1
Exhibit 10.1(n)
AMENDED AND RESTATED
TALON AUTOMOTIVE GROUP, INC.
$100,000,000
CREDIT AGREEMENT
WITH
COMERICA BANK
AS AGENT
FEBRUARY 16, 2001
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TABLE OF CONTENTS
Page
1. DEFINITIONS................................................................................... 1
2. THE INDEBTEDNESS.............................................................................. 21
2.1 Commitments........................................................................... 21
2.2 Swing Loan............................................................................ 21
2.3 Notes................................................................................. 22
2.4 Types of Loans and Maturity........................................................... 22
2.5 Requests for Loans.................................................................... 22
2.6 Disbursement of Loans................................................................. 23
2.7 Facility Fees......................................................................... 24
2.8 Optional Reduction or Termination of Revolving Loan Commitment........................ 24
2.9 Purpose of Loans...................................................................... 25
2.10 Prepayment and Readvances............................................................. 25
2.11 Currency Appreciation; Reduction of Indebtedness...................................... 25
2.12 Swing Loan Refunding.................................................................. 25
2.13 Account Netting....................................................................... 26
3. LETTERS OF CREDIT............................................................................. 26
3.1 Letters of Credit.................................................................... 26
3.2 Conditions to Issuance............................................................... 27
3.3 Participations in Letters of Credit.................................................. 27
3.4 Letter of Credit Fees................................................................ 28
3.5 Issuance Fees........................................................................ 28
3.6 Draws Under Letters of Credit........................................................ 28
3.7 Funding of Letter of Credit Payment as Advance....................................... 29
3.8 Obligations Irrevocable.............................................................. 29
3.9 Risk Under Letters of Credit......................................................... 30
3.10 Indemnification...................................................................... 31
3.11 Right of Reimbursement............................................................... 31
4. INTEREST, FEES AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS........... 31
4.1 Interest............................................................................. 31
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TABLE OF CONTENTS
(continued)
Page
4.2 Basis of Computation................................................................. 32
4.3 Conversion and Renewal of Loans...................................................... 32
4.4 Prepayments.......................................................................... 32
4.5 Mandatory Repayments................................................................. 33
5. SPECIAL PROVISIONS FOR LOANS.................................................................. 33
5.1 Reimbursement of Prepayment Costs.................................................... 33
5.2 Eurocurrency Lending Offices......................................................... 33
5.3 Circumstances Affecting Eurocurrency-based Availability.............................. 33
5.4 Laws Affecting Eurocurrency-based Loan Availability.................................. 34
5.5 Increased Costs...................................................................... 34
5.6 Availability of Alternative Currency................................................. 35
5.7 Refunding Advances in Same Currency.................................................. 35
5.8 Judgment Currency.................................................................... 35
6. PAYMENTS...................................................................................... 36
6.1 Payment Procedure.................................................................... 36
6.2 Application of Proceeds.............................................................. 36
6.3 Pro-rata Recovery.................................................................... 37
6.4 Deposits and Accounts................................................................ 37
6.5 Net Payments......................................................................... 37
6.6 Tax Treaty Certificate............................................................... 38
6.7 Replacement of Banks................................................................. 38
7. CONDITIONS.................................................................................... 39
7.1 Conditions Precedent To Initial Loans and Closing Date............................... 39
(a) Documents Executed and Filed................................................ 39
(b) Previously Executed And/Or Delivered Documents.............................. 39
(c) Amendment Fee............................................................... 39
(d) Agent's Fee................................................................. 39
(e) Opinion of Borrower's Counsel............................................... 40
(f) Approval of Agent's Counsel................................................. 40
7.2 Conditions Precedent to All Loans.................................................... 40
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TABLE OF CONTENTS
(continued)
Page
(a) Effectiveness............................................................... 40
(b) No Default; Representations and Warranties.................................. 40
(c) Adverse Change, etc......................................................... 40
(d) Enforceability of Documents................................................. 40
8. REPRESENTATIONS AND WARRANTIES................................................................ 40
8.1 Corporate Status..................................................................... 40
8.2 Corporate Power and Authority; Business.............................................. 41
8.3 No Violation......................................................................... 41
8.4 Litigation........................................................................... 41
8.5 Use of Proceeds...................................................................... 41
8.6 Governmental Approvals, etc.......................................................... 41
8.7 True and Complete Disclosure......................................................... 41
8.8 Financial Statements................................................................. 42
8.9 Security Interests................................................................... 42
8.10 Tax Returns and Payments............................................................. 42
8.11 Patents, etc......................................................................... 42
8.12 Compliance with Laws, etc............................................................ 42
8.13 Properties........................................................................... 42
8.14 Collective Bargaining Agreements..................................................... 42
8.15 Indebtedness Outstanding............................................................. 43
8.16 Environmental Protection............................................................. 43
8.17 Senior Subordinated Debt Documents................................................... 44
8.18 ERISA................................................................................ 44
8.19 Survival of Representations and Warranties........................................... 45
9. AFFIRMATIVE COVENANTS......................................................................... 45
9.1 Reporting Requirements Covenants..................................................... 45
9.2 Insurance............................................................................ 47
9.3 Books, Records and Inspections....................................................... 47
9.4 Payment of Taxes and Utilities....................................................... 48
9.5 Compliance with Statutes, etc........................................................ 48
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TABLE OF CONTENTS
(continued)
Page
9.6 Performance of Obligations........................................................... 48
9.7 End of Fiscal Years; Fiscal Quarters................................................. 48
9.8 Environmental Events................................................................. 48
9.9 Further Guarantees and Liens......................................................... 49
9.10 Compliance with Formula Amount....................................................... 49
9.11 Construction Liens................................................................... 49
9.12 Defend Title......................................................................... 49
9.13 ERISA................................................................................ 49
10. NEGATIVE COVENANTS............................................................................ 50
10.1 Changes in Business.................................................................. 50
10.2 Liens................................................................................ 50
10.3 Indebtedness......................................................................... 50
10.4 Financial Covenants.................................................................. 51
10.5 Dividends............................................................................ 53
10.6 Stock Acquisition.................................................................... 53
10.7 Extension of Credit.................................................................. 53
10.8 Guarantee Obligations................................................................ 53
10.9 Subordinate Indebtedness............................................................. 53
10.10 Property Transfer, Merger or Lease-Back.............................................. 53
10.11 Acquisitions......................................................................... 54
10.12 Sale or Discount of Receivables...................................................... 54
10.13 Other Agreements..................................................................... 55
10.14 Use of Loan Proceeds................................................................. 55
10.15 Management Fees and Dividend......................................................... 55
10.16 Capital Expenditures................................................................. 55
11. DEFAULTS...................................................................................... 55
11.1 Failure to Pay Monies Due............................................................ 55
11.2 Misrepresentation.................................................................... 55
11.3 Noncompliance with Agreement......................................................... 55
11.4 Other Defaults....................................................................... 56
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TABLE OF CONTENTS
(continued)
Page
11.5 Judgments............................................................................ 56
11.6 Business Suspension, Bankruptcy, Etc................................................. 56
11.7 Change of Control.................................................................... 56
11.8 Repudiations, Revocations, Etc....................................................... 56
11.9 Inadequate Funding or Termination of Employee Benefit Plan(s)........................ 57
11.10 Occurrence of Certain Reportable Events.............................................. 57
11.11 Exercise of Remedies................................................................. 57
11.12 Waiver of Defaults................................................................... 57
12. AGENT......................................................................................... 58
12.1 Appointment of Agent................................................................. 58
12.2 Deposit Account with Agent........................................................... 58
12.3 Exculpatory Provisions............................................................... 58
12.4 Successor Agents..................................................................... 59
12.5 Right of Agent as Bank............................................................... 59
12.6 Credit Decisions..................................................................... 59
12.7 Notices by Agent..................................................................... 59
12.8 Agent's Fees......................................................................... 59
12.9 Nature of Agency..................................................................... 59
12.10 Actions; Confirmation of Agent's Authority to Act in Event of Default................ 59
12.11 Authority of Agent to Enforce Notes And This Agreement............................... 60
13. MISCELLANEOUS................................................................................. 60
13.1 Law of Michigan; Submission to Jurisdiction.......................................... 60
13.2 Agent's Costs and Expenses........................................................... 60
13.3 Notices.............................................................................. 61
13.4 Further Action....................................................................... 61
13.5 Successors and Assigns............................................................... 61
(a) Assignments................................................................. 61
(b) Participations.............................................................. 62
13.6 Indulgence........................................................................... 62
13.7 Counterparts......................................................................... 62
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TABLE OF CONTENTS
(continued)
Page
13.8 Entire Agreement; Amendments; Waivers; Consents...................................... 62
13.9 Confidentiality...................................................................... 63
13.10 Interest............................................................................. 63
13.11 Jury Waiver.......................................................................... 64
13.12 Conflicts............................................................................ 64
13.13 Effective Upon Execution............................................................. 64
13.14 Collateral Valuations................................................................ 64
13.15 WAIVER OF CLAIMS..................................................................... 64
13.16 Written Modifications................................................................ 65
13.17 Additional Documentation............................................................. 65
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AMENDED AND RESTATED
TALON AUTOMOTIVE GROUP, INC.
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, made as of the 16th day of
February, 2001, between TALON AUTOMOTIVE GROUP, INC. a Michigan corporation
("TAG"), VELTRI METAL PRODUCTS CO., a Nova Scotia corporation ("Veltri", called
together with TAG, the "Borrowers" and either one referred to individually
herein as a "Borrower") each of the "Banks" party hereto, and COMERICA BANK, a
Michigan banking corporation as agent for the Banks (in such capacity, "Agent").
WHEREAS, Borrowers, Agent and the Banks entered into a certain Credit
Agreement dated as of April 28, 1998, a certain First Amendment to Credit
Agreement dated as of August 31, 1998, a certain Second Amendment to Credit
Agreement dated as of March 26, 1999, a certain Third Amendment to Credit
Agreement dated as of December 30, 1999, a certain Fourth Amendment to Credit
Agreement dated as of February 15, 2000, a certain Fifth Amendment to Credit
Agreement dated as of June 27, 2000, a certain Sixth Amendment to Credit
Agreement dated as of August 11, 2000, a certain Seventh Amendment to Credit
Agreement dated as of September 29, 2000 and a certain Eighth Amendment to
Credit Agreement dated as of October 27, 2000 (as so amended, the "Prior
Agreement"), pursuant to which Borrowers incurred certain indebtedness and
obligations and granted the Agent, on behalf of the Banks, certain security for
such indebtedness and obligations;
WHEREAS, Borrowers have requested Agent and Banks to amend certain
provisions of the Agreement; and
WHEREAS, Agent and the Banks constituting the Majority Banks are
willing to do so, but only on the terms and conditions set forth herein;
NOW, THEREFORE, it is agreed that the Prior Agreement is hereby amended
and restated in its entirety as follows:
1. DEFINITIONS
For the purposes of this Agreement the following terms (when
capitalized) will have the following meanings:
1.1 "Access Agreement" shall mean the Access and Security Agreement
among Borrower, Agent and Designated Customers dated as of even date herewith.
1.2 "Accounts" means, with respect to any Person, all accounts
receivable, monies and book debts at any time owed to such Person, and all
instruments, chattel paper and other documents evidencing or securing any such
accounts receivable, monies or book debts.
1.3 "Acknowledgement of Leasehold Mortgage" shall mean, with respect to
any Leasehold Real Estate of any Person, an agreement between the landlord, the
registered
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encumbrancers with respect to the landlord's title to such Leasehold Real
Estate, the Agent and such Person (in its capacity as tenant) with respect to
the priority of, and the enforcement procedures relating to, the Mortgage
registered against such Leasehold Real Estate.
1.4 "Advance" shall mean a borrowing requested by a Borrower and made
by the Banks (or, in the case of the Swing Loans, made by Agent or the Canadian
Swingline Lender, as applicable), or otherwise made by Banks in the absence of
such a request pursuant to Section 2.10 hereof.
1.5 "Affiliate" shall mean, when used with respect to any Person, any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person. For purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
1.6 "Affiliate Loans" shall mean the following described unsecured
loans from time to time made by a Borrower to another Loan Party, to the extent
that the obligation with respect to such Loan is pledged to Agent on behalf of
the Banks and is subordinated to such Loan Party's obligations under the
Documents, all pursuant to documents and agreements satisfactory to Agent:
(a) a loan of Ten Million Dollars ($10,000,000) loan owing by
Veltri to VS as of the date of the Prior Agreement;
(b) Twenty Five Million Dollars ($25,000,000) of the proceeds of
Senior Subordinated Notes borrowed by Veltri from TAG as of the date of the
Prior Agreement for the purpose of repaying indebtedness of Veltri that was then
existing; and
(c) additional Affiliate Loans in aggregate amount at any time
outstanding not to exceed Fifteen Million Dollars ($15,000,000).
1.7 "Agent" shall mean Comerica Bank in its capacity as Agent hereunder
or any successor appointed in accordance with Section 12.4 hereof.
1.8 "Agent's Fees" shall mean those fees and expenses required to be
paid by Borrowers to Agent for Agent's sole account under Section 12.8 hereof.
1.9 "Agreement" shall mean this Agreement as amended from time to time
in accordance with the terms hereof.
1.10 "Alternate Base Rate" shall mean, for any day, one percent (1%)
plus:
(a) in the case of any calculation of the Prime-based Rate for an
Advance denominated in Dollars, the Federal Funds Effective Rate; and
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(b) in the case of any calculation of the Prime-based Rate for an
Advance denominated in Canadian Dollars, the BA Rate.
1.11 "Alternative Currency" shall mean Canadian Dollars or any other
currency approved in writing by all of the Banks.
1.12 "Applicable Interest Rate" shall mean:
(a) in the case of any Swing Loan, the Prime-based Rate, or such
other rate of interest that the Agent or Canadian Swingline Lender (as
applicable) in its sole discretion quotes to TAG or Veltri for the relevant
Advance for such period as Agent or the Canadian Swingline Lender is willing (in
its sole discretion) to offer such rate of interest for such Advance; and
(b) with respect to all other Loans, the Eurocurrency-based Rate
or the Prime-based Rate, as selected by a Borrower from time to time or
otherwise determined pursuant to the terms and conditions of this Agreement.
1.13 "Applicable Margin" shall mean: (i) two and three-quarters (2
3/4%) per annum with respect to any Prime-based Loan under the Swing Loan
provided by the Canadian Swingline Lender and one and three- quarters percent (1
3/4%) per annum with respect to any other Prime-based Loan under this Agreement,
(ii) three and three-quarter percent (3 3/4%) per annum with respect to any
Eurocurrency-based Loan or Letter of Credit Fee, and (iii) one-half percent
(1/2%) per annum with respect to Facility Fee payments described in clause (a)
of Section 2.7 of this Agreement.
1.14 "Assignment Agreement" shall mean an assignment agreement executed
by a Bank and delivered to Agent pursuant to Section 13.5(a) hereof, in the form
attached as Exhibit "A" hereto.
1.15 "BA Rate" shall mean, for any day, the arithmetic average of the
bankers acceptance rates for one month periods which appear on the Reuter's
Screen CDOR Page at 10:00 a.m. Toronto time (as determined by Agent), or if such
day is not a Business Day then on the immediately preceding Business Day.
1.16 "Banks" shall mean each Bank signatory hereto, and each other
Person who becomes a Bank pursuant to Section 13.5(a) hereof.
1.17 "Bond Settlement Documents" shall mean in the alternative,
agreements with holders of Senior Subordinated Notes pursuant to which not less
than seventy six percent (76%) of the holders of the Senior Subordinated Notes
(with such percentage determined by reference to the aggregate face amounts
thereof bound by such agreements):
(a) agree to: (i) not take any action to collect on the Senior
Subordinated Notes, including, without limitation, instructing the indenture
trustee thereof on how to proceed in the exercise of any remedies, (ii) if and
when reasonably appropriate, use best efforts to give instructions to such
trustee to desist from taking action that is inconsistent with such agreement,
and (iii) not join in, cooperate with or encourage the exercise of rights or
remedies by any other
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holder of the Senior Subordinated Notes, by such trustee or by any other
creditor of the Borrowers (or by any representative of, or fiduciary for, any of
them), including an involuntary bankruptcy proceeding or other insolvency
proceeding; or (b) agree to exchange such Senior Subordinated Notes for equity
in TAG and/or new notes upon terms and conditions satisfactory to the Majority
Banks. It being acknowledged that, in connection with any consent to such terms
and conditions, Agent and Majority Banks may, in their discretion, require
amendments to provisions of this Agreement deemed by them to be impacted by such
exchange of Senior Subordinated Notes, including (without limitation) financial
covenants set forth in this Agreement and/or the methods and/or amounts utilized
in the calculation thereof.
1.18 "Borrowing Base" shall mean, as of any date, the sum of:
(a) (i) ninety percent (90%) of the positive difference between
the Designated Eligible Accounts of each Designated Customer and the Designated
Customer Offsets for such Designated Customer, and (ii) eighty five percent
(85%) of the Eligible Accounts Receivable, plus
(b) (i) seventy percent (70%) of the value of the Designated
Eligible Inventory, and (ii) fifty percent (50%) of the value of the Eligible
Inventory, plus
(c) the lesser of Ten Million Dollars ($10,000,000) or fifty
percent (50%) of the Eligible Tooling Invoices, plus
(d) seventy five percent (75%) of the net realizable value of
Eligible Real Estate, to the extent Agent has obtained an appraisal in form and
content satisfactory to Agent identifying the net realizable value for such
Eligible Real Estate, plus
(e) (i) (x) for the period commencing June 1, 2001 and ending
September 30, 2001 only, the lesser of ninety and two-tenths percent (90.2%) of
the forced liquidation value of Eligible Equipment, to the extent Agent has
obtained an appraisal in form and content satisfactory to Agent for such
Eligible Equipment or Three Million Five Hundred Thousand Dollars ($3,500,000)
in excess of the amount determined under clause (y) of this subsection (e)(i)
below, and (y) at all other times eighty percent (80%) of the forced liquidation
value of Eligible Equipment, to the extent Agent has obtained an appraisal in
form and content satisfactory to Agent for such Eligible Equipment, plus (ii)
sixty percent (60%) of the net book value (adjusted monthly upon the delivery of
financial statements) of Eligible Equipment acquired after the last delivery of
an appraisal of Eligible Equipment, satisfactory to Agent.
1.19 "Buildings and Fixtures" means all plant, buildings, structures,
erections, improvements, appurtenances and fixtures (including fixed machinery
and fixed equipment) situate on the Leasehold Real Estate or on the Real Estate,
or both, as the context requires.
1.20 "Business Day" shall mean any day on which commercial banks are
open for domestic and international business in Detroit, Michigan and: (a) when
used in reference to any Eurocurrency-based Loan, also a day on which dealings
are made in deposits in the relevant eurocurrency in the London interbank
market; and (b) when used in reference to any Swing Loan
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to be made by the Canadian Swingline Lender, also a day on which the Canadian
Swingline Lender is open for commercial business in Toronto, Ontario.
1.21 "Canadian Dollars" and "$Cd" shall mean lawful currency of Canada.
1.22 "Canadian Swingline Lender" shall mean National Bank of Canada.
1.23 "Change in Control" shall mean the occurrence of either of the
following, unless such occurrence arises out of the performance of Bond
Settlement Documents:
(a) Permitted Holders shall cease to control, directly or
indirectly, in each case free and clear of all Liens, a majority (on a fully
diluted basis) of the issued and outstanding shares of voting stock of TAG; and
(b) any "Change of Control" as defined in the Senior Subordinated
Note Indenture.
1.24 "Closing Checklist" shall mean the closing checklist attached
hereto as Exhibit "B".
1.25 "Closing Date" shall mean the date, on or before February _____,
2001, on which the conditions of Section 7.1 hereof have been satisfied.
1.26 "Collateral" means all Stock, Accounts, Inventory, Intellectual
Property, Equipment, Buildings and Fixtures, Leasehold Real Estate, Real Estate,
and all books, records, instruments, chattel paper, negotiable documents of
title, intangibles and proceeds of each Loan Party, including any bank accounts
and deposits therein, and any substitutions for, or replacements of, any of the
foregoing.
1.27 "Customer Agreement" shall mean that certain Accommodation
Agreement as of even date herewith among Borrowers, Agent and Designated
Customers.
1.28 "Default" shall mean an event, occurrence or circumstance which,
with the giving of notice and/or passage of time, would constitute an Event of
Default.
1.29 "Default Rate" shall mean, with respect to any Loan, two percent
(2%) plus its Applicable Interest Rate.
1.30 "Designated Customer Offset" shall mean, at any time, the right of
a Designated Customer under a Customer Agreement to offset, against the
Designated Eligible Accounts owed by such Designated Customer from time to time,
Permitted Setoffs (as defined in the Customer Agreements).
1.31 "Designated Customers" shall mean, so long as the Customer
Agreement to which they are party remains in full force and effect, General
Motors Corporation and/or any of its Affiliates or subsidiaries and
DaimlerChrysler Corporation and/or any of its Affiliates or subsidiaries.
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1.32 "Designated Eligible Accounts" shall mean Accounts which:
(a) are from time to time owing to a Borrower by a Designated
Customer;
(b) payment of which is subject to the terms of a Customer
Agreement; and
(c) would satisfy all of the requirements for Eligible Accounts in
the absence of the Designated Customer Offset provided for in the relevant
Customer Agreement.
1.33 "Designated Eligible Inventory" shall mean Inventory which:
(a) is subject to a repurchase obligation of a Designated Customer
pursuant to a Customer Agreement and such Designated Customer has agreed to
waive all rights of offset, recoupment and deductions with respect to such
repurchase obligation except as expressly provided in such Customer Agreement;
(b) would satisfy all of the requirements for Eligible Inventory
in the absence of the relevant Designated Customer's right and obligation to
repurchase described in clause (a) above.
1.34 "Documents" shall mean this Agreement, the Notes, the Guaranties,
the Security Documents, the Financing Statements, the Letter of Credit
Agreements, the Customer Agreements, Access Agreements, the Bond Settlement
Documents and all other documents, agreements and instruments delivered to Agent
and/or the Canadian Swingline Lender, in connection with this Agreement as the
same may be amended or modified from time to time.
