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ARVINMERITOR INC | ARVINMERITOR RECEIVABLES CORPORATION | GMAC COMMERCIAL FINANCE LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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6
LOAN AND
SECURITY AGREEMENT
The Financial
Institution(s) Listed TABLE OF CONTENTS
EXHIBITS A. Assignment and Acceptance Agreement B. Borrowing Base Certificate C. Compliance Certificate D. Form of Setoff Limitation Letter E. Form of Revolving Note F. Form of Swingline Note G. Performance Undertaking H. Notice of Borrowing I. Commitment and Acceptance J. Credit and Collection Policy SCHEDULES 1 List of Setoff Limitation Agreements executed as of the Closing Date 3 List of Closing Documents 4.1(A) Name of Loan Parties; Chief Executive Office; Organizational Identification Numbers 4.1(B) Capitalization of Borrower 4.5(B) Bank Accounts 4.6 Names and Locations RIDERS A. Reporting Rider LOAN AND SECURITY AGREEMENT This AGREEMENT is dated as of September 8, 2009 and entered into among ARVINMERITOR RECEIVABLES CORPORATION, a Delaware Corporation (“ Borrower ”), ARVINMERITOR, INC., an Indiana corporation (together with its successors, “ ArvinMeritor ”), in its capacity as the initial collection agent (in such capacity, together with its successors and permitted assigns in such capacity, the “ Collection Agent ”), the financial institution(s) listed on the signature pages hereof and their respective successors and Eligible Assignees (each individually a “ Lender ” and collectively “ Lenders ”) and GMAC COMMERCIAL FINANCE LLC, a Delaware limited liability company (in its individual capacity, “ GMAC CF ”), for itself as Sole Lead Arranger, Book Runner, a Lender and as Agent. BACKGROUND A. Borrower desires that Lenders extend a credit facility to provide working capital financing to Borrower that Borrower will use to purchase Accounts from the Originators. B. To secure Borrower’s obligations under the Loan Documents, Borrower is granting to Agent, for the benefit of Agent and Lenders, a security interest in and lien upon all of Borrower’s personal property as more particularly described in this Agreement. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Borrower, Agent and Lenders agree as follows:
The capitalized terms not otherwise defined in this Agreement have the meanings set forth below: " Access Agreement " means that certain Access Agreement executed by Originators and Agent of approximate even date under which Originators, among other things, agree to provide Agent with access to their books and records. “ Account Files " means with respect to an Account, (a) the Contract giving rise to the Account and instruments, books, records and other evidences of such Account including, without limitation, electronic files, tapes, discs, and related property and rights and (b) UCC financing statements related thereto, if any. “ Accounting Changes ” means: (a) changes in accounting principles required by GAAP and implemented by Borrower; and (b) changes in accounting principles recommended by Company’s Accountants. All such adjustments resulting from expenditures made subsequent to the Closing Date (including, but not limited to, capitalization of costs and expenses or payment of pre-Closing Date liabilities) will be treated as expenses in the period the expenditures are made and deducted as part of the calculation of net income in such period. “ Accounts Sale Agreemen t” means the Third Amended and Restated Purchase and Sale Agreement dated as of the Closing Date between certain Originators, as sellers, Borrower, as buyer, and certain other Subsidiaries of ArvinMeritor, as withdrawing originators/sellers, as further amended, supplemented, restated or otherwise modified from time to time as permitted by subsection 7.17. “ Administrative Agent ” means JPMorgan Chase Bank, N.A., as administrative agent under the Parent Credit Agreement or an successor or replacement agent acting in a similar capacity in respect of the Parent Credit Agreement. “ Advance ” means an advance under the Revolving Loan or Swingline Loan. “ Adverse Claim ” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, capitalized lease or other title retention agreement). “ Affected Lender ” has the meaning assigned to that term in subsection 2.11. “ Affiliate ” means any Person (other than Agent or any Lender): (a) directly or indirectly controlling, controlled by, or under common control with, any Loan Party; (b) directly or indirectly owning or holding ten percent (10%) or more of any equity interest in Borrower; (c) ten percent (10%) or more of whose stock or other equity interest having ordinary voting power for the election of directors or the power to direct or cause the direction of management, is directly or indirectly owned or held by Borrower; or (d) which has a senior officer who is also a senior officer of Borrower; provided that independent directors are not deemed to be senior officers for purposes of this provision. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other equity interest, or by contract or otherwise. “ Agency Fees " has the meaning given in the Fee Letter. “ Agent ” means GMAC CF in its capacity as agent for the Lenders under the Loan Documents and any successor in such capacity appointed pursuant to subsection 9.1(G). “ Agent’s Account ” means the following Deposit Account of Agent:
JPMorgan Chase Bank,
