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EXHIBIT 10.1
VALASSIS COMMUNICATIONS, INC.
CREDIT AGREEMENT
DATED AS OF NOVEMBER 16, 1998
EXECUTION COPY
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TABLE OF CONTENTS
1. DEFINITIONS....................................................................1
2. REVOLVING CREDIT..............................................................19
2.1 Revolving Credit Commitment..........................................19
2.2 Accrual of Interest and Maturity.....................................19
2.3 Requests for Revolving Credit Advances and Requests for Refundings
and Conversions of Revolving Credit Advances.........................19
2.4 Disbursement of Revolving Credit Advances............................20
2.5 Prime-based Advance in Absence of Election or Upon Default...........22
2.6 Facility Fee.........................................................22
2.7 Reduction of Indebtedness; Revolving Credit Aggregate Commitment.....22
2.8 Application of Advances..............................................22
2.9 Extension of Revolving Credit Maturity Date..........................22
2.10 Optional Reduction or Termination of Revolving Credit
Aggregate Commitment.................................................23
2.11 Optional Increase in Revolving Credit Aggregate Commitment...........24
3. LETTERS OF CREDIT.............................................................26
3.1 Letters of Credit....................................................26
3.2 Conditions to Issuance...............................................26
3.3 Notice...............................................................28
3.4 Letter of Credit Fees................................................28
3.5 Issuance Fees........................................................29
3.6 Draws and Demands for Payment Under Letters of Credit................29
3.7 Obligations Irrevocable..............................................30
3.8 Risk Under Letters of Credit.........................................31
3.9 Indemnification......................................................32
3.10 Right of Reimbursement...............................................33
4. SWING LINE CREDIT.............................................................33
4.1 Swing Line Commitment................................................33
4.2 Accrual of Interest; Margin Adjustments..............................34
4.3 Requests for Swing Line Advances.....................................34
4.4 Disbursement of Swing Line Advances..................................35
4.5 Refunding of or Participation Interest in Swing Line Advances........35
5. MARGIN AND FEE ADJUSTMENTS; INTEREST PAYMENTS.................................37
5.1 Margin and Fee Adjustments...........................................37
5.2 Prime-based Interest Payments........................................37
5.3 Eurocurrency-based Interest Payments.................................37
5.4 Quoted Rate Interest Payments........................................37
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5.5 Interest Payments on Conversions.....................................38
5.6 Interest on Default..................................................38
5.7 Prepayment...........................................................38
6. CONDITIONS....................................................................38
6.1 Execution of Notes and this Agreement................................38
6.2 Corporate Authority..................................................39
6.3 Licenses, Permits, Etc...............................................39
6.4 Representations and Warranties.......................................39
6.5 Opinion of Counsel...................................................39
6.6 No Default; No Material Adverse Change...............................39
6.7 Company's Certificate................................................39
6.8 Other Documents and Instruments......................................40
6.9 Continuing Conditions................................................40
7. REPRESENTATIONS AND WARRANTIES................................................40
7.1 Corporate Authority..................................................40
7.2 Due Authorization - Company..........................................40
7.3 Encumbrances.........................................................41
7.4 Capital Stock; Shareholders; Subsidiaries............................41
7.5 Investments in Non-Subsidiaries......................................41
7.6 Taxes................................................................41
7.7 No Defaults..........................................................42
7.8 Enforceability of Agreement and Loan Documents.......................42
7.9 Compliance with Laws.................................................42
7.10 Non-contravention....................................................42
7.11 No Litigation........................................................42
7.12 Consents, Approvals and Filings, Etc.................................42
7.13 Agreements Affecting Financial Condition.............................43
7.14 No Investment Company or Margin Stock................................43
7.15 ERISA................................................................43
7.16 Conditions Affecting Business or Properties..........................43
7.17 Environmental and Safety Matters.....................................43
7.18 Accuracy of Information..............................................44
7.19 Foreign Employee Benefit Plans.......................................45
7.20 Labor Relations......................................................45
7.21 Solvency.............................................................45
7.22 Year 2000............................................................46
8. AFFIRMATIVE COVENANTS.........................................................46
8.1 Preservation of Existence, Etc.......................................46
8.2 Keeping of Books.....................................................46
8.3 Reporting Requirements...............................................46
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8.4 Fixed Charge Coverage Ratio..........................................47
8.5 Funded Debt to EBITDA Ratio..........................................47
8.6 Taxes................................................................48
8.7 Inspections..........................................................48
8.8 Compliance with Leases...............................................48
8.9 Governmental and Other Approvals.....................................48
8.10 Insurance............................................................48
8.11 Compliance with Laws.................................................48
8.12 Compliance with ERISA................................................49
8.13 ERISA Notices........................................................49
8.14 Foreign Employee Benefit Plans.......................................49
8.15 Notices re Other Debt................................................49
8.16 Rating Change........................................................50
8.17 Year 2000 Requirement................................................50
9. NEGATIVE COVENANTS............................................................50
9.1 Capital Structure and Redemptions....................................50
9.2 Business Purposes....................................................50
9.3 Mergers or Dispositions..............................................50
9.4 Indebtedness.........................................................50
9.5 Liens................................................................51
9.6 Acquisitions.........................................................52
9.7 Dividends............................................................52
9.8 Investments..........................................................52
9.9 Accounts Receivable..................................................53
9.10 Transactions with Affiliates.........................................53
9.11 Permitted Subordinated Debt..........................................53
9.12 Sale and Leaseback...................................................53
9.13 Corporate Documents..................................................53
9.14 Fiscal Year..........................................................54
9.15 Senior Notes.........................................................54
9.16 Maximum Subsidiary Investment Amount.................................54
10. DEFAULTS......................................................................54
10.1 Events of Default....................................................54
10.2 Exercise of Remedies.................................................56
10.3 Rights Cumulative....................................................56
10.4 Waiver by Company of Certain Laws....................................56
10.5 Waiver of Defaults...................................................56
10.6 Set Off..............................................................57
11. PAYMENTS, RECOVERIES AND COLLECTIONS..........................................57
11.1 Payment Procedure....................................................57
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11.2 Pro-rata Recovery....................................................58
11.3 Deposits and Accounts................................................59
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS..............................59
12.1 Reimbursement of Prepayment Costs....................................59
12.2 Agent's Eurocurrency Lending Office..................................60
12.3 Circumstances Affecting Eurocurrency-based Rate Availability.........60
12.4 Laws Affecting Eurocurrency-based Advance Availability...............60
12.5 Increased Cost of Eurocurrency-based Advances........................61
12.6 Other Increased Costs................................................61
13. AGENT.........................................................................62
13.1 Appointment of Agent.................................................62
13.2 Deposit Account with Agent...........................................62
13.3 Scope of Agent's Duties..............................................62
13.4 Successor Agent......................................................63
13.5 Loans by Agent.......................................................64
13.6 Credit Decisions.....................................................64
13.7 Agent's Fees.........................................................64
13.8 Authority of Agent to Enforce Notes and This Agreement...............64
13.9 Indemnification......................................................64
13.10 Knowledge of Default.................................................65
13.11 Agent's Authorization; Action by Banks...............................65
13.12 Enforcement Actions by the Agent.....................................65
14. MISCELLANEOUS.................................................................66
14.1 Accounting Principles................................................66
14.2 Consent to Jurisdiction..............................................66
14.3 Law of Michigan......................................................66
14.4 Interest.............................................................66
14.5 Closing Costs and Other Costs; Indemnification.......................66
14.6 Notices..............................................................68
14.7 Further Action.......................................................68
14.8 Successors and Assigns; Participations; Assignments..................68
14.9 Indulgence...........................................................71
14.10 Counterparts.........................................................71
14.11 Amendment and Waiver.................................................71
14.12 Taxes and Fees.......................................................72
14.13 Confidentiality......................................................72
14.14 Withholding Taxes....................................................72
14.15 Power of Attorney....................................................73
14.16 WAIVER OF JURY TRIAL.................................................74
14.17 Complete Agreement; Conflicts........................................74
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14.18 Severability.........................................................74
14.19 Table of Contents and Headings.......................................74
14.20 Construction of Certain Provisions...................................74
14.21 Independence of Covenants............................................75
14.22 Reliance on and Survival of Various Provisions.......................75
14.23 Effective Upon Execution.............................................75
14.24 Payment of Fees......................................................75
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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EXHIBITS
A. BORROWING BASE AND COVENANT COMPLIANCE REPORT
B. REVOLVING CREDIT NOTE
C. PERCENTAGES
D. REQUEST FOR REVOLVING CREDIT ADVANCE
E. REQUEST FOR SWING LINE ADVANCE
F. SWING LINE NOTE
G. LETTER OF CREDIT NOTICE
H. FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE
I. NEW BANK ADDENDUM
J. FORM OF ASSIGNMENT
SCHEDULES
1.1 Pricing Matrix
1.2 Additional Permitted Encumbrances
7.4 Subsidiaries
7.5 Joint Ventures
7.9 Compliance with Laws
7.11 Litigation
7.15 Pension Plans
7.17 Environmental Matters
7.18 Contingent Obligations
9.4 Existing Debt
9.8 Additional Permitted Investments
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made as of the 16th day of
November, 1998, by and among Comerica Bank and the other financial institutions
from time to time parties hereto as lenders of the Revolving Credit
(individually, a "Revolving Credit Bank", and collectively the "Revolving Credit
Banks"), Comerica Bank, as lender of the Swing Line Credit ("Swing Line Bank"
and together with Revolving Credit Banks, collectively referred to as the
"Banks"), Comerica Bank, as agent for the Banks (in such capacity, "Agent"), and
Valassis Communications, Inc., a Delaware corporation ("Company").
COMPANY, AGENT AND BANKS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account Party(ies)" shall mean, with respect to any Letter of Credit,
the account party or parties (which shall be Company) named in an application to
the Agent for the issuance of such Letter of Credit.
"Advance(s)" shall mean Revolving Credit Advance(s) and Swing Line
Advance(s).
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
"Agent" shall mean Comerica Bank, in its capacity as agent hereunder,
or any successor agent appointed in accordance with Section 13.4 hereof.
"Agent's Fees" shall mean those agency and other fees and expenses
required to be paid by Company to Agent under Section 13.7 hereof.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
half of one percent (1/2%).
"Applicable Facility Fee Percentage" shall mean, as of any date of
determination thereof, the applicable percentage used to calculate the Facility
Fee due and payable hereunder, determined
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(based on the Company's Funded Debt to EBITDA Ratio) by reference to the
appropriate columns in the pricing matrix attached to this Agreement as SCHEDULE
1.1.
"Applicable L/C Fee Percentage" shall mean, as of any date of
determination thereof, the applicable percentage used to calculate the Letter of
Credit Fees due and payable hereunder, determined (based on the Company's Funded
Debt to EBITDA Ratio) by reference to the appropriate columns in the pricing
matrix attached to this Agreement as SCHEDULE 1.1.
"Applicable Interest Rate" shall mean (i) in respect of a Revolving
Credit Advance, the Eurocurrency-based Rate or the Prime-based Rate, applicable
to such Advance (in the case of a Eurocurrency-based Advance, for the relevant
Interest Period), and (ii) in respect of a Swing Line Advance, the Prime-based
Rate or the Quoted Rate applicable to such Advance for the relevant Interest
Period, in either case as selected by Company from time to time subject to the
terms and conditions of this Agreement.
"Banks" shall mean Comerica Bank and such other financial institutions
from time to time hereto as lenders which shall include the Revolving Credit
Banks and the Swing Line Bank and any assignee which becomes a Bank pursuant to
Section 14.8 hereof.
"Business Day" shall mean (i) with respect to Eurocurrency-based
Advances, any day on which commercial banks are open for domestic business in
Detroit, London and New York and (ii) in all other instances, any day on which
commercial banks are open for domestic business in Detroit and New York.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) with respect to which the
discounted present value of the rental obligations of such Person as lessee
thereunder, in conformity with GAAP, is required to be capitalized on the
balance sheet of that Person.
"Capital Expenditures" shall mean for any period of determination,
without duplication, any amounts paid or accrued during such period which in
accordance with GAAP would be classified as capital expenditures on a balance
sheet.
"Change of Ownership or Control" shall mean an event or series of
events by which (i) any Person or Persons acting in concert, who as of the date
hereof does not have the power to elect a majority of the Board of Directors of
Company, acquires the power to vote sufficient number of shares of voting stock
of Company to enable such Person to elect a majority of the Board of Directors
of Company; or (ii) with respect to each Subsidiary, Company shall own, directly
or indirectly, less than 51% of the issued and outstanding capital stock of such
Subsidiary unless such change in ownership is the result of a Permitted Merger.
"Consolidated" or "Consolidating" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more Persons
of the amounts signified by such term
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for all such Persons determined on a consolidated basis in accordance with GAAP.
Unless otherwise specified herein, references to Consolidated or Consolidating
financial statements or data of Company includes consolidation with its
Subsidiaries in accordance with GAAP.
"Core Business" shall mean (i) with respect to Company and its
Subsidiaries (other than VCI Properties, Inc.), sales promotion and related
activities and (ii) with respect to VCI Properties, Inc., leasing and subleasing
real property located at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Covenant Compliance Report" shall mean the report to be furnished by
Company to the Agent, in the form of attached EXHIBIT "A" and certified by a
Responsible Officer of Company pursuant to Section 8.3 hereof in which report
Company shall set forth, among other things, detailed calculations and the
resultant ratios or financial tests with respect to the covenants contained in
Sections 8.4, 8.5, 9.1, 9.7, 9.11 and 9.15 of this Agreement.
"Debt" shall mean, as of any applicable date of determination, all
items of indebtedness, obligation or liability of a Person, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities on a
balance sheet of such Person in accordance with GAAP; provided, however that for
purposes of calculating the aggregate Debt of Company and its Subsidiaries, the
direct and indirect and absolute and contingent obligations of Company and its
Subsidiaries (whether direct or contingent) shall be determined without
duplication.
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Dollar" or "Dollars" and the sign "$" shall mean lawful money of the
United States of America.
"EBITDA" shall mean, for any period of determination, on a Consolidated
basis for the Company and its Subsidiaries, the sum of the amounts for such
period of (i) Net Income, plus (ii) the amount deducted in determining Net
Income representing amortization expense of assets, plus (iii) Interest Expense,
plus (iv) the amount deducted in determining Net Income representing all income
taxes, plus (v) the amount deducted in determining Net Income representing
depreciation of assets, plus (vi) extraordinary losses (and any unusual losses
arising in or outside of the ordinary course of business not included in
extraordinary losses determined in accordance with GAAP which have been included
in the determination of Net Income) minus (vii) extraordinary gains (and any
unusual gains arising in or outside of the ordinary course of business not
included in extraordinary
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gains determined in accordance with GAAP which have been included in the
determination of Net Income).
"Equity Interest" means, with respect to any Person, any and all
shares, share capital, interests, participations, warrants, options or other
equivalents (however designated) of capital stock of a corporation and any and
all equivalent ownership interests in a Person (other than a corporation).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code and the regulations in effect from time
to time thereunder.
"ERISA Affiliate" shall mean (i) any corporation which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Internal Revenue Code) as the Company; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Company;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Company, any corporation
described in clause (i) above or any partnership or trade or business described
in clause (ii) above.
"Eurocurrency-based Advance" shall mean a Revolving Credit Advance
which bears interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean, with respect to any
Eurocurrency-Interest Period, the per annum interest rate which is equal to the
sum of the Margin plus the quotient of:
(A) the per annum interest rate at which Dollar deposits are
offered to Agent's Eurocurrency Lending Office by other prime
banks in the Eurocurrency market in an amount comparable to
the relevant Eurocurrency-based Advance and for a period equal
to the relevant Eurocurrency-Interest Period at approximately
11:00 A.M. Detroit time two (2) Business Days prior to the
first day of such Eurocurrency-Interest Period, divided by
(B) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements
(including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that is specified on
the first day of such Eurocurrency-Interest Period by the
Board of Governors of the Federal Reserve System (or any
successor agency thereto) for determining the maximum reserve
requirement with respect to Eurocurrency funding (currently
referred to as "eurocurrency liabilities" in Regulation D of
such Board) maintained by a member bank of such System,
all as conclusively determined (absent manifest error) by the Agent, such sum to
be rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
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"Eurocurrency-Interest Period" shall mean the Interest Period
applicable to a Eurocurrency-based Advance.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at Grand Cayman, British West Indies or such other
branch or branches of Agent, domestic or foreign, as it may hereafter designate
as a Eurocurrency Lending Office by notice to Company and the Banks, and (b) as
to each of the Banks, its office, branch or Affiliate located at its address set
forth on the signature pages hereof (or identified thereon as a Eurocurrency
Lending Office), or at such other office, branch or Affiliate of such Bank as it
may hereafter designate as its Eurocurrency Lending Office by notice to Company
and Agent.
"Event of Default" shall mean each of the Events of Default specified
in Section 10.1 hereof.
"Existing Senior Indentures" shall mean the Indenture between Company
(as successor by merger to Valassis Inserts, Inc.) and The Bank of New York,
Trustee, dated as of March 15, 1992, and the Indenture between Company and The
Bank of New York, as Trustee, dated as of November 15, 1994, pursuant to which
the Senior Notes were issued, as such Indentures may be amended, restated,
supplemented or replaced from time to time.
"Existing Senior Notes" shall mean the $120,000,000 principal amount of
Company's Senior Notes due 1999, issued on March 15, 1992 pursuant to the
Existing Senior Indenture dated as of such date and the $255,000,000 principal
amount of Company's Senior Notes due 2003, issued on November 28, 1994 pursuant
to the Existing Senior Indenture dated as of November 15, 1994.
"Facility Fee" shall mean the fee payable by Company to Agent for
distribution to the Banks based on their respective Percentages under Section
2.6 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fees" shall mean the Facility Fee, the Letter of Credit Fees, the
Agent's Fees and the other fees and charges payable by Company to the Banks or
Agent hereunder.
"Financial Statements" shall mean all consolidated balance sheets,
statements of cash flows, statements of operations and other financial data
(whether of the Company, the Subsidiaries or
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otherwise) which have been furnished by the Company or its public accountants to
the Agent or the Banks for the purposes of, or in connection with, this
Agreement and the transactions contemplated hereby.
"Fixed Charge Coverage Ratio" shall mean as of any date of
determination, a ratio (i) the numerator of which shall be the sum of the
amounts of (a) EBITDA for the four-quarter period ending on such date, minus (b)
Company's and the Subsidiaries' Capital Expenditures for such period (minus
Capital Expenditures permitted under Section 9.4(g) hereof), and (ii) the
denominator of which shall be the sum of the amount of (a) Interest Expense for
such period, plus (b) dividends, excluding dividends to Company or any
Subsidiary, accrued or paid (without duplication) during such period, all as
determined on a Consolidated basis.
"Foreign Employee Benefit Plan" shall mean any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of Company, any of its Subsidiaries or any of its ERISA
Affiliates and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"Foreign Pension Plan" shall mean any employee pension benefit plan as
defined in Section 3(2) of ERISA which is maintained or contributed to for the
benefit of the employees of Company, any of its Subsidiaries or any of its ERISA
Affiliates and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"Funded Debt" shall mean as of any date of determination interest
bearing Debt of a Person, including without limitation, with respect to Company,
the Indebtedness, the Permitted Senior Debt and the Permitted Subordinated Debt,
and with respect to any Person, all letter of credit obligations and guarantees
by such Person of interest-bearing Debt; provided, however, that for purposes of
calculating the aggregate Funded Debt of Company and its Subsidiaries, the
direct and indirect and absolute and contingent obligations of Company and its
Subsidiaries (whether direct or contingent) shall be determined without
duplication.
"Funded Debt to EBITDA Ratio" shall mean as of any date of
determination, a ratio, the numerator of which shall equal Funded Debt of
Company and its Subsidiaries as of such date and the denominator of which shall
equal EBITDA for the four quarter period ending on such date.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof, consistently applied,
subject to the provisions of Section 14.1 hereof.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Gross-up" shall have the meaning set forth in Section 11.1(d) hereof.
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"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal, state,
provincial, local, foreign or other governmental or quasi-governmental authority
or body (or any agency, instrumentality or political subdivision thereof)
pertaining to hazardous material or toxic or dangerous waste, substances or
material on or about any facilities owned, leased or operated by Company or any
of its Subsidiaries, or any portion thereof including, without limitation, those
relating to soil, surface, subsurface ground water conditions and the condition
of the ambient air; and any state and local laws and regulations pertaining to
such material and/or asbestos; any so-called "superfund" or "superlien" law; and
any other federal, state, provincial, foreign or local statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter in effect.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement in its entirety and not to any particular paragraph or provision of
this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities (including
without limitation interest, fees and other charges) arising under this
Agreement or the other Loan Documents, whether direct or indirect, absolute or
contingent, of Company to the Banks or to the Agent, in any manner and at any
time, whether evidenced by the Notes or arising under any of the other Loan
Documents, due or hereafter to become due, now owing or that may hereafter be
incurred by Company to, or acquired by, the Banks or by Agent, and any judgments
that may hereafter be rendered on such indebtedness or any part thereof, with
interest according to the rates and terms specified, or as provided by law, and
any and all consolidations, amendments, renewals, replacements, substitutions or
extensions of any of the foregoing.
"Indentures" shall mean the Senior Indentures and the Subordinated
Indenture.
"Insolvency Proceeding" shall mean with respect to any Person any of
the following events: (i) a creditor's committee shall have been appointed for
the business of such Person, (ii) such Person shall have made a general
assignment for the benefit of creditors, (iii) such Person shall have been
adjudicated bankrupt, (iv) such Person shall have filed a voluntary petition in
bankruptcy or for reorganization or to effect a plan or arrangement with
creditors or shall have failed to pay its debts generally as such debts became
due in the ordinary course of business or is the subject of an involuntary
petition in bankruptcy, or a reorganization, arrangement or creditor composition
proceeding, (v) such Person shall have applied for or permitted the appointment
of a receiver or trustee or custodian for any of its property or assets, (vi) a
receiver shall have been appointed for any property or assets of such Person,
(vii) an order shall have been entered approving a petition for
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reorganization of such Person or (viii) such Person shall take any action
authorizing or in furtherance of any of the actions described in this
definition.
"Intangible Assets" shall mean with respect to any Person, assets of
such Person having no physical existence and that, in conformity with GAAP,
should be classified as intangible assets, including, without limitation,
patents, patent rights, trademarks, trade names, copyrights, franchises,
licenses, customer lists, organizational expenses and goodwill.
"Interest Expense" shall mean for any period, total interest expense,
whether paid or accrued (including the interest component of Capitalized
Leases), and all commissions, fees and discounts with respect to letters of
credit and other Funded Debt of Company and its Subsidiaries on a Consolidated
basis, but excluding interest expense not payable in cash (including
amortization of discount), all as determined in accordance with GAAP.
"Interest Period" shall mean (i) with respect to a Eurocurrency-based
Advance, one (1), two (2), three (3) or six (6) months (or any lesser or greater
period of time agreed to in advance by Company, Agent and the Banks) as selected
by Company pursuant to Section 2.3 hereof, provided, however, that any
Eurocurrency-Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month and (ii) with respect to a
Swing Line Advance, a period of one (1) to thirty (30) days agreed to in advance
by Company and Swing Line Bank as selected by Company pursuant to Section 4.3
hereof. Each Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day or, if such next
succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day, and no Interest Period which would end after the
Revolving Credit Maturity Date shall be permitted with respect to any Advance.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, as of any date of determination, any loan or
advance by Company or any of its Subsidiaries to, or any other loan, advance or
investment by Company or any of its Subsidiaries in, any Person (including
without limitation, any Subsidiary of Company or any Joint Venture), whether
such loan, advance or investment shall be in the nature of an investment in
shares of stock or other capital or securities, general or limited partnership
or joint venture interests, evidences of indebtedness or otherwise. The amount
of any Investment, as of any date of determination, shall be the aggregate
original principal or capital amount thereof less all returns of principal or
equity thereon as of such date (and otherwise without adjustment by reason of
the financial condition of such other Person) and shall, if made by the transfer
or exchange of property other than cash, be deemed to have been made in an
original principal or capital amount equal to the fair market value of such
property at the time such Investment was made.
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"Issuing Office" shall mean Agent's office located at One Detroit
Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other office as
Agent shall designate as its Issuing Office.
"Joint Venture" shall mean any corporation, partnership, association,
joint stock company, business trust or other combined enterprise, other than a
Subsidiary, in which (or to which) the Company or any of its Subsidiaries has
made a loan, investment or advance or has an ownership stake or interest,
whether in the nature of an equity capital interest or otherwise.
"Letter(s) of Credit" shall mean any standby or documentary letters of
credit issued by Agent at the request of or for the account of an Account Party
or Account Parties pursuant to Article 3 hereof.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Agent of
an Account Party or Account Parties requesting Agent to issue such Letter of
Credit, as amended, replaced, supplemented or restated from time to time.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Maximum Amount" shall mean as of any date of
determination Ten Million Dollars ($10,000,000).
"Letter of Credit Obligation(s)" shall mean the obligation of an
Account Party or Account Parties 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 to the Agent under such
Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Agent in its capacity hereunder as issuer of a Letter of Credit as a
result of a draft or other demand for payment under any Letter of Credit.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, financing statement or comparable notice or other
filing or recording, lessor's or lessee's interest under any lease,
subordination or any claim or right, or any other type of lien, charge,
encumbrance, preferential or priority arrangement or other claim or right,
whether based on common law or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Letter of Credit Documents, the Letters of Credit, and any other documents,
certificates, instruments or agreements
9
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executed pursuant to or in connection with any such document or this Agreement,
as such documents may be amended, replaced, supplemented or restated from time
to time.
