EXHIBIT 10.1
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PLASTIPAK HOLDINGS, INC.
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF AUGUST 20, 2001
COMERICA BANK, AS LEAD ARRANGER
AND ADMINISTRATIVE AGENT
BANK ONE, MICHIGAN, AS SYNDICATIONS AGENT
STANDARD FEDERAL BANK, AS SYNDICATIONS AGENT
FLEET NATIONAL BANK, AS DOCUMENTATION AGENT
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TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................................................1
1.1 Certain Defined Terms...........................................................................1
2. REVOLVING CREDIT........................................................................................27
2.1 Commitment.....................................................................................27
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness.....................................28
2.3 Requests for and Refundings and Conversions of Advances........................................28
2.4 Disbursement of Advances.......................................................................31
2.5 Swing Line Advances............................................................................33
2.6 Prime-based Interest Payments..................................................................37
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest Payments.........................38
2.8 Interest Payments on Conversions...............................................................38
2.9 Interest on Default............................................................................38
2.10 Prepayment of Revolving Credit Advances........................................................38
2.11 Reserved.......................................................................................39
2.12 Prime-based Advance in Absence of Election or upon Default.....................................39
2.13 Revolving Credit Facility Fee..................................................................39
2.14 Mandatory Reduction of Indebtedness............................................................39
2.15 Mandatory Repayment of Revolving Advances; Mandatory Reduction of Revolving Credit Aggregate
Commitment.....................................................................................40
2.16 Optional Reduction or Termination of Revolving Credit Aggregate Commitment.....................41
2.17 Extension of Revolving Credit Maturity Date....................................................42
2.18 Application of Advances........................................................................43
3. LETTERS OF CREDIT.......................................................................................43
3.1 Letters of Credit..............................................................................43
3.2 Conditions to Issuance.........................................................................43
3.3 Notice.........................................................................................45
3.4 Letter of Credit Fees..........................................................................45
3.5 Other Fees.....................................................................................46
3.6 Draws and Demands for Payment Under Letters of Credit..........................................46
3.7 Obligations Irrevocable........................................................................48
3.8 Risk Under Letters of Credit...................................................................49
3.9 Indemnification................................................................................50
3.10 Right of Reimbursement.........................................................................51
3.11 Existing Letters of Credit.....................................................................51
4. MARGIN ADJUSTMENTS......................................................................................52
4.1 Margin Adjustments.............................................................................52
Table of Contents
(Continued)
5. CONDITIONS..............................................................................................52
5.1 Execution of Notes and this Agreement..........................................................52
5.2 Corporate Authority............................................................................52
5.3 Collateral Documents...........................................................................53
5.4 Senior Debt....................................................................................54
5.5 Insurance......................................................................................54
5.6 Compliance with Certain Documents and Agreements...............................................54
5.7 Opinion of Counsel.............................................................................54
5.8 Borrowers' Certificate.........................................................................54
5.9 Payment of Fees................................................................................54
5.10 Reserved. .....................................................................................55
5.11 ...............................................................................................55
Continuing Conditions............................................................................................55
Plastipak Brazil.................................................................................................55
6. REPRESENTATIONS AND WARRANTIES..........................................................................55
6.1 Corporate Authority............................................................................55
6.2 Due Authorization - Borrowers..................................................................56
6.3 Due Authorization - Guarantors.................................................................56
6.4 Liens..........................................................................................56
6.5 Taxes..........................................................................................56
6.6 No Defaults....................................................................................56
6.7 Enforceability of Agreement and Loan Documents -- Borrowers....................................57
6.8 Enforceability of Loan Documents -- Guarantors.................................................57
6.9 Compliance with Laws...........................................................................57
6.10 Non-contravention -- Borrowers.................................................................57
6.11 Non-contravention -- Guarantors................................................................57
6.12 No Litigation..................................................................................58
6.13 Consents, Approvals and Filings, Etc...........................................................58
6.14 Agreements Affecting Financial Condition.......................................................58
6.15 No Investment Company or Margin Stock..........................................................58
6.16 ERISA..........................................................................................59
6.17 Conditions Affecting Business or Properties....................................................59
6.18 Environmental and Safety Matters...............................................................59
6.19 Subsidiaries...................................................................................60
6.20 Accuracy of Information........................................................................60
6.21 Labor Relations................................................................................60
6.22 Solvency.......................................................................................60
6.23 Capitalization.................................................................................61
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Table of Contents
(Continued)
6.24 Completion of Environmental Tasks..............................................................61
Senior Unsecured Note Documents..................................................................................61
7. AFFIRMATIVE COVENANTS...................................................................................61
7.1 Financial Statements...........................................................................61
7.2 Certificates; Other Information................................................................62
7.3 Payment of Obligations.........................................................................62
7.4 Conduct of Business and Maintenance of Existence...............................................63
7.5 Maintenance of Property; Insurance.............................................................63
7.6 Inspection of Property; Books and Records, Discussions.........................................63
7.7 Notices........................................................................................64
7.8 Hazardous Material Laws........................................................................65
7.9 Debt Service Coverage Ratio....................................................................65
7.10 Senior Secured Debt Ratio......................................................................65
7.11 Leverage Ratio.................................................................................65
7.12 Consolidated Tangible Net Worth................................................................65
7.13 Taxes..........................................................................................66
7.14 Governmental and Other Approvals...............................................................66
7.15 Compliance with ERISA..........................................................................66
7.16 ERISA Notices..................................................................................66
7.17 Security.......................................................................................67
7.18 Defense of Collateral..........................................................................67
7.19 Use of Proceeds................................................................................67
7.20 Future Subsidiaries; Additional Collateral.....................................................67
7.21 Further Assurances.............................................................................68
7.22 Appraisals.....................................................................................68
7.23 Plastipak Brazil...............................................................................68
8. NEGATIVE COVENANTS......................................................................................68
8.1 Limitation on Debt.............................................................................68
8.2 Limitation on Liens............................................................................69
8.3 Limitation on Guarantee Obligations............................................................69
8.4 Acquisitions...................................................................................70
8.5 Limitation on Mergers, or Sale of Assets.......................................................70
8.6 Restricted Payments............................................................................70
8.7 Limitation on Investments, Loans and Advances..................................................71
8.8 Transactions with Affiliates...................................................................72
8.9 Sale and Leaseback.............................................................................72
8.10 Limitation on Negative Pledge Clauses..........................................................72
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Table of Contents
(Continued)
8.11 Prepayment of Debts............................................................................72
8.12 Amendment of Debt and Subordinated Debt Documents and Senior Unsecured
Debt Documents..............................................................................72
8.13 Modification of Certain Agreements.............................................................73
8.14 Limitation on Capital Expenditures.............................................................73
9. DEFAULTS................................................................................................73
9.1 Events of Default..............................................................................73
9.2 Exercise of Remedies...........................................................................75
9.3 Rights Cumulative..............................................................................75
9.4 Waiver by Borrowers of Certain Laws............................................................76
9.5 Waiver of Defaults.............................................................................76
9.6 Set Off........................................................................................76
10. PAYMENTS, RECOVERIES AND COLLECTIONS....................................................................76
10.1 Payment Procedure..............................................................................76
10.2 Application of Proceeds of Collateral..........................................................78
10.3 Pro-rata Recovery..............................................................................78
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS........................................................78
11.1 Reimbursement of Prepayment Costs..............................................................78
11.2 Eurocurrency Lending Office....................................................................79
11.3 Circumstances Affecting Eurocurrency-based Rate Availability...................................79
11.4 Laws Affecting Eurocurrency-based Advance Availability.........................................80
11.5 Increased Cost of Eurocurrency-based Advances..................................................80
11.6 Capital Adequacy and Other Increased Costs.....................................................81
11.7 Substitution of Lenders........................................................................82
11.8 Right of Lenders to Fund through Branches and Affiliates.......................................82
12. AGENT...................................................................................................83
12.1 Appointment of Agent...........................................................................83
12.2 Deposit Account with Agent.....................................................................83
12.3 Scope of Agent's Duties........................................................................83
12.4 Successor Agent................................................................................84
12.5 Agent in its Individual Capacity...............................................................84
12.6 Credit Decisions...............................................................................84
12.7 Authority of Agent to Enforce This Agreement...................................................85
12.8 Indemnification................................................................................85
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Table of Contents
(Continued)
12.9 Knowledge of Default...........................................................................86
12.10 Agent's Authorization; Action by Lenders.......................................................86
12.11 Enforcement Actions by the Agent...............................................................86
12.12 Collateral Matters.............................................................................86
12.13 No Duties Imposed on Documentation Agent or Syndications Agent.................................87
13. MISCELLANEOUS...........................................................................................87
13.1 Accounting Principles..........................................................................87
13.2 Consent to Jurisdiction........................................................................87
13.3 Law of Michigan................................................................................88
13.4 Interest.......................................................................................88
13.5 Closing Costs and Other Costs; Indemnification.................................................88
13.6 Notices........................................................................................90
13.7 Further Action.................................................................................90
13.8 Successors and Assigns; Participations; Assignments............................................90
13.9 Indulgence.....................................................................................93
13.10 Counterparts...................................................................................93
13.11 Amendment and Waiver...........................................................................93
13.12 Confidentiality................................................................................94
13.13 Withholding Taxes..............................................................................95
13.14 Taxes and Fees.................................................................................95
13.15 WAIVER OF JURY TRIAL...........................................................................95
13.16 Complete Agreement; Conflicts..................................................................96
13.17 Severability...................................................................................96
13.18 Table of Contents and Headings.................................................................96
13.19 Construction of Certain Provisions.............................................................96
13.20 Independence of Covenants......................................................................96
13.21 Reliance on and Survival of Various Provisions.................................................97
13.22 Complete Agreement; Amendment and Restatement..................................................97
13.23 Termination of Pledge Agreements...............................................................97
13.24 Young Parties...................................................................................97
13.25 Release of Real Estate Collateral...............................................................97
13.26 Plastipak Brazil................................................................................97
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Table of Contents
(Continued)
SCHEDULES
Schedule 1.1 Pricing Matrix
Schedule 1.2 Percentages and Allocations
Schedule 1.3 Existing Letters of Credit
Schedule 5.2 List of Jurisdictions in which Holdings and/or Subsidiaries do
business
Schedule 5.3(b) List of Jurisdictions in which to file financing statements
Schedule 6.9 Compliance with Laws
Schedule 6.12 Litigation
Schedule 6.16 Employee Pension Benefit Plans
Schedule 6.18 Environmental Matters
Schedule 6.19 Subsidiaries
Schedule 6.20 Contingent Obligations
Schedule 6.23 Capitalization
Schedule 8.1 Existing Funded Debt
Schedule 8.2 Permitted Liens
Schedule 8.3 Existing Guaranties
Schedule 8.7 Existing Investments
Schedule 13.6 Notices
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Table of Contents
(Continued)
EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF SWING LINE NOTE
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF NOTICE OF LETTERS OF CREDIT
F FORM OF SWING LINE LENDER PARTICIPATION CERTIFICATE
G FORM OF BORROWER ADDENDUM
H FORM OF ASSIGNMENT AGREEMENT
I FORM OF COVENANT COMPLIANCE REPORT
J FORM OF INTERCOMPANY NOTE
K FORM OF BORROWING BASE CERTIFICATE
L FORM OF YOUNG PLEDGE AGREEMENT
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FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This Fourth Amended and Restated Revolving Credit Agreement
("Agreement") is made as of the 20th day of August, 2001, by and among the
financial institutions from time to time signatory hereto (individually a
"Lender," and any and all such financial institutions collectively the
"Lenders"), Comerica Bank, as administrative agent for the Lenders (in such
capacity, "Agent"), Plastipak Holdings, Inc., a Michigan corporation
("Holdings"), Plastipak Packaging, Inc., a Delaware corporation ("Packaging"),
and the other Borrowers (as defined below) from time to time signatory hereto.
RECITALS:
A. Holdings and Packaging have requested that the Lenders extend to
them credit and letters of credit as previously extended by Comerica Bank, Key
Corporate Capital Inc. and Bank One, Michigan, under the Revolving Credit
Agreement dated August 31, 1982, as amended and restated pursuant to the Amended
and Restated Credit Agreement dated January 19, 1993, as amended, and as further
amended and restated pursuant to the Second Amended and Restated Credit
Agreement dated as of September 1, 1994, by and between Packaging and such
banks, and as further amended and restated pursuant to the Third Amended and
Restated Revolving Credit Agreement dated as of December 22, 1999, as amended,
by and between Holdings, Packaging, the other Borrowers party thereto, the
Lenders party thereto and Agent (as amended, the "Prior Credit Agreement") on
the terms and conditions set forth herein.
B. The Lenders are prepared to extend such credit as aforesaid, but
only upon the terms and conditions set forth in this Agreement.
C. This Agreement shall constitute an amendment and restatement of the
Prior Credit Agreement as provided in Section 13.22 hereof.
NOW THEREFORE, in consideration of the covenants contained herein,
Holdings, the Borrowers, the Lenders and Agent agree as follows:
1. DEFINITIONS
1.1 Certain Defined Terms. For the purposes of this Agreement the
following terms will have the following meanings:
"Account" shall mean any right to payment of a Person for goods sold or
leased or for services rendered.
"Account Party(ies)" shall mean, with respect to any Letter of Credit,
the account party or parties (which shall be a Borrower or, with the counter
signature of a Borrower, Plastipak Brazil or a Guarantor) as named in an
application to the Agent for the issuance of such Letter of Credit.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by any Borrower, and made by the Lenders under Section 2.1 hereof or
requested by any Borrower and made by the Swing Line Lender under Section 2.5
hereof, including without limitation any readvance, refunding or conversion of
such borrowing pursuant to Section 2.3 or 2.5 hereof, any advance in respect of
a Letter of Credit under Section 3.6 hereof (including without limitation the
unreimbursed amount of any draws under any Letters of Credit), and shall
include, as applicable, a Eurocurrency-based Advance, a Prime-based Advance, and
a Quoted Rate Advance.
"Affected Lender" shall have the meaning set forth in Section 11.7.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. Unless otherwise specified to the contrary herein, or the context
requires otherwise, Affiliate shall refer to Affiliates of Holdings.
"Agent" shall mean Comerica Bank, in its capacity as agent for the
Lenders hereunder, or any successor agent appointed in accordance with Section
12.4 hereof.
"Agent's Correspondent" shall mean Agent's Grand Cayman Branch (or for
the account of said branch office, at Agent's main office in Detroit, Michigan,
United States); or such other bank or banks as Agent may from time to time
designate by written notice to Borrowers and the Lenders.
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 1.1.
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"Applicable Interest Rate" shall mean (a) for Advances of the Revolving
Credit, the Eurocurrency-based Rate or the Prime-based Rate and (b) for Advances
of the Swing Line, the Prime-based Rate or a Quoted Rate, in each case as
selected by Borrowers from time to time subject to the terms and conditions of
this Agreement.
"Applicable Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined by reference to the
appropriate columns in the Pricing Matrix attached to this Agreement as Schedule
1.1.
"Asset Sale" shall mean the sale, transfer or other disposition by the
Borrowers or any Subsidiary of any asset to any Person, other than sales,
transfers or other dispositions of inventory in the ordinary course of business
and sales of assets that have been damaged, become obsolete or are no longer
useable.
"Assignment Agreement" shall mean any Assignment Agreement
substantially in the form of the Assignment Agreement attached hereto as Exhibit
H, as amended or otherwise modified from time to time.
"Borrower(s)" shall mean Packaging, Clean Tech, Whiteline and Tabb
Realty, and any other Domestic Subsidiary which, after the Effective Date and
with the prior written approval of the Lenders, becomes a party hereto pursuant
to Section 2.1(a) hereof.
"Borrower Addendum" shall mean an addendum substantially in the form
attached hereto as Exhibit G, to be executed and delivered by each Borrower
which becomes a party to this Agreement after the date hereof, as such Exhibit
may be amended from time to time.
"Borrower Sublimit" shall mean the following amounts as to each
Borrower:
Packaging $ 150,000,000
Clean Tech $ 15,000,000
Whiteline $ 10,000,000
Tabb Realty $ 65,000,000
Any reduction in the Revolving Credit Aggregate Commitment pursuant to Sections
2.15 or 2.16 shall reduce Packaging's Borrower Sublimit by an equal amount.
"Borrowing Base" shall mean, as of any date of determination thereof,
an amount equal to the sum of (i) 85% of Eligible Accounts, plus (ii) the lesser
of (a) 65% of Eligible Inventory and (b) $40,000,000, plus (iii) 50% of Eligible
Fixed Assets.
3
"Borrowing Base Certificate" shall mean a Borrowing Base certificate,
substantially in the form of Exhibit K, with appropriate insertions and executed
by a Responsible Officer.
"Borrowing Base Obligor" shall mean any Borrower or any Guarantor.
"Brazilian Pledge" shall mean the Quota Pledge Agreement dated December
22, 1999, executed and delivered by Holdings in favor of the Agent, as amended
or otherwise modified from time to time.
"Brazilian Maximum Amount" shall mean Fifty Million Dollars
($50,000,000), plus fifty percent (50%) of the net income (not reduced by
losses) of Plastipak Brazil for the period (taken as one accounting period) from
November 4, 2001 to the date of determination.
"Business Day" shall mean any day, other than a Saturday or a Sunday,
on which commercial banks are open for domestic and international business
(including dealings in foreign exchange) in London and New York, and the Agent
is open for such business in Detroit.
"Capex Covenant Amount" shall mean Fourteen Million Dollars
($14,000,000) for Fiscal Year 2001, increasing by Five Hundred Thousand Dollars
($500,000) on the first day of each following Fiscal Year.
"Capital Expenditures" shall mean, without duplication, any amounts
paid or accrued in respect of a period in respect of any purchase or other
acquisition for value of fixed or capital assets, whether by Operating Lease,
Capitalized Lease, purchase or otherwise; provided that, in no event shall
Capital Expenditures include amounts expended in respect of normal repair and
maintenance of plant facilities, machinery, fixtures and other like capital
assets utilized in the ordinary conduct of business (to the extent such amounts
would not be capitalized in preparing a balance sheet determined in accordance
with GAAP).
"Capitalized Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) which, in conformity with GAAP,
is required to be capitalized on the balance sheet of such Person.
"Change in Control" shall mean any of the following events or
circumstances: if (a) Holdings or a controlling portion of its voting stock or a
substantial portion of its assets comes under the practical, beneficial or
effective control of one or more Persons other than William C. Young (or any
Person becoming a successor to William C. Young through a Change in Control in
which the Majority Lenders do not exercise the judgment referred to below),
whether by reason of death, merger, consolidation, sale or purchase of stock or
assets or otherwise; or (b) William C. Young (or any Person becoming a successor
to William C. Young through a Change
4
in Control in which the Majority Lenders do not exercise the judgment referred
to below) shall no longer remain in office as President and Chief Executive
Officer of Holdings, whether by reason of death, resignation or otherwise; and
any such change of control or office holder may adversely affect, in the
reasonable judgment of the Majority Lenders, the ability of the Borrowers to
carry on their business as conducted before such change or may result in a
Material Adverse Effect.
"Clean Tech" shall mean Clean Tech, Inc., a 100% Subsidiary.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Lenders is
or has been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise.
"Collateral Documents" shall mean the Security Agreement, the Brazilian
Pledge, the Pledge Agreement, the Mortgages, the Equipment Pledge Agreement, the
Young Pledge Agreement, and all of the other acknowledgments, certificates,
stock powers, financing statements, instruments and other security documents
executed by Borrowers or any Subsidiary in favor of the Agent for the benefit of
the Lenders and delivered to the Agent, as security for the Indebtedness, in
each case as of the Effective Date or, from time to time, subsequent thereto, in
connection with such Security Agreement, this Agreement and the other Loan
Documents, in each case, as such collateral documents may be amended or
otherwise modified from time to time.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking
corporation, its successors or assigns.
"Commitment" shall mean the Revolving Credit Aggregate Commitment.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrowers within the
meaning of Section 4001 of ERISA or which is part of a group which includes the
Borrowers and which is treated as a single employer under Section 414 of the
Internal Revenue Code.
"Consolidated" (or "consolidated") or "Consolidating" (or
"consolidating") shall mean, when used with reference to any financial term in
this Agreement, the aggregate for two or more Persons of the amounts signified
by such term for all such Persons determined on a consolidated basis in
accordance with GAAP.
"Consolidated Debt" shall mean as of any date of determination, all
Debt of Holdings and its Consolidated Subsidiaries as of such date.
5
"Consolidated EBITDA" shall mean for any period, Consolidated Net
Income for such period plus, without duplication and only to the extent
reflected as a charge or reduction in the statement of such Consolidated Net
Income for such period, the sum of (a) Consolidated Income Tax Expense, (b)
Consolidated Interest Expense, (c) Consolidated depreciation and amortization
expense,(d) extraordinary losses (or minus extraordinary gains), (e) all
unamortized costs (not to exceed $1,236,729) relating to the Prior Credit
Agreement, (f) all non-capitalized expenses (not to exceed $1,000,000) related
to the Senior Unsecured Debt transaction and this Agreement and incurred in
Fiscal Year 2001), (g) other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income, minus (h) non-cash items increasing such Consolidated
Net Income for such period, other than the accrual of revenue in the ordinary
course of business, in each case determined in accordance with GAAP.
"Consolidated EBITDAR" shall mean for any period, Consolidated EBITDA
for such period plus, without duplication and only to the extent reflected as a
charge or reduction in the statement of such Consolidated EBITDA for such
period, Consolidated Rental Expense.
"Consolidated Income Tax Expense" shall mean for any period the
aggregate amount of taxes based on the income or profits of Holdings and its
Consolidated Subsidiaries determined in accordance with GAAP (to the extent such
income and profits were included in determining Consolidated Net Income for such
period).
"Consolidated Interest Expense" shall mean for any period the total
interest expense (including that attributable to Capitalized Leases) of Holdings
and its Consolidated Subsidiaries determined in accordance with GAAP for such
period.
"Consolidated Net Income" shall mean for any period, the net income (or
loss) of Holdings and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided, that the cumulative effect
of a change in accounting principles shall be excluded.
"Consolidated Net Worth" shall mean, as of any date of determination,
the total common shareholders' equity of Holdings and its Consolidated
Subsidiaries, as reflected on the most recent regularly prepared quarterly or
annual balance sheet of Holdings and such Subsidiaries, which balance sheet
shall be prepared in accordance with GAAP.
"Consolidated Rental Expense" shall mean for any period all sums paid
by Holdings or
6
any Consolidated Subsidiary with respect to Operating Leases during such period.
"Consolidated Senior Secured Debt" shall mean as of any date of
determination, all Consolidated Total Debt that is secured by a Lien on any
assets of Holdings or any Subsidiary.
"Consolidated Subsidiaries" shall mean the Subsidiaries of Holdings
which are treated as Consolidated for purposes of GAAP.
"Consolidated Tangible Net Worth" shall mean as of any date of
determination, Consolidated Net Worth as of such date minus all intangible
assets of Holdings and its Consolidated Subsidiaries such as patents,
trademarks, copyrights, goodwill and similar intangible assets, as determined in
accordance with GAAP.
"Consolidated Total Debt" shall mean, as of any date of determination,
Total Debt of Holdings and its Consolidated Subsidiaries as of such date, minus
all Young Debt.
"Consolidated Total Liabilities" shall mean, as of any date of
determination, all Liabilities of Holdings and its Consolidated Subsidiaries as
of such date.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Covenant Compliance Report" shall mean the report to be furnished by
Borrowers to the Agent pursuant to Section 7.2(a) hereof, in the form of
attached Exhibit I and certified by a Responsible Officer, in which report
Borrowers shall set forth, among other things, detailed calculations and the
resultant ratios or financial tests with respect to the Pledge Release Ratio and
the financial covenants contained in Sections 7.9 through 7.12A of this
Agreement.
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected by the Agent to have a
material adverse effect on the financial condition or businesses of Holdings and
its Subsidiaries (taken as a whole) or on the ability of Holdings and its
Subsidiaries (taken as a whole) to pay their debts, as such debts become due.
"Debt" shall mean, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services as of such date (other than trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) the principal component of all obligations of such person under
Capitalized
7
Leases, (c) all obligations of such Person in respect of letters of credit,
acceptances or similar obligations issued or created for the account of such
Person, (d) all liabilities secured by any lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (e) all Guarantee Obligations of such Person, (f) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person and (g) all
obligations (contingent or otherwise) under any interest rate swap transaction,
basis swap transaction, forward rate transaction, commodity swap transaction,
equity transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered into by
such Person.
"Debt Service Coverage Ratio" shall mean, as of the last day of each
fiscal quarter of Holdings, the ratio of (a) Consolidated EBITDAR for the four
fiscal quarters then ending, minus the sum of the Capex Covenant Amount and
Consolidated Income Tax Expense for such period to (b) the sum of all payments
of principal paid or due and payable with respect to long term Consolidated Debt
(excluding the Advances) for such period, plus Consolidated Interest Expense and
Consolidated Rental Expense for such period.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Defaulting Lender" is defined in Section 2.4(c).
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Loan Party(ies)" shall mean any Borrower or any Guarantor
incorporated or organized under the laws of the United States of America, or any
state, territory, possession or other political subdivision thereof.
"Domestic Subsidiary" shall mean any direct or indirect Subsidiary of
Holdings which is incorporated or organized under the laws of the United States
of America, or any state, territory, possession or other political subdivision
thereof which is a domestic Subsidiary for purposes of Section 956 of the
Internal Revenue Code; and "Domestic Subsidiaries" shall mean any or all of
them.
"Effective Date" shall mean the date on which all the conditions
precedent set forth in Sections 5.1 through 5.10 have been satisfied.
"Eligible Accounts" shall mean an Account which has been included in a
Borrowing Base Certificate to determine the Borrowing Base, and as to which
Account, unless otherwise
8
approved by Agent in its sole discretion, the following is true and accurate as
of the time it was utilized to determine the Borrowing Base:
(a) such Account arose in the ordinary course of the business of any
Borrowing Base Obligor out of either (i) a bona fide sale of Inventory
by a Borrowing Base Obligor, and in such case such Inventory has been
shipped to the applicable Account Debtor or (ii) services rendered by a
Borrowing Base Obligor and such services have been performed;
(b) such Account represents a legally valid and enforceable claim which
is due and owing by such Account Debtor to the Borrowing Base Obligor
and for such amount as is represented by Packaging to Agent in the
applicable Borrowing Base Certificate;
(c) it is evidenced by an invoice dated not later than the date of
shipment or performance, rendered to such Account Debtor;
(d) the unpaid balance of such Account as represented to Agent in the
applicable Borrowing Base Certificate is not subject to any defense,
counterclaim, setoff, contra account, credit, allowance or adjustment
by the Account Debtor because of returned, inferior or damaged
Inventory or services, or for any other reason;
(e) the transactions leading to the creation of such Account comply
with all applicable local, state and federal laws and regulations of
the jurisdiction in which such Account was created where the failure to
comply therewith could reasonably be expected to impair the
collectibility of such Account;
(f) the applicable Borrowing Base Obligor has granted to the Agent
pursuant to or in accordance with the Collateral Documents a perfected
first priority security interest in such Account prior in right to all
other Persons and such Account has not been sold, transferred or
otherwise assigned or encumbered by any Borrowing Base Obligor;
(g) it is not owing more than ninety (90) days after the date of the
original invoice or other writing evidencing such Account;
(h) it is not owing by an Account Debtor who, together with any
Affiliate(s) of such Account Debtor, as of the date of determination,
has failed to pay twenty-five percent (25%) or more of the aggregate
amount of its/their respective Accounts owing to any Borrowing Base
Obligor within ninety (90) days after the original invoice date;
(i) such Account is not represented by any note, trade acceptance,
draft or other negotiable instrument or by any chattel paper, except
any such as has been endorsed and
9
delivered by the applicable Borrowing Base Obligor, pursuant to or in
accordance with the Collateral Documents or this Agreement on or prior
to such Account's inclusion in any applicable Borrowing Base
Certificate;
(j) it is not owing by any Account Debtor as to which Holdings or any
Subsidiary has received actual notice of the death of the related
Account Debtor or any general partner thereof, nor of the dissolution,
liquidation, termination of existence, insolvency, business failure,
appointment of a receiver for any part of the property of, assignment
for the benefit of creditors by, or the filing of a petition in
bankruptcy or the commencement of any proceeding under any bankruptcy
or insolvency laws by or against, such Account Debtor;
(k) the Account Debtor on such Account is not:
(i) an Affiliate of Holdings or any of its Subsidiaries other than
Absopure Water Company, Buffalo Don's Artesian Wells, Ltd., and
Sprinklets Water Centers, Inc. (provided, however, that with
respect to such entities, to constitute Eligible Accounts, any such
Accounts shall meet all other requirements of this definition and
shall be on arms-length terms; and such Eligible Accounts shall not
exceed $6,000,000 in the aggregate);
(ii) the United States of America or any state or political
subdivision thereof, or by any department, agency, or
instrumentality thereof, unless all necessary steps are taken to
comply with the Federal Assignment of Claims Act or with any
comparable state law, if applicable, and all other necessary steps
are taken to perfect the Banks' security interest in such Account;
(iii) a Foreign Person, unless such Account is secured by a letter
of credit or a guaranty issued by a bank acceptable to the Agent
and in form and substance acceptable to the Agent, in its sole
discretion;
(iv) an Account Debtor whose obligations the Agent, acting in its
reasonable commercial discretion (based on the collectibility of
the Accounts owed to such Account Debtor), has notified Holdings
are deemed not to constitute Eligible Accounts; or
(l) It is not an Account billed in advance of transfer of title to the
Inventory being sold, payable on delivery, for consigned goods, for
guaranteed sales, for unbilled sales, for progress billings, payable at
any future date in accordance with its terms, subject to a retainage or
holdback, or insured by a surety company.
