<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter Ended June 30, 1995
Commission File Number 1-8269
OMNICARE, INC.
--------------
Incorporated under the laws of I.R.S. Employer Identification
State of Delaware No. 31-1001351
2800 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio 45202-4728
--------------------------------------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code (513) 762-6666
--------------------------------------------------------------------------------
Indicate by check mark whether the registrant:
1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such
reports) and
2) has been subject to such filing requirement for the past 90 days.
Yes x No
--- ---
COMMON STOCK OUTSTANDING
<TABLE>
<CAPTION>
NUMBER
OF
SHARES DATE
------ ----
<S> <C> <C>
Common Stock, $1 par value 26,255,558 June 30, 1995
</TABLE>
<PAGE> 2
OMNICARE, INC. AND
SUBSIDIARY COMPANIES
Index
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet -
June 30, 1995 and December 31, 1994 3
Consolidated Statement of Income -
Three and six months ended -
June 30, 1995 and 1994 4
Consolidated Statement of Cash Flow -
Six months ended -
June 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition 8
Part II. Other Information:
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
-2-
<PAGE> 3
Item 1. Financial Statements
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheet
UNAUDITED
(in thousands except share data)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 28,090 $ 34,553
Marketable securities 26,005 45,245
Accounts receivable, less allowances 68,791 60,083
Inventories 25,638 21,116
Deferred income tax benefits 6,182 5,818
Other current assets 4,407 3,445
-------- --------
Total current assets 159,113 170,260
Properties and equipment, at cost
less accumulated depreciation 27,605 23,452
Intangible assets, less accumulated amortization 137,301 117,832
other assets 6,677 5,661
-------- --------
Total assets $330,696 $317,205
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,648 $ 17,666
Amounts payable pursuant to acquisition agreements 6,146 4,576
Current portion of long-term debt 701 5,549
Income taxes payable 318 1,875
Accrued employee compensation 3,427 3,230
Liabilities relating to discontinued operations 1,989 2,399
Other current liabilities 10,212 9,415
-------- --------
Total current liabilities 42,441 44,710
Long-term debt 82,720 85,323
Deferred income taxes 2,444 1,616
Amounts payable pursuant to acquisition agreements 1,400 2,910
Other noncurrent liabilities 2,877 2,542
-------- --------
Total liabilities 131,882 137,101
-------- --------
Stockholders' equity:
Preferred stock-authorized 1,000,000 shares
without par value; none issued
Common stock-authorized 44,000,000 shares
$1 par; 26,279,731 shares issued
(1994-30,672,051 shares) (a) 26,280 15,336
Paid-in capital 97,667 129,971
Retained earnings 80,291 71,475
-------- --------
204,238 216,782
Treasury stock, at cost-24,173 shares
(1994-4,976,548 shares) (a) (453) (33,060)
Deferred compensation (2,461) (858)
Unallocated stock of ESOP (2,510) (2,760)
-------- --------
Total stockholders' equity 198,814 180,104
-------- --------
Total liabilities and stockholders' equity $330,696 $317,205
======== ========
<FN>
(a) Adjusted For two-for-one stock split distributed on June 21, 1995.
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
-3-
<PAGE> 4
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Statement of Income
UNAUDITED
(in thousands except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- --------------------
1995 1994(a) 1995 1994(a)
---- ------- ---- -------
<S> <C> <C> <C> <C>
Sales $97,125 $73,901 $187,652 $142,116
Cost of sales 70,168 54,828 136,047 105,826
------- ------- -------- --------
Gross profit 26,957 19,073 51,605 36,290
Selling, general and administrative expenses 16,549 11,959 31,962 22,509
Acquisition expenses 1,292 - 1,292 -
------- ------- -------- --------
Operating income 9,116 7,114 18,351 13,781
Investment income 985 367 2,081 782
Interest expense (1,576) (1,677) (3,207) (3,317)
------- ------- -------- --------
Income before income taxes 8,525 5,804 17,225 11,246
Income taxes 3,629 2,241 7,078 4,274
------- ------- -------- --------
Net income $ 4,896 $ 3,563 $ 10,147 $ 6,972
======= ======= ======== ========
Earnings per share(b):
Primary $ .19 $ .16 $ .39 $ .32
Fully diluted $ .18 $ .16 $ .36 $ .31
Dividends paid per share(b) $ .025 $ .023 $ .05 $ .045
Weighted average number of
common shares outstanding(b):
Primary 26,230 22,111 26,100 22,087
======= ======= ======== ========
Fully diluted 32,506 28,067 32,390 28,007
======= ======= ======== ========
<FN>
(a) Restated for the June 30, 1995 acquisition of Specialized Pharmacy
Services, Inc. in a pooling of interests transaction.
(b) Adjusted for two-for-one stock split distributed on June 21, 1995.
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
-4-
<PAGE> 5
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Statement of Cash Flow
UNAUDITED
<TABLE>
<CAPTION>
(in thousands) SIX MONTHS ENDED
JUNE 30,
-------------------
1995 1994
------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 10,147 $ 6,972
Adjustments to reconcile net income
to net cash flow from operating activities:
Depreciation and amortization 4,936 3,901
Provision for doubtful accounts 1,351 850
Deferred tax provision 368 312
Changes in assets and liabilities, net of effects
from acquisition/disposal of businesses:
Accounts receivable (7,467) (8,252)
Inventories (2,906) (209)
Current and noncurrent assets (1,080) (1,342)
Income taxes payable (1,557) 20
Payables and accrued liabilities 1,423 1,924
Current and noncurrent liabilities 1,418 445
-------- --------
Net cash flow from operating activities 6,633 4,621
-------- --------
Cash flow from investing activities:
Acquisition of businesses (16,774) (28,488)
Capital expenditures (6,718) (3,826)
Marketable securities 19,240 -
Proceeds from sale of properties 187 297
Cash flow from discontinued operations (410) (582)
-------- --------
Net cash flow from investing activities (4,475) (32,599)
-------- --------
Cash flow from financing activities:
Net borrowings (repayments) under revolving
lines of credit (3,670) 1,727
Proceeds from long-term borrowings 856 261
Principal payments on long-term obligations (4,448) (868)
Exercise of stock options net of stock
tendered in payment (84) (61)
Dividends paid (1,275) (1,731)
-------- --------
Net cash flow from financing activities (8,621) (672)
-------- --------
Net decrease in cash and cash equivalents (6,463) (28,650)
Cash and cash equivalents at beginning of period 34,553 63,422
-------- --------
Cash and cash equivalents at end of period $ 28,090 $ 34,772
======== ========
Supplemental disclosures of cash flow information
Income taxes paid $ 6,603 $ 3,292
Interest paid 2,937 2,931
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
-5-
<PAGE> 6
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial Statements
1. The interim financial data are unaudited; however, in the opinion of the
management of Omnicare, Inc., the interim data include all adjustments (which
include only normal recurring adjustments) considered necessary for a fair
presentation of the consolidated financial position, results of operations and
cash flow of Omnicare, Inc. and its consolidated subsidiaries ("Company").
2. During the period January 1, 1995 to June 30, 1995, the Company has
completed six acquisitions including Shore Pharmaceutical Providers, Inc.
("Shore"), in Westbury, New York, in January, North Shore Pharmacy
Services, Inc. ("North Shore"), in Boston, Massachusetts, Genrex Nursing Home
Pharmacy Division of Genovese Drug Stores, Inc. ("Genrex"), in Melville, New
York, Consulting and Pharmaceutical Services, Inc. ("CAPS"), in Yakima,
Washington, all in March, Pioneer I.V., Ltd. ("Pioneer") in Moline, Illinois,
in May, and Specialized Pharmacy Services, Inc. ("Specialized"), in Livonia,
Michigan in June. The Shore, North Shore, Genrex, CAPS and Pioneer
acquisitions have been accounted for as purchase transactions and, accordingly,
the purchase price paid for each has been allocated to the fair value of the
assets acquired and liabilities assumed.
The Company acquired all the outstanding stock of Specialized on June 30,
1995 for 403,185 shares of the Company's common stock, $1 par value, in a
pooling of interests transaction, and, accordingly, the consolidated financial
statements have been restated for all periods prior to the acquisition to
include the
-6-
<PAGE> 7
historical results of operations, financial position and cash flow of
Specialized.
Summarized results of operations of the Company and Specialized for the
period from January 1, 1995 through June 30, 1995, the date of acquisition, are
as follows (in thousands):
<TABLE>
<CAPTION>
OMNICARE SPECIALIZED
-------- -----------
<S> <C> <C>
Three months ended June 30, 1995:
Sales $ 88,738 $ 8,387
Net income 4,674 222
Three months ended June 30, 1994:
Sales $ 66,089 $7,812
Net income 3,536 27
Six months ended June 30, 1995:
Sales $171,211 $16,441
Net income 9,861 286
Six months ended June 30, 1994:
Sales $126,786 $15,330
Net income 6,918 54
</TABLE>
3. On May 15, 1995, the Board of Directors declared a two-for-one split of the
Company's $1 par value common stock. As a result of the split, 12,944,180
additional shares were issued including 2,514,994 from treasury stock.
Additional paid-in capital and treasury stock were reduced by $45,524,000 and
$35,095,000, respectively. All references in the accompanying financial
statements to the number of common shares and per share amounts for 1994 have
been restated to reflect the stock split.
-7-
<PAGE> 8
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition.
Results of Operations
On June 30, 1995, the Company issued 403,185 shares of its common stock for
all the outstanding common stock of Specialized Pharmacy Services, Inc.
("Specialized"). Specialized is a leading provider of institutional pharmacy
services for long-term care facilities in Michigan with $32 million in annual
sales. The acquisition was accounted for as a pooling of interests and,
accordingly, the Company's consolidated financial statements have been restated
for all periods presented herein to include the results of operations,
financial position and cash flows of Specialized (See Note 2 to the
Consolidated Financial Statements). In accordance with accounting rules for
pooling of interests transactions, a charge to operating income for
acquisition-related expenses was recorded in the second quarter of 1995.
The following table presents the Company's consolidated results of
operations excluding the effect of acquisition expenses (in thousands except per
share amounts):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
1995 1994 1995 1994
------ ------ ------- ------
<S> <C> <C> <C> <C>
Net income, as reported $4,896 $3,563 $10,147 $6,972
Acquisition expenses, net of taxes 989 - 989 -
------ ------ ------- ------
Pro forma net income $5,885 $3,563 $11,136 $6,972
====== ====== ======= ======
Pro forma earnings per share:
Primary $ 0.22 $ 0.16 $ 0.43 $ 0.32
====== ====== ======= ======
Fully diluted $ 0.21 $ 0.16 $ 0.39 $ 0.31
====== ====== ======= ======
</TABLE>
-8-
<PAGE> 9
Excluding the aforementioned charge for acquisition expenses, net
income for the quarter ended June 30, 1995 rose 65% to $5,885,000 over net
income of $3,563,000 earned in the same period of 1994, while earnings per
share, on a primary basis, increased 38% to $0.22 and, on a fully diluted
basis, were up 31% to $0.21 versus the $0.16 earned on both a primary and fully
diluted basis in the second quarter of 1994. The average number of shares
outstanding was higher by 19%, on a primary basis, and 16%, on a fully diluted
basis, over the prior year quarter. The 1995 quarter included the
aforementioned acquisition expenses of $1,292,000 before taxes and $989,000
after taxes, or $0.04 per primary share and $0.03 per fully diluted share. Net
income for the 1995 second quarter, including these acquisition expenses, was
$4,896,000, or $0.19 per primary share and $0.18 per fully diluted share.
Sales for the second quarter of 1995 of $97,125,000 were 31% higher than
the $73,901,000 recorded in the comparable 1994 period. Operating income of
$10,408,000 for the 1995 quarter, excluding acquisition expenses, was 46%
higher than in the prior year quarter.
Excluding the acquisition expenses from the results for the first six
months of 1995, net income increased 60% to $11,136,000 over the $6,972,000
earned in the comparable 1994 period. Primary earnings per share, on this
basis, of $0.43 were up 34% over the $0.32 earned in the first half of 1994 and
fully diluted earnings per share of $0.39 were up 26% over the $0.31 earned in
the 1994 period. Net income, including acquisition expenses, for the 1995
six-month period was $10,147,000 versus $6,972,000 for the 1994 period and
earnings per share for the 1995 period were $0.39 on a primary basis and $0.36
fully diluted versus $0.32 primary and $0.31 fully diluted in the 1994 first
half.
-9-
<PAGE> 10
Sales for the six months ended June 30, 1995 were $187,652,000, up 32%
over the $142,116,000 earned in the 1994 first half. Operating income of
$19,643,000 for the 1995 period, excluding acquisition expenses, was 43% higher
than in the 1994 period.
The increases in quarterly and year-to-date sales over comparable prior
year periods are due to the Company's continued focus on advancing its growth
strategy in the long-term care pharmacy market. The year-to-date results have
benefitted from the contribution of acquisitions made during the second half of
1994 and in 1995, as well as internal growth. During the quarter, two
acquisitions were completed (See Note 2 to the Consolidated Financial
Statements), and since June 30, 1995, one additional acquisition has been
completed, bringing the total number of acquisitions to date in 1995 to seven.
Together, these acquisitions have added approximately 36,400 new nursing
facility residents to Omnicare's base of business. The June acquisition of
Specialized, based in Livonia, Michigan, added 18,100 new nursing facility
residents and approximately $32 million in annual sales. In May, Omnicare
completed the acquisition of Pioneer I.V., Ltd., an institutional pharmacy
provider serving 1,150 nursing facility residents in Moline, Illinois. Also,
during July, the Company acquired CPM Datascript, Corp., based in Hollis, New
York, which provides long-term care pharmacy services to over 3,400 residents
on Long Island and in New York City.
The Company's existing pharmacy operations continued to generate solid
growth through the addition of new clients, increases in drug utilization
reflecting higher acuity levels of nursing home residents, and the rapid
expansion of infusion therapy services.
-10-
<PAGE> 11
As a result of both acquisition activity and internal growth, the total
number of nursing facility residents served by the Company rose to
approximately 190,700, up 29% over year-end 1994 and up 57% over the number
served one year ago.
Interest expense, net of investment income, of $591,000 and $1,126,000,
for the three and six month periods ended June 30, 1995, respectively,
decreased by $719,000 and $1,409,000, respectively, over the same periods of
1994 due to an increase in the invested cash balance, owing primarily to the
receipt of $59.2 million in net proceeds from a stock offering in November
1994.
During the three and six month periods ended June 30, 1995, the effective
tax rates of 42.6% and 41.1%, respectively, increased 4.0 and 3.1 percentage
points, respectively, over the comparable prior year periods. These 1995
increases were caused by the favorable impact on last year's tax rate of the
income of Evergreen Pharmaceutical East, Inc., an S Corporation, acquired on
September 30, 1994 in a pooling of interests transaction, which was not subject
to corporate tax. The 1995 rates were also affected by the nondeductibility of
a portion of the expenses related to the Specialized acquisition. Had these
acquisition expenses not been incurred in 1995, the effective tax rates for the
three and six month periods ended June 30, 1995 would have been 40.1% and
39.9%, respectively.
Liquidity and Capital Resources
Cash and cash equivalents and marketable securities at June 30, 1995
decreased $25,703,000 to $54,095,000 from the $79,798,000 at December 31, 1994.
The Company's capital requirements are primarily
-11-
<PAGE> 12
related to its acquisition program. In the first six months of 1995, the
Company made six acquisitions for an aggregate capital investment of
approximately $26 million. Such acquisitions were financed from cash and cash
equivalents and a total of 788,429 shares of the Company's common stock
(adjusted for the two-for-one stock split distributed June 21, 1995). There are
no material commitments outstanding at June 30, 1995 other than
acquisition-related payments which may be made contingent on the performance
of businesses acquired.
In April, 1995 the Company increased its revolving line of credit from $50
million to $135 million at significantly more favorable terms. The Company's
current ratio at June 30, 1995 and December 31, 1994 was 3.8 to 1.
On February 1, 1995, the Company's Board of Directors increased the
quarterly cash dividend by 11% to 2.5 cents per share, on a post-June 21, 1995
stock split basis, for an indicated annual rate of 10 cents per share in 1995.
Dividends paid consisted of (in thousands):
Six months ended
June 30,
-----------------
1995 1994
-------- -------
Omnicare, Inc. quarterly dividends of 2.5 cents and
2.3 cents per share in 1995 and 1994, respectively $1,275 $ 834
Dividends paid to former Lo-Med owners(a) - 402
Dividends paid to former Evergreen owners(a) - 495
------ ------
Total $1,275 $1,731
======= ======
(a) Lo-Med and Evergreen were acquired in pooling of interests transactions
on June 30, 1994 and September 30, 1994, respectively.
The Company believes its sources of liquidity and capital are adequate for
its needs.
-12-
<PAGE> 13
PART II. -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) Omnicare held its Annual Meeting of Stockholders on May 15, 1995.
(b) The names of each director elected at this Annual Meeting are as follows:
Edward L. Hutton Thomas C. Hutton
Joel F. Gemunder Patrick E. Keefe
Ronald K. Baur Sandra E. Laney
Kenneth W. Chesterman Andrea R. Lindell
Charles H. Erhart, Jr. Sheldon Margen, M.D.
Mary Lou Fox Kevin J. McNamara
John A. Mount Timothy S. O'Toole
Cheryl D. Hodges D. Walter Robbins
(c) The Stockholders approved the adoption of the amendment to the
Company's Certificate of Incorporation increasing the number of
authorized shares of Common Stock from 22,000,000 to 44,000,000.
9,613,437 votes were cast in favor of the proposal, 698,070 votes
were cast against it, 22,979 votes abstained and 3,847 were
broker non-votes.
(d) The Stockholders approved the adoption of the Company's 1995
Premium-Priced Stock Option Plan. 10,150,228 votes were cast in
favor of the proposal, 133,288 votes were cast against it and
54,817 votes abstained.
(e) The Stockholders ratified the selection by the Board of Directors
of Price Waterhouse LLP as independent accountants for the
Company and its consolidated subsidiaries for the year 1995.
10,250,523 votes were cast in favor of the proposal, 31,250 votes
were cast against it, 26,650 votes abstained and zero were broker
non-votes.
With respect to the election of directors, the number of votes
cast for each nominee was as follows:
<TABLE>
<CAPTION>
VOTES BROKER
VOTES FOR WITHHELD NON-VOTES
--------- -------- ---------
<S> <C> <C> <C>
E. L. Hutton 10,308,384 29,949 -0-
J. F. Gemunder 10,311,228 24,261 -0-
R. K. Baur 10,311,628 23,461 -0-
K. W. Chesterman 10,310,681 25,355 -0-
C. H. Erhart, Jr. 10,308,279 30,159 -0-
M. L. Fox 10,311,769 23,179 -0-
C. D. Hodges 10,311,476 23,765 -0-
T. C. Hutton 10,312,126 22,465 -0-
P. E. Keefe 10,311,826 23,065 -0-
S. E. Laney 10,312,131 22,455 -0-
A. R. Lindell 10,311,072 24,573 -0-
S. Margen 10,308,367 29,983 -0-
K. J. McNamara 10,311,781 23,155 -0-
J. A. Mount 10,311,068 24,581 -0-
T. S. O'Toole 10,311,723 23,271 -0-
D. W. Robbins 10,306,990 32,737 -0-
</TABLE>
-13-
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<S> <C>
3(i) Articles of Incorporation:
Omnicare, Inc. Restated Certificate of Incorporation was
filed as Exhibit 3 to its Registration Statement on Form
S-3 (Registration No. 33-59689) and is incorporated herein
by reference.
4 Instruments defining the Rights of
Security Holders, including Indentures:
Omnicare, Inc. Revolving Credit Agreement dated as of
April 7, 1995
10 Material Contracts:
Omnicare, Inc. 1995 Premium-Priced Stock Option Plan was
filed as an exhibit to its Proxy Statement for its 1995
Annual Meeting of Stockholders and is incorporated herein
by reference.
11 Computation of Earnings per Share
27.1 Financial Data Schedule for the six months ended June 30, 1995.
27.2 Financial Data Schedule for the three months ended March 31,
1995 (as restated).
27.3 Financial Data Schedule for the year ended December 31,
1994 (as restated).
</TABLE>
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter ended June 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Omnicare, Inc.
-----------------------------------
(Registrant)
Date August 14, 1995 By /s/ Joel F. Gemunder
------------------- --------------------------------
Joel F. Gemunder
President
(Principal Executive Officer)
Date August 14, 1995 By /s/ Thomas R. Marsh
------------------- --------------------------------
Thomas R. Marsh
Vice President and
Controller and Acting Treasurer
(Principal Financial and
Accounting Officer)
-14-
<PAGE> 1
EXECUTION COPY
EXHIBIT 4
================================================================================
OMNICARE, INC.
REVOLVING CREDIT AGREEMENT
DATED AS OF APRIL 7, 1995
COMERICA BANK, AS AGENT
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. REVOLVING CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1 Revolving Credit Commitment. . . . . . . . . . . . . . . . . . . . . . . . 16
2.2 Accrual of Interest and Maturity. . . . . . . . . . . . . . . . . . . . . . 16
2.3 Requests for Advances and Requests for
Refundings and Conversions of Revolving
Credit Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4 Disbursement of Revolving Credit Advances. . . . . . . . . . . . . . . . . 18
2.5 Prime-based Advance in Absence of Election
or Upon Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.6 Revolving Credit Commitment Fee. . . . . . . . . . . . . . . . . . . . . . 19
2.7 Reduction of Indebtedness; Revolving Credit
Aggregate Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.8 Optional Reduction or Termination of
Revolving Credit Aggregate Commitment. . . . . . . . . . . . . . . . . . . 20
2.9 Extension of Revolving Credit Maturity
Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 Conditions to Issuance. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.4 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.5 Issuance Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.6 Draws and Demands for Payment Under Letters
of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.7 Obligations Irrevocable. . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.8 Risk Under Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . 28
3.9 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.10 Right of Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4. SWING LINE CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.1 Swing Line Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Accrual of Interest; Margin Adjustments. . . . . . . . . . . . . . . . . . 31
4.3 Requests for Swing Line Advances. . . . . . . . . . . . . . . . . . . . . . 31
4.4 Disbursement of Swing Line Advances. . . . . . . . . . . . . . . . . . . . 32
4.5 Refunding of or Participation Interest in
Swing Line Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5. MARGIN ADJUSTMENTS; INTEREST PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 34
5.1 Margin Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.2 Prime-based Interest Payments. . . . . . . . . . . . . . . . . . . . . . . 35
5.3 Eurocurrency-based Interest Payments. . . . . . . . . . . . . . . . . . . . 35
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5.4 Quoted Rate Advance Interest Payments. . . . . . . . . . . . . . 35
5.5 Interest Payments on Conversions. . . . . . . . . . . . . . . . . 35
5.6 Interest on Default. . . . . . . . . . . . . . . . . . . . . . . 36
5.7 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.1 Execution of Notes and this Agreement. . . . . . . . . . . . . . 36
6.2 Corporate Authority. . . . . . . . . . . . . . . . . . . . . . . 37
6.3 Collateral Documents. . . . . . . . . . . . . . . . . . . . . . . 37
6.4 Licenses, Permits, Etc. . . . . . . . . . . . . . . . . . . . . . 37
6.5 Representations and Warranties -- All
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.6 Compliance with Certain Documents and
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.7 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . . 38
6.8 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.9 Company's Certificate. . . . . . . . . . . . . . . . . . . . . . 38
6.10 Payment of Fees. . . . . . . . . . . . . . . . . . . . . . . . . 38
6.11 Termination of Existing Credit Agreement. . . . . . . . . . . . . 38
6.12 Other Documents and Instruments. . . . . . . . . . . . . . . . . 38
6.13 Continuing Conditions. . . . . . . . . . . . . . . . . . . . . . 39
7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 39
7.1 Corporate Authority. . . . . . . . . . . . . . . . . . . . . . . 39
7.2 Due Authorization - Company. . . . . . . . . . . . . . . . . . . 39
7.3 Due Authorization - Guarantors. . . . . . . . . . . . . . . . . . 40
7.4 Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.5 Capital Stock; Shareholders; Subsidiaries. . . . . . . . . . . . 40
7.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.7 No Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.8 Enforceability of Agreement and Loan
Documents -- Company. . . . . . . . . . . . . . . . . . . . . . 40
7.9 Enforceability of Loan Documents --
Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.10 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 41
7.11 Non-contravention -- Company. . . . . . . . . . . . . . . . . . . 41
7.12 Non-contravention -- Guarantors. . . . . . . . . . . . . . . . . 41
7.13 No Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.14 Senior Indebtedness Status. . . . . . . . . . . . . . . . . . . . 42
7.15 Consents, Approvals and Filings, Etc. . . . . . . . . . . . . . . 42
7.16 Agreements Affecting Financial Condition. . . . . . . . . . . . . 43
7.17 No Investment Company or Margin Stock. . . . . . . . . . . . . . 43
7.18 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.19 Conditions Affecting Business or
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.20 Environmental and Safety Matters. . . . . . . . . . . . . . . . . 43
7.21 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . 44
8. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.1 Preservation of Existence, Etc. . . . . . . . . . . . . . . . . . 45
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8.2 Keeping of Books. . . . . . . . . . . . . . . . . . . . . . . . . 45
8.3 Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . 45
8.4 Maintain Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . 47
8.5 Maintain Leverage Ratio. . . . . . . . . . . . . . . . . . . . . 47
8.6 Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.7 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.8 Inspections. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.9 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.10 Governmental and Other Approvals. . . . . . . . . . . . . . . . . 48
8.11 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.12 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 49
8.13 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . . 49
8.14 ERISA Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.15 Subsidiaries; Guaranties. . . . . . . . . . . . . . . . . . . . . 50
8.16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 50
9. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.1 Capital Structure and Redemptions. . . . . . . . . . . . . . . . 51
9.2 Business Purposes. . . . . . . . . . . . . . . . . . . . . . . . 51
9.3 Mergers or Dispositions. . . . . . . . . . . . . . . . . . . . . 51
9.4 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.5 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.6 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.7 Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.8 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.9 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.10 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . 55
9.11 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 55
9.12 No Further Negative Pledges. . . . . . . . . . . . . . . . . . . 55
10. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 56
10.2 Exercise of Remedies. . . . . . . . . . . . . . . . . . . . . . . 58
10.3 Rights Cumulative. . . . . . . . . . . . . . . . . . . . . . . . 58
10.4 Waiver by Company of Certain Laws. . . . . . . . . . . . . . . . 59
10.5 Waiver of Defaults. . . . . . . . . . . . . . . . . . . . . . . . 59
10.6 Deposits and Accounts. . . . . . . . . . . . . . . . . . . . . . 59
11. PAYMENTS, RECOVERIES AND COLLECTIONS. . . . . . . . . . . . . . . . . . . . 60
11.1 Payment Procedure. . . . . . . . . . . . . . . . . . . . . . . . 60
11.2 Application of Proceeds of Collateral. . . . . . . . . . . . . . 61
11.3 Pro-rata Recovery. . . . . . . . . . . . . . . . . . . . . . . . 62
11.4 Deposits and Accounts. . . . . . . . . . . . . . . . . . . . . . 62
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS. . . . . . . . . . . . . . 62
12.1 Reimbursement of Prepayment Costs. . . . . . . . . . . . . . . . 62
12.2 Agent's Eurocurrency Lending Office. . . . . . . . . . . . . . . 63
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12.3 Circumstances Affecting Eurocurrency-based
Rate Availability. . . . . . . . . . . . . . . . . . . . . . . . 63
12.4 Laws Affecting Eurocurrency-based Advance
Availability. . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.5 Increased Cost of Eurocurrency-based
Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.6 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
12.7 Other Increased Costs. . . . . . . . . . . . . . . . . . . . . . 65
12.8 HLT Determination. . . . . . . . . . . . . . . . . . . . . . . . 66
12.9 Substitution of Banks. . . . . . . . . . . . . . . . . . . . . . 67
13. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
13.1 Appointment of Agent. . . . . . . . . . . . . . . . . . . . . . . 67
13.2 Deposit Account with Agent. . . . . . . . . . . . . . . . . . . . 68
13.3 Scope of Agent's Duties. . . . . . . . . . . . . . . . . . . . . 68
13.4 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . 69
13.5 Loans by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 69
13.6 Credit Decisions. . . . . . . . . . . . . . . . . . . . . . . . . 69
13.7 Agent's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.8 Authority of Agent to Enforce Notes and
This Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 70
13.9 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 70
13.10 Knowledge of Default. . . . . . . . . . . . . . . . . . . . . . . 71
13.11 Agent's Authorization; Action by Banks. . . . . . . . . . . . . . 71
13.12 Enforcement Actions by the Agent. . . . . . . . . . . . . . . . . 71
14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
14.1 Accounting Principles. . . . . . . . . . . . . . . . . . . . . . 72
14.2 Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . 72
14.3 Law of Michigan. . . . . . . . . . . . . . . . . . . . . . . . . 72
14.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
14.5 Closing Costs and Other Costs;
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 73
14.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.7 Further Action. . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.8 Successors and Assigns; Participations;
Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.9 Indulgence . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.11 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . 78
14.12 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.13 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.14 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . 80
14.15 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . 80
14.16 Complete Agreement; Conflicts . . . . . . . . . . . . . . . . . . 80
14.17 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 80
14.18 Table of Contents and Headings . . . . . . . . . . . . . . . . . 81
14.19 Construction of Certain Provisions . . . . . . . . . . . . . . . 81
14.20 Independence of Covenants . . . . . . . . . . . . . . . . . . . . 81
14.21 Reliance on and Survival of Various
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
14.22 Effective Upon Execution . . . . . . . . . . . . . . . . . . . . 81
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EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF NOTICE OF LETTERS OF CREDIT
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF SWING LINE NOTE
F FORM OF SWING LINE PARTICIPATION CERTIFICATE
G PERCENTAGES
H FORM OF COVENANT COMPLIANCE AND INTEREST RATE
ADJUSTMENT REPORT
I FORM OF JOINDER AGREEMENT
J FORM OF ASSIGNMENT AGREEMENT
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1 Applicable L/C Fee Percentage, Applicable
Revolving Commitment Fee Percentage and Eurocurrency
Margins . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 List of Guarantors at Closing . . . . . . . . . . . . . . . .