"Majority Banks" shall mean at any time the Banks holding not less than
sixty six and two thirds percent (66%) of the sum of the aggregate principal
amount of the Indebtedness then outstanding under the Notes (or, if no
Indebtedness is then outstanding, the Banks holding not less than sixty six and
two thirds percent (66%) of the Revolving Credit Aggregate Commitment);
provided, however, that for purposes of determining Majority Banks hereunder,
Indebtedness outstanding under the Swing Line Note shall be allocated among the
Banks based on their respective Percentages; provided, further, however, that in
the event any of the Banks (a "Non-Advancing Bank") shall have failed to fund
its Percentage of any Advance requested by Company which such Non-Advancing Bank
is obligated to fund under the terms of this Agreement and such failure to fund
has not been cured, then for so long as such failure continues, "Majority Banks"
shall mean the Banks (excluding all Non-Advancing Banks) holding not less than
sixty six and two thirds percent (66%) of the aggregate Percentage of Banks
(excluding all Non-Advancing Banks).
"Margin" shall mean, as of any date of determination thereof, the
applicable interest rate margin component of the Eurocurrency-based Rate,
determined in accordance with the provisions of Section 5.1 hereof (based on
Company's Funded Debt to EBITDA Ratio) by reference to the appropriate columns
in the pricing matrix attached to this Agreement as SCHEDULE 1.1.
"Material Adverse Effect"shall mean a material adverse effect on (a)
the business or financial condition of the Company and its Subsidiaries taken as
a whole, (b) the ability of the Company to perform its obligations under this
Agreement, the Notes or any other Loan Document, or (c) the validity or
enforceability of this Agreement, any of the Notes or any of the other Loan
Documents or the rights or remedies of the Agent or the Banks hereunder or
thereunder.
"Maximum Subsidiary Investment Amount" shall mean (i) the sum of (A)
all cash Investments by Company now existing or hereafter made, or which the
Company is under a contract obligation to make, in any Subsidiary or Joint
Venture, (B) the amount of any guaranty obligations whether now existing or
hereafter incurred by Company in respect of obligations of any Subsidiary or
Joint Venture and (C) the fair market value of all assets of Company hereafter
contributed or sold to any Subsidiary or Joint Venture, minus (ii) any cash
dividends (but not intercompany loans) received by Company in respect of the
capital stock of its Subsidiaries after the date hereof. For purposes of this
definition, the amount of any Investment, as of any date of determination, shall
be the aggregate original principal or capital amount thereof less all returns
of principal or equity thereon as of such date (and otherwise without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time such Investment was made.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
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"▇▇▇▇▇'▇ Rating" shall mean for any day, the rating of Company's senior
long-term unsecured and non-credit enhanced debt by Moody's in effect at 11:00
a.m. Detroit time on such day.
"Net Income" shall mean for any period, the net earnings (or loss)
after taxes of Company and its Subsidiaries on a Consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"New Bank Addendum" shall mean an addendum, substantially in the form
of EXHIBIT "I" hereto, to be executed and delivered by each Bank becoming a
party to this Agreement pursuant to Section 2.11 hereof.
"Notes" shall mean the Revolving Credit Notes and the Swing Line Note.
"Pension Plan(s)" shall mean all employee pension benefit plans of
Company or its Subsidiaries, as defined in Section 3(2) of ERISA.
"Percentage" shall mean, with respect to any Bank, its percentage
share, as set forth on EXHIBIT "C", hereto, of the Revolving Credit and its risk
participation in Letters of Credit, as such Exhibit may be revised from time to
time by Agent in accordance with Section 2.11 or 14.9(c) hereof.
"Permitted Acquisitions" shall mean any acquisition by the Company or
any Subsidiary of all or substantially all of the assets of another Person, or
of a division or line of business of another Person or fifty one percent (51%)
or more of the shares of stock or other ownership interests of another Person
which satisfies and/or is conducted in accordance with the following
requirements:
(i) each such stock acquisition shall, under GAAP, be
required to be consolidated by Company, and not treated by Company or
any of its Subsidiaries as an equity investment;
(ii) on the date of any such acquisition, all necessary
governmental, quasi-governmental, agency, regulatory or similar
approvals of applicable jurisdictions (or the respective agencies,
instrumentalities or political subdivisions, as applicable, of such
jurisdictions) and all necessary non-governmental and other third-party
approvals which, in each case, are material to such acquisition have
been obtained and are in effect, and Company and its Subsidiaries are
in full compliance thereunder, and all necessary declarations,
registrations or other filings with any court, governmental or
regulatory authority, securities exchange or any other person have been
made;
(iii) if a stock acquisition, the acquisition target must
be principally engaged in a Core Business and, if an asset acquisition,
the assets so acquired must be used by Company
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or such Subsidiary in a Core Business, and in either case, the
acquisition target must not be the subject of an Insolvency Proceeding;
(iv) if a stock acquisition, the acquisition shall have
been approved by the Board of Directors of the acquisition target or
all of the shareholders whose stock is being acquired of such
acquisition target not later than the date any Request for Revolving
Credit Advance or Request for Swing Line Advance is delivered to Bank
in connection with an Advance to be used to pay all or a portion of the
acquisition consideration and as of such date, no claim or challenge
has been asserted or threatened by any shareholder, director, officer
or employee of the acquisition target or by any other person which
would reasonably be expected to have a Material Adverse Effect;
(v) not less than ten (10) Business Days prior to the
date of such acquisition, the Company provides to Agent written notice
of the proposed acquisition together with (i) Pro Forma Projected
Financial Information and (ii) a Covenant Compliance Report (which is
prepared after giving effect to such acquisition); and
(vi) both immediately before and immediately after such
acquisition, no Default or Event of Default (whether or not related to
such acquisition) has occurred and is continuing under this Agreement
or any of the other Loan Documents as evidenced by a certificate of an
authorized officer of Company.
"Permitted Encumbrances" shall mean, with respect to any Person:
(a) the liens and encumbrances, if any, granted under or
established by this Agreement or the other Loan Documents;
(b) liens for taxes, assessments and other governmental
charges not yet due and payable or which are being contested in good
faith by appropriate proceedings diligently pursued, provided that such
provision for the payment of all such taxes known to such Person has
been made on the books of such Person as may be required by GAAP;
(c) mechanics', materialmen's, carriers', warehousemen's
and similar liens and encumbrances arising in the ordinary course of
business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any levy, execution or other enforcement
of such liens and encumbrances shall have been duly suspended; and (ii)
such provision for the payment of such liens and encumbrances has been
made on the books of such Person as may be required by GAAP;
(d) liens arising in connection with worker's
compensation, unemployment insurance, old age pensions (subject to the
applicable provisions of this Agreement) and
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23
social security benefits and other forms of governmental insurance or
similar benefits which are not overdue or are being contested in good
faith by appropriate proceedings diligently pursued, provided that in
the case of any such contest (i) any levy, execution or other
enforcement of such liens shall have been duly suspended; and (ii) such
provision for the payment of such liens has been made on the books of
such Person as may be required by GAAP;
(e)(i) liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts with the
United States or any foreign government or any agency thereof entered
into in the ordinary course of business and (ii) liens incurred or
deposits made in the ordinary course of business to secure the
performance of statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations incurred in connection with the
borrowing of money, any lease-purchase arrangements or the payment of
the deferred purchase price of property), provided that full provision
for the payment of all such obligations set forth in clauses (i) and
(ii) has been made on the books of such Person as may be required by
GAAP;
(f) those existing liens and encumbrances of the Company
or its Subsidiaries identified in SCHEDULE 1.2, hereto;
(g) liens in the nature of any minor imperfections of
title, including but not limited to easements, covenants, rights-of-way
or other similar restrictions, which, either individually or in the
aggregate would not (i) materially adversely affect the present or
future use of the property to which they relate, or (ii) have a
material adverse effect on the sale or lease of such property, or (iii)
render title thereto unmarketable; and
(h) any interest or title of a lessor under any lease of
property to, or of any consignor of goods cosigned to, or of any
creditor of any consignee in goods consigned to such consignee by,
Company or any of its Subsidiaries.
"Permitted Investments" shall mean:
(i) Governmental Obligations;
(ii) Obligations of a state of the United States, the
District of Columbia or any possession of the United States, or any
political subdivision thereof, which are described in Section 103(a) of
the Internal Revenue Code and are graded in any of the highest three
(3) major grades as determined by at least one nationally recognized
rating agency; or secured, as to payments of principal and interest, by
a letter of credit provided by a financial institution or insurance
provided by a bond insurance company which itself or its debt is rated
in the highest three (3) major grades as determined by at least one
Rating Agency;
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(iii) Banker's acceptances, commercial accounts,
certificates of deposit, or depository receipts issued by a bank, trust
company, savings and loan association, savings bank or other financial
institution whose deposits are insured by the Federal Deposit Insurance
Corporation and whose reported capital and surplus equal at least
$50,000,000;
(iv) Commercial paper rated at the time of purchase within
the two highest classifications established by not less than two
nationally recognized rating agencies, and which matures within 270
days after the date of issue;
(v) Preferred stock (bearing a AAA rating by S&P and
Moody's) issued by closed-end municipal bond funds;
(vi) tax-exempt variable rate demand bonds and/or auction
reset securities that (A) are backed by letters of credit, bond
insurance or surety bonds, (B) have a long-term rating of AA or better
by S&P or Moody's, (C) have a maturity date within one year after the
date of issue;
(vii) Secured repurchase agreements against obligations
itemized in paragraph (i) above, and executed by a bank or trust
company or by members of the association of primary dealers or other
recognized dealers in United States government securities, the market
value of which must be maintained at levels at least equal to the
amounts advanced; and
(viii) Any fund or other pooling arrangement which
exclusively purchases and holds the investments itemized in (i) through
(vi) above.
"Permitted Merger(s)" shall mean any merger of any Subsidiary into
Company, of any Subsidiary into any other Subsidiary (other than the merger of a
Wholly-Owned Subsidiary into a Subsidiary which is not a Wholly-Owned
Subsidiary) or of a Person into Company or a Wholly-Owned Subsidiary in
connection with a Permitted Acquisition which, in each case, satisfies and/or is
conducted in accordance with the following requirements:
(a) not less than ten (10) Business Days nor more
than ninety (90) days prior to the commencement of such
proposed merger, Company provides written notice thereof to
Agent along with (i) drafts of all material documents
pertaining to such proposed merger, (ii) Pro Forma Projected
Financial Information and (iii) a Covenant Compliance Report
(which shall be prepared after giving effect to such merger);
(b) (i) immediately following and as the direct
result of any such merger, the surviving or successor entity
has succeeded by operation of applicable law (as confirmed by
an opinion(s) of counsel in form and substance reasonably
satisfactory
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to the Majority Banks) to all of the obligations of the
non-surviving entity under this Agreement and the other Loan
Documents, and to all of the property rights of such
non-surviving entity subject to the applicable Loan Documents
and (ii) in the case of a merger of a Person into Company or a
Wholly-Owned Subsidiary, the Company or the Wholly-Owned
Subsidiary, as applicable, is the surviving entity;
(c) such Person shall not be the subject of an
Insolvency Proceeding;
(d) concurrently with such proposed merger, the
surviving entity involved in such merger shall execute or
cause to be executed, and provide or cause to be provided to
Agent, for the Banks, such documents and instruments
(including without limitation opinions of counsel, amendments,
acknowledgments and consents) as reasonably requested by the
Majority Banks; and
(e) both immediately before and immediately after
such merger, no Default or Event of Default (whether or not
related to such restructuring), has occurred and is continuing
under this Agreement or any of the other Loan Documents.
"Permitted Senior Debt" shall mean Debt which is evidenced by the
Existing Senior Notes, and any extension, renewal, refunding or refinancing
thereof and any Debt of Company incurred or issued after the date hereof which
satisfies all of the following requirements: such Debt is unsecured, is incurred
or issued as part of a private placement or carrying a public debt rating by a
Rating Agency and which has a term of not less than six (6) years and which has
an amortization schedule not greater than level amortization to maturity (but
with no principal payments required for a period of not less than five (5)
years) and with no put or call option or other provision for mandatory early
repayment except for acceleration on default.
"Permitted Subordinated Debt" shall mean the Debt evidenced by the
Subordinated Notes and any extension, renewal, refunding or refinancing thereof,
provided that any such extension, renewal, refunding or refinancing is in an
aggregate principal amount not greater than the principal amount of the
Subordinated Notes outstanding at the time thereof and is on terms (including,
without limitation, maturity, amortization, interest rate, premiums, fees,
covenants, events of default, remedies and subordination terms) not materially
less advantageous to the Company or materially adverse to the Banks than the
terms of the Subordinated Notes as of the date hereof.
"Permitted Transfer(s)" shall mean any (i) sale, assignment, transfer
or other disposition of inventory in the ordinary course of business, (ii) prior
to the occurrence of an Event of Default, the sale, assignment, transfer or
other disposition of worn-out or obsolete machinery or equipment the aggregate
value of which shall not exceed $2,500,000 during any fiscal year, (iii) sale
after the date hereof of other assets for consideration not less than fair
market value provided that such sales do not exceed $10,000,000 in aggregate
fair market value and (iv) sale of Permitted Investments.
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"Person" shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock company,
or a government or any agency or political subdivision thereof or other entity
of any kind.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which
is equal to the greater of (i) the Prime Rate, or (ii) the Alternate Base Rate.
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition or merger, as applicable, a statement executed by a
Responsible Officer of Company (supported by reasonable detail) setting forth
the total consideration to be paid or incurred in connection with the proposed
acquisition or merger, as applicable, and pro forma combined projected financial
information for Company and its consolidated Subsidiaries and the acquisition or
merger target (if applicable), consisting of projected balance sheets as of the
proposed effective date of the acquisition or the closing date and as of the end
of at least the next succeeding three (3) fiscal years of Company following the
acquisition and projected statements of income for each of those years,
including sufficient detail to permit calculation of the amounts and the
covenants described in Sections 8.4, 8.5, 9.1, 9.7, 9.11 and 9.15 hereof, as
projected as of the effective date of the acquisition or merger, as applicable,
and for those fiscal years and accompanied by (i) a statement setting forth a
calculation of the ratios and amounts so described, (ii) a statement in
reasonable detail specifying all material assumptions underlying the projections
and (iii) such other information as any Bank shall reasonably request.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" shall mean any Swing Line Advance which bears
interest at the Quoted Rate.
"Rating Agency" shall mean ▇▇▇▇▇'▇, S&P or any other
nationally-recognized statistical rating organization which is acceptable to the
Agent.
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"Request for Revolving Credit Advance" shall mean a Request for
Revolving Credit Advance issued by Company under Section 2.3 of this Agreement
in the form annexed hereto as EXHIBIT "D".
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by Company under Section 4.3 of this Agreement in the form
annexed hereto as EXHIBIT "E".
"Responsible Officer" shall mean (i) with respect to Requests for
Revolving Credit Advances or Requests for Swing Line Advances, the chief
executive officer, the president, the chief financial officer or treasurer of
Company or any other officer of Company designated by the chief executive
officer, chief financial officer, president or treasurer of Company, (ii) with
respect to compliance with financial covenants and the issuance of Covenant
Compliance Reports, the president, the chief financial officer or the treasurer
of Company or any other officer having substantially the same authority and
responsibility and (iii) in all other instances, the chief financial officer,
the chief executive officer or the president of the Company or any other officer
having substantially the same authority and responsibility.
"Revolving Credit" shall mean the revolving credit loans to be advanced
from time to time to the Company by the Banks pursuant to Article 2 hereof, in
an aggregate amount (subject to the terms hereof) not to exceed the Revolving
Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by Company
and made by Banks under Section 2.1 of this Agreement, including without
limitation any readvance, refunding or conversion of such borrowing pursuant to
Section 2.3 hereof, and shall include, as applicable, a Eurocurrency-based
Advance and/or Prime-based Advance.
"Revolving Credit Aggregate Commitment" initially shall mean One
Hundred Million Dollars ($100,000,000), subject to any increases in the
Revolving Credit Aggregate Commitment pursuant to Section 2.11 of this Agreement
by an amount not to exceed in the aggregate the Revolving Credit Optional
Increase and subject to reduction or termination under Section 2.10 or 10.2
hereof.
"Revolving Credit Banks" shall mean Comerica Bank and such other
financial institutions from time to time parties hereto as lenders of the
Revolving Credit.
"Revolving Credit Maturity Date" shall mean October 31, 2001, subject
to extension pursuant to the terms of Section 2.9 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.1 hereof, made by Company to each of the Banks in the
form annexed to this agreement as EXHIBIT "B", as such notes may be amended or
supplemented from time to time, and any other notes issued in substitution,
replacement or renewal thereof from time to time.
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"Revolving Credit Optional Increase" shall mean an amount up to Thirty
Five Million Dollars ($35,000,000).
"S&P" shall mean Standard and Poor's Ratings Group or any successor
thereto.
"S&P Rating" shall mean for any day, the rating of the Company's senior
long term unsecured and non-credit enhanced debt by S&P in effect at 11:00 a.m.
Detroit time on such day.
"Senior Indentures" shall mean the Existing Senior Indentures and any
other indenture or agreement issued or executed in connection with the issuance
of Permitted Senior Debt.
"Senior Notes" shall mean the Existing Senior Notes and any note or
other instrument issued after the date hereof by Company or its Subsidiaries to
evidence Permitted Senior Debt.
"Stock Redemption Cap" shall mean as of any date of determination the
sum of (i) Seventy Five Million Dollars ($75,000,000) plus (ii) fifty percent
(50%) of Net Income from the date hereof through such date of determination.
"Subordinated Indenture" shall mean the Indenture between Company (as
successor by merger to Valassis Inserts, Inc.) and The Bank of New York,
Trustee, dated as of March 15, 1992, pursuant to which the Subordinated Notes
were issued, as may be amended, restated, supplemented or replaced from time to
time.
"Subordinated Notes" shall mean the $150,000,000 original principal
amount of Company's Senior Subordinated Notes due 1999, issued on March 15,
1992, pursuant to the Subordinated Indenture.
"Subsidiary(ies)" shall mean any corporation, association, joint stock
company, or business trust of which fifty one percent (51%) or more of the
outstanding voting stock or share capital is owned either directly or indirectly
by any Person or one or more of its Subsidiaries or by any Person and one or
more of its Subsidiaries, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by any
Person and/or its Subsidiaries. Unless otherwise specified to the contrary
herein, Subsidiary(ies) shall refer to the Company's Subsidiary(ies).
"Swing Line Bank" shall mean Comerica Bank, in its capacity as lender
under Article 4 of this Agreement, and its successors and assigns.
"Swing Line Note" shall mean the swing line note described in Section
4.1 hereof made by Company to Swing Line Bank in the form annexed hereto as
EXHIBIT "F", as such Note may be
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amended or supplemented from time to time, and any notes issued in substitution,
replacement or renewal thereof from time to time.
"Swing Line Advance" shall mean an Advance made by Swing Line Bank to
Company pursuant to Section 4.1 hereof.
"Wholly-Owned Subsidiary" shall mean any direct, wholly owned
Subsidiary of the Company.
2. REVOLVING CREDIT
2.1 Revolving Credit Commitment. Subject to the terms and
conditions of this Agreement, each Bank severally and for itself alone agrees to
make Advances of the Revolving Credit to Company from time to time on any
Business Day during the period from the effective date hereof until (but
excluding) the Revolving Credit Maturity Date in an aggregate amount not to
exceed at any one time outstanding each such Bank's Percentage of the Revolving
Credit Aggregate Commitment. All of such Revolving Credit Advances hereunder
shall be evidenced by the Revolving Credit Notes, under which advances,
repayments and readvances may be made, subject to the terms and conditions of
this Agreement.
2.2 Accrual of Interest and Maturity. (a) The Revolving Credit
Notes, and all principal and interest outstanding thereunder, shall mature and
become due and payable in full on the Revolving Credit Maturity Date, and each
Revolving Credit Advance evidenced by the Revolving Credit Notes from time to
time outstanding hereunder shall, from and after the date of such Advance, bear
interest at its Applicable Interest Rate. The amount and date of each Revolving
Credit Advance, its Applicable Interest Rate, its Interest Period (if any), and
the amount and date of any repayment shall be noted on Agent's records, which
records will be conclusive evidence thereof, absent manifest error; provided,
however, that any failure by the Agent to record any such information shall not
relieve Company of its obligation to repay the outstanding principal amount of
such Revolving Credit Advance, all interest accrued thereon and any amount
payable with respect thereto in accordance with the terms of this Agreement and
the other Loan Documents.
2.3 Requests for Revolving Credit Advances and Requests for
Refundings and Conversions of Revolving Credit Advances. Company may request a
Revolving Credit Advance, refund any Revolving Credit Advance in the same type
of Revolving Credit Advance or convert any Advance to any other type of
Revolving Credit Advance only after delivery to Agent of a Request for Revolving
Credit Advance executed by a Responsible Officer of Company, subject to the
following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall
set forth the information required on the Request for Revolving Credit
Advance form annexed hereto as EXHIBIT "D", including without
limitation:
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(i) the proposed date of Revolving Credit Advance, which
must be a Business Day;
(ii) whether the Revolving Credit Advance is a refunding
or conversion of an outstanding Revolving Credit
Advance; and
(iii) whether such Revolving Credit Advance is to be a
Prime-based Advance or a Eurocurrency-based Advance,
and, except in the case of a Prime-based Advance, the
first Interest Period applicable thereto;
(b) each such Request for Revolving Credit Advance shall
be delivered to Agent by 11:00 a.m. (Detroit time) three (3) Business
Days prior to the proposed date of the Revolving Credit Advance, except
in the case of a Prime-based Advance, for which the Request for
Revolving Credit Advance must be delivered by 10 a.m. (Detroit time) on
the proposed date of the Revolving Credit Advance;
(c) the principal amount of such requested Revolving
Credit Advance, plus the principal amount of all other Advances then
outstanding hereunder, plus the aggregate undrawn portion of any
Letters of Credit which shall be then outstanding as of such date plus
the aggregate face amount of all Letters of Credit requested but not
yet issued as of such date, plus the aggregate amount of all
outstanding Letter of Credit Obligations, less the principal amount of
any outstanding Swing Line Advance and/or Revolving Credit Advance to
be refunded by the requested Revolving Credit Advance shall not exceed
the then applicable Revolving Credit Aggregate Commitment;
(d) the principal amount of such Revolving Credit
Advance, plus the amount of any other outstanding Indebtedness under
this Agreement to be then combined therewith having the same Applicable
Interest Rate and Interest Period, if any, shall be (i) with respect to
Eurocurrency-based Advances, at least Two Million Dollars ($2,000,000)
or a larger multiple thereof and (ii) with respect to Prime-based
Advances, at least One Million Dollars ($1,000,000) or a larger
multiple thereof, and at any one time there shall not be in effect more
than five (5) Interest Periods; and
(e) each Request for Revolving Credit Advance, once
delivered to Agent, shall not be revocable by Company, and shall
constitute and include a certification by the Company as of the date
thereof that:
(i) both before and after the Revolving Credit Advance,
the obligations of the Company set forth in this
Agreement and the other Loan Documents are valid,
binding and enforceable obligations of Company;
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(ii) to the best knowledge of Company all conditions to
Advances of the Revolving Credit (including, without
limitation, Section 6.6 hereof) have been satisfied;
and
(iii) both before and after the Revolving Credit Advance,
the representations and warranties of Company
contained in this Agreement and the Loan Documents
are true and correct in all material respects.
2.4 Disbursement of Revolving Credit Advances.
(a) Upon receiving any Request for Revolving Credit
Advance from Company under Section 2.3 hereof, Agent shall promptly
notify each Bank by wire, telecopy, telex or by telephone (confirmed by
wire, telecopy or telex) of the amount of such Revolving Credit Advance
to be made and the date such Revolving Credit Advance is to be made by
said Bank pursuant to its Percentage of the Revolving Credit Advance.
Unless such Bank's commitment to make Revolving Credit Advances
hereunder shall have been suspended or terminated in accordance with
this Agreement (or unless such Revolving Credit Advance is a refunding
or conversion of a Revolving Credit Advance) each Bank shall send the
amount of its Percentage of the Revolving Credit Advance in same day
funds in Dollars to Agent at the office of Agent located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ not later than 2:00 p.m. (Detroit time)
on the date of such Revolving Credit Advance.
(b) Subject to submission of an executed Request for
Revolving Credit Advance by Company without exceptions noted in the
compliance certification therein and to the other terms and conditions
hereof, Agent shall make available to Company the aggregate of the
amounts so received by it from the Banks under this Section 2.4, in
like funds, not later than 4:00 p.m. (Detroit time) on the date of such
Revolving Credit Advance by credit to an account of Company maintained
with Agent or to such other account or third party as Company may
reasonably direct.
(c) Unless Agent shall have been notified by any Bank
prior to the date of any proposed Revolving Credit Advance that such
Bank does not intend to make available to Agent such Bank's Percentage
of such Revolving Credit Advance, Agent may assume that such Bank has
made such amount available to Agent on such date, as aforesaid, and
may, in its sole discretion and without obligation to do so, in
reliance upon such assumption, make available to Company a
corresponding amount. If such amount is not in fact made available to
Agent by such Bank in accordance with Section 2.4(a), 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 Company, and Company
shall pay such amount to Agent. Agent shall also be entitled to recover
from such Bank or from Company, as the case may be, interest on such
amount in respect of each
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day from the date such amount was made available by Agent to Company to
the date such amount is recovered by Agent, at a rate per annum equal
to:
(i) in the case of such Bank, the Federal Funds Effective
Rate; or
(ii) in the case of Company, the rate of interest then
applicable to the Revolving Credit Advance.
The obligation of any Bank to make any Revolving Credit Advance
hereunder shall not be affected by the failure of any other Bank to
make any Revolving Credit Advance hereunder, and no Bank shall have any
liability to the Company, the Agent, any other Bank, or any other party
for another Bank's failure to make any loan or Revolving Credit Advance
hereunder.
