes and empowers the
Administrative Agent to demand, ▇▇▇ for, collect and receive every such payment
or distribution and give acquittance therefor and to make and present for and on
behalf of the Borrower and each of the Guarantors such proofs of claim and take
such other action, in the Administrative Agent's own name or in the name of the
Borrower or applicable Guarantor or otherwise, as the Administrative Agent may
deem necessary or advisable for the enforcement of this Section 10.17. The
Administrative Agent may vote such claims or proofs of claim in any such
proceeding, receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
apply the same on account of any of the Obligations. Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower or any Guarantor upon or with respect to the Intercompany Indebtedness
at any time an Event of Default shall have occurred and be continuing and prior
to the satisfaction of all of the Obligations and the termination of all
financing arrangements among the Borrower and the Lenders, the Borrower or
applicable Guarantor shall receive and hold the same in trust, as trustee, for
the benefit of the Lenders and shall so long as any Event of Default shall have
occurred and be continuing promptly deliver the same to the Administrative
Agent, for the benefit of the Lenders, in precisely the form received (except
for the endorsement or assignment of the Borrower or applicable Guarantor where
necessary), for application to any of the Obligations, due or not due, and,
until so delivered, the same shall be held in trust by the Borrower or
applicable Guarantor as the property of the Lenders. If the Borrower or
applicable Guarantor fails to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its officers or
employees is irrevocably authorized to make the same. So long as any Event of
Default shall have occurred and be continuing, the Borrower and the Guarantors
agree that until the Obligations have been indefeasibly paid in full in cash and
all financing arrangements among the Borrower or applicable Guarantor and the
Lenders have been terminated, neither the Borrower nor any Guarantor will either
assign or transfer to any Person (other than the Administrative Agent) any claim
the Borrower or such Guarantor has or may have against the Borrower or any other
Guarantor, as the case may be.
SECTION 10.18 Foreign Subsidiaries. Notwithstanding any provision of
any Loan Document or the Orders to the contrary, no more than 65% of the capital
stock (or comparable equity interests) of any Foreign Subsidiary which is a
"controlled foreign corporation" within the meaning of Section 957(a) of the
Code, shall be pledged or similarly hypothecated to guaranty or support any
Obligations of the Borrower. The parties agree that any pledge, guaranty or
security or similar interest made or granted in contravention of this Section
10.18 shall be void ab initio.
SECTION 10.19 Marshaling; Recapture. Neither the Administrative Agent
nor any Lender shall be under any obligation to marshal any assets in favor of
the Borrower or any Guarantor against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Borrower or any Guarantor, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to the Borrower or such Guarantor or its respective estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the Obligations or part thereof which has been paid, reduced or
satisfied by the amount so repaid shall be reinstated by the amount so repaid
and shall be included within the liabilities of the Borrower and the Guarantors
to such Lender as of the date such initial payment, reduction or satisfaction
occurred.
73
SECTION 10.20 Borrowing Base Addendum. The parties acknowledge and
agree that upon the completion of the Initial Lenders' review and evaluation of
the inventory, real property, machinery and equipment of the Borrower and its
Domestic Subsidiaries, and in any event before the entry of the Final Order, the
parties shall execute and deliver the Borrowing Base Addendum.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
▇▇▇▇▇ LEMMERZ INTERNATIONAL, INC.
By: ___________________________________________
Name: ____________________________________
Title: ___________________________________
GUARANTORS:
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- CALIFORNIA, INC.
HLI (EUROPE), LTD.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- MEXICO, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- OHIO, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- ▇▇▇▇▇▇, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- GEORGIA, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- CMI, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- TEXAS, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- HUNTINGTON, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- ▇▇▇▇▇, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- KENTUCKY, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- CADILLAC, INC.
HLI -- SUMMERFIELD REALTY CORP.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- MONTAGUE, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- BRISTOL, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- EQUIPMENT
& ENGINEERING, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- PCA, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- WABASH, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- SOUTHFIELD, INC.
HLI -- VENTURES, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- LAREDO, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL --
TRANSPORTATION, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- TECHNICAL
CENTER, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL -- PETERSBURG, INC.
HLI REALTY, INC.
HLI NETHERLANDS HOLDINGS, INC.
▇▇▇▇▇ LEMMERZ INTERNATIONAL IMPORT, INC.
CMI -- QUAKER ALLOY, INC.
By: __________________________________________
Name: ___________________________________
Title: __________________________________
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: __________________________________________
Name: ___________________________________
Title: __________________________________
LENDERS:
CIBC, INC.