3 Additional Permitted Liens . . . . . . . . . . . . . . . . . .
7.5 Shareholders of Subsidiaries . . . . . . . . . . . . . . . . .
7.13 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .
7.18 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . .
7.20 Environmental Matters . . . . . . . . . . . . . . . . . . . .
7.21 Contingent Obligations . . . . . . . . . . . . . . . . . . . .
9.5 Additional Permitted Indebtedness . . . . . . . . . . . . . .
9.9 Additional Permitted Investments . . . . . . . . . . . . . . .
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made as of the 7th day of
April, 1995, by and among Comerica Bank and the other financial institutions
from time to time parties hereto as lenders of the Revolving Credit
(individually, "Revolving Credit Bank", and collectively "Revolving Credit
Banks"), Comerica Bank, as lender of the Swing Line Credit ("Swing Line Bank"
and together with Revolving Credit Banks, collectively referred to as the
"Banks") Comerica Bank, as agent for the Banks (in such capacity, "Agent"), and
Omnicare, Inc., a Delaware corporation ("Company").
COMPANY, AGENT AND BANKS AGREE:
1. DEFINITIONS
For the purposes of this Agreement the following terms will have the
following meanings:
"Account Party(ies)" shall mean, with respect to any Letter of Credit,
the account party or parties (which shall be Company, individually, or a
Subsidiary (jointly and severally with Company) named in an application to the
Agent for the issuance of such Letter of Credit.
"Advance(s)" shall mean Revolving Credit Advance(s) and Swing Line
Advance(s).
"Affected Lender" shall have the meaning set forth in Section 12.9.
"Affiliate" shall mean, with respect to any Person, any other Person
or group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agent" shall mean Comerica Bank, in its capacity as agent hereunder,
or any successor agent appointed in accordance with Section 13.4 hereof.
"Agent's Fees" shall mean those agency, letter of credit issuance and
other fees and expenses required to be paid by Company to Agent under Sections
3.5 and 13.7 hereof.
<PAGE> 9
"Alternate Base Rate" shall mean, for any day, an interest rate per
annum equal to the Federal Funds Effective Rate in effect on such day, plus one
half of one percent (1/2%).
"Applicable Commitment Fee Percentage" shall mean as of any date of
determination thereof, the applicable percentage used to calculate the
Revolving Credit Commitment Fee due and payable hereunder, determined (based
upon the Fixed Charge Coverage Ratio, on a Consolidated basis) by reference to
the appropriate columns in the pricing matrix attached to this Agreement as
Schedule 1.
"Applicable L/C Fee Percentage" shall mean, as of any date of
determination thereof, the applicable percentage used to calculate the Letter
of Credit Fees due and payable hereunder, determined (based upon the Fixed
Charge Coverage Ratio, on a Consolidated basis) by reference to the appropriate
columns in the pricing matrix attached to this Agreement as Schedule 1.
"Applicable Interest Rate" shall mean (i) in respect of a Revolving
Credit Advance, the Eurocurrency-based Rate or the Prime-based Rate, applicable
to such Advance (in the case of a Eurocurrency-based Advance, for the relevant
Interest Period), and (ii) in respect of a Swing Line Advance, the Prime-based
Rate or the Quoted Rate, applicable to such Advance, for the relevant Interest
Period, as selected by Company from time to time subject to the terms and
conditions of this Agreement.
"Banks" shall mean Comerica Bank ("Comerica") and such other financial
institutions from time to time parties hereto as lenders and shall include the
Revolving Credit Banks and the Swing Line Bank and any assignee which becomes a
Bank pursuant to Section 14.8 hereof.
"Business Day" shall mean any day on which commercial banks are open
for domestic and international business in Detroit, London and New York.
"Capital Expenditures" shall mean, without duplication, any amounts
accrued in respect of a period in respect of any purchase or other acquisition
for value of fixed or capital assets; provided that, in no event shall Capital
Expenditures include amounts expended in respect of normal repair and
maintenance of plant facilities, machinery, fixtures and other like capital
assets utilized in the ordinary conduct of business (to the extent such amounts
would not be capitalized in preparing a balance sheet determined in accordance
with GAAP).
"Capital Stock" shall mean all shares, options, warrants, interests,
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including,
without limitation, common stock, preferred stock, or any other "equity stock"
(as such term is
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defined in rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Act of 1934, as
amended).
"Capitalized Lease" shall mean any lease of property (real, personal
or mixed) the obligation for rent with respect to which is required to be
capitalized on a balance sheet of the lessee in accordance with GAAP and
liability thereunder as so capitalized should be disclosed in a note to such
balance sheet.
"Collateral Documents" shall mean the guaranty agreements executed and
delivered (or to be executed and delivered) to the Agent by certain of the
Company's Subsidiaries in accordance with the terms and conditions of this
Agreement, as the same may be amended from time to time.
"Company" shall mean Omnicare, Inc., a Delaware corporation.
"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 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.
"Convertible Notes" shall mean the 5-3/4% Convertible Subordinated
Notes due 2003 issued by Company pursuant to the terms of the Indenture.
"Covenant Compliance and Interest Rate Adjustment Report" shall mean
the report to be furnished by Company to the Agent pursuant to Section 8.3
hereof, in the form of attached Exhibit "H" and certified by the chief
financial officer of Company (or in such officer's absence, a responsible
senior officer), in which report Company shall set forth, among other things,
detailed calculations and the resultant ratios or financial tests with respect
to the financial covenants contained in Sections 8.4, 8.5 and 8.6 of this
Agreement.
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the financial condition or businesses of the Company and its
Subsidiaries (taken as a whole) or on the ability of the Company and
Subsidiaries (taken as a whole) to pay their debts, as such debts become due.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
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<PAGE> 11
"Dollars" and the sign "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, for any date of determination, the net income
from continuing operations of such Person for the four preceding fiscal
quarters, plus, to the extent deducted in the computation of such net income,
the amount of depreciation, amortization, interest and income tax expense for
such period, all as determined in accordance with GAAP.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor act or code and the regulations in effect
from time to time thereunder.
"Eurocurrency-based Advance" shall mean a Revolving Credit Advance
which bears interest at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean, with respect to any
Eurocurrency-Interest Period, the per annum interest rate which is equal to the
sum of the Margin plus the quotient of:
(A) the per annum interest rate at which deposits in eurodollars
are offered to Agent's Eurocurrency Lending Office by other
prime banks in the eurodollar market in an amount comparable
to the relevant Eurocurrency-based Advance and for a period
equal to the relevant Eurocurrency-Interest Period at
approximately 11:00 A.M. Detroit time two (2) Business Days
prior to the first day of such Eurocurrency-Interest Period,
divided by
(B) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements
(including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that is specified on
the first day of such Eurocurrency-Interest Period by the
Board of Governors of the Federal Reserve System (or any
successor agency thereto) for determining the maximum reserve
requirement with respect to eurodollar funding (currently
referred to as "eurocurrency liabilities" in Regulation D of
such Board) maintained by a member bank of such System,
all as conclusively determined (absent manifest error) by the Agent, such sum
to be rounded upward, if necessary, to the nearest whole multiple of 1/16th of
1%.
"Eurocurrency-Interest Period" shall mean the Interest Period
applicable to a Eurocurrency-based Advance.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent, Agent's office located at Grand Cayman, British West Indies or such
other branch or branches of Agent, domestic or
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<PAGE> 12
foreign, as it may hereafter designate as a Eurocurrency Lending Office by
notice to Company and the Banks, and (b) as to each of the Banks, its office,
branch or affiliate located at its address set forth on the signature pages
hereof (or identified thereon as a Eurocurrency Lending Office), or at such
other office, branch or affiliate of such Bank as it may hereafter designate as
its Eurocurrency Lending Office by notice to Company and Agent.
"Existing Revolving Credit Agreement" shall mean the Amended and
Restated Revolving Credit Agreement dated as of March 27, 1992 by and among
Company, Comerica Bank and NBD Bank, N.A. as lenders and Comerica Bank, as
agent for the lenders, as amended.
"Event of Default" shall mean each of the Events of Default specified
in Section 10.1 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fees" shall mean the Revolving Credit Commitment Fee, the Letter of
Credit Fees, the Agent's Fees and the other fees and charges payable by Company
to the Banks or Agent hereunder.
"Fixed Charge Coverage Ratio" shall mean as at any date of
determination, a ratio (i) the numerator of which shall be equal to EBITDA for
the preceding four fiscal quarters ending on such date of determination and
(ii) the denominator of which shall be the sum of Fixed Charges for such
period.
"Fixed Charges" of any Person shall mean, for any date of
determination, (a) the sum, without duplication, of (i) all interest payable
during the preceding four fiscal quarters on indebtedness of such Person, plus
(ii) all payments of principal or other sums payable during such period by such
Person with respect to indebtedness of such Person (excluding, however,
payments of principal outstanding under the Revolving Credit Notes and the
Swing Line Note) plus (iii) all debt discount and expense amortized or required
to be amortized during such period by such Person, plus (iv) the maximum amount
of all rental payments paid or required to be paid by such Person during such
period under Capitalized Leases, plus (v) all Capital Expenditures during such
period, minus (b) all
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interest income received in cash during such period by such Person, as
determined in accordance with GAAP.
"Financial Statements" shall mean all those balance sheets, earnings
statements and other financial data (whether of the Company, the Guarantors or
otherwise) which have been furnished to the Agent or the Banks for the purposes
of, or in connection with, this Agreement and the transactions contemplated
hereby.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof, consistently
applied.
"Governmental Obligations" means noncallable direct general
obligations of the United States of America or obligations the payment of
principal of and interest on which is unconditionally guaranteed by the United
States of America.
"Guarantor(s)" shall mean as of the date hereof, each Subsidiary of
the Company listed on attached Schedule 2 hereto and subsequent to the date
hereof shall also include each Person becoming a Significant Subsidiary of the
Company, or otherwise entering into the Guaranty (by joinder agreement or
otherwise), from time to time pursuant to the terms and provisions of this
Agreement.
"Guaranty" shall mean, collectively (unless the context indicates
otherwise), those guaranties or joinder agreements delivered by the
Subsidiaries listed on attached Schedule 2 hereto as of the date hereof, or by
any Person which becomes a Significant Subsidiary of Company from time to time
subsequent hereto or by any Person who is otherwise required to enter into the
Guaranty pursuant to the provisions of this Agreement, for the benefit of the
Banks and Agent, pursuant to this Agreement, as amended from time to time.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any federal,
state, provincial, local, foreign or other governmental or quasi-governmental
authority or body (or any agency, instrumentality or political subdivision
thereof) pertaining to any hazardous, toxic or dangerous waste, substance or
material on or about any facilities owned, leased or operated by Company or any
of its Subsidiaries, or any portion thereof including, without limitation,
those relating to soil, surface, subsurface ground water conditions and the
condition of the ambient air; and any state and local laws and regulations
pertaining to any hazardous, toxic or dangerous waste, substance or material
and/or
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asbestos; any so-called "superfund" or "superlien" law; and any other federal,
state, provincial, foreign or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"HLT Determination" shall mean any determination by the Agent or by
the Majority Banks, or by applicable federal or state regulatory authorities
(including without limitation any central bank or other governmental body
having jurisdiction over any of the Banks) that the Indebtedness (or any
specific loan facility or portion thereof pursuant to this Agreement) would be
classified as a "highly-leveraged transaction" or an "HLT" under applicable
federal or state law, regulations or guidelines in effect from time to time,
provided that (a), with any determination of HLT status by Agent or the
Majority Banks, Agent shall have given Company not less than thirty (30) days
prior written notice thereof, accompanied by a certificate setting forth the
basis for such determination (which shall be presumed correct absent manifest
error) and (b) with respect to any determination of HLT status by a federal or
state regulatory authority, Agent shall have given written notice thereof to
Company, accompanied by a copy of such determination (if in writing).
"Indebtedness" shall mean all indebtedness and liabilities (including
without limitation interest, fees and other charges) arising under this
Agreement or any of the Loan Documents, whether direct or indirect, absolute or
contingent, of Company or any Guarantor to any of the Banks or to the Agent, in
any manner and at any time, whether evidenced by the Notes, arising under the
Guaranty, or any of the other Loan Documents, due or hereafter to become due,
now owing or that may hereafter be incurred by Company or any Guarantor to, or
acquired by, any of the Banks or by Agent, and any judgments that may hereafter
be rendered on such indebtedness or any part thereof, with interest according
to the rates and terms specified, or as provided by law, and any and all
consolidations, amendments, renewals, replacements, substitutions or extensions
of any of the foregoing; provided, however that for purposes of calculating the
Indebtedness outstanding under the Notes or any of the Loan Documents, the
direct and indirect and absolute and contingent obligations of the Company and
the Guarantors (whether direct or contingent) shall be determined without
duplication.
"Indenture" shall mean the Indenture dated as of October 1, 1993 by
and between Company and NBD Bank (formerly known as NBD
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Bank, N.A.) pursuant to which the Convertible Notes were issued, as the same
may be amended or modified from time to time.
"Interest Period" shall mean (i) with respect to a Eurocurrency-based
Advance, one (1), two (2), three (3) or six (6) months (or any lesser or
greater number of days agreed to in advance by Company, Agent and the Revolving
Credit Banks) as selected by Company pursuant to Section 2.3, provided,
however, that any Eurocurrency-Interest Period which commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month
and (ii) with respect to a Swing Line Advance, shall mean a period of one (1)
to thirty (30) days agreed to in advance by Company and the Swing Line Bank as
selected by Company pursuant to Section 4.3. Each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day, and no
Interest Period which would end after the Revolving Credit Maturity Date shall
be permitted with respect to any Advance.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean any loan or advance by Company or any of its
Subsidiaries to, or any other loan, advance or investment by Company or any of
its Subsidiaries in, any Person (including without limitation, any Subsidiary
of Company), without offset, reduction or other adjustment, whether such loan,
advance or investment shall be in the nature of an investment in shares of
stock or other capital or securities, general or limited partnership or joint
venture interests, evidences of indebtedness or otherwise.
"Issuing Office" shall mean Agent's office located at One Detroit
Center, 500 Woodward Avenue, Detroit, Michigan 48226-3289 or such other office
as Agent shall designate as its Issuing Office.
"Joinder Agreement" shall mean a joinder agreement in the form
attached to this Agreement as Exhibit "I", to be executed and delivered by any
Subsidiary required to be a party to the Guaranty pursuant to Section 8.15 of
this Agreement.
"Joint Venture" shall mean any corporation, partnership, association,
joint stock company, business trust or other combined enterprise, other than a
Subsidiary, in which or to which the Company or any of its Subsidiaries has
made a loan, investment or advance, or has an ownership stake or interest,
whether in the
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nature of capital stock, partnership or other equity interests or otherwise to
fund a business enterprise which engages or will engage in a business in which
Company or any of its Subsidiaries is engaged as of the date of this Agreement
or a business related thereto.
"Letter(s) of Credit" shall mean any standby or documentary letters of
credit issued by Agent at the request of or for the account of an Account Party
or Account Parties pursuant to Article 3 hereof.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Agent of
an Account Party or Account Parties requesting Agent to issue such Letter of
Credit, as amended from time to time.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Maximum Amount" shall mean as of any date of
determination the lesser of: (a) Twenty Million Dollars ($20,000,000); or (b)
the Revolving Credit Aggregate Commitment as of such date, minus the aggregate
principal amount of Advances outstanding as of such date under the Notes.
"Letter of Credit Obligation(s)" shall mean the obligation of an
Account Party or Account Parties under each Letter of Credit Agreement to
reimburse the Agent for each payment made by the Agent under the Letter of
Credit issued pursuant to such Letter of Credit Agreement, together with all
other sums, fees, charges and amounts which may be owing to the Agent under
such Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to
be paid by the Agent in its capacity hereunder as issuer of a Letter of Credit
as a result of a draft or other demand for payment under any Letter of Credit.
"Leverage Ratio" shall mean, as at the time any determination thereof
is to be made, a ratio, the numerator of which shall be Senior Indebtedness as
of such date and the denominator of which shall be EBITDA for the four
preceding fiscal quarters ending on the date of determination determined in
accordance with GAAP.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, financing
statement or comparable notice or other filing or recording, lessor's or
lessee's interest under any lease, subordination or any claim or right, or any
other type of
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lien, charge, encumbrance, preferential or priority arrangement or other claim
or right, whether based on common law or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Letter of Credit Agreements, the Letters of Credit, the Collateral
Documents, and any other documents, certificates, instruments or agreements
executed pursuant to or in connection with any such document or this Agreement,
as such documents may be amended from time to time.
"Majority Banks" shall mean at any time Banks holding not less than
fifty-one percent (51%) of the sum of the aggregate principal amount of the
Indebtedness then outstanding under the Revolving Credit Notes (or, if no
Indebtedness is then outstanding, Banks holding not less than fifty-one percent
(51%) of the Percentages).
"Margin" shall mean, as of any date of determination thereof, the
applicable interest rate margin determined in accordance with the provisions of
Section 5.1 hereof (based upon the Fixed Charge Coverage Ratio, on a
Consolidated basis) by reference to the appropriate columns in the pricing
matrix attached to this Agreement as Schedule 1.
"Net Worth" of any Person shall mean, as of any date, the amount of
any capital stock, paid in capital and similar equity accounts plus (or minus
in the case of a deficit) the capital surplus and retained earnings of such
Person and the amount of any foreign currency translation adjustment account
shown as a capital account of such Person, as determined in accordance with
GAAP.
"Notes" shall mean the Revolving Credit Notes and the Swing Line Note.
"Pension Plan(s)" shall mean all employee pension benefit plans, as
defined in Section 3(2) of ERISA, which are maintained or contributed to by
Company or its Subsidiaries.
"Percentage" shall mean, with respect to any Bank, its percentage
share, as set forth on Exhibit "G", hereto, of the Revolving Credit and its
risk participation in Letters of Credit as such Exhibit may be revised from
time to time by Agent in accordance with Section 14.8 hereof.
"Permitted Acquisitions" shall mean any acquisition by the Company or
any Subsidiary of all or substantially all of the assets of another Person, or
of a division or line of business of another Person or fifty one percent (51%)
or more of the shares of stock or other ownership interests of another Person
which satisfies and/or is conducted in accordance with the following
requirements:
(i) on the date of any such acquisition, all
necessary governmental, quasi-governmental, agency, regulatory
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or similar approvals of applicable jurisdictions (or the respective
agencies, instrumentalities or political subdivisions, as applicable,
of such jurisdictions) and all necessary non-governmental and other
third-party approvals which, in each case, are material to such
acquisition have been obtained and are in effect, and Company and its
Subsidiaries are in full compliance thereunder, and all necessary
declarations, registrations or other filings with any court,
governmental or regulatory authority, securities exchange or any other
person have been made;
(ii) if an acquisition of stock of an acquisition
target, the acquisition shall have been approved by the Board of
Directors or all of the shareholders whose stock is being acquired of
such acquisition target not later than the date any Request for
Advance is delivered to Bank in connection with an Advance to be used
to pay a portion of the acquisition consideration and as of such date,
no claim or challenge has been asserted or threatened by any
shareholder, director, officer or employee of the acquisition target
or by any other Person which might reasonably be expected to have a
material adverse effect on Company and its Consolidated Subsidiary;
and
(iii) both before and after such acquisition, no
Default or Event of Default (whether or not related to such
acquisition), has occurred and is continuing under this Agreement, or
any of the other Loan Documents.
"Permitted Encumbrances" shall mean, with respect to any Person:
(a) the liens and encumbrances granted under or
established by this Agreement or the Loan Documents;
(b) liens for taxes not yet due and payable or which are
being contested in good faith by appropriate proceedings diligently
pursued, provided that such provision for the payment of all such
taxes known to such Person has been made on the books of such Person
as may be required by GAAP;
(c) mechanics', materialmen's, carriers', warehousemen's
and similar liens and encumbrances arising in the ordinary course of
business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any levy, execution or other enforcement
of such liens and encumbrances shall have been duly suspended; and
(ii) such provision for the payment of such liens and encumbrances has
been made on the books of such Person as may be required by GAAP;
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(d) liens arising in connection with worker's
compensation, unemployment insurance, old age pensions (subject to the
applicable provisions of this Agreement) and social security benefits
which are not overdue or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in the case
of any such contest (i) any levy, execution or other enforcement of
such liens shall have been duly suspended; and (ii) such provision for
the payment of such liens has been made on the books of such Person as
may be required by GAAP;
(e)(i) liens incurred in the ordinary course of business to
secure the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts with
the United States or any foreign government or any agency thereof
entered into in the ordinary course of business and (ii) liens
incurred or deposits made in the ordinary course of business to secure
the performance of statutory obligations, bids, leases, fee and
expense arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations incurred in connection with the
borrowing of money, any lease-purchase arrangements or the payment of
the deferred purchase price of property), provided that full provision
for the payment of all such obligations set forth in clauses (i) and
(ii) has been made on the books of such Person as may be required by
GAAP;
(f) any easements, restrictions, mineral, oil, gas and
mining rights and reservations and minor defects in title with respect
to real property which do not individually or in the aggregate
materially detract from the value of such real property; and
(g) those liens and encumbrances of the Company or its
Subsidiaries identified in Schedule 3 hereto.
"Permitted Investments" shall mean:
(i) Governmental Obligations;
(ii) Obligations of a state of the United States,
the District of Columbia or any possession of the United States, or
any political subdivision thereof, which are described in Section
103(a) of the Internal Revenue Code and are graded in any of the
highest three (3) major grades as determined by at least one
nationally recognized rating agency; or secured, as to payments of
principal and interest, by a letter of credit provided by a financial
institution or insurance provided by a bond insurance company which in
each case is itself or its debt is rated in one of the highest three
(3) major grades as determined by at least one Rating Agency;
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(iii) Banker's acceptances, commercial accounts,
certificates of deposit, or depository receipts issued by a bank,
trust company, savings and loan association, savings bank or other
financial institution whose deposits are insured by the Federal
Deposit Insurance Corporation and whose reported capital and surplus
equal at least $250,000,000;
(iv) Commercial paper rated at the time of
purchase within the two highest classifications established by each
Rating Agency, and which matures within 270 days after the date of
issue;
(v) Secured repurchase agreements against
obligations itemized in paragraph (i) above, and executed by a bank or
trust company or by members of the association of primary dealers or
other recognized dealers in United States government securities, the
market value of which must be maintained at levels at least equal to
the amounts advanced; and
(vi) Any fund or other pooling arrangement which
exclusively purchases and holds the investments itemized in (i)
through (iv) above.
"Person" shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock
company, or a government or any agency or political subdivision thereof or
other entity of any kind.
"Prime Rate" shall mean the per annum rate of interest announced by
the Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent, to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Prime-based Advance" shall mean an Advance which bears interest at
the Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest
which is equal to the greater of (i) the Prime Rate, or (ii) the Alternate Base
Rate.
"Purchasing Lender" shall have the meaning set forth in Section 12.9.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears
interest at the Quoted Rate.
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"Rating Agency" shall mean Moody's Investors Service, Standard and
Poor's Ratings Group or any other nationally-recognized statistical rating
organization which is acceptable to the Agent.
"Request for Revolving Credit Advance" shall mean a Request for
Revolving Credit Advance issued by Company under Section 2.3 of this Agreement
in the form annexed hereto as Exhibit "A".
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by Company under Section 4.3 of this Agreement in the form
attached hereto as Exhibit "D".
"Revolving Credit" shall mean the revolving credit loan to be advanced
to the Company by the Revolving Credit Banks pursuant to Article 2 hereof, in
an aggregate amount (subject to the terms hereof), not to exceed, at any one
time outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by Company
and made by Revolving Credit Banks under Section 2.1 of this Agreement,
including without limitation any readvance, refunding or conversion of such
borrowing pursuant to Section 2.3 hereof and any advance in respect of a Letter
of Credit under Section 3.6 hereof, and shall include, as applicable, a
Eurocurrency- based Advance and/or Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean One Hundred Thirty
Five Million Dollars ($135,000,000) subject to reduction or termination under
Section 2.8 or 10.2 hereof.
"Revolving Credit Banks" shall mean Comerica Bank, and such other
financial institutions from time to time parties hereto as lenders of the
Revolving Credit.
"Revolving Credit Commitment Fee" shall mean the fees payable to Agent
for distribution to the Revolving Credit Banks pursuant to Section 2.6 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of
(i) March 31, 2000, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall be terminated pursuant to Section 2.8 or Section 10.2 hereof.
"Revolving Credit Notes" shall mean the revolving credit notes
described in Section 2.1 hereof, made by Company to each of the Revolving
Credit Banks in the form annexed to this agreement as Exhibit "B", as such
notes may be amended or supplemented from time to time, and any other notes
issued in substitution, replacement or renewal thereof from time to time.
"Senior Indebtedness" of any Person shall mean, as of any date,
without duplication, (a) all obligations of such Person for
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borrowed money (excluding, however, any such obligations which are, and remain
at all times after incurrence, expressly subordinate and junior in right and
priority to payment of the Indebtedness by agreement satisfactory in form and
substance to the Majority Banks), (b) all obligations of such Person in respect
of letters of credit, surety bonds or similar obligations issued for the
account of such Person, (c) all obligations of such Person as lessee or user
under any lease of real or personal property which, in accordance with GAAP,
are or should be capitalized on the books of the lessee or user, (d) all
obligations of such Person in respect of the deferred purchase price for goods,
property or services acquired by such Person, (e) all obligations of such
Person to purchase goods, property or services where payment therefor is
required regardless of whether delivery of such goods or property or the
performance of such services is ever made or tendered, (f) all obligations of
such Person in respect of any interest rate or currency swap, rate cap or other
similar transaction (valued in an amount equal to the highest termination
payment, if any, that would be payable by such Person upon termination for any
reason on the date of determination), and (g) all obligations of others similar
in character to those described in clauses (a) through (f) of this definition
to the extent such Person is liable, contingently or otherwise, as obligor,
guarantor or in any other capacity, or in respect of which obligations such
Person assures a creditor against loss or agrees to take any action to prevent
any such loss (other than endorsements of negotiable instruments for collection
in the ordinary course of business) including without limitation all
obligations of such Person to advance funds to, or to purchase property or
services from, any other Person in order to maintain the financial condition of
such other Person.