2.5 Prime-based Advance in Absence of Election or Upon Default.
If, as to any outstanding Eurocurrency-based Advance, Agent has not received
payment on the last day of the Interest Period applicable thereto, or does not
receive a timely Request for Revolving Credit Advance meeting the requirements
of Section 2.3 hereof with respect to the refunding or conversion of such
Advance, or, subject to Section 5.5 hereof, if on such day a Default or Event of
Default shall have occurred and be continuing, the principal amount thereof
which is not then prepaid shall be converted automatically to a Prime-based
Advance and the Agent shall thereafter promptly notify Company and the Banks of
said action.
2.6 Facility Fee. From the date hereof to the Revolving Credit
Maturity Date, the Company shall pay to the Agent, for distribution to the Banks
pro rata, a Facility Fee equal to the Applicable Facility Fee Percentage per
annum times the Revolving Credit Aggregate Commitment. The Facility Fee shall be
payable quarterly in arrears commencing January 4, 1999 (in respect of the prior
quarter or portion thereof), and on the first Business Day of each calendar
quarter thereafter and on the Revolving Credit Maturity Date, and shall be
computed on the basis of a year of three hundred sixty (360) days and assessed
for the actual numbers of days elapsed. Whenever any payment of the Facility Fee
shall be due on a day which is not a Business Day, the date for payment thereof
shall be extended to the next Business Day. Upon receipt of such payment, Agent
shall make prompt payment to each Bank of its share of the Facility Fee based
upon its respective Percentage. The Facility Fee shall not be refundable under
any circumstances.
2.7 Reduction of Indebtedness; Revolving Credit Aggregate
Commitment. If at any time and for any reason the aggregate principal amount of
Advances hereunder to Company, plus the aggregate undrawn amount of any Letters
of Credit which shall be outstanding at such time, plus the face among of any
requested but not yet issued Letters of Credit, plus any unreimbursed Letter of
Credit Obligations shall exceed the Revolving Credit Aggregate Commitment,
Company shall immediately reduce any pending request for an Advance or request
for a Letter of Credit on such day by the amount of such excess and, to the
extent any excess remains thereafter, immediately repay an amount of the
Indebtedness equal to such excess. Company acknowledges that, in connection with
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any repayment required hereunder, it shall also be responsible for the
reimbursement of any prepayment or other costs required under Section 12.1
hereof; provided, however, that Company shall, in order to reduce any such
prepayment costs and expenses, first prepay such portion of the Indebtedness
then carried as a Prime-based Advance, if any.
2.8 Application of Advances. Revolving Credit Advances shall be
available, subject to the terms hereof, to fund working capital needs or other
general corporate purposes of the Company.
2.9 Extension of Revolving Credit Maturity Date. (a) Provided that
no Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent and each Bank (which notice shall be irrevocable and
which shall not be deemed effective unless actually received by Agent and each
Bank) not less than 90 nor more than 120 days prior to the first and second
anniversary dates of this Agreement, request that the Banks extend the Revolving
Credit Maturity Date then in effect to a date that is one year later than the
Revolving Credit Maturity Date then in effect (each such request, a "Request").
Each such Request shall be accompanied by Company's financial projections for
the period commencing on the last day of the then current fiscal quarter and
ending on the last day of the fiscal year in which the proposed Revolving Credit
Maturity Date would fall. Each Bank shall, not later than thirty (30) calendar
days following the date of its receipt of the Request, give written notice to
the Agent stating whether such Bank is willing to extend the Revolving Credit
Maturity Date as requested. If Agent has received the aforesaid written
approvals of such Request from each of the Banks, then, effective upon the date
of Agent's receipt of all such written approvals from the Banks, as aforesaid,
the Revolving Credit Maturity Date shall be so extended for an additional one
year period, the term Revolving Credit Maturity Date shall mean such extended
date and Agent shall promptly notify the Company that such extension has
occurred.
(b) If (i) any Bank gives the Agent written notice that it is
unwilling to extend the Revolving Credit Maturity Date as requested or (ii) any
Bank fails to provide written approval to Agent of such a Request within thirty
(30) calendar days of the date of such Bank's receipt of the Request, then (w)
the Banks shall be deemed to have declined to extend the Revolving Credit
Maturity Date, (x) the then-current Revolving Credit Maturity Date shall remain
in effect (with no further right on the part of Company to request extensions
thereof under this Section 2.9), and (y) the commitments of the Banks to make
Advances of the Revolving Credit hereunder shall terminate on the Revolving
Credit Maturity Date then in effect, and Agent shall promptly notify Company
thereof.
2.10 Optional Reduction or Termination of Revolving Credit
Aggregate Commitment. The Company may, upon at least five (5) Business Days'
prior written notice to Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to at least Five
Million Dollars ($5,000,000) or a larger integral multiple of One Million
Dollars ($1,000,000); (ii) each reduction shall be accompanied by the payment of
the Facility Fee, if any, accrued to the date of such
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reduction; (iii) the Company shall prepay in accordance with the terms hereof
the amount, if any, by which the aggregate unpaid principal amount of Advances
plus the aggregate amount of outstanding Letters of Credit plus the face amount
of any requested but not yet issued Letters of Credit plus any unreimbursed
Letter of Credit Obligations exceeds the amount of the Revolving Credit
Aggregate Commitment, taking into account the aforesaid reductions thereof,
together with accrued but unpaid interest on the principal amount of such
prepaid Advances to the date of prepayment; (iv) if the termination or reduction
of the Revolving Credit Aggregate Commitment requires the prepayment of a
Eurocurrency-based Advance, the termination or reduction may be made only on the
last Business Day of the then current Interest Period applicable to such Advance
(subject to the provisions of Section 12.1 hereof); and (v) no reduction shall
reduce the amount of the Revolving Credit Aggregate Commitment to an amount
which is less than the sum of the aggregate undrawn amount of any Letters of
Credit plus the aggregate amount of outstanding Letters of Credit plus the face
amount of any requested but not yet issued Letters of Credit plus any
unreimbursed Letter of Credit Obligations outstanding at such time. Reductions
of the Revolving Credit Aggregate Commitment and any accompanying prepayments of
the Revolving Credit Notes shall be distributed by Agent to each Revolving
Credit Bank in accordance with such Bank's Percentage thereof, and will not be
available for reinstatement by or readvance to the Company and any accompanying
prepayments of the Swing Line Note shall be distributed by Agent to the Swing
Line Bank and will be available for reinstatement by or readvance to the
Company. Any reductions of the Revolving Credit Aggregate Commitment hereunder
shall reduce each Revolving Credit Bank's portion thereof proportionately (based
upon the applicable Percentages), and shall be permanent and irrevocable. Any
payments made pursuant to this Section shall be applied first to outstanding
Prime-based Advances under the Revolving Credit, next to Prime-based Advances
under the Swing Line Note, next to Quoted Rate Advances and then to
Eurocurrency-based Advances.
2.11 Optional Increase in Revolving Credit Aggregate Commitment.
Provided that no Default or Event of Default has occurred and is continuing, and
provided that the Company has not previously elected to reduce or terminate the
Revolving Credit Aggregate Commitment under Section 2.10 hereof, the Company may
request that the Revolving Credit Aggregate Commitment be increased in an
aggregate amount (for all such Requests under this Section 2.11) not to exceed
the Revolving Credit Optional Increase, subject, in each case, to Section 12.1
hereof and to the satisfaction concurrently with or prior to the date of each
such request of the following conditions:
(a) the Company shall have delivered to the Agent not
less than thirty (30) days prior to the Revolving
Credit Maturity Date then in effect a written request
for such increase, specifying the amount of Revolving
Credit Optional Increase thereby requested (each such
request, a "Request for Increase"); provided, however
that in the event the Company has previously
delivered a Request for Increase pursuant to this
Section 2.11, the Company may not deliver a
subsequent Request for Increase until all the
conditions to effectiveness of such first Request for
Increase have been fully satisfied hereunder (or such
Request for Increase has been withdrawn); and
provided
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further that the Company may make no more than two
Requests for Increase in any calendar year;
(b) a lender or lenders meeting the requirements of
Section 14.8(c) hereof and acceptable to the Company
and the Agent (including, for the purposes of this
Section 2.11, any existing Bank which agrees to
increase its commitment hereunder, the "New Bank(s)")
shall have become a party to this Agreement by
executing and delivering a New Bank Addendum for a
minimum amount (including for the purposes of this
Section 2.11, the existing commitment of any existing
Bank) for each such New Bank of Ten Million Dollars
($10,000,000) and an aggregate amount for all such
New Banks of that portion of the Revolving Credit
Optional Increase, taking into account the amount of
any prior increase in the Revolving Credit Aggregate
Commitment (pursuant to this Section 2.11), covered
by the applicable Request for Increase, provided,
however that each New Bank shall remit to the Agent
funds in an amount equal to its Percentage (after
giving effect to this Section 2.11) of all Advances
of the Revolving Credit then outstanding, such sums
to be reallocated among and paid to the existing
Banks based upon the new Percentages as determined
below;
(c) the Company shall have paid to the Agent for
distribution to the existing Banks, as applicable,
all interest, fees (including the Facility Fee) and
other amounts, if any, accrued to the effective date
of such increase and any breakage fees attributable
to the reduction (prior to the last day of the
applicable Interest Period) of any outstanding
Eurocurrency-based Advances, calculated on the basis
set forth in Section 12.1 hereof as though Company
has prepaid such Advances;
(d) the Company shall have executed and delivered to the
Agent new Revolving Credit Notes payable to each of
the New Banks in the face amount of each such New
Bank's Percentage of the Revolving Credit Aggregate
Commitment (after giving effect to this Section 2.11)
and, if applicable, renewal and replacement Revolving
Credit Notes payable to each of the existing Banks in
the face amount of each such Bank's Percentage of the
Revolving Credit Aggregate Commitment (after giving
effect to this Section 2.11), each of such Revolving
Credit Notes to be substantially in the form of
EXHIBIT "B" of this Agreement, and dated as of the
effective date of such increase (with appropriate
insertions relevant to such Notes and acceptable to
the applicable Bank, including the New Banks);
(e) (i) the representations and warranties made by
Company, or any other party to any of the Loan
Documents (excluding the Agent and Banks), in this
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Agreement or any of the other Loan Documents, and the
representations and warranties of any of the
foregoing which are contained in any certificate,
document or financial or other statement furnished at
any time hereunder or thereunder or in connection
herewith or therewith shall have been true and
correct in all material respects when made; and (ii)
no Default or Event of Default shall have occurred
and be continuing; and
(f) such other amendments, acknowledgments, consents,
documents, instruments, any registrations, if any,
shall have been executed and delivered and/or
obtained by Company as required by Agent or the
Majority Banks, in their reasonable discretion.
Promptly on or after the date on which all of the conditions to such Request for
Increase set forth above have been satisfied, Agent shall notify the Company and
each of the Banks of the amount of the Revolving Credit Aggregate Commitment as
increased pursuant this Section 2.11 and the date on which such increase has
become effective and shall prepare and distribute to Company and each of the
Banks (including the New Banks) a revised EXHIBIT "C" to this Agreement setting
forth the applicable new Percentages of the Banks (including the New Bank(s)),
taking into account such increase and assignments (if any).
3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent may through its Issuing Office, at any time and from time to
time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Agent may
reasonably require, issue standby or documentary Letters of Credit for the
account of such Account Party, in an aggregate amount for all Letters of Credit
issued hereunder at any one time outstanding not to exceed the Letter of Credit
Maximum Amount. Each Letter of Credit shall be in a minimum face amount of One
Million Dollars ($1,000,000) and shall have an expiration date not later than
one (1) year from its date of issuance; provided that each Letter of Credit
(including any renewal thereof) shall expire not later than ten (10) Business
Days prior to the Revolving Credit Maturity Date in effect on the date of
issuance thereof. The submission of all applications and the issuance of each
Letter of Credit hereunder shall be subject in all respects to applicable
provisions of U.S. law and regulations, including without limitation, the
Trading With the Enemy Act, Export Administration Act, International Emergency
Economic Powers Act, and the Regulations of the Office of Foreign Assets Control
of the U.S. Department of the Treasury.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at
the request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
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(a) the face amount of the Letter of Credit requested,
plus any other requested but not yet issued Letters
of Credit, plus the undrawn portion of all other
outstanding Letters of Credit, plus the aggregate
principal amount of all outstanding Letter of Credit
Obligations (to the extent such Letter of Credit
Obligations have not been deemed paid by a
Prime-based Advance pursuant to Section 3.6(a)
hereof), does not exceed the Letter of Credit Maximum
Amount;
(b) the face amount of the Letter of Credit requested,
plus the aggregate principal amount of all Advances
outstanding under the Notes, plus the aggregate
undrawn portion of all other outstanding Letters of
Credit, plus any other requested but not yet issued
Letters of Credit plus the aggregate principal amount
of all outstanding Letter of Credit Obligations do
not exceed the then applicable Revolving Credit
Aggregate Commitment;
(c) the obligations of Company set forth in this
Agreement and the Loan Documents are valid, binding
and enforceable obligations of Company and the valid,
binding and enforceable nature of this Agreement and
the Loan Documents has not been disputed by Company;
(d) both immediately before and immediately after
issuance of the Letter of Credit requested, no
Default or Event of Default exists;
(e) the representations and warranties contained in this
Agreement and the Loan Documents are true in all
material respects as if made on such date (except to
the extent any such representation or warranty
contained in this Agreement by its express terms
relates solely to an earlier specified date);
(f) 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 material
contract, agreement or other borrowing of Company;
(g) the Account Party requesting the Letter of Credit
shall have delivered to Agent at its Issuing Office,
not less than five (5) Business Days prior to the
requested date for issuance (or such shorter time as
the Agent, in its sole discretion, may permit), the
Letter of Credit Agreement related thereto, together
with such other documents and materials as may be
reasonably required pursuant to the terms thereof,
and the terms of the proposed Letter of Credit shall
be satisfactory to Agent and its Issuing Office in
the exercise of its reasonable discretion;
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(h) 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 a participation
therein pursuant to Section 3.6 hereof, and no law,
rule, regulation, request or directive (whether or
not having the force of law) shall prohibit or
request that Agent refrain from issuing, or any Bank
refrain from taking a participation in, the Letter of
Credit requested or letters of credit generally;
(i) there shall have been no introduction of or change in
the interpretation of any law or regulation that
would make it unlawful or unduly burdensome for the
Agent to issue the requested Letter of Credit, no
general suspension on trading on the New York Stock
Exchange or any other national securities exchange,
no declaration of a general banking moratorium by
banking authorities in the United States, Michigan or
the respective jurisdictions in which the Banks, the
Account Party and the beneficiary of the requested
Letter of Credit are located, and no establishment of
any new restrictions on transactions involving
letters of credit or on banks materially affecting
the extension of credit by banks; and
(j) Agent shall have received the issuance fee required
in connection with the issuance of such Letter of
Credit pursuant to Section 3.5 hereof.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by the Company and the Account Party of the matters
set forth in this Section 3.2 (a) through (f). The Agent shall be entitled to
rely on such certification without any duty of inquiry.
3.3 Notice. Agent shall give notice, substantially in the form
attached as EXHIBIT "G", to each Revolving Credit Bank of the issuance of each
Letter of Credit, not later than three (3) Business Days after issuance of each
Letter of Credit, specifying the amount thereof and the amount of such Bank's
Percentage thereof.
3.4 Letter of Credit Fees. Company shall pay to the Agent for
distribution to the Revolving Credit Banks in accordance with the Percentages,
Letter of Credit Fees as follows:
(a) a per annum Letter of Credit Fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto in the amount of
the Applicable L/C Fee Percentage (determined with reference to SCHEDULE 1.1 of
this Agreement), exclusive of the issuance fee of one-eighth of one percentage
point (1/8%) on the face amount thereof to be paid to Agent under Section 3.5
hereof.
(b) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either
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(i) impose, modify or cause to be deemed applicable any reserve, special
deposit, limitation or similar requirement against letters of credit issued by,
or assets held by, or deposits in or for the account of, Agent or the Banks or
(ii) impose on Agent or the Banks any other condition regarding this Agreement
or the Letters of Credit, and the result of any event referred to in clause (i)
or (ii) above shall be to increase in an amount deemed material by Agent or the
Banks the cost or expense to Agent or the Banks of issuing or maintaining or
participating in any of the Letters of Credit (which increase in cost or expense
shall be determined by the Agent's or such Bank's reasonable allocation of the
aggregate of such cost increases and expense resulting from such events), then,
upon demand by the Agent or such Bank, as the case may be, the Company shall,
within ten days following demand for payment, pay to Agent or such Revolving
Credit Bank, as the case may be, from time to time as specified by the Agent or
such Bank, additional amounts which shall be sufficient to compensate the Agent
or such Revolving Credit Bank for such increased cost and expense, together with
interest on each such amount from ten days after the date demanded until payment
in full thereof at the Prime-based Rate. A certificate as to such increased cost
or expense incurred by the Agent or such Revolving Credit Bank, as the case may
be, as a result of any event mentioned in clause (i) or (ii) above, shall be
promptly submitted to the Company and shall be conclusive, absent manifest
error, as to the amount thereof.
(c) All payments by the Company to the Agent or the
Revolving Credit Banks under this Section 3.4 shall be made in Dollars and in
immediately available funds at the Agent's Issuing Office or such other office
of the Agent as may be designated from time to time by written notice to the
Company by the Agent. The aforesaid fees shall be nonrefundable under all
circumstances, shall be payable semi-annually in advance (or such lesser period,
if applicable, for Letters of Credit issued with stated expiration dates of less
than one year) upon the issuance of each such Letter of Credit, and shall be
calculated on the basis of a 360 day year and assessed for the actual number of
days from the date of the issuance thereof to the stated expiration thereof.
3.5 Issuance Fees. In connection with the Letters of Credit, and
in addition to the Letter of Credit Fees, the Company and the applicable Account
Party shall pay, for the sole account of the Agent, (a) a letter of credit
issuance fee of one eighth percentage point (1/8%) to be retained by Agent for
its own account and (b) standard documentation, administration, payment and
cancellation charges assessed by Agent or its Issuing Office, at the times, in
the amounts and on the terms set forth or to be set forth from time to time in
the standard fee schedule of Agent's Issuing Office in effect from time to time.
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company and each applicable Account Party agrees
to pay to the Agent, on the day on which the Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit, an amount equal
to the amount paid by the Agent in respect of such draft or other demand under
such Letter of Credit and all expenses paid or incurred by the Agent relative
thereto. Unless the Company or the applicable Account Party shall have made such
payment to the
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Agent on such day, upon each such payment by the Agent, the Agent shall be
deemed to have disbursed to the Company or the applicable Account Party, and the
Company or the applicable Account Party shall be deemed to have elected to
substitute for its Letter of Credit Obligation, a Prime-based Advance from the
Banks in an amount equal to the amount so paid by the Agent in respect of such
draft or other demand under such Letter of Credit. Such Prime-based Advance
shall be disbursed notwithstanding any failure to satisfy any conditions for
disbursement of any Advance set forth in Article 2 hereof and, to the extent of
the Prime-based Advance so disbursed, the Letter of Credit Obligation of the
Company or the applicable Account Party under this Section 3.6 shall be deemed
satisfied.
(b) If the Agent shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Agent shall provide notice
thereof to the Company and the applicable Account Party on the date such draft
or demand is honored, and to each Revolving Credit Bank on such date unless the
Company or applicable Account Party shall have satisfied its Letter of Credit
Obligation under Section 3.6(a) by payment to the Agent on such date. The Agent
shall further use reasonable efforts to provide notice to the Company or
applicable Account Party prior to honoring any such draft or other demand for
payment, but such notice, or the failure to provide such notice, shall not
affect the rights or obligations of the Agent with respect to any Letter of
Credit or the rights and obligations of the parties hereto, including without
limitation the obligations of the Company or applicable Account Party under
Section 3.6(a) hereof.
(c) Upon issuance by the Agent of each Letter of Credit hereunder,
each Revolving Credit Bank shall automatically acquire a pro rata risk
participation interest in such Letter of Credit and related Letter of Credit
Payment based on its respective Percentage. Each Revolving Credit Bank, on the
date a draft or demand under any Letter of Credit is honored, shall make its
Percentage share of the amount paid by the Agent, and not reimbursed by the
Company or applicable Account Party on such day, available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Bank shall not have made such pro rata portion
available to the Agent, such Bank, the Company and the applicable Account Party
severally agree to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount was paid by the
Agent until such amount is so made available to the Agent at a per annum rate
equal to the interest rate applicable during such period to the related Advance
disbursed under Section 3.6(a) in respect of the Letter of Credit Obligation of
the Company and the applicable Account Party. If such Bank shall pay such amount
to the Agent together with such interest, such amount so paid shall constitute a
Prime-based Advance by such Bank disbursed in respect of the Letter of Credit
Obligation of the Company or applicable Account Party under Section 3.6(a) for
purposes of this Agreement, effective as of the date such amount was paid by the
Agent. The failure of any Revolving Credit Bank to make its pro rata portion of
any such amount paid by the Agent available to the Agent shall not relieve any
other Revolving Credit Bank of its obligation to make available its pro rata
portion of such amount, but no Bank shall be responsible for failure of any
other Bank to make such pro rata portion available to the Agent.
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(d) Nothing in this Agreement shall be construed to require or
authorize any Bank other than Comerica Bank to issue any Letter of Credit, it
being recognized that the Agent shall be the sole issuer of Letters of Credit
under this Agreement.
3.7 Obligations Irrevocable. The obligations of Company and any
Account Party to make payments to Agent or the Revolving Credit Banks with
respect to Letter of Credit Obligations under Section 3.6 hereof, shall be
unconditional and irrevocable and not subject to any qualification or exception
whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter
of Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in any
collateral or security, with respect to any of the Letter of Credit Documents;
(c) The existence of any claim, setoff, defense or other
right which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in connection with
any of the Letter of Credit Documents, the transactions contemplated herein or
therein or any unrelated transactions;
(d) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(e) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of
the Agent or any Bank or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Bank or any such party under this Agreement, any of the Loan Documents or
any of the Letter of Credit Documents, or any other acts or omissions on the
part of the Agent, any Bank or any such party; or
(g) Any other event or circumstance that would, in the
absence of this Section 3.7, result in the release or discharge by operation of
law or otherwise of Company or any Account Party from the performance or
observance of any obligation, covenant or agreement contained in Section 3.6.
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No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may have
against the beneficiary of any Letter of Credit shall be available hereunder to
Company or any Account Party against the Agent or any Bank. Nothing contained in
this Section 3.7 shall be deemed to prevent Company or the Account Parties,
after satisfaction in full of the absolute and unconditional obligations of
Company and the Account Parties hereunder, from asserting in a separate action
any claim, defense, set off or other right which they (or any of them) may have
against Agent or any Bank.
3.8 Risk Under Letters of Credit. (a) In the issuance and the
handling of Letters of Credit and any security therefor, or any documents or
instruments given in connection therewith, Agent shall have the sole right to
take or refrain from taking any and all actions under or upon the Letters of
Credit.
(b) Subject to other terms and conditions of this
Agreement, Agent shall issue the Letters of Credit and shall hold 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, except pursuant to Section 13.3
hereof, Agent will have no further obligation with respect thereto. In the
administration of Letters of Credit, Agent shall not be liable for any action
taken or omitted on the advice of counsel, accountants, appraisers or other
experts selected by Agent with due care and Agent may rely upon any notice,
communication, certificate or other statement from Company, any Account Party,
beneficiaries of Letters of Credit, or any other Person which Agent believes to
be authentic. Agent will, upon request, furnish the Banks with copies of Letter
of Credit Agreements, Letters of Credit and documents related thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Agent makes no representation
and shall, subject to Section 3.7 hereof, have no responsibility with respect to
(i) the obligations of Company or any Account Party or the validity, sufficiency
or enforceability of any document or instrument given in connection therewith,
(ii) the financial condition of, any representations made by, or any act or
omission of Company, the applicable Account Party 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 in the absence of its gross
negligence or willful misconduct. Each of the Banks expressly acknowledges that
they have made and will continue to make their own evaluations of Company's and
the Account Parties' creditworthiness without reliance on any representation of
Agent or Agent's officers, agents and employees.
(d) If at any time Agent shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, 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 Revolving Credit Bank its share
thereof, less such
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Bank's pro rata share of the costs of such recovery, including court costs and
attorney's fees. If at any time any Revolving Credit Bank shall receive from any
source whatsoever any payment on any such unreimbursed amount or interest
thereon in excess of such Bank's Percentage share of such payment, such Bank
will promptly pay over such excess to Agent, for redistribution in accordance
with this Agreement.
3.9 Indemnification. (a) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and against any and
all claims, damages, losses, liabilities, costs or expenses of any kind or
nature whatsoever which the Banks or the Agent or any such person may incur or
which may be claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Bank nor the Agent or any of their respective
officers, directors, employees or agents shall be liable or responsible for: (i)
the use which may be made of any Letter of Credit or for any acts or omissions
of any beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of any Letter of Credit (unless such payment resulted from the gross
negligence or willful misconduct of the Agent), including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
(iv) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit; or (v) any other event or circumstance whatsoever arising in
connection with any Letter of Credit (unless such event or circumstance arose as
a result of the gross negligence or willful misconduct of the Agent); provided,
however, that Company and Account Parties shall not be required to indemnify the
Banks and the Agent and such other persons, and the Banks and Agent shall be
liable to the Company and the Account Parties to the extent, but only to the
extent, of any direct, as opposed to consequential or incidental, damages
suffered by Company and/or the Account Parties which were caused by the Agent's
gross negligence, willful misconduct or wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit.
(b) It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further investigation
and regardless of any notice or information to the contrary. It is further
acknowledged and agreed that Company or an Account Party may have rights against
the beneficiary or others in connection with any Letter of Credit with respect
to which the Banks are alleged to be liable and it shall be a condition of the
assertion of any liability of the Banks under this Section that Company or
applicable Account Party shall contemporaneously pursue all remedies in respect
of the alleged loss against such beneficiary and any other parties obligated or
liable in connection with such Letter of Credit and any related transactions.