1.35 "Dollars" and the sign "$" shall mean lawful money of the United
States of America.
1.36 "Dollar Amount" shall mean (i) with respect to each Advance made
or carried (or to be carried) in Dollars, the principal amount thereof and (ii)
with respect to each Advance made or carried (or to be made or carried) in an
Alternative Currency, the amount of Dollars which is equivalent to such amount
of Alternate Currency at the spot exchange rate determined by the Agent to be
available to it for the sale of Dollars for such Alternative Currency at
approximately 11:00 a.m. (Detroit time) two (2) Business Days before such
Advance is made, as such Dollar Amount may be adjusted from time to time
pursuant to Section 2.11 or 5.8 hereof. When used with respect to Alternative
Currency portion of an Advance being repaid or remaining outstanding at any time
or other amount of Dollars to be determined from an asset or other item
initially expressed as an amount of Alternative Currency, "Dollar Amount" shall
mean the amount of Dollars which is equivalent to the principal amount of such
Advance or other amount initially expressed as an amount of Alternative Currency
at the most favorable spot exchange rate determined by the Agent to be available
to it for the sale of Dollars for such Alternative Currency at the relevant
time.
1.37 "EBITDA" shall mean, as of the last day of any fiscal month or
quarter, Net Income plus the aggregate amounts deducted in determining Net
Income for such period in respect of taxes based on income, Michigan single
business tax, interest expense and
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depreciation and amortization, all determined in accordance with GAAP; provided,
however, that solely for the purpose of calculating compliance with clause (d)
of Section 10.4 hereof for periods in which Restructuring Charges have been
incurred, the amount of Restructuring Charges incurred during such period of
calculation shall be added to the calculation of EBITDA for such period of
calculation.
1.38 "EDC" shall mean the Export Development Corporation, an agency of
the Canadian government.
1.39 "EDC Financing" shall mean loans and advances provided to Veltri
by the EDC, (i) for the purpose and on the terms described in that certain loan
agreement dated as of December 17, 1997, as amended, between the EDC and Veltri
("EDC Honda Financing"), (ii) loans and advances that may be extended by the EDC
to Veltri for the purpose of financing the manufacturer of tooling for
additional Honda programs, (iii) loans and advances that may be extended by the
EDC to Veltri for the purpose of financing the manufacture of tooling for the KJ
Program ("EDC KJ Program Financing"), (iv) loans and advances that may be
extended by the EDC to Veltri for the purpose of financing the manufacture of
tooling for the RS Program ("EDC RS Program Financing"), (v) loans and advances
that may hereafter be extended by the EDC to Veltri for the purpose of financing
the manufacture of tooling for the CS Program, and (vi) loans and advances that
may hereafter be extended by the EDC to Veltri for the purpose of financing the
manufacture of tooling for additional programs with the approval of the Majority
Banks.
1.40 "EDC Financing Collateral" shall mean with respect to any
particular EDC Financing, the rights and interests of Veltri in and to tangible
and intangible personal property of the types described on Exhibit C hereto, to
the extent arising out of tools, molds, fixtures and dies financed pursuant to
the relevant EDC Financing; it being understood that EDC Collateral for each EDC
Financing shall be separate, and no EDC Financing shall be cross collateralized
with any other EDC Financing.
1.41 "EDC Indemnification" shall mean the indemnification of the EDC by
Veltri for the purposes and on the terms and conditions described in that
certain indemnification agreement dated as of December 17, 1997 as amended
between the EDC and Veltri and as may be described in substantially similar
indemnification agreements between the EDC and Veltri.
1.42 "Eligible Accounts" shall mean an Account arising in the ordinary
course of the business of a Loan Party which meets each of the following
requirements:
(a) it is not owing more than ninety (90) days after the date of
the original invoice or other writing evidencing such Account;
(b) it arises from the sale or lease of goods and such goods have
been shipped or delivered to the account debtor; or it arises from services
rendered and such services have been performed;
(c) it is evidenced by an invoice, dated not later than the date
of shipment or performance, rendered to such account debtor, or some other
evidence of billing acceptable to Agent;
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(d) it is not evidenced by any note, trade acceptance, draft or
other negotiable instrument or by any chattel paper, unless such note or other
document or instrument previously has been endorsed and delivered to Agent;
(e) it is a valid, legally enforceable obligation of the account
debtor thereunder, and is not subject to any offset, counterclaim or other
defense on the part of such account debtor or to any claim on the part of such
account debtor denying liability thereunder in whole or in part;
(f) it is not an Account billed in advance, payable on delivery,
for consigned goods, for guaranteed sales, for unbilled sales, for progress
billings, payable at a future date in accordance with its terms, subject to a
retainage or holdback by the account debtor or insured by a surety company;
(g) the Account is subject to a duly perfected Lien in favor of
the Agent on behalf of the Banks pursuant to the Security Documents ranking in
priority to all other Liens, which Lien has been duly registered, filed or
recorded in all applicable jurisdictions and all other steps necessary or of
advantage have been taken to create, perfect, preserve and protect such Lien;
(h) the Account does not constitute an obligation of: (i) any
Governmental Entity, unless such Account may be assigned to the Agent under
applicable law and all steps required by the Agent in connection therewith in
order that all monies due and to become due thereunder have been assigned to the
Agent in accordance with such laws, including notice to the applicable
Governmental Entity, have been duly taken, (ii) any Person organized, or located
in, a jurisdiction other than a state or territory of the United States or a
Province of Canada unless (x) the Account Debtor with respect thereto is a
subsidiary of General Motors Corporation, Ford Motor Company or DaimlerChrysler
Corporation organized under the laws of and located within the Republic of
Mexico or (y) the Account is insured by export credit insurance policies
acceptable to Agent, the proceeds of which have been assigned to Agent or (iii)
any Affiliate of a Borrower; and
(i) the Account has not arisen out of a written order or contract
with or from an account debtor which by its nature or terms prevents, restricts,
forbids or makes void or unenforceable the assignment to the Agent of such
Account, or requires notice to, or the consent of, the account debtor.
An Account which is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Account.
1.43 "Eligible Equipment" shall mean Equipment owned by a Loan Party
which is:
(a) used in the ordinary course of such Loan Party's business;
(b) owned subject to a first perfected security interest granted
to Agent on behalf of the Banks and no other Liens; and
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(c) subject to a duly perfected Lien in favor of the Agent ranking
in priority to all other Liens, which Lien has been duly registered, filed or
recorded in all applicable jurisdictions and all other steps necessary or of
advantage have been taken to create, perfect, preserve and protect such Lien.
1.44 "Eligible Inventory" shall mean all Inventory of a Loan Party
which is in good and merchantable condition and is not obsolete or discontinued,
would properly be classified as "finished goods", "work-in-process" or "raw
materials" under GAAP, excluding:
(a) Inventory covered by or subject to a title retention agreement
or a seller's right to repurchase, or any consensual or nonconsensual Lien
(including without limitation purchase money security interests) other than
Liens in favor of Agent on behalf of Banks;
(b) any Inventory which is not subject to a duly perfected Lien in
favor of the Agent ranking in priority to all other Liens, which Lien has been
duly registered, filed or recorded in all applicable jurisdictions and all other
steps necessary or of advantage have been taken to create, perfect, preserve and
protect such Liens; and
(c) tooling inventory which is the subject of an Eligible Tooling
Invoice.
Inventory shall be valued at the lesser of cost or market value on a FIFO basis
and Inventory which is at any time Eligible Inventory, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be
Eligible Inventory.
1.45 "Eligible Tooling Invoices" shall mean invoices rendered and paid
by a Loan Party for payment in connection with a supplier's production of
tooling for such Loan Party, provided that (i) such Loan Party has in force a
contract for the sale of such tooling to a purchaser who is an automobile
manufacturer, a first tier supplier to an automobile manufacturer or other
Person acceptable to Agent, and (upon any request by Agent therefor) provides a
copy of such contract to Agent (ii) such tooling is owned by such Loan Party;
(iii) if such actions have been requested by Agent or the Majority Banks, all
steps deemed necessary by Agent to perfect a first priority Lien on the relevant
tooling in favor of Agent on behalf of Banks shall have been taken, and (iv)
each Eligible Tooling Invoice shall cease to be an Eligible Tooling Invoice upon
the earliest to occur of the following:
(a) 240 days after the date of such invoice,
(b) delivery of the tooling related thereto to the Person
purchasing such tooling,
(c) default under or revocation or termination of the contract or
agreement pursuant to which such tooling is to be purchased from Loan Party,
(d) bankruptcy or insolvency of the Person purchasing such tooling
from the Loan Party or the supplier producing such tooling for such Loan Party,
or
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(e) such tooling or Eligible Tooling Invoice becomes, or is
determined to be included within, Eligible Accounts Receivable, Eligible
Inventory or Eligible Equipment. For purposes of this definition, all goods or
invoices which would otherwise constitute "Eligible Tooling Invoices" which are
financed other than by Advances (including, without limitation, under the EDC
Financing) shall be excluded from this definition.
1.46 "Environmental Laws" shall mean the common law and all federal,
state, local and foreign laws or regulations, codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder, now or
hereafter in effect, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
constituent substances or wastes, including, without limitation, petroleum,
including crude oil or any fraction thereof, or any petroleum product
(collectively referred to as "Hazardous Materials"), into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), (ii) the manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport or handling of
Hazardous Materials, and (iii) underground storage tanks, and related piping,
and emissions, discharges, releases or threatened releases therefrom.
1.47 "Eligible Real Estate" shall mean Leasehold Real Estate and Real
Property of a Loan Party:
(a) which is used in the ordinary course of a Loan Party's
business;
(b) subject to a first perfected mortgage, deed of trust or
leasehold mortgage granted to Agent on behalf of Banks and no other Liens other
than Permitted Liens and (in the case of Leasehold Real Estate) Liens on the
owner's interests therein securing obligations of such owner; and
(c) for which Agent has received such surveys, appraisals, title
insurance, flood plain certificates, title opinions, environmental report and
other assurances and due diligence documentation as Agent shall require in
connection therewith.
1.48 "Equipment" means, with respect to any Person, all tools,
machinery, equipment, furniture, chattels, motor vehicles and accessories now
owned or hereafter acquired or reacquired by such Person, whether or not
conditionally or unconditionally sold to such Person.
1.49 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor act or code. Section references to ERISA are
to ERISA as in effect as of the date of this Agreement and any subsequent
amendment, supplement or substitution thereof.
1.50 "ERISA Affiliates" shall mean any entity, whether or not
incorporated, which is under common control or would be considered a single
employer with a Borrower within the meaning of Section 414(b), (c) or (m) of the
internal revenue code and regulations promulgated under those sections or within
the meaning of Section 4001(b) of ERISA and regulations promulgated under that
section.
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1.51 "Equity Ownership Plan" shall mean the Talon Automotive Group,
Inc. Amended and Restated Equity Ownership Plan dated as of April 28, 1998.
1.52 "Eurocurrency-based Loan" shall mean a Loan which bears interest
at a rate based on the Eurocurrency-based Rate.
1.53 "Eurocurrency-based Rate" shall mean a per annum interest rate
equal to the Eurocurrency Rate for the relevant Loan, plus the Applicable Margin
for Eurocurrency-based Loans.
1.54 "Eurocurrency Lending Office" shall mean Agent's office located at
Grand Cayman or such other branch of Agent, domestic or foreign, as it may
hereafter designate as its Eurocurrency Lending Office by notice to Borrower.
1.55 "Eurocurrency Rate" shall mean:
(a) the per annum interest rate at which the Eurocurrency Lending
Office offers deposits in the relevant eurocurrency to prime banks in the
eurocurrency market in an amount comparable to the relevant Eurocurrency-based
Loan and for a period equal to the relevant Interest Period at approximately
11:00 a.m. Detroit time two (2) Business Days prior to the first day of such
Interest Period; divided by,
(b) a percentage (expressed as a decimal) equal to one hundred
percent (100%) minus that percentage which is in effect on the date for an
Advance of a Eurocurrency-based Loan, as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirements for a member bank of the Federal Reserve System with
deposits exceeding five billion dollars in respect of "Eurocurrency Liabilities"
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurocurrency-based Loans is determined
or any category of extensions of credit or other assets which includes loans by
a non-United States Eurocurrency Lending Office of such a bank to United States
residents).
1.56 "Event of Default" shall mean the Events of Default specified in
Sections 11.1 through 11.10 hereof.
1.57 "Facility Fee" shall mean the facility fees payable by Borrowers
to Agent for the account of the Banks pursuant to Section 2.7 hereof.
1.58 "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.
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1.59 "Financing Statements" shall mean financing statements filed in
accordance with the UCC, the Personal Property Security Act (Ontario) and any
other statutes deemed advisable by the Agent, in such filing offices as the
Agent deems advisable, describing the Agent (in its capacity as agent for the
Banks) as secured party and a Loan Party as debtor, covering the Collateral.
1.60 "GAAP" shall mean, at any time, generally accepted accounting
principles applied in a manner consistent with the application thereof used in
the financial statements of Borrowers referred to in Section 8.8 hereof.
1.61 "Guaranty" shall mean the TAG Guaranty, the Veltri Guaranty, the
VS Guaranty and each other guaranty hereafter executed and delivered to Agent
and the Banks by a Loan Party pursuant to Section 9.9 hereof, in each case
guarantying payment and performance of all indebtedness and obligations of the
Borrowers hereunder.
1.62 "Hedging Agreements" shall mean any currency hedging agreement,
rate or currency sway or forward exchange agreement, or other rate protection or
foreign exchange agreement from time to time entered between a Borrower and one
or more of the Banks and, for the purposes of each Guaranty and other Security
Document, the obligations of the Borrowers under each such Hedging Agreement
shall be deemed to be obligations hereunder.
1.63 "Highest Lawful Rate" shall mean, with respect to each Bank, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on its Notes or
other indebtedness under laws applicable to such Bank which are in effect as of
the date hereof or, to the extent allowed by law, under such laws applicable to
such Bank which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws allow as of the date hereof.
1.64 "Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) the
deferred purchase price of assets or services which in accordance with GAAP
would be shown on the liability side of the balance sheet of such Person, (iii)
the face amount of all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder, (iv) all obligations of
any other Person secured by any Lien on any property owned by such first Person,
whether or not such obligations have been assumed by such first Person, and (v)
all capitalized lease obligations of such Person, (vi) all obligations of such
Person under interest rate agreements; provided, however, that the term
Indebtedness shall not include Affiliate Loans.
1.65 "Intellectual Property" means, with respect to any Person, any and
all issued patents and patent applications, industrial design registrations,
trade marks, registrations and applications therefor, trade names and styles,
logos, copyright registrations and applications therefor, all of the foregoing
owned by or licensed to such Person.
1.66 "Interest Coverage Ratio" shall mean, as of the date of any
determination thereof a ratio, the numerator of which is EBITDA and the
denominator of which is Interest Expense for the quarter then ended.
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1.67 "Interest Expense" shall mean, for any Person, consolidated cash
interest expense plus interest expense on capital lease obligations, (except for
capitalized loan financing costs and non-cash interest expense on indebtedness
with respect to which no payment of principal is required to be made prior to
the Maturity Date in effect at the time of the relevant calculation of Interest
Expense), all Facility Fees or other recurring fees associated with this
Agreement.
1.68 "Interest Period" shall mean:
(a) in the case of any Prime-based Loan, an initial period
beginning on the date of the Advance thereof and ending on the first Business
Day of the month following the month in which such Advance is made, and
thereafter, successive Interest Periods ending on the first Business Day of each
month thereafter; and
(b) in the case of any Loan which is a Eurocurrency-based Loan,
one (1) month.
provided however, that:
(i) any Interest Period which would otherwise
end on a day which is not a Business Day
shall be extended to the next succeeding
Business Day unless the next succeeding
Business Day falls in another calendar
month, in which case, such Interest Period
shall end on the immediately preceding
Business Day;
(ii) when an Interest Period for a
Eurocurrency-based Loan begins on a day
which has no numerically corresponding day
in another calendar month during which such
Interest Period is to end, it shall end on
the last Business Day of such other calendar
month; and
(iii) no Interest Period for any Loan shall extend
beyond the Maturity Date.
1.69 "Inventory" means, with respect to any Person, all inventory now
owned or hereafter acquired by such Person, including: (i) finished goods,
work-in-progress, raw materials, new and unused production, packing and shipping
supplies; (ii) all new and unused maintenance items; and (iii) all other
materials and supplies on hand to be used or consumed or which might be used or
consumed in connection with the manufacture, packing, shipping, advertising,
selling, or furnishing of goods.
1.70 "KJ Program" shall mean the production by Borrowers, pursuant to a
contract with DaimlerChrysler Motor Company of tooling for production platforms
to be utilized in the production of model year 2001.5 Jeep Cherokees.
1.71 "Leasehold Real Estate" means, with respect to any Person, real
estate held under a lease, agreement to lease or other right of occupation.
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1.72 "Letter(s) of Credit" shall mean any standby letters of credit
hereafter issued by Agent at the request of TAG and for the account of a Loan
Party pursuant to Article 3 hereof.
1.73 "Letter of Credit Agreement" shall mean in respect of each Letter
of Credit issued pursuant to this Agreement, the application of TAG requesting
Agent to issue such Letter of Credit (including the terms and conditions on the
reverse side thereof or otherwise provided therein), in the form and substance
acceptable to Agent.
1.74 "Letter of Credit Fees" shall mean the fees payable to Agent for
the account of the Banks in connection with Letters of Credit pursuant to
Section 3.4 hereof.
1.75 "Letter of Credit Maximum" shall mean, as of any date, the lesser
of:
(a) Six Million Dollars ($6,000,000); or
(b) the Revolving Maximum minus the sum of the aggregate principal
amount of outstanding Revolving Loans and Swing Loans.
1.76 "Letter of Credit Notice" shall mean Agent's notice of the
issuance of a Letter of Credit in the form attached hereto as Exhibit "D".
1.77 "Letter of Credit Obligation" shall mean the obligation of TAG
under each Letter of Credit Agreement to reimburse the Agent for each payment
made by the Agent under the Letter of Credit issued pursuant to such Letter of
Credit Agreement, together with all other sums, fees, charges and amounts which
may be owing under such Letter of Credit Agreement.
1.78 "Letter of Credit Payment" shall mean any amount paid or required
to be paid by the Agent in its capacity as issuer of a Letter of Credit as a
result of a draw against any Letter of Credit.
1.79 "Leverage Ratio" shall mean, as of any date, the ratio of:
(a) an amount equal to the difference between the Borrowers'
Indebtedness (other than Indebtedness evidenced by the Senior Subordinated Notes
and/or the Bond Settlement Documents) less a sum equal to (i) the amount of cash
and cash equivalents then on hand, plus (ii) the lesser of Ten Million Dollars
($10,000,000) or an amount equal to fifty percent (50%) of the then existing
Eligible Tooling Invoices; to
(b) EBITDA for the four quarter period then ended.
1.80 "Lien" means, with respect to any Property, any charge, mortgage,
pledge, hypothecation, security interest, lien, conditional sale (or other title
retention agreement or lease in the nature thereof), lease, servitude,
assignment, adverse claim, defect of title, restriction, trust, right to set-off
or other encumbrance of any kind in respect of such Property (including any Lien
accounted for as a capitalized lease obligation for purposes of a balance sheet
prepared in accordance with GAAP), whether or not filed, recorded or otherwise
perfected under applicable law.
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1.81 "Loan" shall mean any one or more Swing Loan, Revolving Loan
and/or Letter of Credit Obligation, or all of them, as the context indicates.
1.82 "Loan Party" shall mean each Borrower and each Subsidiary of a
Borrower.
1.83 "Majority Banks" shall mean, so long as the Revolving Commitment
is in effect, banks whose Percentages are, in aggregate, in excess of fifty
percent (50%) and thereafter, Banks having outstanding Loans in excess of fifty
percent (50%) of all Loans then outstanding.
1.84 "Material Adverse Effect" shall mean:
(a) any materially adverse effect with respect to the operations,
business, properties, assets, nature of assets, liabilities (contingent or
otherwise), financial condition or prospects of a Borrower; or
(b) any facts or circumstance as to which singly or in the
aggregate, create a reasonable likelihood of such a materially adverse change,
or a reasonable likelihood that a Borrower will be rendered unable to perform
obligations under any of the Documents, or a reasonable likelihood that Agent or
the Banks will be rendered unable to enforce in any material respect rights or
remedies purported to be granted them under any of the Documents.
1.85 "Maturity Date" shall mean, April 27, 2003.
1.86 "Mortgages" shall mean mortgages, deeds of trust or debentures
executed by a Loan Party pursuant to which such Person grants Agent (in its
capacity as agent for the Banks) a first priority mortgage on the Real Property
and/or Leasehold Real Estate of such Loan Party.
1.87 "Multiemployer Plans" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which Borrower or any ERISA
Affiliate is or has been required to contribute.
1.88 "Net Income" shall mean, for any period of any determination
thereof, the net income before extraordinary items (reduced by the amount of any
dividend paid during the period of determination pursuant to clause (b) of
Section 10.5 hereof) all determined in accordance with GAAP.
1.89 "Net Proceeds" shall mean, with respect to any sale or disposal of
any assets of a Borrower or any Subsidiary, the net proceeds of such event after
reasonable expenses associated with such sale or disposal (including reasonable
commissions, legal and accounting fees and expenses).
1.90 "Net Worth" shall mean, as of any date, the amount of any capital
stock, paid in capital or similar equity accounts plus (or minus in the case of
a deficit) the capital surplus and retained earnings of such Person (excluding
the effect of any foreign currency translation adjustments) less treasury stock,
all as determined in accordance with GAAP.
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1.91 "Notes" shall mean any one or more of the promissory notes made by
Borrower to the Banks as evidence of Loans, or all of them, as the context
indicates.
1.92 "Pension Plans" shall mean any pension plan as defined in Section
3(2) of ERISA (other than a Multiemployer Plan) which is or has been maintained
by or to which contributions are or have been made by a Borrower or any ERISA
Affiliate.