N.A. Structured Finance Division Account No.: [REDACTED] Reference: ArvinMeritor Receivables Corporation “ Agreement ” means this Loan and Security Agreement as it may be amended, restated, supplemented or otherwise modified from time to time. “ Anti-Terrorism Laws ” means any laws or regulations relating to terrorism or money-laundering, including, without limitation, (i) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 and relating to Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, (ii) the U.S. Patriot Act, (iii) the International Emergency Economic Power Act, 50 U.S.C. §1701 et seq., (iv) the Bank Secrecy Act, (v) the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. and (vi) any related rules and regulations of the U.S. Treasury Department’s Office of Foreign Assets Control or any other Governmental Authority, in each case as the same may be amended, supplemented, modified, replaced or otherwise in effect from time to time. “ Applicable Margin ” for each type of Loan means the applicable percentage specified below:
“Assigning Lender ” has the meaning set forth in subsection 9.5(A). “ Assignment and Acceptance Agreement ” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A . " Assignment of Rights " means that certain Assignment of Rights executed by Borrower in favor of Agent on or about the date of this Agreement under which Borrower assigned to Agent all of its rights under the Accounts Sale Agreement. “ Audits ” has the meaning given in subsection 5.9. " Authorized Officer " means the president, chief financial officer, treasurer, assistant treasurer, or controller of any Person, and with respect to ArvinMeritor, also includes any Treasury Director and Treasury Manager. “ Base Rate ” means a variable rate of interest per annum equal to the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus fifty (50) basis points, or (c) LIBOR for an Interest Period of three months plus one hundred (100) basis points. “ Base Rate Loans ” means Loans bearing interest at rates determined by reference to the Base Rate. " Big Four Accounting Firm " means PriceWaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, or KPMG, and any of their controlled affiliates. “ Blocked Accounts ” means a deposit account with respect to which the Collecting Bank has acknowledged and agreed, in a manner satisfactory to Agent and with the written consent of Borrower, that (a) except with respect to making account adjustments related only to the Blocked Account, charging fees and expenses associated with the Blocked Accounts and Lockboxes and returned unpaid deposit items associated with the Lockboxes or Blocked Accounts, the Collecting Bank has no right to setoff against the Blocked Account, (b) the Collecting Bank does not have and will not take any Lien in the Lockboxes or Blocked Account, (c) the Collecting Bank will comply with instructions originated by Agent directing disposition of the funds in the Blocked Account or items in the Lockboxes without the further consent of Borrower or Collection Agent, and (d) all such payments received will be promptly transferred to Agent's Account. “ Borrower ” has the meaning assigned to that term in the introductory paragraph of this Agreement. “ Borrowing Base ” means, as of any date of determination, an amount equal to up to the following: (a) 80% of the following amount – (i) the aggregate amount of Eligible Accounts, minus (ii) the Dilution Reserve, the Core Return Reserve and the Designated Customer Reserve; MINUS (b) the Interest and Fee Reserve, the Parent Credit Agreement Reserve (if any), and such other reserves as Agent in its reasonable credit judgment may elect to establish. “ Borrowing Base Certificate ” means a certificate and schedule duly executed by an Authorized Officer of Borrower appropriately completed and in substantially the form of Exhibit B . “ Business Day ” means (a) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of New York or Michigan or is a day on which banking institutions located in any such state are closed, or (b) for the purposes of determining LIBOR only, a London Banking Day. “ Cash Equivalents ” means: (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within six (6) months from the date of acquisition thereof; (b) commercial paper maturing no more than six (6) months from the date issued and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s Investors Service, Inc.; and (c) certificates of deposit or bankers’ acceptances maturing within six (6) months from the date of issuance thereof issued by, or overnight reverse repurchase agreements from, any commercial bank organized under the laws of the United States of America, or any state thereof or the District of Columbia, having combined capital and surplus of not less than $250,000,000 and not subject to setoff rights in favor of such bank. “ Certificate of Exemption ” has the meaning assigned to that term in subsection 2.9(C). “ Change of Control ” means: (a) With respect to ArvinMeritor, that:
(i) any
“person” or “group” (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act) becomes
the “beneficial owner” (as defined in Rule 13d-3 under
the Securities Exchange Act), directly or indirectly, of fifty
percent (50%) or more of the voting power of the then outstanding
capital stock of ArvinMeritor entitled to vote generally in the
