_________________________________________________________________
_________________________________________________________________
REPUBLIC AUTOMOTIVE PARTS, INC.
$50,000,000
REVOLVING CREDIT AGREEMENT
WITH
COMERICA BANK
AS AGENT
March 31, 1997
_________________________________________________________________
_________________________________________________________________
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
2. THE INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . 9
2.1 Commitment . . . . . . . . . . . . . . . . . . . . . 9
2.2 Note . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Maturity . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Requests for Advance . . . . . . . . . . . . . . . . 9
2.5 Disbursement of Advances . . . . . . . . . . . . . . 10
2.6 Commitment Fees. . . . . . . . . . . . . . . . . . . 10
2.7 Unutilized Commitment Designations . . . . . . . . . 11
2.8 Utilized Commitment Designations . . . . . . . . . . 11
2.9 Optional Reduction or Termination
of Revolving Loan Commitment....................... 11
2.10 Purpose of Advances. . . . . . . . . . . . . . . . . 12
2.11 Prepayment and Readvances. . . . . . . . . . . . . . 12
3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . 12
3.1 Letters of Credit. . . . . . . . . . . . . . . . . . 12
3.2 Conditions to Issuance . . . . . . . . . . . . . . . 12
3.3 Participations in Letters of Credit. . . . . . . . . 13
3.4 Letter of Credit Fees. . . . . . . . . . . . . . . . 14
3.5 Issuance Fees. . . . . . . . . . . . . . . . . . . . 14
3.6 Draws Under Letters of Credit. . . . . . . . . . . . 14
3.7 Funding of Letter of Credit Payment as Advance . . . 15
3.8 Obligations Irrevocable. . . . . . . . . . . . . . . 15
3.9 Risk Under Letters of Credit . . . . . . . . . . . . 16
3.10 Indemnification. . . . . . . . . . . . . . . . . . . 17
3.11 Right of Reimbursement . . . . . . . . . . . . . . . 18
4. INTEREST, FEE AND INTEREST CALCULATION, INTEREST PERIODS,
CONVERSIONS, PREPAYMENTS. . . . . . . . . . . . . . . . . 18
4.1 Interest . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Calculations . . . . . . . . . . . . . . . . . . . . 18
4.3 Conversion and Renewal of Advances . . . . . . . . . 19
4.4 Prepayments. . . . . . . . . . . . . . . . . . . . . 19
5. SPECIAL PROVISIONS FOR ADVANCES . . . . . . . . . . . . . 19
5.1 Reimbursement of Prepayment Costs. . . . . . . . . . 19
5.2 Agent's Eurodollar Lending Office. . . . . . . . . . 20
5.3 Circumstances Affecting Eurocurrency-based
Availability....................................... 20
5.4 Laws Affecting Eurodollar-based Loan Availability. . 20
5.5 Increased Costs. . . . . . . . . . . . . . . . . . . 20
5.6 Margin Adjustments . . . . . . . . . . . . . . . . . 21
6. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Payment Procedure. . . . . . . . . . . . . . . . . . 22
6.2 Application of Proceeds. . . . . . . . . . . . . . . 23
6.3 Pro-rata Recovery. . . . . . . . . . . . . . . . . . 23
6.4 Deposits and Accounts. . . . . . . . . . . . . . . . 23
6.5 Net Payments . . . . . . . . . . . . . . . . . . . . 24
6.6 Tax Treaty Certificate . . . . . . . . . . . . . . . 24
7. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Authority Documents. . . . . . . . . . . . . . . . . 25
8. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 25
8.1 Organization . . . . . . . . . . . . . . . . . . . . 25
8.2 Authorization. . . . . . . . . . . . . . . . . . . . 26
8.3 Non-Contravention. . . . . . . . . . . . . . . . . . 26
8.4 Litigation . . . . . . . . . . . . . . . . . . . . . 26
8.5 Encumbrances . . . . . . . . . . . . . . . . . . . . 26
8.6 Subsidiaries . . . . . . . . . . . . . . . . . . . . 26
8.7 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 26
8.8 Financial Information. . . . . . . . . . . . . . . . 26
8.9 Environmental Compliance . . . . . . . . . . . . . . 27
8.10 Environmental Proceedings. . . . . . . . . . . . . . 27
8.11 Environmental Clean-ups. . . . . . . . . . . . . . . 27
8.12 Environmental Orders . . . . . . . . . . . . . . . . 27
9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . 27
9.1 Reporting Requirements . . . . . . . . . . . . . . . 28
9.2 Net Working Capital. . . . . . . . . . . . . . . . . 28
9.3 Effective Tangible Net Worth . . . . . . . . . . . . 28
9.4 Cash Flow Coverage . . . . . . . . . . . . . . . . . 29
9.5 Leverage Ratio . . . . . . . . . . . . . . . . . . . 29
9.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 29
9.7 Insurance. . . . . . . . . . . . . . . . . . . . . . 29
9.8 Books and Records. . . . . . . . . . . . . . . . . . 29
9.9 Notice of Defaults . . . . . . . . . . . . . . . . . 29
9.10 Maintenance of Status. . . . . . . . . . . . . . . . 29
9.11 Compliance with ERISA. . . . . . . . . . . . . . . . 29
9.12 Notice of ERISA Events . . . . . . . . . . . . . . . 30
10. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 30
10.1 Mergers/Consolidations . . . . . . . . . . . . . . . 30
10.2 Guaranties . . . . . . . . . . . . . . . . . . . . . 30
10.3 Acquisitions . . . . . . . . . . . . . . . . . . . . 31
10.4 Liens. . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 Investments/Loans. . . . . . . . . . . . . . . . . . 33
10.6 Dividends. . . . . . . . . . . . . . . . . . . . . . 33
11. ENVIRONMENTAL PROVISIONS. . . . . . . . . . . . . . . . . 34
11.1 Environmental Compliance . . . . . . . . . . . . . . 34
11.2 Notice of Environmental Matters. . . . . . . . . . . 34
11.3 Notice of Environmental Warranties . . . . . . . . . 34
11.4 Testing and Reports. . . . . . . . . . . . . . . . . 34
11.5 Environmental Audits and Findings. . . . . . . . . . 34
11.6 Indemnification. . . . . . . . . . . . . . . . . . . 35
12. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . 35
12.1 Payments . . . . . . . . . . . . . . . . . . . . . . 35
12.2 Other Defaults . . . . . . . . . . . . . . . . . . . 35
12.3 Insolvency . . . . . . . . . . . . . . . . . . . . . 36
12.4 Cash Collateral. . . . . . . . . . . . . . . . . . . 37
13. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.1 Appointment of Agent . . . . . . . . . . . . . . . . 37
13.2 Deposit Account with Agent . . . . . . . . . . . . . 37
13.3 Exculpatory Provisions . . . . . . . . . . . . . . . 37
13.4 Successor Agents . . . . . . . . . . . . . . . . . . 38
13.5 Right of Agent as Bank . . . . . . . . . . . . . . . 38
13.6 Credit Decisions . . . . . . . . . . . . . . . . . . 38
13.7 Notices by Agent . . . . . . . . . . . . . . . . . . 38
13.8 Agent's Fees . . . . . . . . . . . . . . . . . . . . 38
13.9 Nature of Agency . . . . . . . . . . . . . . . . . . 38
13.10 Actions; Confirmation of Agent's Authority to
Act in Event of Default. . . . . . . . . . . . . . 38
13.11 Authority of Agent to Enforce Notes
And This Agreement................................ 39
14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 39
14.1 Law of Michigan; Submission to Jurisdiction. . . . . 39
14.2 Agent's Costs and Expenses . . . . . . . . . . . . . 39
14.3 Notices. . . . . . . . . . . . . . . . . . . . . . . 40
14.4 Successors and Assigns . . . . . . . . . . . . . . . 40
14.5 Indulgence . . . . . . . . . . . . . . . . . . . . . 41
14.6 Counterparts . . . . . . . . . . . . . . . . . . . . 41
14.7 Entire Agreement; Amendments; Waivers; Consents. . . 41
14.8 Confidentiality. . . . . . . . . . . . . . . . . . . 42
14.9 Interest . . . . . . . . . . . . . . . . . . . . . . 42
14.10 Jury Waiver ..... . . . . . . . . . . . . . . . . . 43
14.11 Effective Upon Execution. . . . . . . . ..... . . . 43
REPUBLIC AUTOMOTIVE PARTS, INC.
REVOLVING CREDIT AGREEMENT
THIS AGREEMENT, made as of the 31st day of March, 1997, between REPUBLIC
AUTOMOTIVE PARTS, INC., a Delaware corporation ("Borrower"), the Banks
(defined below) from time to time party hereto, and COMERICA BANK, a Michigan
banking corporation as agent for the Banks (in such capacity, "Agent").
WHEREAS, pursuant to a certain Fifth Amended and Restated Credit
Agreement dated as of July 5, 1995 between Company and Comerica Bank ("Prior
Agreement"), Comerica Bank has made certain loans and advances to Borrower and
issued certain letters of credit for the accounts of ▇▇▇▇▇▇▇▇,
WHEREAS, ▇▇▇▇▇▇▇▇ has requested Agent and the Banks to extend and renew
loans and advances outstanding under the Prior Agreement and to provide
Borrower with facilities for additional loans and extensions of credit to
Borrower and for the issuance of letters of credit for the account of
▇▇▇▇▇▇▇▇, and
WHEREAS, Agent and the Banks are willing to do so, but only on the terms
and conditions of this Agreement;
NOW, Therefore, IT IS AGREED that the Prior Agreement is hereby amended
and restated as follows:
1. DEFINITIONS
For the purposes of this Agreement the following terms (when
capitalized) will have the following meanings:
1.1 "Acquisition Capital Expenditures" shall mean with respect to any
period, capital expenditures during such period which are made as part of an
acquisition by Borrower or a Subsidiary which is permitted pursuant to the
provisions of Section 10.3.
1.2 "Activation Fee" shall mean the fee payable to the Bank in
connection with each designation by Borrower, pursuant to Section 2.8 hereof,
of all or any portion of the Unutilized Commitment as Utilized Commitment, in
the amount of .025 percent of the portion of the Unutilized Commitment thereby
designated as Utilized Commitment.
1.3 "Advance" shall mean a borrowing requested by ▇▇▇▇▇▇▇▇ and made by
the Banks, or otherwise made by ▇▇▇▇▇ in the absence of Borrower's request
pursuant to Section 3.7 hereof.
1.4 "Affiliate" shall mean, when used with respect to any person, any
other person which, directly or indirectly, controls or is controlled by or is
under common control with such person. For purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any person, shall mean
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
1.5 "Agent" shall mean Comerica Bank in its capacity as Agent
hereunder or any successor appointed in accordance with Section 13.4 hereof.
1.6 "Agent's Fees" shall mean those fees and expenses required to be
paid by Borrower to Agent under Section 13.8 hereof.
1.7 "Agreement" shall mean this Agreement as amended from time to time
in accordance with the terms hereof.
1.8 "Alternate Base Rate" shall mean, for any day, a rate per annum
equal to the Federal Funds Effective Rate in effect on such day plus one
percent (1%).
1.9 "Applicable Interest Rate" shall mean the Eurodollar-based Rate or
the Prime-based Rate, as selected by a Borrower from time to time or otherwise
determined pursuant to the terms and conditions of this Agreement.
1.10 "Assignment Agreement" shall mean an assignment agreement executed
by a Bank and delivered to Agent pursuant to Section 14.4(a) hereof, in the
form attached as Exhibit "A" hereto.
1.11 "Banks" shall mean each lender signatory hereto and each Person
who becomes a party hereto pursuant to Section 14.4(a) hereof.
1.12 "Business Day" shall mean any day on which commercial banks are
open for domestic and international business (including dealings in dollar
deposits in the interbank market) in Detroit and London.
1.13 "Cash Flow Coverage Ratio" shall mean as of any date of
determination, a ratio, the numerator of which is earnings for the four
preceding fiscal quarters ending as of such date of determination before
interest expense for such period, taxes for such period and depreciation and
amortization for such period, plus the increase if any in the LIFO Reserve
during such period and the denominator of which is interest expense and taxes
for such period, plus an amount equal to all scheduled payments of principal
with respect to Long Term Debt during such period, plus all scheduled payments
with respect to capitalized leases during such period, plus the amount of all
capital expenditures (except Acquisition Capital Expenditures) during such
period, all as determined in accordance with GAAP on a consolidated basis for
Borrower and its Subsidiaries. In determining the Cash Flow Coverage Ratio,
principal payments with respect to Advances shall be excluded.
1.14 "Closing Date" shall mean the date, on or before March ___, 1997,
on which the conditions of Section 7.1 hereof have been satisfied.
1.15 "Commitment Fees" shall mean the commitment fees payable to Agent
for distribution to the Banks pursuant to Section 2.6 hereof.
1.16 "Default" shall mean an event, occurrence or circumstance which,
with the giving of notice and/or passage of time, would constitute an Event of
Default.
1.17 "Default Rate" shall mean three percent (3%) plus the Applicable
Interest Rate.
1.18 "Documents" shall mean this Agreement, the Notes, the Guaranties,
the Letter of Credit Agreements, the subordination agreements relating to
Subordinated Debt, and all other agreements and instruments delivered to Banks
pursuant to this Agreement or any of the foregoing.
1.19 "Dollars" and the sign "$" shall mean lawful money of the United
States of America.
1.20 "EBITDA" shall mean, as of the last day of any fiscal quarter, for
the four fiscal quarters immediately preceding any calculation thereof, net
income (before extraordinary items) plus the aggregate amounts deducted in
determining net income for such period in respect of federal, state and local
income and franchise taxes, interest expense and depreciation and
amortization, all determined on a consolidated basis in accordance with GAAP.
1.21 "Effective Tangible Net Worth" shall mean, as of the date of any
determination thereof, the sum of Tangible Net Worth and the principal amount
of Subordinated Debt then outstanding.
