<PAGE>
EXHIBIT 10.12
EXECUTION COPY
================================================================================
PLASTIPAK HOLDINGS, INC.
FIFTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF JANUARY 28, 2005
COMERICA BANK, AS LEAD ARRANGER
AND ADMINISTRATIVE AGENT
FLEET NATIONAL BANK, AS SYNDICATION AGENT
JPMORGAN CHASE BANK N.A., AS SYNDICATION AGENT
STANDARD FEDERAL BANK N.A., AS DOCUMENTATION AGENT
BANK OF MONTREAL, AS DOCUMENTATION AGENT
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S>
<C>
1.
DEFINITIONS.......................................................................................
1
1.1 CERTAIN DEFINED
TERMS......................................................................
1
2. REVOLVING
CREDIT..................................................................................
26
2.1
COMMITMENT.................................................................................
26
2.2 ACCRUAL OF INTEREST
AND MATURITY; EVIDENCE OF
INDEBTEDNESS................................. 26
2.3 REQUESTS FOR AND
REFUNDINGS AND CONVERSIONS OF
ADVANCES.................................... 27
2.4 DISBURSEMENT OF
ADVANCES...................................................................
29
2.5 SWING LINE
ADVANCES........................................................................
31
2.6 PRIME-BASED INTEREST
PAYMENTS..............................................................
35
2.7 EUROCURRENCY-BASED
INTEREST PAYMENTS AND QUOTED RATE INTEREST
PAYMENTS..................... 35
2.8 INTEREST PAYMENTS ON
CONVERSIONS...........................................................
35
2.9 INTEREST ON
DEFAULT........................................................................
36
2.10 OPTIONAL PREPAYMENT OF
REVOLVING CREDIT
ADVANCES........................................... 36
2.11
RESERVED...................................................................................
36
2.12 PRIME-BASED ADVANCE IN
ABSENCE OF ELECTION OR UPON
DEFAULT................................. 37
2.13 REVOLVING CREDIT FACILITY
FEE..............................................................
37
2.14 MANDATORY REDUCTION OF
INDEBTEDNESS........................................................
37
2.15 MANDATORY REPAYMENT OF
REVOLVING ADVANCES; MANDATORY REDUCTION OF REVOLVING CREDIT
AGGREGATE
COMMITMENT.......................................................................
38
2.16 OPTIONAL REDUCTION OR
TERMINATION OF REVOLVING CREDIT AGGREGATE
COMMITMENT................. 39
2.17 EXTENSION OF REVOLVING
CREDIT MATURITY
DATE................................................ 39
2.18 APPLICATION OF
ADVANCES....................................................................
40
3. LETTERS OF
CREDIT.................................................................................
40
3.1 LETTERS OF
CREDIT..........................................................................
40
3.2 CONDITIONS TO
ISSUANCE.....................................................................
41
3.3
NOTICE.....................................................................................
42
3.4 LETTER OF CREDIT
FEES......................................................................
42
3.5 OTHER
FEES.................................................................................
43
3.6 DRAWS AND DEMANDS FOR
PAYMENT UNDER LETTERS OF
CREDIT...................................... 43
3.7 OBLIGATIONS
IRREVOCABLE....................................................................
45
3.8 RISK UNDER LETTERS OF
CREDIT...............................................................
46
3.9
INDEMNIFICATION............................................................................
47
3.10 RIGHT OF
REIMBURSEMENT.....................................................................
48
3.11 EXISTING LETTERS OF
CREDIT.................................................................
48
4. MARGIN
ADJUSTMENTS................................................................................
48
4.1 MARGIN
ADJUSTMENTS.........................................................................
48
5.
CONDITIONS........................................................................................
49
5.1 EXECUTION OF NOTES AND THIS
AGREEMENT......................................................
49
5.2 CORPORATE
AUTHORITY........................................................................
49
5.3 COLLATERAL
DOCUMENTS.......................................................................
50
5.4
INSURANCE..................................................................................
50
5.5 COMPLIANCE WITH
CERTAIN DOCUMENTS AND
AGREEMENTS........................................... 50
5.6 OPINION OF
COUNSEL.........................................................................
50
</TABLE>
i
<PAGE>
<TABLE>
<S>
<C>
5.7 BORROWERS'
CERTIFICATE.....................................................................
50
5.8 PAYMENT OF
FEES............................................................................
50
5.9 CONTINUING
CONDITIONS......................................................................
51
5.10 FOREIGN
SUBSIDIARIES.......................................................................
51
6. REPRESENTATIONS AND
WARRANTIES....................................................................
52
6.1 CORPORATE
AUTHORITY........................................................................
52
6.2 DUE AUTHORIZATION -
BORROWERS..............................................................
52
6.3 DUE AUTHORIZATION -
SUBSIDIARIES...........................................................
52
6.4
LIENS......................................................................................
53
6.5
TAXES......................................................................................
53
6.6 NO
DEFAULTS................................................................................
53
6.7 ENFORCEABILITY OF
AGREEMENT AND LOAN DOCUMENTS --
BORROWERS................................ 53
6.8 ENFORCEABILITY OF LOAN
DOCUMENTS --
SUBSIDIARIES...........................................
53
6.9 COMPLIANCE WITH
LAWS.......................................................................
53
6.10 NON-CONTRAVENTION --
BORROWERS.............................................................
54
6.11 NON-CONTRAVENTION --
SUBSIDIARIES..........................................................
54
6.12 NO
LITIGATION..............................................................................
54
6.13 CONSENTS, APPROVALS AND
FILINGS, ETC.......................................................
55
6.14 AGREEMENTS AFFECTING
FINANCIAL
CONDITION...................................................
55
6.15 NO INVESTMENT COMPANY OR
MARGIN STOCK......................................................
55
6.16
ERISA......................................................................................
55
6.17 CONDITIONS AFFECTING
BUSINESS OR
PROPERTIES................................................
56
6.18 ENVIRONMENTAL AND SAFETY
MATTERS...........................................................
56
6.19
SUBSIDIARIES...............................................................................
56
6.20 ACCURACY OF
INFORMATION....................................................................
56
6.21 LABOR
RELATIONS............................................................................
57
6.22
SOLVENCY...................................................................................
57
6.23
CAPITALIZATION.............................................................................
57
6.24
RESERVED...................................................................................
58
6.25 SENIOR UNSECURED NOTE
DOCUMENTS............................................................
58
7. AFFIRMATIVE
COVENANTS.............................................................................
58
7.1 FINANCIAL
STATEMENTS.......................................................................
58
7.2 CERTIFICATES; OTHER
INFORMATION............................................................
59
7.3 PAYMENT OF
OBLIGATIONS.....................................................................
59
7.4 CONDUCT OF BUSINESS
AND MAINTENANCE OF
EXISTENCE........................................... 59
7.5 MAINTENANCE OF
PROPERTY;
INSURANCE.........................................................
60
7.6 INSPECTION OF
PROPERTY; BOOKS AND RECORDS, DISCUSSIONS;
AUDITS............................. 60
7.7
NOTICES....................................................................................
61
7.8 HAZARDOUS MATERIAL
LAWS....................................................................
61
7.9 DEBT SERVICE COVERAGE
RATIO................................................................
62
7.10 SENIOR SECURED DEBT
RATIO..................................................................
62
7.11 LEVERAGE
RATIO.............................................................................
62
7.12 CONSOLIDATED TANGIBLE NET
WORTH............................................................
62
7.13
TAXES......................................................................................
62
7.14 GOVERNMENTAL AND OTHER
APPROVALS...........................................................
62
7.15 COMPLIANCE WITH
ERISA......................................................................
63
7.16 ERISA
NOTICES..............................................................................
63
7.17 SECURITY; FOREIGN
SIGNIFICANT
SUBSIDIARIES.................................................
63
7.18 DEFENSE OF
COLLATERAL......................................................................
64
</TABLE>
ii
<PAGE>
<TABLE>
<S>
<C>
7.19 USE OF
PROCEEDS............................................................................
64
7.20 FUTURE SUBSIDIARIES;
ADDITIONAL
COLLATERAL.................................................
64
7.21 FURTHER
ASSURANCES.........................................................................
65
8. NEGATIVE
COVENANTS................................................................................
65
8.1 LIMITATION ON
DEBT.........................................................................
65
8.2 LIMITATION ON
LIENS........................................................................
66
8.3 LIMITATION ON
GUARANTEE
OBLIGATIONS........................................................
67
8.4
ACQUISITIONS...............................................................................
67
8.5 LIMITATION ON MERGERS,
OR SALE OF
ASSETS...................................................
67
8.6 RESTRICTED
PAYMENTS........................................................................
68
8.7 LIMITATION ON
INVESTMENTS, LOANS AND
ADVANCES.............................................. 68
8.8 TRANSACTIONS WITH
AFFILIATES...............................................................
69
8.9 SALE AND
LEASEBACK.........................................................................
70
8.10 LIMITATION ON NEGATIVE
PLEDGE
CLAUSES......................................................
70
8.11 PREPAYMENT OF
DEBTS........................................................................
70
8.12 AMENDMENT OF CERTAIN
DOCUMENTS RELATING TO
DEBT............................................ 70
8.13 MODIFICATION OF CERTAIN
AGREEMENTS.........................................................
70
8.14 LIMITATION ON CAPITAL
EXPENDITURES.........................................................
71
9.
DEFAULTS..........................................................................................
71
9.1 EVENTS OF
DEFAULT..........................................................................
71
9.2 EXERCISE OF
REMEDIES.......................................................................
73
9.3 RIGHTS
CUMULATIVE..........................................................................
73
9.4 WAIVER BY BORROWERS OF
CERTAIN
LAWS........................................................
73
9.5 WAIVER OF
DEFAULTS.........................................................................
73
9.6 SET
OFF....................................................................................
74
10. PAYMENTS, RECOVERIES AND
COLLECTIONS..............................................................
74
10.1 PAYMENT
PROCEDURE..........................................................................
74
10.2 APPLICATION OF PROCEEDS OF
COLLATERAL......................................................
75
10.3 PRO-RATA
RECOVERY..........................................................................
76
11. CHANGES IN LAW OR CIRCUMSTANCES;
INCREASED COSTS..................................................
76
11.1 REIMBURSEMENT OF PREPAYMENT
COSTS..........................................................
76
11.2 EUROCURRENCY LENDING
OFFICE................................................................
76
11.3 CIRCUMSTANCES AFFECTING
EUROCURRENCY-BASED RATE AVAILABILITY...............................
77
11.4 LAWS AFFECTING
EUROCURRENCY-BASED ADVANCE
AVAILABILITY..................................... 77
11.5 INCREASED COST OF
EUROCURRENCY-BASED
ADVANCES.............................................. 77
11.6 CAPITAL ADEQUACY AND OTHER
INCREASED COSTS.................................................
78
11.7 SUBSTITUTION OF
LENDERS....................................................................
79
11.8 RIGHT OF LENDERS TO FUND
THROUGH BRANCHES AND AFFILIATES...................................
79
12.
AGENT.............................................................................................
79
12.1 APPOINTMENT OF
AGENT.......................................................................
79
12.2 DEPOSIT ACCOUNT WITH
AGENT.................................................................
80
12.3 SCOPE OF AGENT'S
DUTIES....................................................................
80
12.4 SUCCESSOR
AGENT............................................................................
81
12.5 AGENT IN ITS INDIVIDUAL
CAPACITY...........................................................
81
12.6 CREDIT
DECISIONS...........................................................................
81
12.7 AUTHORITY OF AGENT TO
ENFORCE THIS
AGREEMENT...............................................
81
</TABLE>
iii
<PAGE>
<TABLE>
<S>
<C>
12.8
INDEMNIFICATION............................................................................
82
12.9 KNOWLEDGE OF
DEFAULT.......................................................................
82
12.10 AGENT'S AUTHORIZATION; ACTION BY
LENDERS...................................................
82
12.11 ENFORCEMENT ACTIONS BY THE
AGENT...........................................................
83
12.12 COLLATERAL MATTERS; REAL ESTATE
LIEN RELEASE EVENT.........................................
83
12.13 AGENT'S
FEES...............................................................................
84
12.14 NO DUTIES IMPOSED ON DOCUMENTATION
AGENTS OR SYNDICATIONS AGENTS...........................
84
13.
MISCELLANEOUS.....................................................................................
84
13.1 ACCOUNTING
PRINCIPLES......................................................................
84
13.2 CONSENT TO
JURISDICTION....................................................................
85
13.3 LAW OF
MICHIGAN............................................................................
85
13.4
INTEREST...................................................................................
85
13.5 CLOSING COSTS AND OTHER
COSTS; INDEMNIFICATION.............................................
85
13.6
NOTICES....................................................................................
87
13.7 FURTHER
ACTION.............................................................................
87
13.8 SUCCESSORS AND ASSIGNS;
PARTICIPATIONS; ASSIGNMENTS........................................
87
13.9
INDULGENCE.................................................................................
90
13.10
COUNTERPARTS...............................................................................
90
13.11 AMENDMENT AND
WAIVER.......................................................................
90
13.12
CONFIDENTIALITY............................................................................
91
13.13 WITHHOLDING
TAXES..........................................................................
91
13.14 TAXES AND
FEES.............................................................................
92
13.15 WAIVER OF JURY
TRIAL.......................................................................
92
13.16 COMPLETE AGREEMENT;
CONFLICTS..............................................................
92
13.17
SEVERABILITY...............................................................................
93
13.18 TABLE OF CONTENTS AND
HEADINGS.............................................................
93
13.19 CONSTRUCTION OF CERTAIN
PROVISIONS.........................................................
93
13.20 INDEPENDENCE OF
COVENANTS..................................................................
93
13.21 RELIANCE ON AND SURVIVAL OF
VARIOUS PROVISIONS.............................................
93
13.22 COMPLETE AGREEMENT; AMENDMENT AND
RESTATEMENT..............................................
93
13.23 TERMINATION OF PLEDGE
AGREEMENTS...........................................................
94
13.24 YOUNG
PARTIES..............................................................................
94
13.25 RELEASE OF REAL ESTATE
COLLATERAL..........................................................
94
13.26 FOREIGN
SUBSIDIARIES.......................................................................