election of the directors of ArvinMeritor; or (b) With respect to Borrower, that ArvinMeritor ceases to beneficially own and control, directly or indirectly, 100% of the issued and outstanding shares of each class of capital stock of Borrower entitled (without regard to the occurrence of any contingency) to vote for the election of a majority of the members of the board of directors of Borrower. (c) With respect to an Originator, that such Originator ceases to be a direct or indirect Subsidiary of ArvinMeritor. “ Chargebacks ” means amounts that are re-billed or re-invoiced to an Account Debtor when the Account Debtor pays less than 100% of a the original invoice amount. “ Closing Date ” means September 9, 2009. “ Co-Documentation Agents ” means GMAC CF and Wachovia Bank, National Association. “ Collateral ” has the meaning assigned to that term in subsection 2.7(A). “ Collecting Banks ” has the meaning assigned to that term in subsection 4.18. “ Collections ” means, with respect to any Account, all cash collections and other cash proceeds in respect of such Account, including, without limitation, all yield, finance charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Account. “ Commitment ” or “ Commitments ” as applicable, means (a) as to any Lender, the commitment of such Lender to make Revolving Advances pursuant to subsection 2.1 (A), and without duplication to purchase a participation in the Swingline Loan pursuant to subsection 2.1(B) in the aggregate amount set forth on the signature page of this Agreement opposite such Lender’s signature, in any Commitment and Acceptance or in the most recent Assignment and Acceptance Agreement, if any, executed by such Lender and (b) as to all Lenders, the aggregate commitments of all Lenders to make Revolving Advances and without duplication to purchase participations in the Swingline Loan pursuant to subsection 2.1(B). “ Commitment Cap ” means initially One Hundred Five Million Dollars ($105,000,000), with such amount (a) increased pursuant to subsection 2.16 and (b) decreased as provided in subsections 2.3(B) and 2.11; provided , however , the Commitment Cap may not at any time exceed One Hundred Twenty-Five Million Dollars ($125,000,000). “ Commitment and Acceptance ” has the meaning given in subsection 2.16. “ Company’s Accountants ” means the independent certified public accountants selected by ArvinMeritor and reasonably acceptable to Agent, which selection will not be modified during the term of this Agreement without Agent’s prior written consent, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, any Big Four Accounting Firm will automatically be deemed reasonably acceptable to Agent, and ArvinMeritor will be permitted to modify its selection to any other Big Four Accounting Firm during the term of this Agreement without consent of Agent. “ Compliance Certificate ” means a certificate duly executed by an Authorized Officer of Borrower appropriately completed and in substantially the form of Exhibit C . “ Contract ” means either (i) a contract, purchase order, release, supply agreement or other agreement under which Originator supplies goods or services to an Account Debtor, or (ii) an invoice issued by the Originator to an Account Debtor, in either of the foregoing cases, pursuant to which such Account Debtor is obligated to pay for goods and/or services. “ Control” means “control” as defined in the UCC with respect to a particular item of Collateral. " Core Credits " means credits and deductions for the value of cores returned to the Originators by their customers. "Core Return Reserve " means (a) two and one-half (2.5) times the average monthly Core Credits given by Originators or taken by their customers over the prior twelve month period, or (b) such other amount Agent that reasonably determines is necessary to reflect anticipated Core Credits to be taken against the unpaid Accounts. “ Credit and Collection Policy ” means, with respect to any Account, the finance policy of Originators, Borrower and Collection Agent attached as Exhibit J the for prior to the Closing Date, as modified from time to time in accordance with the terms of this Agreement. “ Daily Interest Amount ” has the meaning assigned to that term in subsection 9.8(A)(3). “ Daily Interest Rate ” has the meaning assigned to that term in subsection 9.8(A)(3). “ Daily Loan Balance ” has the meaning assigned to that term in subsection 9.8(A)(3). “ Deemed Collection ” means any Collection deemed to have been received by an Originator pursuant to Section 3.2 of the Accounts Sale Agreement. “ Default ” means a condition, act or event that, after notice or lapse of time or both, would constitute an Event of Default if that condition, act or event were not cured or removed within any applicable grace or cure period. “ Default Rate ” has the meaning assigned to that term in subsection 2.2(A). “ Defaulted Account ” means, as of any date of determination, any Account (i) which has been or should have been charged-off or deemed uncollectible in accordance with the Credit and Collection Policy after taking a reasonable time to apply Collections received to applicable invoices and reconcile the amount of such Account, (ii) as to which, as of such date of determination, any payment, or part thereof, remains unpaid for 61 days or more past the due date for such payment, determined by reference to the original contractual payment terms of such Account, (iii) as to which, as of such date of determination, any payment, or part thereof, remains unpaid for 91 days or more past the invoice date if no due date was specified on the original invoice, (iv) which is subject to an asserted dispute or setoff but only to the extent of such asserted dispute or setoff, or (v) unless the Agent in its sole discretion has otherwise agreed, as to which the Account Debtor thereon has suffered an Event of Bankruptcy. “ Defaulted Amount ” means, with respect to any Lender at any time, any amount required to be paid hereunder or under any other Loan Document by such Lender to the Agent, to the Borrower, or to any other Lender, which amount has not been so paid in breach of this Agreement. “ Defaulting Lender ” means, at any time, any Lender that owes a Defaulted Amount. “ Designated Account ” has the meaning ascribed to such term in the Accounts Sale Agreement. “ Designated Customer Reserve ” means an aggregate amount equal to 25% of the Eligible Accounts of each of Volvo, Mack and Hino, but in each case the Eligible Accounts of such Account Debtor shall be included in the calculation of this reserve only for the period from the Closing Date until the earlier of (i) the date such Account Debtor has executed and delivered a Setoff Limitation Agreement, or (ii) the date on which all Accounts of such Account Debtor cease to be Eligible Accounts. “ Dilution Reserve ” means, as of any date of determination, a reserve for the amount by which the total dilution of Accounts exceeds five percent (5%); with dilution referring to all actual offsets to Accounts, including, without limitation, customer payment discounts and/or volume discounts, write-offs, credit memoranda, returns and allowances, and billing errors, but specially excluding deductions for (i) Core Credits, and (ii) credits issued to net the accounts payable owing by the Originators to Account Debtors to the extent such credits have been reflected in the calculation of the amount of Eligible Accounts. “ Eligible Accounts ” means, as at any date of determination, the aggregate of all Accounts that Agent, in its reasonable credit judgment, deems to be eligible for borrowing purposes. Without limiting the generality of the foregoing, the Agent may determine that the following of Borrower’s Accounts are not Eligible Accounts: (1) Accounts that are payable in a currency other than U.S. dollars;
(29) Accounts that are otherwise Eligible Accounts, which according to the original contractual payment terms of such Account have a due date that is more than 60 days from invoice date, to the extent such Accounts represent more than ten percent (10%) of Borrower’s total Accounts. It is the intent of the parties that an Account that is described in more than one of clauses (1) through (29) above or another class of Accounts that Agent, in its reasonable credit judgment, determines to be ineligible, shall not be excluded more than once in the calculation of the amount of Eligible Accounts. “ Eligible Assignee ” will mean (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000 (or $250,000,000 in the case of an assignment of a Commitment); (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “ OECD ”), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000 (or $250,000,000 in the case of an assignment of a Commitment), provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (c) any nationally recognized financial institution or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses, including but not limited to, commercial finance companies, insurance companies, mutual funds and lease financing companies, (d) a Related Fund (as such term is defined in subsection 9.5(D)), and (e) a Person that is primarily engaged in the business of lending that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; provided , however , that no Affiliate of Borrower will be an Eligible Assignee and no Person shall be an Eligible Assignee if such Person appears on the list of Specially Designated Nationals and Blocked Persons prepared by the U.S. Treasury Department’s Office of Foreign Assets Control or the purchase by such Person of an assignment or the performance by any Agent of its duties under the Loan Documents with respect to such Person violates or would violate any Anti-Terrorism Law. “ Employee Benefit Plan ” means any employee benefit plan within the meaning of Section 3(3) of ERISA which (a) is maintained for employees of any Loan Party or any ERISA Affiliate or (b) has at any time within the preceding 6 years been maintained for the employees of any Loan Party or any current or former ERISA Affiliate. “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and all rules and regulations promulgated thereunder. “ ERISA Affiliate ”, as applied to any Loan Party, means any Person who is a member of a group which is under common control with any Loan Party, who together with any Loan Party is treated as a single employer within the meaning of Section 414(b) and (c) of the IRC. “ Event of Bankruptcy ” will be deemed to have occurred with respect to a Person if either: (a) A case or other proceeding is commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts and, solely in the case of Borrower, such case or proceeding continues undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person is entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or (b) Such Person commences a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or for any substantial part of its property, or makes any general assignment for the benefit of creditors, or fails to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors votes to authorize any of the foregoing. “ Event of Default ” has the meaning assigned to that term in subsection 8.1. “ Excess Interest ” has the meaning assigned to that term in subsection 2.2(C). “ Federal Funds Effective Rate ” means, for any day, 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 on the immediately following Business Day by the Board of Governors of the Federal Reserve System as the Federal Funds Rate or Federal Reserve Statistical Release H.15(519) entitled “Selected Interest Rates” or any successor publication of the Federal Reserve System reporting the Federal Funds Effective Rate or its equivalent or, if such rate is not published for any Business Day, the average of the quotations for the day of the requested Loan received by Agent from three Federal funds brokers of recognized standing selected by Agent. " Fee Letter " means that certain letter agreement between Borrower and Agent dated on or about the Closing