10
Any 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.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $500,000,000; (ii) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus of at least
$500,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (iii) a Person that is primarily engaged in the business
of commercial banking and that is (A) a Subsidiary of a Lender, (B) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (C) a Person of which a Lender
is a Subsidiary; (iv) an insurance company, mutual fund or other financial
institution organized under the laws of the United States, any state thereof,
any other country which is a member of the OECD or a political subdivision of
any such country; and (v) any fund which invests in bank loans and whose assets
exceed $100,000,000; provided that no Person shall be an Eligible Assignee in
respect of the Revolving Commitment unless, at the time of the proposed
assignment to such Person, such Person is able to make Revolving Advances in
Dollars.
"Eligible Fixed Assets" shall mean all Equipment and real estate owned
by any Borrowing Base Obligor which has been included in a Borrowing Base
Certificate to determine the Borrowing Base and as to which Equipment or real
estate the following is true and accurate as of the time it was utilized to
determine the Borrowing Base and as of the time a Borrower has requested a
Revolving Credit Advance or a Swing Line Advance based in part thereon:
(a) such item of Equipment or real estate is located in the United
States of America at such location as any Borrowing Base Obligor shall
have represented in the Loan Documents;
(b) such item of Equipment or real estate is not subject to a Lien in
favor of any Person other than the Agent for the benefit of the Banks,
and the Agent, for the benefit of the Banks, shall have a valid and
perfected first priority Lien thereon; and
(c) the value of such item of Equipment or real estate was determined
based on the greater of (a) its net book value as determined in
accordance with GAAP or (b) its appraised value, but only if such
appraisal is prepared by an appraiser acceptable to the Agent and is
dated as of a date within six (6) months of the date of valuation of
the applicable Equipment or real estate.
11
"Eligible Foreign Subsidiary" shall mean any Foreign Subsidiary whose
Equity Interests are pledged to the Agent pursuant to a Foreign Share Pledge.
"Eligible Inventory" shall mean Inventory of any Borrowing Base Obligor
which has been included in a Borrowing Base Certificate to determine the
Borrowing Base and as to which Inventory the following is true and accurate as
of the time it was utilized to determine the Borrowing Base and as of the time a
Borrower has requested a Revolving Credit Advance or a Swing Line Advance based
in part thereon:
(a) such item of Inventory is of merchantable quality and is usable or
saleable by any Borrowing Base Obligor in the ordinary course of its
business and is not obsolete or discontinued;
(b) such item of Inventory is properly classified under GAAP as "raw
materials inventory" or "finished goods inventory" and not as
"work-in-process";
(c) such item of Inventory has not been sold, transferred or otherwise
assigned by any Borrowing Base Obligor to any other Person;
(d) such item of Inventory is located within the United States of
America at such location or locations as any Borrowing Base Obligor
shall have represented in the Loan Documents relating to Inventory;
(e) such item of Inventory is not subject to a Lien in favor of any
Person other than the Agent for the benefit of the Banks, and the
Agent, for the benefit of the Banks, shall have a valid and perfected
first priority Lien therein;
(f) such item of Inventory is not consigned goods or subject to a
seller's right to repurchase; and
(g) the value of each item of Inventory utilized to determine the
Borrowing Base was determined in accordance with GAAP.
Any 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.
"Environmental Tasks" shall mean those environmental compliance and
remediation measures set forth (and identified as Environmental Tasks) on
Schedule 7.8 to the Prior Credit Agreement.
12
"Equipment" shall mean all equipment as defined in the UCC.
"Equipment Pledge Agreement" shall mean an Equipment Pledge Agreement
encumbering all unencumbered Equipment of Plastipak Brazil, to be dated as of
the date of execution and delivery thereof, from Plastipak Brazil to the Agent
for the benefit of the Banks, in form and substance satisfactory to the Agent,
as amended from time to time.
"Equity Interests" means, with respect to any Person, any and all
shares, share capital, interests, participations, warrants, options or other
equivalents (however designated) of capital stock of a corporation and any and
all equivalent ownership interests in a Person (other than a corporation).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code and the regulations in effect from time
to time thereunder.
"Eurocurrency-based Advance" shall mean any Advance which bears
interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of the Applicable Margin (subject, if applicable, to adjustment
under Section 4.1 hereof), plus
(A) the per annum interest rate at which deposits in the relevant
eurocurrency are offered to Agent's Eurocurrency Lending
Office by other prime banks in the relevant eurocurrency
market in an amount comparable to the relevant
Eurocurrency-based Advance and for a period equal to the
relevant Eurocurrency-Interest Period at approximately 11:00
a.m. Detroit time two (2) Business Days prior to the first day
of such Eurocurrency-Interest Period, divided by
(B) a percentage equal to 100% minus the maximum rate on such date
at which Agent is required to maintain reserves on
'eurocurrency liabilities' as defined in and pursuant to
Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and
as long as Agent is required to maintain reserves against a
category of liabilities which includes eurocurrency deposits
or includes a category of assets which includes eurocurrency
loans, the rate at which such reserves are required to be
maintained on such category, such sum to be rounded upward, if
necessary, to the nearest whole multiple of 1/16th of 1%.
"Eurocurrency-Interest Period" shall mean, an interest period of one,
two, three or six
13
months (or any lesser or greater number of days agreed to in advance by the
relevant Borrower, Agent and the Lenders), in each case as selected by such
Borrower, as applicable, for a Eurocurrency-based Advance pursuant to Section
2.3 or 2.5 hereof, as the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at its Grand Caymans Branch or such other branch
of Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by written notice to Borrowers and the Lenders and (b) as to each
of the Lenders, its office, branch or affiliate located at its address set forth
on the signature pages hereof (or identified thereon as its Eurocurrency Lending
Office), or at such other office, branch or affiliate of such Lender as it may
hereafter designate as its Eurocurrency Lending Office by written notice to
Borrowers and Agent.
"Event of Default" shall mean each of the Events of Default specified
in Section 9.1 hereof.
"Existing Letters of Credit" shall mean the Letters of Credit set forth
on Schedule 1.3 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fees" shall mean the Revolving Credit Facility Fee, the Letter of
Credit Fees and the other fees and charges payable by Borrowers to the Lenders
or Agent hereunder.
"Financial Statements" shall mean all those balance sheets, earnings
statements, statement of cash flows, and other financial data (whether of
Holdings or its Subsidiaries) which have been furnished to the Agent or the
Lenders for the purposes of, or in connection with, this Agreement and the
transactions contemplated hereby.
"Fiscal Year" shall mean each fiscal year of Holdings, ending on the
Saturday closest to October 31 of each year. For purposes of this Agreement, a
designated Fiscal Year (e.g., Fiscal Year 2001) shall mean the Fiscal Year
ending in the year indicated.
14
"Foreign Person" shall mean an Account Debtor which (i) does not
maintain its chief executive office in the United States of America, (ii) is not
organized under the laws of the United States of America, or any state thereof,
or (iii) is the government of any foreign country or sovereign state, or of any
state, province, municipality or other instrumentality thereof.
"Foreign Share Pledge" shall mean such domestic or local law share
pledge(s) as shall be advisable or necessary under applicable local law to
create and perfect Liens on the Equity Interests of the Foreign Subsidiaries and
securing the Indebtedness (subject to Section 956 of the Internal Revenue Code).
"Foreign Subsidiary(ies)" shall mean all direct or indirect
Subsidiaries of Holdings other than the Domestic Subsidiaries.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof, consistently applied.
"Governmental Authority" shall mean any nation or government, any
state, province or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof (including the Central Bank of
Brazil), any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Governmental Obligations" means noncallable direct general obligations
of the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guarantee Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was induced by a reimbursement agreement, counter
indemnity or similar obligation issued by the guaranteeing person, in either
case guaranteeing or in effect guaranteeing any Debt, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
15
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by
Borrowers in good faith.
"Guaranty" shall mean that certain guaranty of all outstanding
Indebtedness, executed and delivered by Holdings and each of the Domestic
Subsidiaries (whether by execution thereof, or by execution of the Joinder
Agreement attached as "Exhibit A" to the form of such Guaranty), to the Agent,
on behalf of the Lenders, dated December 22, 1999, as amended from time to time.
"Guarantor(s)" shall mean Holdings and each Subsidiary which is
required by the Lenders to guarantee the obligations of the Borrowers hereunder
and under the other Loan Documents.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any Governmental
Authority pertaining to any hazardous, toxic or dangerous waste, substance or
material on or about any facilities owned, leased or operated by Holdings or any
of its Subsidiaries, or any portion thereof including, without limitation, those
relating to soil, surface, subsurface ground water conditions and the condition
of the ambient air; and any state, provincial and local laws and regulations
pertaining to any hazardous, toxic or dangerous waste, substance or material
and/or asbestos; any so-called "superfund" or "superlien" law; and any other
federal, state, provincial, foreign or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing liability
or standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect.
"Hedging Transaction" means each interest rate swap transaction, basis
swap transaction, forward rate transaction, commodity swap transaction, equity
transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered
16
into by the Borrowers from time to time; provided that such transaction is
entered into for risk management purposes and not for speculative purposes.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities (including,
without limitation, interest accruing at the then applicable rate provided in
this Agreement or any other applicable Loan Document after the Revolving Credit
Maturity Date and interest accruing at the then applicable rate provided in this
Agreement or any other applicable Loan Document after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to Holdings or any Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), fees and
other charges arising under this Agreement or any of the other Loan Documents,
whether direct or indirect, absolute or contingent, of Holdings or any Borrower
to any of the Lenders or Affiliates thereof or to the Agent, in any manner and
at any time, whether arising under this Agreement, or under any Guaranty or any
of the other Loan Documents, due or hereafter to become due, now owing or that
may hereafter be incurred by Holdings, Borrowers or any Subsidiary to, any of
the Lenders or Affiliates thereof or to the Agent (and which shall be deemed to
include any liabilities of any Borrower or any Subsidiary to any Lender arising
in connection with account overdrafts), and any judgments that may hereafter be
rendered on such indebtedness or any part thereof, with interest according to
the rates and terms specified, or as provided by law, any payment obligations,
if any, under Hedging Transactions evidenced by Interest Rate Protection
Agreements, and any and all consolidations, amendments, renewals, replacements,
substitutions or extensions of any of the foregoing; provided, however that for
purposes of calculating the Indebtedness outstanding under the Agreement or any
of the other Loan Documents, the direct and indirect and absolute and contingent
obligations of Holdings, Borrowers and the Subsidiaries (whether direct or
contingent) shall be determined without duplication.
"Insolvency Proceeding" shall mean, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up, administration or relief of
debtors, or (b) any general assignment for the benefit of creditors,
arrangement, compromise, composition, marshaling of assets for creditors, or
other, similar arrangement in respect of such Person's creditors generally or
any substantial portion of its creditors.
"Intercompany Loan" shall mean any loan (or advance in the nature of a
loan) by Holdings or any Subsidiary to any other Subsidiary or to Holdings,
provided that each such loan or advance is subordinated in right of payment and
priority to the Indebtedness on terms and
17
conditions satisfactory to Agent and the Majority Lenders.
"Intercompany Loans, Advances or Investments" shall mean any
Intercompany Loan, and any advance or investment by Holdings or any Subsidiary
(including without limitation any guaranty of obligations or indebtedness to
third parties) to or in another Subsidiary.
"Intercompany Notes" shall mean the promissory notes, substantially in
the form attached hereto as Exhibit J, issued or to be issued by Holdings or any
Subsidiary to evidence an Intercompany Loan.
"Interest Coverage Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a) Consolidated EBITDA for the four fiscal
quarters then ending to (b) Consolidated Interest Expense for such period.
"Interest Period" shall mean (a) with respect to a Eurocurrency-based
Advance, a Eurocurrency-Interest Period commencing on the day a
Eurocurrency-based Advance is made, or on the effective date of an election of
the Eurocurrency-based Rate and (b) with respect to a Swing Line Advance carried
at the Quoted Rate, an interest period of one month (or any lesser number of
days agreed to in advance by a Borrower, Agent and the Swing Line Lender);
provided, however that (i) any Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next succeeding Business Day,
except that as to a Eurocurrency-Interest Period, if the next succeeding
Business Day falls in another calendar month, such Eurocurrency-Interest Period
shall end on the next preceding Business Day, and (ii) when a
Eurocurrency-Interest Period begins on a day which has no numerically
corresponding day in the calendar month during which such Eurocurrency-Interest
Period is to end, it shall end on the last Business Day of such calendar month,
and (iii) no Interest Period shall extend beyond the Revolving Credit Maturity
Date.
"Interest Rate Protection Agreement" means any Hedging Transaction
entered into between a Borrower and any Lender or an Affiliate of a Lender.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, when used with respect to any Person, (a) any
loan, investment or advance made by such Person to any other Person (including,
without limitation, any contingent obligation) in respect of any capital stock,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in stock or other ownership interests in
any other Person, including, without limitation, any investment made in exchange
for the issuance of shares of stock of such Person.
18
"Issuing Lender" shall mean Comerica Bank in its capacity as issuer of
one or more Letters of Credit hereunder, or its successor designated by the
Borrowers and the Lenders.
"Issuing Office" shall mean Issuing Lender's office located at One
Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226-3289 or such other
office as Issuing Lender shall designate as its Issuing Office.
"Joinder Agreement" shall mean a joinder agreement in the form attached
as Exhibit A to the form of the Guaranty to be executed and delivered by any
Person required to be a Guarantor pursuant to Section 7.20 of this Agreement.
"Lenders" shall mean Comerica Bank and such other financial
institutions from time to time parties hereto as lenders and shall include the
Lenders, the Swing Line Lender, the Issuing Lender and any assignee which
becomes a Lender pursuant to Section 13.8 hereof.
"Letter(s) of Credit" shall mean any standby letters of credit issued
by Issuing Lender at the request of and for the account of an Account Party
pursuant to Article 3 hereof.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Issuing
Lender of an Account Party or Account Parties requesting Issuing Lender to issue
such Letter of Credit, as amended from time to time.
"Letter of Credit Documents" is defined in Section 3.7.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Lenders in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Maximum Amount" shall mean Sixty-Five Million Dollars
($65,000,000).
"Letter of Credit Obligations" shall mean at any date of determination,
the sum of (a) the aggregate undrawn amount of all Letters of Credit then
outstanding, (b) the aggregate face amount of all Letters of Credit requested
but not yet issued as of such date and (c) the aggregate amount of Reimbursement
Obligations which have not been reimbursed by Borrowers as of such date.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Issuing Lender in its capacity hereunder as issuer of a Letter of
Credit as a result of a draft or
19
other demand for payment under any Letter of Credit.
"Leverage Ratio" shall mean, as of the last day of each fiscal quarter
of Holdings, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the four fiscal quarters then ending.
"Liabilities" shall mean all items of indebtedness, obligation or
liability of a Person that should be classified as liabilities or a balance
sheet of such Person in accordance with GAAP.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, financing statement
(but excluding precautionary financing statements in respect of Operating
Leases) or comparable notice or other filing or recording, Capitalized Lease,
subordination of any claim or right, or any other type of lien, charge,
encumbrance, preferential or priority arrangement, whether based on common law
or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes
(if issued), the Letter of Credit Agreements, the Letters of Credit, the
Guaranty(ies), the Collateral Documents, any Interest Rate Protection Agreements
and any other documents, certificates, instruments or agreements executed
pursuant to or in connection with any such document or this Agreement, as such
documents may be amended from time to time.
"Loan Parties" shall mean collectively any or all of the Borrowers and
any or all of the Guarantors, and "Loan Party" shall mean any one of them, as
the context indicates or otherwise requires.
"Majority Lenders" shall mean (a) so long as the Revolving Credit
Aggregate Commitment is outstanding hereunder, at any time Lenders holding not
less than 51% of the aggregate principal amount of the Revolving Credit
Aggregate Commitment, and (b) if the Revolving Credit Aggregate Commitment has
been terminated, at any time Lenders holding not less than 51% of the aggregate
principal amount of the Indebtedness then outstanding hereunder (provided that,
for purposes of determining Majority Lenders hereunder, Indebtedness outstanding
under the Swing Line or under any Letter of Credit shall be allocated among the
Lenders based on their respective Percentages).
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business or financial condition of Holdings and its Subsidiaries taken as a
whole, (b) the ability of the Borrowers to perform their respective obligations
under this Agreement, the Notes (if issued) or any other Loan Document to which
any of them is a party, or (c) the validity or enforceability of this Agreement,
any of the Notes (if issued) or any of the other Loan Documents or the rights or
20
remedies of the Agent or the Lenders hereunder or thereunder.
"Maximum Availability" shall mean as to any Borrower as of any date of
determination, the lesser of (a) the then applicable Revolving Credit Aggregate
Commitment and (b) the Borrowing Base minus the sum of (i) of the aggregate
principal amount of all Advances of the Revolving Credit and of the Swing Line
then outstanding hereunder plus (ii) of the aggregate amount of Letter of Credit
Obligations outstanding as of the date of the requested Advance in each case
determined pursuant to the terms hereof as of the date of the requested Advance
or the issuance of the requested Letter of Credit, as the case may be.
"Mortgages" shall mean the mortgages of real property owned by Tabb
Realty, dated December 22, 1999, and any other mortgage of real property
(substantially in the form of the Mortgages executed and delivered as of
December 22, 1999, subject to local law requirements and limitations, as
determined by counsel acceptable to Agent) owned or leased by Holdings or any
Subsidiary delivered on or after the Effective Date, in each case pursuant to
Section 7.20 hereof, as such mortgages may be amended or otherwise modified from
time to time, and "Mortgage" shall mean any of them.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, (a) with respect to any Asset Sale, the
aggregate cash payments received by Holdings or any Subsidiary, as the case may
be, from such Asset Sale, net of the reasonable direct expenses of sale such as
commissions and pro rated property taxes and net of any taxes actually payable
by Holdings or any Subsidiary in respect of such sales, (b) with respect to the
issuance of any Equity Interests, the aggregate cash proceeds received by
Holdings or any Subsidiary pursuant to such issuance, net of the direct costs
relating to such issuance (including sales and underwriting commissions), and
(c) with respect to issuance of Debt, the aggregate cash proceeds received by
Holdings or any Subsidiary pursuant to such issuance, net of the direct costs
relating to such issuance (including up-front fees and placement fees).
"Non-Defaulting Lender" is defined in Section 2.4(c).
"Notes" shall mean the Revolving Credit Notes and the Swing Line Notes.
"Operating Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) which, in conformity with GAAP,
is not required to be capitalized on a balance sheet of such Person.
"Percentage" shall mean with respect to each Lender, its percentage
share, as set forth on
21
Schedule 1.2, of the Revolving Credit and its risk participation in Letters of
Credit and its participation in any outstanding Swing Line Advances as such
Schedule may be revised from time to time by Agent in accordance with Section
13.8.
"Pension Plan" shall mean any plan established and maintained by a
Borrower which is qualified under Section 401(a) of the Internal Revenue Code
and subject to the minimum funding standards of Section 412 of the Internal
Revenue Code.
"Permitted Acquisition" shall mean any acquisition (including by way of
merger or consolidation) by Holdings or any 100% Domestic Subsidiary of all or
substantially all of the assets of another Person, or of a division or line of
business of another Person, or shares of stock or other ownership interests of
another Person, which is conducted in accordance with the following
requirements:
(a) Such acquisition is of a business or Person engaged in a
business related to a business consolidated by Holdings or any
Subsidiary;
(b) Holdings shall have delivered to the Agent and the Lenders not
less than twenty (20) nor more than ninety (90) days prior to
the date of such acquisition, notice of such acquisition
together with Pro Forma Projected Financial Information,
copies of all material documents relating to such acquisition,
and an opinion of Holdings's general counsel stating that to
the best knowledge of such counsel such acquisition complies
with this Agreement and all laws and regulations, in each case
in form and substance satisfactory to the Agent and the
Majority Lenders;
(c) Both before and after giving effect to such acquisition,
Maximum Availability shall not be less than Twenty Million
Dollars ($20,000,000);
(d) Both immediately before and after such acquisition, no Default
or Event of Default shall have occurred and be continuing;
(e) The board of directors (or other Person(s) exercising similar
functions) of the seller of the assets or issuer of the shares
of stock or other ownership interests being acquired shall not
have disapproved such transaction or recommended that such
transaction be disapproved;
(f) If the sum of the purchase price of such proposed new
acquisition, computed on the basis of total acquisition
consideration paid or incurred, or to be paid or incurred, by
Holdings and its Subsidiaries with respect thereto, including
the amount of Debt assumed or to which such assets, businesses
or business or
22
ownership interests or shares, or any Person so acquired, is
subject, plus the total of all such consideration paid or
incurred in connection with acquisitions closed in the
immediately preceding twelve month period, is greater than
Twenty-Five Million Dollars ($25,000,000), the acquisition
shall have been approved in writing by the Majority Lenders
prior to its consummation; and
(g) Unless approved by the Majority Lenders, the Person or assets
to be acquired shall not have, or expose any Borrower or any
Subsidiary to, any contingent liabilities or liabilities under
any Hazardous Materials Laws which may result in a Material
Adverse Effect.
"Permitted Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District
of Columbia or any possession of the United States, or any political
subdivision thereof, which are described in Section 103(a) of the
Internal Revenue Code and are graded in any of the highest three (3)
major grades as determined by at least one Rating Agency; or secured,
as to payments of principal and interest, by a letter of credit
provided by a financial institution or insurance provided by a bond
insurance company which in each case is itself or its debt is rated in
one of the highest three (3) major grades as determined by at least one
Rating Agency;
(c) Banker's acceptances, commercial accounts, demand deposit
accounts, certificates of deposit, or depository receipts issued by or
maintained with any Lender or a bank, trust company, savings and loan
association, savings bank or other financial institution whose deposits
are insured by the Federal Deposit Insurance Corporation and whose
reported capital and surplus equal at least $250,000,000, provided that
such minimum capital and surplus requirement shall not apply to demand
deposit accounts maintained by Holdings or any of its Subsidiaries in
the ordinary course of business;
(d) Commercial paper rated at the time of purchase within the
two highest classifications established by not less than two Rating
Agencies, and which matures within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations itemized
in paragraph (a) above, and executed by a bank or trust company or by
members of the association of primary dealers or other recognized
dealers in United States government securities, the market value of
which must be maintained at levels at least equal to the amounts
23
advanced;
(f) Any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (a) through (e) above;
and
(g) Investments by Plastipak Brazil in obligations similar in
nature, term and credit quality to those enumerated in clauses (a)
through (f) above, except that the country of Plastipak Brazil's
incorporation shall be substituted for the United States of America.
"Permitted Liens" shall mean with respect to any Person:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of such
Person in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's liens or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure (i) the performance of bids, trade
contracts (other than for borrowed money), statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature or (ii) the performance of leases permitted hereunder, in
each case given or incurred on terms, in amounts and otherwise in the
ordinary course of business; and
(e) easements, rights-of-way, restrictions and other similar
encumbrances or Liens incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the
business of such Person.
"Permitted Real Estate Debt" shall mean all Debt of Tabb Realty that
meets each of the following conditions:
24
(a) such Debt is secured solely by a Lien on real estate owned
by Tabb Realty;
(b) such Debt is not subject to a Guarantee Obligation of or
by Holdings or any other Subsidiary;
(c) Holdings and the Borrowers shall have complied with the
mandatory prepayment provisions of Section 2.15(b)(ii) at the time such
Debt is incurred; and
(d) no Default or Event of Default shall have occurred and be
continuing at the time such Debt is incurred.
"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, or a government
or any agency or political subdivision thereof or other entity of any kind.
"Plastipak Brazil" shall mean Plastipak Packaging do Brazil, Ltda, a
limited liability quota company organized under the laws of Brazil.
"Pledge Agreement(s)" shall mean the Pledge Agreement dated December
22, 1999, and each other stock pledge agreement executed and delivered by
Holdings or any Subsidiary in form satisfactory of the Agent and the Majority
Lenders, in each case as amended or otherwise modified from time to time.
"Pledge Release Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a) the sum of Consolidated Total Liabilities
minus all Subordinated Debt as of such date to (b) the sum of Consolidated
Tangible Net Worth plus all Subordinated Debt as of such date.
"Pledge Termination Conditions" shall mean the following conditions to
be satisfied prior to the termination of the Pledge Agreement, the Young Pledge
Agreement and the Brazilian Pledge Agreement, as follows:
(a) the Leverage Ratio and the Pledge Release Ratio, as determined
based on the most recent Covenant Compliance Certificate
delivered by the Borrowers pursuant to Section 7.2(a), shall
be not greater than 2.0 to 1.0 and 2.5 to 1.0, respectively;
and
(b) no Default or Event of Default has occurred and is continuing
under this Agreement or any of the other Loan Documents.
25
"Potential Financial Institution" is defined in Section 2.4(c).
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which
is equal to the Applicable Margin plus the greater of (i) the Prime Rate, and
(ii) the Alternate Base Rate.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Prior Credit Agreement" is defined in the Recitals.
"Pro Forma Projected Financial Information" shall mean, as to any
proposed acquisition, a statement executed by a Responsible Officer (supported
by reasonable detail) setting forth the total consideration to be paid or
incurred in connection with the proposed acquisition, and pro forma combined
projected financial information for Holdings and its Consolidated Subsidiaries
and the acquisition target (if applicable), consisting of projected balance
sheets as of the proposed effective date of the acquisition or the closing date
and as of the end of at least the next succeeding three (3) fiscal years of
Holdings following the acquisition and projected statements of income and cash
flows for each of those years, including sufficient detail to permit calculation
of the amounts and the ratios described in Sections 7.9 through 7.12A hereof, as
projected as of the effective date of the acquisition and for those fiscal years
and accompanied by (i) a statement setting forth a calculation of the ratios and
amounts so described, (ii) a statement in reasonable detail specifying all
material assumptions underlying the projections and (iii) such other information
as any Lender shall reasonably request.
"Purchasing Lender" shall have the meaning set forth in Section 11.10.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Lender in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest
at the Quoted Rate.
"Rating Agency" shall mean Moody's Investor Services, Standard and
Poor's Ratings Group or any other nationally recognized statistical rating
organization which is acceptable to the Agent.
26
"Register" is defined in Section 13.8(f) hereof.
"Reimbursement Obligation(s)" shall mean the obligation of an Account
Party or Account Parties under each Letter of Credit Agreement and this
Agreement to reimburse the Issuing Lender for each payment made by the Issuing
Lender under the Letter of Credit issued pursuant to such Letter of Credit
Agreement, together with all other sums, fees, charges and amounts which may be
owing to the Issuing Lender under such Letter of Credit Agreement or this
Agreement relating to Letters of Credit.
"Request for Advance" shall mean a Request for Revolving Credit Advance
or a Request for Swing Line Advance as the context may indicate.
"Request for Revolving Credit Advance" shall mean a Request for
Revolving Credit Advance issued by any of the Borrowers under Section 2.3 of
this Agreement in the form annexed hereto as Exhibit A, as amended or otherwise
modified.
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by any of the Borrowers under Section 2.5(c) of this Agreement in
the form attached hereto as Exhibit D, as amended or otherwise modified.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean the chief executive officer, chief
financial officer, president, treasurer or the general counsel of Holdings, or
with respect to compliance with financial covenants, the chief financial officer
or the treasurer of Holdings or any other officer having substantially the same
authority and responsibility.
"Revolving Credit" shall mean the revolving credit loan to be advanced
to a Borrower by the Lenders pursuant to Article 2 hereof, in an aggregate
amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by a
Borrower and made by the Lenders under Section 2.1 of this Agreement, including
without limitation any readvance, refunding or conversion of such borrowing
pursuant to Section 2.3 hereof and any advance in respect of a Letter of Credit
under Section 3.6 hereof, and shall include, as applicable, a
27
Eurocurrency-based Advance and/or a Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean One Hundred Fifty
Million Dollars ($150,000,000), subject to reduction or termination under
Sections 2.15, 2.16 or 9.2 hereof.