94
</TABLE>
iv
<PAGE>
TABLE OF CONTENTS
(continued)
SCHEDULES
Schedule
1.1
Pricing Matrix
Schedule
1.2
Percentages and Allocations
Schedule
1.3
Existing Letters of Credit
Schedule
5.2
List of Jurisdictions in which Holdings and/or
Subsidiaries do business
Schedule
5.3
Real Estate Documentation
Schedule
5.3(b) List of
Jurisdictions in which to file financing
statements
Schedule
6.9(a) Compliance with
Laws
Schedule
6.9(c) Tax
Identification Numbers
Schedule
6.12
Litigation
Schedule
6.16
Employee Pension Benefit Plans
Schedule
6.18
Environmental Matters
Schedule
6.19
Subsidiaries
Schedule
6.20
Contingent Obligations
Schedule
6.23
Capitalization
Schedule
8.1
Existing Funded Debt
Schedule
8.2
Permitted Liens
Schedule
8.3
Existing Guaranties
Schedule
8.7
Existing Investments
Schedule
13.6
Notices
v
<PAGE>
TABLE OF CONTENTS
(continued)
EXHIBITS
A
FORM OF REQUEST
FOR REVOLVING CREDIT ADVANCE
B
FORM OF
REVOLVING CREDIT NOTE
C
FORM OF SWING
LINE NOTE
D
FORM OF REQUEST
FOR SWING LINE ADVANCE
E
FORM OF NOTICE
OF LETTERS OF CREDIT
F
FORM OF SWING
LINE LENDER PARTICIPATION CERTIFICATE
G
FORM OF BORROWER
ADDENDUM
H
FORM OF
ASSIGNMENT AGREEMENT
I
FORM OF COVENANT
COMPLIANCE REPORT
J
FORM OF
INTERCOMPANY NOTE
K
FORM OF
BORROWING BASE CERTIFICATE
vi
<PAGE>
FIFTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This Fifth
Amended and Restated Revolving Credit Agreement ("Agreement")
is made as of the 28th day of January,
2005, by and among the financial
institutions from time to time signatory
hereto (individually a "Lender," and
any and all such financial institutions
collectively the "Lenders"), Comerica
Bank, as administrative agent for the
Lenders (in such capacity, "Agent"),
Plastipak Holdings, Inc., a Michigan
corporation ("Holdings"), Plastipak
Packaging, Inc., a Delaware corporation
("Packaging"), and the other Borrowers
(as defined below) from time to time
signatory hereto.
RECITALS:
A.
Packaging and the other Borrowers have requested that the
Lenders
continue to extend to them credit and
letters of credit as previously extended
by Comerica Bank, Key Corporate Capital
Inc. and Bank One, Michigan, under the
Revolving Credit Agreement dated August 31,
1982, as amended and restated
pursuant to the Amended and Restated Credit
Agreement dated January 19, 1993, as
amended, and as further amended and
restated pursuant to the Second Amended and
Restated Credit Agreement dated as of
September 1, 1994, by and between
Packaging and such banks, and as further
amended and restated pursuant to the
Third Amended and Restated Revolving Credit
Agreement dated as of December 22,
1999, as amended, and as further amended
and restated pursuant to the Fourth
Amended and Restated Revolving Credit
Agreement dated as of August 20, 2001 as
amended, by and among Holdings, Packaging,
the other Borrowers party thereto,
the Lenders party thereto and Agent (as
amended, the "Prior Credit Agreement")
on the terms and conditions set forth
herein.
B. The
Lenders are prepared to extend such credit as aforesaid, but
only
upon the terms and conditions set forth in
this Agreement.
C. This
Agreement shall constitute an amendment and restatement of the
Prior Credit Agreement as provided in
Section 13.22 hereof.
NOW
THEREFORE, in consideration of the covenants contained herein,
Holdings, the Borrowers, the Lenders and
Agent agree as follows:
1.
DEFINITIONS
1.1
Certain Defined Terms. For the purposes of this Agreement the
following terms will have the following
meanings:
"2002
Senior Notes" shall mean the unsecured notes issued by Holdings
in
2002 pursuant to an amendment to the Senior
Unsecured Debt Indenture, which
notes were issued in the original principal
amount of $50,000,000.
"Account"
shall mean any right to payment of a Person for goods sold or
leased or for services rendered.
"Account
Party(ies)" shall mean, with respect to any Letter of Credit,
the
account party or parties (which shall be a
Borrower or, with the counter
signature of Packaging, a Guarantor or, if
a Foreign
1
<PAGE>
Subsidiary has complied with the
requirements of Section 5.10 hereof, a Foreign
Subsidiary) as named in an application to
the Agent for the issuance of such
Letter of Credit.
"Advance(s)" shall mean, as the context may indicate, a
borrowing
requested by any Borrower, and made by the
Lenders under Section 2.1 hereof or
requested by any Borrower and made by the
Swing Line Lender under Section 2.5
hereof, including without limitation any
readvance, refunding or conversion of
such borrowing pursuant to Section 2.3 or
2.5 hereof, any advance in respect of
a Letter of Credit under Section 3.6 hereof
(including without limitation the
unreimbursed amount of any draws under any
Letters of Credit), and shall
include, as applicable, a
Eurocurrency-based Advance, a Prime-based Advance, and
a Quoted Rate Advance.
"Affected
Lender" shall have the meaning set forth in Section 11.7.
"Affiliate" shall mean, with respect to any Person, any other
Person or
group acting in concert in respect of the
first Person that, directly or
indirectly, through one or more
intermediaries, controls, or is controlled by,
or is under common control with such first
Person. For purposes of this
definition, "control" (including, with
correlative meanings, the terms
"controlled by" and "under common control
with"), as used with respect to any
Person or group of Persons, shall mean the
possession, directly or indirectly,
of the power to direct or cause the
direction of management and policies of such
Person, whether through the ownership of
voting securities or by contract or
otherwise. Unless otherwise specified to
the contrary herein, or the context
requires otherwise, Affiliate shall refer
to Affiliates of Holdings.
"Agent"
shall mean Comerica Bank, in its capacity as agent for the
Lenders
hereunder, or any successor agent appointed
in accordance with Section 12.4
hereof.
"Agent's
Correspondent" shall mean Agent's Grand Cayman Branch (or for
the
account of said branch office, at Agent's
main office in Detroit, Michigan,
United States); or such other bank or banks
as Agent may from time to time
designate by written notice to Borrowers
and the Lenders.
"Alternate
Base Rate" shall mean, for any day, an interest rate per annum
equal to the Federal Funds Effective Rate
in effect on such day, plus one
percent (1%).
"Applicable Fee Percentage" shall mean, as of any date of
determination
thereof, the applicable percentage used to
calculate certain of the fees due and
payable hereunder, determined by reference
to the appropriate columns in the
Pricing Matrix attached to this Agreement
as Schedule 1.1.
"Applicable Interest Rate" shall mean (a) for Advances of the
Revolving
Credit, the Eurocurrency-based Rate or the
Prime-based Rate and (b) for Advances
of the Swing Line, the Prime-based Rate or
a Quoted Rate, in each case as
selected by Borrowers from time to time
subject to the terms and conditions of
this Agreement.
"Applicable Margin" shall mean, as of any date of determination
thereof,
the applicable interest rate margin,
determined by reference to the appropriate
columns in the Pricing Matrix attached to
this Agreement as Schedule 1.1.
"Asset
Sale" shall mean the sale, transfer or other disposition by the
Borrowers or any Subsidiary of any asset to
any Person, other than sales,
transfers or other dispositions of
inventory in the ordinary course of business
and sales of assets that have been damaged,
become obsolete or are no longer
useable.
2
<PAGE>
"Assignment Agreement" shall mean any Assignment Agreement
substantially
in the form of the Assignment Agreement
attached hereto as Exhibit H, as amended
or otherwise modified from time to
time.
"Borrower(s)" shall mean Packaging, Clean Tech, Whiteline and Tabb
Realty,
and any other Domestic Subsidiary which,
after the Effective Date and with the
prior written approval of the Lenders,
becomes a Borrower hereunder pursuant to
Section 2.1 hereof.
"Borrower
Addendum" shall mean an addendum substantially in the form
attached hereto as Exhibit G, to be
executed and delivered by each Borrower
which becomes a party to this Agreement
after the date hereof, as such Exhibit G
may be amended from time to time.
"Borrower
Sublimit" shall mean the following amounts as to each Borrower:
<TABLE>
<S>
<C>
Packaging
$ 300,000,000
Clean Tech
$ 30,000,000
Whiteline
$ 20,000,000
Tabb Realty
$ 165,000,000
</TABLE>
In no
event shall any Borrower Sublimit be in excess of the Revolving
Credit Aggregate Commitment. Upon reduction
of the Revolving Credit Aggregate
Commitment resulting in a Borrower Sublimit
being in excess thereof, such
Borrower Sublimit shall be deemed
automatically reduced to an amount equal to
the Revolving Credit Aggregate Commitment
then in effect.
"Borrowing
Base" shall mean, as of any date of determination thereof, an
amount equal to the sum of (i) 85% of
Eligible Accounts, plus (ii) the lesser of
(a) 65% of Eligible Inventory and (b)
$60,000,000, plus (iii) 50% of Eligible
Equipment and plus (iv) 65% of Eligible
Real Estate.
"Borrowing
Base Certificate" shall mean a Borrowing Base certificate,
substantially in the form of Exhibit K,
with appropriate insertions and executed
by a Responsible Officer.
"Borrowing
Base Obligor" shall mean any Borrower or any Guarantor.
"Brazilian
Maximum Amount" shall mean $60,000,000 plus fifty percent (50%)
of the net income (not reduced by losses)
of Plastipak Brazil for the period
from October 31, 2004 to the date of
determination, subject to reduction by the
amount of all then outstanding Letter of
Credit Obligations of any other Foreign
Subsidiary.
"Brazilian
Pledge" shall mean the Quota Pledge Agreement dated December
22, 1999, executed and delivered by
Holdings in favor of the Agent, as amended
or otherwise modified from time to
time.
"Business
Day" shall mean any day, other than a Saturday or a Sunday, on
which commercial banks are open for
domestic and international business
(including dealings in foreign exchange) in
London and New York, and the Agent
is open for such business in Detroit.
"Capex
Covenant Amount" shall mean Fifteen Million Five Hundred
Thousand
Dollars ($15,500,000) for Fiscal Year 2004,
increasing by Five Hundred Thousand
Dollars ($500,000) on the first day of each
following Fiscal Year.
3
<PAGE>
"Capital
Expenditures" shall mean, without duplication, any amounts paid
or accrued in respect of a period in
respect of any purchase or other
acquisition for value of fixed or capital
assets, whether by Operating Lease,
Capitalized Lease, purchase or otherwise;
provided that, in no event shall
Capital Expenditures include amounts
expended in respect of normal repair and
maintenance of plant facilities, machinery,
fixtures and other like capital
assets utilized in the ordinary conduct of
business (to the extent such amounts
would not be capitalized in preparing a
balance sheet determined in accordance
with GAAP).
"Capitalized Lease" shall mean, as applied to any Person, any lease
of any
property (whether real, personal or mixed)
which, in conformity with GAAP, is
required to be capitalized on the balance
sheet of such Person.
"Change in
Control" shall mean any of the following events or
circumstances: if (a) Holdings or a
controlling portion of its voting stock or a
substantial portion of its assets comes
under the practical, beneficial or
effective control of one or more Persons
other than William C. Young (or any
Person becoming a successor to William C.
Young through a Change in Control in
which the Majority Lenders do not exercise
the judgment referred to below),
whether by reason of death, merger,
consolidation, sale or purchase of stock or
assets or otherwise; (b) William C. Young
(or any Person becoming a successor to
William C. Young through a Change in
Control in which the Majority Lenders do
not exercise the judgment referred to
below) shall no longer remain in office as
President and Chief Executive Officer of
Holdings, whether by reason of death,
resignation or otherwise; and any such
change of control or office holder may
adversely affect, in the reasonable
judgment of the Majority Lenders, the
ability of the Borrowers to carry on their
business as conducted before such
change or may result in a Material Adverse
Effect; or (c) any "Change in
Control" or "Change of Control" (or any
other similar concept) as defined or
described in any Subordinated Debt
Documents, Permitted Real Estate Debt
Documents or the Senior Unsecured Debt
Documents.
"Clean
Tech" shall mean Clean Tech, Inc., a 100% Subsidiary.
"Collateral" shall mean all property or rights in which a
security
interest, mortgage, Lien or other
encumbrance for the benefit of the Lenders is
or has been granted or arises or has
arisen, under or in connection with this
Agreement, the other Loan Documents, or
otherwise.
"Collateral Documents" shall mean the Security Agreement, the
Pledge
Agreements, the Mortgages, the Equipment
Pledge Agreements, any joinders to each
such document, and all of the other
acknowledgments, certificates, stock powers,
financing statements, instruments and other
security documents executed by
Credit Parties or any Subsidiary in favor
of the Agent and delivered to the
Agent, as security for the Indebtedness, in
each case prior to or as of the
Effective Date or, from time to time,
subsequent thereto, in connection with
such Security Agreement, the Pledge
Agreements, the Equipment Pledge Agreements,
this Agreement and the other Loan
Documents, in each case, as such collateral
documents may be amended or otherwise
modified from time to time.
"Comerica
Bank" shall mean Comerica Bank, a Michigan banking corporation,
its successors or assigns.
"Commitment" shall mean the Revolving Credit Aggregate
Commitment.
"Commonly
Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control
with any of the Credit Parties
within the meaning of Section 4001 of ERISA
or which is part of a group which
includes the Credit Parties and which is
treated as a single employer under
Section 414 of the Internal Revenue Code
specifically excluding the Young
Parties.
4
<PAGE>
"Consolidated" (or "consolidated") or "Consolidating" (or
"consolidating")
shall mean, when used with reference to any
financial term in this Agreement,
the aggregate for two or more Persons of
the amounts signified by such term for
all such Persons determined on a
consolidated basis in accordance with GAAP.
"Consolidated Debt" shall mean as of any date of determination, all
Debt
of Holdings and its Consolidated
Subsidiaries as of such date.
"Consolidated EBITDA" shall mean for any period, Consolidated Net
Income
for such period plus, without duplication
and only to the extent reflected as a
charge or reduction in the statement of
such Consolidated Net Income for such
period, the sum of (a) Consolidated Income
Tax Expense, (b) Consolidated
Interest Expense, (c) Consolidated
depreciation and amortization expense,(d)
extraordinary losses (or minus
extraordinary gains), (e) all unamortized costs
(not to exceed $1,236,729) relating to the
Prior Credit Agreement, (f) all
non-capitalized expenses (not to exceed
$1,500,000) related to this Agreement
and incurred in Fiscal Year 2005), (g)
other non-cash expenses (excluding any
such non-cash expense to the extent that it
represents an accrual of or reserve
for cash expenses in any future period or
amortization of a prepaid cash expense
that was paid in a prior period) for such
period to the extent that such
depreciation, amortization and other
non-cash expenses were deducted in
computing such Consolidated Net Income,
minus (h) non-cash items increasing such
Consolidated Net Income for such period,
other than the accrual of revenue in
the ordinary course of business, in each
case determined in accordance with
GAAP.
"Consolidated EBITDAR" shall mean for any period, Consolidated
EBITDA for
such period plus, without duplication and
only to the extent reflected as a
charge or reduction in the statement of
such Consolidated EBITDA for such
period, Consolidated Rental Expense.
"Consolidated Fixed Charges" shall mean, for any period, the sum of
(a)
Consolidated Interest Expense for such
period, plus (b) Capital Expenditures of
Holdings and its Consolidated Subsidiaries
for such period, plus (c)
Consolidated Income Tax Expense for such
period, plus (d) the aggregate amount
of all dividends paid in cash on the Equity
Interests of Holdings during such
period, plus (e) all installments of
principal or other sums payable during such
period by Holdings and its Consolidated
Subsidiaries with respect to
Consolidated Debt (excluding voluntary and
mandatory prepayments of Revolving
Credit Advances).
"Consolidated Income Tax Expense" shall mean for any period the
aggregate
amount of taxes based on the income or
profits of Holdings and its Consolidated
Subsidiaries determined in accordance with
GAAP (to the extent such income and
profits were included in determining
Consolidated Net Income for such period).