"Significant Subsidiary" shall mean each Subsidiary of Company which
at any date of determination has assets, determined in accordance with GAAP,
with a book value equal to or greater than an amount equal to two and one half
percent (2 1/2%) of the Consolidated assets of Company and its Consolidated
Subsidiaries determined as of the last day of the fiscal quarter of Company
ending immediately preceding such date of determination.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, or business trust of which more than fifty percent (50%) of the
outstanding voting stock or share capital is owned either directly or
indirectly by any Person or one or more of its Subsidiaries, or the management
of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by any Person and/or its Subsidiaries. Unless
otherwise specified to the contrary herein, Subsidiary(ies) shall refer to the
Company's Subsidiary(ies).
"Swing Line Advance" shall mean an Advance made by Swing Line Bank to
Company pursuant to Section 4.1 hereof.
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"Swing Line Bank" shall mean Comerica Bank, in its capacity as lender
under Article 4 of this Agreement, and its successors and assigns.
"Swing Line Note" shall mean the swing line note described in Section
4.1 hereof, made by Company to Swing Line Bank in the form annexed hereto as
Exhibit "E", as such Note may be amended or supplemented from time to time, and
any notes issued in substitution, replacement or renewal thereof from time to
time.
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all indebtedness for
borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
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2. REVOLVING CREDIT.
2.1 Revolving Credit Commitment. Subject to the terms and
conditions of this Agreement, each Revolving Credit Bank severally and for
itself alone agrees to make Advances of the Revolving Credit to Company from
time to time on any Business Day during the period from the effective date
hereof until (but excluding) the Revolving Credit Maturity Date in an aggregate
amount not to exceed at any one time outstanding each such Revolving Credit
Bank's Percentage of the Revolving Credit Aggregate Commitment. All of such
Advances hereunder shall be evidenced by the Revolving Credit Notes, under
which advances, repayments and readvances may be made, subject to the terms and
conditions of this Agreement.
2.2 Accrual of Interest and Maturity. (a) The Revolving Credit
Notes, and all principal and interest outstanding thereunder, shall mature and
become due and payable in full on the Revolving Credit Maturity Date, and each
Advance evidenced by the Revolving Credit Notes from time to time outstanding
hereunder shall, from and after the date of such Advance, bear interest at its
Applicable Interest Rate. The amount and date of each Revolving Credit Advance,
its Applicable Interest Rate, its Interest Period, and the amount and date of
any repayment shall be noted on Agent's records, which records will be
conclusive evidence thereof, absent manifest error; provided, however, that any
failure by the Agent to record any such information shall not relieve Company
of its obligation to repay the outstanding principal amount of such Advance,
all interest accrued thereon and any amount payable with respect thereto in
accordance with the terms of this Agreement and the Loan Documents.
2.3 Requests for Advances and Requests for Refundings and
Conversions of Revolving Credit Advances. Company may request a Revolving
Credit Advance, refund any Revolving Credit Advance in the same type of
Revolving Credit Advance or convert any Revolving Credit Advance to any other
type of Revolving Credit Advance only after delivery to Agent of a Request for
Revolving Credit Advance executed by an authorized officer of Company subject
to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall
set forth the information required on the Request for Revolving Credit
Advance form annexed hereto as Exhibit "A", including without
limitation:
(i) the proposed date of Revolving Credit Advance, which
must be a Business Day;
(ii) whether the Revolving Credit Advance is a refunding
or conversion of an outstanding Revolving Credit
Advance; and
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(iii) whether such Revolving Credit Advance is to be a
Prime-based Advance, a Eurocurrency-based Advance,
and, except in the case of a Prime-based Advance, the
first Interest Period applicable thereto;
(b) each such Request for Revolving Credit Advance shall
be delivered to Agent by 11:00 a.m. (Detroit time) three (3) Business
Days prior to the proposed date of Revolving Credit Advance, except in
the case of a Prime-based Advance, for which the Request for Revolving
Credit Advance must be delivered by 10 a.m. (Detroit time) on such
proposed date;
(c) the principal amount of such requested Revolving
Credit Advance, plus the principal amount of all other Advances then
outstanding hereunder, plus the aggregate undrawn portion of any
Letters of Credit which shall be outstanding as of the date of the
requested Revolving Credit Advance and the aggregate face amount of
Letters of Credit requested but not yet issued, less the principal
amount of any outstanding Swing Line Advance or Revolving Credit
Advance to be refunded by the requested Revolving Credit Advance shall
not exceed the then applicable Revolving Credit Aggregate Commitment;
(d) the principal amount of such Revolving Credit
Advance, plus the amount of any other outstanding Indebtedness under
this Agreement to be then combined therewith having the same
Applicable Interest Rate and Interest Period, if any, shall be at
least One Million Dollars ($1,000,000) or a larger integral multiple
of One Million Dollars ($1,000,000) and at any one time there shall
not be in effect more than five (5) Interest Periods;
(e) each Request for Revolving Credit Advance shall
constitute and include a certification by the Company as of the date
thereof that:
(i) both before and after the Revolving Credit Advance,
the obligations of the Company and the Guarantors set
forth in this Agreement and the Loan Documents, as
applicable, are valid, binding and enforceable
obligations of such parties;
(ii) to the best knowledge of Company all conditions to
Advances of the Revolving Credit have been satisfied;
(iii) there is no Default or Event of Default in existence,
and none will exist upon the making of the Advance;
and
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(iv) the representations and warranties contained in this
Agreement and the Loan Documents are true and correct
in all material respects and shall be true and
correct in all material respects as of and
immediately after the making of the Advance.
2.4 Disbursement of Revolving Credit Advances.
(a) Upon receiving any Request for Revolving Credit
Advance from Company under Section 2.3 hereof, Agent shall promptly
notify each Revolving Credit Bank by wire, telecopy, telex or by
telephone (confirmed by wire, telecopy or telex) of the amount of such
Revolving Credit Advance to be made and the date such Advance is to be
made by said Revolving Credit Bank pursuant to its Percentage of the
Revolving Credit Advance. Unless such Revolving Credit Bank's
commitment to make Revolving Credit Advances hereunder shall have been
suspended or terminated in accordance with this Agreement, each
Revolving Credit Bank shall send the amount of its Percentage of the
Advance in same day funds in Dollars to Agent at the office of Agent
located at One Detroit Center, Detroit, Michigan 48226-3289 not later
than 2:00 p.m. (Detroit time) on the date of such Advance.
(b) Subject to submission of an executed Request for
Revolving Credit Advance by Company without exceptions noted in the
compliance certification therein and to the other terms and conditions
hereof, Agent shall make available to Company the aggregate of the
amounts so received by it from the Revolving Credit Banks under this
Section 2.4, in like funds, not later than 4:00 p.m. (Detroit time) on
the date of such Revolving Credit Advance by credit to an account of
Company maintained with Agent or to such other account or third party
as Company may reasonably direct.
(c) Unless Agent shall have been notified by any
Revolving Credit Bank prior to the date of any proposed Revolving
Credit Advance that such Revolving Credit Bank does not intend to make
available to Agent such Revolving Credit Bank's Percentage of the
Revolving Credit Advance, Agent may assume that such Revolving Credit
Bank has made such amount available to Agent on such date, as
aforesaid and may, in its sole discretion and without obligation to do
so, in reliance upon such assumption, make available to Company a
corresponding amount. If such amount is not in fact made available to
Agent by such Revolving Credit Bank in accordance with Section 2.4(a),
as aforesaid, Agent shall be entitled to recover such amount on demand
from such Revolving Credit Bank. If such Revolving Credit Bank does
not pay such amount forthwith upon Agent's demand therefor, the Agent
shall promptly notify Company, and Company shall pay such amount to
Agent. Agent shall also be entitled to recover from such
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Revolving Credit Bank or from Company, as the case may be, interest on
such amount in respect of each day from the date such amount was made
available by Agent to Company to the date such amount is recovered by
Agent, at a rate per annum equal to:
(i) in the case of such Revolving Credit Bank, the
Federal Funds Effective Rate; or
(ii) in the case of Company, the rate of interest then
applicable to the Revolving Credit Advance.
The obligation of any Revolving Credit Bank to make any Revolving
Credit Advance hereunder shall not be affected by the failure of any
other Revolving Credit Bank to make any Revolving Credit Advance
hereunder, and no Bank shall have any liability to the Company, the
Agent, any other Bank, or any other party for another Bank's failure
to make any loan or Revolving Credit Advance hereunder.
2.5 Prime-based Advance in Absence of Election or Upon Default.
If, as to any outstanding Eurocurrency-based Advance, Agent has not received
payment on the last day of the Interest Period applicable thereto, or does not
receive a timely Request for Revolving Credit Advance meeting the requirements
of Section 2.3 hereof with respect to the refunding or conversion of such
Advance, or, subject to Section 5.6 hereof, if on such day a Default or Event
of Default shall exist, the principal amount thereof which is not then prepaid
shall be converted automatically to a Prime-based Advance and the Agent shall
thereafter promptly notify Company of said action.
2.6 Revolving Credit Commitment Fee. From the date hereof to (but
excluding) the Revolving Credit Maturity Date, the Company shall pay to each of
the Revolving Credit Banks, a Revolving Credit Commitment Fee determined by
multiplying the Applicable Commitment Fee Percentage times the average daily
amount by which such Bank's Percentage of the Revolving Credit Aggregate
Commitment then in effect exceeds the sum of (i) such Bank's Percentage of the
aggregate principal amount of Revolving Credit Advances outstanding from time
to time during such period (plus, in the case of the Swing Line Bank, the
aggregate principal amount of Swing Line Advances outstanding during such
period) and (ii) such Bank's Percentage of the aggregate daily undrawn amount
of any Letters of Credit during such period, calculated on a daily basis. The
Revolving Credit Commitment Fee shall be payable quarterly in arrears
commencing April 1, 1995, and on the first day of each calendar quarter
thereafter and at the Revolving Credit Maturity Date, and shall be computed on
the basis of a year of three hundred sixty (360) days and assessed for the
actual number of days elapsed. Whenever any payment of the Revolving Credit
Commitment Fee shall be due on a day which is not a Business Day, the date for
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payment thereof shall be extended to the next Business Day. Such Revolving
Credit Commitment Fees shall be paid by Company to the Agent. Upon receipt of
such payment, Agent shall make prompt payment to each Revolving Credit Bank of
its share of the Revolving Credit Commitment Fee. The Revolving Credit
Commitment Fee shall not be refundable under any circumstances.
2.7 Reduction of Indebtedness; Revolving Credit Aggregate
Commitment. If at any time and for any reason the aggregate principal amount of
Advances hereunder to Company, plus the aggregate undrawn amount of any Letters
of Credit which shall be outstanding at such time, shall exceed the then
applicable Revolving Credit Aggregate Commitment, Company shall immediately
reduce any pending request for an Advance on such day by the amount of such
excess and, to the extent any excess remains thereafter, immediately repay an
amount of the Indebtedness equal to such excess and, to the extent such
Indebtedness consists of Letter of Credit obligations, provide cash collateral
on the basis set forth in Section 10.2 hereof. Company acknowledges that, in
connection with any repayment required hereunder, it shall also be responsible
for the reimbursement of any prepayment or other costs required under Section
12.1 hereof; provided, however, that Company shall, in order to reduce any such
prepayment costs and expenses, first prepay such portion of the Indebtedness
then carried as a Prime-based Advance, if any.
2.8 Optional Reduction or Termination of Revolving Credit
Aggregate Commitment. The Company may, upon at least five (5) Business Days'
prior written notice to Agent, permanently reduce the Revolving Credit
Aggregate Commitment in whole at any time, or in part from time to time,
without premium or penalty, provided that: (i) each partial reduction of the
Revolving Credit Aggregate Commitment shall be in an aggregate amount equal to
at least Five Million Dollars ($5,000,000) or a larger integral multiple of One
Million Dollars ($1,000,000); (ii) each reduction shall be accompanied by the
payment of the Revolving Credit Commitment Fee, if any, accrued to the date of
such reduction; (iii) the Company shall prepay in accordance with the terms
hereof the amount, if any, by which the aggregate unpaid principal amount of
Swing Line Advances and Revolving Credit Advances, plus the aggregate amount of
outstanding Letters of Credit, exceeds the amount of the Revolving Credit
Aggregate Commitment, taking into account the aforesaid reductions thereof,
together with accrued but unpaid interest on the principal amount of such
prepaid Advances to the date of prepayment; (iv) if the termination or
reduction of the Revolving Credit Aggregate Commitment requires the prepayment
of a Eurocurrency-based Advance or Quoted Rate Advance, the termination or
reduction may be made only on the last Business Day of the then current
Interest Period applicable to such Advance and (v) no reduction shall reduce
the amount of the Revolving Credit Aggregate Commitment to an amount which is
less than the sum of the aggregate undrawn amount of any Letters of Credit
outstanding at such time.
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Reductions of the Revolving Credit Aggregate Commitment and any accompanying
prepayments of the Revolving Credit Notes shall be distributed by Agent to each
Revolving Credit Bank in accordance with such Bank's Percentage thereof, and
will not be available for reinstatement by or readvance to the Company and any
accompanying prepayments of the Swing Line Notes shall be distributed by Agent
to the Swing Line Bank and will not be available for reinstatement by or
readvance to the Company. Any reductions of the Revolving Credit Aggregate
Commitment hereunder shall reduce each Revolving Credit Bank's portion thereof
proportionately (based upon the applicable Percentages), and shall be permanent
and irrevocable. Any payments made pursuant to this Section shall be applied
first to outstanding Prime-based Advances under the Revolving Credit, next to
Swing Line Advances which bear interest at the Prime-based Rate, next to Quoted
Rate Advances and then to Eurocurrency-based Advances.
2.9 Extension of Revolving Credit Maturity Date. (a) Provided that
no Default or Event of Default has occurred and is continuing, Company may, by
written notice to Agent and each Bank (which notice shall be irrevocable and
which shall not be deemed effective unless actually received by Agent and each
Bank) prior to May 31 but not before April 1, of each year (except 1995) ending
before June 1, 1998, request that the Banks extend the then applicable
Revolving Credit Maturity Date to a date that is one year later than the
Revolving Credit Maturity Date then in effect (each such request, a "Request").
Each Bank shall, not later than thirty (30) calendar days following the date of
its receipt of the Request, give written notice to the Agent stating whether
such Bank is willing to extend the Revolving Credit Maturity Date as requested.
If Agent has received the aforesaid written approvals of such Request from each
of the Banks, then, effective upon the date of Agent's receipt of all such
written approvals from the Banks, as aforesaid, the Revolving Credit Maturity
Date shall be so extended for an additional one year period, the term Revolving
Credit Maturity Date shall mean such extended date and Agent shall promptly
notify the Company that such extension has occurred.
(b) If (i) any Bank gives the Agent written notice that
it is unwilling to extend the Revolving Credit Maturity Date as requested or
(ii) any Bank fails to provide written approval to Agent of such a Request
within thirty (30) calendar days of the date of such Bank's receipt of the
Request, then (w) the Banks shall be deemed to have declined to extend the
Revolving Credit Maturity Date, (x) the then-current Revolving Credit Maturity
Date shall remain in effect (with no further right on the part of Company to
request extensions thereof under this Section 2.9), and (y) the commitments of
the Banks to make Advances of the Revolving Credit hereunder shall terminate on
the Revolving Credit Maturity Date then in effect, and Agent shall promptly
notify Company thereof.
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3. LETTERS OF CREDIT.
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Agent may through its Issuing Office, at any time and from time to
time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account Party
accompanied by a duly executed Letter of Credit Agreement, and such other
documentation related to the requested Letter of Credit as the Agent may
reasonably require, issue standby or documentary Letters of Credit for the
account of such Account Party, in an aggregate amount for all Letters of Credit
issued hereunder at any one time outstanding not to exceed the Letter of Credit
Maximum Amount. Each Letter of Credit shall be in a minimum face amount of Two
Hundred Fifty Thousand Dollars ($250,000) and shall have an expiration date not
later than three (3) years from its date of issuance; provided that each Letter
of Credit (including any renewal thereof) shall expire not later than ten (10)
Business Days prior to the Revolving Credit Maturity Date in effect on the date
of issuance thereof. The submission of all applications and the issuance of
each Letter of Credit hereunder shall be subject in all respects to applicable
provisions of U.S. law and regulations, including without limitation, the
Trading With the Enemy Act, Export Administration Act, International Emergency
Economic Powers Act, and the Regulations of the Office of Foreign Assets
Control of the U.S. Department of the Treasury.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at
the request and for the account of any Account Party unless, as of the date of
issuance of such Letter of Credit:
(a) the face amount of the Letter of Credit requested,
plus the undrawn portion of all other outstanding
Letters of Credit and the aggregate amount of all
unpaid Letter of Credit Obligations, does not exceed
the Letter of Credit Maximum Amount;
(b) the face amount of the Letter of Credit requested,
plus the aggregate principal amount of all Advances
outstanding under the Notes, plus the aggregate
undrawn portion of all other outstanding Letters of
Credit and the aggregate amount of all unpaid Letter
of Credit Obligations, do not exceed the then
applicable Revolving Credit Aggregate Commitment;
(c) the obligations of Company set forth in this
Agreement and the Loan Documents are valid, binding
and enforceable obligations of Company and the valid,
binding and enforceable nature of this Agreement and
the Loan Documents has not been disputed by Company;
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(d) both immediately before and immediately after
issuance of the Letter of Credit requested, no
Default or Event of Default exists;
(e) the representations and warranties contained in this
Agreement and the Loan Documents are true in all
material respects as if made on such date;
(f) the execution of the Letter of Credit Agreement with
respect to the Letter of Credit requested will not
violate the terms and conditions of any material
contract, agreement or other borrowing of Company;
(g) the Account Party requesting the Letter of Credit
shall have delivered to Agent at its Issuing Office,
not less than five (5) Business Days prior to the
requested date for issuance (or such shorter time as
the Agent, in its sole discretion, may permit), the
Letter of Credit Agreement related thereto, together
with such other documents and materials as may be
reasonably required pursuant to the terms thereof,
and the terms of the proposed Letter of Credit shall
be satisfactory to Agent and its Issuing Office in
the exercise of its reasonable discretion;
(h) no order, judgment or decree of any court, arbitrator
or governmental authority shall purport by its terms
to enjoin or restrain Agent from issuing the Letter
of Credit, or any Bank from taking an assignment of
its Percentage thereof pursuant to Section 3.6
hereof, and no law, rule, regulation, request or
directive (whether or not having the force of law)
shall prohibit or request that Agent refrain from
issuing, or any Bank refrain from taking an
assignment of its Percentage of, the Letter of Credit
requested or letters of credit generally;
(i) there shall have been no introduction of or change in
the interpretation of any law or regulation that
would make it unlawful for the Agent to issue the
requested Letter of Credit, no general suspension of
trading on the New York Stock Exchange or any other
national securities exchange, no declaration of a
general banking moratorium by banking authorities in
the United States, Michigan or the respective
jurisdictions in which the Banks, the Account Party
and the beneficiary of the requested Letter of Credit
are located (each a "Banking Authority"), and no
establishment of any new
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restrictions by any Banking Authority on transactions
involving letters of credit or on banks materially
affecting the extension of credit by banks; and
(j) Agent shall have received the issuance fee required
in connection with the issuance of such Letter of
Credit pursuant to Section 3.5 hereof.
Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by the Company and the Account Party of the
matters set forth in this Section 3.2 (a) through (f). The Agent shall be
entitled to rely on such certification without any duty of inquiry.
3.3 Notice. Agent shall give notice, substantially in the form
attached as Exhibit "C", to each Revolving Credit Bank of the issuance of each
Letter of Credit, not later than three (3) Business Days after issuance of each
Letter of Credit, specifying the amount thereof and the amount of such Bank's
Percentage thereof.
3.4 Letter of Credit Fees. Company shall pay to the Agent for
distribution to the Revolving Credit Banks in accordance with the Percentages,
Letter of Credit Fees as follows:
(a) a per annum Letter of Credit Fee with respect to the
undrawn amount of each Letter of Credit issued pursuant hereto in the amount of
the Applicable L/C Fee Percentage (determined with reference to Schedule 1 of
this Agreement), exclusive of the issuance fee of one-eighth of one percentage
point (1/8%) per annum on the face amount thereof to be paid to Agent under
Section 3.5 hereof.
(b) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or
cause to be deemed applicable any reserve, special deposit, limitation or
similar requirement against letters of credit issued by, or assets held by, or
deposits in or for the account of, Agent or any of the Banks or (ii) impose on
Agent or any of the Banks any other condition regarding this Agreement or the
Letters of Credit, and the result of any event referred to in clause (i) or
(ii) above shall be to increase in an amount deemed material by Agent or the
Banks the cost or expense to Agent or the Banks of issuing or maintaining or
participating in any of the Letters of Credit (which increase in cost or
expense shall be determined by the Agent's or such Bank's reasonable allocation
of the aggregate of such cost increases and expense resulting from such
events), then, upon demand by the Agent or such Bank, as the
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case may be, the Company shall, within ten days following demand for payment,
pay to Agent or such Bank, as the case may be, from time to time as specified
by the Agent or such Bank, additional amounts which shall be sufficient to
compensate the Agent or such Bank for such increased cost and expense, together
with interest on each such amount from ten days after the date demanded until
payment in full thereof at the Prime-based Rate. A certificate as to such
increased cost or expense incurred by the Agent or such Bank, as the case may
be, as a result of any event mentioned in clause (i) or (ii) above, shall be
promptly submitted to the Company and shall be conclusive, absent manifest
error, as to the amount thereof.
(c) All payments by the Company to the Agent or the
Revolving Credit Banks under this Section 3.4 shall be made in Dollars and in
immediately available funds at the Agent's Issuing Office or such other office
of the Agent as may be designated from time to time by written notice to the
Company by the Agent. The aforesaid fees shall be nonrefundable under all
circumstances, shall be payable quarterly in arrears on the first day of each
calendar quarter, and shall be calculated on the basis of a 360 day year and
assessed for the actual number of days from the date of the issuance thereof to
the stated expiration thereof.
3.5 Issuance Fees. In connection with the Letters of Credit, and
in addition to the Letter of Credit Fees (including a letter of credit issuance
fee of one eighth percentage point (1/8%) to be retained by Agent for its own
account), the Company and the applicable Account Party shall pay, for the sole
account of the Agent, standard documentation, administration, payment and
cancellation charges assessed by Agent or its Issuing Office, at the times, in
the amounts and on the terms set forth or to be set forth from time to time in
the standard fee schedule of Agent's Issuing Office in effect from time to
time.
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company and each applicable Account Party agrees
to pay to the Agent, on the day on which the Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit, an amount
equal to the amount paid by the Agent in respect of such draft or other demand
under such Letter of Credit and all expenses paid or incurred by the Agent
relative thereto. Unless the Company or the applicable Account Party shall have
made such payment to the Agent on such day, upon each such payment by the
Agent, the Agent shall be deemed to have disbursed to the Company, and the
Company shall be deemed to have elected to substitute for its reimbursement
obligation, a Prime-based Advance from the Banks in an amount equal to the
amount so paid by the Agent in respect of such draft or other demand under such
Letter of Credit. Such Prime-based Advance shall be disbursed notwithstanding
any failure to satisfy any conditions for disbursement of any Advance set forth
in Article 2 hereof and, to the extent of the Prime-based Advance so disbursed,
the reimbursement obligation of
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the Company or the applicable Account Party to the Agent under this Section 3.6
shall be deemed satisfied.
(b) If the Agent shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Agent shall provide notice
thereof to the Company and the applicable Account Party on the date such draft
or demand is honored, and to each Revolving Credit Bank on such date unless the
Company or applicable Account Party shall have satisfied its reimbursement
obligation under Section 3.6(a) by payment to the Agent on such date. The Agent
shall further use reasonable efforts to provide notice to the Company or
applicable Account Party prior to honoring any such draft or other demand for
payment, but such notice, or the failure to provide such notice, shall not
affect the rights or obligations of the Agent with respect to any Letter of
Credit or the rights and obligations of the parties hereto, including without
limitation the obligations of the Company or applicable Account Party under
Section 3.6(a) hereof.
(c) Upon issuance by the Agent of each Letter of Credit hereunder,
each Revolving Credit Bank shall automatically acquire a pro rata risk
participation interest in such Letter of Credit and related Letter of Credit
Payment based on its respective Percentage. Each Revolving Credit Bank, on the
date a draft or demand under any Letter of Credit is honored, shall make its
Percentage share of the amount paid by the Agent, and not reimbursed by the
Company or applicable Account Party by payment to the Agent on such day,
available in immediately available funds at the principal office of the Agent
for the account of the Agent. If and to the extent such Bank shall not have
made such pro rata portion available to the Agent, such Bank, the Company and
the applicable Account Party severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
such amount was paid by the Agent until such amount is so made available to the
Agent at a per annum rate equal to the interest rate applicable during such
period to the related Advance disbursed under Section 3.6(a) in respect of the
reimbursement obligation of the Company and the applicable Account Party. If
such Bank shall pay such amount to the Agent together with such interest, such
amount so paid shall constitute a Prime-based Advance by such Bank disbursed in
respect of the reimbursement obligation of the Company or applicable Account
Party under Section 3.6(a) for purposes of this Agreement, effective as of the
date such amount was paid by the Agent. The failure of any Revolving Credit
Bank to make its pro rata portion of any such amount paid by the Agent
available to the Agent shall not relieve any other Revolving Credit Bank of its
obligation to make available its pro rata portion of such amount, but no Bank
shall be responsible for failure of any other Bank to make such pro rata
portion available to the Agent.
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<PAGE> 35
(d) Nothing in this Agreement shall be construed to require or
authorize any Bank to issue any Letter of Credit, it being recognized that the
Agent shall be the sole issuer of Letters of Credit under this Agreement.
3.7 Obligations Irrevocable. The obligations of Company and any
Account Party to make payments to Agent or the Revolving Credit Banks with
respect to Letter of Credit Obligations under Section 3.6 hereof, shall be
unconditional and irrevocable and not subject to any qualification or exception
whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter
of Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(c) The existence of any claim, setoff, defense or other
right which the Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in connection with
any of the Letter of Credit Documents, the transactions contemplated herein or
therein or any unrelated transactions;
(d) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(e) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of
the Agent or any Bank or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the
Agent, any Bank or any such party under this Agreement, any of the Loan
Documents or any of the Letter of Credit Documents, or any other acts or
omissions on the part of the Agent, any Bank or any such party; or
(g) Any other event or circumstance that would, in the
absence of this Section 3.7, result in the release or discharge by
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operation of law or otherwise of Company or any Account Party from the
performance or observance of any obligation, covenant or agreement contained in
Section 3.6.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Company or any Account Party has or may
have against the beneficiary of any Letter of Credit shall be available
hereunder to Company or any Account Party against the Agent or any Bank.
Nothing contained in this Section 3.7 shall be deemed to prevent Company or the
Account Parties, after satisfaction in full of the absolute and unconditional
obligations of Company and the Account Parties hereunder, from asserting in a
separate action any claim, defense, set off or other right which they (or any
of them) may have against Agent or any Bank.
3.8 Risk Under Letters of Credit. (a) In assigning and the
handling of Letters of Credit and any security therefor, or any documents or
instruments given in connection therewith, Agent shall have the sole right to
take or refrain from taking any and all actions under or upon the Letters of
Credit.
(b) Subject to other terms and conditions of this
Agreement, Agent shall issue the Letters of Credit and shall hold the documents
related thereto in its own name and shall make all collections thereunder and
otherwise administer the Letters of Credit in accordance with Agent's regularly
established practices and procedures and, except pursuant to Section 13.3
hereof, Agent will have no further obligation with respect thereto. In the
administration of Letters of Credit, Agent shall not be liable for any action
taken or omitted on the advice of counsel, accountants, appraisers or other
experts selected by Agent with due care and Agent may rely upon any notice,
communication, certificate or other statement from Company, any Account Party,
beneficiaries of Letters of Credit, or any other Person which Agent believes to
be authentic. Agent will, upon request, furnish the Banks with copies of Letter
of Credit Agreements, Letters of Credit and documents related thereto.