1.93 "Percentage" shall mean, with respect to any Bank, the percentage
set forth opposite its name on Exhibit "E" hereto, as such Percentages may
change from time to time pursuant to Section 13.5(a) hereto.
1.94 "Permitted Holders" shall mean (i) Randolph J. Agley, Judith A.
Agley, James R. Agley, Joseph A. Agley, James J. Agley, Michael T. Timmis, Nancy
E. Timmis, Michael T.O. Timmis, Wayne C. Inman or Amelia P. Inman, (ii) any
relative, family member or any Person controlled by any of the persons listed in
subparagraph (i) above, (iii) any trust including, without limitation, a
charitable remainder trust, created by or for the benefit of any of the persons
listed in subparagraphs (i) or (ii) above and (iv) any private foundation
created by any of the persons listed in subparagraphs (i) or (ii) above.
1.95 "Permitted Liens" shall mean:
(a) Liens for taxes, assessments or governmental charges or claims
not yet delinquent, or Liens for taxes, assessments or governmental charges
being contested in good faith and by appropriate proceedings for which adequate
reserves, (to the extent required by GAAP) have been established;
(b) Liens in respect of property or assets of a Loan Party which
were imposed by law in the ordinary course of business, such as carriers',
warehousemen's and construction Liens and other similar Liens arising in the
ordinary course of business, which are not delinquent or which are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or asset subject to
such Lien;
(c) Liens (other than any Lien imposed by ERISA or pursuant to
Environmental Laws) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other type
of social security, or to secure the performance of tenders, statutory
obligations, surety bonds, bids, leases, governmental contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations in respect of the payment for
borrow money or the equivalent);
(d) Easements, rights of way, restrictions, minor defects or
irregularities in title not interfering in any material respect with the
business of a Loan Party, in each case incurred in the ordinary course of
business and which do not materially impair for its intended purposes the Real
Property to which it relates and which do not materially adversely affect the
value of the Real Property to which it relates;
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(e) The Lien of any judgment rendered which does not give rise to
a Default or Event of Default and Liens created by deposits of cash or cash
equivalents permitting the relevant Loan Party to appeal court judgments that
are being contested in good faith by appropriate proceedings and do not give
rise to a Default or an Event of Default; and
(f) Assignments, leases or subleases granted to others not
interfering in any material respect with the ordinary conduct of the relevant
Loan Party's business and not materially affecting the value of the Collateral.
1.96 "Person" shall mean an individual, corporation, partnership,
trust, incorporated or unincorporated organization, association, syndicate,
joint venture, joint stock company, or a government or any agent or political
subdivision thereof or other entity of any kind, and pronouns have a similarly
extended meaning.
1.97 "Postponed Fee Rate" shall mean:
(a) in the event that the aggregate amount of Loans, Advances and
Letters of Credit outstanding at any time exceeds the amount of the Borrowing
Base, which for the purpose hereof and notwithstanding anything to the contrary
contained in the definition of Borrowing Base, shall be determined by including
in the portion of the Borrowing Base computation (described in clause (e)(i) of
the definition of "Borrowing Base") only eighty percent (80%) of the forced
liquidation of Eligible Equipment for which Agent has obtained an appraisal in
form and content satisfactory to Agent, .225%; and
(b) otherwise, .125%.
1.98 "Prime Rate" shall mean:
(a) for all purposes other than those specified in clause (b)
below, the per annum interest rate established by Agent as its prime rate for
its borrowers as such rate may vary from time to time, which rate is not
necessarily the lowest rate on loans made by Agent at any such time, and
(b) with respect to Swing Loans made by the Canadian Swingline
Lender, and Canadian Dollar denominated Advances under the Revolving Loan to the
extent and so long as they are carried as Prime- based Loans pursuant to Section
5.3 or 5.4 hereof, the Canadian Swingline Lender's reference rate of interest
for loans made in Canadian Dollars to Canadian customers and designated as its
"prime rate," which rates are set by the Agent and Canadian Swingline Lender as
their prime rates for borrowers, based on their respective costs, desired return
and general economic conditions as such rates may vary from time to time, which
rates are not necessarily the lowest rate on loans made by the Lender or
Canadian Swingline Lender at any such time.
1.99 "Prime-based Loan" shall mean a Loan which bears interest at the
Prime-based Rate.
1.100 "Prime-based Rate" shall mean, as of any day:
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(a) that rate of interest which is the greater of: (i) the Prime
Rate; or (ii) the Alternate Base Rate; plus
(b) the Applicable Margin then in effect.
1.101 "Projections" shall mean the analysis and financial projections
for the Borrowers and their respective business units, set forth in the Conway,
MacKenzie & Dunleavy Financial Projections for 2000-2002, copies of which were
delivered to Agent and the Banks on or about December 15, 2000.
1.102 "Property" means, with respect to any Person, any interest of
such Person in any land or property or asset, wherever situated, whether real or
immovable, personal, movable or mixed, tangible or corporeal, intangible or
incorporeal, including capital stock in any other Person.
1.103 "PSI Consolidation Plan" means the organizational and facility
restructuring plan as presented to the Banks on December 12, 2000 and included
in the CM&D projections. This plan includes the closure of four existing PSI
facilities, commonly referred to as Plant 5, Oxford, New Baltimore and APEC, in
2000 and 2001 and the movement of the related sales volume and corresponding
equipment into existing Veltri operations in the Royal Oak, Michigan and
Windsor, Canada, and any remaining equipment would be sold. As part of the
closure, the current PSI division including the majority of it's administrative
infrastructure will be eliminated and/or transferred to the Veltri Division of
the Talon Automotive Group.
1.104 "Quarterly Date" shall mean the last Business Day of each March,
June, September and December.
1.105 "Real Property" shall mean all right, title and interest of a
Loan Party in the real property (including, without limitation, that real
property described in Exhibit "F" hereto), whether as owner, lessee or
otherwise, and whether now existing or hereafter arising.
1.106 "Request for Loan" shall mean a request for an Advance under a
Note issued by a Borrower under this Agreement in the form annexed hereto as
Exhibit "G".
1.107 "Restructuring Charges" shall mean for the fiscal quarter of
Borrower ending December 31, 2000, a charge of up to Ten Million Two Hundred
Thousand Dollars ($10,200,000) taken in connection with the PSI Consolidation
Plan.
1.108 "Revolving Loan" shall mean the revolving credit loans to be
advanced and readvanced to Borrowers pursuant to Section 2.1 hereof.
1.109 "Revolving Loan Commitment" shall mean One Hundred Million
Dollars ($100,000,000) or such lesser amount to which it may be reduced pursuant
to Section 2.8 or Section 4.5 hereof.
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1.110 "Revolving Loan Subcommitment" shall mean Thirty Million Canadian
Dollars (Cd $30,000,000) or such lesser amount to which the Revolving Loan
Commitment is reduced pursuant to Section 2.8 or Section 4.5 hereof.
1.111 "Revolving Maximum" shall mean, as of any date, the lesser of:
(a) Revolving Loan Commitment, or (b) the Borrowing Base.
1.112 "RS Program" shall mean the production by Borrowers, pursuant to
a contract with DaimlerChrysler Motor Company, of tooling for production
platforms to be used in the production of model year 2000 Chrysler Mini Vans.
1.113 "Security Documents" means those agreements and other documents
in favor of the Agent for the benefit of itself and the Banks described in
Sections 7.1(a) and 9.9 hereof, as such documents may be amended or supplemented
from time to time, and any other agreement or instrument which the Agent for the
benefit of itself and the Banks may from time to time deem necessary for the
purpose of obtaining, creating, perfecting, preserving or protecting any of the
Liens in favor of the Agent in any of the Collateral.
1.114 "Senior Subordinated Debt Documents" shall mean the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and all agreements
and documents executed in connection therewith.
1.115 "Senior Subordinated Notes" shall mean the Senior Subordinated
Notes issued by TAG pursuant to the Senior Subordinated Note Indenture in the
aggregate principal amount of One Hundred Twenty Million Dollars ($120,000,000)
due May 1, 2008.
1.116 "Senior Subordinated Note Indenture" shall mean the Senior
Subordinated Indenture between the TAG and U.S. Bank Trust National Association
as trustee, dated as of April 28, 1998, as amended or modified from time to
time.
1.117 "Services Agreement" shall mean that certain business services
agreement dated as of July 1, 1997, as amended and restated as of April 1, 1998,
between TAG and Talon L.L.C.
1.118 "Stock" shall mean, with respect to any Loan Party, any shares of
capital stock of any Person, or other equity or ownership interest in, any other
Person owned, held or otherwise controlled by such Loan Party.
1.119 "Subordination Agreement" shall mean a subordination agreement in
form and content satisfactory to Agent, subordinating payment of the Affiliate
Loans to the prior payment of all of the Indebtedness owing by Borrower to Agent
and the Banks.
1.120 "Subordinated Debt" of any Person shall mean, as of any date,
that Indebtedness of such Person for borrowed money which is expressly
subordinate and junior in right and priority of payment to the Advances and
other Indebtedness of such Person to the Agent and the Banks in manner and by
agreement satisfactory in form and substance to the Agent and subject to such
other terms and provisions, including without limitation maturities, covenants,
defaults,
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rates and fees, acceptable to the Agent, and shall include, without limitation,
all indebtedness owing pursuant to the Senior Subordinated Debt Documents.
1.121 "Subsidiary" shall mean any corporation, limited partnership,
joint venture or other business entity in which a Borrower or a Subsidiary of
Borrower now or hereafter holds direct or indirect ownership of fifty percent
(50%) or more of the voting interests or equity interests.
1.122 "Swingline Lender" shall mean Agent and the Canadian Swingline
Lender, as applicable.
1.123 "Swing Loan" shall mean the swing loans to be advanced and
readvanced to a Borrower from time to time pursuant to Section 2.2 hereof.
1.124 "Swing Loan Commitment" shall mean, as of any date,
(a) With respect to Swing Loans made by Agent to TAG, Ten
Million Dollars ($10,000,000);
(b) with respect to Swing Loans made by the Canadian Swingline
Lender to Veltri, Twelve Million Five Hundred Thousand Canadian Dollars
($12,500,000 Cd); and
(c) with respect to all Swing Loans outstanding at any time
(whether advanced by Agent or the Canadian Swingline Lender, or both of them)
the principal amount by which the Revolving Maximum exceeds the aggregate amount
of Revolving Loans and Letters of Credit then outstanding.
1.125 "TAG Guaranty" shall mean a guaranty agreement executed and
delivered by the TAG to Agent and the Banks, pursuant to which the TAG
unconditionally guaranties payment and performance of the indebtedness and
obligations of Veltri under this Agreement and the other Documents.
1.126 "Termination Event" shall mean, (i) a "reportable event"
described in Section 4043 of ERISA or in the regulations thereunder (excluding
events for which the requirement for notice of such reportable event has been
waived by the PBGC) with respect to a Title IV Plan, or (ii) the withdrawal of a
Borrower or any ERISA Affiliate from a Title IV Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a Title IV Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings by the PBGC to terminate a Title
IV Plan or to appoint a trustee to administer a Title IV Plan, or (v) any other
event or condition which might constitute reasonable grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan, or (vi) the complete or partial withdrawal (within the
meaning of Section 4203 and 4205, respectively, of ERISA) of a Borrower or any
ERISA Affiliate from a Multiemployer Plan, or (vii) the insolvency or
reorganization (within the meaning of Section 4245 and 4241, respectively, or
ERISA) or termination of any Multiemployer Plan, or (viii) the failure to make
any payment or contribution to any Pension Plan or Multiemployer Plan or the
making of any
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amendment to any Pension Plan which could reasonably be expected to result in
the imposition of a Lien or the posting of a bond or other security.
1.127 "Tooling Loan" shall mean all Advances at any time made and
outstanding hereunder for the purpose of financing dies, molds, tooling and
similar items to be produced for or by a Loan Party in connection with an
Eligible Tooling Invoice.
1.128 "Tooling Maximum" shall mean Thirty Six Million Dollars
($36,000,000).
1.129 "UCC" shall mean Public Act 174 of 1962 of State of Michigan, as
amended.
1.130 "Veltri Guaranty" shall mean a guaranty agreement executed and
delivered by Veltri to Agent and the Banks, pursuant to which Veltri
unconditionally guarantees payment and performance of the indebtedness and
obligations of TAG under this Agreement and the other Documents.
1.131 "VS" shall mean VS Holdings, Inc., a Michigan corporation (and
successor by merger to Veltri Holdings USA, Inc. a former Subsidiary of TAG) and
a wholly owned subsidiary of TAG.
1.132 "VS Guaranty" shall mean a guaranty agreement executed and delivered
by VS to Agent and the Banks pursuant to which VS unconditionally guaranties
payment and performance of the obligations of Borrowers under this Agreement and
the other Documents.
2. THE INDEBTEDNESS
2.1 COMMITMENTS. Subject to the terms and conditions of this Agreement,
each Bank severally agrees to lend to Borrowers from time to time from the date
of this Agreement until the Maturity Date, such Bank's respective Percentage of
each Revolving Loan, with such Advances to be made in Dollars or Alternative
Currency (in the case of Advances to TAG) or Alternative Currency (in the case
of Advances to Veltri), in aggregate principal Dollar Amount outstanding at any
time not to exceed the Revolving Maximum, and (b) in the case of Advances
outstanding to Veltri, the Revolving Loan Subcommitment.
2.2 SWING LOAN. Subject to the terms and conditions of this Agreement,
Agent and Canadian Swingline Lender agree to Lend to Borrowers, in Dollars (in
the case of Agent) or Alternative Currency (in the case of the Canadian
Swingline Lender), at any time, Swing Loans in aggregate principal amount
outstanding from time to time not to exceed the Swing Loan Commitments
applicable to Agent and Canadian Swingline Lender. Subject to the terms and
conditions of this Agreement, Canadian Swingline Lender may, at the request of
Veltri, at any time and from time to time from the Closing Date until the third
(3rd) Business Day prior to the Maturity Date, issue Canadian Dollar denominated
letters of credit in an aggregate amount outstanding not to exceed One Million
Dollars ($1,000,000), for the account of Veltri. Such letters of credit shall
constitute use of the Swing Loan Commitment of the Canadian Swingline Lender.
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2.3 NOTES. The Loans shall be evidenced by promissory notes made and
delivered to the Banks pursuant to the Prior Agreement:
(a) in the case of the Revolving Loan, in the form attached as Exhibit
"G" to the Prior Agreement (i) made by TAG to each Bank in principal amounts
equal to each Bank's Percentage of the Revolving Loan Commitment, and (ii) made
by Veltri to each Bank in principal amounts equal to each Bank's Percentage of
the Revolving Loan Subcommitment;
(b) in the case of the Swing Loans, (i) advanced by Agent, in the form
attached as Exhibit "H" to the Prior Agreement made by TAG to Agent in the
principal amount of Ten Million Dollars ($10,000,000) and (ii) advanced by
Canadian Swingline Lender, in the form attached as Exhibit "I" to the Prior
Agreement made by Veltri to the Canadian Swingline Lender in the principal
amount of Twelve Million Five Hundred Thousand Canadian Dollars ($12,500,000
Cd).
2.4 TYPES OF LOANS AND MATURITY. Each of the Notes, and all principal
and interest then outstanding thereunder, shall mature and become due and
payable in full on the Maturity Date. Each Loan from time to time outstanding
shall be either a Prime-based Loan or a Eurocurrency-based Loan as the relevant
Borrower may elect or as otherwise applicable pursuant to the provisions hereof;
provided, however, that the Applicable Interest Rate for all Swing Loans shall
be the Prime-based Rate. The amount and date of each Loan, its Applicable
Interest Rate, its Interest Period, and the amount and date of any repayment
shall be noted on Agent's records, which records will be presumed correct absent
manifest error.
2.5 REQUESTS FOR LOANS. Borrower may request Loans by delivery to Agent
(and, in the case of a request by Veltri for a Swing Loan from Canadian
Swingline Lender, simultaneous delivery to the Canadian Swingline Lender) of a
Request for Loan executed by an authorized officer and subject to the following:
(a) each such Request for Loan shall indicate the Loan to which it
relates and shall set forth all other information required on the Request for
Loan form;
(b) each such Request for Loan shall be delivered to Agent by 10:00
a.m. (Detroit time) three (3) Business Days prior to the proposed date of Loan,
except in the case of a Prime-based Loan, for which the Request for Loan must be
delivered by 10:00 a.m. (Detroit time) on such proposed date;
(c) the principal amount of such Advance, plus the amount of any
outstanding Advance under the same Notes having the same Applicable Interest
Rate and Interest Period shall be at least: (i) in the case of a Prime-based
Loan (other than a Swing Loan), One Million Dollars ($1,000,000), or a greater
integral multiple of One Hundred Thousand Dollars ($100,000); (ii) in the case
of a Eurocurrency-based Loan, Two Million Dollars ($2,000,000) or a greater
integral multiple of One Hundred Thousand Dollars ($100,000) or an equivalent
Dollar Amount of Alternative Currency; and (iii) in the case of a request for a
Swing Loan, Two Hundred Fifty Thousand Dollars ($250,000) if made to Agent and
Two Hundred Fifty Thousand Canadian Dollars ($250,000 Cd) if made to the
Canadian Swingline Leader;
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(d) a Request for Loan, once delivered to Agent, shall not be revocable
by Borrower;
(e) upon the making of the Advance for which the Request for Loan
relates Eurocurrency-based Loans in effect shall not exceed six (6);
(f) each Request for Loan shall constitute a certification by the
Borrower as of the date thereof that all of the conditions set forth in Section
7.2 hereof are satisfied as of the date of such request and shall be satisfied
as of the date such Advance is requested;
(g) the principal amount requested, together with the principal amount
of all other Advances and Letter of Credit Obligations then outstanding shall
not exceed the Revolving Maximum;
(h) if such Request for Loan is for a Tooling Loan, the principal
amount requested, together with the principal amount of all other Tooling Loans
outstanding will not exceed the Tooling Maximum;
(i) if the Request for Loan is made by TAG, and the Advance requested
is denominated in Canadian Dollars, (i) upon the making thereof the aggregate
Dollar Amount of all Advances to TAG denominated in Canadian Dollars shall not
exceed Ten Million Dollars ($10,000,000), and (ii) the Advance requested shall
be for a Eurocurrency-based Loan; and
(j) if the Requests for Loan is made by Veltri (i) the Advance
requested shall be denominated in Canadian Dollars, (ii) upon the making
thereof, there shall be no more than three (3) Interest Periods in effect with
respect to Advances denominated in Canadian Dollars, (iii) the Advance requested
shall not exceed, when added to the aggregate amount of all other Advances to
Veltri then outstanding, the Revolving Loan Subcommitment and (iv) the Advances
requested shall be a Eurocurrency-based Loan (if it is to be made by the Bank
under Revolving Notes) or a Prime-based Loan (if it is to be made by the
Canadian Swingline Lender).
2.6 DISBURSEMENT OF LOANS. Upon receiving any Request for Loan under
Section 2.5 hereof or upon Agent's or Canadian Swingline Lender's exercise of
its discretion to have their respective Swing Loans refunded by the Banks with
Revolving Loans pursuant to Section 2.12 hereof, Agent shall promptly notify
each Bank by wire, telex or by telephone, including facsimile transmission
(confirmed by wire or telex) of the date for such Advance, its Applicable
Interest Rate and the amount and currency of the Advance to be made by said Bank
pursuant to its Percentage of the relevant Loan. Each Bank shall, not later than
2:00 p.m. (Detroit time) on the date of such Advance, make available the amount
of its Percentage of the Advance in immediately available funds in the currency
of the Advance to Agent, at the office of Agent located at 500 Woodward Avenue,
Detroit, Michigan. Subject to submission of an executed Request for Loan without
exceptions noted in the compliance certification therein, Agent shall: (i) in
the case of a Revolving Loan made for the purpose of refunding a Swing Loan,
apply the proceeds of the Advance toward payment of the relevant Swing Loan, and
(ii) in each other case make available to Borrower, not later than 4:00 p.m.
(Detroit time) on such date, the aggregate of the amounts so received by it in
like funds by credit to an account of Borrower, maintained with Agent or to such
other account or third party as Borrower may direct. Unless Agent shall have
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been notified by any Bank prior to the funding of any proposed Advance that such
Bank does not intend to make its Percentage of the Advance available, Agent may
assume that such Bank has made such amount available on such date and may, in
reliance upon such assumption, make available to Borrower a corresponding
amount. If such amount is not in fact made available to Agent by such Bank,
Agent shall be entitled to recover such amount on demand from such Bank. If such
Bank does not pay such amount forthwith upon Agent's demand therefor, the Agent
shall promptly notify Borrower and Borrower shall repay such amount to Agent.
Agent shall also be entitled to recover from such Bank or Borrower interest on
such amount in respect of each day from the date such amount was made available
by Agent to the date such amount is recovered by Agent, at a
rate per annum equal to the Applicable Interest Rate, in the case of Borrower
and the Federal Funds Effective Rate in the case of a Bank. The obligation of
any Bank to make any Advance shall not be affected by the failure of any other
Bank to make any Advance and no Bank shall have any liability to Borrower, the
Agent, or any other Bank for another Bank's failure to make any Advance
hereunder.
2.7 FACILITY FEES. The Borrowers shall pay to the Agent, on behalf of
the Banks, the following described Facility Fees:
(a) on the first day of each month and on the date that the Revolving
Loan Commitment is terminated (whether pursuant to Section 2.8, 4.5 or 11.11
hereof), in the amount of the Applicable Margin for Facility Fees multiplied by
the average amount of the Revolving Loan Commitment in effect during the monthly
or other period ended as of the date for such payment; and
(b) unless, prior to such date, the Revolving Loan Commitment has been
reduced to zero and all Loans and Advances have been repaid in full and all
Letters of Credit have then expired and/or been surrendered to Agent, (i) on
October 1, 2001, in an amount equal to the Postponed Fee Rate multiplied by the
Revolving Loan Commitment then in effect (or, if the Revolving Loan Commitment
is then terminated, the aggregate amount of Loans, Advances and Letters of
Credit then outstanding), (ii) on February 1, 2002, in an amount equal to the
Postponed Fee Rate multiplied by the Revolving Loan Commitment then in effect
(or, if the Revolving Loan Commitment is then terminated, the aggregate amount
of Loans, Advances and Letters of Credit then outstanding), and (iii) on October
1, 2002, in an amount equal to one-half percent (1/2%) multiplied by the
Revolving Loan Commitment then in effect (or, if the Revolving Loan Commitment
is then terminated, the aggregate amount of Loans, Advances and Letters of
Credit then outstanding).