"Consolidated
Interest Expense" shall mean for any period the total
interest expense (including that
attributable to Capitalized Leases) of Holdings
and its Consolidated Subsidiaries
determined in accordance with GAAP for such
period.
"Consolidated Net Income" shall mean for any period, the net income
(or
loss) of Holdings and its Consolidated
Subsidiaries, determined on a
consolidated basis in accordance with GAAP;
provided, that the cumulative effect
of a change in accounting principles shall
be excluded.
"Consolidated Net Worth" shall mean, as of any date of
determination, the
total common shareholders' equity of
Holdings and its Consolidated Subsidiaries,
as reflected on the most recent regularly
prepared quarterly or annual balance
sheet of Holdings and such Consolidated
Subsidiaries, which balance sheet shall
be prepared in accordance with GAAP.
5
<PAGE>
"Consolidated Rental Expense" shall mean for any period all sums
paid by
Holdings or any Consolidated Subsidiary
with respect to Operating Leases during
such period.
"Consolidated Senior Secured Debt" shall mean as of any date of
determination, all Consolidated Total Debt
that is secured by a Lien on any
assets of Holdings or any Subsidiary.
"Consolidated Subsidiaries" shall mean the Subsidiaries of Holdings
which
are treated as Consolidated for purposes of
GAAP.
"Consolidated Tangible Net Worth" shall mean as of any date of
determination, Consolidated Net Worth as of
such date plus all Subordinated Debt
of Holdings and its Consolidated
Subsidiaries and minus all intangible assets of
Holdings and its Consolidated Subsidiaries
such as patents, trademarks,
copyrights, goodwill and similar intangible
assets, as determined in accordance
with GAAP.
"Consolidated Total Debt" shall mean, as of any date of
determination,
Total Debt of Holdings and its Consolidated
Subsidiaries as of such date.
"Consolidated Total Liabilities" shall mean, as of any date of
determination, all Liabilities of Holdings
and its Consolidated Subsidiaries as
of such date.
"Contractual Obligation" shall mean, as to any Person, any
provision of
any security issued by such Person or of
any agreement, instrument or other
undertaking to which such Person is a party
or by which it or any of its
property is bound.
"Covenant
Compliance Report" shall mean the report to be furnished by
Borrowers to the Agent pursuant to Section
7.2(a) hereof, in the form of
attached Exhibit I and certified by a
Responsible Officer, in which report
Borrowers shall set forth, among other
things, detailed calculations and the
resultant ratios or financial tests with
respect to the Pledge Release Ratio,
the Fixed Charge Coverage Ratio and the
financial covenants contained in
Sections 7.9 through 7.12A of this
Agreement.
"Credit
Parties" shall mean collectively any or all of Holdings and the
Borrowers provided that the "Credit
Parties" shall mean all Credit Parties
unless the context indicates or otherwise
requires and "Credit Party" shall mean
any one of them, as the context indicates
or otherwise requires
"De
Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which
may result therefrom, would not,
individually or in the aggregate,
reasonably be expected by the Agent to have a
material adverse effect on the financial
condition or businesses of Holdings and
its Subsidiaries (taken as a whole) or on
the ability of Holdings and its
Subsidiaries (taken as a whole) to pay
their debts, as such debts become due.
"Debt"
shall mean, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed
money or for the deferred purchase
price of property or services as of such
date (other than trade liabilities
incurred in the ordinary course of business
and payable in accordance with
customary practices) or which is evidenced
by a note, bond, debenture or similar
instrument, (b) the principal component of
all obligations of such person under
Capitalized Leases, (c) all obligations of
such Person in respect of letters of
credit, acceptances or similar obligations
issued or created for the account of
such Person, (d) all liabilities secured by
any Lien on any property owned by
such Person even though such Person has not
assumed or otherwise become liable
for the payment thereof, (e) all Guarantee
Obligations of such Person, (f) all
obligations of such Person under
conditional sale or other title retention
agreements relating to property or assets
purchased by such Person, (g) all
obligations (contingent or otherwise) under
any interest rate swap transaction,
basis swap transaction, forward rate
transaction, commodity swap
6
<PAGE>
transaction, equity transaction, equity
index transaction, foreign exchange
transaction, cap transaction, floor
transaction (including any option with
respect to any of these transactions and
any combination of any of the
foregoing) entered into by such Person and
(h) any Debt or off balance sheet
obligations issued pursuant to a
Securitization Transaction (whether by a
Special Purpose Subsidiary or
otherwise).
"Debt
Service Coverage Ratio" shall mean, as of the last day of each
fiscal quarter of Holdings, the ratio of
(a) Consolidated EBITDAR for the four
fiscal quarters then ending, minus the sum
of the Capex Covenant Amount and
Consolidated Income Tax Expense for such
period to (b) the sum of all payments
of principal paid or due and payable with
respect to Consolidated Debt
(excluding the Advances) for such period,
plus Consolidated Interest Expense and
Consolidated Rental Expense for such
period, plus all cash dividends paid by
Holdings to its shareholders during such
period.
"Default"
shall mean any event which with the giving of notice or the
passage of time, or both, would constitute
an Event of Default under this
Agreement.
"Defaulting Lender" is defined in Section 2.4(c).
"Dollars"
and the sign "$" shall mean lawful money of the United States
of
America.
"Domestic
Indebtedness" shall mean that portion of the Indebtedness
arising from any obligations of any Credit
Party and any Domestic Subsidiary.
"Domestic
Loan Party(ies)" shall mean any Borrower or any Guarantor
incorporated or organized under the laws of
the United States of America, or any
state, territory, possession or other
political subdivision thereof.
"Domestic
Significant Subsidiary(ies)" shall mean each Domestic
Subsidiary
which has assets totaling at least
$1,000,000, or revenues of at least
$1,000,000 in any Fiscal Year.
"Domestic
Subsidiary(ies)" shall mean any direct or indirect Subsidiary
of
Holdings which is incorporated or organized
under the laws of the United States
of America, or any state, territory,
possession or other political subdivision
thereof which is a domestic Subsidiary for
purposes of Section 956 of the
Internal Revenue Code; and "Domestic
Subsidiaries" shall mean any or all of
them.
"Effective
Date" shall mean the date on which all the conditions precedent
set forth in Sections 5.1 through 5.9,
inclusive have been satisfied.
"Eligible
Accounts" shall mean an Account which has been included in a
Borrowing Base Certificate to determine the
Borrowing Base, and as to which
Account, unless otherwise approved by Agent
in its sole discretion, the
following is true and accurate as of the
time it was utilized to determine the
Borrowing Base:
(a) such Account arose in the ordinary course of the business of
any
Borrowing
Base Obligor out of either (i) a bona fide sale of Inventory by
a
Borrowing Base Obligor, and in such case such Inventory has been
shipped
to the
applicable Account Debtor or (ii) services rendered by a
Borrowing
Base
Obligor and such services have been performed;
(b) such Account represents a legally valid and enforceable
claim
which is
due and owing by such Account Debtor to the Borrowing Base
Obligor
and for such amount as is represented by the Borrowers to Agent
in
the
applicable Borrowing Base Certificate;
7
<PAGE>
(c) it is evidenced by an invoice dated not later than the date
of
shipment
or performance, rendered to such Account Debtor;
(d) the unpaid balance of such Account as represented to Agent
in
the
applicable Borrowing Base Certificate is not subject to any
defense,
counterclaim, setoff, contra account, credit, allowance or
adjustment by
the
Account Debtor because of returned, inferior or damaged Inventory
or
services,
or for any other reason;
(e) the transactions leading to the creation of such Account
comply
with all
applicable local, state and federal laws and regulations of the
jurisdiction in which such Account was created where the failure to
comply
therewith
could reasonably be expected to impair the collectibility of
such
Account;
(f) the applicable Borrowing Base Obligor has granted to the
Agent
pursuant
to or in accordance with the Collateral Documents a perfected
first
priority security interest in such Account prior in right to
all
other
Persons and such Account has not been sold, transferred or
otherwise
assigned
or encumbered by any Borrowing Base Obligor;
(g) it is not owing more than ninety (90) days after the date of
the
original
invoice or other writing evidencing such Account;
(h) it is not owing by an Account Debtor who, together with any
Affiliate(s) of such Account Debtor, as of the date of
determination, has
failed to
pay twenty-five percent (25%) or more of the aggregate amount
of
its/their
respective Accounts owing to any Borrowing Base Obligor within
ninety (90) days after the
original invoice date;
(i) such Account is not represented by any note, trade
acceptance,
draft or
other negotiable instrument or by any chattel paper, except any
such as
has been endorsed and delivered by the applicable Borrowing
Base
Obligor,
pursuant to or in accordance with the Collateral Documents or
this
Agreement on or prior to such Account's inclusion in any
applicable
Borrowing
Base Certificate;
(j) it is not owing by any Account Debtor as to which Holdings
or
any
Subsidiary has received actual notice of the death of the
related
Account
Debtor or any general partner thereof, nor of the dissolution,
liquidation, termination of existence, insolvency, business
failure,
appointment of a receiver for any part of the property of,
assignment for
the
benefit of creditors by, or the filing of a petition in bankruptcy
or
the
commencement of any proceeding under any bankruptcy or insolvency
laws
by or
against, such Account Debtor;
(k) the Account Debtor on such Account is not:
(i) an Affiliate of Holdings or any of its Subsidiaries other
than Absopure Water Company, Buffalo Don's Artesian Wells,
Ltd.,
Waters of America, L.L.C., One Water Source, L.L.C., Two Water
Source, L.L.C. and Sprinklets Water Centers, Inc. (provided,
however, that with respect to such entities, to constitute
Eligible
Accounts, any such Accounts shall meet all other requirements
of
this definition and shall be on arms-length terms; and such
Eligible
Accounts shall not exceed $10,000,000 in the aggregate);
(ii) the United States of America or any state or political
subdivision thereof, or by any department, agency, or
instrumentality thereof, unless all necessary steps are taken
to
comply with the Federal Assignment of Claims Act or with any
comparable state
8
<PAGE>
law, if applicable, and all other necessary steps are taken to
perfect the Lenders' security interest in such Account;
(iii) a Foreign Person, unless such Account is secured by a
letter of credit or a guaranty issued by a bank acceptable to
the
Agent or covered by foreign receivable insurance provided by an
insurer acceptable to the Agent and, in each case, in form and
substance acceptable to the Agent, in its sole discretion;
(iv) an Account Debtor whose obligations the Agent, acting in
its reasonable commercial discretion (based on the collectibility
of
the Accounts owed to such Account Debtor), has notified Holdings
are
deemed not to constitute Eligible Accounts; or
(l) It is not an Account billed in advance of transfer of title
to
the
Inventory being sold, payable on delivery, for consigned goods,
for
guaranteed
sales, for unbilled sales, for progress billings, payable at
any future
date in accordance with its terms, subject to a retainage or
holdback,
or insured by a surety company.
Any
Account which is at any time an Eligible Account but which
subsequently fails to meet any of the
foregoing requirements, shall forthwith
cease to be an Eligible Account.
"Eligible
Assignee" shall mean a commercial bank, a mutual fund, an
insurance company, a financial institution,
a "qualified institutional buyer"
(as defined in Rule 144A of the Securities
Act), any fund that regularly invests
in bank loans or any other "accredited
investor" (as defined in Regulation D)
but in any event excluding any individual
and Holdings and its Subsidiaries and
Affiliates; provided that no Person shall
be an Eligible Assignee in respect of
the Revolving Commitment unless, at the
time of the proposed assignment to such
Person, such Person is able to make
Revolving Advances in Dollars.
"Eligible
Equipment" shall mean all Equipment owned by any Borrowing Base
Obligor which has been included in a
Borrowing Base Certificate to determine the
Borrowing Base and as to which Equipment
the following is true and accurate as
of the time it was utilized to determine
the Borrowing Base and as of the time a
Borrower has requested a Revolving Credit
Advance or a Swing Line Advance based
in part thereon:
(a) such item of Equipment is located in the United States of
America at
such location as any Borrowing Base Obligor shall have
represented in the Loan Documents;
(b) such item of Equipment is not subject to a Lien in favor of
any
Person
other than the Agent for the benefit of the Lenders, and the
Agent,
for the
benefit of the Lenders, shall have a valid and perfected first
priority
Lien thereon; and
(c) the value of such item of Equipment is determined based on
its
appraised
fair market value but only if such appraisal was prepared by an
appraiser
acceptable to the Agent and was dated as of a date within
twenty-four (24) months of the date of valuation of the
applicable
Equipment
or its net book value as determined in accordance with GAAP if
no such
appraisal exists.
"Eligible
Foreign Subsidiary" shall mean any Foreign Subsidiary whose
Equity Interests are pledged to the Agent
pursuant to a Foreign Pledge
Agreement.
"Eligible
Inventory" shall mean Inventory of any Borrowing Base Obligor
which has been included in a Borrowing Base
Certificate to determine the
Borrowing Base and as to which Inventory
the
9
<PAGE>
following is true and accurate as of the
time it was utilized to determine the
Borrowing Base and as of the time a
Borrower has requested a Revolving Credit
Advance or a Swing Line Advance based in
part thereon:
(a) such item of Inventory is of merchantable quality and is
usable
or
saleable by any Borrowing Base Obligor in the ordinary course of
its
business
and is not obsolete or discontinued;
(b) such item of Inventory is properly classified under GAAP as
"raw
materials
inventory" or "finished goods inventory" and not as
"work-in-process";
(c) such item of Inventory has not been sold, transferred or
otherwise
assigned by any Borrowing Base Obligor to any other Person;
(d) such item of Inventory is located within the United States
of
America at
such location or locations as any Borrowing Base Obligor shall
have
represented in the Loan Documents relating to Inventory;
(e) such item of Inventory is not subject to a Lien in favor of
any
Person
other than the Agent for the benefit of the Lenders, and the
Agent,
for the
benefit of the Lenders, shall have a valid and perfected first
priority
Lien therein;
(f) such item of Inventory is not consigned goods or subject to
a
seller's
right to repurchase; and
(g) the value of each item of Inventory utilized to determine
the
Borrowing
Base was determined in accordance with GAAP.
Any
Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the
foregoing requirements, shall forthwith
cease to be Eligible Inventory.
"Eligible
Real Estate" shall mean all real estate owned by any Borrowing
Base Obligor which has been included in a
Borrowing Base Certificate to
determine the Borrowing Base and as to
which real estate the following is true
and accurate as of the time it was utilized
to determine the Borrowing Base and
as of the time a Borrower has requested a
Revolving Credit Advance or a Swing
Line Advance based in part thereon:
(a) the real estate is located in the United States of America
at
such
address as any Borrowing Base Obligor shall have represented in
the
Loan
Documents;
(b) the real estate is not subject to a Lien in favor of any
Person
other than
the Agent for the benefit of the Lenders, and the Agent, for
the
benefit of the Lenders, shall have a valid and perfected first
priority
Lien thereon;
(c) the value of such real estate is determined based on its
appraised
fair market value, but only if such appraisal was prepared by
an
appraiser
acceptable to the Agent and was dated as of a date within
twenty-four (24) months of the date of valuation of the applicable
real
estate or
its net book value as determined in accordance with GAAP, if no
such
appraisal exists; and
(d) Agent shall have on file an appraisal satisfying all FIRREA
requirements for the applicable parcel of real estate included in
the
Borrowing
Base.