(c) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Agent makes no representation
and shall, subject to Section 3.7 hereof, have no responsibility with respect
to (i) the obligations of Company or any Account Party or, the validity,
sufficiency or enforceability of any document or instrument given in connection
therewith, (ii) the financial condition of, any representations made by, or any
act or omission of Company, the applicable Account Party or any other Person,
or (iii) any failure or delay in exercising any rights or powers possessed by
Agent in its capacity as issuer of Letters of Credit in the absence of its
gross negligence or willful misconduct. Each of the Banks expressly acknowledge
that they have made and will continue to make their own evaluations of
Company's
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creditworthiness without reliance on any representation of Agent or Agent's
officers, agents and employees.
(d) If at any time Agent shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent shall receive same for the pro rata
benefit of the Banks in accordance with their respective Percentage interests
therein and shall promptly deliver to each Revolving Credit Bank its share
thereof, less such Bank's pro rata share of the costs of such recovery,
including court costs and attorney's fees. If at any time any Revolving Credit
Bank shall receive from any source whatsoever any payment on any such
unreimbursed amount or interest thereon in excess of such Bank's Percentage
share of such payment, such Bank will promptly pay over such excess to Agent,
for redistribution in accordance with this Agreement.
3.9 Indemnification. (a) The Company and each Account Party hereby
indemnifies and agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and against any and
all claims, damages, losses, liabilities, costs or expenses of any kind or
nature whatsoever which the Banks or the Agent or any such person may incur or
which may be claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Bank nor the Agent or any of their respective
officers, directors, employees or agents shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or for any acts or
omissions of any beneficiary in connection therewith; (ii) the validity,
sufficiency or genuineness of documents or of any endorsement thereon, even if
such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (iii) payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of any Letter of Credit (unless such payment
resulted from the gross negligence or willful misconduct of the Agent),
including failure of any documents to bear any reference or adequate reference
to such Letter of Credit; (iv) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that Company and Account Parties shall not be required to
indemnify the Banks and the Agent and such other persons, and the Agent shall
be liable to the Company and the Account Parties to the extent, but only to the
extent, of any direct, as opposed to consequential or incidental, damages
suffered by Company and the Account Parties which were caused by the Agent's
gross negligence, willful misconduct or wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit.
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(b) It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further
investigation and regardless of any notice or information to the contrary. It
is further acknowledged and agreed that Company or an Account Party may have
rights against the beneficiary or others in connection with any Letter of
Credit with respect to which the Banks are alleged to be liable and it shall be
a condition of the assertion of any liability of the Banks under this Section
that Company or applicable Account Party shall contemporaneously pursue all
remedies in respect of the alleged loss against such beneficiary and any other
parties obligated or liable in connection with such Letter of Credit and any
related transactions.
3.10 Right of Reimbursement. Each Revolving Credit Bank agrees to
reimburse the Agent on demand, pro rata in accordance with their Percentages,
for (i) the reasonable out-of-pocket costs and expenses of the Agent to be
reimbursed by Company or any Account Party pursuant to any Letter of Credit
Agreement or any Letter of Credit, to the extent not reimbursed by Company or
Account Party and (ii) any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, fees, expenses or disbursements of
any kind and nature whatsoever which may be imposed on, incurred by or asserted
against Agent (in its capacity as issuer of any Letter of Credit) in any way
relating to or arising out of this Agreement, any Letter of Credit, any
documentation or any transaction relating thereto, or any Letter of Credit
Agreement, except to the extent that such liabilities, losses, costs or
expenses were incurred by Agent solely as a result of Agent's gross negligence
or willful misconduct.
4. SWING LINE CREDIT.
4.1 Swing Line Advances. The Swing Line Bank shall, on the terms
and subject to the conditions hereinafter set forth, make one or more advances
(each such advance being a "Swing Line Advance") to Company from time to time
on any Business Day during the period from the date hereof to (but excluding)
the Revolving Credit Maturity Date in an aggregate amount not to exceed Five
Million Dollars ($5,000,000) at any time outstanding; provided, however, that
after giving effect to all Swing Line Advances and all Revolving Credit
Advances requested to be made on such date, the sum of the aggregate principal
amount of all outstanding Advances, the undrawn portion of all outstanding
Letters of Credit and the aggregate amount of all unpaid Letter of Credit
Obligations shall not exceed the then applicable Revolving Credit Aggregate
Commitment. All Swing Line Advances shall be evidenced by the Swing Line Note,
under which advances, repayments and readvances may be made, subject to the
terms and conditions of this Agreement. Each Swing Line Advance shall mature
and the principal amount thereof shall be due and payable by Company on the
last day of the Interest
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Period applicable thereto. In no event whatsoever shall any outstanding Swing
Line Advance be deemed to reduce, modify or affect any Bank's commitment to
make Revolving Credit Advances based upon its Percentage.
4.2 Accrual of Interest; Margin Adjustments. Each Swing Line
Advance shall, from time to time after the date of such Advance, bear interest
at its Applicable Interest Rate. The amount and date of each Swing Line
Advance, its Applicable Interest Rate, its Interest Period, and the amount and
date of any repayment shall be noted on Agent's records, which records will be
conclusive evidence thereof, absent manifest error; provided, however, that any
failure by the Agent to record any such information shall not relieve Company
of its obligation to repay the outstanding principal amount of such Advance,
all interest accrued therein and any amount payable with respect thereto in
accordance with the terms of this Agreement and the Loan Documents.
4.3 Requests for Swing Line Advances. Company may request a Swing
Line Advance only after delivery to Swing Line Bank of a Request for Swing Line
Advance executed by an authorized officer of Company, subject to the following
and to the remaining provisions hereof:
(a) each such Request for Swing Line Advance shall set
forth the information required on the Request for Swing Line Advance form
annexed hereto as Exhibit "D", including without limitation:
(i) the proposed date of Swing Line Advance,
which must be a Business Day;
(ii) whether such Swing Line Advance is to be a
Prime-based Advance or Quoted Rate Advance; and
(iii) the duration of the Interest Period
applicable thereto;
(b) each such Request for Swing Line Advance shall be
delivered to Swing Line Bank by 12:00 p.m. (Detroit time) on the proposed date
of the Swing Line Advance;
(c) the principal amount of such requested Swing Line
Advance, plus the principal amount of all other Advances then outstanding
hereunder, plus the aggregate undrawn portion of any Letter of Credit which
shall be outstanding as of the date of the requested Swing Line Advance, plus
the aggregate face amount of Letters of Credit requested but not yet issued,
shall not exceed the then applicable Revolving Credit Aggregate Commitment;
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(d) the principal amount of such Swing Line Advance shall
be at least Fifty Thousand Dollars ($50,000) or any larger amount in multiples
of Fifty Thousand Dollars ($50,000);
(e) each Request for Swing Line Advance, once delivered
to Swing Line Bank, shall not be revocable by Company, and shall constitute and
include a certification by the Company as of the date thereof that:
(i) both before and after the Swing Line Advance,
the obligations of the Company and the Guarantors set forth in this
Agreement and the Loan Documents, as applicable, are valid, binding
and enforceable obligations of such parties;
(ii) to the best knowledge of Company all
conditions to Advances have been satisfied;
(iii) there is no Default or Event of Default in
existence, and none shall exist upon the making of the Swing Line
Advance; and
(iv) the representations and warranties contained
in this Agreement and the Loan Documents are true and correct in all
material respects and shall be true and correct in all material
respects as of and immediately after the making of the Swing Line
Advance.
Swing Line Bank shall promptly deliver to Agent by telecopier a copy of any
Request for Swing Line Advance received.
4.4 Disbursement of Swing Line Advances. Subject to submission of
an executed Request for Swing Line Advance by Company without exceptions noted
in the compliance certification therein and to the other terms and conditions
hereof, Swing Line Bank shall make available to Company the amount so
requested, in same day funds, not later than 4:00 p.m. (Detroit time) on the
date of such Swing Line Advance by credit to an account of Company maintained
with Swing Line Bank or to such other account or third party as Company may
reasonably direct. Swing Line Bank shall promptly notify Agent of any Swing
Line Advance by telephone, telex or telecopier.
4.5 Refunding of or Participation Interest in Swing Line Advances.
(a) The Agent, at any time in its sole and absolute
discretion, may (or, upon the request of the Swing Line Bank, shall) on behalf
of the Company (which hereby irrevocably directs the Agent to act on its
behalf) request each Revolving Credit Bank (including the Swing Line Bank in
its capacity as a Revolving Credit Bank) to make a Revolving Credit Advance in
an amount equal to such Revolving Credit Bank's Percentage of the principal
amount
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of the Swing Line Advances (the "Refunded Swing Line Advances") outstanding on
the date such notice is given; provided that (i) at any time as there shall be
a Swing Line Advance outstanding for more than thirty days, the Agent shall, on
behalf of the Company (which hereby irrevocably directs the Agent to act on its
behalf), promptly request each Revolving Credit Bank (including the Swing Line
Bank) to make a Revolving Credit Advance in an amount equal to such Revolving
Credit Bank's Percentage of the principal amount of such outstanding Swing Line
Advance and (ii) Swing Line Advances may be prepaid by the Borrower in
accordance with the provisions of Section 5.7 hereof. Unless any of the events
described in Section 10.1(j) shall have occurred (in which event the procedures
of paragraph (b) of this Section 4.5 shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Revolving Credit Bank shall make the
proceeds of its Revolving Credit Advance available to the Agent for the ratable
benefit of the Swing Line Bank at the office of the Agent specified in Section
2.4(a) prior to 11:00 a.m. Detroit time, in funds immediately available on the
Business Day next succeeding the date such notice is given. The proceeds of
such Revolving Credit Advances shall be immediately applied to repay the
Refunded Swing Line Advances.
(b) If, prior to the making of a Revolving Credit
Advances pursuant to paragraph (a) of this Section 4.5, one of the events
described in Section 10.1(j) shall have occurred, each Revolving Credit Bank
will, on the date such Revolving Credit Advance was to have been made, purchase
from the Swing Line Bank an undivided participating interest in the Refunded
Swing Line Advance in an amount equal to its Percentage of such Refunded Swing
Line Advance. Each Bank will immediately transfer to the Agent, in immediately
available funds, the amount of its participation and upon receipt thereof the
Agent will deliver to such Bank a Swing Line Bank Participation Certificate in
the form of Exhibit "F" dated the date of receipt of such funds and in such
amount.
(c) Each Bank's obligation to make Revolving Credit
Advances and to purchase participation interests in accordance with clauses (a)
and (b) above shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Bank may have against Swing Line
Bank, the Company or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of any Default or Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of the Company or any other
Person; (iv) any breach of this Agreement by the Company or any other Person;
(v) any inability of the Company to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such participating
interest is to be purchased or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Bank does
not make available to the Agent the amount required
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pursuant to clause (a) or (b) above, as the case may be, the Agent shall be
entitled to recover such amount on demand from such Bank, together with
interest thereon for each day from the date of non-payment until such amount is
paid in full at the Federal Funds Effective Rate for the first two Business
Days and at the Alternate Base Rate thereafter.
5. MARGIN ADJUSTMENTS; INTEREST PAYMENTS
5.1 Margin Adjustments. Adjustments in the Margin applicable to
Eurocurrency-based Advances, the Applicable Commitment Fee Percentage and the
Applicable L/C Fee Percentage, based upon the Fixed Charge Coverage Ratio (on a
Consolidated basis), shall be implemented on a quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only,
effective (i) as to all Prime-based Advances outstanding hereunder, the
Applicable Commitment Fee and the Applicable L/C Fee Percentage, upon the
required date of delivery of the financial statements under Sections 8.3(b) and
8.3(c) hereunder, in each case establishing applicability of the appropriate
adjustment, and (ii) as to each Eurocurrency-based Advance outstanding
hereunder, effective upon the expiration of the applicable Interest Period(s),
if any, in effect on the date of the delivery of such financial statements, in
each case with no retroactivity or claw- back. In the event Company fails
timely to deliver the financial statements required under Section 8.3(b) and
8.3(c), then from the date of such financial statements (but no later than the
date delivery of such financial statements was required) until such financial
statements are delivered, the margins and fee percentages shall be those set
forth under the Level 3 Column of the pricing matrix.
(b) With respect to Eurocurrency-based Advances outstanding
hereunder, an adjustment hereunder, after becoming effective, shall remain in
effect only through the end of the applicable Interest Period(s) for such
Eurocurrency-based Advances if any; provided, however, that upon any change in
the Margin level then in effect, as aforesaid, or the occurrence of any other
event which under the terms hereof causes such adjustment no longer to be
applicable, then any such subsequent adjustment or no adjustment, as the case
may be, shall be effective (and said pricing shall thereby be adjusted up or
down, as applicable) with the commencement of each Interest Period following
such change or event, all in accordance with the preceding subparagraph.
(c) Such Margin adjustments under this Section 5.1 shall be made
irrespective of, and in addition to, any other interest rate adjustments
hereunder.
5.2 Prime-based Interest Payments. Interest on the unpaid balance
of all Prime-based Advances from time to time outstanding shall accrue from the
date of such Advances to the Revolving Credit
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Maturity Date (and until paid), at a per annum interest rate equal to the
Prime-based Rate, and shall be payable in immediately available funds quarterly
commencing on the first day of the calendar quarter next succeeding the
calendar quarter during which the initial Advance is made and on the first day
of each calendar quarter thereafter. Interest accruing at the Prime-based Rate
shall be computed on the basis of a 360 day year and assessed for the actual
number of days elapsed, and in such computation effect shall be given to any
change in the interest rate resulting from a change in the Prime-based Rate on
the date of such change in the Prime-based Rate.
5.3 Eurocurrency-based Interest Payments. Interest on each
Eurocurrency-based Advance having a related Eurocurrency-Interest Period of 3
months or less shall accrue at its Eurocurrency-based Rate and shall be payable
in immediately available funds on the last day of the Interest Period
applicable thereto. Interest shall be payable in immediately available funds on
each Eurocurrency-based Advance outstanding from time to time having a
Eurocurrency-Interest Period of 6 months or longer, at intervals of 3 months
after the first day of the applicable Interest Period, and shall also be
payable on the last day of the Interest Period applicable thereto. Interest
accruing at the Eurocurrency-based Rate shall be computed on the basis of a 360
day year and assessed for the actual number of days elapsed from the first day
of the Interest Period applicable thereto to, but not including, the last day
thereof.
5.4 Quoted Rate Advance Interest Payments. Interest on each Quoted
Rate Advance shall accrue at its Quoted Rate and shall be payable in
immediately available funds on the last day of the Interest Period applicable
thereto. Interest accruing at the Quoted Rate shall be computed on the basis of
a 360 day year and assessed for the actual number of days elapsed from the
first day of the Interest Period applicable thereto to, but not including the
last day thereof.
5.5 Interest Payments on Conversions. Notwithstanding anything to
the contrary in Sections 5.2 and 5.3, all accrued and unpaid interest on any
Revolving Credit Advance refunded or converted pursuant to Section 2.3 hereof
shall be due and payable in full on the date such Advance is refunded or
converted.
5.6 Interest on Default. Notwithstanding anything to the contrary
set forth in Sections 5.2, 5.3 and 5.4, in the event and so long as any Event
of Default shall exist under this Agreement, interest shall be payable daily on
the principal amount of all Advances from time to time outstanding (and on all
other monetary obligations of Company hereunder and under the other Loan
Documents) at a per annum rate equal to the Applicable Interest Rate (and, with
respect to Eurocurrency-based Advances calculated on the bases of the maximum
Margins) in respect of each such Advance, plus, in the case of
Eurocurrency-based Advances and
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Quoted Rate Advances, three percent (3%) per annum for the remainder of the
then existing Interest Period, if any, and at all other such times and for all
Prime-based Advances, at a per annum rate equal to the Prime-based Rate, plus
three percent (3%).
5.7 Prepayment. Company may prepay all or part of the outstanding
balance of any Prime-based Advance(s) (subject to not less than one (1)
Business Day's notice to Agent) at any time, provided that the amount of any
partial prepayment shall be at least Five Hundred Thousand Dollars ($500,000)
and the aggregate balance of Prime-based Advance(s) remaining outstanding under
the Revolving Credit Notes shall be at least Five Hundred Thousand Dollars
($500,000) and the aggregate amount outstanding under all Swing Line Advances
shall be at least Five Hundred Thousand Dollars ($500,000). Company may prepay
all or part of any Eurocurrency-based Advance (subject to not less than three
(3) Business Days' notice to Agent) only on the last day of the Interest Period
applicable thereto, provided that the amount of any such partial prepayment
shall be at least Five Hundred Thousand Dollars ($500,000), and the unpaid
portion of such Advance which is refunded or converted under Section 2.7 shall
be at least One Million Dollars ($1,000,000). Company may prepay Quoted Rate
Advances only on the last day of the Interest Period applicable thereto. Any
prepayment made in accordance with this Section shall be without premium,
penalty or prejudice to the right to reborrow under the terms of this
Agreement. Any other prepayment of all or any portion of the Revolving Credit,
whether by acceleration, mandatory or required prepayment or otherwise, shall
be subject to Section 12.1 hereof, but otherwise without premium, penalty or
prejudice.
6. CONDITIONS.
The obligations of Banks to make Advances or issue Letters of Credit
pursuant to this Agreement are subject to the following conditions:
6.1 Execution of Notes and this Agreement. Company shall have
executed and delivered to Agent for the account of each Bank, the Revolving
Credit Notes, the Swing Line Note and this Agreement (including all schedules,
exhibits, certificates, opinions, financial statements and other documents to
be delivered pursuant hereto), and such Revolving Credit Notes, the Swing Line
Note, the Loan Documents and this Agreement shall be in full force and effect.
6.2 Corporate Authority. Agent shall have received, with a
counterpart thereof for each Bank: (i) certified copies of resolutions of the
Board of Directors of Company evidencing approval of the transactions
contemplated by this Agreement and the Notes and authorizing the execution and
delivery thereof and the borrowing of Advances hereunder and of each of the
Guarantors
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evidencing approval of its entering into the Collateral Documents; and (ii) (A)
certified copies of Company's, and each Guarantor's, certificate of
incorporation and bylaws or other constitutional documents certified (in the
case of certificates of incorporation or articles of incorporation) as true and
complete as of a recent date by the appropriate official of the jurisdiction of
incorporation of each such entity; and (B) a certificate of good standing from
the state or other jurisdictions of Company's and each Guarantor's
incorporation, and from every state or other jurisdiction in which either
Company or any Guarantor is qualified to do business, if issued by such
jurisdictions, subject to the limitations (as to qualification and
authorization to do business) contained in Section 7.1, hereof.
6.3 Collateral Documents. As security for all Indebtedness of
Company to the Banks hereunder, each of the Guarantors shall have furnished,
executed, and delivered to the Agent, or caused to be furnished, executed and
delivered to the Agent, prior to or concurrently with the initial borrowing
hereunder, in form and substance satisfactory to Agent and the Banks and
supported by appropriate resolutions in certified form authorizing same, the
Guaranty.
6.4 Licenses, Permits, Etc. The Agent shall have received, with a
counterpart for each Bank, copies of each authorization, license, permit,
consent, order or approval of, or registration, declaration or filing with, any
governmental authority or any securities exchange or other person (including
without limitation any securities holder) obtained or made by the Company, any
of its Subsidiaries, or any other Person (as of the relevant date of Advance or
loan hereunder) in connection with the execution and delivery of the Loan
Documents.
6.5 Representations and Warranties -- All Parties. The
representations and warranties made by Company, Guarantors or any other party
to any of the Loan Documents (excluding the Agent and Banks) under this
Agreement or any of the Loan Documents (except, in the case of refundings or
conversions of outstanding Advances, the representations set forth in Section
7.13, Section 7.20 and the second sentence of Section 7.21), and the
representations and warranties of any of the foregoing which are contained in
any certificate, document or financial or other statement furnished at any time
hereunder or thereunder or in connection herewith or therewith shall have been
true and correct in all material respects when made and shall be true and
correct in all material respects on and as of the date of the making of any
Advance hereunder.
6.6 Compliance with Certain Documents and Agreements. The Company
and each of the Guarantors (and any of their respective Subsidiaries or
Affiliates) shall have each performed and complied with all agreements and
conditions contained in this Agreement, the Loan Documents, or any agreement or
other document executed
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thereunder and required to be performed or complied with by each of them (as of
the applicable date) and none of such parties shall be in default in the
performance or compliance with any of the terms or provisions hereof or
thereof.
6.7 Opinion of Counsel. Company and each of the Guarantors shall
furnish Agent prior to the initial Advance under this Agreement, and with
signed copies for each Bank, opinions of counsel to the Company and each of the
Guarantors, dated the date hereof, and covering such matters as required by and
otherwise satisfactory in form and substance to the Agent and each of the
Banks.
6.8 No Default. No Default or Event of Default shall have occurred
and be continuing, and there shall have been no material adverse change in the
financial condition, properties, business, prospects of, results or operations
of the Company and its Subsidiaries taken as a whole from December 31, 1994 to
the date of the making of the first borrowing hereunder.
6.9 Company's Certificate. The Agent shall have received, with a
signed counterpart for each Bank, a certificate of a responsible senior officer
of Company dated the date of the making of Advances hereunder, stating that to
the best of his or her knowledge after due inquiry, the conditions of
paragraphs 6.1, 6.4 through 6.6, 6.8 and 6.11 hereof have been fully satisfied.
6.10 Payment of Fees. Company shall have paid to the Agent all
fees, costs and expenses required hereunder to be paid to Agent upon execution
of this Agreement.
6.11 Termination of Existing Credit Agreement. Agent shall have
received evidence satisfactory to Agent of the termination of the Existing
Revolving Credit Agreement and payment in full by Company of all of its
obligations thereunder.
6.12 Other Documents and Instruments. The Agent shall have
received, with a photocopy for each Bank, such other instruments and documents
as each of the Banks may reasonably request in connection with the making of
Advances or issuance of Letters of Credit hereunder, and all such instruments
and documents shall be satisfactory in form and substance to the Banks.
6.13 Continuing Conditions. The obligations of the Banks to make
Advances or issue Letters of Credit under this Agreement shall be subject to
the continuing conditions that all documents executed or submitted pursuant
hereto shall be satisfactory in form and substance (consistent with the terms
hereof) to Agent and its counsel and to each of the Banks; Agent and its
counsel and each of the Banks and their respective counsel shall have received
all information, and such counterpart originals or such certified or other
copies of such materials, as Agent or its counsel and each of
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the Banks and their respective counsel may reasonably request; and all other
legal matters relating to the transactions contemplated by this Agreement
(including, without limitation, matters arising from time to time as a result
of changes occurring with respect to any statutory, regulatory or decisional
law applicable hereto) shall be satisfactory to counsel to Agent and counsel to
each of the Banks.
\ 7. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and
warranties shall be deemed to be continuing representations and warranties
until the Revolving Credit Maturity Date and thereafter until final payment in
full of the Indebtedness and the performance by Company of all other
obligations under this Agreement:
7.1 Corporate Authority. Each of Company and its Subsidiaries is a
corporation duly organized and existing in good standing under the laws of the
applicable jurisdiction of organization, charter or incorporation; it is duly
qualified and authorized to do business as a corporation or foreign corporation
in each jurisdiction where the character of its assets or the nature of its
activities makes such qualification necessary, except where such failure to
qualify and be authorized to do business is not reasonably likely to have a
material adverse impact on the Company and its Subsidiaries taken as a whole.
7.2 Due Authorization - Company. Execution, delivery and
performance of this Agreement and any other documents and instruments required
under or in connection with this Agreement or the Loan Documents (or to be so
executed and delivered), and the issuance of the Notes by Company are within
its corporate powers, have been duly authorized, are not in contravention of
law or the terms of Company's Certificate of Incorporation or Bylaws and,
except as have been previously obtained or as referred to in Section 7.15,
below, do not require the consent or approval, material to the transactions
contemplated by this Agreement or the Loan Documents, of any governmental body,
agency or authority.
7.3 Due Authorization - Guarantors. Execution, delivery and
performance of the Guaranty and all other documents and instruments required of
Guarantors under or in connection with this Agreement or the Loan Documents (or
to be so executed and delivered) are within the corporate powers of the
Guarantors, have been duly authorized, are not in contravention of law or the
terms of the Guarantor's Articles of Incorporation or Bylaws, and, except as
have been previously obtained (or as referred to in Section 7.15 below), do not
require the consent or approval, material to the transactions contemplated by
this Agreement, and the Loan Documents, of any governmental body, agency or
authority not previously obtained.
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7.4 Encumbrances. There are no security interests in, liens,
mortgages, or other encumbrances on and no financing statements on file with
respect to any of the property owned by Company or any of its Subsidiaries
except for the Permitted Encumbrances.
7.5 Capital Stock; Shareholders; Subsidiaries. As of the date
hereof, (a) all present Subsidiaries of Company are set forth in the attached
Schedule 7.5, along with the percentage of the outstanding voting stock owned
by Company or by a Subsidiary of Company (and identifying that Subsidiary); and
(b) other than as disclosed on Schedule 7.5, there are no outstanding options,
warrants or rights to purchase, nor any agreement for the subscription,
purchase or acquisition of, any shares of the capital stock of any of Company's
Subsidiaries.
7.6 Taxes. Each of Company and its Subsidiaries has filed on or
before their respective due dates, all federal, state and foreign tax returns
which are required to be filed or has obtained extensions for filing such tax
returns and is not delinquent in filing such returns in accordance with such
extensions and has paid all taxes which have become due pursuant to those
returns or pursuant to any assessments received by any such party, as the case
may be, to the extent such taxes have become due, except to the extent such tax
payments are being actively contested in good faith by appropriate proceedings
and with respect to which adequate provision has been made on the books of
Company as may be required by GAAP.
7.7 No Defaults. There exists no default under the provisions of
any instrument evidencing the Convertible Notes, any Senior Indebtedness or any
other indebtedness for borrowed money of the Company or any of its Subsidiaries
which is permitted hereunder or any Senior Indebtedness connected with any of
the Permitted Encumbrances, or of any agreement relating thereto.
7.8 Enforceability of Agreement and Loan Documents -- Company.
This Agreement, each of the Loan Documents to which Company is a party, and all
other certificates, agreements and documents executed and delivered by Company
under or in connection herewith or therewith have each been duly executed and
delivered by its duly authorized officers and constitute the valid and binding
obligations of Company, enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditor's rights, generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in law or equity).
7.9 Enforceability of Loan Documents -- Guarantors. The Loan
Documents to which each of the Guarantors is a party, and all certificates,
documents and agreements executed in connection
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therewith by the Guarantors have each been duly executed and delivered by the
respective duly authorized officers of the Guarantors and constitute the valid
and binding obligations of Guarantors, enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditor's rights, generally and by
general principles of equity (regardless of whether enforcement is considered
in a proceeding in law or equity).
7.10 Compliance with Laws. The Company and its Subsidiaries each
has complied with all applicable laws, including without limitation, Hazardous
Material Laws, except to the extent that failure to comply therewith would not
materially interfere with the conduct of the business of Company and its
Subsidiaries taken as a whole, or would not have a material adverse effect upon
Company and its Subsidiaries taken as a whole, or upon any material property
(whether personal or real) owned by any of them.
7.11 Non-contravention -- Company. The execution, delivery and
performance of this Agreement and the Loan Documents and any other documents
and instruments required under or in connection with this Agreement by Company
are not in contravention of the terms of any indenture, agreement or
undertaking to which Company or any of its Subsidiaries is a party or by which
its or their properties are bound or affected.
7.12 Non-contravention -- Guarantors. The execution, delivery and
performance of those Loan Documents signed by the Guarantors, and any other
documents and instruments required under or in connection with this Agreement
by the Guarantors are not in contravention of the terms of any indenture,
agreement or undertaking to which any Subsidiary or Company is a party or by
which it or its properties are bound or affected.