Upon receipt of any such payment, Agent shall make prompt payment to
each Bank of its share of such Facility Fees, based on the Percentages held by
each Bank.
2.8 OPTIONAL REDUCTION OR TERMINATION OF REVOLVING LOAN COMMITMENT.
Upon at least five (5) Business Days' prior written notice to the Agent,
Borrowers may permanently reduce the Revolving Loan Commitment, in whole or in
part, provided that:
(a) each partial reduction of the Revolving Loan Commitment shall be in
an amount equal to Five Million Dollars ($5,000,000) or an integral multiple
thereof;
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(b) each reduction or termination shall be accompanied by the payment
of the Facility Fee accrued on the amount of the Revolving Loan Commitment so
reduced through the date of such reduction or termination;
(c) the Revolving Loan Commitment as so reduced shall not be less than
the sum of undrawn face amount of outstanding Letters of Credit; and
(d) the Borrowers shall prepay Revolving Loans and/or Swing Loans in
the amount, if any, by which the principal amount of Revolving Loans and Swing
Loans, plus the aggregate face amount of all unexpired Letters of Credit as of
the date of such reduction exceeds the amount of the Revolving Loan Commitment
as so reduced, together with interest thereon to the date of prepayment and any
additional amounts required thereon pursuant to Section 5.1 hereof.
2.9 PURPOSE OF LOANS. Advances and Letters of Credit outstanding under
the Prior Agreement as of the Closing Date shall be continued hereunder as
Loans, Advances and Letters of Credit under this Agreement. Thereafter Swing
Loans and Revolving Loans shall be available to and used by Borrowers solely for
working capital purposes.
2.10 PREPAYMENT AND READVANCES. Each of the Loans from time to time
outstanding hereunder may be prepaid (subject to Sections 4.4 and 5.1) from time
to time in accordance with the terms of this Agreement. Amounts so prepaid shall
be available for readvance.
2.11 CURRENCY APPRECIATION; REDUCTION OF INDEBTEDNESS. If at any time
the Dollar Amount of Advances outstanding added to the outstanding Letter of
Credit Obligations, calculated as of the last day of any Interest Period
applicable to any Advance exceeds the Revolving Maximum, the Borrowers shall,
immediately on demand by Agent, repay Advances of Revolving Loans or Swing
Loans, or reduce any requests for Advances of Revolving Loans or Swing Loans
pending on such day, by an amount equal to such excess.
2.12 SWING LOAN REFUNDING.
(a) The Agent or the Canadian Swingline Lender may at any time in their
sole and absolute discretion require that their respective Swing Loans be
refunded by a Revolving Loan which is a Prime-based Loan, and upon notice
thereof by the Agent or the Canadian Swingline Lender (as applicable) to the
Borrowers and the Banks, TAG shall be deemed to have requested a Revolving Loan
bearing interest at the Prime-based Rate in an amount equal to the Dollar Amount
of any such Swing Loan, and such Revolving Loan shall be made to refund such
Swing Loan. Such Revolving Loan shall be disbursed, and each Bank shall make its
Percentage thereof available, notwithstanding any failure to satisfy any
conditions for disbursement of any Loan set forth in Section 7.2 hereof or any
other condition; provided, however, that such disbursement: (A) shall not be
deemed to be a waiver of any Event of Default or Default, if any, and (B) shall
be made by each Bank on the Business Day after such notice is made to the Bank.
If for any reason (including without limitation as a result of the occurrence of
a bankruptcy filing), Revolving Loans may not be made and the Agent is then
requiring that any Swing Loan be refunded by a Revolving Loan, effective on the
date each Revolving Loan would otherwise have been made under this Section 2.12,
each Bank severally agrees that it shall unconditionally
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and irrevocably, without regard to the occurrence of any Default or Event of
Default, in lieu of a disbursement of any Revolving Loan, to the extent of such
Bank's Percentage, purchase a participation interest in such Swing Loan.
(b) Each Bank's obligation to comply with the terms of this Section
2.12, 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 or any Borrower may have
against the Agent, any Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default; (iii)
any adverse change in the condition (financial or otherwise) of any Borrower;
(iv) any breach of this Agreement by a Borrower or any other Bank; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
2.13 ACCOUNT NETTING. Borrowers authorize their respective Swingline
Lenders, daily or otherwise as and when determined by such applicable Swingline
Lender from time to time, to ascertain the position or net position (as the case
may be) between such Borrower and its Swingline Lender in respect to any deposit
accounts maintained by such Borrower with its Swingline Lender and that:
(a) if such position or net position is a credit in favor of such
Borrower, the applicable Swingline Lender may apply the amount of such credit or
any part thereof as a repayment of the Swing Loan provided by the applicable
Swingline Lender and the applicable Swingline Lender will debit such account
with the amount of such repayment; and
(b) if such position or net position is a debit in favor of the
applicable Swingline Lender, the applicable Swingline Lender will make an
Advance under its Swing Loan in an amount as may be required to place such
account in such credit or net credit position as has been agreed between such
Borrower the applicable Swingline Lender from time to time, and the applicable
Swingline Lender may increase the unpaid balance owing under its Swing Loan, and
credit such account with the amount of such advance.
3. LETTERS OF CREDIT
3.1 LETTERS OF CREDIT. Pursuant to the Prior Agreement, certain Letters
of Credit have been issued by Agent, which Letters of Credit are hereafter
intended to constitute Letters of Credit under this Agreement for all purposes.
Subject to the terms and conditions of this Agreement, Agent may, at the request
of TAG, at any time and from time to time from the Closing Date until the third
(3rd) Business Day prior to the Maturity Date, issue additional Letters of
Credit for the accounts of Loan Parties, in an aggregate amount at any one time
outstanding not to exceed the Letter of Credit Maximum. Each Letter of Credit
shall provide an initial expiration date not later than the earlier of (a) one
(1) year from its date of issuance (subject to renewals) and that it is
available by drafts drawn at sight and presentation of documents; and (b) three
(3) Business Days prior to the Maturity Date.
3.2 CONDITIONS TO ISSUANCE. No Letter of Credit shall be issued
pursuant to Section 3.1 hereof unless, as of the date the issuance of such
Letter of Credit is requested:
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(a) the face amount of the Letter of Credit requested, plus the undrawn
face amount of all other outstanding Letters of Credit will not exceed the
Letter of Credit Maximum;
(b) the face amount of the Letter of Credit requested, plus the
principal amount of all Loans then outstanding, will not exceed the Revolving
Maximum;
(c) the execution of the Letter of Credit Agreement with respect to the
Letter of Credit requested will not violate the terms and conditions of any
contract, agreement or other borrowing of TAG;
(d) TAG shall have delivered to Agent, not less than five (5) Business
Days prior to the requested date for issuance, the Letter of Credit Agreement
related thereto, together with such other documents and materials as may be
required pursuant to the terms thereof, and the terms of the proposed Letter of
Credit shall be satisfactory to Agent;
(e) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain Agent
from issuing the Letter of Credit, or any Bank from taking an acquiring of its
interest pursuant to Section 3.3 hereof, and no law, rule, regulation, request
or directive (whether or not having the force of law) of or from any
governmental authority shall prohibit or request that Agent refrain from
issuing, or any Bank refrain from taking an assignment of its interest in the
Letter of Credit requested or letters of credit generally;
(f) Agent shall have received the issuance fee required in connection
with the issuance of such Letter of Credit pursuant to Section 3.5 hereof; and
(g) all of the conditions set forth in Section 7.2 hereof are satisfied
as of the date of such request and shall be satisfied as of the date requested
for issuance of such Letter of Credit.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by TAG of the matters set forth in this Section
3.2(a) through (g).
3.3 PARTICIPATIONS IN LETTERS OF CREDIT. Immediately upon the issuance
of any Letter of Credit, each Bank shall be deemed to have, without further
action on the part of Agent or any Bank, irrevocably and unconditionally
purchased and received, without recourse or warranty, a participation in and
assignment of Agent's engagement under such Letter of Credit in an amount equal
to each such Bank's then Percentage of the face amount of such Letter of Credit,
and Banks hereby absolutely and unconditionally assume, as primary obligors and
not sureties, and unconditionally agree to pay and discharge when due in
accordance with the terms hereof, their respective Percentages of the Letter of
Credit Payments under such Letters of Credit. Agent shall deliver to each Bank a
Letter of Credit Notice with respect to 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 each Bank's Percentage thereof.
3.4 LETTER OF CREDIT FEES. TAG agrees to pay to Agent, for the accounts
of the Banks, Letter of Credit Fees with respect to the undrawn face amount of
each Letter of Credit at
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a per annum rate equal to the Applicable Margin with respect to Letters of
Credit. Such fees shall be payable quarterly in arrears on each Quarterly Date
and shall be assessed for the actual number of days elapsed from the date of the
issuance of each Letter of Credit until the earlier of the date of expiration of
such Letter of Credit, or the date of surrender of such Letter of Credit. Upon
receipt of such payment, Agent shall make prompt payment to each Bank of its
share of the Letter of Credit Fees, based upon the Percentage interests of each
such Bank in the Letters of Credit to which such Letters of Credit Fees relate.
3.5 ISSUANCE FEES. In connection with the Letters of Credit, TAG will
pay, for the sole account of the Agent, letter of credit issuance fees in the
amount of one-half percent (1/2%) of the face amount of each Letter of Credit
(payable on issuance) and standard administration, payment and cancellation
charges assessed by Agent, at the times, in the amounts and on the terms
separately agreed upon (or to be separately agreed upon from time to time)
between Agent and Borrower.
3.6 DRAWS UNDER LETTERS OF CREDIT.
(a) Upon receipt of any draw against a Letter of Credit, Agent shall
promptly notify TAG of the amount of such draw and the date for payment of such
draw. TAG hereby agrees to deposit with Agent, on the first Business Day
subsequent to such notice, funds sufficient to pay all Letter of Credit
Obligations with respect to such draws. So long as all of the conditions set
forth in Sections 2.5 and 7.2 hereof are complied with, TAG shall be entitled to
fund such deposit with proceeds of an Advance requested in accordance with
Section 2.5 hereof. In the event that sufficient funds are not deposited with
Agent on or before the date for payment of a draw, Agent shall so notify Banks
and, immediately upon Agent's payment under any Letter of Credit and for all
purposes of this Agreement and the Documents, the amount paid as a result of
such draw: (i) shall constitute a Revolving Loan made by Banks in accordance
with the Percentages in effect on such date, whether or not TAG is then entitled
to request Advances under this Agreement or is in default hereunder or otherwise
(and TAG shall not be entitled to refuse any such Advance); (ii) shall be
evidenced by the Notes evidencing the Revolving Loans; (iii) shall bear interest
at the Default Rate applicable to Prime- based Loans which are Revolving Loans
until repaid; and (iv) shall be due and payable on demand.
(b) Any amounts so paid by Agent pursuant to a draft against any Letter
of Credit (regardless of whether it is considered to be an Advance), with
interest thereon as aforesaid, shall be considered to be a Revolving Loan for
all purposes of this Agreement and the Documents, and shall be covered thereby
to the full extent thereof.
(c) In the event that TAG fails to deposit with Agent funds sufficient
to pay Letter of Credit Obligations with respect to any draw (whether through an
Advance requested pursuant to Section 2.5 or otherwise) on a timely basis, from
the date of Agent's payment on such draw until such Letter of Credit Obligations
resulting from such draw shall have been paid, Borrowers shall not be entitled
to request or receive any direct Advance under Notes or to request or receive
any other Loans or the issuance of Letters of Credit hereunder.
3.7 FUNDING OF LETTER OF CREDIT PAYMENT AS ADVANCE. By or before 11:00
a.m. (Detroit Time) on the date for payment of any draw on any Letter of Credit,
Agent shall
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promptly notify each Bank by wire, telex or by telephone (confirmed by wire,
telecopy or telex) of the amount of such draw (providing each Bank with a copy
of the draft and accompanying certificate), and, if applicable, the amount of
resulting Advances to be made pursuant to Section 3.6(a) hereof. If such an
Advance is required pursuant to Section 3.6(a) hereof, each Bank hereby
irrevocably and unconditionally agrees to make available the amount of its
Percentage of such Advance in immediately available funds in Dollars to Agent,
at the office of Agent located at 500 Woodward Avenue, Detroit, Michigan, no
later than 2:00 p.m. (Detroit time) on the date the Letter of Credit Payments
are to be made in connection with such draw. In the event such draw is not
considered to be or is subsequently determined not to constitute an Advance
hereunder, each Bank shall nevertheless be obligated to purchase from Agent a
participation interest in its Percentage of the draw, for an amount equal to its
Percentage thereof. If such amount is not in fact made available to Agent by
such Bank, as aforesaid, Agent shall be entitled to recover such amount on
demand from such Bank. If such Bank does not pay such amount forthwith upon
Agent's demand therefor, the Agent shall promptly notify TAG, and TAG shall
immediately repay such amount to Agent. Agent shall also be entitled to recover
from such Bank or TAG, as the case may be, interest on such amount in respect of
each day from the date such amount was paid by Agent pursuant to the draft
related thereto, at a rate per annum equal to: (i) in the case of TAG, the
Default Rate applicable to Prime-based Loans which are Revolving Loans; and (ii)
in the case of a Bank, the Federal Funds Effective Rate until two (2) Business
Days after such amount was paid by Agent and thereafter, the rate provided for
TAG in clause (i) of this sentence. The obligation of any Bank to make any
Advance hereunder shall not be affected by the failure of any other Bank to make
any Advance hereunder, or to fund its Percentage of any Letter of Credit
Payment, as the case may be, and no Bank shall have any liability to either
Borrower, the Agent, or any other Bank for another Bank's failure to make any
such Advance hereunder, or to fund the Percentage of any other Bank.
3.8 OBLIGATIONS IRREVOCABLE. The obligations to make payments to Agent
with respect to Letter of Credit Obligations under Section 3.6 hereof, and the
obligations of Banks to make Advances with respect to and purchase interests in,
Letter of Credit Payments pursuant to Section 3.7 hereof, shall be irrevocable
and not subject to any qualification or exception whatsoever, including:
(a) invalidity or unenforceability of this Agreement or any other
Documents or any portions hereof or thereof;
(b) the existence of any claim, set-off, defense or other right which
any Borrower or any Bank may have against a beneficiary named in a Letter of
Credit, Agent, any Bank or any other Person;
(c) any draft, certificate or any other document presented in
connection with a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(d) the occurrence of any Default or Event of Default;
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(e) payment by the Agent (other than as a result of its gross
negligence or willful misconduct) under any Letter of Credit against
presentation of a draft or accompanying certificate which does
not comply with the terms of the Letter of Credit;
(f) any failure, omission, delay or lack on the part of Agent or any
party to this Agreement or any of the Documents to enforce, assert or exercise
any right, power or remedy conferred upon Agent or any such party under this
Agreement or any Documents, or any other acts or omissions on the part of the
Agent or any such party;
(g) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets of any Borrower or
other Loan Party; the receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangements, composition with creditors
or readjustment or other similar proceedings affecting any Borrower, or any of
its assets, or any allegation or contest of the validity of this Agreement or
any of the Documents, in any such proceedings; and
(h) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, and any other event or action that would, in
the absence of this clause, result in the release or discharge by operation of
law of any Borrower from the performance or observance of any obligation,
covenant or agreement contained in this Agreement or any of the Documents.
3.9 RISK UNDER LETTERS OF CREDIT.
(a) In assigning and handling of Letters of Credit and any security
therefor, or any documents or instruments given in connection therewith, Agent
shall (as among Agent and the Banks) have the sole right to take or refrain from
taking any and all actions under or upon the Letters of Credit; provided,
however, that without the prior written concurrence of the Banks, Agent shall
not: (i) amend, modify, terminate or release any of the obligations of Loan
Parties respecting Letters of Credit or under any of said documents or
instruments or any security interest, mortgage or guaranty given with respect
thereto; (ii) compromise any claim or waive any right or privilege against Loan
Parties; or (iii) settle any litigation respecting any Letter of Credit or any
of said documents and instruments.
(b) Subject to other terms and conditions of this Agreement, Agent
shall hold the Letter of Credit Agreements and the documents related thereto in
its own name and shall make all collections thereunder and otherwise administer
the Letters of Credit in accordance with Agent's regularly established practices
and procedures and Agent will have no further obligation with respect thereto.
In the administration of Letters of Credit, Agent shall not be liable (except
for the consequences solely resulting from its own willful misconduct or gross
negligence) for any action taken or omitted, and shall be entitled at all times
to rely upon on the advice of counsel, accountants, appraisers and other experts
selected by Agent and Agent may rely upon any notice, communication, certificate
or other statement from Borrowers, 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.
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(c) In connection with the issuance and administration of Letters of
Credit and the assignments hereunder, Agent makes no representation and shall
have no responsibilities with respect to: (i) the obligations of the Loan
Parties or, the validity, sufficiency or enforceability of any document or
instrument given in connection therewith, or the taking of any action with
respect to same; (ii) the financial condition of, any representations made by,
or any act or omission of the Loan Parties or any other Person; or (iii) any
failure or delay in exercising any rights or powers possessed by Agent in its
capacity as issuer of Letters of Credit.
(d) If at any time Agent shall recover any part of any unreimbursed
amount for any Letter of Credit Obligation, or any interest thereon, Agent shall
receive same for the pro rata benefit of the Banks in accordance with their
respective Percentage interests therein and shall promptly deliver to each Bank
its share thereof, less Bank's pro rata share of the costs of such recovery,
including court costs and reasonable attorney's fees. If at any time any Bank
shall receive from any source whatsoever any payment on any such unreimbursed
amount or interest thereon in excess of such Bank's share of such payment, such
Bank will promptly pay over such excess to Agent for redistribution in
accordance with this Agreement.
3.10 INDEMNIFICATION. The Borrowers hereby indemnify and hold Agent and
each of the Banks harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses whatsoever which any such party may incur (or
which may be claimed against any such party by any person) by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to pay under, any Letter of Credit; provided, however, that the Borrowers shall
not be required to indemnify Agent or the Banks pursuant to this Section 3.10
for claims, damages, losses, liabilities, costs or expenses to the extent, but
only to the extent, caused by the willful and wrongful failure or willful and
wrongful misconduct or gross negligence of the Agent or such Bank. Nothing in
this Section 3.10 is intended nor shall be deemed to limit, reduce or otherwise
affect in any manner whatsoever the reimbursement obligation of TAG contained in
Section 3.6 hereof.
3.11 RIGHT OF REIMBURSEMENT. Each 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 TAG pursuant
to any Letter of Credit Agreement or any Letter of Credit, to the extent not
reimbursed by TAG; and (ii) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, fees, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Agent (in its capacity as issuer of any Letter
of Credit) in any way relating to or arising out of this Agreement, any Letter
of Credit, any Letter of Credit Agreement, except to the extent that such
liabilities, losses, costs or expenses were incurred by Agent as a result of
Agent's gross negligence or willful misconduct.
4. INTEREST, FEES AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS,
PREPAYMENTS
4.1 INTEREST. The Notes and the Loans hereunder shall bear interest
from the date thereof on the unpaid principal balance thereof from time to time
outstanding at the Applicable Interest Rates, as selected by a Borrower or as
otherwise applicable pursuant to the provisions of this Agreement from time to
time, provided, however, that in no event shall any Notes or Loans
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bear interest at a rate greater than its Highest Lawful Rate. Interest with
respect to each type of Loan shall be payable on the last day of each Interest
Period applicable thereto. Notwithstanding the foregoing, in the event and so
long as an Event of Default shall exist, all principal outstanding under the
Notes shall bear interest, payable on demand, from the date of such Event of
Default or acceleration at a rate per annum equal to the Default Rate, provided,
however, that in no event shall any Bank's Notes, Loans or other Indebtedness
bear interest at a rate greater than the Highest Lawful Rate applicable to such
Bank.
4.2 BASIS OF COMPUTATION. The amount of all interest and fees hereunder
shall be computed for the actual number of days elapsed on the basis of a year
consisting of three hundred sixty (360) days. For the purposes hereof, whenever
interest is calculated on the basis of a year of 360 days or 365 days, each rate
of interest determined pursuant to such calculation expressed as an annual rate
for the purposes of the Interest Act (Canada) is equivalent to such rate as so
determined multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by 360 or 365 days as the case may be.
The principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Agreement, and the rates of interest stipulated in this
Agreement are intended to be nominal rates and not effective rates or yields.
4.3 CONVERSION AND RENEWAL OF LOANS. Providing that no Event of Default
shall have occurred and be continuing each outstanding Loan may be either paid
or renewed or converted into another Loan, in each case as of the last day of
its Interest Period for the Advance being paid, renewed or converted; provided
that any conversion of a Eurocurrency-based Loan shall be made only on the last
Business Day of the Interest Period applicable thereto unless the Borrower pays
the prepayment costs required under Section 5.1 hereof; provided, however, that
each conversion or renewal of an Advance made in Alternative Currency shall be
made with a new Advance in the same Alternative Currency. Eurocurrency-based
Rates may be selected only for portions of Loans which are an amount of Two
Million Dollars ($2,000,000) or greater integral multiples of One Hundred
Thousand Dollars ($100,000). The Borrowers may select the Applicable Interest
Rate and Interest Periods for such renewals and conversions by giving the Agent
not less than three (3) Business Days' prior notice in the manner provided in
Section 2.5 hereof, specifying the date of such renewal or conversion, the
Advances to be converted, the type of Advance elected and, the duration of the
Interest Period therefor. The Agent shall promptly notify each Bank of each such
request by wire, telex or telephone (including facsimile transmission, confirmed
by wire or telex) specifying the date of such renewal or conversion, the Advance
to be converted, the type of Advance elected, the Applicable Interest Rate, the
duration of the Interest Period therefor and each Percentage of such Advance. If
with respect to any Advance outstanding at any time, the Agent does not receive
notice of the election three (3) or more Business Days prior to the last day of
the Interest Period therefor Borrower shall be deemed to have elected to convert
such Advance to a Prime-based Loan at the end of the then current Interest
Period.
