EXHIBIT 10.1
TERM LOAN AND GUARANTY AGREEMENT
dated as of December 22, 2005
among
AUTOCAM CORPORATION,
as Borrower
TITAN HOLDINGS, INC.,
and
CERTAIN SUBSIDIARIES OF AUTOCAM CORPORATION,
as Guarantors
VARIOUS LENDERS
THE BANK OF NEW YORK,
as Administrative Agent and Collateral Agent
and
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Syndication Agent, Lead Arranger and Sole Bookrunner
----------
$60,000,000
E12,668,918.92
Senior Secured Credit Facility
----------
TABLE OF CONTENTS
PAGE
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(1) SECTION 1. DEFINITIONS AND INTERPRETATION.................................. 1
1.1 Definitions......................................................... 1
1.2 Accounting Terms.................................................... 32
1.3 Interpretation, etc................................................. 32
(2) SECTION 2. LOANS........................................................... 33
2.1 Term Loans.......................................................... 33
2.2 Pro Rata Shares..................................................... 34
2.3 Use of Proceeds..................................................... 34
2.4 Evidence of Debt; Register; Lenders' Books and Records; Notes....... 34
2.5 Interest on Loans................................................... 35
2.6 Conversion/Continuation............................................. 37
2.7 Default Interest.................................................... 37
2.8 Fees................................................................ 38
2.9 Repayment of Loans.................................................. 38
2.10 Voluntary Prepayments/Commitment Reductions......................... 38
2.11 Mandatory Prepayments............................................... 41
2.12 Application of Prepayments/Reductions............................... 42
2.13 General Provisions Regarding Payments............................... 43
2.14 Ratable Sharing..................................................... 44
2.15 Making or Maintaining Eurocurrency Rate Loans....................... 45
2.16 Increased Costs; Capital Adequacy................................... 47
2.17 Taxes; Withholding, etc............................................. 48
2.18 Obligation to Mitigate.............................................. 51
2.19 Removal or Replacement of a Lender.................................. 51
(3) SECTION 3. CONDITIONS PRECEDENT............................................ 52
3.1 Closing Date........................................................ 52
3.2 Additional Conditions to the Credit Extension....................... 56
(4) SECTION 4. REPRESENTATIONS AND WARRANTIES.................................. 57
4.1 Organization; Requisite Power and Authority; Qualification.......... 57
4.2 Capital Stock and Ownership......................................... 57
4.3 Due Authorization................................................... 58
4.4 No Conflict......................................................... 58
4.5 Governmental Consents............................................... 58
4.6 Binding Obligation.................................................. 58
4.7 Historical Financial Statements..................................... 59
4.8 Projections......................................................... 59
4.9 No Material Adverse Change.......................................... 59
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TABLE OF CONTENTS
(CONT'D)
PAGE
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4.10 No Restricted Junior Payments....................................... 59
4.11 Adverse Proceedings, etc............................................ 59
4.12 Payment of Taxes.................................................... 59
4.13 Properties.......................................................... 60
4.14 Environmental Matters............................................... 60
4.15 No Defaults......................................................... 61
4.16 Material Contracts.................................................. 61
4.17 Governmental Regulation............................................. 61
4.18 Margin Stock........................................................ 61
4.19 Employee Matters.................................................... 61
4.20 Employee Benefit Plans.............................................. 62
4.21 Certain Fees........................................................ 62
4.22 Solvency............................................................ 62
4.23 First Lien Credit Agreement and Other Agreements.................... 62
4.24 Compliance with Statutes, etc....................................... 63
4.25 Disclosure.......................................................... 63
4.26 Second Lien Claims.................................................. 63
4.27 Quarterly Financials................................................ 63
(5) SECTION 5. AFFIRMATIVE COVENANTS........................................... 63
5.1 Financial Statements and Other Reports.............................. 64
5.2 Existence........................................................... 67
5.3 Payment of Taxes and Claims......................................... 67
5.4 Maintenance of Properties........................................... 67
5.5 Insurance........................................................... 67
5.6 Inspections......................................................... 68
5.7 Lenders Meetings.................................................... 68
5.8 Compliance with Laws................................................ 68
5.9 Environmental....................................................... 69
5.10 Subsidiaries........................................................ 70
5.11 Additional Material Real Estate Assets.............................. 70
5.12 Interest Rate Protection............................................ 71
5.13 Further Assurances.................................................. 71
5.14 Control Agreements.................................................. 71
(6) SECTION 6. NEGATIVE COVENANTS.............................................. 72
6.1 Indebtedness........................................................ 72
6.2 Liens............................................................... 76
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TABLE OF CONTENTS
(CONT'D)
PAGE
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6.3 Equitable Lien...................................................... 78
6.4 No Further Negative Pledges......................................... 78
6.5 Restricted Junior Payments.......................................... 79
6.6 Restrictions on Subsidiary Distributions............................ 79
6.7 Investments......................................................... 80
6.8 Financial Covenant.................................................. 81
6.9 Fundamental Changes; Disposition of Assets; Acquisitions............ 82
6.10 Disposal of Subsidiary Interests.................................... 83
6.11 Sales and Lease-Backs............................................... 84
6.12 Transactions with Shareholders and Affiliates....................... 84
6.13 Conduct of Business................................................. 85
6.14 Permitted Activities of Holdings.................................... 85
6.15 Amendments or Waivers with respect to First Lien Credit Agreement... 85
6.16 Amendments or Waivers with respect to Subordinated Indebtedness..... 85
6.17 Fiscal Year......................................................... 86
(7) SECTION 7. GUARANTY........................................................ 86
7.1 Guaranty of the Obligations......................................... 86
7.2 Contribution by Guarantors.......................................... 86
7.3 Payment by Guarantors............................................... 87
7.4 Liability of Guarantors Absolute.................................... 87
7.5 Waivers by Guarantors............................................... 89
7.6 Guarantors' Rights of Subrogation, Contribution, etc................ 90
7.7 Subordination of Other Obligations.................................. 90
7.8 Continuing Guaranty................................................. 90
7.9 Authority of Guarantors or Company.................................. 91
7.10 Financial Condition of Company...................................... 91
7.11 Bankruptcy, etc..................................................... 91
7.12 Discharge of Guaranty Upon Sale of Guarantor........................ 92
7.13 Dutch Law Limitation................................................ 92
(8) SECTION 8. EVENTS OF DEFAULT............................................... 92
8.1 Events of Default................................................... 92
(9) SECTION 9. AGENTS.......................................................... 95
9.1 Appointment of Agents............................................... 95
9.2 Powers and Duties................................................... 96
9.3 General Immunity.................................................... 96
9.4 Agents Entitled to Act as Lender.................................... 98
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TABLE OF CONTENTS
(CONT'D)
PAGE
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9.5 Lenders' Representations, Warranties and Acknowledgment............. 98
9.6 Right to Indemnity.................................................. 98
9.7 Successor Administrative Agent, Collateral Agent.................... 99
9.8 Collateral Documents, Guaranty and Intercreditor Agreement.......... 100
9.9 Dutch Collateral Debt Covenant...................................... 100
9.10 USA Patriot Act..................................................... 102
(10)SECTION 10. MISCELLANEOUS.................................................. 102
10.1 Notices............................................................. 102
10.2 Expenses............................................................ 104
10.3 Indemnity........................................................... 105
10.4 Set-Off............................................................. 105
10.5 Amendments and Waivers.............................................. 106
10.6 Successors and Assigns; Participations.............................. 107
10.7 Independence of Covenants........................................... 110
10.8 Survival of Representations, Warranties and Agreements.............. 110
10.9 No Waiver; Remedies Cumulative...................................... 110
10.10 Marshalling; Payments Set Aside..................................... 111
10.11 Severability........................................................ 111
10.12 Obligations Several; Independent Nature of Lenders' Rights.......... 111
10.13 Headings............................................................ 111
10.14 APPLICABLE LAW...................................................... 111
10.15 CONSENT TO JURISDICTION............................................. 111
10.16 WAIVER OF JURY TRIAL................................................ 112
10.17 Confidentiality..................................................... 112
10.18 Usury Savings Clause................................................ 113
10.19 Counterparts........................................................ 114
10.20 Judgment Currency................................................... 114
10.21 Effectiveness....................................................... 114
10.22 Intercreditor Agreement............................................. 114
iv
APPENDIX: A Notice Addresses
SCHEDULES: 3.1(e) Closing Date Mortgaged Properties
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Form of Funding Notice
A-2 Form of Conversion/Continuation Notice
B-1 Form of Dollar Term Loan Note
B-2 Form of Euro Term Loan Note
C Form of Compliance Certificate
D Form of Assignment Agreement
E Form of Certificate Re Non-bank Status
F-1 Form of Closing Date Certificate
F-2 Form of Solvency Certificate
G Form of Counterpart Agreement
H Form of Pledge and Security Agreement
I Form of Mortgage
v
TERM LOAN AND GUARANTY AGREEMENT
This TERM LOAN AND GUARANTY AGREEMENT, dated as of December 22, 2005, is entered
into by and among AUTOCAM CORPORATION, a Michigan corporation ("Company"), TITAN
HOLDINGS, INC., a Delaware corporation ("Holdings"), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party hereto from time to time, GOLDMAN
SACHS CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, and Sole Bookrunner (in
such capacities, the "Lead Arranger"), as Syndication Agent (in such capacity,
"Syndication Agent"), and THE BANK OF NEW YORK ("BNY"), as Administrative Agent
(together with its permitted successors in such capacity, "Administrative
Agent") and as Collateral Agent (together with its permitted successor in such
capacity, "Collateral Agent").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend certain senior secured second lien term
loans to Company, comprised of $60,000,000 of U.S. Dollar denominated term loans
and E12,668,918.92 Euro denominated term loans, the proceeds of which shall be
applied as described herein;
WHEREAS, Company has agreed to secure all of the Obligations by granting to
Collateral Agent, for the benefit of Secured Parties, a Second Priority Lien on
substantially all of its assets, including a pledge of all of the Capital Stock
of each of its Domestic Subsidiaries and certain of its Foreign Subsidiaries and
65% of all the Capital Stock of its remaining Foreign Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Company
hereunder and to secure their respective Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, a Second Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Domestic Subsidiaries and certain
Foreign Subsidiaries and 65% of all the Capital Stock of each of their
respective remaining Foreign Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"Additional Sponsor Equity" means Cash proceeds received by Parent from the
issuance of its Capital Stock to, or other capital contributions by, one or more
Sponsors for their own account on any day after the Closing Date. "Adjusted
Eurocurrency Rate" means, for any Interest Rate Determination Date with respect
to an Interest Period for a Eurocurrency Rate Loan, the rate per annum obtained
by dividing (and rounding upward to the next whole multiple of 1/16 of 1%) (i)
(a) in the case of a Eurocurrency Rate Loan denominated in Dollars, the rate per
annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by
Administrative Agent to be the offered rate which appears on the page of the
Telerate Screen which displays an average British Bankers Association Interest
Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a
term equivalent to such period in Dollars, determined as of approximately 11:00
a.m. (London, England time) on such Interest Rate Determination Date, (b) in the
case of a Eurocurrency Rate Loan denominated in Euro, the offered quotation
which appears on the page of the Telerate Screen which displays an average rate
of the Banking Federation of the EMU for the euro (currently being page 248) for
deposits (for delivery on the first day of such period) with a term equivalent
to such period in Euro, determined as of approximately 11:00 A.M. (London,
England time) on such Interest Rate Determination Date, (c) in the event the
rate referenced in the preceding clause (a) or (b), as applicable, does not
appear on such page or service or if such page or service shall cease to be
available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the
rate determined by Administrative Agent to be the offered rate on such other
page or other service which displays, in the case of Eurocurrency Rate Loans in
Dollars, an average British Bankers Association Interest Settlement Rate for
deposits (for delivery on the first day of such period) with a term equivalent
to such period in Dollars, or in the case of a Eurocurrency Rate Loan in Euro,
the average rate of the Banking Federation of the EMU for deposits (for delivery
on the first day of such period) with a term equivalent to such period in Euros,
in each case determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (d) in the event the rates referenced
in the preceding clauses (a), (b) and (c) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market or European Interbank market,
as applicable, by BNY for deposits (for
delivery on the first day of the relevant period) in Dollars or Euro, as
applicable, of amounts in same day funds comparable to the principal amount of
the applicable Loan of Administrative Agent, in its capacity as a Lender, for
which the Adjusted Eurocurrency Rate is then being determined with maturities
comparable to such period as of approximately 11:00 a.m. (London, England time)
on such Interest Rate Determination Date, by (ii) an amount equal to (a) one
minus (b) the Applicable Reserve Requirement.
"Administrative Agent" as defined in the preamble hereto.
"Adverse Proceeding" means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration (whether or
not purportedly on behalf of Holdings or any of its Subsidiaries) at law or in
equity, or before or by any Governmental Authority, domestic or foreign
(including any Environmental Claims), whether pending or, to the knowledge of
Holdings or any of its Subsidiaries, threatened against or affecting Holdings or
any of its Subsidiaries or any property of Holdings or any of its Subsidiaries.
"Affected Lender" as defined in Section 2.15(b).
"Affected Loans" as defined in Section 2.15(b).
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person, provided no Person shall be an Affiliate of Holdings, Company or any of
its Subsidiaries solely because such Person controls, or is under common control
with, one or more of the entities constituting the Sponsors. For the purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power (i) to
vote 10% or more of the Securities having ordinary voting power for the election
of directors of such Person or (ii) to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agent" means each of Syndication Agent, Administrative Agent and Collateral
Agent.
"Aggregate Amounts Due" as defined in Section 2.14.
"Aggregate Payments" as defined in Section 7.2.
"Agreement" means this Term Loan and Guaranty Agreement, dated as of December
22, 2005, as it may be amended, supplemented or otherwise modified from time to
time.
"Applicable Margin" means (A) with respect to Dollar Term Loans (i) 8.50% per
annum with respect to such Loans that are Eurocurrency Rate Loans and (ii) 7.50%
per annum with respect to such Loans that are Base Rate Loans, and (B) with
respect to Euro Term Loans, 9.50% per annum.
"Applicable Reserve Requirement" means, at any time, for any Eurocurrency Rate
Loan, the maximum rate, expressed as a decimal, at which reserves (including,
without limitation, any basic marginal, special, supplemental, emergency or
other reserves) are required to be maintained with respect thereto against
"Eurocurrency liabilities" (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System or other applicable banking regulator. Without limiting the
effect of the foregoing, the Applicable Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to which
the applicable Adjusted Eurocurrency Rate or any other interest rate of a Loan
is to be determined, or (ii) any category of extensions of credit or other
assets which include Eurocurrency Rate Loans, including a percentage rate per
annum determined by Administrative Agent to reflect the requirements of the Bank
of England and/or the Financial Services Authority and/or the European Central
Bank in respect of monetary control, liquidity or otherwise. A Eurocurrency Rate
Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurocurrency Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.
"Asset Sale" means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than Company or any Guarantor
Domestic Subsidiary), in one transaction or a series of transactions, of all or
any part of Holdings' or any of its Subsidiaries' businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of Holdings' Subsidiaries, other than (i)
inventory (or other assets) sold or leased in the ordinary course of business,
(ii) Cash Equivalents sold for Cash or Cash Equivalents in the ordinary course
of business of Company and its Subsidiaries, (iii) the sale or discount without
recourse of accounts receivable only in connection with the compromise thereof
or the assignment of past-due accounts receivable for collection, (iv) sales of
other assets for aggregate consideration of less than $1,150,000 with respect to
any transaction or series of related transactions and less than $5,750,000 in
the aggregate during any Fiscal Year, and (v) the sale, transfer, lease, other
disposition or relocation of equipment by Bouverat or Frank & Pignard to the New
Polish Subsidiary (or to a plant
2
owned or leased by such New Polish Subsidiary); provided, that, the aggregate
fair market value of such equipment when sold, transferred, leased, disposed of
or relocated by Bouverat or Frank & Pignard to the New Polish Subsidiary (or to
a plant owned or leased by such New Polish Subsidiary) and not sold,
transferred, leased, disposed of or relocated back to Bouverat or Frank &
Pignard shall not exceed $9,775,000, unless such equipment remains or becomes
subject to a perfected security interest (or analogous Lien) under applicable
law reasonably satisfactory to Administrative Agent and Syndication Agent
securing either Obligations under this Agreement or intercompany loans permitted
hereby that are pledged as Collateral to the Collateral Agent. The Collateral
Agent shall (x) grant its consent to any transaction described in the foregoing
clauses (i) - (v), if consent is necessary to permit any such transaction under
any Collateral Document, and (y) at the request and sole expense of such
transferor, execute and deliver all releases or other documents reasonably
necessary or desirable for the release of the Liens created by any of the
Collateral Documents on the property that is the subject of such transaction.
"Assignment Agreement" means an Assignment and Assumption Agreement
substantially in the form of Exhibit D, with such amendments or modifications as
may be approved by Administrative Agent.
"Authorized Officer" means, as applied to any Person, any individual holding the
position of chairman of the board (if an officer), chief executive officer,
president or one of its vice presidents (or the equivalent thereof), and such
Person's chief financial officer or treasurer.
"Autocam Brazil" means Autocam do Brasil Usinagem Ltda., a limited liability
company organized and existing under the laws of Brazil.
"Autocam Europe" means Autocam Europe, B.V., a corporation organized and
existing under the laws of the Netherlands.
"Autocam France" means Autocam France, Sarl, a French societe a responsabilite
limitee (limited liability company).
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"Base Rate" means, for any day, a rate per annum equal to the greater of (i) the
Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"Base Rate Loan" means a Loan bearing interest at a rate determined by reference
to the Base Rate.
"Beneficiary" means each Agent, Lender and Lender Counterparty.
"Bouverat" means Bouverat Industries, S.A.S., a French societe par actions
simplifiee.
"Brazilian Security Documents" means (a) all intercompany note(s) (or other
similar agreement(s) under the laws of Brazil) evidencing intercompany loans
made by the Company to Autocam Brazil, and (b) all pledge or assignment
agreement(s) evidencing the pledge or assignment of the note or other document
described in clause (a) by Company to secure the Obligations.
"Business Day" means (i) any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the States of New York or Texas or is a day on
which banking institutions located in the State of New York or Dallas, Texas are
authorized or required by law or other governmental action to close and (ii)
with respect to all notices, determinations, fundings and payments in connection
with the Adjusted Eurocurrency Rate or any Eurocurrency Rate Loans, the term
"Business Day" shall mean any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in Dollar deposits,
in the London interbank market, or in Euro deposits in the European interbank
market, as applicable.
"Capital Lease" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.
"Capital Stock" means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing (other than convertible Indebtedness,
until converted).
"Cash" means money, currency or a credit balance in any demand or Deposit
Account.
"Cash Equivalents" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit, time deposits, eurodollar time deposits,
overnight bank deposits or bankers' acceptances (or, in the case of Foreign
Subsidiaries, the foreign equivalent) maturing within one year after such date
and issued or accepted by, and money market deposit accounts issued or offered
by, any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (a) is
at least "adequately capitalized" (as defined in the regulations of its primary
Federal banking
3
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $500,000,000 (or, in the case of Foreign Subsidiaries, any local
office of any commercial bank organized under the law of the relevant
jurisdiction or any political subdivision thereof which has combined capital and
surplus and undivided profits in excess of the foreign currency equivalent of
$100,000,000; (v) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (i) or (ii) above and
entered into with any commercial bank satisfying the requirements of clause (iv)
above; and (vi) shares of any money market mutual fund that (a) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's; provided, that, in the case of any Investment by a Foreign
Subsidiary, "Cash Equivalents" shall also include: (i) direct obligations of the
sovereign nation (or any agency thereof) in which such Foreign Subsidiary is
organized and is conducting business or in obligations fully and unconditionally
guaranteed by such sovereign nation (or any agency thereof), (ii) investments of
the type and maturity described in clauses (i) through (v) above of foreign
obligors, which Investments or obligors (or the parents of such obligors) have
ratings described in such clauses or equivalent ratings from comparable foreign
rating agencies and (iii) shares of money market mutual or similar funds which
invest exclusively in assets otherwise satisfying the requirements of this
definition (including this proviso).
"Certificate re Non-Bank Status" means a certificate substantially in the form
of Exhibit E.
"Change of Control" means, at any time, (i) prior to an IPO, one or more of the
Sponsors shall cease to beneficially own and control, directly or indirectly, at
least 51% on a fully diluted basis of the economic and voting interests in the
Capital Stock of Holdings; (ii) after an IPO, (a) one or more of the Sponsors
shall cease to beneficially own and control, directly or indirectly, at least
35% on a fully diluted basis of the economic and voting interests in the Capital
Stock of Holdings and (b) any Person or "group" (within the meaning of Rules
13d-3 and 13d-5 under the Exchange Act) other than one or more of the Sponsors
(A) shall, directly or indirectly, beneficially own a percentage of the economic
and/or voting interests in the Capital Stock of Holdings on a fully-diluted
basis that is greater than the percentage of the economic interests and/or in
the Capital Stock of Holdings on a fully-diluted basis then held, directly or
indirectly, by the Sponsors, taken together, or (B) shall have obtained the
power (whether or not exercised) to elect a majority of the members of the board
of directors (or similar governing body) of Holdings; (iii) Holdings shall cease
to beneficially own and control 100% on a fully diluted basis of the economic
and voting interest in the Capital Stock of Company or the failure at any time
of Holdings to have the power (whether or not exercised) to elect a majority of
the members of the board of directors (or similar governing body) of Company;
(iv) the majority of the seats (other than vacant seats) on the board of
directors (or similar governing body) of Holdings cease to be occupied by
Persons who either (a) were members of the board of directors of Holdings on the
Closing Date or (b) were either (x) nominated for election by the board of
directors of Holdings, a majority of whom were directors on the Closing Date or
whose election or nomination for election was previously approved by a majority
of such directors or (y) designated or appointed by Sponsor; or (v) any "change
of control" or similar event under the First Lien Credit Agreement or the Senior
Subordinated Note Indenture or related documentation shall occur.
"Class" means (i) with respect to Lenders, each of the following classes of
Lenders: (a) Lenders having Dollar Term Loan Exposure and (b) Lenders having
Euro Term Loan Exposure, and (ii) with respect to Loans, each of the following
classes of Loans: (a) Dollar Term Loans and (b) Euro Term Loans.
"Closing Date" means the date on which the Term Loans are made.
"Closing Date Certificate" means a Closing Date Certificate substantially in the
form of Exhibit F-1.
"Closing Date Mortgaged Property" as defined in Section 3.1(e).
"Collateral" means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant to
the Collateral Documents as security for the Obligations.
"Collateral Agent" as defined in the preamble hereto.
"Collateral Documents" means the Pledge and Security Agreement, the Mortgages,
the Brazilian Security Documents, the Control Agreements, the Landlord Personal
Property Collateral Access Agreements, if any, and all other instruments,
documents and agreements delivered by any Credit Party pursuant to this
Agreement or any of the other Credit Documents in order to grant to Collateral
Agent, for the benefit of Lenders, a Lien on any real, personal or mixed
property of that Credit Party as security for the Obligations.
"Commitment" means a Term Loan Commitment.
"Company" as defined in the preamble hereto.
"Compliance Certificate" means a Compliance Certificate substantially in the
form of Exhibit C.
"Consolidated Adjusted EBITDA" means, for any period, an amount determined for
Holdings and its Subsidiaries on a consolidated basis equal to (i) the sum,
without duplication, of the amounts for such period of (a) Consolidated Net
Income, (b) Consolidated Interest Expense, (c) provisions for taxes based on
income, (d) total depreciation expense, (e) total amortization expense, (f) to
the extent reducing Consolidated Net Income, (I) net extraordinary losses, (II)
(a) other unusual or non recurring expenses or losses in an amount not to exceed
$10,000,000 in the aggregate for all periods from June 21, 2004 through the date
of determination and (b) French Restructuring Costs, in an aggregate combined
amount (for both
4
clauses (II)(a) and (II)(b)) not to exceed $15,000,000 for any twelve month
period, (III) Franklin Park Lease Termination charges, (IV) Insurance
Termination charges, (V) charges associated with the write-off of unamortized
financing fees and related costs arising in connection with the repayment of
First Lien Term Loans and reduction of revolving commitments under the First
Lien Credit Agreement on or about the Closing Date, and (VI) Second Lien
Transaction Costs paid or which became due and payable in Cash by Company and
its Subsidiaries on or about the Closing Date, and (g) other non-Cash items
reducing Consolidated Net Income (including whether or not includible as a
separate item in the statement of Consolidated Net Income, non-Cash losses on
sales of assets outside the ordinary course of business or returned surplus
assets of any Pension Plan but excluding any such non-Cash item to the extent
that it represents an accrual or reserve for potential Cash items in any future
period or amortization of a prepaid Cash item that was paid in a prior period),
minus (ii) the sum, without duplication, of the amounts for such period of (a)
any income or gains that are extraordinary, unusual or non-recurring (including
whether or not includible as a separate item in the statement of Consolidated
Net Income, gains on sales of assets outside the ordinary course of business or
returned surplus assets of any Pension Plan), and (b) other non-Cash items
increasing Consolidated Net Income (excluding any such non-Cash item to the
extent it represents the reversal of an accrual or reserve for potential Cash
item in any prior period).
"Consolidated Capital Expenditures" means, for any period, the aggregate of all
expenditures of Holdings and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in
"expenditures for property, plant and equipment" or similar items reflected in
the consolidated statement of cash flows of Holdings and its Subsidiaries, and
other than any amount of such expenditures that constitute Permitted Acquisition
Expenses, the permitted reinvestment of Net Asset Sale Proceeds in accordance
with Section 2.11(a), the permitted investment of Net Insurance/Condemnation
Proceeds in accordance with Section 2.11(b) or the purchase price of equipment
that is purchased simultaneously with the trade-in of existing equipment to the
extent the credit granted by the seller of such equipment for the equipment
being traded in at such time.
"Consolidated Cash Interest Expense" means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable in Cash.
"Consolidated Current Assets" means, as at any date of determination, the total
assets of Holdings and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of determination, the
total liabilities of Holdings and its Subsidiaries on a consolidated basis that
may properly be classified as current liabilities in conformity with GAAP,
excluding (without duplication) (i) the current portion of long term debt and
(ii) Indebtedness constituting revolving loans and swing line loans outstanding
under the First Lien Credit Agreement.
"Consolidated Excess Cash Flow" means, for any period, an amount (if positive)
equal to: (i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital
Adjustment, minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding (i) repayments of revolving loans or swing line loans under the First
Lien Credit Agreement except to the extent the revolving commitments thereunder
are permanently reduced in connection with such repayments and (ii) repurchases
of Term Loans made pursuant to Section 2.10(c) or term loans under the First
Lien Credit Agreement), (b)(x) Consolidated Capital Expenditures and (y)
Permitted Acquisition Expenses (excluding any Permitted Acquisition Expenses
paid in respect of Cash or Cash Equivalents of an acquired Person), except to
the extent financed with the proceeds of, in the case of (x) Additional Sponsor
Equity or, in the case of (x) or (y), other financings, insurance proceeds or
Asset Sales, (c) Consolidated Cash Interest Expense, (d) provisions for current
taxes based on income of Holdings and its Subsidiaries and payable in cash with
respect to such period, (e) amounts paid pursuant to Section 6.5(b) and (c), and
(f) amounts described in clause (f) of the definition of Consolidated Adjusted
EBITDA and payable in Cash by Holdings and Company with respect to such period.
"Consolidated Interest Expense" means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of Holdings and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries, including all commissions, discounts, debt issuance costs and
other fees and charges owed with respect to Indebtedness or letters of credit
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in Section 2.8 payable on or before the Closing Date and any
unamortized fees associated with the repayment of the First Lien Term Loans and
reduction of revolving commitments under the First Lien Credit Agreement on or
about the Closing Date.
"Consolidated Net Income" means, for any period, (i) the net income (or loss) of
Holdings and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP, minus (ii) (a) the
income (or loss) of any Person (other than a Subsidiary of Holdings) in which
any other Person (other than Holdings or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Holdings or any of its Subsidiaries by such Person during such
period, (b) except as provided in Section 6.8(b), the income
5
(or loss) of any Person accrued prior to the date it becomes a Subsidiary of
Holdings or is merged into or consolidated with Holdings or any of its
Subsidiaries or that Person's assets are acquired by Holdings or any of its
Subsidiaries and (c) the undistributed income of any Subsidiary of Holdings to
the extent that the declaration or payment of dividends or similar distributions
by that Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary.