"Revolving Credit Facility Fee" shall mean the fees payable to Agent
for distribution to the Lenders pursuant to Section 2.13 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
August 20, 2006 and (ii) the date on which the Revolving Credit Aggregate
Commitment shall be terminated pursuant to Sections 2.15, 2.16 or 9.2 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.1 hereof, made by each of the Borrowers to each of the
Lenders in the form annexed to this agreement as Exhibit B, as such notes may be
amended or supplemented from time to time, and any other notes issued in
substitution, replacement or renewal thereof from time to time.
"Security Agreement" shall mean the Security Agreement dated December
22, 1999, as amended or otherwise modified from time to time.
"Senior Unsecured Debt" shall mean the indebtedness of Holdings
evidenced by the Senior Unsecured Notes.
"Senior Unsecured Debt Documents" shall mean the Senior Unsecured
Notes, the Senior Unsecured Debt Indenture, and all other documents and
agreements to evidence the Senior Unsecured Debt, as the same may be amended
from time to time (subject to the terms of this Agreement), and any and all
other documents executed in exchange therefor or replacement or renewal thereof.
"Senior Unsecured Debt Indenture" shall mean the Indenture relating to
the Senior Unsecured Notes.
"Senior Unsecured Notes" shall mean the 10.75% Senior Notes of Holdings
due 2011 in the original principal amount of $275,000,000, and the notes of
Holdings issued in exchange therefor pursuant to the Registration Rights
Agreement entered into in connection with the Senior Unsecured Debt Documents.
"Senior Secured Debt Ratio" shall mean, as of the last day of each
fiscal quarter of Holdings, the ratio of (a) Consolidated Senior Secured Debt on
such date to (b) Consolidated
28
EBITDA for the four fiscal quarters then ending.
"Subordinated Debt" shall mean any Debt of Holdings or any Consolidated
Subsidiary which has been subordinated in right of payment and priority to the
Indebtedness, on terms and conditions satisfactory to the Agent and the Majority
Lenders.
"Subordinated Debt Documents" shall mean and include any documents
evidencing Subordinated Debt, as the same may be amended, modified or
supplemented from time to time in compliance with the terms of this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company or any other business
entity of which more than fifty percent (50%) of the outstanding voting stock,
share capital, membership or other interests, as the case may be, is owned
either directly or indirectly by any Person or one or more of its Subsidiaries,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by any Person and/or its
Subsidiaries. Unless otherwise specified to the contrary herein or the context
otherwise requires, Subsidiary(ies) shall refer to the Subsidiary(ies) of
Holdings. "100% Subsidiary(ies)" shall mean any of the Subsidiaries of Holdings
whose stock (other than directors' or qualifying shares to the extent required
under applicable law) or other ownership interests is owned 100% by any other
100% Subsidiary and/or Holdings.
"Swing Line" shall mean the revolving credit loan to be advanced to
Borrowers by the Swing Line Lender pursuant to Section 2.5 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Swing Line Maximum Amount.
"Swing Line Advance" shall mean a borrowing made by Swing Line Lender
to Borrowers pursuant to Section 2.5 hereof.
"Swing Line Lender" shall mean Comerica Bank in its capacity as lender
under Section 2.5 of this Agreement or its successor as lender of the Swing
Line.
"Swing Line Maximum Amount" shall mean Fifteen Million Dollars
($15,000,000).
"Swing Line Notes" shall mean the swing line notes which may be issued
by each Borrower at the request of Swing Line Lender pursuant to Section 2.5(a)
hereof in the form annexed hereto as Exhibit C, as the case may be, as such
Notes may be amended or supplemented from time to time, and any notes issued in
substitution, replacement or renewal thereof from time to time.
29
"Tabb Realty" shall mean TABB Realty, LLC, a 100% Subsidiary.
"Tangible Net Worth Adjustment Amount" shall mean, as of any date of
determination, an amount equal to the sum of fifty percent (50%) of Consolidated
Net Income (not reduced by losses) for each Fiscal Year from November 4, 2001 to
the date of determination, plus one hundred percent (100%) of the Net Cash
Proceeds of Subordinated Debt and Equity Interests received by Holdings or any
Subsidiary after November 4, 2001.
"Total Debt" of any Person shall mean, as of the applicable date of
determination (but without duplication), all Debt of such Person other than
indebtedness described in sub-section (g) of the definition of Debt.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code as in effect in the State of Michigan, as amended, revised or replaced from
time to time.
"Whiteline" shall mean Whiteline Express, Ltd., a 100% Subsidiary.
"Young Debt" shall mean the existing Subordinated Debt by Whiteline to
the William C. Young Revocable Trust in the principal amount of approximately
$745,000.
"Young Parties" shall mean (a) Absopure Water Company, Buffalo Don's
Artesian Wells, Ltd., Sprinklets Water Centers, Inc., Multi-Investments Limited
Partnership, WP&WCY Realty LLC, William P. Young Company, or any Person owned
(in whole or in part) by any of them, and (b) William P. Young, Mary E. Young,
William C. Young, their respective families and trust, and/or any Person owned
(in whole or in part) or which are under the control of any of them (other than
the Borrowers and their respective Subsidiaries).
"Young Pledge Agreement" shall mean the Pledge Agreement in the form
attached hereto as Exhibit L, encumbering 23,257 shares of the common stock of
Holdings, as amended or otherwise modified from time to time.
30
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally and for itself alone agrees to make Advances of the
Revolving Credit to any of the Borrowers from time to time on any Business Day
during the period from the Effective Date hereof until (but excluding) the
Revolving Credit Maturity Date in an aggregate amount, not to exceed at any one
time outstanding such Lender's Percentage of the Revolving Credit Aggregate
Commitment. Subject to the terms and conditions set forth herein, advances,
repayments and readvances may be made under the Revolving Credit. Advances of
the Revolving Credit shall be subject to the following additional conditions and
limitations:
(a) A Borrower shall not be entitled to request an Advance of the
Revolving Credit or the Swing Line or the issuance of a Letter of
Credit hereunder until (i) with the approval of all Lenders, it has
become a party to this Agreement either by execution and delivery of
this Agreement, or by execution and delivery of a Borrower Addendum to
this Agreement, (ii) unless waived in writing by all Lenders, it has
become a party to the Guaranty by execution and delivery of a Joinder
Agreement, (iii) unless waived in writing by all Lenders, it has become
a party to the Security Agreement, and (iv) unless waived in writing by
all Lenders, Holdings has encumbered and/or delivered (or caused to be
encumbered and/or delivered), as the case may be, pursuant to a Pledge
Agreement those shares of stock issued by such Borrower and owned
(directly or indirectly by Holdings) which are required to be
encumbered and/or delivered under Section 7.20 hereof, as applicable,
and accompanied in each case by authority documents, legal opinions and
other supporting documents as required by Agent and the Majority
Lenders hereunder.
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness. (a)
Each Borrower hereby unconditionally promises to pay to the Agent for the
account of each Lender the then unpaid principal amount of each Revolving Credit
Advance (plus all accrued and unpaid interest) of such Lender to such Borrower
on the Revolving Credit Maturity Date and on such other dates and in such other
amounts as may be required from time to time pursuant to this Agreement.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each
Borrower to the appropriate lending office of such Lender resulting
from each Revolving Credit Advance made by such lending office of such
Lender from time to time, including the amounts of principal and
interest payable thereon and paid to such Lender from time to time
under this Agreement.
(c) The Agent shall maintain the Register pursuant to Section
13.8(f), and a subaccount therein for each Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount of
each Revolving Credit Advance made hereunder, the
31
type thereof and each Interest Period applicable to any
Eurocurrency-based Advance, (ii) the amount of any principal or
interest due and payable or to become due and payable from the
applicable Borrower, as the case may be, to each Lender hereunder in
respect of the Revolving Credit Advances and (iii) both the amount of
any sum received by the Agent hereunder from the applicable Borrower in
respect of the Revolving Credit Advances and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to paragraphs (b) and (c) of this Section
2.1 shall absent manifest error, to the extent permitted by applicable
law, be conclusive evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that
the failure of any Lender or the Agent to maintain the Register or any
such account, as applicable, or any error therein, shall not in any
manner affect the obligation of each Borrower to repay the Revolving
Credit Advances (and all other amounts owing with respect thereto) made
to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrowers agree that, upon written request to the Agent
(with a copy to Holdings) by any Lender, each of the Borrowers will
execute and deliver, to such Lender, at such Borrower's own expense, a
Revolving Credit Note evidencing the outstanding Revolving Credit
Advances owing to such Lender; provided, that the delivery of such
Revolving Credit Notes shall not be a condition precedent to the
Effective Date.
2.3 Requests for and Refundings and Conversions of Advances. A Borrower
may request an Advance of the Revolving Credit, refund any such Advance in the
same type of Advance or convert any such Advance to any other type of Advance of
the Revolving Credit only after delivery to Agent of a Request for Revolving
Credit Advance executed by a person previously authorized (in a writing
delivered to the Agent by Holdings or such Borrower) to execute such Request,
subject to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set forth
the information required on the Request for Revolving Credit Advance
form annexed hereto as Exhibit A, including without limitation:
(i) the proposed date of such Advance, which must be a Business
Day;
(ii) whether such Advance is a refunding or conversion of an
32
outstanding Advance; and
(iii) whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a
Prime-based Advance, the first Interest Period applicable thereto.
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by noon (Detroit time) three (3) Business Days prior
to the proposed date of Advance, except in the case of a Prime-based
Advance, for which the Request for Advance must be delivered by 11:00
a.m. (Detroit time) on such proposed date;
(c) on the proposed date of such Advance,
(i) as to any Borrower as of any date of determination, after
giving effect to all Advances and Letters of Credit requested by
any Borrower on such date of determination, the sum of (i) the
aggregate outstanding principal amount of all Advances of the
Revolving Credit and of the Swing Line on such date plus (ii) the
aggregate outstanding amount of Letter of Credit Obligations on
such date shall not exceed the lesser of (a) the then applicable
Revolving Credit Aggregate Commitment and (b) the Borrowing Base;
(ii) as to any Borrower, after giving effect to all Advances
and Letters of Credit requested by any such Borrower on such date
of determination, the sum of (i) of the aggregate outstanding
principal amount of all Advances of the Revolving Credit and of the
Swing Line hereunder to such Borrower on such date plus (ii) the
aggregate outstanding amount of Letter of Credit Obligations for
the account of such Borrower on such date shall not exceed the
Borrower Sublimit applicable to such Borrower;
provided however, that, in the case of any Advance being applied to
refund an outstanding Advance, the aggregate principal amount of
such Advances to be refunded shall not be included for purposes of
calculating availability under this Section 2.3(c);
(d) in the case of a Prime-based Advance, the principal amount of
the initial funding of such Advance, as opposed to any refunding or
conversion thereof, shall be at least Two Million Dollars ($2,000,000);
(e) in the case of a Eurocurrency-based Advance the principal
amount of such Advance, plus the amount of any other outstanding
Revolving Credit Advance to be then
33
combined therewith having the same Applicable Interest Rate and
Interest Period, if any, shall be at least Three Million Dollars
($3,000,000) (or a larger integral multiple of One Hundred Thousand
Dollars ($100,000)) and in any case, at any one time there shall not be
in effect for any Borrower more than six (6) Applicable Interest Rates
and Interest Periods;
(f) a Request for Revolving Credit Advance, once delivered to
Agent, shall not be revocable by the Borrowers;
(g) each Request for Revolving Credit Advance shall constitute a
certification by Holdings and the applicable Borrower, if any, as of
the date thereof that:
(i) both before and after such Advance, the obligations of the
Borrowers and the Guarantors set forth in this Agreement and the
other Loan Documents to which such Persons are parties are valid,
binding and enforceable obligations of the applicable Borrowers and
Guarantors;
(ii) all conditions to Advances of the Revolving Credit have
been satisfied, and shall remain satisfied to and including the
date of such Advance (both before and after giving effect to such
Advance);
(iii) there is no Default or Event of Default in existence, and
none will exist upon the making of such Advance (both before and
after giving effect to such Advance);
(iv) the representations and warranties contained in this
Agreement and the other Loan Documents are true and correct in all
material respects and shall be true and correct in all material
respects as of the making of such Advance (both before and after
giving effect to such Advance); and
(v) the execution of such Request for Advance will not violate
the material terms and conditions of any material contract,
agreement or other borrowing of the Borrowers.
Agent, acting on behalf of the Lenders, may, at its option, lend under
this Section 2 upon the telephone request of a person previously
authorized (in a writing delivered to the Agent) by the applicable
Borrower to make such requests and, in the event Agent, acting on
behalf of the Lenders, makes any such Advance upon a telephone request,
the requesting officer shall fax to Agent, on the same day as such
telephone request, a Request for Advance. Borrowers hereby authorize
Agent to disburse Advances under this
34
Section 2.3 pursuant to the telephone instructions of any person
purporting to be a person identified by name on a written list of
persons authorized by Holdings and delivered to Agent prior to the date
of such request to make Requests for Advance on behalf of the
Borrowers. Notwithstanding the foregoing, each Borrower acknowledges
that each Borrower (i) shall bear all risk of loss resulting from
disbursements made upon any telephone request, and (ii) shall indemnify
the Lenders for all losses caused by their good faith reliance on any
telephone request. Each telephone request for an Advance shall
constitute a certification of the matters set forth in the Request for
Revolving Credit Advance form as of the date of such requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance from a
Borrower under Section 2.3 hereof, Agent shall promptly notify each
Lender by wire, telex or telephone (confirmed by wire, telecopy or
telex) of the amount of such Advance to be made and the date such
Advance is to be made by said Lender pursuant to its Percentage of such
Advance. Unless such Lender's commitment to make Advances of the
Revolving Credit hereunder shall have been suspended or terminated in
accordance with this Agreement, each such Lender shall make available
the amount of its Percentage of each Advance in immediately available
funds to Agent,
(i) for Prime-based Advances, at the office of Agent located at
One Detroit Center, Detroit, Michigan 48226, not later than 3:00
p.m. (Detroit time) on the date of such Advance;
(ii) for Eurocurrency-based Advances, at the Agent's
Correspondent for the account of the Eurocurrency Lending Office of
the Agent, not later than 12 noon (the time of the Agent's
Correspondent) on the date of such Advance.
(b) Subject to submission of an executed Request for Revolving
Credit Advance by the applicable Borrower without exceptions noted in
the compliance certification therein, Agent shall make available to the
applicable Borrower the aggregate of the amounts so received by it from
the Lenders in like funds:
(i) for Prime-based Advances, not later than 4:00 p.m. (Detroit
time) on the date of such Advance by credit to an account of such
Borrower maintained with Agent or to such other account or third
party as such Borrower may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than 4:00 p.m.
(the
35
time of the Agent's Correspondent) on the date of such Advance, by
credit to an account of such Borrower maintained with Agent's
Correspondent or to such other account or third party as such
Borrower may reasonably direct.
(c) Agent shall deliver the documents and papers received by it for
the account of each Lender to such Lender or upon its order. Unless
Agent shall have been notified by any Lender prior to the date of any
proposed Revolving Credit Advance that such Lender does not intend to
make available to Agent such Lender's Percentage of such Advance, Agent
may assume that such Lender has made such amount available to Agent on
such date and in such currency, as aforesaid and may, in reliance upon
such assumption, make available to the applicable Borrower a
corresponding amount. If such amount is not in fact made available to
Agent by such Lender, as aforesaid, Agent shall be entitled to recover
such amount on demand from such Lender. If such Lender does not pay
such amount forthwith upon Agent's demand therefor, the Agent shall
promptly notify Holdings, and the applicable Borrower shall pay such
amount to Agent. Agent shall also be entitled to recover from such
Lender or the applicable Borrower, as the case may be, but without
duplication, interest on such amount in respect of each day from the
date such amount was made available by Agent to such Borrower, to the
date such amount is recovered by Agent, at a rate per annum equal to:
(i) in the case of such Lender, for the first two (2) Business
Days such amount remains unpaid, with respect to Prime-based
Advances, the Federal Funds Effective Rate, and with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or deposit
insurance and of any fees, penalties, overdraft charges or other
costs or expenses incurred by Agent as a result of such failure to
deliver funds hereunder) of carrying such amount and thereafter, at
the rate of interest then applicable to such Revolving Credit
Advances; and
(ii) in the case of such Borrower, the rate of interest then
applicable to such Advance of the Revolving Credit.
The obligation of any Lender to make any Advance of the Revolving
Credit hereunder shall not be affected by the failure of any other
Lender to make any Advance hereunder, and no Lender shall have any
liability to Holdings or any of its Subsidiaries, the Agent, any other
Lender, or any other party for another Lender's failure to make any
loan or Advance hereunder. In the event any Lender shall fail to
advance any amounts required to be advanced in accordance with the
terms of this Article 2 (a "Defaulting Lender"), the Agent shall
promptly provide written notice thereof to the Borrowers and to each
other Lender (each such other Lender being referred to in this Section
as a "Non-Defaulting
36
Lender"). Each Non-Defaulting Lender shall have ten (10) Business Days from
receipt of said notice to exercise its option to agree to enter into an
agreement pursuant to which the Non-Defaulting Lender shall assume the
Defaulting Lender's rights and obligations under this Agreement, its Notes and
the other Loan Documents. The Non-Defaulting Lender shall exercise such option
by providing written notice of same to the Defaulting Lender (and if there is
more than one Non-Defaulting Lender, the assignment agreement shall be entered
into with the Non-Defaulting Lender who first notifies the Defaulting Lender of
its decision to exercise said option) and to Borrowers. If no Non-Defaulting
Lender shall exercise the above-described option within the said ten (10)
Business Day period and if Borrowers shall, subject to Section 13.8(c) hereof,
within thirty (30) days of delivering the notice described above, advise such
Defaulting Lender of another bank or financial institution to which assignments
are permitted pursuant to Section 13.8(c) hereof and which is willing to assume
such Defaulting Lender's rights and obligations under this Agreement, its Notes
and the other Loan Documents (each such bank or financial institution being
hereinafter referred to as a "Potential Financial Institution"), such Defaulting
Lender shall, subject to Section 13.8(c), assign its said rights and obligations
to the Potential Financial Institution; provided however that any such
assignment shall not alter Borrowers' remedies vis a vis the Defaulting Lender.
2.5 Swing Line Advances.
(a) The Swing Line Lender shall, on the terms and subject to the
conditions hereinafter set forth (including without limitation Section 2.5(c)
hereof), make one or more Advances (each such advance being a "Swing Line
Advance") to any Borrower (provided that any Borrower requesting Swing Line
Advances hereunder has become a party to this Agreement, either by execution and
delivery of this Agreement or by complying with the terms and conditions set
forth in Section 2.1(a) hereof), from time to time on any Business Day during
the period from the date hereof to (but excluding) the Revolving Credit Maturity
Date an amount not to exceed at any time outstanding the Swing Line Maximum
Amount. Swing Line Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of each of the Borrowers to Swing
Line Lender resulting from each Swing Line Advance of such Lender from time to
time, including the amounts of principal and interest payable thereon and paid
to such Lender from time to time. The entries made in such account or accounts
of Swing Line Lender shall, to the extent permitted by applicable law, be
conclusive evidence, absent manifest error, of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of Swing Line Lender to maintain such account, as applicable, or any
error therein, shall not in any manner affect the obligation of each Borrower to
repay the Swing Line Advances (and all other amounts owing with respect thereto)
made to such Borrower by Swing Line Lender in accordance with the
37
terms of this Agreement. Advances, repayments and readvances under the Swing
Line may be made, subject to the terms and conditions of this Agreement. Each
Swing Line Advance shall mature and the principal amount thereof shall be due
and payable by the applicable Borrower on the last day of the Interest Period
applicable thereto (if any) and, in the case of any Prime-based Advance, on the
Revolving Credit Maturity Date.
The Borrowers agree that, upon the written request of Swing Line Lender (with a
copy to Holdings), each of the Borrowers will execute and deliver to Swing Line
Lender Swing Line Notes; provided, that the delivery of such Swing Line Notes
shall not be a condition precedent to the Effective Date.
(b) Accrual of Interest. Each Swing Line Advance shall, from time to
time after the date of such Advance, bear interest at its Applicable Interest
Rate. The amount and date of each Swing Line Advance, its Applicable Interest
Rate, its Interest Period, if any, and the amount and date of any repayment
shall be noted on Swing Line Lender's account maintained pursuant to Section
2.5(a), which records will be conclusive evidence thereof, absent manifest
error; provided, however, that any failure by the Swing Line Lender to record
any such information shall not relieve the applicable Borrower of its obligation
to repay the outstanding principal amount of such Advance, all interest accrued
thereon and any amount payable with respect thereto in accordance with the terms
of this Agreement and the other Loan Documents.
(c) Requests for Swing Line Advances. A Borrower may request a Swing
Line Advance only after delivery to Swing Line Lender of a Request for Swing
Line Advance executed by a person authorized (in a writing a copy of which has
been previously delivered to the Agent) by the applicable Borrower to make such
requests, subject to the following and to the remaining provisions hereof:
(i) each such Request for Swing Line Advance shall set forth
the information required on the Request for Advance form annexed hereto
as Exhibit D, including without limitation:
(A) the proposed date of such Swing Line Advance,
which must be a Business Day;
(B) whether such Swing Line Advance is to be a
Prime-based Advance or a Quoted Rate Advance, and;
(C) in the case of a Quoted Rate Advance, the
duration of the Interest Period applicable thereto.
38
(ii) in the case of any Borrower requesting any Swing Line
Advance, after giving effect to all Swing Line Advances requested by
any Borrower on such date of determination, the aggregate principal
amount of all outstanding Swing Line Advances on such date shall not
exceed the Swing Line Maximum Amount;
(iii) as to any Borrower, after giving effect to all Swing
Line Advances requested by any such Borrower on such date of
determination, the sum of (i) of the aggregate outstanding principal
amount of all Advances of the Revolving Credit and of the Swing Line
hereunder to such Borrower on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations for the account of
such Borrower on such date shall not exceed the Borrower Sublimit
applicable to such Borrower;
(iv) in the case of any Borrower requesting any Swing Line
Advance, on the proposed date of such Swing Line Advance, after giving
effect to all Advances and Letters of Credit requested by any Borrower
on such date of determination, the sum of (x) of the aggregate
outstanding principal amount of all Advances of the Revolving Credit
and of the Swing Line on such date plus (y) the aggregate outstanding
amount of Letter of Credit Obligations on such date shall not exceed
the lesser of (a) the then applicable Revolving Credit Aggregate
Commitment and (b) the Borrowing Base;
(v) the principal amount of the initial funding of such
Advance, as opposed to any refunding or conversion thereof, shall be at
least One Hundred Thousand Dollars ($100,000) or such lesser amount as
shall be agreed to by Swing Line Bank;
(vi) each such Request for Swing Line Advance shall be
delivered to the Swing Line Lender by 2:00 p.m. (Detroit time) on the
proposed date of the Advance;
(vii) each Request for Swing Line Advance, once delivered to
Swing Line Lender, shall be irrevocable by the Borrowers, and shall
constitute and include a certification by the applicable Borrower as of
the date thereof that:
(A) both before and after such Swing Line Advance,
the obligations of the Borrowers and Guarantors set forth in
this Agreement and the other Loan Documents, are valid,
binding and enforceable obligations of the Borrowers and
Guarantors;
39
(B) all conditions to the making of Swing Line
Advances have been satisfied (both before and after giving
effect to such Advance);
(C) both before and after the making of such Swing
Line Advance, there is no Default or Event of Default in
existence; and
(D) both before and after such Swing Line Advance,
the representations and warranties contained in this Agreement
and the other Loan Documents are true and correct in all
material respects.
Swing Line Lender shall promptly deliver to Agent by telecopy a copy of any
Request for Advance received hereunder.
(d) Disbursement of Swing Line Advances. Subject to submission
of an executed Request for Swing Line Advance by a Borrower without
exceptions noted in the compliance certification therein and to the
other terms and conditions hereof, Swing Line Lender shall make
available to the applicable Borrower the amount so requested, in like
funds and currencies, not later than 4:00 p.m. (Detroit time) on the
date of such Advance by credit to an account of the applicable Borrower
maintained with Agent or to such other account or third party as the
Borrower may reasonably direct in writing; and
Swing Line Lender shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
(e) Refunding of or Participation Interest in Swing Line
Advances.
(i) The Agent, at any time in its sole and absolute
discretion, may on behalf of the applicable Borrower (each of which
hereby irrevocably directs the Agent to act on its behalf) request each
of the Lenders (including the Swing Line Lender in its capacity as a
Lender) to make an Advance of the Revolving Credit to each of the
Borrowers, in an amount equal to such Lender's Percentage of the
principal amount of the aggregate Swing Line Advances outstanding to
each such party on the date such notice is given (the "Refunded Swing
Line Advances"). The applicable Advance of the Revolving Credit used to
refund such Swing Line Advance shall be a Prime-based Advance. In
connection with the making of any such Refunded Swing Line Advances or
the purchase of a participation interest in Swing Line Advances under
Section 2.5(e)(ii) hereof, the Swing Line Lender shall retain its claim
against the applicable Borrower for any unpaid interest or fees in
respect thereof. Unless any of the events described in Section 9.1(k)
hereof
40
shall have occurred (in which event the procedures of subparagraph (ii)
of this Section 2.5(e) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of an
Advance of the Revolving Credit are then satisfied but subject to
Section 2.5(e)(iii), each Lender shall make the proceeds of its Advance
of the Revolving Credit available to the Agent for the benefit of the
Swing Line Lender at the office of the Agent specified in Section
2.4(a) hereof prior to 11:00 a.m. Detroit time on the Business Day next
succeeding the date such notice is given in immediately available
funds. The proceeds of such Advances of the Revolving Credit shall be
immediately applied to repay the Refunded Swing Line Advances in
accordance with the provisions of Section 10.1 hereof.
(ii) If, prior to the making of an Advance of the Revolving
Credit pursuant to subparagraph (i) of this Section 2.5(e), one of the
events described in Section 9.1(k) hereof shall have occurred, each
Lender will, on the date such Advance of the Revolving Credit was to
have been made, purchase from the Swing Line Lender an undivided
participating interest in each Refunded Swing Line Advance in an amount
equal to its Percentage of such Refunded Swing Line Advance. Each
Lender within the time periods specified in Section 2.5(e)(i) hereof,
as applicable, shall immediately transfer to the Agent, in immediately
available funds the amount of its participation and upon receipt
thereof the Agent will deliver to such Lender a Swing Line
Participation Certificate in the form of Exhibit F evidencing such
participation.
(iii) Each Lender's obligation to make Advances of the
Revolving Credit and to purchase participation interests in accordance
with clauses (i) and (ii) of this Section 2.5(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (1) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against Swing Line Lender,
the Borrowers or any other Person for any reason whatsoever; (2) the
occurrence or continuance of any Default or Event of Default; (3) any
adverse change in the condition (financial or otherwise) of any
Borrower or any other Person; (4) any breach of this Agreement by any
Borrower or any other Person; (5) any inability of the Borrowers to
satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such participating interest is to be
purchased; (6) the termination of the Revolving Credit Aggregate
Commitment; or (7) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any
Lender does not make available to the Agent the amount required
pursuant to clause (1) or (2) above, as the case may be, the Agent
shall be entitled to recover such amount on
41
demand from such Lender, together with interest thereon for each day
from the date of non-payment until such amount is paid in full (x) for
the first two (2) Business Days such amount remains unpaid, at the
Federal Funds Effective Rate and (y) thereafter, at the rate of
interest then applicable to such Swing Line Advances.
Notwithstanding the foregoing, no Lender shall be required, except in
the case of Swing Line Advances deemed to have been made pursuant to Sections
3.6(a) and 3.6(c) hereof, to make any Revolving Credit Advance to refund a Swing
Line Advance or to purchase a participation in a Swing Line Advance if prior to
the making of the Swing Line Advance by the Swing Line Lender, the Agent had
obtained actual knowledge that an Event of Default had occurred and was
continuing; provided, however that the obligation of the Lenders to make such
Revolving Credit Advances shall be reinstated upon the date of which such Event
of Default has been waived by the requisite Lenders, as applicable.
2.6 Prime-based Interest Payments. Interest on the unpaid balance
of all Prime-based Advances of the Revolving Credit and all Swing Line Advances
carried at a Prime-based Rate from time to time outstanding shall accrue from
the date of such Advance to the Revolving Credit Maturity Date (and until paid),
at a per annum interest rate equal to the Prime-based Rate, and shall be payable
in immediately available funds quarterly commencing on the first day of
Holdings' fiscal quarter next succeeding the calendar quarter during which the
initial Advance of the Revolving Credit or Swing Line Advance, as the case may
be, is made and on the first day of each fiscal quarter thereafter. Interest
accruing at the Prime-based Rate shall be computed on the basis of a 360 day
year and assessed for the actual number of days elapsed, and in such computation
effect shall be given to any change in the interest rate resulting from a change
in the Prime-based Rate on the date of such change in the Prime-based Rate.
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments.