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3.10 Right of Reimbursement. Each Revolving Credit Bank agrees to
reimburse the Agent on demand, pro rata in accordance with their Percentages,
for (i) the out-of-pocket costs and expenses of the Agent to be reimbursed by
Company or any Account Party pursuant to any Letter of Credit Agreement or any
Letter of Credit, to the extent not reimbursed by Company or Account Party 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 documentation or any
transaction relating thereto, or any Letter of Credit Agreement, except to the
extent that such liabilities, losses, costs or expenses were incurred by Agent
solely as a result of Agent's gross negligence or willful misconduct or wrongful
dishonor of any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other documentation
strictly complying with the terms and conditions of such Letter of Credit.
4. SWING LINE CREDIT.
4.1 Swing Line Commitment. Swing Line Bank shall, on the terms and
subject to the conditions hereinafter set forth, make one or more advances (each
such advance being a "Swing Line Advance") to Company from time to time on any
Business Day during the period from the date hereof to (but excluding) the
Revolving Credit Maturity Date in an aggregate amount not to exceed Ten Million
Dollars ($10,000,000) at any time outstanding; provided, however, that after
giving effect to all Swing Line Advances and all Revolving Credit Advances
requested to be made on such date, the aggregate principal amount of all
outstanding Advances plus the aggregate undrawn amount of all Letters of Credit
then outstanding plus the face amount of all Letters of Credit requested but not
yet issued, plus unreimbursed Letter of Credit Obligations shall not exceed the
then applicable Revolving Credit Aggregate Commitment. All Swing Line Advances
shall be evidenced by the Swing Line Note, under which advances, repayments and
readvances may be made, subject to the terms and conditions of this Agreement.
Each Swing Line Advance shall mature and the principal amount thereof shall be
due and payable by Company on the last day of the Interest Period applicable
thereto. In no event whatsoever shall any outstanding Swing Line Advance be
deemed to reduce, modify or affect any Bank's commitment to make Revolving
Credit Advances based upon its Percentage.
4.2 Accrual of Interest; Margin Adjustments. Each Swing Line
Advance shall, from time to time after the date of such Advance, bear interest
at its Applicable Interest Rate. The amount and date of each Swing Line 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
conclusive evidence thereof, absent manifest error; provided, however, that any
failure by the Agent to record any such information shall not relieve Company of
its obligation to repay the outstanding principal amount of such Advance, all
interest accrued thereon and any amount payable with respect thereto in
accordance with the terms of this Agreement and the Loan Documents.
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4.3 Requests for Swing Line Advances. Company may request a Swing
Line Advance only after delivery to Swing Line Bank of a Request for Swing Line
Advance executed by a Responsible Officer of Company, subject to the following
and to the remaining provisions hereof:
(a) each such Request for Swing Line Advance shall set
forth the information required on the Request for Swing Line Advance form
annexed hereto as EXHIBIT "E", including without limitation:
(i) the proposed date of such Swing Line
Advance, which must be a Business Day;
(ii) whether such Swing Line Advance is to be a
Prime-based Advance or Quoted Rate Advance; and
(iii) the duration of the Interest Period
applicable thereto;
(b) each such Request for Swing Line Advance shall be
delivered to Swing Line Bank by 12:00 p.m. (Detroit time) on the proposed date
of the Swing Line Advance;
(c) the principal amount of such requested Swing Line
Advance, plus the principal amount of all other Advances then outstanding
hereunder, plus the aggregate undrawn portion of any Letter of Credit which
shall be outstanding as of the date of the requested Swing Line Advance, plus
the aggregate face amount of Letters of Credit requested but not yet issued,
plus the aggregate amount of all outstanding Letter of Credit Obligations shall
not exceed the then applicable Revolving Credit Aggregate Commitment;
(d) the principal amount of such Swing Line Advance shall
be at least Two Hundred Fifty Thousand Dollars ($250,000) or a larger multiple
thereof;
(e) each Request for Swing Line Advance, once delivered
to Swing Line Bank, shall not be revocable by Company, and shall constitute and
include a certification by the Company as of the date thereof that:
(i) both before and after the Swing Line Advance,
the obligations of the Company set forth in this Agreement and the Loan
Documents, are valid, binding and enforceable obligations of Company;
(ii) to the best knowledge of Company all
conditions to Advances (including, without limitation, Section 6.6
hereof) have been satisfied; and
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(iii) both before and after the Advance, the
representations and warranties contained in this Agreement and the Loan
Documents are true and correct in all material respects.
Swing Line Bank shall promptly deliver to Agent by telecopier a copy of any
Request for Swing Line Advance received.
4.4 Disbursement of Swing Line Advances. Subject to submission of
an executed Request for Swing Line Advance by Company without exceptions noted
in the compliance certification therein and to the other terms and conditions
hereof, Swing Line Bank shall make available to Company the amount so requested,
in same day funds, not later than 4:00 p.m. (Detroit time) on the date of such
Swing Line Advance by credit to an account of Company maintained with Swing Line
Bank or to such other account or third party as Company may reasonably direct.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
4.5 Refunding of or Participation Interest in Swing Line Advances.
(a) The Agent, at any time in its sole and absolute
discretion, may (or, upon the request of the Swing Line Bank, shall) on behalf
of the Company (which hereby irrevocably directs the Agent to act on its behalf)
request each Revolving Credit Bank (including the Swing Line Bank in its
capacity as a Revolving Credit Bank) to make a Prime-based Advance of the
Revolving Credit in an amount equal to such Revolving Credit Bank's Percentage
of the principal amount of the Swing Line Advances (the "Refunded Swing Line
Advances") outstanding on the date such notice is given; provided that (i) at
any time as there shall be a Swing Line Advance outstanding for more than thirty
days, the Agent shall, on behalf of the Company (which hereby irrevocably
directs the Agent to act on its behalf), promptly request each Revolving Credit
Bank (including the Swing Line Bank) to make a Prime-based Advance of the
Revolving Credit in an amount equal to such Revolving Credit Bank's Percentage
of the principal amount of such outstanding Swing Line Advance and (ii) Swing
Line Advances shall be prepaid by the Company in accordance with the provisions
of Section 5.7 hereof. Unless any of the events described in Section 10.1(j)
shall have occurred (in which event the procedures of paragraph (b) of this
Section 4.5 shall apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of a Revolving Credit Advance are then
satisfied, each Revolving Credit Bank shall make the proceeds of its Revolving
Credit Advance available to the Agent for the benefit of the Swing Line Bank at
the office of the Agent specified in Section 2.4(a) prior to 11:00 a.m. Detroit
time, in funds immediately available on the Business Day next succeeding the
date such notice is given. The proceeds of such Revolving Credit Advances shall
be immediately applied to repay the Refunded Swing Line Advances.
(b) If, prior to the making of Revolving Credit Advances
pursuant to paragraph (a) of this Section 4.5, one of the events described in
Section 10.1(j) shall have occurred, each Revolving Credit Bank will, on the
date such Revolving Credit Advance was to have been made,
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purchase from the Swing Line Bank an undivided participating interest in each
Refunded Swing Line Advance in an amount equal to its Percentage of such
Refunded Swing Line Advance. Each Bank will immediately transfer to the Agent,
in immediately available funds, the amount of its participation and upon receipt
thereof the Agent will deliver to such Bank a Swing Line Bank Participation
Certificate in the form of EXHIBIT "H" dated the date of receipt of such funds
and in such amount.
(c) Each Bank's obligation to make Revolving Credit
Advances and to purchase participation interests in accordance with clauses (a)
and (b) above shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against Swing Line
Bank, the Company or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of any Default or Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of the Company or any other
Person; (iv) any breach of this Agreement by the Company or any other Person;
(v) any inability of the Company to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such participating
interest is to be purchased or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Bank does not
make available to the Agent the amount required pursuant to clause (a) or (b)
above, as the case may be, the Agent shall be entitled to recover such amount on
demand from such Bank, together with interest thereon for each day from the date
of non-payment until such amount is paid in full at the Federal Funds Effective
Rate.
5. MARGIN AND FEE ADJUSTMENTS; INTEREST PAYMENTS
5.1 Margin and Fee Adjustments. Adjustments in the Margin
applicable to Eurocurrency-based Advances, the Applicable Facility Fee
Percentage and the Applicable L/C Fee Percentage, based on Company's Funded Debt
to EBITDA Ratio, shall be implemented as follows:
(i) Such adjustments shall be given prospective effect
only and, with respect to adjustments in the Margin,
effective as to each Eurocurrency-based Advance
outstanding hereunder, upon the latest required date
of delivery of the financial statements required
under Section 8.3(b) and (c) hereof, in each case
with no retroactivity or claw-back.
(ii) Such adjustments under this Section 5.1 shall be made
irrespective of, and in addition to, any other
interest rate adjustments hereunder.
5.2 Prime-based Interest Payments. Interest on the unpaid balance
of all Prime-based Advances from time to time outstanding shall accrue from the
date of such Advances until paid, at a per annum interest rate equal to the
Prime-based Rate, and shall be payable in immediately available funds quarterly
commencing on the first Business Day of the fiscal quarter next succeeding the
date the initial Advance is made and on the first Business Day of each fiscal
quarter thereafter.
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Interest accruing at the Prime-based Rate shall be computed on the basis of a
360 day year and assessed for the actual number of days elapsed, and in such
computation effect shall be given to any change in the interest rate resulting
from a change in the Prime-based Rate on the date of such change in the
Prime-based Rate.
5.3 Eurocurrency-based Interest Payments. Interest on each
Eurocurrency-based Advance having a related Eurocurrency-Interest Period of 3
months or less shall accrue at its Eurocurrency-based Rate and shall be payable
in immediately available funds on the last day of the Interest Period applicable
thereto. Interest shall be payable in immediately available funds on each
Eurocurrency-based Advance outstanding from time to time having a
Eurocurrency-Interest Period of 6 months or longer, at intervals of 3 months
after the first day of the applicable Interest Period, and shall also be payable
on the last day of the Interest Period applicable thereto. Interest accruing at
the Eurocurrency-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed from the first day of the
Interest Period applicable thereto to, but not including, the last day thereof.
5.4 Quoted Rate Interest Payments. Interest on each Quoted Rate
Advance shall accrue at its Quoted Rate and shall be payable in immediately
available funds on the last day of the Interest Period applicable thereto.
Interest accruing at the Quoted Rate shall be computed on the basis of a 360 day
year and assessed for the actual number of days elapsed from the first day of
the Interest Period applicable thereto to, but not including, the last day
thereof.
5.5 Interest Payments on Conversions. Notwithstanding anything to
the contrary in Sections 5.2 and 5.3 above, all accrued and unpaid interest on
any Revolving Credit Advance refunded or converted pursuant to Section 2.3
hereof shall be due and payable in full on the date such Advance is refunded or
converted.
5.6 Interest on Default. Notwithstanding anything to the contrary
set forth in Sections 5.2, 5.3 and 5.4, in the event and so long as any Event of
Default shall exist under this Agreement, interest shall be payable daily on the
principal amount of all Advances from time to time outstanding (and on all other
monetary obligations of Company hereunder and under the other Loan Documents) at
a per annum rate equal to the Applicable Interest Rate (and, with respect to
Eurocurrency-based Advances, calculated on the basis of the maximum Margin
chargeable hereunder, whether or not otherwise applicable) in respect of each
such Advance, plus, in the case of Eurocurrency-based Advances and Quoted Rate
Advances, three percent (3%) per annum for the remainder of the then existing
Interest Period, if any, and at all other such times and for all Prime-based
Advances, at a per annum rate equal to the Prime-based Rate, plus three percent
(3%).
5.7 Prepayment. Company may prepay all or part of the outstanding
balance of any Prime-based Advance(s) (subject to not less than one (1) Business
Day's notice to Agent) at any time, provided that the amount of any partial
prepayment shall be at least Five Hundred Thousand Dollars ($500,000) and the
aggregate balance of Prime-based Advance(s) remaining outstanding, if
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any, under the Notes shall be at least Five Hundred Thousand Dollars ($500,000).
Company may prepay Quoted Rate Advances only on the last day of the Interest
Period applicable thereto. Company may prepay all or part of any
Eurocurrency-based Advance (subject to not less than three (3) Business Days'
notice to Agent) only on the last day of the Interest Period applicable thereto
(subject to the provisions of Section 11.1 hereof), provided that the amount of
any such partial prepayment shall be at least Five Hundred Thousand Dollars
($500,000), and the unpaid portion of such Advance which is refunded or
converted under Section 2.3, if any, hereof shall meet the minimum Advance
amount set forth in Section 2.3(d) hereof. Any prepayment made in accordance
with this Section shall be without premium, penalty or prejudice to Company's
right to reborrow under the terms of this Agreement and shall not cause any
reduction in the Revolving Credit Aggregate Commitment. Any other prepayment of
all or any portion of the Revolving Credit, whether by acceleration, mandatory
or required prepayment or otherwise, shall be subject to Section 12.1 hereof,
but otherwise without premium, penalty or prejudice.
6. CONDITIONS
A. The obligations of Banks to make the initial Advance under
this Agreement are subject to the following conditions:
6.1 Execution of Notes and this Agreement. Company shall have
executed and delivered to Agent for the account of each Bank, the Notes and this
Agreement (including all schedules, exhibits, certificates, opinions, Financial
Statements and other documents to be delivered pursuant hereto), and, as
applicable, the other Loan Documents, and such Notes, this Agreement, and the
other Loan Documents shall be in full force and effect.
6.2 Corporate Authority. Agent shall have received, with a
counterpart thereof for each Bank: (i) certified copies of resolutions of the
Board of Directors of Company evidencing approval of the form of this Agreement,
the other Loan Documents and the Notes and authorizing the execution and
delivery thereof and the borrowing of Advances hereunder; and (ii) (A) certified
copies of Company's articles of incorporation and bylaws or other constituent
documents certified as true and complete as of a recent date by the appropriate
official of the jurisdiction of incorporation of each such entity and (B) a
certificate of good standing from the state or other jurisdiction of Company's
incorporation and from every state or other jurisdiction in which Company is
qualified to do business, if issued by such jurisdictions, subject to the
limitations (as to qualification and authorization to do business) contained in
Section 7.1 hereof.
6.3 Licenses, Permits, Etc. The Agent shall have received, with a
counterpart for each Bank, copies of each authorization, license, permit,
consent, order or approval of, or registration, declaration or filing with, any
governmental authority or any securities exchange or other Person (including
without limitation any securities holder) obtained or made by the Company or any
other Person (as of the relevant date of Advance or loan hereunder) in
connection with the transactions contemplated by this Agreement or the Loan
Documents.
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6.4 Representations and Warranties. The representations and
warranties made by Company or any other party to any of the Loan Documents
(excluding the Agent and Banks) under this Agreement or any of the Loan
Documents, and the representations and warranties of any of the foregoing which
are contained in any certificate, document or financial or other statement
furnished at any time hereunder or thereunder or in connection herewith or
therewith shall have been true and correct in all material respects when made
and shall be true and correct in all material respects on and as of the date of
the making of any Advance hereunder except as may be affected by subsequent
transactions permitted by this Agreement.
6.5 Opinion of Counsel. Company shall furnish Agent prior to the
initial Advance under this Agreement, and with signed copies for each Bank,
opinions of counsel to the Company, dated the date hereof, and covering such
matters as required by and otherwise satisfactory in form and substance to the
Agent and each of the Banks.
6.6 No Default; No Material Adverse Change. No Default or Event of
Default shall have occurred and be continuing, and there shall have been no
material adverse change in the financial condition, properties, business,
prospects of, results or operations of the Company and its Subsidiaries (taken
as a whole) from September 30, 1998 to the date of the making of the first
Advance hereunder.
6.7 Company's Certificate. The Agent shall have received, with a
signed counterpart for each Bank, a certificate of a responsible senior officer
of Company dated the date of the making of Advances hereunder, stating that to
the best of his or her knowledge after due inquiry, the conditions of paragraphs
6.1, 6.3, 6.4 and 6.6 hereof have been fully satisfied.
6.8 Other Documents and Instruments. The Agent shall have
received, with a photocopy for each Bank, such other instruments and documents
as each of the Banks may reasonably request in connection with the making of
loans hereunder, and all such instruments and documents shall be satisfactory in
form and substance to the Banks in the exercise of their reasonable discretion.
6.9 Continuing Conditions.
A. The obligations of the Banks to make Advances or loans under
this Agreement shall be subject to the continuing conditions that all documents
executed or submitted pursuant hereto shall be satisfactory in form and
substance (consistent with the terms hereof) to Agent and its counsel and to
each of the Banks; Agent and its counsel and each of the Banks and their
respective counsel shall have received all information, and such counterpart
originals or such certified or other copies of such materials, as Agent or its
counsel and each of the Banks and their respective counsel may reasonably
request; and all other legal matters relating to the transactions contemplated
by this Agreement (including, without limitation, matters arising from time to
time as a result of changes occurring with respect to any statutory, regulatory
or decisional law applicable hereto) shall be
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satisfactory to counsel to Agent and counsel to each of the Banks in the
exercise of their reasonable discretion.
B. The obligations of Banks to make all other Advances under this
Agreement are subject to the conditions set forth in Sections 6.4, 6.6, 6.7, 6.8
and 6.9 hereof, provided, however, if an Advance is a refunding or conversion of
an Advance, such Advance shall not be subject to Section 6.7 hereof.
7. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties until the
Revolving Credit Maturity Date and thereafter until final payment in full of the
Indebtedness and the performance by Company of all of its other obligations
under this Agreement:
7.1 Corporate Authority. Each of Company and its Subsidiaries is a
corporation duly organized and existing in good standing under the laws of the
applicable jurisdiction of organization, charter or incorporation; it is duly
qualified and authorized to do business as a corporation or foreign corporation
in each jurisdiction where the character of its assets or the nature of its
activities makes such qualification necessary, except where such failure to
qualify and be authorized to do business will not have a Material Adverse
Effect.
7.2 Due Authorization - Company. Execution, delivery and
performance of this Agreement, the other Loan Documents (to the extent
applicable) and any other documents and instruments required under or in
connection with this Agreement or the other Loan Documents (or to be so executed
and delivered), and the issuance of the Notes by Company are within its
corporate powers, have been duly authorized, are not in contravention of law or
the terms of Company's Articles of Incorporation or Bylaws, and, except as have
been previously obtained or as referred to in Section 7.11 below, do not require
the consent or approval, material to the transactions contemplated by this
Agreement or the Loan Documents, of any governmental body, agency or authority
not previously delivered under Section 6.3 hereof.
7.3 Encumbrances. There are no security interests in, liens,
mortgages, or other encumbrances on and no financing statements on file with
respect to, any of the Company's real or personal property, except Liens
permitted under Section 9.5 hereof.
7.4 Capital Stock; Shareholders; Subsidiaries. As of the date
hereof all present Wholly-Owned Subsidiaries and other Subsidiaries of Company
are set forth in the attached SCHEDULE 7.4, along with the percentage of the
outstanding voting stock in each such Wholly-Owned or other such Subsidiary
owned by Company or by a Subsidiary of Company (and identifying that
Subsidiary). The authorized capital stock and membership interests (as
applicable) of Company and each Subsidiary is as set forth in SCHEDULE 7.4. All
issued and outstanding shares of capital stock and membership
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interests (as applicable) of Company and each Subsidiary are duly authorized and
validly issued, fully paid, nonassessable, and free and clear of all Liens and
such Equity Interests were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. The capital stock and
membership interests, as applicable, of Company and each Subsidiary is owned by
the stockholders and in the amounts set forth on Schedule 7.4. No shares of the
capital stock of Company or any Subsidiary, other than those described above,
are issued and outstanding. Except as set forth on Schedule 7.4, there are no
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from
Company or any Subsidiary of any shares of capital stock, membership interests
or other securities of Company or any Subsidiary.
7.5 Investments in Non-Subsidiaries. SCHEDULE 7.5 annexed hereto
contains a full and complete list of all Joint Ventures in which each of the
Subsidiaries has an ownership interest as of the date hereof, along with the
percentage voting stock or control of each such Subsidiary in the Joint
Ventures.
7.6 Taxes. Each of Company and its Subsidiaries has filed on or
before their respective due dates, all federal, state and foreign tax returns
which are required to be filed or has obtained extensions for filing such tax
returns and is not delinquent in filing such returns in accordance with such
extensions and has paid all taxes which have become due pursuant to those
returns or pursuant to any assessments received by any such party, as the case
may be, to the extent such taxes have become due, except to the extent such tax
payments are being actively contested in good faith by appropriate proceedings
and with respect to which adequate provision has been made on the books of
Company or such Subsidiary as may be required by GAAP.
7.7 No Defaults. There exists no default under the provisions of
any instrument evidencing any Debt of the Company or any of its Subsidiaries
which is permitted hereunder or any Debt connected with any of the Permitted
Encumbrances, or of any agreement relating thereto.
7.8 Enforceability of Agreement and Loan Documents. This
Agreement, each of the other Loan Documents to which Company is a party, and all
other certificates, agreements and documents executed and delivered by Company
under or in connection herewith or therewith have each been duly executed and
delivered by its duly authorized officers and constitute the valid and binding
obligations of Company, enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting the enforcement
of creditor's rights generally and by general principles of equity.
7.9 Compliance with Laws. Except as disclosed on SCHEDULE 7.9
hereof, Company and each of the Subsidiaries has complied with all applicable
federal, state and local laws, ordinances, codes, rules, regulations and
guidelines (including consent decrees and administrative orders) except to the
extent that failure to comply therewith would not have a Material Adverse
Effect. Except as
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set forth in SCHEDULE 7.9 hereof, and without limiting the generality of Section
7.11, there is no pending or, to the knowledge of Company threatened,
litigation, action, proceeding or controversy affecting Company or any of the
Subsidiaries, and no pending or, to the knowledge of Company threatened,
complaint, notice or inquiry to Company or any of the Subsidiaries, regarding
potential liability of Company or any of the Subsidiaries, which might in each
case reasonably be expected to have a Material Adverse Effect.
7.10 Non-contravention. The execution, delivery and performance of
this Agreement and the other Loan Documents are not in contravention of the
terms of any material indenture, agreement or undertaking to which Company or
any of its Subsidiaries is a party or by which it or its properties are bound or
affected.
7.11 No Litigation. No litigation (including derivative actions),
arbitration proceeding, labor controversy or governmental investigation or
proceeding is pending or, to the Company's knowledge, threatened against the
Company which might reasonably be expected to have a Material Adverse Effect,
except as set forth in SCHEDULE 7.11 hereto. Except as set forth in SCHEDULE
7.11, there is not outstanding against Company any judgment, decree, injunction,
rule, or order of any court, government, department, commission, agency,
instrumentality or arbitrator nor is Company in violation of any applicable law,
regulation, ordinance, order, injunction, decree or requirement of any
governmental body or court where such violation would reasonably be expected to
have a Material Adverse Effect.
7.12 Consents, Approvals and Filings, Etc. Except as have been
previously obtained, no authorization, consent, approval, license, qualification
or formal exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any securities exchange or
any other Person (whether or not governmental) is required in connection with
the execution, delivery and performance by Company of this Agreement or any of
the Loan Documents to which it is a party. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations which have previously been obtained or made, as the case may be,
are in full force and effect and are not the subject of any attack, or to the
knowledge of Company threatened attack by appeal or direct proceeding or
otherwise which would have a Material Adverse Effect.
7.13 Agreements Affecting Financial Condition. Neither the Company
nor any of its Subsidiaries is party to any agreement or instrument or subject
to any charter or other corporate restriction which would have a Material
Adverse Effect.
7.14 No Investment Company or Margin Stock. Neither the Company nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
directly or indirectly, in the business of extending credit for the purpose of
purchasing or carrying margin stock. None of the proceeds of any of the Notes
will be used by the
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Company or any of its Subsidiaries to purchase or carry margin stock or will be
made available by the Company or any of its Subsidiaries in any manner to any
other Person to enable or assist such Person in purchasing or carrying margin
stock. Terms for which meanings are provided in Regulation U of the Board of
Governors of the Federal Reserve System or any regulations substituted therefor,
as from time to time in effect, are used in this paragraph with such meanings.
7.15 ERISA. Neither Company nor any of its Subsidiaries maintains
or contributes to any Pension Plan subject to Title IV of ERISA, except as set
forth on SCHEDULE 7.15 hereto; and there is no accumulated funding deficiency
within the meaning of ERISA, or any existing liability with respect to any of
the Pension Plans owed to the Pension Benefit Guaranty Corporation or any
successor thereto, and no "reportable event" or "prohibited transaction", as
defined in ERISA, has occurred with respect to any Pension Plan, and all such
Pension Plans are in material compliance with the requirements of the Internal
Revenue Code and ERISA (and, if applicable, any comparable foreign law
provisions).
7.16 Conditions Affecting Business or Properties. Neither the
respective businesses nor the properties of Company or any of its Subsidiaries
is affected by any fire, explosion, accident, strike, lockout or other dispute,
drought, storm, hail, earthquake, embargo, Act of God or other casualty which
has had a Material Adverse Effect, or if such event or condition were to
continue for more than ten (10) additional days would reasonably be expected to
have a Material Adverse Effect.
7.17 Environmental and Safety Matters. (a) Each of the Company and
its Subsidiaries is in compliance with all federal, state and local laws,
ordinances and regulations relating to safety and industrial hygiene or to the
environment, including without limitation all Hazardous Material Laws in
jurisdictions in which the Company or its Subsidiaries owns or operates, or has
owned or operated, a facility or site, or arranges or has arranged for disposal
or treatment of hazardous substances, solid waste, or other wastes, accepts or
has accepted for transport any hazardous substances, solid wastes or other
wastes or holds or has held any interest in real property or otherwise, except
for De Minimis Matters or as otherwise disclosed on SCHEDULE 7.17 hereto, and as
to such matters disclosed on such Schedule, none will have a Material Adverse
Effect.