Date that provides for certain fees Borrower must pay to Agent in connection with this Agreement. “ Fiscal Year ” means each twelve (12) month period ending on or around the last day of September in each year. “ Foreign Lender ” has the meaning given to that term in subsection 2.9(C). “ Funding Date ” means the date of each funding of a Loan. “ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board that are applicable to the circumstances as of the date of determination. “ GMAC CF ” has the meaning given to that term in the introductory paragraph of this Agreement. “ Governmental Authority ” means any federal, state or municipal court or other governmental department, commission, board, bureau, agency or instrumentality, governmental or quasi-governmental, domestic or foreign, in each case, only to the extent such entity has competent jurisdiction. “ Hino ” means Hino Motors Ltd. and its Affiliates and Subsidiaries. “ Indebtedness ”, as applied to any Person, means without duplication: (a) all indebtedness for borrowed money; (b) obligations under leases which in accordance with GAAP constitute Capital Leases; (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (d) any obligation owed for all or any part of the deferred purchase price of property or services if the purchase price is due more than six (6) months from the date the obligation is incurred or is evidenced by a note or similar written instrument; (e) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby is assumed by that Person or is non-recourse to the credit of that Person; (f) obligations in respect of Letters of Credit or similar instruments; (g) all obligations of such Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter the risks of that Person arising from fluctuations in currency values or interest rates; (h) “earnouts” and similar payment obligations; (i) any advances under any factoring arrangement; and (j) all guarantees by such Person of Indebtedness of others. “ Indemnified Liabilities ” has the meaning assigned to that term in subsection 11.2. “ Indemnitees ” has the meaning assigned to that term in subsection 11.2. “ Independent Director ” means a member of Borrower’s Board of Directors who: (A) meets all of the requirements for an “Independent Director” under the Borrower’s Organizational Documents in effect as of the date of this Agreement; (B) has prior experience as an independent director for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy; provided , however , that an individual will not be deemed to be ineligible to be an Independent Director solely because such individual serves or has served in the capacity of an “independent director” or similar capacity for special purpose entities formed by ArvinMeritor or any of its Affiliates; and (C) has at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities. " Intercreditor Agreement " means the Intercreditor Agreement dated on or about the Closing Date between Agent and JPMorgan Chase N.A., as agent under the Parent Credit Agreement. “ Interest and Fee Reserve ” means a reserve equal to Agent’s estimate of (a) the Servicing Fee(s) owing to Collection Agent, and (b) interest and fees owing to Agent and/or the Lenders under the Loan Documents, in both cases which will be payable by Borrower during the next two calendar months. “ Interest Period ” means, in connection with each LIBOR Loan, an interest period which Borrower elects to be applicable to such Loan, which Interest Period will be either a one (1), two (2), three (3), or six (6) month period; provided that: (1) the initial Interest Period for any LIBOR Loan will commence on the Funding Date of such Loan; (2) in the case of successive Interest Periods, each successive Interest Period will commence on the day on which the immediately preceding Interest Period expires;
(6) there will be no more than four (4) Interest Periods relating to LIBOR Loans outstanding at any time. “ Interest Rate ” has the meaning assigned to that term in subsection 2.2(A). “ Interest Settlement Date ” has the meaning assigned to that term in subsection 9.8(A)(2). “ IRC ” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute and all rules and regulations promulgated thereunder. “ IRS ” means the Internal Revenue Service or any successor agency responsible for federal income taxes in the United States of America. “ Lender ” or “ Lenders ” has the meaning given to that term in the opening section of this Agreement and any New Lender that becomes a Lender pursuant to a Commitment and Acceptance delivered under subsection 2.16, together with their respective successors and assigns. “ Letter of Non-Exemption ” has the meaning assigned to that term in subsection 2.9(C). “ Liabilities ” has the meaning given that term in accordance with GAAP and will include, without limitation, Indebtedness. “ LIBOR ” means, for each Interest Period, a rate per annum equal to the greater of three percent (3.0%) per annum or: (1) the offered rate for deposits in U.S. dollars in an amount comparable to the amount of the applicable Loan in the London interbank market for the relevant Interest Period which is published by the British Bankers’ Association and currently appears on the Telerate Page 3750 as of 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, that if such a rate ceases to be available to Agent on that or any other source from the British Bankers’ Association, LIBOR will be equal to a rate per annum equal to the average rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which Agent determines that U.S. dollars in an amount comparable to the amount of the applicable Loans are being offered to prime banks at approximately 