10
<PAGE>
"Equipment" shall mean all equipment as defined in the UCC.
"Equipment
Pledge Agreement(s)" shall mean those certain pledge agreements
encumbering certain Equipment of a Foreign
Subsidiary, from such Foreign
Subsidiary to Agent for the benefit of the
Lenders and securing the Foreign
Indebtedness, to be dated as of the date of
execution and delivery thereof, in
form and substance satisfactory to the
Agent, as amended, restated or otherwise
modified from time to time.
"Equity
Interests" means, with respect to any Person, any and all
shares,
share capital, interests, participations,
warrants, options or other equivalents
(however designated) of capital stock of a
corporation and any and all
equivalent ownership interests in a Person
(other than a corporation).
"ERISA"
shall mean the Employee Retirement Income Security Act of 1974,
as
amended, or any successor act or code and
the regulations in effect from time to
time thereunder.
"Eurocurrency-based Advance" shall mean any Advance which bears
interest
at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate
which is
equal to the sum of the Applicable Margin
(subject, if applicable, to adjustment
under Section 4.1 hereof), plus
(A) the per annum interest rate at which deposits in the
relevant eurocurrency are offered to Agent's Eurocurrency
Lending Office by other prime banks in the relevant
eurocurrency market in an amount comparable to the relevant
Eurocurrency-based Advance and for a period equal to the
relevant Eurocurrency-Interest Period two (2) Business Days
prior to the first day of such Eurocurrency-Interest Period,
divided by
(B) a percentage equal to 100% minus the maximum rate on
such date at which Agent is required to maintain reserves on
`eurocurrency liabilities' as defined in and pursuant to
Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and
as long as Agent is required to maintain reserves against a
category of liabilities which includes eurocurrency deposits
or includes a category of assets which includes eurocurrency
loans, the rate at which such reserves are required to be
maintained on such category.
"Eurocurrency-Interest Period" shall mean, an interest period of
one, two,
three or six months (or any lesser or
greater number of days agreed to in
advance by the relevant Borrower, Agent and
the Lenders), in each case as
selected by such Borrower, as applicable,
for a Eurocurrency-based Advance
pursuant to Section 2.3 or 2.5 hereof, as
the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the
Agent,
Agent's office located at its Grand Caymans
Branch or such other branch of
Agent, domestic or foreign, as it may
hereafter designate as its Eurocurrency
Lending Office by written notice to
Borrowers and the Lenders and (b) as to each
of the Lenders, its office, branch or
affiliate located at its address set forth
on the signature pages hereof (or
identified thereon as its Eurocurrency Lending
Office), or at such other office, branch or
affiliate of such Lender as it may
hereafter designate as its Eurocurrency
Lending Office by written notice to
Borrowers and Agent.
11
<PAGE>
"Event of
Default" shall mean each of the Events of Default specified in
Section 9.1 hereof.
"Existing
Letters of Credit" shall mean the Letters of Credit set forth
on
Schedule 1.3 hereof.
"Federal
Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged
by Federal funds brokers, as published for
such day (or, if such day is not a
Business Day, for the next preceding
Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so
published for any day which is a
Business Day, the average of the quotations
for such day on such transactions
received by Agent from three Federal funds
brokers of recognized standing
selected by it, all as conclusively
determined by the Agent.
"Fee
Letter" shall mean that certain Agency Fee Letter dated as of
October
26, 2004, as the same may be amended,
restated or otherwise modified,
supplemented or replaced from time to
time.
"Fees"
shall mean the Revolving Credit Facility Fee, the Letter of
Credit
Fees and the other fees and charges payable
by Borrowers to the Lenders or Agent
hereunder.
"Financial
Statements" shall mean all those balance sheets, earnings
statements, statement of cash flows, and
other financial data (whether of
Holdings or its Subsidiaries) which have
been furnished to the Agent or the
Lenders for the purposes of, or in
connection with, this Agreement and the
transactions contemplated hereby.
"Fiscal
Year" shall mean each fiscal year of Holdings, ending on the
Saturday closest to October 31 of each
year. For purposes of this Agreement, a
designated Fiscal Year (e.g., Fiscal Year
2004) shall mean the Fiscal Year
ending in the year indicated.
"Fixed
Charge Coverage Ratio" shall mean, as of the applicable date of
determination, a ratio, the numerator of
which is Consolidated EBITDA for the
four fiscal quarters then ending and the
denominator of which is Consolidated
Fixed Charges for the period then
ending.
"Foreign
Guarantor(s)" shall mean each Foreign Subsidiary which shall
have
executed and delivered the Foreign Guaranty
or a joinder agreement thereto.
"Foreign
Guaranty" shall mean that certain Guaranty of all outstanding
Foreign Indebtedness, executed and
delivered by certain of the Foreign
Subsidiaries (whether by execution thereof
or by execution of a joinder
agreement) to the Agent for the benefit of
the Lenders in form and substance
acceptable to Agent, as the same may be
amended, restated or otherwise modified
from time to time.
"Foreign
Indebtedness" shall mean that portion of the Indebtedness under
this Agreement on which any Foreign
Subsidiary is directly obligated.
"Foreign
Person" shall mean an Account Debtor which (i) does not
maintain
its chief executive office in the United
States of America, (ii) is not
organized under the laws of the United
States of America, or any state thereof,
or (iii) is the government of any foreign
country or sovereign state, or of any
state, province, municipality or other
instrumentality thereof.
"Foreign
Pledge Agreements" shall mean such domestic or local law share
pledge(s) as shall be advisable or
necessary under applicable local law to
create and perfect Liens on the Equity
Interests of the Foreign Subsidiaries and
securing the Indebtedness (subject to
Section 956 of the Internal Revenue
12
<PAGE>
Code), as the same may be amended, restated
or otherwise modified from time to
time, and includes the Brazilian
Pledge.
"Foreign
Significant Subsidiary(ies)" shall mean each Foreign Subsidiary
which has assets totaling at least
$10,000,000.
"Foreign
Subsidiary(ies)" shall mean all direct or indirect Subsidiaries
of Holdings other than the Domestic
Subsidiaries.
"GAAP"
shall mean generally accepted accounting principles in the
United
States of America, as in effect on the date
hereof, consistently applied.
"Governmental Authority" shall mean any nation or government, any
state,
province or other political subdivision
thereof, any central bank (or similar
monetary or regulatory authority) thereof
(including the Central Bank of
Brazil), any entity exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining
to government, and any corporation or
other entity owned or controlled, through
stock or capital ownership or
otherwise, by any of the foregoing.
"Governmental Obligations" means noncallable direct general
obligations of
the United States of America or obligations
the payment of principal of and
interest on which is unconditionally
guaranteed by the United States of America.
"Guarantee
Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing
person in respect of any obligation
of another Person (including, without
limitation, any bank under any letter of
credit), the creation of which was induced
by a reimbursement agreement, counter
indemnity or similar obligation issued by
the guaranteeing person, in either
case guaranteeing or in effect guaranteeing
any Debt, leases, dividends or other
obligations (the "primary obligations") of
any other third Person (the "primary
obligor") in any manner, whether directly
or indirectly, including, without
limitation, any obligation of the
guaranteeing person, whether or not
contingent, (i) to purchase any such
primary obligation or any property
constituting direct or indirect security
therefor, (ii) to advance or supply
funds (1) for the purchase or payment of
any such primary obligation or (2) to
maintain working capital or equity capital
of the primary obligor or otherwise
to maintain the net worth or solvency of
the primary obligor, (iii) to purchase
property, securities or services primarily
for the purpose of assuring the owner
of any such primary obligation of the
ability of the primary obligor to make
payment of such primary obligation or (iv)
otherwise to assure or hold harmless
the owner of any such primary obligation
against loss in respect thereof;
provided, however, that the term Guarantee
Obligation shall not include
endorsements of instruments for deposit or
collection in the ordinary course of
business. The amount of any Guarantee
Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an
amount equal to the stated or
determinable amount of the primary
obligation in respect of which such Guarantee
Obligation is made and (b) the maximum
amount for which such guaranteeing person
may be liable pursuant to the terms of the
instrument embodying such Guarantee
Obligation, unless such primary obligation
and the maximum amount for which such
guaranteeing person may be liable are not
stated or determinable, in which case
the amount of such Guarantee Obligation
shall be such guaranteeing person's
maximum reasonably anticipated liability in
respect thereof as determined by the
Credit Parties in good faith.
"Guaranty"
shall mean that certain guaranty of all outstanding
Indebtedness, executed and delivered by
Holdings and each of the Domestic
Subsidiaries (whether by execution thereof,
or by execution of the joinder
agreement attached as "Exhibit A" to the
form of such Guaranty), to the Agent,
on behalf of the Lenders, dated December
22, 1999, as amended from time to time.
13
<PAGE>
"Guarantor(s)" shall mean Holdings and each Domestic Subsidiary
which is
required by the Lenders to guarantee the
obligations of the Borrowers hereunder
and under the other Loan Documents.
"Hazardous
Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material
defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous
Material Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and directives
issued by any Governmental Authority
pertaining to any hazardous, toxic or
dangerous waste, substance or material on
or about any facilities owned, leased or
operated by Holdings or any of its
Subsidiaries, or any portion thereof
including, without limitation, those
relating to soil, surface, subsurface
ground water conditions and the condition
of the ambient air; and any state,
provincial and local laws and regulations
pertaining to any hazardous, toxic or
dangerous waste, substance or material
and/or asbestos; any so-called "superfund"
or "superlien" law; and any other
federal, state, provincial, foreign or
local statute, law, ordinance, code,
rule, regulation, order or decree
regulating, relating to, or imposing liability
or standards of conduct concerning, any
hazardous, toxic or dangerous waste,
substance or material, as now or at any
time hereafter in effect.
"Hedging
Transaction" means each interest rate swap transaction, basis
swap transaction, forward rate transaction,
commodity swap transaction, equity
transaction, equity index transaction,
foreign exchange transaction, cap
transaction, floor transaction (including
any option with respect to any of
these transactions and any combination of
any of the foregoing) entered into by
the Borrowers from time to time; provided
that such transaction is entered into
for risk management purposes and not for
speculative purposes.
"Hereof",
"hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular
paragraph or provision of this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities
(including,
without limitation, interest accruing at
the then applicable rate provided in
this Agreement or any other applicable Loan
Document after the Revolving Credit
Maturity Date and interest accruing at the
then applicable rate provided in this
Agreement or any other applicable Loan
Document after the filing of any petition
in bankruptcy, or the commencement of any
insolvency, reorganization or like
proceeding, relating to any Credit Party,
whether or not a claim for post-filing
or post-petition interest is allowed in
such proceeding), fees and other charges
arising under this Agreement or any of the
other Loan Documents, whether direct
or indirect, absolute or contingent, of any
Credit Party to any of the Lenders
or Affiliates thereof or to the Agent, in
any manner and at any time, whether
arising under this Agreement, or under any
Guaranty or any of the other Loan
Documents, due or hereafter to become due,
now owing or that may hereafter be
incurred by any Credit Party or any
Subsidiary to, any of the Lenders or
Affiliates thereof or to the Agent (and
which shall be deemed to include any
liabilities of any Borrower or any
Subsidiary to any Lender arising in
connection with account overdrafts), and
any judgments that may hereafter be
rendered on such indebtedness or any part
thereof, with interest according to
the rates and terms specified, or as
provided by law, any payment obligations,
if any, under Hedging Transactions
evidenced by Interest Rate Protection
Agreements, and any and all consolidations,
amendments, renewals, replacements,
substitutions or extensions of any of the
foregoing; provided, however that for
purposes of calculating the Indebtedness
outstanding under the Agreement or any
of the other Loan Documents, the direct and
indirect and absolute and contingent
obligations of any Credit Party and the
Subsidiaries (whether direct or
contingent) shall be determined without
duplication.
"Insolvency Proceeding" shall mean, with respect to any Person, (a)
any
case, action or proceeding with respect to
such Person before any court or other
Governmental Authority relating to
bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution,
winding-up, administration
14
<PAGE>
or relief of debtors, or (b) any general
assignment for the benefit of
creditors, arrangement, compromise,
composition, marshaling of assets for
creditors, or other, similar arrangement in
respect of such Person's creditors
generally or any substantial portion of its
creditors.
"Intercompany Loan" shall mean any loan (or advance in the nature
of a
loan) by Holdings or any Subsidiary to any
other Subsidiary or to Holdings,
provided that each such loan or advance is
evidenced by an Intercompany Note
which subordinates such loan in right of
payment and priority to the
Indebtedness on terms and conditions
satisfactory to Agent and the Majority
Lenders.
"Intercompany Loans, Advances or Investments" shall mean any
Intercompany
Loan, and any advance or investment by
Holdings or any Subsidiary (including
without limitation any guaranty of
obligations or indebtedness to third parties)
to or in another Subsidiary.
"Intercompany Notes" shall mean the promissory notes, substantially
in the
form attached hereto as Exhibit J, issued
or to be issued by Holdings or any
Subsidiary to evidence an Intercompany
Loan.
"Interest
Coverage Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a)
Consolidated EBITDA for the four fiscal
quarters then ending to (b) Consolidated
Interest Expense for such period.
"Interest
Period" shall mean (a) with respect to a Eurocurrency-based
Advance, a Eurocurrency-Interest Period
commencing on the day a
Eurocurrency-based Advance is made, or on
the effective date of an election of
the Eurocurrency-based Rate and (b) with
respect to a Swing Line Advance carried
at the Quoted Rate, an interest period of
one month (or any lesser number of
days agreed to in advance by a Borrower,
Agent and the Swing Line Lender);
provided, however that (i) any Interest
Period which would otherwise end on a
day which is not a Business Day shall end
on the next succeeding Business Day,
except that as to a Eurocurrency-Interest
Period, if the next succeeding
Business Day falls in another calendar
month, such Eurocurrency-Interest Period
shall end on the next preceding Business
Day, and (ii) when a
Eurocurrency-Interest Period begins on a
day which has no numerically
corresponding day in the calendar month
during which such Eurocurrency-Interest
Period is to end, it shall end on the last
Business Day of such calendar month,
and (iii) no Interest Period shall extend
beyond the Revolving Credit Maturity
Date.
"Interest
Rate Protection Agreement" means any Hedging Transaction
entered
into between a Borrower and any Lender or
an Affiliate of a Lender.
"Internal
Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the
regulations promulgated thereunder.
"Investment" shall mean, when used with respect to any Person, (a)
any
loan, investment or advance made by such
Person to any other Person (including,
without limitation, any contingent
obligation) in respect of any capital stock,
Debt, obligation or liability of such other
Person and (b) any other investment
made by such Person (however acquired) in
stock or other ownership interests in
any other Person, including, without
limitation, any investment made in exchange
for the issuance of shares of stock of such
Person.
"Issuing
Lender" shall mean Comerica Bank in its capacity as issuer of
one
or more Letters of Credit hereunder, or its
successor designated by the
Borrowers and the Lenders.