1.22 "Environmental Laws" shall mean all federal, state and local laws
including statutes, regulations, ordinances, codes, rules, and other
governmental restrictions and requirements, relating to environmental
pollution, contamination or other impairment of any nature, any hazardous or
other toxic substances of any nature, whether liquid, solid and/or gaseous,
including smoke, vapor, fumes, soot, acids, alkalis, chemicals, wastes,
by-products, and recycled materials. These Environmental Laws shall include
but not be limited to the Federal Solid Waste Disposal Act, the Federal Clean
Air Act, the Federal Clean Water Act, the Federal Resource Conservation and
Recovery Act of 1976, the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act of 1986, regulations of the Environmental Protection
Agency, regulations of the Nuclear Regulatory Agency, regulations of any state
department of natural resources or state environmental protection agency now
or at any time hereafter in effect and local health department ordinances.
1.23 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor act or code. Section references to ERISA
are to ERISA as in effect as of the date of this Agreement and any subsequent
amendment, supplement or substitution thereof.
1.24 "Eurodollar-based Advance" shall mean an Advance which bears
interest at a rate based on the Eurodollar-based Rate.
1.25 "Eurodollar-based Rate" shall mean a per annum interest rate equal
to the Eurodollar Rate, plus the Margin from time to time in effect.
1.26 "Eurodollar Lending Office" shall mean Agent's office located at
Grand Cayman or such other branch of Agent, domestic or foreign, as it may
hereafter designate as its Eurodollar Lending Office by notice to Borrower.
1.27 "Eurodollar Rate" shall mean:
(a) the per annum interest rate at which the Eurodollar Lending
Office offers deposits to prime banks in the eurocurrency
market in an amount comparable to the relevant Eurodollar-based
Advance and for a period equal to the relevant Interest Period
at approximately 11:00 a.m. Detroit time two (2) Business Days
prior to the first day of such Interest Period; divided by,
(b) a percentage (expressed as a decimal) equal to one hundred
percent (100%) minus that percentage which is in effect on
the date for an Advance of a Eurodollar-based Advance as
prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum
reserve requirements for a member bank of the Federal
Reserve System with deposits exceeding five billion dollars
in respect of "Eurocurrency Liabilities" (or in respect of
any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar-based
Advances is determined or any category of extensions of
credit or other assets which includes loans by a non-United
States Eurodollar Lending Office of such a bank to United
States residents).
1.28 "Event of Default" shall mean any of the Events of Default
specified in Sections 12.1 through 12.3 hereof.
1.29 "Federal Funds Effective Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on
such transactions received by Agent from three Federal funds brokers of
recognized standing selected by it.
1.30 "GAAP" shall mean generally accepted accounting principles in the
United States of America consistent with those used in preparation of the
financial statements of Borrower required under this Agreement.
1.31 "Guaranty" shall mean the guaranty agreements executed and
delivered to the Agent by each of the now existing or hereafter formed or
acquired Subsidiaries of Borrower, in each case, guarantying to Agent and to
each Bank the payment and performance of indebtedness and obligations of
Borrower to Agent and the Banks.
1.32 "Highest Lawful Rate" shall mean, with respect to each Bank, the
maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on its Note
or other indebtedness under laws applicable to such Bank which are in effect
as of the date hereof or, to the extent allowed by law, under such laws
applicable to such Bank which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws allow as of the
date hereof.
1.33 "Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money (including
Subordinated Debt), (ii) the face amount of all letters of credit (other than
trade letters of credit) issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iii) all capitalized lease
obligations of such Person, (iv) all obligations of such Person under interest
rate agreements, and (v) all obligations which have the economic effect of a
guaranty of Indebtedness of the types described in clauses (i) through (iv)
above, regardless of characterization.
1.34 "Interest Period" shall mean an interest period:
(a) in the case of any Advance which is a Prime-based Advance,
an initial period beginning on the date of the Advance
thereof and ending on the next occurring Quarterly Date and
thereafter, successive Interest Periods beginning on the day
after each Quarterly Date and ending on each succeeding
Quarterly Date; and
(b) in the case of any Advance which is a Eurodollar-based
Advance, one (1), two (2), three (3) or six (6) months as
selected by ▇▇▇▇▇▇▇▇.
provided however, that:
(i) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the
next succeeding Business Day unless the next
succeeding Business Day falls in another calendar
month, in which case, such Interest Period shall end
on the immediately preceding Business Day;
(ii) when an Interest Period for a Eurodollar-based Advance
begins on a day which has no numerically corresponding
day in another calendar month during which such
Interest Period is to end, it shall end on the last
Business Day of such other calendar month; and
(iii) no Interest Period for any Advance shall extend beyond
the Maturity Date.
1.35 "Letter(s) of Credit" shall mean any standby letters of credit:
(a) issued pursuant to the Prior Agreement and unexpired as of
the Closing Date; and
(b) hereafter issued by Agent at the request of or for the
account of Borrower pursuant to Article 3 hereof.
1.36 "Letter of Credit Agreement" shall mean, in respect of each Letter
of Credit, the application of Borrower requesting Agent to issue such Letter
of Credit (including the terms and conditions on the reverse side thereof or
otherwise provided therein), in the form and substance acceptable to Agent
providing, however, that "Letter of Credit Agreement" shall not include any
provision of any such application which conflicts or is inconsistent with
provisions of this Agreement and, in the event of any such conflict or
inconsistency, the provisions of this Agreement shall control.
1.37 "Letter of Credit Fees" shall mean the fees payable to Agent for
the account of the Banks in connection with Letters of Credit pursuant to
Section 3.4 hereof.
1.38 "Letter of Credit Maximum" shall mean, as of any date, the lesser
of:
(a) Five Million Dollars ($5,000,000); or
(b) the Utilized Commitment minus the sum of the aggregate
principal amount of outstanding Advances.
1.39 "Letter of Credit Obligation" shall mean the obligation of
Borrower under each Letter of Credit Agreement to reimburse the Agent for each
payment made by the Agent under the Letter of Credit issued pursuant to such
Letter of Credit Agreement, together with all other sums, fees, charges and
amounts which may be owing under such Letter of Credit Agreement.
1.40 "Letter of Credit Payment" shall mean any amount paid or required
to be paid by the Agent in its capacity as issuer of a Letter of Credit as a
result of a draw against any Letter of Credit.
1.41 "Leverage Ratio" shall mean the ratio of the Indebtedness
(determined on a consolidated basis in accordance with GAAP) to EBITDA.
1.42 "Long Term Debt" shall mean the consolidated long term
indebtedness of Company and the Subsidiaries, excluding all Subordinated Debt,
but including any unfunded ERISA liability and capitalized lease.
1.43 "Majority Banks" shall mean:
(a) so long as there are fewer than three (3) Banks or any one
Bank has a Percentage greater than thirty five percent
(35%), all of the Banks; and
(b) at all other times, the Banks whose Percentages constitute
sixty-five percent (65%) or more.
1.44 "Margin" shall mean, as of any date of determination thereof, the
applicable interest rate margin, determined in accordance with the provisions
of Section 5.6 hereof by reference to the appropriate columns in the pricing
matrix attached to this Agreement as Schedule 5.6.
1.45 "Material Adverse Change or Effect" shall mean with respect to any
matter that such matter could reasonably be expected to materially and
adversely affect the business, properties, condition (financial or otherwise),
or results of operations of Borrower and its Subsidiaries, in each case
considered as a whole.
1.46 "Maturity Date" shall mean April 30, 2001.
1.47 "Net Working Capital" shall mean the dollar amount computed by
subtracting current liabilities (excluding any payments under the Notes which
shall fall due within one year) from current assets; provided, however, for
purposes of this computation, all prepaid items shall be excluded from current
assets.
1.48 "Notes" shall mean the promissory notes made by Borrower to the
Banks as evidence of Advances pursuant to Section 2.2 hereof.
1.49 "Pension Plans" shall mean any pension plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) which is or has been
maintained by or to which contributions are or have been made by Borrower or
any ERISA Affiliate.
1.50 "Percentage" shall mean, with respect to each Bank, the percentage
set forth opposite its name on Schedule 1.50 hereto, as such Percentages may
change from time to time pursuant to Section 14.4(a) hereto.
1.51 "Person" shall mean an individual, corporation, partnership,
trust, incorporated or unincorporated organization, joint venture, joint stock
company, or a government or any agent or political subdivision thereof or
other entity of any kind.
1.52 "Prime Rate" shall mean the per annum interest rate established by
Agent as its prime rate for its borrowers as such rate may vary from time to
time, which rate is not necessarily the lowest rate on loans made by Agent at
any such time.
1.53 "Prime-based Advance" shall mean an Advance which bears interest
at a rate based on the Prime-based Rate.
1.54 "Prime-based Rate" shall mean, as of any day:
(a) that rate of interest which is the greater of: (i) the Prime
Rate; or (ii) the Alternate Base Rate; plus
(b) the Margin then in effect for Prime-based Advances.
1.55 "Quarterly Net Earnings" shall mean as of any date of
determination the positive net earnings of Borrower computed for each fiscal
quarter in which Borrower has positive net earnings, commencing with the
fiscal quarter beginning on January 1, 1997 and, excluding in the
determination thereof, each fiscal quarter for which Borrower has net losses.
1.56 "Quarterly Date" shall mean the last Business Day of each March,
June, September and December.
1.57 "Request for Advance" shall mean a request for an Advance under
the Notes issued by Borrower under this Agreement in the form annexed hereto
as Exhibit "B".
1.58 "Revolving Commitment" shall mean Fifty Million Dollars
($50,000,000) or such lesser amount to which it may be reduced pursuant to
Section 2.9 hereof.
1.59 "Subordinated Debt" shall mean Indebtedness of Borrower or a
Subsidiary which is subordinated to the Indebtedness of Borrower to Agent and
the Banks, on terms and conditions, and pursuant to a written subordination
agreement, satisfactory to Agent and the Banks, including, without limitation,
Indebtedness of Borrower or its Subsidiaries outstanding on the Closing Date
evidenced by the Subordinated Promissory Notes made by Republic Automotive
Parts Sales, Inc. (i) as of July 7, 1995, to the order of Beacon Auto Parts
Company in the principal amount of Two Million Dollars ($2,000,000), (ii) as
of September 27, 1995 to the order of Prefered Power, Inc. in the principal
amount of Six Hundred Ninety One Thousand Six Hundred Thirty Eight and 95/100
Dollars ($691,638.95), and (iii) as of August 1, 1995 to the order of ▇▇▇▇▇ ▇.
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the principal amount of Two Hundred Thousand Dollars
($200,000).
1.60 "Subsidiary" shall mean a corporation of which more than fifty
percent (50%) of the outstanding voting stock is owned by Borrower, either
directly or indirectly through one or more intermediaries.
1.61 "Tangible Net Worth" shall mean the dollar amount computed by
subtracting total liabilities from total assets of Borrower and the
Subsidiaries on a consolidated basis and subtracting from such amount goodwill
and other intangible assets.
1.62 "Utilized Commitment" shall mean that portion of the Revolving
Commitment designated by Borrower from time to time in writing to Agent
pursuant to Section 2.8 hereof as the active portion thereof and shall be an
amount equal to the Revolving Commitment less the Unutilized Commitment. As of
the date of this Agreement, the Utilized Commitment shall be Fifty Million
Dollars ($50,000,000).
1.63 "Unutilized Commitment" shall mean the amount designated by
Borrower from time to time in writing to Agent pursuant to Section 2.7 hereof
as the inactive portion of the Revolving Commitment, and shall be an amount
equal to the Revolving Commitment less the Utilized Commitment. As of the date
of this Agreement, the Unutilized Commitment shall be $0.
1.64 "Usage" shall mean, as of any day, an amount equal to the
principal sum of all Advances outstanding on such day plus the aggregate face
amount of all unexpired Letters of Credit outstanding on such day.
2. THE INDEBTEDNESS
2.1 Commitment. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make Advances to Borrower, such
Bank's respective Percentage of the Revolving Commitment from time to time
until the Maturity Date to be made at any time during its Advance Period, in
aggregate principal amounts outstanding at any time not to exceed the
Revolving Commitment.
2.2 Note. The Advances shall be evidenced by Notes made by Borrower
to each Bank in principal amounts equal to each Bank's Percentage of the
Revolving Commitment, in the form attached hereto as Exhibit "C".
2.3 Maturity. The Notes, and all principal and interest then
outstanding thereunder, shall mature and become due and payable in full on the
Maturity Date. Each Advance shall be either a Prime-based Advance or a
Eurodollar-based Advance, as the Borrower may elect or as otherwise applicable
pursuant to the provisions hereof. The amount and date of each Advance, its
Applicable Interest Rate, its Interest Period, and the amount and date of any
repayment shall be noted on Agent's records, which records will be presumed
correct absent manifest error.