"Consolidated Senior Debt" means Consolidated Total Debt minus the aggregate
stated balance sheet amount of all Subordinated Indebtedness, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Debt" means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of Holdings and its Subsidiaries
determined on a consolidated basis in accordance with GAAP; provided that for
purposes of calculating the ratios referred to in Section 6.8 for any period,
any portion of the Consolidated Total Debt that is denominated in Euros shall be
converted into Dollars by applying the exchange rate used by the Company in
calculating Consolidated Net Income for the preparation of the financial
statements delivered to the Lenders under this Agreement for such period.
"Consolidated Working Capital" means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period excluding
from such calculation the Net Current Assets of any Subsidiary acquired in a
Permitted Acquisition during such period, determined at the time of such
acquisition.
"Contractual Obligation" means, as applied to any Person, any provision of any
Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.
"Contributing Guarantors" as defined in Section 7.2.
"Control Agreement" means an agreement, satisfactory in form and substance to
Administrative Agent and executed by the financial institution or securities
intermediary at which a Deposit Account or a Securities Account, as the case may
be, is maintained, pursuant to which such financial institution or securities
intermediary confirms and acknowledges Administrative Agent's security interest
in such account, and agrees that the financial institution or securities
intermediary, as the case may be, will comply (subject to the control rights of
the First Lien Lenders), with instructions originated by Administrative Agent as
to disposition of funds in such account, without further consent by Company or
any Subsidiary.
"Conversion/Continuation Date" means the effective date of a continuation or
conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"Conversion/Continuation Notice" means the Conversion/Continuation Notice
substantially in the form of Exhibit A-2.
"Counterpart Agreement" means a Counterpart Agreement substantially in the form
of Exhibit G delivered by a Credit Party pursuant to Section 5.10.
"Credit Document" means any of this Agreement, the Notes, if any, the Collateral
Documents and all other documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of any Agent or any Lender in
connection herewith.
"Credit Extension" means the making of a Loan.
"Credit Party" means each Person (other than any Agent or any Lender or any
other representative thereof) from time to time party to a Credit Document.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Holdings' and its Subsidiaries' operations
and not for speculative purposes.
"Default" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.
"Deposit Account" means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.
"Dollar Equivalent" means with respect to an amount denominated in Euro on any
date, the amount of Dollars that may be purchased with such amount of Euro at
the Spot Exchange Rate on such date and, with respect to an amount denominated
in Dollars on any date, the principal amount thereof.
"Dollar PIK Amount" shall have the meaning assigned to such term in Section
2.5(b).
"Dollar Term Loan" means a Dollar Term Loan made by a Lender to Company pursuant
to Section 2.1(a)(i) together with any amount added thereto pursuant to Section
2.5(b).
"Dollar Term Loan Commitment" means the commitment of a Lender to make or
otherwise fund a Dollar Term Loan and "Dollar Term Loan Commitments" means such
commitments of all Lenders in the aggregate. The amount of each Lender's Dollar
Term Loan Commitment, if any, shall be set forth in the Register. The aggregate
amount of the Dollar Term Loan Commitments as of the Closing Date is
$60,000,000.
6
"Dollar Term Loan Exposure" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Dollar Term Loans of such
Lender; provided, at any time prior to the making of the Dollar Term Loans on
the Closing Date, the Dollar Term Loan Exposure of any Lender shall be equal to
such Lender's Dollar Term Loan Commitment.
"Dollar Term Loan Note" means a promissory note in the form of Exhibit B-1, as
it may be amended, supplemented or otherwise modified from time to time.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Domestic Subsidiary" means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.
"Eligible Assignee" means (i) any Lender, any Affiliate of any Lender and any
Related Fund (any two or more Related Funds being treated as a single Eligible
Assignee for all purposes hereof), and (ii) any commercial bank, insurance
company, investment or mutual fund or other entity that is an "accredited
investor" (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans as one of its businesses; provided, no Affiliate of
Holdings or Sponsor shall be an Eligible Assignee except for any Affiliate of
Goldman, Sachs & Co.
"Employee Benefit Plan" means any "employee benefit plan" as defined in Section
3(3) of ERISA which is or was sponsored, maintained or contributed to by, or
required to be contributed to by, Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"EMU" means the Economic and Monetary Union as contemplated in the Treaty on
European Union.
"EMU Legislation" means legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency (whether known as the euro or otherwise), being in part the
implementation of the third stage of EMU.
"Environmental Claim" means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any Governmental Authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or any actual or alleged Hazardous Materials Activity; or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"Environmental Laws" means any and all current or future foreign or domestic,
federal or state (or any subdivision of either of them), statutes, ordinances,
orders, rules, regulations, judgments, Governmental Authorizations, or any other
requirements of Governmental Authorities relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity; (ii) the
generation, use, storage, transportation or disposal of Hazardous Materials; or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner applicable
to Holdings or any of its Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation which is
a member of a controlled group of corporations within the meaning of Section
414(b) of the Internal Revenue Code of which that Person is a member; (ii) any
trade or business (whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section 414(m) or
(o) of the Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii) above is a
member. Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Holdings or any such Subsidiary
within the meaning of this definition with respect to the period such entity was
an ERISA Affiliate of Holdings or such Subsidiary and with respect to
liabilities arising after such period for which Holdings or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability to Holdings, any of its
Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which could reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Holdings,
7
any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefore, or the receipt by Holdings,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which could reasonably be expected to give rise to the imposition on
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Euro" and "E" means the single currency of participating member states of the
EMU and as referred to in EMU Legislation.
"Euro PIK Amount" shall have the meaning assigned to such term in Section
2.5(b).
"Euro Term Loan" means a Euro Term Loan made by a Lender to Company pursuant to
Section 2.1(a)(ii) together with any amount added thereto pursuant to Section
2.5(b).
"Euro Term Loan Commitment" means the commitment of a Lender to make or
otherwise fund a Euro Term Loan and "Euro Term Loan Commitments" means such
commitments of all Lenders in the aggregate. The amount of each Lender's Euro
Term Loan Commitment, if any, shall be set forth in the Register. The aggregate
amount of the Euro Term Loan Commitments as of the Closing Date is
E12,668,918.92.
"Euro Term Loan Exposure" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Euro Term Loans of such
Lender; provided, at any time prior to the making of the Euro Term Loans on the
Closing Date, the Euro Term Loan Exposure of any Lender shall be equal to such
Lender's Euro Term Loan Commitment. "Euro Term Loan Note" means a promissory
note in the form of Exhibit B-2, as it may be amended, supplemented or otherwise
modified from time to time.
"Eurocurrency Rate Loan" means a Loan bearing interest at a rate determined by
reference to the Adjusted Eurocurrency Rate.
"Event of Default" means each of the conditions or events set forth in Section
8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.
"Excluded Tax" means, with respect to Administrative Agent, any Lender or any
other recipient of any payment to be made by or on account of any Obligation,
(i) any Tax (and any liability with respect thereto) imposed as a result of a
connection or former connection between any Lender and the jurisdiction imposing
such tax, including without limitation, any connection arising from such Lender
being or having been a citizen, domiciliary, or resident of such jurisdiction,
being organized in such jurisdiction, or having had a permanent establishment or
fixed place of business therein, but excluding any such connection arising from
the activities of such Lender pursuant to or in respect of this Agreement or any
other Credit Document, including executing, delivering or performing its
obligations or receiving a payment under or enforcing this Agreement or any
other loan document, and (ii) in the case of a U.S. Lender or Non-U.S. Lender
(other than a Replacement Lender that is an assignee pursuant to a request by
Company under Section 2.19), any Tax that (a) is imposed on amounts payable to
any such Non-U.S. Lender at the time such Non-U.S. Lender becomes a party to
this Agreement or designates a new lending office, or (b) is attributable to
such U.S. Lender or Non-U.S. Lender's failure to comply with Sections 2.17(c),
except to the extent that such U.S. Lender or Non-U.S. Lender (or its assignor,
if any) was entitled, at the time of assignment or designation of a new lending
office, as the case may be, to receive additional amounts from Company with
respect to such Tax pursuant to Sections 2.17(c).
"Facility" means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"Fair Share Contribution Amount" as defined in Section 7.2.
"Fair Share" as defined in Section 7.2.
"Federal Funds Effective Rate" means for any day, the rate per annum (expressed,
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
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 on such day, as published by the Federal
8
Reserve Bank of New York on the Business Day next succeeding such day; provided,
(i) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Administrative Agent, in its capacity
as a Lender, on such day on such transactions as determined by Administrative
Agent.
"Financial Officer Certification" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Holdings that such financial statements fairly
present, in all material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
"Financial Plan" as defined in Section 5.1(i).
"First Lien Collateral Agent" means Citicorp North America, Inc., as collateral
agent under the First Lien Credit Agreement, and any successor thereto acting in
such capacity.
"First Lien Credit Agreement" means (i) the Credit and Guaranty Agreement dated
as of June 21, 2004, as amended by the First Amendment to Credit and Guaranty
Agreement dated as of March 31, 2005 and the Second Amendment to Credit and
Guaranty Agreement dated as of the date hereof, by and among the Company,
Holdings, Autocam France, certain Subsidiaries of Company, the financial
institutions party thereto, GSCP, as Syndication Agent, Citicorp North America,
Inc., as general administrative agent and collateral agent, Citibank
International PLC, as European administrative agent and Bank One, NA, ING
Capital, LLC and National City Bank, as documentation agents, as the same may be
amended, restated supplemented, extended or otherwise modified from time to time
to the extent permitted under Sections 6.1(s) and 6.15, and (ii) to the extent
permitted by Sections 6.1(s) and 6.15, any replacement agreement or facility
designated by the Company as the "First Lien Credit Agreement" existing at any
time to refund, refinance, replace or renew (including subsequent or successive
refinancings, replacements and renewals), in whole or in part, amounts
outstanding under the document described in clause (i) plus any additional
amounts to the extent permitted under this Agreement (as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with Sections 6.1(s) and 6.15).
"First Lien Credit Documents" means the First Lien Credit Agreement and the
"Credit Documents" as defined in the First Lien Credit Agreement.
"First Lien Hedge Agreements" means Hedge Agreements entered into with one or
more Persons that are First Lien Lenders or Affiliates of First Lien Lenders in
accordance with the terms of the First Lien Credit Documents.
"First Lien Lenders" means the lenders under the First Lien Credit Agreement.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries ending on
December 31 of each calendar year.
"Flood Hazard Property" means any Real Estate Asset subject to a mortgage in
favor of Collateral Agent, for the benefit of the Lenders, and located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"Foreign Plan" means any employee benefit plan maintained by Company or any of
its Subsidiaries that is mandated or governed by any law, rule or regulation of
any Government Authority other than the United States, any state thereof or any
other political subdivision thereof.
"Foreign Pledge Agreement" means each pledge agreement or similar instrument
governed by the laws of a country other than the United States, executed on the
Closing Date or from time to time thereafter in accordance with Section 5.10 by
Company, any Domestic Subsidiary, or any Guarantor Foreign Subsidiary that owns
Capital Stock of one or more Foreign Subsidiaries organized in such country, in
form and substance reasonably satisfactory to Collateral Agent, as such Foreign
Pledge Agreement may be amended, supplemented or otherwise modified from time to
time.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary.
"Frank & Pignard" means Frank & Pignard, SAS, a French societe par actions
simplifiee.
"Franklin Park Lease" means the lease for the facility formerly operated by
Autocam Har, Inc. in Franklin Park, Illinois.
"Franklin Park Lease Termination Charges" means, for any period, charges taken
in such period associated with the termination of the Franklin Park Lease in
excess of the rental and other payments required by the terms of such lease for
such period, in an aggregate amount not to exceed $2,000,000 for all periods
from the June 21, 2004 through the date of determination.
"French Restructuring Costs" means employee severance, plant closure or
relocation costs and incremental management costs incurred in connection with
the restructuring of the operations of Subsidiaries of Autocam France in an
aggregate amount not to exceed $15,000,000 for all periods from June 21, 2004
through the date of determination.
"French Receivables Facility" means the sales by Autocam France or any of its
Subsidiaries of trade receivables pursuant to (i) facility documentation as in
effect on the Closing Date, as the same may be amended from time to time to the
extent approved by Administrative Agent and Syndication Agent (which approval
shall not be unreasonably withheld, delayed or conditioned), or (ii) terms
substantially similar to the terms of transactions of a similar nature pursuant
to market terms at
9
such time.
"Funding Guarantors" as defined in Section 7.2.
"Funding Notice" means a notice substantially in the form of Exhibit A-1.
"GAAP" means, subject to the limitations on the application thereof set forth in
Section 1.2, United States generally accepted accounting principles in effect as
of the date of determination or application thereof.
"Governmental Authority" means any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.
"Governmental Authorization" means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.
"Grantor" as defined in the Pledge and Security Agreement.
"Guaranteed Obligations" as defined in Section 7.1.
"Guarantor" means each of Holdings, each Domestic Subsidiary of Holdings (other
than Company), Autocam Europe and each other Guarantor Foreign Subsidiary of
Company.
"Guarantor Domestic Subsidiary" means a Guarantor Subsidiary other than a
Guarantor Foreign Subsidiary.
"Guarantor Foreign Subsidiary" as defined in Section 5.10.
"Guarantor Subsidiary" means each Guarantor other than Holdings.
"Guaranty" means the guaranty of each Guarantor set forth in Section 7.
"Hazardous Materials" means any chemical, material or substance, exposure to
which is prohibited, limited or regulated as hazardous by any Governmental
Authority or which may or could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or threatened
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
entered into with a Lender Counterparty in order to satisfy the requirements of
this Agreement or otherwise in the ordinary course of Holdings' or any of its
Subsidiaries' businesses.
"Highest Lawful Rate" means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or received under
the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Historical Financial Statements" means as of the Closing Date, (i) the audited
financial statements of Holdings and its Subsidiaries, for the immediately
preceding three Fiscal Years, consisting of balance sheets and the related
consolidated statements of income, stockholders' equity and cash flows for such
Fiscal Years, and (ii) the unaudited financial statements of Holdings and its
Subsidiaries as at the most recently ended Fiscal Quarter, consisting of a
balance sheet and the related consolidated statements of income, stockholders'
equity and cash flows for the nine month period, as applicable, ending on such
date, and, in the case of clauses (i) and (ii), certified by the chief financial
officer of Holdings that they fairly present, in all material respects, the
financial condition of Holdings and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments.
"Holdings" as defined in the preamble hereto.
"Increased-Cost Lenders" as defined in Section 2.19.
"Indebtedness", as applied to any Person, means, without duplication, (i) all
indebtedness for borrowed money; (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP; (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money;
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument; (v) all indebtedness of another Person secured by any Lien
on any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person; (vi) the face amount of any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of
10
another; (viii) any obligation of such Person the primary purpose or intent of
which is to provide assurance to an obligee that the obligation of another
Person that is the obligor thereof will be paid or discharged, or any agreement
relating thereto will be complied with, or the holders thereof will be protected
(in whole or in part) against loss in respect thereof; (ix) any liability of
such Person for an obligation of another through any agreement (contingent or
otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (b) to maintain the solvency or any balance sheet
item, level of income or financial condition of another if, in the case of any
agreement described under subclauses (a) or (b) of this clause (ix), the primary
purpose or intent thereof is as described in clause (viii) above; (x)
obligations in respect of any Receivables Facility to the extent properly
classified as a liability on a balance sheet in accordance with GAAP and (xi)
all obligations of such Person in respect of any exchange traded or over the
counter derivative transaction, including, without limitation, any Interest Rate
Agreement and Currency Agreement, whether entered into for hedging or
speculative purposes; provided, in no event shall (x) obligations under any
Interest Rate Agreement and any Currency Agreement be deemed "Indebtedness" for
any purpose under Section 6.8 or (y) trade payables and accrued expenses, in
each case payable directly or through a bank clearing arrangement and arising in
the ordinary course of business, constitute Indebtedness.
"Indemnified Liabilities" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders' agreement to
make Credit Extensions or the use or intended use of the proceeds thereof, or
any enforcement of any of the Credit Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in the commitment
letter delivered by any Lender or Sponsor with respect to the transactions
contemplated by this Agreement; or (iii) any (a) Hazardous Materials Activity
which can reasonably be expected to result in non-compliance with, or liability
under, Environmental Laws, or (b) Environmental Claim relating to or arising
from any past or present activity, operation, land ownership, or practice of
Holdings or any of its Subsidiaries.
"Indemnitee" as defined in Section 10.3.
"Insurance Termination Charges" means charges arising from the forgiving of
loans made to members of Company management under Company's insurance program in
connection with the termination of such program, in an aggregate amount not to
exceed $2,500,000 from the Closing Date through the date of determination.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated as of
the date hereof by and among the Company, the Collateral Agent on behalf of and
for the benefit of the Lenders and First Lien Collateral Agent on behalf of and
for the benefit of the First Lien Lenders, in form and substance satisfactory to
the Collateral Agent and the Lenders (as the same may be amended, restated,
supplemented or otherwise modified from time to time).
"Interest Payment Date" means with respect to (i) any Base Rate Loan, each March
31, June 30, September 30 and December 31 of each year, commencing on the first
such date to occur after the Closing Date and the final maturity date of such
Loan; and (ii) any Eurocurrency Rate Loan, the last day of each Interest Period
applicable to such Loan; provided, in the case of each Interest Period of longer
than three months "Interest Payment Date" shall also include each date that is
three months, or an integral multiple thereof, after the commencement of such
Interest Period.
"Interest Period" means, in connection with a Eurocurrency Rate Loan, an
interest period of one-, two-, three- or six-months, or, if available to each
affected Lender, nine or twelve months, as selected by Company in its Funding
Notice or Conversion/Continuation Notice, (i) initially, commencing on the
Closing Date or Conversion/Continuation Date thereof, as the case may be; and
(ii) thereafter, commencing on the day on which the immediately preceding
Interest Period expires; provided, (a) if an Interest Period would otherwise
expire on a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day unless no further Business Day occurs in such
month, in which case such Interest Period shall expire on the immediately
preceding Business Day; (b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) of this definition, end on the last Business Day of
a calendar month; and (c) no Interest Period with respect to any portion of any
Term Loans shall extend beyond the Term Loan Maturity Date.
11
"Interest Rate Agreement" means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedging agreement
or other similar agreement or arrangement, each of which is for the purpose of
hedging the interest rate exposure associated with Holdings' and its
Subsidiaries' operations and not for speculative purposes.
"Interest Rate Determination Date" means, with respect to any Interest Period,
the date that is two Business Days prior to the first day of such Interest
Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.
"Investment" means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of
the Securities of any other Person (other than a Guarantor Subsidiary); (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Holdings from any Person (other than Holdings or any
Guarantor Subsidiary), of any Capital Stock of such Person; and (iii) any direct
or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Holdings or any of
its Subsidiaries to any other Person (other than Holdings or any Guarantor
Subsidiary), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
equal to the sum of (a) the original cost of such Investment, plus (b) the cost
of all additions thereto, minus (c) any net, after-tax cash proceeds from the
disposition of or other net, after-tax cash distributions on such Investment
without any adjustments for increases or decreases in value or write-ups,
write-downs or write-offs with respect to such Investment, provided that the
amount of any Investment shall not be less than zero.
"IPO" means a bona fide underwritten initial public offering of voting common
stock of a Parent Company as a direct result of which at least 10% of the
aggregate voting common stock of such Parent Company (calculated on a fully
diluted basis after giving effect to all options to acquire voting common stock
of such Parent Company then outstanding, regardless of whether such options are
then currently exercisable) is beneficially owned by Persons other than the
Sponsor, such Parent Company and their respective Affiliates (including, in the
case of such Parent Company, all directors, officers and employees of such
Parent Company, Company and any Subsidiary of such Parent Company).
"Joint Venture" means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form; provided, in no event
shall any corporate Subsidiary of any Person be considered to be a Joint Venture
to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold Property, a
letter, certificate or other instrument in writing from the lessor under the
related lease, pursuant to which, among other things, the landlord consents to
the granting of a Mortgage on such Leasehold Property by the Credit Party
tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to Collateral Agent in its reasonable discretion, but in any event
sufficient for Collateral Agent to obtain a Title Policy with respect to such
Mortgage.
"Landlord Personal Property Collateral Access Agreement" means a landlord waiver
and collateral access agreement in form and substance acceptable to the
Collateral Agent.
"Lead Arranger" as defined in the preamble hereto.
"Leasehold Property" means any leasehold interest of any Credit Party as lessee
under any lease of real property, other than any such leasehold interest
designated from time to time by Collateral Agent in its sole discretion as not
being required to be included in the Collateral.
"Lender" means each financial institution listed on the signature pages hereto
as a Lender, and any other Person that becomes a party hereto pursuant to an
Assignment Agreement.
"Lender Counterparty" means each Lender or any Affiliate of a Lender
counterparty to a Hedge Agreement (including any Person who is a Lender (and any
Affiliate thereof) as of the Closing Date but subsequently, whether before or
after entering into a Hedge Agreement, ceases to be a Lender) including, without
limitation, each such Affiliate that provides written notice in form and
substance satisfactory to the Collateral Agent as to the existence and terms of
the applicable Hedge Agreement.
"Leverage Ratio" means the ratio as of the last day of any Fiscal Quarter of (i)
Consolidated Total Debt as of such day to (ii) Consolidated Adjusted EBITDA for
the four-Fiscal Quarter period ending on such date. "Lien" means (i) any lien,
mortgage, pledge, assignment, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, and any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.
"Loan" means a Dollar Term Loan or a Euro Term Loan.
"Local Time" shall mean with respect to a Term Loan or delivery of Dollars, or
notice with respect thereto, New York City time.
"Management Services Agreement" means that certain Management Services Agreement
entered into on or about June 21, 2004, by and between Sponsor and Holdings (as
the same may be amended, restated, supplemented or otherwise modified
12
from time to time).
"Margin Stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Material Adverse Effect" means a material adverse effect on and/or material
adverse developments with respect to (i) the business operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole; (ii) the ability of any Credit Party to fully and
timely perform its Obligations; (iii) the legality, validity, binding effect or
enforceability against a Credit Party of a Credit Document to which it is a
party; or (iv) the rights, remedies and benefits available to, or conferred
upon, any Agent and any Lender or any Secured Party under any Credit Document.
"Material Contract" means any contract or other arrangement to which Holdings or
any of its Subsidiaries is a party (other than the Credit Documents) for which
breach, nonperformance, cancellation or failure to renew could reasonably be
expected to have a Material Adverse Effect.
"Material Real Estate Asset" means (i) (a) any fee-owned Real Estate Asset
having a fair market value in excess of $1,000,000 as of the date of the
acquisition thereof and (b) all Leasehold Properties other than those with
respect to which the aggregate rental payments under the term of the lease are
less than $1,000,000 per annum or (ii) any Real Estate Asset that the Requisite
Lenders have determined in their reasonable judgment is material to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries, taken as a whole.
"Moody's" means Moody's Investor Services, Inc.
"Mortgage" means a Mortgage substantially in the form of Exhibit I, as it may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan" means any Employee Benefit Plan which is a "multiemployer
plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners, and any
successor thereto.
"Narrative Report" means, with respect to the financial statements for which
such narrative report is required, a narrative report describing the operations
of Holdings and its Subsidiaries in the form prepared for presentation to senior
management thereof for the applicable month, Fiscal Quarter or Fiscal Year and
for the period from the beginning of the then current Fiscal Year to the end of
such period to which such financial statements relate.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, an amount equal
to: (i) Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received by Holdings or any of its Subsidiaries from such
Asset Sale, minus (ii) any bona fide direct costs incurred in connection with
such Asset Sale, including (a) income or gains taxes paid or reasonably
estimated to be payable by the seller as a result of any gain recognized in
connection with such Asset Sale, (b) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other than the
Loans and the loans under the First Lien Credit Agreement) or other Contractual
Obligation that is secured by a Lien on the stock or assets in question and that
is required to be repaid under the terms thereof as a result of such Asset Sale,
(c) a reasonable reserve for any indemnification payments (fixed or contingent)
attributable to seller's indemnities and representations and warranties to
purchaser in respect of such Asset Sale undertaken by Holdings or any of its
Subsidiaries in connection with such Asset Sale, and (d) reasonable brokerage or
selling commissions and fees and expenses of professional advisors and any title
and recordation expenses.
"Net Current Assets" means, for any Person as at any date of determination, the
difference (which may be a negative number) between (i) the total assets of such
Person that may properly be classified as current assets in conformity with
GAAP, excluding Cash and Cash Equivalents, minus (ii) the total liabilities of
such Person that may properly be classified as current liabilities in conformity
with GAAP, excluding (without duplication) the current portion of long term debt
and revolving loans and swing line loans under the First Lien Credit Agreement.
"Net Insurance/Condemnation Proceeds" means an amount equal to: (i) any Cash
payments or proceeds received by Holdings or any of its Subsidiaries (a) under
any insurance policy insuring against loss or damage to assets and property used
the business of Holdings or its Subsidiaries (except, so long as no Default or
Event of Default has occurred and is continuing, the proceeds of business
interruption insurance or any other insurance policy to the extent such coverage
compensates Company or its Subsidiaries for lost revenue or profits) or (b) as a
result of the taking of any assets of Holdings or any of its Subsidiaries by any
Person pursuant to the power of eminent domain, condemnation or otherwise, or
pursuant to a sale of any such assets to a purchaser with such power under
threat of such a taking, minus (ii) (a) any actual and reasonable costs and
expenses incurred by Holdings or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Holdings or such Subsidiary in respect
thereof (including fees and expenses of professional advisors), (b) any bona
fide direct costs and expenses incurred in connection with any taking or sale of
such assets as referred to in clause (i)(b) of this definition, including income
or gains taxes paid or reasonably estimated to be payable as a result of any
gain recognized in connection therewith, reasonable fees and expenses of
professional advisors, title and recordation expenses and reasonable
indemnification reserves and (c) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans and the loans under the First Lien Credit Agreement) or other Contractual
Obligations
13
that is secured by a Lien on the assets in question and that is required to be
repaid under the terms thereof as a result of such loss, damage, taking or sale.
"New Polish Subsidiary" is defined in Section 6.1(b)(vii).
"Non-U.S. Lender" as defined in Section 2.17(c).
"Notice" means a Funding Notice or a Conversion/Continuation Notice.
"Obligations" means all obligations of every nature of each Credit Party from
time to time owed to the Agents (including former Agents), the Lenders or any of
them and Lender Counterparties, under any Credit Document or Hedge Agreement
(including, without limitation, with respect to a Hedge Agreement, obligations
owed thereunder to any person who was a Lender or an Affiliate of a Lender at
the time such Hedge Agreement was entered into), whether for principal, interest
(including interest which, but for the filing of a petition in bankruptcy with
respect to such Credit Party, would have accrued on any Obligation, whether or
not a claim is allowed against such Credit Party for such interest in the
related bankruptcy proceeding), payments for early termination of Hedge
Agreements, fees, expenses, indemnification or otherwise.
"Obligee Guarantor" as defined in Section 7.7.
"Offer" as defined in Section 2.10.
"Offer Loans" as defined in Section 2.10.
"Organizational Documents" means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability company,
its articles of organization or certificate of formation, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"Parent" means Micron Holdings, Inc.
"Parent Common Stock" means the common stock of Parent, par value $0.01 per
share.
"Parent Company" means Parent or Holdings or any other intermediate holding
company between the Sponsor and Holdings.
"Parent Credit Document" as defined is Section 5.3.
"Patriot Act" as defined in Section 9.10.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA, and, for purposes of Section 8.1(k), any Foreign Plan.