4.4 PREPAYMENTS. Upon not less than two (2) Business Days' prior
written notice to the Agent, the Borrowers may prepay Revolving Loans or Swing
Loans in whole at any time or in part from time to time, without premium or
penalty but with accrued interest on the principal being prepaid to the date of
such prepayment, provided that: (i) each partial prepayment shall be
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in an amount not less than Two Million Dollars ($2,000,000) or greater integral
multiples of One Hundred Thousand Dollars ($100,000), (ii) in the case of a
Eurocurrency-based Loan such prepayment may only be made either on the last
Business Day of the Interest Period with respect thereto or, together with
payment of the additional amount applicable to such payment pursuant to Section
5.1. Each prepayment under this Section 4.4 shall be made to the Agent, and
promptly upon receipt thereof, the Agent shall (except in the case of a payment
on a Swing Loan) remit to each Bank its share thereof in accordance with its
Percentage. In each notice of prepayment under this Section 4.4, the Borrowers
shall specify the date of prepayment, the amount of the prepayment and the
Advances to be prepaid.
4.5 MANDATORY REPAYMENTS. Immediately upon receipt of any proceeds of
any sale or other disposal of assets by a Borrower or other Loan Party (other
than sales and disposals specifically permitted under clauses (i) through (iv)
of Section 10.10(a) of this Agreement): (a) the Revolving Loan Commitment shall
be automatically and permanently reduced by an amount equal to the Net Proceeds
thereof, and (b) the Borrowers shall deliver the Net Proceeds of such sale or
other disposition, in the form received, to Agent for application on Revolving
Loans or Swing Loans. Each such prepayment shall be made in accordance with
Section 4.4 hereof; provided, however that such prepayment shall not be required
to be in the minimum amounts specified under clause (i) of Section 4.4.
5. SPECIAL PROVISIONS FOR LOANS
5.1 REIMBURSEMENT OF PREPAYMENT COSTS. As to any Eurocurrency-based
Loan, if any prepayment thereof shall occur on any day other than the last day
of an Interest Period (whether pursuant to this Article, or by acceleration, or
otherwise), or if an Applicable Interest Rate shall be changed (other than as a
result of a change in the Applicable Margin occurring pursuant to the terms
hereof) during any Interest Period pursuant to this Article, or if a Borrower
shall fail to borrow any such Advance on the date requested therefor, Borrowers
hereby agree to reimburse Banks on demand for any costs incurred by Banks as a
result of the timing thereof including but not limited to any net costs incurred
in liquidating or employing deposits from third parties, to each Bank which
shall have delivered to Borrowers a certificate setting forth in reasonable
detail the basis for determining such costs, which certificate shall be
conclusively presumed correct save for manifest error.
5.2 EUROCURRENCY LENDING OFFICES. For any Loan for which the Applicable
Interest Rate is the Eurocurrency-based Rate, if Agent shall designate a
Eurocurrency Lending Office which maintains books separate from those of the
rest of Agent or if any Bank shall designate as its eurodollar lending office an
office which maintains books separate from those of the rest of such Bank, Agent
or such Bank shall have the option of maintaining and carrying the relevant Loan
on the books of such office.
5.3 CIRCUMSTANCES AFFECTING EUROCURRENCY-BASED AVAILABILITY. If with
respect to any Interest Period for a Eurocurrency-based Loan, Agent or any Bank
determines that, by reason of circumstances affecting the foreign exchange and
interbank markets generally, deposits in the relevant eurocurrency in the
applicable amounts are not being offered to any Bank for such Interest Period,
then Agent shall forthwith give notice thereof to the Borrowers. Thereafter, the
obligations of Banks to make Eurocurrency-based Loans for such Interest Periods,
and the right
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of Borrowers to convert an Advance to or refund an Advance as a Eurocurrency-
based Loan for such Interest Period shall be suspended until the Agent notifies
Borrower that such circumstance no longer exists.
5.4 LAWS AFFECTING EUROCURRENCY-BASED LOAN AVAILABILITY. If, after the
date hereof, the introduction of, or any change in, any applicable law, rule or
regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any of the Banks (or any of their respective
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 Loan or
Advance with interest at the Eurocurrency-based Rate, such Bank shall forthwith
give notice thereof to Borrowers and to Agent. Thereafter: (a) the obligations
of Banks to make Eurocurrency-based Loans and the right of Borrowers to convert
an Advance or refund an Advance as a Eurocurrency-based Loan shall be suspended;
and (b) if any of the Banks may not lawfully continue to maintain a
Eurocurrency-based Loan to the end of the then current Interest Period, the
Prime-based Rate shall be the Applicable Interest Rate for such Bank's
Eurocurrency-based Loans for the remainder of such Interest Period.
Each Bank agrees that, as promptly as practicable after it becomes
aware of the occurrence of any event or the existence of a condition that would
make it unlawful or impossible to maintain any Loan or Advance with interest at
the Eurocurrency-based Rate, it will, to the extent not inconsistent with such
Bank's internal policies or otherwise disadvantageous to such Bank, use
reasonable efforts to make, fund or maintain the affected Eurocurrency-based
Loans of such Bank through another lending office of such Bank if, as a result
thereof, such illegality or impossibility would cease to exist, and if, as
determined by such Bank, in its reasonable discretion, the making, funding or
maintaining of such Loans through such other lending office would not otherwise
materially adversely affect such Loans or such Bank. Borrower hereby agrees to
pay all reasonable expenses incurred by any Bank in utilizing such other lending
office of such Bank pursuant to this Section 5.4.
5.5 INCREASED COSTS. In the event that any change after the date hereof
in applicable law, treaty or governmental regulation, or in the interpretation
or application thereof, or compliance by Agent or any Bank with any request or
directive (whether or not having the force of law) from any central bank or
other financial, monetary or other authority:
(a) shall subject any of the Banks or Agent (or any of their respective
eurodollar lending offices) to any tax, duty or other charge with respect to any
Loan or any Note or shall change the basis of taxation of payments to any of the
Banks (or any of their respective eurodollar lending offices) of the principal
of or interest on any Loan or any Note or any Letter of Credit or any other
amounts due under this Agreement (except for changes in the rate of tax on the
overall net income or gross receipts of any of the Banks or Agent or any of
their respective eurocurrency lending offices imposed by the jurisdiction in
which Agent's or such Bank's principal executive office or eurocurrency lending
office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System but excluding
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with respect to any Eurocurrency-based Loan any such requirement included in an
applicable Eurodollar Reserve Requirement), risk-based capital requirement,
liquidity ratio or special deposit, or similar requirement against assets of,
deposits with or for the account of, or credit extended by any of the Banks or
Agent (or any of their respective eurocurrency lending offices) or shall impose
on any of the Banks or Agent (or any of their respective eurocurrency lending
offices) or the foreign exchange and interbank markets or other condition
affecting any Loan or any of the Notes or any Letter of Credit or any commitment
of Agent or any Bank under this Agreement;
and the result of any of the foregoing is to increase the costs to any of the
Banks or Agent of making, renewing or maintaining any part of the Loans or its
commitments hereunder or to reduce the amount or rate of return on any sum
received or receivable by, or the rate of return on the capital of, Agent or any
of the Banks under this Agreement, or under the Notes or under any Letter of
Credit Agreement, then such Bank (if applicable) shall promptly notify Agent,
and Agent shall promptly notify Borrowers and (if applicable) such Bank or Banks
of such fact and demand compensation therefor and, Borrowers hereby agree to pay
to Agent or such Bank such additional amount or amounts as will compensate such
Agent or Bank or Banks for such increased costs or reduced return within thirty
(30) days of such notice. A certificate of a Bank demanding such compensation
setting forth in reasonable detail the basis for determining such additional
amount or amounts necessary to compensate shall be conclusively presumed to be
correct save for manifest error.
5.6 AVAILABILITY OF ALTERNATIVE CURRENCY. The Agent and the Banks shall
not be required to make any Advance requested to be made in Alternative Currency
if, at any time prior to making such Advance, the Agent shall determine, in its
sole discretion, that (i) deposits in the Alternative Currency in the amounts
and maturities required to fund such Advance will not be available to the Agent
or any Bank; (ii) a fundamental change has occurred in the foreign exchange or
interbank markets with respect to the applicable Alternative Currency
(including, without limitation, changes in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls); or (iii) it has become otherwise materially impractical for the Agent
or any Bank to make such Advance in the applicable Alternative Currency. The
Agent shall promptly notify the Borrowers and Banks of any such determination.
5.7 REFUNDING ADVANCES IN SAME CURRENCY. If pursuant to any provisions
of this Agreement, the Borrower repays one or more Advances and on the same day
borrows an amount in the same currency, the Agent shall apply the proceeds of
such new borrowing to repay the principal of the Advance or Advances being
repaid and only an amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be remitted by the Agent to the
relevant Borrower, or by such Borrower to the Agent, as the case may be.
5.8 JUDGMENT CURRENCY. The obligation of Borrowers to make payments of
the principal of and interest on the Notes and any other amounts payable
hereunder in the currency specified for such payment herein or in the Notes
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment, which is expressed in or converted into any other currency, except
to the extent that such tender or recovery shall result in the actual receipt by
the Bank of the full amount of the particular currency expressed to be payable
herein or in the
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Notes. The Agent shall, using all amounts obtained or received from Borrowers
pursuant to any such tender or recovery in payment of principal of and interest
on the Notes, promptly purchase the applicable currency at the most favorable
spot exchange rate determined by the Agent to be available to it. The obligation
of Borrowers to make payments in the applicable currency shall be enforceable as
an alternative or additional cause of action solely for the purpose of
recovering in the applicable currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the currency expressed to be
payable herein or in the Notes.
6. PAYMENTS
6.1 PAYMENT PROCEDURE.
(a) Except as specifically set forth herein with respect to payments to
be made to the Canadian Swingline Lender in connection with Swing Loans made by
it, all payments by the Borrowers of principal of, or interest on, the Notes or
of Facility Fees, or of Letter of Credit Obligations or Letter of Credit Fees
and Agent's Fees, shall be made without setoff, deduction or counterclaim on the
date specified for payment under this Agreement not later than 11:00 a.m.
(Detroit time) in immediately available funds to Agent. Upon receipt of each
such payment, the Agent shall make payment to each Bank in like funds on the
same day of all amounts received by it to the extent received for the account of
such Bank.
(b) Unless the Agent shall have been notified by the Borrowers prior to
the date on which any payment to be made by Borrowers is due, that the relevant
Borrower does not intend to remit such payment, the Agent may, in its
discretion, assume such payment has been remitted when so due and the Agent may,
in reliance upon such assumption, make available to each Bank on such payment
date an amount equal to such Bank's share of such assumed payment. If such
payment has not in fact been remitted to the Agent, each Bank shall forthwith on
demand, repay to the Agent the amount of such assumed payment made available to
such Bank, together with the interest thereon, in respect of each day from and
including the date such amount was made available by the Agent to such Bank to
the date such amount is repaid to the Agent at a rate equal to the Federal Funds
Effective Rate, as the same may vary from time to time.
(c) Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall be made (except as specifically
indicated to the contrary herein) on the next succeeding Business Day and such
extension of time shall be included in computing interest, if any, in connection
with such payment.
(d) All payments of principal and interest on each Advance shall be
payable in the currency in which such Advance was originally made. All other
payments of, fees and reimbursements by Borrowers to Agent and/or the Banks
shall be made in Dollars.
6.2 APPLICATION OF PROCEEDS. Notwithstanding anything to the contrary
in this Agreement, after an Event of Default, the proceeds of any offsets,
voluntary payments by Borrowers or others and any other sums received or
collected in respect of the indebtedness hereunder, shall be applied first to
the costs and expenses of Agent in enforcement and collection and, second, to
payment in full of Swing Loans, third, to the other indebtedness and obligations
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of Borrowers hereunder in accordance with the respective aggregate principal
amounts of each Bank's Loans and risk participations in Letters of Credit
outstanding, and then, if there is any excess, to Borrowers.
6.3 PRO-RATA RECOVERY. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the indebtedness and
obligations of Borrowers hereunder in excess of its pro rata share of payments
then or thereafter obtained by all Banks upon all such indebtedness and
obligations, such Bank shall purchase from the other Banks such participations
in the Notes and/or Letter of Credit Obligations held by them as shall be
necessary to cause such purchasing Bank to share the excess payment or other
recovery ratably in accordance with the respective aggregate principal amounts
of each Bank's Loans and risk participations in Letters of Credit outstanding as
of the date of the Event of Default; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing holder, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without
interest. To the extent any payment received by Agent or any Bank is deemed a
preference, fraudulent transfer or otherwise by a court of competent
jurisdiction which requires Agent or any Bank to disgorge such payment, then
such payment will be deemed to have never occurred and the Loan will be
increased accordingly.
6.4 DEPOSITS AND ACCOUNTS. In addition to and not in limitation of any
rights of any Agent, Bank or other holder of any Note or assignee of Letter of
Credit Agreements and Letter of Credit Obligations under applicable law, Agent,
each Bank and each other such holder shall, in the event and so long as there
exists an Event of Default and without notice or demand of any kind, have the
right to liquidate and collect all property or assets of any Borrower (including
deposits and other credits), whether presently owned or hereafter acquired, in
possession or control of (or owing by) Agent or such Bank or other holder for
any purpose, and to apply the proceeds of any such liquidations and collections,
and offset any amounts owing to Borrowers (or either of them) against
obligations hereunder and under the Notes and the Documents, provided, however,
that any such amount so applied by Agent or such Bank or other holder on any of
the Notes shall be subject to the provisions of Section 6.2 and 6.3.
6.5 NET PAYMENTS. All payments by Loan Parties under this Agreement or
any Document shall be made in such amounts as may be necessary in order that all
such payments (after deduction or withholding for or on account of any present
or future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any government or any political subdivision or taxing authority
thereof, other than any tax on or measured by the net income of a Bank pursuant
to the income tax laws of the United States or of the jurisdiction in which it
is incorporated or the jurisdiction where such Bank's lending office is located
or in which it has any other contacts or connection that would subject it to
taxation therein (collectively, "Taxes")), shall not be less than the amounts
otherwise specified to be paid under this Agreement and/or the Documents. A
certificate as to the calculation of any additional amounts payable to a Bank
under this Section 6.5 submitted to the Borrowers by such Bank shall, absent
manifest error, be presumed correct for all purposes. With respect to each
deduction or withholding for or on account of any Taxes, the relevant Loan Party
shall promptly furnish to each Bank such certificates, receipts and other
documents as may be required (in the judgment of such Bank) to
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establish any tax credit to which such Bank may be entitled. Borrowers agree to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income of such Bank pursuant to the laws of the United
States of America, any State or political subdivision thereof, or the
jurisdiction in which such Bank is incorporated, or a jurisdiction in which the
principal office or lending office of such Bank is located, or under the laws of
any political subdivision or taxing authority of any such jurisdiction, as such
Bank shall determine are or were payable by such Bank in respect of amounts
payable to such Bank pursuant to this Section 6.5.
6.6 TAX TREATY CERTIFICATE. Each Bank (and each Person who becomes a
Bank pursuant to Section 13.5 hereof) that is not incorporated under the laws of
the United States of America or a state thereof, or which is lending from a
lending office that is not incorporated under the laws of the United States of
America or a state thereof agrees that, on or prior to the date it becomes a
Bank hereunder, it will deliver to Borrowers and the Agent duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or any successor
applicable form (a "Form 1001 or 4224"), certifying that such Bank is entitled
to receive payments hereunder payable to it without deduction or withholding of
any United States Federal taxes. Each Bank that delivers a Form 1001 or 4224
pursuant to the immediately preceding sentence further agrees to deliver to
Borrowers and Agent further copies of such Form 1001 or 4224 or other manner of
certification, as the case may be, on or before the date that any such form or
certification expires or becomes obsolete or upon the occurrence of any event
requiring a change in the most recent form or certification previously delivered
by it, unless in any such case there has occurred, on or prior to the date on
which any such delivery would otherwise be required, any change in law, rule,
regulation, treaty, convention or directive, or any change in the interpretation
or application of any thereof, that renders all such forms inapplicable or which
would prevent such Bank from duly completing and delivering any such form or
certification with respect to it. Notwithstanding any provision of Section 6.5
to the contrary, Loan Parties shall not have any obligation to pay any Taxes
(except to the extent required by law) pursuant to Section 6.5 to the extent
that such Taxes result from: (i) the failure of any Bank to comply with its
obligations pursuant to this Section 6.6; or (ii) any representation made on
Form 1001 or 4224 by such Bank proving to have been incorrect, false or
misleading in any material respect when made or deemed to be made.
6.7 REPLACEMENT OF BANKS. In the event and so long as any Bank shall
require Borrower to pay additional amounts pursuant to Section 5.5 or 6.5 hereof
or shall have its obligations to make Eurocurrency- based Loans suspended
pursuant to Section 5.3 or 5.4 hereof, or its obligation to make Loans
denominated in Alternative Currency suspended pursuant to Section 5.6 hereof, so
long as there does not exist any Event of Default hereunder, Borrower shall be
entitled to (without prejudice to such Bank's right to receive such additional
amounts) require such Bank to assign its interests hereunder and in the Loans
(in accordance with the procedures and subject to the restrictions set forth in
Section 13.5(a) hereof) to such other bank or financial institution as may be
selected by Borrower and approved by Agent.
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7. CONDITIONS
7.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND CLOSING DATE. The right
of Borrowers to request the initial Loans and Letters of Credit pursuant to this
Agreement is subject to, and the Closing Date of this Agreement shall be, the
date of satisfaction of the following conditions:
(a) DOCUMENTS EXECUTED AND FILED. The Borrowers shall have executed (or
caused to be executed) and delivered to the Agent and, as appropriate, all of
the documents, instruments and agreements indicated on the Closing Checklist
(except for the Bond Settlement Documents) and each such document, instrument
and other agreement shall be in form satisfactory to Agent and the Majority
Banks.
(b) PREVIOUSLY EXECUTED AND/OR DELIVERED DOCUMENTS. Borrowers (and each
other Loan Party, by its acknowledgment hereof) hereby acknowledge and agrees:
(i) Each of them are party to certain of the "Documents" (as
defined in the Prior Agreement) and it is intended and agreed that each such
"Document" so executed and/or delivered in connection with the Prior Agreement
shall continue in full force and effect in connection with this Agreement and
shall constitute a Document as defined herein;
(ii) To the extent that any "Document" executed in connection
with the Prior Agreement (including each Note and Security Document) to which a
Borrower or other Loan Party is party contains any reference to the Prior
Agreement, each such reference is hereby deemed amended to constitute a
reference to this Agreement; and
(iii) Each of the security agreements included in the Documents
to which they are parties are hereby amended to replace, in Section 6.1 of each
such security agreement the words "so long as any Event of Default exists, at
the sole discretion of Agent, the Indebtedness may be put on a Remittance
Basis...," with the words "The Indebtedness shall be on a Remittance Basis..."
(iv) Each security interest, Lien, mortgage or other encumbrance
granted pursuant to "Documents" executed and/or delivered under or pursuant to
the Prior Agreement are intended to continue hereunder from the original dates
of the grants, attachment and perfection thereof under such "Documents" executed
and/or delivered in connection with the Prior Agreement.
(c) AMENDMENT FEE. Each of the Banks who have executed this amendment
and restatement of the Prior Agreement shall have been paid an amendment fee in
amount equal to one-half percent (1/2%) of such Bank's Percentage of the
Revolving Loan Commitment. Such amendment fee shall be deemed fully earned as of
the Closing Date and shall not be refundable under any circumstance.
(d) AGENT'S FEE. Agent shall have been paid such portions of the
Agent's Fees as are due and payable on the Closing Date pursuant to a separate
fee letter between Agent
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and Borrowers dated February _____, 2001. Such Agent's Fee shall be deemed fully
earned as of the Closing Date and shall not be refundable under any
circumstance.
(e) OPINION OF BORROWER'S COUNSEL. Agent shall have received, with
signed copies thereof for each Bank, opinions of counsel to the Loan Parties
addressed to Agent and the Banks covering such matters as Agent shall require.
(f) APPROVAL OF AGENT'S COUNSEL. All actions, proceedings, instruments
and documents required to carry out the transactions contemplated by this
Agreement or incidental thereto and all other related legal matters shall have
been satisfactory to and approved by legal counsel for the Agent, and said
counsel shall have been furnished with such certified copies of actions and
proceedings and such other instruments and documents as they shall have
reasonably requested.
7.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the Agent and the
Banks to make Advances and Loans (other than Revolving Loans required for the
purpose of refunding Swing Loans) and the obligation of Agent to issue any
Letter of Credit shall be subject to the satisfaction of the following
conditions:
(a) EFFECTIVENESS. This Agreement shall have become effective as
provided in Section 7.1.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of the
making of such Loan or Advance or the issuance of such Letter of Credit and
after giving effect thereto: (i) there shall exist no Default or Event of
Default; and (ii) all representations and warranties contained herein or in the
other Documents shall be true and correct in all material respects.
(c) ADVERSE CHANGE, ETC. Since November 30, 2000, nothing shall have
occurred or become known which the Agent or the Banks shall have determined has
a Materially Adverse Effect.
(d) ENFORCEABILITY OF DOCUMENTS. Both before and after such Advance,
the obligations of the Borrowers in the Documents shall be valid, binding and
enforceable.
8. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this Agreement and
to make Loans and Advances hereunder, the Borrowers represent and warrant to the
Agent and the Banks:
8.1 CORPORATE STATUS. Each Loan Party is a duly organized and validly
existing corporation in good standing under the laws of the jurisdiction of its
organization, has the corporate or other organizational power and authority and
has obtained all requisite governmental licenses, authorizations, consents and
approvals necessary to own and operate its property and assets and to transact
the business in which it is engaged and presently proposes to engage, including,
without limitation, those required by the Environmental Laws, and is duly
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qualified and is authorized to do business in, and is in good standing in, all
jurisdictions where by virtue of the nature of its activities or extent of its
properties it is required to be so qualified and where the failure to be so
qualified would have a Material Adverse Effect.
8.2 CORPORATE POWER AND AUTHORITY; BUSINESS. Each Loan Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which they are party and each of them has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Documents to which they are party and has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of the Borrowers and/or
other Loan Party thereto enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or by equitable
principles relating to enforceability, good faith and fair dealing.
8.3 NO VIOLATION. Neither the execution, delivery or performance by the
Loan Parties of the Documents, nor compliance with the terms and provisions
thereof, nor the consummation of the transactions contemplated therein will
result in a material contravention of any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, or will conflict or be inconsistent, in any
material respect, with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any Lien upon any of the property or assets of any of
them pursuant to the terms of, any indenture, mortgage, deed of trust, material
agreement or other material instruments to which any of them are parties.
8.4 LITIGATION. Except as specifically set forth on Schedule 8.4 hereto,
there are no actions, judgments, suits or proceedings pending or, to the
Borrowers' knowledge, threatened against any Loan Party that are likely to have
a Material Adverse Effect.
8.5 USE OF PROCEEDS. Neither the making of any Loan hereunder, nor the use
of the proceeds thereof, will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.
8.6 GOVERNMENTAL APPROVALS, ETC. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any third party or any foreign or domestic governmental or public
body or authority, or by any subdivision thereof, is required to authorize or is
required in connection with the execution, delivery and performance of any
Document or the transactions contemplated therein, or the legality, validity,
binding effect or enforceability of any Document other than certain consents
from landlords of Borrowers, the absence of which will not have a Material
Adverse Effect.
8.7 TRUE AND COMPLETE DISCLOSURE. All factual information heretofore or
contemporaneously furnished by or on behalf of Borrowers in writing to Agent or
any Bank for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information hereafter
furnished to Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. Except as specifically set forth on Schedule 8.7
hereto, there is no fact known to
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Borrowers which affects the business, operations, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of any
other Loan Party which would have a Material Adverse Effect and which has not
been disclosed herein.
8.8 FINANCIAL STATEMENTS. The Borrowers have heretofore delivered to the
Agent and the Banks balance sheets and statements of operations, stockholders'
equity and cash flow for the fiscal year ended December 31, 1999 and the month
ended November 30, 2000. The pro forma balance sheets and the other financial
statements referred to in the preceding sentence were prepared in accordance
with GAAP, and fairly present in all material respects the financial position of
the entities described therein and the results of its operations and cash flows
for the periods covered thereby.
8.9 SECURITY INTERESTS. There exist no Liens, in the property or assets of
the other Loan Parties except to the extent specifically permitted under Section
10.2 hereof.
8.10 TAX RETURNS AND PAYMENTS. Except as set forth on Schedule 8.10 hereto,
each Loan Party has filed all tax returns required to be filed by it and has
paid all taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith and for
which adequate reserves have been established to the extent required by GAAP.
8.11 PATENTS, ETC. Except as set forth on Schedule 8.11 hereto, each Loan
Party has all material patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of its respective businesses as presently
conducted and as proposed to be conducted.
8.12 COMPLIANCE WITH LAWS, ETC. Except as set forth on Schedule 8.12
hereto, each Loan Party is in compliance, in all material respects, with all
applicable laws and regulations, including without limitation those relating to
pollution and environmental control, equal employment opportunity and employee
safety, in all jurisdictions in which it is presently doing business, and will
comply, in all material respects, with all such laws and regulations which may
be imposed in the future in jurisdictions in which any of them may then be doing
business.
8.13 PROPERTIES. Each Loan Party has good and marketable title to and
beneficial ownership of all properties owned by it (subject only to Liens
permitted by Section 10.2 hereof), as reflected in the balance sheets mentioned
in Section 8.8 above and hold all material licenses, certificates of occupancy
or operation and similar certificates and clearances of municipal and other
authorities necessary to own and operate its properties in the manner and for
the purposes currently operated.
8.14 COLLECTIVE BARGAINING AGREEMENTS. Set forth on Schedule 8.14 hereto is
a list and description (including dates of termination) of all collective
bargaining or similar agreements to which the Loan Parties are party or are
subject as of the date hereof and any union, labor organization or other
bargaining agent in respect of their respective employees on the date indicated
in Schedule 8.14 hereto. There are no strikes pending or, to Borrowers'
knowledge, threatened against any Loan Party that are likely to have a Material
Adverse Effect.
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8.15 INDEBTEDNESS OUTSTANDING. Set forth on Schedule 8.15 hereto is a list
and description of all Indebtedness of Borrowers (other than the Loans) that are
outstanding immediately as of the Closing Date.
8.16 ENVIRONMENTAL PROTECTION. Except as set forth on Schedule 8.16 hereto
and except to the extent such failure or circumstance would not have a Material
Adverse Effect:
(a) The Loan Parties have all permits, licenses and other
authorizations which are required with respect to the operation of their
businesses under any Environmental Law and each such authorization is in full
force and effect.
(b) The Loan Parties are compliance with all terms and conditions of
the permits, licenses and authorizations specified in Subsection 8.16(a) above,
and are also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any Environmental Law applicable to them and their businesses,
assets, operations and properties (including, without limitation, compliance
with standards, schedules and timetables therein), including without limitation
those arising under the Resource Conservation and Recovery Act of 1976, as
amended, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("CERCLA"), the Federal Water Pollution Control Act, the Federal Clean Air
Act, and the Toxic Substances Control Act.
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the knowledge of
Borrowers threatened against any Loan Party under any Environmental Law.
(d) No Loan Party has received notice that it has been identified as a
potentially responsible party under CERCLA or any comparable state law nor have
any of them received any notification that any hazardous substances or any
pollutant or contaminant, as defined in CERCLA and its implementing regulations,
or any toxic substance, hazardous waste, hazardous constituents, hazardous
materials, asbestos or asbestos containing materials, petroleum, including crude
oil and any fractions thereof, or other wastes, chemicals, substances or
materials regulated by any Environmental Laws (collectively "Hazardous
Materials") that it or any of their respective predecessors in interest has
used, generated, stored, tested, handled, transported or disposed of, has been
found at any site at which any governmental agency or private party is
conducting a remedial investigation or other action pursuant to any
Environmental Law.
(e) To the best knowledge of Borrowers, there have been no releases
(i.e., any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) of Hazardous Materials by any Loan Party on, upon, into or from any of
the real properties owned or operated by them at any time. To the best knowledge
of Borrowers there has been no such releases on, upon, under or into any such
real property or in the vicinity of any of such real property that, through
soil, surface water or groundwater migration or contamination, may be located
on, in or under such real properties.
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(f) To the best knowledge of Borrowers, there is no friable asbestos
in, on, or at the respective real properties or any facility or equipment of any
Loan Party.
(g) To the best knowledge of Borrowers, no real property owned or
operated by any Loan Party is: (i) listed or proposed for listing on the
National Priorities List under CERCLA; or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
governmental authority.
(h) To the best of Borrowers' knowledge, there are no past or present
events, conditions, circumstances, activities, practices, incidents, actions or
plans which may interfere with or prevent compliance by any Loan Party with any
Environmental Law, or which may give rise to any common law or legal liability,
including, without limitation, liability under CERCLA or similar state, local or
foreign laws, or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing or notice of violation, study or investigation, based on or
related to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport, shipping or handling, or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, chemical or industrial, toxic or hazardous substance or waste.
8.17 SENIOR SUBORDINATED DEBT DOCUMENTS. All Advances and all other present
and future indebtedness, obligations and liabilities pursuant to this Agreement
and the Loan Documents, is "Senior Debt" as defined in the Senior Subordinated
Debt Documents and, other than the Advances and all other present and future
indebtedness, obligations and liabilities pursuant to the Loan Documents, there
is, as of the date of this Agreement, no other "Designated Senior Debt"
thereunder. True and complete copies of the Bond Settlement Documents (and any
amendments thereto) shall be delivered to Agent and the Banks on or before 45
days after the date hereof and upon delivery, each such Bond Settlement
Documents shall be in full force and effect.
8.18 ERISA. Except as specifically set forth in Schedule 8.18 hereof:
(a) Each of the Borrowers and the ERISA Affiliates is in compliance in
all material respects with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
employee benefit plans, Pension Plans and Multiemployer Plans.
(b) No Termination Event has occurred or is reasonably expected to
occur with respect to any Pension Plan which resulted or would result in a
liability to a Borrower or any ERISA Affiliate.
(c) The sum of the amount of unfunded benefit liabilities (determined
in accordance with Statement of Financial Accounting Standards No. 35) under all
Title IV Plans (excluding each Title IV Plan with an amount of unfunded benefit
liabilities of zero or less) is not more than Zero Dollars ($0) as of the
Closing Date.
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(d) Neither of the Borrowers nor any ERISA Affiliate has any
obligation to contribute to or any liability or potential liability (including,
but not limited to, actual or potential withdrawal liability) with respect to
any Multiemployer Plan or any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code. Neither of the
Borrowers nor any ERISA Affiliate has incurred or reasonably expects to incur
any withdrawal liability under Section 4201 et seq. of ERISA to any
Multiemployer Plan or any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code.
(e) Neither of the Borrowers nor any ERISA Affiliate has incurred any
accumulated funding deficiency (whether or not waived) with respect to any
Pension Plan.
(f) Neither of the Borrowers nor any ERISA Affiliate has or reasonably
expects to become subject to a Lien in favor of any Pension Plan under Section
302(f) or 307 of ERISA or Section 401(a)(29) or 412(n) of the Code.
(g) The execution, performance and delivery of the Documents by
Borrower will not involve any prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code for which an exemption
therefrom is not available.
8.19 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All the representations
and warranties of the Borrower contained in Section 8.1 through 8.18, inclusive,
shall survive the execution and delivery of this Agreement and shall continue in
full force and effect until all amounts owing hereunder have been repaid and the
credit facilities made available hereunder have been terminated, notwithstanding
any investigation made at any time by or on behalf of the Agent or any of the
Banks.
9. AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, for so long as this Agreement is in
effect and until the Commitments are fully terminated and the Loans and Letter
of Credit Obligations together with interest, fees and all other obligations
incurred hereunder or under the Loan Documents are paid in full it will and,
will cause each other Loan Party to:
9.1 REPORTING REQUIREMENTS COVENANTS. Furnish or cause to be furnished to
Agent (with a copy for each Bank):
(a) as soon as available and in any event within ninety (90) days
after the close of each fiscal year of TAG, balance sheets of TAG (i) as at the
end of such fiscal year and the related statements of operations, stockholders
equity and cash flows for such fiscal year, setting forth comparative figures
for the preceding fiscal year, and a report on such balance sheets and financial
statements by independent certified public accountants of recognized national
standing, which report shall not be qualified as to the scope of audit or as to
the status of Borrowers as a going concern, and shall state that such financial
statements fairly present, in all material respects, the financial position of
Borrowers as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, in conformity with GAAP, and (ii)
copies of tax returns filed for the Borrowers for the fiscal year then ended;
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(b) as soon as available and in any event within thirty (30) days
after the end of each month: (i) the consolidated and consolidating balance
sheets of TAG as at the end of such month and the related statements of
operations, of stockholders' equity and of cash flows for such month and for the
elapsed portion of the fiscal year ended with the last day of such month, and in
each case setting forth comparative figures for the related periods in the prior
fiscal year, subject to normal year-end audit adjustment, (ii) reports on the
Loan Parties' Inventory, agings of each Loan Parties' Accounts Receivable (with
an aging summary) and accounts payable (with an aging summary), and (iii)
written monthly management discussion and analysis of the Borrowers' financial
results for the month then ended and a comparison of such results to the
projected results for such month included in the Projections; in each case, in
form and content satisfactory to Agent and certified by the chief financial
officer, controller or chief accounting officer of Borrowers;
(c) at the time of the delivery of the financial statements provided
for in Subsections 9.1(a) and (b),(i) a certificate of the chief financial
officer, controller or chief accounting officer of TAG to the effect that no
Default or Event of Default exists, or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate shall be
accompanied by a compliance certificate in a form reasonably acceptable to the
Agent setting forth the calculations required to establish whether Borrowers
were in compliance with the covenants in this Agreement as at the end of such
period, and (ii) a compliance certificate from the chief financial officer,
controller or chief accounting officer of Veltri dated as of the end of the
month ended immediately prior thereto, in a form reasonably acceptable to the
Agent, setting forth the calculations required to establish whether Veltri was
in compliance with the terms and conditions for EDC Financing;
(d) within four (4) days after the end of each week, a Borrowing Base
calculation and certification and an Accounts Receivable summary report, in form
and content satisfactory to Agent and certified by the chief financial officer,
controller or chief accounting officer of Borrowers;
(e) promptly upon receipt thereof, a copy of each annual "management
letter" submitted to Borrowers by its independent accountants in connection with
any annual audit made by them of the books of Borrowers;
(f) promptly upon any officer of a Borrower obtaining knowledge of any
condition or event which constitutes a Default or Event of Default, or becoming
aware that any Bank has given any notice or taken any other action with respect
to a claimed Default or Event of Default under this Agreement, an officers'
certificate specifying the nature and period of existence of any such condition
or event, or specifying the nature of such claimed Default or Event of Default,
and explaining the action Borrowers have taken or proposes to take with respect
thereto;
(g) within (i) ninety (90) days after the end of each fiscal year of
TAG, a copy of TAG's Form 10-K Report filed with the Securities Exchange
Commission for such annual accounting period, and (ii) forty five (45) days
after the end of each fiscal quarter of TAG, a copy of TAG's Form 10-Q Report
filed with the Securities Exchange Commission for such quarterly accounting
period; and
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(h) with reasonable promptness, such other information and data with
respect to Loan Parties as from time to time may be reasonably requested by any
Bank.
9.2 INSURANCE. Keep its insurable properties (including but not limited to
the Collateral) adequately insured and maintain (a) insurance against fire and
other risks customarily insured against under an "all-risk" policy and such
additional risks customarily insured against by companies engaged in the same or
a similar business to that of the relevant Loan Party, (b) necessary worker's
compensation insurance, (c) public liability and product liability insurance,
and (d) such other insurance as may be required by law or as may be reasonably
required in writing by the Agent or the Majority Banks, all of which Insurance
shall be in such amounts, containing such terms, in such form, for such
purposes, prepaid for such time period, and written by such companies as shall
be satisfactory to the Agent and the Majority Banks. All such policies shall
contain a provision whereby they may not be canceled or amended except upon
thirty (30) days' prior written notice to the Agent. The Borrowers will promptly
deliver to the Agent, at the Agent's request, evidence satisfactory to the Agent
that such insurance has been so procured and, with respect to casualty
insurance, made payable to the Agent. If the relevant Loan Party fails to
maintain satisfactory insurance as herein provided, the Agent shall have the
option to do so, and the Borrowers agree to repay the Agent upon demand, with
interest at the Prime-based Rate then in effect for the Revolving Loan, all
amounts so expended by the Agent. The Borrowers hereby appoint the Agent or any
employee or agent of the Agent as attorney-in-fact, which appointment is coupled
with an interest and irrevocable, and authorizes the Agent or any employee or
agent of the Agent, on behalf of the Borrowers or the relevant Loan Party, to
adjust and compromise any loss under said insurance (which adjustment or
compromise shall only be made with the Borrowers' consent if an Event of Default
has not occurred and is not continuing hereunder) and to endorse any check or
draft payable in connection with returned or unearned premiums on said insurance
or the proceeds of said insurance, and any amount so collected shall be applied
toward repair and/or replacement of the Collateral to which such casualty
occurred or satisfaction of the Indebtedness in accordance in accordance with
the provisions governing such application in the Documents pursuant to which
Agent's Liens on such Collateral were granted.
9.3 BOOKS, RECORDS AND INSPECTIONS. Each Loan Party will keep true books of
records and accounts of all its business transactions in accordance with GAAP or
(with respect to activities and transactions in foreign jurisdictions) such
other accounting principals as may be required in such foreign jurisdiction and
shall permit, upon reasonable prior notice by Agent to any authorized officer of
Borrowers, officers and designated representatives of the Agent and/or any Banks
to visit and inspect properties or assets of each Loan Party and to examine the
books of account of each Loan Party and to discuss the affairs, finances and
accounts of Borrower and with its and their officers and independent
accountants, all at such times and intervals as the Agent may reasonably
request, including, without limitation audits of Inventory and Accounts
Receivable to be performed by or on Agent's behalf at Borrowers' expense: (a) so
long as no Event of Default is existing, up to four (4) times each calendar year
in Agent's discretion, and (b) in the event and so long as an Event of Default
exists, at such intervals as Agent or the Majority Banks may require.
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9.4 PAYMENT OF TAXES AND UTILITIES. Each Loan Party will pay and
discharge all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties belonging to it, and
all utility charges, dues, rates and assessments of whatever nature or kind and
to whomever assessed now or hereafter charged or payable with respect to the
Real Property, prior to the date on which material penalties attach thereto, and
all lawful claims which, if unpaid, might become a Lien or charge upon any
properties of any Loan Party or cause a failure or forfeiture of title thereto;
provided that neither Borrower shall not be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings promptly instituted and diligently conducted if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
9.5 COMPLIANCE WITH STATUTES, ETC. Each Loan Party will comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property other than
non-compliance which would not reasonably be expected to have a Material Adverse
Effect.
9.6 PERFORMANCE OF OBLIGATIONS. Borrowers will: (a) perform all of their
obligations under the Access Agreement and Customer Agreements, and will
promptly deliver to Agent copies of each notice or report issued by or to a
Borrower pursuant to the terms thereof, and (b) perform in all material respects
all of their obligations under the terms of each mortgage, indenture, security
agreement, other debt instrument, their respective trade obligations and
material contracts by which they are bound or to which they are party, except
where nonperformance would not have a Material Adverse Effect and except to the
extent that non-compliance with any of the foregoing is specifically described
on Schedule 8.7 hereto.
9.7 END OF FISCAL YEARS; FISCAL QUARTERS. Borrower will have its fiscal
years end on December 31 and the first three fiscal quarters of each year end on
each of the thirteenth (13th), twenty sixth (26th) and thirty ninth (39th) week
of each year.
9.8 ENVIRONMENTAL EVENTS.
(a) The Borrowers will promptly give notice to the Agent upon
becoming aware of any of the following which would reasonably be expected to
result in liability under any Environmental Law: (i) of any violation of any
Environmental Law; (ii) of any inquiry, proceeding, investigation or other
action, including a request for information or a notice of potential
environmental liability from any foreign, federal, state or local environmental
agency or board; or (iii) of the discovery of the release of any Hazardous
Material at, on, under or from any of the real properties owned or operated by
any Loan Party or any facility or equipment thereat in excess of reportable or
allowable standards or levels under any Environmental Law.
(b) In the event of the presence of any Hazardous Material on any
of the real properties owned or operated by any Loan Party which is in violation
of, or which could reasonably be expected to result in liability under, any
Environmental law, in each case which would have a Material Adverse Effect, upon
discovery thereof and the determination of its materiality, shall take all
necessary steps to initiate and expeditiously complete all remedial,
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corrective and other action to mitigate and eliminate any such adverse effect,
and shall keep the Agent informed of their actions and the results.
9.9 FURTHER GUARANTEES AND LIENS. Borrowers will, immediately after any
Person at any time becoming a direct or indirect Subsidiary of a Borrower,
deliver or cause to be delivered to the Agent a pledge of all of the issued
capital stock of such Person, and a guarantee from such Person, together with
all Security Documents applicable to such Person in the Agent's opinion, and
evidence of the registration, filing and recording of the Liens on the property
of such Person constituted by such Security Documents in all jurisdictions where
such registration, filing or recording is necessary or of advantage to the
creation, perfection, preservation or protection of such Liens, all in form,
scope and substance acceptable to the Agent.
9.10 COMPLIANCE WITH FORMULA AMOUNT. In the event that, at any time, the
principal amount of the Loans and Letters of Credit exceeds the Borrowing Base,
pay to Agent, for application on Swing Loans and/or Revolving Loans, an amount
sufficient to eliminate such excess.
9.11 CONSTRUCTION LIENS. Upon receiving notice or obtaining knowledge of
a construction lien registered upon title to the Real Property, the Borrowers
will forthwith discharge, or cause to be discharged, such lien.
9.12 DEFEND TITLE. Each Loan Party shall warrant and defend its title to
the Real Property and ensure that each document relating to the Real Property to
which it is a party constitutes a legal, valid, and binding obligation
enforceable against it in accordance with its terms.
9.13 ERISA. Borrower will furnish to each of the Banks:
(a) promptly upon knowing or having reason to know of the
occurrence of any: (i) Termination Event; or (ii) "prohibited transaction,"
within the meaning of Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder, which in the
case of all such events described in clause (i) or (ii) results or could
reasonably be expected to result in a liability of a Borrower or any ERISA
Affiliates in the aggregate in excess of Five Hundred Thousand Dollars
($500,000), a written notice specifying the nature thereof, what action Borrower
or ERISA Affiliates have taken, are taking or propose to take with respect
thereto, and, when known, any action taken or threatened by the Internal Revenue
Service, Department of Labor, PBGC or Multiemployer Plan sponsor with respect
thereto; and
(b) if requested by Agent or any Bank, copies of: (i) all notices
received by a Borrower or ERISA Affiliates of PBGC's intent to terminate any
Title IV Plan or to have a trustee appointed to administer any Title IV Plan,
the notice of which event is required pursuant to the preceding paragraph (a);
(ii) upon the request of the Agent each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) filed by a Borrower or any of its ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan;
(iii) the most recent actuarial valuation report for each Title IV Plan; and
(iv) all notices received by a
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Borrower or any ERISA Affiliates from a Multiemployer Plan sponsor concerning
the imposition or amount of withdrawal liability pursuant to Section 4202 of
ERISA.