15
<PAGE>
"Issuing
Office" shall mean Issuing Lender's office located at One
Detroit
Center, 500 Woodward Avenue, Detroit,
Michigan 48226-3289 or such other office
as Issuing Lender shall designate as its
Issuing Office.
"Lenders"
shall mean Comerica Bank and such other financial institutions
from time to time parties hereto as lenders
and shall include the Lenders, the
Swing Line Lender, the Issuing Lender and
any assignee which becomes a Lender
pursuant to Section 13.8 hereof.
"Letter(s)
of Credit" shall mean any standby letters of credit issued by
Issuing Lender at the request of and for
the account of an Account Party
pursuant to Article 3 hereof.
"Letter of
Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related
documentation satisfactory to the Issuing
Lender of an Account Party or Account
Parties requesting Issuing Lender to issue
such Letter of Credit, as amended from time
to time.
"Letter of
Credit Documents" is defined in Section 3.7.
"Letter of
Credit Fees" shall mean the fees payable to Agent for the
accounts of the Lenders in connection with
Letters of Credit pursuant to Section
3.4 hereof.
"Letter of
Credit Maximum Amount" shall mean One Hundred Million Dollars
($100,000,000).
"Letter of
Credit Obligations" shall mean at any date of determination,
the sum of (a) the aggregate undrawn amount
of all Letters of Credit then
outstanding, (b) the aggregate face amount
of all Letters of Credit requested
but not yet issued as of such date and (c)
the aggregate amount of Reimbursement
Obligations which have not been reimbursed
as of such date.
"Letter of
Credit Payment" shall mean any amount paid or required to be
paid by the Issuing Lender in its capacity
hereunder as issuer of a Letter of
Credit as a result of a draft or other
demand for payment under any Letter of
Credit.
"Leverage
Ratio" shall mean, as of the last day of each fiscal quarter of
Holdings, the ratio of (a) Consolidated
Total Debt as of such date to (b)
Consolidated EBITDA for the four fiscal
quarters then ending.
"Liabilities" shall mean all items of indebtedness, obligation
or
liability of a Person that should be
classified as liabilities on a balance
sheet of such Person in accordance with
GAAP, and shall include any liabilities
arising under or pursuant to any Permitted
Securitization.
"Lien"
shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement,
option, trust receipt, conditional sale
or title retaining contract, sale and
leaseback transaction, financing statement
(but excluding precautionary financing
statements in respect of Operating
Leases) or comparable notice or other
filing or recording, Capitalized Lease,
subordination of any claim or right, or any
other type of Lien, charge,
encumbrance, preferential or priority
arrangement, whether based on common law
or statute.
"Loan
Documents" shall mean, collectively, this Agreement, the Notes
(if
issued), the Letter of Credit Agreements,
the Letters of Credit, the
Guaranty(ies) (and any joinders thereto),
the Foreign Guaranty (and any joinders
thereto), the Collateral Documents, any
Interest Rate Protection Agreements and
any other documents, certificates,
instruments or agreements executed pursuant
to or in connection with any such document
or this Agreement, as such documents
may be amended from time to time.
16
<PAGE>
"Loan
Parties" shall mean collectively any or all of the Borrowers and
any
or all of the Guarantors, and any or all of
the Foreign Significant Subsidiaries
provided that the "Loan Parties" shall mean
all Loan Parties unless the context
indicates or otherwise requires and "Loan
Party" shall mean any one of them, as
the context indicates or otherwise
requires.
"Majority
Lenders" shall mean (a) so long as the Revolving Credit
Aggregate Commitment is outstanding
hereunder, at any time Lenders holding not
less than 51% of the aggregate principal
amount of the Revolving Credit
Aggregate Commitment, and (b) if the
Revolving Credit Aggregate Commitment has
been terminated, at any time Lenders
holding not less than 51% of the aggregate
principal amount of the Indebtedness then
outstanding hereunder (provided that,
for purposes of determining Majority
Lenders hereunder, Indebtedness outstanding
under the Swing Line or under any Letter of
Credit shall be allocated among the
Lenders based on their respective
Percentages).
"Material
Adverse Effect" shall mean a material adverse effect on (a) the
business or financial condition of Holdings
and its Subsidiaries taken as a
whole, (b) the ability of the Loan Parties
to perform their respective
obligations under this Agreement, the Notes
(if issued) or any other Loan
Document to which any of them is a party,
or (c) the validity or enforceability
of this Agreement, any of the Notes (if
issued) or any of the other Loan
Documents or the rights or remedies of the
Agent or the Lenders hereunder or
thereunder.
"Maximum
Availability" shall mean, as of any date of determination, the
lesser of (a) the then applicable Revolving
Credit Aggregate Commitment and (b)
the Borrowing Base minus the sum of (i) of
the aggregate principal amount of all
Advances of the Revolving Credit and of the
Swing Line then outstanding
hereunder plus (ii) of the aggregate amount
of Letter of Credit Obligations
outstanding as of the date of the requested
Advance in each case determined
pursuant to the terms hereof as of the date
of the requested Advance or the
issuance of the requested Letter of Credit,
as the case may be.
"Mortgages" shall mean the mortgages, deeds of trust or other
documents
granting a Lien over real property owned or
leased by Holdings or any Subsidiary
delivered at any time prior to or on or
after the Effective Date, in each case
pursuant to Section 7.20 hereof, as such
mortgages may be amended or otherwise
modified from time to time, and "Mortgage"
shall mean any of them.
"Multiemployer Plan" shall mean a Pension Plan which is a
multiemployer
plan as defined in Section 4001(a)(3) of
ERISA.
"Net Cash
Proceeds" shall mean, (a) with respect to any Asset Sale, the
aggregate cash payments received by
Borrowers or any Subsidiary, as the case may
be, from such Asset Sale, net of the
reasonable direct expenses of sale paid to
non-Affiliates such as commissions and pro
rated property taxes and net of any
taxes actually payable by Borrowers or any
Subsidiary in respect of such sales,
(b) with respect to the issuance of any
Equity Interests, the aggregate cash
proceeds received by a Credit Party or any
Subsidiary pursuant to such issuance,
net of the direct costs relating to such
issuance (including sales and
underwriting commissions), and (c) with
respect to issuance of Debt or Permitted
Securitizations, the aggregate cash
proceeds received by a Credit Party or any
Subsidiary pursuant to such issuance of
Debt, and pursuant to each transfer or
encumbrance of accounts receivable under or
pursuant to any Permitted
Securitization, in each case net of the
direct costs relating to such issuance
(including up-front fees and placement
fees) or securitization.
"Non-Defaulting Lender" is defined in Section 2.4(c).
"Notes"
shall mean the Revolving Credit Notes and the Swing Line Notes.
17
<PAGE>
"Operating
Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed)
which, in conformity with GAAP, is
not required to be capitalized on a balance
sheet of such Person.
"Other
Foreign Subsidiaries Maximum Amount" shall mean $60,000,000,
subject to reduction by the amount of the
then outstanding Letter of Credit
Obligations of Plastipak Brazil.
"Percentage" shall mean with respect to each Lender, its percentage
share,
as set forth on Schedule 1.2, of the
Revolving Credit and its risk participation
in Letters of Credit and its participation
in any outstanding Swing Line
Advances as such Schedule may be revised
from time to time by Agent in
accordance with Section 13.8.
"Pension
Plan" shall mean any plan established and maintained by a
Credit
Party or any Subsidiary which is qualified
under Section 401(a) of the Internal
Revenue Code and subject to the minimum
funding standards of Section 412 of the
Internal Revenue Code.
"Permitted
Acquisition" shall mean any acquisition (including by way of
merger or consolidation) by Holdings or any
100% Domestic Subsidiary of all or
substantially all of the assets of another
Person, or of a division or line of
business of another Person, or Equity
Interests of another Person, which is
conducted in accordance with the following
requirements:
(a) Such acquisition is of a business or Person engaged in a
business
related to a business conducted by Holdings or any Subsidiary;
(b) Holdings shall have delivered to the Agent and the Lenders
not
less than
twenty (20) nor more than ninety (90) days prior to the date of
such
acquisition, notice of such acquisition together with Pro Forma
Projected
Financial Information, copies of all material documents
relating
to such
acquisition, and an opinion of Holdings' general counsel
stating
that to
the best knowledge of such counsel such acquisition complies
with
this
Agreement and all laws and regulations, in each case in form
and
substance
satisfactory to the Agent and the Majority Lenders;
(c) Both before and after giving effect to such acquisition,
Maximum
Availability shall not be less than Twenty Million Dollars
($20,000,000);
(d) Both immediately before and after such acquisition, no
Default
or Event
of Default shall have occurred and be continuing;
(e)
The board of directors (or other Person(s) exercising similar
functions)
of the seller of the assets or issuer of the Equity Interests
being
acquired shall not have disapproved such transaction or
recommended
that such
transaction be disapproved;
(f) If the sum of the purchase price of such proposed new
acquisition, computed on the basis of total acquisition
consideration paid
or
incurred, or to be paid or incurred, by Holdings and its
Subsidiaries
with
respect thereto, including the amount of Debt assumed or to
which
such
assets, businesses or business or ownership interests or shares,
or
any Person
so acquired, is subject, plus the total of all such
consideration paid or incurred in connection with acquisitions
closed in
the
immediately preceding twelve month period, is greater than
Twenty-Five
Million
Dollars ($25,000,000), the acquisition shall have been approved
in
writing by
the Majority Lenders prior to its consummation; and
18
<PAGE>
(g) Unless approved in writing by the Majority Lenders, the
Person
or assets
to be acquired shall not have, or expose any Credit Party or
any
Subsidiary
to, any contingent liabilities or liabilities under any
Hazardous
Materials Laws which may result in a Material Adverse Effect.
"Permitted
Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District
of
Columbia
or any possession of the United States, or any political
subdivision thereof, which are described in Section 103(a) of the
Internal
Revenue
Code and are graded in any of the highest three (3) major
grades
as
determined by at least one Rating Agency; or secured, as to
payments of
principal
and interest, by a letter of credit provided by a financial
institution or insurance provided by a bond insurance company which
in
each case
is itself or its debt is rated in one of the highest three (3)
major
grades as determined by at least one Rating Agency;
(c) Banker's acceptances, commercial accounts, demand deposit
accounts,
certificates of deposit, or depository receipts issued by or
maintained
with any Lender or a bank, trust company, savings and loan
association, savings bank or other financial institution whose
deposits
are
insured by the Federal Deposit Insurance Corporation and whose
reported
capital and surplus equal at least $250,000,000, provided that
such
minimum capital and surplus requirement shall not apply to
demand
deposit
accounts maintained by Holdings or any of its Subsidiaries in
the
ordinary course
of business;
(d) Commercial paper rated at the time of purchase within the
two
highest
classifications established by not less than two Rating
Agencies,
and which
matures within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations itemized
in
paragraph
(a) above, and executed by a bank or trust company or by
members
of the
association of primary dealers or other recognized dealers in
United
States government securities, the market value of which must be
maintained
at levels at least equal to the amounts advanced;
(f) Any fund or other pooling arrangement which exclusively
purchases
and holds the investments itemized in (a) through (e) above;
and
(g) Investments by any Foreign Subsidiary in obligations similar
in
nature,
term and credit quality to those enumerated in clauses (a)
through
(f) above,
except that the country of such Foreign Subsidiary's formation
shall be
substituted for the United States of America.
"Permitted
Liens" shall mean with respect to any Person:
(a) Liens for taxes not yet due or which are being contested in
good
faith by
appropriate proceedings, provided that adequate reserves with
respect
thereto are maintained on the books of such Person in
conformity
with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's liens or other like Liens arising in the
ordinary
course of
business which are not overdue for a period of more than 60
days
or which
are being contested in good faith by appropriate proceedings;
19
<PAGE>
(c) pledges or deposits in connection with workers'
compensation,
unemployment insurance and other social security legislation and
deposits
securing
liability to insurance carriers under insurance or
self-insurance
arrangements;
(d) deposits to secure (i) the performance of bids, trade
contracts
(other
than for borrowed money), statutory obligations, surety and
appeal
bonds,
performance bonds and other obligations of a like nature or
(ii)
the
performance of leases permitted hereunder, in each case given
or
incurred
on terms, in amounts and otherwise in the ordinary course of
business;
and
(e) easements, rights-of-way, restrictions and other similar
encumbrances or Liens incurred in the ordinary course of business
which,
in the
aggregate, are not substantial in amount and which do not in
any
case
materially detract from the value of the property subject thereto
or
materially
interfere with the ordinary conduct of the business of such
Person.
"Permitted
Real Estate Debt" shall mean that certain Debt of any Credit
Party or any of their respective Domestic
Subsidiaries which is secured solely
by a Lien on real estate owned by any
Credit Party or any of their respective
Domestic Subsidiaries.
"Permitted
Real Estate Debt Documents" shall mean those certain
agreements, documents, certificates and
other instruments evidencing the
Permitted Real Estate Debt, as the same may
be amended, restated or otherwise
modified from time to time in accordance
with the terms of this Agreement.
"Permitted
Real Estate Lender" shall mean the bank or other financial
institution which shall have extended the
Permitted Real Estate Debt to any
Credit Party or any of their respective
Domestic Subsidiaries.
"Permitted
Securitization" shall mean the transfer or encumbrance of
certain accounts receivable by a Borrower
or any Subsidiary to a Special Purpose
Subsidiary conducted in accordance with the
following requirements:
(a)
The applicable
Borrower and/or the Subsidiary disposing of accounts
receivable to a Special Purpose Subsidiary pursuant to such
Permitted Securitization shall itself actually receive
(substantially contemporaneously with such disposition) cash in
connection with any such Securitization Transaction in an
amount
based on normal and customary advance rates (and taking into
account
typical deductions for market-based, arms-length Securitization
Transactions);
(b)
Each such
disposition shall be without recourse to any Credit Party
or any Subsidiary and otherwise on normal and customary terms
and
conditions for comparable asset-based Securitization
Transactions;
(c)
Each such
Securitization Transaction shall be structured on the
basis of the issuance of non-recourse (to the Credit Parties and
the
Subsidiaries) Debt or other similar securities by a Special
Purpose
Subsidiary; and
(d)
Both immediately
before and immediately after each such disposition,
no Default or Event of Default (whether or not related to such
disposition) shall have occurred and be continuing.
20
<PAGE>
"Person"
shall mean a natural person, corporation, limited liability
company, partnership, limited liability
partnership, trust, incorporated or
unincorporated organization, joint venture,
joint stock company, or a government
or any agency or political subdivision
thereof or other entity of any kind.
"Plastipak
Brazil" shall mean Plastipak Packaging do Brazil, Ltda, a
limited liability quota company organized
under the laws of Brazil.
"Pledge
Agreement(s)" shall mean the Foreign Pledge Agreements, the
Young
Pledge Agreement, and each other stock
pledge agreement executed and delivered
by Holdings or any Subsidiary in form
satisfactory of the Agent and the Majority
Lenders, in each case as amended or
otherwise modified from time to time.
"Pledge
Release Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a) the
sum of Consolidated Total Liabilities
minus all Subordinated Debt as of such date
to (b) Consolidated Tangible Net
Worth as of such date.
