EXHIBIT 4.7
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PERCEPTRON, INC.
CREDIT AGREEMENT
DATED AS OF OCTOBER 24, 2002
COMERICA BANK
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EXECUTION COPY
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, made as of the 24th day of October, 2002, by and
between PERCEPTRON, INC., a Michigan corporation (herein called "Company") and
COMERICA BANK, a Michigan banking corporation (herein called "Bank").
RECITALS:
A. Company desires to obtain certain credit facilities from Bank.
B. Bank is willing to extend such credit to Company on the terms and
conditions herein set forth.
NOW, THEREFORE, Bank and Company agree as follows:
WITNESSETH:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account" shall have the meaning assigned to it in the Michigan Uniform
Commercial Code on the date of this Agreement.
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Advance" shall mean a borrowing requested by Company and made by Bank
under Section 2 of this Agreement, including any refunding or conversions of
such borrowings pursuant to Section 3.3 hereof, and shall include a
Eurodollar-based Advance and a Prime-based Advance.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation for the purposes of this definition if such Person possesses,
directly or indirectly, the power (i) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such corporation
or (ii) to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise.
"Alternate Base Rate" shall mean for any day a rate per annum (rounded
upwards, if necessary, to the next higher 1/16 of 1%) 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.
"Applicable Interest Rate" shall mean the Eurodollar-based Rate or the
Prime-based Rate, as selected by Company from time to time subject to the terms
and conditions of this Agreement.
"Applicable L/C Commission Rate" shall mean one percent (1%) per annum.
"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.
"Appraised Value" shall mean an amount equal to the appraised value of
the real property and improvements located at 47827 Halyard Drive, Plymouth,
Michigan based on the appraisal ordered or accepted by Bank, as such value is
adjusted by Bank's internal appraisers.
"Approved Foreign Account Debtor" shall mean the Mexican and Canadian
subsidiaries of Ford Motor Company, DaimlerChrysler Corporation, General Motors
Corporation and BMW [need legal name] and any other Account Debtors approved in
writing by Bank.
"Base Tangible Net Worth" shall initially mean $29,000,000. On the last
day of each fiscal quarter of Company, Base Tangible Net Worth shall increase by
an amount equal to fifty percent (50%) of net income of Company and its
Consolidated Subsidiaries for the fiscal quarter then ended. If net income is
less than $0, it shall be treated as being $0 for purposes of this calculation.
"Borrowing Base" shall mean as of any date of determination, the sum of
(a) eighty percent (80%) of Eligible Accounts, plus (b) the lesser of (i) twenty
five percent (25%) of Eligible Inventory consisting of raw materials and (ii)
$2,000,000, plus (c) the lesser of (i) fifty percent (50%) of Eligible Inventory
consisting of finished goods and (ii) $750,000, plus (d) from and after the
Collateral Effective Date, an amount equal to sixty percent (60%) of the
Appraised Value.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business (including dealings in foreign exchange)
in Detroit, London and New York.
"Capital Expenditure" shall mean, without duplication, any payment made
directly or indirectly for the purpose of acquiring or constructing fixed
assets, real property or equipment which in accordance with GAAP would be added
as a debit to the fixed asset account of Company, including, without limitation,
amounts paid or payable under any conditional sale or other title retention
agreement or under any lease or other periodic payment arrangement which is of
such a nature that payment obligations of Company or a Subsidiary, as
applicable, thereunder would be required by GAAP to be capitalized and shown as
liabilities on the balance sheet of Company and its consolidated Subsidiaries.
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"Capital Lease" shall mean any lease of any property (whether real,
personal or mixed) by Company or any Subsidiary as lessee which, in conformity
with GAAP, is, or is required to be accounted for as a capital lease on the
balance sheet of Company and its consolidated Subsidiaries.
"Collateral Effective Date" shall mean the date of which Bank has
received, reviewed and approved the real estate due diligence items referred to
in Section D of the Commitment Letter.
"Commitment Letter" shall mean the commitment letter dated October 7,
2002 from Bank to Company.
"Consolidated" or "Consolidating" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more Persons
of the amounts signified by such term for all such Persons determined on a
consolidated or combined, as applicable, basis in accordance with GAAP. Unless
otherwise specified herein, references to Consolidated financial statements or
data of Company includes consolidation with its Subsidiaries in accordance with
GAAP.
"Domestic Subsidiary" shall mean each Subsidiary of Company which is
organized under the laws of the United States of America or any state or other
political subdivision thereof.
"EBITDA" shall mean, as of any date of determination, the sum of the
net income of Company and its Consolidated Subsidiaries, for the four preceding
fiscal quarters ending on such date of determination, plus, to the extent
deducted in computating such net income, (i) income taxes for that period, (ii)
interest expense for that period and (iii) depreciation and amortization expense
for that period, in each case determined in accordance with GAAP.
"Eligible Account" shall mean an Account (but shall not include
interest and service charges) arising in the ordinary course of Company's
business which meets each of the following requirements:
(a) it is not owing more than one hundred eighty (180) days after the
date of the original invoice or other writing evidencing such
Account;
(b) it is not owing by an Account Debtor (as defined in the UCC) who
has failed to pay twenty five percent (25 %) or more of the
aggregate amount of its Accounts owing to Company within one
hundred eighty (180) days after the date of the respective
invoices or other writings evidencing such Accounts;
(c) it arises from the sale or lease of goods and such goods have been
shipped or delivered to the Account Debtor under such Account; or
it arises from services rendered and such services have been
performed;
(d) it is evidenced by an invoice, dated not later than the date of
shipment or performance, rendered to such Account Debtor or some
other evidence of billing acceptable to Bank; provided, however,
the requirement regarding the date of the
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invoice shall not apply to invoices for retainages and deferrals
which are due and payable;
(e) it is not evidenced by any note or other negotiable instrument or
by any chattel paper;
(f) it is a valid, legally enforceable obligation of the Account
Debtor thereunder, and is not subject to any offset, counterclaim
or other defense on the part of such Account Debtor or to any
claim on the part of such Account Debtor denying liability
thereunder in whole or in part;
(g) it is not subject to any sale of accounts, any rights of offset,
assignment, lien or security interest whatsoever other than to
Bank;
(h) it is not owing by a subsidiary or affiliate of Company, nor by an
Account Debtor (other than an Approved Foreign 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;
(i) it is not an account owing by the United States of America or any
state or political subdivision thereof, or by any department,
agency, public body corporate or other instrumentality of any of
the foregoing, unless all necessary steps are taken to comply with
the Federal Assignment of Claims Act of 1940, as amended, or with
any comparable state law, if applicable, and all other necessary
steps are taken to perfect Bank's security interest in such
account;
(j) it is not owing by an Account Debtor for which Company has
received a notice of (i) the death of the Account Debtor or any
partner of the Account Debtor, (ii) the dissolution, liquidation,
termination of existence, insolvency or business failure of the
Account Debtor, (iii) the appointment of a receiver for any part
of the property of the Account Debtor, or (iv) an assignment for
the benefit of creditors, the filing of a petition in bankruptcy,
or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against the Account Debtor;
(k) it is not an account billed in advance, payable on delivery, for
consigned goods, for guaranteed sales, for unbilled sales, subject
to a retainage or holdback by the Account Debtor or insured by a
surety company;
(l) it is not payable at a future date in accordance with its terms;
and
(m) it is not owing by any Account Debtor whose obligations Bank (in
its sole reasonable discretion) shall have notified Company are
not deemed to constitute Eligible Accounts.
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An Account which is at any time an Eligible Account, but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be an
Eligible Account.
"Eligible Inventory" shall be valued at the lesser of cost or present
market value in accordance with GAAP, on a first in/first out basis, and shall
mean all of Company's Inventory which is in good and merchantable condition, is
not obsolete or discontinued, and which would properly be classified as "raw
materials" or "finished goods inventory" under GAAP, excluding (a) Company's
work in process, consigned goods and inventory located outside the United States
of America, (b) inventory covered by or subject to a seller's right to
repurchase, or any consensual or nonconsensual lien or security interest
(including without limitation purchase money security interests) other than in
favor of Bank, whether senior or junior to Bank's security interest, and (c)
Inventory that Bank (in its sole reasonable discretion) after having notified
Company, excludes. 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 Laws" shall mean all federal, state and local laws
including statutes, regulations, ordinances, codes, rules, and other
governmental restrictions and requirements, relating to environmental pollution,
contamination or other impairment of the environment or any hazardous or toxic
substances of any nature. These Environmental Laws shall include but not be
limited to the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of
1976, the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, and the Federal Superfund Amendments and Reauthorization
Act of 1986.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code.