(a) Interest on each Eurocurrency-based Advance of the
Revolving Credit shall accrue at the Eurocurrency-based Rate and shall
be payable in immediately available funds on the last day of the
Interest Period applicable thereto (and, if any Interest Period shall
exceed three months, then on the last Business Day of the third month
of such Interest Period, and at three month intervals thereafter).
Interest accruing at the Eurocurrency-based Rate shall be computed on
the basis of a 360 day year and assessed for the actual number of days
elapsed from the first day of the Interest Period applicable thereto to
but not including the last day thereof.
(b) Interest on each Quoted Rate Advance of the Swing
Line shall accrue at its Quoted Rate and shall be payable in
immediately available funds on the last day of the
42
Interest Period applicable thereto. Interest accruing at a Quoted Rate
shall be computed on the basis of a 360 day year and assessed for the
actual number of days elapsed from the first day of the Interest Period
applicable thereto to, but not including, the last day thereof.
2.8 Interest Payments on Conversions. Notwithstanding anything to
the contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
2.9 Interest on Default. In the event and so long as any Event of
Default shall exist, in the case of any Event of Default under Section 9.1(a),
9.1(b) or 9.1(k), immediately upon the occurrence thereof, and in the case of
all other Events of Default, upon notice from the Majority Lenders, interest
shall be payable daily on all Advances from time to time outstanding at a per
annum rate equal to the Applicable Interest Rate plus three percent (3%).
2.10 Prepayment of Revolving Credit Advances.
(a) The Borrowers may prepay all or part of the
outstanding balance of any Prime-based Advance(s) of the Revolving
Credit at any time, provided that the amount of any partial prepayment
shall be at least One Million Dollars ($1,000,000) and, after giving
effect to any such partial prepayment, the aggregate balance of
Prime-based Advance(s) of the Revolving Credit remaining outstanding,
if any, shall be at least Two Million Dollars ($2,000,000). The
Borrowers may prepay all or part of any Eurocurrency-based Advance
(subject to not less than two (2) Business Days' notice to Agent)
provided that the minimum amount of any such partial prepayment shall
be One Million Dollars ($1,000,000), and, after giving effect to any
such partial prepayment, the unpaid portion of such Advance which is
refunded or converted under Section 2.3 hereof shall be a minimum of
Two Million Dollars ($2,000,000); provided further, however that if the
prepayment of a Eurocurrency-based Advance is made on a day other than
the last Business Day of the then current Interest Period applicable to
such Eurocurrency-based Advance, then, pursuant to Section 11.1, the
applicable Borrower shall compensate the Lenders for any losses.
(b) The Borrowers may prepay all or part of the
outstanding balance of any Swing Line Advance carried at the
Prime-based Rate at any time, provided that the minimum amount of any
partial prepayment shall be Twenty Five Thousand Dollars ($25,000) and,
after giving effect to any such partial prepayment, the aggregate
balance of such Swing Line Advances remaining outstanding, if any,
shall be at least a One Hundred Thousand Dollars ($100,000). The
Borrowers may prepay all or part of any Swing Line Advances carried at
the Quoted Rate (subject to not less than two (2)
43
Business Days' notice to Swing Line Lender and Agent), provided that
the amount of any such partial payment shall be at least Twenty Five
Thousand Dollars ($25,000), after giving effect of any such partial
prepayment, and the unpaid portion of such Advance which is refunded or
converted under Section 2.5(c) hereof shall be at least of Two Hundred
Thousand Dollars ($200,000); provided further, however that if the
prepayment of a Quoted Rate Advance is made on a day other than the
last Business Day of the then current Interest Period applicable to
such Quoted Rate Advance, then, pursuant to Section 11.1, the
applicable Borrower shall compensate the Lenders for any losses.
(c) Any prepayment made in accordance with this Section shall
be subject to Section 11.1 hereof, but otherwise without premium,
penalty or prejudice to the right to re-advance under the terms of this
Agreement.
2.11 Reserved.
2.12 Prime-based Advance in Absence of Election or upon Default.
Upon the expiration of any Interest Period applicable to any Eurocurrency-based
Advance, if the applicable Borrower has failed to timely select a new Interest
Period to be applicable to such Eurocurrency Advance, such Borrower shall be
deemed to have elected to convert such Eurocurrency-based Advance into a
Prime-based Advance effective as of the expiration date of such Interest Period.
2.13 Revolving Credit Facility Fee. From the Effective Date to the
Revolving Credit Maturity Date, the Borrowers shall pay to the Agent for
distribution to the Lenders, pro rata in accordance with their respective
Percentages, a Revolving Credit Facility Fee on the Revolving Credit Aggregate
Commitment (determined without regard to usage thereof). The Revolving Credit
Facility Fee shall be equal to the Revolving Credit Aggregate Commitment
multiplied by the Applicable Fee Percentage computed on a daily basis. The
Revolving Credit Facility Fee shall be payable quarterly in arrears commencing
November 1, 2001 (in respect of the prior quarter or portion thereof) and on the
first day of each fiscal quarter thereafter. The Revolving Credit Facility Fee
shall be computed on the basis of a year of three hundred sixty (360) days and
assessed for the actual number of days elapsed. Upon receipt of such payment,
Agent shall make prompt payment to each Lender of its share of the Revolving
Credit Facility Fee based upon its respective Percentage. It is expressly
understood that the Revolving Credit Facility Fees described in this Section are
not refundable under any circumstances.
2.14 Mandatory Reduction of Indebtedness.
(a) If at any time and for any reason, the sum of (A) the
aggregate outstanding principal amount of all Revolving Credit Advances
plus (B) the aggregate outstanding
44
principal amount of all Swing Line Advances plus (C) the aggregate
outstanding amount of all Letter of Credit Obligations, exceeds the
lesser of (i) the Revolving Credit Aggregate Commitment and (ii) the
Borrowing Base (as used in this clause (a), the "Excess"), the
Borrowers shall immediately repay the Indebtedness by the amount of
such Excess, and/or reduce any pending request for an Advance on such
day by the amount of the Excess.
(b) Borrower Sublimit. If at any time and for any reason
with respect to any Borrower, the aggregate principal amount (tested in
the manner set forth in clause (a) above) of all Advances outstanding
hereunder to such Borrower, plus the aggregate amount of all Letter of
Credit Obligations for the account of such Borrower (tested in the
manner set forth in clause (a) above), exceeds the Borrower Sublimit
applicable to such Borrower (as used in this clause (b), the "Excess"),
then in each case, such Borrower shall
(i) immediately repay that portion of the
Indebtedness outstanding to such Borrower then carried as a
Prime-based Advance, if any, by the amount of such Excess,
and/or reduce on such day any pending request for an Advance
submitted by such Borrower by the amount of such Excess, to
the extent thereof; and
(ii) on the last day of each Interest Period of
any Eurocurrency-based Advance outstanding to such Borrower as
of such time, until the necessary reductions of Indebtedness
under this Section 2.14(b) have been fully made, repay such
Indebtedness carried in such Advances and/or reduce any
requests for refunding or conversion of such Advances
submitted (or to be submitted) by such Borrower in respect of
such Advances, by the amount of such Excess, to the extent
thereof.
2.15 Mandatory Repayment of Revolving Advances; Mandatory Reduction
of Revolving Credit Aggregate Commitment.
(a) Immediately upon receipt by Holdings or any
Subsidiary of any Net Cash Proceeds from any Asset Sale not permitted
by Section 8.5(a), (b), (c) or (d) (other than the sale of any asset or
assets, in a single transaction or series of transactions, with a value
less than $1,000,000), Borrowers shall repay (or cause to be repaid)
the Revolving Credit Advances and Swing Line Advances then outstanding
by an amount equal to one hundred percent (100%) of such Net Cash
Proceeds, until such Advances have been repaid in full; provided,
however, that (x) in the case of Asset Sales permitted under Section
8.5(e), such Borrower or Subsidiary may use all or any portion of the
Net Cash Proceeds of such Asset Sale to purchase replacement assets
used or to be used by such Borrower or such
45
Subsidiary, as the case may be, in the business as permitted under
Section 7.4(a) so long as (i) no Default or Event of Default has
occurred and is continuing, (ii) each such purchase is made within 180
days following the date of such Asset Sale and (iii) such Borrower or
Subsidiary delivers to the Agent, concurrently with or prior to the
date of such Asset Sale, a certificate of an authorized officer of such
Borrower or such Subsidiary stating that such Net Cash Proceeds will be
so used and (y) except to the extent used to purchase replacement
assets in compliance with clause (x) of this proviso, in each case,
such Borrower shall comply or such Subsidiary with the mandatory
prepayments provisions of this Section 2.15(a).
(b) Immediately upon receipt by Holdings or any Subsidiary of
the Net Cash Proceeds of the issuance of any Equity Interests of
Holdings or such Subsidiary or of any Subordinated Debt or Permitted
Real Estate Debt issued by Holdings or any Subsidiary on or after the
Effective Date, Borrowers shall repay the Revolving Advances and Swing
Line Advances then outstanding by an amount equal to (i) one hundred
percent (100%) of such Net Cash Proceeds in the case of the issuance of
Subordinated Debt, (ii) in the case of Permitted Real Estate Debt,
sixty-five percent (65%) of the fair market value (as determined by an
appraisal satisfactory to the Agent in its reasonable commercial
discretion in form and content and prepared by an appraiser
satisfactory to the Agent in its sole discretion) of the real property
secured by such Debt, and (iii) fifty percent (50%) of such Net Cash
Proceeds in the case of the issuance of Equity Interests until such
Advances have been paid in full.
(c) To the extent that, on the date any mandatory repayment of
the Revolving Advances under this Section 2.15 is due, the Indebtedness
under the Revolving Credit or any other Indebtedness to be prepaid is
being carried, in whole or in part, at the Eurocurrency-based Rate and
no Default or Event of Default has occurred and is continuing, the
Borrowers may deposit the amount of such mandatory prepayment in a cash
collateral account to be held by the Agent, for and on behalf of the
Agent and the Lenders (which shall be an interest-bearing account), on
such terms and conditions as are reasonably acceptable to Agent and the
Lenders. Subject to the terms and conditions of said cash collateral
account, sums on deposit in said cash collateral account shall be
applied (until exhausted) to reduce the principal balance of the
Revolving Credit on the last day of each Interest Period attributable
to the Eurocurrency-based Advances of such Revolving Advance. Subject
to the terms and conditions set forth herein, amounts repaid under this
Section 2.15 may be immediately reborrowed pursuant to Section 2.1
hereof.
(d) Upon the receipt of any Net Cash Proceeds as described in
this Section 2.15 (except with respect to Permitted Real Estate Debt),
the Revolving Credit Aggregate Commitment shall be reduced by the
amount of such Net Cash Proceeds. Any such
46
reduction shall reduce each Lender's portion of the Revolving Credit
Aggregate Commitment proportionately (based on the applicable
Percentages) and shall be permanent and irrevocable.
2.16 Optional Reduction or Termination of Revolving Credit
Aggregate Commitment. Provided that no Default or Event of Default has occurred
and is continuing, the Borrowers may upon at least five Business Days' prior
written notice to the Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to Five Million
Dollars ($5,000,000) or a larger integral multiple of One Million Dollars
($1,000,000); (ii) each reduction shall be accompanied by the payment of the
Revolving Credit Facility Fee, if any, accrued to the date of such reduction;
(iii) the applicable Borrower shall prepay in accordance with the terms hereof
the amount, if any, by which the amount of the aggregate unpaid principal amount
of Advances outstanding hereunder, plus the amount of the aggregate undrawn
amount of outstanding Letter of Credit Obligations, exceeds the amount of the
then applicable Revolving Credit Aggregate Commitment as so reduced, together
with interest thereon to the date of prepayment, and no reduction shall reduce
the Revolving Credit Aggregate Commitment to an amount which is less than the
Swing Line Maximum Amount; and (iv) no reduction shall reduce the Revolving
Credit Aggregate Commitment to an amount which is less than the aggregate
undrawn amount of any Letters of Credit outstanding at such time; provided,
however, that if the termination or reduction of the Revolving Credit Aggregate
Commitment requires the prepayment of a Eurocurrency-based Advance or a Quoted
Rate Advance and such termination or reduction is made on a day other than the
last Business Day of the then current Interest Period applicable to such
Eurocurrency-based Advance or such Quoted Rate Advance, then, pursuant to
Section 11.1, the applicable Borrower shall compensate the Lenders for any
losses. Reductions of the Revolving Credit Aggregate Commitment and any
accompanying prepayments of Advances of the Revolving Credit shall be
distributed by Agent to each Lender in accordance with such Lender's Percentage
thereof, and will not be available for reinstatement by or readvance to any
Borrower. Any reductions of the Revolving Credit Aggregate Commitment hereunder
shall reduce each Lender's portion thereof proportionately (based on the
applicable Percentages) and shall be permanent and irrevocable. Any payments
made pursuant to this Section shall be applied first to outstanding Prime-based
Advances under the Revolving Credit, next to Swing Line Advances carried at the
Prime-based Rate, next to Eurocurrency-based Advances of the Revolving Credit
and then to Swing Line Advances carried at the Quoted Rate.
2.17 Extension of Revolving Credit Maturity Date.
(a) Provided that no Default or Event of Default has occurred
and is continuing, Borrowers may, by written notice to Agent (with
sufficient copies for each
47
Lender) (which notice shall be irrevocable and which shall not be
deemed effective unless actually received by Agent) prior to March 1,
but not before February 1 of each year beginning in 2003, request that
the Lenders extend the then applicable Revolving Credit Maturity Date
to a date that is one year later than the Revolving Credit Maturity
Date then in effect (each such request, a "Request"). Each Lender
shall, not later than 30 days after such Request, give written notice
to the Agent stating whether such Lender is willing to extend the
Revolving Credit Maturity Date as requested. If Agent has received the
aforesaid written approvals of such Request from each of the Lenders,
then, effective upon the date of Agent's receipt of all such written
approvals from the Lenders, as aforesaid, the Revolving Credit Maturity
Date shall be so extended for such additional one year period, the term
Revolving Credit Maturity Date shall mean such extended date and Agent
shall promptly notify the Borrowers that such extension has occurred.
(b) If (i) any Lender gives the Agent written notice that it
is unwilling to extend the Revolving Credit Maturity Date as requested
or (ii) any Lender fails to provide written approval to Agent of such a
Request on or before 30 days after the applicable Request, then (w) the
Lenders shall be deemed to have declined to extend the Revolving Credit
Maturity Date, (x) the then-current Revolving Credit Maturity Date
shall remain in effect (with no further right on the part of Borrowers
to request extensions thereof under this Section 2.17), and (y) the
commitments of the Lenders to make Advances of the Revolving Credit
hereunder shall terminate on the Revolving Credit Maturity Date then in
effect, and Agent shall promptly notify Borrowers thereof.
2.18 Application of Advances. Advances of the Revolving Credit
(including Swing Line Advances) shall be available, subject to the terms hereof,
to fund working capital needs, Permitted Acquisitions, or other general
corporate purposes of the Borrowers.
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3. LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Issuing Bank shall through the Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account
Party(ies) accompanied by a duly executed Letter of Credit Agreement and such
other documentation related to the requested Letter of Credit as the Issuing
Lender may require, issue Letters of Credit in Dollars for the account of such
Account Party(ies), in an aggregate amount for all Letters of Credit issued
hereunder at any one time outstanding not to exceed the Letter of Credit Maximum
Amount. Each Letter of Credit shall be in a minimum face amount of One Hundred
Thousand Dollars ($100,000) (or such lesser amount as may be agreed to by
Issuing Lender) and each Letter of Credit (including any renewal thereof) shall
expire on the earlier to occur of (x) one (1) year from the date of issuance and
(y) not later than ten (10) Business Days prior to the Revolving Credit Maturity
Date in effect on the date of issuance thereof. The submission of all
applications in respect of and the issuance of each Letter of Credit hereunder
shall be subject in all respects to the Uniform Customs and Practices for
Documentary Credits of the International Chamber of Commerce, 1993 Revisions,
ICC Publication No. 500 or, if applicable, ISP 98, and any successor
documentation thereto, as selected by the Issuing Bank. In the event of any
conflict between this Agreement and any Letter of Credit Document other than any
Letter of Credit, this Agreement shall control.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at
the request and for the account of any Account Party(ies) unless, as of the date
of issuance of such Letter of Credit:
(a) in the case of any Account Party:
(i) after giving effect to the Letter of Credit
requested, the amount of all Letter of Credit Obligations does
not exceed the Letter of Credit Maximum Amount;
(ii) after giving effect to the face amount of the
Letter of Credit requested, the aggregate amount of all Letter
of Credit Obligations outstanding on such date plus the
aggregate amount of all Advances requested or outstanding on
such date does not exceed the lesser of (i) Revolving Credit
Aggregate Commitment and (ii) the Borrowing Base;
(iii) after giving effect to any Letter of Credit
requested by any Borrower, (x) the amount of all Letter of
Credit Obligations outstanding for the account of such
Borrower on such date plus (y) the amount of the principal
amount of any Advances of the Revolving Credit and of the
Swing Line Credit
49
requested or outstanding by such Borrower on such date does
not exceed the Borrower Sublimit applicable to such Borrower;
and
(iv) if the Letter of Credit requested is to be used to
secure borrowings by Plastipak Brazil, after giving effect to
such Letter of Credit, the amount of all Letter of Credit
Obligations in respect of borrowings by Plastipak Brazil shall
not exceed the Brazilian Maximum Amount;
(b) the obligations of the Loan Parties set forth in this
Agreement and the other Loan Documents are valid, binding and
enforceable obligations of the Loan Parties and the valid, binding and
enforceable nature of this Agreement and the other Loan Documents has
not been disputed by any of the Loan Parties;
(c) the representations and warranties contained in this
Agreement and the other Loan Documents are true in all material
respects as if made on such date, and both immediately before and
immediately after issuance of the Letter of Credit requested, no
Default or Event of Default exists;
(d) 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 the
relevant Account Party;
(e) the Account Party requesting the Letter of Credit shall
have delivered to Issuing Lender at its Issuing Office, not less than
three (3) Business Days prior to the requested date for issuance (or
such shorter time as the Issuing Lender, in its sole discretion, may
permit), 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 Issuing Lender;
(f) no order, judgment or decree of any Governmental Authority
shall purport by its terms to enjoin or restrain Issuing Lender from
issuing the Letter of Credit requested, or any Lender from taking an
assignment of its Percentage thereof pursuant to Section 3.6 hereof,
and no law, rule, regulation, request or directive of any Governmental
Authority (whether or not having the force of law) shall prohibit or
request that Issuing Lender refrain from issuing, or any Lender refrain
from taking an assignment of its Percentage of, the Letter of Credit
requested or letters of credit generally;
(g) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or
unduly burdensome for the Issuing Lender to issue or any Lender to take
an assignment of its Percentage of the requested
50
Letter of Credit, no suspension of or material limitation on trading on
the New York Stock Exchange or any other national securities exchange,
no declaration of a general banking moratorium by banking authorities
in the United States, Michigan or the respective jurisdictions in which
the Lenders, the applicable Account Party and the beneficiary of the
requested Letter of Credit are located, and no establishment of any new
restrictions on transactions involving letters of credit or on banks
materially affecting the extension of credit by banks; and
(h) Issuing Lender shall have received the issuance fees
required in connection with the issuance of such Letter of Credit
pursuant to Section 3.4 hereof.
Each Letter of Credit Agreement submitted to Issuing Lender pursuant hereto
shall constitute the certification by the Borrowers and the Account Party of the
matters set forth in Section 3.2 (a) through (d) hereof. The Agent shall be
entitled to rely on such certification without any duty of inquiry.
3.3 Notice. The Issuing Lender will deliver to the Agent, concurrently
or promptly following its delivery of any Letter of Credit, a true and complete
copy of each Letter of Credit. Promptly upon its receipt thereof, Agent shall
give notice, substantially in the form attached as Exhibit E, to each Lender of
the issuance of each Letter of Credit, specifying the amount thereof and the
amount of such Lender's Percentage thereof.
3.4 Letter of Credit Fees. Borrowers (and Plastipak Brazil, but only
with respect to Letters of Credit issued for its account) shall pay to the Agent
for distribution to the Lenders in accordance with their Percentages, letter of
credit fees as follows:
(a) A per annum letter of credit fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto in the
amount of the Applicable Fee Percentage (determined with reference to
Schedule 1.1 to this Agreement).
(b) A letter of credit facing fee in the amount equal to the
greater of (i) $250 and (ii) one-eighth of one percent (1/8%) per annum
on the undrawn amount of each Standby Letter of Credit to be retained
by Issuing Lender for its own account.
(c) If any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration thereof shall either (i) impose, modify or cause to be
deemed applicable any reserve, special deposit, limitation or similar
requirement against letters of credit issued or participated in by, or
assets held by, or deposits in or for the account of, Issuing Lender or
any Lender or (ii) impose on Issuing Lender or any Lender any other
condition regarding this Agreement, the Letters
51
of Credit or any participations in such Letters of Credit, and the
result of any event referred to in clause (i) or (ii) above shall be to
increase the cost or expense to Issuing Lender or such Lender of
issuing or maintaining or participating in any of the Letters of Credit
(which increase in cost or expense shall be determined by the Issuing
Lender's or such Lender's reasonable allocation of the aggregate of
such cost increases and expenses resulting from such events), then,
upon demand by the Issuing Lender or such Lender, as the case may be,
the applicable Account Party shall, within thirty (30) days following
demand for payment, pay to Issuing Lender or such Lender, as the case
may be, from time to time as specified by the Issuing Lender or such
Lender, additional amounts which shall be sufficient to compensate the
Issuing Lender or such Lender for such increased cost and expense,
together with interest on each such amount from ten days after the date
demanded until payment in full thereof at the Prime-based Rate. A
certificate as to such increased cost or expense incurred by the
Issuing Lender or such Lender, as the case may be, as a result of any
event mentioned in clause (i) or (ii) above, submitted to the
applicable Account Party, shall be conclusive evidence, absent manifest
error, as to the amount thereof.
(d) All payments by the Borrowers to the Agent for
distribution to the Issuing Lender or the Lenders under this Section
3.4 shall be made in immediately available funds at the Issuing Office
or such other office of the Agent as may be designated from time to
time by written notice to the Borrowers by the Agent. The fees
described in clause (a) and (b) above shall be nonrefundable under all
circumstances, shall be payable annually in advance (or such lesser
period, if applicable, for Letters of Credit issued with stated
expiration dates of less than one year) upon the issuance of each such
Letter of Credit, and shall be calculated on the basis of a 360 day
year and assessed for the actual number of days from the date of the
issuance thereof to the stated expiration thereof.
3.5 Other Fees. In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees, the Borrowers and the applicable Account
Party(ies) shall pay, for the sole account of the Issuing Lender, standard
documentation, administration, payment and cancellation charges assessed by
Issuing Lender or the Issuing Office, at the times, in the amounts and on the
terms set forth or to be set forth from time to time in the standard fee
schedule of the Issuing Office in effect from time to time and delivered to the
relevant Account Party(ies).
52
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) Packaging and each applicable Account Party agree to pay
to the Agent for the account of the Issuing Lender, on the day on which
the Issuing Lender shall honor a draft or other demand for payment
presented or made under any Letter of Credit, an amount equal to the
amount paid by the Issuing Lender in respect of such draft or other
demand under such Letter of Credit and all reasonable expenses paid or
incurred by the Issuing Lender relative thereto. Unless Packaging or
the applicable Account Party shall have made such payment to the Agent
for the account of the Issuing Lender on such day, upon each such
payment by the Issuing Lender, the Agent shall be deemed to have
disbursed to Packaging or the applicable Account Party, and Packaging
or the applicable Account Party shall be deemed to have elected to
substitute for its Reimbursement Obligation, a Prime-based Advance of
the Revolving Credit from the Lenders in an amount equal to the amount
so paid by the Issuing Lender in respect of such draft or other demand
under such Letter of Credit. Such Advance shall be disbursed
notwithstanding any failure to satisfy any conditions for disbursement
of any Advance set forth in Article 2 hereof, and, to the extent of the
Advance so disbursed, the Reimbursement Obligation of Packaging or the
applicable Account Party to the Agent under this Section 3.6 shall
(unless, taking into account any such deemed Advances, the amount of
the aggregate outstanding principal amount of Advances of the Revolving
Credit and the Swing Line on such date exceed the then applicable
Revolving Credit Aggregate Commitment minus the Letter of Credit
Maximum Amount) be deemed satisfied.
(b) If the Issuing Lender shall honor a draft or other demand
for payment presented or made under any Letter of Credit, the Issuing
Lender shall provide notice thereof to Packaging and the applicable
Account Party on the date such draft or demand is honored, and, to each
Lender on such date unless Holdings or applicable Account Party shall
have satisfied its Reimbursement Obligation under Section 3.6(a) hereof
by payment to the Agent on such date. The Issuing Lender shall further
use reasonable efforts to provide notice to Packaging or applicable
Account Party prior to honoring any such draft or other demand for
payment, but such notice, or the failure to provide such notice, shall
not affect the rights or obligations of the Issuing Lender with respect
to any Letter of Credit or the rights and obligations of the parties
hereto, including without limitation the obligations of Packaging or
the applicable Account Party under Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Lender of each Letter of
Credit hereunder, each Lender shall automatically acquire a pro rata
participation interest in such Letter of Credit and each related Letter
of Credit Payment based on its respective Percentage. Each Lender, on
the date a draft or demand under any Letter of Credit is honored (or
the next
53
succeeding Business Day if the notice required to be given by Agent to
the Lenders under Section 3.6(b) hereof is not given to the Lenders prior to
2:00 p.m. (Detroit time) on such date of draft or demand), shall make its
Percentage of the amount paid by the Issuing Lender, and not reimbursed by
Packaging or the applicable Account Party on such day, in immediately available
funds at the principal office of the Agent for the account of Issuing Lender. If
and to the extent such Lender shall not have made such pro rata portion
available to the Agent, such Bank, Packaging and the applicable Account Party
severally agree to pay to the Issuing Lender forthwith on demand such amount
together with interest thereon, for each day from the date such amount was paid
by the Issuing Lender until such amount is so made available to the Agent at a
per annum rate equal to the interest rate applicable during such period to the
related Advance deemed to have been disbursed under Section 3.6(a) in respect of
the reimbursement obligation of Holdings and the applicable Account Party, as
set forth in Section 2.4(c)(i) or 2.4(c)(ii) hereof, as the case may be. If such
Lender shall pay such amount to the Agent for the account of Issuing Lender
together with such interest, such amount so paid shall be deemed to constitute
an Advance by such Lender disbursed in respect of the reimbursement obligation
of Packaging or the applicable Account Party under Section 3.6(a) hereof for
purposes of this Agreement, effective as of the dates applicable under said
Section 3.6(a). The failure of any Lender to make its pro rata portion of any
such amount paid by the Issuing Lender available to the Agent for the account of
Issuing Lender shall not relieve any other Lender of its obligation to make
available its pro rata portion of such amount, but no Lender shall be
responsible for failure of any other Lender to make such pro rata portion
available to the Agent for the account of Issuing Lender.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized
that the Issuing Lender shall be the sole issuer of Letters of Credit
under this Agreement.
3.7 Obligations Irrevocable. The obligations of the Borrowers and
any Account Party to make payments to Agent for the account of Issuing Lender or
the Lenders with respect to Letter of Credit Obligations under Section 3.6
hereof, shall be unconditional and irrevocable and not subject to any
qualification or exception whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to any Letter of Credit (the "Letter of
Credit Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to or under any of the Letter
of Credit Documents;
54
(c) The existence of any claim, setoff, defense or other right
which the Borrowers or any Account Party may have at any time against
any beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent, the Issuing Lender or any Lender
or any other person or entity, whether in connection with any of the
Letter of Credit Documents, the transactions contemplated herein or
therein or any unrelated transactions;
(d) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(e) Payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do not comply
with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit;
(f) Any failure, omission, delay or lack on the part of the
Agent, Issuing Lender or any Lender or any party to any of the Letter
of Credit Documents to enforce, assert or exercise any right, power or
remedy conferred upon the Agent, Issuing Lender, any Lender or any such
party under this Agreement, any of the other Loan Documents or any of
the Letter of Credit Documents, or any other acts or omissions on the
part of the Agent, Issuing Lender, any Lender or any such party; or
(g) Any other event or circumstance that would, in the absence
of this Section 3.7, result in the release or discharge by operation of
law or otherwise of the Borrowers or any Account Party from the
performance or observance of any obligation, covenant or agreement
contained in Section 3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Borrowers or any Account Party has or
may have against the beneficiary of any Letter of Credit shall be available
hereunder to the Borrowers or any Account Party against the Agent, Issuing
Lender or any Lender. Nothing contained in this Section 3.7 shall be deemed to
prevent the Borrowers or the Account Parties, after satisfaction in full of the
absolute and unconditional obligations of the Borrowers and the Account Parties
hereunder, from asserting in a separate action any claim, defense, set off or
other right which they (or any of them) may have against Agent, Issuing Lender
or any Lender.