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period for settlement in immediately available funds by leading banks in the London interbank market selected by Agent; divided by (2) a number equal to one (1.0) minus the maximum reserve percentages (expressed as a decimal fraction) (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto, as now and from time to time in effect) for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board) which are required to be maintained by any Lender by the Board of Governors of the Federal Reserve System; such rate to be rounded upward to the next whole multiple of one-sixteenth of one percent (.0625%). LIBOR will be adjusted automatically on and as of the effective date of any ch ange in any such reserve percentage. “ LIBOR Loans ” means at any time that portion of the Loans bearing interest at rates determined by reference to LIBOR. “ Lien ” means any lien (statutory or otherwise), mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind, whether voluntary or involuntary (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest). “ Loan ” or “ Loans ” means an advance or advances under the Commitment. “ Loan Documents ” means this Agreement, Performance Undertaking, the Assignment of Rights, the Access Agreement, the Notes (if any) and all other documents, instruments and agreements executed by or on behalf of any Loan Party and delivered concurrently herewith or at any time hereafter to or for Agent or any Lender in connection with the Loans, and any other transaction contemplated by this Agreement, all as amended, restated, supplemented or modified from time to time. “ Loan Party ” means each of Borrower, ArvinMeritor, in its capacity as Performance Guarantor and Collections Agent and each Originator. “ Loan Year ” means each period of twelve (12) consecutive months commencing on the Closing Date and on each anniversary thereof. “ London Banking Day ” means any day on which dealings in deposits in U.S. dollars are transacted in the London Interbank market. “ Mack ” means Mack Trucks, Inc. and its Affiliates and Subsidiaries. “ Material Adverse Effect ” means a material adverse effect upon: (a) the business, operations, prospects, properties, assets or condition (financial or otherwise) of (i) ArvinMeritor and its Subsidiaries taken as a whole, or (ii) the Borrower; (b) the ability of Borrower or ArvinMeritor to perform their respective obligations under any Loan Document to which they are a party; (c) the ability of Agent or any Lender to enforce or collect any of the Obligations; or (d) the enforceability or priority of the Agent’s Liens with respect to the Collateral. " Material Indebtedness " means any Indebtedness in excess of $35,000,000 in aggregate principal amount. “ Maximum Rate ” has the meaning assigned to that term in subsection 2.2(C). “ Maximum Revolving Loan Amount ” means, as of any date of determination, the lesser of (a) the aggregate of the Commitments of all Lenders less the amount of the Swingline Loan and (b) the Borrowing Base less the amount of the Swingline Loan. “ Maximum Swingline Loan Amount ” means at any time the lesser of (a) $10,000,000 and (b) the amount that would cause the Revolving Loan to exceed the Maximum Revolving Loan Amount. “ New Lender ” means a Lender, in each case approved by Borrower and Agent, that agrees to become a Lender, or to increase its Commitment, pursuant to subsection 2.16. “ Note ” or “ Notes ” means the Revolving Notes (if any). “ Notice of Borrowing ” means a notice duly executed by an authorized representative of Borrower appropriately completed and in the form of Exhibit G. “ Obligations ” means all obligations, liabilities and indebtedness of every nature of Borrower from time to time owed to Agent or to any Lender under the Loan Documents (whether incurred before or after the Termination Date) including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from time to time hereafter owing, due or payable including, without limitation, all interest, fees, cost and expenses accrued or incurred after the filing of any petition under any bankruptcy or insolvency law (regardless of whether allowed or allowable in whole or in part as a claim therein). “ OECD ” has the meaning provided in the definition of “Eligible Assignee.” “ OFAC ” means the U.S. Treasury’s Office of Foreign Assets Control. “ Organizational Documents ” means, for any Person, the documents for its formation and organization, which, for example, (a) for a corporation are its corporate charter and bylaws, (b) for a partnership are its certificate of partnership (if applicable) and partnership agreement, (c) for a limited liability company are its certificate of formation or organization and its operating agreement, regulations or the like and (d) for a trust is the trust agreement, declaration of trust, indenture or bylaws under which it is created. “ Originator ” means Meritor Heavy Vehicle Braking Systems (U.S.A.), Inc., a Delaware corporation, or Meritor Heavy Vehicle Systems, LLC, a Delaware limited liability company. " Outstanding Balance " of any Account at any time means the then outstanding principal balance of such Account. “ Parent Credit Agreement ” means (a) the Credit Agreement dated as of June 23, 2006, among ArvinMeritor, ArvinMeritor Finance Ireland, the lenders from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, and (b) any credit agreement or loan agreement in which ArvinMeritor is a borrower and which provides credit facilities that replace or refinance the credit facilities provided under the Credit Agreement described in clause (a), in both cases as amended, restated, or otherwise modified from time to time. " Parent Credit Agreement