"Eurodollar-based Advance" shall mean an Advance which bears interest
at the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean a per annum interest rate which is
the Applicable Margin plus the quotient of:
(a) the per annum interest rate at which Bank's Eurodollar Lending
Office offers deposits to prime banks in the eurodollar market in
an amount comparable to the relevant Eurodollar-based Advance and
for a period equal to the relevant Interest Period at
approximately the time Company requests such Advance on the first
day of such Interest Period; divided by
(b) a percentage equal to 100% minus the maximum rate on such date at
which Bank is required to maintain reserves on "Euro-currency
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 Bank is
required to maintain reserves against a category of liabilities
which includes eurodollar deposits or includes a category of
assets which includes eurodollar
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loans, the rate at which such reserves are required to
be maintained on such category;
all as conclusively determined by Bank, such sum to be rounded upward, if
necessary, to the nearest whole multiple of 1/16th of 1%.
"Eurodollar Lending Office" shall mean Bank's office located at Grand
Cayman, British West Indies or such other branch of Bank, domestic or foreign,
as it may hereafter designate as its Eurodollar Lending Office by notice to
Company.
"Event of Default" shall mean any of the Events of Default specified in
Section 10 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 Bank from three Federal funds brokers of recognized standing
selected by it.
"Funded Debt" of any Person shall mean (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 operating leases and 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 Leases, (c) all reimbursement obligations (actual, contingent or
otherwise) 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 liens on any property owned by such Person as of such
date even though such Person has not assumed or otherwise become liable for the
payment thereof, in each case determined in accordance with GAAP; provided
however that so long as such Person is not personally liable for such
liabilities, the amount of such liability shall be deemed to be the lesser of
the fair market value at such date of the property subject to the lien securing
such liability and the amount of the liability secured, and (e) all Guarantee
Obligations in respect of any liability which constitutes Funded Debt; provided,
however that Funded Debt shall not include 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 prior to the occurrence of a termination event with respect thereto.
"Funded Debt to EBITDA Ratio" shall mean as of any date of
determination thereof, a ratio the numerator of which is Funded Debt of Company
and its Consolidated Subsidiaries as of such date and the denominator of which
is EBITDA, all as determined in accordance with GAAP.
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"GAAP" shall mean, as of any applicable date of determination,
generally accepted accounting principles consistently applied, as in effect on
the date of this Agreement.
"Guaranties" shall mean the guaranties from each Subsidiary.
"Guarantors" shall mean each Subsidiary of Company which is required to
be a Guarantor in accordance with the provisions of this Agreement.
"Indebtedness" shall mean all loans, advances, indebtedness,
obligations and liabilities of Company to Bank under this Agreement, together
with all other indebtedness, obligations and liabilities whatsoever of Company
to Bank arising under or in connection with this Agreement, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising.
"Interest Period" shall mean a period of one (1), two (2), three (3) or
six (6) months as selected by Company pursuant to the provisions of this
Agreement commencing on the day a Eurodollar-based Advance is made, or on the
effective date of an election of the Eurodollar-based Rate made under Section
3.1.
"Inventory" shall have the meaning assigned to it in the Michigan
Uniform Commercial Code on the date of this Agreement.
"Letter of Credit" shall have the meaning set forth in Section 2.6.
"Letter of Credit Reserve" shall mean as of any date of determination,
an amount equal to the aggregate principal amount of all undrawn Letters of
Credit issued by Bank for the account of Company under and pursuant to this
Agreement and the amount of all draws under Letters of Credit paid by Bank and
not reimbursed by Company.
"Loan Documents" shall mean collectively, this Agreement, the Note, the
Security Agreement, the Mortgage and any other instruments or agreements
executed at any time pursuant to or in connection with any such documents.
"Mortgage" shall mean the Continuing Collateral Mortgage from Company
in favor of Bank granting to Bank a first mortgage lien on the property and
improvements located at 47827 Halyard Dr., Plymouth, Michigan.
"Net Worth" shall mean as of any date of determination the
stockholders' equity of Company and its consolidated Subsidiaries as of such
date as determined in accordance with GAAP.
"Permitted Liens" shall mean with respect to any Person:
(a) liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently
pursued, provided that provision for the payment of all such taxes
has been made on the books of such Person as may be required by
generally accepted accounting principles, consistently applied;
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(b) mechanics', materialmen's, banker's, carriers', warehousemen's and
similar liens and encumbrances arising in the ordinary course of
business and securing obligations of such Person that are not
overdue for a period of more than 60 days or are being contested
in good faith by appropriate proceedings diligently pursued,
provided that in the case of any such contest (i) any proceedings
commenced for the enforcement of such liens and encumbrances shall
have been duly suspended; and (ii) such provision for the payment
of such liens and encumbrances has been made on the books of such
Person as may be required by generally accepted accounting
principles, consistently applied;
(c) liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security
benefits and similar statutory obligations which are not overdue
or are being contested in good faith by appropriate proceedings
diligently pursued, provided that in the case of any such contest
(i) any proceedings commenced for the enforcement of such liens
shall have been duly suspended; and (ii) such provision for the
payment of such liens has been made on the books of such Person as
may be required by generally accepted accounting principles,
consistently applied;
(d) (i) liens incurred in the ordinary course of business to secure
the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts
with the United States government or any agency thereof entered
into in the ordinary course of business and (ii) liens incurred or
deposits made in the ordinary course of business to secure the
performance of statutory obligations, bids, leases, fee and
expense arrangements with trustees and fiscal agents and other
similar obligations (exclusive of obligations incurred in
connection with the borrowing of money, any lease-purchase
arrangements or the payment of the deferred purchase price of
property), provided that full provision for the payment of all
such obligations set forth in clauses (i) and (ii) has been made
on the books of such Person as may be required by generally
accepted accounting principles, consistently applied; and
(e) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the
use of real properties, which do not materially interfere with the
business of such Person.
"Person" or "person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated association, joint stock company, government, municipality,
political subdivision or agency, or other entity.
"Prime Rate" shall mean the per annum interest rate established by Bank
as its prime rate for its borrowers as such rate may vary from time to time,
which rate is not necessarily the lowest rate on loans made by Bank at any such
time.
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"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean for any day a per annum interest rate
which is the greater of (i) the Prime Rate plus or minus the Applicable Margin
or (ii) the Alternate Base Rate.
"Request for Advance" shall mean a Request for Advance issued by
Company under this Agreement in the form annexed to this Agreement as Exhibit
"A".
"Revolving Credit Maturity Date" shall mean November 1, 2004.
"Revolving Credit Note" or "Note" shall mean the Note described in
Section 2.1 hereof made by Company to Bank in the form annexed to this Agreement
as Exhibit "B".
"Security Agreement" shall mean the Security Agreements in the form and
content of Exhibit "C" to this Agreement pursuant to which Company and each
Subsidiary grants to Bank a first priority security interest in all tangible and
intangible personal property, wherever located and whether now owned or
hereafter acquired, together with all replacements thereof, substitutions
therefor, accessions thereto and all proceeds and products of all the foregoing.
"Subsidiary" shall mean a corporation or other entity of which more
than fifty percent (50%) of the outstanding voting stock or equivalent equity
interests are owned by Company, either direct or indirectly, through one or more
intermediaries.
"Tangible Net Worth" shall mean as of any date Net Worth less the
Intangible Assets of the Company and its consolidated Subsidiaries, all
determined as of such date. For purposes of this Agreement, "Intangible Assets"
means the amount (to the extent reflected in determining such Net Worth) of (i)
all write-ups (other than write-ups resulting from foreign currency translations
and write-ups of assets of a going concern business made within twelve months
after the acquisition of such business) in the book value of any asset owned by
Company and its consolidated Subsidiaries, (ii) loans or advances to Affiliates
and, to the extent exceeding $1,000,000 in the aggregate, receivables from
Affiliates, (iii) all investments in unconsolidated Subsidiaries of the Company
and all equity investments in Persons which are not Subsidiaries of Company and
(iv) all unamortized debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible assets.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of any applicable state and unless specified otherwise shall mean the
Uniform Commercial Code as in effect in the State of Michigan.