3.8 Risk Under Letters of Credit.
55
(a) In the administration and handling of Letters of Credit
and any security therefor, or any documents or instruments given in
connection therewith, Issuing Lender shall have the sole right to take
or refrain from taking any and all actions under or upon the Letters of
Credit.
(b) Subject to other terms and conditions of this Agreement,
Issuing Lender shall issue the Letters of Credit and shall hold the
documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters of Credit
in accordance with Issuing Lender's regularly established practices and
procedures and will have no further obligation with respect thereto. In
the administration of Letters of Credit, Issuing Lender shall not be
liable for any action taken or omitted on the advice of counsel,
accountants, appraisers or other experts selected by Issuing Lender
with due care and Issuing Lender may rely upon any notice,
communication, certificate or other statement from the Borrowers, any
Account Party, beneficiaries of Letters of Credit, or any other Person
which Issuing Lender believes to be authentic. Issuing Lender will,
upon request, furnish the Lenders with copies of Letter of Credit
Documents related thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Issuing Lender makes
no representation and shall have no responsibility with respect to (i)
the obligations of the Borrowers or any Account Party 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 Borrowers, the applicable Account Party or any
other Person, or (iii) any failure or delay in exercising any rights or
powers possessed by Issuing Lender in its capacity as issuer of Letters
of Credit in the absence of its gross negligence or willful misconduct.
Each of the Lenders expressly acknowledges that it has made and will
continue to make its own evaluations of the Borrowers' and the Account
Parties' creditworthiness without reliance on any representation of
Issuing Lender or Issuing Lender's officers, agents and employees.
(d) If at any time Issuing Lender shall recover any part of
any unreimbursed amount for any draw or other demand for payment under
a Letter of Credit, or any interest thereon, Agent or Issuing Lender,
as the case may be, shall receive same for the pro rata benefit of the
Lenders in accordance with their respective Percentages and shall
promptly deliver to each Lender its share thereof, less such Lender's
pro rata share of the costs of such recovery, including court costs and
attorney's fees. If at any time any Lender shall receive from any
source whatsoever any payment on any such unreimbursed amount or
interest thereon in excess of such Lender's Percentage of such payment,
such
56
Lender will promptly pay over such excess to Agent, for redistribution
in accordance with this Agreement.
3.9 Indemnification. Each of the Borrowers and each Account Party
hereby indemnifies and agrees to hold harmless the Lenders, the Issuing Lender
and the Agent, and their respective officers, directors, employees and agents,
to the extent that such indemnification and agreement is not limited by
applicable law, from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever which the
Lenders, the Issuing Lender or the Agent or any such Person may incur or which
may be claimed against any of them by reason of or in connection with any Letter
of Credit, and none of the Issuing Lender, any Lender or the Agent or any of
their respective officers, directors, employees or agents shall be liable or
responsible for:
(a) the use which may be made of any Letter of Credit or for
any acts or omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents or
of any endorsement thereon, even if such documents should in fact prove
to be in any or all respects invalid, insufficient, fraudulent or
forged;
(c) payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do not
strictly comply with the terms of any Letter of Credit (unless such
payment resulted from the gross negligence or willful misconduct of the
Issuing Lender), including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(d) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or
(e) any other event or circumstance whatsoever arising in
connection with any Letter of Credit;
provided, however, that with respect to subparagraphs (a) through (e) hereof,
none of the Borrowers nor the Account Parties shall be required to indemnify the
Issuing Lender, the other Lenders and the Agent and such other Persons, and the
Issuing Lender shall be liable to the Borrowers and the Account Parties to the
extent, but only to the extent, of any direct, as opposed to consequential or
incidental, damages suffered by any of the Borrowers and the Account Parties
which were caused by the Issuing Lender's gross negligence, willful misconduct
or wrongful honor or dishonor of any Letter of Credit after the presentation to
it by the beneficiary thereunder
57
of a draft or other demand for payment and other documentation strictly
complying with the terms and conditions of such Letter of Credit.
(f) It is understood that in making any payment under a Letter
of Credit the Issuing Lender will rely on documents presented to it
under such Letter of Credit as to any and all matters set forth therein
without further investigation and regardless of any notice or
information to the contrary. It is further acknowledged and agreed that
Borrowers or an Account Party may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which
the Lenders are alleged to be liable and it shall be a condition of the
assertion of any liability of the Lenders under this Section that the
applicable Borrowers or applicable Account Party shall
contemporaneously pursue all remedies in respect of the alleged loss
against such beneficiary and any other parties obligated or liable in
connection with such Letter of Credit and any related transactions;
provided however that, to the extent that the Issuing Lender or the
Lenders are finally adjudicated to have been grossly negligent or to
have acted with willful misconduct, then the Issuing Lender or the
Lenders, as the case may be, shall reimburse the Borrowers or such
Account Party for the reasonable costs and expenses of pursuing such
remedies.
3.10 Right of Reimbursement. Each Lender agrees to reimburse the
Issuing Lender on demand, pro rata in accordance with its respective Percentage,
for (i) the reasonable out-of-pocket costs and expenses of the Issuing Lender to
be reimbursed by the Borrowers or any Account Party pursuant to any Letter of
Credit Agreement or any Letter of Credit, to the extent not reimbursed by the
Borrowers or any Account Party and (ii) any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, fees, reasonable
out-of-pocket expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against Issuing Lender in any way
relating to or arising out of this Agreement, any Letter of Credit, any
documentation or any transaction relating thereto, or any Letter of Credit
Agreement, to the extent not reimbursed by the Borrowers or any Account Party,
except to the extent that such liabilities, losses, costs or expenses were
incurred by Issuing Lender as a result of Issuing Lender's gross negligence or
willful misconduct or by the Issuing Lender's wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit or wrongful honor of any Letter of
Credit.
3.11 Existing Letters of Credit. The Existing Letters of Credit shall
be deemed for all purposes of this Agreement to be Letters of Credit, and each
application submitted in connection with the Existing Letters of Credit shall be
deemed for all purposes of this Agreement to be Letter of Credit Agreements. On
the Effective Date, the Issuing Lender shall be deemed automatically to have
sold and transferred, and each other Lender shall be deemed automatically,
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irrevocably, and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such other Lender's Percentage, in the Existing Letters of
Credit and the applicable Letter of Credit Obligations with respect thereto and
any security therefor or guaranty pertaining thereto. On the Effective Date,
Holdings agrees to pay to each Lender (other than Comerica Bank) its pro-rata
share of an amount equal to Letter of Credit Fees which would have been payable
had such Existing Letters of Credit been issued on the Effective Date.
4. MARGIN ADJUSTMENTS
4.1 Margin Adjustments. Adjustments to the Applicable Margins and the
Applicable Fee Percentages, based on Schedule 1.1 shall be implemented on a
quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder and the Applicable
Fee Percentage, upon the date of delivery of the Financial Statements
to the Agent under Sections 7.1(a) and 7.1(b) and the Covenant
Compliance Certificate under Section 7.2(a) hereunder, in each case
establishing applicability of the appropriate adjustment, in each case
with no retroactivity or claw-back. In the event Holdings fails timely
to deliver the Financial Statements required under Section 7.1(a) or
7.1(b) or the Covenant Compliance Certificate under Section 7.2(a),
then from the date delivery to the Agent of such Financial Statements
and certificate was required until such Financial Statements and
certificate are delivered, the margins and fee percentages shall be at
the highest level on the Pricing Matrix attached to this Agreement as
Schedule 1.1.
(b) From the Effective Date until the receipt of Holdings's
Financial Statements for the fiscal quarter ending on November 3, 2001,
the margins and fee percentages shall be those set forth under the
Level III column of the Pricing Matrix attached to this Agreement as
Schedule 1.1.
5. CONDITIONS
The obligations of the Lenders to make Advances or loans pursuant to
this Agreement, the obligation of the Issuing Lender to issue Letters of Credit
subject to the following conditions:
5.1 Execution of Notes and this Agreement. Each of the Loan Parties
shall have executed and delivered to Agent for the account of each Lender
requesting Notes, the Revolving Credit Notes, the Swing Line Notes, this
Agreement and the other Loan Documents to which they are a party (including all
schedules, exhibits, certificates, opinions, financial statements and other
documents to be delivered pursuant hereto), and such Notes, and this Agreement
and the
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other Loan Documents shall be in full force and effect.
5.2 Corporate Authority. Agent shall have received, with a
counterpart thereof for each Lender:
(a) For each Loan Party, a certificate of its Secretary
or Assistant Secretary as to:
(i) resolutions of the board of directors of such
Loan Party evidencing approval of the transactions
contemplated by this Agreement (and authorizing the execution
and delivery thereof and the borrowing of Advances and in the
case of each Borrower, the requesting of Letters of Credit
hereunder),
(ii) the incumbency and signature of the officers of
such Loan Party executing any Loan Document,
(iii) a certificate of good standing or continued
existence (or the equivalent thereof) from the state of its
incorporation, and from every state or other jurisdiction
listed on Schedule 5.2 hereof if issued by such jurisdiction,
subject to the limitations (as to qualification and
authorization to do business) contained in Section 6.1, and
(iv) copies of such Loan Party's articles of
incorporation and bylaws or other constitutional documents, as
in effect on the Effective Date;
5.3 Collateral Documents. (a) As security for all Indebtedness of
Borrowers to the Lenders hereunder the Agent shall have received the following
documents:
(i) A Reaffirmation of the Guaranty and the other
Collateral Documents, executed and delivered by Holdings and
each of the Domestic Subsidiaries; and
(ii) the Young Pledge Agreement, executed and
delivered by the William C. Young Revocable Trust U/A/D
December 23, 1988, as amended and Multi-Investments Limited
Partnership.
(b) Any documents (including, without limitation, financing
statements, amendments to financing statements, and stock powers)
required to be filed in connection with the Collateral Documents to
create, in favor of the Agent (for and on behalf of Agent
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and the Lenders), a perfected security interest in the Collateral
thereunder shall have been delivered to the Agent in a proper form for
filing in each office in each jurisdiction listed in Schedule 5.3(b),
or other office, as the case may be.
5.4 Senior Debt. The Agent shall have received, in form and substance
satisfactory to the Agent, the following:
(a) evidence that the Senior Unsecured Notes have been issued, and that
Holdings has received gross cash consideration (before underwriters'
discounts and commissions and other expenses of issuance) therefor of
not less than $250,000,000, of which not less than $200,000,000 shall
have been used to prepay the Advances outstanding under the Prior
Credit Agreement;
(b) certified copies of the Senior Unsecured Debt Documents, which
shall be satisfactory to the Agent; and
(c) evidence that the Senior Unsecured Notes have been rated not less
than B3 by Moody's Investor Services.
5.5 Insurance. The Agent shall have received evidence satisfactory to
it that the Loan Parties have obtained the insurance policies required by
Section 7.5 hereof and that such insurance policies are in full force and
effect.
5.6 Compliance with Certain Documents and Agreements. The Loan Parties
(and any of their respective Subsidiaries or Affiliates) shall have each
performed and complied in all material respects with all agreements and
conditions contained in this Agreement, other Loan Documents, or any agreement
or other document executed thereunder and required to be performed or complied
with by each of them (as of the applicable date) and none of such parties shall
be in material default in the performance or compliance with any of the terms or
provisions hereof or thereof.
5.7 Opinion of Counsel. The Loan Parties shall furnish Agent prior to
the initial Advance under this Agreement, and with signed copies for each
Lender, opinions of counsel to the Loan Parties, dated the Effective Date and
covering such matters as reasonably required by and otherwise reasonably
satisfactory in form and substance to the Agent and each of the Lenders.
5.8 Borrowers' Certificate. The Agent shall have received, with a
signed counterpart for each Lender, a certificate of a Responsible Officer of
Holdings dated the Effective Date,
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stating that to the best of his or her knowledge after due inquiry, (a) the
conditions set forth in this Section 5 have been satisfied, (b) the
representations and warranties made by Loan Parties or any other party to any of
the Loan Documents (excluding the Agent and Lenders) in this Agreement or any of
the other Loan Documents, shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on and
as of the Effective Date; and (c) no Default or Event of Default shall have
occurred and be continuing.
5.9 Payment of Fees. Borrowers shall have paid to the Agent all fees,
costs and expenses required to be paid to Agent upon execution of this Agreement
under the terms of this Agreement and under the terms of the commitment letter
dated August 1, 2001 from Comerica Bank to Holdings and Holdings shall have paid
to Comerica Bank all interest and fees required to be paid under the Prior
Credit Agreement.
5.10 Reserved.
5.11 Continuing Conditions. The obligations of the Lenders to make
Advances (including the initial Advance) under this Agreement and the obligation
of the Issuing Lender to issue any Letters of Credit shall be subject to the
continuing conditions that:
(a) No Default or Event of Default shall exist as of the date
of the Advance or the request for the Letter of Credit; and
(b) Each of the representations and warranties contained in
this Agreement and in each of the other Loan Documents shall be true
and correct in all material respects as of the date of the Advance or
Letter of Credit.
5.12 Plastipak Brazil. The obligations of the Issuing Bank to issue
Letters of Credit for the account of Plastipak Brazil shall be subject to the
further conditions that:
(a) all conditions in Sections 5.1 through 5.10 shall have
been satisfied;
(b) Plastipak Brazil shall have executed and delivered to the
Agent the Equipment Pledge Agreement;
(c) the Agent shall have received authority documents for
Plastipak Brazil similar to those described in Section 5.2;
(d) the Agent shall have received an opinion of counsel to
Plastipak Brazil in form and substance satisfactory to the Agent and
evidence that all Requirements of Law have been satisfied in connection
with the Equipment Pledge Agreement; and
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(e) the Agent shall have received evidence satisfactory to it
that it has a valid and perfected first priority Lien on all collateral
described in the Equipment Pledge Agreement.
6. REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrowers represents and warrants with respect
to itself and its Subsidiaries and with respect to all other Loan Parties, and
such representations and warranties shall survive until the Revolving Credit
Maturity Date and thereafter until the expiration of all Letters of Credit and
the final payment in full of the Indebtedness and the performance by Borrowers
of all other obligations under this Agreement:
6.1 Corporate Authority. Each Loan Party is a corporation (or other
business entity) duly organized and existing in good standing under the laws of
the state or jurisdiction of its incorporation or formation, each other
Subsidiary is a corporation or other business entity duly organized and existing
in good standing under the laws of the jurisdiction of its incorporation or
formation; and each Loan Party and each Subsidiary is duly qualified and
authorized to do business as a foreign corporation in each jurisdiction where
the character of its assets or the nature of its activities makes such
qualification necessary and where failure to be so qualified would have a
Material Adverse Effect.
6.2 Due Authorization - Borrowers. Execution, delivery and performance
of this Agreement, the other Loan Documents to which any Borrower is a party and
any other documents and instruments required under or in connection with this
Agreement or the other Loan Documents (or to be so executed and delivered), and
the issuance of the Notes by Borrowers (if requested) are within each Borrower's
corporate powers, have been duly authorized, are not in contravention of law or
the terms of any Borrower's organizational documents and, except as have been
previously obtained or as referred to in Section 6.13, below, do not require the
consent or approval, material to the transactions contemplated by this Agreement
and the other Loan Documents, of any governmental body, agency or authority.
6.3 Due Authorization - Guarantors. Execution, delivery and performance
of the Guaranty, and the other Loan Documents to which any Guarantor is a party,
and all other documents and instruments required of Guarantors under or in
connection with this Agreement and the other Loan Documents (or to be so
executed and delivered), are within the corporate powers of each Guarantor, have
been duly authorized, are not in contravention of law or the terms of any
Guarantor's organizational documents, and, except as have been previously
obtained (or as referred to in Section 6.13 below), do not require the consent
or approval, material to the transactions contemplated by this Agreement and the
other Loan Documents, of any
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governmental body, agency or authority not previously obtained.
6.4 Liens. There are no Liens on and no financing statements on file
with respect to any of the property owned, pledged, mortgaged or otherwise
encumbered (or to be encumbered) by any of the Loan Parties or any of their
respective Subsidiaries except for Liens permitted pursuant to Section 8.2.
6.5 Taxes. Each of the Loan Parties, and each of their respective
Subsidiaries, has filed on or before their respective due dates or within the
applicable grace periods, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all taxes which have become due pursuant to those returns or pursuant
to any assessments received by any such party, as the case may be, to the extent
such taxes have become due, except to the extent such tax payments are being
actively contested in good faith by appropriate proceedings and with respect to
which adequate provision has been made on the books of the applicable Loan Party
or such other Subsidiary as may be required by GAAP.
6.6 No Defaults. There exists no default under the provisions of any
instrument evidencing any indebtedness for borrowed money of any Loan Party or
any of their respective Subsidiaries which is permitted hereunder or of any
agreement relating thereto.
6.7 Enforceability of Agreement and Loan Documents -- Borrowers. This
Agreement, each of the other Loan Documents to which Borrowers are a party, and
all other certificates, agreements and documents executed and delivered by
Borrowers under or in connection herewith or therewith have each been duly
executed and delivered by their respective duly authorized officers and
constitute the valid and binding obligations of Borrowers, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of creditor's
rights, generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in law or equity).
6.8 Enforceability of Loan Documents -- Guarantors. The Loan Documents
to which any of the Guarantors is a party, and all certificates, documents and
agreements executed in connection therewith by the Guarantors, have each been
duly executed and delivered by the duly authorized officers or members or
managers, as the case may be, of the Guarantors and constitute the valid and
binding obligations of such Guarantors, enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditor's rights, generally and by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in law or equity).
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6.9 Compliance with Laws. Except as disclosed on Schedule 6.9, each of
the Loan Parties, and each of their respective Subsidiaries, has complied with
all Requirements of Law of any Governmental Authority having jurisdiction over
it or its businesses except to the extent that failure to comply therewith would
not have a Material Adverse Effect; except for such matters as are not likely to
have a Material Adverse Effect, and except as set forth in Schedule 6.9 hereof,
and without limiting the generality of Section 6.12, there is no pending or, to
the actual knowledge of Borrowers threatened, litigation, action, proceeding or
controversy affecting any Loan Parties or any of their respective Subsidiaries,
and no pending or, to the actual knowledge of Borrowers threatened complaint,
notice or inquiry to any of the Loan Parties or any of the other Subsidiaries,
regarding potential liability of any of the Loan Parties or any of the
Subsidiaries.
6.10 Non-contravention -- Borrowers. The execution, delivery and
performance of this Agreement and the other Loan Documents and any other
documents and instruments required under or in connection with this Agreement by
each of the Borrowers are not in contravention of the terms of any indenture,
agreement or undertaking to which any Borrower or any of its Subsidiaries is a
party or by which its or their properties are bound or affected where such
violation would reasonably be expected to have a Material Adverse Effect.
6.11 Non-contravention -- Guarantors. The execution, delivery and
performance of those Loan Documents signed by the Guarantors, and any other
documents and instruments required under or in connection with this Agreement or
any other Loan Document by the Guarantors, are not in contravention of the terms
of any indenture, agreement or undertaking to which any Loan Party is a party or
by which it or its properties are bound or affected where such violation would
reasonably be expected to have a Material Adverse Effect.
6.12 No Litigation. Except for De Minimis Matters or as set forth on
Schedule 6.12 hereof, there is no suit, action, proceeding, including, without
limitation, any bankruptcy proceeding or governmental investigation, pending
against or to the actual knowledge of the Borrowers threatened against any Loan
Party or any of their respective Subsidiaries (other than any suit, action or
proceeding in which such Loan Party or such Subsidiary is the plaintiff and in
which no counterclaim or cross-claim against such Loan Party or such Subsidiary
has been filed), nor has any Loan Party or any of their respective Subsidiaries
or, to the actual knowledge of the Borrowers any of its or their officers,
members, managers, or directors, as the case may be, been subject to any suit,
action, proceeding or governmental investigation as a result of which any such
officer, member, manager or director is or may be entitled to indemnification by
any Loan Party or any of their respective Subsidiaries, as applicable, which
suits, actions, proceedings or governmental investigations are reasonably likely
to be resolved adversely to such Loan Party or such Subsidiary, and if so
resolved are reasonably likely to have a Material Adverse Effect.
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Except as set forth on Schedule 6.12, there is not outstanding against any Loan
Party or any Subsidiary any judgment, decree, injunction, rule, or order of any
court, government, department, commission, agency, instrumentality or arbitrator
nor is any Loan Party or, to their actual knowledge, any other Subsidiary in
violation of any applicable law, regulation, ordinance, order, injunction,
decree or requirement of any governmental body or court where such matters would
reasonably be expected to have a Material Adverse Effect.
6.13 Consents, Approvals and Filings, Etc. Except as have been
previously obtained, no authorization, consent, approval, license, qualification
or formal exemption from, nor any filing, declaration or registration with, any
Governmental Authority or any other Person (whether or not governmental), is
required in connection with the execution, delivery and performance: (i) by any
of the Loan Parties, of this Agreement, any of the other Loan Documents to which
they are a party, or any other documents or instruments to be executed and or
delivered by any such Loan Parties in connection therewith or herewith; or (ii)
by any Loan Party, of the liens, pledges, mortgages, security interests or other
encumbrances granted, conveyed or otherwise established (or to be granted,
conveyed or otherwise established) by or under this Agreement or the other Loan
Documents, except for such filings to be made concurrently herewith as are
required by the Collateral Documents to perfect liens in favor of the Agent. All
such authorizations, consents, approvals, licenses, qualifications, exemptions,
filings, declarations and registrations which have previously been obtained or
made, as the case may be, are in full force and effect and are not the subject
of any attack, or to the actual knowledge of Borrowers threatened attack (in any
material respect) by appeal or direct proceeding or otherwise.
6.14 Agreements Affecting Financial Condition. None of the Loan Parties
or any of their respective Subsidiaries is party to any agreement or instrument
or subject to any charter or other corporate restriction which has a Material
Adverse Effect.
6.15 No Investment Company or Margin Stock. None of the Loan Parties or
any of their respective Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. None of the Loan
Parties or any of their respective Subsidiaries is engaged principally, or as
one of its important activities, directly or indirectly, in the business of
extending credit for the purpose of purchasing or carrying margin stock. None of
the proceeds of any of the Advances will be used by any Loan Party or any of
their respective Subsidiaries to purchase or carry margin stock or will be made
available by any Loan Party or any of their respective Subsidiaries in any
manner to any other Person to enable or assist such Person in purchasing or
carrying margin stock. Terms for which meanings are provided in Regulation U of
the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph
with such meanings.
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6.16 ERISA. None of the Loan Parties or any of their respective
Subsidiaries maintains or contributes to any Pension Plan subject to Title IV of
ERISA, except as set forth on Schedule 6.16 hereto; and there is no accumulated
funding deficiency within the meaning of ERISA, or any existing liability with
respect to any of the Pension Plans owed to the Pension Benefit Guaranty
Corporation or any successor thereto, and no "reportable event" or "prohibited
transaction", as defined in ERISA, has occurred with respect to any Pension
Plan, and all such Pension Plans are in material compliance with the
requirements of the Internal Revenue Code and ERISA.
6.17 Conditions Affecting Business or Properties. Neither the
respective businesses nor the properties of any Loan Party or any of their
respective Subsidiaries is affected by any fire, explosion, accident, strike,
lockout or other dispute (which in the case of any labor dispute is not merely
threatened), drought, storm, hail, earthquake, embargo, Act of God or other
casualty (not covered by insurance) which is reasonably likely to have a
Material Adverse Effect, or if such event or condition were to continue for more
than thirty (30) additional days would reasonably be expected to have a Material
Adverse Effect.
6.18 Environmental and Safety Matters. Except as set forth in Schedules
6.18 and 6.12 and except for such matters as are not likely to have a Material
Adverse Effect:
(a) to the Borrowers' actual knowledge, all facilities and
property owned or leased by the Loan Parties or any of their respective
Subsidiaries, are owned or leased by the Loan Parties and such
Subsidiaries in material compliance with all Hazardous Material Laws;
(b) to the actual knowledge of the Borrowers, there have been no
past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by any Loan Party or any of their respective Subsidiaries with
respect to any alleged violation of any Hazardous Material Law, or
(ii) complaints, notices or inquiries to any Loan Party or any
of their respective Subsidiaries regarding potential liability under
any Hazardous Material Law; and
(c) to the actual knowledge of the Borrowers, no conditions
exist at, on or under any property now or previously owned or leased by
the Loan Parties or any of their respective Subsidiaries which, with
the passage of time, or the giving of notice or both, would give rise
to liability under any Hazardous Material Law.
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6.19 Subsidiaries. As of the Effective Date, and except as disclosed on
Schedule 6.19 hereto, Holdings has no Subsidiaries.
6.20 Accuracy of Information.
(a) Each of the financial statements of Holdings and its
Subsidiaries furnished to Agent and the Lenders prior to the date of
this Agreement fairly presents (subject to year-end adjustments in the
case of interim statements) the financial condition of Holdings and its
Subsidiaries and the results of their operations for the periods
covered thereby, and has been prepared in accordance with GAAP. The
projections and pro forma financial information contained in the
materials referenced in this clause (a) are based upon good faith
estimates and assumptions believed by management of Holdings to be
reasonable at the time made, it being recognized by the Lenders that
such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected
results set forth therein.
(b) Since October 28, 2000, there has been no material adverse
change in the financial condition of Holdings and its Subsidiaries
taken as a whole, to the best knowledge of Holdings, neither Holdings
nor any of its Subsidiaries has any contingent obligations (including
any liability for taxes) not disclosed by or reserved against in the
balance sheets previously supplied to the Agent, as applicable, except
as set forth on Schedule 6.20 hereof, and at the present time there are
no unrealized or anticipated losses from any present commitment of
Holdings or any of its Subsidiaries which contingent obligations and
losses in the aggregate are likely to have a Material Adverse Effect.
6.21 Labor Relations. None of the Loan Parties or any of their
respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There is (i) no unfair
labor practice complaint pending against the Loan Parties nor any of their
respective Subsidiaries or to the knowledge of Borrowers, threatened against any
of them, before the National Labor Relations Board or any other labor relations
board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against any of them or, to the
knowledge of Borrowers, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against the Borrowers or any Subsidiary or
to the knowledge of Borrowers, threatened against any of them and (iii) no union
representation question existing with respect to the employees of the Loan
Parties or any of their respective Subsidiaries, in each case or in the
aggregate which could reasonably be expected to have a Material Adverse Effect.
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6.22 Solvency. After giving effect to the consummation of the
transactions contemplated by this Agreement, Holdings and each of its
Subsidiaries will be solvent, able to pay its indebtedness as it matures and
will have capital sufficient to carry on its business and all business in which
it is about to engage. This Agreement is being executed and delivered by the
Borrowers to Agent and the Lenders in good faith and in exchange for fair,
equivalent consideration. The capital and monies remaining in the Borrowers and
their Subsidiaries are not now and are not reasonably expected to become so
unreasonably small as to preclude the Borrowers or their Subsidiaries from
carrying on their businesses. None of the Borrowers or any Subsidiary intends to
nor does management of Borrowers or any Subsidiary believe it will incur debts
beyond its ability to pay as they mature. None of the Borrowers or any
Subsidiary contemplates filing a petition in bankruptcy or for an arrangement or
reorganization under the Bankruptcy Code or any similar law of any jurisdiction
now or hereafter in effect relating to any Borrower or any Subsidiary, nor does
any Borrower or any Subsidiary have any knowledge of any threatened bankruptcy
or insolvency proceedings against Borrowers or any Subsidiary.
6.23 Capitalization. The authorized capital stock of each Borrower and
each Subsidiary is as set forth in Schedule 6.23. All issued and outstanding
shares of capital stock of Borrowers are duly authorized and validly issued,
fully paid, nonassessable, and free and clear of all Liens, and such shares were
issued in compliance with all applicable state and federal laws concerning the
issuance of securities. The capital stock of each of the Borrowers and of each
Subsidiary is owned by the stockholders and in the amounts set forth on Schedule
6.23. No shares of the capital stock of any Borrower or any Subsidiary, other
than those described above, are issued and outstanding. Except as disclosed on
Schedule 6.23, there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from a Borrower or any Subsidiary, of any shares of
capital stock or other securities of a Borrower or any Subsidiary.
6.24 Completion of Environmental Tasks. Except as disclosed on Schedule
6.24, Holdings and the Borrowers have completed all Environmental Tasks in
accordance with the Prior Credit Agreement.
6.25 Senior Unsecured Note Documents. No "Event of Default" (as defined
in the Senior Unsecured Debt Indenture) exists, and no event or circumstance
exists which, with the giving of notice, the passage of time, or both, would
constitute such an "Event of Default"; and all Indebtedness incurred under this
Agreement at any time is incurred in compliance with Section 4.09 of the Senior
Unsecured Debt Indenture.