2.4 Requests for Advance. ▇▇▇▇▇▇▇▇ may request Advances by delivery
to Agent of a Request for Advance, executed by an authorized officer of
Borrower and subject to the following:
(a) each such Request for Advance shall set forth all other
information required on the Request for Advance form;
(b) each such Request for Advance shall be delivered to Agent by
12:00 a.m. (Detroit time) three (3) Business Days prior to
the proposed date of Advance, except in the case of a
Prime-based Advance, for which the Request for Advance must be
delivered by 11:00 a.m. (Detroit time) on such proposed
date;
(c) the principal amount of such Advance, plus the amount of any
outstanding Advance under the same Notes having the same
Applicable Interest Rate and Interest Period shall be at
least: (i) in the case of a Prime-based Advance, One Hundred
Thousand Dollars ($100,000), or a greater integral multiple
of One Hundred Thousand Dollars ($100,000); and (ii) in the
case of a Eurodollar-based Advance, Five Hundred Thousand
Dollars ($500,000) or a greater integral multiple of One
Hundred Thousand Dollars ($100,000);
(d) a Request for Advance, once delivered to Agent, shall not be
revocable by Borrower;
(e) upon the making of the Advance (i) there shall be no more
than five (5) Eurodollar-based Advances in effect and (ii)
the Usage shall not exceed the amount of the Utilized
Commitment; and
(f) each Request for Advance shall constitute a certification by
the Borrower as of the date thereof that all of the
conditions set forth in Section 7 hereof are satisfied as of
the date of such request and shall be satisfied as of the
date such Advance is requested;
2.5 Disbursement of Advances. Upon receiving any Request for Advance
under Section 2.4 hereof Agent shall promptly notify each Bank by wire, telex
or by telephone, including facsimile transmission (confirmed by wire or telex)
of the date for such Advance, its Applicable Interest Rate and the amount of
the Advance to be made by each Bank pursuant to its Percentage. Each Bank
shall, not later than 2:00 p.m. (Detroit time) on the date of such Advance,
make available the amount of its Percentage of the Advance in immediately
available funds to Agent, at the office of Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇. Subject to submission of an executed Request for
Advance without exceptions noted in the compliance certification therein,
Agent shall make available to Borrower, not later than 4:00 p.m. (Detroit
time) on such date, the aggregate of the amounts so received by it in like
funds by credit to an account of Borrower, maintained with Agent or to such
other account or third party as Borrower may direct. Unless Agent shall have
been notified by any Bank prior to the funding of any proposed Advance that
such Bank does not intend to make its Percentage of the Advance available,
Agent may assume that such Bank has made such amount available on such date
and may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If such amount is not in fact made available to Agent
by such Bank, Agent shall be entitled to recover such amount on demand from
such Bank. If such Bank does not pay such amount forthwith upon Agent's
demand therefor, the Agent shall be entitled to notify Borrower and, upon such
notice Borrower shall repay such amount to Agent. Agent shall also be
entitled to recover from such Bank or Borrower interest on such amount in
respect of each day from the date such amount was made available by Agent to
the date such amount is recovered by Agent, at a rate per annum equal to the
Applicable Interest Rate, in the case of Borrower and the Federal Funds
Effective Rate in the case of a Bank. The obligation of any Bank to make any
Advance shall not be affected by the failure of any other Bank to make any
Advance and no Bank shall have any liability to Borrower, the Agent, or any
other Bank for another Bank's failure to make any Advance hereunder.
2.6 Commitment Fees. On each Quarterly Date, the Borrower shall pay
to the Agent on behalf of Banks, quarterly in arrears, Commitment Fees in the
amount equal to the sum of: (a) the Margin applicable for Commitment Fees
during such quarterly period multiplied by the average daily amount by which
the Utilized Commitment from time-to-time in effect during such quarterly
period exceeded the Usage during such quarterly period; plus, (b) one-half
(1/2) of the Margin applicable for Commitment Fees during such quarterly
period multiplied by the daily average amount of the Unutilized Commitment
from time-to-time in effect during such quarterly period. Upon receipt of
such payment, Agent shall make prompt payment to each Bank of its share of
such Commitment Fees, based upon the average daily unused portion of the
Banks' respective Percentages of the Utilized Commitment during the quarter
then ended (in the case of the portion of such Commitment Fees described in
clause (a) above) and their respective Percentages (in the case of the portion
of such Commitment Fees described in clause (b) above.) The Commitment Fees
shall be computed on the basis of a year of three hundred sixty (360) days and
assessed for the actual number of days elapsed and shall not be refundable
under any circumstances.
2.7 Unutilized Commitment Designations. Provided that no Default or
Event of Default is then existing Borrower may at any time and from time to
time, upon at least three (3) Business Days' prior written notice to the
Agent, subject to the provisions of Section 2.10, designate a portion of the
Revolving Commitment, to be a portion of the Unutilized Commitment, provided
that (a) each such designation shall be in an aggregate amount equal to at
least One Million Dollars ($1,000,000) or a larger amount in multiples of One
Million Dollars ($1,000,000); (b) upon giving effect to such designation (i)
the Unutilized Commitment shall not exceed Ten Million Dollars ($10,000,000)
and (ii) the Usage shall not exceed the amount of the Utilized Commitment.
The Utilized Commitment shall be reduced by the aggregate amount so designated
under this Section 2.7 as the Unutilized Commitment upon the effective date of
each such designation.
2.8 Utilized Commitment Designations. Provided that no Default or
Event of Default is then existing, Borrower may, upon not less than three (3)
Business Days' prior written notice to the Agent elect to activate all or any
part of the Unutilized Commitment by designating it (or a portion of it) as
Utilized Commitment provided that: (a) on or before the requested date for
activation, Borrower shall pay to the Agent, the Activation Fee; and (b) that
each such activation shall be in an aggregate amount of at least One Million
Dollars ($1,000,000) or a larger amount in multiples of One Million Dollars
($1,000,000). Each activation of the Unutilized Commitment shall remain in
effect (and shall not be reduced by a subsequent designation under Section 2.7
hereof) for a period of not less than ninety (90) consecutive days. Upon the
effectiveness of any activation of the Unutilized Commitment under this
Section 2.8, the Unutilized Commitment shall decrease by the amount so
activated and Agent shall make prompt payment to each of the Banks its prorata
share of the Activation Fee paid by Borrower, in accordance with the
Percentages.
2.9 Optional Reduction or Termination of Revolving Loan Commitment.
Upon at least five (5) Business Days' prior written notice to the Agent, the
Borrower may permanently reduce the Revolving Commitment, in whole or in part,
provided that:
(a) each partial reduction of the Revolving Commitment shall be
in an aggregate amount equal to Five Hundred Thousand
Dollars ($500,000) or an integral multiple thereof;
(b) each reduction or termination shall be accompanied by the
payment of the Commitment Fee accrued on the amount of the
Revolving Commitment so reduced through the date of such
reduction or termination;
(c) the Revolving Commitment, as so reduced, shall not be less
than the sum of undrawn face amount of outstanding Letters
of Credit; and
(d) the Borrower shall prepay Advances in the amount, if any, by
which the Usage as of the date of such reduction exceeds the
amount of the Revolving Commitment as so reduced, together
with interest thereon to the date of prepayment and any
additional amounts required thereon pursuant to Section 5.1
hereof.
2.10 Purpose of Advances. As of the Closing Date, an initial Advance
shall be made, and is deemed to be requested hereby, in the amount necessary
to discharge in full all loans and advances outstanding as of the Closing Date
under and in connection with Prior Agreement other than revolving credit
advances then outstanding under the Prior Agreement with respect to which
either the "Eurodollar-based Rate" or a "Quoted Rate" (each as defined in the
Prior Agreement) is then applicable, which advances shall continue to be held
by the Bank which is party to the Prior Agreement until the expiration of the
"Interest Periods" (as established pursuant to the Prior Agreement) for such
advances, whereupon they shall either be paid by ▇▇▇▇▇▇▇▇ or renewed as
Advances hereunder. Notwithstanding the foregoing, such outstanding Advances
shall be deemed to be Usage hereunder and shall, for the purpose of
acceleration and/or limitations on Advances hereunder, shall be deemed to be
Indebtedness hereunder. Advances hereunder, shall be available to and used by
Borrower for general corporate purposes.
2.11 Prepayment and Readvances. The Advances may be prepaid (subject
to Sections 4.4 and 5.1) from time to time in accordance with the terms of
this Agreement. Amounts so prepaid shall be available for readvance.
3. LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent may, at the request of ▇▇▇▇▇▇▇▇, at any time and from time to
time from the Closing Date until the third (3rd) Business Day prior to the
Maturity Date, issue Letters of Credit for the account of Borrower, in an
aggregate amount at any one time outstanding not to exceed the Letter of
Credit Maximum. Each Letter of Credit shall provide an initial expiration
date not later than the earlier of (a) one (1) year from its date of issuance
(subject to renewals) and that it is available by drafts drawn at sight and
presentation of documents; and (b) three (3) Business Days prior to the
Maturity Date.
3.2 Conditions to Issuance. No Letter of Credit shall be issued
pursuant to Section 3.1 hereof unless, as of the date the issuance of such
Letter of Credit is requested:
(a) the face amount of the Letter of Credit requested, plus the
undrawn face amount of all other outstanding Letters of
Credit will not exceed the Letter of Credit Maximum;
(b) upon the issuance of the Letter of Credit requested, the
Usage will not exceed the amount of the Utilized Commitment;
(c) the execution of the Letter of Credit Agreement with respect
to the Letter of Credit requested will not violate the terms
and conditions of any contract, agreement or other borrowing
of Borrower;
(d) Borrower shall have delivered to Agent, not less than five
(5) Business Days prior to the requested date for issuance,
the Letter of Credit Agreement related thereto, together
with such other documents and materials as may be required
pursuant to the terms thereof, and the terms of the proposed
Letter of Credit shall be satisfactory to Agent;
(e) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin
or restrain Agent from issuing the Letter of Credit, or any
Bank from taking an assignment of its interest pursuant to
Section 3.3 hereof, and no law, rule, regulation, request or
directive (whether or not having the force of law) of or
from any governmental authority shall prohibit or request
that Agent refrain from issuing, or any Bank refrain from
taking an assignment of its interest in the Letter of Credit
requested or letters of credit generally;
(f) Agent shall have received the issuance fee required in
connection with the issuance of such Letter of Credit
pursuant to Section 3.5 hereof; and
(g) all of the conditions set forth in Section 7 hereof are
satisfied as of the date of such request and shall be
satisfied as of the date requested for issuance of such
Letter of Credit.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by Borrower of the matters set forth in this
Section 3.2(a) through (g).
3.3 Participations in Letters of Credit. Immediately upon the
issuance of any Letter of Credit, each Bank shall be deemed to have, without
further action on the part of Agent or any Bank, irrevocably and
unconditionally purchased and received, without recourse or warranty, a
participation in and assignment of Agent's engagement under such Letter of
Credit in an amount equal to each such Bank's Percentage of the face amount of
such Letter of Credit, and Banks hereby absolutely and unconditionally assume,
as primary obligors and not sureties, and unconditionally agree to pay and
discharge when due in accordance with the terms hereof, their respective
Percentages of the Letter of Credit Payments under such Letters of Credit.
3.4 Letter of Credit Fees. ▇▇▇▇▇▇▇▇ agrees to pay to Agent, for the
accounts of the Banks, Letter of Credit Fees with respect to the undrawn face
amount of each Letter of Credit at a per annum rate equal to the Margin then
applicable to Eurodollar-based Advances pursuant to Section 5.6 hereof. Such
fees shall be payable quarterly in arrears on each Quarterly Date and shall be
assessed for the actual number of days elapsed from the date of the issuance
of each Letter of Credit until the earlier of the date of expiration of such
Letter of Credit, or the date of surrender of such Letter of Credit. Upon
receipt of such payment, Agent shall make prompt payment to each Bank of its
share of the Letter of Credit Fees, based upon the Percentage interests of
each such Bank in the Letters of Credit to which such Letters of Credit Fees
relate.
3.5 Issuance Fees. In connection with the Letters of Credit, the
Borrower will pay, for the sole account of the Agent, standard fees and
charges connected with administration, payment and cancellation of or under
Letters of Credit assessed by Agent, at the times, in the amounts and on the
terms separately agreed upon (or to be separately agreed upon from time to
time) between Agent and Borrower.
3.6 Draws Under Letters of Credit.
(a) Upon receipt of any draw against a Letter of Credit, Agent
shall promptly notify Borrower of the amount of such draw
and the date for payment of such draw. The Borrower hereby
agrees to deposit with Agent, on the first Business Day
subsequent to such notice, funds sufficient to pay all
Letter of Credit Obligations with respect to such draws. So
long as all of the conditions set forth in Sections 2.4 and
7 hereof are complied with, Borrower shall be entitled to
fund such deposit with proceeds of an Advance requested in
accordance with Section 2.4 hereof. In the event that
sufficient funds are not deposited with Agent on or before
the date for payment of a draw, Agent shall so notify Banks
and, immediately upon Agent's payment under any Letter of
Credit and for all purposes of this Agreement and the
Documents, the amount paid as a result of such draw: (i)
shall constitute an Advance made by Banks in accordance with
the Percentages in effect on such date, whether or not the
Borrower is then entitled to request Advances under this
Agreement or is in default hereunder or otherwise (and the
Borrower shall not be entitled to refuse any such Advance);
(ii) shall be evidenced by the Notes evidencing the
Advances; (iii) shall bear interest at the Default Rate
applicable to Prime-based Advances until repaid; and (iv)
shall be due and payable on demand.
(b) Any amounts so paid by Agent pursuant to a draft against any
Letter of Credit (regardless of whether it is considered to
be an Advance), with interest thereon as aforesaid, shall be
considered to be an Advance for all purposes of this
Agreement and the Documents, and shall be covered thereby to
the full extent thereof.
(c) In the event that ▇▇▇▇▇▇▇▇ fails to deposit with Agent funds
sufficient to pay Letter of Credit Obligations with respect
to any draw (whether through an Advance requested pursuant
to Section 2.4 or otherwise) on a timely basis, from the
date of Agent's payment on such draw until such Letter of
Credit Obligations resulting from such draw shall have been
paid, Borrower shall not be entitled to request or receive
any direct Advance under Notes or to request or receive any
other Advances or the issuance of Letters of Credit
hereunder.