2. THE INDEBTEDNESS: Revolving Credit
2.1 Bank agrees to make Advances to Company at any time and from time
to time from the effective date hereof until the Revolving Credit Maturity Date,
not to exceed Seven Million Five Hundred Thousand Dollars ($7,500,000) in
aggregate principal amount at any one time outstanding. All of the Advances
under this Section 2 shall be evidenced by the Revolving
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Credit Note under which Advances, repayments and readvances may be made, subject
to the terms and conditions of this Agreement.
2.2 The Revolving Credit Note shall mature on the Revolving Credit
Maturity Date and each Advance from time to time outstanding thereunder shall
bear interest at its Applicable Interest Rate. The amount and date of each
Advance, its Applicable Interest Rate, its Interest Period, if applicable, and
the amount and date of any repayment shall be noted on Bank's records, which
records will be conclusive evidence thereof absent manifest error.
2.3 Company may request an Advance under this Section 2 upon the
delivery to Bank of a Request for Advance executed by an authorized officer of
Company, subject to the following:
(a) each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as Exhibit
"A";
(b) each such Request for Advance shall be delivered to Bank by 11:00
a.m. on the proposed date of Advance;
(c) the principal amount of such Advance, plus the amount of any
outstanding indebtedness to be then combined therewith having the
same Applicable Interest Rate and Interest Period, if any, shall
be in the case of a Eurodollar-based Advance at least $500,000 or
any larger amount in $50,000 increments;
(d) the principal amount of such Advance, plus the sum of the amount
of all other outstanding Advances under this Section 2, and the
Letter of Credit Reserve shall not exceed the formula set forth in
Section 2.5 below;
(e) a Request for Advance, once delivered to Bank, shall not be
revocable by Company.
Bank may, at its option, lend under this Section 2 upon the telephone
request of an authorized officer of Company and, in the event Bank makes any
such advance upon a telephone request, the requesting officer shall, if so
requested by Bank, mail to Bank, on the same day as such telephone request, a
Request for Advance in the form attached as Exhibit "A". Company hereby
authorizes Bank to disburse Advances under this Section 2 pursuant to the
telephone instructions of any person purporting to be an authorized officer of
Company and Company shall bear all risk of loss resulting from disbursements
made upon any telephone request. Each telephone request for an Advance shall
constitute a certification of the matters set forth in the Request for Advance
form as of the date of such requested Advance.
2.4 Company may prepay all or part of the outstanding balance of the
Prime-based Advance(s) under the Revolving Credit Note at any time. Upon one (1)
Business Day prior notice to Bank, Company may prepay all or part of any
Eurodollar-based Advance, provided that the amount of any such partial
prepayment shall be at least $250,000 and the unpaid portion of such Advance
which is refunded or converted under Section 4.3 shall be subject to the
limitations of Section 2.3(c) hereof. Any prepayment of a Prime-based Advance or
a Eurodollar-
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based Advance on the last day of the Interest Period therefor made in accordance
with this Section shall be without premium, penalty or prejudice to Company's
right to reborrow under the terms of this Agreement. Any other prepayment shall
be subject to the provisions of Section 5.1 hereof.
2.5 The aggregate principal amount at any one time outstanding under
the Revolving Credit Note plus the Letter of Credit Reserve shall never exceed
the Borrowing Base. Company shall immediately make all payments necessary to
comply with this provision. Any such payments shall be applied first to
outstanding Prime-based Advances and the remainder, if any, to outstanding
Eurodollar-based Advances.
2.6 In addition to Advances under the Revolving Credit Note to be
provided to Company by Bank under and pursuant to Section 2.1 of this Agreement,
Bank further agrees to issue, or commit to issue, from time to time, standby
letters of credit for the account of Company (herein individually called a
"Letter of Credit" and collectively "Letters of Credit") in aggregate undrawn
amounts not to exceed Seven Million Five Hundred Thousand Dollars ($7,500,000)
at any one time outstanding; provided, however that the sum of the aggregate
amount of Advances outstanding under the Revolving Credit Note plus the Letter
of Credit Reserve shall not exceed Seven Million Five Hundred Thousand Dollars
($7,500,000) at any one time; and provided further that no Letter of Credit
shall, by its terms, have an expiration date which extends beyond the fifth
(5th) Business Day before the Revolving Credit Maturity Date or one (1) year
after issuance, whichever first occurs. In addition to the terms and conditions
of this Agreement, the issuance of any Letters of Credit shall also be subject
to the terms and conditions of any letter of credit applications and agreements
executed and delivered by Company to Bank with respect thereto. Company shall
pay to Bank annually in advance a per annum fee equal to the Applicable L/C
Commission Rate of the amount of each standby Letter of Credit.
2.7 Company agrees to pay to Bank a commitment fee on the average daily
balance of the unused portion of the revolving credit commitment at the rate of
the Applicable Commitment Fee per annum, computed on the actual number of days
elapsed using a year of 360 days. The commitment fee shall be payable quarterly
in arrears on the first day of each July, October, January and April (commencing
January 1, 2003) and on the Revolving Credit Maturity Date. For purposes of
calculating the commitment fee, outstanding Letters of Credit shall be
considered usage of the commitment.
2.8 Proceeds of Advances under the Revolving Credit Note shall be used
solely for working capital purposes, to repay existing indebtedness owed to Bank
One ("Bank One") and for Capital Expenditures.
3. INTEREST, INTEREST PERIODS, CONVERSIONS, PREPAYMENTS.
3.1 The Revolving Credit Note and the Advances thereunder shall bear
interest from the date thereof on the unpaid principal balance thereof from time
to time outstanding, at a rate per annum equal to the Prime-based Rate or the
Eurodollar-based Rate, as the Company may elect subject to the provisions of
this Agreement. Interest shall be payable monthly on the first Business Day of
each month, commencing on the first Business Day following the month during
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which such Advance is made, and at maturity. Notwithstanding the foregoing, from
and after the occurrence of any Event of Default and solely during the
continuation thereof, at the option of Bank, the Advances shall bear interest,
payable on demand, at a rate per annum equal to: (i) in the case of Prime-based
Advances, three percent (3%) above the Prime-based Rate; and (ii) in the case of
a Eurodollar-based Advance, three percent (3%) above the rate which would
otherwise be applicable under this Section 3.1 until the end of the then current
Interest Period, at which time such Advance shall bear interest at the rate
provided for in clause (i) of this Section 3.1. Interest on all Advances shall
be calculated on the basis of a 360 day year for the actual number of days
elapsed. The interest rate with respect to any Prime-based Advance shall change
on the effective date of any change in the Prime-based Rate.
3.2 Each Interest Period for a Eurodollar-based Advance shall commence
on the date such Eurodollar-based Advance is made or is converted from an
Advance of another type pursuant to Section 3.3 hereof or on the last day of the
immediately preceding Interest Period for such Eurodollar-based Advance, and
shall end on the date one, two, three or six months thereafter, as the Company
may elect as set forth below, subject to the following:
(i) no Interest Period shall extend beyond the Revolving Credit
Maturity Date; and
(ii) any Interest Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding
Business Day unless the next succeeding Business Day falls in
another calendar month, in which case, such Interest Period shall
end on the immediately preceding Business Day and when an Interest
Period begins on a day which has no numerically corresponding day
in the calendar month during which such Interest Period is to end,
it shall end on the last Business Day of such calendar month.
The Company shall elect the initial Interest Period applicable to a
Eurodollar-based Advance by its Request for Advance given to the Bank pursuant
to Section 2.3 or by its notice of conversion given to the Bank pursuant to
Section 3.3, as the case may be. Provided that no Event of Default shall have
occurred and be continuing, the Company may elect to continue an Advance as a
Eurodollar-based Advance by giving irrevocable written, telephonic or
telegraphic notice thereof to the Bank, before 11:00 a.m. on the last day of the
then current Interest Period applicable to such Eurodollar-based Advance,
specifying the duration of the succeeding Interest Period therefor. If the Bank
does not receive timely notice of the election and the Interest Period elected
by the Company, the Company shall be deemed to have elected to convert such
Eurodollar-based Advance to a Prime-based Advance at the end of the then current
Interest Period. No more than three (3) Interest Periods shall be in effect at
any one time with respect to the Revolving Credit Note.