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7. AFFIRMATIVE COVENANTS
Holdings and each Borrower covenants and agrees that it will, and, as
applicable, it will cause each of its Subsidiaries, until the later of the
Revolving Credit Maturity Date and thereafter until expiration of all Letters of
Credit and final payment in full of the Indebtedness and the performance by the
Borrowers and the Subsidiaries of all other obligations under this Agreement and
the other Loan Documents, to:
7.1 Financial Statements. Furnish to the Agent with sufficient copies
for each Lender:
(a) as soon as available, but in any event one hundred twenty
(120) days after the end of each fiscal year of Holdings, a copy of the
audited Consolidated and Consolidating financial statements of Holdings
as at the end of such year and the related audited statements of
income, accumulated earnings, and cash flows for such year and
underlying assumptions, setting forth in each case in comparative form
the figures for the previous year, certified as being fairly stated in
all material respects by a nationally recognized certified public
accounting firm reasonably satisfactory to the Agent and the Lenders;
and
(b) as soon as available, but in any event not later than
sixty (60) days after the end of each fiscal quarter of Holdings, the
unaudited Consolidated and Consolidating financial statements of
Holdings as at the end of such fiscal quarter and the related unaudited
statements income, accumulated earnings and cash flows of Holdings for
the portion of the fiscal year through the end of such fiscal quarter,
setting forth in each case in comparative form the figures for the
previous year, and certified by a Responsible Officer as being fairly
stated in all material respects;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods provided however
that the financial statements delivered pursuant to clause (b) hereof will not
be required to include footnotes and will be subject to year-end adjustments.
7.2 Certificates; Other Information. Furnish to the Agent with
sufficient copies for each Lender:
(a) Within sixty (60) days after and as the end of each fiscal
quarter, a Covenant Compliance Certificate substantially in form
attached hereto as Exhibit I;
(b) Within ninety (90) days of the end of each fiscal year of
Holdings,
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projections for the three following fiscal years, including budgets,
balance sheets and income statements;
(c) Within fifteen (15) days after and as of the end of each
month, a Borrowing Base Certificate, agings of the Accounts and
accounts payable of Holdings and all Subsidiaries, and an Inventory
report in form acceptable to the Agent;
(d) Promptly following receipt thereof (but no more than ten
(10) Business Days following receipt), copies of all management letters
from any certified public accountants; and
(e) Promptly and in form to be reasonably satisfactory to
Majority Lenders, such additional financial and/or other information,
or other reports as any Lender may from time to time reasonably
request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrowers.
7.4 Conduct of Business and Maintenance of Existence.
(a) Continue to engage primarily in the businesses conducted
on the Effective Date, and preserve, renew and keep in full force and
effect its existence, except as otherwise permitted pursuant to
Sections 8.4 and 8.5;
(b) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct
of its business except as otherwise permitted pursuant to Section 8.5;
and
(c) comply with all Contractual Obligations and Requirements
of Law, except to the extent that failure to comply therewith would
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in working order and maintain insurance coverage on
its physical assets and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and nature
(including without limitation casualty and public liability and property damage
insurance), and in the event of acquisition of additional property, real or
personal, or of
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incurrence of additional risks of any nature, increase such insurance coverage
in such manner and to such extent as prudent business judgment and present
practice or any applicable Requirements of Law would dictate; and in the case of
all policies covering any Collateral, all such insurance policies shall provide
that the loss payable thereunder shall be payable to the applicable Loan Party,
and to the Agent for the benefit of the Agent and the Lenders (Agent or Agent
and Lenders, as applicable, as mortgagees, or, in the case of personal property
interests, lender loss payee(s)), as their respective interests may appear. Upon
request of Agent or any Lender, certificates evidencing such policies, including
all endorsements thereto, shall be delivered to Agent or such Lender, as the
case may be.
7.6 Inspection of Property; Books and Records, Discussions. Permit
Agent and each Lender, through their authorized attorneys, accountants and
representatives (a) to examine each Borrower's and each Subsidiary's books,
accounts, records, ledgers and assets and properties of every kind and
description wherever located at all reasonable times during normal business
hours, upon oral or written request of Agent or such Lender; (b) at any time and
from time to time, at the request of the Majority Lenders, to conduct full or
partial collateral audits of each Borrower and its Subsidiaries to be completed
by an appraiser as may be selected by Agent and the Majority Lenders, with all
reasonable costs and expenses of such audits to be reimbursed by Borrowers,
provided, however, that except as provided in the following provisio, prior to
the occurrence and continuance of any Default or Event of Default, the Borrowers
shall only be required to reimburse the Agent for the reasonable costs and
expenses of no more than one (1) such audit conducted in any year and provided
further however that Borrowers shall be required to reimburse the Agent for all
reasonable costs and expenses of all audits conducted after the occurrence and
during the continuance of a Default or Event of Default; and provided further,
that the Agent shall conduct an audit of the Accounts and Inventory of Holdings
and its Subsidiaries at the Borrowers' sole cost and expense, to be commenced
within 60 days of the Effective Date; and (c) permit Agent and each Lender or
their authorized representatives, at reasonable times and intervals, to visit
all of their respective offices, discuss their respective financial matters with
their respective officers and independent certified public accountants, as
applicable, and, by this provision, Borrowers authorize such accountants to
discuss the finances and affairs of Borrowers and their Subsidiaries (provided
that Borrowers are given an opportunity to participate in such discussions) and
examine any of its or their books and other corporate records.
7.7 Notices. Promptly upon having actual knowledge give written notice
to the Agent of:
(a) the occurrence of any Default or Event of Default of
which any Borrower or any Subsidiary has knowledge;
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(b) any (i) default or event of default under any Contractual
Obligation of any Borrower or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between a
Borrower or any Subsidiary and any Governmental Authority or any third
party, which in either case, if not cured or if it is reasonably likely
to be adversely determined, as the case may be, would have a Material
Adverse Effect or (iii) any change in the financial condition of
Holdings or any of its Subsidiaries since the date of the last audited
financial statements delivered pursuant to Section 7.1(a) hereof which
could reasonably be expected to have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event
within 30 days after the Borrowers know thereof and to the extent the
same would have a Material Adverse Effect: (i) the occurrence of any
"reportable event" as defined in ERISA with respect to any Pension
Plan, or any withdrawal from or the termination, reorganization or
insolvency of any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the Pension Benefit
Guaranty Corporation or Borrowers or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from or the
terminating, reorganization or insolvency of any Pension Plan;
(d) any event which is reasonably likely to have a Material
Adverse Effect; and
(e) promptly after becoming aware of the taking by the
Internal Revenue Service or any foreign taxing jurisdiction of a
written tax position which could reasonably be expected to have a
Material Adverse Effect upon the Borrowers (or any such tax position
taken by the Borrowers) setting forth the details of such position and
the financial impact thereof.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrowers propose to take with respect thereto.
7.8 Hazardous Material Laws.
(a) Use and operate all of its facilities and properties in
material compliance with all Hazardous Material Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Hazardous Material Laws;
(b) Promptly notify Agent and provide copies upon receipt of
all written
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claims, complaints, notices or inquiries received by any Borrower or
any of its Subsidiaries of a material nature relating to its facilities
and properties or compliance with Hazardous Material Laws, and promptly
cure and have dismissed any actions and proceedings relating to
compliance with Hazardous Material Laws to which any Borrower or any of
Subsidiaries is named as a party and which could reasonably be likely
to have a Material Adverse Effect; and
(c) Perform to completion, on or before ninety (90) days after
the Effective Date, all actions described on Schedule 7.8 to the Prior
Credit Agreement which are incomplete as of the Effective Date; and
provide such information and certifications which any Lender may
reasonably request from time to time to evidence compliance with this
Section 7.8.
7.9 Debt Service Coverage Ratio. Maintain a Debt Service Coverage Ratio
of not less than the following, as of the end of each fiscal quarter of Holdings
during the periods indicated below:
Effective Date through November 1, 2002 1.2 to 1.0
November 2, 2002 and at all times thereafter 1.25 to 1.0
7.10 Senior Secured Debt Ratio. Maintain a Senior Secured Debt Ratio of
not more than the following, as of the end of each fiscal quarter of Holdings
during the periods indicated below:
Effective Date through November 1, 2002 2.25 to 1.0
November 2, 2002 and at all times thereafter 2.0 to 1.0
7.11 Leverage Ratio. Maintain a Leverage Ratio of not more than the
following, as of the end of each fiscal quarter of Holdings during the periods
indicated below:
Effective Date through November 1, 2002 4.25 to 1.0
November 2, 2002 through October 31, 2003 4.0 to 1.0
November 1, 2003 and at all times thereafter 3.75 to 1.0
7.12 Consolidated Tangible Net Worth. Maintain, as of the last day of
each fiscal quarter of Holdings, Consolidated Tangible Net Worth of not less
than the sum of $12,500,000 plus the Tangible Net Worth Adjustment Amount.
7.12A Interest Coverage Ratio. Maintain an Interest Coverage Ratio of
not less than the following as of the end of each fiscal quarter of Holdings
during the periods indicated below:
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Effective Date through October 29, 2004 2.25 to 1.0
October 30, 2004 and at all times thereafter 2.50 to 1.0
7.13 Taxes. Pay and discharge all taxes and other governmental charges,
and all material contractual obligations calling for the payment of money,
before the same shall become overdue, unless and to the extent only that such
payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP on its balance sheet, or where the failure to
pay any such matter could not have a Material Adverse Effect.
7.14 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any Governmental Authority or otherwise) which are necessary in
connection with the execution, delivery and performance by such Loan Parties, of
this Agreement, the other Loan Documents, or any other documents or instruments
to be executed and/or delivered by such Loan Parties in connection therewith or
herewith.
7.15 Compliance with ERISA. Comply in all material respects with all
requirements imposed by ERISA as presently in effect or hereafter promulgated or
the Internal Revenue Code, including, but not limited to, the minimum funding
requirements of any Pension Plan, except where the failure to comply could not
have a Material Adverse Effect.
7.16 ERISA Notices. Promptly, upon having actual knowledge thereof,
notify Agent upon the occurrence of any of the following events:
(a) the termination of any Pension Plan subject to Subtitle C of
Title IV of ERISA;
(b) the appointment of a trustee by a United States District Court
to administer any Pension Plan subject to Title IV of ERISA;
(c) the commencement by the Pension Benefit Guaranty Corporation,
or any successor thereto, of any proceeding to terminate any Pension
Plan subject to Title IV of ERISA;
(d) the failure of a Borrower or any Subsidiary to make any
payment in respect of any Pension Plan required under Section 412 of
the Internal Revenue Code;
(e) the withdrawal of a Borrower or any Subsidiary from any
Multiemployer
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Plan; or
(f) the occurrence of a "reportable event" which is required
to be reported by a Borrower under Section 4043 of ERISA or a
"prohibited transaction" as defined in Section 406 of ERISA or Section
4975 of the Internal Revenue Code which in either case is likely to
have a Material Adverse Effect.
7.17 Security. Take such actions as the Agent or the Majority Lenders
may from time to time reasonably request to establish and maintain first
perfected security interests in and Liens on all of its Collateral, subject only
to Permitted Liens and other liens permitted under Section 8.2 hereof.
7.18 Defense of Collateral. Defend the Collateral from any Liens other
than Liens permitted by Section 8.2.
7.19 Use of Proceeds. Use all Advances of the Revolving Credit for
working capital financing, general corporate purposes, and to finance Permitted
Acquisitions. Borrowers shall not use any portion of the proceeds of any such
advances for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation T, U or X of said
Board of Governors or for any other purpose in violation of (x) any applicable
statute or regulation or (y) the terms and conditions of this Agreement.
7.20 Future Subsidiaries; Additional Collateral.
(a) With respect to each Person which becomes a Domestic
Subsidiary of any Borrower (directly or indirectly) after the Effective
Date, within thirty days of the date such Person is created, acquired
or otherwise becomes a Subsidiary (whichever first occurs), cause such
new Subsidiary to execute and deliver to the Agent (i) a Joinder
Agreement whereby such Domestic Subsidiary becomes obligated as a
Guarantor under the Guaranty and (ii) a Joinder Agreement whereby such
Domestic Subsidiary becomes obligated under the Security Agreement;
(b) With respect to the Equity Interests of each Person which
becomes a Domestic Subsidiary after the Effective Date, but subject to
the provisions of Section 13.23, within thirty days of the date such
Person is created, acquired or becomes a Subsidiary (whichever first
occurs), Holdings shall execute, or cause to be executed, and deliver
to the Agent a Pledge Agreement encumbering all of the Equity Interests
of each such Domestic Subsidiary owned by Holdings or any Subsidiary to
secure the Indebtedness;
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(c) With respect to any Foreign Subsidiary owning assets in
excess of $5,000,000, at the request of the Agent and the Majority
Lenders, Holdings shall execute, or cause to be executed, and deliver
to the Agent a pledge agreement, together with such other agreements
and opinions requested by the Agent, encumbering 65% of the Equity
Interests of such Subsidiary to secure the Indebtedness; and
(d) With respect to real property owned by Holdings or any
Subsidiary after the Effective Date, not later than forty-five days
after such property is acquired, Holdings shall execute or cause to be
executed a Mortgage covering such property, together with such real
estate documentation listed on Schedule 7.20 to the Prior Credit
Agreement;
in each case in form satisfactory to the Agent and the Majority Lenders, in
their reasonable discretion, together with such supporting documentation,
including without limitation corporate authority items, certificates and
opinions of counsel, as reasonably required by the Agent and the Majority
Lenders and the Borrower shall take, or cause to be taken, such steps as are
necessary or advisable under applicable law to perfect the liens granted under
this Section 7.20.
7.21 Further Assurances. Execute and deliver or cause to be executed
and delivered to Agent within a reasonable time following the request of the
Agent or the Majority Lenders, and at the Borrowers' expense, such other
documents or instruments as Agent or the Majority Lenders may reasonably require
to effectuate more fully the purposes of this Agreement or the other Loan
Documents.
7.22 Appraisals. Furnish to the Agent, on or before 180 days after the
Effective Date, appraisals of all Equipment owned by Holdings or any Domestic
Subsidiary, prepared by appraisers satisfactory to the Agent.
7.23 Plastipak Brazil. Satisfy all conditions provided in Section 5.12
on or before ninety (90) days after the Effective Date.
8. NEGATIVE COVENANTS.
Holdings and each Borrower covenants and agrees that, until the
Revolving Credit Maturity Date and thereafter until expiration of all Letters of
Credit and final payment in full of the Indebtedness and the performance by
Borrowers and the Subsidiaries of all other obligations under this Agreement and
the other Loan Documents, it will not, and will not permit any of its
Subsidiaries, to:
8.1 Limitation on Debt. Create, incur, assume or suffer to exist any
Debt, except:
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(a) Indebtedness under this Agreement and the other Loan
Documents;
(b) any Debt, other than pursuant to this Agreement, existing
on the Effective Date and set forth in Schedule 8.1 attached hereto and
any renewals or refinancing of such Debt in amounts not exceeding the
scheduled amounts (less any required amortization according to the
terms thereof), on substantially the same terms and otherwise in
compliance with this Agreement;
(c) Debt of the Borrowers or a Subsidiary other than pursuant
to this Agreement and other than Debt set forth in Schedule 8.1
attached hereto incurred to finance the acquisition of fixed or capital
assets (whether pursuant to a loan or a Capitalized Lease) in an
aggregate amount not exceeding Fifteen Million Dollars ($15,000,000) at
any time outstanding, and any renewals or refinancing of such Debt in
amounts not exceeding the scheduled amounts (less any required
amortization according to the terms thereof), on substantially the same
terms and otherwise in compliance with this Agreement;
(d) Subordinated Debt;
(e) Debt under any Hedging Transactions;
(f) Intercompany Loans, but only to the extent permitted under
the other applicable terms and limitations of this Agreement, including
but not limited to Section 8.7 hereof;
(g) Debt assumed pursuant to a Permitted Acquisition, provided
that such Debt was not entered into, extended or renewed in
contemplation of such acquisition (including Debt secured by Liens
permitted by Section 8.2(c)), and provided further that the aggregate
amount of all such Debt shall not exceed $10,000,000; and
(h) Senior Unsecured Debt, and any renewals, refundings and
refinancings thereof in amounts not exceeding $275,000,000 less all
permitted prepayments thereof;
(i) Permitted Real Estate Debt; and
(j) additional unsecured Debt not exceeding $10,000,000 in
aggregate principal amount at any one time outstanding.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of
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its property, assets or revenues, whether now owned or hereafter acquired,
except for:
(a) Permitted Liens;
(b) Liens securing Debt permitted by Section 8.1(c) incurred
to finance the acquisition of fixed or capital assets, provided that
(i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Debt, (iii) the amount of Debt secured thereby is not increased and
(iv) the principal amount of Debt secured by any such Lien shall at no
time exceed 100% of the original purchase price of such property;
(c) any Lien securing Debt assumed pursuant to a Permitted
Acquisition, provided that such Lien is limited to the property so
acquired, and was not entered into, extended or renewed in
contemplation of such acquisition;
(d) Liens in favor of Agent, as security for the Indebtedness;
and
(e) other Liens, existing on the Effective Date, set forth on
Schedule 8.2.
8.3 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation, except (a) the Guaranties, (b)
guaranties of Senior Unsecured Debt, and (c) any guaranties described on
Schedule 8.3.
8.4 Acquisitions. Other than Permitted Acquisitions, purchase or
otherwise acquire or become obligated for the purchase of all or substantially
all or any material portion of the assets or business interests of any Person,
firm or corporation, or any shares of stock (or other ownership interests) of
any corporation, trusteeship or association, or any business or going concern,
or in any other manner effectuate or attempt to effectuate an expansion of
present business by acquisition.
8.5 Limitation on Mergers, or Sale of Assets. Enter into any merger or
consolidation or convey, sell, lease, assign, transfer or otherwise dispose of
any of its property, business or assets (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired or
make any material change in its capital structure or its present method of
conducting business, except:
(a) inventory leased or sold in the ordinary course of business;
(b) obsolete or worn out property, property no longer useful in the
conduct of
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a Borrower's or any Subsidiary's business or property from closed
offices;
(c) acquisitions by merger in which Holdings or a 100%
Domestic Subsidiary is the surviving corporation and which otherwise
meet the definition of "Permitted Acquisition";
(d) mergers or consolidations of any Subsidiary with or into
Holdings (so long as Holdings shall be the continuing or surviving
corporation); or mergers or consolidations of any Subsidiary with or
into any Domestic Subsidiary that is a Guarantor (so long as such
Guarantor shall be the continuing or surviving corporation); and
(e) subject to the mandatory prepayment provisions of Section
2.15 hereof (and provided that no Default or Event of Default has
occurred and is continuing at the time of each such sale), Asset Sales
in which the sales price is at least the fair market value of the
assets sold and the aggregate amount of such Asset Sales is less than
$10,000,000 in any fiscal year, and other Asset Sales approved by the
Majority Lenders.
8.6 Restricted Payments. Declare or make, or permit any Subsidiary to
declare or make, any distribution, dividend, payment or other distribution of
assets, properties, cash, rights, obligations or securities (collectively,
"Distributions") on account of any Equity Interests, or purchase, redeem or
otherwise acquire for value any Equity Interests, or any warrants, rights or
options to acquire such Equity Interests, now or hereafter outstanding, except
that (i) Holdings's Subsidiaries may make Distributions to Holdings, and (ii)
the Borrowers may redeem Equity Interests of employees pursuant to their
Restricted Stock Bonus Plan in amounts not to exceed $1,500,000 in the aggregate
in any Fiscal Year, provided that no Distributions described in this sub-section
(ii) may be made if a Default or Event of Default is then continuing, either
before any such Distribution or after giving effect thereto (and for this
purpose, compliance with Sections 7.10 and 7.11 shall be determined on a pro
forma basis based on the Borrowers' most recent quarterly financial statements
and Covenant Compliance Certificate).
8.7 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities, of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) Permitted Investments;
(b) Investments existing on the Effective Date and listed on
Schedule 8.7 hereof;
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(c) extensions of trade credit in the ordinary course of business;
(d) loans and advances to officers and employees of a Borrower
or to officers and employees of any Subsidiary in the ordinary course
of business in an aggregate amount, not to exceed $1,000,000 at any one
time outstanding, to the extent permitted by applicable law;
(e) Intercompany Loans, Advances or Investments made on or after
the Effective Date by any Borrower or any Guarantor to any
Domestic Loan Party; provided that any Intercompany Loan
hereunder shall be evidenced by and funded under an
Intercompany Note encumbered in favor of the Agent pursuant to
a Security Agreement and provided further that at the time any
such loan, advance or investment is made (before and after
giving effect thereto) no Default or Event of Default has
occurred and is continuing;
(f) Permitted Acquisitions;
(g) Intercompany Loans, Advances or Investments, including those
listed on Schedule 8.7 and those made after the Effective Date, by all
Borrowers to any Eligible Foreign Subsidiary in an aggregate amount not
to exceed $35,000,000 at any one time outstanding (provided that all
Intercompany Loans covered by this clause (except the existing
$5,000,000 promissory note from Plastipak Brazil as maker to Packaging
as payee, and any extensions and renewals thereof) shall be evidenced
by and funded under an Intercompany Note encumbered in favor of the
Agent pursuant to the applicable Security Agreement and provided
further that at the time any such loan, advance or investment is made
(before and after giving effect thereto) no Default or Event of Default
has occurred and is continuing); and
(h) Investments other than those set forth in clauses (a)
through (g) above or on Schedule 8.7 hereof, in aggregate amount
outstanding at any one time not to exceed $5,000,000.
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.7 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
8.8 Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with
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any Affiliate of a Borrower or any Subsidiary unless such transaction is
otherwise permitted under this Agreement or is in the ordinary course of a
Borrower's or such Subsidiary's business and is upon fair and reasonable terms
no less favorable to the applicable Borrower or such Subsidiary than it would
obtain in a comparable arms length transaction with a Person not a Subsidiary
and such transaction would not contravene any financial assistance provision of
applicable law.
8.9 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by a Borrower or any Subsidiary of real or personal
property which has been or is to be sold or transferred by a Borrower or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of a Borrower or such Subsidiary, as the case may be.
8.10 Limitation on Negative Pledge Clauses. Enter into any agreement,
document or instrument which would restrict or prevent Borrowers and their
Subsidiaries from granting to the Agent on behalf of the Agent and the Lenders
liens upon, security interests in and pledges of their respective assets which
are senior in priority to all other Liens, except for Permitted Liens and any
other agreements, documents or instruments pursuant to which Liens not
prohibited by the terms of this Agreement are created, entered into, or allowed
to exist, or from declaring or paying dividends, principal or interest.
8.11 Prepayment of Debts. Prepay, purchase, redeem or defease any Debt
for money borrowed or any capital leases, except (i) prepayments of the
Indebtedness, and (ii) subject to the terms hereof so long as no Default or
Event of Default (including without limitation pursuant to Section 7.14 hereof)
has occurred and is continuing (both before and after giving effect thereto),
the Young Debt (in its entirety) and regularly scheduled prepayments of
Subordinated Debt, except as prohibited by the terms of the relevant
subordination agreement.
8.12 Amendment of Debt and Subordinated Debt Documents and Senior
Unsecured Debt Documents. Amend, modify or otherwise alter (or suffer to be
amended, modified or altered) any of the material terms and conditions of those
documents or instruments evidencing or otherwise related to any Debt set forth
on Schedule 8.1, or any Subordinated Debt or Senior Unsecured Debt, or waive (or
permit to be waived) any provision thereof in any material respect, without the
prior written approval of Agent and the Majority Lenders. For purposes of those
documents or instruments evidencing or otherwise related to such Debt, any
increase in the original interest rate or principal amount, any shortening of
the original amortization, any change in financial covenants, any change in any
default, remedial or other repayment terms and any change in or waiver of
conditions contained therein which are required under or necessary for
compliance with this Agreement or the other Loan Documents shall (without
reducing the scope of this Section 8.12) be deemed to be material.
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8.13 Modification of Certain Agreements. Make, permit or consent to any
amendment or other modification to the constitutional documents of any of the
Loan Parties, except to the extent that any such amendment (i) does not violate
the terms and conditions of this Agreement or any of the other Loan Documents,
(ii) does not materially adversely affect the interest of the Lenders as
creditor under this Agreement, the other Loan Documents or any other document or
instrument in any respect and (iii) could not reasonably be expected to have a
Material Adverse Effect.
8.14 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except for Capital Expenditures not to exceed $70,000,000 in any
Fiscal Year. In addition, the difference between permitted Capital Expenditures
and actual Capital Expenditures at the end of any Fiscal Year and for the year
then ended may be spent during the following Fiscal Year, provided that any
amounts carried forward pursuant to this paragraph shall expire at the end of
such following Fiscal Year.
9. DEFAULTS
9.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal of any Advance
or interest thereon in accordance with the terms thereof, (ii) any
Reimbursement Obligation, or (iii) any Fees, and in the case interest
payments and Fees, continuance thereof for three (3) Business Days;
(b) non-payment of any money by Borrowers under this Agreement
or by Borrowers or any Subsidiary under any of the other Loan Documents
to which it is a party, other than as set forth in subsection (a),
above within five Business Days after notice from Agent that the same
is due and payable;
(c) default in the observance or performance of any of the
conditions, covenants or agreements of Borrowers set forth in Sections
2.14, 2.15, 7.1, 7.2, 7.4(a), 7.5, 7.6, 7.7, 7.9 through 7.12, or 8 (in
its entirety);
(d) default in the observance or performance of any of the
conditions, covenants or agreements of the Borrowers set forth in
Section 7.20 and continuance thereof for thirty (30) days;
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(e) default in the observance or performance of any of the
other conditions, covenants or agreements set forth in this Agreement
by Borrowers and continuance thereof for a period of thirty (30)
consecutive days after written notice from Agent;
(f) any certification, representation or warranty made by
Borrowers or any Subsidiary herein or in any instrument submitted
pursuant hereto or by any other party to the Loan Documents proves
untrue or misleading in any material adverse respect when made;
(g) default in the observance or performance of or failure to
comply with any of the conditions, covenants or agreements of Borrowers
or any Subsidiary set forth in any of the other Loan Documents, and the
continuance thereof beyond any period of grace or cure specified in any
such document or, in the case of the Collateral Documents, continuance
thereof for a period of thirty (30) days;
(h) default (i) in the payment of any Debt (other than
Indebtedness hereunder, but including without limitation any
Subordinated Debt and the Senior Unsecured Debt) of any Borrower or any
Subsidiary in excess of One Million Dollars ($1,000,000), individually
or in the aggregate when due (whether by acceleration or otherwise) and
continuance thereof beyond any applicable period of cure or (ii)
failure to comply with the terms of any such other obligation for
borrowed money of any Borrower or any Subsidiary, which continues
beyond any applicable period of cure and which would permit the holder
or holders thereto to accelerate such other indebtedness for borrowed
money;
(i) the rendering of any judgment(s) for the payment of money
in excess of the sum of One Million Dollars ($1,000,000) (or the
equivalent thereof in any currency other than Dollars) individually or
in the aggregate against any Borrower or any Subsidiary, and any such
judgment(s) shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) consecutive days,
except as covered by adequate insurance with a reputable carrier and an
action is pending in which an active defense is being made with respect
thereto;
(j) the occurrence of a "reportable event", as defined in
ERISA, which is determined to constitute grounds for termination by the
Pension Benefit Guaranty Corporation of any Pension Plan subject to
Title IV of ERISA maintained or contributed to by or on behalf of a
Borrower or any of its Subsidiaries for the benefit of any of its
employees or for the appointment by the appropriate United States
District Court of a trustee to administer such Pension Plan and such
reportable event is not corrected and
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such determination is not revoked within sixty (60) days after notice
thereof has been given to the plan administrator of such Pension Plan
(without limiting any of Agent's or any Lender's other rights or
remedies hereunder), or the institution of proceedings by the Pension
Benefit Guaranty Corporation to terminate any such Pension Plan or to
appoint a trustee by the appropriate United States District Court to
administer any such Pension Plan, which in either case could reasonably
be expected to have a Material Adverse Effect;
(k) any Loan Party (i) ceases or fails to be solvent, or
generally fails to pay, or admits in writing its inability to pay, its
debts as they become due; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; (iv) takes any action to effectuate
or authorize any of the foregoing; or (A) Any involuntary Insolvency
Proceeding is commenced or filed against Loan Party, or any writ,
judgment, warrant of attachment, execution or similar process is
issued, enforced or levied against a substantial part of any Loan
Party's properties, and such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded, within
60 days after commencement, filing or levy; (B) any Loan Party admits
the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief is ordered in any Insolvency
Proceeding; or (C) any Loan Party acquiesces in the appointment of a
receiver, receiver and manager, administrative receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion
of its property or business; or
(l) a Change in Control shall occur; or
(m) any provision of any Collateral Document shall at any time
for any reason cease to be valid, binding and enforceable against any
Borrower or any Subsidiary, as applicable, or the validity, binding
effect or enforceability thereof shall be contested by any Borrower or
any Subsidiary or any Borrower or any Subsidiary shall deny that it has
any or further liability or obligation under any Collateral Document,
or any such Loan Document shall be terminated, invalidated, revoked or
set aside or in any way cease to give or provide to the Lenders and the
Agent the benefits purported to be created thereby.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent may, and shall, upon being directed to do so
by the Majority Lenders, declare the Commitments terminated; (b) the Agent may,
and shall, upon being directed to do so by the Majority Lenders, declare the
entire unpaid principal Indebtedness, including the Notes, immediately due and
payable, without presentment, notice or demand, all of which are hereby
expressly waived by Borrowers; (c) upon the occurrence of any Event of Default
specified in
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subsection 9.1(k) above and to the extent permitted by law, and notwithstanding
the lack of any declaration by Agent under preceding clause (b), the entire
unpaid principal Indebtedness shall become automatically and immediately due and
payable, and the Commitments shall be automatically and immediately terminated;
(d) the Agent shall demand immediate delivery of cash collateral, and Borrowers
and each Account Party agrees to deliver such cash collateral upon demand, in an
amount equal to the maximum amount that may be available to be drawn at any time
prior to the stated expiry of all outstanding Letters of Credit, and (e) the
Agent may, and shall, if directed to do so by the Majority Lenders or the
Lenders, as applicable (subject to the terms hereof), exercise any remedy
permitted by this Agreement, the other Loan Documents or law.