"Permitted Acquisition" means any acquisition by Company or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Capital Stock of, or a business
line or unit or a division of, any Person; provided,
(i) immediately prior to, and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;
(ii) all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all applicable laws and in conformity
with all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of the Capital
Stock (except for any such Securities in the nature of directors'
qualifying shares required pursuant to applicable law) acquired or
otherwise issued by such Person or any newly formed Subsidiary of Company
in connection with such acquisition shall be owned 100% by Company or a
Guarantor Subsidiary thereof, and Company shall have taken, or caused to be
taken, as of the date such Person becomes a Subsidiary of Company, each of
the actions set forth in Sections 5.10 and/or 5.11, as applicable;
(iv) Holdings and its Subsidiaries shall be in compliance with the
financial covenant set forth in Section 6.8 on a pro forma basis after
giving effect to such acquisition as of the last day of the Fiscal Quarter
most recently ended at least 45 days prior to the date of consummation of
such acquisition (as determined in accordance with Section 6.8(b));
(v) Company shall have delivered to Administrative Agent and Syndication
Agent at least ten Business Days (or such shorter time period as may be
acceptable to the Administrative Agent and the Syndication Agent) prior to
such proposed acquisition, (A) a Compliance Certificate evidencing
compliance with Section 6.8 as required under clause (iv) above, together
with all relevant financial information with respect to such acquired
assets, including, without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate compliance
with Section 6.8, (B) a copy of the acquisition agreement for such
acquisition and (C) such information and due diligence materials relating
to environmental matters as may be required under Section 5.9(a)(iv) or as
may be otherwise reasonably requested by Administrative Agent and the
Syndication Agent;
14
(vi) any Person or assets or division as acquired in accordance herewith
shall be in a Permitted Business; and
(vii) the assets, capital stock, business line, unit or division so
acquired generated positive EBITDA for the four quarter period most
recently ended prior to the date of such acquisition (or for the four
quarter period most recently ended for which financial statements are
available to Holdings and its Subsidiaries), calculated on a pro forma
basis after giving effect to the acquisition and related transactions (as
determined in accordance with Section 6.8(b)) and, to the extent such
Permitted Acquisition is to be financed in whole or part by Indebtedness
(including assumed Indebtedness), the amount of such Indebtedness shall not
exceed an amount equal to 3.5 multiplied by the amount of such positive
EBITDA;
provided, no acquisition of assets, Capital Stock, a business line or unit or a
division of any Person shall constitute a Permitted Acquisition unless made with
the consent of such Person's board of directors or similar governing body.
In addition to the foregoing, the Company's acquisition of assets of ATS
Automation Tooling Systems, Inc.'s Precision Metals Division shall constitute a
Permitted Acquisition so long as the cash consideration paid with respect
thereto is paid with the proceeds of Additional Sponsor Equity.
"Permitted Acquisition Cap" shall mean (a) $57,500,000 plus (b) the amount of
Additional Sponsor Equity utilized to pay consideration toward any Permitted
Acquisition where the assets, capital stock, business line, unit or division so
acquired generated positive cash flow for the four quarter period most recently
ended prior to the date of such acquisition (or for the four quarter period most
recently ended for which financial statements are available to Holdings and its
Subsidiaries), calculated on a pro forma basis after giving effect to the
acquisition and related transactions in the manner described in Section 6.8(b).
"Permitted Acquisition Expenses" means Cash (a) consideration paid by Company or
any of its wholly-owned Subsidiaries to acquire assets, Capital Stock or a
business line or unit or division in connection with a Permitted Acquisition
made in accordance with Section 6.9(f) (including the creation and
capitalization with equity of Subsidiaries to own the property acquired
thereby), (b) bona fide direct costs and expenses incurred as a result of a
Permitted Acquisition (including costs and expenses related to the shutdown of
facilities and employee severance) to the extent such costs and expenses (i) are
capitalized as part of the cost of the Permitted Acquisition in the consolidated
financial statements of Holdings and (ii) are paid by Company or its
Subsidiaries no more than 180 days from the date of such Permitted Acquisition,
and (c) bona fide direct costs and expenses paid in connection with such
Permitted Acquisition, including reasonable brokerage or selling commissions and
fees and expenses of professional advisors and any title and recordation
expenses, provided, no Restricted Junior Payment shall constitute a Permitted
Acquisition Expense.
"Permitted Business" means the design, manufacture and sale of close tolerance
precision machined or molded components and assemblies or activities that are
reasonably similar, ancillary or related to, or in connection with, or
reasonable extension, development or expansion of, any of the foregoing.
"Permitted Liens" means each of the Liens permitted pursuant to Section 6.2.
"Permitted Management Stock Repurchase Payments" means amounts required for any
repurchase, redemption, or other acquisition for value of any Capital Stock of
Parent held by any member of Company's management pursuant to any management
equity subscription agreement, stock option agreement or similar agreement, or
otherwise upon their death, disability, retirement or termination of employment
or departure from the Board of Directors of Company; provided, that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Capital Stock shall not exceed (i) $850,000 in any twelve-month period (with
amounts not used in any twelve-month period carried forward to the next
twelve-month period) or (ii) $3,450,000 in the aggregate from and after June 21,
2004 (increased, in the case of both clauses (i) and (ii), by 50% of the net
proceeds received by Company after the Closing Date from "key man" life
insurance policies).
"Person" means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PIK Amount" shall mean the Dollar PIK Amount or Euro PIK Amount, as applicable.
"Pledge and Security Agreement" means the Pledge and Security Agreement to be
executed by Company and each Guarantor substantially in the form of Exhibit H,
as it may be amended, supplemented or otherwise modified from time to time.
"Prime Rate" means the rate of interest quoted in The Wall Street Journal, Money
Rates Section as the Prime Rate (currently defined as the base rate on corporate
loans posted by at least 75% of the nation's thirty (30) largest banks), as in
effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
Agent or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Principal Amount" in respect of any Receivables Facility shall mean (i) in the
case of any Receivables Facility constituting Indebtedness, the stated balance
sheet liability in respect of such Receivables Facility and (ii) otherwise, the
amount of trade
15
receivables sold under such Receivables Facility (measured as the amount of such
sold trade receivables included on the balance sheet of Company and its
Subsidiaries immediately prior to such sale minus the amount that has been
collected from the account debtor at such time on such trade receivable).
"Principal Office" means the Administrative Agent's "Principal Office" as set
forth on Appendix A, or such other office as Administrative Agent may from time
to time designate in writing to Company and each Lender.
"Projections" as defined in Section 4.8.
"Pro Rata Share" means (i) with respect to all payments, computations and other
matters relating to the Dollar Term Loan of any Lender, the percentage obtained
by dividing (a) the Dollar Term Loan Exposure of that Lender by (b) the
aggregate Dollar Term Loan Exposure of all Lenders; and (ii) with respect to all
payments, computations and other matters relating to the Euro Term Loan of any
Lender, the percentage obtained by dividing (a) the Euro Term Loan Exposure of
that Lender by (b) the aggregate Euro Term Loan Exposure of all Lenders. For all
other purposes with respect to each Lender, "Pro Rata Share" means the
percentage obtained by dividing (A) an amount equal to the sum of the Dollar
Term Loan Exposure and the Euro Term Loan Exposure of that Lender, by (B) an
amount equal to the sum of the aggregate Dollar Term Loan Exposure and the
aggregate Euro Term Loan Exposure.
"Real Estate Asset" means, at any time of determination, any interest (fee,
leasehold or otherwise) then owned by any Credit Party in any real property.
"Receivables Facility" means one or more receivables financing facilities
including, without limitation, the French Receivables Facility, as amended from
time to time, pursuant to which the Company and/or any of its Subsidiaries,
directly or indirectly through another Subsidiary, sells or otherwise transfers
(or sells or transfers interests in) its accounts receivable and related assets
pursuant to arrangements customary in the industry, regardless of whether such
accounts receivable and related assets are required after such sale or transfer
to be recorded as assets of the Company on its consolidated balance sheet in
accordance with GAAP.
"Record Document" means, with respect to any Leasehold Property, (i) the lease
evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (ii) if
such Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document, executed and
acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Collateral Agent.
"Recorded Leasehold Interest" means a Leasehold Property with respect to which a
Record Document has been recorded in all places necessary or desirable, in
Administrative Agent's reasonable judgment, to give constructive notice of such
Leasehold Property to third-party purchasers and encumbrances of the affected
real property.
"Register" as defined in Section 2.4(b).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Related Fund" means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, counsel, agents and advisors
of such Person and of such Person's Affiliates.
"Release" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.
"Replacement Lender" as defined in Section 2.19.
"Required Prepayment Date" as defined in Section 2.12(c).
"Requisite Class Lenders" means, at any time of determination, (i) for the Class
of Lenders having Dollar Term Loan Exposure, Lenders holding more than 50% of
the aggregate Dollar Term Loan Exposure of all Lenders; and (ii) for the Class
of Lenders having Euro Term Loan Exposure, Lenders holding more than 50% of the
aggregate Euro Term Loan Exposure of all Lenders.
"Requisite Lenders" means one or more Lenders having or holding Dollar Term Loan
Exposure and/or Euro Term Loan Exposure representing more than 50% of the sum of
(i) the aggregate Dollar Term Loan Exposure of all Lenders and (ii) the
aggregate Euro Term Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of Holdings or
Company now or hereafter outstanding, or a dividend payable solely in shares of
Capital Stock to the holders of that class; (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock of Holdings or Company now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Holdings or Company now or hereafter
outstanding; (iv) management or similar fees payable to Sponsor
16
or any of its Affiliates and (v) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill
Corporation.
"Second Lien Transaction Costs" means the fees, costs and expenses payable by
Holdings, Company or any of Company's Subsidiaries on or about the Closing Date
in connection with (i) the transactions contemplated by the Credit Documents and
(ii) the amendment of the First Lien Credit Agreement (including, for avoidance
of doubt, consent fees, breakage or other costs and expenses in connection with
the prepayment of Indebtedness).
"Second Priority" means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that (i) such Lien is perfected
and has priority over any other Lien on such Collateral (other than Liens
permitted pursuant to Section 6.2) and (ii) such Lien is the only Lien (other
than Liens permitted pursuant to Section 6.2) to which such Collateral is
subject.
"Secured Parties" has the meaning assigned to that term in the Pledge and
Security Agreement.
"Securities" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Account" means an account to which a financial asset is or may be
credited in accordance with an agreement under which the Person maintaining the
account undertakes to treat the Person for whom the account is maintained as
entitled to exercise the rights that comprise the financial asset.
"Securities Act" means the Securities Act of 1933, as amended from time to time,
and any successor statute.
"Senior Leverage Ratio" means the ratio of (a) Consolidated Senior Debt as of
the date of determination minus the amount of Consolidated Senior Debt repaid
with the proceeds of Additional Sponsor Equity during the 45-day period
following the date of determination to (b) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period ending on such date.
"Senior Subordinated Note Indenture" means the indenture pursuant to which the
Senior Subordinated Notes are issued as such indenture may be amended from time
to time thereafter to the extent permitted under Section 6.16.
"Senior Subordinated Notes" means the (a) $140,000,000 in aggregate principal
amount of 10.875% Senior Subordinated Notes due 2014 of the Company and (b) any
additional Senior Subordinated Notes issued in accordance with Section
6.1(c)(ii), in each case issued pursuant to the Senior Subordinated Note
Indenture.
"Solvency Certificate" means a Solvency Certificate of the chief financial
officer of Holdings substantially in the form of Exhibit F-2. "Solvent" means,
with respect to any Credit Party, that as of the date of determination, both (i)
(a) the sum of such Credit Party's debt (including contingent liabilities) does
not exceed the present fair saleable value of such Credit Party's present assets
(including goodwill and other intangible assets); (b) such Credit Party's
capital is not unreasonably small in relation to its business as contemplated on
the Closing Date and reflected in the Projections or with respect to any
transaction contemplated or undertaken after the Closing Date; and (c) such
Person has not incurred and does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay such
debts as they become due (whether at maturity or otherwise); and (ii) such
Person is "solvent" within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability (irrespective of whether such contingent
liabilities meet the criteria for accrual under Statement of Financial
Accounting Standard No.5).
"Sponsor" means Transportation Resource Partners, LP and other investment
entities controlled by its affiliates, GS Capital Partners 2000 L.P. and other
investment funds managed by affiliates of Goldman, Sachs & Co, and John C.
Kennedy and his immediate family members, collectively.
"Spot Exchange Rate" means, at any date of determination thereof, the spot rate
of exchange in London that appears on the display page applicable to the
relevant currency on the Telerate System Incorporated Service (or such other
page as may replace such page on such service for the purpose of displaying the
spot rate of exchange in London for the conversion of Dollars into such
currency); provided that if there shall at any time no longer exist such a page
on such service, the spot rate of exchange shall be determined by reference to
another similar rate publishing service selected by Administrative Agent and
reasonably acceptable to the Company.
"Subject Transaction" as defined in Section 6.8(b).
"Subordinated Management Fee" means management fees payable by Holdings or any
of its Subsidiaries to Sponsor pursuant to the Management Services Agreement in
an aggregate annual amount not to exceed $690,000, which shall not be payable
(1) at any time when an Event of Default in respect of payment obligations
hereunder shall have occurred and is continuing
17
(or would be caused by such payment) and (2) prior to the payment in full, in
Cash, of all Obligations following the occurrence of, and during the continuance
of, an Event of Default in Section 8.1(f), Section 8.1(g) or Section 8.1(h)
(relating to bankruptcy).
"Subordinated Indebtedness" means the Senior Subordinated Notes and any other
Indebtedness of Holdings and its Subsidiaries (other than intercompany
Indebtedness permitted under Section 6.1) that is subordinated in right of
payment to the Obligations.
"Subsidiary" means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"Syndication Agent" as defined in the preamble hereto.
"Tax" means any present or future tax, levy, impost, duty, assessment, charge,
fee, deduction or withholding of any nature and whatever called, by any
Governmental Authority, on whomsoever and wherever imposed, levied, collected,
withheld or assessed, and all liabilities with respect thereto.
"Term Loan" means a Dollar Term Loan or a Euro Term Loan.
"Term Loan Commitment" means the Dollar Term Loan Commitment or the Euro Term
Loan Commitment of a Lender, and
"Term Loan Commitments" means such commitments of all Lenders in the aggregate.
The initial aggregate amount of the Term Loan Commitments as of the Closing Date
is the Dollar Equivalent of $75,000,000.
"Term Loan Maturity Date" means the earlier of (i) the sixth (6th) anniversary
of the Closing Date, and (ii) the date that all Term Loans shall become due and
payable in full hereunder, whether by acceleration or otherwise.
"Term Loan Note" means a Dollar Term Note or a Euro Term Note.
"Terminated Lender" as defined in Section 2.19.
"Title Policy" as defined in Section 3.1(e).
"Type of Loan" means a Base Rate Loan or a Eurocurrency Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"Waivable Mandatory Prepayment" as defined in Section 2.12(c).
1.2 Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial Statements.
1.3 Interpretation, etc. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non limiting language (such as "without limitation"
or "but not limited to" or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter.
SECTION 2. LOANS
2.1 Term Loans
(a) Term Loan Commitments. Subject to the terms and conditions hereof,
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(i) each Lender with a Dollar Term Loan Commitment severally
agrees to make, on the Closing Date, a Dollar Term Loan to Company in
Dollars in an amount equal to such Lender's Dollar Term Loan Commitment;
and
(ii) each Lender with a Euro Term Loan Commitment severally
agrees to make, on the Closing Date, a Euro Term Loan to Company in Euro in
an amount equal to such Lender's Euro Term Loan Commitment.
(b) The Company may make only one borrowing under each of the Dollar
Term Loan Commitments and the Euro Term Loan Commitments which shall be on the
Closing Date. Any amount borrowed under this Section 2.1(a) (or deemed borrowed
under Section 2.5(b)) and subsequently repaid or prepaid may not be reborrowed.
Subject to Sections 2.10(a) and 2.11, all amounts owed hereunder with respect to
the Dollar Term Loans and the Euro Term Loans shall be paid in full no later
than the Term Loan Maturity Date. Each Lender's Dollar Term Loan Commitment and
Euro Term Loan Commitment shall terminate immediately and without further action
on the Closing Date after giving effect to the funding of such Lender's Dollar
Term Loan Commitment and Euro Term Loan Commitment on such date.
(c) Borrowing Mechanics.
(i) The Company shall each deliver to Administrative Agent a
fully executed Funding Notice at least one day prior to the Closing Date.
Promptly upon receipt by Administrative Agent of such Certificate,
Administrative Agent shall notify each Lender of the proposed borrowing.
(ii) Each Lender shall make its Dollar Term Loan and/or Euro Term
Loan, as the case may be, available to Administrative Agent not later than
12:00 p.m. (Local Time) on the Closing Date, by wire transfer of same day
funds in Dollars or Euro, as applicable, at Administrative Agent's
Principal Office. Upon satisfaction or waiver of the conditions precedent
specified herein, Administrative Agent shall make the proceeds of (a) the
Dollar Term Loans available to Company on the Closing Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Administrative Agent from Lenders to be credited to the account
of Company at Administrative Agent's Principal Office or to such other
account as may be designated in writing to Administrative Agent by Company
and (b) Euro Term Loans available to Company on the Closing Date by causing
an amount of same day funds in Euro, equal to the proceeds of all such
Loans received by Administrative Agent from Lenders to be credited to the
account of Company at Administrative Agent's Principal Office or to such
other account as may be designated in writing to Administrative Agent by
Company.
2.2 Pro Rata Shares. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby nor shall any
Term Loan Commitment of any Lender be increased or decreased as a result of a
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby.
2.3 Use of Proceeds. The proceeds of the Dollar Term Loans and Euro Term
Loans made on the Closing Date shall be used by the Company to repay First Lien
Term Loans, to pay Second Lien Transaction Costs and for working capital and
general corporate purposes of Holdings and its Subsidiaries (including the
repayment of revolving loans outstanding under the First Lien Credit Agreement).
No portion of the proceeds of any Credit Extension shall be used in any manner
that causes or might cause such Credit Extension or the application of such
proceeds to violate Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation thereof or to
violate the Exchange Act.
2.4 Evidence of Debt; Register; Lenders' Books and Records; Notes.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of the
Company to such Lender, including the amounts of the Loans made by it and each
repayment and prepayment in respect thereof. Any such recordation shall be
conclusive and binding on the Company, absent manifest error; provided, that the
failure to make any such recordation, or any error in such recordation, shall
not affect the
19
Company's Obligations in respect of any applicable Term Loans; and provided
further, in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(b) Register. Administrative Agent shall maintain at its Principal
Office a register for the recordation of the names and addresses of Lenders and
the Term Loans of each Lender from time to time (the "Register"). The Register
shall be available for inspection by the Company at any reasonable time and from
time to time upon reasonable prior notice. In addition, Administrative Agent
shall make the Register available for inspection by the Lenders upon reasonable
prior notice at reasonable times, provided that a Lender shall only be entitled
to inspect its own entry in the Register and not that of any other Lender.
Administrative Agent shall record in the Register the Term Loans, and each
repayment or prepayment in respect of the principal amount of the Loans, and any
such recordation shall be conclusive and binding on the Company and each Lender,
absent manifest error; provided, failure to make any such recordation, or any
error in such recordation, shall not affect any Lender's Term Loans or the
Company's Obligations in respect of any Loan. The Company hereby designates
Administrative Agent to serve as Company's agent solely for purposes of
maintaining the Register as provided in this Section 2.4, and the Company hereby
agrees that, to the extent Administrative Agent serves in such capacity,
Administrative Agent and its officers, directors, employees, agents and
affiliates shall constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to the
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, the Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after the Company's receipt of such notice) a Term Loan Note or
Term Loan Notes to evidence such Lender's Dollar Term Loan or Euro Term Loan
(including any amounts added thereto pursuant to Section 2.5(b)). Any Term Loan
Note issued to a Lender on any Interest Payment Date with respect to the Dollar
PIK Amount or Euro PIK Amount, as the case may be, shall be in an aggregate
principal amount equal to the applicable PIK Amount with respect to such Term
Loan for such Interest Payment Date, and shall otherwise be identical to the
outstanding Dollar Term Loan Notes or Euro Term Loan Notes, as the case may be.
2.5 Interest on Loans.
(a) Except as otherwise set forth herein, the Term Loans shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) in the case of Dollar Term Loans:
(1) if a Base Rate Loan, at the Base Rate plus the
Applicable Margin; or
(2) if a Eurocurrency Rate Loan, at the Adjusted
Eurocurrency Rate plus the Applicable Margin; and
(ii) in the case of Euro Term Loans, at the Adjusted Eurocurrency
Rate plus the Applicable Margin.
(b) Company may, at its option, (i) pay up to 1.50% per annum of the
interest payable in respect of the Dollar Term Loans on any Interest Payment
Date by capitalizing and adding such interest to the then outstanding principal
amount of the Dollar Term Loans (the "Dollar PIK Amount") and (ii) pay up to
1.50% per annum of the interest payable in respect of the Euro Term Loans on any
Interest Payment Date by capitalizing and adding such interest to the then
outstanding principal amount of the Euro Term Loans (the "Euro PIK Amount"), in
each case in lieu of payment of such portion of interest in Cash. Each Lender
having Dollar Term Loan Exposure shall receive the same ratio of cash interest
to Dollar PIK Amount on such Interest Payment Date. Each Lender having Euro Term
Loan Exposure shall receive the same ratio of cash interest to Euro PIK Amount
on such Interest Payment Date. From and after the applicable Interest Payment
Date, references to the "Term Loans," "Dollar Term Loans" and "Euro Term Loans"
shall include the applicable PIK Amount capitalized and added to the principal
of such Loans on such date. Unless Company notifies Administrative Agent in
writing at least three Business Days prior to an Interest Payment Date that it
intends to pay in Cash all or any portion of the interest permitted to be paid
in kind on such date pursuant to this Section 2.5(b), Company shall be deemed to
have elected to pay in kind on such Interest Payment Date the maximum amount
permitted by this Section 2.5(b). To the extent the
20
Company elects to pay in Cash any portion of the interest payable on any
Interest Payment Date permitted to be paid in kind pursuant to this Section
2.5(b), the amount of such Cash payment shall be applied ratably to interest
payable on such date in respect of the Dollar Term Loans and the interest
payable on such date in respect of the Euro Term Loans.
(c) The basis for determining the rate of interest with respect to any
Loan, and the Interest Period with respect to any Eurocurrency Rate Loan, shall
be selected by the Company and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be; provided, until the date that Syndication Agent notifies
Company that the primary syndication of the Loans has been completed, as
determined by Syndication Agent, the Term Loans shall be maintained as either
(1) Eurocurrency Rate Loans having an Interest Period of no longer than one
month or (2) in the case of Dollar Loans, Base Rate Loans. If on any day a Loan
is outstanding with respect to which a Conversion/Continuation Notice has not
been delivered to Administrative Agent in accordance with the terms hereof
specifying the applicable basis for determining the rate of interest, then for
that day such Loan shall be a Base Rate Loan if such Loan is denominated in
Dollars or a Eurocurrency Loan with an Interest Period of one month if such Loan
is denominated in Euro.
(d) In connection with Eurocurrency Rate Loans there shall be no more
than four (4) Interest Periods outstanding at any time. In the event Company
fails to specify between a Base Rate Loan or a Eurocurrency Rate Loan in the
Conversion/Continuation Notice, such Loan (if outstanding as a Eurocurrency Rate
Loan) will be automatically converted into a Base Rate Loan on the last day of
the then-current Interest Period for such Loan (or if outstanding as a Base Rate
Loan will remain as a Base Rate Loan). In the event the Company fails to specify
an Interest Period for any Eurocurrency Rate Loan in the applicable
Conversion/Continuation Notice, the Company shall be deemed to have selected an
Interest Period of one month. As soon as practicable after 10:00 a.m. (Local
Time) on each Interest Rate Determination Date, Administrative Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurocurrency Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the Company and each Lender.
(e) Interest payable pursuant to this Section 2.5 shall be computed
(i) in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurocurrency Rate Loans, on the basis
of a 360-day year, in each case for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a
Eurocurrency Rate Loan, the date of conversion of such Eurocurrency Rate Loan to
such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurocurrency
Rate Loan, the date of conversion of such Base Rate Loan to such Eurocurrency
Rate Loan, as the case may be, shall be excluded; provided, if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
(f) Except as otherwise set forth herein, interest on each Loan shall
be payable in arrears on and to (i) each Interest Payment Date applicable to
that Loan; (ii) upon any prepayment of that Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) at
maturity, including final maturity; provided, however, with respect to any
voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
2.6 Conversion/Continuation.
(a) Subject to Section 2.15 and so long as no Default or Event of
Default shall have occurred and then be continuing, the Company shall have the
option:
(i) to convert at any time all or any part of any Term Loan in
Dollars equal to $1,000,000 and integral multiples of $1,000,000 in excess
of that amount from one Type of Loan to another Type of Loan; provided, a
Eurocurrency Rate Loan may only be converted on the expiration of the
Interest Period applicable to such Eurocurrency Rate Loan unless Company
shall pay all amounts due under Section 2.15 in connection with any such
conversion; or
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(ii) upon the expiration of any Interest Period applicable to any
Eurocurrency Rate Loan, to continue all or any portion of such Loan equal
to $1,000,000 or E1,000,000 and integral multiples of $1,000,000 or
E1,000,000 in excess of that amount as a Eurocurrency Rate Loan.
(b) The Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (Local Time) on the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least
three Business Days in advance of the proposed conversion/continuation date (in
the case of a conversion to, or a continuation of, a Eurocurrency Rate Loan).
Except as otherwise provided herein, a Conversion/Continuation Notice for
conversion to, or continuation of, any Eurocurrency Rate Loans (or telephonic
notice in lieu thereof) shall be irrevocable on and after the related Interest
Rate Determination Date, and the Company shall be bound to effect a conversion
or continuation in accordance therewith.
2.7 Default Interest. The amount of Loans, interest, fees or other amounts
not paid when due hereunder or under any other Credit Document, and, to the
extent permitted by applicable law, any interest payments on such Loans,
interest, fees or other amounts not paid when due hereunder or under any other
Credit Document, shall thereafter bear interest to the fullest extent permitted
by law (including post-petition interest in any proceeding under the Bankruptcy
Code or other applicable bankruptcy laws) payable on demand at a rate that is 2%
per annum in excess of the interest rate otherwise payable hereunder with
respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate Loans); provided, in the case of
Eurocurrency Rate Loans in Dollars, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective such
Eurocurrency Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder for Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
Section 2.7 is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.
2.8 Fees. Company agrees to pay to Agents fees in the amounts and at the
times separately agreed upon in writing.
2.9 Repayment of Loans. Company shall repay in full the aggregate principal
amount of Term Loans outstanding and all other amounts owing hereunder with
respect thereto no later than the Term Loan Maturity Date.
2.10 Voluntary Prepayments/Commitment Reductions.
(a) Voluntary Prepayments. The Loans shall not be prepayable at the
Company's option prior to the first anniversary of the Closing Date.
(i) Subject to the provisions of paragraph (b) below, at any time
and from time to time on or after the first anniversary of the Closing
Date:
(1) with respect to Base Rate Loans, Company may prepay any
such Loans on any Business Day in whole or in part, in an aggregate
minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount;
(2) with respect to Eurocurrency Rate Loans in Dollars,
Company may prepay any such Loans on any Business Day in whole or in
part in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount; and
(3) with respect to Eurocurrency Rate Loans in Euro, Company
may prepay any such Loans on any Business Day in whole or in part in
an aggregate minimum amount of E1,000,000 and integral multiples of
E1,000,000 in excess of that amount.
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(ii) All such prepayments shall be made:
(1) upon written or telephonic notice on the day of
prepayment in the case of Base Rate Loans; and
(2) upon not less than three Business Days' prior written or
telephonic notice in the case of Eurocurrency Rate Loans;
in each case given to Administrative Agent by the Company by 12:00 p.m. (Local
Time) on the date required and, if given by telephone, promptly confirmed in
writing to Administrative Agent (and Administrative Agent will promptly transmit
such telephonic or original notice for Term Loans by telefacsimile or telephone
to each Lender). Upon the giving of any such notice, the principal amount of the
Loans specified in such notice shall become due and payable on the prepayment
date specified therein. Any such voluntary prepayment shall be applied as
specified in Section 2.12(a).
(b) Prepayment Premium. In the event that any Term Loan is voluntarily
prepaid on or after the first anniversary of the Closing Date but prior to the
third anniversary of the Closing Date, Company shall pay Lenders a prepayment
premium equal to the percentage set forth below opposite the period in which
prepayment is made multiplied by the principal amount of the Term Loans so
prepaid.