3.3 Provided that no Event of Default shall have occurred and be
continuing, the Company may, on any Business Day, convert any outstanding
Advance into an Advance of another type in the same aggregate principal amount,
provided that any conversion of a Eurodollar-based Advance shall be made only on
the last Business Day of the then current
12
Interest Period applicable to such Advance. If the Company desires to convert an
Advance, it shall give the Bank written, telephonic or telegraphic notice,
specifying the date of such conversion, the Advances to be converted, the type
of Advance elected and, if the conversion is into a Eurodollar-based Advance,
the duration of the first Interest Period therefor, which notice shall be given
not later than 11:00 a.m. on the applicable date of conversion.
4. SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD PROTECTION.
4.1 If Company makes any payment of principal with respect to any
Eurodollar-based Advance on any day other than the last day of the Interest
Period applicable thereto (whether voluntarily, by acceleration, or otherwise),
or if Company fails to borrow any Eurodollar-based Advance after notice has been
given by Company to Bank in accordance with the terms hereof requesting such
Advance, or if Company fails to make any payment of principal or interest when
due in respect of a Eurodollar-based Advance, Company shall reimburse Bank on
demand for any resulting loss, cost or expense incurred by Bank as a result
thereof, including, without limitation, any such loss, cost or expense incurred
in obtaining, liquidating, employing or redeploying deposits from third parties,
whether or not Bank shall have funded or committed to fund such Advance. Such
amount payable by Company to Bank 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 Bank) which would
have accrued to Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to Bank under this paragraph shall be made as
though Bank shall have actually funded or committed to fund the relevant
Eurodollar-based 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 Bank may fund any
Eurodollar-based Advance in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Company, Bank shall
deliver to Company a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
4.2 For any Interest Period for which the Applicable Interest Rate is
the Eurodollar-based Rate, if Bank shall designate a Eurodollar Lending Office
which maintains books separate from those of the rest of Bank, Bank shall have
the option of maintaining and carrying the relevant Advance or Term Loan on the
books of such Eurodollar Lending Office.
4.3 If with respect to any Interest Period Bank reasonably determines
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in Eurodollars in the applicable amounts are not
being offered to the Bank for such Interest Period, then Bank shall forthwith
give notice thereof to the Company. Thereafter, until Bank notifies Company that
such circumstances no longer exist, the obligation of Bank to make Eurodollar-
13
based Advances, and the right of Company to convert an Advance to or refund an
Advance as a Eurodollar-based Advance shall be suspended.
4.4 If, after the date hereof, the introduction or implementation 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 Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for the Bank (or its Eurodollar Lending Office) to honor its obligations
hereunder to make or maintain any Advance with interest at the Eurodollar-based
Rate, Bank shall forthwith give notice thereof to Company. Thereafter (a) the
obligations of Bank to make Eurodollar-based Advances and the right of Company
to convert an Advance or refund an Advance as a Eurodollar-based Advance shall
be suspended and thereafter Company may select as Applicable Interest Rates only
those which remain available, and (b) if Bank may not lawfully continue to
maintain an Advance to the end of the then current Interest Period applicable
thereto, the Prime-based Rate shall be the Applicable Interest Rate for the
remainder of such Interest Period.
4.5 If the adoption or implementation after the date hereof, or any
change after the date hereof in, any applicable law, rule or regulation of any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) 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 Bank (or its Eurodollar Lending Office) to any tax,
duty or other charge with respect to any Advance or any Note or
shall change the basis of taxation of payments to Bank (or its
Eurodollar Lending Office) of the principal of or interest on any
Advance or the Note or any other amounts due under this Agreement
in respect thereof (except for changes in the rate of tax on the
overall net income of Bank or its Eurodollar Lending Office
imposed by any jurisdiction in which Bank is organized or engaged
in business); 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 Bank (or its Eurodollar Lending Office) or shall
impose on Bank (or its Eurodollar Lending Office) or the foreign
exchange and interbank markets any other condition affecting any
Advance or the Note;
and the result of any of the foregoing is to increase the costs to Bank of
maintaining any part of the indebtedness hereunder or to reduce the amount of
any sum received or receivable by Bank under this Agreement or under the Note,
by an amount deemed by the Bank to be material, then Bank shall promptly notify
Company of such fact and demand compensation therefor and, within fifteen days
after demand by Bank, Company agrees to pay to Bank such additional amount or
amounts as will compensate Bank for such increased cost or reduction. Bank will
promptly
14
notify Company of any event of which it has knowledge which will entitle Bank to
compensation pursuant to this Section. A certificate of Bank setting forth the
basis for determining such additional amount or amounts necessary to compensate
Bank shall be conclusively presumed to be correct save for manifest error. Bank
agrees that, as promptly as practical after it becomes aware of the occurrence
of any event or the existence of a condition that will cause Bank to be entitled
to compensation under this Section, it will, to the extent not inconsistent with
Bank's internal policies, use reasonable efforts to make, fund or maintain any
affected Eurodollar-based Advance through another lending office of Bank if as a
result thereof the additional monies which would otherwise be required to be
paid in respect of such Eurodollar-based Advance would be materially reduced and
if, as determined by Bank, in its reasonable discretion, the making, funding or
maintaining of such Eurodollar-based Advance through such other lending office
would not materially adversely affect such Advance or Bank. Company shall pay
all reasonable expenses incurred by Bank in utilizing another lending office
pursuant to this Section.
4.6 In the event that at any time after the date of this Agreement any
change in law such as described in Section 4.5, hereof, shall, in the reasonable
opinion of Bank require that the credit provided under Section 2 of this
Agreement be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by Bank or any
corporation controlling Bank and such change has or would have the effect of
reducing the rate of return on Bank's or Bank's parent's capital or assets as a
consequence of the Bank's obligations hereunder to a level below that which Bank
or Bank's parent would have achieved but for such change, then Bank shall notify
Company and demand compensation therefor and, within fifteen days after demand
by Bank, Company agrees to pay to Bank such additional amount or amounts as will
compensate Bank for such reduction. Bank will promptly notify Company of any
event of which it has knowledge which will entitle Bank to compensation pursuant
to this Section. A certificate of Bank setting forth the basis for determining
such additional amount or amounts necessary to compensate Bank shall be
conclusively presumed to be correct save for manifest error.
4.7 A late installment charge equal to five percent (5%) of each late
installment under any Note may be charged on any installment payment not
received by Bank within ten (10) calendar days after the installment due date
but acceptance of this charge shall not waive any default or Event of Default
under this Agreement.
4.8 Adjustments to the Applicable Margin based on Schedule 1.1 shall be
implemented quarterly as follows:
(a) Such adjustments shall be given prospective effect only, effective
as to all upon the date of delivery of the financial statements
under Sections 7.1(a) and 7.1(b) hereunder and the covenant
compliance report under Section 7.10 hereof, in each case
establishing applicability of the appropriate adjustment, in each
case with no retroactivity or claw-back. In the event the Company
fails timely to deliver such financial statements or the covenant
compliance report, then (but without affecting the Event of
Default resulting therefrom) from the date delivery of such
financial statements and report was required until such financial
statements and
15
report are delivered, the margins shall be at the highest level
(Level 4) on the Pricing Matrix attached to this Agreement as
Schedule 1.1.
(b) From the date of execution of this Agreement until the required
date of delivery (or, if earlier, delivery) under Section 7.1(a)
of the Company's financial statements for the fiscal year ending
June 30, 2003, the margins shall be those set forth under the
Level 3 column of the Pricing Matrix attached to this Agreement as
Schedule 1.1. Thereafter, all margins shall be based upon the
Company's financial statements and covenant compliance reports,
subject to recalculation as provided in subsection 4.8(a) above.
5. CONDITIONS
5.1 Company agrees to furnish Bank prior to the initial borrowing under
this Agreement, in form and substance to be satisfactory to Bank, with (i)
certified copies of resolutions of the Directors of Company evidencing approval
of the borrowings and transactions contemplated hereunder; (ii) a certificate of
good standing from the state of Company's incorporation and from the state(s) in
which it is required to be qualified to do business; (iii) an opinion of
Company's and the Guarantors' legal counsel; and (iv) such other documents and
instruments as Bank may reasonably require.