7.13 No Litigation. There is no suit, action, proceeding,
including, without limitation, any bankruptcy proceeding, or governmental
investigation pending against or to the knowledge of Company, affecting Company
or any of its Subsidiaries (other than any suit, action or proceeding in which
Company or a Subsidiary is the plaintiff and in which no counterclaim or
cross-claim against Company or such Subsidiary has been filed), nor has Company
or any of its Subsidiaries or any of its or their officers or directors been
subject to any suit, action, proceeding or governmental investigation as a
result of which any such officer or director is or may be entitled to
indemnification by Company or a Subsidiary, as applicable, except in each case
as otherwise disclosed in Schedule 7.13 attached hereto and except for
miscellaneous suits, actions and proceedings (other than suits, actions or
proceedings commenced by any government or governmental authority) involving
less than $500,000 in the aggregate, which suits, if resolved
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adversely to Company or any of its Subsidiaries, are not reasonably likely to
have a material adverse effect on the Company and its Subsidiaries taken as a
whole. Except as so disclosed, there is not outstanding against Company or any
Subsidiary any judgment, decree, injunction, rule, or order of any court,
government, department, commission, agency, instrumentality or arbitrator nor
is Company or any Subsidiary in violation of any applicable law, regulation,
ordinance, order, injunction, decree or requirement of any governmental body or
court where such violation would reasonably be expected to have a material
adverse effect on Company and its Subsidiaries taken as a whole.
7.14 Senior Indebtedness Status. The Indebtedness constitutes
"Senior Indebtedness" for purposes of the Convertible Notes and the Indenture.
7.15 Consents, Approvals and Filings, Etc. Except as have been
previously obtained, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory authority or
any securities exchange or any other person or party (whether or not
governmental) is required in connection with the execution, delivery and
performance: (i) by Company of this Agreement, any of the Loan Documents to
which it is a party, or any other documents or instruments to be executed and
or delivered by Company in connection therewith or herewith; (ii) by any
Guarantor, of any of the Loan Documents to which any Guarantor is a party, or
(iii) by Company or any of the Guarantors, of the liens, pledges, mortgages,
security interests or other encumbrances granted, conveyed or otherwise
established (or to be granted, conveyed or otherwise established) by or under
this Agreement or the Loan Documents. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and
registrations which have previously been obtained or made, as the case may be,
are in full force and effect and are not the subject of any attack, or to the
knowledge of Company threatened attack (in any material respect) by appeal or
direct proceeding or otherwise.
7.16 Agreements Affecting Financial Condition. Neither the Company
nor any of its Subsidiaries is party to any agreement or instrument or subject
to any charter or other corporate restriction which materially adversely
affects the financial condition or operations of the Company and its
Subsidiaries (taken as a whole).
7.17 No Investment Company or Margin Stock. Neither the Company nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
directly or indirectly, in the business of extending credit for the purpose of
purchasing or carrying margin stock. None of the proceeds of any of the Loans
will be used by the Company or any of its Subsidiaries to
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purchase or carry margin stock or will be made available by the Company or any
of its Subsidiaries in any manner to any other Person to enable or assist such
Person in purchasing or carrying margin stock. Terms for which meanings are
provided in Regulation U of the Board of Governors of the Federal Reserve
System or any regulations substituted therefor, as from time to time in effect,
are used in this paragraph with such meanings.
7.18 ERISA. Neither Company nor any of its Subsidiaries maintains
or contributes to any Pension Plan subject to Title IV of ERISA, except as set
forth on Schedule 7.18 hereto; and there is no accumulated funding deficiency
within the meaning of ERISA, or any existing liability with respect to any of
the Pension Plans owed to the Pension Benefit Guaranty Corporation or any
successor thereto, and no "reportable event" or "prohibited transaction", as
defined in ERISA, has occurred with respect to any Pension Plan, and all such
Pension Plans are in material compliance with the requirements of the Internal
Revenue Code and ERISA.
7.19 Conditions Affecting Business or Properties. Neither the
respective businesses nor the properties of Company or any of its Subsidiaries
is affected by any fire, explosion, accident, strike, lockout or other dispute,
drought, storm, hail, earthquake, embargo, Act of God or other casualty
(whether or not covered by insurance), which materially adversely affects, or
if such event or condition were to continue for more than ten (10) additional
days would reasonably be expected to materially adversely affect, any such
businesses or properties of Company and its Subsidiaries (taken as a whole).
7.20 Environmental and Safety Matters. (a) Each of the Company and
its Subsidiaries is in compliance with all federal, state and local laws,
ordinances and regulations relating to safety and industrial hygiene or to the
environmental condition, including without limitation all Hazardous Materials
Laws in jurisdictions in which the Company or its Subsidiaries owns or
operates, or has owned or operated, a facility or site, or arranges or has
arranged for disposal or treatment of hazardous substances, solid waste, or
other wastes, accepts or has accepted for transport any hazardous substances,
solid wastes or other wastes or holds or has held any interest in real property
or otherwise, except for De Minimis Matters or as otherwise disclosed on
Schedule 7.20 hereto, and as to such matters disclosed on such Schedule, none
is likely to have a material adverse effect on the financial condition or
businesses of the Company and its Subsidiaries (taken as a whole).
(b) No demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether brought by any
governmental authority, private person or entity or otherwise, arising under,
relating to or in connection with any applicable Hazardous Materials Laws is
pending or, to the best knowledge of Company, after due investigation,
threatened against
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the Company or any of its Subsidiaries, any real property in which the Company
or any of its Subsidiaries holds or has held an interest or any past or present
operation of the Company or any of its Subsidiaries, except as disclosed on
Schedule 7.20 hereto, and as to such matters disclosed on such Schedule, none
will have a material adverse effect on the financial condition or businesses of
the Company and its Subsidiaries (taken as a whole).
(c) Neither the Company nor any of its Subsidiaries (i)
is, to the best knowledge of Company, after due investigation, the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic substances, radioactive materials,
hazardous wastes or related materials into the environment, (ii) has received
any notice of any toxic substances, radioactive materials, hazardous waste or
related materials in, or upon any of its properties in violation of any
applicable Hazardous Materials Laws, or (iii) knows of any basis for any such
investigation, notice or violation, except as disclosed on Schedule 7.20
hereto, and as to such matters disclosed on such Schedule, none will have a
material adverse effect on the financial condition or business of Company and
its Subsidiaries (taken as a whole).
(d) No release, threatened release or disposal of
hazardous waste, solid waste or other wastes is occurring or, to the best
knowledge of Company after due investigation, has occurred on, under or to any
real property in which the Company or any of its Subsidiaries holds any
interest or on which the Company or any of its Subsidiaries performs any of its
operations, in violation of any Hazardous Material Law except as disclosed on
Schedule 7.20 hereto, and as to such matters disclosed on such Schedule, none
will have a material adverse effect on the financial condition or business of
the Company and its Subsidiaries (taken as a whole).
7.21 Accuracy of Information. (a) Each of the Company's financial
statements previously furnished to Agent and the Banks prior to the date of
this Agreement, has been prepared in accordance with GAAP and is complete and
correct in all material respects and fairly presents (subject to year-end audit
adjustments in the case of interim statements) the financial condition of
Company and the results of its operations for the periods covered thereby. (b)
Since December 31, 1994 there has been no material adverse change in the
financial condition of Company or any of its Subsidiaries taken as a whole; to
the best knowledge of Company, neither Company nor any of its Subsidiaries has
any contingent obligations (including any liability for taxes) not disclosed by
or reserved against in the December 31, 1994 balance sheets, as applicable,
except as set forth on Schedule 7.21 hereof, and at the present time there are
no unrealized or anticipated losses from any present commitment of Company or
any of its Subsidiaries which in the aggregate is likely to have a materially
adverse effect on the
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financial condition or businesses of Company and its Subsidiaries taken as a
whole.
8. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, and, as applicable, it will
cause each of its Subsidiaries, until the Revolving Credit Maturity Date and
thereafter until expiration of all Letters of Credit and final payment in full
of the Indebtedness and the performance by the Company of all other obligations
under this Agreement and the other Loan Documents, unless the Majority Banks
shall otherwise consent in writing:
8.1 Preservation of Existence, Etc. Subject to the terms of this
Agreement: (i) preserve and maintain its existence and such of its rights,
licenses, and privileges as are material to the business and operations
conducted by it; (ii) qualify and remain qualified to do business in each
jurisdiction in which such qualification is material to its business and
operations or ownership of its properties; (iii) continue to conduct and
operate its businesses substantially as conducted and operated during the
present and preceding fiscal years; (iv) at all times maintain, preserve and
protect all of its franchises and trade names and preserve all the remainder of
its property and keep the same in good repair, working order and condition; and
(v) from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements, betterments and improvements thereto such that the
businesses carried on in connection therewith may be properly and
advantageously conducted at all times.
8.2 Keeping of Books. Keep proper books of record and account in
which full and correct entries shall be made of all of its financial
transactions and its assets and businesses so as to permit the presentation of
financial statements prepared in accordance with GAAP.
8.3 Reporting Requirements. Furnish Agent with copies for each
Bank:
(a) as soon as possible, and in any event within three
Business Days after becoming aware of the occurrence of any Default or
Event of Default or any other event or occurrence which has or would
reasonably be expected to have a materially adverse effect upon the
business, property or financial condition of Company and its
Subsidiaries (taken as a whole), or upon Company's ability to comply
with its obligations hereunder or upon the Company's or any
Guarantor's ability to comply with its obligations under any of the
Loan Documents, a written statement of a responsible senior officer of
the Company setting forth details of such Default, Event of Default or
other event or occurrence and the action which the
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Company has taken or has caused to be taken or proposes to take or
cause to be taken with respect thereto;
(b) as soon as available, and in any event within one
hundred twenty (120) days after and as of the end of each of Company's
fiscal years, beginning with the fiscal year ending December 31, 1994,
(i) audited financial statements of the Company on a Consolidated
basis containing the balance sheet of the Company and its Consolidated
Subsidiaries as of the close of each such fiscal year, statements of
income and retained earnings and a statement of cash flows for each
such fiscal year, and such other comments and financial details as are
usually included in similar reports, such financial statements to be
prepared in accordance with GAAP and certified by independent
certified public accountants of recognized standing selected by
Company and, if other than one of the "Big 6" accounting firms,
acceptable to the Majority Banks and containing unqualified opinions
as to the fairness of the statements therein contained; and (ii) a
Covenant Compliance and Interest Rate Adjustment Report;
(c) as soon as available, and in any event within sixty
(60) days after and as of the end of each fiscal quarter of Company
(including the last quarter of each fiscal year), commencing with its
quarter ending December 31, 1994, (i) the balance sheet of the Company
and its Consolidated Subsidiaries as of the end of such quarter and
related statements of income, retained earnings and cash flows for the
portion of the fiscal year through the end of such period, each on a
Consolidated basis certified by a responsible financial officer of
Company as to the consistency with prior financial reports and
accounting periods, and as to accuracy and fairness of presentation
and (ii) a Covenant Compliance and Interest Rate Adjustment Report;
(d) promptly upon receipt thereof, copies of all reports
and management letters prepared with respect to Company or any of its
Subsidiaries by any independent certified public accountants in
connection with any annual, interim or other audit or review of the
books of Company or its Subsidiaries, irrespective of the party
requesting such an audit or review;
(e) promptly upon becoming available, a copy of all
financial statements, reports, notices, proxy statements and other
communications sent by the Company or any of its Subsidiaries to their
stockholders, and all regular and periodic reports filed by the
Company or any of its Subsidiaries with any securities exchange or the
Securities and Exchange Commission or any governmental authorities
succeeding to any or all of the functions of said commission or
exchange;
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(f) promptly, and in form and substance reasonably
satisfactory to Agent and the requesting Banks, such other information
as Agent or the Majority Banks (acting through Agent) may reasonably
request from time to time, and additional Covenant Compliance and
Interest Rate Adjustment Reports; and
(g) (i) as soon as available, and in any event within
sixty (60) days after and as of the end of each fiscal quarter of
Company, a schedule listing each Subsidiary of Company and for each
such Subsidiary, its assets as of the end of such fiscal quarter and
its revenues for the three month period ending on such date (or if
such Subsidiary is a newly formed or acquired Subsidiary, the period
beginning on the date such Subsidiary was formed or acquired and
ending on the last day of such fiscal quarter, and, (ii) within
fifteen (15) days after the closing of any Permitted Acquisition, a
certificate identifying any Subsidiary formed in connection with such
Permitted Acquisition and showing the amount of the assets of such
Subsidiary after giving effect to the Permitted Acquisition; provided,
however, such certificate need not be given if the consideration paid
in connection with the Permitted Acquisition (taking into account cash
consideration and the assumption of debt) is less than $1,000,000.
8.4 Maintain Fixed Charge Coverage Ratio. On a Consolidated
basis, maintain at all times a Fixed Charge Coverage Ratio of not less than
1.35 to 1.0.
8.5 Maintain Leverage Ratio. On a Consolidated basis, maintain at
all times a Leverage Ratio of not more than 3.0 to 1.0.
8.6 Net Worth. On a Consolidated basis, maintain at all times a
Net Worth of not less than the base Net Worth. For purposes of this Agreement,
(i) base Net Worth shall be $160,000,000 as of the date
of execution of this Agreement;
(ii) on the last day of each fiscal quarter of Company,
beginning March 31, 1995, the base Net Worth then in
effect shall be adjusted upward by the sum of (a) an
amount equal to 25% of, if a positive number, net
income of Company and its Consolidated Subsidiaries
for the fiscal quarter then ended, (b) 100% of the
net cash proceeds of the issuance of Capital Stock of
the Company or any of its Consolidated Subsidiaries
received during such fiscal quarter, and (c) 100% of
the principal amount of any of the Convertible Notes
converted to common stock of Company pursuant to the
terms of
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the Convertible Notes and the Indenture during such
fiscal quarter.
8.7 Taxes. Pay and discharge all taxes and other governmental
charges, and all material contractual obligations calling for the payment of
money, before the same shall become overdue, unless and to the extent only that
such payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP, on its balance sheet.
8.8 Inspections. Permit Agent and each Bank, through their
authorized attorneys, accountants and representatives to examine Company's and
each Subsidiaries' books, accounts, records, ledgers and assets and properties
at all reasonable times during normal business hours, upon oral or written
request of Agent or such Bank; and permit Agent and each Bank or their
authorized representatives, at reasonable times and intervals, to visit all of
their respective offices, discuss their respective financial matters with their
respective officers and independent certified public accountants, and, by this
provision, Company authorizes such accountants to discuss the finances and
affairs of Company and its Subsidiaries (provided that Company is given an
opportunity to participate in such discussions) and examine any of its or their
books and other corporate records. Such inspection rights are subject to
reasonable limitations imposed by Company and its Subsidiaries with respect to
safety and shall not extend to trade secrets of Company or any of its
Subsidiaries or to information within the attorney-client privilege.
8.9 [Reserved].
8.10 Governmental and Other Approvals. Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance: (i) by Company, of this Agreement, the Loan
Documents, or any other documents or instruments to be executed and/or
delivered by Company in connection therewith or herewith; and (ii) by the
Guarantor, of the Loan Documents to which it is a party.
8.11 Insurance. Maintain insurance coverage on its physical assets
and against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature, and in the event
of acquisition of additional property, real or personal, or of occurrence of
additional risks of any nature, increase such insurance coverage in such manner
and to such extent as prudent business judgment and then current practice would
dictate.
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8.12 Compliance with Laws.
(a) Comply in all material respects with all applicable
laws, rules, regulations and orders of any governmental authority, whether
federal, state, local or foreign (including without limitation Hazardous
Materials Laws), in effect from time to time.
(b) Conduct and use good faith efforts to complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions necessary to clean-up and remove all Hazardous Materials on or
affecting any premises owned or occupied by Company or any of its Subsidiaries,
whether resulting from conduct of Company or any of its Subsidiaries or any
other Person, if required by Hazardous Material Laws, all such actions to be
taken in accordance with such laws, and the orders and directives of all
applicable federal, state and local governmental authorities.
8.13 Compliance with ERISA. Comply in all material respects with
all requirements imposed by ERISA as presently in effect or hereafter
promulgated or the Internal Revenue Code, including, but not limited to, the
minimum funding requirements of any Pension Plan.
8.14 ERISA Notices. Promptly notify Agent and each of the Banks
upon the occurrence of any of the following events:
(a) the termination of any Pension Plan subject to
Subtitle C of Title IV of ERISA;
(b) the appointment of a trustee by a United States
District Court to administer any Pension Plan subject to Title IV of
ERISA;
(c) the commencement by the PBGC, or any successor
thereto, of any proceeding to terminate any Pension Plan subject to
Title IV of ERISA;
(d) the failure of the Company or any Subsidiary to make
any payment in respect of any Pension Plan required under Section 412
of the Internal Revenue Code;
(e) the withdrawal of the Company or any Subsidiary from
any multiemployer plan (as defined in Section 3(37) of ERISA; or
(f) the occurrence of a "reportable event" which is
required to be reported by the Company under Section 4043 of ERISA or
a "prohibited transaction" as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code which is likely to have a
material adverse effect on Company and its Subsidiaries taken as a
whole.
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8.15 Subsidiaries; Guaranties. With respect to each corporation
which becomes a Significant Subsidiary subsequent to the date of this
Agreement, within thirty days of the date such Subsidiary becomes a Significant
Subsidiary, cause such Subsidiary to execute and deliver to Agent, for and on
behalf of each of the Banks, a Joinder Agreement whereby such Subsidiary
becomes obligated as a Guarantor under the Guaranty, together with such
supporting documentation, including without limitation corporate authority
items, certificates and opinions of counsel, as reasonably required by Agent
and the Majority Banks. Determination of whether a Subsidiary is a Significant
Subsidiary may be made by the Agent not more frequently than quarterly based on
the information to be provided by Company to the Agent pursuant to the
provisions of Section 8.3(g) and as of the date of the closing of each
Permitted Acquisition. In addition, if Agent or the Majority Banks shall
determine at any time that (x) the aggregate assets of the then existing
Guarantors are less than ninety percent (90%) of the Consolidated assets of
Company and its Consolidated Subsidiaries at such time or (y) the aggregate
gross revenues of the then existing Guarantors are less than ninety percent
(90%) of the aggregate gross revenues of Company and its Consolidated
Subsidiaries at such time, then within thirty days of written request therefor
by Agent or the Majority Banks, Company will cause additional Subsidiaries to
execute and deliver to Agent, for and on behalf of each of the Banks, a Joinder
Agreement whereby such Subsidiaries become obligated as Guarantors under the
Guaranty, together with such supporting documentation, including without
limitation corporate authority items, certificates and opinions of counsel, as
reasonably required by Agent and the Majority Banks, so that after giving
effect to the addition of such Guarantors, the threshold tests under subclauses
(x) and (y) above each shall be satisfied.
8.16 Use of Proceeds. The initial Advances made to the Company
shall be used by Company (i) to pay the costs and expenses of the transactions
contemplated by this Agreement which are due and payable on the closing date,
and (ii) for the payment of any monies due in connection with the termination
of the Existing Revolving Credit Agreement; and the proceeds of any subsequent
Advances made hereunder shall be used by Company solely for the general
corporate purposes, including working capital purposes, of Company and its
Subsidiaries. Company shall not use any portion of the proceeds of any such
advances for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation G of the Board of Governors of the Federal Reserve
System) in any manner which violates the provisions of Regulation G, T, U or X
of said Board of Governors or for any other purpose in violation of (x) any
applicable statute or regulation or (y) the terms and conditions of this
Agreement.
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9. NEGATIVE COVENANTS
Company covenants and agrees that, until the Revolving Credit Maturity
Date and thereafter until expiration of all Letters of Credit and final payment
in full of the Indebtedness and the performance by Company and the Guarantors
of all other obligations under this Agreement and the other Loan Documents,
without the prior written consent of the Majority Banks it will not, and will
not permit its Subsidiaries to:
9.1 Capital Structure and Redemptions. Purchase, acquire or redeem
any of its capital stock or make any material change in its capital structure
if such change in capital structure will impair the ability of Company or any
of the Guarantors to perform their respective obligations under the Loan
Documents or is reasonably likely to have a material adverse effect upon
Company and its Subsidiaries taken as a whole.
9.2 Business Purposes. Engage in any line of business in which it
is not currently engaged if as a result thereof the business of the Company and
its Subsidiaries, taken as a whole, would be substantially different from what
it was as of December 31, 1994, as described in the Company's 1994 Form 10-K.
9.3 Mergers or Dispositions. Liquidate or dissolve, or consolidate
or merge with any other Person, or permit any other Person to consolidate or
merge with it, or sell, lease, transfer or otherwise dispose of any of its
assets to any other Person (other than in the ordinary course of business),
except that, subject to the last paragraph of this Section:
(a) any Subsidiary may consolidate with or merge
with or into (i) the Company or any Wholly-Owned Subsidiary (if the
Company or such Wholly-Owned Subsidiary shall be the continuing or
surviving corporation) or (ii) any other corporation (if such
Subsidiary shall be the continuing or surviving corporation) provided,
however, no Subsidiary which is a Guarantor may merge or consolidate
with or merge with or into any Wholly-Owned Subsidiary which is not a
Guarantor if the Wholly-Owned Subsidiary shall be the continuing or
surviving corporation;
(b) any Subsidiary may sell, lease, transfer or
otherwise dispose of its assets in their entirety to the Company or
any Wholly-Owned Subsidiary, and may thereafter liquidate and
dissolve; provided, however, no Subsidiary which is a Guarantor may
sell, lease, transfer or otherwise dispose of its assets in their
entirety to a Wholly-Owned Subsidiary which is not a Guarantor;
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(c) the Company may merge with any other
corporation, provided that the Company shall be the continuing or
surviving corporation; and
(d) the Company or any Subsidiary, in addition to
making any sale, lease, transfer or other disposition permitted by the
foregoing provisions of this Section 9.3, may in any fiscal year sell,
lease, transfer or otherwise dispose of any of its assets for a
consideration consisting of cash, debt obligations of the transferee
thereof (or an Affiliate thereof), the assumption of obligations of
the Company or such Subsidiary relating to such assets, or any
combination of the foregoing, which consideration, in any case, shall
be at least equal to the fair value of such assets (as determined in
good faith by the board of directors of the Company) at the time of
such sale, lease, transfer or other disposition, but only if (i) in
the opinion of the board of directors of the Company such sale, lease,
transfer or other disposition is in the best interests of the Company
and (ii) after giving effect to such sale, lease, transfer or other
disposition and to the application of the proceeds thereof and of all
other such sales, leases, transfers and other dispositions theretofore
made in the same fiscal year, the reduction in the aggregate book
value of the consolidated total assets of the Company and its
Consolidated Subsidiaries resulting from such sale, lease, transfer or
other disposition and all other such sales, leases, transfers and
other dispositions theretofore made in the same fiscal year shall not
be more than 10% of the aggregate book value of such consolidated
total assets as at the end of the then most recently completed prior
fiscal year; provided, however, that (1) the consideration for which
assets may be sold, leased, transferred or otherwise disposed of in
compliance with this subsection (d) may not consist, in whole or in
part, of the assumption of obligations of the Company or any
Subsidiary relating to such assets unless (A) in connection with, and
simultaneously with the effectiveness of such assumption, the Company
or such Subsidiary, as the case may be, shall be relieved under
generally accepted accounting principles of all liability therefor or
(B) the assumption is provided by a Person whose unsecured debt
obligations are then rated Baa or higher by Moody's Investors Service,
Inc. or BBB or higher by Standard & Poor's Ratings Group and (2) for
purposes of any computation under this subsection (d) consolidated
total assets of the Company and its Consolidated Subsidiaries (A)
shall not include any assets of the Company and its Consolidated
Subsidiaries consisting of debt obligations of any Person received in
any such sale, lease, transfer or other disposition of assets (whether
or not consummated in such fiscal year) unless the unsecured debt
obligations of such Person shall be rated at the time of such
computation Baa or higher by Moody's Investors Service, Inc. and BBB
or higher by Standard & Poor's Ratings Group and (B)
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shall include an amount equal to the aggregate liabilities which may
be accepted as consideration in accordance with clause (1) of this
proviso.
No merger, consolidation, sale, lease, transfer or other disposition
under any of paragraphs (a) through (d) inclusive, above of this Section 9.3
shall be permitted if at the time thereof, or immediately after giving effect
thereto, any Default or Event of Default shall have occurred and be continuing.
No sale, lease, transfer or other disposition permitted by this Section 9.3
shall in any event release the Company from any of its obligations and
liabilities under this Agreement or any of the Notes.
9.4 Guaranties. Guarantee, endorse, or otherwise become liable for
or upon the obligations of others, except
(a) by endorsement of cash items for deposit in the
ordinary course of business,
(b) the Guaranty;
(c) unsecured guaranties by Company of Senior
Indebtedness of a Subsidiary and unsecured guaranties by a Subsidiary
of Senior Indebtedness of Company or another Subsidiary, in each case
to the extent such Senior Indebtedness is permitted pursuant to the
provisions of Section 9.5(c) hereof.
9.5 Indebtedness. 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
for:
(a) Indebtedness to Banks hereunder;
(b) current unsecured trade, utility or non-extraordinary
accounts payable arising in the ordinary course of Company's or any
Subsidiary's businesses;
(c) Debt set forth in Schedule 9.5 attached hereto, if
any, (in addition to any other matters set forth in this Section 9.5)
and any renewals or refinancing of such indebtedness in amounts not
exceeding the scheduled amounts (less any required amortization
according to the terms thereof) on substantially the same terms and
otherwise in compliance with this Agreement;
(d) unsecured Senior Indebtedness of Company to a
Subsidiary and unsecured Senior Indebtedness of a Guarantor to Company
or another Guarantor; and
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(e) other unsecured Senior Indebtedness not to exceed
Twenty Five Million Dollars ($25,000,000) in the aggregate;
9.6 Liens. Permit or suffer any Lien to exist on any of its
properties, real, personal or mixed, tangible or intangible, whether now owned
or hereafter acquired, except:
(a) purchase money security interests in fixed assets
(including such security interests granted in connection with the
issuance of industrial development revenue bonds issued to permit the
Company or any of its Subsidiaries to acquire fixed assets), provided
that each such security interest is created substantially
contemporaneously with the acquisition of such fixed assets and does
not extend to any property other than the fixed asset so financed;
(b) Permitted Encumbrances; and
(c) liens and encumbrances set forth in Schedule 9.6
attached hereto.
9.7 Acquisitions. Purchase or otherwise acquire or become
obligated for the purchase of all or substantially all or any material portion
of the assets or business interests of any Person, firm or corporation, or any
shares of stock (or other ownership interests) of any corporation, trusteeship
or association, or any business or going concern, or in any other manner
effectuate or attempt to effectuate an expansion of present business by
acquisition, except for Permitted Acquisitions.
9.8 Dividends. Declare or pay any dividends on or make any other
distribution with respect to any shares of its capital stock or other equity
interests, whether by reduction of stockholders' equity or otherwise, except
for dividends and other distributions by Subsidiaries of the Company to Company
and dividends by Company if at the time declared and paid and after giving
effect thereto no Default or Event of Default has occurred and is continuing.
9.9 Investments. Make or allow to remain outstanding any
Investment in, or any loans or advances to, any Person, firm, corporation or
other entity or association, other than:
(a) any loan or other advance by Company or a
Subsidiary, as the case may be, to any and all of its officers
or employees, as the case may be, in the normal course of
business, so long as the aggregate of all such loans or
advances by the Company and its Subsidiaries does not exceed
Two Million Dollars ($2,000,000) at any time outstanding, plus
reasonable, reimbursable business and travel expenses;
(b) Permitted Investments;
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(c) Investments in Company's Subsidiaries
existing as of the date of this Agreement or established
subsequent to the date hereof (in compliance with this
Agreement);
(d) Investments in connection with Permitted
Acquisitions;
(e) the Investments set forth on Schedule 9.9,
hereto; and
(f) Investments in Joint Ventures after the date
of this Agreement in an aggregate amount at any time
outstanding not to exceed Fifteen Million Dollars
($15,000,000).
9.10 Accounts Receivable. Sell or assign any account, note or trade
acceptance receivable, except to Agent on behalf of the Banks or in the
ordinary course of business for collection.
9.11 Transactions with Affiliates. Enter into any transaction with
any of its or their stockholders or officers or its or their Affiliates, except
in the ordinary course of business and on terms not materially less favorable
than would be usual and customary in similar transactions between Persons
dealing at arm's length; provided, however, nothing contained in this Section
9.11 shall prohibit transactions between Company and a Guarantor or between a
Guarantor and another Guarantor in each case in the ordinary course of
business.