Period Percentage
------ ----------
On or after the first, but prior to the second anniversary of the Closing Date 2.00%
On or after the second, but prior to the third anniversary of the Closing Date 1.00%
Term Loans may be prepaid without prepayment premium from and after the third
anniversary of the Closing Date.
(c) Certain Permitted Term Loan Repurchases.
Notwithstanding anything to the contrary contained in this
Section 2.10 or any other provision of this Agreement but subject to the terms
of the First Lien Credit Agreement, so long as (i) there is no Default, (ii)
there is no Event of Default and (iii) no Default or Event of Default would
result therefrom, the Company may repurchase outstanding Term Loans on the
following basis:
(i) Company may repurchase all or any portion of its Term Loans
of one or more Lenders, who elect in their sole discretion to sell the
same, pursuant to an Assignment Agreement, between Company and such Lender
or Lenders in an aggregate principal amount not to exceed $15,000,000 with
respect to all such repurchases pursuant to this clause (i); provided that,
with respect to such repurchases, Company shall simultaneously provide a
copy of such Assignment Agreement and any other agreements between Company
and such Lender with respect to such repurchase to Administrative Agent and
Syndication Agent;
(ii) In addition, Company may make one or more offers (each, an
"Offer") to repurchase all or any portion of its Term Loans (such Term
Loans, the "Offer Loans") of Lenders, provided, (A) Company delivers a
notice of such Offer to Administrative Agent and all Lenders no later than
noon (New York City time) at least five Business Days in advance of a
proposed consummation date of such Offer indicating (1) the last date on
which such Offer may be accepted, (2) the maximum dollar amount of the
Offer, (3) the repurchase price per dollar of principal amount of such
Offer Loans at which Company is willing to repurchase the Offer Loans
(which, in the case of Euro Term Loans, shall be converted to Euro based on
the Spot Exchange Rate as of the date the Offer is made) and (4) the
instructions, consistent with this Section 2.10(c) with respect to the
Offer (which shall be reasonably acceptable to Company, Administrative
Agent and Syndication Agent), that a Lender must follow in order to have
its Offer Loans repurchased; (B) the maximum dollar amount of the Offer
shall be no less than an aggregate $1,000,000; (C) Company shall hold the
Offer open for a minimum period of two Business Days; (D) a Lender who
elects to participate in the Offer may choose to tender all or part of such
Lender's Offer Loans; and (E) the Offer shall be made to Lenders holding
the Offer Loans on a pro rata basis in accordance with their Pro Rata
Shares; provided,
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further that, if any Lender elects not to participate in the Offer, either
in whole or in part, the amount of such Lender's Offer Loans not being
tendered shall be excluded in calculating the pro rata amount applicable to
the balance of such Offer Loans;
(iii) With respect to all repurchases made by Company pursuant to
this Section 2.10(c), (A) Company shall pay all accrued and unpaid
interest, if any, on the repurchased Term Loans to the date of repurchase
of such Term Loans, (B) the repurchase of such Term Loans by Company shall
not be taken into account in the calculation of Consolidated Excess Cash
Flow, (C) Company shall have provided to all Lenders all information that,
together with any previously provided information, would satisfy the
requirements of Rule 10b-5 of the Exchange Act with respect to an offer by
Company to repurchase securities registered under the Securities Act of
1933 (whether or not such securities are outstanding) as if such offer was
being made as of the date of such repurchase of Term Loans from a Lender
and (D) such repurchases shall not be deemed to be voluntary prepayments
pursuant to this Section 2.10, Section 2.12 or 2.13 hereunder except that
the amount of the Loans so repurchased shall be applied on a pro rata basis
to reduce the scheduled remaining installments of principal on such Term
Loan; and
(iv) Following repurchase by Company pursuant to this Section
2.10(c), the Term Loans so repurchased shall be deemed cancelled for all
purposes and no longer outstanding (and may not be resold by Company), for
all purposes of this Agreement and all other Credit Documents, including,
but not limited to (A) the making of, or the application of, any payments
to the Lenders under this Agreement or any other Credit Document, (B) the
making of any request, demand, authorization, direction, notice, consent or
waiver under this Agreement or any other Credit Document or (C) the
determination of Requisite Lenders, or for any similar or related purpose,
under this Agreement or any other Credit Document. Any payment made by
Company in connection with a repurchase permitted by this Section 2.10(c)
shall not be subject to the provisions of either Section 2.13(a) or Section
2.14. Failure by Company to make any payment to a Lender required by an
agreement permitted by this Section 2.10(c) shall not constitute an Event
of Default under Section 8.1(a).
Notwithstanding any of the provisions set forth in this Agreement to the
contrary, Company, the Lenders and Agents hereby agree that nothing in this
Agreement shall be understood to mean or suggest that the Term Loans constitute
"securities" for purposes of either the Securities Act or the Exchange Act.
2.11 Mandatory Prepayments. Subject to Section 2.13, the Company shall
apply the following amounts at the following times in the manner described in
Section 2.12(b):
(a) Asset Sales. No later than the third Business Day following the
date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale
Proceeds, Company shall apply an amount equal to such Net Asset Sale Proceeds in
accordance with Section 2.12(b); provided, so long as no Default or Event of
Default shall have occurred and be continuing, Company shall have the option,
directly or through one or more of its Subsidiaries, to invest Net Asset Sale
Proceeds within three hundred sixty days of receipt thereof in capital assets of
the general type used in the business of Company and its Subsidiaries (including
any such capital assets acquired in a Permitted Acquisition).
(b) Insurance/Condemnation Proceeds. No later than the third Business
Day following the date of receipt by Holdings or any of its Subsidiaries, or
Administrative Agent as loss payee therefor, of any Net Insurance/Condemnation
Proceeds, Company shall apply an amount equal to such Net Insurance/Condemnation
Proceeds in accordance with Section 2.12(b); provided, (i) so long as no Default
or Event of Default shall have occurred and be continuing, Company shall have
the option, directly or through one or more of its Subsidiaries to invest such
Net Insurance/Condemnation Proceeds within three hundred sixty days of receipt
thereof in capital assets of the general type used in the business of Holdings
and its Subsidiaries (including any such capital assets acquired in a Permitted
Acquisition), which investment may include the repair, restoration or
replacement of the applicable assets thereof.
(c) Issuance of Equity Securities. No later than the third Business
Day following the date of receipt by Parent or any of its Subsidiaries of any
Cash proceeds from a capital contribution to, or the issuance of any Capital
Stock of, Parent or any of its Subsidiaries (other than pursuant to any employee
stock or stock option compensation plan and other than any Capital Stock issued
by a Subsidiary of Company to Company or any of its Subsidiaries of which such
issuer is a Subsidiary), to the extent such proceeds are not used to pay
Permitted Acquisition Expenses or, solely in the case of proceeds from
Additional Sponsor Equity, to substantially concurrently pay Consolidated
Capital Expenditures, Company shall apply
24
an amount equal to 50% of such proceeds (net of underwriting or placement
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) in accordance with
Section 2.12(b); provided, during any period in which the Leverage Ratio
(determined for any such period by reference to the most recent Compliance
Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio)
shall be less than 3.00:1.00, Company shall only be required to apply an amount
equal to 25% of such net proceeds.
(d) Issuance of Debt. No later than the third Business Day following
the date of receipt by Holdings or any of its Subsidiaries of any Cash proceeds
from the incurrence of any Indebtedness of Holdings or any of its Subsidiaries
(other than with respect to any Indebtedness permitted to be incurred pursuant
to Section 6.1 except Section 6.1(c)(ii)), Company shall apply an amount equal
to 100% of such proceeds (net of underwriting or placement discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses) in accordance with Section
2.12(b).
(e) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow after the Closing Date for any Fiscal Year
(commencing with Fiscal Year ending December 31, 2004), Company shall, no later
than one hundred twenty days after the end of such Fiscal Year, apply an amount
equal to 75% of such Consolidated Excess Cash Flow in accordance with Section
2.12(b); provided, during any period in which the Leverage Ratio (determined for
any such period by reference to the most recent Compliance Certificate delivered
pursuant to Section 5.1(d) calculating the Leverage Ratio) shall be less than
3.00:1.00, Company shall only be required to apply an amount equal to 50% of
such Consolidated Excess Cash Flow.
(f) Prepayment Certificate. Concurrently with any prepayment of the
Loans pursuant to Sections 2.11(a) through 2.11(e), Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds or Consolidated Excess
Cash Flow, as the case may be. In the event that Company shall subsequently
determine that the actual amount received exceeded the amount set forth in such
certificate, Company shall promptly apply an amount equal to such excess in
accordance with Section 2.12(b), and Company shall concurrently therewith
deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the derivation of such excess.
2.12 Application of Prepayments/Reductions.
(a) Application of Voluntary Prepayments. Any prepayment of any Term
Loan pursuant to Section 2.10(a) shall be applied as specified by the Company in
the applicable notice of prepayment; provided, if the Company fails to specify
the Loans to which any such prepayment shall be applied, such prepayment shall
be applied to prepay the Dollar Term Loans and the Euro Term Loans on a pro rata
basis (in accordance with the respective outstanding principal amounts thereof).
(b) Application of Mandatory Prepayments. Any amount required to be
paid pursuant to Sections 2.11(a) through 2.11(e) shall be applied as follows:
first, to prepay the "Obligations" under (and as defined in) the
First Lien Credit Agreement to the extent such prepayment is required
pursuant to the terms thereof;
second, to prepay the Dollar Term Loans and Euro Term Loans to
the full extent thereof on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof); and
third, any amounts remaining after application in accordance
herewith may be retained by the Company.
(c) Waivable Mandatory Prepayment. Anything contained herein to the
contrary notwithstanding, in the event Company is required to make any mandatory
prepayment (a "Waivable Mandatory Prepayment") of the Loans pursuant to clause
"second" of Section (b), not less than three Business Days prior to the date
(the "Required Prepayment Date") on which Company is required to make such
Waivable Mandatory Prepayment, Company shall notify Administrative Agent of the
amount of such prepayment, and Administrative Agent will promptly thereafter
notify each Lender holding an outstanding Loan of the amount of such Lender's
Pro Rata Share of such Waivable Mandatory Prepayment and such
25
Lender's option to refuse such amount. Each such Lender may exercise such option
by giving written notice to Company and Administrative Agent of its election to
do so on or before the first Business Day prior to the Required Prepayment Date
(it being understood that any Lender which does not notify Company and
Administrative Agent of its election to exercise such option on or before the
first Business Day prior to the Required Prepayment Date shall be deemed to have
elected, as of such date, not to exercise such option). On the Required
Prepayment Date, Company shall pay to Administrative Agent an amount equal to
that portion of the Waivable Mandatory Prepayment payable to those Lenders that
have elected not to exercise such option, to prepay the Loans of such Lenders
(which prepayment shall be applied to the scheduled installments of principal of
the Loans in accordance with Section 2.12(b)). Company may retain any portion of
the Waivable Mandatory Prepayment not otherwise payable to Lenders hereunder.
(d) Application of Prepayments of Loans to Base Rate Loans and
Eurocurrency Rate Loans. Considering each Class of Loans being prepaid
separately, any prepayment thereof shall be applied first to Base Rate Loans to
the full extent thereof before application to Eurocurrency Rate Loans, in each
case in a manner which minimizes the amount of any payments required to be made
by Company pursuant to Section 2.15(c).
2.13 General Provisions Regarding Payments.
(a) All payments by the Company of principal, interest, fees and other
Obligations shall be made in the currency in which such Obligation is
denominated (either Dollars or Euro) in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (Local Time) on the date due at
Administrative Agent's Principal Office for the account of Lenders; funds
received by Administrative Agent after that time on such due date shall be
deemed to have been paid by the Company on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan shall
be accompanied by payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments (and, in any event, any payments in
respect of any Loan on a date when interest is due and payable with respect to
such Loan) shall be applied to the payment of interest before application to
principal.
(c) Administrative Agent shall promptly distribute to each Lender at
such address as such Lender shall indicate in writing, such Lender's applicable
Pro Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurocurrency Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "Interest
Period", whenever any payment to be made hereunder shall be stated to be due on
a day that 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 the
computation of the payment of interest hereunder.
(f) The Company hereby authorizes Administrative Agent to charge the
Company's accounts with Administrative Agent in order to cause timely payment to
be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(g) Administrative Agent may deem any payment by or on behalf of the
Company hereunder that is not made in same day funds prior to 12:00 p.m. (Local
Time) to be a non-conforming payment. Any such payment shall not be deemed to
have been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic or electronic notice to the
Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day) at
26
the rate determined pursuant to Section 2.7 from the date such amount was due
and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not otherwise been
waived, and the maturity of the Obligations shall have been accelerated pursuant
to Section 8.1, all payments or proceeds received by Agents hereunder in respect
of any of the Obligations, shall be applied in accordance with the application
arrangements described in Section 7.2 of the Pledge and Security Agreement.
2.14 Ratable Sharing. Lenders hereby agree among themselves that, except as
otherwise provided in the Collateral Documents with respect to amounts realized
from the exercise of rights with respect to Liens on the Collateral, if any of
them shall, whether by voluntary or mandatory payment (other than a voluntary or
mandatory payment or prepayment of Loans made and applied in accordance with the
terms hereof), through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Credit
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to such Lender hereunder or under the other Credit
Documents (collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply such proportionately
greater payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt by
such seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided, if all or part of such proportionately greater payment received by
such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of the Company or otherwise, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. The Company expressly consents to the foregoing arrangement
and agrees that any holder of a participation so purchased may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by the Company to that holder with respect thereto as fully as if
that holder were owed the amount of the participation held by that holder.
2.15 Making or Maintaining Eurocurrency Rate Loans.
(a) Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto absent manifest error), on
any Interest Rate Determination Date with respect to any Eurocurrency Rate
Loans, that by reason of circumstances affecting the applicable interbank market
adequate and reasonable means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of Adjusted
Eurodollar Rate, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company and each Lender
of such determination, whereupon (i) no Loans may be made as, or converted to,
Eurocurrency Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by the
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by the Company.
(b) Illegality or Impracticability of Eurocurrency Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurocurrency Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good faith with any
law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the
applicable interbank market or the position of such Lender in that market, then,
and in any such event, such Lender shall be an "Affected Lender" and it shall on
that day give notice (by telefacsimile or by telephone confirmed in writing) to
Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(1) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurocurrency Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (2) to the extent such determination by the
Affected Lender relates to a Eurocurrency Rate Loan then being requested by
Company pursuant
27
to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender
shall make such Loan as (or continue such Loan as or convert such Loan to, as
the case may be) a Base Rate Loan, (3) the Affected Lender's obligation to
maintain its outstanding Eurocurrency Rate Loans (the "Affected Loans") shall be
terminated at the earlier to occur of the expiration of the Interest Period then
in effect with respect to the Affected Loans or when required by law, (4) the
Affected Loans in Dollars shall automatically convert into Base Rate Loans on
the date of such termination, and (5) the Affected Loans in Euro shall be repaid
by the Company on the date of such termination, together with all interest
accrued thereon. Notwithstanding the foregoing, to the extent a determination by
an Affected Lender as described above relates to a Eurocurrency Rate Loan then
being requested by the Company pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Company shall have the option, subject to
the provisions of Section 2.15(c), to rescind such Funding Notice or
Conversion/Continuation Notice as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this Section 2.15(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurocurrency Rate Loans in accordance with the terms
hereof.
(c) Compensation for Breakage or Non-Commencement of Interest Periods.
The Company shall compensate each Lender, upon written request by such Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by such
Lender to Lenders of funds borrowed by it to make or carry its Eurocurrency Rate
Loans and any loss, expense or liability sustained by such Lender in connection
with the liquidation or re-employment of such funds but excluding loss of
anticipated profits) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender) a borrowing of any Eurocurrency Rate Loan by the
Company does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurocurrency Rate Loan of the Company does not occur on a date specified
therefor in a Conversion/Continuation Notice or a telephonic request for
conversion or continuation; (ii) if any prepayment or other principal payment
of, or any conversion of, any of its Eurocurrency Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan (including,
without limitation, pursuant to Section 2.10(c) hereof); or (iii) if any
prepayment of any of its Eurocurrency Rate Loans is not made on any date
specified in a notice of prepayment given by the Company.
(d) Booking of Eurocurrency Rate Loans. Any Lender may make, carry or
transfer Eurocurrency Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurocurrency Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.15 and under
Section 2.16 shall be made as though such Lender had actually funded each of its
relevant Eurocurrency Rate Loans through the purchase of a Eurocurrency deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurocurrency Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of such Lender to a domestic office of such Lender in the United States
of America; provided, however, each Lender may fund each of its Eurocurrency
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this Section
2.15 and under Section 2.16.
2.16 Increased Costs; Capital Adequacy.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.17 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof (in the case of each Lender listed on the signature pages hereof on the
Closing Date), or after the effective date of the Assignment Agreement pursuant
to which such Lender became a Lender (in the case of each other Lender), and
with respect to any Lender that changes its lending office, after the date of
such change in lending office, or compliance by such Lender with any guideline,
request or directive issued or made after the date hereof by any central bank or
other governmental or quasi-governmental authority (whether or not having the
force of law): (i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any
28
Excluded Tax) with respect to this Agreement or any of the Credit Documents or
any of its obligations hereunder or thereunder or any payments to such Lender
(or its applicable lending office) of principal, interest, fees or any other
amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Lender (other than any such reserve or other
requirements with respect to Eurocurrency Rate Loans that are reflected in the
definition of Adjusted Eurocurrency Rate); or (iii) imposes any other condition
(other than with respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder or the London interbank
market or the European interbank market; and the result of any of the foregoing
is to increase the cost to such Lender of agreeing to make, making or
maintaining Loans hereunder or to reduce any amount received or receivable by
such Lender (or its applicable lending office) with respect thereto; then, in
any such case, Company shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender under this Section 2.16(a), which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender shall
have determined that the adoption, effectiveness, phase-in or applicability
after the Closing Date of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or participations therein or other obligations hereunder
with respect to the Loans to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement referred to in the
next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under
this Section 2.16(b), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
2.17 Taxes; Withholding, etc.
(a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than any Excluded Tax) imposed,
levied, collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of America or
any other jurisdiction from or to which a payment is made by or on behalf of any
Credit Party or by any federation or organization of which the United States of
America or any such jurisdiction is a member at the time of payment.
(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to pay or make any deduction or withholding on account of any
Tax from any sum paid or payable by any Credit Party to Administrative Agent or
any Lender under any of the Credit Documents: (i) Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Company becomes aware of it; (ii) Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) except with respect to any Excluded Tax, the sum payable by such
Credit Party in respect of which the relevant deduction, withholding or payment
is required shall be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding or payment been required
or made; and (iv) within thirty days after paying any sum from which
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it is required by law to make any deduction or withholding, and within thirty
days after the due date of payment of any Tax which it is required by clause
(ii) above to pay, Company shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing or other authority;
provided, no such additional amount shall be required to be paid to any Lender
under clause (iii) above except to the extent that any change in any applicable
law, treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof after the date hereof (in
the case of each Lender listed on the signature pages hereof on the Closing
Date) or after the effective date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date hereof or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender. Moreover,
if any Taxes (other than any Excluded Taxes) are directly asserted against
Administrative Agent or any Lender with respect to any payments under any Credit
Document, such payee may pay such Taxes, and, upon receipt of reasonably
satisfactory documentation evidencing such payment, the Credit Parties shall
promptly pay such additional amounts (including, without limitation, any
penalties, interest or reasonable expenses) as may be necessary in order that
the net amount received by such payee after the payment of such Taxes (including
any Taxes on such additional amount) shall equal the amount such payee would
have received had no such Taxes been asserted; provided that Administrative
Agent and each Lender shall use reasonable efforts, to the extent consistent
with applicable laws and regulations, to minimize to the extent possible any
such Taxes if they can do so without material cost or regulatory disadvantage;
and provided further that no additional amount shall be required to be paid to
any Lender under this sentence except to the extent that any change in the law
(including any administrative or judicial interpretation thereof) under which
the liability for such Taxes arises after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
effective date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) shall result in an increase in the
amount or rate of such Tax from those in effect at the date hereof or at the
date of such Assignment Agreement, as the case may be.
(c) Evidence of Exemption From U.S. Withholding Tax. (i) Each Lender
with Term Loan Exposure that is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal
income tax purposes (a "Non-U.S. Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the case of
each Lender listed on the signature pages hereof on the Closing Date) or on or
prior to the date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), upon designation of a new lending
office and at such other times as may be necessary in the determination of
Company or Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms), properly completed and duly executed by such
Lender, and such other documentation reasonably requested by Company, to
establish that such Lender is not subject to or is subject to a reduced rate of
deduction or withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts payable
under any of the Credit Documents, or (2) if such Lender is not a "bank" or
other Person described in Section 881(c)(3) of the Internal Revenue Code and
cannot establish that it is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
interest payable under any of the Credit Documents pursuant to clause (1) above,
a Certificate re Non-Bank Status together with two original copies of the
appropriate Internal Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, and such other documentation
reasonably requested by Company, to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to
such payments.
(ii) Each Lender that is a United States Person (as such term in
defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S.
federal income tax purposes and is not an exempt recipient (as such term is
defined in Section 6049(b)(4) and the U.S. Treasury regulations thereunder
(a "U.S. Lender") shall deliver to Administrative Agent for transmission to
Company, on or prior to the Closing Date (in the case of each Lender listed
on the signature pages hereof on the Closing Date) or on or prior to the
date of the Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), two original copies of Internal Revenue
Service Form W-9 (or any successor forms), properly completed and duly
executed by such Lender, and such other documentation reasonably requested
by Company or Administrative Agent, to establish that such Lender is not
subject to deduction or withholding of United States federal backup
withholding tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Credit Documents.
(iii) Each Lender hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other evidence
required to be provided by subsection (i) or (ii) of this Section 2.17(c),
whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or
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inaccurate in any material respect, that such Lender shall promptly deliver
to Administrative Agent for transmission to Company two new original copies
of Internal Revenue Service Form W-8BEN, W-8ECI or W-9, or a Certificate re
Non-Bank Status and two original copies of the appropriate Internal Revenue
Service Form W-8 (or applicable successor form), as the case may be,
properly completed and duly executed by such Lender, and such other
documentation reasonably requested by Company or Administrative Agent, to
confirm or establish that such Lender is not subject to or is subject to a
reduced rate of deduction or withholding of United States federal income
tax with respect to payments to such Lender under the Credit Documents, or
notify Administrative Agent and Company of its inability to deliver any
such forms, certificates or other evidence.
(iv) Company shall not be required to pay any additional amount to any
Lender under Section 2.17(b)(iii) and shall withhold from any payment to
such Lender the amount equal to the applicable withholding tax required by
law if such Lender shall have failed (1) to deliver the forms, certificates
or other evidence referred to in this Section 2.17(c), or (2) to notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence, as the case may be; provided, if
such Lender shall have satisfied the requirements of this Section 2.17(c)
on the Closing Date or on the date of the Assignment Agreement pursuant to
which it became a Lender, as applicable, nothing in this subsection (iv) of
Section 2.17(c) shall relieve Company of its obligation to pay any
additional amounts pursuant this Section 2.17 in the event that, as a
result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described herein.
(d) Tax Refund. (i) If the Administrative Agent or a Lender
determines, in its sole discretion, that it has received a refund (whether by
way of a direct payment or by offset) of any Taxes as to which it has been
indemnified by the Company pursuant to Section 2.16 or with respect to which the
Company has paid additional amounts pursuant to this Section 2.17, it shall pay
over the amount of such refund to the Company (but only to the extent of
indemnity payments made, or additional amounts paid, by the Company with respect
to the Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, however, that the Company, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Company (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority.
(ii) If a Lender which has received indemnification from the Company
pursuant to Section 2.16 or with respect to which the Company has paid
additional amounts pursuant to this Section 2.17 shall become aware that it
is entitled to a refund (whether by way of a direct payment or by offset)
of any Taxes as to which it has been indemnified by or has received
additional amounts from the Company, such Lender shall, at the expense of
the Company, reasonably cooperate with the Company in seeking to obtain
such refund. (iii) Nothing contained in this Section 2.17 shall require the
Administrative Agent or any Lender to make available its tax returns (or
any other information relating to its Taxes which it deems confidential) to
the Company or any other Person.
2.18 Obligation to Mitigate. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans, becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.15, 2.16 or 2.17,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Credit Extensions, including
any Affected Loans, through another office of such Lender, or (b) take such
other measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.15, 2.16 or 2.17 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making,
funding or maintaining of such Loans through such other office or in accordance
with such other measures would not otherwise adversely affect such Loans or the
interests of such Lender; provided, such Lender will not be obligated to utilize
such other office pursuant to this Section 2.18 unless Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other
office as described in clause (a) above. A certificate as to the amount of any
such expenses payable by Company
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pursuant to this Section 2.18 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to the Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
2.19 Removal or Replacement of a Lender. Anything contained herein to the
contrary notwithstanding, in the event that: (a)(i) any Lender (an
"Increased-Cost Lender") shall give notice to the Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.15, 2.16 or 2.17 or the Company shall have established to the
reasonable satisfaction of Administrative Agent and such Lender that such Lender
is entitled to such payments, (ii) the circumstances which have caused such
Lender to be an Affected Lender or which entitle such Lender to receive such
payments shall remain in effect, and (iii) such Lender shall fail to (x)
withdraw such notice or (y) waive in writing the right to receive applicable
payments, in each of cases (a)(i) and (a)(ii) above, within five Business Days
after Company's request for such withdrawal or waiver; or (b) in connection with
any proposed amendment, modification, termination, waiver or consent with
respect to any of the provisions hereof as contemplated by Section 10.5(b), the
consent of Requisite Lenders shall have been obtained but the consent of one or
more of such other Lenders (each a "Non-Consenting Lender") whose consent is
required shall not have been obtained; then, with respect to each such
Increased-Cost Lender or Non-Consenting Lender (the "Terminated Lender"),
Company may, by giving written notice to Administrative Agent and any Terminated
Lender of its election to do so, elect to cause such Terminated Lender (and such
Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans in
full to one or more Eligible Assignees (each a "Replacement Lender") in
accordance with the provisions of Section 10.6 and Terminated Lender shall pay
any fees payable thereunder in connection with such assignment; provided, (1) on
the date of such assignment, the Replacement Lender shall pay to Terminated
Lender an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Terminated Lender and all accrued but unpaid fees owing
to such Terminated Lender pursuant to Section 2.8 (including any prepayment
premiums payable on such Loans pursuant to Section 2.10(b) if the Loans of such
Lender were prepaid on such date); (2) on the date of such assignment, Company
shall pay any amounts payable to such Terminated Lender pursuant to Section
2.15(c), 2.16 or 2.17; and (3) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender. Upon the prepayment of all amounts owing to any
Terminated Lender, such Terminated Lender shall no longer constitute a "Lender"
for purposes hereof; provided, any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.
SECTION 3. CONDITIONS PRECEDENT
3.1 Closing Date. The obligation of any Lender to make a Credit Extension
on the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 10.5, of the following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received (i) sufficient copies of each Organizational Document executed and
delivered by each Credit Party, as applicable, and, to the extent applicable,
certified as of a recent date by the appropriate governmental official, for each
Lender, each dated the Closing Date or a recent date prior thereto; (ii)
signature and incumbency certificates of the officers of such Person executing
the Credit Documents to which it is a party; (iii) resolutions of the Board of
Directors or similar governing body of each Credit Party approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party or by which it or its assets may
be bound as of the Closing Date, certified as of the Closing Date by its
secretary or an assistant secretary as being in full force and effect without
modification or amendment; (iv) a good standing certificate (or analogous
document in the case of Guarantor Foreign Subsidiaries) from the applicable
Governmental Authority of each Credit Party's jurisdiction of incorporation,
organization or formation, each dated a recent date prior to the Closing Date;
and (v) such other documents as Administrative Agent or Lenders may reasonably
request.
(c) Organizational and Capital Structure. The organizational structure
and capital structure of Holdings, Parent and its Subsidiaries shall be as set
forth on Schedule 4.1.