5.2 As security for all indebtedness of Company to Bank hereunder,
Company agrees to furnish, execute and deliver to Bank, or cause to be
furnished, executed and delivered to Bank, prior to or simultaneously with the
initial borrowing hereunder, in form to be satisfactory to Bank and supported by
appropriate resolution in certified form authorizing same, the following:
(a) The Security Agreements;
(b) The Mortgage;
(c) Financing Statements required or requested by Bank to perfect all
security interests to be conferred upon Bank under this Agreement
and to accord Bank a perfected first priority security position
under the Uniform Commercial Code (subject only to the
encumbrances permitted hereunder);
(d) Such other documents or agreements of security and appropriate
assurances of validity and perfected first priority of lien or
security interest as Bank may reasonably request at any time.
6. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement:
6.1 Company is a corporation duly organized and existing in good
standing under the laws of the State of Michigan; Company and each of its
Subsidiaries is in good standing in each jurisdiction in which it is required to
be qualified to do business, except where the failure to be
16
so qualified would not have a material adverse effect on the financial condition
of Company and its Subsidiaries or their ability to carry on their business;
execution, delivery and performance of this Agreement and other documents and
instruments required under this Agreement, and the issuance of the Note by
Company are within its powers, have been duly authorized, are not in
contravention of law or the terms of Company's Articles of Incorporation or
Bylaws, and do not require the consent or approval of any governmental body,
agency or authority; and this Agreement and other documents and instruments
required under this Agreement and Note, when issued and delivered, will be valid
and binding on the Company in accordance with their terms.
6.2 The execution, delivery and performance of this Agreement and any
other documents and instruments required under this Agreement, and the issuance
of the Notes by Company are not in contravention of the unwaived terms of any
indenture, agreement or undertaking to which Company is a party or by which it
is bound.
6.3 Except as described in attached Schedule 6.3, no litigation or
other proceeding before any court or administrative agency is pending, or to the
knowledge of the officers of Company is threatened against Company or any of its
Subsidiaries, the outcome of which would reasonably be expected to materially
impair Company's or any Subsidiary's financial condition or the ability of
Company or any Subsidiary to carry on its business.
6.4 There are no security interests in, liens, mortgages, or other
encumbrances on any of Company's or any Subsidiary's assets, except to Bank or
as otherwise permitted by this Agreement.
6.5 Neither Company nor any Subsidiary maintains or contributes to any
employee pension benefit plan subject to title IV of the "Employee Retirement
Income Security Act of 1974" (herein called "ERISA"), except those set forth in
attached Schedule 6.5. There was no unfunded past service liability of any
pension plan maintained by the Company as of June 30, 2002 , and there is no
accumulated funding deficiency within the meaning of ERISA, or any existing
material liability with respect to any pension plan owed to the Pension Benefit
Guaranty Corporation ("PBGC") or any successor thereto, except any funding
deficiency for which an application to the PBGC for waiver is pending or for
which a waiver has been granted by the PBGC.
6.6 The financial statements of the Company dated June 30, 2002,
previously furnished to Bank, fairly present in all material respects the
financial condition of the Company and its consolidated Subsidiaries as of such
date; since said date there has been no material adverse change in the financial
condition of the Company and its consolidated Subsidiaries; to the best of the
knowledge of Company's officers, Company does not have any material contingent
obligations (including any liability for taxes) not disclosed by or reserved
against in said balance sheet, and at the present time there are no material
unrealized or anticipated losses from any present commitment of Company or any
of its Subsidiaries.
6.7 To the best knowledge of Company, the financial projections
previously furnished by Company to Bank were as of the date thereof and are as
of the date of execution of this
17
Agreement reasonable in all material respects taking into account all facts and
information known or reasonably available to Company.
6.8 All tax returns and tax reports of Company and its consolidated
Subsidiaries required by law to have been filed have been duly filed or
extensions obtained, and all taxes, assessments and other governmental charges
or levies (other than those presently payable without penalty and those
currently being contested in good faith for which adequate reserves have been
established) upon Company and its consolidated Subsidiaries (or any of its or
their properties) which are due and payable and for which the failure to pay
would materially adversely affect its business or the value of its property or
assets have been paid. The charges, accruals and reserves on the books of
Company in respect of the Federal income tax for all periods are adequate in the
opinion of Company.
6.9 Except as set forth in Schedule 6.9, there are no Subsidiaries of
Company.
6.10 Except as set forth in Schedule 6.10:
(a) Company and each of its Subsidiaries, in the conduct of its
business, is in compliance in all material respects with all
federal, state or local laws, statutes, ordinances and regulations
applicable to any of them, the enforcement of which, if such
Person were not in compliance, would reasonably be expected to
materially adversely affect its business or the value of its
property or assets. Company and its Subsidiaries have all
approvals, authorizations, consents, licenses, orders and other
permits of all governmental agencies and authorities, whether
federal, state or local, required to permit the operation of their
business as presently conducted, except such approvals,
authorizations, consents, licenses, orders and other permits with
respect to which the failure to have would not reasonably be
expected to materially adversely affect their business or the
value of their property or assets (taken as a whole).
(b) Neither Company nor any Subsidiary is a party to any litigation or
administrative proceeding, nor so far as is known by Company is
any litigation or administrative proceeding threatened against
Company or any Subsidiary, the outcome of which would reasonably
be expected to have a material adverse effect on the Company or
any Subsidiary which in either case (i) asserts or alleges that
Company or any Subsidiary violated Environmental Laws, (ii)
asserts or alleges that Company or any Subsidiary is required to
clean up, remove, or take remedial or other response action due to
the disposal, depositing, discharge, leaking or other release of
any hazardous substances or materials, (iii) asserts or alleges
that Company or any Subsidiary is required to pay all or a portion
of the cost of any past, present, or future cleanup, removal or
remedial or other response action which arises out of or is
related to the disposal, depositing, discharge, leaking or other
release of any hazardous substances or materials by Company or any
Subsidiary.
(c) Neither Company nor any Subsidiary is subject to any judgment,
decree, order or citation related to or arising out of applicable
Environmental Laws which would
18
reasonably be expected to materially adversely affect its business
or the value of its property or assets and to the best knowledge
of the Company, neither Company nor any Subsidiary has been named
or listed as a potentially responsible party by any governmental
body or agency in a matter arising under any applicable
Environmental Laws which would reasonably be expected to
materially adversely affect its business or the value of its
property or assets.
(d) To the best of Company's knowledge, Company and its Subsidiaries
have all permits, licenses and approvals required under applicable
Environmental Laws, the failure of which to have would have a
material adverse effect on the operation of their business as
presently conducted and as proposed to be conducted.
6.11 Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Company is not 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, and
none of the proceeds of any of the loans hereunder will be used, directly or
indirectly, for any purpose which would violate the provisions of Regulation U
or X of the Board of Governors of the Federal Reserve System. 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.
6.12 Company and its Subsidiaries have good and valid title to the
property pledged, mortgaged or otherwise encumbered or to be encumbered by them
under the Security Agreements.
7. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, so long as Bank may make any
advance under this Agreement and thereafter so long as any indebtedness remains
outstanding under this Agreement:
7.1 Furnish Bank:
(a) within ninety one (91) days after and as of the end of each fiscal
year of Company and its consolidated Subsidiaries, a detailed
consolidated audit report of Company certified to by independent
certified public accountants satisfactory to Bank;
(b) within twenty (20) days after and as of the end of each month,
consolidated balance sheets and statements of profit and loss of
Company and its Domestic Subsidiaries;
(c) within forty six (46) days after and as of the end of each fiscal
quarter, consolidated balance sheets and statements of profit and
loss of Company and its consolidated Subsidiaries;
19
(d) within twenty (20) days after and as of the end of each month,
including the last month of each fiscal year, (i) the monthly
aging of Company's accounts (and a schedule identifying each
Eligible Account), and any such schedule shall be accompanied, if
so requested by Bank, by a true and correct copy of the invoices
evidencing Eligible Accounts, and by evidence of shipment or
performance, (ii) a monthly aging of Company's accounts payable,
(iii) an inventory report in form satisfactory to Bank and (iv) a
borrowing base report, each in form acceptable to Bank;
(e) within thirty (30) days prior to July 1 of each year, financial
projections for the Company and its consolidated Subsidiaries in
form satisfactory to Bank;
(f) as soon as available, Company's 8-K, 10-Q and 10-K reports filed
with the federal Securities and Exchange Commission, and in any
event, with respect to the 10-Q report, within forty six (46) days
of the end of each of the first three fiscal quarters of each of
Company's fiscal years, and with respect to the 10-K report,
within ninety one (91) days after and as of the end of each of
Company's fiscal years; and as soon as available, copies of all
material filings, reports or other documents filed by Company or
any of its Subsidiaries with the federal Securities and Exchange
Commission or other federal regulator or taxing agencies or
authorities in the United States, or comparable agencies or
authorities in foreign jurisdictions, or any stock exchanges in
such jurisdiction;
(g) such information as required by the terms and conditions of any
security agreements referred to in this Agreement;
(h) promptly, and in form to be satisfactory to Bank, such other
information as Bank may reasonably request from time to time.