9.12 No Further Negative Pledges. Enter into or become subject to
any agreement (other than this Agreement or the Loan Documents) (i) prohibiting
the guaranteeing by the Company or any Subsidiary of any obligations, (ii)
prohibiting the creation or assumption of any lien or encumbrance upon the
properties or assets of the Company or any Subsidiary, whether now owned or
hereafter acquired, or (iii) requiring an obligation to become secured (or
further secured) if another obligation is secured or further secured.
10. DEFAULTS
10.1 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest
under any of the Notes issued hereunder in accordance with the terms
thereof (ii) any reimbursement obligation under Section 3.6 hereof, or
(iii) any Fees, and in the case of interest payments and Fees,
continuance thereof for five (5) Business Days;
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(b) non-payment of any money by Company under this
Agreement or by Company or any Guarantor under any of the Loan
Documents, other than as set forth in subsection (a), above within
three Business Days after notice from Agent that the same is due and
payable;
(c) default in the observance or performance of any of
the conditions, covenants or agreements of Company set forth in
Sections 2.7, 3.6, 8.1 through 8.6, 8.15, 8.16, or 9 (in its
entirety);
(d) default in the observance or performance of any of
the other conditions, covenants or agreements set forth in this
Agreement by Company and continuance thereof for a period of thirty
(30) consecutive days;
(e) any representation or warranty made by Company or any
Guarantor herein or in any instrument submitted pursuant hereto or by
any other party to the Loan Documents proves untrue or misleading in
any material adverse respect when made;
(f) default in the observance or performance of or
failure to comply with any of the conditions, covenants or agreements
of Company or any Guarantor set forth in any of the other Loan
Documents, and the continuance thereof beyond any period of grace or
cure specified in any such document;
(g) default (i) in the payment of any of the Convertible
Notes, any other indebtedness for borrowed money or any Senior
Indebtedness of Company, any Guarantor or any of the Significant
Subsidiaries in excess of One Million Dollars ($1,000,000) in the
aggregate when due (whether by acceleration or otherwise) and
continuance thereof beyond any applicable period of cure or (ii)
failure to comply with the terms of any other obligation of Company,
any Guarantor or any of the Significant Subsidiaries with respect to
the Convertible Notes, any other indebtedness for borrowed money, or
for Senior Indebtedness of Company, any Guarantor or any of the
Significant Subsidiaries in excess of One Million Dollars ($1,000,000)
in the aggregate which with the giving of notice or passage of time or
both would permit the holder or holders thereto to accelerate such
Senior Indebtedness, other indebtedness for borrowed money or
Convertible Notes or terminate its commitment thereunder, as
applicable;
(h) the rendering of any judgment(s) for the payment of
money in excess of the sum of One Million Dollars ($1,000,000)
individually or in the aggregate against Company, any Guarantor or any
of the Significant Subsidiaries, and such judgments shall remain
unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a
period of thirty (30) consecutive days, except as covered by adequate
insurance with a reputable
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carrier and an action is pending in which an active defense is being
made with respect thereto;
(i) the occurrence of a "reportable event", as defined in
ERISA, which is determined to constitute grounds for termination by
the Pension Benefit Guaranty Corporation of any Pension Plan subject
to Title IV of ERISA maintained or contributed to by or on behalf of
the Company or any of its Subsidiaries for the benefit of any of its
employees or for the appointment by the appropriate United States
District Court of a trustee to administer such Pension Plan and such
reportable event is not corrected and such determination is not
revoked within sixty (60) days after notice thereof has been given to
the plan administrator of such Pension Plan (without limiting any of
Agent's or any Bank's other rights or remedies hereunder), or the
institution of proceedings by the Pension Benefit Guaranty Corporation
to terminate any such Pension Plan or to appoint a trustee by the
appropriate United States District Court to administer any such
Pension Plan;
(j) the Company or any of its Significant Subsidiaries or
any Guarantor shall be dissolved or liquidated (or any judgment, order
or decree therefor shall be entered) or; if a creditors' committee
shall have been appointed for the business of Company or any of its
Significant Subsidiaries or any Guarantor; or if Company or any of its
Significant Subsidiaries 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 fail to pay its debts generally as such debts become due in
the ordinary course of business (except as contested in good faith and
for which adequate reserves are made in such party's financial
statements); or shall file an answer to a creditor's petition or other
petition filed against it, admitting the material allegations thereof
for an adjudication in bankruptcy or for reorganization; or shall have
applied for or permitted the appointment of a receiver or trustee or
custodian for any of its property or assets; or such receiver, trustee
or custodian shall have been appointed for any of its property or
assets (otherwise than upon application or consent of Company or any
of its Subsidiaries); or if an order shall be entered approving any
petition for reorganization of Company or any of its Significant
Subsidiaries or any Guarantor; or the Company or any of its
Significant Subsidiaries or any Guarantor shall take any action
(corporate or other) authorizing or in furtherance any of the actions
described above in this subsection;
(k) any Person or group of Persons acting in concert
shall acquire or control, directly or indirectly, whether by
ownership, proxy, voting trust or otherwise, more than fifty
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percent (50%) of the issued and outstanding securities of Company
having ordinary voting power for the election of directors;
(l) if there shall occur a Change in Control (as defined
in the Indenture);
(m) the revocation of any Guaranty or Joinder Agreement.
10.2 Exercise of Remedies. If an Event of Default has occurred and
is continuing hereunder: (v) the Agent shall, upon being directed to do so by
the Majority Banks, declare the Revolving Credit Aggregate Commitment,
terminated; (w) the Agent shall, upon being directed to do so by the Majority
Banks, declare the entire unpaid principal Indebtedness, including the Notes,
immediately due and payable, without presentment, notice or demand, all of
which are hereby expressly waived by Company; (x) upon the occurrence of any
Event of Default specified in subsection 10.1(j), above, and notwithstanding
the lack of any declaration by Agent under preceding clause (w), the entire
unpaid principal Indebtedness, including the Notes, shall become automatically
and immediately due and payable, and the Revolving Credit Aggregate Commitment
shall be automatically and immediately terminated; (y) the Agent shall, upon
being directed to do so by the Majority Banks, demand immediate delivery of
cash collateral, and the Company and each Account Party agrees to deliver such
cash collateral upon demand, in an amount equal to the maximum amount that may
be available to be drawn at any time prior to the stated expiry of all
outstanding Letters of Credit, and (z) the Agent shall, if directed to do so by
the Majority Banks or the Banks, as applicable (subject to the terms hereof),
exercise any remedy permitted by this Agreement, the Loan Documents or law.
10.3 Rights Cumulative. No delay or failure of Agent and/or Banks
in exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Banks under this Agreement are cumulative
and not exclusive of any right or remedies which Banks would otherwise have.
10.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, Company hereby agrees to waive, and does hereby absolutely and
irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for
interest on the Notes, or any security interest or mortgage contemplated by or
granted under or in connection with this Agreement. These waivers have been
voluntarily given, with full knowledge of the consequences thereof.
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10.5 Waiver of Defaults. No Event of Default shall be waived by the
Banks except in a writing signed by an officer of the Agent in accordance with
Section 14.11 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude
other or further exercise of their rights by Agent or the Banks. No waiver of
any Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Banks in enforcing any of their
rights shall constitute a waiver of any of their rights. Company expressly
agrees that this Section may not be waived or modified by the Banks or Agent by
course of performance, estoppel or otherwise.
10.6 Deposits and Accounts.
Upon the occurrence and during the continuance of any Event of
Default, each Bank may at any time and from time to time, without notice to the
Company (any requirement for such notice being expressly waived by the Company)
set off and apply against any and all of the obligations of the Company now or
hereafter existing under this Agreement, whether owing to such Bank or any
other Bank or the Agent, any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Bank to or for the credit or the account of the Company and
any property of the Company from time to time in possession of such Bank,
irrespective of whether or not such deposits held or indebtedness owing by such
Bank may be contingent and unmatured and regardless of whether any Collateral
then held by Agent or any Bank is adequate to cover the Indebtedness. Promptly
following any such setoff, such Bank shall give written notice to Agent and to
Company of the occurrence thereof. The Company hereby grants to the Banks and
the Agent a lien on and security interest in all such deposits, indebtedness
and property as collateral security for the payment and performance of all of
the obligations of the Company under this Agreement. The rights of each Bank
under this Section 10.6 are in addition to the other rights and remedies
(including, without limitation, other rights of setoff) which such Bank may
have.
11. PAYMENTS, RECOVERIES AND COLLECTIONS.
11.1 Payment Procedure.
(a) All payments by Company of principal of, or interest
on, the Notes, or of Fees, shall be made without setoff or
counterclaim on the date specified for payment under this Agreement
not later than 12:00 noon (Detroit time) in immediately available
funds to Agent, for the ratable account of the Banks, at Agent's
office located at One Detroit Center, Detroit, Michigan 48226-3289,
(care of Agent's Eurocurrency Lending Office, for Eurocurrency-based
Advances). Upon receipt by the Agent of each such payment, the Agent
shall make prompt payment in like funds received to each Bank as
appropriate,
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or, in respect of Eurocurrency-based Advances, to such Bank's
Eurocurrency Lending Office.
(b) Unless the Agent shall have been notified by Company
prior to the date on which any payment to be made by Company is due
that Company does not intend to remit such payment, the Agent may, in
its sole discretion and without obligation to do so, assume that the
Company has remitted such payment when so due and the Agent may, in
reliance upon such assumption, make available to each Bank on such
payment date an amount equal to such Bank's share of such assumed
payment. If Company has not in fact remitted such payment to the
Agent each Bank shall forthwith on demand repay to the Agent the
amount of such assumed payment made available or transferred to such
Bank, together with the interest thereon, in respect of each day from
and including the date such amount was made available by the Agent to
such Bank to the date such amount is repaid to the Agent at a rate per
annum equal to (i) for Prime-based Advances, the Federal Funds
Effective Rate (daily average), as the same may vary from time to
time, and (ii) with respect to Eurocurrency-based Advances, Agent's
aggregate marginal cost (including the cost of maintaining any
required reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent) of
carrying such amount.
(c) Subject to the definition of Interest Period,
whenever any payment to be made hereunder shall otherwise be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in computing interest, if any, in connection with such
payment.
(d) All payments to be made by the Company under this
Agreement or any of the Notes (including without limitation payments
under the Swing Line Note) shall be made without set-off or
counterclaim, as aforesaid, and without deduction for or on account of
any present or future withholding or other taxes of any nature imposed
by any governmental authority or of any political subdivision thereof
or any federation or organization of which such governmental authority
may at the time of payment be a member, unless Company is compelled by
law to make payment subject to such tax. In such event, Company shall:
(i) pay to the Agent for Agent's own account
and/or, as the case may be, for the account
of the Banks (and, in the case of Advances of
the Swing Line, pay to the Swing Line Bank
which funded such Advances) such additional
amounts as may be necessary to ensure that
the Agent and/or such Bank or Banks receive a
net amount equal to the full amount which
would have been
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receivable had payment not been made subject
to such tax; and
(ii) remit such tax to the relevant taxing
authorities according to applicable law, and
send to the Agent or the applicable Bank
(including the Swing Line Bank) or Banks, as
the case may be, such certificates or
certified copy receipts as the Agent or such
Bank or Banks shall reasonably require as
proof of the payment by the Company, of any
such taxes payable by the Company.
As used herein, the terms "tax", "taxes" and "taxation" include all
existing taxes, levies, imposts, duties, charges, fees, deductions and
withholdings and any restrictions or conditions resulting in a charge together
with interest thereon and fines and penalties with respect thereto which may be
imposed by reason of any violation or default with respect to the law regarding
such tax, assessed as a result of or in connection with the transactions
hereunder, or the payment and or receipt of funds hereunder, or the payment or
delivery of funds into or out of any jurisdiction other than the United States
(whether assessed against Company, Agent or any of the Banks).
11.2 Application of Proceeds of Collateral. Notwithstanding
anything to the contrary in this Agreement, after an Event of Default, the
proceeds of any enforcement of the Collateral Documents, together with any
offsets, voluntary payments by Company or any Guarantor or others and any other
sums received or collected in respect of the Indebtedness, shall be applied,
first, to the Notes on a pro rata basis (or in such order and manner as
determined by the Majority Banks; subject, however, to the applicable
Percentages of the loans held by each of the Banks), next, to any other
Indebtedness on a pro rata basis, and then, if there is any excess, to Company
or the applicable Guarantor, as the case may be. The application of such
proceeds and other sums to the Revolving Credit Notes shall be based on each
Bank's Percentage of the aggregate of the loans.
11.3 Pro-rata Recovery. If any Bank shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of, or interest on, any of the Revolving
Credit Notes in excess of its pro rata share of payments then or thereafter
obtained by all Banks upon principal of and interest on all Revolving Credit
Notes, such Bank shall purchase from the other Banks such participations in the
Revolving Credit Notes held by them as shall be necessary to cause such
purchasing Bank to share the excess payment or other recovery ratably in
accordance with the Percentage with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing
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holder, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
11.4 Deposits and Accounts. In addition to and not in limitation of
any rights of any Bank or other holder of any of the Notes under applicable
law, each Bank and each other such holder shall, upon acceleration of the
Indebtedness under the Notes and without notice or demand of any kind, have the
right to appropriate and apply to the payment of the Notes owing to it any and
all balances, credits, deposits, accounts or moneys of Company then or
thereafter with such Bank or other holder; provided, however, that any such
amount so applied by any Bank or other holder on any of the Notes owing to it
shall be subject to the provisions of Section 11.3, hereof.
12. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
12.1 Reimbursement of Prepayment Costs. If Company makes any
payment of principal with respect to any Eurodollar-based Advance or Quoted
Rate Advance on any day other than the last day of the Interest Period
applicable thereto (whether voluntarily, by acceleration, or otherwise), or if
Company fails to borrow any Eurocurrency-based Advance or Quoted Rate Advance
after notice has been given by Company to Agent in accordance with the terms
hereof requesting such Advance, or if Company fails to make any payment of
principal or interest in respect of a Eurocurrency-based Advance or Quoted Rate
Advance when due, Company shall reimburse Agent and Banks, as the case may be
on demand for any resulting loss, cost or expense incurred by Agent and Banks,
as the case may be as a result thereof, including, without limitation, any such
loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not Agent and Banks, as the
case may be shall have funded or committed to fund such Advance. Such amount
payable by Company to Agent and Banks, as the case may be may include, without
limitation, an amount equal to the excess, if any, of (a) the amount of
interest which would have accrued on the amount so prepaid, or not so borrowed,
refunded or converted, for the period from the date of such prepayment or of
such failure to borrow, refund or convert, through the last day of the relevant
Interest Period, at the applicable rate of interest for said Advance(s)
provided under this Agreement, over (b) the amount of interest (as reasonably
determined by Agent and Banks, as the case may be) which would have accrued to
Agent and Banks, as the case may be on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. Calculation of any amounts payable to any Bank under this paragraph
shall be made as though such Bank shall have actually funded or committed to
fund the relevant Advance through the purchase of an underlying deposit in an
amount equal to the amount of such Advance and having a maturity comparable to
the relevant Interest Period; provided, however, that any Bank may fund any
Eurodollar-based Advance or Quoted Rate Advance, as the case may be in any
manner it deems fit and the foregoing assumptions
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shall be utilized only for the purpose of the calculation of amounts payable
under this paragraph. Upon the written request of Company, Agent and Banks
shall deliver to Company a certificate setting forth the basis for determining
such losses, costs and expenses, which certificate shall be conclusively
presumed correct, absent manifest error.
12.2 Agent's Eurocurrency Lending Office. For any Advance to which
the Eurocurrency-based Rate is applicable, if Agent shall designate a
Eurocurrency Lending Office which maintains books separate from those of the
rest of Agent, Agent shall have the option of maintaining and carrying the
relevant Advance on the books of such Eurocurrency Lending Office.
12.3 Circumstances Affecting Eurocurrency-based Rate Availability.
If with respect to any Interest Period, Agent or the Banks (after consultation
with Agent) shall determine that, by reason of circumstances affecting the
interbank markets generally, deposits in eurodollars in the applicable amounts
are not being offered to the Agent for such Interest Period, then Agent shall
forthwith give notice thereof to the Company. Thereafter, until Agent notifies
Company that such circumstances no longer exist, the obligation of Banks to
make Eurocurrency-based Advances, and the right of Company to convert an
Advance to or refund an Advance as a Eurocurrency-based Advance shall be
suspended, and the Company shall repay in full (or cause to be repaid in full)
the then outstanding principal amount of each such Eurocurrency-based Advance
covered hereby together with accrued interest thereon, any amounts payable
under Section 12.1, hereof, and all other amounts payable hereunder on the last
day of the then current Interest Period applicable to such Advance. Upon the
date for repayment as aforesaid and unless Company notifies Agent to the
contrary within two (2) Business Days after receiving a notice from Agent
pursuant to this Section, such outstanding principal amount shall be converted
to a Prime-based Advance as of the last day of such Interest Period.
12.4 Laws Affecting Eurocurrency-based Advance Availability. In the
event that any applicable law, rule or regulation (whether domestic or foreign)
now or hereafter in effect and whether or not currently applicable to any Bank
or the Agent or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by the Agent or any of the Banks (or any of their
respective Eurocurrency Lending Offices) with any request or directive (whether
or not having the force of law) of any such authority, shall make it unlawful
or impossible for any of the Banks (or any of their respective Eurocurrency
Lending Offices) to honor its obligations hereunder to make or maintain any
Advance with interest at the Eurocurrency-based Rate, Agent shall so notify
Company and the right of Company to convert an Advance or refund an Advance as
a Eurocurrency-based Advance, shall be suspended and thereafter Company may
select as Applicable Interest Rates only those which
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remain available and which are permitted to be selected hereunder, and if any
of the Banks may not lawfully continue to maintain an Advance to the end of the
then current Interest Period applicable thereto as a Eurocurrency-based
Advance, Company shall immediately prepay such Advance, together with interest
to the date of payment, and any amounts payable under Sections 12.1 or 12.6
with respect to such prepayment and the applicable Advance shall immediately be
converted to a Prime-based Advance and the Prime-based Rate shall be applicable
thereto.
12.5 Increased Cost of Eurocurrency-based Advances. In the event
that any change in applicable law, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not currently applicable to
any Bank or the Agent or any interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any of the
Banks with any request or directive (whether or not having the force of law)
made by any such authority, central bank or comparable agency after the date
hereof:
(a) shall subject the Agent or any of the Banks to any
tax, duty or other charge with respect to any Advance or any Note or
shall change the basis of taxation of payments to the Agent or any of
the Banks of the principal of or interest on any Advance or any Note
or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net income or
revenues of the Agent or of any of the Banks imposed by the United
States of America or the jurisdiction in which such Bank's principal
executive office is located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by the Agent or any of the Banks or shall impose on the Agent
or any of the Banks or the interbank markets any other condition
affecting any Advance or any of the Notes;
and the result of any of the foregoing is to increase the costs to the Agent or
any of the Banks of making, funding or maintaining any part of the Indebtedness
hereunder as a Eurocurrency-based Advance or to reduce the amount of any sum
received or receivable by the Agent or any of the Banks under this Agreement or
under the Notes in respect of a Eurocurrency-based Advance then Agent or Bank,
as the case may be, shall promptly notify the Company of such fact and demand
compensation therefor and, within fifteen (15) days after such notice, Company
agrees to pay to Agent or such Bank such additional amount or amounts as will
compensate Agent or such Bank or Banks for such increased cost or reduction. A
certificate of Agent or such Bank setting forth the basis for determining such
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additional amount or amounts necessary to compensate or such Bank or Banks
shall be conclusively presumed to be correct save for manifest error.
12.6 Indemnity. The Company will indemnify Agent and each of the
Banks against any loss or expense which may arise or be attributable to the
Agent's and each Bank's obtaining, liquidating or employing deposits or other
funds acquired to effect, fund or maintain the Advances (a) as a consequence of
any failure by the Company to make any payment when due of any amount due
hereunder in connection with a Eurocurrency-based Advance, (b) due to any
failure of the Company to borrow on a date specified therefor in a Request for
Revolving Credit Advance or (c) due to any payment or prepayment of any
Eurocurrency-based Advance on a date other than the last day of the Interest
Period for such Revolving Credit Advance, whether required by another provision
of this Agreement or otherwise. The Agent's and each Bank's (as applicable)
calculations of any such loss or expense shall be furnished to the Company and
shall be conclusive, absent manifest error.
12.7 Other Increased Costs. In the event that after the date hereof
the adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank or Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk based capital guidelines, affects
or would affect the amount of capital required or expected to be maintained by
such Bank or Agent (or any corporation controlling such Bank or Agent) and such
Bank or Agent, as the case may be, determines that the amount of such capital
is increased by or based upon the existence of such Bank's or Agent's
obligations or Advances hereunder and such increase has the effect of reducing
the rate of return on such Bank's or Agent's (or such controlling
corporation's) capital as a consequence of such obligations or Advances
hereunder to a level below that which such Bank or Agent (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank or Agent to be material, then the Company shall pay to such
Bank or Agent, as the case may be, from time to time, upon request by such Bank
or Agent, additional amounts sufficient to compensate such Bank or Agent (or
such controlling corporation) for any increase in the amount of capital and
reduced rate of return which such Bank or Agent reasonably determines to be
allocable to the existence of such Bank's or Agent's obligations or Advances
hereunder. A statement as to the amount of such compensation, prepared in good
faith and in reasonable detail by such Bank or Agent, as the case may be, shall
be submitted by such Bank or by Agent to the Company, reasonably promptly after
becoming aware of any event described in
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this Section 12.7 and shall be conclusive, absent manifest error in
computation.
12.8 HLT Determination. In the event at any time of an HLT
Determination, the Agent, the Banks and Company shall commence negotiations in
good faith to agree upon whether and, if so, the extent to which fees, interest
rates and/or margins hereunder should be increased so as to reflect such HLT
Determination and to compensate the Banks and Agent for additional costs,
expenses and/or fees which result from or are associated with any such HLT
Determination, including without limitation any costs resulting from any
requirement that additional capital be allocated to the Indebtedness, or any
portion thereof. If Company and the Majority Banks agree that fees, interest
rates and/or margins should be increased, and agree on the amount of such
increase or increases, this Agreement may be amended to give effect to such
increase or increases as provided in Section 14.11 hereof. If Company and
Majority Banks fail to agree on whether and, if so, the extent to which fees,
interest rates and/or margins hereunder should be increased within 60 days
after notice to Company of an HLT Determination as herein provided, then (i)
the Agent shall, if requested by the Majority Banks, by written notice to
Company terminate the commitments of the Banks to fund and/or maintain Advances
under this Agreement and such commitments shall thereupon terminate, (ii)
Company shall be obligated within two (2) Business Days of receipt of such
notice to repay all outstanding Indebtedness (except that Eurocurrency-based
Advances and Quoted Rate Advances may be paid at the end of the respective
Interest Periods applicable thereto) and (iii) the Company may, at its option,
on at least ten Business Days' written notice to the Agent (which shall
promptly notify the Banks thereof) prepay all Indebtedness outstanding
hereunder by paying the aggregate principal amount thereof, together, with all
accrued interest thereon to the date of prepayment; provided that, if the
Company prepays any Advances carried at the Eurocurrency-based Rate, or the
Quoted Rate, pursuant to this Section 12.8, Company shall compensate the Banks
for any resulting funding losses as provided in Section 12.1 hereof. Subject
to compliance by Company with this Section 12.8, the Banks acknowledge that an
HLT Determination shall not constitute a Default or an Event of Default
hereunder.
12.9 Substitution of Banks. If (i) the obligation of any Bank to
make Eurodollar-based Advances has been suspended pursuant to Section 12.3 or
Section 12.4 or (ii) any Bank has demanded compensation under Section 12.5 (in
each case, an "Affected Lender"), Company shall have the right, with the
assistance of the Agent, to seek a substitute lender or lenders (which may be
one or more of the Banks (the "Purchasing Lender" or "Purchasing Lenders") to
purchase the Revolving Credit Note and assume the commitment under this
Agreement of such Affected Lender. The Affected Lender shall be obligated to
sell its Revolving Credit Note and assign its commitment to such Purchasing
Lender or Purchasing Lenders within fifteen days after receiving notice from
Company requiring it to do
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so, at an aggregate price equal to the outstanding principal amount thereof
plus unpaid interest accrued thereon up to but excluding the date of the sale.
In connection with any such sale, and as a condition thereof, Company shall pay
to the Affected Lender all fees accrued for its account hereunder to but
excluding the date of such sale, plus, if demanded by the Affected Lender at
least two Business Days prior to such sale, (i) the amount of any compensation
which would be due to the Affected Lender under Section 12.1 if Company has
prepaid the outstanding Eurodollar-based Advances of the Affected Lender on the
date of such sale and (ii) any additional compensation accrued for its account
under Section 12.5 to but excluding said date. Upon such sale, the Purchasing
Lender or Purchasing Lenders shall assume the Affected Lender's commitment and
the Affected Lender shall be released from its obligations hereunder to a
corresponding extent. If any Purchasing Lender is not already one of the Banks,
the Affected Lender, as assignor, such Purchasing Lender, as assignee, Company
and the Agent, with the subscribed consent of the Swing Line Bank shall enter
into an Assignment Agreement pursuant to Section 14.8 hereof, whereupon such
Purchasing Lender shall be a Bank party to this Agreement, shall be deemed to
be an assignee hereunder and shall have all the rights and obligations of a
Bank with a Percentage equal to its ratable share of the Revolving Credit
Aggregate Commitment of the Affected Lender. In connection with any assignment
pursuant to this Section 12.9, Company or the Purchasing Lender shall pay to
the Agent the administrative fee for processing such assignment referred to in
Section 14.8. Upon the consummation of any sale pursuant to this Section 12.9,
the Affected Lender, the Agent and Company shall make appropriate arrangements
so that, if required, each Purchasing Lender receives a new Revolving Credit
Note.
13. AGENT
13.1 Appointment of Agent. Each Bank and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Bank or
holder under this Agreement and the Loan Documents and to exercise such powers
hereunder and thereunder as are specifically delegated to Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto, including without limitation the power to execute or authorize the
execution of financing or similar statements or notices, and other documents.
In performing its functions and duties under this Agreement, the Agent shall
act solely as agent of the Banks and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Company. Each Bank agrees (which agreement shall survive any termination of
this Agreement) to reimburse Agent for all reasonable out-of-pocket expenses
(including house and outside attorneys' fees and disbursements) incurred by
Agent hereunder or in connection herewith or with an Event of Default or in
enforcing the obligations of Company under this Agreement or the Loan Documents
or any other instrument executed pursuant hereto, and for
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which Agent is not reimbursed by Company, pro rata according to such Bank's
Percentage. Agent shall not be required to take any action under the Loan
Documents, or to prosecute or defend any suit in respect of the Loan Documents,
unless indemnified to its satisfaction by the Banks against loss, costs,
liability and expense. If any indemnity furnished to Agent shall become
impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given.
13.2 Deposit Account with Agent. Company hereby authorizes Agent,
in Agent's sole discretion, to charge its general deposit account(s), if any,
maintained with Agent for the amount of any principal, interest, or other
amounts or costs due under this Agreement when the same become due and payable
under the terms of this Agreement or the Notes.
13.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). Neither Agent nor any of its directors, officers,
employees or agents shall be liable to any Bank for any action taken or omitted
to be taken by it under this Agreement or any document executed pursuant
hereto, or in connection herewith or therewith with the consent or at the
request of the Majority Banks or in the absence of their own gross negligence
or wilful misconduct, nor be responsible for or have any duties to ascertain,
inquire into or verify (a) any recitals or warranties herein or therein, (b)
the effectiveness, enforceability, validity or due execution of this Agreement
or any document executed pursuant hereto or any security thereunder, (c) the
performance by Company of its obligations hereunder or thereunder, or (d) the
satisfaction of any condition hereunder or thereunder, including without
limitation the making of any Advance or the issuance of any Letter of Credit.