"Pledge
Termination Conditions" shall mean the following conditions to
be
satisfied prior to the termination of the
Pledge Agreements, as follows:
(a) the Leverage Ratio and the Pledge Release Ratio, as
determined
based on
the most recent Covenant Compliance Certificate delivered by
the
Borrowers
pursuant to Section 7.2(a), shall be not greater than 2.0 to
1.0
and 2.5 to
1.0, respectively; and
(b) no Default or Event of Default has occurred and is
continuing
under this
Agreement or any of the other Loan Documents.
"Potential
Financial Institution" is defined in Section 2.4(c).
"Prime-based Advance" shall mean an Advance which bears interest at
the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest
which is
equal to the Applicable Margin plus the
greater of (i) the Prime Rate, and (ii)
the Alternate Base Rate.
"Prime
Rate" shall mean the per annum rate of interest announced by
the
Agent, at its main office from time to time
as its "prime rate" (it being
acknowledged that such announced rate may
not necessarily be the lowest rate
charged by the Agent to any of its
customers), which Prime Rate shall change
simultaneously with any change in such
announced rate.
"Prior
Credit Agreement" is defined in the Recitals.
"Pro Forma
Projected Financial Information" shall mean, as to any proposed
acquisition, a statement executed by a
Responsible Officer (supported by
reasonable detail) setting forth the total
consideration to be paid or incurred
in connection with the proposed
acquisition, and pro forma combined projected
financial information for Holdings and its
Consolidated Subsidiaries and the
acquisition target (if applicable),
consisting of projected balance sheets as of
the proposed effective date of the
acquisition or the closing date and as of the
end of at least the next succeeding three
(3) Fiscal Years of Holdings following
the acquisition and projected statements of
income and cash flows for each of
those years, including sufficient detail to
permit calculation of the amounts
and the ratios described in Sections 7.9
through 7.12A hereof, as projected as
of the effective date of the acquisition
and for those Fiscal Years and
accompanied by (i) a statement setting
forth a calculation of the ratios and
amounts so described, (ii)
21
<PAGE>
a statement in reasonable detail specifying
all material assumptions underlying
the projections and (iii) such other
information as any Lender shall reasonably
request.
"Purchasing Lender" shall have the meaning set forth in Section
11.7.
"Quoted
Rate" shall mean the rate of interest per annum offered by the
Swing Line Lender in its sole discretion
with respect to a Swing Line Advance.
"Quoted
Rate Advance" means any Swing Line Advance which bears interest
at
the Quoted Rate.
"Rating
Agency" shall mean Moody's Investor Services, Standard and
Poor's
Ratings Group or any other nationally
recognized statistical rating organization
which is acceptable to the Agent.
"Real
Estate Lien Release" shall have the meaning set forth in
Section
12.12(c) of this Agreement.
"Register"
is defined in Section 13.8(f) hereof.
"Reimbursement Obligation(s)" shall mean the obligation of an
Account
Party or Account Parties under each Letter
of Credit Agreement and this
Agreement to reimburse the Issuing Lender
for each payment made by the Issuing
Lender under the Letter of Credit issued
pursuant to such Letter of Credit
Agreement, together with all other sums,
fees, charges and amounts which may be
owing to the Issuing Lender under such
Letter of Credit Agreement or this
Agreement relating to Letters of
Credit.
"Request
for Advance" shall mean a Request for Revolving Credit Advance
or
a Request for Swing Line Advance as the
context may indicate.
"Request
for Revolving Credit Advance" shall mean a Request for
Revolving
Credit Advance issued by any of the
Borrowers under Section 2.3 of this
Agreement in the form annexed hereto as
Exhibit A, as amended or otherwise
modified.
"Request
for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by any of the Borrowers
under Section 2.5(c) of this Agreement in
the form attached hereto as Exhibit D, as
amended or otherwise modified.
"Requirement of Law" shall mean as to any Person, the certificate
of
incorporation and bylaws, certificate of
formation and operating agreement, the
partnership agreement or other
organizational or governing documents of such
Person and any law, treaty, rule or
regulation or determination of an
arbitration or a court or other
Governmental Authority, in each case applicable
to or binding upon such Person or any of
its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean the chief executive officer,
chief
financial officer, president, treasurer or
the general counsel of a Credit
Party, as applicable, or with respect to
compliance with financial covenants,
the chief financial officer or the
treasurer of a Credit Party, as applicable or
any other officer having substantially the
same authority and responsibility.
"Revolving
Credit" shall mean the revolving credit loan to be advanced to
a Borrower by the Lenders pursuant to
Article 2 hereof, in an aggregate amount
(subject to the terms hereof), not to
exceed, at any one time outstanding, the
Revolving Credit Aggregate Commitment.
22
<PAGE>
"Revolving
Credit Advance" shall mean a borrowing requested by a Borrower
and made by the Lenders under Section 2.1
of this Agreement, including without
limitation any readvance, refunding or
conversion of such borrowing pursuant to
Section 2.3 hereof and any advance in
respect of a Letter of Credit under
Section 3.6 hereof, and shall include, as
applicable, a Eurocurrency-based
Advance and/or a Prime-based Advance.
"Revolving
Credit Aggregate Commitment" shall mean Three Hundred Million
Dollars ($300,000,000), subject to
reduction or termination under Sections 2.15,
2.16 or 9.2 hereof.
"Revolving
Credit Facility Fee" shall mean the fees payable to Agent for
distribution to the Lenders pursuant to
Section 2.13 hereof.
"Revolving
Credit Maturity Date" shall mean the earlier to occur of (i)
January 28, 2010, as such date may be
extended in accordance with Section
2.17(a) of this Agreement and (ii) the date
on which the Revolving Credit
Aggregate Commitment shall be terminated
pursuant to Sections 2.15, 2.16 or 9.2
hereof.
"Revolving
Credit Notes" shall mean the revolving credit notes described
in Section 2.1 hereof, made by each of the
Borrowers to each of the Lenders in
the form annexed to this agreement as
Exhibit B, as such notes may be amended or
supplemented from time to time, and any
other notes issued in substitution,
replacement or renewal thereof from time to
time.
"Securitization Transaction(s)" shall mean a transfer of, or grant
of a
Lien on, accounts receivable by any
Borrower or Subsidiary to a Special Purpose
Subsidiary or other special purpose or
limited purpose entity and the issuance
(whether by such Special Purpose Subsidiary
or other special purpose or limited
purpose entity or any other Person) of Debt
or of any securities secured
directly or indirectly by interests in, or
of trust or comparable certificates
or other securities directly or indirectly
evidencing interests in, such
accounts receivable.
"Security
Agreement" shall mean the Amended and Restated Security
Agreement dated as January 28, 2005, as
amended or otherwise modified from time
to time.
"Senior
Secured Debt Ratio" shall mean, as of the last day of each
fiscal
quarter of Holdings, the ratio of (a)
Consolidated Senior Secured Debt on such
date to (b) Consolidated EBITDA for the
four fiscal quarters then ending.
"Senior
Unsecured Debt" shall mean the indebtedness of Holdings
evidenced
by the Senior Unsecured Notes.
"Senior
Unsecured Debt Documents" shall mean the Senior Unsecured
Notes,
the Senior Unsecured Debt Indenture, and
all other documents and agreements to
evidence the Senior Unsecured Debt, as the
same may be amended from time to time
(subject to the terms of this Agreement),
and any and all other documents
executed in exchange therefor or
replacement or renewal thereof.
"Senior
Unsecured Debt Indenture" shall mean the Indenture relating to
the
Senior Unsecured Notes.
"Senior
Unsecured Notes" shall mean (a) the 10.75% Senior Notes of
Holdings due 2011 in the original principal
amount of $275,000,000, and the
notes of Holdings issued in exchange
therefor pursuant to the Registration
Rights Agreement entered into in connection
with the Senior Unsecured Debt
Documents and (b) the 2002 Senior Notes,
and the notes of Holdings issued in
exchange therefor pursuant
23
<PAGE>
to any Registration Rights Agreement
entered into in connection with the Senior
Unsecured Debt Documents.
"Special
Purpose Subsidiary" shall mean any wholly-owned direct or
indirect Subsidiary of Holdings established
for the sole purpose of conducting a
Permitted Securitization and otherwise
established and operated in accordance
with customary industry practices and not
prohibited by this Agreement.
"Subordinated Debt" shall mean any Debt of Holdings or any
Subsidiary
which has been subordinated, in writing, in
right of payment and priority to the
Indebtedness, on terms and conditions
satisfactory to the Agent and the Majority
Lenders.
"Subordinated Debt Documents" shall mean and include any
documents
evidencing Subordinated Debt, as the same
may be amended, modified or
supplemented from time to time in
compliance with the terms of this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association,
joint
stock company, business trust, limited
liability company or any other business
entity of which more than fifty percent
(50%) of the outstanding voting stock,
share capital, membership or other
interests, as the case may be, is owned
either directly or indirectly by any Person
or one or more of its Subsidiaries,
or the management of which is otherwise
controlled, directly, or indirectly
through one or more intermediaries, or
both, by any Person and/or its
Subsidiaries. Unless otherwise specified to
the contrary herein or the context
otherwise requires, Subsidiary(ies) shall
refer to the Subsidiary(ies) of
Holdings. "100% Subsidiary(ies)" shall mean
any of the Subsidiaries of Holdings
whose stock (other than directors' or
qualifying shares to the extent required
under applicable law) or other ownership
interests is owned 100% by any other
100% Subsidiary and/or Holdings.
"Swing
Line" shall mean the revolving credit loan to be advanced to
Borrowers by the Swing Line Lender pursuant
to Section 2.5 hereof, in an
aggregate amount (subject to the terms
hereof), not to exceed, at any one time
outstanding, the Swing Line Maximum
Amount.
"Swing
Line Advance" shall mean a borrowing made by Swing Line Lender
to
Borrowers pursuant to Section 2.5
hereof.
"Swing
Line Lender" shall mean Comerica Bank in its capacity as lender
under Section 2.5 of this Agreement or its
successor as lender of the Swing
Line.
"Swing Line Maximum Amount" shall
mean Twenty Million Dollars
($20,000,000).
"Swing
Line Notes" shall mean the swing line notes which may be issued
by
each Borrower at the request of Swing Line
Lender pursuant to Section 2.5(a)
hereof in the form annexed hereto as
Exhibit C, as the case may be, as such
Notes may be amended or supplemented from
time to time, and any notes issued in
substitution, replacement or renewal
thereof from time to time.
"Tabb
Realty" shall mean TABB Realty, LLC, a 100% Subsidiary.
"Tangible
Net Worth Adjustment Amount" shall mean, as of any date of
determination, an amount equal to the sum
of fifty percent (50%) of Consolidated
Net Income (not reduced by losses) for each
fiscal quarter from the fiscal
quarter ending on or about October 31, 2004
to the date of determination, plus
one hundred percent (100%) of the Net Cash
Proceeds of Subordinated Debt and
24
<PAGE>
issuances of Equity Interests received by
Holdings or any Subsidiary after the
fiscal quarter ending on or about October
31, 2004.
"Total
Debt" of any Person shall mean, as of the applicable date of
determination (but without duplication),
all Debt of such Person other than
indebtedness described in sub-section (g)
of the definition of Debt.
"Uniform
Commercial Code" or "UCC" shall mean the Uniform Commercial
Code
as in effect in the State of Michigan, as
amended, revised or replaced from time
to time.
"Whiteline" shall mean Whiteline Express, Ltd., a 100%
Subsidiary.
"Young
Parties" shall mean (a) Absopure Water Company, Buffalo Don's
Artesian Wells, Ltd., Sprinklets Water
Centers, Inc., Multi-Investments Limited
Partnership, WCY Realty LLC, William P.
Young Company, Waters of America,
L.L.C., The Clean Drink Company, L.L.C.,
The Clean Drink Company II, L.L.C., My
TABB, LLC, My TABB II, LLC, One Water
Source, LLC, Two Water Source, LLC or any
Person owned (in whole or in part) by any
of them, and (b) the estate of William
P. Young, the estate of Mary E. Young,
William C. Young, their respective
families and trusts, and/or any Person now
or hereafter owned (in whole or in
part) or which are under the control of any
of them (other than the Loan Parties
and their respective Subsidiaries).
"Young Pledge Agreement"
shall mean the Pledge Agreement dated as of
August 21, 2001, encumbering 23,257 shares
of the common stock of Holdings, as
amended or otherwise modified from time to
time.
2.
REVOLVING CREDIT
2.1
Commitment. Subject to the terms and conditions of this
Agreement,
each Lender severally and for itself alone
agrees to make Advances of the
Revolving Credit to any of the Borrowers
from time to time on any Business Day
during the period from the Effective Date
hereof until (but excluding) the
Revolving Credit Maturity Date in an
aggregate amount, not to exceed at any one
time outstanding such Lender's Percentage
of the Revolving Credit Aggregate
Commitment. Subject to the terms and
conditions set forth herein, advances,
repayments and readvances may be made under
the Revolving Credit. Advances of
the Revolving Credit shall be subject to
the following additional conditions and
limitations:
A Person
shall not be entitled to request an Advance of the Revolving
Credit or the Swing Line or the issuance of
a Letter of Credit hereunder until
(i) with the approval of all Lenders, it
has become a party to this Agreement
either by execution and delivery of this
Agreement, or by execution and delivery
of a Borrower Addendum to this Agreement,
(ii) unless waived in writing by all
Lenders, it has become a party to the
Guaranty by execution and delivery of the
Guaranty or of a joinder agreement to the
Guaranty, (iii) unless waived in
writing by all Lenders, it has become a
party to the Security Agreement, and
(iv) unless waived in writing by all
Lenders, Holdings has encumbered and/or
delivered (or caused to be encumbered
and/or delivered), as the case may be,
either pursuant to the Security Agreement
or a separate Pledge Agreement those
Equity Interests issued by such Borrower
and owned by Holdings or a Subsidiary
of Holdings which are required to be
encumbered and/or delivered under Section
7.20 hereof, as applicable, and accompanied
in each case by authority documents,
legal opinions and other supporting
documents as required by Agent and the
Majority Lenders hereunder.
2.2
Accrual of Interest and Maturity; Evidence of Indebtedness.
25
<PAGE>
(a) Each Borrower hereby unconditionally promises to pay to the
Agent for
the account of each Lender the then unpaid principal amount of
each
Revolving Credit Advance (plus all accrued and unpaid interest)
of
such
Lender to such Borrower on the Revolving Credit Maturity Date and
on
such other
dates and in such other amounts as may be required from time to
time
pursuant to this Agreement. Subject to the terms and conditions
hereof,
each Revolving Credit Advance shall, from time to time from and
after the
date of such Advance (until paid), bear interest at its
Applicable
Interest Rate.
(b) Each Lender shall maintain in accordance with its usual
practice
an account
or accounts evidencing indebtedness of each Borrower to the
appropriate lending office
of such Lender resulting from each Revolving
Credit
Advance made by such lending office of such Lender from time to
time,
including the amounts of principal and interest payable thereon
and
paid to
such Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to Section
13.8(f),
and a subaccount therein for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of
each
Revolving
Credit Advance made hereunder, the type thereof and each
Interest
Period applicable to any Eurocurrency-based Advance, (ii) the
amount of
any principal or interest due and payable or to become due and
payable
from the applicable Borrower, as the case may be, to each
Lender
hereunder
in respect of the Revolving Credit Advances and (iii) both the
amount of
any sum received by the Agent hereunder from the applicable
Borrower
in respect of the Revolving Credit Advances and each Lender's
share
thereof.