(d) Governmental Authorizations and Consents. Each Credit Party shall
have obtained all Governmental Authorizations and all consents of other Persons,
in each case that are necessary or advisable in connection with the transactions
contemplated by the Credit Documents and each of the foregoing shall be in full
force and effect and in
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form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent, except for such registrations, consents, approvals,
notices or actions the failure of which to obtain, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
All applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the transactions contemplated by the
Credit Documents or the financing thereof and no action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
(e) Real Estate Assets. In order to create in favor of Collateral
Agent, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected Second Priority Lien in certain
Real Estate Assets, Collateral Agent shall have received from Company and each
applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper form for
recording in the respective applicable jurisdictions, encumbering each Real
Estate Asset listed in Schedule 3.1(e) (each, a "Closing Date Mortgaged
Property");
(ii) an opinion of Honigman Miller Schwartz and Cohn LLP with
respect to the enforceability of the form(s) of Mortgages to be recorded in
the state of Michigan and such other matters as Collateral Agent may
reasonably request and subject to appropriate assumptions and
qualifications required by the counsel issuing the opinion, reasonably
satisfactory to Collateral Agent;
(iii) (A) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by one or more title companies
reasonably satisfactory to Collateral Agent with respect to each Closing
Date Mortgaged Property (each, a "Title Policy"), in amounts not less than
the fair market value of each Closing Date Mortgaged Property, together
with a title report issued by a title company with respect thereto, dated
not more than thirty days prior to the Closing Date and copies of all
recorded documents listed as exceptions to title or otherwise referred to
therein, each in form and substance reasonably satisfactory to Collateral
Agent and (B) evidence satisfactory to Collateral Agent that such Credit
Party has paid to the title company all premiums in connection with the
issuance of each Title Policy and to the appropriate governmental
authorities all other sums and recording fees required in connection with
recording the Mortgages for each Closing Date Mortgaged Property in the
appropriate real estate records; and
(iv) evidence of flood insurance with respect to each Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve
System, in form and substance reasonably satisfactory to Collateral Agent.
(f) Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid, perfected Second
Priority Lien in the personal property Collateral, Collateral Agent shall have
received:
(i) evidence satisfactory to Collateral Agent of the compliance
by each Credit Party with their obligations under the Pledge and Security
Agreement and the other Collateral Documents (including, without
limitation, their obligations to execute and deliver (a) UCC financing
statements, (b) all cover sheets or other documents or instruments required
to be filed with any applicable intellectual property registries, including
but not limited to the United States Patent and Trademark Office and the
United States Copyright Officer, (c) originals of stock certificates (which
stock certificates shall be accompanied by irrevocable undated stock
powers, duly endorsed in blank) representing all Capital Stock pledged
pursuant to the Pledge and Security Agreement and any Foreign Pledge
Agreements, and (d) other instruments and chattel paper (duly endorsed,
where appropriate) evidencing any Collateral); provided that with respect
to items described in clauses (c) and (d) above, delivery to the First Lien
Collateral Agent as agent for the Collateral Agent and the Lenders
hereunder for perfection purposes pursuant to the terms of the
Intercreditor Agreement shall constitute delivery to the Collateral Agent
under this Section 3.1(f)(i);
(ii) a completed Officer's Certificate dated the Closing Date and
executed by an Authorized Officer of each Credit Party, certifying the
exact name and jurisdiction of organization of each of Holdings and its
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Subsidiaries and attaching (A) the results of a recent search, by a Person
satisfactory to Collateral Agent, of all effective UCC financing statements
(or equivalent filings) made with respect to any personal or mixed property
of any Credit Party in the jurisdictions specified by Collateral Agent,
together with copies of all such filings disclosed by such search, and (B)
UCC termination statements (or similar documents) duly executed or
authorized by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements (or equivalent filings) disclosed in such search (other than any
such financing statements in respect of Permitted Liens;
(iii) evidence that each Credit Party shall have taken or caused
to be taken any other action, executed and delivered or caused to be
executed and delivered any other agreement, document and instrument
(including without limitation, (i) a Landlord Personal Property Collateral
Access Agreement executed by the landlord of any Leasehold Property and by
the applicable Credit Party and (ii) any intercompany notes evidencing
Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and made
or caused to be made any other filing and recording (other than as set
forth herein) reasonably required by Collateral Agent; and
(iv) execution and delivery to Collateral Agent of Foreign Pledge
Agreements with respect to 65% (or 100%, if no material adverse tax
consequences will be caused as a result thereof) of the Capital Stock owned
by Company, a Domestic Subsidiary of Company, or a Guarantor Foreign
Subsidiary of all Foreign Subsidiaries with respect to which Collateral
Agent deems a Foreign Pledge Agreement necessary or advisable to perfect or
otherwise protect the Second Priority Liens granted to Collateral Agent on
behalf of Lenders in such Capital Stock, and the taking of all such other
actions under the laws of the jurisdictions as Collateral Agent may deem
necessary or advisable to perfect or otherwise protect such Liens.
(g) Amendment to First Lien Credit Agreement. Administrative Agent
shall have received evidence satisfactory to the Administrative Agent that the
First Lien Credit Agreement has been (or shall be concurrently with the making
of the Term Loans and the application of the proceeds thereof) amended to permit
Holdings and its Subsidiaries to enter into the Loan Documents (including the
granting of Liens granted thereby) and the incurrence of the Term Loans
hereunder.
(h) Intercreditor Agreement. First Lien Collateral Agent shall have
executed and delivered the Intercreditor Agreement, reasonably satisfactory in
form and substance to the Collateral Agent and the Lenders.
(i) Evidence of Insurance. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to Section 5.5 is in full
force and effect, together with endorsements naming Collateral Agent, for the
benefit of Lenders, as additional insured and loss payee thereunder to the
extent required under Section 5.5.
(j) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of (i) Fried, Frank, Harris, Shriver & Jacobson LLP,
(ii) Honigman Miller Schwartz and Cohn LLP, and (iii) NautaDutilh N.V., counsel
for Credit Parties, with respect to such matters as Administrative Agent or
Syndication Agent may reasonably request and subject to appropriate assumptions
and qualifications required by the counsel issuing the opinion, dated as of the
Closing Date and otherwise in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent (and each Credit Party hereby
instructs such counsel to deliver such opinions to Agents and Lenders).
(k) Fees. Company shall have paid to Syndication Agent and
Administrative Agent, the fees payable on the Closing Date.
(l) Solvency Certificate. On the Closing Date, Syndication Agent and
Administrative Agent shall have received a Solvency Certificate from Company
dated the Closing Date and addressed to Syndication Agent, Administrative Agent
and Lenders, and in form, scope and substance satisfactory to Syndication Agent
and Administrative Agent, certifying that after giving effect to the
transactions contemplated by the Credit Documents to occur on or prior to the
Closing Date, Company and Company and its Subsidiaries on a consolidated basis
are and will be Solvent.
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(m) Closing Date Certificate. Holdings and Company shall have
delivered to Syndication Agent and Administrative Agent an originally executed
Closing Date Certificate, together with all attachments thereto.
(n) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent
and Syndication Agent, singly or in the aggregate, materially impairs the
transactions contemplated by the Credit Documents, or that could reasonably be
expected to have a Material Adverse Effect.
(o) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent or Syndication Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and Syndication Agent
and such counsel, and Administrative Agent, Syndication Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent or Syndication Agent may reasonably request.
Notwithstanding the foregoing, Administrative Agent hereby delegates its
responsibility to accept delivery of the closing items under this Section 3 to
GSCP, and GSCP accepts such delegation. Lenders hereby agree that Administrative
Agent may rely on a written acknowledgement by GSCP to Administrative Agent that
GSCP has received all of the necessary deliveries, and made, or instructed
Administrative Agent to make, all of the necessary filings, required under this
Section 3 unless such delivery has been waived in accordance with this
Agreement. Each Lender, by delivering its signature page to this Agreement and
funding a Loan on the Closing Date, shall be deemed to have acknowledged receipt
of, and consented to and approved, each Credit Document and each other document
required to be approved by any Agent, Requisite Lenders or Lenders, as
applicable on the Closing Date.
3.2 Additional Conditions to the Credit Extension.
(a) Conditions Precedent. The obligation of each Lender to make any
Loan on the Closing Date, is also subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions precedent:
(i) Administrative Agent shall have received a fully executed and
delivered Funding Notice;
(ii) on and as of the Closing Date, the representations and
warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects;
(iii) as of the Closing Date, no event shall have occurred and be
continuing or would result from the consummation of the Credit Extension on
the Closing Date that would constitute an Event of Default or a Default.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of the Loans, additional information reasonably
satisfactory to the requesting party confirming the satisfaction of any of the
foregoing if, in the good faith judgment of such Agent or Requisite Lenders such
request is warranted under the circumstances.
(b) Notices. Any Notice shall be executed by an Authorized Officer in
a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing or conversion/continuation, as the case may be; provided
each such notice shall be promptly confirmed in writing by delivery of the
applicable Notice to Administrative Agent on or before the applicable date of
borrowing or continuation/conversion. Neither Administrative Agent nor any
Lender shall incur any liability to Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized on behalf of
Company or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans on the Closing Date, each Credit Party represents and warrants to each
Lender on the Closing Date, that the following statements are true and correct,
except to the extent any representation or warranty relates to a specific date,
in which case such statement shall be true and correct as
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of such specific date:
4.1 Organization; Requisite Power and Authority; Qualification. Each of
Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (c) is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had, and could not be reasonably expected to have, a Material Adverse Effect.
4.2 Capital Stock and Ownership. The Capital Stock of each of Holdings and
its Subsidiaries has been duly authorized and validly issued and is fully paid
and non-assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which Holdings or any of its Subsidiaries is a party requiring, and there is
no membership interest or other Capital Stock of Holdings or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the
issuance by Holdings or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Holdings or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Holdings and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date.
4.3 Due Authorization. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4 No Conflict. The execution, delivery and performance by Credit Parties
of the Credit Documents to which they are parties and the consummation of the
transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, any of the Organizational
Documents of Holdings or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Holdings or any of
its Subsidiaries except to the extent such violation could not be reasonably
expected to have a Material Adverse Effect; (b) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Holdings or any of its Subsidiaries except
to the extent such conflict, breach or default could not reasonably be expected
to have a Material Adverse Effect; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Holdings or any
of its Subsidiaries (other than any Liens created under any of the Credit
Documents in favor of Collateral Agent, on behalf of Secured Parties or
Permitted Liens); or (d) require any approval of stockholders, members or
partners or any approval or consent of any Person under any Contractual
Obligation of Holdings or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders and except for any such approvals or consents the failure of
which to obtain could not reasonably be expected to have a Material Adverse
Effect. Each Credit Extension constitutes "Permitted Debt" under (and as defined
in) the Senior Subordinated Note Indenture as of the Closing Date.
4.5 Governmental Consents. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Collateral Agent for filing and/or recordation, as of the Closing Date, and
except for such registrations, consents, approvals, notices or actions the
failure of which to obtain, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
4.6 Binding Obligation. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.7 Historical Financial Statements. The Historical Financial Statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position, on a consolidated basis, of the Persons
described in
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such financial statements as at the respective dates thereof and the results of
operations and cash flows, on a consolidated basis, of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments. As of the Closing Date, neither Holdings nor any of its
Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
Historical Financial Statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Holdings and any of its
Subsidiaries taken as a whole.
4.8 Projections. On and as of the Closing Date, the Projections of Holdings
and its Subsidiaries for the period of the last Fiscal Quarter of Fiscal Year
2005, through and including Fiscal Year 2010 (the "Projections"), copies of
which have been delivered to the Administrative Agent and the Syndication Agent,
are based on good faith estimates and assumptions believed to be reasonable by
the management of Holdings; provided, the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material.
4.9 No Material Adverse Change. Since September 30, 2005, no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect.
4.10 No Restricted Junior Payments. Since the Closing Date, neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11 Adverse Proceedings, etc. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.12 Payment of Taxes. Except as otherwise permitted under Section 5.3, all
tax returns and reports of Holdings and its Subsidiaries required to be filed by
any of them have been timely filed, and all taxes shown on such tax returns to
be due and payable and all assessments, fees and other governmental charges upon
Holdings and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable except to the extent failure to do so could not reasonably be
expected to have a Material Adverse Effect. Holdings knows of no proposed tax
assessment against Holdings or any of its Subsidiaries which is not being
actively contested by Holdings or such Subsidiary in good faith and by
appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
4.13 Properties.
(a) Title. Each of Holdings and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets owned on and after the
Closing Date to the extent reflected in their respective Historical Financial
Statements referred to in Section 4.7 and in the most recent financial
statements delivered pursuant to Section 5.1, in each case except for assets
disposed of since the Closing Date in the ordinary course of business or as
otherwise permitted under Section 6.9. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Estate Asset of any Credit Party, regardless of whether such Credit
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. Each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Holdings does not have knowledge of any default that has occurred and is
continuing thereunder with respect to a
37
Material Real Estate Asset, and each such agreement constitutes the legally
valid and binding obligation of each applicable Credit Party, enforceable
against such Credit Party in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles.
4.14 Environmental Matters. Neither Holdings nor any of its Subsidiaries
nor any of their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. There are and, to each
of Holdings' and its Subsidiaries' knowledge, have been, no conditions,
occurrences, or Hazardous Materials Activities which could reasonably be
expected to form the basis of an Environmental Claim against Holdings or any of
its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither Holdings nor any of its
Subsidiaries nor, to any Credit Party's knowledge, any predecessor of Holdings
or any of its Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at any Facility.
Compliance with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws could not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. No event or
condition has occurred or is occurring with respect to Holdings or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity which individually or in the
aggregate has had, or could reasonably be expected to have, a Material Adverse
Effect.
4.15 No Defaults. Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.16 Material Contracts. All Material Contracts are in full force and
effect and no defaults currently exist thereunder that has had or could
reasonably be expected to have a Material Adverse Effect.
4.17 Governmental Regulation. Neither Holdings nor any of its Subsidiaries
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable. Neither Holdings nor any of its Subsidiaries is a "registered
investment company" or a company "controlled" by a "registered investment
company" or a "principal underwriter" of a "registered investment company" as
such terms are defined in the Investment Company Act of 1940.
4.18 Margin Stock. Neither Holdings nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans made to such Credit Party will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
4.19 Employee Matters. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries, or to the knowledge of Holdings and
Company, threatened against any of them before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement that is so pending against Holdings or any of
its Subsidiaries or to the knowledge of Holdings and Company, threatened against
any of them, (b) no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and (c) to the knowledge of Holdings and Company, no
union organization activity that is taking place, except (with respect to any
matter specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
38
4.20 Employee Benefit Plans. Except as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect, Holdings,
each of its Subsidiaries and each of their respective ERISA Affiliates are in
substantial compliance with all applicable provisions and requirements of ERISA
and the Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have substantially
performed all their obligations under each Employee Benefit Plan. Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the Internal
Revenue Service indicating that such Employee Benefit Plan is so qualified and
to the Company's knowledge, nothing has occurred subsequent to the issuance of
such determination letter which, if not corrected, would cause such Employee
Benefit Plan to lose its qualified status. No liability to the PBGC (other than
required premium payments), has been or is reasonably expected to be incurred by
Holdings, any of its Subsidiaries or any of their ERISA Affiliates. No ERISA
Event that would constitute an Event of Default under Section 8.1(k) has
occurred or is reasonably expected to occur. Except to the extent required under
Section 4980B of the Internal Revenue Code or similar state laws, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates. The present value
of the aggregate benefit liabilities under each Pension Plan sponsored,
maintained or contributed to by Holdings, any of its Subsidiaries or any of
their ERISA Affiliates, (determined as of the end of the most recent plan year
on the basis of the actuarial assumptions specified for funding purposes in the
most recent actuarial valuation for such Pension Plan), did not exceed the
aggregate current value of the assets of such Pension Plan by more than
$500,000. To the Company's knowledge, as of the most recent valuation date for
each Multiemployer Plan for which the actuarial report is available, the
potential liability of Holdings, its Subsidiaries and their respective ERISA
Affiliates for a complete withdrawal from such Multiemployer Plan (within the
meaning of Section 4203 of ERISA), when aggregated with such potential liability
for a complete withdrawal from all Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA does not exceed $500,000.
Holdings, each of its Subsidiaries and each of their ERISA Affiliates have
complied in all material respects with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and are not in material "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan. As of the date hereof, Company and its Subsidiaries have
made full payment when due of all required contributions to any Foreign Plan.
4.21 Certain Fees. Except as contemplated by Section 2.8, no broker's or
finder's fee or commission will be payable with respect hereto or any of the
transactions contemplated hereby.
4.22 Solvency. Each Credit Party (other than Autocam-Har, Inc., as a result
of Franklin Park Lease Termination Charges) is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23 First Lien Credit Agreement and Other Agreements. The Company has
heretofore delivered to the Administrative Agent true, correct and complete
copies of the First Lien Credit Documents, all exhibits and schedules thereto,
the Management Services Agreement and the Senior Subordinated Note Indenture.
4.24 Compliance with Statutes, etc. Each of Holdings and its Subsidiaries
is in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all Governmental Authorities, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any such Real Estate Asset
or the operations of Holdings or any of its Subsidiaries), except such
non-compliance that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
4.25 Disclosure. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Holdings or any of
its Subsidiaries (as modified or supplemented by other information so furnished
in writing) for use in connection with the transactions contemplated hereby at
the time such representation or warranty is made contains any untrue statement
of a material fact or, considering such representations and warranties as a
whole, omits to state a material fact (known to Holdings or Company, in the case
of any document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Holdings or Company to be reasonable at
the time made, it being recognized by Lenders that such projections as to future
events are not
39
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ materially from the projected
results. There are no facts known to Holdings or Company (other than matters of
a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby (including the Form 10-Q for the period ended September 30, 2005 filed by
the Company with the Securities Exchange Commission).
4.26 Second Lien Claims. The Obligations constitute "Second Lien Claims"
under the Intercreditor Agreement.
4.27 Quarterly Financials. The Company's quarterly financial statements for
the quarterly period ended after September 30, 2005 were prepared in conformity
with GAAP and fairly present in all material respects, the financial position,
on a consolidated basis, of the Persons described in such financial statements
as at the respective dates thereof and the results of operations and cash flows,
on a consolidated basis, of the entities described therein for each of the
periods then ended, subject to changes resulting from audit and normal year-end
adjustments that individually or in the aggregate do not constitute or evidence
a Material Adverse Effect.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that until payment in full of all
Obligations, each Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1 Financial Statements and Other Reports. Holdings will deliver to Agents
for delivery to the Lenders:
(a) Monthly Reports. Solely to Administrative Agent (and to other
Lenders upon request), as soon as available, and in any event within 45 days
after the end of each month ending after the Closing Date, the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such month and
the related consolidated statements of income, stockholders' equity and cash
flows of Holdings and its Subsidiaries for such month and for the period from
the beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, to the extent prepared on a
monthly basis, all in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto;
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, the consolidated and consolidating balance sheets of Holdings
and its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated (and with respect to statements of income, consolidating)
statements of income, stockholders' equity and cash flows of Holdings and its
Subsidiaries for such Fiscal Quarter and for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from the
Financial Plan for the current Fiscal Year, all in reasonable detail, together
with a Financial Officer Certification and a Narrative Report with respect
thereto;
(c) Annual Financial Statements. As soon as available, and in any
event within 90 days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheets of Holdings and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated (and with respect to statements of
income, consolidating) statements of income, stockholders' equity and cash flows
of Holdings and its Subsidiaries for such Fiscal Year, setting forth in each
case in comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the Financial Plan for the Fiscal Year
covered by such financial statements, in reasonable detail, together with a
Financial Officer Certification and a Narrative Report with respect thereto; and
(ii) with respect to such consolidated financial statements a report thereon of
Deloitte & Touche, LLP or other independent certified public accountants of
recognized national standing selected by Holdings, and reasonably satisfactory
to Administrative Agent (which report shall be unqualified as to going concern
and scope of audit, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial position of
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards) together (to the
40
extent not inconsistent with the pronouncements of the Institute of Certified
Public Accountants and FASB) with a written statement by such independent
certified public accountants stating whether, in connection with their audit
examination, any failure to comply with the terms, covenants, provisions or
conditions of Article 5 or Article 6 (insofar as they relate to the accounting
matters) has come to their attention and, if such a failure to comply has come
to their attention, specifying the nature and period of existence thereof;
(d) Compliance Certificate. Together with each delivery of financial
statements of Holdings and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c), a duly executed and completed Compliance Certificate;
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Holdings and its Subsidiaries delivered
pursuant to Section 5.1(b) or 5.1(c) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies been
made, then, together with the first delivery of such financial statements after
such change, one or more statements of reconciliation for all such prior
financial statements in form and substance satisfactory to Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Holdings or
Company obtaining knowledge (i) of any condition or event that constitutes a
Default or an Event of Default or that notice has been given to Holdings or
Company with respect thereto; (ii) that any Person has given any notice to
Holdings or any of its Subsidiaries or taken any other action with respect to
any event or condition set forth in Section 8.1(b); (iii) delivery of a notice
of default, event of default or acceleration from the First Lien Lenders or a
trustee, agent or other representative of such a lender, or (iv) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, a certificate of its
Authorized Officers specifying the nature and period of existence of such
condition, event or change, or specifying the notice given and action taken by
any such Person and the nature of such claimed Event of Default, Default,
default, event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Holdings or
Company obtaining knowledge of (i) the institution of, or non-frivolous threat
of, any Adverse Proceeding not previously disclosed in writing by Company to
Lenders, or (ii) any material development in any Adverse Proceeding that, in the
case of either (i) or (ii) if adversely determined, individually or in the
aggregate, could be reasonably expected to have a Material Adverse Effect, or
seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby,
written notice thereof together with such other information as may be reasonably
available to Holdings or Company (without waiver of attorney-client or similar
privilege) to enable Lenders and their counsel to evaluate such matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and
(ii) upon request in writing, with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed
by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; (2) all
notices received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (3) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall reasonably
request;
(i) Financial Plan. As soon as practicable and in any event no later
than thirty days after the beginning of each Fiscal Year, a consolidated plan
and financial forecast for such Fiscal Year and each of the next four Fiscal
Years (or portion thereof) (or, if earlier, through the final maturity date of
the Loans) (a "Financial Plan"), including (i) a forecasted consolidated balance
sheet and forecasted consolidated statements of income and cash flows of
Holdings and its Subsidiaries for each month of such Fiscal Year, each quarter
of the subsequent Fiscal Year, and each Fiscal Year for the remaining Fiscal
Years covered in such Financial Plan and (ii) forecasts demonstrating projected
compliance with the requirements of Section 6.8 during the years covered by such
Financial Plan, together, in each case, with an explanation of the assumptions
on which such forecasts are based all in form and substance reasonably
satisfactory to Agents;
41
(j) Insurance Report. As soon as practicable and in any event by the
last day of the first month of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by Holdings and its Subsidiaries and
all material insurance coverage planned to be maintained by Holdings and its
Subsidiaries in such Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Parent, Holdings or Company;
(l) First Lien Credit Agreement. Promptly upon execution and delivery
thereof, copies of any amendment, restatement, supplement or other modification
to or waiver of the First Lien Credit Agreement entered into after the date
hereof;
(m) Information Regarding Collateral. (a) Company will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit Party's
corporate name, (ii) in any Credit Party's identity, corporate structure or
jurisdiction of organization or (iii) in any Credit Party's Federal Taxpayer
Identification Number. Company agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected security interest in all the Collateral as contemplated in
the Collateral Documents. Company also agrees promptly to notify Collateral
Agent if any material portion of the Collateral is damaged or destroyed; and
(n) Other Information. (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy statements
sent or made available generally by Holdings to its security holders acting in
such capacity or by any Subsidiary of Holdings to its security holders other
than Holdings or another Subsidiary of Holdings, (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Holdings or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, (iii) all press releases and other statements made available
generally by Holdings or any of its Subsidiaries to the public concerning
material developments in the business of Holdings or any of its Subsidiaries,
and (B) such other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent or any Lender.
5.2 Existence. Except as otherwise permitted under Section 6.9, each Credit
Party will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its existence and all rights and franchises,
licenses and permits material to its business; provided, no Credit Party or any
of its Subsidiaries shall be required to preserve any such existence, right or
franchise, licenses and permits if such Person's board of directors (or similar
governing body) shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Person, and that the loss
thereof could not reasonably be expected to have a Material Adverse Effect.
5.3 Payment of Taxes and Claims. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all material Taxes imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim. No
Credit Party will, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than Holdings or any of its Subsidiaries or Parent, provided that Parent
and each Credit Party shall have agreed in a Credit Document (in form and
substance reasonably satisfactory to Administrative Agent and Syndication Agent)
that Parent shall be subject to limitations on its activities substantially
equivalent to those set forth in Section 6.14 (as applied to Parent rather than
Holdings)(such Credit Document being referred to herein as the "Parent Credit
Document")).
5.4 Maintenance of Properties. Each Credit Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties
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used or useful in the business of Holdings and its Subsidiaries and from time to
time will make or cause to be made all appropriate repairs, renewals and
replacements thereof.
5.5 Insurance. Holdings will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Holdings and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Holdings will
maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and (b)
replacement value casualty insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses. Each such policy of insurance shall (i) name Collateral
Agent, on behalf of Lenders as an additional insured thereunder as its interests
may appear and (ii) in the case of each casualty insurance policy, contain a
loss payable clause or endorsement, satisfactory in form and substance to
Collateral Agent, that names Collateral Agent, on behalf of Lenders as the loss
payee thereunder for any covered loss thereunder in excess of $500,000 and
provides for at least thirty days' prior written notice to Collateral Agent of
any modification or cancellation of such policy.
5.6 Inspections. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested; provided that any such
representatives not employed by such Lender shall have been advised by such
Lender of and agreed to comply with Section 10.17. If such visit and inspection
occurs at a time when no Default or Event of Default has occurred and is
continuing, such visit and inspection shall be at the expense of such Lender
and, if such visit and inspection occur at a time when a Default or Event of
Default has occurred and is continuing, such visit and inspection shall be paid
by Company pursuant to Section 10.2. By this provision, each Credit Party
authorizes its independent public accountants to discuss the affairs, finances
and accounts of such Credit Party and its Subsidiaries, provided, such Credit
Party may, if its so chooses, be present and participate in any such discussion.
5.7 Lenders Meetings. Holdings and Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
5.8 Compliance with Laws. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9 Environmental.
(a) Environmental Disclosure. Holdings will deliver to Administrative
Agent and Lenders the following information and materials, in each case to the
extent that they relate to circumstances that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect:
(i) as soon as practicable following receipt thereof, copies of
all environmental audits, investigations, analyses and reports of any kind
or character, whether prepared by personnel of Holdings or any of its
Subsidiaries or by independent consultants, governmental authorities or any
other Persons, with respect to significant environmental matters at any
Facility or with respect to any Environmental Claims;
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(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported to
any federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (2) any remedial action taken by Holdings or
any other Person in response to any Hazardous Materials Activities, and (3)
Holdings or Company's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions on
the ownership, occupancy, transferability or use thereof under any
Environmental Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (1) any Environmental Claims, (2)
any Release required to be reported to any federal, state or local
governmental or regulatory agency, and (3) any request for information from
any governmental agency that suggests such agency is investigating whether
Holdings or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Holdings or any
of its Subsidiaries that could reasonably be expected to expose Holdings or
any of its Subsidiaries to, or result in, Environmental Claims or affect
the ability of Holdings or any of its Subsidiaries to maintain in full
force and effect all Governmental Authorizations required under any
Environmental Laws for their respective operations and (2) any proposed
action to be taken by Holdings or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject
Holdings or any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to this
Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries, and (ii) make an appropriate
response to any Environmental Claim against such Credit Party or any of its
Subsidiaries and discharge any obligations it may have to any Person thereunder,
in the cases of (i) and (ii) where failure to do so could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
5.10 Subsidiaries. In the event that any Person becomes a Domestic
Subsidiary of Company or a Foreign Subsidiary of Company for which becoming a
Guarantor will not cause adverse tax consequences for Company reasonably
determined by Company to be material and is legally permissible under applicable
law (a "Guarantor Foreign Subsidiary"), whether pursuant to a Permitted
Acquisition or otherwise, Company shall (a) promptly cause such Subsidiary to
become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), 3.1(e), 3.1(f) and 3.1(j) which, in the case of a Guarantor Foreign
Subsidiary, are required by Syndication Agent and Administrative Agent. In the
event that any Person becomes a Foreign Subsidiary of Company and is not a
Guarantor Foreign Subsidiary, and the ownership interests of such Foreign
Subsidiary are owned by Company, by any Domestic Subsidiary thereof or by any
Guarantor Foreign Subsidiary, Company shall, or shall cause such Domestic
Subsidiary or Guarantor Foreign Subsidiary to, deliver, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(b), and Company shall take, or shall cause such Domestic Subsidiary
or Guarantor Foreign Subsidiary to take, all of the actions referred to in
Section 3.1(e)(iii) necessary to grant and to perfect a Second Priority Lien in
favor of Collateral Agent (to the extent a Second Priority Lien can be
effectively granted under applicable law), for the benefit of Secured Parties,
under the Pledge and Security Agreement in 65% of such ownership interests. With
respect to each such Subsidiary, Company shall promptly send to Administrative
Agent written notice setting forth with respect to such Person (i) the date on
which such Person became a Subsidiary of Company, and (ii) all of the data
required to be set forth in Schedules 4.1 and 4.2 with respect to all
Subsidiaries of Company; provided, such written notice shall be deemed to
supplement Schedule 4.1 and 4.2 for all purposes hereof.