7.2 Pay and discharge, and cause its Subsidiaries to pay and discharge,
all taxes and other governmental charges, and all 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.
7.3 Maintain, and cause its Subsidiaries to maintain, insurance
coverage on their physical assets and against other business risks in such
amounts and of such types as are customarily carried by companies similar in
size and nature, and in the event of acquisition of additional property, real or
personal, or of incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business
judgment and present practice would dictate; and in the case of all policies
covering property mortgaged or pledged to Bank or property in which Bank shall
have a security interest of any kind whatsoever, other than those policies
protecting against casualty liabilities to strangers, all such insurance
policies shall provide that the loss payable thereunder shall be payable to
Company and Bank (as mortgagee) as their respective interests may appear, all
said policies or copies thereof, including all endorsements thereon and those
required hereunder, to be deposited with Bank.
20
7.4 Permit Bank, through its authorized attorneys, accountants and
representatives, to examine Company's and each Subsidiary's books, accounts,
records, ledgers and assets of every kind and description at all reasonable
times upon oral or written request of Bank, which shall include but shall not be
limited to collateral audits of Company conducted by Bank, at Company's own cost
and expense.
7.5 Promptly notify Bank of any condition or event which constitutes or
with the running of time and/or the giving of notice would constitute an event
of default under this Agreement, and promptly inform Bank of the existence or
occurrence of any condition or event (other than conditions having an effect on
the economy in general) which could have a material adverse effect upon
Company's or any Subsidiary's financial condition.
7.6 Maintain, and cause its Subsidiaries to maintain, in good standing
all licenses required by the State of Michigan or any agency thereof, or other
governmental authority that may be necessary or required for Company and its
Subsidiaries to carry on its general business objects and purposes.
7.7 Comply, and cause its Subsidiaries to comply, with all material
requirements imposed by ERISA as presently in effect or hereafter promulgated,
including but not limited to, the minimum funding requirements of any Pension
Plan.
7.8 Promptly notify Bank after the occurrence thereof in writing of any
of the following events:
(a) the termination of a Pension Plan pursuant to Subtitle C of Title
IV of ERISA or otherwise;
(b) the appointment of a trustee by a United States District Court to
administer a Pension Plan;
(c) the commencement by the Pension Benefit Guaranty Corporation, or
any successor thereto of any proceeding to terminate a Pension
Plan;
(d) the failure of a Pension Plan to satisfy the minimum funding
requirements for any plan year as established in Section 412 of
the Internal Revenue Code of 1954, as amended or any similar
provision under the Internal Revenue Code of 1986, as amended;
(e) the withdrawal of Company or any Subsidiary from a Pension Plan;
or
(f) a reportable event, within the meaning of Title IV of ERISA.
7.9 Furnish Bank, upon Bank's request, in form satisfactory to Bank
with pledges, assignments, mortgages, lien instruments or other security
instruments covering any or all of Company's and each Domestic Subsidiary's real
and personal property, of every nature and description, whether now owed or
hereafter acquired, to the extent that Bank may in its sole reasonable
discretion require.
21
7.10 Furnish to the Bank concurrently with the delivery of each of the
financial statements required by Section 7.1(a) and Section 7.1(c), a statement
prepared and certified by the chief financial officer of Company (or in such
officer's absence, a responsible senior officer of Company) (a) setting forth
all computations necessary to show compliance by Company with the financial
covenants contained in Section 7.11 hereof, (b) stating that as of the date
thereof, no condition or event which constitutes an event of default hereunder
or which with the running of time and/or the giving of notice would constitute
an event of default hereunder has occurred and is continuing, or if any such
event or condition has occurred and is continuing or exists, specifying in
detail the nature and period of existence thereof and any action with respect
thereto taken or contemplated to be taken by Company and (c) stating that the
signer has personally reviewed this Agreement and that such certificate is based
on an examination sufficient to assure that such certificate is accurate.
7.11 Maintain at all times Tangible Net Worth of not less than the Base
Tangible Net Worth.
7.12 Maintain all domestic cash collection, general disbursement and
other bank accounts with Bank.
7.13 Cause each person that is or becomes a Domestic Subsidiary of the
Company from time to time to execute and deliver a secured Guaranty to the Bank,
together with such other documentation as Bank may reasonable require.
7.14 On or before January 31, 2003, deliver to Bank the items described
as items 1, 2, 3 and 5 in Section D of the Commitment Letter.
8. NEGATIVE COVENANTS
Company covenants and agrees that, so long as Bank may make any
Advances under this Agreement and thereafter so long as any Indebtedness remains
outstanding under this Agreement, it will not, and will cause its Subsidiaries
not to, without the prior written consent of Bank:
8.1 Purchase, acquire or redeem any of its stock or make any material
change in its capital structure.
8.2 Enter into any merger or consolidation or sell, lease, transfer, or
dispose of all, substantially all, or any part of its assets, except sales of
inventory in the ordinary course of its business and dispositions permitted
pursuant to the terms of any Security Agreement.
8.3 Guarantee, endorse, or otherwise become secondarily liable for or
upon the obligations of others, except by endorsement for deposit in the
ordinary course of business and guaranties in favor of Bank.
8.4 Purchase or otherwise acquire or become obligated for the purchase
of all or substantially all of the assets or business interests of any person,
firm or corporation or any shares of stock of any corporation, trusteeship or
association or in any other manner effectuate or
22
attempt to effectuate an expansion of present business by acquisition without
the prior written consent of Bank.
8.5 Affirmatively pledge or mortgage any of its assets, whether now
owned or hereafter acquired, or create, suffer or permit to exist any lien,
security interest in, or encumbrance thereon, except:
(a) to Bank;
(b) the Permitted Liens;
(c) liens described in attached Schedule 8.5; and
(d) liens and security interests upon fixed assets acquired by Company
after the date of this Agreement (including by virtue of a Capital
Lease) provided that (i) any such lien or security interest is
created solely for the purpose of securing indebtedness
representing, or incurred to finance, the cost of the item of
property subject thereto; (ii) the principal amount of the
indebtedness secured by such lien does not exceed 100% of the fair
value of the property at the time it was acquired, and (iii) the
lien or security interest does not cover any property other than
such item of property.
8.6 Sell, assign, transfer or confer a security interest in any
account, contract, note, trade acceptance or other receivable, except to Bank.
8.7 Materially alter the character of its business from that conducted
as of the date of this Agreement.
8.8 Declare or pay any dividends or make any other distribution upon
its stock except dividends payable in the stock of Company.
8.9 Make any Capital Expenditure during any fiscal year if after giving
effect thereto the aggregate amount of all Capital Expenditures made by Company
and its Subsidiaries during such fiscal year would exceed $1,000,000.
8.10 Enter into any transaction or series of transactions with any
Affiliate other than on terms and conditions as favorable to Company as would be
obtainable in a comparable arms-length transaction with a Person other than an
Affiliate.
8.11 Make or allow to remain outstanding any investment (whether such
investment shall be of the character of investment in shares of stock, evidence
of indebtedness or other securities or otherwise) in, or any loans or advances
or extensions of credit to, any person, firm, corporation or other entity or
association, except:
(a) investments of surplus cash in cash equivalents;
(b) sales on open account and in the ordinary course of business;
23
(c) deposits made in the ordinary course of business in order to
obtain goods or services;
(d) Company's existing investments in its Subsidiaries;
(e) other loans, advances and investments not exceeding $1,100,000 in
the aggregate at any time outstanding.
8.12 Enter into or become subject to any agreement (other than this
Agreement) (i) prohibiting the creation or assumption of any lien or encumbrance
upon the properties or assets of Company or (ii) requiring an obligation to
become secured (or further secured) if another obligation is secured or further
secured.