By: __________________________________________
Name: ___________________________________
Title: __________________________________
BANK OF AMERICA, N.A.
By: __________________________________________
Name: ___________________________________
Title: __________________________________
CITICORP USA, INC.
By: __________________________________________
Name: ___________________________________
Title: __________________________________
EXHIBITS AND SCHEDULES OMITTED
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 1. DEFINITIONS..................................................................................... 1
SECTION 1.1 ..............................................................................Defined Terms 1
SECTION 1.2 ............................................................................Terms Generally 22
SECTION 2. AMOUNT AND TERMS OF CREDIT...................................................................... 22
SECTION 2.1 ..................................................................Commitment of the Lenders 22
SECTION 2.2 ..........................................................................Letters of Credit 23
SECTION 2.3 ...................................................................................Issuance 25
SECTION 2.4 ............................................Nature of Letter of Credit Obligations Absolute 25
SECTION 2.5 ............................................................................Making of Loans 25
SECTION 2.6 ................................Repayment of Loans and Unreimbursed Draws; Evidence of Debt 26
SECTION 2.7 ..........................................................................Interest on Loans 27
SECTION 2.8 ...........................................................................Default Interest 27
SECTION 2.9 ............................................Optional Termination or Reduction of Commitment 27
SECTION 2.10 ................................................................Alternate Rate of Interest 27
SECTION 2.11 ......................................................................Refinancing of Loans 28
SECTION 2.12 ..............................................Mandatory Prepayment; Commitment Termination 28
SECTION 2.13 ....................................Optional Prepayment of Loans; Reimbursement of Lenders 30
SECTION 2.14 .............................................Reserve Requirements; Change in Circumstances 31
SECTION 2.15 ........................................................................Change in Legality 32
SECTION 2.16 ....................................................................ProRata Treatment etc. 32
SECTION 2.17 .....................................................................................Taxes 33
SECTION 2.18 ..............................................................................Certain Fees 35
SECTION 2.19 .....................................................................Unused Commitment Fee 35
SECTION 2.20 .....................................................................Letter of Credit Fees 35
SECTION 2.21 ............................................................................Nature of Fees 35
SECTION 2.22 ........................................................................Priority and Liens 36
SECTION 2.23 ....................................................................Use of Cash Collateral 37
SECTION 2.24 ..........................................................................Right of Set-Off 37
SECTION 2.25 .............................................Security Interest in Letter of Credit Account 37
SECTION 2.26 ....................................................................Payment of Obligations 38
SECTION 2.27 ..........................................................No Discharge; Survival of Claims 38
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 2.28 ............................................................Replacement of Certain Lenders 38
SECTION 2.29 .....................................................Loans to Certain Foreign Subsidiaries 38
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................................................. 39
SECTION 3.1 .................................................................Organization and Authority 39
SECTION 3.2 ..............................................................................Due Execution 39
SECTION 3.3 ............................................................................Statements Made 40
SECTION 3.4 .......................................................................Financial Statements 40
SECTION 3.5 ..................................................................................Ownership 41
SECTION 3.6 ......................................................................................Liens 41
SECTION 3.7 ........................................................................Compliance with Law 41
SECTION 3.8 ..................................................................................Insurance 41
SECTION 3.9 .................................................................................The Orders 41
SECTION 3.10 ...........................................................................Use of Proceeds 41
SECTION 3.11 ................................................................................Litigation 42
SECTION 3.12 .......................................................................Labor Controversies 42
SECTION 3.13 ....................................................................................ERISA. 42
SECTION 4. CONDITIONS OF LENDING........................................................................... 42
SECTION 4.1 ..........................Conditions Precedent to Initial Loan and Initial Letter of Credit 42
SECTION 4.2 ................................Conditions Precedent to Each Loan and Each Letter of Credit 46
SECTION 5. AFFIRMATIVE COVENANTS........................................................................... 47
SECTION 5.1 ........................................................Financial Statements, Reports, etc. 47
SECTION 5.2 ..................................................................................Existence 50
SECTION 5.3 ..................................................................................Insurance 50
SECTION 5.4 ......................................................................Obligations and Taxes 50
SECTION 5.5 ...........................................................Notice of Event of Default, etc. 51
SECTION 5.6 ................................................................Access to Books and Records 51
SECTION 5.7 ......................................................Maintenance of Cash Management System 52
SECTION 5.8 .................................................................Borrowing Base Certificate 52