(b) No demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether brought by any
governmental authority, private person or entity or otherwise, arising under,
relating to or in connection with any applicable Hazardous Material Laws is
pending or, to the best knowledge of Company, after due investigation,
threatened against the Company or any of its Subsidiaries, any real property in
which the Company or any of its Subsidiaries holds or has held an interest or
any past or present operation of the Company or any of its Subsidiaries, except
as disclosed on SCHEDULE 7.17 hereto, and as to such matters disclosed on such
Schedule, none will have a Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries (i)
is, to the best knowledge of Company, after due investigation, the subject of
any federal or state investigation evaluating
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whether any remedial action is needed to respond to a release of any toxic
substances, radioactive materials, hazardous wastes or related materials into
the environment, (ii) has received any notice of any toxic substances,
radioactive materials, hazardous waste or related materials in, or upon any of
its properties in violation of any applicable Hazardous Material Laws, or (iii)
knows of any basis for any such investigation, notice or violation, except as
disclosed on SCHEDULE 7.17 hereto, and as to such matters disclosed on such
Schedule, none will have a Material Adverse Effect.
(d) No release, threatened release or disposal of
hazardous waste, solid waste or other wastes is occurring or, to the best
knowledge of Company after due investigation, has occurred on, under or to any
real property in which the Company or any of its Subsidiaries holds any interest
or on which it performs any of its operations, in violation of any Hazardous
Material Law except as disclosed on SCHEDULE 7.17 hereto, and as to such matters
disclosed on such Schedule, none will have a Material Adverse Effect.
7.18 Accuracy of Information. Each of the Company's Financial
Statements previously furnished to Agent and the Banks prior to the date of this
Agreement, has been prepared in accordance with GAAP and is complete and correct
in all material respects and fairly presents the financial condition of Company
and the results of its operations for the periods covered thereby; since
September 30, 1998 there has been no material adverse change in the financial
condition of Company and its Subsidiaries (taken as a whole); to the best
knowledge of Company, neither Company nor any of its Subsidiaries has any
contingent obligations (including any liability for taxes) not disclosed by or
reserved against in the September 30, 1998 balance sheets, as applicable, except
as set forth on SCHEDULE 7.18 hereof, and at the present time there are no
unrealized or anticipated losses from any present commitment of Company or any
of its Subsidiaries.
7.19 Foreign Employee Benefit Plans. Neither the Company nor any
Subsidiary is now maintaining or contributing to or has ever maintained or
contributed to any Foreign Employee Benefit Plan. Each Foreign Employee Benefit
Plan established after the date hereof is in compliance in all material respects
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such plan. With respect to any
Foreign Employee Benefit Plan established after the date hereof and maintained
or contributed to by the Company, any of its Subsidiaries or any ERISA Affiliate
(other than a Foreign Pension Plan) reasonable reserves have been established
where required by ordinary accounting practices in the jurisdiction in which
such plan is maintained or, in the case of an ERISA Affiliate, the failure to
establish such reserves would not have or would not be reasonably likely to
have, a material adverse effect on Company and its Subsidiaries (taken as a
whole). There are no actions, suits or claims other than routine claims for
benefits pending or threatened against the Company, any of its Subsidiaries or
any ERISA Affiliate with respect to any Foreign Employee Benefit Plan
established after the date hereof or, in the case of an ERISA Affiliate, such
actions, suits or claims would not have or would not be reasonably likely to
have a Material Adverse Effect.
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7.20 Labor Relations. Neither Company nor any Subsidiary is engaged
in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against Company or any Subsidiary or, to the knowledge of Company, threatened
against any of them, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against any of them or, to the knowledge of Company,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Company or any Subsidiary or to the knowledge of
Company, threatened against any of them and (iii) no union representation
question existing with respect to the employees of Company or any Subsidiary.
7.21 Solvency. After giving effect to the consummation of the
transactions contemplated by this Agreement, Company and its Subsidiaries will
each be solvent, able to pay its indebtedness as it matures and will have
capital sufficient to carry on its business and all business in which it is
about to engage. This Agreement is being executed and delivered by Company to
Agent and the Banks in good faith and in exchange for fair, equivalent
consideration. Neither Company nor any Subsidiary is insolvent, nor will Company
be rendered insolvent by its execution and delivery to Agent and the Banks of
this Agreement or by the consummation of the transactions contemplated by this
Agreement, and the capital and monies remaining in the Company and its
Subsidiaries are not now and will not become so unreasonably small as to
preclude Company or its Subsidiaries from carrying on their businesses. Neither
Company nor any Subsidiary intends to nor does the management of Company or any
Subsidiary believe it will incur debts beyond its ability to pay as they mature.
Neither Company nor any Subsidiary contemplates filing a petition in bankruptcy
or for an arrangement or reorganization under the Bankruptcy Code, nor does
Company or any Subsidiary have any knowledge of any threatened bankruptcy or
insolvency proceedings against Company or any Subsidiary.
7.22 Year 2000. The cost to the Company and its Subsidiaries of any
reprogramming and testing which may be required under Section 8.17 hereof and of
the reasonably foreseeable consequences of year 2000 to the Company and its
Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) is not expected to result in a Default
or have a Material Adverse Effect.
8. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it will
cause each of its Subsidiaries, until the Revolving Credit Maturity Date and
thereafter until final payment in full of the Indebtedness and the performance
by the Company of all other obligations under this Agreement and the other Loan
Documents:
8.1 Preservation of Existence, Etc. Except as otherwise permitted
under this Agreement and except for dissolution of Subsidiaries having no assets
or de minimis assets: (i) preserve and maintain its existence and such of its
rights, licenses, and privileges as are material to the business
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and operations conducted by it; (ii) qualify and remain qualified to do
business in each jurisdiction in which such qualification is material to its
business and operations or ownership of its properties; (iii) continue to
conduct and operate its businesses substantially as conducted and operated
during the present and preceding fiscal years; (iv) at all times maintain,
preserve and protect all of its franchises and trade names and preserve all the
remainder of its property and keep the same in good repair, working order and
condition, if the failure to do so in any instance would have a material
adverse effect on the financial condition of Company and its Subsidiaries
(taken as a whole); and (v) from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements, betterments and improvements
thereto such that the businesses carried on in connection therewith may be
properly and advantageously conducted at all times, if the failure to do so in
any instance would have a Material Adverse effect.
8.2 Keeping of Books. Keep proper books of record and account in
which full and correct entries shall be made of all of its financial
transactions and its assets and businesses so as to permit the presentation of
Financial Statements prepared in accordance with GAAP.
8.3 Reporting Requirements. Furnish Agent with copies for each
Bank:
(a) as soon as possible, and in any event within three
Business Days after becoming aware of the occurrence of any Default or
Event of Default or any other event or occurrence which has or would
reasonably be expected to have a materially adverse effect upon the
business, property or financial condition of Company and its
Subsidiaries (taken as a whole), or upon Company's or any of its
Subsidiaries' ability to comply with its obligations hereunder or under
any of the other Loan Documents, a written statement of a Responsible
Officer of the Company setting forth details of such Default, Event of
Default or other event or occurrence and the action which the Company
has taken or has caused to be taken or proposes to take or cause to be
taken with respect thereto;
(b) as soon as available, and in any event within ninety
(90) days after and as of the end of each of Company's fiscal years,
(i) audited Financial Statements of the Company on a Consolidated basis
containing the balance sheet of the Company and its Subsidiaries as of
the close of each such fiscal year, statements of income and retained
earnings and a statement of cash flows for each such fiscal year, and
such Financial Statements to be prepared in accordance with GAAP and
certified by independent certified public accountants of recognized
standing selected by Company and acceptable to the Majority Banks and
containing unqualified opinions as to the fairness of the statements
therein contained; and (ii) a Covenant Compliance Report;
(c) as soon as available, and in any event within
forty-five (45) days after and as of the end of each fiscal quarter of
Company (excluding the last quarter of each fiscal year), (i) copies of
Company's Form 10-Q reports and (ii) a Covenant Compliance Report;
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(d) as soon as available and in any event within one
hundred twenty (120) days after the end of each of Company's fiscal
years, Company's financial projections for the period commencing on the
last day of such fiscal year and ending on the last day of the fiscal
year during which the Revolving Credit Maturity Date falls;
(e) promptly upon receipt thereof, copies of all reports
and management letters prepared with respect to Company or any of its
Subsidiaries by any independent certified public accountants in
connection with any annual, interim or other audit or review of the
books of Company or its Subsidiaries, irrespective of the party
requesting such an audit or review;
(f) to the extent not previously delivered, promptly upon
becoming available, a copy of all Financial Statements, reports,
notices, proxy statements and other communications sent by the Company
or any of its Subsidiaries to their stockholders, and all regular and
periodic reports filed by the Company or any of its Subsidiaries with
any securities exchange, the Securities and Exchange Commission, the
Corporations and Securities Bureau of the Department of Commerce of the
State of Michigan (excluding annual reports) or any governmental
authorities succeeding to any or all of the functions of said
commission or bureau;
(g) promptly, and in form and substance reasonably
satisfactory to Agent and the requesting Banks, such other information
as Agent or the Majority Banks (acting through Agent) may reasonably
request from time to time.
8.4 Fixed Charge Coverage Ratio. Maintain as of the end of each
fiscal quarter of Company a Fixed Charge Coverage Ratio of not less than 3.0 to
1.0.
8.5 Funded Debt to EBITDA Ratio. Maintain as of the end of each
fiscal quarter of Company a Funded Debt to EBITDA Ratio of not more than 3.0 to
1.0.
8.6 Taxes. Pay and discharge all taxes and other governmental
charges, and all material contractual obligations calling for the payment of
money, before the same shall become overdue, unless and to the extent only that
such payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP, on its balance sheet.
8.7 Inspections. Permit Agent and each Bank, through their
authorized attorneys, accountants and representatives to examine Company's and
each of its Subsidiaries' books, accounts, records, ledgers and assets and
properties of every kind and description wherever located at all reasonable
times during normal business hours, upon reasonable oral or written request of
Agent or such Bank, which shall include audits at Company's sole cost and
expense (provided that prior to the occurrence of an Event of Default, Company
shall not be required to reimburse Agent or any Bank for the cost of more than
one audit per year); and permit Agent and each Bank or their
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authorized representatives, at reasonable times and intervals, to visit all of
their respective offices, discuss their respective financial matters with their
respective officers and independent certified public accountants, and, by this
provision, Company authorizes such accountants to discuss the finances and
affairs of Company and its Subsidiaries (provided that Company is given an
opportunity to participate in such discussions) and examine any of its or their
books and other corporate records.
8.8 Compliance with Leases. Comply with the material terms and
conditions of any leases covering any premises or real property and any orders,
ordinances, laws or statutes of any city, state or other governmental department
having jurisdiction with respect to such premises or property, or the conduct of
business thereon.
8.9 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance by Company, of this Agreement and the other Loan
Documents.
8.10 Insurance. 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 occurrence of
additional risks of any nature, increase such insurance coverage in such manner
and to such extent as prudent business judgment and then current practice would
dictate; and deposit with Agent all said policies or copies thereof, including
all endorsements thereon and those required hereunder.
8.11 Compliance with Laws.
(a) Comply in all material respects with all applicable
laws, rules, regulations and orders of any governmental authority, whether
federal, state, local or foreign (including without limitation Hazardous
Material Laws), in effect from time to time; and
(b) Conduct and complete, or cause to be conducted and
completed, all investigations, studies, sampling and testing, and all remedial,
removal and other actions necessary to clean-up and remove all Hazardous
Materials on or affecting any premises owned or occupied by Company or any of
its Subsidiaries, whether resulting from conduct of Company or any of its
Subsidiaries or any other Person, if required by Hazardous Material Laws, all
such actions shall be taken in accordance with such laws, and the orders and
directives of all applicable federal, state and local governmental authorities.
8.12 Compliance with ERISA. Comply in all material respects with
all requirements imposed by ERISA as presently in effect or hereafter
promulgated or the Internal Revenue Code, including, but not limited to, the
minimum funding requirements of any Pension Plan.
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8.13 ERISA Notices. Promptly notify Agent and each of the Banks
upon the occurrence 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 PBGC, or any successor
thereto, of any proceeding to terminate any Pension Plan;
(d) the failure of the Company or any Subsidiary to make
any payment in respect of any Pension Plan required under Section 412
of the Internal Revenue Code;
(e) the withdrawal of the Company or any Subsidiary from
any Pension Plan, including, without limitation, any multiemployer
plan; or
(f) the occurrence of a "reportable event" which is
required to be reported by the Company under Section 4043 of ERISA or a
"prohibited transaction" as defined in Section 406 of ERISA or Section
4975 of the Internal Revenue Code which in either case is likely to
have a Material Adverse Effect.
8.14 Foreign Employee Benefit Plans. Establish, maintain and
operate all Foreign Employee Benefit Plans to comply in all material respects
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such plans.
8.15 Notices re Other Debt. Deliver or cause to be delivered to
Agent within five (5) Business Days of receipt thereof a copy of each report,
notice or communication regarding potential or actual defaults delivered by or
on behalf of Company or any Subsidiary to the trustee under any of the
Indentures or to the holders of any instrument evidencing any Debt and each
notice or communication received by Company or any Subsidiary from any such
trustee or holder.
8.16 Rating Change. Promptly notify Agent and each of the Banks of
any change in Company's ▇▇▇▇▇'▇ Rating or S&P Rating and furnish Agent and each
of the Banks with a copy of any report issued by ▇▇▇▇▇'▇ or S&P in connection
therewith.
8.17 Year 2000 Requirement. Review the areas in its business and
operations which could be materially adversely affected by, and develop a
program to address on a timely basis, the risk that computer applications used
by the Company and its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after
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December 31, 1999; and complete by June 1, 1999 any reprogramming required to
permit the proper functioning, in and following the year 2000, of computer
systems and equipment containing embedded microchips owned or leased by the
Company or any of its Subsidiaries and the testing of all such systems and
equipment, as so reprogrammed.
9. NEGATIVE COVENANTS
Company covenants and agrees that, until the Revolving Credit Maturity
Date and thereafter until final payment in full of the Indebtedness and the
performance by Company of all other obligations under this Agreement and the
other Loan Documents, without the prior written consent of the Majority Banks it
will not, and will not permit the Subsidiaries (including without limitation
Subsidiaries acquired or created after the date hereof) to:
9.1 Capital Structure and Redemptions. Purchase, acquire or redeem
any of its capital stock (other than redemptions of the capital stock of Company
not to exceed the Stock Redemption Cap) or make any material change in its
capital structure other than the issuance of additional capital stock and
options with respect thereto.
9.2 Business Purposes. Make any material changes in its business
objects or engage in business other than the Core Business.
9.3 Mergers or Dispositions. Enter into any merger or
consolidation, except for Permitted Mergers, or sell, lease, transfer, relocate
or dispose of all, substantially all, or any material part of its assets, except
for Permitted Transfers.
9.4 Indebtedness. Subject to the provisions of Section 9.16
hereof, become or remain obligated for any Debt, except for:
(a) the Indebtedness;
(b) current unsecured trade, utility and
non-extraordinary accounts payable arising in the ordinary course of
Company's or any Subsidiary's business (including any such payables
assumed by Company or a Subsidiary in connection with a Permitted
Acquisition) and other Debt arising in the ordinary course of Company's
or any Subsidiary's business;
(c) Permitted Senior Debt, Permitted Subordinated Debt
and other existing Debt as set forth on SCHEDULE 9.4 annexed hereto;
(d) Debt in respect of taxes, assessment, governmental
charges and claims for labor, materials or supplies to the extent that
payment thereof is not required pursuant to Section 8.7 hereof;
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(e) Debt incurred in connection with the making of
Investments permitted under Section 9.8(b) hereof or in connection with
the making of an Investment in the form of a loan to Company by a
Subsidiary;
(f) Debt in respect of interest rate exchange, swap,
collar or cap or similar agreements providing interest rate protection
and foreign exchange contracts;
(g) Secured purchase money Debt (including capitalized
leases) not to exceed $15,000,000 in the aggregate at any time
outstanding incurred after the date hereof to finance the acquisition
of fixed assets, provided that (A) such Debt has a scheduled maturity
and is not due on demand and (B) immediately prior to and after giving
effect to the incurrence of such Debt no Default or Event of Default
has occurred and is continuing; and
(h) Other unsecured Debt incurred after the date hereof
not to exceed $10,000,000 in the aggregate at any time, provided that
(A) such Debt has a scheduled maturity and is not due on demand and (B)
immediately prior to and after giving effect to the incurrence of such
Debt, no Default or Event of Default has occurred and is continuing;
provided, however, in no event shall the Funded Debt of Company and its
Subsidiaries exceed $600,000,000 in the aggregate at any time.
9.5 Liens. Permit or suffer any Lien to exist on any of its
properties, real, personal or mixed, tangible or intangible, whether now owned
or hereafter acquired, except:
(a) in favor of Agent, as security for the Indebtedness;
(b) purchase money security interests in fixed assets to
secure the purchase money Debt permitted under Section 9.4(g) hereof,
provided that such security interest is (or was, to the extent such
security interest exists at the time of a Permitted Acquisition)
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 provided further that the sum of all such
purchase money Debt outstanding at any time shall not exceed the
aggregate amount set forth in Section 9.4(g), hereof; and
(c) the Permitted Encumbrances.
9.6 Acquisitions. Subject to the provisions of Section 9.8 and
Section 9.16 hereof, purchase or otherwise acquire or become obligated for the
purchase of all or substantially all or any material portion of the assets or
business interests of any Person, firm or corporation, or any shares of stock
(or other ownership interests) of any corporation, trusteeship or association,
or any business or going concern, or in any other manner effectuate or attempt
to effectuate an expansion of present business by acquisition, except for
Permitted Acquisitions and Permitted Mergers, provided,
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however, in no event shall Permitted Acquisitions and Permitted Mergers made or
incurred after the date hereof exceed Fifty Million Dollars ($50,000,000) in the
aggregate.
9.7 Dividends. Declare or pay any dividends in cash or property
on or make any other distribution in cash or property with respect to any
shares of its capital stock or other equity interests, whether by reduction of
stockholders' equity or otherwise, except for (i) dividends and other
distributions by Subsidiaries to Company and (ii) so long as immediately prior
thereto and after giving effect thereto no Default and Event of Default has
occurred and is continuing, cash dividends on the capital stock of Company in
an amount not to exceed $12,500,000 in the aggregate during any fiscal quarter
of Company.
9.8 Investments. Subject to the provisions of Section 9.16 hereof,
make or allow to remain outstanding any Investment in, or any loans or advances
to, any Person, firm, corporation or other entity or association, other than:
(a) Permitted Investments;
(b) Investments in Subsidiaries and Joint
Ventures existing as of the date of this Agreement or
established subsequent to the date hereof (in compliance with
this Agreement);
(c) Permitted Acquisitions (excluding any
Investments owned by the target of the Permitted Acquisition
not otherwise permitted by Section 9.8(e) below);
(d) the Investments set forth on SCHEDULE 9.8,
hereto;
(e) Investments in any Joint Venture owned by
the target of a Permitted Acquisition upon the effective date
of such Permitted Acquisition and not made in contemplation of
such Permitted Acquisition, which shall not exceed One Million
Dollars ($1,000,000) in the aggregate outstanding at any time
for all such Investments
(f) Investments received in connection with the
bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course
of business; and
(g) Investments in the form of non-cash
consideration received in connection with a Permitted Transfer
in accordance with this Agreement;
provided, however, Company shall not make any of the Investments described in
clauses (a) through (g) above if immediately prior thereto and after giving
effect thereto, a Default or Event of Default
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shall have occurred and be continuing; and further provided that in no event
shall Investments consisting of loans or advances by Company to its Subsidiaries
exceed Fifteen Million Dollars ($15,000,000) in the aggregate at any time
outstanding.
9.9 Accounts Receivable. Sell or assign any account, note or trade
acceptance receivable, except to Agent on behalf of the Banks or in the ordinary
course of business for collection.
9.10 Transactions with Affiliates. Enter into any transaction with
any of its or their stockholders or officers or its or their Affiliates, except
in the ordinary course of business and on terms not materially less favorable
than would be usual and customary in similar transactions between Persons
dealing at arm's length.
9.11 Permitted Subordinated Debt. (i) Amend, supplement or
otherwise modify the Subordinated Indenture or the Subordinated Notes (each as
in effect as of the date hereof) or the terms of any other Permitted
Subordinated Debt in any way that would be materially less advantageous to the
Company or materially adverse to the Banks, including, without limitation, with
respect to amount, maturity, amortization, interest rate, premiums, fees,
covenants, events of default, remedies and subordination provisions; or (ii)
declare or make any payment or prepayment on the Permitted Subordinated Debt if
immediately prior to such payment or after giving effect thereto a Default or
Event of Default shall have occurred and be continuing.
9.12 Sale and Leaseback. Become liable, directly or indirectly,
with respect to any lease of any real or personal property (i) which it or one
of its Subsidiaries sold or transferred or will sell or transfer to any other
Person or (ii) which it or one of its Subsidiaries intends to use for
substantially the same purpose as any other real or personal property which has
been or will be sold or transferred by it or one of its Subsidiaries to any
other Person in connection with such lease.
9.13 Corporate Documents. Amend, modify or otherwise change any of
the terms or provisions of any of its constituent documents (other than its
bylaws, in which case, any of the material terms or provisions thereof) as in
effect on the date hereof.
9.14 Fiscal Year. Change its fiscal year for accounting or tax
purposes from a period consisting of the twelve month period ending on December
31 of each year.
9.15 Senior Notes. (i) Amend, supplement or otherwise modify the
Senior Indentures or the Senior Notes (each as in effect as of the date hereof)
in any way that would be materially less advantageous to the Company or
materially adverse to the Banks, including, without limitation, with respect to
amount, maturity, amortization, interest rate, premiums, fees, covenants, events
of default and remedies; or (ii) purchase, redeem, prepay or repay any principal
of, premium, if any, interest or other amount payable in respect of the Senior
Notes, other than the Existing Senior Notes, provided that immediately prior and
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing.
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9.16 Maximum Subsidiary Investment Amount. Allow the Maximum
Subsidiary Investment Amount to exceed Sixty Eight Million Dollars ($68,000,000)
in the aggregate at any time.
10. DEFAULTS
10.1 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest
under any of the Notes issued hereunder in accordance with the terms
thereof or (ii) any Fees;
(b) non-payment of any money by Company under this
Agreement or under any of the Loan Documents, other than as set forth
in subsection (a) above, within five (5) Business Days after written
notice from Agent that the same is due and payable;
(c) default in the observance or performance of any of
the conditions, covenants or agreements of Company set forth in Section
2.7, 8.1, 8.3 through 8.5 (both inclusive), 8.7, 8.9, 8.11, 8.13
through 8.18 (both inclusive), or 9 (in its entirety);
(d) default in the observance or performance of any of
the other conditions, covenants or agreements set forth in this
Agreement by Company and continuance thereof for a period of thirty
(30) consecutive days;
(e) any representation or warranty made by Company herein
or in any instrument submitted pursuant hereto or by any other party to
the Loan Documents proves untrue or misleading in any material adverse
respect when made;
(f) default in the observance or performance of or
failure to comply with any of the conditions, covenants or agreements
of Company set forth in any of the other Loan Documents, and the
continuance thereof beyond any period of grace or cure specified in any
such document;
(g) default in the payment of or failure to comply with
the terms of any other obligation of Company or any of its
Subsidiaries for Debt of Company or any of its Subsidiaries in excess
of Ten Million Dollars ($10,000,000) in the aggregate which (taking
into account applicable periods of notice or cure, if any), would
permit the holder or holders thereto to accelerate the Debt or
terminate its commitment thereunder;
(h) the rendering of any judgment(s) for the payment of
money in excess of the sum of Ten Million Dollars ($10,000,000)
individually or in the aggregate against Company or any of its
Subsidiaries, and such judgments shall remain unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of sixty (60)
consecutive days, except as
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covered by adequate insurance with a reputable carrier and to the
extent an action is pending in which an active defense is being made
with respect thereto; provided, however, if such judgment(s) are in
excess of Thirty Million Dollars ($30,000,000) in the aggregate, the
entry thereof shall immediately constitute an Event of Default
hereunder;
(i) the occurrence of an "reportable event", as defined
in ERISA, which is determined to constitute grounds for termination by
the Pension Benefit Guaranty Corporation of any Pension Plan maintained
or contributed to by or on behalf of the Company or any of its
Subsidiaries for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a
trustee to administer such Pension Plan and such reportable event is
not corrected and such determination is not revoked within sixty (60)
days after notice thereof has been given to the plan administrator of
such Pension Plan (without limiting any of Agent's or any Bank's other
rights or remedies hereunder), or the institution of proceedings by the
Pension Benefit Guaranty Corporation to terminate any such Pension Plan
or to appoint a trustee by the appropriate United States District Court
to administer any such Pension Plan;
(j) the Company or any of its Subsidiaries shall be
dissolved or liquidated (or any judgment, order or decree therefor
shall be entered) other than in connection with a Permitted Merger or
as otherwise expressly permitted hereunder; or if a creditors'
committee shall have been appointed for the business of Company or any
of its Subsidiaries; or if Company or any of its Subsidiaries 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 fail to pay its debts generally as
such debts become due in the ordinary course of business (except as
contested in good faith and for which adequate reserves are made in
such party's Financial Statements) or becomes the subject of an
involuntary petition in bankruptcy, or a reorganization, arrangement or
creditor composition proceeding which is not dismissed within sixty
(60) days of commencement thereof, 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 Company or any of its Subsidiaries); or if an
order shall be entered approving any petition for reorganization of
Company or any of its Subsidiaries; or the Company or any of its
Subsidiaries shall take any action (corporate or other) authorizing or
in furtherance of any of the actions described above in this
subsection; or
(k) the occurrence of a Change of Ownership or Control.