44
5.11 Additional Material Real Estate Assets. In the event that any Credit
Party other than Autocam Europe or any other Guarantor Foreign Subsidiary
acquires a Material Real Estate Asset or a Real Estate Asset owned or leased on
the Closing Date becomes a Material Real Estate Asset and such interest has not
otherwise been made subject to the Lien of the Collateral Documents in favor of
Collateral Agent, for the benefit of Secured Parties, then such Credit Party,
contemporaneously with acquiring such Material Real Estate Asset, shall take all
such actions and execute and deliver, or cause to be executed and delivered, all
such mortgages, documents, instruments, agreements, opinions and certificates
similar to those described in Sections 3.1(e), and 3.1(f) with respect to each
such Material Real Estate Asset that Collateral Agent shall reasonably request
to create in favor of Collateral Agent, for the benefit of Secured Parties, a
valid and, subject to any filing and/or recording referred to herein, perfected
Second Priority security interest in such Material Real Estate Assets. In
addition to the foregoing, Company shall, at the request of Requisite Lenders,
deliver, from time to time, to Administrative Agent such appraisals as are
required by law or regulation of Real Estate Assets with respect to which
Collateral Agent has been granted a Lien.
5.12 Interest Rate Protection. Company shall maintain, or caused to be
maintained, in effect one or more Interest Rate Agreements for a term of not
less than two years and otherwise in form and substance reasonably satisfactory
to Administrative Agent and Syndication Agent, which Interest Rate Agreements
shall to the extent needed to effectively limit the interest costs to Company
with respect to an aggregate notional principal amount of not less than 50% of
the aggregate principal amount of the Consolidated Total Debt outstanding from
time to time (other than the revolving loans and swing line loans made under the
First Lien Credit Agreement) to a rate satisfactory to Administrative Agent and
Syndication Agent. The Administrative Agent and the Syndication Agent
acknowledge that, as of the Closing Date (based on the information provided by
the Company), the Company does not need to maintain in effect any Interest Rate
Agreements in order to comply with this Section 5.12.
5.13 Further Assurances. At any time or from time to time upon the request
of Administrative Agent, each Credit Party will, at its expense, promptly
execute, acknowledge and deliver such further documents and do such other acts
and things as Administrative Agent or Collateral Agent may reasonably request in
order to effect fully the purposes of the Credit Documents. In furtherance and
not in limitation of the foregoing, each Credit Party shall take such actions as
Administrative Agent or Collateral Agent may reasonably request from time to
time to ensure that the Obligations are guarantied by the Guarantors and are
secured by substantially all of the assets of Holdings, and its Subsidiaries and
all of the outstanding Capital Stock of Company and its Subsidiaries (subject to
limitations contained in the Credit Documents with respect to Foreign
Subsidiaries).
5.14 Control Agreements. Company shall not permit any Deposit Account or
Securities Account maintained by Company or any of its Domestic Subsidiaries
(other than payroll or tax deposit accounts) at any time to be maintained at
Comerica or otherwise have a principal balance in excess of $200,000 for any
such account or $1,000,000 in the aggregate for all such accounts unless Company
or such Domestic Subsidiary, as the case may be, has (i) executed and delivered
to Collateral Agent a Control Agreement, and (ii) taken all other steps
necessary or, in the opinion of Collateral Agent, desirable to ensure that
Collateral Agent has a perfected security interest in such account; provided
that, if Company or such Domestic Subsidiary is unable to obtain a Control
Agreement from the financial institution at which the Deposit Account or
Securities Account is maintained, upon the request of the Collateral Agent,
Company shall, or shall cause such Domestic Subsidiary to, transfer all amounts
in the applicable account to an account maintained at a financial institution
from which Company or such Domestic Subsidiary has obtained a Control Agreement.
The Administrative Agent, the Collateral Agent and the Lenders shall not (and
shall not request or cause any agent or representative to) (x) deliver to any
bank, securities intermediary or other financial institution at which any
Deposit Account or Securities Account is maintained by Company or any of its
Domestic Subsidiaries a Notice of Sole Control (as defined in the Pledge and
Security Agreement) or any analogous notice of sole control pursuant to any
Control Agreement, (y) originate any instruction directing disposition of funds
in any such Deposit Account pursuant to any Control Agreement or (z) originate
any entitlement order or other notification directing transfer or redemption of
financial or other assets in any such Securities Account pursuant to any Control
Agreement, in each case unless an Event of Default shall have occurred and be
continuing. Any bank, securities intermediary or other financial institution at
which any Deposit Account or Securities Account is maintained (in its capacity
as such) shall not be bound by this Section.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that until payment in full of all
Obligations, such Credit Party shall perform, and
45
shall cause each of its Subsidiaries to perform, all covenants in this Section
6.
6.1 Indebtedness. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) (i) Indebtedness (a) of any Guarantor Domestic Subsidiary to
Company or to any other Guarantor Domestic Subsidiary, or (b) of Company to
any Guarantor Domestic Subsidiary, or (c) of Autocam France to Company or
any Guarantor Domestic Subsidiary made, directly or indirectly with the
proceeds of the domestic revolving loans made under the First Lien Credit
Agreement; provided, (A) all such Indebtedness shall be evidenced by
promissory notes and all such notes shall be subject to a Second Priority
Lien pursuant to the Pledge and Security Agreement, (B) all such
Indebtedness shall be unsecured and subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement that in any
such case, is reasonably satisfactory to Administrative Agent, and (C) any
payment by any such Guarantor Subsidiary under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made;
(ii) Indebtedness of Frank & Pignard to Autocam France arising as
a result of intercompany loans;
(iii) Indebtedness of Autocam Brazil to the Company arising as a
result of intercompany loans in an aggregate principal amount outstanding
at any time not to exceed $5,750,000, provided that any such intercompany
loan is evidenced by an intercompany note (or other similar agreement
appropriate under the laws of Brazil to evidence intercompany loans), which
is pledged by the Company to secure the Obligations;
(iv) Indebtedness of Bouverat to Autocam France arising as a
result of intercompany loans;
(v) Indebtedness of any Foreign Subsidiary to Company or any
Guarantor Subsidiary, provided, (A) all such Indebtedness shall be
evidenced by promissory notes and all such notes shall be subject to a
Second Priority Lien pursuant to the Pledge and Security Agreement, (B) all
such Indebtedness shall be unsecured and subordinated in right of payment
to the payment in full of the Obligations pursuant to the terms and
conditions of the applicable promissory notes or an intercompany
subordination agreement and (C) the intercompany loan giving rise to such
Indebtedness is permitted as an Investment under Section 6.7(d), 6.7(m),
6.7(n) or 6.7(o);
(vi) Indebtedness between Company and Holdings arising as a
result of Restricted Junior Payments permitted under Section 6.5(b) or (c);
and
(vii) (A) Indebtedness of Autocam Europe or its wholly-owned
subsidiary organized under the laws of Poland (the "New Polish Subsidiary")
to Company or a Guarantor Domestic Subsidiary in an aggregate principal
amount outstanding at any time not to exceed $3,450,000 minus the amount of
equity investments made pursuant to the proviso in Section 6.7(e) and (B)
Indebtedness of the New Polish Subsidiary to Autocam Europe made with the
proceeds of loans made to Autocam Europe under clause (A); provided, that
(w) Company shall have complied with Section 5.10 with respect to the New
Polish Subsidiary; (x) any such intercompany loan is evidenced by an
intercompany note (or other similar agreement appropriate under the laws of
the Netherlands or Poland, as applicable, to evidence intercompany loans),
which is pledged by the Company, the applicable Guarantor Domestic
Subsidiary or Autocam Europe, as applicable, to secure the Obligations, (y)
at such time as the aggregate amount of intercompany loans made to the New
Polish Subsidiary pursuant to Section 6.1(b)(vii)(A) and (B) equals or
exceeds $2,300,000, such intercompany loans shall be secured by assets of
the New Polish Subsidiary in which security interests can legally and
practicably be taken without the incurrence of excessive costs in relation
to the value of the security afforded thereby as determined by the
Administrative Agent and Syndication Agent and without causing adverse tax
consequences for Company, reasonably determined by Company to be material;
and (z) the proceeds of
46
intercompany loans made to Autocam Europe under clause (A) above shall be
used to make intercompany loans to the New Polish Subsidiary pursuant to
clause (B) above.
(c) (i) Indebtedness under the Senior Subordinated Notes and the
subordinated guaranties thereof by Guarantor Subsidiaries, (ii) any additional
notes issued under the Senior Subordinated Notes Indenture (the proceeds of
which are applied to repay loans under the First Lien Credit Agreement or the
Loans pursuant to Section 2.11(d)) and the subordinated guarantees thereof by
guarantor subsidiaries thereof and (iii) any extensions, renewals, refinancings
or replacements of any such Indebtedness permitted under the preceding clauses
(i) and (ii), provided, that (w) any such Indebtedness is unsecured and
subordinated in right of payment on terms equivalent to those set forth in the
Senior Subordinated Notes Indenture or on other terms reasonably satisfactory to
the Administrative Agent and Syndication Agent, (x) the other terms and
conditions thereof are not less favorable taken as a whole to the obligor
thereon or to the Lenders than the Indebtedness being extended, renewed,
refinanced or replaced, (y) the average life to maturity thereof is greater than
or equal to that of the Indebtedness being extended, renewed, refinanced or
replaced; and (z) shall not (A) include Indebtedness of an obligor that was not
an obligor with respect to the Indebtedness being extended, renewed, refinanced
or replaced, (B) exceed in a principal amount the Indebtedness being extended,
renewed, refinanced or replaced or (C) be incurred, created or assumed if any
Default or Event of Default has occurred and is continuing or would result
therefrom;
(d) Indebtedness incurred by Holdings or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price, earn-outs or similar obligations, or from guaranties or letters of
credit, surety bonds or performance bonds securing the performance of Company or
any such Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or other permitted acquisitions or permitted dispositions of any
business, assets or Subsidiary of Holdings or any of its Subsidiaries;
(e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business that support other obligations of
Holdings and its Subsidiaries (other than in respect of Indebtedness) incurred
in compliance with this Agreement;
(f) Indebtedness in respect of (i) netting services, overdraft
protections and otherwise in connection with endorsements of checks and other
negotiable instruments and deposit accounts incurred in the ordinary course of
business; (ii) workers' compensation claims, self-insurance obligations,
performance, surety, release, appeal and similar bonds and completion guarantees
incurred in the ordinary course of business of Company and its Subsidiaries and
any reimbursement obligations in respect of the foregoing; and (iii)
indemnification obligations or obligations in respect of purchase price
adjustments or similar obligations incurred or assumed by Company and its
Subsidiaries in connection with an Asset Sale otherwise permitted under this
Agreement;
(g) guaranties in the ordinary course of business of the obligations
of suppliers, customers, franchisees and licensees of Holdings and its
Subsidiaries;
(h) guaranties by Company of Indebtedness of a Domestic Guarantor
Subsidiary or guaranties by a Subsidiary of Company of Indebtedness of Company
or a Domestic Guarantor Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this Section 6.1;
(i) Indebtedness described in Schedule 6.1, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as the
same are in effect on the date of this Agreement and (ii) refinancings and
extensions of any such Indebtedness if the terms and conditions thereof
(including the terms and conditions of any guarantee or other credit support for
such Indebtedness) are not less favorable to the obligor thereon or to the
Lenders than the Indebtedness being refinanced or extended, and the average life
to maturity thereof is greater than or equal to that of the Indebtedness being
refinanced or extended; provided, such Indebtedness permitted under the
immediately preceding clause (i) or (ii) above shall not (A) include
Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced, (B) exceed in a principal
amount the Indebtedness being renewed, extended or refinanced or (C) incurred,
created or assumed if any Default or Event of Default has occurred and is
continuing or would result therefrom;
(j) Indebtedness under Receivables Facilities in an aggregate
outstanding Principal Amount not to exceed at any time the Dollar Equivalent of
$40,250,000 minus the outstanding Principal Amount of obligations not
constituting Indebtedness under any Receivables Facility; provided that no more
than $5,750,000 of Indebtedness under such
47
Receivables Facilities shall provide recourse to Company or any of its
Subsidiaries other than customary provisions relating to the breach of
representations by Company and/or its Subsidiaries;
(k) Indebtedness with respect to Capital Leases and purchase money
Indebtedness in an aggregate combined principal (or stated balance sheet) amount
outstanding not to exceed at any time $11,500,000 provided, in the case of
purchase money Indebtedness, any such Indebtedness (i) shall be secured only to
the asset acquired in connection with the incurrence of such Indebtedness (plus
accessions and improvements thereto), and (ii) shall constitute not more than
90% of the aggregate consideration paid with respect to such asset;
(l) Indebtedness with respect to Capital Leases or purchase money
Indebtedness (or similar types of financing in the relevant country) incurred by
Foreign Subsidiaries in connection with the acquisition and/or construction of
and/or acquisition and installation of equipment for a manufacturing facility
outside of the United States in an aggregate combined principal amount
outstanding not to exceed at any time $23,000,000, provided that no Credit Party
shall be an obligor in respect of such Indebtedness, and in the case of purchase
money Indebtedness, such Indebtedness shall satisfy the requirements described
in the proviso of Section 6.1(k) above;
(m) Indebtedness under Hedge Agreements or First Lien Hedge
Agreements;
(n) (i) Indebtedness of any Person that becomes a Guarantor Subsidiary
after the date hereof pursuant to a Permitted Acquisition (including purchase
money Indebtedness or Capital Leases of such Person), which Indebtedness exists
at the time such Person becomes a Subsidiary and is not created in contemplation
of, or in connection with, such Person becoming a Subsidiary; and (ii) any
extensions, renewals, refinancings or replacements of such Indebtedness which
extensions, renewals, refinancings or replacements (A) are on terms and
conditions (including the terms and conditions of any guarantee or other credit
support for such Indebtedness) taken as a whole not materially less favorable to
Company and its Subsidiaries or the Lenders than the terms and conditions of the
Indebtedness being extended, renewed, refinanced or replaced, (B) do not add as
obligor any Person that would not have been an obligor under the Indebtedness
being extended, renewed, replaced or refinanced, (C) do not result in a greater
principal amount or shorter remaining average life to maturity than the
Indebtedness being extended, renewed, replaced or refinanced and (D) are not
effected at any time when a Default or Event of Default has occurred and is
continuing or would result therefrom; provided, the aggregate principal amount
outstanding of Indebtedness described in clauses (i) and (ii) does not exceed
$11,500,000 at any time outstanding;
(o) Indebtedness of Autocam Brazil and its Subsidiaries denominated in
the legal currency of Brazil in an aggregate principal amount outstanding not to
exceed at any time the equivalent of $11,500,000;
(p) other Indebtedness of Foreign Subsidiaries in an aggregate
principal amount outstanding not to exceed at any time $5,750,000;
(q) Indebtedness consisting of reimbursement obligations in respect of
letters of credit in an aggregate principal amount outstanding not to exceed at
any time $1,150,000;
(r) other unsecured Indebtedness of Holdings and its Guarantor
Subsidiaries, which is unsecured in an aggregate principal amount not to exceed
at any time $4,025,000;
(s) Indebtedness of Company and Autocam France under the First Lien
Credit Agreement (and the guaranties thereof by the Guarantors) in an aggregate
principal amount at any one time outstanding under this clause (s) (with letters
of credit and revolving commitments being deemed to have a principal amount
equal to the maximum potential liability of the Company thereunder) not to
exceed an amount equal to the Dollar Equivalent of $115,000,000 minus the sum of
all mandatory prepayments of loans thereunder (resulting in reductions of
revolving commitments under the First Lien Credit Agreement in the case of
repayments of revolving loans thereunder), paid or made on or prior to the date
of determination; and
(t) Indebtedness of the Company consisting of unsecured guaranties of
Indebtedness of Autocam Brazil permitted hereunder; provided that the principal
amount guaranteed shall be deemed to constitute either Investments made under
Section 6.7(d), or, at the Company's election, intercompany loans made to
Autocam Brazil under Section 6.1(b)(iii).
48
For purposes of determining compliance with this Section 6.1 and 6.2,
Indebtedness incurred in currencies other than Dollars shall be considered to be
outstanding in Dollars using Spot Exchange Rate as of the date of incurrence
(except for any Indebtedness incurred in currencies other than Dollars under any
revolving facility under the First Lien Credit Agreement, which shall be
considered to be outstanding in Dollars using the Spot Exchange Rate as of the
effective date of the applicable revolving commitments).
6.2 Liens. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;
(b) Liens for Taxes or Liens imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code, in each case, if the underlying obligations
are being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of set-off), Liens
of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by law (other than any such Lien imposed pursuant to Section
401 (a)(29) or 412(n) of the Internal Revenue Code or by ERISA or any such Lien
imposed by a Government Authority in connection with any Foreign Plan), in each
case incurred in the ordinary course of business (i) for amounts not yet overdue
or (ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five days) are being contested in good faith
by appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;
(d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance, other types of social
security and other similar statutory obligations, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money or other Indebtedness), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the Collateral on
account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any lease
permitted hereunder;
(g) Liens solely on any cash earnest money deposits or escrows made by
Holdings or any of its Subsidiaries in connection with any letter of intent or
purchase agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business or Liens evidenced by the filing
of UCC financing statements relating solely to goods consigned with the Company
and its Subsidiaries in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
49
(k) licenses of patents, trademarks and other intellectual property
rights granted by Holdings or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of Company or such Subsidiary;
(l) Liens described in Schedule 6.2 and any renewals or replacements
of such Liens granted to secure a renewal, extension, refinancing or replacement
of the Indebtedness originally secured by such Lien, so long as such renewal,
extension, refinancing or replacement is permitted by Section 6.1 and such
renewal or replacement Lien does not cover more property than the Lien described
in Schedule 6.2 (plus accessions and improvements thereto and proceeds and
distributions thereon) or on a title report delivered pursuant to Section
3.1(e)(iii);
(m) Liens securing Indebtedness permitted pursuant to Sections 6.1(k),
6.1(l) and 6.1(n); provided, any such Lien (i) exists on the date of the
applicable acquisition or, solely in the case of Indebtedness permitted in
Section 6.1(k) or 6.1(l), is created in connection with the financing of the
acquisition within 180 days thereafter, (ii) solely in the case of Indebtedness
permitted by Section 6.1(n), is not created in contemplation of, or in
connection with, such Permitted Acquisition, and (iii) applies only to the
property or assets acquired (plus accessions and improvements thereto and
proceeds and distributions thereon);
(n) Liens securing Indebtedness permitted pursuant to Section
6.1(b)(ii), (iii), (iv), and (vii);
(o) Liens on any receivables and related rights sold pursuant to any
Receivables Facility permitted hereunder;
(p) other Liens securing obligations in an aggregate principal amount
not to exceed $1,150,000 at any time outstanding;
(q) other Liens on assets other than the Collateral securing
Indebtedness in an aggregate principal amount not to exceed $2,300,000 at any
time outstanding; and
(r) Liens on the Collateral securing Indebtedness permitted pursuant
to Section 6.1(s) and First Lien Hedge Agreements.
6.3 Equitable Lien. If any Credit Party or any of its Subsidiaries shall
create or assume any Lien upon any of its properties or assets, whether now
owned or hereafter acquired, other than Permitted Liens, it shall make or cause
to be made effective provisions whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4 No Further Negative Pledges. Except (a) as set forth in the First Lien
Credit Agreement, (b) with respect to specific property encumbered to secure
payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to a permitted Asset Sale or other disposition of assets
not prohibited by this Agreement, (c) with respect to restrictions by reason of
customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses and similar agreements entered into in the
ordinary course of business (provided that such restrictions are limited to the
property or assets secured by such Liens or the property or assets subject to
such leases, licenses or similar agreements, as the case may be) or joint
ventures, (d) with respect to restrictions on property or assets subject to a
Lien permitted under Section 6.2(m), provided, such restrictions relate only to
the property or assets subject to such Lien, (e) with respect to restrictions,
if any, under the Senior Subordinated Note Indenture or restrictions no less
favorable taken as a whole to the Lenders under documents governing Indebtedness
permitted under Section 6.1(c), and (f) with respect to restrictions permitted
pursuant to the proviso to Section 6.6, no Credit Party nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
6.5 Restricted Junior Payments. No Credit Party shall, nor shall it permit
any of its Subsidiaries or Affiliates through any manner or means or through any
other Person to, directly or indirectly, declare, order, pay, make or set apart,
or agree to declare, order, pay, make or set apart, any sum for any Restricted
Junior Payment except that (a) Company may
50
make regularly scheduled payments of interest (including payments of additional
interest imposed under the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued for failure to comply with certain
provisions thereof) in respect of any Subordinated Indebtedness in accordance
with the terms of, and only to the extent required by, and subject to the
subordination provisions contained in, the indenture or other agreement pursuant
to which such Subordinated Indebtedness was issued; (b) so long as no Default or
Event of Default shall have occurred and be continuing or shall be caused
thereby, Company may make Restricted Junior Payments to Holdings (and, subject
to delivery of the Parent Credit Document, Holdings may make Restricted Junior
Payments to Parent) (i) in an aggregate amount not to exceed $450,000 in any
Fiscal Year, to the extent necessary to permit Holdings (or Parent, as
applicable) to pay general administrative costs and expenses and to pay
franchise taxes and other fees to maintain its corporate existence and (ii) to
the extent necessary to permit Holdings (or Parent, as applicable) to discharge
the consolidated tax liabilities of Holdings (or Parent, as applicable) and its
Subsidiaries, in each case so long as Holdings (or Parent, as applicable)
applies the amount of any such Restricted Junior Payment for such purpose
(provided this Section 6.5 shall not prohibit direct payment of by Company of
taxes for itself and its Subsidiaries or such other costs and expenses); and (c)
Company may make Restricted Junior Payments to Holdings for the purpose of
paying, and Holdings may pay (i) the Subordinated Management Fees plus
reasonable out-of-pocket expenses incurred pursuant to the Management Services
Agreement and (ii) Permitted Management Stock Repurchase Payments.
6.6 Restrictions on Subsidiary Distributions. No Credit Party shall, nor
shall it permit any of its Subsidiaries to, create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or consensual
restriction of any kind on the ability of any Subsidiary of Company to (a) pay
dividends or make any other distributions on any of such Subsidiary's Capital
Stock owned by Company or any other Subsidiary of Company, (b) repay or prepay
any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (c) make loans or advances to Company or any other Subsidiary of
Company, or (d) transfer any of its property or assets to Company or any other
Subsidiary of Company; provided that the foregoing shall not prohibit
encumbrances or restrictions (i) in agreements evidencing Indebtedness permitted
by Section 6.1(a), (c), (i), (m) or (s), (ii) in agreements evidencing
Indebtedness permitted by Section 6.1(k) and 6.1(j) that impose restrictions on
the property so leased or acquired, (iii) restrictions imposed by applicable
law, (iv) agreements evidencing Indebtedness of Foreign Subsidiaries permitted
by Section 6.1(l) and 6.1(n), (iv) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business or joint
venture agreements not otherwise prohibited under this Agreement, (v) that are
or were created by virtue of any sale, lease, transfer or other disposition of,
agreement to sell, lease, transfer or other disposition or option or right with
respect to any property, assets or Capital Stock not otherwise prohibited under
this Agreement and (vi) imposed pursuant to Permitted Liens.
6.7 Investments. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) Investments owned as of the Closing Date in any Subsidiary;
(c) Investments made after the Closing Date in the Company or any
wholly-owned Guarantor Domestic Subsidiary;
(d) Investments made after the Closing Date by Company or any of its
Domestic Subsidiaries in Foreign Subsidiaries in an aggregate amount not to
exceed $11,500,000; provided, that a change in the form of Investment (e.g. debt
to equity, equity to debt or equity to equity) or the applicable investee
without increase in amount shall not be deemed an additional Investment under
this Section 6.7(d);
(e) intercompany loans to the extent permitted under (i) Section
6.1(b)(i)-(iv), (ii) Section 6.1(b)(vii), provided that the Company may make up
to $1,150,000 of the Investments permitted under Section 6.1(b)(vii)(A) and the
corresponding Investments permitted under Section 6.1(b)(vii)(B) in the form of
equity Investments, rather than as intercompany loans, and (iii) to the extent
owed to Autocam Europe, Section 6.1(b)(v);
(f) Investments (i) in any Securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors or in
settlement of litigation, (ii) deposits, prepayments and other credits to
suppliers
51
made in the ordinary course of business, (iii) prepaid expenses and lease,
utility, worker's compensation, performance and other similar deposits made in
the ordinary course of business of Holdings and its Subsidiaries, (iv) arising
in connection with extensions of trade credit in the ordinary course of business
and (v) arising in connection with guarantees permitted under Section 6.1 or
given in respect of obligations (other than Indebtedness) in the ordinary course
of business;
(g) Consolidated Capital Expenditures and expenditures that would be
Consolidated Capital Expenditures but for express exclusions set forth in the
definition thereof;
(h) loans and advances to directors, consultants and employees of
Holdings and its Subsidiaries made (i) in the ordinary course of business in an
aggregate principal amount not to exceed $250,000 outstanding at any time, (ii)
to purchase Capital Stock of any Parent Company pursuant to management and
employment agreements of Company approved by the Board of Directors of Holdings
not to exceed $575,000 outstanding at any time, and (iii) investments made under
Company's current split dollar insurance program (as the same may be modified to
reflect requirements of law) for certain senior managers of Company currently
benefiting from such program in an aggregate amount from and after the Closing
Date not to exceed $1,725,000;
(i) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
(j) Investments described in Schedule 6.7;
(k) Investments that constitute Hedge Agreements;
(l) Investments constituting promissory notes or other non-cash
consideration received in connection with an Asset Sale permitted under Section
6.9;
(m) Investments made in Autocam Europe and/or Autocam France with the
proceeds of the Term Loans, so as to permit Autocam France to repay the European
term loans on or about the Closing Date with the proceeds of the Loans made
hereunder;
(n) Investments in the Chinese joint venture currently named Wuxi
Weifu Autocam Precision Machinery Co., LTD. in an aggregate amount not to exceed
$3,450,000 in the aggregate; provided that no less than 50% of each such
Investment shall be returned to the Company or any of its Guarantor Domestic
Subsidiaries (including by way of technology transfer royalty payments or
purchases of machine tools, or otherwise) within one year of the date such
Investments are made; and
(o) other Investments in an aggregate amount not to exceed at any time
$2,875,000.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
payment not otherwise permitted under the terms of Section 6.5.