3.7 Funding of Letter of Credit Payment as Advance. By or before
11:00 a.m. (Detroit Time) on the date for payment of any draw on any Letter of
Credit, Agent shall promptly notify each Bank by wire, telex or by telephone
(confirmed by wire, telecopy or telex) of the amount of such draw (providing
each Bank with a copy of the draft and accompanying certificate), and, if
applicable, the amount of resulting Advances to be made pursuant to Section
3.6(a) hereof. If such an Advance is required pursuant to Section 3.6(a)
hereof, each Bank hereby irrevocably and unconditionally agrees to make
available the amount of its Percentage of such Advance in immediately
available funds to Agent, at the office of Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, no later than 2:00 p.m. (Detroit time) on the date
the Letter of Credit Payments are to be made in connection with such draw. In
the event such draw is not considered to be or is subsequently determined not
to constitute an Advance hereunder, each Bank shall nevertheless be obligated
to purchase from Agent a participation interest in its Percentage of the draw,
for an amount equal to its Percentage thereof. In such event, if such amount
is not in fact made available to Agent by such Bank, as aforesaid, Agent shall
be entitled to recover such amount on demand from such Bank. If such Bank
does not pay such amount forthwith upon Agent's demand therefor, the Agent
shall promptly notify Borrower, and Borrower shall immediately repay such
amount to Agent. Agent shall also be entitled to recover from such Bank or
Borrower, as the case may be, interest on such amount in respect of each day
from the date such amount was paid by Agent pursuant to the draft related
thereto, at a rate per annum equal to: (i) in the case of Borrower, the
Default Rate applicable to Prime-based Advances; and (ii) in the case of a
Bank, the Federal Funds Effective Rate until two (2) Business Days after such
amount was paid by Agent and thereafter, the rate provided for Borrower in
clause (i) of this sentence. The obligation of any Bank to make any Advance
hereunder shall not be affected by the failure of any other Bank to make any
Advance hereunder, or to fund its Percentage of any Letter of Credit Payment,
as the case may be, and no Bank shall have any liability to Borrower, the
Agent, or any other Bank for another Bank's failure to make any such Advance
hereunder, or to fund the Percentage of any other Bank.
3.8 Obligations Irrevocable. The obligations of Borrower to make
payments to Agent with respect to Letter of Credit Obligations under Section
3.6 hereof, and the obligations of Banks to make Advances with respect to and
purchase interests in, Letter of Credit Payments pursuant to Section 3.7
hereof, shall be irrevocable and not subject to any qualification or exception
whatsoever, including:
(a) invalidity or unenforceability of this Agreement or any
other Documents or any portions hereof or thereof;
(b) the existence of any claim, set-off, defense or other right
which Borrower or any Bank may have against a beneficiary
named in a Letter of Credit, Agent, any Bank or any other
Person;
(c) any draft, certificate or any other document presented in
connection with a 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
except to the extent resulting from the gross negligence or
willful misconduct of Agent;
(d) the occurrence of any Default or Event of Default;
(e) payment by the Agent (other than as a result of its gross
negligence or willful misconduct) under any Letter of Credit
against presentation of a draft or accompanying certificate
which does not comply with the terms of the Letter of
Credit;
(f) any failure, omission, delay or lack on the part of Agent or
any party to this Agreement or any of the Documents to
enforce, assert or exercise any right, power or remedy
conferred upon Agent or any such party under this Agreement
or any Documents;
(g) the voluntary or involuntary liquidation, dissolution, sale
or other disposition of all or substantially all the assets
of the Borrower; the receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangements, composition with creditors or readjustment or
other similar proceedings affecting the Borrower, or any of
its assets, or any allegation or contest of the validity of
this Agreement or any of the Documents, in any such
proceedings; and
(h) except to the extent resulting from the gross negligence or
willful misconduct of Agent, any other circumstance or
happening whatsoever, whether or not similar to any of the
foregoing, and any other event or action that would, in the
absence of this clause, result in the release or discharge
by operation of law of the Borrower from the performance or
observance of any obligation, covenant or agreement
contained in this Agreement or any of the Documents.
3.9 Risk Under Letters of Credit.
(a) In assigning and handling of Letters of Credit and any
security therefor, or any documents or instruments given in
connection therewith, Agent shall (as among Agent and the
Banks) have the sole right to take or refrain from taking
any and all actions under or upon the Letters of Credit;
provided, however, that without the prior written
concurrence of the Banks, Agent shall not: (i) amend,
modify, terminate or release any of the obligations of
Borrower respecting Letters of Credit or under any of said
documents or instruments or any security interest, mortgage
or guaranty given with respect thereto; (ii) compromise any
claim or waive any right or privilege against Borrower; or
(iii) settle any litigation respecting any Letter of Credit
or any of said documents and instruments.
(b) Subject to other terms and conditions of this Agreement,
Agent shall hold the Letter of Credit Agreements and the
documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters
of Credit in accordance with Agent's regularly established
practices and procedures and Agent will have no further
obligation with respect thereto. In the administration of
Letters of Credit, Agent shall not be liable (except for the
consequences resulting from its own willful misconduct or
gross negligence) for any action taken or omitted, and shall
be entitled at all times to rely upon on the advice of
counsel, accountants, appraisers and other experts selected
by Agent and Agent may rely upon any notice, communication,
certificate or other statement from Borrower, beneficiaries
of Letters of Credit, or any other Person which Agent
believes to be authentic. Agent will notify the Banks of
the issuance and amounts of Letters of Credit within three
(3) Business Days of each issuance thereof.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Agent makes
no representation and shall have no responsibilities with
respect to: (i) the obligations of Borrower or, the
validity, sufficiency or enforceability of any document or
instrument given in connection therewith, or the taking of
any action with respect to same; (ii) the financial
condition of, any representations made by, or any act or
omission of Borrower or any other Person; or (iii) any
failure or delay in exercising any rights or powers
possessed by Agent in its capacity as issuer of Letters of
Credit.
(d) If at any time Agent shall recover any part of any
unreimbursed amount for any Letter of Credit Obligation, or
any interest thereon, Agent shall receive same for the pro
rata benefit of the Banks in accordance with their
respective Percentage interests therein and shall promptly
deliver to each Bank its share thereof, less Bank's pro rata
share of the costs of such recovery, including court costs
and reasonable attorney's fees. If at any time any Bank
shall receive from any source whatsoever any payment on any
such unreimbursed amount or interest thereon in excess of
such Bank's share of such payment, such Bank will promptly
pay over such excess to Agent for redistribution in
accordance with this Agreement.
3.10 Indemnification. The Borrower hereby indemnifies and holds Agent
and each of the Banks harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses whatsoever which any such party may
incur (or which may be claimed against any such party by any person) by reason
of or in connection with the execution and delivery or transfer of, or payment
or failure to pay under, any Letter of Credit; provided, however, that the
Borrower shall not be required to indemnify Agent or the Banks pursuant to
this Section 3.10 for claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by the willful and wrongful
failure or willful and wrongful misconduct or gross negligence of the Agent or
any Bank. Nothing in this Section 3.10 is intended nor shall be deemed to
limit, reduce or otherwise affect in any manner whatsoever the reimbursement
obligation of Borrower contained in Section 3.6 hereof.
3.11 Right of Reimbursement. Each Bank agrees to reimburse the Agent
on demand, pro rata in accordance their Percentages, for: (i) the reasonable
out-of-pocket costs and expenses of the Agent to be reimbursed by ▇▇▇▇▇▇▇▇
pursuant to any Letter of Credit Agreement or any Letter of Credit, to the
extent not reimbursed by ▇▇▇▇▇▇▇▇; and (ii) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
fees, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against Agent (in its capacity as issuer
of any Letter of Credit) in any way relating to or arising out of this
Agreement, any Letter of Credit, any Letter of Credit Agreement, except to the
extent that such liabilities, losses, costs or expenses were incurred by Agent
as a result of Agent's gross negligence or willful misconduct.
4. INTEREST, FEE AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS,
PREPAYMENTS
4.1 Interest. The Advances hereunder shall bear interest from the
date thereof on the unpaid principal balance thereof from time to time
outstanding at the Applicable Interest Rates, as selected by Borrower or as
otherwise applicable pursuant to the provisions of this Agreement from time to
time, provided, however, that in no event shall any Notes or Advances bear
interest at a rate greater than its Highest Lawful Rate. Interest with
respect to each type of Advance shall be payable on the last day of each
Interest Period applicable thereto, provided however, that if such Interest
Period is longer than three (3) months, interest shall also be payable three
(3) months following the first day of such Interest Period. Notwithstanding
the foregoing, in the event and so long as the Indebtedness remains unpaid
hereunder at maturity (whether by reason of occurrence of the Maturity Date or
by reason of an acceleration thereof pursuant to the terms of this Agreement),
all principal outstanding under the Notes shall bear interest, payable on
demand, from the date of such maturity or acceleration at a rate per annum
equal to the Default Rate, provided, however, that in no event shall any
Bank's Notes, Advances or other Indebtedness bear interest at a rate greater
than the Highest Lawful Rate applicable to such Bank.
4.2 Calculations. Commitment Fees, Letter of Credit Fees, and
interest on all Advances shall be calculated on the basis of a 360 day year
for the actual number of days elapsed in the period for determination thereof.
The interest rate with respect to all Advances shall change on the effective
date of any adjustment of the Margin. Additionally, the interest rate with
respect to any Prime-based Advance shall change on the effective date of any
change in the Prime Rate or Alternate Base Rate (as applicable).
4.3 Conversion and Renewal of Advances. Providing that no Event of
Default shall have occurred and be continuing: (i) each outstanding Advance
may be either paid or renewed or converted into another Advance at any time;
provided that any conversion of a Eurodollar-based Loan shall be made only on
the last Business Day of the Interest Period applicable thereto unless the
Borrower pays the prepayment costs required under Section 5.1 hereof.
Eurodollar-based Rates may be selected only for portions of Advances which are
an amount of Five Hundred Thousand Dollars ($500,000) or greater integral
multiples of One Hundred Thousand Dollars ($100,000). The Borrower may select
the Applicable Interest Rate and Interest Periods for such renewals and
conversions by giving the Agent not less than three (3) Business Days' prior
notice in the manner provided in Section 2.4 hereof, specifying the date of
such renewal or conversion, the Advances to be converted, the type of Advance
elected and, the duration of the Interest Period therefor. The Agent shall
promptly notify each Bank of each such request by wire, telex or telephone
(including facsimile transmission, confirmed by wire or telex) specifying the
date of such renewal or conversion, the Advance to be converted, the type of
Advance elected, the Applicable Interest Rate, the duration of the Interest
Period therefor and each Percentage of such Advance. If with respect to any
Advance outstanding at any time, the Agent does not receive notice of the
election three (3) or more Business Days prior to the last day of the Interest
Period therefore shall be deemed to have elected to convert such Advance to a
Prime-based Loan at the end of the then current Interest Period.
4.4 Prepayments. Upon not less than two (2) Business Days' prior
written notice to the Agent, the Borrower may prepay Advances in whole at any
time or in part from time to time, without premium or penalty but with accrued
interest on the principal being prepaid to the date of such prepayment,
provided that: (i) each partial prepayment shall be in an amount not less than
One Hundred Thousand Dollars ($100,000) or greater integral multiple of One
Hundred Thousand Dollars ($100,000), (ii) in the case of a Eurodollar-based
Loan such prepayment may only be on the last Business Day of the Interest
Period with respect thereto unless the Borrower pays the prepayment costs
required under Section 5.1 hereof. Each prepayment under this Section 4.4
shall be made to the Agent, and promptly upon receipt thereof, the Agent shall
remit to each Bank its share thereof in accordance with its Percentage. In
each notice of prepayment under this Section 4.4, the Borrower shall specify
the date of prepayment, the amount of the prepayment and the Advances to be
prepaid.
5. SPECIAL PROVISIONS FOR ADVANCES
5.1 Reimbursement of Prepayment Costs. As to any Eurodollar-based
Advance: if any prepayment thereof shall occur on any day other than the last
day of an Interest Period (whether pursuant to this Article, or by
acceleration, or otherwise), or if an Applicable Interest Rate shall be
changed (other than as a result of a change in the Margin occurring pursuant
to the terms hereof) during any Interest Period pursuant to this Article, or
if Borrower shall fail to borrow any such Advance on the date requested
therefor, ▇▇▇▇▇▇▇▇ hereby agrees to reimburse Banks on demand for any costs
incurred by Banks as a result of the timing thereof including but not limited
to any net costs incurred in liquidating or employing deposits from third
parties, to each Bank which shall have delivered to Borrower a certificate
setting forth in reasonable detail the basis for determining such costs, which
certificate shall be conclusively presumed correct save for manifest error.
5.2 Agent's Eurodollar Lending Office. For any Loan for which the
Applicable Interest Rate is the Eurodollar-based Rate, if Agent shall
designate a Eurodollar Lending Office which maintains books separate from
those of the rest of Agent or if any Bank shall designate as its eurodollar
lending office an office which maintains books separate from those of the rest
of such Bank, Agent or such Bank shall have the option of maintaining and
carrying the relevant Loan on the books of such office.
5.3 Circumstances Affecting Eurocurrency-based Availability. If with
respect to any Interest Period for a Eurodollar-based Loan, Agent or any Bank
determines that, by reason of circumstances affecting the foreign exchange and
interbank markets generally, deposits in eurodollars in the applicable amounts
are not being offered to any Bank for such Interest Period, then Agent shall
forthwith give notice thereof to the Borrower. Thereafter, the obligations of
Banks to make Eurodollar-based Loans for such Interest Periods, and the right
of Borrower to convert an Advance to or refund an Advance as a Eurodollar-based
Loan for such Interest Period shall be suspended until the Agent notifies
Borrower that such circumstance no longer exists.
5.4 Laws Affecting Eurodollar-based Loan Availability. If, after the
date hereof, the introduction of, or any change in, any applicable law, rule
or regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any of the Banks (or any of their respective
eurodollar lending offices) with any request or directive, hereafter
promulgated or first made applicable to any of the Banks (whether or not
having the force of law), of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective eurodollar lending
offices) to honor its obligations hereunder to make or maintain any Loan or
Advance with interest at the Eurodollar-based Rate, such Bank shall forthwith
give notice thereof to Borrower and to Agent. Thereafter: (a) the obligations
of Banks to make Eurodollar-based Loans and the right of Borrower to convert
an Advance or refund an Advance as a Eurodollar-based Loan shall be suspended;
and (b) if any of the Banks may not lawfully continue to maintain a
Eurodollar-based Loan to the end of the then current Interest Period, the
Prime-based Rate shall be the Applicable Interest Rate for such Bank's
Eurodollar-based Loans for the remainder of such Interest Period.