9.3 Rights Cumulative. No delay or failure of Agent and/or Lenders 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, or the exercise of any other power, right or
privilege. The rights of Agent and Lenders under this Agreement are cumulative
and not exclusive of any right or remedies which Lenders would otherwise have.
9.4 Waiver by Borrowers of Certain Laws. To the extent permitted by
applicable law, each Borrower hereby agrees to waive, and does hereby absolutely
and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the
Lenders except in a writing signed by an officer of the Agent in accordance with
Section 13.11 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 their rights by Agent or the Lenders. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Lenders in enforcing any of their
rights shall constitute a waiver of any of their rights. Borrowers expressly
agree that this Section may not be waived or modified by the Lenders or Agent by
course of performance, estoppel or otherwise.
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9.6 Set Off. Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to the Borrowers but subject to the provisions of Section 10.3 hereof
(any requirement for such notice being expressly waived by the Borrowers), to
the extent permitted by applicable law, set off and apply against any and all of
the obligations of the Borrowers now or hereafter existing under this Agreement,
whether owing to such Lender, any Affiliate of such Lender or any other Lender
or the Agent, any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of any Borrower and any
property of any Borrower from time to time in possession of such Lender,
irrespective of whether or not such deposits held or indebtedness owing by such
Lender may be contingent and unmatured and regardless of whether any Collateral
then held by the Agent or any Lender is adequate to cover the Indebtedness. Each
Borrower hereby grants to the Lenders and the Agent a lien on and security
interest in all such deposits, indebtedness and property as collateral security
for the payment and performance of all of their respective obligations under
this Agreement and the other Loan Documents. The rights of the Agent and each
Lender under this Section 9.6 are in addition to the other rights and remedies
(including, without limitation, other rights of setoff) which the Agent and such
Lender may have.
10. PAYMENTS, RECOVERIES AND COLLECTIONS
10.1 Payment Procedure.
(a) All payments by the Borrowers in respect of principal of, or
interest on, any Advance or in respect of any Letter of Credit
Obligations or Fees shall be made without setoff or counterclaim on the
date specified for payment under this Agreement not later than 11:00
a.m. (Detroit time) in Dollars in immediately available funds to Agent,
for the ratable account of the Lenders, at Agent's office located at
One Detroit Center, Detroit, Michigan 48226-3289. Upon receipt of each
such payment, the Agent shall make prompt payment to each Lender, or,
in respect of Eurocurrency-based Advances, such Lender's Eurocurrency
Lending Office, in like funds, of all amounts received by it for the
account of such Lender.
(b) Unless the Agent shall have been notified by Borrowers prior
to the date on which any payment to be made by Borrowers is due that
Borrowers do not intend to remit such payment, the Agent may, in its
sole discretion and without obligation to do so, assume that the
Borrowers have remitted such payment when so due and the Agent may, in
reliance upon such assumption, make available to each Lender on such
payment date an amount equal to such Lender's share of such assumed
payment. If Borrowers have not in fact remitted such payment to the
Agent, each Lender shall forthwith on demand repay to the Agent the
amount of such assumed payment made available or transferred to such
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Lender, 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 Lender to the date such amount is repaid to the Agent at a rate
per annum equal to (i) for Prime-based Advances, the Federal Funds
Effective Rate (daily average), as the same may vary from time to time,
and (ii) with respect to Eurocurrency-based Advances, Agent's aggregate
marginal cost (including the cost of maintaining any required reserves
or deposit insurance and of any fees, penalties, overdraft charges or
other costs or expenses incurred by Agent) of carrying such amount.
(c) Subject to the definition of Interest Period, whenever any
payment to be made hereunder shall otherwise be due on a day which is
not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in computing
interest, if any, in connection with such payment.
(d) All payments to be made by Borrowers under this Agreement
or any of the Notes (including without limitation payments under the
Swing Line) shall be made without set-off or counterclaim, as
aforesaid, and, subject to compliance by the Lenders with Section
13.13, without deduction for or on account of any present or future
withholding or other taxes of any nature imposed by any Governmental
Authority may at the time of payment be a member, unless Borrowers are
compelled by law to make payment subject to such tax. In such event,
Borrowers shall:
(i) pay to the Agent for Agent's own account and/or,
as the case may be, for the account of the Lenders (and, in
the case of Advances of the Swing Line, pay to the Swing Line
Lender which funded such Advances) such additional amounts as
may be necessary to ensure that the Agent and/or such Lender
or Lenders receive a net amount equal to the full amount which
would have been receivable had payment not been made subject
to such tax; and
(ii) remit such tax to the relevant taxing
authorities according to applicable law, and send to the Agent
or the applicable Lender (including the Swing Line Lender) or
Lenders, as the case may be, such certificates or certified
copy receipts as the Agent or such Lender or Lenders shall
reasonably require as proof of the payment by the Borrowers,
of any such taxes payable by the Borrowers.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes,
levies, imposts, duties, charges, fees, deductions and withholdings and any
restrictions or conditions resulting in a charge together with interest (and any
taxes payable upon the amounts paid or payable pursuant to this Section 10.1)
thereon and fines and penalties with respect thereto which may be imposed
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by reason of any violation or default with respect to the law regarding such
tax.
10.2 Application of Proceeds of Collateral. Notwithstanding anything to
the contrary in this Agreement, after an Event of Default, the proceeds of any
Collateral, together with any offsets, voluntary payments by Borrowers or any
Subsidiary of the Borrowers or others and any other sums received or collected
in respect of the Indebtedness, shall be applied, first, to the Advances of the
Revolving Credit, any Reimbursement Obligations and indebtedness owed under any
Interest Rate Protection Agreements on a pro rata basis (or in such order and
manner as determined by the Majority Lenders; subject, however, to the
applicable Percentages of the loans held by each of the Lenders), next, to any
other Indebtedness on a pro rata basis, and then, if there is any excess, to
Borrowers and the Subsidiaries, as the case may be. Subject to the terms of this
Section 10.2, the application of such proceeds and other sums to the Advances of
the Revolving Credit, the Reimbursement Obligations and under any Interest Rate
Protection Agreements shall be based on each Lender's Percentage of the
aggregate of the loans.
10.3 Pro-rata Recovery. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the Indebtedness in excess of
its pro rata share of payments then or thereafter obtained by all Lenders upon
principal of and interest on all Indebtedness, such Lender shall purchase from
the other Lenders such participations in the Revolving Credit, and/or
Reimbursement Obligation held by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably in
accordance with the Percentage with each of them; provided, however, that if all
or any portion of the excess payment or other recovery is thereafter recovered
from such purchasing holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
11.1 Reimbursement of Prepayment Costs. If any Borrower makes any
payment of principal with respect to any Eurocurrency-based Advance or Quoted
Rate Advance on any day other than the last day of the Interest Period
applicable thereto (whether voluntarily, by acceleration, or otherwise), or if
any Borrower converts or refunds (or attempts to convert or refund) any such
Advance on any day other than the last day of the Interest Period applicable
thereto; or if any Borrower fails to borrow, refund or convert into any
Eurocurrency-based Advance or Quoted Rate Advance after notice has been given by
such Borrower to Agent in accordance with the terms hereof requesting such
Advance, or if any Borrower fails to make any payment of principal or interest
in respect of a Eurocurrency-based Advance or Quoted Rate Advance when due, the
applicable Borrower shall reimburse Agent for itself and/or on behalf of any
Lender, as the case may be, on demand for any resulting loss, cost or expense
incurred by Agent and Lenders, as the case may be, as a result thereof,
including, without limitation, any
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such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Lenders, as
the case may be, shall have funded or committed to fund such Advance. Such
amount payable by such Borrower to Agent for itself and/or on behalf of any
Lender, as the case may be, may include, without limitation, an amount equal to
the excess, if any, of (a) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, refunded or converted, for the period
from the date of such prepayment or of such failure to borrow, refund or
convert, through the last day of the relevant Interest Period, at the applicable
rate of interest for said Advance(s) provided under this Agreement, over (b) the
amount of interest (as reasonably determined by Agent and Lenders, as the case
may be) which would have accrued to Agent and Lenders, as the case may be, on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurocurrency market. Calculation of any amounts
payable to any Lender under this paragraph shall be made as though such Lender
shall have actually funded or committed to fund the relevant Advance through the
purchase of an underlying deposit in an amount equal to the amount of such
Advance and having a maturity comparable to the relevant Interest Period;
provided, however, that any Lender may fund any Eurocurrency-based Advance or
Quoted Rate Advance, as the case may be, in any manner it deems fit and the
foregoing assumptions shall be utilized only for the purpose of the calculation
of amounts payable under this paragraph. Upon the written request of Borrowers,
Agent and Lenders shall deliver to Borrowers a certificate setting forth the
basis for determining such losses, costs and expenses, which certificate shall
be conclusively presumed correct, absent manifest error.
11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Lender, as applicable,
shall designate a Eurocurrency Lending Office which maintains books separate
from those of the rest of Agent or such Lender, Agent or such Lender, as the
case may be, shall have the option of maintaining and carrying the relevant
Advance on the books of such Eurocurrency Lending Office.
11.3 Circumstances Affecting Eurocurrency-based Rate Availability. If
with respect to any Interest Period, Agent or the Majority Lenders (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars in the applicable amounts are not being offered to the Agent or such
Lenders for such Interest Period, then Agent shall forthwith give notice thereof
to the Borrowers. Thereafter, until Agent notifies the Borrowers that such
circumstances no longer exist, (i) the obligation of Lenders to make
Eurocurrency-based Advances, and the right of the Borrowers to convert an
Advance to or refund an Advance as a Eurocurrency-based Advance, as the case may
be, shall be suspended, and (ii) the Borrowers shall repay in full (or cause to
be repaid in full) the then outstanding principal amount of each such
Eurocurrency-based Advance, together with accrued interest thereon, any amounts
payable under Section 11.1 hereof, and all other amounts payable hereunder on
the last day of the then current Interest Period applicable to
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such Advance. Upon the date for repayment as aforesaid, such outstanding
principal amount shall be converted to a Prime-based Advance as of the last day
of such Interest Period.
11.4 Laws Affecting Eurocurrency-based Advance Availability. If, after
the date of this Agreement, 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 Lenders (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 Lenders (or any of their respective Eurocurrency
Lending Offices) to honor its obligations hereunder to make or maintain any
Advance with interest at the Eurocurrency-based Rate, such Lender shall
forthwith give notice thereof to Holdings and to Agent. Thereafter, (a) the
obligations of Lenders to make Eurocurrency-based Advances and the right of any
Borrower to convert an Advance into or refund an Advance as a Eurocurrency-based
Advance shall be suspended and thereafter the Borrowers may select as Applicable
Interest Rates only those which remain available and which are permitted to be
selected hereunder, and (b) if any of the Lenders may not lawfully continue to
maintain an Advance to the end of the then current Interest Period applicable
thereto as a Eurocurrency-based Advance, the applicable Advance shall
immediately be converted to a Prime-based Advance and the Prime-based Rate shall
be applicable thereto for the remainder of such Interest Period. For purposes of
this Section, a change in law, rule, regulation, interpretation or
administration shall include, without limitation, any change made or which
becomes effective on the basis of a law, rule, regulation, interpretation or
administration presently in force, the effective date of which change is delayed
by the terms of such law, rule, regulation, interpretation or administration.
11.5 Increased Cost of Eurocurrency-based Advances. If the adoption
after the date of this Agreement of, or any change after the date of this
Agreement in, any applicable law, rule or regulation of or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by Agent or any of the
Lenders (or any of their respective Eurocurrency Lending Offices) with any
request or directive (whether or not having the force of law) made by any such
authority, central bank or comparable agency after the date hereof:
(a) shall subject any of the Lenders (or any of their
respective Eurocurrency Lending Offices) to any tax, duty or other
charge with respect to any Advance or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective
Eurocurrency Lending Offices) of the principal of or interest on any
Advance or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the overall net
income of any of the Lenders or any of their respective Eurocurrency
Lending Offices imposed by the jurisdiction in which such Lender's
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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), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any of the Lenders (or any of their respective
Eurocurrency Lending Offices) or shall impose on any of the Lenders (or
any of their respective Eurocurrency Lending Offices) or the foreign
exchange and interbank markets any other condition affecting any
Advance;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or to reduce the amount of any sum received or
receivable by any of the Lenders under this Agreement in respect of a
Eurocurrency-based Advance, then such Lender shall notify Agent, and Agent (or
such Lender, as aforesaid) shall promptly notify the Borrowers of such fact and
demand compensation therefor and, within fifteen (15) days after such notice,
the applicable Borrower agrees to pay to such Lender such additional amount or
amounts as will compensate such Lender or Lenders for such increased cost or
reduction. A certificate of Agent (or such Lender, if applicable) setting forth
the basis for determining such additional amount or amounts necessary to
compensate such Lender or Lenders shall be conclusively presumed to be correct
save for manifest error. For purposes of this Section, a change in law, rule,
regulation, interpretation, administration, request or directive shall include,
without limitation, any change made or which becomes effective on the basis of a
law, rule, regulation, interpretation, administration, request or directive
presently in force, the effective date of which change is delayed by the terms
of such law, rule, regulation, interpretation, administration, request or
directive.
11.6 Capital Adequacy and Other Increased Costs. In the event that
after the Effective Date the adoption of or any change in any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Lender or Agent, or any
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
or Agent with any guideline, request or directive of any such authority (whether
or not having the force of law), including any risk based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or Agent (or any corporation controlling such Lender
or Agent) and such Lender or Agent, as the case may be, determines that the
amount of such capital is increased by or based upon the existence of such
Lender's or Agent's obligations or Advances hereunder and such increase has the
effect of reducing the rate of return on such Lender's or Agent's (or such
controlling corporation's) capital as a consequence of such obligations or
Advances hereunder to a level below that which such Lender or Agent (or such
controlling corporation) could have achieved but for such circumstances (taking
into
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consideration its policies with respect to capital adequacy) by an amount deemed
by such Lender or Agent to be material (collectively, "Increased Costs"), then
Agent or such Lender shall notify the Borrowers, and thereafter the applicable
Borrower shall pay to such Lender or Agent, as the case may be, from time to
time, upon request by such Lender or Agent, additional amounts sufficient to
compensate such Lender or Agent (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which such Lender
or Agent reasonably determines to be allocable to the existence of such Lender's
or Agent's obligations or Advances hereunder. A statement as to the amount of
such compensation, prepared in good faith and in reasonable detail by such
Lender or Agent, as the case may be, shall be submitted by such Lender or by
Agent to the Borrowers, reasonably promptly after becoming aware of any event
described in this Section 11.6 and shall be conclusive, absent manifest error in
computation.
11.7 Substitution of Lenders. If (a) the obligation of any Lender to
make Eurocurrency-based Advances has been suspended pursuant to Section 11.3 or
11.4 or (b) any Lender has demanded compensation under Section 3.4(c), 11.1,
11.5 or 11.6 (in each case, an "Affected Lender"), then the Borrowers shall have
the right (subject to Section 13.8 hereof), with the assistance of the Agent, to
seek a substitute Lender or Lenders (which may be one or more of the Lenders
(the "Purchasing Lender" or "Purchasing Lenders") to purchase the Advances of
the Revolving Credit and assume the commitments (including without limitation
its participations in Swing Line Advances and Letters of Credit) under this
Agreement of such Affected Lender. The Affected Lender shall be obligated to
sell its Advances of the Revolving Credit and assign its commitments to such
Purchasing Lender or Purchasing Lenders within fifteen days after receiving
notice from Borrowers requiring it to do so, at an aggregate price equal to the
outstanding principal amount thereof, plus unpaid interest accrued thereon up to
but excluding the date of the sale and any other amounts owed to the Affected
Lender under any Loan Document. In connection with any such sale, and as a
condition thereof, Borrowers shall pay to the Affected Lender all fees accrued
for its account hereunder to but excluding the date of such sale, plus, if
demanded by the Affected Lender within ten Business Days after such sale, (i)
the amount of any compensation which would be due to the Affected Lender under
Section 11.1 if the applicable Borrower has prepaid the outstanding
Eurocurrency-based Advances of the Affected Lender on the date of such sale and
(ii) any additional compensation accrued for its account under Sections 3.4(c),
11.5 and 11.6 to but excluding said date. Upon such sale, the Purchasing Lender
or Purchasing Lenders shall assume the Affected Lender's commitment, and the
Affected Lender shall be released from its obligations hereunder to a
corresponding extent. If any Purchasing Lender is not already one of the
Lenders, the Affected Lender, as assignor, such Purchasing Lender, as assignee,
Holdings and the Agent, shall enter into an Assignment Agreement pursuant to
Section 13.8 hereof, whereupon such Purchasing Lender shall be a Lender party to
this Agreement, shall be deemed to be an assignee hereunder and shall have all
the rights and obligations of a Lender with a Revolving Credit Percentage equal
to its ratable share of the then applicable Revolving Credit Aggregate
Commitment. In connection with any
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assignment pursuant to this Section 11.7, the Borrowers or the Purchasing Lender
shall pay to the Agent the administrative fee for processing such assignment
referred to in Section 13.8.
11.8 Right of Lenders to Fund through Branches and Affiliates. Each
Lender (including without limitation the Swing Line Lender) may, if it so
elects, fulfill its commitment as to any Advance hereunder by designating a
branch or Affiliate of such Lender to make such Advance; provided that (a) such
Lender shall remain solely responsible for the performances of its obligations
hereunder and (b) no such designation shall result in any material increased
costs to the applicable Borrower.
12. AGENT
12.1 Appointment of Agent. Each Lender and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Lender or
holder under this Agreement and the other Loan Documents and to exercise such
powers hereunder and thereunder as are specifically delegated to Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto, including without limitation the power to execute or
authorize the execution of financing or similar statements or notices, and other
documents. In performing its functions and duties under this Agreement, the
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Borrowers. Each Lender agrees (which agreement shall survive
any termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees and
disbursements) incurred by Agent hereunder or in connection herewith or with an
Event of Default or in enforcing the obligations of Borrowers under this
Agreement or the other Loan Documents or any other instrument executed pursuant
hereto, and for which Agent is not reimbursed by Borrowers, pro rata according
to such Lender's Percentage, but excluding any such expense resulting from
Agent's gross negligence or wilful misconduct. Agent shall not be required to
take any action under the Loan Documents, or to prosecute or defend any suit in
respect of the Loan Documents, unless indemnified to its satisfaction by the
Lenders against loss, costs, liability and expense (excluding liability
resulting from its gross negligence or wilful misconduct). If any indemnity
furnished to Agent shall become impaired, it may call for additional indemnity
and cease to do the acts indemnified against until such additional indemnity is
given.
12.2 Deposit Account with Agent. Borrowers hereby authorize Agent, in
Agent's sole discretion, upon notice to Borrowers to charge its general deposit
account(s), if any, maintained with Agent for the amount of any principal,
interest, or other amounts or costs due under this Agreement when the same
become due and payable under the terms of this Agreement or the Notes.
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12.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Lender (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of the Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it or them under this
Agreement or any document executed pursuant hereto, or in connection herewith or
therewith with the consent or at the request of the Majority Lenders (or all of
the Lenders for those acts requiring consent of all of the Lenders) (except for
its or their own wilful misconduct or gross negligence), nor be responsible for
or have any duties to ascertain, inquire into or verify (a) any recitals or
warranties made by the Borrowers, or any Subsidiary or Affiliate of the
Borrowers, or any officer thereof contained herein or therein, (b) the
effectiveness, enforceability, validity or due execution of this Agreement or
any document executed pursuant hereto or any security thereunder, (c) the
performance by Borrowers of their respective obligations hereunder or
thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation the making of any Advance or the issuance of any
Letter of Credit. The Agent and its Affiliates shall be entitled to rely upon
any certificate, notice, document or other communication (including any cable,
telegraph, telex, facsimile transmission or oral communication) believed by it
to be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof.
The Agent may employ agents and may consult with legal counsel (who may be
counsel for a Borrower), independent public accountants and other experts
selected by it and shall not be liable to the Lenders (except as to money or
property received by them or their authorized agents), for the negligence or
misconduct of any such agent selected by it with reasonable care or for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
12.4 Successor Agent. The Agent may resign as such at any time upon at
least 30 days' prior notice to Borrowers and all Lenders. If Agent at any time
shall resign or if the office of Agent shall become vacant for any other reason,
the Majority Lenders shall, by written instrument, appoint successor agent(s)
satisfactory to such Majority Lenders, and, so long as no Default or Event of
Default has occurred and is continuing, to Borrowers. Such successor agent shall
thereupon become the Agent hereunder, as applicable, and shall be entitled to
receive from the prior Agent such documents of transfer and assignment as such
successor Agent may reasonably request. Any such successor Agent shall be a
commercial bank organized under the laws of the United States or any state
thereof and shall have a combined capital and surplus of at least $500,000,000.
If a successor is not so appointed or does not accept such appointment before
the resigning Agent's resignation becomes effective, the resigning Agent may
appoint a temporary successor to act until such appointment by the Majority
Lenders is made and accepted or if no such temporary successor is appointed as
provided above by the resigning Agent, the Majority Lenders shall thereafter
perform all of the duties of the resigning Agent hereunder until
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such appointment by the Majority Lenders is made and accepted. Such successor
Agent shall succeed to all of the rights and obligations of the resigning Agent
as if originally named. The resigning Agent shall duly assign, transfer and
deliver to such successor Agent all moneys at the time held by the resigning
Agent hereunder after deducting therefrom its expenses for which it is entitled
to be reimbursed. Upon such succession of any such successor Agent, the
resigning agent shall be discharged from its duties and obligations hereunder,
except for its gross negligence or wilful misconduct arising prior to its
resignation hereunder, and the provisions of this Article 12 shall continue in
effect for the benefit of the resigning Agent in respect of any actions taken or
omitted to be taken by it while it was acting as Agent. 1.1
12.5 Agent in its Individual Capacity. Comerica Bank, its Affiliates
and their respective successors and assigns, shall have the same rights and
powers hereunder as any other Lender and may exercise or refrain from exercising
the same as though Comerica Bank were not the Agent. Comerica Bank and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, and generally engage in any kind of banking,
trust, financial advisory or other business with Borrowers (or their
Subsidiaries) as if Comerica Bank were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Lenders.
12.6 Credit Decisions. Each Lender acknowledges that it has,
independently of Agent and each other Lender and based on the financial
statements of Borrowers 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 Lender also acknowledges that it will,
independently of Agent and each other Lender 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 Authority of Agent to Enforce This Agreement. Each Lender, 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 any Indebtedness
outstanding under this Agreement or any other Loan Document and to file such
proofs of debt or other documents as may be necessary to have the claims of the
Lenders allowed in any proceeding relative to Borrowers, or any of their
Subsidiaries, or their respective creditors or affecting their respective
properties, and to take such other actions which Agent considers to be necessary
or desirable for the protection, collection and enforcement of the Notes, this
Agreement or the other Loan Documents.
12.8 Indemnification. The Lenders agree to indemnify the Agent and its
Affiliates (to the extent not reimbursed by Borrowers, but without limiting any
obligation of Borrowers to
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make such reimbursement), ratably according to their respective Percentages,
from and against any and all claims, damages, losses, liabilities, costs or
expenses of any kind or nature whatsoever (including, without limitation, fees
and disbursements of counsel) which may be imposed on, incurred by, or asserted
against the Agent and its Affiliates in any way relating to or arising out of
this Agreement, any of the other Loan Documents or the transactions contemplated
hereby or any action taken or omitted by the Agent and its Affiliates under this
Agreement or any of the Loan Documents; provided, however, that no Lender shall
be liable for any portion of such claims, damages, losses, liabilities, costs or
expenses resulting from the Agent's or its Affiliates's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent and its Affiliates promptly upon demand for its ratable
share of any out-of-pocket expenses (including, without limitation, fees and
expenses of counsel) incurred by the Agent and its Affiliates in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any of the other Loan Documents, to the extent that the Agent and its
Affiliates are not reimbursed for such expenses by Borrowers, but without
limiting the obligation of Borrowers to make such reimbursement. Each Lender
agrees to reimburse the Agent and its Affiliates promptly upon demand for its
ratable share of any amounts owing to the Agent and its Affiliates by the
Lenders pursuant to this Section, provided that, if the Agent and its Affiliates
are subsequently reimbursed by the Borrowers for such amounts, it shall refund
to the Lenders on a pro rata basis the amount of any excess reimbursement. If
the indemnity furnished to the Agent and its Affiliates under this Section
shall, in the judgment of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity from the Lenders and cease, or not
commence, to take any action until such additional indemnity is furnished.
12.9 Knowledge of Default. It is expressly understood and agreed that
the Agent shall be entitled to assume that no Event of Default has occurred and
is continuing, unless the officers of the Agent immediately responsible for
matters concerning this Agreement shall have been notified in a writing
specifying such Event of Default and stating that such notice is a "notice of
default" by a Lender or by Borrowers. Upon receiving such a notice, the Agent
shall promptly notify each Lender of such Event of Default and provide each
Lender with a copy of such notice and, shall endeavor to provide such notice to
the Lenders within three (3) Business Days (but without any liability whatsoever
in the event of its failure to do so). Agent shall also furnish the Lenders,
promptly upon receipt, with copies of all other notices or other information
required to be provided by Borrowers hereunder.
12.10 Agent's Authorization; Action by Lenders. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Lenders to give any approval or consent, or to make
any request, or to take any other action on behalf of the Lenders (including
without limitation the exercise of any right or remedy hereunder
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or under the other Loan Documents), the Agent shall be required to give such
approval or consent, or to make such request or to take such other action only
when so requested in writing by the Majority Lenders or the Lenders, as
applicable hereunder. Action that may be taken by Majority Lenders or all of the
Lenders, as the case may be (as provided for hereunder) may be taken (i)
pursuant to a vote at a meeting (which may be held by telephone conference call)
as to which all of the Lenders have been given reasonable advance notice, or
(ii) pursuant to the written consent of the requisite Percentages of the Lenders
as required hereunder, provided that all of the Lenders are given reasonable
advance notice of the requests for such consent.
12.11 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, the Agent will take such action, assert such rights and
pursue such remedies under this Agreement and the other Loan Documents as the
Majority Lenders or all of the Lenders, as the case may be (as provided for
hereunder), shall direct; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action or
omission may expose the Agent to personal liability (for which it has not
received indemnification satisfactory to the Agent) or is contrary to this
Agreement, any of the Loan Documents or applicable law. Except as expressly
provided above or elsewhere in this Agreement or the other Loan Documents, no
Lender (other than the Agent, acting in its capacity as agent) shall be entitled
to take any enforcement action of any kind under any of the Loan Documents;
provided, however, that if an Event of Default under Section 9.1(a) or (b) shall
occur and be continuing, and the Agent has not commenced enforcement action to
collect the applicable delinquent amounts under the Loan Documents within 30
days of demand by any Lender or has failed, for a period of 30 days, to continue
to prosecute, with reasonable diligence, such action, then any Lender may
commence suit to recover any unpaid Advances or other amounts then due and owing
to it.
12.12 Collateral Matters.
(a) The Agent is authorized on behalf of all the Lenders,
without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to
perfect and maintain a perfected security interest in and Liens upon
the Collateral granted pursuant to the Loan Documents.
(b) The Lenders agree to release, and hereby irrevocably
authorize the Agent to release, any Lien granted to or held by the
Agent upon any Collateral (i) upon termination of the Revolving Credit
Aggregate Commitment and payment in full of all Indebtedness (including
Letter of Credit Obligations) payable under this Agreement and under
any other Loan Document; (ii) constituting property sold or to be sold
or disposed of as part of or in connection with any disposition
permitted hereunder; (iii) pursuant to
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Sections 13.23 and 13.25; or (iv) if approved, authorized or ratified
in writing by the Majority Lenders, or all the Lenders, as the case may
be, as provided in Section 13.11. Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to this
Section 12.12(b).