10.2 Exercise of Remedies. If an Event of Default has occurred and
is continuing hereunder: (v) the Agent shall, upon being directed to do so by
the Majority Banks, declare the Revolving Credit Aggregate Commitment (and any
commitment to increase the Revolving Credit
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Aggregate Commitment) terminated; (w) the Agent shall, upon being directed to do
so by the Majority Banks, declare the entire unpaid principal Indebtedness,
including the Notes, immediately due and payable, without presentment, notice or
demand, all of which are hereby expressly waived by Company; (x) upon the
occurrence of any Event of Default specified in subsection 10.1(j), above, and
notwithstanding the lack of any declaration by Agent under preceding clause (w),
the entire unpaid principal Indebtedness, including the Notes, shall become
automatically and immediately due and payable, and the Revolving Credit
Aggregate Commitment shall be automatically and immediately terminated; (y) the
Agent shall, upon being directed to do so by the Majority Banks, demand
immediate delivery of cash collateral, and the Company and each Account Party
agrees to deliver such cash collateral upon demand, in an amount equal to the
maximum amount that may be available to be drawn at any time prior to the stated
expiration of all outstanding Letters of Credit; and (z) the Agent shall, if
directed to do so by the Majority Banks or the Banks, as applicable (subject to
the terms hereof), exercise any remedy permitted by this Agreement, the other
Loan Documents or law.
10.3 Rights Cumulative. No delay or failure of Agent and/or Banks
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 other or further exercise thereof, or the exercise of any other power, right
or privilege. The rights of Agent and Banks under this Agreement are cumulative
and not exclusive of any right or remedies which Banks would otherwise have.
10.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
10.5 Waiver of Defaults. No Event of Default shall be waived by the
Banks except in a writing signed by an officer of the Agent in accordance with
Section 14.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude any
other or further exercise of their rights by Agent or the Banks. No waiver of
any Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Banks in enforcing any of their
rights shall constitute a waiver of any of their rights. Company expressly
agrees that this Section may not be waived or modified by the Banks or Agent by
course of performance, estoppel or otherwise.
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10.6 Set Off. Upon the occurrence and during the continuance of any
Event of Default, each Bank may at any time and from time to time, without
notice to the Company (any requirement for such notice being expressly waived by
the Company) set off and apply against any and all of the obligations of the
Company now or hereafter existing under this Agreement, whether owing to such
Bank or any other Bank or the Agent, any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Bank to or for the credit or the account of the Company
and any property of the Company from time to time in possession of such Bank,
irrespective of whether or not such deposits held or indebtedness owing by such
Bank may be contingent and unmatured and regardless of whether any collateral
then held by Agent or any Bank is adequate to cover the Indebtedness. Promptly
following any such setoff, such Bank shall give written notice to Agent and to
Company of the occurrence thereof. The Company hereby grants to the Banks and
the Agent a lien on and security interest in all such deposits, indebtedness and
property as collateral security for the payment and performance of all of the
obligations of the Company under this Agreement. The rights of each Bank under
this Section 10.6 are in addition to the other rights and remedies (including,
without limitation, other rights of setoff) which such Bank may have.
11. PAYMENTS, RECOVERIES AND COLLECTIONS
11.1 Payment Procedure.
(a) All payments by Company of principal of, or interest
on, the Notes, or any other Indebtedness, shall be made on the date
specified for payment under this Agreement not later than 11:00 a.m.
(Detroit time) in immediately available funds to Agent, for the ratable
account of the Banks, at Agent's office located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (care of Agent's Eurocurrency Lending Office,
for Eurocurrency-based Advances). Upon receipt by the Agent of each
such payment, the Agent shall make prompt payment in like funds
received to each Bank as appropriate, or, in respect of
Eurocurrency-based Advances, to such Bank's Eurocurrency Lending
Office.
(b) Unless the Agent shall have been notified by Company
prior to the date on which any payment to be made by Company is due
that Company does not intend to remit such payment, the Agent may, in
its sole discretion and without obligation to do so, assume that the
Company has remitted such payment 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 Company has not in fact remitted such payment to the Agent
each Bank shall forthwith on demand repay to the Agent the amount of
such assumed payment made available or transferred 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 per annum
equal to (i) for Prime-based Advances, the Federal Funds Effective Rate
(daily average), as the same may vary from time to time, and (ii) with
respect to Eurocurrency-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any
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required reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent) of
carrying such amount.
(c) Subject to the definition of Interest Period,
whenever any payment to be made hereunder shall otherwise be due on a
day which is not a Business Day, such payment shall be made 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) Subject to the provisions of Sections 14.12 and 14.14
hereof, all payments to be made by Company hereunder shall be made
without set-off or counterclaim and without deduction for or on account
of any present or future withholding or other taxes of any nature
imposed by any governmental authority thereof or any federation or
organization of which such governmental authority may at the time of
payment be a member, unless Company is compelled by law to make payment
subject to such tax. In such event, Company shall
(i) pay to the Agent, for Agent's own account and/or, as
the case may be, for the account of the Banks, such additional
amount (the "Gross-Up") as may be necessary to ensure that the
Agent and the Banks receive a net amount equal to the full
amount which would have been receivable had payment not been
made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities
according to applicable law, and send to the Agent such
certificates or certified copy receipts as the Agent shall
reasonably require as proof of the payment by the Company of
any such taxes payable by the Company.
If Agent or any Bank receives a cash refund with respect to taxes paid
by Company pursuant to this Section 11.1(d), it shall promptly remit
such cash refund, in the amount received, to Company.
As used herein, the terms "tax", "taxes" and "taxation" include all
existing taxes, levies, imposts, duties, charges, fees, deductions and
withholdings and any restrictions or conditions resulting in a charge
together with interest thereon and fines and penalties with respect
thereto which may be imposed by reason of any violation or default with
respect to the law regarding such tax, assessed as a result of or in
connection with the transactions hereunder, or the payment and or
receipt of funds hereunder, or the payment or delivery of funds into or
out of any jurisdiction other than the United States (whether assessed
against Company, Agent or any of the Banks).
11.2 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
in excess of its pro rata share of payments then or thereafter obtained by all
Banks upon principal of and interest on all Indebtedness, such Bank shall
purchase from the other
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Banks such participations in the Revolving Credit 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
Percentage with each of them; 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.
11.3 Deposits and Accounts. In addition to and not in limitation
of any rights of any Bank or other holder of any of the Notes under applicable
law, each Bank and each other such holder shall, upon acceleration of the
Indebtedness under the Notes and without notice or demand of any kind, have the
right to appropriate and apply to the payment of the Notes owing to it any and
all balances, credits, deposits, accounts or moneys of Company then or
thereafter with such Bank or other holder; provided, however, that any such
amount so applied by any Bank or other holder on any of the Notes owing to it
shall be subject to the provisions of Section 11.2, hereof.
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
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12.1 Reimbursement of Prepayment Costs. If Company makes any
payment of principal with respect to any Eurocurrency-based Advance or Quoted
Rate Advance (or converts or refunds, or attempts to convert or refund any such
Advance) on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if Company
fails to borrow, refund or convert any Eurocurrency-based Advance or Quoted Rate
Advance after notice has been given by Company to Agent in accordance with the
terms hereof requesting such Advance, or if Company fails to make any payment of
principal or interest in respect of a Eurocurrency-based Advance or Quoted Rate
Advance when due, Company shall reimburse Agent and each Bank, as the case may
be, on demand for any resulting loss, cost or expense incurred by Agent and
Banks, as the case may be, as a result thereof, including, without limitation,
any such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Banks, as the
case may be, shall have funded or committed to fund such Advance. Such amount
payable by Company to Agent and Banks, as the case may be, may include, without
limitation, an amount equal to the excess, if any, of (a) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, refunded
or converted, for the period from the date of such prepayment or of such failure
to borrow, refund or convert, through the last day of the relevant Interest
Period, at the applicable rate of interest for said Advance(s) provided under
this Agreement, over (b) the amount of interest (as reasonably determined by
Agent and Banks, as the case may be) which would have accrued to Agent and
Banks, as the case may be, on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to any Bank (including Swing Line Bank) under
this paragraph shall be made as though such Bank shall have actually funded or
committed to fund the relevant Advance through the purchase of an underlying
deposit in an amount equal to the amount of such Advance and having a maturity
comparable to the relevant Interest Period; provided, however, that any Bank may
fund any Eurocurrency-based Advance or Quoted Rate Advance in any manner it
deems fit and the foregoing assumptions shall be utilized only for the purpose
of the calculation of amounts payable under this paragraph. Upon the written
request of Company, Agent and Banks shall deliver to Company a certificate
setting forth the basis for determining such losses, costs and expenses, which
certificate shall be conclusively presumed correct, absent manifest error.
12.2 Agent's Eurocurrency Lending Office. For any Advance to which
the Eurocurrency-based Rate is applicable, if Agent shall designate a
Eurocurrency Lending Office which maintains books separate from those of the
rest of Agent, Agent shall have the option of maintaining and carrying the
relevant Advance on the books of such Eurocurrency Lending Office.
12.3 Circumstances Affecting Eurocurrency-based Rate Availability.
If with respect to any Interest Period, Agent or any of the Banks (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the interbank markets generally, deposits in Eurocurrencys in the
applicable amounts are not being offered to the Agent or such Bank for such
Interest Period, then Agent shall forthwith give notice thereof to the Company.
Thereafter, until Agent notifies Company that such circumstances no longer
exist, the obligation of Banks to make Eurocurrency-based Advances, and the
right of Company to convert an Advance to or refund an Advance as a
Eurocurrency-based Advance shall be suspended, and the Company shall repay in
full (or cause to
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be repaid in full) the then outstanding principal amount of each such
Eurocurrency-based Advance covered hereby together with accrued interest
thereon, any amounts payable under Section 12.1, hereof, and all other amounts
payable hereunder on the last day of the then current Interest Period applicable
to such Advance. Upon the date for repayment as aforesaid and unless Company
notifies Agent to the contrary within two (2) Business Days after receiving a
notice from Agent pursuant to this Section, such outstanding principal amount
shall be converted to a Prime-based Advance as of the last day of such Interest
Period.
12.4 Laws Affecting Eurocurrency-based Advance Availability. In the
event that any applicable law, rule or regulation (whether domestic or foreign)
now or hereafter in effect and whether or not currently applicable to any Bank
or the Agent or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by the Agent or any of the Banks (or any of their respective
Eurocurrency Lending Offices) with any request or directive (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 Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate, such Bank, or the Agent, shall notify
the Company (and the Agent, as the case may be) and the right of Company to
convert an Advance or refund an Advance as a Eurocurrency-based Advance, shall
be suspended and thereafter Company may select as Applicable Interest Rates only
those which remain available and which are permitted to be selected hereunder,
and if any of the Banks may not lawfully continue to maintain an Advance to the
end of the then current Interest Period applicable thereto as a
Eurocurrency-based Advance, Company shall immediately prepay such Advance,
together with interest to the date of payment, and any amounts payable under
Section 12.1 with respect to such prepayment and the applicable Advance shall
immediately be converted to a Prime-based Advance and the Prime-based Rate shall
be applicable thereto.
12.5 Increased Cost of Eurocurrency-based Advances. In the event
that any applicable law, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not currently applicable to any Bank or the
Agent or any interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or any of the Banks (or their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) made by any such authority, central bank or
comparable agency after the date hereof:
(a) shall subject the Agent or any of the Banks (or their
respective Eurocurrency Lending Offices) to any tax, duty or other
charge with respect to any Advance or any Note or shall change the
basis of taxation of payments to the Agent or any of the Banks of the
principal of or interest on any Advance or any Note or any other
amounts due under this Agreement in respect thereof (except for changes
in the rate of tax on the overall net income or revenues of the Agent
or of any of the Banks (or their respective Eurocurrency Lending
Offices) imposed by the United States of America or the jurisdiction in
which such Bank's principal executive office is located); or
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(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by the Agent or any of the Banks (or their respective
Eurocurrency Lending Offices) or shall impose on the Agent or any of
the Banks or the interbank markets any other condition affecting any
Advance or any of the Notes;
and the result of any of the foregoing is to increase the costs to the Agent or
any of the Banks of making, funding or maintaining any part of the Indebtedness
hereunder as a Eurocurrency-based Advance or to reduce the amount of any sum
received or receivable by the Agent or any of the Banks under this Agreement or
under the Notes in respect of a Eurocurrency-based Advance then Agent or Bank,
as the case may be, shall promptly notify the Company of such fact and demand
compensation therefor and, within fifteen (15) days after such notice, Company
agrees to pay to Agent or such Bank such additional amount or amounts as will
compensate Agent or such Bank or Banks for such increased cost or reduction. A
certificate of Agent or such Bank setting forth the basis for determining such
additional amount or amounts necessary to compensate or such Bank or Banks shall
be conclusively presumed to be correct save for manifest error.
12.6 Other Increased Costs. In the event that after the date hereof
the adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank or Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk based capital guidelines, affects
or would affect the amount of capital required or expected to be maintained by
such Bank or Agent (or any corporation controlling such Bank or Agent) and such
Bank or Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Bank's or Agent's obligations
or Advances hereunder and such increase has the effect of reducing the rate of
return on such Bank's or Agent's (or such controlling corporation's) capital as
a consequence of such obligations or Advances hereunder to a level below that
which such Bank or Agent (or such controlling corporation) could have achieved
but for such circumstances (taking into consideration its policies with respect
to capital adequacy) by an amount deemed by such Bank or Agent to be material,
then the Company shall pay to such Bank or Agent, as the case may be, from time
to time, upon request by such Bank or Agent, additional amounts sufficient to
compensate such Bank or Agent (or such controlling corporation) for any increase
in the amount of capital and reduced rate of return which such Bank or Agent
reasonably determines to be allocable to the existence of such Bank's or Agent's
obligations or Advances hereunder. A statement as to the amount of such
compensation, prepared in good faith and in reasonable detail by such Bank or
Agent, as the case may be, shall be submitted by such Bank or by Agent to the
Company, reasonably promptly after becoming aware of any event described in this
Section 12.6 and shall be conclusive, absent manifest error in computation.
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13. AGENT
13.1 Appointment of Agent. Each Bank and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or
holder under this Agreement and the Loan Documents and to exercise such powers
hereunder and thereunder as are specifically delegated to Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto, including without limitation the power to execute or authorize the
execution of financing or similar statements or notices, and other documents. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
Company. Each Bank agrees (which agreement shall survive any termination of this
Agreement) to reimburse Agent for all reasonable out-of-pocket expenses
(including in-house and outside attorneys' fees and disbursements) incurred by
Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Company under this Agreement or the Loan Documents
or any other instrument executed pursuant hereto, and for which Agent is not
reimbursed by Company, pro rata according to such Bank's Percentage. Agent shall
not be required to take any action under the Loan Documents, or to prosecute or
defend any suit in respect of the Loan Documents, unless indemnified to its
satisfaction by the Banks against loss, costs, liability and expense. If any
indemnity furnished to Agent 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. Company hereby authorizes Agent,
in Agent's sole discretion, to charge its general deposit account(s), if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same become due and payable
under the terms of this Agreement or the Notes.
13.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). Neither Agent nor any of its directors, officers,
employees or agents shall 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 with the consent or at the request of the
Majority Banks or in the absence of their own gross negligence or wilful
misconduct, nor be responsible for or have any duties to ascertain, inquire into
or verify (a) any recitals or warranties herein or therein, (b) the
effectiveness, enforceability, validity or due execution of this Agreement or
any document executed pursuant hereto or any security thereunder, (c) the
performance by Company of its obligations hereunder or thereunder, or (d) the
satisfaction of any condition hereunder or thereunder, including without
limitation the making of any Advance or the issuance of any Letter of Credit.
Agent shall be entitled to rely upon any certificate, notice, document or other
communication (including any cable, telegraph, telex, facsimile transmission or
oral communication) believed by it to be genuine and correct and to have been
sent or given by or on behalf of a proper person. Agent may treat the payee of
any Note as the holder thereof. Agent may employ agents and may consult with
legal counsel (who may be counsel for Company), independent
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public accountants and other experts selected by it and shall not be liable to
the Banks (except as to money or property received by them or their authorized
agents), for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
13.4 Successor Agent. Agent may resign as such at any time upon at
least thirty (30) days prior notice to Company and all Banks. If Agent at any
time shall resign or if the office of Agent shall become vacant for any other
reason, Majority Banks shall, by written instrument, appoint successor agent(s)
satisfactory to such Majority Banks, and, so long as no Default or Event of
Default has occurred and is continuing, to Company; provided, that Company shall
be entitled to deal with the Agent until receiving notice of appointment of a
successor agent. Such successor agent shall thereupon become the Agent
hereunder, as applicable, and shall be entitled to receive from the prior Agent
such documents of transfer and assignment as such successor Agent may reasonably
request. Any such successor Agent shall be a commercial bank organized under the
laws of the United States or any state thereof and shall have a combined capital
and surplus of at least $500,000,000. If a successor is not so appointed or does
not accept such appointment before the resigning Agent's resignation becomes
effective, the resigning Agent may appoint a temporary successor which is one of
the Banks to act until such appointment by the Majority Banks is made and
accepted or if no such temporary successor is appointed as provided above by the
resigning Agent, the Majority Banks shall thereafter perform all of the duties
of the resigning Agent hereunder until such appointment by the Majority Banks is
made and accepted. Such successor Agent shall succeed to all of the rights and
obligations of the resigning Agent as if originally named. The resigning Agent
shall duly assign, transfer and deliver to such successor Agent all moneys at
the time held by the resigning Agent hereunder after deducting therefrom its
expenses for which it is entitled to be reimbursed. Upon such succession of any
such successor Agent, the provisions of this Article 13 shall continue in effect
for the benefit of the resigning Agent in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
13.5 Loans by Agent. Comerica Bank and its successors and assigns,
in its capacity as a Bank hereunder, shall have the same rights and powers
hereunder as any other Bank and may exercise or refrain from exercising the same
as though it were not the Agent. Comerica Bank and its Affiliates may (without
having to account therefor to any Bank) accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with Company (or the Subsidiaries of Company) as if it were not acting
as Agent hereunder, and may accept fees and other consideration therefor without
having to account for the same to the Banks.
13.6 Credit Decisions. Each Bank acknowledges that it has,
independently of Agent and each other Bank and based on the Financial Statements
of Company 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
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not exercising from time to time any rights and privileges available to it under
this Agreement or any document executed pursuant hereto.
13.7 Agent's Fees. Commencing on January 4, 1999 and on the first
Business Day of each succeeding year until the Indebtedness has been repaid and
no commitment to fund any Advance hereunder is outstanding, Company shall pay to
Agent an annual agency fee and such other fees and charges as set forth in a
letter agreement between Company and Agent dated October 26, 1998 (and executed
by Company on October 30, 1998), as may be amended, restated, and replaced from
time to time. The Agent's Fees described in this Section 13.7 shall not be
refundable under any circumstance.
13.8 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 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 Company, or
any of its Subsidiaries, or their respective creditors or affecting their
respective 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 Loan Documents.
13.9 Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by Company, but without limiting any obligation of
Company to make such reimbursement), ratably according to their respective
Percentages, from and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement, any of the other Loan Documents or the transactions contemplated
hereby or any action taken or omitted by the Agent under this Agreement or any
of the other Loan Documents; provided, however, that no Bank shall be liable for
any portion of such claims, damages, losses, liabilities, costs or expenses
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including,
without limitation, fees and expenses of counsel) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents, to
the extent that the Agent is not reimbursed for such expenses by Company, but
without limiting the obligation of Company to make such reimbursement. Each Bank
agrees to reimburse the Agent promptly upon demand for its ratable share of any
amounts owing to the Agent by the Banks pursuant to this Section. If the
indemnity furnished to the Agent under this Section shall, in the judgment of
the Agent, be insufficient or become impaired, the Agent may call for additional
indemnity from the Banks and cease, or not commence, to take any action until
such additional indemnity is furnished.
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13.10 Knowledge of Default. It is expressly understood and agreed
that the Agent shall be entitled to assume that no Event of Default has occurred
and is continuing, unless the officers of the Agent immediately responsible for
matters concerning this Agreement shall have been notified in a writing
specifying such Event of Default and stating that such notice is a "notice of
default" by a Bank or by Company. Upon receiving such a notice, the Agent shall
promptly notify each Bank of such Event of Default and provide each Bank with a
copy of such notice. Agent shall also furnish the Banks, promptly upon receipt,
with copies of all other notices or other information required to be provided by
Company under this Agreement.
13.11 Agent's Authorization; Action by Banks. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make any
request, or to take any other action on behalf of the Banks (including without
limitation the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or all of the Banks, as applicable hereunder. Action that
may be taken by Majority Banks or all of the Banks, as the case may be (as
provided for hereunder) may be taken (i) pursuant to a vote at a meeting (which
may be held by telephone conference call) as to which all of the Banks have been
given reasonable advance notice, or (ii) pursuant to the written consent of the
requisite Percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
13.12 Enforcement Actions by the Agent. Except as otherwise
expressly provided under this Agreement or in any of the other Loan Documents
and subject to the terms hereof, Agent will take such action, assert such rights
and pursue such remedies under this Agreement and the other Loan Documents as
the Majority Banks or all of the Banks, as the case may be (as provided for
hereunder), shall direct; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action or
omission may expose the Agent to personal liability or is contrary to this
Agreement, any of the other Loan Documents or applicable law. Except as
expressly provided above or elsewhere in this Agreement or the other Loan
Documents, no Bank (other than the Agent, acting in its capacity as agent) shall
be entitled to take any enforcement action of any kind under any of the Loan
Documents.
14. MISCELLANEOUS
14.1 Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all Financial Statements required to be
delivered hereunder shall be prepared in accordance with GAAP.
14.2 Consent to Jurisdiction. Company and Banks hereby irrevocably
submit to the non-exclusive jurisdiction of any United States Federal or
Michigan state court sitting in Detroit in any action or proceeding arising out
of or relating to this Agreement or any of the other Loan Documents
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and Company and Banks hereby irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in any such United States
Federal or Michigan state court. Company irrevocably consents to the service of
any and all process in any such action or proceeding brought in any court in or
of the State of Michigan by the delivery of copies of such process to Company at
its address specified on the signature page hereto or by certified mail directed
to such address or such other address as may be designated by Company in a
notice to the other parties that complies as to delivery with the terms of
Section 14.6. Nothing in this Section shall affect the right of the Banks and
the Agent to serve process in any other manner permitted by law or limit the
right of the Banks or the Agent (or any of them) to bring any such action or
proceeding against Company or any of its property in the courts of any other
jurisdiction. Company hereby irrevocably waives any objection to the laying of
venue of any such suit or proceeding in the above described courts.
14.3 Law of Michigan. This Agreement and the Notes have been
delivered at Detroit, Michigan, and shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan except as and to
the extent expressed to the contrary in any of the Loan Documents. 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.
14.4 Interest. In the event the obligation of Company to pay
interest on the principal balance of the Notes is or becomes in excess of the
maximum interest rate which Company is permitted by law to contract or agree to
pay, giving due consideration to the execution date of this Agreement, then, in
that event, the rate of interest applicable with respect to each Bank's
Percentage shall be deemed to be immediately reduced to such maximum rate and
all previous payments in excess of the maximum rate shall be deemed to have been
payments in reduction of principal and not of interest.
14.5 Closing Costs and Other Costs; Indemnification. (a) Company
agrees to pay, or reimburse the Agent for payment of, on demand (i) all
reasonable closing costs and expenses, including, by way of description and not
limitation, in-house and outside attorney fees and advances, appraisal and
accounting fees, and lien search fees incurred by Agent in connection with the
commitment, consummation and closing of the loans contemplated hereby or in
connection with the administration of this Agreement or any amendment,
refinancing or restructuring of the credit arrangements provided under this
Agreement, (ii) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing, recording or
amendment of this Agreement and the Loan Documents and the consummation of the
transactions contemplated hereby, and any and all liabilities with respect to or
resulting from any delay in paying or omitting to pay such taxes or fees, and
(iii) all reasonable costs and expenses of the Agent or any of the Banks
(including reasonable fees and expenses of outside counsel (but without
duplication of fees and expenses for the same services) in connection with any
action or proceeding relating to a court order, injunction or other process or
decree restraining or seeking to restrain the Agent or any of the Banks
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from paying any amount under, or otherwise relating in any way to, any Letter of
Credit and any and all costs and expenses which any of them may incur relative
to any payment under any Letter of Credit. At Agent's option, all of said
amounts required to be paid by Company, if not paid when due, may be charged by
Agent as a Prime-based Advance against the Indebtedness.
(b) Company agrees to indemnify and save Agent and each
of the Banks harmless from all loss, cost, damage, liability or expenses,
including reasonable in-house and outside attorneys' fees and disbursements (but
without duplication of fees and expenses for the same services), incurred by
Agent and the Banks by reason of an Event of Default, or enforcing the
obligations of Company under this Agreement or any of the other Loan Documents
or in the prosecution or defense of any action or proceeding concerning any
matter growing out of or connected with this Agreement or any of the other Loan
Documents, excluding, however, any loss, cost, damage, liability or expenses
arising solely as a result of the gross negligence or willful misconduct of the
party seeking to be indemnified under this Section 14.5(b).