Each Bank agrees that, as promptly as practicable after it becomes aware
of the occurrence of any event or the existence of a condition that would make
it unlawful or impossible to maintain any Loan or Advance with interest at the
Eurodollar-based Rate, it will, to the extent not inconsistent with such
Bank's internal policies or otherwise disadvantageous to such Bank, use
reasonable efforts to make, fund or maintain the affected Eurodollar-based
Loans of such Bank through another lending office of such Bank if, as a result
thereof, such illegality or impossibility would cease to exist, and if, as
determined by such Bank, in its reasonable discretion, the making, funding or
maintaining of such Advances through such other lending office would not
otherwise materially adversely affect such Advances or such Bank. Borrower
hereby agrees to pay all reasonable additional or increased expenses incurred
by any Bank in utilizing such other lending office of such Bank pursuant to
this Section 5.4.
5.5 Increased Costs. In the event that any change after the date
hereof in applicable law, treaty or governmental regulation, or in the
interpretation or application thereof, or compliance by Agent or any Bank with
any request or directive hereafter promulgated or first made applicable to any
of the Banks (whether or not having the force of law) from any central bank or
other financial, monetary or other authority:
(a) shall subject any of the Banks or Agent (or any of their
respective eurodollar lending offices) to any tax, duty or
other charge with respect to any Loan or any Note or shall
change the basis of taxation of payments to any of the Banks
(or any of their respective eurodollar lending offices) of
the principal of or interest on any Loan or any Note or any
Letter of Credit or any other amounts due under this
Agreement (except for changes in the rate of tax on the net
income or gross receipts of any of the Banks or Agent or any
of their respective eurodollar lending offices imposed by
the jurisdiction in which Agent's or such Bank's principal
executive office or eurodollar lending office is located);
or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System but excluding with
respect to any Eurodollar-based Loan any such requirement
included in an applicable Eurodollar Reserve Requirement),
risk-based capital requirement, liquidity ratio or special
deposit, or similar requirement against assets of, deposits
with or for the account of, or credit extended by any of the
Banks or Agent (or any of their respective eurodollar
lending offices) not in effect as of the Closing Date, or
shall impose on any of the Banks or Agent (or any of their
respective eurodollar lending offices) or the foreign
exchange and interbank markets or other condition affecting
any Loan or any of the Notes or any Letter of Credit or any
commitment of Agent or any Bank under this Agreement;
and the result of any of the foregoing is to increase the costs to any of the
Banks or Agent of making, renewing or maintaining any part of the Advances or
its commitments hereunder or to reduce the amount or rate of return on any sum
received or receivable by, or the rate of return on the capital of, Agent or
any of the Banks under this Agreement, or under the Notes, or under any Letter
of Credit Agreement, then such Bank (if applicable) shall promptly notify
Agent, and Agent shall promptly notify Borrower and (if applicable) such Bank
or Banks of such fact and demand compensation therefor and, Borrower hereby
agrees to pay to Agent or such Bank (so long as similar obligations of other
borrowers owed to the relevant Bank are then being enforced, collected or
requested by the relevant Bank) such additional amount or amounts as will
compensate such Agent or Bank or Banks for such increased costs or reduced
return within thirty (30) days of such notice. A certificate of a Bank
demanding such compensation setting forth in reasonable detail the basis for
determining such additional amount or amounts necessary to compensate shall be
conclusively presumed to be correct save for manifest error.
5.6 Margin Adjustments. Adjustments in the Margin, based on the
applicable Leverage Ratio level set forth in Schedule 5.6, shall be
implemented on a quarterly basis as follows:
(a) Such Margin adjustments shall be given prospective effect
only, effective on the first day of the first month
following the required date of delivery of the financial
statements under Section 9.1(a) and 9.1(b) hereof,
establishing applicability of the appropriate adjustments,
if any. In any event the Borrower fails timely to deliver
the financial statements required under Section 9.1(a) and
9.1(b), from the date subsequent to the date for such
delivery on which Agent notifies Borrower of such failure
and of such increase in Margin, until the date of delivery
of such financial statements, the Margin shall be the
highest Margin set forth in the pricing matrix attached as
Schedule 5.6.
(b) An adjustment hereunder, after becoming effective, shall
remain in effect only until the first day of the first month
following the delivery of quarterly financial statements, as
aforesaid, demonstrating any change in the applicable
financial covenants or the occurrence of any event which
under the terms hereof causes such adjustment no longer to
be applicable, then any such subsequent adjustment or no
adjustment, as the case may be, shall be effective (and said
pricing shall thereby be adjusted up or down, as
applicable), in accordance with subparagraph (a), above.
(c) Such Margin adjustments under this Section 5.6 shall be made
irrespective of, and in addition to, any other interest rate
or Margin adjustments hereunder.
6. PAYMENTS
6.1 Payment Procedure.
(a) All payments by Borrower of principal of, or interest on,
the Notes or of Commitment Fees, or of Letter of Credit
Obligations or Letter of Credit Fees and Agent's Fees, shall
be made without setoff, deduction or counterclaim on the
date specified for payment under this Agreement not later
than 11:00 a.m. (Detroit time) in immediately available
funds to Agent. Upon receipt of each such payment, the
Agent shall make payment to each Bank in like funds not
later than 4:30 p.m. (Detroit time) on the same day of all
amounts received by it to the extent received for the
account of such Bank.
(b) Unless the Agent shall have been notified by Borrower prior
to the date on which any payment to be made by Borrower is
due, that Borrower does not intend to remit such payment,
the Agent may, in its discretion, assume such payment has
been remitted when so due and the Agent may, in reliance
upon such assumption, make available to each Bank on such
payment date an amount equal to such Bank's share of such
assumed payment. If such payment has not in fact been
remitted to the Agent, each Bank shall forthwith on demand,
repay to the Agent the amount of such assumed payment made
available to such Bank, together with the interest thereon,
in respect of each day from and including the date such
amount was made available by the Agent to such Bank to the
date such amount is repaid to the Agent at a rate equal to
the Federal Funds Effective Rate, as the same may vary from
time to time.
(c) Whenever any payment to be made shall otherwise be due on a
day which is not a Business Day, such payment shall be made
(except as specifically indicated to the contrary herein) on
the next succeeding Business Day and such extension of time
shall be included in computing interest, if any, in
connection with such payment.
(d) All payments hereunder shall be payable by Borrower to Agent
and/or the Banks shall be made in Dollars.
6.2 Application of Proceeds. Notwithstanding anything to the contrary
in this Agreement, after an Event of Default, the proceeds of any offsets,
voluntary payments by Borrower or others and any other sums received or
collected in respect of the indebtedness hereunder, shall be applied first to
the costs and expenses of Agent in enforcement and collection and, second, to
payment in full of the other indebtedness and obligations of Borrower
hereunder, and then, if there is any excess, to Borrower.
6.3 Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of, or interest on, any of the indebtedness
and obligations of Borrower hereunder in excess of its pro rata share of
payments then or thereafter obtained by all Banks upon all such indebtedness
and obligations, such Bank shall purchase from the other Banks such
participations in the Notes and/or Letter of Credit Obligations held by them
as shall be necessary to cause such purchasing Bank to share the excess
payment or other recovery ratably in accordance with the Percentages in effect
as of the date of the Event of Default; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing holder, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
6.4 Deposits and Accounts. In addition to and not in limitation of
any rights of Agent, any Bank or other holder of any Note or assignee of
Letter of Credit Agreements and Letter of Credit Obligations under applicable
law, Agent, each Bank and each other such holder shall, in the event and so
long as there exists an Event of Default and without notice or demand of any
kind, have the right to liquidate and collect all property or assets of
Borrower (including deposits and other credits), whether presently owned or
hereafter acquired, in possession or control of (or owing by) Agent or such
Bank or other holder for any purpose, and to apply the proceeds of any such
liquidations and collections, and offset any amounts owing to Borrower against
obligations hereunder and under the Notes and the Documents, provided,
however, that any such amount so applied by Agent or such Bank or other holder
on any of the Notes shall be subject to the provisions of Section 6.2 and 6.3.
6.5 Net Payments. All payments by Borrower under this Agreement or
any other Document shall be made in such amounts as may be necessary in order
that all such payments (after deduction or withholding for or on account of
any present or future taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by any government or any political subdivision or
taxing authority thereof, other than any tax on or measured by the net income
of Agent or any Bank pursuant to the income tax laws of the United States or
of the jurisdiction in which it is incorporated or the jurisdiction where such
Bank's lending office is located or in which it has any other contacts or
connection that would subject it to taxation therein (collectively, "Taxes"),
shall not be less than the amounts otherwise specified to be paid under this
Agreement and/or the other Documents. A certificate as to the calculation of
any additional amounts payable under this Section 6.5 submitted to the
Borrower by such Bank shall, absent manifest error, be final, conclusive and
binding for all purposes upon all parties hereto. With respect to each
deduction or withholding for or on account of any Taxes, Borrower shall
promptly furnish to Agent and each Bank such certificates, receipts and other
documents as may be required (in the judgment of such Bank) to establish any
tax credit to which such Agent and Bank may be entitled. Borrower agrees to
reimburse each Agent and Bank, upon the written request, for taxes imposed on
or measured by the net income of such Agent or Bank pursuant to the laws of
the United States of America, any State or political subdivision thereof, or
the jurisdiction in which Agent or such Bank is incorporated, or a
jurisdiction in which the principal office or lending office of Agent or such
Bank is located, or under the laws of any political subdivision or taxing
authority of any such jurisdiction, as such Agent or such Bank shall determine
are or were payable by such Bank, in respect of amounts payable to Agent or
such Bank pursuant to this Section 6.5. As of the date of this Agreement,
each of the Banks signatory hereto represents to Agent and Borrower that there
is no Tax presently imposed (or presently enacted for future imposition) upon
them which would result in an obligation of Borrower for reimbursement under
this Section 6.5.
6.6 Tax Treaty Certificate. Each Bank (and each Person who becomes a
Bank pursuant to Section 14.5(a) hereof) that is not incorporated under the
laws of the United States of America or a state thereof, or which is lending
from a lending office that is not incorporated under the laws of the United
States of America or a state thereof agrees that, on or prior to the date it
becomes a Bank hereunder, it will deliver to Borrower and the Agent duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
or any successor applicable form (a "Form 1001 or 4224"), certifying that such
Bank is entitled to receive payments hereunder payable to it without deduction
or withholding of any United States Federal taxes. Each Bank that delivers a
Form 1001 or 4224 pursuant to the immediately preceding sentence further
agrees to deliver to Borrower and Agent further copies of such Form 1001 or
4224 or other manner of certification, as the case may be, on or before the
date that any such form or certification expires or becomes obsolete or upon
the occurrence of any event requiring a change in the most recent form or
certification previously delivered by it, unless in any such case there has
occurred, on or prior to the date on which any such delivery would otherwise
be required, any change in law, rule, regulation, treaty, convention or
directive, or any change in the interpretation or application of any thereof,
that renders all such forms inapplicable or which would prevent such Bank from
duly completing and delivering any such form or certification with respect to
it. Notwithstanding any provision of Section 6.5 to the contrary, Borrower
shall not have any obligation to reimburse a Bank for Taxes pursuant to
Section 6.5 to the extent that such Taxes would not have been imposed but for:
(i) the failure of such Bank to comply with its obligations pursuant to this
Section 6.6; or (ii) any representation made on Form 1001 or 4224 by such Bank
proving to have been incorrect, false or misleading in any material respect
when made or deemed to be made.
7. CONDITIONS
7.1 Authority Documents. ▇▇▇▇▇▇▇▇ agrees to furnish Agent and the
Banks at the time of the initial borrowing hereunder with:
(a) certified copies of resolutions of the Board of Directors of
Borrower and each of the Subsidiaries evidencing approval
the execution, delivery and performance of the Documents to
which each is a party;
(b) duly executed copies of this Agreement, the Notes and each
of the Guaranties;
(c) certified copies of the Articles of Incorporation and Bylaws
of the Borrower and each of the Subsidiaries;
(d) certificates of good standing from the jurisdiction of
incorporation of Borrower and each Subsidiary and from each
state in which any of them are required by law to qualify to
do business; and
(e) a Guaranty of each Subsidiary, with an opinion of ▇▇▇▇▇▇▇▇'s
and Guarantors' counsel to the effect that the execution,
delivery and performance of this Agreement, and the issuance
of the Notes by ▇▇▇▇▇▇▇▇, and the execution, delivery and
performance by Guarantors of the Guaranties, are within
their respective corporate powers, have been duly authorized
by all necessary corporate action thereof and are not in
contravention of the terms of Borrower's or Guarantors'
respective certificates of incorporation or bylaws and
covering such other legal matters as Agent and the Banks may
require.
8. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement:
8.1 Organization. Borrower and each Subsidiary is a corporation duly
organized and existing in good standing under the laws of their respective
jurisdictions, of incorporation; they are duly qualified and authorized to do
business as a foreign corporation in each jurisdiction where, given the
character of its assets or the nature of its activities, failure to be so
qualified could have a Material Adverse Effect.
8.2 Authorization. The execution, delivery and performance of this
Agreement, any other documents and instruments required under this Agreement
to which Borrower is a party, and the issuance of the Notes by ▇▇▇▇▇▇▇▇, and
the execution, delivery and performance by Subsidiaries of the Guaranties, are
within their respective corporate powers, have been duly authorized, are not
in contravention of law or the terms of Borrower's or any Subsidiaries'
Articles of Incorporation or Bylaws, and do not require the consent or
approval of any governmental body, agency or authority; and this Agreement,
the Notes, any other Documents and instruments required under this Agreement
to which Borrower is a party, and the Guaranties when issued and delivered
under this Agreement, will be valid and binding in accordance with their
terms.
8.3 Non-Contravention. The execution, delivery and performance of
this Agreement and any other documents and instruments required under this
Agreement to which Borrower is a party, and the issuance of the Notes by
▇▇▇▇▇▇▇▇, and the execution, delivery and performance by Subsidiaries of the
Guaranties are not in contravention of the unwaived terms of any indenture,
agreement or undertaking to which Borrower or any Subsidiary is a party or by
which it is bound.