Reserve " means, on any date on which a Parent Credit Agreement is no longer in effect, a reserve equal to twenty-five percent (25%) of Eligible Accounts; provided however, at Borrower's request this reserve may be reduced or eliminated (a) upon the approval of the Requisite Lenders if the Commitment Cap is less than One Hundred Twenty-Five Million Dollars ($125,000,000); or (b) upon the approval of at least seventy percent (70%) of Lenders (who are not Defaulting Lenders) as measured by the sum of such Lenders' outstanding Loans and unutilized Commitments as a percentage of all such outstanding Loans and unutilized Commitments of Lenders (who are not Defaulting Lenders). " Performance Guarantor " means ArvinMeritor. " Performance Undertaking " means the Performance Undertaking dated as of the Closing Date by ArvinMeritor in favor of Borrower, as further amended, restated, or otherwise modified from time to time as permitted by subsection 7.17. “ Person ” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof. “ Prime Rate ” means the rate of interest from time to time announced from time to time by JPMorgan Chase Bank, N.A., as its “prime rate”, or if such rate is not announced, the prime rate quoted by any comparable domestic banking institution selected by Agent. The Prime Rate is merely a reference rate and may not necessarily represent the lowest or best rate actually charged to any customer by the applicable bank. “ Pro Rata Share ” means (a) with respect to matters relating to a particular Commitment of a Lender, the percentage obtained by dividing (i) such Commitment of that Lender by (ii) all such Commitments of all Lenders and (b) with respect to all other matters, the percentage obtained by dividing (i) the Commitment of a Lender by (ii) the aggregate of all Commitments of all Lenders, in either (a) or (b), as such percentage may be adjusted by assignments permitted pursuant to subsection 9.5; provided, however, if any Commitment is terminated pursuant to the terms hereof, then “Pro Rata Share” means the percentage obtained by dividing (x) the aggregate amount of such Lender’s outstanding Loans related to such Commitment by (y) the aggregate amount of all outstanding Loans related to such Commitment. “ Projections ” means (a) ArvinMeritor and its Subsidiaries’ forecasted profit and loss statement(s), (b) ArvinMeritor and its Subsidiaries’ forecasted cash flow statements, and (c) Borrower’s projected Revolving Loan balances, all prepared consistent with ArvinMeritor’s and its Subsidiaries’ historical financial statements and based upon good faith estimates and assumptions by Borrower and ArvinMeritor (as the case may be) believed to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions. “ Register ” has the meaning assigned to that term in subsection 9.5(E). “ Related Fund ” has the meaning assigned to that term in subsection 9.5 (D). “ Related Security ” means, with respect to any Account, (a) all right, title and interest, but none of the obligations, of the applicable Originator, in, to and under other Adverse Claims and property subject to Adverse Claims from time to time purporting to secure payment of such Account, whether pursuant to the Contract related to such Account or otherwise, (b) all Uniform Commercial Code financing statements or similar instruments covering any collateral securing payment of such Account, (c) all guaranties, indemnities, insurance and other agreements (including the related Account File), Supporting Obligations, arrangements and other collateral of whatever character from time to time supporting or securing payment of such Account, whether pursuant to the Contract relating to such Account or otherwise relating to such Account, (d) all right, title and interest, if any, of the Borrower or any Originator in any Lockboxes or Blocked Accounts, and (e) all other instruments and all rights under the documents in the Account File relating to such Account and all rights (but not obligations) relating to such Account. “ Replacement Lender ” has the meaning assigned to that term in subsection 2.11(A). “ Reporting Rider ” means Rider A attached to this Agreement and made a part hereof. “ Requisite Lenders ” means at least two Lenders (other than a Defaulting Lender) if there are three or more Lenders (excluding any Defaulting Lender(s)) or if there are only two Lenders (excluding any Defaulting Lender(s)), a single Lender holding or being responsible for, in the aggregate: more than fifty percent (50%) of the sum of the (a) outstanding Loans and (b) unutilized Commitments of all Lenders which are not Defaulting Lenders. “ Revolving Advance ” means each advance made by Lender(s) under the Commitment pursuant to subsection 2.1 (A). “ Revolving Loan ” means the outstanding balance of all Revolving Advances and any amounts added to the principal balance of the Revolving Loan pursuant to this Agreement. “ Revolving Note ” means each promissory note of Borrower in substantially the form of Exhibit E , issued to evidence the Commitments (if any). “ Sanctioned Country ” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise published from time to time. “ Sanctioned Person ” means (i) a Person named on the list of “Specially Designated Nationals” or “Blocked Persons” maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC. “ Settlement Date ” has the meaning assigned to that term in subsection 9.8(A)(2). “ Servicing Fee ” means the monthly servicing fee payable to ArvinMeritor for acting as Collection Agent in an amount not to exceed 1.8% per annum times the monthly average aggregate amount of outstanding Accounts. “ Setoff Limitation Agreement ” means (a) an agreement executed by an Account