12.13 No Duties Imposed on Documentation Agent or Syndications Agents.
Fleet National Bank has been designated as Documentation Agent and Bank One,
Michigan and Standard Federal Bank have been designated as Syndications Agents
under this Agreement. In such capacity, Fleet National Bank, Bank One, Michigan
and Standard Federal Bank shall have no duties, responsibilities or other
obligations and other than their rights and remedies as Lenders hereunder, and
shall have no administrative, collateral or other rights or responsibilities,
duties or other obligations, but shall be entitled to the benefits of Section
12.5 and 12.6.
13. MISCELLANEOUS
13.1 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder, subject to year-end audit adjustments thereto and the
omission of footnote disclosure in the case of unaudited statements, shall be
prepared in accordance with GAAP.
13.2 Consent to Jurisdiction. Borrowers, the Agent and the Lenders
hereby irrevocably submit to the non-exclusive jurisdiction of any United States
Federal Court or Michigan state court sitting in Detroit, Michigan in any action
or proceeding arising out of or relating to this Agreement or any of the Loan
Documents and Borrowers, Agent and Lenders hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
any such United States Federal Court or Michigan state court. Borrowers
irrevocably consent to the service of any and all process in any such action or
proceeding brought in any court in or of the State of Michigan by the delivery
of copies of such process to Borrowers at their respective addresses specified
on the signature page hereto or by certified mail directed to such address or
such other address as may be designated by Borrowers in a notice to the other
parties that complies as to delivery with the terms of Section 13.6. Nothing in
this Section shall affect the right of the Lenders and the Agent to serve
process in any other manner permitted by law or limit the right of the Lenders
or the Agent (or any of them) to bring any such action or proceeding against
Borrowers or any Subsidiary or any of its or their property in the courts with
subject matter jurisdiction of any other jurisdiction. Borrowers hereby
irrevocably waive any objection to the laying of venue of any such suit or
proceeding in the above described courts.
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13.3 Law of Michigan. This Agreement and the Notes have been delivered
at Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan (without regard to its
conflict of laws provisions). 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.
13.4 Interest. It is the intention of the parties hereto that each
Lender and the Agent shall conform to usury laws applicable to them.
Accordingly, if the transactions with any Lender or Agent contemplated hereby
would be usurious under such applicable laws, then, notwithstanding anything to
the contrary in the Notes or Loan Documents, 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 such Lender under the
Notes payable to such Lender, this Agreement, the Loan Documents or under any
other agreement entered into in connection with or as security for or
guaranteeing this Agreement or such Notes or Loan Documents shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be credited automatically, if theretofore paid, on the principal
amount of the Indebtedness owed to such Lender or, if no Indebtedness to such
Lender is outstanding, shall be refunded to Borrowers by such Lender, and (ii)
in the event that the maturity of any such Note or other Indebtedness is
accelerated or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to such Lender may
never include more than the maximum amount allowed by such applicable law and
excess interest, if any, to such Lender shall be canceled automatically as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Indebtedness owed to such
Lender by the Borrowers or, if no Indebtedness to such Lender is then
outstanding, shall be refunded by such Lender to the Borrowers.
13.5 Closing Costs and Other Costs; Indemnification. (a) Borrowers
agree to pay, or reimburse the Agent (and in the case of (ii) and (iii) below,
the Lenders) for payment of, on demand (i) all reasonable closing costs and
expenses, including, by way of description and not limitation, house and outside
attorney fees and advances, appraisal and accounting fees, and lien search fees
incurred by Agent in connection with the commitment, consummation and closing of
the loans contemplated hereby or in connection with the administration of this
Agreement or any amendment, refinancing or restructuring of the credit
arrangements provided under this Agreement, (ii) all stamp and other taxes and
fees payable or determined to be payable in
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connection with the execution, delivery, filing, recording or amendment of this
Agreement and the Loan Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, and (iii) all
reasonable costs and expenses of the Agent or any of the Lenders (including
reasonable fees and expenses of outside counsel (but without duplication of fees
and expenses for the same services) in connection with any action or proceeding
relating to a court order, injunction or other process or decree restraining or
seeking to restrain the Agent or any of the Lenders from paying any amount
under, or otherwise relating in any way to, any Letter of Credit and any and all
costs and expenses which any of them may incur relative to any payment under any
Letter of Credit. At Agent's option, all of said amounts required to be paid by
Borrowers, if not paid when due, may be charged by Agent as a Prime-based
Advance to Holdings against the Indebtedness of Holdings.
(b) Borrowers agree to indemnify and save Agent and each of
the Lenders harmless from all loss, cost, damage, liability or
expenses, including reasonable house and outside attorneys' fees and
disbursements (but without duplication of fees and expenses for the
same services), incurred by Agent and the Lenders by reason of an Event
of Default, or enforcing the obligations of Borrowers or any Subsidiary
under this Agreement or any of the other Loan Documents or in the
prosecution or defense of any action or proceeding concerning any
matter growing out of or connected with this Agreement or any of the
Loan Documents, excluding, however, any loss, cost, damage, liability
or expenses arising solely as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified under this
Section 13.5(b).
(c) Borrowers agree to defend, indemnify and hold harmless
Agent and each of the Lenders, and their respective employees, agents,
officers and directors from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs or expenses
of whatever kind or nature arising out of or related to (i) the
presence, disposal, release or threatened release of any Hazardous
Materials on, from or affecting any premises owned or occupied by
Borrowers or any of their respective Subsidiaries, (ii) any personal
injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Materials in violation of
applicable Hazardous Material Laws, (iii) any lawsuit or other
proceeding brought or threatened, settlement reached or governmental
order or decree relating to such Hazardous Materials, (iv) the cost of
removal of all Hazardous Materials from all or any portion of any
premises owned by Borrowers or their respective Subsidiaries, (v) the
taking of necessary precautions to protect against the release of
Hazardous Materials on or affecting any premises owned by Borrowers or
any of their respective Subsidiaries, (vi) complying with all Hazardous
Material Laws and/or (vii) any violation of Hazardous Material Laws,
including without limitation, reasonable attorneys and consultants
fees, investigation and laboratory fees,
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environmental studies required by Agent or any Lender in connection
with the violation of Hazardous Material Laws (whether before or after
the occurrence of any Default or Event of Default hereunder), court
costs and litigation expenses, excluding however, any such matter
arising as a result of its or their gross negligence or willful
misconduct. The obligations of Borrowers under this Section 13.5(c)
shall be in addition to any and all other obligations and liabilities
the Borrowers may have to Agent or any of the Lenders at common law or
pursuant to any other agreement.
13.6 Notices. Except as expressly provided otherwise in this Agreement,
all notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing and shall be given by
personal delivery, by mail, by reputable overnight courier, by telex or by
facsimile and addressed or delivered to it at its address set forth on Schedule
13.6 or at such other address as may be designated by such party in a notice to
the other parties that complies as to delivery with the terms of this Section
13.6. Any notice, if personally delivered or if mailed and properly addressed
with postage prepaid and sent by registered or certified mail, shall be deemed
given when received or when delivery is refused; any notice, if given to a
reputable overnight courier and properly addressed, shall be deemed given two
(2) Business Days after the date on which it was sent, unless it is actually
received sooner by the named addressee; and any notice, if transmitted by telex
or facsimile, shall be deemed given when received (answer back confirmed in the
case of telexes and receipt confirmed in the case of telecopies). Agent may,
but, except as specifically provided herein, shall not be required to, take any
action on the basis of any notice given to it by telephone, but the giver of any
such notice shall promptly confirm such notice in writing or by telex or
facsimile, and such notice will not be deemed to have been received until such
confirmation is deemed received in accordance with the provisions of this
Section set forth above. If such telephonic notice conflicts with any such
confirmation, the terms of such telephonic notice shall control.
13.7 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 reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and to
provide for Advances under and payment of the Notes, according to the intent and
purpose herein and therein expressed.
13.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to
the benefit of Borrowers and the Lenders and their respective
successors and assigns.
(b) The foregoing shall not authorize any assignment by
Borrowers of their
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rights or duties hereunder, and, except as otherwise provided herein,
no such assignment shall be made (or effective) without the prior
written approval of all of the Lenders.
(c) The Borrowers and Agent acknowledge that each of the
Lenders may at any time and from time to time, subject to the terms and
conditions hereof, assign or grant participations in such Lender's
rights and obligations hereunder (on a pro rata basis only) and under
the other Loan Documents to any Eligible Assignee, the identity of
which institution is approved by Borrowers and Agent, such approval not
to be unreasonably withheld or delayed; provided, however, that (i) the
approval of Borrowers shall not be required upon the occurrence and
during the continuance of an Event of Default, and (ii) the approval of
Borrowers and Agent shall not be required for any such sale, transfer,
assignment or participation to the Affiliate of an assigning Lender,
any other Lender or any Federal Reserve Bank. The Borrowers authorize
each Lender to disclose to any prospective assignee or participant,
once approved by Borrowers and Agent, any and all financial information
in such Lender's possession concerning the Borrowers which has been
delivered to such Lender pursuant to this Agreement, provided that each
such prospective participant shall execute a confidentiality agreement
consistent with the terms of Section 13.12 hereof.
(d) Each assignment by a Lender of all or any portion of its
rights and obligations hereunder and under the other Loan Documents,
which assignments shall be on a pro rata basis only (but only if
additional loan facilities are added to this Agreement), shall be made
pursuant to an Assignment Agreement substantially (as determined by
Agent) in the form attached hereto as Exhibit H (with appropriate
insertions acceptable to Agent) (provided however that such Lender need
not deliver an Assignment Agreement in connection with assignments to
such Lender's Affiliates or to a Federal Reserve Lender) and shall be
subject to the terms and conditions hereof, and to the following
restrictions:
(i) each assignment shall be in a minimum amount of
the lesser of (x) Five Million Dollars ($5,000,000) or such
lesser amount as the Agent shall agree and (y) the entire
remaining amount of assigning Lender's aggregate interest in
the Revolving Credit (and participations in any outstanding
Letters of Credit); provided however that, after giving effect
to such assignment, in no event shall the entire remaining
amount (if any) of assigning Lender's aggregate interest in
the Revolving Credit (and participations in any outstanding
Letters of Credit) be less than Five Million Dollars
($5,000,000); and
(ii) no assignment shall be effective unless Agent
has received from the assignee (or from the assigning Lender)
an assignment fee of $3,500 for each
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such assignment.
In connection with any assignment, Borrowers and Agent shall be entitled to
continue to deal solely and directly with the assigning Lender in connection
with the interest so assigned until (x) the Agent shall have received a notice
of assignment duly executed by the assigning Lender and an Assignment Agreement
(with respect thereto) duly executed by the assigning Lender and each assignee;
and (y) the assigning Lender shall have delivered to the Agent the original of
each Note held by the assigning Lender under this Agreement. From and after the
date on which the Agent shall notify Borrowers and the assigning Lender that the
foregoing conditions shall have been satisfied and all consents (if any)
required shall have been given, the assignee thereunder shall be deemed to be a
party to this Agreement. To the extent that rights and obligations hereunder
shall have been assigned to such assignee as provided in such notice of
assignment (and Assignment Agreement), such assignee shall have the rights and
obligations of a Lender under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment). In addition, the assigning
Lender, to the extent that rights and obligations hereunder shall have been
assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Borrowers' receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement and assuming the Borrowers have consented to such
assignment (if their consent is required), Borrowers shall, to the extent
applicable, execute and deliver to the Agent in exchange for any surrendered
Note, new Note(s) payable to the order of the assignee in an amount equal to the
amount assigned to it pursuant to such notice of assignment (and Assignment
Agreement), and with respect to the portion of the Indebtedness retained by the
assigning Lender, to the extent applicable, new Note(s) payable to the order of
the assigning Lender in an amount equal to the amount retained by such Lender
hereunder. Agent, the Lenders and the Borrowers acknowledge and agree that any
such new Note(s) shall be given in renewal and replacement of the surrendered
Notes and shall not effect or constitute a novation or discharge of the
Indebtedness evidenced by any surrendered Note, and each such new Note may
contain a provision confirming such agreement. In addition, promptly following
receipt of such Notes, Agent shall prepare and distribute to Borrowers and the
assigning Lender and the assignee Lender a revised Schedule 1.2 to this
Agreement setting forth the applicable new Percentages of the Lenders (including
the assignee Lender), taking into account such assignment.
(e) Each Lender agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be
subject to the following restrictions (which shall be set forth in the
applicable Participation Agreement):
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(i) such Lender shall remain the holder of its Notes
hereunder, notwithstanding any such participation;
(ii) except as expressly set forth in this Section
13.8(e) with respect to rights of setoff and the benefits of
Section 11 hereof, a participant shall have no direct rights
or remedies hereunder;
(iii) a participant shall not reassign or transfer, or
grant any sub-participations in its participation interest
hereunder or any part thereof; and
(iv) such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrowers
relating to the Notes and the other Loan Documents, including,
without limitation, the right to proceed against any
Guaranties, or cause Agent to do so (subject to the terms and
conditions hereof), and the right to approve any amendment,
modification or waiver of any provision of this Agreement
without the consent of the participant (other than a
participant which is an Affiliate of such Lender), except for
those matters covered by Section 13.11(a) through (e) and (h)
hereof (provided that a participant may exercise approval
rights over such matters only on an indirect basis, acting
through such Lender, and Borrowers, Agent and the other
Lenders may continue to deal directly with such Lender in
connection with such Lender's rights and duties hereunder).
Borrowers agree that each participant shall be deemed to have the right of
setoff under Section 9.6 hereof in respect of its participation interest in
amounts owing under this Agreement and the other Loan Documents to the same
extent as if the Indebtedness were owing directly to it as a Lender under this
Agreement, shall be subject to the pro rata recovery provisions of Section 11.3
hereof and shall be entitled to the benefits of Section 11 hereof. The amount,
terms and conditions of any participation shall be as set forth in the
participation agreement between the issuing Lender and the Person purchasing
such participation, and none of the Borrowers, the Agent and the other Lenders
shall have any responsibility or obligation with respect thereto, or to any
Person to whom any such participation may be issued. No such participation shall
relieve any issuing Lender of any of its obligations under this Agreement or any
of the other Loan Documents, and all actions hereunder shall be conducted as if
no such participation had been granted.
(f) The Agent shall maintain at its principal office a copy of
each Assignment Agreement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the
Lenders, the Percentages of such Lenders and the principal amount of
each type of Advance owing to each such Lender from time to time. The
entries in the
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Register shall be conclusive evidence, absent manifest error, and the
Borrowers, the Agent, and the Lenders may treat each Person whose name
is recorded in the Register as the owner of the Advances recorded
therein for all purposes of this Agreement. The Register shall be
available for inspection by the any of the Borrowers or any Lender upon
reasonable notice to the Agent and a copy of such information shall be
provided to any such party on their prior written request. The Agent
shall give prompt written notice to Holdings of the making of any entry
in the Register or any change in such entry.
(g) Nothing in this Agreement, the Notes or the other Loan
Documents, expressed or implied, is intended to or shall confer on any
Person other than the respective parties hereto and thereto and their
successors and assignees and participants permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other
claim under this Agreement, the Notes or the other Loan Documents.
13.9 Indulgence. No delay or failure of Agent and the Lenders 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 the Lenders hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Lenders would
otherwise have.
13.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
13.11 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, nor consent to any departure by
Borrowers or any Subsidiary therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders (or by the Agent
at the written request of the Majority Lenders) or, if this Agreement expressly
so requires with respect to the subject matter thereof, by all Lenders (and,
with respect to any amendments to this Agreement or the other Loan Documents, by
Borrowers or the Subsidiaries which are signatories thereto), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) increase any Lender's commitments hereunder, (b) reduce the
principal of, or interest on, any outstanding Indebtedness or any Fees or other
amounts payable hereunder, (c) postpone any date fixed for any payment of
principal of, or interest on, any outstanding Indebtedness or any Fees or other
amounts payable hereunder, (d) waive any Event of Default specified in Sections
9.1(a) or (b) hereof, (e) except as expressly permitted hereunder, or under the
Collateral Documents, release or defer the granting or perfecting of a lien or
security interest in any Collateral or release any guaranty or similar
undertaking provided by
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any Person except as shall be otherwise expressly permitted in this Agreement or
any other Loan Document, (f) terminate or modify any indemnity provided to the
Lenders hereunder or under the other Loan Documents, except as shall be
otherwise expressly provided in this Agreement or any other Loan Document, (g)
take any action which requires the approval or consent of all Lenders pursuant
to the terms of this Agreement or any other Loan Document, (h) change the
definitions of "Percentage", "Interest Period"," Majority Lenders", " Borrower,"
"Borrowing Base," or Section 10.3 or this Section 13.11, or (i) amend Section
7.20 or consent to any departure therefrom by the Borrowers; and provided
further, that no amendment, waiver or consent shall, unless in writing signed by
the Swing Line Lender, do any of the following: (x) reduce the principal of, or
interest on, the Swing Line Note or (y) postpone any date fixed for any payment
of principal of, or interest on, the Swing Line Note; and provided further,
however, that no amendment, waiver, or consent shall, unless in writing and
signed by the Agent in addition to all the Lenders, affect benefits (including
without limitation economic benefits) available to such of the Lender or the
Agent, as the case may be, under this Agreement or any of the other Loan
Documents, or under or in connection with any transactions not related to the
transactions contemplated hereby.
13.12 Confidentiality. Each Lender agrees that it will not disclose
without the prior consent of Borrowers (other than to its employees, its
Subsidiaries, another Lender, an Affiliate of a Lender or to its auditors or
counsel) any information with respect to Borrowers, which is furnished pursuant
to this Agreement or any of the other Loan Documents; provided that any Lender
may disclose any such information (a) as has become generally available to the
public or has been lawfully obtained by such Lender from any third party under
no duty of confidentiality to Borrowers, (b) as may be required or appropriate
in any report, statement or testimony submitted to, or in respect to any
inquiry, by, any municipal, state or federal regulatory body having or claiming
to have jurisdiction over such Lender, including the Board of Governors of the
Federal Reserve System of the United States, the Office of the Comptroller of
the Currency or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation (provided that each Lender agrees that if it
is served with a subpoena or other legal process requiring disclosure of any
confidential information concerning any Borrower, it will promptly notify such
Borrower and provide to such Borrower copies of such summons or subpoena), (d)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, and (e) to any permitted transferee or assignee or to any approved
participant of, or with respect to, the Notes, as aforesaid.
13.13 Withholding Taxes. If any Lender is not incorporated under the
laws of the United States or a state thereof, such Lender shall promptly (but in
any event prior to the initial payment of interest hereunder) deliver to the
Agent two executed copies of (i) Internal Revenue Service Form W-8BEN (or any
successor form) specifying the applicable tax treaty between the
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United States and the jurisdiction of such Lender's domicile which provides for
the exemption from withholding on interest payments to such Lender, (ii)
Internal Revenue Service Form W8CEI (or any successor form) evidencing that the
income to be received by such Lender hereunder is effectively connected with the
conduct of a trade or business in the United States or (iii) other evidence
satisfactory to the Agent that such Lender is exempt from United States income
tax withholding with respect to such income. Such Lender shall amend or
supplement any such form or evidence as required to insure that it is accurate,
complete and non-misleading at all times. Promptly upon notice from the Agent of
any determination by the Internal Revenue Service that any payments previously
made to such Lender hereunder were subject to United States income tax
withholding when made, such Lender shall pay to the Agent the excess of the
aggregate amount required to be withheld from such payments over the aggregate
amount actually withheld by the Agent. In addition, from time to time upon the
reasonable request and at the sole expense of the Borrowers, each Lender and the
Agent shall (to the extent it is able to do so based upon applicable facts and
circumstances), complete and provide the Borrowers with such forms, certificates
or other documents as may be reasonably necessary to allow the Borrowers, as
applicable, to make any payment under this Agreement or the other Loan Documents
without any withholding for or on the account of any tax under Section 10.1(d)
hereof (or with such withholding at a reduced rate), provided that the execution
and delivery of such forms, certificates or other documents does not adversely
affect or otherwise restrict the right and benefits (including without
limitation economic benefits) available to such of the Lender or the Agent, as
the case may be, under this Agreement or any of the other Loan Documents, or
under or in connection with any transactions not related to the transactions
contemplated hereby.
13.14 Taxes and Fees. Should any tax (other than as a result of a
Lender's failure to comply with Section 13.13 or a tax based upon the net income
or capitalization of any Lender or the Agent by any jurisdiction where a Lender
or Agent is located), recording or filing fee become payable in respect of this
Agreement or any of the other Loan Documents or any amendment, modification or
supplement hereof or thereof, the Borrowers agree to pay the same, together with
any interest or penalties thereon arising from the Borrowers' act or omission,
and agrees to hold the Agent and the Lenders harmless with respect thereto.
Notwithstanding the foregoing, nothing contained in this Section 13.14 shall
affect or reduce the rights of any Lender or the Agent under Section 11.5
hereof.
13.15 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT AND THE BORROWERS
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
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CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE LENDERS, THE
AGENT, NOR BORROWERS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE,
ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT
BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDERS
AND THE AGENT OR BORROWERS EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF
THEM.
13.16 Complete Agreement; Conflicts. This Agreement, the Notes (if
issued), any Requests for Revolving Credit Advance and Requests for Swing Line
Advance hereunder, and the Loan Documents contain the entire agreement of the
parties hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by
anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
13.17 Severability. In case any one or more of the obligations of
Borrowers under this Agreement, the Notes or any of the other Loan Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of Borrowers shall not
in any way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Borrowers under this Agreement, the Notes
or any of the other Loan Documents in any other jurisdiction.
13.18 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
1.1
13.19 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
13.20 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
109
13.21 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Borrowers or any party
to any of the Loan Documents made herein or in any of the Loan Documents or in
any certificate, report, financial statement or other document furnished by or
on behalf of Borrowers or any Subsidiary in connection with this Agreement or
any of the Loan Documents shall be deemed to have been relied upon by the
Lenders, notwithstanding any investigation heretofore or hereafter made by any
Lenders or on such Lenders's behalf, and those covenants and agreements of
Borrowers set forth in Section 11.6 hereof (together with any other indemnities
of Borrowers or any Subsidiary contained elsewhere in this Agreement or in any
of the other Loan Documents) and of Lenders set forth in Section 12.8 hereof
shall survive the repayment in full of the Indebtedness and the termination of
the Revolving Credit Aggregate Commitment.
13.22 Complete Agreement; Amendment and Restatement. This Agreement,
the Notes (if issued), any Requests for Advance or Letters of Credit hereunder,
the other Loan Documents and any agreements, certificates, or other documents
given to secure the Indebtedness, contain the entire agreement of the parties
hereto, and none of the parties hereto shall be bound by anything not expressed
in writing. This Agreement constitutes an amendment and restatement of the Prior
Credit Agreement, which Prior Credit Agreement is fully superseded and amended
and restated in its entirety hereby; provided, however, that the Indebtedness
governed by the Prior Credit Agreement shall remain outstanding and in full
force and effect and provided further that this Agreement does not constitute a
novation of such Indebtedness.
13.23 Termination of Pledge Agreements. Upon fulfillment of each of the
Pledge Termination Conditions, the Agent will execute a writing terminating the
Pledge Agreement, the Young Pledge Agreement and the Brazilian Pledge Agreement.
13.24 Young Parties. The Agent, the Lenders and the Borrowers hereby
agree that as of the date hereof, none of the Young Parties (a) is a Borrower or
a Subsidiary, and as such none of such parties is subject to the affirmative
covenants in Article 6 of this Agreement, unless they become Borrowers or
Subsidiaries at a future date, and (b) is subject to the negative covenants in
Article 8 of this Agreement, except to the extent that such party is a party to
or a recipient of a transaction with Holdings or one of its Subsidiaries which
Holdings or a Subsidiary is prohibited from entering into pursuant to Article 8.
13.25 Release of Real Estate Collateral. Upon the incurrence of
Permitted Real Estate Debt, and compliance by the Borrowers with the mandatory
prepayment provisions of Section 2.15(b)(ii), the Agent shall release the
applicable real estate from the Lien of the Mortgage.
13.26 Plastipak Brazil. Plastipak Brazil executes this Agreement for
the purpose of
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evidencing the Issuing Bank's commitment to issue Letters of Credit for its
account (in amounts not to exceed the Brazilian Maximum Amount, and subject to
the conditions in Section 5.12), and its obligations under Sections 3.4 through
3.9 with respect to such Letters of Credit. All of such Letters of Credit shall
be used for the sole purpose of securing loans or other credit accommodations
made by any Lender or an Affiliate of any Lender to Plastipak Brazil.
* * *
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
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WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, PLASTIPAK HOLDINGS, INC.
as Agent
By: /S/ Robert M. Porterfield By: /S/ William C. Young
------------------------------------ -----------------------------------------
Robert M. Porterfield William C. Young
Its: Vice-President Its: President
------------------------------------ ------------------------------------------
PLASTIPAK PACKAGING, INC.
By: /S/ William C. Young
--------------------------------------
William C. Young
Its: President
----------------------------------------
WHITELINE EXPRESS, LTD.
By: /S/ William C. Young
-----------------------------------------
William C. Young
Its: President
----------------------------------------
TABB REALTY, LLC
By: /S/ William C. Young
-----------------------------------------
William C. Young
Its: Manager
----------------------------------------
CLEAN TECH, INC.
By: /S/ William C. Young
-----------------------------------------
William C. Young
Its: President
----------------------------------------
112
PLASTIPAK PACKAGING DO BRAZIL,
LTDA
By: /s/ Marcelo Gianesi
------------------------------------------------
Marcelo Gianesi
Its: Administrative Finance Manager
-----------------------------------------------
SWING LINE LENDER: COMERICA BANK
By: /S/ Robert M. Porterfield
------------------------------------------------
Robert M. Porterfield
Its: Vice-President
-----------------------------------------------
ISSUING LENDER: COMERICA BANK
By: /S/ Robert M. Porterfield
------------------------------------------------
Robert M. Porterfield
Its: Vice-President
-----------------------------------------------
LENDERS: COMERICA BANK
By: /S/ Robert M. Porterfield
------------------------------------------------
Robert M. Porterfield
Its: Vice-President
-----------------------------------------------
113
STANDARD FEDERAL BANK
By: /S/ Sara Brorby
-----------------------------------------
Sara Brorby
Its: Commercial Banking Officer
----------------------------------------
114
FLEET NATIONAL BANK
By: /S/ Jeffrey C. Lynch
----------------------------------------------
Jeffrey C. Lynch
Its: Managing Director
---------------------------------------------
115
NATIONAL CITY BANK
By: /S/ John R. DeFrancesco
------------------------------------------------
John R. DeFrancesco
Its: Vice-President
-----------------------------------------------
116
BANK ONE, MICHIGAN
By: /S/ Mark L. McClure
-----------------------------------------------
Mark L. McClure
Its: First Vice President
----------------------------------------------
117
ASSOCIATED BANK, N.A.
By: /S/ Joseph J. Gehrke
------------------------------------------------
Joseph J. Gehrke
Its: Assistant Vice President
-----------------------------------------------
118
FIRSTMERIT BANK, N.A.
By: /S/ Kathryn B. Nielsen
-----------------------------------------
Kathryn B. Nielsen
Its: Vice-President
----------------------------------------
119
MARINE BANK
By: /S/ William E. Shaw
-------------------------------------------
William E. Shaw
Its: Senior Vice President
------------------------------------------
120
REAFFIRMATION OF LOAN DOCUMENTS
AND AMENDMENT
Each of the undersigned Guarantors hereby (i) consents to the execution
and delivery by the Borrowers of the attached Fourth Amended and Restated
Revolving Credit Agreement as of the date thereof, (ii) reaffirms and ratifies
all of its obligations to the Agent and the Lenders under or pursuant to the
Guaranty and all Collateral Documents executed and delivered by it in connection
with the Third Amended and Restated Revolving Credit Agreement, and (iii) agrees
that the definition of "Credit Agreement" in each of such Loan Documents is
amended to read, "that certain Fourth Amended and Restated Credit Agreement
dated as of August 20, 2001 (as amended or otherwise modified or restated from
time to time, the "Credit Agreement")".
PLASTIPAK HOLDINGS, INC.
By: /S/ William C. Young
-----------------------------------
William C. Young
Its: President
----------------------------------
PLASTIPAK PACKAGING, INC.
By: /S/ William C. Young
-----------------------------------
William C. Young
Its: President
----------------------------------
CLEAN TECH, INC.
By: /S/ William C. Young
-----------------------------------
William C. Young
Its: President
----------------------------------
WHITELINE EXPRESS, LTD.
By: /S/ William C. Young
-----------------------------------
William C. Young
Its: President
----------------------------------
121
TABB REALTY, LLC
By: /S/ William C. Young
--------------------------------------
William C. Young
Its: President
-------------------------------------
Accepted:
COMERICA BANK, AS AGENT
By: /S/ Robert M. Porterfield
--------------------------------------
Robert M. Porterfield
Its: Vice-President
-------------------------------------
122