(d) The entries made in the Register and the accounts of each
Lender
maintained
pursuant to paragraphs (b) and (c) of this Section 2.1 shall
absent
manifest error, to the extent permitted by applicable law, be
conclusive
evidence of the existence and amounts of the obligations of the
Borrowers
therein recorded; provided, however, that the failure of any
Lender or
the Agent to maintain the Register or any such account, as
applicable, or any error therein, shall not in any manner affect
the
obligation
of each Borrower to repay the Revolving Credit Advances (and
all other
amounts owing with respect thereto) made to such Borrower by
such
Lender in accordance with the terms of this Agreement.
(e) The Borrowers agree that, upon written request to the Agent
(with a
copy to Holdings) by any Lender, each of the Borrowers will
execute
and deliver, to such Lender, at such Borrower's own expense, a
Revolving
Credit Note evidencing an amount equal to such Lender's
Percentage
of the Revolving Credit Aggregate Commitment; provided, that
the
delivery of such Revolving Credit Notes shall not be a
condition
precedent
to the Effective Date.
2.3
Requests for Advances; Refundings and Conversions of Advances.
A
Borrower may request an Advance of the
Revolving Credit, refund any such Advance
in the same type of Advance or convert any
such Advance to any other type of
Advance of the Revolving Credit only after
delivery to Agent of a Request for
Revolving Credit Advance executed by a
person previously authorized (in a
writing delivered to the Agent by Holdings
or such Borrower) to execute such
Request, subject to the following and to
the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set
forth
the
information required on the Request for Revolving Credit Advance
form
annexed
hereto as Exhibit A, including without limitation:
(i) the proposed date of such Advance, which must be a
Business Day;
26
<PAGE>
(ii) whether such Advance is a refunding or conversion of an
outstanding Advance; and
(iii) whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a
Prime-based
Advance, the first Interest Period applicable thereto.
(b) each such Request for Revolving Credit Advance shall be
delivered
to Agent by noon (Detroit time) three (3) Business Days prior
to
the
proposed date of Advance, except in the case of a Prime-based
Advance,
for which the Request
for Advance must be delivered by 11:00 a.m. (Detroit
time) on
such proposed date;
(c) on the proposed date of such Advance,
(i) as to any Borrower as of any date of determination, after
giving
effect to all Advances and Letters of Credit requested by any
Borrower on such date of determination, the sum of (i) the
aggregate
outstanding principal amount of all Advances of the Revolving
Credit
and of the Swing Line on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations on such date
shall not exceed the lesser of (a) the then applicable
Revolving
Credit Aggregate Commitment and (b) the Borrowing Base;
(ii) as to any Borrower, after giving effect to all Advances
and Letters of Credit requested by any such Borrower on such date
of
determination, the sum of (i) of the aggregate outstanding
principal
amount of all Advances of the Revolving Credit and of the Swing
Line
hereunder to such Borrower on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations for the
account
of such Borrower on such date shall not exceed the Borrower
Sublimit
applicable to such Borrower;
provided
however, that, in the case of any Advance being applied to
refund
an
outstanding Advance, the aggregate principal amount of such
Advances to
be
refunded shall not be included for purposes of calculating
availability
under this
Section 2.3(c);
(d) in the case of a Prime-based Advance, the principal amount
of
the
initial funding of such Advance, as opposed to any refunding or
conversion
thereof, shall be at least Two Million Dollars ($2,000,000);
(e) in the case of a Eurocurrency-based Advance the principal
amount
of such
Advance, plus the amount of any other outstanding Revolving
Credit
Advance to
be then combined therewith having the same Applicable Interest
Rate and
Interest Period, if any, shall be at least Three Million
Dollars
($3,000,000) (or a larger integral multiple of One Hundred
Thousand
Dollars
($100,000)) and in any case, at any one time there shall not be
in
effect for
any Borrower more than six (6) Applicable Interest Rates and
Interest
Periods;
(f) a Request for Revolving Credit Advance, once delivered to
Agent,
shall not
be revocable by the Borrowers;
(g) each Request for Revolving Credit Advance shall constitute
a
certification by Holdings and the applicable Borrower, if any, as
of the
date
thereof that:
27
<PAGE>
(i) both before and after such Advance, the obligations of the
Borrowers and the Guarantors set forth in this Agreement and
the
other Loan Documents to which such Persons are parties are
valid,
binding and enforceable obligations of the applicable Borrowers
and
Guarantors;
(ii) all conditions to Advances of the Revolving Credit have
been satisfied, and shall remain satisfied to and including the
date
of such Advance (both before and after giving effect to such
Advance);
(iii) there is no Default or Event of Default in existence,
and none will exist upon the making of such Advance (both before
and
after giving effect to such Advance);
(iv) the representations and warranties contained in this
Agreement and the other Loan Documents are true and correct in
all
material respects and shall be true and correct in all material
respects as of the making of such Advance (both before and
after
giving effect to such Advance); and
(v) the execution of such Request for Advance will not violate
the material terms and conditions of any material contract,
agreement or other borrowing of the Borrowers.
Agent,
acting on behalf of the Lenders, may, at its option, lend under
this Section 2 upon the telephone request
of a person previously authorized (in
a writing delivered to the Agent) by the
applicable Borrower to make such
requests and, in the event Agent, acting on
behalf of the Lenders, makes any
such Advance upon a telephone request, the
requesting officer shall fax to
Agent, on the same day as such telephone
request, a Request for Advance.
Borrowers hereby authorize Agent to
disburse Advances under this Section 2.3
pursuant to the telephone instructions of
any person purporting to be a person
identified by name on a written list of
persons authorized by Borrowers and
delivered to Agent prior to the date of
such request to make Requests for
Advance on behalf of the Borrowers.
Notwithstanding the foregoing, each Borrower
acknowledges that each Borrower (i) shall
bear all risk of loss resulting from
disbursements made upon any telephone
request, and (ii) shall indemnify the
Lenders for all losses caused by their good
faith reliance on any telephone
request. Each telephone request for an
Advance shall constitute a certification
of the matters set forth in the Request for
Revolving Credit Advance form as of
the date of such requested Advance.
2.4
Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance from
a
Borrower
under Section 2.3 hereof, Agent shall promptly notify each
Lender
by wire,
or telephone (confirmed by wire or telecopy) of the amount of
such
Advance to be made and the date such Advance is to be made by
said
Lender
pursuant to its Percentage of such Advance. Unless such
Lender's
commitment
to make Advances of the Revolving Credit hereunder shall have
been
suspended or terminated in accordance with this Agreement, each
such
Lender
shall make available the amount of its Percentage of each
Advance
in
immediately available funds to Agent,
(i) for Prime-based Advances, at the office of Agent located
at One Detroit Center, Detroit, Michigan 48226, not later than
3:00
p.m. (Detroit time) on the date of such Advance;
28
<PAGE>
(ii) for Eurocurrency-based Advances, at the Agent's
Correspondent for the account of the Eurocurrency Lending Office
of
the Agent, not later than 12 noon (the time of the Agent's
Correspondent) on the date of such Advance.
(b) Subject to submission of an executed Request for Revolving
Credit
Advance by the applicable Borrower without exceptions noted in
the
compliance
certification therein and compliance with the terms and
conditions
of this Agreement, Agent shall make available to the applicable
Borrower
the aggregate of the amounts so received by it from the Lenders
in like
funds:
(i)
for Prime-based Advances, not later than 4:00 p.m.
(Detroit time) on the date of such Advance by credit to an
account
of such Borrower maintained with Agent or to such other account
or
third party as such Borrower may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than 4:00 p.m.
(the time of the Agent's Correspondent) on the date of such
Advance,
by credit to an account of such Borrower maintained with
Agent's
Correspondent or to such other account or third party as such
Borrower may reasonably direct.
(c) Agent shall deliver the documents and papers received by it
for
the
account of each Lender to such Lender or upon its order. Unless
Agent
shall have
been notified by any Lender prior to the date of any proposed
Revolving
Credit Advance that such Lender does not intend to make
available
to Agent such Lender's Percentage of such Advance, Agent may
assume
that such Lender has made such amount available to Agent on
such
date and
in such currency, as aforesaid and may, in reliance upon such
assumption, make available to the applicable Borrower a
corresponding
amount. If
such amount is not in fact made available to Agent by such
Lender, as
aforesaid, Agent shall be entitled to recover such amount on
demand
from such Lender. If such Lender does not pay such amount
forthwith
upon
Agent's demand therefor, the Agent shall promptly notify
Holdings,
and the
applicable Borrower shall pay such amount to Agent. Agent shall
also be
entitled to recover from such Lender or the applicable
Borrower,
as the
case may be, but without duplication, interest on such amount
in
respect of
each day from the date such amount was made available by Agent
to such
Borrower, to the date such amount is recovered by Agent, at a
rate
per annum
equal to:
(i) in the case of such Lender, for the first two (2) Business
Days such amount remains unpaid, with respect to Prime-based
Advances, the Federal Funds Effective Rate, and with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or
deposit
insurance and of any fees, penalties, overdraft charges or
other
costs or expenses incurred by Agent as a result of such failure
to
deliver funds hereunder) of carrying such amount and thereafter,
at
the rate of interest then applicable to such Revolving Credit
Advances; and
(ii) in the case of such Borrower, the rate of interest then
applicable to such Advance of the Revolving Credit.
The
obligation of any Lender to make any Advance of the Revolving
Credit
hereunder shall not be affected by the
failure of any other Lender to make any
Advance hereunder, and no Lender shall have
any liability to Holdings or any of
its Subsidiaries, the Agent, any other
Lender, or any other party for another
Lender's failure to make any loan or
Advance hereunder. In the event any Lender
shall fail to advance any amounts required
to be advanced in accordance with the
terms of this Article 2 (a
29
<PAGE>
"Defaulting Lender"), the Agent shall
promptly provide written notice thereof to
the Borrowers and to each other Lender
(each such other Lender being referred to
in this Section as a "Non-Defaulting
Lender"). Each Non-Defaulting Lender shall
have ten (10) Business Days from receipt of
said notice to exercise its option
to agree to enter into an agreement
pursuant to which the Non-Defaulting Lender
shall assume the Defaulting Lender's rights
and obligations under this
Agreement, its Notes and the other Loan
Documents. The Non-Defaulting Lender
shall exercise such option by providing
written notice of same to the Defaulting
Lender (and if there is more than one
Non-Defaulting Lender, the assignment
agreement shall be entered into with the
Non-Defaulting Lender who first
notifies the Defaulting Lender of its
decision to exercise said option) and to
Borrowers. If no Non-Defaulting Lender
shall exercise the above-described option
within the said ten (10) Business Day
period, (X) Borrowers may, subject to
Section 13.8(c) hereof, within thirty (30)
days of the delivery of the notice
described above, advise such Defaulting
Lender of another bank or financial
institution to which assignments are
permitted pursuant to Section 13.8(c)
hereof and which is willing to assume such
Defaulting Lender's rights and
obligations under this Agreement, its Notes
and the other Loan Documents (each
such bank or financial institution being
hereinafter referred to as a "Potential
Financial Institution"), whereupon such
Defaulting Lender shall, subject to
Section 13.8(c), assign its said rights and
obligations to the Potential
Financial Institution and (Y) at any time
following the passage of thirty (30)
days after delivering the notice described
above, Agent may, at its option,
reduce the Revolving Credit Aggregate
Commitment by an amount equal to the
amount of such Defaulting Lender's
Percentage, it being understood that after
such a reduction, the Borrowers shall
comply with the requirements of Section
2.14(a) of this Agreement, if applicable,
and provided that any assignment or
reduction pursuant to clauses (X) and (Y)
of this Section 2.4 shall not alter
Borrowers' remedies vis a vis the
Defaulting Lender.
2.5 Swing
Line Advances.
(a) Advances. The Swing Line Lender shall, on the terms and
subject
to the
conditions hereinafter set forth (including without limitation
Section
2.5(c) hereof), make one or more Advances (each such advance
being
a "Swing
Line Advance") to any Borrower (provided that any Borrower
requesting
Swing Line Advances hereunder has become a party to this
Agreement,
either by execution and delivery of this Agreement or by
complying
with the terms and conditions set forth in Section 2.1(a)
hereof),
from time to time on any Business Day during the period from
the
date
hereof to (but excluding) the Revolving Credit Maturity Date an
amount not
to exceed at any time outstanding the Swing Line Maximum
Amount.
Swing Line Lender shall maintain in accordance with its usual
practice
an account or accounts evidencing indebtedness of each of the
Borrowers
to Swing Line Lender resulting from each Swing Line Advance of
such
Lender from time to time, including the amounts of principal
and
interest
payable thereon and paid to such Lender from time to time. The
entries
made in such account or accounts of Swing Line Lender shall, to
the extent
permitted by applicable law, be conclusive evidence, absent
manifest
error, of the existence and amounts of the obligations of the
Borrower
therein recorded; provided, however, that the failure of Swing
Line
Lender to maintain such account, as applicable, or any error
therein,
shall not
in any manner affect the obligation of each Borrower to repay
the Swing
Line Advances (and all other amounts owing with respect
thereto)
made to
such Borrower by Swing Line Lender in accordance with the terms
of
this
Agreement. Advances, repayments and readvances under the Swing
Line
may be
made, subject to the terms and conditions of this Agreement.
Each
Swing Line
Advance shall mature and the principal amount thereof shall be
due and
payable by the applicable Borrower on the last day of the
Interest
Period
applicable thereto (if any) and, in the case of any Prime-based
Advance,
on the Revolving Credit Maturity Date.
The
Borrowers agree that, upon the written request of Swing Line
Lender
(with a
copy to Holdings), each of the Borrowers will execute and
deliver
to Swing
Line Lender Swing Line
30
<PAGE>
Notes;
provided, that the delivery of such Swing Line Notes shall not be
a
condition
precedent to the Effective Date.
(b) Accrual of Interest. Each Swing Line Advance shall, from time
to
time after
the date of such Advance, bear interest at its Applicable
Interest
Rate. The amount and date of each Swing Line Advance, its
Applicable
Interest Rate, its Interest Period, if any, and the amount and
date of
any repayment shall be noted on Swing Line Lender's account
maintained
pursuant to Section 2.5(a), which records will be conclusive
evidence
thereof, absent manifest error; provided, however, that any
failure by
the Swing Line Lender to record any such information shall not
relieve
the applicable Borrower of its obligation to repay the
outstanding
principal
amount of such Advance, all interest accrued thereon and any
amount
payable with respect thereto in accordance with the terms of
this
Agreement
and the other Loan Documents.