8.13 Become or remain obligated for any indebtedness for borrowed
money, or for any indebtedness incurred in connection with the acquisition of
any property, real or personal, tangible or intangible, except:
(a) indebtedness to Bank;
(b) current unsecured trade payables and accrued liabilities arising
in the ordinary course of Company's business (including, without
limitation, obligations under operating leases);
(c) indebtedness described in attached Schedule 8.13;
(d) purchase money indebtedness incurred in connection with the
acquisition of fixed assets in an aggregate amount not exceeding
$500,000 incurred during any single fiscal year of Company.
9. ENVIRONMENTAL PROVISIONS
9.1 Company shall comply, and shall cause its Subsidiaries to comply,
with all applicable Environmental Laws except for such non-compliance which
would reasonably not be expected to materially adversely affect its business or
the value of its property or assets.
9.2 Company shall provide to Bank, promptly upon receipt, copies of any
correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a circumstance
or condition which requires or may require a financial contribution by Company
or any Subsidiary to a cleanup, removal, remedial action, or other response by
or on the part of Company or any Subsidiary under applicable Environmental Laws
or which seeks damages or civil, criminal or punitive penalties from Company for
an alleged violation of Environmental Laws, where such contribution, response or
damages would reasonably be expected to materially adversely affect its business
or the value of its property or assets.
9.3 Company shall promptly notify Bank in writing as soon as Company
becomes aware of the occurrence or existence of any condition or circumstance
which makes the
24
environmental warranties contained in this Agreement incomplete or inaccurate in
any material respect as of any date.
9.4 In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement incomplete or inaccurate
in any material respect as of any date, Company shall, at the reasonable request
of Bank, at its sole expense, retain an environmental consultant, reasonably
acceptable to Bank, to conduct a thorough and complete investigation regarding
the changed condition and/or circumstance. A copy of the environmental
consultant's report will be promptly delivered to both Bank and Company upon
completion.
9.5 At any time Company, directly or indirectly through any
environmental consultant or other representative, determines to undertake an
environmental audit, assessment or investigation relating to any fact, event or
condition which would reasonably be expected to materially adversely affect its
business or the value of its property or assets, Company shall promptly provide
Bank with written notice of the initiation of the environmental audit, fully
describing the purpose and intended scope of the environmental audit. Upon
receipt, Company will promptly provide to Bank copies of all final findings and
conclusions of any such environmental investigation.
9.6 Company hereby indemnifies, saves and holds Bank and any of its
past, present and future officers, directors, shareholders, employees,
representatives and consultants harmless from any and all loss, damages, suits,
penalties, costs, liabilities and expenses (including but not limited to
reasonable investigation, environmental audit(s), and legal expenses) arising
out of any claim, loss or damage to any property, injuries to or death of
persons, contamination of or adverse affects on the environment, or any
violation of any applicable Environmental Laws, caused by or in any way related
to any property owned or operated by Company, or due to any acts of Company or
such person's, officers, directors, shareholders, employees, consultants and/or
representatives; provided, however, that the foregoing indemnification shall not
be applicable when arising solely from events or conditions occurring while the
Bank is in sole possession (subject to the rights of any creditors of Company)
of such property or for which the Bank is otherwise solely responsible. In no
event shall Company be liable hereunder for any loss, damages, suits, penalties,
costs, liabilities or expenses arising from any act of gross negligence of Bank,
or its agents or employees.
It is expressly understood and agreed that the indemnifications granted
herein are intended to protect Bank, its past, present and future officers,
directors, shareholders, employees, consultants and representatives from any
claims that may arise by reason of the security interest, liens and/or mortgages
granted to Bank, or under any other document or agreement given to secure
repayment of any indebtedness from Company, whether or not such claims arise
before or after Bank has foreclosed upon and/or otherwise become the owner of
any such property. All obligations of indemnity as provided hereunder shall be
secured by the collateral documents.
It is expressly agreed and understood that the provisions hereof shall
and are intended to be continuing and shall survive the repayment of any
indebtedness from Company to Bank.
25
9.7 Company shall maintain, and shall cause its Subsidiary to maintain,
all permits, licenses and approvals required under applicable Environmental Laws
except such permits, licenses and approvals the failure of which to have would
reasonably not be expected to materially adversely affect its business or the
value of its property or assets.
10. EVENTS OF DEFAULT
10.1 Upon occurrence of any of the following events of default:
(a) non-payment of any installment of the principal of the Note when
due or any reimbursement obligation with respect to any Letter of
Credit when due;
(b) non-payment of any interest on the Notes when due in accordance
with the terms thereof, or upon non-payment of any other
outstanding Indebtedness when due in accordance with the terms
thereof;
(c) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in Section 7 or set
forth in Section 8;
(d) default in observance or performance of any of the other
conditions, covenants or agreements of Company herein set forth,
and continuance thereof for thirty (30) days after written notice
to Company by Bank;
(e) any material representation or warranty made by Company or any
other Person herein or in any instrument submitted pursuant hereto
proves untrue in any material respect when made or deemed made;
(f) default in the observance or performance of any of the conditions,
covenants or agreements of Company or any other Person set forth
in any collateral document which may be given to secure the
indebtedness hereunder or in any other collateral document related
to or connected with this Agreement or the indebtedness hereunder
and continuance for ten (10) days;
(g) default in the payment of any other obligation of Company, any
Subsidiary or any Guarantor for borrowed money in an aggregate
amount in excess of Fifty Thousand Dollars ($50,000), or in the
observance or performance of any conditions, covenants or
agreements related or given with respect to any obligations for
borrowed money in an aggregate amount in excess of Fifty Thousand
Dollars ($50,000) sufficient to permit the holder thereof to
accelerate the maturity of such obligation;
(h) judgments for the payment of money in excess of the sum of One
Hundred Thousand Dollars ($100,000) in the aggregate shall be
rendered against Company, any Subsidiary or any Guarantor and such
judgments shall remain unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of thirty (30) consecutive days
from the date of its entry and such judgment is not covered
26
by insurance from a solvent insurer who is defending such action
without reservation of rights;
(i) the occurrence of any "reportable event", as defined in the
Employee Retirement Income Security Act of 1974 and any amendments
thereto, which is determined to constitute grounds for termination
by the Pension Benefit Guaranty Corporation of any employee
pension benefit plan maintained by or on behalf of Company or any
Subsidiary 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 plan and is reasonably likely that the
occurrence of such event would result in a material adverse effect
on Company, and such reportable event is not corrected and such
determination is not revoked within thirty (30) days after notice
thereof has been given to the plan administrator or Company; or
the institution of proceedings by the Pension Benefit Guaranty
Corporation to terminate any such employee benefit pension plan or
to appoint a trustee to administer such plan; or the appointment
of a trustee by the appropriate United States District Court to
administer any such employee benefit pension plan;
(j) if there shall be any change for any reason in the management,
ownership or control of Company or any Subsidiary which in the
sole reasonable judgment of Bank materially adversely affects
Company;
(k) if any of the Guaranties is revoked;
then, or at any time thereafter, unless such default is remedied, Bank may give
notice to Company declaring all outstanding indebtedness hereunder and under the
Note to be due and payable, whereupon all Indebtedness then outstanding
hereunder and under the Note and any Letters of Credit shall immediately become
due and payable without further notice and demand, and Bank shall not be
obligated to make further Advances or issue any Letter of Credit hereunder.
10.2 If a creditors' committee shall have been appointed for the
business of Company, any Subsidiary or any Guarantor in connection with any
bankruptcy or insolvency; or if Company, any Subsidiary or any Guarantor shall
have made a general assignment for the benefit of creditors or shall have been
adjudicated bankrupt, or shall have filed a voluntary petition in bankruptcy or
for reorganization or to effect a plan or arrangement with creditors; or shall
file an answer to a creditor's petition or other petition filed against it,
admitting the material allegations thereof for an adjudication in bankruptcy or
for reorganization; or shall have applied for or permitted the appointment of a
receiver, or trustee or custodian for any of its property or assets; or such
receiver, trustee or custodian shall have been appointed for any of its property
or assets (otherwise than upon application or consent of Company, any Subsidiary
or any Guarantor, as applicable), and such receiver, trustee or custodian so
appointed shall not have been discharged within sixty (60) days after the date
of his appointment or if an order shall be entered and shall not be dismissed or
stayed within sixty (60) days from its entry, approving any petition for
reorganization of Company, any Subsidiary or any Guarantor, then the Note and
all Indebtedness then outstanding hereunder and under any Letters of Credit
shall automatically become
27
immediately due and payable and Bank shall not be obligated to make further
Advances or issue any Letters of Credit under this Agreement.