8.4 Litigation. No litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of the officers of
▇▇▇▇▇▇▇▇ is threatened against Borrower or any Subsidiary, the outcome of
which is likely to result in a Material Adverse Change or Effect.
8.5 Encumbrances. There are no security interests in, liens,
mortgages, or other encumbrances on any of Borrower's or Subsidiaries' assets,
except as permitted in this Agreement.
8.6 Subsidiaries. As of the date of this Agreement there are no
Subsidiaries of Borrower other than those executing Guaranties as of the date
of this Agreement and Borrower shall not create any additional Subsidiaries
unless at the time the Subsidiary is created the Subsidiary executes and
delivers a Guaranty.
8.7 ERISA. As of the date of this Agreement, neither Borrower nor any
Subsidiary maintains or contributes to any employee pension benefit plan
subject to title IV of ERISA except the following plans: (a) Republic
Automotive Parts, Inc. Employees' Retirement Plan; (b) Republic Automotive
Parts, Inc. Savings Plan. There is no "unfunded past service liability" of
these Pension Plans as of the date of this Agreement and there is no
accumulated funding deficiency with respect to the meaning of ERISA, or any
existing liability with respect to the Pension Plans owed to the Pension
Benefit Guaranty Corporation or any successor thereto.
8.8 Financial Information. The consolidated balance sheet of ▇▇▇▇▇▇▇▇
and Subsidiaries and the related income statement, both dated December 31,
1996, previously furnished to Agent and the Banks, fairly present in all
material respects the financial condition of Borrower and Subsidiaries as of
the date thereof; since said date there has been no Material Adverse Change or
Effect in the consolidated financial condition of Borrower and Subsidiaries;
to the knowledge of ▇▇▇▇▇▇▇▇'s president and chief financial officer and
except as disclosed to and accepted in writing by Bank, neither Borrower nor
any of its Subsidiaries has any material contingent obligations (including any
liability for taxes) of a type required to be disclosed or reserved against on
said financial statements which has not been so disclosed by or reserved
against in said financial statements or, with respect to subsequent fiscal
years, is not disclosed by or reserved against in the financial statements
delivered pursuant to Section 9.1 for the most recent fiscal year then ending.
8.9 Environmental Compliance. To the knowledge of Borrower, Borrower
and the Subsidiaries are in the conduct of their respective businesses in all
material respects in compliance with all Environmental Laws and all other
federal, state or local laws, statutes, ordinances and regulations applicable
to Borrower and the Subsidiaries, and Borrower and the Subsidiaries has all
approvals, authorizations, consents, licenses, orders and other permits of all
governmental agencies and authorities, whether federal, state or local,
required to permit the operation of its business as presently conducted, the
absence of which would result in a Material Adverse Change or Effect.
8.10 Environmental Proceedings. As of the date of execution of this
Agreement, to the knowledge of Borrower and except as disclosed to and
accepted in writing by Bank, Borrower is not, and no Subsidiary is, a party to
any litigation or administrative proceeding, nor is any litigation or
administrative proceeding threatened against Borrower or any Subsidiary, which
in either case (i) asserts or alleges that Borrower or any Subsidiary violated
Environmental Laws, (ii) asserts or alleges that Borrower or any Subsidiary is
required to clean up, remove, or take remedial or other response action due to
the disposal, depositing, discharge, leaking or other release of any hazardous
substances or materials, (iii) asserts or alleges that Borrower or any
Subsidiary is required to pay all or a portion of the cost of any past,
present, or future cleanup, removal or remedial or other response action which
arises out of or is related to the disposal, depositing, discharge, leaking or
other release of any hazardous substances or materials.
8.11 Environmental Clean-ups. As of the date of execution of this
Agreement, to the knowledge of Borrower and except as disclosed to and
accepted in writing by Bank, there are no conditions existing currently or
likely to exist during the term of this Agreement which would subject Borrower
or any Subsidiary to damages, penalties, injunction relief or cleanup costs
under any applicable Environmental Laws or which require or are likely to
require cleanup, removal, remedial action or other response pursuant to
applicable Environmental Laws by Borrower or any Subsidiary.
8.12 Environmental Orders. As of the date of execution of this
Agreement, to the knowledge of the Borrower and except as disclosed to and
accepted in writing by Bank, ▇▇▇▇▇▇▇▇ is not, and no Subsidiary is, subject to
any judgment, decree, order or citation related to or arising out of
applicable Environmental Laws and Borrower has not, and no Subsidiary has,
been named or listed as a potentially responsible party by any governmental
body or agency in a matter arising under any applicable Environmental Laws.
9. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that it will, so long as Agent or the
Banks are committed to make any Advances or to issue Letters of Credit under
this Agreement and thereafter so long as any indebtedness remains outstanding
under this Agreement:
9.1 Reporting Requirements. Furnish Bank:
(a) within one hundred twenty (120) days after and as of the end
of each of Borrower's fiscal years, a consolidated audit
report of Borrower and the Subsidiaries without material
qualification certified to by independent certified public
accountants satisfactory to Bank;
(b) within sixty (60) days after and as of the end of each
quarter, including the last quarter of each fiscal year, a
consolidated balance sheet and statement of profit and loss
and surplus reconciliation of ▇▇▇▇▇▇▇▇ and the Subsidiaries
certified on behalf of Borrower by an authorized officer of
▇▇▇▇▇▇▇▇;
(c) concurrently with the delivery of each of the financial
statements required by Section 9.1(a) and (b) hereof, a
statement prepared and certified on behalf of Borrower by
the chief financial officer of ▇▇▇▇▇▇▇▇ (or in his absence,
a responsible senior officer of Borrower) (i) setting forth
all computations necessary to show compliance by Borrower
with each of the covenants contained in Sections 9.2, 9.3,
9.4, and 9.5 of this Agreement, (ii) stating that as of the
date thereof, no condition or event which constitutes a
Default or Event of Default hereunder has occurred and is
continuing, or if any such event or condition has occurred
and is continuing or exists, specifying in detail the nature
and period of existence thereof and any action taken with
respect thereto taken or contemplated to be taken by
Borrower and (iii) stating that such officer reviewed this
Agreement on behalf of Borrower and that such certificate is
based on an examination sufficient to assure that such
certificate is accurate;
(d) promptly, and in form to be reasonably satisfactory to Agent
and the Banks, such other information as Agent or any Bank
may reasonably request from time to time.
9.2 Net Working Capital. Maintain, at all times, Net Working Capital
of not less than Forty Five Million Dollars ($45,000,000.00)
9.3 Effective Tangible Net Worth. Maintain Effective Tangible Net
Worth of not less than Thirty Million Dollars ($30,000,000.00) plus fifty
percent (50%) of Quarterly Net Earnings, plus fifty percent (50%) of the net
cash proceeds of any offering of equity interests by Borrower or any
Subsidiary to a Person other than Borrower or a wholly-owned Subsidiary of
Borrower.
9.4 Cash Flow Coverage. Maintain, as of the end of each fiscal
quarter, a Cash Flow Coverage Ratio of not less than 1.25 to 1.
9.5 Leverage Ratio. Maintain, as of the end of each fiscal quarter, a
Leverage Ratio of not more than 3.9 to 1.
9.6 Taxes. Pay and discharge and cause each Subsidiary to pay and
discharge all taxes and other governmental charges and all other obligations
to governmental authorities calling for the payment of money, before the same
shall become overdue, unless and to the extent only that such payment is being
contested in good faith.
9.7 Insurance. Maintain and cause each Subsidiary to maintain
insurance coverage on its physical assets and against other business risks in
such amounts and of such types as are customarily carried by companies similar
in size and nature, and in the event of acquisition of additional property,
real or personal, or of incurrence of additional risks of any nature, increase
such insurance coverage in such manner and to such extent as prudent business
judgment and present practice would dictate; and in the case of all policies
covering property mortgaged or pledged to Agent on behalf of the Banks or
property in which Agent shall have a security interest of any kind whatsoever,
other than those policies protecting against casualty liabilities to
strangers, all such insurance policies shall provide that the loss payable
thereunder shall be payable to Borrower and Agent (on behalf of the Banks) as
their respective interests may appear; all said policies or copies thereof,
including all endorsements thereon and those required hereunder, to be
deposited with Bank.
9.8 Books and Records. Permit Bank, through its authorized attorneys,
accountants, and representatives, to examine ▇▇▇▇▇▇▇▇'s and Subsidiaries'
books, accounts, records, ledgers and assets of every kind and description at
all reasonable times upon oral or written request of Agent or the Banks.
9.9 Notice of Defaults. Promptly notify Agent and the Banks of any
condition or event which to the knowledge of Borrower constitutes or with the
running of time and/or the giving of notice would constitute a Default or
Event of Default under this Agreement, and promptly inform Bank of any
Material Adverse Change or Effect.
9.10 Maintenance of Status. Maintain and cause each Subsidiary to
maintain in good standing all licenses required by the states in which they
own and operate assets or carry on their business, or any agency thereof, or
other governmental authority that may be necessary or required for Borrower or
Subsidiaries to carry on its general business objects and purposes, except
where the failure to maintain such licenses will not result in a Material
Adverse Change or Effect.
9.11 Compliance with ERISA. Comply, and cause each Subsidiary to
comply in all material respects with all requirements imposed by ERISA as
presently in effect or hereafter promulgated including, but not limited to,
the minimum funding requirements of any Pension Plans.
9.12 Notice of ERISA Events. Promptly notify Agent and the Banks upon
the occurrence thereof of any of the following events:
(a) the termination of any Pension Plan pursuant to Subtitle C
of Title IV of ERISA or otherwise;
(b) the appointment of a trustee by a United States District
Court to administer any Pension Plan;
(c) the commencement by the Pension Benefit Guaranty
Corporation, or any successor thereto, of any proceeding to
terminate any Pension Plan;
(d) the failure of any Pension Plan to satisfy the minimum
funding requirements for any plan year as established in
Section 412 of the Internal Revenue Code of 1954, as
amended;
(e) the withdrawal of the Borrower or any of the Subsidiaries
from any Pension Plan;
(f) a reportable event, within the meaning of Title IV of ERISA
which is likely to result in a material liability, or
(g) the creation of any Pension Plan after the date of this
agreement or the acquisition of the stock or assets of any
entity which maintains a pension plan subject to ERISA.
10. NEGATIVE COVENANTS
Borrower covenants and agrees that so long as Agent or the Banks are
committed to.make any Advances or to issue any Letters of Credit under this
Agreement and thereafter so long as any Indebtedness remains outstanding under
this Agreement, it will not:
10.1 Mergers/Consolidations. Enter into any merger or consolidation or
sell, lease, transfer, or dispose of all, substantially all, or any material
part of its assets, or allow any Subsidiary to do so, except:
(a) in the ordinary course of its business;
(b) a merger or consolidation permitted in Section 10.3 hereof;
or
(c) the sale, lease or transfer of assets between Borrower and
any Subsidiary or between Subsidiaries.
10.2 Guaranties. Guarantee, endorse, or otherwise become secondarily
liable for or upon the obligations of others, or allow any Subsidiary to do
the same except:
(a) the Guaranties;
(b) by endorsement for deposit in the ordinary course of
business;
(c) guarantees of notes executed by jobbers under the terms and
conditions of the Borrower's then existing jobber financing
program; provided, however, that the outstanding principal
and interest outstanding under said guaranteed notes shall
not exceed One Million Dollars ($1,000,000.00) at any time;
and
(d) guaranties by Borrower or a Subsidiary of obligations of
Borrower or any Subsidiary.
10.3 Acquisitions. Purchase or otherwise acquire or become obligated
for the purchase of, or allow any Subsidiary to purchase or become obligated
to purchase, all or substantially all of the assets or business interests of
any person, firm or corporation or any shares of stock of any corporation,
trusteeship or association or in any manner effectuate or attempt to
effectuate an expansion of present business by acquisition; unless, after
giving effect to the proposed purchase or acquisition:
(a) Borrower is the surviving corporation and Borrower is not
merged into any Subsidiary;
(b) if the merger or consolidation involves a Subsidiary of
Borrower, either the Subsidiary is the surviving corporation
or the surviving corporation is a wholly owned direct or
indirect Subsidiary of Borrower;
(c) Borrower or any Subsidiary will be engaged in the same or
related line of business, at the wholesale or retail level,
in which they are engaged as of the date of this Agreement
including being in the business of remanufacturing,
repackaging or marketing its own line of automotive parts
and accessories or related items; and
(d) No Default or Event of Default exists and, upon giving
proforma effect to the contemplated transaction, no Default
or Event of Default will exist.