6.8 Financial Covenant.
(a) Senior Leverage Ratio. Holdings shall not permit the Senior
Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending December 31, 2005, to exceed the correlative ratio
indicated:
FISCAL QUARTER ENDING SENIOR LEVERAGE RATIO
- --------------------- ---------------------
December 31, 2005 5.25:1.00
March 31, 2006 5.25:1.00
June 30, 2006 5.25:1.00
September 30, 2006 5.25:1.00
December 31, 2006 5.25:1.00
March 31, 2007 5.25:1.00
June 30, 2007 5.25:1.00
52
FISCAL QUARTER ENDING SENIOR LEVERAGE RATIO
- --------------------- ---------------------
September 30, 2007 5.25:1.00
December 31, 2007 4.75:1.00
March 31, 2008 4.75:1.00
June 30, 2008 4.75:1.00
September 30, 2008 4.75:1.00
December 31, 2008 and each Fiscal 4.25:1.00
thereafter
(b) Certain Calculations. With respect to any period during which a
Permitted Acquisition involving the payment by Holdings and its Subsidiaries of
consideration in excess of $500,000 or an Asset Sale involving the receipt by
Holdings and its Subsidiaries of gross proceeds in excess of $500,000 has
occurred (each, a "Subject Transaction"), for purposes of determining compliance
with the financial covenant set forth in this Section 6.8, Consolidated Adjusted
EBITDA shall be calculated with respect to such period on a pro forma basis
(including pro forma adjustments arising out of events which are directly
attributable to a specific transaction, are factually supportable and are
expected to have a continuing impact, in each case determined on a basis
consistent with Article 11 of Regulation S-X promulgated under the Securities
Act and as interpreted by the staff of the Securities and Exchange Commission,
which would include cost savings resulting from head count reduction, closure of
facilities and similar restructuring charges, which pro forma adjustments shall
be certified by the chief financial officer of Parent) using the historical
audited financial statements of any business so acquired or to be acquired or
sold or to be sold and the consolidated financial statements of Holdings and its
Subsidiaries which shall be reformulated as if such Subject Transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period).
6.9 Fundamental Changes; Disposition of Assets; Acquisitions. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), exchange, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, or acquire by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials and equipment and Capital Expenditures in the ordinary course of
business) the business, property or fixed assets of, or stock or other evidence
of beneficial ownership of, any Person or any division or line of business or
other business unit of any Person, except:
(a) any Subsidiary of Holdings may be merged with or into Company or
any Guarantor Domestic Subsidiary, or be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to Company or any Guarantor Domestic Subsidiary; provided, in the
case of such a merger, Company or such Guarantor Domestic Subsidiary, as
applicable shall be the continuing or surviving Person;
(b) any Subsidiary of Autocam France may be merged with or into
Autocam France or with or into any Wholly Owned Subsidiary of Autocam France, or
be liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to Autocam France
or to any Wholly Owned Subsidiary of Autocam France; provided, in the case of
such a merger, Autocam France or the Wholly Owned Subsidiary of Autocan France,
as the case may be, shall be the continuing or surviving Person;
(c) sales or other dispositions of assets that do not constitute Asset
Sales;
(d) Asset Sales, the proceeds of which (valued at the principal amount
thereof in the case of non-Cash proceeds consisting of notes or other debt
Securities and valued at fair market value in the case of other non-Cash
proceeds) (i) are less than $5,750,000 with respect to any single Asset Sale or
series of related Asset Sales and (ii) when aggregated with the proceeds of all
other Asset Sales made within the same Fiscal Year, are less than $11,500,000;
provided (1) the
53
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof (determined in good faith by the board of
directors of Company (or similar governing body)), (2) no less than 75% thereof
shall be paid in Cash or in securities, notes or other obligations converted
into Cash within 30 days of receipt and (3) the Net Asset Sale Proceeds thereof
shall be applied as required by Section 2.11(a);
(e) disposals of obsolete, worn out or surplus property or disposals
of equipment, by means of trade in, so long as such equipment is replaced,
substantially concurrently, by like kind equipment in an effort to upgrade any
facilities of Company and its Subsidiaries;
(f) Permitted Acquisitions, the consideration for which (including,
without limitation, cash paid, or acquired or assumed Indebtedness and the value
of any other consideration paid or given (other than the assumption of current
liabilities (other than the current portion of any funded Indebtedness) incurred
in the ordinary course of business of the subject of such acquisition) in the
aggregate from the Closing Date to the date of determination does not exceed the
Permitted Acquisition Cap;
(g) Company may liquidate any of its Subsidiaries that has total net
assets (as shown on the most recent balance sheet of such Subsidiary delivered
to the Agents and at the time of liquidation) of $115,000 or less, provided, any
Restricted Junior Payments in connection with such liquidation are made in
accordance with Section 6.5;
(h) sales of Capital Stock in any Subsidiary to qualify directors or
allow for investments by foreign nationals, in either case, to the extent
required by applicable law;
(i) sales of receivables and related rights under Receivables
Facilities (including the French Receivables Facility) in an aggregate Principal
Amount outstanding from time to time not to exceed the Dollar Equivalent of
$28,750,000; and
(j) Investments made in accordance with Section 6.7 and any grant of a
Permitted Lien.
6.10 Disposal of Subsidiary Interests. Except for (i) Liens created under
any of the Credit Documents and the First Lien Credit Documents and (ii) any
sale of all of its interests in the Capital Stock of any of its Subsidiaries in
compliance with the provisions of Section 6.9, no Credit Party shall, nor shall
it permit any of its Subsidiaries to, (a) directly or indirectly sell, assign,
pledge or otherwise encumber or dispose of any Capital Stock of any of its
Subsidiaries, except to qualify directors or allow for investments by foreign
nationals, in either case, if required by applicable law; or (b) permit any of
its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors or allow for investment by foreign
nationals, in either case, if required by applicable law. Any Subsidiary that
would constitute a wholly-owned Subsidiary except for any Capital Stock issued
to directors or foreign nationals as permitted under this Section 6.10 shall be
deemed a wholly-owned Subsidiary for purposes of this Agreement.
6.11 Sales and Lease-Backs. Except for leases permitted pursuant to Section
6.1(i), no Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease of any property (whether real, personal
or mixed), whether now owned or hereafter acquired, which such Credit Party (a)
has sold or transferred or is to sell or to transfer to any other Person (other
than Holdings or any of its Subsidiaries), or (b) intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by such Credit Party to any Person (other than Holdings or
any of its Subsidiaries) in connection with such lease (it being acknowledged
that equipment and other personal property first acquired in the ordinary course
of business of Company and its Subsidiaries in connection with, and not more
than 180 days prior to the commencement of, a Capital Lease or operating lease
otherwise permitted by this Agreement is not considered a sale and lease-back
governed by this Section 6.11 or an Asset Sale); provided, that Company and its
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that the applicable lessee,
guarantor or other surety would not be prohibited under Section 6.1 from
entering into, and remaining liable under, such lease. The sale and lease back
transaction shall be deemed to be (i) the sale of the asset subject to such
transaction (and any Net Asset Sale Proceeds arising from such sale shall be
subject to application by the Company or its Subsidiaries pursuant to Section
2.11(a)), and (ii) the incurrence of Indebtedness in a principal amount equal to
the amount of any liability for the
54
lease shown (or required to be shown) on the consolidated balance sheet of the
Company and its Subsidiaries in accordance with GAAP.
6.12 Transactions with Shareholders and Affiliates. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 10%
or more of any class of Capital Stock of Parent or any of its Subsidiaries or
with any Affiliate of Holdings or of any such holder, on terms taken as a whole
that are less favorable to Holdings or that Subsidiary, as the case may be, than
those available at the time from a Person who is not such a holder or Affiliate;
provided, the foregoing restriction shall not apply to (a) any transaction
between Company and any Guarantor Subsidiary; (b) reasonable and customary fees
paid to members of the board of directors (or similar governing body) of
Holdings and its Subsidiaries; (c) employment, compensation or indemnification
arrangements for directors, consultants, officers and other employees of
Holdings and its Subsidiaries entered into in the ordinary course of business;
(d) loans or advances to officers, directors, consultants and employees
otherwise permitted pursuant to Section 6.7 or guarantees in respect thereof or
otherwise made on their behalf (including any payments on such guarantees), (e)
the grant of options or similar rights to directors and employees of Holdings
and its Subsidiaries, (f) payment of Subordinated Management Fees, Permitted
Management Stock Repurchase Payments and other Restricted Junior Payments (or
payments that would be Restricted Junior Payments but for the exceptions in the
definition of such term) to the extent permitted by Section 6.5, (g)
intercompany Indebtedness permitted by Section 6.1, and (h) transactions
described in Schedule 6.12.
6.13 Conduct of Business. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, engage in any business
other than (i) the businesses engaged in by such Credit Party on the Closing
Date and similar or related businesses and (ii) such other lines of business as
may be consented to by Requisite Lenders.
6.14 Permitted Activities of Holdings. Holdings shall not (a) incur,
directly or indirectly, any Indebtedness or any other obligation or liability
whatsoever other than the Indebtedness and obligations under or in connection
with the Credit Documents, the Management Services Agreement, the Senior
Subordinated Note Indenture and the First Lien Credit Documents (and any related
Credit Documents as defined therein); (b) create or suffer to exist any Lien
upon any property or assets now owned or hereafter acquired by it other than the
Liens created under the Collateral Documents to which it is a party or permitted
pursuant to Section 6.2; (c) engage in any business or activity or own any
material operating assets other than (i) holding 100% of the Capital Stock of
Company and, indirectly, Company's Subsidiaries, (ii) performing its obligations
and activities incidental thereto under the Credit Documents, the Management
Services Agreement, the Senior Subordinated Note Indenture and the First Lien
Credit Documents (and any related Credit Documents as defined therein); and
(iii) making Restricted Junior Payments and Investments to the extent permitted
by this Agreement; (d) consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person; (e) sell
or otherwise dispose of any Capital Stock of any of its Subsidiaries; (f) create
or acquire any Subsidiary or make or own any Investment in any Person other than
Company; or (g) fail to hold itself out to the public as a legal entity separate
and distinct from all other Persons.
6.15 Amendments or Waivers with respect to First Lien Credit Agreement. No
Credit Party shall nor shall it permit any of its Subsidiaries to, agree to any
amendment, restatement, supplement or other modification to, or waiver of, any
of its material rights under the First Lien Credit Agreement or any related
document, or make any payment consistent with an amendment thereof or change
thereto, if such amendment or change would (a) increase the principal amount of
loans and commitments under the First Lien Credit Agreement to an amount in
excess of the amount permitted by Section 6.1(s), or (b) otherwise violate the
terms of the Intercreditor Agreement.
6.16 Amendments or Waivers with respect to Subordinated Indebtedness. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or if the effect of such amendment or change, together with all other
amendments or changes made, is to increase materially the obligations of the
obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to any Credit Party or Lenders.
55
6.17 Fiscal Year. No Credit Party shall, nor shall it permit any of its
Subsidiaries to change its Fiscal Year-end from December 31.
SECTION 7. GUARANTY
7.1 Guaranty of the Obligations. Subject to the provisions of Section 7.2,
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Administrative Agent for the ratable benefit of the Beneficiaries the due and
punctual payment in full of all Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)) (collectively, the "Guaranteed Obligations").
7.2 Contribution by Guarantors. All Guarantors desire to allocate among
themselves (collectively, the "Contributing Guarantors"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"Funding Guarantor") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "Fair Share" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "Fair
Share Contribution Amount" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "Aggregate Payments" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3 Payment by Guarantors. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of the Company to
pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)), Guarantors will upon demand pay, or cause to be paid, in
Cash, to Administrative Agent for the ratable benefit of Beneficiaries, an
amount equal to the sum of the unpaid principal amount of all Guaranteed
Obligations then due as aforesaid, accrued and unpaid interest on such
Guaranteed Obligations (including interest which, but for Company's becoming the
subject of a case under the Bankruptcy Code, would have accrued on such
Guaranteed Obligations, whether or not a claim is allowed against Company for
such interest in the related bankruptcy case) and all other Guaranteed
Obligations then owed to Beneficiaries as aforesaid.
7.4 Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations (or the release of such Guarantor permitted by the Credit
Documents). In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees as follows:
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(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the occurrence
of an Event of Default notwithstanding the existence of any dispute between the
Company and any Beneficiary with respect to the existence of such Event of
Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including any
other Guarantor) of the obligations of Company, and a separate action or actions
may be brought and prosecuted against such Guarantor whether or not any action
is brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith or the
applicable Hedge Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
Company or any security for the Guaranteed Obligations; and (vi) exercise any
other rights available to it under the Credit Documents or the Hedge Agreements;
and
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Credit
Documents or the Hedge Agreements, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to events of default) hereof, any of the other Credit Documents, any of
the Hedge Agreements or any agreement or instrument executed pursuant thereto,
or of any other guaranty or security for the Guaranteed Obligations, in each
case whether or not in accordance with the terms hereof or such Credit Document,
such Hedge Agreement or any agreement relating to such other guaranty or
security; (iii) the Guaranteed Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any respect;
(iv) the application of payments received from any source (other than payments
received pursuant to the other Credit Documents or any of the Hedge Agreements
or from the proceeds of any security for the Guaranteed Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Guaranteed Obligations) to the payment of indebtedness other than the
Guaranteed Obligations, even though any Beneficiary
57
might have elected to apply such payment to any part or all of the Guaranteed
Obligations; (v) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Holdings or any of its
Subsidiaries and to any corresponding restructuring of the Guaranteed
Obligations; (vi) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guaranteed Obligations;
(vii) any defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guaranteed Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and (viii) any other
act or thing or omission, or delay to do any other act or thing, which may or
might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guaranteed Obligations.
7.5 Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of
Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Company, any
other guarantor (including any other Guarantor) of the Guaranteed Obligations or
any other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any Deposit Account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any other
remedy in the power of any Beneficiary whatsoever; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Company or any other Guarantor including any defense based on or arising out
of the lack of validity or the unenforceability of the Guaranteed Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of Company or any other Guarantor from any cause other than
payment in full of the Guaranteed Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guaranteed Obligations, except behavior which amounts
to willful misconduct, gross negligence or bad faith; (e) (i) any principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations affecting
such Guarantor's liability hereunder or the enforcement hereof, (iii) any rights
to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and
any requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge Agreements or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to Company
and notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
7.6 Guarantors' Rights of Subrogation, Contribution, etc. Until the
Guaranteed Obligations shall have been indefeasibly paid in full, each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary. In addition, until the Guaranteed Obligations shall
have been indefeasibly paid in full, each Guarantor shall withhold exercise of
any right of contribution such Guarantor may have against any other guarantor
(including any other Guarantor) of the Guaranteed Obligations, including,
without limitation, any such right of contribution as contemplated by Section
7.2. Each Guarantor further agrees that, to the extent the waiver or agreement
to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of
58
Beneficiaries to be credited and applied against the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms hereof.
7.7 Subordination of Other Obligations. Any Indebtedness of Company or any
Guarantor now or hereafter held by any Guarantor (the "Obligee Guarantor") is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8 Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been paid in
full. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty
as to future transactions giving rise to any Guaranteed Obligations.
7.9 Authority of Guarantors or Company. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10 Financial Condition of Company. Any Credit Extension may be made to
Company or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the financial or other condition of Company at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantor's assessment, of
the financial condition of Company. Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Credit
Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
7.11 Bankruptcy, etc. (a) Without limiting any Guarantor's ability to file
a voluntary bankruptcy petition in respect of itself, so long as any Guaranteed
Obligations remain outstanding, no Guarantor shall, without the prior written
consent of Administrative Agent acting pursuant to the instructions of Requisite
Lenders, commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Company or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or any other
Guarantor or by any defense which Company or any other Guarantor may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed Obligations
are paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a
59
preference, fraudulent transfer or otherwise, and any such payments which are so
rescinded or recovered shall constitute Guaranteed Obligations for all purposes
hereunder.
7.12 Discharge of Guaranty Upon Sale of Guarantor. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in a
transaction consummated in accordance with the terms and conditions hereof, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale.
7.13 Dutch Law Limitation. To the extent applicable and notwithstanding any
other provision of this Section 7, the guarantee, indemnity and other
obligations of any Guarantor incorporated under the laws of the Netherlands
(each, a "Dutch Guarantor") or any Subsidiary of a Dutch Guarantor expressed to
be assumed in this Section 7 shall be deemed not to be assumed by such Guarantor
or such Subsidiary to the extent that the same would constitute unlawful
financial assistance within the meaning of Articles 2:207(c) or 2:98(c) of the
Dutch Civil Code and the provisions of this Agreement and the other Credit
Documents shall be construed accordingly.
SECTION 8. EVENTS OF DEFAULT
8.1 Events of Default. If any one or more of the following conditions or
events shall occur:
(a) Failure to Make Payments When Due. Failure by Company to pay (i)
when due any installment of principal of any Loan, whether at stated maturity,
by acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; or (ii) any interest on any Loan or any fee or any other amount due
hereunder within five days after the date due; or
(b) Default in Other Agreements.
(i) Failure of any Credit Party or any of their respective
Subsidiaries to pay when due any principal of or interest on or any other
amount payable in respect of one or more items of Indebtedness (other than
Indebtedness referred to in Section 8.1(a)) in an individual principal
amount of $5,750,000 or more or with an aggregate principal amount of
$11,500,000 or more, in each case beyond the grace period, if any, provided
therefor; or
(ii) breach or default by any Credit Party with respect to any
other material term of (1) one or more items of Indebtedness in the
individual or aggregate principal amounts referred to in clause (i) above
or (2) any loan agreement, mortgage, indenture or other agreement relating
to such item(s) of Indebtedness, in each case beyond the grace period, if
any, provided therefor, if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness (or a
trustee on behalf of such holder or holders), to cause, that Indebtedness
to become or be declared due and payable (or redeemable) prior to its
stated maturity or the stated maturity of any underlying obligation, as the
case may be
; provided that an "Event of Default" under and as defined in the First
Lien Credit Agreement ("First Lien Event of Default") shall constitute an
Event of Default under this Section 8.1 only after a period of 60 days has
elapsed, and such First Lien Event of Default shall not have been remedied
or waived, after the earlier of (i) an officer of Company or any Credit
Party becoming aware of such First Lien Event of Default or (ii) notice of
such First Lien Event of Default from the administrative agent under the
First Lien Credit Agreement to Company or Autocam France, or from Company
or Autocam France to such administrative agent or any First Lien Lender; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.3, Section
5.2 or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
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(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 8.1, and such default shall not have been remedied
or waived within thirty days after the earlier of (i) an officer of such Credit
Party becoming aware of such default or (ii) receipt by Company of notice from
Administrative Agent or any Lender of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc.. (i) A court
of competent jurisdiction shall enter a decree or order for relief in respect of
Holdings or any of its Subsidiaries in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Holdings or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty days without having been dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc.. (i) Holdings
or any of its Subsidiaries shall have an order for relief entered with respect
to it or shall commence a voluntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or Holdings or any of its Subsidiaries shall make any assignment for
the benefit of creditors; or (ii) Holdings or any of its Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the board of directors (or similar
governing body) of Holdings or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to herein or in Section 8.1(f); or
(h) French Bankruptcy Events. Autocam France, Frank & Pignard,
Bouverat or any other Subsidiary that is located in France (i) is unable or
shall admit in writing its inability to pay its debts generally as they become
due; (ii) shall declare to the court such inability (declaration de cessation
des paiements); (iii) shall suspend making payments of any of its debts, or, by
reason of actual or anticipated financial difficulties, or shall commence
negotiations with one or more of its creditors with a view to rescheduling any
of its Indebtedness; (iv) shall apply for or take any corporate action approving
any voluntary liquidation (liquidation volontaire); (v) shall apply for the
appointment of a conciliator (conciliateur), or a "mandataire ad-hoc" in
accordance with Articles 611-3 et seq of the French Code de Commerce; (v) shall
enter into an amicable settlement (accord amiable) with its creditors; (vi)
shall cease its payments (cessation de paiements) for the purposes of Article
621-1 et seq. of the French Code de Commerce; (vii) shall have a judgment issued
in respect of its judicial reorganization (redressement judiciaire) and the
administrateur judiciaire named in connection with such proceedings does not (or
is deemed not to) opt to continue performance of this Agreement; (viii) shall
have a judgment issued in respect of its judicial liquidation (liquidation
judiciaire) pursuant to Article 620-1 et seq. of the French Code de Commerce, or
for the transfer of the whole or part of its business (cessation totale ou
partielle de l'entreprise); or (ix) shall apply for or take any corporate action
approving any procedure for the resolution, restructuring, reduction or
modification of any debt, in any manner, if such procedure is set forth in Book
Six (Livre Six) of the French Code de Commerce at the time of such application
or corporate action and is not enumerated above; or
(i) Judgments and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving (i) in any individual case an amount in
excess of $5,750,000 or (ii) in the aggregate at any time an amount in excess of
$11,500,000 (in either case to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against Holdings or any of its Subsidiaries or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of sixty days (or in any event later than five days prior
to the date of any proposed sale thereunder); or
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(j) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order shall remain undischarged or unstayed for a period in
excess of thirty days; or
(k) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events or similar events in respect of any Foreign Plans, which individually or
in the aggregate (A) have or could reasonably be expected to have a Material
Adverse Effect, (B) have resulted in liabilities of Holdings, its Subsidiaries
or any of their ERISA Affiliates, taken together, in excess of $11,500,000 which
liabilities (1) have continued for a period of 60 days without being paid,
waived or otherwise discharged and (2) are not being contested in good faith by
appropriate proceedings or (ii) there shall be imposed a Lien or security
interest under Section 401(a)(29) or Section 412(n) of the Internal Revenue Code
or under ERISA on Collateral which Lien or security interest (1) has continued
in effect for a period of 60 days without being discharged and (2) is not being
contested in good faith by appropriate proceedings; or
(l) Change of Control. A Change of Control shall occur; or
(m) Guaranties, Collateral Documents and other Credit Documents. At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full of all Obligations, shall cease to
be in full force and effect (other than in accordance with its terms) or shall
be declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof or the satisfaction in full of the Obligations
in accordance with the terms hereof) or shall be declared null and void, or
Collateral Agent shall not have or shall cease to have a valid and perfected
Lien in any Collateral purported to be covered by the Collateral Documents with
the priority required by the relevant Collateral Document (unless released
pursuant to the terms of the Credit Documents), in each case for any reason
other than the failure of Collateral Agent or any Secured Party to take any
action within its control, or (iii) any Credit Party shall contest the validity
or enforceability of any Credit Document in writing or deny in writing that it
has any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g) automatically, and (2) so long as any other Event of Default
shall be continuing, at the request of (or with the consent of) Requisite
Lenders, upon notice to Company by Administrative Agent, (A) each of the
following shall immediately become due and payable, in each case without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Credit Party: (I) the unpaid principal amount of
and accrued interest on the Loans, and (II) all other Obligations; and (B)
Administrative Agent may (and at the direction of the Requisite Lenders, shall)
cause Collateral Agent to enforce any and all Liens and security interests
created pursuant to Collateral Documents.
SECTION 9. AGENTS
9.1 Appointment of Agents. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. GSCP
is hereby appointed Lead Arranger hereunder, and each Lender hereby authorizes
Lead Arranger to act as its agents in accordance with the terms hereof and the
other Credit Documents. The Bank of New York is hereby appointed Administrative
Agent and Collateral Agent hereunder and under the other Credit Documents and
each Lender hereby authorizes Administrative Agent and Collateral Agent to act
as its agent in accordance with the terms hereof and the other Credit Documents
(including through powers of attorney with respect actions in foreign
jurisdictions). Subject to Sections 9.2 and 9.3, each Agent hereby agrees to act
upon the express conditions contained herein and the other Credit Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties hereunder, each Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Holdings or any of its Subsidiaries.
Syndication Agent, without consent of or notice to any party hereto, may assign
any and all of its rights or obligations hereunder to any of its Affiliates. As
of the Closing Date, GSCP, in its capacity as Lead Arranger or Syndication Agent
shall not have any obligations but shall be entitled to all benefits of this
Section 9.
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9.2 Powers and Duties. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its Related
Parties, its agents, sub-agents, Affiliates or employees. The exculpatory
provisions of this Agreement shall apply to any such agent, Related Parties,
sub-agents, affiliates and employees of any Agent and any such agent or
sub-agent, and shall apply to their respective activities in connection with the
activities of such Agent. No Agent shall have, by reason hereof or any of the
other Credit Documents, a fiduciary relationship in respect of any Lender
regardless of whether a Default exists; and nothing herein or any of the other
Credit Documents, expressed or implied, is intended to or shall be so construed
as to impose upon any Agent any obligations in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein. No Agent
shall be required to take any action that, in its opinion or the opinion of its
counsel, may expose such Agent or any of its Related Parties to liability or
that is contrary to any Credit Document or applicable law.
9.3 General Immunity.
(a) No Responsibility for Certain Matters. No Agent nor any Related
Party shall be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectability or sufficiency hereof or
any other Credit Document (other than solely to confirm receipt of items
expressly required to be delivered to such Agent hereunder) or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
any Agent to Lenders or by or on behalf of any Credit Party to any Agent or any
Lender in connection with the Credit Documents and the transactions contemplated
thereby or for the financial condition or business affairs of any Credit Party
or any other Person liable for the payment of any Obligations, nor shall any
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Credit Documents or as to the use of the proceeds of the Loans or as
to the existence or possible existence of any Event of Default or Default or to
make any disclosures with respect to the foregoing. Anything contained herein to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the component
amounts thereof. No Agent shall be required to take any action that, in its
opinion or the opinion of its counsel, may expose such Agent to liability or
that is contrary to any Credit Document or applicable law.
(b) Exculpatory Provisions. No Agent or any Related Party shall be
liable to Lenders for any action taken or omitted by any Agent under or in
connection with any of the Credit Documents except to the extent caused by such
Agent's gross negligence or willful misconduct as determined by a court of
competent jurisdiction by a final and nonappealable judgment. Each Agent may at
any time request instructions from Requisite Lenders or all affected Lenders
with respect to any actions or approvals, which by the terms of this Agreement
or any of the Credit Documents, such Agent is permitted or required to take or
to grant. Each Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection herewith or
any of the other Credit Documents or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until such Agent
shall have received instructions in respect thereof from Requisite Lenders (or
such other Lenders as may be required to give such instructions under Section
10.5) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), such Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Holdings and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting hereunder or any of the other Credit
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under Section 10.5).
(c) Delegation of Duties. Administrative Agent may perform any and all
of its duties and exercise its rights and powers under this Agreement or under
any other Credit Document by or through any one or more sub-agents appointed by
Administrative Agent. Administrative Agent and any such sub-agent may perform
any and all of its duties and
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exercise its rights and powers by or through their respective Affiliates. The
exculpatory, indemnification and other provisions of this Section 9.3 and of
Section 9.6 shall apply to the Affiliates of Administrative Agent and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent. All of the rights, benefits, and privileges (including the exculpatory
and indemnification provisions) of this Section 9.3 and of Section 9.6 shall
apply to any such sub-agent and to the Affiliates of any such sub-agent, and
shall apply to their respective activities as sub-agent as if such sub-agent and
Affiliates were named herein. Notwithstanding anything herein to the contrary,
with respect to each sub-agent appointed by the Administrative Agent, (i) such
sub-agent shall be a third party beneficiary under this Agreement with respect
to all such rights, benefits and privileges (including exculpatory rights and
rights to indemnification) and shall have all of the rights and benefits of a
third party beneficiary, including an independent right of action to enforce
such rights, benefits and privileges (including exculpatory rights and rights to
indemnification) directly, without the consent or joinder of any other Person,
against any or all of the Credit Parties and the Lenders, (ii) such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) shall not be modified or amended without the consent of such
sub-agent, and (iii) such sub-agent shall only have obligations to
Administrative Agent and not to any Credit Party, Lender or any other Person and
no Credit Party, Lender or any other Person shall have any rights, directly or
indirectly, as a third party beneficiary or otherwise, against such sub-agent.
9.4 Agents Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as if
it were not performing the duties and functions delegated to it hereunder, and
the term "Lender" shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to, own securities of, and generally engage in any
kind of banking, trust, financial advisory or other business with Holdings or
any of its Affiliates as if it were not performing the duties specified herein,
and may accept fees and other consideration from Company for services in
connection herewith and otherwise without having to account for the same to
Lenders.
9.5 Lenders' Representations, Warranties and Acknowledgment.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Holdings and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement
and funding its Dollar Term Loan and/or Euro Term Loan on the Closing Date,
shall be deemed to have acknowledged receipt of, and consented to and approved,
each Credit Document and each other document required to be approved by any
Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.