9.14 Intentionally omitted.
10. NEGATIVE COVENANTS
Borrower hereby covenants and agrees that so long as this Agreement is in
effect and until the Commitments are fully terminated and the Loans together
with interest, fees and all other obligations incurred hereunder or under the
Documents are paid in full, it will not and, it will not permit any Loan Party
to:
10.1 CHANGES IN BUSINESS. Materially alter the character of its primary
businesses from, or enter into businesses materially different from its business
as conducted as of the Closing Date except for such changes contemplated by the
PSI Consolidation Plan.
10.2 LIENS. Create, incur, assume or suffer to exist any Lien upon or
with respect to any of its property or assets, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets or
assign any right to receive income, or file or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute, except:
(a) to Agent on behalf of the Banks;
(b) Permitted Liens;
(c) Liens upon real or tangible personal property acquired by a
Loan Party provided that: (i) any such Lien either encumbers
such property prior to the acquisition thereof or is created
solely for the purpose of securing indebtedness incurred to
finance the acquisition thereof; (ii) the principal amount of
the indebtedness secured by such Lien does not exceed the fair
value of the property at the time such Lien was created; (iii)
such Lien does not extend to or cover any other property other
than the assets so acquired; and (iv) the incurrence of the
indebtedness secured by such Lien is permitted by Section
10.3(c) hereof;
(d) Liens upon the EDC Financing Collateral granted by Veltri to
the EDC as security for the EDC Financing;
(e) Liens granted to Designated Customers under the Access
Agreement.
10.3 INDEBTEDNESS. Contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) pursuant to this Agreement and the Documents;
(b) Indebtedness existing as of the Closing Date and listed on
Schedule 8.15 hereof;
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(c) Indebtedness (excluding indebtedness incurred under real
estate operating leases existing as of the date hereof and increases thereunder)
incurred after the Closing Date to finance the cost of its acquisitions and
capital leases of personal tangible property (together with indebtedness and/or
liabilities under new real estate operating lease(s))not to exceed Two Hundred
Fifty Thousand Dollars ($250,000) for an annual period;
(d) trade indebtedness incurred and paid in the ordinary course of
business;
(e) the Affiliate Loans;
(f) the EDC Financing and EDC Indemnifications to the extent that
the obligations thereunder (i) do not exceed Twenty Six Million Dollars
($26,000,000) and (ii) when added to the Tooling Loans, do not exceed the
Tooling Maximum;
(g) the Indebtedness under the Senior Subordinated Debt Documents;
(h) obligations under Hedging Agreements.
10.4 FINANCIAL COVENANTS. Permit:
(a) the Interest Coverage Ratio to be less than:
(i) as of the end of the second quarter of Borrowers' 2001
fiscal year: 1.25:1;
(ii) as of the end of the third quarter of Borrowers' 2001
fiscal year: 2.0:1;
(iii) as of the end of the fourth quarter of Borrowers' 2001
fiscal year: 2.25:1;
(iv) as of the end of the first quarter of Borrowers' 2002
fiscal year: 3.00:1;
(v) as of the end of the second quarter of Borrowers' 2002
fiscal year: 1.5:1;
(vi) as of the end of the third quarter of Borrowers' 2002
fiscal year: 1.2:1; and
(vii) as of the end of the fourth quarter of Borrowers' 2002
fiscal year: 1.30:1.
(b) the Leverage Ratio to be greater than:
(i) as of the end of the fourth quarter of Borrowers' 2001
fiscal year: 5.0:1;
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(ii) as of the end of the first quarter of Borrowers' 2002
fiscal year: 4.0:1;
(iii) as of the end of any fiscal quarter thereafter: 3.0:1.
(c) EBITDA, to be less than:
(i) for the first quarter of Borrowers' 2001 fiscal year:
$124,271;
(ii) for the second quarter of Borrowers' 2001 fiscal year:
$3,216,733;
(iii) for the third quarter of Borrowers' 2001 fiscal year:
$5,618,109;
(iv) for the fourth quarter of Borrowers' 2001 fiscal year:
$6,485,151;
(v) for the first quarter of Borrowers' 2002 fiscal year:
$7,853,906;
(vi) for the second quarter of Borrowers' 2002 fiscal year:
$7,715,528;
(vii) for the third quarter of Borrowers' 2002 fiscal year:
$7,134,308;
(viii) for the fourth quarter of Borrowers' 2002 fiscal year:
$8,100,408.
(d) EBITDA, on a cumulative basis from December 1, 2000 to the end
of each of the following months, to be less than the amount set forth opposite
each such month:
(i) December, 2000: -$773,973;
(ii) January, 2001: -$1,188,041;
(iii) February, 2001: -$1,721,407;
(iv) March, 2001: -$649,802;
(v) April, 2001: $10,253;
(vi) May, 2001: $1,030,153;
(vii) June, 2001: $2,566,931;
(viii) July, 2001: $2,972,408;
(ix) August, 2001: $5,211,028;
(x) September, 2001: $8,185,040;
(xi) October, 2001: $10,479,220;
(xii) November, 2001: $12,684,710; and
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(xiii) December, 2001: $14,670,192.
10.5 DIVIDENDS. Declare or pay any dividend (other than dividends payable
solely in shares of its capital stock) on, or make any other distribution with
respect to (whether by reduction of capital or otherwise) any shares of its
capital stock, other than so long as TAG is taxed as an S Corporation, dividends
declared by TAG for the purpose of funding (and in such amounts as are necessary
for the funding of) the payment of income taxes incurred by shareholders of TAG
as a result of TAG's election to be taxed as an S Corporation; provided however,
(x) that dividends and distributions otherwise permitted hereunder may only be
declared and/or paid if, upon giving effect to such declaration and/or payment,
no Default or Event of Default shall exist, and (y) for the purpose of
determining the amount of dividends allowable, it shall be assumed that income
recognized by the shareholders of TAG as a result of TAG's election to be taxed
as an S corporation is subject to Federal and State of Michigan income tax at
the highest marginal rates in effect for individuals.
10.6 STOCK ACQUISITION. Purchase, redeem, retire or otherwise acquire any
of the shares of its capital stock, or make any commitment to do so other than
redemptions of TAG stock in accordance with the terms of the Equity Ownership
Plan to the extent that, upon giving effect thereto, no Default or Event of
Default shall exist.
10.7 EXTENSION OF CREDIT. Make loans, advances or extensions of credit to
any Person, except for: (a) sales on open account in the ordinary course of
business; (b) Affiliate Loans; and (c) promissory notes issued to TAG pursuant
to the Equity Ownership Plan.
10.8 GUARANTEE OBLIGATIONS. Guarantee or otherwise be or become
responsible for obligations of any other Person, whether by agreement to
purchase the indebtedness of any other Person, agreement for the furnishing of
funds, goods, supplies or services for the purpose of paying or discharging
indebtedness of any other person, or otherwise, except for:
(a) by endorsement of negotiable instruments in the ordinary
course of business for deposit or collection,
(b) the Guaranties,
(c) the EDC Indemnification, and
(d) TAG's guaranties of the lease obligations of Veltri under and
in connection with Veltri's existing equipment lease from ABN AMRO Canada and
Westcoast Capital Corporation and the real property lease for Veltri's Windsor,
Ontario location.
10.9 SUBORDINATE INDEBTEDNESS. Subordinate any indebtedness due to it
from a Person to indebtedness of other creditors of such Person.
10.10 PROPERTY TRANSFER, MERGER OR LEASE-BACK. (a) Sell, lease, transfer
or otherwise dispose of properties or assets except for (i) sales and transfers
of assets having an aggregate book value of no more than One Hundred Thousand
Dollars ($100,000)(1) during any calendar
- ----------
(1) Need to determine.
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year, (ii) sales and transfers among Loan Parties, (iii) sales of Inventory in
the ordinary course of business, (iv) sales of machinery and equipment which are
simultaneously replaced with machinery and equipment of at least equivalent
value or used to repay debt related thereto, (v) sales, for fair market values,
of machinery and equipment currently located at the facilities currently
operated by TAG's "Production Stamping" division and commonly referred to as the
"Oxford Plant", "New Baltimore Plant" and "Plant 5", and (vi) other sales and
dispositions of assets with aggregate book value not to exceed Five Million
Dollars ($5,000,000) the terms of which are approved in writing by the Agent and
the Banks; provided that the Net Proceeds of each such sale or other disposition
of property described in clauses (v) and (vi) above shall be applied toward a
mandatory reduction of Loans and Advances then outstanding and a permanent
reduction of the Revolving Loan Commitment in accordance with Section 4.5
hereof, and provided further that Borrowers acknowledge and agree that
notwithstanding anything to the contrary set forth above, any releases of
Collateral arising out of the sale or other disposition of property described in
clauses (v) and (vi) above, remain subject to the consent of all Banks in
accordance with Section 13.8(a) hereof and that the foregoing provisions of this
Section 10.10 do not constitute a consent to releases of interests in Collateral
in connection with the potential for sales, leases or dispositions described
above, (b) change its name, consolidate with or merge into any other
corporation, permit another corporation to merge into it, acquire all or
substantially all the properties or assets of any other person, enter into any
reorganization or recapitalization or reclassify its capital stock.
10.11 ACQUISITIONS. Purchase or hold beneficially any Stock or other
securities of, or make any investment or acquire any interest whatsoever in, any
other Person or acquire all or substantially all of the assets of any Person, or
of any operating or business unit of any person except for:
(a) investments in obligations issued by the Government of Canada
or the United States of America, or an instrumentality or agency of either such
country, maturing within 365 days of the date of acquisition of such obligation,
and guaranteed fully as to principal, premium, if any, and interest by the
Government of Canada or the United States of America;
(b) investments in certificates of deposits issued or acceptances
accepted by or guaranteed by any bank to which the Bank Act (Canada) applies or
by any company licensed to carry on the business of a trust company in one or
more provinces of Canada or by a bank or trust company organized under the laws
of the United States or any state thereof or the District of Columbia having
combined capital and surplus of not less than $100,000,000, maturing within 365
days of the date of purchase;
(c) investments in commercial paper given the highest rating by
two established national credit rating agencies in Canada or the United States
and maturing not more than 90 days from the date of acquisition thereof;
(d) existing investments in and loans and advances to Loan
Parties.
10.12 SALE OR DISCOUNT OF RECEIVABLES. Sell or discount, notes or accounts
receivables which exceed, in aggregate face value at any time, Five Hundred
Thousand Dollars ($500,000).
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10.13 OTHER AGREEMENTS. Agree to (a) any amendment or revision to the
Services Agreement, which would have the effect of increasing the amount or
accelerating the date for, any payments thereunder, or (b) any modification to
or termination of any obligation of a Designated Customer under any Access
Agreement or Customer Agreement or with respect to any Designated Eligible
Account or Designated Eligible Inventory, or (c) any modification to or
termination of any obligation or agreement under any Bond Settlement Document
once same have been entered into.
10.14 USE OF LOAN PROCEEDS. Use or permit use of the proceeds of Loans for
purposes other than those permitted under this Agreement and will not use or
permit the use of any such Loan proceeds in violation of Regulation U or G of
the Federal Reserve Board as now or hereafter in effect, or for any other
purpose which violates provisions of regulations of the Federal Reserve Board.
10.15 MANAGEMENT FEES AND DIVIDEND. Pay any management, consulting,
business services or similar fees (including any fees or other amounts payable
pursuant to the Services Agreement) or amounts to any Affiliate.
10.16 CAPITAL EXPENDITURES. Make, or contract or agree to make, capital
expenditures which would exceed:
(a) (i) during the 2001 fiscal year of Borrowers, Fourteen Million
Two Hundred Fifty Thousand Dollars ($14,250,000) in aggregate amount, or (ii)
during any quarter included in the 2001 fiscal year of Borrowers, Six Million
Dollars ($6,000,000); and
(b) (i) during the 2002 fiscal year of Borrowers, Eight Million
Dollars ($8,000,000) in aggregate amount, or (ii) during any quarter included in
the 2002 fiscal year of Borrowers, Three Million Dollars ($3,000,000).
10.17 EXCESS INVENTORY. Purchase, acquire or possess, at any time, "raw
materials" Inventory in excess of what is necessary to produce parts for
Designated Customers under then outstanding "releases" issued by such Designated
Customers in accordance with effective purchase orders.
11. DEFAULTS
11.1 FAILURE TO PAY MONIES DUE. If a Borrower shall fail to pay, when
due, (a) any principal, interest, or fee under any Note or this Agreement and
ten (10) days shall pass after the due date therefor without cure, or (b) any
Letter of Credit Obligation to be paid hereunder or under any Letter of Credit
Agreement in accordance with the terms hereof and thereof and ten (10) days
shall pass after the due date without cure.
11.2 MISREPRESENTATION. If any warranty or representation of any Loan
Party in connection with or contained in this Agreement or any other Document,
or if any financial data or other information now or hereafter furnished to the
Agent or the Banks by or on behalf of a Loan Party shall prove to be false or
misleading in any material respect and, in the case of any such circumstance
which is capable of being cured within a period of thirty (30) days, the
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continuation thereof for a period of thirty (30) days after the earlier of: (i)
Borrowers' actual knowledge thereof, or (ii) written notice by Bank to
Borrowers.
11.3 NONCOMPLIANCE WITH AGREEMENT. If any Loan Party shall fail to
perform any of its obligations and covenants under, or shall fail to comply with
any of the provisions of, this Agreement or any of the other Documents and, in
the case of any such circumstance which is capable of being cured within a
period of thirty (30) days, the continuation thereof for a period of thirty (30)
days after the earlier of: (i) Borrowers' actual knowledge thereof, or (ii)
written notice by Bank to Borrowers.
11.4 OTHER DEFAULTS. (i) If any Loan Party shall default in the due
payment of any of its indebtedness (other than the Indebtedness and the Senior
Subordinated Notes) which is in the aggregate in an amount greater than Five
Hundred Dollars ($500,000) or in the observance or performance of any term,
covenant or condition in any agreement or instrument evidencing, securing or
relating to such indebtedness, and such default shall not be waived and shall be
continued for a period sufficient to permit acceleration of the indebtedness; or
(ii) the Bond Settlement Documents have not been entered into (or are not
effective) and delivered to Agent on or before 45 days after the date hereof.
11.5 JUDGMENTS. If there shall be rendered against any Loan Parties one
or more judgments or decrees involving an aggregate liability of Five Hundred
Thousand Dollars ($500,000) or more, which has or have become non-appealable and
shall remain undischarged, unsatisfied by insurance and unstayed for more than
thirty (30) days, whether or not consecutive; or if a writ of attachment or
garnishment against the property of any Loan Party shall be issued and levied
and not released or appealed and bonded in a manner reasonably satisfactory to
the Agent.
11.6 BUSINESS SUSPENSION, BANKRUPTCY, ETC. If any Loan Party shall
voluntarily suspend transaction of its business, shall not pay its debts as they
mature or shall make a general assignment for the benefit of creditors; or
proceedings in bankruptcy, or for reorganization or liquidation of such Loan
Party, under the Bankruptcy Code or under any other state or federal law for the
relief of debtors shall be commenced by any Loan Party or shall be commenced
against any Loan Party and shall not be discharged within forty-five (45) days
of commencement; or a receiver, trustee or custodian shall be appointed for any
Loan Party or for any substantial portion of its properties or assets
involuntarily and shall not be terminated within forty-five (45) days of such
appointment.
11.7 CHANGE OF CONTROL. If any Change of Control occurs, whether by
reason of death, merger, consolidation or sale and such Change of Control
adversely impacts, in the sole judgment of the Banks, upon the ability of the
Borrowers to carry on business as theretofore conducted.
11.8 REPUDIATIONS, REVOCATIONS, ETC. (i) If there is any repudiation,
revocation or any attempt to repudiate or revoke any Document by any Loan Party,
or (ii) if any Designated Customer shall default in payment or performance of
any of its obligations under an Access Agreement or Customer Agreement and such
default continues for a period in excess of five (5) Business Days or if any
Designated Customer shall repudiate, revoke, modify or terminate, or
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attempt to repudiate, revoke, modify or terminate any Access Agreement or
Customer Agreement, or any of its obligations thereunder or shall engage in any
resourcing as described in the Customer Agreements, or (iii) before the Bond
Settlement Documents have been entered into and are effective, if any holder of
a Senior Subordinated Notes takes any action to collect on the Senior
Subordinated Notes, including without limitation the acceleration thereof or the
commencement of any involuntary bankruptcy proceeding or other insolvency
proceeding, or (iv) once the Bond Settlement Documents have been entered into,
if any holder of Senior Subordinated Notes shall repudiate, revoke or attempt to
repudiate or revoke any obligation under a Bond Settlement Document or shall
breach any obligation owed by it under a Bond Settlement Document, or (v) once
the Bond Settlement Documents have been entered into, if, at any time there are
not Bond Settlement Documents in effect with respect to at least seventy six
percent (76%) of the face amount of Senior Subordinated Notes, or (vi) once the
Bond Settlement Documents have been entered into, if any holders or holder of
Senior Subordinated Notes who is not party to a Bond Settlement Document shall
institute any action or proceeding to collect amounts evidenced by the Senior
Subordinated Notes held by such holder or to otherwise enforce Borrower's
obligations with respect to Senior Subordinated Debt Documents.
11.9 INADEQUATE FUNDING OR TERMINATION OF EMPLOYEE BENEFIT PLAN(S). If a
Borrower or ERISA Affiliate shall fail to meet its minimum funding requirements
under ERISA with respect to any Pension Plan or if any Termination Event occurs
with respect to any such Pension Plan and such event continues for thirty (30)
days and there shall result therefrom a liability which is likely to have a
Material Adverse Effect.
11.10 OCCURRENCE OF CERTAIN REPORTABLE EVENTS. If there shall occur, with
respect to any Pension Plan maintained by a Borrower or any ERISA Affiliate, any
reportable event (within the meaning of Section 4043(b) of ERISA) which
constitutes a ground for the termination of any such plan, and such event
continues for thirty (30) days, provided that termination of such plan or
appointment of such trustee would have a Material Adverse Effect.
11.11 EXERCISE OF REMEDIES. If an Event of Default has occurred and is
continuing hereunder:
(a) Agent may, and upon the written direction of the Majority
Banks, Agent shall, terminate Banks' commitments to make Advances and Agent's
commitment to issue Letters of Credit;
(b) Agent may and upon the written direction of the Majority
Banks, Agent shall: (i) declare the entire unpaid balance of the indebtedness
hereunder, including the Notes, immediately due and payable, without
presentment, notice or demand, all of which are hereby expressly waived by
Borrower, and/or (ii) require the payment by Borrowers into a restricted demand
deposit account with Agent of an amount equal to the undrawn face amount of any
outstanding Letters of Credit; and
(c) immediately and automatically upon the occurrence of any Event
of Default specified in Subsection 11.6 above, and notwithstanding the lack of
any declaration by Agent under preceding clause (b), the entire unpaid principal
of the Loans and other indebtedness hereunder, including the Notes, shall become
automatically due and payable;
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(d) Agent may, and upon the written direction of the Majority
Banks, Agent shall, on behalf of all Banks, exercise any remedy permitted by
this Agreement, the other Documents or law.
11.12 WAIVER OF DEFAULTS. No Event of Default shall be waived by the Banks
except in a writing made in accordance with Section 13.8 hereof. No single or
partial exercise of any right, power or privilege hereunder, nor any delay in
the exercise thereof, shall preclude other or further exercise of Agent's rights
or of Banks' rights by Agent. No waiver of any Event of Default shall extend to
any other or future Event of Default. No forbearance on the part of the Agent in
enforcing Agent's or any of Banks' rights shall constitute a waiver of any of
their respective rights. Borrowers expressly agree that this Section may not be
waived or modified by Banks or Agent by course of performance, estoppel or
otherwise.
12. AGENT
12.1 APPOINTMENT OF AGENT. Each Bank appoints and authorizes Agent to act
on behalf of such Bank or holder under the Documents and to exercise the
respective powers hereunder and thereunder as are specifically delegated to or
required of them by the terms hereof and thereof, together with such powers as
may be reasonably incidental thereto, including, the power to execute financing
or similar statements or notices and other documents. Each Bank agrees (which
agreement shall survive any termination of this Agreement) to reimburse Agent
(to the extent Agent is not reimbursed by Borrowers), for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees) incurred by
Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Loan Parties under this Agreement or the Documents
or any other instrument executed pursuant hereto, pro rata according to such
Bank's Percentage of the Loans. Agent shall not be required to take any action
under the Documents, or to prosecute or defend any suit in respect of the
Documents, unless indemnified to its satisfaction by the Banks against loss,
costs, liability and expense. If any indemnity furnished pursuant hereto shall
become impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given.
12.2 DEPOSIT ACCOUNT WITH AGENT. Borrowers hereby authorize Agent to
charge its general deposit account, if any, maintained with Agent for the amount
of any principal, interest or other payment due under this Agreement, the Notes,
any Letter of Credit Agreement or other Document when the same becomes due and
payable under the terms of this Agreement, the Notes, and Letter of Credit
Agreement or the other Documents.
12.3 EXCULPATORY PROVISIONS. Agent agrees to exercise its rights and
powers, and to perform its duties as Agent hereunder and under the Documents in
accordance with its usual customs and practices in bank-agency transactions, but
only upon and subject to the express terms and conditions of this Section 12.3
(and no implied covenants or other obligations shall be read into this Agreement
against the Agent). Agent shall not be liable to any Bank for any action taken
or omitted to be taken by it under this Agreement or any document executed
pursuant hereto, or in connection herewith or therewith, except for its own
willful misconduct or gross negligence, nor be responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any document executed pursuant
hereto, or any security thereunder, nor to make any inquiry respecting the
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performance by Borrowers of obligations hereunder or thereunder, and each of
them shall be entitled to rely upon advice of counsel concerning legal matters
and upon any notice, consent, certificate, statement or writing which is
believes to be genuine and to have been presented by a proper person.