SECTION 5.9 .....................................................................Restructuring Advisor. 53
SECTION 5.10 ......................................................................Compliance with Laws 53
SECTION 5.11 .......................................................................Final Order Opinion 53
SECTION 5.12 ...........................................Repatriation of Funds from Foreign Subsidiaries 53
SECTION 6. NEGATIVE COVENANTS.............................................................................. 53
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6.1 ......................................................................................Liens 53
SECTION 6.2 ...............................................................................Merger, etc 53
SECTION 6.3 ...............................................................................Indebtedness 54
SECTION 6.4 .......................................................................Capital Expenditures 54
SECTION 6.5 .....................................................................................EBITDA 55
SECTION 6.6 ...........................................................Guarantees and Other Liabilities 56
SECTION 6.7 ..........................................................................Chapter 11 Claims 56
SECTION 6.8 ...................................................................Dividends; Capital Stock 56
SECTION 6.9 ...............................................................Transactions with Affiliates 56
SECTION 6.10 ...........................................................Investments, Loans and Advances 56
SECTION 6.11 .....................................................................Disposition of Assets 57
SECTION 6.12 ........................................................................Nature of Business 57
SECTION 6.13 ........................................................Limitation on Certain Restrictions 57
SECTION 6.14 ........................................Right of Subrogation among Borrower and Guarantors 57
SECTION 6.15 .................................................................Securitization Subsidiary 57
SECTION 7. EVENTS OF DEFAULT............................................................................... 57
SECTION 7.1 ..........................................................................Events of Default 57
SECTION 7.2 .......................................................................Application of Funds 61
SECTION 8. THE ADMINISTRATIVE AGENT........................................................................ 61
SECTION 8.1 .....................................................Administration by Administrative Agent 61
SECTION 8.2 ......................................................................Advances and Payments 62
SECTION 8.3 .........................................................................Sharing of Setoffs 62
SECTION 8.4 ..............................................................Agreement of Required Lenders 62
SECTION 8.5 ..........................................................Liability of Administrative Agent 63
SECTION 8.6 ..........................................................Reimbursement and Indemnification 63
SECTION 8.7 .............................................................Rights of Administrative Agent 63
SECTION 8.8 ...............................................Independent Lenders; Relations Among Lenders 64
SECTION 8.9 .........................................................................Notice of Transfer 64
SECTION 8.10 ............................................................Successor Administrative Agent 64
SECTION 9. GUARANTY........................................................................................ 64
SECTION 9.1 ...................................................................................Guaranty 64
SECTION 9.2 ..................................................................No Impairment of Guaranty 65
SECTION 9.3 ................................................................................Subrogation 65
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 10. MISCELLANEOUS................................................................................... 66
SECTION 10.1 ...................................................................................Notices 66
SECTION 10.2 ...............................Survival of Agreement, Representations and Warranties, etc. 66
SECTION 10.3 ....................................................................Successors and Assigns 67
SECTION 10.4 ...........................................................................Confidentiality 69
SECTION 10.5 ..................................................................................Expenses 69
SECTION 10.6 .................................................................................Indemnity 69
SECTION 10.7 ....................................................................Choice of Law; Waivers 70
SECTION 10.8 .................................................................................No Waiver 70
SECTION 10.9 .....................................................................Extension of Maturity 70
SECTION 10.10 .........................................................................Amendments, etc. 70
SECTION 10.11 .............................................................................Severability 71
SECTION 10.12 .................................................................................Headings 71
SECTION 10.13 .................................................Execution in Counterparts; Effectiveness 72
SECTION 10.14 ........................................................Prior Agreements; Jointly Drafted 72
SECTION 10.15 .......................................................................Further Assurances 72
SECTION 10.16 .....................................................................Waiver of Jury Trial 72
SECTION 10.17 ...............................................Subordination of Intercompany Indebtedness 72
SECTION 10.18 .....................................................................Foreign Subsidiaries 73
SECTION 10.19 ....................................................................Marshaling; Recapture 73
SECTION 10.20 ..................................................................Borrowing Base Addendum 73
Annex A -- Commitment Amounts
Exhibit A-1 -- Form of Interim Order
Exhibit A-2 -- Form of Final Order
Exhibit B -- Form of Security and Pledge Agreement
Exhibit C -- Form of Borrowing Base Certificate
Exhibit D -- Form of Assignment and Acceptance
Schedule 3.5 -- Subsidiaries
Schedule 3.6 -- Liens
Schedule 3.11 -- Litigation
Schedule 3.12 -- Intellectual Property
Schedule 3.13 -- Labor Controversies
Schedule 6.3 -- Existing Indebtedness of Foreign Subsidiaries
Schedule 6.11 -- Assets Eligible For Sale
Schedule 6.13 -- Borrower Transaction Restrictions