(c) Company agrees to defend, indemnify and hold harmless
Agent and each of the Banks, and their respective employees, agents, officers
and directors from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs or expenses of whatever kind or nature
arising out of or related to (i) the presence, disposal, release or threatened
release of any Hazardous Materials on, from or affecting any premises owned or
occupied by Company or any of its Subsidiaries, (ii) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (iii) any lawsuit or other proceeding
brought or threatened, settlement reached or governmental order or decree
relating to such Hazardous Materials, (iv) the cost of removal of all Hazardous
Materials from all or any portion of any premises owned by Company or its
Subsidiaries, (v) the taking of necessary precautions to protect against the
release of Hazardous Materials on or affecting any premises owned by Company or
any of its Subsidiaries, (vi) complying with all Hazardous Material Laws and/or
(vii) any violation of Hazardous Material Laws, including without limitation,
reasonable attorneys and consultants fees, investigation and laboratory fees,
environmental studies required by Agent or any Bank in connection with the
violation of Hazardous Material Laws (whether before or after the occurrence of
any Default or Event of Default hereunder), court costs and litigation expenses,
excluding however, those arising as a result of its or their gross negligence or
willful misconduct. The obligations of Company under this Section 14.5(c) shall
be in addition to any and all other obligations and liabilities Company may have
to Agent or any of the Banks at common law or pursuant to any other agreement.
14.6 Notices. Except as expressly provided otherwise in this
Agreement, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall be
given by personal delivery, by mail, by reputable overnight courier, by telex or
by facsimile and addressed or delivered to it at its address set forth on the
signature pages hereof or at such other address as may be designated by such
party in a notice to the other parties that complies as to delivery with the
terms of this Section 14.6. Any notice, if personally delivered or if mailed and
properly addressed with postage prepaid and sent by registered
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or certified mail, shall be deemed given when received or when delivery is
refused; any notice, if given to a reputable overnight courier and properly
addressed, shall be deemed given two (2) Business Days after the date on which
it was sent, unless it is actually received sooner by the named addressee; and
any notice, if transmitted by telex or facsimile, shall be deemed given when
received (answerback confirmed in the case of telexes and receipt confirmed in
the case of telecopies). Agent may, but shall not be required to, take any
action on the basis of any notice given to it by telephone, but the giver of any
such notice shall promptly confirm such notice in writing or by telex or
facsimile, and such notice will not be deemed to have been received until such
confirmation is deemed received in accordance with the provisions of this
Section set forth above. If such telephonic notice conflicts with any such
confirmation, the terms of such telephonic notice shall control.
14.7 Further Action. Company, from time to time, upon written
request of Agent will make, execute, acknowledge and deliver or cause to be
made, executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the other Loan Documents,
and to provide for Advances under and payment of the Notes, according to the
intent and purpose herein and therein expressed.
14.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure
to the benefit of Company, the Agent and the Banks and their respective
successors and assigns.
(b) The foregoing shall not authorize any assignment by
Company of its rights or duties hereunder, and, except as otherwise provided
herein, no such assignment shall be made (or effective) without the prior
written approval of the Banks.
(c) Company and Agent acknowledge that each of the Banks
may at any time and from time to time, subject to the terms and conditions
hereof, assign or grant participations in such Bank's rights and obligations
hereunder and under the other Loan Documents to any commercial bank, savings and
loan association, insurance company, pension fund, mutual fund, loan or debt
fund, commercial finance company or other similar financial institution, the
identity of which institution is approved by Company and Agent, such approval
not to be unreasonably withheld or delayed; provided, however, that (i) the
approval of Company shall not be required upon the occurrence and during the
continuance of a Default or Event of Default, and (ii) the approval of Company
and Agent shall not be required for any such sale, transfer, assignment or
participation to the Affiliate of an assigning Bank, any other Bank or any
Federal Reserve Bank. Company authorizes each Bank to disclose to any
prospective assignee or participant, once approved by Company and Agent, any and
all financial information in such Bank's possession concerning Company which has
been delivered to such Bank pursuant to this Agreement; provided that each such
prospective assignee or participant shall execute a confidentiality agreement
consistent with the terms of Section 14.13 hereof.
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(d) Each assignment by a Bank of any portion of its
rights and obligations hereunder and under the other Loan Documents shall be
made pursuant to an Assignment Agreement substantially (as determined by Agent)
in the form attached hereto as EXHIBIT J (with appropriate insertions acceptable
to Agent) and shall be subject to the terms and conditions hereof, and to the
following restrictions:
(i) each assignment shall cover all of the Notes
issued by Company hereunder to the assigning
Bank (and not any particular note or notes),
and shall be for a fixed and not varying
percentage thereof, with the same percentage
applicable to each such Note;
(ii) each assignment shall be in a minimum amount
of Ten Million Dollars ($10,000,000) and to
the extent the assignment is less than the
entire Bank's interest, the assigning Bank
retains at least a $10,000,000 interest; and
(iii) no assignment shall be effective unless
Agent has received from the assignee (or
from the assigning Bank) an assignment fee
of $3,500 for each such assignment.
In connection with any assignment, Company and Agent shall be entitled to
continue to deal solely and directly with the assigning Bank in connection with
the interest so assigned until (x) the Agent shall have received a notice of
assignment duly executed by the assigning Bank and an Assignment Agreement (with
respect thereto) duly executed by the assigning Bank and each assignee; and (y)
the assigning Bank shall have delivered to the Agent the original of each Note
held by the assigning Bank under this Agreement. From and after the date on
which the Agent shall notify Company and the assigning Bank that the foregoing
conditions shall have been satisfied and all consents (if any) required shall
have been given, the assignee thereunder shall be deemed to be a party to this
Agreement. To the extent that rights and obligations hereunder shall have been
assigned to such assignee as provided in such notice of assignment (and
Assignment Agreement), such assignee shall have the rights and obligations of a
Bank under this Agreement and the other Loan Documents (including without
limitation the right to receive fees payable hereunder in respect of the period
following such assignment). In addition, the assigning Bank, to the extent that
rights and obligations hereunder shall have been assigned by it as provided in
such notice of assignment (and Assignment Agreement), but not otherwise, shall
relinquish its rights and be released from its obligations under this Agreement
and the other Loan Documents.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement and assuming Company has consented to such
assignment (if its consent is required), Company shall, to the extent
applicable, execute and deliver to the Agent in exchange for any surrendered
Note, new Note(s) payable to the
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order of the assignee in an amount equal to the amount assigned to it pursuant
to such notice of assignment (and Assignment Agreement), and with respect to the
portion of the Indebtedness retained by the assigning Bank, to the extent
applicable, new Note(s) payable to the order of the assigning Bank in an amount
equal to the amount retained by such Bank hereunder shall be executed and
delivered by Company. Agent, the Banks and Company acknowledge and agree that
any such new Note(s) shall be given in renewal and replacement of the
surrendered Notes and shall not effect or constitute a novation or discharge of
the Indebtedness evidenced by any surrendered Note, and each such new Note may
contain a provision confirming such agreement. In addition, promptly following
receipt of such Notes, Agent shall prepare and distribute to Company and each of
the Banks a revised EXHIBIT C to this Agreement setting forth the applicable new
Percentages of the Banks (including the assignee Bank), taking into account such
assignment.
(e) Each Bank agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be subject
to the following restrictions (which shall be set forth in the applicable
participation agreement):
(i) such Bank shall remain the holder of its
Notes hereunder, notwithstanding any
such participation;
(ii) except as expressly set forth in this
Section 14.8(e) with respect to rights of
setoff and the benefits of Section 12
hereof, a participant shall have no direct
rights or remedies hereunder;
(iii) a participant shall not reassign or
transfer, or grant any sub-participations in
its participation interest hereunder or any
part thereof; and
(iv) such Bank shall retain the sole right and
responsibility to enforce the obligations of
Company relating to the Notes and the other
Loan Documents, or cause Agent to do so
(subject to the terms and conditions
hereof), and the right to approve any
amendment, modification or waiver of any
provision of this Agreement without the
consent of the participant, except for those
matters covered by Section 14.11(a) through
(e) and (h) hereof (provided that a
participant may exercise approval rights
over such matters only on an indirect basis,
acting through such Bank, and Company, Agent
and the other Banks may continue to deal
directly with such Bank in connection with
such Bank's rights and duties hereunder).
Company agrees that each participant shall be deemed to have the right of setoff
under Section 10.6 hereof in respect of its participation interest in amounts
owing under this Agreement and the other Loan Documents to the same extent as if
the Indebtedness were owing directly to it as a Bank under this Agreement, shall
be subject to the pro rata recovery provisions of Section 11.2 hereof and shall
be entitled to the benefits of Section 12 hereof but not in excess of the amount
that would have been payable to the Bank from which it received the
participation if no such participation had been granted. The amount, terms and
conditions of any participation shall be as set forth in the
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participation agreement between the issuing Bank and the Person purchasing such
participation, and none of Company, the Agent and the other Banks shall have any
responsibility or obligation with respect thereto, or to any Person to whom any
such participation may be issued. No such participation shall relieve any
issuing Bank of any of its obligations under this Agreement or any of the other
Loan Documents, and all actions hereunder shall be conducted as if no such
participation had been granted.
(f) Nothing in this Agreement, the Notes or the other
Loan Documents, expressed or implied, is intended to or shall confer on any
Person other than the respective parties hereto and thereto and their successors
and assignees and participants permitted hereunder and thereunder any benefit or
any legal or equitable right, remedy or other claim under this Agreement, the
Notes or the other Loan Documents.
14.9 Indulgence. No delay or failure of Agent and the Banks 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
other or further exercise thereof, nor the exercise of any other right, power or
privilege. The rights of Agent and the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
14.10 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.
14.11 Amendment and Waiver. No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
Company therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Banks or, if this Agreement expressly so
requires with respect to the subject matter thereof, by all Banks (and, with
respect to any amendments to this Agreement or the other Loan Documents, by
Company if a signatory thereto), 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, unless in
writing and signed by all the Banks, do any of the following: (a) except as
contemplated by Section 2.11 hereunder, increase any Bank's commitment
hereunder, (b) reduce the principal of, or interest on, the Notes or any Fees
(other than the Agent's Fees) or other amounts payable hereunder, (c) postpone
any date fixed for any payment of principal of, or interest on, the Notes or any
Fees (other than the Agent's Fees) or other amounts payable hereunder, (d) waive
any Event of Default specified in Section 10.1(a) or (b) hereof, (e) release or
defer the granting or perfecting of a Lien in any collateral or release any
guaranty or similar undertaking provided by any Person, or alter the required
priority of any Lien or terminate or modify any indemnity provided to the Banks
hereunder or under the Loan Documents, in each case except as shall be otherwise
expressly provided in this Agreement or any other Loan Document, (f) take any
action which requires the signing of all Banks pursuant to the terms of this
Agreement or any other Loan Document, (g) change the aggregate unpaid principal
amount of the Notes which shall be required for the Banks or any of them to take
any action under this Agreement or any other Loan Document,
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or (h) change the definition of "Majority Banks" or this Section 14.11; provided
further, that no amendment, wavier or consent shall, unless in writing signed by
the Swing Line Bank do either of the following: (x) reduce the principal of, or
interest on, the Swing Line Note or (y) postpone any date fixed any payment of
principal of, or interest on, the Swing Line Note; provided further, that no
amendment, waiver, or consent shall, unless in writing and signed by the Agent
in addition to all the Banks, affect the rights or duties of the Agent under
this Agreement or any other Loan Document. All references in this Agreement to
"Banks" or "the Banks" shall refer to all Banks, unless expressly stated to
refer to Majority Banks.
14.12 Taxes and Fees. Should any documentary, stamp or similar tax
(other than a franchise tax or tax based upon the net income of any Bank or
Agent imposed by the jurisdiction in which such Bank or Agent have their
respective principal executive offices), or recording or filing fee become
payable in respect of this Agreement or any of the other Loan Documents (or the
execution, filing or recording thereof) or any amendment, modification or
supplement hereof or thereof, Company agrees to pay the same together with any
interest or penalties thereon and agrees to hold the Agent and the Banks
harmless with respect thereto.
14.13 Confidentiality. Each Bank agrees that it will not disclose
without the prior written consent of Company (other than to its employees, to
another Bank or to its auditors or counsel) any information with respect to
Company, which is furnished pursuant to this Agreement or any of the other Loan
Documents; provided that any Bank may disclose any such information (a) as has
become generally available to the public or has been lawfully obtained by such
Bank from any third party under no duty of confidentiality to Company, (b) as
may be required or appropriate in any report, statement or testimony submitted
to, or in respect to any inquiry by, any municipal, state or federal regulatory
body having or claiming to have jurisdiction over such Bank, including the Board
of Governors of the Federal Reserve System of the United States, the Office of
the Comptroller of the Currency or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in respect to any summons or
subpoena or in connection with any litigation, (d) in order to comply with any
law, order, regulation or ruling applicable to such Bank, and (e) to any
permitted transferee or assignee or to any permitted participant of, or with
respect to, the Notes, as aforesaid so long as such transferee, assignee or
participant agrees in writing to be bound by the terms and conditions of this
Section 14.13. Each Bank shall give notice to Company of any disclosure made by
such Bank under this Section unless such notice is prohibited by law, order,
regulation or ruling.
14.14 Withholding Taxes. If any Bank is not incorporated under the
laws of the United States or a state thereof, such Bank shall, prior to the
effective date of this Agreement in the case of the lenders which are Banks as
of the date of this Agreement and prior to the effective date of any assignment
permitted under Section 14.8 hereof in the case of any lender which becomes a
Bank after the date hereof, deliver to the Agent two executed copies of (i)
Internal Revenue Service Form 1001 specifying the applicable tax treaty between
the United States and the jurisdiction of such Bank's domicile which provides
for the exemption from withholding on interest payments to such Bank, (ii)
Internal Revenue Service Form 4224 evidencing that the income to be received by
such
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Bank hereunder is effectively connected with the conduct of a trade or business
in the United States or (iii) other evidence satisfactory to the Agent and
Company that such Bank is exempt from United States income tax withholding with
respect to such income. Such Bank shall amend or supplement any such form or
evidence (and submit new forms or evidence upon the expiration of any forms or
other evidence previously delivered to Agent) as required to insure that it is
accurate, complete and non-misleading at all times. Promptly upon notice from
the Agent of any determination by the Internal Revenue Service that any payments
previously made to such Bank hereunder were subject to United States income tax
withholding when made, such Bank shall pay to the Agent the excess of the
aggregate amount required to be withheld from such payments over the aggregate
amount actually withheld by the Agent. In addition, from time to time upon the
reasonable request and at the sole expense of the Company, each Bank and the
Agent shall (to the extent it is able to do so based upon applicable facts and
circumstances), complete and provide the Company with such forms, certificates
or other documents as may be reasonably necessary to allow the Company to make
any payment under this Agreement or the other Loan Documents without any
withholding for or on the account of any tax under Section 11.1(d) hereof (or
with such withholding at a reduced rate), provided that the execution and
delivery of such forms, certificates or other documents does not adversely
affect or otherwise restrict the right and benefits (including without
limitation economic benefits) available to such Bank or the Agent, as the case
may be, under this Agreement or any of the other Loan Documents, or under or in
connection with any transactions not related to the transactions contemplated
hereby. Notwithstanding any provision of this Section 14.14 or Section 11.1(d)
to the contrary, Company shall have no obligation to pay a Gross-Up with respect
to withholding tax paid by Company pursuant to Section 11.1(d) to the extent
such Gross-Up results from any agreement or certificate delivered pursuant to
this Section having been incorrect in any material respect when made.
14.15 Power of Attorney. Company does hereby make, constitute and
appoint any officer or agent of Agent as its true and lawful attorney-in-fact,
with power, upon the occurrence of any Event of Default (exercisable only so
long as such Event of Default is continuing and with full power of
substitution), to endorse its name, or the names of any of its officers or
agents, upon any notes, checks, drafts, money orders, or other instruments of
payment (including payments payable under any policy of insurance) in full or
part payment of any amounts owing to the Banks; to sign and endorse the name of
Company, and/or any of its officers or agents, upon any invoice, freight or
express ▇▇▇▇, ▇▇▇▇ of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with Accounts of
the Company, and any instrument or document relating thereto or to Company's
rights therein; to request from any insurance company providing insurance
coverage in accordance with Section 6.14 hereof to issue certificates of
insurance, at Company's expense, evidencing the loss payable provisions required
under Section 6.14 hereof; to execute on behalf of Company any financing
statements, amendments, subordinations or other filings pursuant to this
Agreement or any of the Loan Documents, granting unto Agent, as the
attorney-in-fact of Company, full power to do any and all things necessary to be
done in and about the Company's premises as fully and effectually as Company
might or could do, and hereby ratifying all that any said attorney shall
lawfully do or cause to be done by virtue hereof. The power of attorney
described herein shall be deemed coupled with an interest and shall be
irrevocable until
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86
the Revolving Credit Maturity Date and thereafter until payment in full of all
the Indebtedness and the performance by Company of all other obligations under
this Agreement and the Loan Documents.
14.16 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT,
ANY OF THE OTHER LOAN DOCUMENTS OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER
THE BANKS, THE AGENT, NOR COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE
BANKS AND THE AGENT OR COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF
THEM.
14.17 Complete Agreement; Conflicts. This Agreement, the Notes, any
Requests for Revolving Credit Advance, any Requests for Swing Line Advance, and
the other Loan Documents contain the entire agreement of the parties hereto,
superseding all prior agreements, discussions and understandings relating to the
subject matter hereof, and none of the parties shall be bound by anything not
expressed in writing. In the event of any conflict between the terms of this
Agreement and the other Loan Documents, this Agreement shall govern.
14.18 Severability. In case any one or more of the obligations of
Company under this Agreement, the Notes or any of the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of Company shall not in any way
be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents in any other jurisdiction.
14.19 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
14.20 Construction of Certain Provisions. If any provision of this
Agreement or any of the other Loan Documents refers to any action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person, whether or not expressly specified in such provision.
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14.21 Independence of Covenants. Each covenant hereunder shall be
given independent effect (subject to any exceptions stated in such covenant) so
that if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
14.22 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Company or any party to
any of the Loan Documents made herein or in any of the Loan Documents or in any
certificate, report, Financial Statement or other document furnished by or on
behalf of Company or any Subsidiary in connection with this Agreement or any of
the other Loan Documents shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by any Bank or on
such Bank's behalf, and those covenants and agreements of Company set forth in
Sections 12.1, 12.6, and 14.5 hereof (together with any other indemnities of
Company or any Subsidiary contained elsewhere in this Agreement or in any of the
other Loan Documents) and of Banks set forth in Section 13.9 hereof shall,
notwithstanding anything to the contrary contained in this Agreement, survive
the repayment in full of the Indebtedness and the termination of the Revolving
Credit Aggregate Commitment.
14.23 Effective Upon Execution. This Agreement shall become
effective upon the execution hereof by Banks, Agent and Company and the issuance
by Company of the Notes hereunder and satisfaction of all conditions precedent
forth herein, and shall remain effective until the Indebtedness has been repaid
and discharged in full and no commitment to extend any credit hereunder or under
any of the other Loan Documents, whether optional or obligatory, remains
outstanding.
14.24 Payment of Fees. Concurrent with the execution and delivery of
this Agreement, Company shall pay to the Agent all costs and expenses required
hereunder to be paid to Agent upon execution of this Agreement.
[The rest of this page intentionally left blank.]
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88
WITNESS the due execution hereof as of the day and year first above
written.
COMPANY: VALASSIS COMMUNICATIONS, INC.
By:_____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Secretary
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
AGENT: COMERICA BANK,
as Agent
By:_____________________________
Its:____________________________
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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REVOLVING CREDIT BANKS:
Operations Contact: COMERICA BANK
Comerica Bank
One Detroit Center By:_____________________________
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇ ▇▇▇▇ Its:____________________________
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ One Detroit Center
Attention: Nekold ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ Attention: M. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Operations Contact: ▇▇▇▇▇▇ TRUST AND SAVINGS BANKS
Harris Trust and Savings Bank
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ By:_____________________________
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇. Law
Attention: ▇▇▇▇▇▇ ▇▇▇▇ Its: Vice President
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Law
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Operations Contact: KEYBANK NATIONAL ASSOCIATION
KeyBank National Bank
OH-01-27-0606 By: ____________________________
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ Its: Senior Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ OH-01-27-0606
Facsimile (216) 689-4981 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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SWING LINE BANK: COMERICA BANK
By:___________________________
Its:__________________________
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT "A"
COVENANT COMPLIANCE REPORT
To: Comerica Bank
Re: Valassis Communications, Inc. Credit Agreement dated as of
November 16, 1998 (as amended from time to time, the
"Agreement")
This Covenant Compliance Report ("Report") is furnished pursuant to
Section 8.3 of the Agreement and sets forth various information as of
, 19 (the "Computation Date").
Part I.
1. Fixed Charge Coverage Ratio. On the Computation Date, the
Fixed Charge Coverage Ratio, which is required to be not less than 3.0 to 1.0,
was to 1.0 as computed in the supporting documents attached hereto as
Schedule 1.
2. Funded Debt to EBITDA Ratio. As of the Computation Date, the
Funded Debt to EBITDA Ratio, which is required to be not more than 3.00 to 1.0,
was to 1.0 as computed in the supporting documents attached hereto as
Schedule 2.
3. Capital Stock Redemptions. As of the Computation Date, the
aggregate redemptions of the capital stock of Company, which is required to be
not more than the sum of $75,000,000 plus 50% of Net Income from ,
1998 through such date, was $ , as computed in the supporting
documents attached hereto as Schedule 3.
4. Cash Dividends. As of the Computation Date, the cash dividends
on the capital stock of Company made during the fiscal quarter (or portion
thereof) ending on such date, which is required to be not more than $12,500,000,
was $ , as computed in the supporting documents attached hereto as
Schedule 4.
5. Subordinated Indebtedness. As of the Computation Date, (i) the
aggregate outstanding Permitted Subordinated Indebtedness was $ and
(ii) the aggregate purchase, redemption, prepayment or repayment of Permitted
Subordinated Indebtedness during the fiscal quarter (or portion thereof) ending
on such date was $ , as computed in the supporting documents
attached hereto as Schedule 5.
6. Permitted Senior Indebtedness. As of the Computation Date (i)
the aggregate outstanding Permitted Senior Indebtedness was $ and
(ii) the aggregate purchase, redemption, prepayment or repayment of the Senior
Notes during the fiscal quarter (or portion
92
thereof) ending on such date was $ , as computed in the supporting
documents attached hereto as Schedule 6.
Part II.
The undersigned officer of Company hereby certifies that:
A. All of the information set forth in this Report (and in any
Schedule attached hereto) is true and correct in all material respects.
B. As of the Computation Date, the Company has observed and
performed all of its covenants and other agreements contained in the Agreement
and in the Notes and any other Loan Documents to be observed, performed and
satisfied by them.
C. I have reviewed the Agreement and this Report is based on an
examination sufficient to assure that this Report is accurate.
D. Except as stated in Schedule 7 hereto (which shall describe
any existing Event of Default or event which with the passage of time and/or the
giving of notice, would constitute an Event of Default and the notice and period
of existence thereof and any action taken with respect thereto or contemplated
to be taken by Company), no Event of Default, or event which with the passage of
time and/or the giving of notice would constitute an Event of Default, has
occurred and is continuing on the date of this Report.
Capitalized terms used in this Report and in the schedules hereto,
unless specifically defined to the contrary, have the meanings given to them in
the Agreement.
IN WITNESS WHEREOF, Company has caused this Report to be executed and
delivered by its duly authorized officer this day of , 19 .
VALASSIS COMMUNICATIONS, INC.
By:_____________________________
Its:____________________________
93
EXHIBIT "B"
REVOLVING CREDIT NOTE
$______________ November 16, 1998
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Valassis
Communications, Inc., a Delaware corporation ("Company") promises to pay to the
order of [insert Bank] ("Bank") at , in lawful money of the United States of
America, the sum of [Insert Amount derived from Percentages] Dollars ($ ), or
so much of said sum as may from time to time have been advanced and then be
outstanding hereunder pursuant to the Valassis Communications, Inc. Credit
Agreement dated as of November 16, 1998, made by and among the Company, certain
banks, including the Bank, and Comerica Bank as Agent for such banks, as the
same may be amended from time to time (the "Agreement"), together with interest
thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the
Agreement or as otherwise determined thereunder, and interest shall be computed,
assessed and payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to and may be accelerated or matured
under, the terms of the Agreement, to which reference is hereby made.
Definitions and terms of the Agreement are hereby incorporated by reference
herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
94
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
VALASSIS COMMUNICATIONS, INC.
By:__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Secretary
2
95
EXHIBIT "C"
PERCENTAGES
Bank Percentage
---- ----------
Comerica Bank 45%
▇▇▇▇▇▇ Trust and Savings Bank 30%
KeyBank National Association 25%
-----------
100%
96
EXHIBIT "D"
REQUEST FOR REVOLVING CREDIT ADVANCE
No._________________ Dated:__________________
To: Comerica Bank - Agent
Re: Valassis Communications, Inc. Credit Agreement by and among Comerica
Bank (individually and as Agent), the lenders from time to time parties
thereto (collectively, "Banks"), and Valassis Communications, Inc.
("Company") dated as of November 16, 1998 (as amended from time to
time, the "Agreement").
Pursuant to the Agreement, the Company requests a Revolving Credit
Advance from Banks as follows:
A. Date of Advance:________________________
B. Amount of Advance:
$__________________________
[ ] Comerica Bank Account No. _______________
[ ] Other: __________________________________
__________________________________
C. Type of Activity:
1. Advance [ ]
2. Refunding of an Advance [ ]
3. Conversion [ ]
D. Interest Rate:
1. Prime-based Rate [ ]
2. Eurocurrency-based Rate [ ]
97
E. Interest Period (for Eurocurrency-based Advances only):
1. One (1) Month [ ]
2. Two (2) Months [ ]
3. Three (3) Months [ ]
4. Six (6) Months [ ]
The Company certifies to the matters specified in Sections 2.3(e) and
6.7 of the Agreement.
VALASSIS COMMUNICATIONS, INC.