Agent shall be entitled to rely upon any certificate, notice, document or other
communication (including any cable, telegraph, telex, facsimile transmission or
oral communication) believed by it to be genuine and correct and to have been
sent or given by or on behalf of a proper person. Agent may treat the payee of
any Note as the holder thereof. Agent may employ agents and may consult with
legal counsel (who may be counsel for Company), independent public accountants
and other experts selected by it and shall not be liable to the Banks (except
as to money or property received by them or their authorized agents), for the
negligence or misconduct of any such agent selected by it with reasonable care
or for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
13.4 Successor Agent. Agent may resign as such at any time upon at
least 30 days prior notice to Company and all Banks. If Agent at any time
shall resign or if the office of Agent shall become vacant for any other
reason, Majority Banks shall, by
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written instrument, appoint successor agent(s) satisfactory to such Majority
Banks, and, so long as no Default or Event of Default has occurred and is
continuing, to Company. Such successor agent shall thereupon become the Agent
hereunder, as applicable, and shall be entitled to receive from the prior Agent
such documents of transfer and assignment as such successor Agent may
reasonably request. Any such successor Agent shall be a commercial bank
organized under the laws of the United States or any state thereof and shall
have a combined capital and surplus of at least $500,000,000. If a successor is
not so appointed or does not accept such appointment before the resigning
Agent's resignation becomes effective, the resigning Agent may appoint a
temporary successor to act until such appointment by the Majority Banks is made
and accepted or if no such temporary successor is appointed as provided above
by the resigning Agent, the Majority Banks shall thereafter perform all of the
duties of the resigning Agent hereunder until such appointment by the Majority
Banks is made and accepted. Such successor Agent shall succeed to all of the
rights and obligations of the resigning Agent as if originally named. The
resigning Agent shall duly assign, transfer and deliver to such successor Agent
all moneys at the time held by the resigning Agent hereunder after deducting
therefrom its expenses for which it is entitled to be reimbursed. Upon such
succession of any such successor Agent, the provisions of this Article 13 shall
continue in effect for the benefit of the resigning Agent in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
13.5 Loans by Agent. Comerica and its successors and assigns, in
its capacity as a Bank hereunder, shall have the same rights and powers
hereunder as any other Bank and may exercise or refrain from exercising the
same as though it were not the Agent. Comerica and its affiliates may (without
having to account therefor to any Bank) accept deposits from, lend money to,
and generally engage in any kind of banking, trust, financial advisory or other
business with Company (or the shareholders of Company) as if it were not acting
as Agent hereunder, and may accept fees and other consideration therefor
without having to account for the same to the Banks.
13.6 Credit Decisions. Each Bank acknowledges that it has,
independently of Agent and each other Bank and based on the financial
statements of Company and such other documents, information and investigations
as it has deemed appropriate, made its own credit decision to extend credit
hereunder from time to time. Each Bank also acknowledges that it will,
independently of Agent and each other Bank and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this
Agreement or any document executed pursuant hereto.
13.7 Agent's Fees. Company shall pay to Agent the annual agency fee
and such other fees and charges in the amounts and at
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the times set forth in the letter agreement between Company and Agent dated
March __, 1995. The Agent's Fees described in this Section 13.7 shall not be
refundable under any circumstances.
13.8 Authority of Agent to Enforce Notes and This Agreement. Each
Bank, subject to the terms and conditions of this Agreement, authorizes the
Agent with full power and authority as attorney-in-fact to institute and
maintain actions, suits or proceedings for the collection and enforcement of
the Notes and to file such proofs of debt or other documents as may be
necessary to have the claims of the Banks allowed in any proceeding relative to
Company, or any of its Subsidiaries, or their respective creditors or affecting
their respective properties, and to take such other actions which Agent
considers to be necessary or desirable for the protection, collection and
enforcement of the Notes, this Agreement or the Loan Documents.
13.9 Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by Company, but without limiting any obligation of
Company to make such reimbursement), ratably according to their respective
Percentages, from and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement, any of the Loan Documents or the transactions
contemplated hereby or any action taken or omitted by the Agent under this
Agreement or any of the Loan Documents; provided, however, that no Bank shall
be liable for any portion of such claims, damages, losses, liabilities, costs
or expenses resulting from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the Loan Documents, to the
extent that the Agent is not reimbursed for such expenses by Company, but
without limiting the obligation of Company to make such reimbursement. Each
Bank agrees to reimburse the Agent promptly upon demand for its ratable share
of any amounts owing to the Agent by the Banks pursuant to this Section. If the
indemnity furnished to the Agent under this Section shall, in the judgment of
the Agent, be insufficient or become impaired, the Agent may call for
additional indemnity from the Banks and cease, or not commence, to take any
action until such additional indemnity is furnished.
13.10 Knowledge of Default. It is expressly understood and agreed
that the Agent shall be entitled to assume that no Event of Default has
occurred and is continuing, unless the officers of the
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Agent immediately responsible for matters concerning this Agreement shall have
been notified in a writing specifying such Event of Default and stating that
such notice is a "notice of default" by a Bank or by Company. Upon receiving
such a notice, the Agent shall promptly notify each Bank of such Event of
Default and provide each Bank with a copy of such notice. Agent shall also
furnish the Banks, promptly upon receipt, with copies of all other notices or
other information required to be provided by Company hereunder.
13.11 Agent's Authorization; Action by Banks. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Banks to give any approval or consent, or to make
any request, or to take any other action on behalf of the Banks (including
without limitation the exercise of any right or remedy hereunder or under the
other Loan Documents), the Agent shall be required to give such approval or
consent, or to make such request or to take such other action only when so
requested in writing by the Majority Banks or the Banks, as applicable
hereunder. Action that may be taken by Majority Banks or all of the Banks, as
the case may be (as provided for hereunder) may be taken (i) pursuant to a vote
at a meeting (which may be held by telephone conference call) as to which all
of the Banks have been given reasonable advance notice, or (ii) pursuant to the
written consent of the requisite Percentages of the Banks as required
hereunder, provided that all of the Banks are given reasonable advance notice
of the requests for such consent.
13.12 Enforcement Actions by the Agent. Except as otherwise
expressly provided under this Agreement or in any of the other Loan Documents
and subject to the terms hereof, Agent will take such action, assert such
rights and pursue such remedies under this Agreement and the other Loan
Documents as the Majority Banks or all of the Banks, as the case may be (as
provided for hereunder), shall direct; provided, however, that the Agent shall
not be required to act or omit to act if, in the judgment of the Agent, such
action or omission may expose the Agent to personal liability or is contrary to
this Agreement, any of the Loan Documents or applicable law. Except as
expressly provided above or elsewhere in this Agreement or the other Loan
Documents, no Bank (other than the Agent, acting in its capacity as agent)
shall be entitled to take any enforcement action of any kind under any of the
Loan Documents.
14. MISCELLANEOUS
14.1 Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, it shall be done, unless otherwise specified
herein, in accordance with GAAP. Furthermore, all financial statements required
to be delivered hereunder shall be prepared in accordance with GAAP.
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14.2 Consent to Jurisdiction. Company and Banks hereby irrevocably
submit to the non-exclusive jurisdiction of any United States Federal or
Michigan state court sitting in Detroit in any action or proceeding arising out
of or relating to this Agreement or any of the Loan Documents and Company and
Banks hereby irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in any such United States Federal or
Michigan state court. Company irrevocably consents to the service of any and
all process in any such action or proceeding brought in any court in or of the
State of Michigan by the delivery of copies of such process to Company at its
address specified on the signature page hereto or by certified mail directed to
such address or such other address as may be designated by Company in a notice
to the other parties that complies as to delivery with the terms of Section
14.6. Nothing in this Section shall affect the right of the Banks and the Agent
to serve process in any other manner permitted by law or limit the right of the
Banks or the Agent (or any of them) to bring any such action or proceeding
against Company or any Guarantor or any of its or their property in the courts
of any other jurisdiction. Company hereby irrevocably waives any objection to
the laying of venue of any such suit or proceeding in the above described
courts.
14.3 Law of Michigan. This Agreement and the Notes have been
delivered at Detroit, Michigan, and shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan. Whenever
possible each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
14.4 Interest. In the event the obligation of Company to pay
interest on the principal balance of the Notes is or becomes in excess of the
maximum interest rate which Company is permitted by law to contract or agree to
pay, giving due consideration to the execution date of this Agreement, then, in
that event, the rate of interest applicable with respect to such Bank's
Percentage shall be deemed to be immediately reduced to such maximum rate and
all previous payments in excess of the maximum rate shall be deemed to have
been payments in reduction of principal and not of interest.
14.5 Closing Costs and Other Costs; Indemnification. (a) Company
agrees to pay, or reimburse the Agent for payment of, on demand (i) all
reasonable closing costs and expenses, including, by way of description and not
limitation, house and outside attorney fees and advances, appraisal and
accounting fees, and lien search fees incurred by Agent in connection with the
commitment, consummation and closing of the loans contemplated hereby or in
connection with the administration of this Agreement or any amendment,
refinancing or restructuring of the credit arrangements
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provided under this Agreement, (ii) all stamp and other taxes and fees payable
or determined to be payable in connection with the execution, delivery, filing,
recording or amendment of this Agreement and the Loan Documents and the
consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting
to pay such taxes or fees, (iii) all reasonable costs and expenses of the Agent
or any of the Banks (including reasonable fees and expenses of counsel and
whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the amendment, waiver or
enforcement of this Agreement, or the Loan Documents or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement and (iv) all reasonable costs and expenses of the Agent or any of the
Banks (including reasonable fees and expenses of counsel) in connection with
any action or proceeding relating to a court order, injunction or other process
or decree restraining or seeking to restrain the Agent or any of the Banks from
paying any amount under, or otherwise relating in any way to, any Letter of
Credit and any and all costs and expenses which any of them may incur relative
to any payment under any Letter of Credit. All of said amounts required to be
paid by Company, may, at Agent's option, be charged by Agent as a Prime-based
Advance against the Indebtedness.
(b) Company agrees to indemnify and save Agent and each
of the Banks harmless from all loss, cost, damage, liability or expenses,
including reasonable attorneys' fees and disbursements, incurred by Agent and
the Banks by reason of an Event of Default, or enforcing the obligations of
Company or any Guarantor under this Agreement or any of the other Loan
Documents or in the prosecution or defense of any action or proceeding
concerning any matter growing out of or connected with this Agreement or any of
the Loan Documents, excluding, however, any loss, cost, damage, liability or
expenses arising solely as a result of the gross negligence or willful
misconduct of the party seeking to be indemnified under this Section 14.5(b).
(c) Company agrees to defend, indemnify and hold harmless
Agent and each of the Banks, and their respective employees, agents, officers
and directors from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs or expenses of whatever kind or nature
arising out of or related to (i) the presence, disposal, release or threatened
release of any Hazardous Materials on, from or affecting any premises owned or
occupied by Company or any of its Subsidiaries, (ii) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (iii) any lawsuit or other proceeding
brought or threatened, settlement reached or governmental order or decree
relating to such Hazardous Materials, (iv) the cost of removal of all Hazardous
Materials from all or any portion of any premises owned by Company or its
Subsidiaries, (v) the taking of necessary
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precautions to protect against the release of Hazardous Materials on or
affecting any premises owned by Company or any of its Subsidiaries, (vi)
complying with all Hazardous Material Laws and/or (vii) any violation of
Hazardous Material Laws, including without limitation, reasonable attorneys and
consultants fees, investigation and laboratory fees, environmental studies
required by Agent or any Bank in connection with the violation of Hazardous
Material Laws (whether before or after the occurrence of any Default or Event
of Default hereunder), court costs and litigation expenses; and, if so
requested by Agent or any Bank, Company shall execute, and shall cause the
Guarantors to execute, separate indemnities covering the foregoing matters. The
obligations of Company under this Section 14.5(c) shall be in addition to any
and all other obligations and liabilities the Company may have to Agent or any
of the Banks at common law or pursuant to any other agreement.
14.6 Notices. Except as expressly provided otherwise in this
Agreement, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing and shall
be given by personal delivery, by mail, by reputable overnight courier, by
telex or by facsimile and addressed or delivered to it at its address set forth
on the signature pages hereof or at such other address as may be designated by
such party in a notice to the other parties that complies as to delivery with
the terms of this Section 14.6. Any notice, if personally delivered or if
mailed and properly addressed with postage prepaid and sent by registered or
certified mail, shall be deemed given when received or when delivery is
refused; any notice, if given to a reputable overnight courier and properly
addressed, shall be deemed given 2 Business Days after the date on which it was
sent, unless it is actually received sooner by the named addressee; and any
notice, if transmitted by telex or facsimile, shall be deemed given when
received (answerback confirmed in the case of telexes and receipt confirmed in
the case of telecopies). Agent may, but shall not be required to, take any
action on the basis of any notice given to it by telephone, but the giver of
any such notice shall promptly confirm such notice in writing or by telex or
facsimile, and such notice will not be deemed to have been received until such
confirmation is deemed received in accordance with the provisions of this
Section set forth above. If such telephonic notice conflicts with any such
confirmation, the terms of such telephonic notice shall control.
14.7 Further Action. Company, from time to time, upon written
request of Agent will make, execute, acknowledge and deliver or cause to be
made, executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and
to provide for Advances under and payment of the Notes, according to the intent
and purpose herein and therein expressed.
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14.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure
to the benefit of Company, the Agent and the Banks, and their respective
successors and assigns.
(b) The foregoing shall not authorize any assignment by
Company of its rights or duties hereunder, and no such assignment shall be made
(or effective) without the prior written approval of the Banks.
(c) Each of the Banks may at any time and from time to
time, subject to the terms and conditions hereof, grant participations (but not
assignments, except as expressly permitted hereunder) in such Bank's rights and
obligations hereunder and under the other Loan Documents to any commercial
bank, savings and loan association, insurance company, pension fund, mutual
fund, commercial finance company or other similar financial institution, which
institution is approved in advance in writing by Company and Agent, in each
case, such approval not to be unreasonably withheld or delayed; provided,
however, that (i) the approval of Company shall not be required upon the
occurrence and during the continuance of a Default or Event of Default and (ii)
the approval of Company and Agent shall not be required for the grant of a
participation by a Bank to its Affiliate, to any other Bank or to any Federal
Reserve Bank. The Company authorizes each Bank to disclose to any prospective
participant, once approved by Company and Agent (if such approval is required),
any and all financial information in such Bank's possession concerning the
Company which has been delivered to such Bank pursuant to this Agreement;
provided that each such prospective participant shall execute a confidentiality
agreement consistent with the terms of Section 14.13, hereof. A Bank shall not
be permitted to assign or otherwise transfer (except by participation according
to the terms hereof) its rights and obligations hereunder, except, (x) to an
Affiliate of an assigning Bank or to any Bank or (y) with the prior written
consent of the Company and the Agent which, in the case of the Agent, shall not
be unreasonably withheld, to any other financial institution; provided that any
such assignment shall not be in an amount less than $10,000,000;
(d) Each assignment by a Bank of any portion of its
rights and obligations hereunder and under the other Loan Documents shall be
made pursuant to an Assignment Agreement substantially (as determined by Agent)
in the form attached hereto as Exhibit "J" (with appropriate insertions
acceptable to Agent) and shall be subject to the terms and conditions hereof,
and to the following restrictions:
(i) each assignment shall cover all of the Notes
issued by Company hereunder, and shall be for
a fixed and not varying percentage thereof,
with the same percentage applicable to each
such Note;
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(ii) each assignment shall be in a minimum amount
of Ten Million Dollars ($10,000,000);
(iii) no assignment shall violate any "blue sky" or
other securities law of any jurisdiction or
shall require the Company or any other Person
to file a registration statement or similar
application with the United States Securities
and Exchange Commission (or similar state
regulatory body) or to qualify under the
"blue sky" or other securities laws of any
jurisdiction; and
(iv) no assignment shall be effective unless Agent
has received from the assignee (or from the
assigning Bank) an assignment fee of $3,000
for each such assignment.
In connection with any assignment, Company and Agent shall be entitled to
continue to deal solely and directly with the assigning Bank in connection with
the interest so assigned until the Agent shall have received a notice of
assignment duly executed by the assigning Bank and an Assignment Agreement
(with respect thereto) duly executed by the assigning Bank and each assignee.
From and after the date on which the Agent shall notify Company and the
assigning Bank that the foregoing conditions shall have been satisfied and all
consents (if any) required shall have been given, the assignee thereunder shall
be deemed to be a party to this Agreement. To the extent that rights and
obligations hereunder shall have been assigned to such assignee as provided in
such notice of assignment (and Assignment Agreement), such assignee shall have
the rights and obligations of a Bank under this Agreement (including without
limitation the right to receive fees payable hereunder in respect of the period
following such assignment). In addition, the assigning Bank, to the extent that
rights and obligations hereunder shall have been assigned by it as provided in
such notice of assignment (and Assignment Agreement), but not otherwise, shall
relinquish its rights and be released from its obligations under this
Agreement.
Within five (5) Business Days following Company's receipt of notice from the
Agent that Agent has accepted and executed a notice of assignment and the duly
executed Assignment Agreement, Company shall, to the extent applicable, execute
and deliver to the Agent in exchange for any surrendered Note, new Note(s)
payable to the order of the assignee in an amount equal to the amount assigned
to it pursuant to such notice of assignment (and Assignment Agreement), and
with respect to the portion of the Indebtedness retained by the assigning Bank,
to the extent applicable, a new Note payable to the order of the assigning Bank
in an amount equal to the amount retained by such Bank hereunder shall be
executed and delivered by the Company. Agent, the Banks and the Company
acknowledge and agree that any such new Note(s) shall be given in renewal and
replacement of the surrendered Notes and shall not
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effect or constitute a novation or discharge of the Indebtedness evidenced by
any surrendered Note, and each such new Note shall contain a provision
confirming such agreement. In addition, promptly following receipt of such
Notes, Agent shall prepare and distribute to Company and each of the Banks a
revised Exhibit G to this Agreement setting forth the applicable new
Percentages of the Banks (including the assignee Bank), taking into account
such assignment.
(e) Each Bank agrees that any participation agreement
permitted hereunder shall comply with all applicable laws and shall be subject
to the following restrictions (which shall be set forth in the applicable
Participation Agreement):
(i) such Bank shall remain the holder of its
Notes hereunder, notwithstanding any such
participation;
(ii) except as expressly set forth in this Section
14.8(e) with respect to rights of setoff and
the benefits of Article 12 hereof, a
participant shall have no direct rights or
remedies hereunder;
(iii) a participant shall not reassign or transfer,
or grant any sub-participations in its
participation interest hereunder or any part
thereof; and
(iv) such Bank shall retain the sole right and
responsibility to enforce the obligations of
the Company relating to the Notes and Loan
Documents, including, without limitation, the
right to proceed against any Guaranties, or
cause Agent to do so (subject to the terms
and conditions hereof), and the right to
approve any amendment, modification or waiver
of any provision of this Agreement without
the consent of the participant, except for
those matters covered by Section 14.11(a)
through (e) and (h) hereof (provided that a
participant may exercise approval rights over
such matters only on an indirect basis,
acting through such Bank, and Company, Agent
and the other Banks may continue to deal
directly with such Bank in connection with
such Bank's rights and duties hereunder), and
shall otherwise be in form satisfactory to
Agent.
Company agrees that each participant shall be deemed to have the right of
setoff under Section 11.4 hereof, in respect of its participation interest in
amounts owing under this Agreement and the Loan Documents to the same extent as
if the Indebtedness were owing directly to it as a Bank under this Agreement,
shall be
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subject to the pro rata recovery provisions of Section 11.3 hereof, and that
each participant shall be entitled to the benefits of Article 12 hereof. The
amount, terms and conditions of any participation shall be as set forth in the
participation agreement between the issuing Bank and the Person purchasing
such participation, and none of the Company, the Agent and the other Banks
shall have any responsibility or obligation with respect thereto, or to any
Person to whom any such participation may be issued. No such participation
shall relieve any issuing Bank of any of its obligations under this Agreement
or any of the other Loan Documents, and all actions hereunder shall be
conducted as if no such participation had been granted.
(f) Nothing in this Agreement, the Loan Documents or the
Notes, expressed or implied, is intended to or shall confer on any Person other
than the respective parties hereto and thereto and their successors and
assignees permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement, the Notes or the
other Loan Documents.
14.9 Indulgence. No delay or failure of Agent and the Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege nor shall any single or partial exercise thereof preclude
any further exercise thereof, nor the exercise of any other right, power or
privilege. The rights of Agent and the Banks hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Banks would
otherwise have.
14.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same
instrument.
14.11 Amendment and Waiver. No amendment or waiver of any provision
of this Agreement or any Loan Document, nor consent to any departure by Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks or, if this Agreement expressly so requires
with respect to the subject matter thereof, by all Banks (and, with respect to
any amendments to this Agreement or the other Loan Documents, by Company or the
Guarantors which are signatories thereto), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following: (a)
subject the Banks to any additional obligations, (b) reduce the principal of,
or interest on, the Revolving Credit Notes or any Fees or other amounts payable
hereunder, (c) postpone any date fixed for any payment of principal of, or
interest on, the Revolving Notes or any Fees or other amounts payable
hereunder, (d) waive any Event of Default specified in Sections 10.1(a) or (b)
hereof, (e) release any Guarantor, (f) terminate or modify any indemnity
provided to the Banks hereunder or under the Loan
-80-
<PAGE> 88
Documents, except as shall be otherwise expressly provided in this Agreement or
any Loan Document, (g) take any action which requires the signing of all Banks
pursuant to the terms of this Agreement or any Loan Document, (h) change the
aggregate unpaid principal amount of the Notes which shall be required for the
Banks or any of them to take any action under this Agreement or any Loan
Document or (i) change the definition of "Majority Banks" or this Section
14.11; provided further, that no amendment, waiver or consent shall, unless in
writing signed by the Swing Line Bank do any of the following: (x) reduce the
principal of, or interest on, the Swing Line Note or (y) postpone any date
fixed for any payment of principal of, or interest on, the Swing Line Note; and
provided further, however, that no amendment, waiver, or consent shall, unless
in writing and signed by the Agent in addition to all the Banks, affect the
rights or duties of the Agent under this Agreement or any Loan Document. All
references in this Agreement to "Banks" or "the Banks" shall refer to all
Banks, unless expressly stated to refer to Majority Banks.
14.12 [Reserved].
14.13 Confidentiality. Each Bank agrees that it will not disclose
without the prior consent of Company (other than to its employees, its
Affiliates to another Bank or to its auditors or counsel) any information with
respect to Company, which is furnished pursuant to this Agreement or any of the
Loan Documents; provided that any Bank may disclose any such information (a) as
has become generally available to the public or has been lawfully obtained by
such Bank from any third party under no duty of confidentiality to Company, (b)
as may be required or appropriate in any report, statement or testimony
submitted to, or in respect to any inquiry, by, any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Bank,
including the Board of Governors of the Federal Reserve System of the United
States, the Office of the Comptroller of the Currency or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to such
Bank, and (e) to any permitted transferee or assignee or to any approved
participant of, or with respect to, the Notes, as aforesaid.
14.14 Withholding Taxes. If any Bank is not incorporated under the
laws of the United States or a state thereof, such Bank shall promptly deliver
to the Agent two executed copies of (i) Internal Revenue Service Form 1001
specifying the applicable tax treaty between the United States and the
jurisdiction of such Bank's domicile which provides for the exemption from
withholding on interest payments to such Bank, (ii) Internal Revenue Service
Form 4224 evidencing that the income to be received by such Bank hereunder is
effectively connected with the conduct of a trade or business in the United
States or (iii) other evidence satisfactory
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<PAGE> 89
to the Agent that such Bank is exempt from United States income tax withholding
with respect to such income. Such Bank shall amend or supplement any such form
or evidence as required to insure that it is accurate, complete and
non-misleading at all times. Promptly upon notice from the Agent of any
determination by the Internal Revenue Service that any payments previously made
to such Bank hereunder were subject to United States income tax withholding
when made, such Bank shall pay to the Agent the excess of the aggregate amount
required to be withheld from such payments over the aggregate amount actually
withheld by the Agent.
14.15 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANKS, THE
AGENT, NOR COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT
BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE BANKS AND
THE AGENT OR COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
14.16 Complete Agreement; Conflicts. This Agreement, the Notes, any
Requests for Revolving Credit Advance and Requests for Swing Line Advance
hereunder, and the Loan Documents contain the entire agreement of the parties
hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound
by anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
14.17 Severability. In case any one or more of the obligations of
Company under this Agreement, the Notes or any of the other Loan Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of Company shall not
in any way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents in any other jurisdiction.
14.18 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions
hereof.
-82-
<PAGE> 90
14.19 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
14.20 Independence of Covenants. Each covenant hereunder shall be
given independent effect (subject to any exceptions stated in such covenant) so
that if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
14.21 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Company or any party
to any of the Loan Documents made herein or in any of the Loan Documents or in
any certificate, report, financial statement or other document furnished by or
on behalf of Company or any Guarantor in connection with this Agreement or any
of the Loan Documents shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by any Bank or
on such Bank's behalf, and those covenants and agreements of Company set forth
in Sections 3.9, 12.1, 12.6, 12.7 and 14.5 hereof (together with any other
indemnities of Company or any Guarantor contained elsewhere in this Agreement
or in any of the Loan Documents) and of Banks set forth in Section 14.13 hereof
shall survive the repayment in full of the Indebtedness and the termination of
the Revolving Credit Aggregate Commitment.
14.22 Effective Upon Execution. This Agreement shall become
effective upon the execution hereof by Banks, Agent and Company and the
issuance by Company of the Revolving Credit Notes and the Swing Line Note
hereunder, and shall remain effective until the Indebtedness has been repaid
and discharged in full, all Letters of Credit have expired and no commitment to
extend any credit hereunder or under any of the other Loan Documents, whether
optional or obligatory, remains outstanding.
-83-
<PAGE> 91
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, OMNICARE, INC.
as Agent
By: By:
------------------------ ---------------------------
Kurt H. Stump
Its: Vice President Its: Senior Vice President and
One Detroit Center Chief Financial Officer
500 Woodward Avenue 2800 Chemed Center
9th Floor MC 3279 255 East Fifth Street
Detroit, Michigan 48226 Cincinnati, Ohio 45202-4728
Attention: Hugh G. Porter Attn: Kurt H. Stump
Facsimile No. (513) 762-6678
SWING LINE BANK: COMERICA BANK
By:
---------------------------
Eurocurrency Lending Office: Its: Vice President
Comerica Bank One Detroit Center
One Detroit Center 500 Woodward Avenue
500 Woodward Ave. Detroit, Michigan 48226
9th Floor MC 3289 Attention: Hugh G. Porter
Detroit, Michigan 48226 Telephone: (313) 222-6192
Attention: Sandra Fields Facsimile No. (313) 222-3330
Telephone No. (313) 222-5265
Facsimile No. (313) 222-9434
-84-
<PAGE> 92
REVOLVING CREDIT BANKS: COMERICA BANK
By:
---------------------------
Its: Vice President
Eurocurrency Lending Office: One Detroit Center
Comerica Bank 500 Woodward Avenue
One Detroit Center Detroit, Michigan 48226
500 Woodward Ave. Attention: Hugh G. Porter
9th Floor MC 3289 Telephone: (313) 222-6192
Detroit, Michigan 48226 Facsimile No. (313) 222-3330
Attention: Sandra Fields
Telephone No. (313) 222-5265
Facsimile No. (313) 222-9434
-85-
<PAGE> 93
REVOLVING CREDIT BANK: THE FIFTH THIRD BANK
Eurocurrency Lending Office: By:
----------------------------------
Its: Senior Vice President
The Fifth Third Bank
38 Fountain Square Plaza 38 Fountain Square Plaza
Cincinnati, Ohio 45263 Cincinnati, Ohio 45263
Attention: Edward H. Silva, Jr. Attention: Edward H. Silva, Jr.
Telephone No. (513) 579-5635 Telephone No. (513) 579-5635
Facsimile No. (513) 579-5226 Facsimile No. (513) 579-5226
-86-
<PAGE> 94
REVOLVING CREDIT BANK: THE FIRST NATIONAL BANK OF CHICAGO
By:
----------------------------------
Eurocurrency Lending Office: Its:
---------------------------------
--------------------------- -------------------------------------
--------------------------- -------------------------------------
--------------------------- -------------------------------------
--------------------------- Attention:
--------------------------- ---------------------------
Attention: Telephone:
----------------- ---------------------------
Telephone No. Facsimile No.