10.4 Liens. Affirmatively pledge or mortgage, or allow any Subsidiary
to pledge or mortgage, any of their assets, whether now owned or hereafter
acquired, or create or permit to exist any lien, security interest in, or
encumbrance thereon, except for the following:
(a) to Agent on behalf of the Banks;
(b) (i) purchase money security interests in inventory and fixed
assets solely to secure purchase money indebtedness of
Borrower or any Subsidiary in connection with the
acquisition of all or part of the inventory or fixed assets
of any person, firm or corporation in an acquisition
permitted pursuant to the provisions of Section 10.3, or to
which such inventory or fixed assets so acquired are subject
at the time of such acquisition; provided that such security
interest is granted to the seller of the inventory or fixed
assets, is created substantially contemporaneously with the
acquisition of such inventory or fixed assets and does not
extend to any property other than the inventory or fixed
asset so financed and proceeds thereof, (ii) capitalized
leases for fixed assets solely to secure purchase money or
lease indebtedness of Borrower or any Subsidiary; provided
that such security interest or lease is created
substantially contemporaneously with the acquisition of such
fixed assets and does not extend to any property other than
the fixed asset so financed and (iii) purchase money
security interests in inventory and fixed assets covering
assets acquired by Borrower or any Subsidiary in connection
with an acquisition to the extent the aggregate indebtedness
secured thereby does not exceed Five Hundred Thousand
Dollars ($500,000) excluding any extension or renewal
thereof. It is expressly understood and agreed that Borrower
and the Subsidiaries shall not be entitled to grant purchase
money security interests to vendors of Borrower or any
Subsidiary for the purchase of any inventory or fixed assets
in the ordinary course of Borrower's or any Subsidiary's
business, except as permitted above in the case of assets
acquired in connection with an acquisition or in subsection
(c) below;
(c) purchase money security interests in inventory on
consignment solely to secure inventory on consignment to
Borrower or any Subsidiary not to exceed in the aggregate
the sum of Five Hundred Thousand Dollars ($500,000);
provided that such security interest is created
substantially contemporaneously with the consignment of such
inventory and does not extend to any property other than the
consigned inventory so financed and proceeds thereof;
(d) liens for taxes, assessments or other governmental charges
incurred in the ordinary course of business and not yet past
due or being contested in good faith by appropriate
proceedings and, if requested by Bank, bonded in a manner
satisfactory to Bank;
(e) liens not delinquent created by statute in connection with
workmen's compensation, unemployment insurance, social
security and similar statutory obligations;
(f) liens of mechanics, materialmen, carriers, warehousemen or
other like statutory or common law liens securing
obligations incurred in good faith in the ordinary course of
business that are not yet due and payable or are being
contested in good faith by appropriate proceedings and, if
requested by Agent, bonded in a manner satisfactory to
Agent;
(g) landlord liens and rental deposits arising under law or by
the terms of any leases of real property securing
obligations that are not yet due and payable or are being
contested in good faith;
(h) encumbrances consisting of zoning restrictions, rights-
of-way, easements or other restrictions on the use of real
property, none of which materially impairs the use of such
property by Borrower or any Subsidiary in the operation of
the business for which it is used and none of which is
violated in any material respect by any existing or proposed
structure or land use; and
(i) pledges and deposits not exceeding at any time in aggregate
amount the sum of $1,000,000 made in the ordinary course of
business to secure the performance of bids, surety, stay,
appeal or customs bonds or pledges or deposits for similar
purposes.
10.5 Investments/Loans. Make or allow to remain outstanding any
investment in, or any loans or advances to, any Person other than:
(a) to or in a Subsidiary which has prior thereto executed or
concurrently therewith executed and delivered to Bank a
Guaranty;
(b) loans and/or advances to officers and/or employees in the
ordinary course of business;
(c) extensions of credit terms to customers and/or restructuring
of outstanding credit balances owing by customers;
(d) loans and investments listed on Schedule 10.5 hereto and
refinancings and/or restructuring thereof;
(e) deposit and money market accounts, time deposits,
certificates of deposit, bankers' acceptances and repurchase
obligations with or of banks, financial institutions and
mutual funds;
(f) direct obligations of, or guaranteed by, or backed by the
full faith and credit of, the United States Government;
(g) investment grade commercial paper; and
(h) investments, loans and/or advances with an unrecovered cost
basis at any one time outstanding not exceeding Five Million
Dollars ($5,000,000) in the aggregate.
10.6 Dividends. Declare or pay any dividends during any four quarter
period in excess (in the aggregate) of the amount of Borrower's net income for
such four quarter period, as determined in accordance with generally accepted
accounting principles consistently applied, less current maturities of
Borrower's Long Term Debt as of the end of such four quarter period.
11. ENVIRONMENTAL PROVISIONS
11.1 Environmental Compliance. Borrower shall timely comply, or
diligently pursue compliance, and shall cause the Subsidiaries to comply or
diligently pursue compliance, in all material respects with all applicable
Environmental Laws.
11.2 Notice of Environmental Matters. Borrower shall provide to Agent
and the Banks, promptly upon receipt, copies of any correspondence, notice,
pleading, citation, indictment, complaint, order, decree, or other document
from any source asserting or alleging a circumstance or condition which (i)
requires or may require a financial cost to Borrower or any Subsidiary, (ii)
requires or may require cleanup, removal, remedial action, or similar response
by or on the part of Borrower or any Subsidiary under applicable Environmental
Laws or (iii) seeks damages or civil, criminal or punitive penalties from
Borrower or any Subsidiary for an alleged violation of Environmental Laws,
where the aggregate amount of any such costs, responses, damages or penalties
may exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate.
11.3 Notice of Environmental Warranties. Borrower shall promptly
notify Agent and the Banks in writing as soon as Borrower becomes aware of any
condition or circumstance which makes the environmental warranties contained
in this Agreement incomplete or inaccurate in any material respect as of any
date (and not just the date such warranties are made).
11.4 Testing and Reports. In the event of any condition or
circumstance that makes any environmental warranty, representation and/or
agreement incomplete or inaccurate in any material respect as of any date,
Borrower shall, at its sole expense, if reasonably requested by Agent or any
Bank, retain an environmental professional consultant, reasonably acceptable
to agent, to conduct an environmental audit reasonably satisfactory to Agent
regarding the changed condition and/or circumstance and any environmental
concerns arising from that changed condition and/or circumstance. A copy of
the environmental consultant's report will be promptly delivered to both
Agent, the Banks and Borrower upon completion.
11.5 Environmental Audits and Findings. If Borrower or any Subsidiary,
directly or indirectly through any professional consultant or other
representative, undertakes an environmental audit, assessment or investigation
and the findings or conclusions of such audit, assessment or investigation
disclose (i) contamination of, or adverse effects on, any real property owned
by Borrower or any Subsidiary at any time or (ii) a violation of any
Environmental law by Borrower or any Subsidiary, either or both of which may
require a financial contribution by Borrower in excess of Two Hundred Fifty
Thousand Dollars ($250,000) in the aggregate, Borrower will promptly provide
to Agent and the Banks, and will cause Subsidiaries to promptly provide to
Agent and the Banks, upon receipt, copies of all final findings and
conclusions of any such environmental investigation. Preliminary findings and
conclusions shall also be provided to Agent and the Banks if final reports
have not been completed and delivered to them within 60 days following
completion of the preliminary findings and conclusions.
11.6 Indemnification. Borrower hereby indemnifies, saves and holds the
Agent and the Banks and any of its past, present and future officers,
directors, shareholders, employees, representatives and consultants harmless
from any and all loss, damages, suits, penalties, costs, liabilities and
expenses (including but not limited to reasonable investigation, environmental
audit(s), and legal expenses) arising out of any claim, loss or damage of any
property, injuries to or death of persons, contamination of or adverse affects
on the environment, or any violation of any applicable Environmental Laws,
caused by or in any way related to Borrower's or any Subsidiary's real
property, or due to any acts of Borrower or any Subsidiary, their officers,
directors, shareholders, employees, consultants and/or representatives. In no
event shall Borrower be liable hereunder for any loss, damages, suits,
penalties, costs, liabilities or expenses (i) arising from any act of
negligence of Agent or a Bank, or its agents, employees, representatives or
consultants or (ii) arising from any action taken by Agent or a Bank while it
is in possession of any such real property.
It is expressly agreed and understood that the provisions hereof shall
and are intended to be continuing and shall survive the repayment of any
indebtedness from Borrower to Agent and the Banks.
12. DEFAULTS
12.1 Payments. Upon non-payment of the principal or interest due under
the terms of this Agreement or on the Notes when due in accordance with the
terms thereof and continuance of such default for a period of ten (10) days,
the Banks' commitments to make further Advances and/or Agent's engagement to
issue Letters of Credit under this Agreement shall automatically be suspended
and the Majority Bank's may declare the Notes and ▇▇▇▇▇▇▇▇'s other obligations
hereunder to be immediately due and payable.
12.2 Other Defaults. Upon occurrence of any of the following:
(a) default in the observance or performance of any of the
covenants or agreements of Borrower set forth in Sections
9.l through 9.5, 9.9, 9.13 and 10.1 through 10.7, inclusive,
hereof and in the case of default with respect to Section
9.1, continuance thereof for three (3) Business Days after
notice to Borrower by Agent or any Bank;
(b) default in the observance or performance of any of the other
covenants or agreements of Borrower herein set forth and
continuance thereof for thirty (30) days after the earlier
of either: (i) Borrower's actual notice thereof, or (ii)
notice to Borrower by Agent or any Bank;
(c) any representation or warranty made by Borrower herein or in
any instrument submitted pursuant hereto proves untrue in
any material respect;
(d) default in the payment of any other obligation of Borrower
or any Subsidiary for borrowed money in excess of $250,000
in the aggregate other than (e) below, or in the observance
or performance of any conditions, covenants or agreements
related or given with respect thereto, and such default
continues beyond any period of cure therefore and as a
result of such default, the outstanding indebtedness may be
accelerated and become immediately due and payable in full;
(e) defaults in the aggregate amount of $2,000,000 or more on
note(s) owing from time to time by Borrower or any
Subsidiary to various sellers for acquisitions permitted in
Section 10.3 hereof, and any of such seller(s) has taken any
remedy, whether demand, acceleration, or otherwise, against
Borrower or any Subsidiary;
(f) if judgments in aggregate amount in excess of Two Hundred
Fifty Thousand Dollars ($250,000) shall be rendered against
Borrower and/or any Subsidiaries and such judgment or
judgments remain unpaid and unstayed for the later of (i) a
period of thirty (30) days, or (ii) a period of time
sufficient to allow for the judgment creditor or creditors
with respect thereto to institute proceedings to enforce
such judgment or judgments;
(g) if there shall be any change for any reason whatsoever in
the management of Borrower by both ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President and Chief Executive Officer, and ▇▇▇▇▇▇ ▇. ▇▇▇▇,
Executive Vice President and Chief Financial Officer, which
could in the reasonable judgment of the Majority Banks
result in a Material Adverse Change or Effect;
then, or at any time thereafter, unless such default is remedied, Agent may
(and if requested by the Majority Banks shall) give notice to Borrower
declaring all outstanding indebtedness hereunder to be due and payable,
whereupon the Notes and all indebtedness then outstanding hereunder shall
immediately become due and payable without further notice and demand, as the
case may be, and ▇▇▇▇▇' commitments to make further Advances or and the
Agent's commitment to issue Letters of Credit under this Agreement shall
automatically terminate.
12.3 Insolvency. If a creditors' committee shall have been appointed
for the business of Borrower or any Subsidiary; or if Borrower or any
Subsidiary shall have made a general assignment for the benefit of creditors
or shall have been adjudicated bankrupt, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to effect a plan or
arrangement with creditors; or shall file an answer to a creditor's petition
or other petition filed against it, admitting the material allegations thereof
for an adjudication in bankruptcy or for reorganization; or shall have applied
for or permitted the appointment of a receiver or trustee or custodian for any
of its property or assets; or such receiver, trustee or custodian shall have
been appointed for any of its property or assets (otherwise than upon
application or consent of Borrower or any Subsidiary) and such receiver,
trustee, or custodian so appointed shall not have been discharged within sixty
(60) days after the date of his appointment; or if an order shall be entered
and shall not be dismissed or stayed within sixty (60) days from its entry,
approving any petition for reorganization of Borrower or any Subsidiary; then
the Notes and all indebtedness then outstanding hereunder shall automatically
become immediately due and payable, and the Banks' commitments to make further
Advances and the Agent's engagement to issue Letters of Credit under this
Agreement shall automatically terminate.
12.4 Cash Collateral. Upon the occurrence and during the continuance
of any Event of Default, Borrower shall immediately upon demand by Agent
deposit with Agent cash collateral in the amount equal to the maximum amount
available to be drawn at any time under any Letters of Credit then
outstanding.
13. AGENT
13.1 Appointment of Agent. Each Bank appoints and authorizes Agent to
act on behalf of such Bank or holder under the Documents and to exercise the
respective powers hereunder and thereunder as are specifically delegated to or
required of them by the terms hereof and thereof, together with such powers as
may be reasonably incidental thereto, including, the power to execute
financing or similar statements or notices and other documents. Each Bank
agrees (which agreement shall survive any termination of this Agreement) to
reimburse Agent (to the extent Agent is not reimbursed by ▇▇▇▇▇▇▇▇), for all
reasonable out-of-pocket expenses (including house and outside attorneys'
fees) incurred by Agent hereunder or in connection herewith or with an Event
of Default or in enforcing the obligations of Borrower under this Agreement or
the Documents or any other instrument executed pursuant hereto, pro rata
according to the Percentages. Agent shall not be required to take any action
under the Documents, or to prosecute or defend any suit in respect of the
Documents, unless indemnified to its satisfaction by the Banks against loss,
costs, liability and expense. If any indemnity furnished pursuant hereto
shall become impaired, it may call for additional indemnity and cease to do
the acts indemnified against until such additional indemnity is given.
13.2 Deposit Account with Agent. Borrower hereby authorizes Agent to
charge its general deposit account, if any, maintained with Agent for the
amount of any principal, interest or other payment due under this Agreement,
the Notes, any Letter of Credit Agreement or other Document when the same
becomes due and payable under the terms of this Agreement, the Notes, any
Letter of Credit Agreement or the other Documents.
13.3 Exculpatory Provisions. Agent agrees to exercise its rights and
powers, and to perform its duties as Agent hereunder and under the Documents
in accordance with its usual customs and practices in bank-agency
transactions, but only upon and subject to the express terms and conditions of
this Section 13.3 (and no implied covenants or other obligations shall be read
into this Agreement against the Agent). Agent shall not be liable to any Bank
for any action taken or omitted to be taken by it under this Agreement or any
document executed pursuant hereto, or in connection herewith or therewith,
except for its own willful misconduct or gross negligence, nor be responsible
for any recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement or any document
executed pursuant hereto, or any security thereunder, nor to make any inquiry
respecting the performance by Borrower of its obligations hereunder or
thereunder, and each of them shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement
or writing which is believes to be genuine and to have been presented by a
proper person.
13.4 Successor Agents. Agent may resign as such at any time upon at
least thirty (30) days prior notice to ▇▇▇▇▇▇▇▇ and all Banks. If Agent at
any time shall resign, the Banks may appoint a successor Agent which shall
thereupon become Agent hereunder and shall be entitled to receive from the
prior Agent such documents of transfer and assignment as such successor Agent
may reasonably request.