9.6 Right to Indemnity. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent and each of its Related Parties, to the
extent that such Agent or such Related Party shall not have been reimbursed by
any Credit Party, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Agent
in exercising its powers, rights and remedies or performing its duties hereunder
or under the other Credit Documents or otherwise in its capacity as such Agent
in any way relating to or arising out of this Agreement or the other Credit
Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct as determined by a court of competent jurisdiction by a final
and non-appealable judgment. If any indemnity furnished to any Agent for any
purpose shall, in the opinion of such Agent, be insufficient or become impaired,
such Agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished;
provided, in no event shall this sentence require any Lender to indemnify any
Agent against any liability, obligation, loss, damage, penalty, action,
judgment, suit, cost, expense or disbursement in excess of such Lender's Pro
Rata Share thereof; and provided further, this sentence shall not be deemed to
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require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
9.7 Successor Administrative Agent, Collateral Agent. Administrative Agent
may resign at any time by giving forty-five days' prior written notice thereof
to Lenders and the Company, and Administrative Agent may be removed at any time
with or without cause by an instrument or concurrent instruments in writing
delivered to the Company and Administrative Agent and signed by Requisite
Lenders. Upon receipt of any such notice of resignation, the Requisite Lenders
shall have the right, in consultation with the Company, to appoint a successor,
which shall be a bank with an office in New York, New York, or an Affiliate of
any such bank with an office in New York, New York. If no such successor shall
have been so appointed by the Requisite Lenders and shall have accepted such
appoint appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf
of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above provided that if the Administrative Agent shall
notify the Company and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be
discharged from its duties and obligations thereunder and under the other Credit
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Credit Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(ii) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Requisite Lenders appoint a successor
Administrative Agent as provided for above in this paragraph. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Administrative Agent under the Credit Documents, and (ii) execute and
deliver to such successor Administrative Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent of the
security interests created under the Collateral Documents, whereupon such
retiring or removed Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent hereunder. Any resignation or
removal of BNY or its successor as Administrative Agent pursuant to this Section
shall also constitute the resignation or removal of BNY or its successor as
Collateral Agent, and any successor Administrative Agent appointed pursuant to
this Section shall, upon its acceptance of such appointment, become the
successor Collateral Agent for all purposes hereunder and under the other Credit
Documents.
9.8 Collateral Documents, Guaranty and Intercreditor Agreement.
(a) Agents under Collateral Documents, Guaranty and Intercreditor
Agreement. Each Lender hereby further authorizes Administrative Agent or
Collateral Agent, as applicable, on behalf of and for the benefit of Lenders, to
be agent for and representative of Lenders with respect to the Guaranty, the
Intercreditor Agreement, the Collateral and the Collateral Documents and to
execute and deliver on its behalf the Intercreditor Agreement and each of the
Collateral Documents to which it is party. Subject to Section 10.5, without
further written consent or authorization from Lenders, Administrative Agent or
Collateral Agent, as applicable may execute any documents or instruments
necessary to (i) release any Lien encumbering any item of Collateral that is the
subject of a sale or other disposition of assets permitted hereby or to which
Requisite Lenders (or such other Lenders as may be required to give such consent
under Section 10.5) have otherwise consented or (ii) release any Guarantor from
the Guaranty pursuant to Section 7.12 or with respect to which Requisite Lenders
(or such other Lenders as may be required to give such consent under Section
10.5) have otherwise consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Company, Administrative Agent, Collateral Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of Lenders in accordance with the terms hereof and all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on
any of the Collateral
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pursuant to a public or private sale, Collateral Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.
9.9 Dutch Collateral Debt Covenant.
(a) Definitions. In this Section 9.9:
"Dutch Obligor" means (i) Autocam Corporation, (ii) Autocam Europe if
and when it grants a Lien to Collateral Agent pursuant to Dutch Law, and (iii)
any Foreign Subsidiary of Company not in existence on the Closing Date organized
under the laws of the Netherlands, which becomes a Guarantor Foreign Subsidiary
and grants a Lien to Collateral Agent pursuant to Dutch law.
(b) Parallel Debt Undertaking. The Dutch Obligor irrevocably and
unconditionally undertakes (and to the extent necessary undertakes in advance
(bij voorbaat)) to pay to Collateral Agent amounts equal to any amounts owing by
each Credit Party to the Agents (including former Agents), the Lenders or any of
them and Lender Counterparties in respect of the Obligations (whether present or
future and whether actual or contingent) as and when the same fall due for
payment thereunder. Such a payment undertaking and the obligations and
liabilities resulting from it by the Dutch Obligor to Collateral Agent are
referred to as the "Parallel Debt".
(c) Acknowledgment. Each party to this Agreement acknowledges that (i)
the Parallel Debt constitutes, undertakings, obligations and liabilities of the
Dutch Obligor to Collateral Agent separate and independent from, and without
prejudice to the Obligations (whether present or future and whether actual or
contingent) of each Credit Party to the Agents (including former Agents), the
Lenders or any of them and Lender Counterparties, and (ii) the Parallel Debt
represents the Collateral Agent's own separate and independent claim (eigen en
zelfstandige vordering) to receive payment of the Parallel Debt from the Dutch
Obligor; provided that in all events the aggregate amount which may become due
under the Parallel Debt shall never exceed the aggregate amount which may become
due under the Obligations.
(d) Decrease Parallel Debt. Each party to this Agreement agrees that
the aggregate amount due by the Dutch Obligor under the Parallel Debt will be
decreased to the extent a Credit Party has paid any amounts to the Agents, the
Lenders or any of them and Lender Counterparties to reduce its outstanding
Obligations provided except to the extent such payment shall have been
subsequently avoided or reduced by virtue of provisions or enactments relating
to bankruptcy, insolvency, preference, liquidation or similar laws of general
application.
(e) Decrease Obligations. Each party to this Agreement agrees that to
the extent the Dutch Obligor has paid any amounts to Collateral Agent under the
Parallel Debt the aggregate amount due by each Credit Party under the
Obligations will be decreased accordingly, except to the extent such payment
shall have been subsequently avoided or reduced by virtue of provisions or
enactments relating to bankruptcy, insolvency, preference, liquidation or
similar laws of general application.
(f) Application Parallel Debt. To the extent Collateral Agent receives
any amount in payment of the Parallel Debt subject to the terms of the
Intercreditor Agreement, Collateral Agent shall distribute such amount among the
Lenders and Lender Counterparties in accordance with the terms of the Credit
Documents.
(g) Default. For the avoidance of doubt, the Parallel Debt will become
due and payable (opeisbaar) at the same time and to the same extent as the
related Obligations become due and payable.
(h) No common property. Each party to this Agreement confirms that, in
accordance with this Section 9.9 the claim of Collateral Agent against the Dutch
Obligor in respect of the Parallel Debt does not constitute common property (een
gemeenschap) within the meaning of Article 3:166 Dutch Civil Code and that the
provisions relating to such common property shall not apply. If, however, it
shall be held that such claim of Collateral Agent does constitute
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such common property and such provisions do apply, the parties to this Agreement
agree that this Agreement shall constitute the administration agreement
(beheersregeling) within the meaning of Article 3:168 Dutch Civil Code.
(i) No agent. For the purpose of this Section 9.9 Collateral Agent
acts in its own name and on behalf of itself and not as agent or representative
of any other party to this Agreement and any Lien granted by a Dutch Obligor to
Collateral Agent to secure the Parallel Debt is granted to Collateral Agent in
its capacity as creditor of the Parallel Debt.
(j) Governing Law. Notwithstanding the provisions of Section 10.14,
this Section 9.9 shall be governed by the law of the Netherlands.
9.10 USA Patriot Act. Each Lender and Agent hereby notifies Company that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Patriot Act"), it is required to
obtain, verify and record information that identifies Credit Parties, which
information includes the name and address of each Credit Party and other
information that will allow such Lender to identify such Credit Party in
accordance with the Patriot Act.
SECTION 10. MISCELLANEOUS
10.1 Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given to a Credit Party,
Syndication Agent, Collateral Agent or Administrative Agent, shall be sent to
such Person's address as set forth on Appendix A or in the other relevant Credit
Document, and in the case of any Lender, the address as indicated on Appendix A
or otherwise indicated to Administrative Agent in writing. Each notice hereunder
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, no notice to any Agent shall be effective
until received by such Agent.
The Company hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to the Credit Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, borrowing or other extension of credit (including any election of an
interest rate or interest period relating thereto), (ii) relates to the payment
of any principal or other amount due under this Agreement prior to the scheduled
date therefor, (iii) provides notice of any default or event of default under
this Agreement or (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any borrowing or other
extension of credit thereunder (all such non-excluded communications being
referred to herein collectively as "Communications"), by transmitting the
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to SJerard@Bankofny.com. In addition, the Company agrees to
continue to provide the Communications to the Administrative Agent in the manner
specified in the Credit Documents but only to the extent requested by the
Administrative Agent. The Company further agrees that the Administrative Agent
may make the Communications available to the Lenders by posting the
Communications on Intralinks or a substantially similar electronic transmission
system (the "Platform"). THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE".
THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS
OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, "AGENT PARTIES") HAVE ANY LIABILITY TO COMPANY, ANY LENDER OR ANY
OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION,
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR
EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF COMPANY'S OR
THE ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET,
EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH AGENT
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PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. The Administrative Agent agrees
that the receipt of the Communications by the Administrative Agent at its e-mail
address set forth above shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of the Credit Documents.
Each Lender agrees that notice to it (as provided in the next sentence)
specifying that the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such Lender for purposes
of the Credit Documents. Each Lender agrees to notify the Administrative Agent
in writing (including by electronic communication) from time to time of such
Lender's e-mail address to which the foregoing notice may be sent by electronic
transmission and (ii) that the foregoing notice may be sent to such e-mail
address. Nothing herein shall prejudice the right of the Administrative Agent or
any Lender to give any notice or other communication pursuant to any Credit
Document in any other manner specified in such Credit Document.
10.2 Expenses.
(a) Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (a) all the actual and reasonable
costs and expenses of preparation of the Credit Documents and any consents,
amendments, waivers or other modifications thereto; (b) all the costs of
furnishing all opinions by counsel for Company and the other Credit Parties; (c)
the reasonable out-of-pocket fees, expenses and disbursements of counsel to
Agents in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (d) all the out-of-pocket actual costs and reasonable expenses of
creating and perfecting Liens in favor of Collateral Agent, for the benefit of
Lenders pursuant hereto, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums and
reasonable fees, expenses and disbursements of counsel to each Agent and of
counsel providing any opinions that any Agent or Requisite Lenders may request
in respect of the Collateral or the Liens created pursuant to the Collateral
Documents; (e) all the out-of-pocket actual costs and reasonable fees, expenses
and disbursements of any auditors, accountants, consultants or appraisers; (f)
all the out-of-pocket actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any appraisers, consultants,
advisors and agents employed or retained by Collateral Agent and its counsel) in
connection with the custody or preservation of any of the Collateral; (g) all
other out-of-pocket actual and reasonable costs and expenses incurred by each
Agent in connection with the syndication of the Loans and Commitments and the
negotiation, preparation and execution of the Credit Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; and (h) during the continuance of a Default or an Event of
Default, (i) all costs and expenses of inspections and visits by any Agent or
Lender pursuant to Section 5.6 and (ii) all costs and expenses, including
reasonable attorneys' fees and costs of settlement, incurred by any Agent and
Lenders in enforcing any Obligations of or in collecting any payments due from
any Credit Party hereunder or under the other Credit Documents by reason of such
Default or Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy cases or proceedings.
(b) Reimbursement. To the extent that Company for any reason fails to
indefeasibly pay any amount required under this Section 10 to be paid by it to
any Agent (or any sub-agent thereof, or any Related Party of any of the
foregoing), each Lender severally agrees to pay to such Agent (or any such
sub-agent) or such Related Party, as the case may be, such Lender's Pro Rata
Share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided, that the
reimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against any Agent (or
any such sub-agent) in its capacity as such, or against any Related Party of any
of the foregoing acting for such Agent (or any such sub-agent) in connection
with such capacity). All amounts due under this Section 10.2(b) shall be paid
promptly after demand therefore.
10.3 Indemnity.
(a) In addition to the payment of expenses pursuant to Section 10.2,
whether or not the transactions contemplated hereby shall be consummated, each
Credit Party agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless, each Agent, the Lead Arranger and Lender and
their respective Related Parties (each, an "Indemnitee"), from and against any
and all Indemnified Liabilities; provided, no Credit Party shall have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee as determined by a court of
competent jurisdiction
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by a final and non-appealable judgment. To the extent that the undertakings to
defend, indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, no Credit Party shall
assert, and each Credit Party hereby waives, any claim against Lenders, Agents
and their respective Related Parties, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) (whether or not the claim therefor is based on contract, tort or duty
imposed by any applicable legal requirement) arising out of, in connection with,
arising out of, as a result of, or in any way related to, this Agreement or any
Credit Document or any agreement or instrument contemplated hereby or thereby or
referred to herein or therein, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof or any act or omission or event
occurring in connection therewith, and Holdings and Company hereby waives,
releases and agrees not to sue upon any such claim or any such damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
10.4 Set-Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender and each Agent is hereby
authorized by each Credit Party at any time or from time to time subject to the
consent of Administrative Agent (such consent not to be unreasonably withheld or
delayed), without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender or such Agent to or for the credit or the
account of any Credit Party against and on account of the obligations and
liabilities of any Credit Party to such Lender or such Agent hereunder and under
the other Credit Documents, including all claims of any nature or description
arising out of or connected hereto or with any other Credit Document,
irrespective of whether or not (a) such Lender or such Agent shall have made any
demand hereunder or (b) the principal of or the interest on the Loans or any
other amounts due hereunder shall have become due and payable pursuant to
Section 2 and although such obligations and liabilities, or any of them, may be
contingent or unmatured. A Lender's failure to obtain the required consent of
the Administrative Agent described above shall not affect the validity of any
such set off or application. Each Credit Party hereby further grants to
Administrative Agent and each Lender a security interest in all Deposit Accounts
maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5 Amendments and Waivers.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b), no
amendment, modification, termination or waiver of any provision of the Credit
Documents, or consent to any departure by any Credit Party therefrom, shall in
any event be effective without the written concurrence of the Requisite Lenders
(and, to the extent the rights or obligations of an Agent are affected, such
Agent).
(b) Affected Lenders' Consent. Without the written consent of each
Lender that would be affected thereby (and the consent of an Agent if the rights
or obligations of such Agent are affected), no amendment, modification,
termination, or consent shall be effective if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);
(iii) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan pursuant
to Section 2.7) or any fee payable hereunder;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of this
Section 10.5(b);
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(vii) amend the definition of "Requisite Lenders" or "Pro Rata
Share"; provided, with the consent of Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination
of "Requisite Lenders" or "Pro Rata Share" on substantially the same basis
as the Term Loan Commitments and the Term Loans are included on the Closing
Date;
(viii) release all or substantially all of the Collateral or all
or substantially all of the Guarantors from the Guaranty except as
expressly provided in the Credit Documents; or
(ix) consent to the assignment or transfer by any Credit Party of
any of its rights and obligations under any Credit Document except as
expressly provided in any Credit Document.
(c) Other Consents. No amendment, modification, termination or waiver
of any provision of the Credit Documents, or consent to any departure by any
Credit Party therefrom, shall:
(i) amend the definition of "Requisite Class Lenders" without the
consent of Requisite Class Lenders of each Class; provided, with the
consent of the Requisite Lenders, additional extensions of credit pursuant
hereto may be included in the determination of such "Requisite Class
Lenders" on substantially the same basis as the Term Loan Commitments and
the Term Loans are included on the Closing Date;
(ii) alter the required application of any repayments or
prepayments as between Classes pursuant to Section 2.12 without the consent
of Requisite Class Lenders of each Class which is being allocated a lesser
repayment or prepayment as a result thereof; provided, Requisite Lenders
may waive, in whole or in part, any prepayment so long as the application,
as between Classes, of any portion of such prepayment which is still
required to be made is not altered; or
(iii) amend, modify, terminate or waive any provision of Section
9 as the same applies to any Agent, or any other provision hereof as the
same applies to the rights or obligations of any Agent, in each case
without the consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by a
Credit Party, on such Credit Party.
10.6 Successors and Assigns; Participations.
(a) Generally. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of Lenders. No Credit Party's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by any Credit Party without the prior written consent of all Lenders.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby,
Affiliates of each of the Agents and Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Register. Company, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Loans listed therein for all purposes hereof, and no
assignment or transfer of any such Loan shall be effective, in each case, unless
and until an Assignment Agreement effecting the assignment or transfer thereof
shall have been delivered to and accepted by Administrative Agent and recorded
in the Register as provided in Section 10.6(e). Prior to such recordation, all
amounts owed with respect to the applicable Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Loans.
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(c) Right to Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its Loans
owing to it or other Obligation (provided, however, that each such assignment
shall be of a uniform, and not varying, percentage of all rights and obligations
under and in respect of any Loan):
(i) to any Person meeting the criteria of clause (i) of the
definition of the term of "Eligible Assignee" upon the giving of notice to
Company and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee"; provided, that each such
assignment pursuant to this Section 10.6(c)(ii) shall be in an aggregate
amount of not less than $1,000,000 or E1,000,000 (or such lesser amount as
may be agreed to by Company and Administrative Agent or as shall constitute
the aggregate amount of the Dollar Term Loans or Euro Term Loans with
respect to the assignment of Term Loans).
(d) Mechanics. The assigning Lender and the assignee thereof shall
execute and deliver to Administrative Agent an Assignment Agreement, together
with such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent pursuant
to Section 2.17(c).
(e) Notice of Assignment. Upon its receipt of a duly executed and
completed Assignment Agreement (and any forms, certificates or other evidence
required by this Agreement in connection therewith), Administrative Agent shall
record the information contained in such Assignment Agreement in the Register,
shall give prompt notice thereof to Company and shall maintain a copy of such
Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in loans such as the applicable Loans;
and (iii) it will make or invest in, as the case may be, its Loans for its own
account in the ordinary course of its business and without a view to
distribution of such Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that, subject
to the provisions of this Section 10.6, the disposition of such Loans or any
interests therein shall at all times remain within its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions of this
Section 10.6, as of the "Effective Date" specified in the applicable Assignment
Agreement: (i) the assignee thereunder shall have the rights and obligations of
a "Lender" hereunder to the extent such rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement and shall thereafter
be a party hereto and a "Lender" for all purposes hereof; (ii) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned thereby pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination hereof under Section
10.8) and be released from its obligations hereunder (and, in the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations hereunder, such Lender shall cease to be a party
hereto; provided, anything contained in any of the Credit Documents to the
contrary notwithstanding, such assigning Lender shall continue to be entitled to
the benefit of all indemnities hereunder as specified herein with respect to
matters arising out of the prior involvement of such assigning Lender as a
Lender hereunder); (iii) if applicable, the Term Loan Commitments shall be
modified to reflect the Term Loan Commitment of such assignee; and (iv) if any
such assignment occurs after the issuance of any Note hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative
Agent for cancellation, and thereupon Company shall issue and deliver new Notes,
if so requested by the assignee and/or assigning Lender, to such assignee and/or
to such assigning Lender, with appropriate insertions, to reflect the new
outstanding Loans of the assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Holdings, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Loans or in any
other Obligation. The holder of any such participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender to take or omit to take any action hereunder except with respect to any
amendment, modification or waiver that would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver
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of applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default shall not constitute a change in the
terms of such participation, and that an increase in any Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under the Collateral
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. Company agrees that
each participant shall be entitled to the benefits of Sections 2.15(c), 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section
2.16 or 2.17 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is made with Company's prior written consent
and (ii) a participant that would be a Non-U.S. Lender if it were a Lender shall
not be entitled to the benefits of Section 2.17 unless Company is notified of
the participation sold to such participant and such participant agrees, for the
benefit of Company, to comply with Section 2.17 as though it were a Lender. To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 10.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.14 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 10.6, any Lender may assign and/or pledge all
or any portion of its Loans, the other Obligations owed by or to such Lender,
and its Notes, if any, to secure obligations of such Lender including, without
limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided, no Lender, as
between Company and such Lender, shall be relieved of any of its obligations
hereunder as a result of any such assignment and pledge, and provided further,
in no event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder unless and until an assignment is made
in accordance with the provisions of Section 10.6(c).
10.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8 Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.15(c), 2.16, 2.17, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.14, 9.3(b)
and 9.6 shall survive the payment of the Loans and the termination hereof.
10.9 No Waiver; Remedies Cumulative. No failure or delay on the part of any
Agent or any Lender in the exercise of any power, right or privilege hereunder
or under any other Credit Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. The
rights, powers and remedies given to each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers and
remedies existing by virtue of any statute or rule of law or in any of the other
Credit Documents or any of the Hedge Agreements. Any forbearance or failure to
exercise, and any delay in exercising, any right, power or remedy hereunder
shall not impair any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right, power or
remedy.
10.10 Marshalling; Payments Set Aside. Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of
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such recovery, the obligation or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor or related thereto, shall
be revived and continued in full force and effect as if such payment or payments
had not been made or such enforcement or setoff had not occurred.
10.11 Severability. In case any provision in or obligation hereunder or any
Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12 Obligations Several; Independent Nature of Lenders' Rights. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13 Headings. Section headings herein are included herein for convenience
of reference only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.
10.14 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND
SECTION 5-1402 OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK) WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
10.15 CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR
ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES AGENTS AND
LENDERS RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
10.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE,
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MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED
BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER
CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17 Confidentiality. Each Lender shall hold all non-public information
regarding Company and its Subsidiaries and their businesses identified as such
by Company and obtained by such Lender pursuant to the requirements hereof in
accordance with such Lender's customary procedures for handling confidential
information of such nature, it being understood and agreed by Company that, in
any event, a Lender may make (i) disclosures of such information to Affiliates
of such Lender and to their agents and advisors (and to other persons authorized
by a Lender or Agent to organize, present or disseminate such information in
connection with disclosures otherwise made in accordance with this Section
10.17, (ii) disclosures of such information reasonably required by any bona fide
or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Loans
or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in Hedge Agreements
(provided, such assignees, transferees, participants, counterparties and
advisors are advised of and agree to be bound by the provisions of this Section
10.17), (iii) disclosure to any rating agency when required by it, provided
that, prior to any disclosure, such rating agency shall undertake in writing to
preserve the confidentiality of any confidential information relating to the
Credit Parties received by it from any of the Agents or any Lender, and (iv)
disclosures required or requested by any governmental agency or representative
thereof or by the NAIC or pursuant to legal or judicial process; provided,
unless specifically prohibited by applicable law or court order, each Lender
shall make reasonable efforts to notify Company of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition or other routine
examination of such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information.
Notwithstanding anything to the contrary set forth herein, each party (and each
of their respective employees, representatives or other agents) may disclose to
any and all persons, without limitations of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions and other tax analyses) that are provided to any
such party relating to such tax treatment and tax structure. However, any
information relating to the tax treatment or tax structure shall remain subject
to the confidentiality provisions hereof (and the foregoing sentence shall not
apply) to the extent reasonably necessary to enable the parties hereto, their
respective Affiliates, and their and their respective Affiliates' directors and
employees to comply with applicable securities laws. For this purpose, "tax
structure" means any facts relevant to the federal income tax treatment of the
transactions contemplated by this Agreement but does not include information
relating to the identity of any of the parties hereto or any of their respective
Affiliates.
10.18 Usury Savings Clause. Notwithstanding any other provision herein, the
aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Company shall pay to Administrative Agent an amount
equal to the difference between the amount of interest paid and the amount of
interest which would have been paid if the Highest Lawful Rate had at all times
been in effect. Notwithstanding the foregoing, it is the intention of Lenders
and Company to conform strictly to any applicable usury laws. Accordingly, if
any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such excess
shall be cancelled automatically and, if previously paid, shall at such Lender's
option be applied to the outstanding amount of the Loans made hereunder or be
refunded to Company.
10.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
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10.20 Judgment Currency.
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in any currency (the "Original
Currency") into another currency (the "Other Currency"), the parties hereto
agree, to the fullest extent permitted by law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures
Administrative Agent or a Lender could purchase the Original Currency with such
Other Currency in New York, New York on the Business Day immediately preceding
the day on which any such judgment, or any relevant part thereof, is given.
(b) The obligations of Company in respect of any sum due from it to
any Agent or Lender hereunder shall, notwithstanding any judgment in such Other
Currency, be discharged only to the extent that on the Business Day following
receipt by such Agent or Lender of any sum adjudged to be so due in such Other
Currency such Agent or Lender may in accordance with normal banking procedures
purchase the Original Currency with such Other Currency; if the Original
Currency so purchased is less than the sum originally due such Agent or Lender
in the Original Currency, Company agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Agent or Lender against
such loss, and if the Original Currency so purchased exceeds the sum originally
due to such Agent or Lender in the Original Currency, such Agent or Lender shall
remit such excess to Company.
10.21 Effectiveness. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.22 Intercreditor Agreement.
EACH LENDER HEREUNDER (A) ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE
INTERCREDITOR AGREEMENT, (B) CONSENTS TO THE SUBORDINATION OF LIENS PROVIDED FOR
IN THE INTERCREDITOR AGREEMENT, (C) AGREES THAT IT WILL BE BOUND BY AND WILL
TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND
(D) AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT TO ENTER INTO THE
INTERCREDITOR AGREEMENT AS COLLATERAL AGENT AND ON BEHALF OF SUCH LENDER. THE
FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE FIRST LIEN LENDERS TO
EXTEND CREDIT TO THE COMPANY AND SUCH LENDERS ARE INTENDED THIRD PARTY
BENEFICIARIES OF SUCH PROVISIONS.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AUTOCAM CORPORATION
TITAN HOLDINGS, INC.
AUTOCAM-PAX, INC.
AUTOCAM SOUTH CAROLINA, INC.
AUTOCAM GREENVILLE, INC.
AUTOCAM ACQUISITION, INC.
AUTOCAM LASER TECHNOLOGIES, INC.
AUTOCAM-HAR, INC.
AUTOCAM INTERNATIONAL, LTD.
AUTOCAM INTERNATIONAL SALES CORPORATION
By: /s/ Warren A. Veltman
------------------------------------
Name: Warren A. Veltman
Title: Treasurer and Secretary
S-1
AUTOCAM EUROPE B.V.
By: Autocam Corporation,
as Managing Director
By: /s/ Warren A. Veltman
------------------------------------
Name: Warren A. Veltman
Title: Treasurer and Secretary
S-2
THE BANK OF NEW YORK,
as Administrative Agent and Collateral
Agent
By: /s/ Stephen C. Jerard
------------------------------------
Name: Stephen C. Jerard
Title: Vice President
Address for Notices:
The Bank of New York
600 East Las Colinas Blvd. Suite 1300
Irving, TX 75039
Attention: Stephen C. Jerard
Telecopier: (972) 401-8556
E-mail: SJerard@Bankofny.com
with a copy to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, TX 75202
Attention: Laurie G. Lang
Telecopier: (214) 200-0667
Laurie.Lang@haynesboone.com
S-3
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent,
Sole Bookrunner and a Lender
By: Authorized Signatory
Address for Notices:
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telecopier: (212) 357-0932
E-mail: stephen.king@gs.com
with a copy to:
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telecopier: (212) 357-4597
E-mail: john.makrinos@gs.com
S-1
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
Notice Addresses
AUTOCAM CORPORATION
4070 East Paris Avenue Southeast
Grand Rapids, MI 49512
Attention: Warren A. Veltman, Chief Financial Officer
Telecopier: (616) 698-6876
TITAN HOLDINGS, INC.
4070 East Paris Avenue Southeast
Grand Rapids, MI 49512
Attention: Warren A. Veltman, Chief Financial Officer
Telecopier: (616) 698-6876
in each case, with a copy to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004-1980
Attention: Craig F. Miller, Esq.
Telecopier: (212) 859-4000
THE BANK OF NEW YORK,
as Administrative Agent and Collateral Agent
The Bank of New York
600 East Las Colinas Blvd. Suite 1300
Irving, TX 75039
Attention: Stephen C. Jerard
Telecopier: (972) 401-8556
E-mail: SJerard@Bankofny.com
with a copy to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, TX 75202
Attention: Laurie G. Lang
Telecopier: (214) 200-0667
Laurie.Lang@haynesboone.com
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent, Sole Bookrunner and a Lender
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telecopier: (212) 357-0932
with a copy to:
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telecopier: (212) 357-4597
2