-------------- ------------------------
Facsimile No.
--------------
-87-
<PAGE> 95
REVOLVING CREDIT BANK: NBD BANK
Eurocurrency Lending Office: By:
----------------------------------
Its: Vice President
NBD Bank
611 Woodward Avenue 611 Woodward Avenue
Detroit, Michigan 48226 Detroit, Michigan 48226
Attention: Shirley Carroll Attention: Gary C. Wilson
Telephone No. (313) 225-3692 Telephone No. (313) 225-1381
Facsimile No. (313) 225-3269 Facsimile No. (313) 225-3269
-88-
<PAGE> 96
REVOLVING CREDIT BANK: PNC BANK, OHIO, N.A.
By:
----------------------------------
Eurocurrency Lending Office: Its:
---------------------------------
--------------------------- -------------------------------------
--------------------------- -------------------------------------
--------------------------- -------------------------------------
--------------------------- Attention:
--------------------------- ---------------------------
Attention: Telephone:
----------------- ---------------------------
Telephone No. Facsimile No.
-------------- ------------------------
Facsimile No.
--------------
-89-
<PAGE> 97
REVOLVING CREDIT BANK: STAR BANK, N.A.
By:
----------------------------------
Eurocurrency Lending Office: Its:
---------------------------------
--------------------------- -------------------------------------
--------------------------- -------------------------------------
--------------------------- -------------------------------------
--------------------------- Attention:
--------------------------- ---------------------------
Attention: Telephone:
----------------- ---------------------------
Telephone No. Facsimile No.
-------------- ------------------------
Facsimile No.
--------------
-90-
<PAGE> 98
EXHIBITS
FOR $135,000,000 REVOLVING CREDIT
AGREEMENT DATED AS OF APRIL 7, 1995
BY AND AMONG OMNICARE, INC.,
COMERICA BANK, AS AGENT AND THE
BANKS SIGNATORY THERETO
<TABLE>
<S> <C> <C> <C>
1. Exhibit "A" - Form of Request for Revolving Credit Advance
Exhibit "B" - Form of Revolving Credit Note
Exhibit "C" - Form of Notice of Letters of Credit
Exhibit "D" - Form of Request for Swing Line Advance
Exhibit "E" - Form of Swing Line Note
Exhibit "F" - Form of Swing Line Participation Certificate
Exhibit "G" - Percentages
Exhibit "H" - Form of Covenant Compliance Report
Exhibit "I" - Form of Joinder Agreement
Exhibit "J" - Form of Assignment Agreement
Schedule 1 - Applicable L/C Fee Percentage, Applicable
Revolving Commitment Fee Percentage and
Eruocurrency Margins
Schedule 2* - List of Guarantors at Closing
Schedule 3* - Additional Permitted Liens
Schedule 7.5* - Shareholders of Subsidiaries
Schedule 7.13* - Litigation
Schedule 7.18* - Pension Plans
Schedule 7.20* - Environmental Matters
Schedule 7.21* - Contingent Obligations
Schedule 9.5* - Additional Permitted Indebtedness
Schedule 9.9* - Additional Permitted Investments
2. Revolving Credit Notes*
3. Guaranty Agreement*
</TABLE>
* Referenced exhibits will be furnished upon request of the Commission.
<PAGE> 99
EXHIBIT "A"
REQUEST FOR REVOLVING CREDIT ADVANCE
No. Dated:
---------------------- -----------------------
To: Comerica Bank - Agent
Re: Omnicare, Inc. $135,000,000 Revolving Credit Agreement by and among
Comerica Bank (individually and as Agent), the lenders from time to
time parties thereto (collectively, "Banks"), and Omnicare, Inc.
("Company") dated as of April 7, 1995 (as amended from time to time,
the "Agreement").
Pursuant to the Agreement, the Company requests an Advance from Banks
as follows:
A. Date of Advance:
---------------------------
B. Amount of Advance:
$
----------------
/ / Comerica Bank Account No.
--------------
/ / Other:
----------------------------------
----------------------------------
C. Type of Activity:
1. Advance / /
2. Refunding / /
of a Revolving Credit Advance / /
of a Swing Line Advance / /
3. Conversion / /
D. Interest Rate:
1. Prime-based Rate / /
2. Eurocurrency-based Rate / /
E. Interest Period (for Eurocurrency-based Advances only):
1. One (1) Month / /
2. Two (2) Months / /
3. Three (3) Months / /
4. Six (6) Months / /
<PAGE> 100
The Company certifies to the matters specified in Section 2.3(e) of
the Agreement.
OMNICARE, INC.
By:
-------------------------------
Its:
------------------------------
Agent Approval:
--------------------
-2-
<PAGE> 101
EXHIBIT "B"
REVOLVING CREDIT NOTE
$ April 7, 1995
---------------
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Omnicare,
Inc., a Delaware corporation ("Company") promises to pay to the order of [insert
Bank] ("Bank") at Detroit, Michigan, in care of Agent, in lawful money of the
United States of America, the sum of [Insert Amount derived from Percentages]
Dollars ($____________), or so much of said sum as may from time to time have
been advanced and then be outstanding hereunder pursuant to the Omnicare, Inc.
$135,000,000 Revolving Credit Agreement dated as of April 7, 1995, made by and
among the Company, certain banks, including the Bank, and Comerica Bank as Agent
for such banks, as the same may be amended from time to time (the "Agreement"),
together with interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the
Agreement or as otherwise determined thereunder, and interest shall be
computed, assessed and payable as set forth in the Agreement.
This Note is a note under which advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only
in accordance with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in accordance with, and
may be accelerated or matured under, the terms of the Agreement, to which
reference is hereby made. Definitions and terms of the Agreement are hereby
incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
<PAGE> 102
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
OMNICARE, INC.
By:
---------------------------
Its:
--------------------------
-2-
<PAGE> 103
EXHIBIT "C"
LETTER OF CREDIT NOTICE
TO: Members of the Bank Group
RE: Issuance of Letter of Credit pursuant to Article 3 of the Omnicare,
Inc. ("Company") $135,000,000 Revolving Credit Agreement ("Agreement")
dated April 7, 1995 between Company, Agent and the Banks.
On ______________________, 19__,(1) Agent, in accordance with Article 3
of the Agreement, issued its Letter of Credit number _____________, in favor of
____________________(2) for the account of Company [and ___________________].(3)
The face amount of such Letter of Credit is $____________. The amount of each
Bank's participation in the Letter of Credit is as follows:(4)
Comerica Bank $
----------------------------
$
-------------------------------- ----------------------------
$
-------------------------------- ----------------------------
$
-------------------------------- ----------------------------
$
-------------------------------- ----------------------------
This notification is delivered this ____ day of ___________, 19___,
pursuant to Section 3.3 of the Agreement. Except as otherwise defined,
capitalized terms used herein have the meanings given them in the Agreement.
Signed:
COMERICA BANK
By:
-----------------------------
Its:
----------------------------
----------------------------------
(1) Date of Issuance
(2) Beneficiary
(3) Other Account Party (i.e. Subsidiary of Company), if any
(4) Amounts based on Percentages
<PAGE> 104
EXHIBIT "D"
REQUEST FOR SWING LINE ADVANCE
No. Dated:
---------------------- -----------------------
To: Comerica Bank, Swing Line Bank
Re: Omnicare, Inc. $135,000,000 Revolving Credit Agreement by and among
Comerica Bank (individually and as Agent), the lenders from time to
time parties thereto (collectively, "Banks"), and Omnicare, Inc.
("Company") dated as of April 7, 1995 (as amended from time to time,
the "Agreement").
Pursuant to the Agreement, the Company requests a Swing Line Advance
from the Swing Line Bank as follows:
A. Date of Advance:
---------------------------
B. Amount of Advance:
$
----------------
/ / Comerica Bank Account No.
--------------
/ / Other:
----------------------------------
----------------------------------
C. Interest Rate:
1. Prime-based Rate / /
2. Quoted Rate / /
D. Interest Period:
1. days(1)
------------
-----------------------------------
(1) Insert up to 30 days.
<PAGE> 105
The Company certifies to the matters specified in Section 4.3(e) of
the Agreement.
OMNICARE, INC.
By:
--------------------------------
Its:
-------------------------------
Swing Line Bank Approval:
--------------------
-2-
<PAGE> 106
EXHIBIT "E"
SWING LINE NOTE
$5,000,000 April __, 1995
On the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Omnicare,
Inc., a Delaware corporation ("Company") promises to pay to the order of
Comerica Bank ("Bank") at 500 Woodward Avenue, Detroit, Michigan in lawful
money of the United States of America, the sum of Five Million Dollars
($5,000,000), or so much of said sum as may from time to time have been
advanced and then be outstanding hereunder pursuant to Article 4 of the
Omnicare, Inc. $135,000,000 Revolving Credit Agreement dated as of April __,
1995, executed by and among the Company, certain banks, including the Bank, and
Comerica Bank as Agent for such banks, as the same may be amended from time to
time (the "Agreement"), together with interest thereon as hereinafter set
forth.
The unpaid principal indebtedness from time to time outstanding under
this Note shall be due and payable on the last day of the Interest Period
applicable thereto or as otherwise set forth in the Agreement, provided that no
Swing Line Advance may mature or be payable on a day later than the Revolving
Credit Maturity Date.
Each of the Swing Line Advances made hereunder shall bear interest at
the Prime-based Rate or the Quoted Rate from time to time applicable thereto
under the Agreement or as otherwise determined thereunder, and interest shall
be computed, assessed and payable as set forth in the Agreement.
This Note is a note under which advances, repayments and readvances
may be made from time to time, but only in accordance with the terms and
conditions of the Agreement. This Note evidences borrowings under, is subject
to, is secured in accordance with, and may be accelerated or matured under, the
terms of the Agreement, to which reference is hereby made. Definitions and
terms of the Agreement are hereby incorporated by reference herein.
This Note shall be interpreted and the rights of the parties hereunder
shall be determined under the laws of, and enforceable in, the State of
Michigan.
Company hereby waives presentment for payment, demand, protest and
notice of dishonor and nonpayment of this Note and agrees that no obligation
hereunder shall be discharged by reason of any extension, indulgence, release,
or forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.
<PAGE> 107
Nothing herein shall limit any right granted Bank by any other
instrument or by law.
OMNICARE, INC.
By:
---------------------------
Its:
--------------------------
-2-
<PAGE> 108
EXHIBIT F
FORM OF
SWING LINE LOAN PARTICIPATION CERTIFICATE
, 19
------------------ --
[Name of Bank]
--------------------------
--------------------------
Ladies and Gentlemen:
Pursuant to subsection 4.5(b) of the Revolving Credit Agreement dated
as of April 7, 1995, among Omnicare, Inc., the Banks named therein and Comerica
Bank, as Agent, the undersigned hereby acknowledges receipt from you of
$___________________ as payment for a participating interest in the following
Swing Line Loan:
Date of Swing Line Loan:
--------------------------------
Principal Amount of Swing Line Loan:
--------------------
The participation evidenced by this certificate shall be subject to the terms
and conditions of the Revolving Credit Agreement including without limitation
Section 4.5(b) thereof.
Very truly yours,
COMERICA BANK, as Agent
By:
----------------------------
Its:
---------------------------
<PAGE> 109
EXHIBIT G
PERCENTAGES
<TABLE>
<CAPTION>
BANK PERCENTAGE
---- ----------
<S> <C>
Comerica Bank 29.629629629%
NBD Bank 22.222222222%
The First National Bank of Chicago 14.814814814%
PNC Bank, Ohio, N.A.
14.814814814%
The Fifth Third Bank 11.111111111%
Star Bank 7.407407407%
</TABLE>
<PAGE> 110
EXHIBIT "H"
COVENANT COMPLIANCE AND INTEREST RATE ADJUSTMENT REPORT
To: Comerica Bank
Re: Omnicare, Inc. $135,000,000 Revolving Credit Agreement dated
as of April 7, 1995 (the "Agreement")
This Covenant Compliance and Interest Rate Adjustment Report
("Report") is furnished pursuant to Section 8.3 of the Agreement and sets forth
various information as of _____________, 19__ (the "Computation Date").
1. Leverage Ratio. On the Computation Date, the Leverage Ratio,
which is required to be not more than 3.0 to 1.0 was __________ as computed in
the supporting documents attached hereto as Schedule 1.
2. Fixed Charge Coverage Ratio. On the Computation Date, the
Fixed Charge Coverage Ratio, which is required to be not less than 1.35 to 1.0
was _________ as computed in the supporting documents attached hereto as
Schedule 2.
3. Net Worth. On the Computation Date, the base Net Worth, which
is required to be not less than $___________ was $__________ as computed in
the supporting documents attached as Schedule 3.
4. Eurocurrency Margin. The aggregate applicable Margin which
shall become effective pursuant to the provisions of Section 5.1 of the
Agreement and which is based on the Fixed Charge Coverage Ratio on the
Computation Date is _______________________ percent (_____%).
The undersigned officer of Company hereby certifies that:
A. All of the information set forth in this Report (and in any
Schedule attached hereto) is true and correct in all material respects.
B. As of the Computation Date, the Company has observed and
performed all of its covenants and other agreements contained in the Agreement
and in the Notes and any other Loan Documents to be observed, performed and
satisfied by them.
C. I have reviewed the Agreement and this Report is based on an
examination sufficient to assure that this Report is accurate.
D. Except as stated in Schedule 4 hereto (which shall describe
any existing Event of Default or event which with the passage of time and/or
the giving of notice, would constitute an
<PAGE> 111
Event of Default and the notice and period of existence thereof and any action
taken with respect thereto or contemplated to be taken by Company), no Event of
Default, or event which with the passage of time and/or the giving of notice
would constitute an Event of Default, has occurred and is continuing on the date
of this Report.
Capitalized terms used in this Report and in the schedules hereto,
unless specifically defined to the contrary, have the meanings given to them in
the Agreement.
IN WITNESS WHEREOF, Company has caused this Report to be executed and
delivered by its duly authorized officer this ______ day of __________________,
19__.
OMNICARE, INC.
By:
---------------------------
Its:
--------------------------
-2-
<PAGE> 112
EXHIBIT "I"
JOINDER AGREEMENT
THIS JOINDER AGREEMENT is dated as of ______________, 199_ by
_____________________, a ______________________ corporation ("New Guarantor").
WHEREAS, pursuant to Section 8.15 of that certain Omnicare, Inc.
$135,000,000 Revolving Credit Agreement dated as of April 7, 1995 (the "Loan
Agreement") by and among Omnicare, Inc. ("Company"), the Banks signatory
thereto and Comerica Bank, as Agent for the Banks (in such capacity, "Agent"),
and pursuant to Section 5.7 of that certain Guaranty dated as of April 7, 1995
(the "Guaranty") executed and delivered by the Guarantors named therein
("Guarantors") in favor of Agent, for and on behalf of the Banks, the New
Guarantor must execute and deliver a Joinder Agreement in accordance with the
Loan Agreement and the Guaranty.
NOW THEREFORE, as a further inducement to Banks to continue to provide
credit accommodations to Company and the Account Parties (as defined in the
Loan Agreement), New Guarantor hereby covenants and agrees as follows:
1. All capitalized terms used herein shall have the meanings
assigned to them in the Loan Agreement unless expressly
defined to the contrary.
2. New Guarantor hereby enters into this Joinder Agreement in
order to comply with Section 8.15 of the Loan Agreement and
Section 5.7 of the Guaranty and does so in consideration of
the Advances made or to be made from time to time under the
Loan Agreement (and the other Loan Documents, as defined in
the Loan Agreement), from which New Guarantor shall derive
direct and indirect benefit as with the other Guarantors (all
as set forth and on the same basis as in the Guaranty).
3. New Guarantor shall be considered, and deemed to be, for all
purposes of the Loan Agreement, the Guaranty and the other
Loan Documents, a Guarantor under the Guaranty as fully as
though New Guarantor had executed and delivered the Guaranty
at the time originally executed and delivered under the Loan
Agreement and hereby ratifies and confirms its obligations
under the Guaranty, all in accordance with the terms thereof.
4. No Default or Event of Default (each such term being defined
in the Loan Agreement) has occurred and is continuing under
the Loan Agreement.
<PAGE> 113
5. This Joinder Agreement shall be governed by the laws of the
State of Michigan and shall be binding upon New Guarantor and
its successors and assigns.
IN WITNESS WHEREOF, the undersigned New Guarantor has executed and
delivered this Joinder Agreement as of __________________, 199__.
[NEW GUARANTOR]
By:
------------------------------
Its:
-----------------------------
-2-
<PAGE> 114
EXHIBIT "J"
FORM OF
ASSIGNMENT AGREEMENT
Date:
-------------------
To: Omnicare, INC.
and
COMERICA BANK ("Agent")
Re: Omnicare, Inc. $135,000,000 Revolving Credit Agreement dated as of
April 7, 1995 (the "Agreement"), among Omnicare, Inc. ("Company"),
Agent and certain Banks
Gentlemen and Ladies:
Reference is made to Section 14.8(c), (d) and (e) of the Agreement.
Unless otherwise defined herein or the context otherwise requires, all
initially capitalized terms used herein without definition shall have the
meanings specified in the Agreement.
This Agreement constitutes notice to each of you of the proposed
assignment and delegation by [insert assignor Bank] (the "Assignor") to
[insert proposed assignee] (the "Assignee") of a _____% undivided interest in
Assignor's Revolving Credit Note under the Agreement (the "Note"), such that
after giving effect to the assignment and assumption hereafter provided the
Assignee's interest in the Note shall equal $_____________(1) and its Percentage
shall equal ___% under the Loan Documents.
The Assignor hereby instructs the Agent to make all payments from and
including the "Effective Date" (as hereafter defined) hereof in respect of the
interest assigned hereby, directly to the Assignee. The Assignor and the
Assignee agree that all interest and fees accrued up to, but not including, the
Effective Date of the assignment and delegation being made hereby are the
property of the Assignor, and not the Assignee. The Assignee agrees that, upon
receipt of any such interest or fees accrued up to the Effective Date, the
Assignee will promptly remit the same to the Assignor.
The Assignee hereby confirms that it has received a copy of the
Agreement and the exhibits and schedules referred to therein, and all other
Loan Documents which it considers necessary,
----------------------------------
(1) Such amount shall not be less than a minimum amount of $10,000,000.
<PAGE> 115
together with copies of the other documents which were required to be delivered
under the Agreement as a condition to the making of the loans thereunder. The
Assignee acknowledges and agrees that it: (a) has made and will continue to
make such inquiries and has taken and will take such care on its own behalf as
would have been the case had its Percentage been granted and its loans been
made directly by such Assignee to the Company without the intervention of the
Agent, the Assignor or any other bank; and (b) has made and will continue to
make, independently and without reliance upon the Agent, the Assignor or any
other bank, and based on such documents and information as it has deemed
appropriate, its own credit analysis and decisions relating to the Agreement.
The Assignee further acknowledges and agrees that neither the Agent, nor the
Assignor has made any representations or warranties about the creditworthiness
of the Company, or any other party to the Agreement or any other of the Loan
Documents, or with respect to the legality, validity, sufficiency or
enforceability of the Agreement, or any other of the Loan Documents. This
assignment shall be made without recourse to or warranty by the Assignor,
except as set forth herein.
Assignee represents and warrants that it is a Person to which
assignments are permitted pursuant to Section 14.8(c) of the Agreement.
Assignor and Assignee represent and warrant that this assignment shall not
violate any "blue sky" or other securities law of any jurisdiction or require
the Company or any other Person to file a registration statement with the
United States Securities and Exchange Commission or apply to qualify any loans
or any interest in any thereof, under the "blue sky" or other securities laws
of any jurisdiction.
Except as otherwise provided in the Agreement, effective as of the
Effective Date:
(a) the Assignee: (i) shall be deemed automatically to have become
a party to the Agreement, to have assumed all of the Assignor's
obligations thereunder to the extent of the Assignee's
percentage referred to in the second paragraph of this
Assignment Agreement, and to have all the rights and
obligations of a party to the Agreement, as if it were an
original signatory thereto to the extent specified in the
second paragraph hereof; and (ii) agrees to be bound by the
terms and conditions set forth in the Agreement as if it were
an original signatory thereto; and
(b) the Assignor's obligations under the Agreement shall be
reduced by the percentage referred to in the second paragraph
of this Assignment Agreement.
-2-
<PAGE> 116
As used herein, the term "Effective Date" means the date on
which all of the following have occurred or have been completed, as reasonably
determined by the Agent:
(1) the delivery to the Agent of an original of this Assignment
Agreement executed by the Assignor and the Assignee;
(2) the payment to the Agent, of all accrued fees, expenses and
other items for which reimbursement is then owing under the
Agreement;
(3) the payment to the Agent of the $3,000 processing fee referred
to in Section 14.8(d) (iv) of the Agreement; and
(4) all other restrictions and items noted in Sections 14.8(c),
(d) and (e) of the Agreement have been satisfied.
The Agent shall notify the Assignor and the Assignee of the Effective Date.
The Assignee hereby advises each of you of the following
administrative details with respect to the assigned loans:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
(C) Proposed effective date of assignment.
The Assignee has delivered to the Agent (or is delivering to the Agent
concurrently herewith) the tax forms referred to in Section 14.14 of the
Agreement, other forms reasonably requested by the Agent, and the original of
each Note held by the Assignor under the Agreement.
-3-
<PAGE> 117
Please evidence your consent to and acceptance of the proposed
assignment and delegation set forth herein by signing and returning
counterparts hereof to the Assignor and the Assignee.
[ASSIGNOR]
By:
----------------------------
Its:
---------------------------
[ASSIGNEE]
By:
----------------------------
Its:
---------------------------
ACCEPTED AND CONSENTED TO
this ___ day of ________, 199_
COMERICA BANK, Agent
By:
-----------------------------
Its:
----------------------------
OMNICARE, INC.
By:
-----------------------------
Its:
----------------------------
[This form of Assignment Agreement (including footnotes) is subject in all
respects to the terms and conditions of the Agreement which shall govern in the
event of any inconsistencies or omissions.]
-4-
<PAGE> 118
SCHEDULE 1
APPLICABLE FEE PERCENTAGE
AND EUROCURRENCY MARGINS
(EXPRESSED AS BASIS POINTS PER ANNUM)
<TABLE>
<CAPTION>
==========================================================================================================================
BASIS FOR PRICING LEVEL I LEVEL II LEVEL III
==========================================================================================================================
<S> <C> <C> <C>
Less than or equal to Less than or equal to
Fixed Charge Coverage Ratio Greater than 2.0 to 1.00 2.0 to 1.0 but greater 1.65 to 1.0
than 1.65 to 1.0
--------------------------------------------------------------------------------------------------------------------------
Eurocurrency Margin 25.0 37.5 75.0
--------------------------------------------------------------------------------------------------------------------------
Letters of Credit Fee (Section 3.4) 25.0 37.5 75.0
--------------------------------------------------------------------------------------------------------------------------
Commitment Fee (Section 2.6) 10.0 18.75 25.0
==========================================================================================================================
</TABLE>
<PAGE> 1
Exhibit 11 Omnicare, Inc. and Subsidiary Companies
Computation of Earnings Per Common Share
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ----------------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Primary Earnings*
Net income $ 4,896 $ 3,563 $10,147 $ 6,972
Aftertax expense related to preferred
stock dividend payable to minority
interest in subsidiary 3 - 6 -
Minority interest in net income of
subsidiary (6) - (10) -
------- ------- ------- -------
Net income as adjusted $ 4,893 $ 3,563 $10,143 $ 6,972
======= ======= ======= =======
Shares
Weighted average number of common
shares outstanding 26,230 22,111 26,100 22,087
Additional shares assuming conversion of:
Stock options and stock warrants 610 342 622 324
------- ------- ------- -------
Average common shares outstanding and
equivalent as adjusted 26,840 22,453 26,722 22,411
------- ------- ------- -------
Primary earnings per common share $ 0.18 $ 0.16 $ 0.38 $ 0.31
======= ======= ======= =======
Fully Diluted Earnings
Net income $ 4,896 $ 3,563 $10,147 $ 6,972
Aftertax expense related to preferred stock
divided payable to minority interest in
subsidiary 3 - 6 -
Minority interest in net income of subsidiary (6) - (10) -
Aftertax interest expense related to 5 3/4%
convertible subordinated debentures 802 811 1,605 1,621
------- ------- ------- -------
Net income as adjusted $ 5,695 $ 4,374 $11,748 $ 8,593
======= ======= ======= =======
Shares
Weighted average number of common
shares outstanding 26,230 22,111 26,100 22,087
Additional shares assuming conversion of:
Stock options and stock warrants 701 380 715 344
Convertible subordinated debentures 5,575 5,576 5,575 5,576
------- ------- ------- -------
Average common shares outstanding and
equivalents as adjusted 32,506 28,067 32,390 28,007
------- ------- ------- -------
Fully diluted earnings per common share $ 0.18 $ 0.16 $ 0.36 $ 0.31
======= ======= ======= =======
</TABLE>
* This calculation is submitted in accordance with Regulation S-K Item
602(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 if it results in dilution of less than 3% or is
anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000353230
<NAME> OMNICARE, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 28,090
<SECURITIES> 26,005
<RECEIVABLES> 72,772
<ALLOWANCES> 3,981
<INVENTORY> 25,638
<CURRENT-ASSETS> 159,113
<PP&E> 42,853
<DEPRECIATION> 15,248
<TOTAL-ASSETS> 330,696
<CURRENT-LIABILITIES> 42,441
<BONDS> 82,720
<COMMON> 26,280
0
0
<OTHER-SE> 172,534
<TOTAL-LIABILITY-AND-EQUITY> 330,696
<SALES> 187,652
<TOTAL-REVENUES> 187,652
<CGS> 136,047
<TOTAL-COSTS> 136,047
<OTHER-EXPENSES> 33,254
<LOSS-PROVISION> 1,452
<INTEREST-EXPENSE> 3,207
<INCOME-PRETAX> 17,225
<INCOME-TAX> 7,078
<INCOME-CONTINUING> 10,147
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,147
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.36
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000353230
<NAME> OMNICARE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 25,616
<SECURITIES> 45,980
<RECEIVABLES> 69,231
<ALLOWANCES> 3,891
<INVENTORY> 25,264
<CURRENT-ASSETS> 172,251
<PP&E> 39,458
<DEPRECIATION> 13,852
<TOTAL-ASSETS> 336,826
<CURRENT-LIABILITIES> 49,860
<BONDS> 85,175
<COMMON> 15,609
0
0
<OTHER-SE> 178,339
<TOTAL-LIABILITY-AND-EQUITY> 336,826
<SALES> 90,527
<TOTAL-REVENUES> 90,527
<CGS> 65,879
<TOTAL-COSTS> 65,879
<OTHER-EXPENSES> 15,413
<LOSS-PROVISION> 560
<INTEREST-EXPENSE> 1,631
<INCOME-PRETAX> 8,700
<INCOME-TAX> 3,449
<INCOME-CONTINUING> 5,251
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,251
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.19
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000353230
<NAME> OMNICARE, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 34,553
<SECURITIES> 45,245
<RECEIVABLES> 63,764
<ALLOWANCES> 3,681
<INVENTORY> 21,116
<CURRENT-ASSETS> 170,260
<PP&E> 36,724
<DEPRECIATION> 13,272
<TOTAL-ASSETS> 317,205
<CURRENT-LIABILITIES> 44,710
<BONDS> 85,323
<COMMON> 15,336
0
0
<OTHER-SE> 164,768
<TOTAL-LIABILITY-AND-EQUITY> 317,205
<SALES> 307,655
<TOTAL-REVENUES> 307,655
<CGS> 227,533
<TOTAL-COSTS> 227,533
<OTHER-EXPENSES> 52,491
<LOSS-PROVISION> 2,298
<INTEREST-EXPENSE> 6,533
<INCOME-PRETAX> 22,678
<INCOME-TAX> 9,147
<INCOME-CONTINUING> 13,531
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,531
<EPS-PRIMARY> 0.60
<EPS-DILUTED> 0.59
</TABLE>