By:___________________________
Its:__________________________
Agent Approval:____________________
2
98
EXHIBIT "E"
REQUEST FOR SWING LINE ADVANCE
No._________________ Dated:__________________
To: Comerica Bank, Swing Line Bank
Re: Valassis Communications, Inc. Credit Agreement by and among Comerica
Bank (individually and as Agent), the lenders from time to time parties
thereto (collectively, "Banks"), and Valassis Communications, Inc.
("Company") dated as of November 16, 1998 (as amended from time to
time, the "Agreement").
Pursuant to the Agreement, the Company requests a Swing Line Advance
from the Swing Line Bank as follows:
A. Date of Advance:_____________________
B. Amount of Advance:
$____________________
[ ] Comerica Bank Account No. _______________
[ ] Other: __________________________________
__________________________________
C. Interest Rate:
1. Prime-based Rate [ ]
2. Quoted Rate [ ]
D. Interest Period:
1. ________________ days(1)
----------------------------------
(1)Insert up to 30 days.
99
100
The Company certifies to the matters specified in Sections 4.3(e) and
6.7 of the Agreement.
VALASSIS COMMUNICATIONS, INC.
By:_________________________
Its:________________________
Swing Line Bank Approval:___________________
3
101
EXHIBIT "F"
SWING LINE NOTE
$10,000,000 November 16, 1998
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, VALASSIS
COMMUNICATIONS, INC., a Michigan corporation ("Company") promises to pay to the
order of Comerica Bank ("Bank") at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ in
lawful money of the United States of America, the sum of Ten Million Dollars
($10,000,000), or so much of said sum as may from time to time have been
advanced and then be outstanding hereunder pursuant to Article 4 of the Credit
Agreement dated as of November 16, 1998, executed by and among the Company,
certain banks, including the Bank, and Comerica Bank as Agent for such banks, as
the same may be amended from time to time (the "Agreement"), together with
interest thereon as hereinafter set forth.
The unpaid principal indebtedness from time to time outstanding under
this Note shall be due and payable on the last day of the Interest Period
applicable thereto or as otherwise set forth in the Agreement, provided that no
Swing Line Advance may mature or be payable on a day later than the Revolving
Credit Maturity Date.
Each of the Swing Line Advances made hereunder shall bear interest at
the Prime-based Rate or the Quoted Rate from time to time applicable thereto
under the Agreement or as otherwise determined thereunder, and interest shall be
computed, assessed and payable as set forth in the Agreement.
This Note is a note under which advances, repayments and readvances may
be made from time to time, but only in accordance with the terms and conditions
of the Agreement. This Note evidences borrowings under, is subject to and may be
accelerated or matured under, the terms of the Agreement, to which reference is
hereby made. Definitions and terms of the Agreement are hereby incorporated by
reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
102
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
VALASSIS COMMUNICATIONS, INC.
By:__________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Secretary
2
103
EXHIBIT "G"
LETTER OF CREDIT NOTICE
TO: Members of the Bank Group
RE: Issuance of Letter of Credit pursuant to Article 3 of the Valassis
Communications, Inc. ("Company") Credit Agreement (as amended from time
to time, "Agreement") dated November 16, 1998 between Company, Agent
and the Banks.
On ______________________, 19__,(2) Agent, in accordance with Article 3
of the Agreement, issued its Letter of Credit number______________ , in favor of
_______________ (3) for the account of Company [and ____________________ ].(4)
The face amount of such Letter of Credit is $________. The amount of each Bank's
participation in the Letter of Credit is as follows:(5)
Comerica Bank $________________
____________________________________ $________________
____________________________________ $________________
____________________________________ $________________
____________________________________ $________________
This notification is delivered this______day of____________ , 19__,
pursuant to Section 3.3 of the Agreement. Except as otherwise defined,
capitalized terms used herein have the meanings given them in the Agreement.
Signed:
COMERICA BANK
-------------------------
(2)Date of Issuance
(3)Beneficiary
(4)Other Account Party (i.e. Subsidiary of Company), if any
(5)Amounts based on Percentages
104
By:______________________
Its:_____________________
EXHIBIT "H"
FORM OF
SWING LINE LOAN PARTICIPATION CERTIFICATE
_____________ , 19__
[Name of Bank]
_________________________
_________________________
Dear Sirs:
Pursuant to subsection 4.5(b) of the Credit Agreement dated as of
November 16, 1998, among Valassis Communications, Inc., the Banks named therein
and Comerica Bank, as Agent, the undersigned hereby acknowledges receipt from
you of $__________ as payment for a participating interest in the following
Swing Line Loan:
Date of Swing Line Loan:___________________________
Principal Amount of Swing Line Loan:_________________
The participation evidenced by this certificate shall be subject to the terms
and conditions of the Agreement including without limitation Section 4.5(b)
thereof.
Very truly yours,
COMERICA BANK, as Agent
105
By:______________________
Its:_____________________
106
EXHIBIT "I"
FORM OF NEW BANK ADDENDUM
NEW BANK ADDENDUM, dated ____________________ , to the Valassis
Communications Inc. Credit Agreement dated as of November 16, 1998 (as amended
from time to time, the "Credit Agreement"), among Valassis Communications, Inc.
("Company"), each of the financial institutions parties thereto (collectively,
the "Banks") and Comerica Bank, as Agent for the Banks.
W I T N E S S E T H:
WHEREAS, the Credit Agreement provides in Section 2.11 thereof that a
financial institution, although not originally a party thereto, may become a
party to the Credit Agreement with the consent of the Company and the Agent by
executing and delivering to the Agent a New Bank Addendum to the Credit
Agreement in substantially the form of this new bank addendum; and
WHEREAS, the undersigned New Bank was not an original party to the
Credit Agreement but now desires to become a party thereto;
NOW, THEREFORE, the New Bank hereby agrees as follows:
The New Bank hereby confirms that it has received a copy of the Credit
Agreement and the exhibits and schedules referred to therein, and all other Loan
Documents which it considers necessary, together with copies of the other
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the loans thereunder. The New Bank acknowledges and
agrees that it: (a) has made and will continue to make such inquiries and has
taken and will take such care on its own behalf as would have been the case had
its commitment been granted and its loans been made directly by such New Bank to
the Company without the intervention of the Agent or any other Bank; and (b) has
made and will continue to make, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, its own credit analysis and decisions relating to the Credit
Agreement. The New Bank further acknowledges and agrees that the Agent has not
made any representations or warranties about the creditworthiness of the Company
or any other party to the Credit Agreement or any other of the Loan Documents,
or with respect to the legality, validity, sufficiency or enforceability of the
Credit Agreement, or any other of the Loan Documents.
New Bank represents and warrants that it is a Person to which
assignments are permitted pursuant to Sections 14.9(c) and (d) of the Credit
Agreement.
107
Except as otherwise provided in the Credit Agreement, effective as of
the Effective Date (as defined below):
(a) the New Bank (i) shall be deemed automatically to have become
a party to the Credit Agreement and the other Loan Documents,
and to have all the rights and obligations of a party to the
Credit Agreement and the other Loan Documents, as if it were
an original signatory; and (ii) agrees to be bound by the
terms and conditions set forth in the Credit Agreement and the
other Loan Documents as if it were an original signatory
thereto; and
(b) the New Bank shall be a Bank and its Percentage of the
Revolving Credit (and its risk participation in Letters of
Credit) shall be as set forth in the attached revised Exhibit
C (Percentages); provided any fees paid prior to the Effective
Date, including any Letter of Credit Fees, shall not be
recalculated, redistributed or reallocated by Company, Agent
or the Banks.
As used herein, the term "Effective Date" means the date on which all
of the following have occurred or have been completed, as reasonably determined
by the Agent:
(1) the Company shall have paid to the Agent, all interest, fees
(including the Facility Fee) and other amounts, if any,
accrued to the Effective Date for which reimbursement is then
owing under the Credit Agreement;
(2) New Bank shall have remitted to the Agent funds in an amount
equal to its Percentage of all Advances of the Revolving
Credit outstanding as of the Effective Date; and
(3) the Company shall have executed and delivered to the Agent for
the New Bank, new Revolving Credit Notes payable to such New
Bank in the face amount of such New Bank's Percentage of the
Revolving Credit Aggregate Commitment (after giving effect to
this New Bank Addendum, and any other New Bank Addendum
executed concurrently herewith).
The Agent shall notify the New Bank, along with Company, of the
Effective Date. The New Bank shall deliver herewith to the Agent administrative
details with respect to the funding and distribution of Advances (and Letters of
Credit) as requested by Agent.
Terms defined in the Credit Agreement and not otherwise defined herein
shall have their defined meanings when used herein.
108
IN WITNESS WHEREOF, the undersigned has caused this New Bank Addendum
to be executed and delivered by a duly authorized officer on the date first
above written.
[INSERT NAME OF BANK]
By______________________________
Title:
Accepted this _______________ day of
VALASSIS COMMUNICATIONS, INC.
By______________________________________
Title:
Accepted this _______________ day of
_____________________________, ________.
COMERICA BANK, as Agent
By______________________________________
Title:
3
109
EXHIBIT "J"
FORM OF ASSIGNMENT
Date:_______________
To: VALASSIS COMMUNICATIONS, INC.
and
COMERICA BANK ("Agent")
Re: Valassis Communications, Inc. Credit Agreement dated as of November 16,
1998 (as amended or otherwise modified from time to time, the "Credit
Agreement"), among Valassis Communications, Inc. ("Company"), Comerica
Bank in its capacity as agent for the Banks ("Agent") and certain Banks
Ladies and Gentlemen:
Reference is made to Sections 14.9(c), (d) and (e) of the Credit
Agreement. Unless otherwise defined herein or the context otherwise requires,
all initially capitalized terms used herein without definition shall have the
meanings specified in the Credit Agreement.
This Agreement constitutes notice to each of you of the proposed
assignment and delegation by [insert assignor Bank] (the "Assignor") to [insert
proposed assignee] (the "Assignee"), and the Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, effective on the "Effective Date" (as hereafter defined) that
undivided interest in each of Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents equal to_____ % of the Revolving Credit
(and participations in any outstanding Letters of Credit) such that, after
giving effect to the foregoing assignment and assumption, [and the other
assignments by Assignor to____________ on the date hereof,] the Assignee's
interest in the Revolving Credit (and participations in any outstanding Letters
of Credit) shall be as set forth on the attached schedule.
The Assignor hereby instructs the Agent to make all payments from and
including the Effective Date hereof in respect of the interest assigned hereby,
directly to the Assignee. The Assignor and the Assignee agree that all interest
and fees accrued up to, but not including, the Effective Date of the assignment
and delegation being made hereby are the property of the Assignor, and not the
Assignee. The Assignee agrees that, upon receipt of any such interest or fees
accrued up to the Effective Date, the Assignee will promptly remit the same to
the Assignor.
110
The Assignee hereby confirms that it has received a copy of the Credit
Agreement and the exhibits and schedules referred to therein, and all other Loan
Documents which it considers necessary, together with copies of the other
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the loans thereunder. The Assignee acknowledges and
agrees that it: (a) is legally authorized to enter into this Assignment
Agreement; (b) has made and will continue to make such inquiries and has taken
and will take such care on its own behalf as would have been the case had its
Percentage been granted and its loans been made directly by such Assignee to
Company without the intervention of the Agent, the Assignor or any other Bank;
and (c) has made and will continue to make, independently and without reliance
upon the Agent, the Assignor or any other Bank, and based on such documents and
information as it has deemed appropriate, its own credit analysis and decisions
relating to the Credit Agreement. The Assignee further acknowledges and agrees
that neither the Agent, nor the Assignor has made any representations or
warranties about the creditworthiness of any other party to the Credit Agreement
or any other of the Loan Documents, or with respect to the legality, validity,
sufficiency or enforceability of the Credit Agreement, or any other of the Loan
Documents. This assignment shall be made without recourse to or warranty by the
Assignor, except as set forth herein.
Assignee represents and warrants that it is a Person to which
assignments are permitted pursuant to Section 14.8(c) of the Credit Agreement.
Assignor represents and warrants, as of the Effective Date, that it is
the legal and beneficial owner of the interest being assigned and delegated by
it hereunder and that such interest is free and clear of any pledge, encumbrance
or other adverse claim or interest created by Assignor.
Except as otherwise provided in the Credit Agreement, effective as of
the Effective Date:
(a) the Assignee: (i) shall be deemed automatically to have become
a party to the Credit Agreement and the other Loan Documents,
to have assumed all of the Assignor's obligations thereunder
to the extent of the Assignee's Percentage referred to in the
second paragraph of this Assignment Agreement, and to have all
the rights and obligations of a party to the Credit Agreement
and the other Loan Documents, as if it were an original
signatory thereto to the extent specified in the second
paragraph hereof; and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the other
Loan Documents as if it were an original signatory thereto;
and
(b) the Assignor's obligations under the Credit Agreement and the
other Loan Documents shall be reduced by the percentage
assigned to Assignee referred to in the second paragraph of
this Assignment Agreement.
111
As used herein, the term "Effective Date" means the date on which all
of the following have occurred or have been completed, as reasonably determined
by the Agent:
(1) the delivery to the Agent of an original of this Assignment
Agreement executed by the Assignor and the Assignee;
(2) the payment to the Agent, of all accrued fees, expenses and
other items for which reimbursement is then owing under the
Credit Agreement;
(3) the payment to the Agent of the $3,500 processing fee referred
to in Section 14.8(d) (ii) of the Credit Agreement; and
(4) all other restrictions and items noted in Sections 14.8(c) and
(d) of the Credit Agreement have been completed.
Following the execution and delivery of this Assignment Agreement by
the Assignor and Assignee to the Agent, Agent shall notify the Assignor and the
Assignee, along with Company, of the Effective Date.
On the Effective Date the Assignee shall pay to the Assignor the amount
agreed upon with respect to the outstanding principal amount of the outstanding
Advances of the Revolving Credit owed to Assignor by Company under the Credit
Agreement in respect of the interest being assigned hereby.
The Assignee hereby advises each of you that an administrative detail
with respect to the assigned loans has been filed with the Agent.
The Assignee has delivered to the Agent (or is delivering to the Agent
concurrently herewith) the tax forms referred to in Section 14.14 of the Credit
Agreement, and other forms reasonably requested by the Agent. The Assignor has
delivered to the Agent (or is delivering to Agent concurrently herewith), the
original of each Note (if any issued) held by the Assignor under the Credit
Agreement.
Please evidence your consent to and acceptance of the proposed
assignment and delegation set forth herein by signing and returning counterparts
hereof to the Assignor and the Assignee.
[ASSIGNOR]
By:___________________________
Its:__________________________
[ASSIGNEE]
112
By:______________________________
Its:_____________________________
ACCEPTED AND CONSENTED TO
this ______ day of _____________, _____
COMERICA BANK, Agent
By:__________________________________
Its:_________________________________
VALASSIS COMMUNICATIONS, INC.
By:__________________________________
Its:_________________________________
[This form of Assignment Agreement (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]
113
SCHEDULE 1.1
APPLICABLE FEE PERCENTAGE AND MARGIN
VALASSIS COMMUNICATIONS, INC.
(expressed as basis points per annum)
------------------------------------------------------------------------------------------------------------
Basis for Pricing LEVEL I LEVEL II LEVEL III LEVEL IV
------------------------------------------------------------------------------------------------------------
Funded Debt to <1.50 to 1 >1.50 to 1 but >2.00 to 1 but >2.50 to 1
- - -
EBITDA Ratio <2.00 to 1 <2.50 to 1 <
------------------------------------------------------------------------------------------------------------
Facility Fee 15.00 22.50 25.00 27.50
------------------------------------------------------------------------------------------------------------
Eurocurrency Margin 52.50 60.00 72.50 87.50
ALL IN DRAWN COST 67.50 82.50 97.50 115.00
Letter of Credit Fee 52.50 60.00 72.50 87.50
------------------------------------------------------------------------------------------------------------
[Level III shall be the applicable Level until delivery of the 1998 fiscal year
audited financial statements required under Section 8.3(b).]
114
SCHEDULE 1.2
ADDITIONAL PERMITTED ENCUMBRANCES
1. Liens referenced in Schedule 1.2(A) hereto relating to the Livonia,
Michigan property owned by Company.
2. Liens referenced in Schedule 1.2(B) hereto relating to the Wichita,
Kansas property owned by Company.
3. Liens referenced in Schedule 1.2(C) hereto relating to the Durham,
North Carolina property owned by Company.
4. Liens on the equipment subject to the equipment leases listed as Item 1
on Schedule 9.4 hereof.
5. Purchase Money Liens on equipment purchased by Company listed as item 2
on Schedule 9.4 hereof.
6. Liens on deposits for equipment purchases relating to equipment ordered
by Company but not yet delivered, not exceeding $3 million in the
aggregate amount.
115
SCHEDULE 1.2(A)
PERMITTED TITLE EXCEPTIONS - MICHIGAN
1. Dower Interest of the wife of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ who as a married man
conveyed subject property to Company in certain deed recorded in Liber
23039, Page 484, ▇▇▇▇▇ County Records.
2. Pole Line Permit in favor of the Detroit Edison Company, to construct,
operate and maintain its lines over subject property as disclosed in
instrument recorded in Liber 11252, Page 550, ▇▇▇▇▇ County Records,
3. Easement over the southerly 10 feet of subject property in favor of
Consumers Power Company as recorded in Liber 17406, Page 324, ▇▇▇▇▇
County Records.
4. Easement in favor of the Detroit Edison Company and Michigan ▇▇▇▇
Telephone Company, as recorded in Liber 15598, Page 538, and in Liber
16298, Page 688, ▇▇▇▇▇ County Records.
5. Easement in favor of the Detroit Edison Company and Michigan ▇▇▇▇
Telephone Company as recorded in Liber 15598, Page 539, ▇▇▇▇▇ County
Records.
6. Easement in favor of the Detroit Edison Company and Michigan ▇▇▇▇
Telephone Company, as recorded in Liber 16298, Page 1685, ▇▇▇▇▇ County
Records.
7. Easement in favor of the City of Livonia for water main over the west
20 feet of subject property, as recorded in Liber 18318, Page 555, and
in Liber 18318, Page 557, ▇▇▇▇▇ County Records.
8. Easement in favor of the City of Livonia for storm and sanitary sewer
as recorded in Liber 18318, Page 46, ▇▇▇▇▇ County Records.
9. Exclusive Easement in favor of Michigan ▇▇▇▇ Telephone Company, dated
July 31, 1984 as recorded in Liber 22112, Pace 287, ▇▇▇▇▇ County
Records.
116
10. Building and use restrictions contained in instrument recorded in Liber
6996, Page 607, as to the east 165 feet of subject property.
11. Easement in favor of the City of Livonia for sanitary sewer as recorded
in Liber 21337, Page 178, ▇▇▇▇▇ County Records,
12. State of facts shown on a survey by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, dated February
22, 1992, for Valassis Inserts, Inc.
SCHEDULE 1.2(B)
PERMITTED TITLE EXCEPTIONS - KANSAS
1. In respect of the leasehold estate under the lease affecting premises
known as Lot 1 (except the north 337.446 feet thereof), Block 1, ▇▇▇▇▇
Second Addition to Wichita, Sedgwick County, Kansas (the "City Lease"),
subject to (i) the full fee simple interest of the fee owner thereof to
the extent set forth in the City Lease, (ii) the terms of the City
Lease, and (iii) matters to which the City Lease is subject.
2. Drainage and utility easement as shown on and established by the
recorded plat of said subdivision.
3. Drainage and utility easement as shown on and established by the
recorded plat of said subdivision.
4. Access controls to ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, as shown on and
established by the recorded plat of said first subdivision.
5. Access controls to ▇▇▇▇▇ Street as established by instrument filed on
Film 668, Page 619.
6. Buildings setback lines, utility easements, drainage easements and
access controls as shown on Lot Split filed on Film 686, Page 1157.
7. Utility easement granted to City of Wichita on Film 705, Page 318, over
a portion of subject property.
8. Affidavit by Kansas Gas & Electric Company employee claiming right of
way, filed on Film 724, Page 1573.
117
9. Navigational easement for navigable airspace as established by
instrument filed on Film 660, Page 1112.
10. Covenants and restrictions contained on Film 660, Page 1097; and on
Film 193, Page 1306.
11. State of facts shown on survey by March ▇. ▇▇▇▇▇, dated February 27,
1992, entitled Valassis Inserts - Wichita.
12. Building setback lines as shown on the recorded plat of said
subdivision.
118
SCHEDULE 1.2(C)
PERMITTED TITLE EXCEPTIONS - NORTH CAROLINA
1. Restrictive covenants and easements contained therein, filed for record
in Book 1112, Page 249, amended in Book 1265, Page 224; Book 1308, Page
278 and Book 1382, Page 395, Durham County Registry.
2. Declaration of Easements recorded in Book 1112, Page 245, Durham County
Registry.
3. Easements, setback lines and any other facts shown on Plats recorded in
Plat Book 102, Page 169 and Plat Book 113, Page 18, Durham County
Registry.
4. UCC Financing Statement between ▇.▇. ▇▇▇▇ Publishing Co. and Harrnon
Associates Corporation, filed July 31, 1989 at 11:00 A.M., in FS No.
2798, as amended on March 5, 1990 at 11:05 A.M. in Book 89, Page 2798,
Durham County Registry.
5. State of facts shown on a survey by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, dated March 2,
1992, entitled Valassis Inserts, Inc.
6. Railroad right of way to Durham and Southern Railway crossing the
insured land and rights of the railroad company in and to the ties,
rails and other properties constituting said railroad or in and to the
use thereof: and rights of others entitled thereto in and to the use of
said right of way.
7. Rights of others entitled thereto in and to the wet weather drainage
swale as shown on survey prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, R.L.S., dated
February 16, 1992.
8. Storm drain pipes, inlets, sanitary sewer lines, water lines, water
valves, manholes and telephone box as shown on survey prepared by
February 16, 1992.
119
SCHEDULE 7.4
CAPITAL STOCK, SHAREHOLDERS, SUBSIDIARIES
(a) Wholly-Owned Subsidiaries of Company
--------------------------------------------------------------------------------------------------------------------
Outstanding
Subsidiary Authorized Issued Shares Shares Owner
--------------------------------------------------------------------------------------------------------------------
VCI Properties, Inc. 1000 100 100 Company
--------------------------------------------------------------------------------------------------------------------
VCI Enterprises, Inc. 1000 100 100 Company
--------------------------------------------------------------------------------------------------------------------
Valassis International, Inc. 1000 1000 1000 Company
--------------------------------------------------------------------------------------------------------------------
Destination Marketing Group 1000 1000 1000 Company
--------------------------------------------------------------------------------------------------------------------
Bluestreak, Inc. f/k/a Songbird, 1000 1000 1000 Company
Inc.
--------------------------------------------------------------------------------------------------------------------
Promotion Watch, Inc 1000 1000 1000 Company
--------------------------------------------------------------------------------------------------------------------
(b) Other Subsidiaries
--------------------------------------------------------------------------------------------------------------------
Outstanding
Subsidiary Authorized Issued Shares Shares Owner
--------------------------------------------------------------------------------------------------------------------
Valassis of Canada Inc. Unlimited 110 110 Valassis
International
--------------------------------------------------------------------------------------------------------------------
VCI Fulfillment, S.A. de C.V. 1000 1000 1000 Valassis
International
--------------------------------------------------------------------------------------------------------------------
Adhome Inc. Unlimited 100 100 Valassis of
Canada (owns 75%
of shares)
--------------------------------------------------------------------------------------------------------------------
(a) There are no preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements or understandings for the
purchase or acquisition from Company or any Subsidiary of any shares of
capital stock, membership interests or other securities of Company or
any Subsidiary, except:
120
Stock options granted to employees and directors of the Company.
121
SCHEDULE 7.5
JOINT VENTURES
--------------------------------------------------------------------------------------------------------------------
Percentage
Name Form of Entity Type of Interest Interest Owner
--------------------------------------------------------------------------------------------------------------------
Valassis of
Geomedia, Inc. Corporation Shares 25% Canada Inc.
--------------------------------------------------------------------------------------------------------------------
122
SCHEDULE 7.9
COMPLIANCE WITH LAWS/LITIGATION
None.
123
SCHEDULE 7.11
LITIGATION
None.
124
SCHEDULE 7.15
PENSION PLANS SUBJECT TO TITLE IV OF ERISA
None.
125
SCHEDULE 7.17
ENVIRONMENTAL MATTERS
None.
126
SCHEDULE 7.18
CONTINGENT OBLIGATIONS
(NOT DISCLOSED BY OR RESERVED AGAINST
IN SEPTEMBER 30, 1998 BALANCE SHEETS)
None.
127
SCHEDULE 9.4
EXISTING DEBT
1. Existing equipment leases entered into by Company and its Subsidiaries
in the ordinary course of business.
2. Existing purchase money Debt of the Company and its Subsidiaries
incurred in connection with the purchase of equipment in the ordinary
course of business.
3. (a) Letter of Credit number 517232 issued by Comerica Bank Detroit
in favor of the Company for the benefit of Vanderbilt
Association New York Partnerships in the amount of $50,000,
expiring December 31, 1998, relating to the VCI Properties,
Inc. lease of office space in New York, and any renewals
thereof.
(b) Letter of Credit number 515380 issued by Comerica Bank Detroit
in favor of Bureau of Workers' Disability Compensation
(Michigan) in the amount of $400,000 expiring July 31, 1999,
and any renewals thereof.
(c) Letter of Credit number 527470 issued by Comerica Bank Detroit
in favor of Jaed Limited Partnership in the amount of $690,000
expiring September 1, 1999, and any renewals thereof.
(d) Letter of Credit number 528828 issued by Comerica Bank Detroit
in favor of the Company for the benefit of Bank of Nova
Scotia, Atlanta, Georgia, in the amount of $1,706,594 expiring
December 31, 1998, and any renewals thereof.
128
SCHEDULE 9.8
ADDITIONAL INVESTMENTS
None.