13.5 Right of Agent as Bank. Agent, in its capacity as a Bank, shall
have the same rights and powers with respect to the credit extended by it, and
the Notes held by it, and with respect to participation interests in Letters
of Credit issued and Letter of Credit Agreements entered pursuant hereto, as
any Bank, and may exercise the same as if it were not Agent or the issuer of
Letters of Credit, and the term "Bank" and, when appropriate, "holder" shall
include Agent its individual capacity.
13.6 Credit Decisions. Each Bank acknowledges that it has and shall,
independently of Agent and each other Bank and based on the financial
statements of ▇▇▇▇▇▇▇▇ and such other documents, information and
investigations as it has deemed appropriate, made its own credit decision to
extend credit hereunder from time to time. Each Bank also acknowledges that
it will, independently of Agent and each other Bank and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under
this Agreement or any document executed pursuant hereto.
13.7 Notices by Agent. Agent shall give prompt notice to each Bank of
each notice or request required or permitted to be given to Agent by Borrower
pursuant to the terms of this Agreement and of any litigation commenced by or
against Agent with respect to this Agreement.
13.8 Agent's Fees. The Borrower shall pay to Agent the Agent's Fees at
the times and in the amount set forth (or to be set forth from time to time)
in a letter agreement between Agent and Borrower. The Agent's Fees described
in this Section 13.8 are not refundable under any circumstances.
13.9 Nature of Agency. The appointment of Agent as agent is for the
convenience of ▇▇▇▇▇ and the Borrower in making Advances, issuing Letters of
Credit, collecting fees and principal and interest on the Advances and dealing
with ▇▇▇▇▇▇▇▇. No Bank is purchasing the Advances from Agent and this
Agreement is not intended to be a purchase or participation agreement.
13.10 Actions; Confirmation of Agent's Authority to Act in Event of
Default. Subject to Section 14.8 hereof, Agent is hereby expressly authorized
to act in all litigation and in all other respects as the representative of
Banks where Agent considers it to be necessary or desirable in order to carry
out the purposes of this Agreement or any of the Documents. In conducting
such litigation hereunder on behalf of ▇▇▇▇▇, Agent shall at all times be
indemnified by ▇▇▇▇▇ as provided in 13.1 hereof. Agent shall undertake to
give each Bank prompt notice of any litigation commenced against Agent and/or
Banks with respect to this Agreement the Documents or any matter referred to
herein or therein.
13.11 Authority of Agent to Enforce Notes And This Agreement. Each
Bank, subject to the terms and conditions of this Agreement, authorizes the
Agent with full power and authority as attorney-in-fact to institute and
maintain actions, suits or proceedings for the collection and enforcement of
the Notes, this Agreement and the Documents (or any of them) and to file such
proofs of debt or other documents as may be necessary to have the claims of
the Banks allowed in any proceeding relative to the Borrower or its creditors
or affecting its properties, and to take such other actions which Agent
considers to be necessary or desirable for the protection, collection and
enforcement of the Notes, this Agreement or the Documents (or any of them).
14. MISCELLANEOUS
14.1 Law of Michigan; Submission to Jurisdiction. This Agreement, the
Notes and Documents have been delivered at Detroit, Michigan, and shall be
governed by and construed and enforced in accordance with the laws of the
State of Michigan. Whenever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Any legal action or proceeding with respect to this Agreement or any
other Document may be brought in the courts of the State of Michigan or of the
United States District Court for the Eastern District of Michigan, and, by
execution and delivery of this Agreement, each party hereto hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
Borrower further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to its
address for notices pursuant to Section 14.3 hereof, such service to become
effective three (3) Business Days after such mailing. Nothing herein shall
affect the rights of the Agent or any Bank to serve process in any other
manner permitted by law.
Borrower hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any proceedings arising out of or in
connection with this Agreement or any Document brought in the courts referred
to above and hereby further irrevocably waives and agrees not to plead or
claim in any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
14.2 Agent's Costs and Expenses. Borrower shall pay all costs and
expenses, including, by way of description and not limitation, reasonable
attorney fees and out-of-pocket expenses and lien and title search fees
incurred by Agent in connection with the commitment, consummation, and closing
of the loans contemplated hereby and in the exercise and enforcement of its
rights and prerogatives hereunder and under the Documents. All costs,
including attorney fees, incurred by Agent in revising, protecting, exercising
or enforcing any of its rights hereunder and under the Documents, or otherwise
incurred by Agent in connection with an Event of Default or incurred by Agent
or any of the Banks in connection with the enforcement hereof, including by
way of description and not limitation, such charges in any court or bankruptcy
proceedings or arising out of any claim or action by any person against Agent
or any Bank which would not have been asserted were it not for Agent's or such
Bank's relationship with Borrower hereunder or under the Documents, shall also
be paid by ▇▇▇▇▇▇▇▇.
14.3 Notices. Except as otherwise provided herein, all notices
hereunder shall be sufficient if made in writing and delivered to the mailing
and delivery address of the respective parties indicated on the signature
pages to this Agreement, or transmitted to the facsimile or telex numbers set
forth on their respective signature pages to this Agreement. All such notices
shall be deemed received (i) two (2) Business Days after deposit thereof in
the mails, if given by mail, (ii) one (1) Business Day after deposit with
express courier service, or (iii) if by facsimile or telex transmission, the
Business Day of transmission if transmitted during customary business hours of
the addressee and, if not transmitted during such business hours, the
following Business Day, provided, however, that notices to the Agent shall
not be effective until actual receipt thereof.
14.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ and their respective
successors and assigns, provided that the foregoing shall not authorize any
assignment by Borrower of its rights or duties hereunder. Any Bank may sell,
assign, grant participations in, or otherwise transfer to any other Person all
or part of the interests of such Bank under this Agreement and the Notes and
the Documents (including its participation interests in Letters of Credit),
and Advances made and to be made by such Bank, subject to the following terms
and conditions:
(a) Assignments. Each Bank, with the written consent of the
Agent (which consent shall not be unreasonably withheld) may
assign all or a portion of its Advances, Notes and other
interests and obligations under this Agreement and the
Documents pursuant to an Assignment Agreement to another
Bank or (provided, however, so long as no Event of Default
is existing such assignment shall require the consent of
Borrower) to other commercial banks or financial
institutions acceptable to Agent and the Borrower, provided
that the aggregate amount of the Commitments and Advances so
assigned to any one Person, and the portion thereof retained
by such assigning Bank (if any), shall in each case be not
less than Five Million Dollars ($5,000,000) after giving
effect to such assignment. Any such assignment will become
effective five (5) Business Days after the Agent's receipt
of a copy of the Assignment Agreement executed by the
assigning Bank and the assignee Bank, payment to Agent of a
processing and recordation fee in the amount of Three
Thousand Dollars ($3,000) for Agent's sole account, and
delivery to Agent (in escrow, pending issuance of Notes
pursuant to the following sentence) of the assigning Bank's
then effective Note. On or before such effective date (x)
Agent shall provide Borrower with written notice of such
assignment, (y) Borrower shall execute and deliver to Agent
new Notes made payable to the assignee and assignor, and (z)
Agent shall prepare and deliver to Borrower and the Banks a
new Schedule 1.50 to this Agreement (which new Schedule 1.50
shall automatically and without further action or consent be
deemed to amend and restate the prior Schedule 1.50) setting
forth the Percentages in effect as a result of such
assignment, whereupon the assignee will become a "Bank" for
all purposes of this Agreement and the other Documents, to
the extent of such assignment.
(b) Participations. Each Bank may transfer or grant
participating interests in its Advances, Notes and other
interests and obligations hereunder to any Person
("Participants") provided that, as between such transferring
Bank and its Participant, such Bank shall retain all of its
power, authority and discretion to grant or participate in
the granting of any waiver, consent or other approval
hereunder and to participate in the approval of any
amendment to this Agreement, such Bank's Notes, the
Documents or any other instrument or agreement delivered
hereunder or in connection herewith, except that such Bank
may agree with any Participant that during the existence of
the Participant's interest, such Bank will not, without
consent of such Participant, agree to any amendment,
modification, waiver, release or consent which pursuant to
the terms hereof, requires the consent of all Banks. All
amounts payable by Borrower hereunder shall be determined as
if the Bank had not transferred or granted any participating
interest and Borrower shall have no liability under this
Agreement to any such participant.
14.5 Indulgence. No delay or failure of Agent and ▇▇▇▇▇ in exercising
any right, power or privilege hereunder shall affect such right, power or
privilege nor shall any single or partial exercise thereof preclude any
further exercise thereof, nor the exercise of any other right, power or
privilege. The rights of Agent and ▇▇▇▇▇ hereunder are cumulative and are not
exclusive of any rights or remedies which Agent and ▇▇▇▇▇ would otherwise
have.
14.6 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same
instrument.
14.7 Entire Agreement; Amendments; Waivers; Consents. This Agreement,
the Notes, the Letter of Credit Agreements and Letters of Credit, the
Documents, and any agreements certificates, or other documents given pursuant
to the foregoing, contain and will contain the entire agreement of the parties
hereto, and none of the parties shall be bound by anything not expressed in
writing, except that Borrower shall be bound by telephonic requests for
Advances made hereunder. No amendment or waiver of any provision of this
Agreement or any Document, nor consent to any departure by Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Agent and the Majority Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall:
(a) unless in writing and signed by all Banks;
(i) postpone a Maturity Date or any other date fixed for
any payment of principal of, or interest on, any
Advances, Letter of Credit Obligation or any fees
payable hereunder;
(ii) reduce the principal of, or interest on, any Note or
any Letter of Credit Obligations or any fees or other
amounts payable hereunder;
(iii) subject Banks to any additional obligations, increase
the aggregate amount of principal indebtedness which
may be incurred under the Notes, or (except as
specifically set forth in Section 14.5(a) hereof)
change the Percentages;
(iv) release any Guaranty;
(v) change this Section 14.7; and
(b) unless in writing and signed by the Agent in addition to all
Banks, affect the rights or duties of the Agent under this
Agreement or any Document.
14.8 Confidentiality. Agent and each Bank agrees that all
documentation and other information made available by Borrower under the terms
of this Agreement shall (except to the extent required by regulatory authority
or legal or governmental process or otherwise by governmental authority or
law, or if such documentation and other information is publicly available or
hereafter becomes publicly available other than by action of Agent or any
Bank, or was theretofore known or hereafter becomes known to Agent or such
Bank independent of any disclosure thereto by Borrower) be held in the
strictest confidence and used solely in administration and enforcement of
Advances from time to time outstanding hereunder and in the prosecution or
defense of legal proceedings arising in connection herewith; provided that:
(i) Agent and each Bank may disclose such documentation and information to the
Agent and/or to any other Bank which is a party to this Agreement; and (ii)
Agent and each Bank may disclose such documentation and other information to
any other bank or other Person to which it sells or proposes to sell a
participation in its Advances hereunder if such other bank or Person, prior to
such disclosure, agrees for the benefit of Borrower to comply with the
provisions of this Section 14.8.
14.9 Interest. It is the intention of the parties hereto that each
Bank and the Agent shall conform to usury laws applicable to them, if any.
Accordingly, if the transactions with any Bank or Agent contemplated hereby
would be usurious under such applicable laws, then, notwithstanding anything
to the contrary in the Notes or Documents payable to Agent or such Bank, this
Agreement or any other agreement entered into in connection with or as
security for or guaranteeing this Agreement or the Indebtedness, it is agreed
as follows: (i) the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved, charged or
received by Agent or such Bank under the Notes payable to Agent or such Bank,
this Agreement, the Documents or under any other agreement entered into in
connection with or as security for or guaranteeing this Agreement or such
Notes or Documents shall under no circumstances exceed the Highest Lawful Rate
and any excess shall be credited automatically, if theretofore paid, on the
principal amount of Advances owed to such Agent or Bank or, if it has Advances
outstanding, shall be refunded to Borrower by such Bank; and (ii) in the event
that the maturity of any such Note or other Indebtedness hereunder is
accelerated or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to such Bank may
never include more than the Highest Lawful Rate and excess interest, if any,
to Agent or such Bank shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by
Agent or such Bank (as applicable) on the principal amount of the Indebtedness
owed to Agent or such Bank (as applicable) by the Borrower or, if no such
Indebtedness is then outstanding, shall be refunded to the Borrower.
14.10 Jury Waiver. Each of the parties to this agreement hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the Documents or
the transactions contemplated hereby or thereby.
14.11 Effective Upon Execution. This Agreement shall become effective
upon the later of the execution hereof by ▇▇▇▇▇, Agent and ▇▇▇▇▇▇▇▇ and the
Closing Date, and shall remain effective until all Advances and indebtedness
hereunder have been repaid and discharged in full and no commitment to fund
any Loan hereunder remains outstanding.
[SIGNATURES ARE ON NEXT PAGE]
WITNESS the due execution hereof as of the day and year first above
written.
REPUBLIC AUTOMOTIVE PARTS, INC.
By:/s/_Donald_B._Hauk________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Executive Vice President and Chief
Financial Officer
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
P.O. Box 2088
Brentwood, Tennessee 37027
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇,
Executive Vice President and Chief
Financial Officer
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
COMERICA BANK, as Agent and Bank
By:/s/_Kristine_L._Andersen__________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Account Officer
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
SUNTRUST BANK, NASHVILLE, N.A.
By:/s/_Allen_K._Oakley_______________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Senior Vice President
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:▇▇▇▇▇_▇.▇▇▇▇▇▇__________________
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1.50
PERCENTAGES
Comerica Bank 70%
Sun Trust 30%
Total: 100%
SCHEDULE 5.6
MARGINS
<2.9:1.0 <3.4:1.0
but but
Leverage Ratio <2.4:1.0 >=2.4:1.0 >=2.9:1.0 >=3.4:1.0
-------- --------- --------- ---------
Margin for Commitment Fee .15% .20% .25% .30%
Margin for Eurodollar-based
Advances .75% 1.00% 1.25% 1.50%
Margin for Prime-based
Advances 0% 0% 0% .25%
SCHEDULE 10.5
EXISTING LOANS AND INVESTMENTS
None.