(c) Requests for Swing Line Advances. A Borrower may request a
Swing
Line
Advance only after delivery to Swing Line Lender of a Request
for
Swing Line
Advance executed by a person authorized (in a writing a copy of
which has
been previously delivered to the Agent) by the applicable
Borrower
to make such requests, subject to the following and to the
remaining
provisions hereof:
(i) each such Request for Swing Line Advance shall set forth
the information required on the Request for Advance form
annexed
hereto as Exhibit D, including without limitation:
(A) the proposed date of such Swing Line Advance, which
must be a Business Day;
(B) whether such Swing Line Advance is to be a
Prime-based Advance or a Quoted Rate Advance, and;
(C) in the case of a Quoted Rate Advance, the duration
of the Interest Period applicable thereto.
(ii) in the case of any Borrower requesting any Swing Line
Advance, after giving effect to all Swing Line Advances requested
by
any Borrower on such date of determination, the aggregate
principal
amount of all outstanding Swing Line Advances on such date shall
not
exceed the Swing Line Maximum Amount;
(iii) as to any Borrower, after giving effect to all Swing
Line Advances requested by any such Borrower on such date of
determination, the sum of (i) of the aggregate outstanding
principal
amount of all Advances of the Revolving Credit and of the Swing
Line
hereunder to such Borrower on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations for the
account
of such Borrower on such date shall not exceed the Borrower
Sublimit
applicable to such Borrower;
(iv) in the case of any Borrower requesting any Swing Line
Advance, on the proposed date of such Swing Line Advance, after
giving effect to all Advances and Letters of Credit requested by
any
Borrower on such date of determination, the sum of (x) of the
aggregate outstanding principal amount of all Advances of the
Revolving Credit and of the Swing Line on such date plus (y)
the
aggregate outstanding amount of Letter of Credit Obligations on
such
date shall not exceed the lesser of (a) the then applicable
Revolving Credit Aggregate Commitment and (b) the Borrowing
Base;
31
<PAGE>
(v) the principal amount of the initial funding of such
Advance, as opposed to any refunding or conversion thereof, shall
be
at least One Hundred Thousand Dollars ($100,000) or such lesser
amount as shall be agreed to by Swing Line Lender;
(vi) each such Request for Swing Line Advance shall be
delivered to the Swing Line Lender by 2:00 p.m. (Detroit time)
on
the proposed date of the Advance;
(vii) each Request for Swing Line Advance, once delivered to
Swing Line Lender, shall be irrevocable by the Borrowers, and
shall
constitute and include a certification by the applicable Borrower
as
of the date thereof that:
(A) both before and after such Swing Line Advance, the
obligations of the Borrowers and Guarantors set forth in this
Agreement and the other Loan Documents, are valid, binding and
enforceable obligations of the Borrowers and Guarantors;
(B) all conditions to the making of Swing Line Advances
have been satisfied (both before and after giving effect to
such Advance);
(C) both before and after the making of such Swing Line
Advance, there is no Default or Event of Default in existence;
and
(D) both before and after such Swing Line Advance, the
representations and warranties contained in this Agreement and
the other
Loan Documents are true and correct in all material
respects.
At the
option of the Swing Line Lender, subject to revocation by Swing
Line Lender at any time and from time to
time, Borrowers may utilize the Swing
Line Bank's "Sweep to Loan" automated
system for obtaining Swing Line Advances.
Each time a Swing Line Advance is made
using the "Sweep to Loan" system,
Borrowers shall be deemed to have certified
to the Swing Line Lender and the
Lenders each of the matters set forth in
clause (vii) of this Section 2.5(c).
Swing Line Lenders may revoke the
Borrowers' privilege to use the "Sweep to
Loan" system at any time and from time to
time for any reason and, immediately
upon any such revocation, the "Sweep to
Loan" system shall no longer be
available to the Borrowers for the funding
of Swing Line Advances hereunder (or
otherwise) and the regular procedures set
forth for the making of Swing Line
Advances shall be deemed immediately to
apply. Swing Line Lender may, at its
option, also elect to make Swing Line
Advances upon a Borrower's telephone
requests on the basis set forth in the
succeeding paragraph, provided that the
Borrowers comply with the provisions set
forth in Section 2.5.
Swing Line
Lender may, at its option, lend under this Section 2.5(c) upon
the telephone request of an authorized
officer of a Borrower and, in the event
Swing Line Lender makes any such Advance
upon a telephone request, the
requesting officer shall, if so requested
by Swing Line Lender, fax to Swing
Line Lender, on the same day as such
telephone request, a Request for Swing Line
Advance. Borrowers hereby authorize Swing
Line Lender to disburse Advances under
this Section 2.5(c) pursuant to the
telephone instructions of any person
purporting to be a person identified by
name on a written list of persons
authorized by each Borrower to make
Requests for Advance on behalf of the
Borrowers. Notwithstanding the foregoing,
the Borrowers acknowledge that the
Borrowers shall bear all risk of loss
resulting from disbursements made upon any
telephone request. Each telephone request
for an Advance shall constitute a
certification of the matters set forth in
the Request for Swing Line Advance
form as of the date of such requested
Advance. Swing Line Lender shall promptly
deliver to Agent by telecopy a copy of any
Request for Advance received
hereunder.
32
<PAGE>
(d) Disbursement of Swing Line Advances. Subject to submission of
an
executed
Request for Swing Line Advance by a Borrower without exceptions
noted in
the compliance certification therein and to the other terms and
conditions
hereof, Swing Line Lender shall make available to the
applicable
Borrower the amount so requested, in like funds and currencies,
not later
than 4:00 p.m. (Detroit time) on the date of such Advance by
credit to
an account of the applicable Borrower maintained with Agent or
to such
other account or third party as the Borrower may reasonably
direct
in
writing; and
Swing Line
Lender shall promptly notify Agent of any Swing Line Advance by
telephone or telecopier.
(e) Refunding of or Participation Interest in Swing Line
Advances.
(i) The Agent, at any time in its sole and absolute
discretion, may on behalf of the applicable Borrower (each of
which
hereby irrevocably directs the Agent to act on its behalf)
request
each of the Lenders (including the Swing Line Lender in its
capacity
as a Lender) to make an Advance of the Revolving Credit to each
of
the Borrowers, in an amount equal to such Lender's Percentage of
the
principal amount of the aggregate Swing Line Advances outstanding
to
each such party on the date such notice is given (the "Refunded
Swing Line Advances"). The applicable Advance of the Revolving
Credit used to refund such Swing Line Advance shall be a
Prime-based
Advance. In connection with the making of any such Refunded
Swing
Line Advances or the purchase of a participation interest in
Swing
Line Advances under Section 2.5(e)(ii) hereof, the Swing Line
Lender
shall retain its claim against the applicable Borrower for any
unpaid interest or fees in respect thereof. Unless any of the
events
described in Section 9.1(k) hereof shall have occurred (in
which
event the procedures of subparagraph (ii) of this Section
2.5(e)
shall apply) and regardless of whether the conditions precedent
set
forth in this Agreement to the making of an Advance of the
Revolving
Credit are then satisfied but subject to Section 2.5(e)(iii),
each
Lender shall make the proceeds of its Advance of the Revolving
Credit available to the Agent for the benefit of the Swing Line
Lender at the office of the Agent specified in Section 2.4(a)
hereof
prior to 11:00 a.m. Detroit time on the Business Day next
succeeding
the date such notice is given in immediately available funds.
The
proceeds of such Advances of the Revolving Credit shall be
immediately applied to repay the Refunded Swing Line Advances
in
accordance with the provisions of Section 10.1 hereof.
(ii) If, prior to the making of an Advance of the Revolving
Credit pursuant to subparagraph (i) of this Section 2.5(e), one
of
the
events described in Section 9.1(k) hereof shall have occurred,
each Lender will, on the date such Advance of the Revolving
Credit
was to have been made, purchase from the Swing Line Lender an
undivided participating interest in each Refunded Swing Line
Advance
in an amount equal to its Percentage of such Refunded Swing
Line
Advance. Each Lender within the time periods specified in
Section
2.5(e)(i) hereof, as applicable, shall immediately transfer to
the
Agent, in immediately available funds the amount of its
participation and upon receipt thereof the Agent will deliver
to
such Lender a Swing Line Participation Certificate in the form
of
Exhibit F evidencing such participation.
(iii) Each Lender's obligation to make Advances of the
Revolving Credit and to purchase participation interests in
accordance with clauses (i) and (ii) of this Section 2.5(e) shall
be
absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (1) any set-off,
counterclaim, recoupment, defense or other
33
<PAGE>
right which such Lender may have against Swing Line Lender, the
Borrowers or any other Person for any reason whatsoever; (2)
the
occurrence or continuance of any Default or Event of Default;
(3)
any adverse change in the condition (financial or otherwise) of
any
Borrower or any other Person; (4) any breach of this Agreement
by
any Borrower or any other Person; (5) any inability of the
Borrowers
to satisfy the conditions precedent to borrowing set forth in
this
Agreement on the date upon which such participating interest is
to
be purchased; (6) the termination of the Revolving Credit
Aggregate
Commitment; or (7) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If
any
Lender does not make available to the Agent the amount required
pursuant to clause (1) or (2) above, as the case may be, the
Agent
shall be entitled to recover such amount on demand from such
Lender,
together with interest thereon for each day from the date of
non-payment until such amount is paid in full (x) for the first
two
(2) Business Days such amount remains unpaid, at the Federal
Funds
Effective Rate and (y) thereafter, at the rate of interest then
applicable to such Swing Line Advances.
Notwithstanding the foregoing, no Lender shall be required, except
in the
case of Swing Line Advances deemed to have
been made pursuant to Sections 3.6(a)
and 3.6(c) hereof, to make any Revolving
Credit Advance to refund a Swing Line
Advance or to purchase a participation in a
Swing Line Advance if prior to the
making of the Swing Line Advance by the
Swing Line Lender, the Agent had
obtained actual knowledge that an Event of
Default had occurred and was
continuing; provided, however that the
obligation of the Lenders to make such
Revolving Credit Advances shall be
reinstated upon the date of which such Event
of Default has been waived by the requisite
Lenders, as applicable.
2.6
Prime-based Interest Payments. Interest on the unpaid balance of
all
Prime-based Advances of the Revolving
Credit and all Swing Line Advances carried
at a Prime-based Rate from time to time
outstanding shall accrue from the date
of such Advance to the Revolving Credit
Maturity Date (and until paid), at a per
annum interest rate equal to the
Prime-based Rate, and shall be payable in
immediately available funds quarterly
commencing on the first day of Holdings'
fiscal quarter next succeeding the calendar
quarter during which the initial
Advance of the Revolving Credit or Swing
Line Advance, as the case may be, is
made and on the first day of each fiscal
quarter thereafter. Interest accruing
at the Prime-based Rate shall be computed
on the basis of a 360 day year and
assessed for the actual number of days
elapsed, and in such computation effect
shall be given to any change in the
interest rate resulting from a change in the
Prime-based Rate on the date of such change
in the Prime-based Rate.
2.7
Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments.
(a) Interest on each Eurocurrency-based Advance of the
Revolving
Credit
shall accrue at the Eurocurrency-based Rate and shall be payable
in
immediately available funds on the last day of the Interest
Period
applicable
thereto (and, if any Interest Period shall exceed three months,
then on
the last Business Day of the third month of such Interest
Period,
and at
three month intervals thereafter). Interest accruing at the
Eurocurrency-based Rate shall be computed on the basis of a 360 day
year
and
assessed for the actual number of days elapsed from the first day
of
the
Interest Period applicable thereto to but not including the last
day
thereof.
(b) Interest on each Quoted Rate Advance of the Swing Line
shall
accrue at
its Quoted Rate and shall be payable in immediately available
funds on
the last day of the Interest Period applicable thereto.
Interest
accruing
at a Quoted Rate shall be computed on the basis of a 360 day
year
and
assessed for the actual number of days elapsed from the first day
of
the
Interest Period applicable thereto to, but not including, the last
day
thereof.
34
<PAGE>
2.8
Interest Payments on Conversions. Notwithstanding anything to
the
contrary in the preceding sections, all
accrued and unpaid interest on any
Advance converted pursuant to Section 2.3
hereof shall be due and payable in
full on the date such Advance is
converted.
2.9
Interest on Default. In the event and so long as any Event of
Default
shall exist, in the case of any Event of
Default under Section 9.1(a), 9.1(b) or
9.1(k), immediately upon the occurrence
thereof, and in the case of all other
Events of Default, upon notice from the
Majority Lenders, interest shall be
payable daily on all Advances from time to
time outstanding at a per annum rate
equal to the Applicable Interest Rate plus
three percent (3%).
2.10
Optional Prepayment of Revolving Credit Advances.
(a) The Borrowers may prepay all or part of the outstanding
balance
of any
Prime-based Advance(s) of the Revolving Credit at any time,
provided
that the amount of any partial prepayment shall be at least One
Million
Dollars ($1,000,000) and, after giving effect to any such
partial
prepayment, the aggregate balance of Prime-based Advance(s) of
the
Revolving
Credit remaining outstanding, if any, shall be at least Two
Million
Dollars ($2,000,000). The Borrowers may prepay all or part of
any
Eurocurrency-based Advance (subject to not less than two (2)
Business
Days'
notice to Agent) provided that the minimum amount of any such
partial
prepayment shall be One Million Dollars ($1,000,000), and,
after
giving
effect to any such partial prepayment, the unpaid portion of
such
Advance
which is refunded or converted under Section 2.3 hereof shall be
a
minimum of
Two Million Dollars ($2,000,000); provided further, however
that if
the prepayment of a Eurocurrency-based Advance is made on a day
other than the
last Business Day of the then current Interest Period
applicable
to such Eurocurrency-based Advance, then, pursuant to Section
11.1, the
applicable Borrower shall compensate the Lenders for any
losses.
(b) The Borrowers may prepay all or part of the outstanding
balance
of any
Swing Line Advance carried at the Prime-based Rate at any time,
provided
that after giving effect to any such partial prepayment, the
aggregate
balance of such Swing Line Advances remaining outstanding, if
any, shall
be at least a One Hundred Thousand Dollars ($100,000). The
Borrowers
may prepay all or part of any Swing Line Advances carried at
the
Quoted
Rate (subject to not less than two (2) Business Days' notice to
Swing Line
Lender and Agent), provided that after giving effect of any
such
partial prepayment, and the unpaid portion of such Advance which
is
refunded
or converted under Section 2.5(c) hereof shall be at least of
Two
Hundred
Thousand Dollars ($200,000); provided further, however that if
the
prepayment
of a Quoted Rate Advance is made on a day other than the last
Business
Day of the then current Interest Period applicable to such
Quoted
Rate
Advance, then, pursuant to Section 11.1, the applicable
Borrower
shall
compensate the Swing Line Lenders for any losses.
(c) Any prepayment made in accordance with this Section shall
be
subject to
Section 11.1 hereof, but otherwise without premium, penalty or
prejudice
to the right to readvance under the terms of this Agreement.
2.11
Reserved.
2.12
Prime-based Advance in Absence of Election or upon Default. (a)
Upon
the expiration of any Interest Period
applicable to any Eurocurrency-based
Advance, if the applicable Borrower has
failed to timely select a new Interest
Period to be applicable to such
Eurocurrency Advance, such Borrower shall be
deemed to have elected to convert such
Eurocurrency-based Advance into a
Prime-based Advance effective as