10.3 Upon the occurrence and during the continuance of an Event of
Default, unless all of the Indebtedness is then immediately fully paid, Bank
shall have and may exercise any one or more of the rights and remedies for which
provision is made for a secured party under the UCC, under the Security
Agreements or under any other document contemplated hereby or for which
provision is provided by law or in equity, including, without limitation, the
right to take possession and sell, lease or otherwise dispose of any or all of
the collateral and to set off against the Indebtedness any amount owing by Bank
to Company and/or any property of Company in possession of Bank. Company agrees,
upon request of Bank, to assemble the collateral and make it available to Bank
at any place designated by Bank which is reasonably convenient to Bank and
Company.
10.4 All of the Indebtedness shall constitute one loan secured by
Bank's security interest in the collateral and by all other security interests,
mortgages, liens, claims, and encumbrances now and from time to time hereafter
granted from Company to Bank. Upon the occurrence and during the continuance of
an Event of Default which is not cured within the cure period, if any, provided
hereunder, Bank may in its sole discretion apply the collateral to any portion
of the Indebtedness. The proceeds of any sale or other disposition of the
Collateral authorized by this Agreement shall be applied by Bank, first upon all
expenses authorized by the Michigan Uniform Commercial Code (or other applicable
law) or otherwise in connection with the sale and all reasonable attorneys' fees
and legal expenses incurred by Bank; the balance of the proceeds of such sale or
other disposition shall be applied in the payment of the Indebtedness, first to
interest, then to principal, then to other Indebtedness and the surplus, if any,
shall be paid over to Company or to such other Person or Persons as may be
entitled thereto under applicable law. Company shall remain liable for any
deficiency, which Company shall pay to Bank immediately upon demand.
10.5 The remedies provided for herein are cumulative to the remedies
for collection of the Indebtedness as provided by law, in equity or by any
mortgage, security agreement or other document contemplated hereby. Nothing
herein contained is intended, nor shall it be construed, to preclude Bank from
pursuing any other remedy for the recovery of any other sum to which Bank may be
or become entitled for the breach of this Agreement by Company.
10.6 Upon the occurrence and during the continuance of any Event of
Default, Company shall immediately upon demand by Bank deposit with Bank cash
collateral in the amount equal to the maximum amount available to be drawn at
any time under any Letter of Credit then outstanding.
11. MISCELLANEOUS
11.1 This Agreement shall be binding upon and shall inure to the
benefit of Company and Bank and their respective successors and assigns, except
that the credit provided for under this Agreement and no part thereof and no
obligation of Bank hereunder shall be assignable or otherwise transferable by
Company.
28
11.2 Company shall pay all closing costs and expenses, including, by
way of description and not limitation, reasonable attorney fees (in an amount
not to exceed $15,000), lien search fees, appraisal fees and title policy fees
incurred by Bank in connection with the commitment, consummation and closing of
this Agreement. All of said amounts required to be paid by Company may, at
Bank's option, be charged by Bank as an advance against the proceeds of the
Note. All costs, including reasonable attorney fees incurred by Bank in
protecting or enforcing any of its or any of the Bank's rights against Company
or any collateral or in defending Bank from any claims or liabilities by any
party or otherwise incurred by Bank in connection with an event of default or
the enforcement of this Agreement or the related documents, including by way of
description and not limitation, such charges in any court or bankruptcy
proceedings or arising out of any claim or action by any person against Bank
which would not have been asserted were it not for Bank's relationship with
Company hereunder, shall also be paid by Company.
11.3 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 in accordance with GAAP.
11.4 No delay or failure of Bank 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 Bank under this
Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have.
11.5 Except as expressly provided otherwise in this Agreement, all
notices and other communications provided to any party hereto under this
Agreement 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 below 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 11.5. 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; any notice,
if given to a reputable overnight courier and properly addressed, shall be
deemed given two (2) Business Days after the date on which it was sent, unless
it is actually received sooner by the named addressee; and any notice, if
transmitted by telex or facsimile, shall be deemed given when received
(answerback confirmed in the case of telexes and receipt confirmed in the case
of telecopies). Bank may, but shall not be required to, take any action on the
basis of any notice given to it by telephone, but Company 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.
29
To Company:
47827 Halyard Drive
Plymouth, Michigan 48170
Attention: Mr. John Garber
Fax No. (734) 414-4840
To Bank:
500 Woodward Avenue
Detroit, Michigan 48226
Attention: Brian E. Marshall
Fax No. (313) 222-3503
11.6 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. 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.
11.7 No amendments or waiver of any provisions of this Agreement nor
consent to any departure by Company therefrom shall in any event be effective
unless the same shall be in writing and signed by the Bank, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, waiver or consent
with respect to any provision of this Agreement shall affect any other provision
of this Agreement.
11.8 All sums payable by Company to Bank under this Agreement or the
other documents contemplated hereby shall be paid directly to Bank at its
principal office set forth in Section 11.5 hereof in immediately available
United States funds, without set off, deduction or counterclaim. In its sole
discretion, Bank may charge any and all deposit or other accounts (including
without limit an account evidenced by a certificate of deposit) of Company with
Bank for all or a part of any Indebtedness then due; provided, however, that
this authorization shall not affect Company's obligation to pay, when due, any
Indebtedness whether or not account balances are sufficient to pay amounts due.
11.9 Any payment of the Indebtedness made by mail will be deemed
tendered and received only upon actual receipt by Bank at the address designated
for such payment, whether or not Bank has authorized payment by mail or any
other manner, and shall not be deemed to have been made in a timely manner
unless received on the date due for such payment, time being of the essence.
Company expressly assumes all risks of loss or liability resulting from
non-delivery or delay of delivery of any item of payment transmitted by mail or
in any other manner. Acceptance by Bank of any payment in an amount less than
the amount then due shall be deemed an acceptance on account only, and the
failure to pay the entire amount then due shall be and continue to be an Event
of Default, and at any time thereafter and until the entire amount then due has
been paid, Bank shall be entitled to exercise any and all rights conferred upon
it
30
herein upon the occurrence of an Event of Default. Upon the occurrence and
during the continuance of an Event of Default, Company waives the right to
direct the application of any and all payments at any time or times hereafter
received by Bank from or on behalf of Company. Upon the occurrence and during
the continuance of an Event of Default, Company agrees that Bank shall have the
continuing exclusive right to apply and to reapply any and all payments received
at any time or times hereafter against the Indebtedness in such manner as Bank
may deem advisable, notwithstanding any entry by Bank upon any of its books and
records. Company expressly agrees that to the extent that Bank receives any
payment or benefit and such payment or benefit, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or is required to be repaid to a trustee, receiver, or any other party under any
bankruptcy act, state or federal law, common law or equitable cause, then to the
extent of such payment or benefit, the Indebtedness or part thereof intended to
be satisfied shall be revived and continued in full force and effect as if such
payment or benefit had not been made and, further, any such repayment by Bank,
to the extent that Bank did not directly receive a corresponding cash payment,
shall be added to and be additional Indebtedness payable upon demand by Bank.
11.10 In the event Company's obligation to pay interest on the
principal balance of the Note is or becomes in excess of the maximum interest
rate which Company is permitted by law to contract or agree to pay, giving due
consideration to the execution date of this Agreement, then, in that event, the
rate of interest applicable shall be deemed to be immediately reduced to such
maximum rate and all previous payments in excess of such maximum rate shall be
deemed to have been payments in reduction of principal and not of interest.
11.11 COMPANY AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
11.12 This Agreement shall become effective upon the execution hereof
by Bank and Company.
31
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK PERCEPTRON, INC.
By: /S/ Brian E. Marshall By: /S/ John Garber
Its: Vice President Its: Vice President
32
SCHEDULE 1.1
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
LEVEL FUNDED DEBT EURODOLLAR PRIME UNUSED
TO EBITDA MARGIN MARGIN FEE
RATIO
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1 < 2.0 to 1.0 188 b.p. -50 b.p. 13 b.p.
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2 > 2.0 to 1.0 213 b.p. -25 b.p. 25 b.p.
-
and
< 3.0 to 1.0
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
3 > 3.0 to 1.0 238 b.p. 0 b.p. 25 b.p.
-
and
< 4.0 to 1.0
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
4 > 4.0 to 1.0 263 b.p. 25 b.p. 38 b.p.
-
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------