12.4 SUCCESSOR AGENTS. Agent may resign as such at any time upon at least
thirty (30) days prior notice to Borrowers and all Banks. If Agent at any time
shall resign, Majority Banks may appoint a successor Agent which shall thereupon
become Agent hereunder and shall be entitled to receive from the prior Agent
such documents of transfer and assignment as such successor Agent may reasonably
request.
12.5 RIGHT OF AGENT AS BANK. Agent, in its capacity as a Bank, shall have
the same rights and powers with respect to the credit extended by it, and the
Notes held by it, and with respect to participation interests in Letters of
Credit issued and Letter of Credit Agreements entered pursuant hereto, as any
Bank, and may exercise the same as if it were not Agent, or the issuer of
Letters of Credit, and the term "Bank" and, when appropriate, "holder" shall
include Agent its individual capacity.
12.6 CREDIT DECISIONS. Each Bank acknowledges that it has and shall,
independently of Agent and each other Bank and based on the financial statements
of Loan Parties and such other documents, information and investigations as it
has deemed appropriate, made its own credit decision to extend credit hereunder
from time to time. Each Bank also acknowledges that it will, independently of
Agent and each other Bank and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any document
executed pursuant hereto.
12.7 NOTICES BY AGENT. Agent shall give prompt notice to each Bank of
each notice or request required or permitted to be given to Agent by Borrower
pursuant to the terms of this Agreement and of any litigation commenced by or
against Agent with respect to this Agreement.
12.8 AGENT'S FEES. The Borrowers shall pay to Agent the Agent's Fees at
the times and in the amount set forth (or to be set forth from time to time) in
a letter agreement between Agent and Borrowers. The Agent's Fees described in
this Section are not refundable under any circumstances.
12.9 NATURE OF AGENCY. The appointment of Agent as agent is for the
convenience of Banks and the Borrowers in making Advances of the Loans, issuing
Letters of Credit, collecting fees and principal and interest on the Loans and
dealing with Borrower. No Bank is purchasing the Loans from Agent and this
Agreement is not intended to be a purchase or participation agreement.
12.10 ACTIONS; CONFIRMATION OF AGENT'S AUTHORITY TO ACT IN EVENT OF
DEFAULT. Subject to Section 13.8 hereof, Agent is hereby expressly authorized to
act in all litigation and in all other respects as the representative of Banks
where Agent considers it to be necessary or desirable in order to carry out the
purposes of this Agreement or any of the Documents. In conducting such
litigation hereunder on behalf of Banks, Agent shall at all times be indemnified
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by Banks as provided in Section 12.1 hereof. Agent shall undertake to give each
Bank prompt notice of any litigation commenced against Agent and/or Banks with
respect to this Agreement the Documents or any matter referred to herein or
therein.
12.11 AUTHORITY OF AGENT TO ENFORCE NOTES AND THIS AGREEMENT. Each Bank,
subject to the terms and conditions of this Agreement, authorizes the Agent with
full power and authority as attorney-in-fact to institute and maintain actions,
suits or proceedings for the collection and enforcement of the Notes, this
Agreement and the Documents (or any of them) and to file such proofs of claim or
other documents as may be necessary to have the claims of the Banks allowed in
any proceeding relative to the Borrowers or its creditors or affecting its
properties, and to take such other actions which Agent considers to be necessary
or desirable for the protection, collection and enforcement of the Notes, this
Agreement or the Documents (or any of them). The Banks hereby agree to indemnify
Agent for any and all actions taken by Agent at the direction of the Majority
Banks.
13. MISCELLANEOUS
13.1 LAW OF MICHIGAN; SUBMISSION TO JURISDICTION. This Agreement, the
Notes and Documents have been delivered at Detroit, Michigan, and shall be
governed by and construed and enforced in accordance with the laws of the State
of Michigan except in the case of certain of the Documents executed by Loan
Parties organized in Canada, which Documents expressly state that they are to be
governed by the laws of Ontario, Canada. Whenever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
Any legal action or proceeding with respect to this Agreement or any other
Document may be brought in the courts of the State of Michigan or of the United
States District Court for the Eastern District of Michigan, or in the courts of
the Province of Ontario, and, by execution and delivery of this Agreement, each
party hereto hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts. Borrowers further irrevocably consent to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to its address for notices pursuant to Section 13.3 hereof, such
service to become effective three (3) Business Days after such mailing. Nothing
herein shall affect the rights of the Agent or any Bank to serve process in any
other manner permitted by law.
Borrowers hereby irrevocably waive any objection which they may now or
hereafter have to the laying of venue of any proceedings arising out of or in
connection with this Agreement or any Document brought in the courts referred to
above and hereby further irrevocably waive and agree not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
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13.2 AGENT'S COSTS AND EXPENSES. Borrowers shall pay all costs and
expenses, including, by way of description and not limitation, reasonable
attorney fees and out-of-pocket expenses and lien and title search fees incurred
by Agent in connection with the commitment, consummation, and closing of the
loans contemplated hereby and in the exercise and enforcement of its rights and
prerogatives hereunder and under the Documents. All costs, including attorney
fees, incurred by Agent in revising, protecting, exercising or enforcing any of
its rights hereunder and under the Documents, or otherwise incurred by Agent in
connection with an Event of Default or incurred by Agent or any of the Banks in
connection with the enforcement hereof, including by way of description and not
limitation, such charges in any court or bankruptcy proceedings or arising out
of any claim or action by any person against Agent or any Bank which would not
have been asserted were it not for Agent's or such Bank's relationship with
Borrower hereunder or under the Documents, shall also be paid by Borrowers.
13.3 NOTICES. Except as otherwise provided herein, all notices hereunder
shall be sufficient if made in writing and delivered to the mailing and delivery
address of the respective parties indicated on the signature pages to this
Agreement, or transmitted to the facsimile or telex numbers set forth on their
respective signature pages to this Agreement. All such notices shall be deemed
received (i) two (2) Business Days after deposit thereof in the mails, if given
by mail, (ii) one (1) Business Day after deposit with express courier service,
or (iii) if by facsimile or telex transmission, the Business Day of transmission
if transmitted during customary business hours of the addressee and, if not
transmitted during such business hours, the following Business Day, provided,
however, that notices to the Agent shall not be effective until actual receipt
thereof.
13.4 FURTHER ACTION. Borrowers, 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 be required to carry out
the intent and purpose of this Agreement and the Documents, and to provide for
Loans under and payment of the Notes, according to the intent and purpose herein
and therein expressed.
13.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of Borrowers, Agent and Banks and their respective
successors and assigns, provided that the foregoing shall not authorize any
assignment by Borrowers of any rights or duties hereunder. Any Bank may sell,
assign, grant participations in, or otherwise transfer to any other Person all
or part of the interests of such Bank under this Agreement and the Notes and the
Documents (including its participation interests in Letters of Credit), and
Loans made and to be made by such Bank, subject to the following terms and
conditions:
(a) ASSIGNMENTS. Each Bank, with the written consent of the Agent
(which consent shall not be unreasonably withheld) may assign all or a portion
of its Loans, Notes and other interests and obligations under this Agreement and
the Documents pursuant to an Assignment Agreement to another Bank or (with the
consent of TAG which consent shall not unreasonably be withheld, provided that
no such consent shall be required in connection with any assignment made during
any period when an Event of Default is existing) to other commercial banks or
financial institutions, provided that the aggregate amount of the
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Commitments and Loans so assigned, and the portion thereof retained by such
assigning Bank (if any), shall in each case be not less than Five Million
Dollars ($5,000,000) after giving effect to such assignment. Any such assignment
will become effective five (5) Business Days after the Agent's receipt of a copy
of the Assignment Agreement executed by the assigning Bank and the assignee
Bank, payment to Agent of a processing and recordation fee in the amount of
Three Thousand Five Hundred Dollars ($3,500) for Agent's sole account, and
delivery to Agent (in escrow, pending issuance of Notes pursuant to the
following sentence) of the assigning Bank's then effective Note. On or before
such effective date (x) Agent shall provide TAG with written notice of such
assignment, (y) Borrowers shall execute and deliver to Agent new Notes made
payable to the assignee and assignor, and (z) Agent shall prepare and deliver to
Borrowers and the Banks a new Exhibit "E" to this Agreement (which new Exhibit
"E" shall automatically and without further action or consent be deemed to amend
and restate the prior Exhibit "E") setting forth the Percentages in effect as a
result of such assignment, whereupon the assignee will become a "Bank" for all
purposes of this Agreement and the other Documents, to the extent of such
assignment.
(b) PARTICIPATIONS. Each Bank may transfer or grant participating
interests in its Loans, Notes and other interests and obligations hereunder to
any Person ("Participants") provided that, as between such transferring Bank and
its Participant, such Bank shall retain all of its power, authority and
discretion to grant or participate in the granting of any waiver, consent or
other approval hereunder and to participate in the approval of any amendment to
this Agreement, such Bank's Notes, the Documents or any other instrument or
agreement delivered hereunder or in connection herewith, except that such Bank
may agree with any Participant that during the existence of the Participant's
interest, such Bank will not, without consent of such Participant, agree to any
amendment, modification, waiver, release or consent which pursuant to the terms
hereof, requires the consent of all Banks. All amounts payable by Borrower
hereunder shall be determined as if the Bank had not sold such participation.
13.6 INDULGENCE. No delay or failure of Agent and 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 further exercise
thereof, nor the exercise of any other right, power or privilege. The rights of
Agent and Banks hereunder are cumulative and are not exclusive of any rights or
remedies which Agent and Banks would otherwise have.
13.7 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.
13.8 ENTIRE AGREEMENT; AMENDMENTS; WAIVERS; CONSENTS. This Agreement, the
Notes, the Letter of Credit Agreements and Letters of Credit, the Documents, and
any agreements, certificates, or other documents given pursuant to the
foregoing, contain and will contain the entire agreement of the parties hereto,
and none of the parties shall be bound by anything not expressed in writing,
except that Borrowers shall be bound by telephonic requests for Loans made
hereunder. No amendment or waiver of any provision of this Agreement or any
Document, nor consent to any departure by Borrowers therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Agent
and the Majority Banks and then
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such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall:
(a) unless in writing and signed by all Banks;
(i) postpone a Maturity Date or any other date fixed for any
payment of principal of, or interest on, any Loans,
Letter of Credit Obligation or any fees payable
hereunder;
(ii) reduce the principal of, or interest on, any Note or any
Letter of Credit Obligation or any fees or other amounts
payable hereunder;
(iii) subject Banks to any additional obligations, increase
the aggregate amount of principal indebtedness which may
be incurred under the Notes, or (except as specifically
set forth in Section 13.5(a) hereof) change the
Percentages;
(iv) release any Collateral for any of Borrowers' obligations
and indebtedness to Agent and the Bank;
(v) change this Section 13.8;
(vi) change the definition of "Majority Banks" or otherwise
change the Percentage required to take or authorize any
action hereunder; and
(b) unless in writing and signed by the Agent in
addition to all Banks, affect the rights or duties of
the Agent under this Agreement or any Document.
13.9 CONFIDENTIALITY. Each Bank agrees that all documentation and other
information made available by Borrower to such Bank under the terms of this
Agreement shall (except to the extent required by regulatory authority or legal
or governmental process or otherwise by governmental authority or law, or if
such documentation and other information is publicly available or hereafter
becomes publicly available other than by action of such Bank, or was theretofore
known or hereafter becomes known to such Bank independent of any disclosure
thereto by a Borrower) be held in the strictest confidence by such Bank and used
solely in administration and enforcement of Loans from time to time outstanding
from such Bank to Borrowers and in the prosecution or defense of legal
proceedings arising in connection herewith; provided that: (i) such Bank may
disclose such documentation and information to the Agent and/or to any other
Bank which is a party to this Agreement; and (ii) such Bank may disclose such
documentation and other information to any other bank or other Person to which
such Bank sells or proposes to sell a participation in its Loans hereunder if
such other bank or Person, prior to such disclosure, agrees for the benefit of
Borrower to comply with the provisions of this Section 13.9.
13.10 INTEREST. It is the intention of the parties hereto that each Bank
and the Agent shall conform to usury laws applicable to them, if any.
Accordingly, if the transactions with any Bank or Agent contemplated hereby
would be usurious under such applicable laws, then,
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notwithstanding anything to the contrary in the Notes or Documents payable to
Agent or such Bank, this Agreement or any other agreement entered into in
connection with or as security for or guaranteeing this Agreement or the
Indebtedness, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received by Agent or such Bank under the Notes payable to
Agent or such Bank, this Agreement, the Documents or under any other agreement
entered into in connection with or as security for or guaranteeing this
Agreement or such Notes or Documents shall under no circumstances exceed the
Highest Lawful Rate and any excess shall be credited automatically, if
theretofore paid, on the principal amount of Loans owed to such Agent or Bank
or, if it has no Loans outstanding, shall be refunded to Borrower by such Bank,
(ii) in the event that the maturity of any such Note or other Indebtedness
hereunder is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to such Bank may never include more than the Highest Lawful Rate and
excess interest, if any, to Agent or such Bank shall be canceled automatically
as of the date of such acceleration or prepayment and, if theretofore paid,
shall be credited by Agent or such Bank (as applicable) on the principal amount
of the Indebtedness owed to Agent or such Bank (as applicable) by the Borrower
or, if no such Indebtedness is then outstanding, shall be refunded to the
Borrower. Without limiting the foregoing, in no event shall the aggregate
"interest" (as defined in Section 347 of the Criminal Code (Canada), as the same
may be amended, replaced or enacted from time to time) payable under this
Agreement exceed the maximum amount of interest on the "credit advanced" (as
defined in that section under this Agreement lawfully permitted under that
section).
13.11 JURY WAIVER. Each of the parties to this agreement hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the Documents or the
transactions contemplated hereby or thereby.
13.12 CONFLICTS. In the event of direct conflict between the provision of
this Agreement and any term of any Security Document, the relevant term of this
Agreement shall control.
13.13 EFFECTIVE UPON EXECUTION. This amendment to and restatement of the
Prior Agreement shall become effective upon the later of the execution hereof by
the Majority Banks, Agent and Borrowers and the Closing Date (and the execution
and delivery, as appropriate, to Agent of all of the documents, instruments and
agreements indicated on the Closing Checklist) and shall remain effective until
all Loans and obligations hereunder have been repaid and discharged in full and
no commitment to fund any Loan hereunder remains outstanding. Upon the effective
date hereof, this Amendment shall constitute the waiver by the Agent and
Majority Banks of the requirements of Section 10.4 of the Agreement (as it was
in effect prior to the date of this Amendment) for the second, third and fourth
fiscal quarters of Borrowers' 2000 fiscal year, and of any Defaults or Events of
Default which may have existed as a consequence of Borrower's failure to comply
with such requirements as of such dates.
13.14 COLLATERAL VALUATIONS. Borrowers agree to permit Agent and its
designees to conduct such fair market value appraisals, inspections, surveys
and/or testing, whether for environmental contamination or otherwise, that Agent
deems necessary, on any and all real property upon which Agent may possess a
mortgage or other lien securing the Loans, and the
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cost of such appraisals, inspections, surveys and testing are part of the costs
and expenses for which Borrowers must reimburse Agent upon demand.
13.15 WAIVER OF CLAIMS. EACH BORROWER, IN EVERY CAPACITY, INCLUDING, BUT
NOT LIMITED TO, AS A SHAREHOLDER, PARTNER, OFFICER, DIRECTOR, INVESTOR AND/OR
CREDITOR OF BORROWER, OR ANY ONE OR MORE OF THEM, HEREBY WAIVES, DISCHARGES AND
FOREVER RELEASES AGENT AND EACH BANK, AND THEIR RESPECTIVE EMPLOYEES, OFFICERS,
DIRECTORS, ATTORNEYS, STOCKHOLDERS AND SUCCESSORS AND ASSIGNS, FROM AND OF ANY
AND ALL CLAIMS, CAUSES OF ACTION, DEFENSES, COUNTERCLAIMS OR OFFSETS AND/OR
ALLEGATIONS EACH OR BOTH MAY HAVE OR MAY HAVE MADE OR WHICH ARE BASED ON FACTS
OR CIRCUMSTANCES ARISING AT ANY TIME UP THROUGH AND INCLUDING THE DATE OF THIS
AGREEMENT, WHETHER KNOWN OR UNKNOWN, AGAINST ANY OR ALL OF AGENT, ANY BANK OR
BANKS, AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS,
STOCKHOLDERS AND SUCCESSORS AND ASSIGNS.
13.16 WRITTEN MODIFICATIONS. Agent and Banks anticipate that discussions
addressing the Loans may take place in the future. During the course of such
discussions, Agent, Banks and Borrowers, may touch upon and possibly reach a
preliminary understanding on one or more issues prior to concluding
negotiations. Notwithstanding this fact and absent an express written waiver by
Agent and Majority Banks (or to the extent required pursuant to Section 13.8 of
this Agreement, all of the Banks), Agent will not be bound by an agreement on
any individual issues unless and until an agreement is reached on all issues and
such agreement is reduced to writing and signed by Borrower, Agent and Majority
Banks (or to the extent required pursuant to Section 13.8 of this Agreement, all
of the Banks).
13.17 ADDITIONAL DOCUMENTATION. Each Borrower agrees to execute any and
all additional or supplemental documentation, and provide such further
assistance and assurances as Agent may require, in Agent's sole and absolute
discretion, to give full effect of the terms, conditions and intentions of this
Agreement.
[signatures on the following pages]
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WITNESS the due execution hereof as of the day and year first above
written.
TALON AUTOMOTIVE GROUP INC.
By: /s/ David J. Woodward
--------------------------------------
Its: Vice President
-------------------------------------
900 Wilshire, Suite 203
Troy, Michigan 48084
Attn: David J. Woodward
Telephone No. (248) 362-7600
Facsimile No. (248) 362-7612
VELTRI METAL PRODUCTS CO.
By: /s/ David J. Woodward
--------------------------------------
Its: Vice President
-------------------------------------
900 Wilshire, Suite 203
Troy, Michigan 48084
Attn: David J. Woodward
Telephone No. (248) 362-7600
Facsimile No. (248) 362-7612
COMERICA BANK, as Agent and Bank
By:
--------------------------------------
Its:
-------------------------------------
500 Woodward Avenue
Detroit, MI 48226-3241
Attn:
------------------------------------
Telephone No. (313) 222-0242
Facsimile No. (313) 222-5759
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VELTRI METAL PRODUCTS CO.
By:
--------------------------------------
Its:
-------------------------------------
900 Wilshire, Suite 203
Troy, Michigan 48084
Attn: David J. Woodward
Telephone No. (248) 362-7600
Facsimile No. (248) 362-7612
COMERICA BANK, as Agent and Bank
By: /s/ Russell A. Stokes
--------------------------------------
Its: Vice President
-------------------------------------
500 Woodward Avenue
Detroit, MI 48226-3241
Attn:
------------------------------------
Telephone No. (313) 222-0242
Facsimile No. (313) 222-5759
NATIONAL BANK OF CANADA, NEW YORK BRANCH
By:
--------------------------------------
Its:
-------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
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NATIONAL BANK OF CANADA, NEW YORK BRANCH
By: /s/ Duane K. Bedard
--------------------------------------
Its: Vice President/Manager
-------------------------------------
By: /s/ Kevin Finn
--------------------------------------
Its: Vice President
-------------------------------------
Telephone No. 248/354-4800
---------------------------
Facsimile No. 248/354-1768
---------------------------
PARIBAS
By:
--------------------------------------
Its:
-------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
MICHIGAN NATIONAL BANK
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
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NATIONAL BANK OF CANADA, NEW YORK BRANCH
By:
--------------------------------------
Its:
-------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
BNP PARIBAS
By: /s/ NICHOLAS C. MAST
--------------------------------------
Its: Managing Director
-------------------------------------
By: /s/ Brian Hewett
--------------------------------------
Its: Director
-------------------------------------
Telephone No. 312 853 6034
---------------------------
Facsimile No. 312 853 6020
---------------------------
MICHIGAN NATIONAL BANK
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
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NATIONAL BANK OF CANADA, NEW YORK BRANCH
By:
--------------------------------------
Its:
-------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
PARIBAS
By:
--------------------------------------
Its:
-------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
MICHIGAN NATIONAL BANK
By: /s/ Frederick W. Puleo
--------------------------------------
Its: Vice President
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
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FLEET BANK
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
DRESDNER BANK AG NEW YORK AND GRAND CAYMEN
BRANCHES
Michael Petix
/s/ By: /s/ James M. Gallagher
--------------------------------------
Vice President Its: First Vice President
-------------------------------------
Telephone No. 212-429-2294
312-444-1313 ---------------------------
312-444-1192 Facsimile No. 212-429-3009
---------------------------
LASALLE BANK NATIONAL ASSOCIATION
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
Each of the undersigned hereby acknowledges and agrees to the foregoing
amendment and restatement of the Prior Agreement.
VS HOLDINGS, INC.
By:
---------------------------
Its:
--------------------------
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FLEET BANK
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
DRESDNER BANK AG NEW YORK AND GRAND CAYMEN
BRANCHES
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ James Thompson
--------------------------------------
Its: Group Senior Vice President
-------------------------------------
Telephone No. 312-904-8092
---------------------------
Facsimile No. 312-904-8169
---------------------------
Each of the undersigned hereby acknowledges and agrees to the foregoing
amendment and restatement of the Prior Agreement.
VS HOLDINGS, INC.
By:
---------------------------
Its:
--------------------------
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FLEET BANK
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
DRESDNER BANK AG NEW YORK AND GRAND CAYMEN
BRANCHES
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
LASALLE BANK NATIONAL ASSOCIATION
By:
--------------------------------------
Its:
-------------------------------------
Telephone No.
---------------------------
Facsimile No.
---------------------------
Each of the undersigned hereby acknowledges and agrees to the foregoing
amendment and restatement of the Prior Agreement.
VS HOLDINGS, INC.
By: /s/ David J. Woodward
---------------------------
Its: Vice President
--------------------------
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