Debtor in form and substance acceptable to Agent under which the Account Debtor limits its setoff and recoupment rights to ordinary course of business items acceptable to Agent (including those agreements referenced on Schedule 1), or (b) an agreement substantially similar to Exhibit D . “ SPV ” has the meaning assigned to that term in subsection 9.5(A). " Subordinated Notes " has the meaning ascribed to such term in the Accounts Sale Agreement. “ Subsidiary ” means, with respect to any Person, any corporation, association or other business entity of which more than fifty percent (50%) of the total voting power of shares of stock (or equivalent ownership or controlling interest) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other subsidiaries of that Person or a combination thereof. “ Swingline Advance ” means each Revolving Advance converted by Agent into an advance under the Swingline Loan pursuant to subsection 2.1(B). “ Swingline Lender ” means GMAC CF, or if GMAC CF resigns as Swingline Lender, another Lender selected by Agent and reasonably acceptable to Borrower. “ Swingline Loan ” means the outstanding balance of all Swingline Advances and any amounts added to the principal balance of the Swingline Loan pursuant to this Agreement. “ Swingline Note ” means the promissory note of Borrower in substantially the form of Exhibit F , issued to evidence the Swingline Loan (if any). “ Swingline Suspension Notice ” has the meaning given in subsection 2.1(B). “ Tax Distributions ” means dividends and/or distributions paid by Borrower to ArvinMeritor in an amount equal to the product of (a) taxable income related to ArvinMeritor’s ownership interest in Borrower multiplied by (b) the sum of the highest effective corporate federal and state income tax rates in a state in which ArvinMeritor is obligated to pay taxes. “ Tax Liabilities ” has the meaning assigned to that term in subsection 2.9(A). “ Termination Date ” has the meaning assigned to that term in subsection 2.5. “ Third Party Proceeds ” has the meaning given in subsection 10.2(C)(6). “ U.S. Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as the same may be amended, supplemented, modified, replaced or otherwise in effect from time to time. “ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, to the extent the law of any other state or other jurisdiction applies to the attachment, perfection, priority or enforcement of any Lien granted to Agent in any of the Collateral, “UCC” means the Uniform Commercial Code as in effect in such other state or jurisdiction for purposes of the provisions hereof relating to such attachment, perfection, priority or enforcement of a Lien in such Collateral. To the extent this Agreement defines the term “Collateral” by reference to terms used in the UCC, each of such terms will have the broadest meaning given to such terms under the UCC as in effect in any state or other jurisdiction. “ Undrawn Availability ” means an amount equal to the Maximum Revolving Loan Amount less the Revolving Loan. " Unpaid Balance " means, with respect to any Account, the sum (without duplication) of (a) the Outstanding Balance thereof, and (b) the aggregate amount required to repay in full all interest, finance, prepayment and other fees and charges of any kind payable by the Account Debtor in respect of, such Outstanding Balance. “ Volvo ” means Volvo Trucks North America, Inc. and its Affiliates and Subsidiaries. The following terms used in this Agreement will have the respective meanings provided for in the UCC: “Accounts”, “Account Debtor”, “Chattel Paper”, “Deposit Account”, “Documents”, “Equipment", “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter of Credit”, “Letter-of-Credit Rights”, “Payment Intangibles”, “Proceeds”, “Record”, “Software”, and “Supporting Obligations”. For purposes of this Agreement, all accounting terms not otherwise defined herein will have the meanings assigned to such terms in conformity with GAAP. Quarterly and annual financial statements furnished to Agent or any Lender pursuant to subsection 5.1 will be prepared in accordance with GAAP (as in effect at the time of such preparation) on a consistent basis. In the event any Accounting Changes occur and such changes affect standards or terms in this Agreement, then Borrower and Lenders agree to enter into good faith negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the financial condition of Borrower will be the same after such Accounting Changes as if such Accounting Changes had not been made, and until such time as such an amendment has been executed and delivered by Borrower and Requisite Lenders, (A) all standards and terms in this Agreement will be calculated and/or construed as if such Accounting Changes had not been made, and (B) Borrower will prepare footnotes to each Compliance Certificate and the financial statements required to be delivered hereunder that show the impact of the Accounting Changes on the financial statements delivered. 1.4 Other Definitional Provisions. R eferences to “Sections”, “subsections”, “Riders”, “Exhibits”, “Schedules” and “Addenda” will be to Sections, subsections, Riders, Exhibits, Schedules and Addenda, respectively, of this Agreement unless otherwise specifically provided. Any of the terms defined in subsection 1.1 or otherwise in this Agreement may, unless the context otherwise requires, be used in the singular or the plural depending on the reference. In this Agreement, words importing any gender include the other genders; the words “including,” “includes” and “include” will be deemed to be followed by the words “without limitation”; the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”; references to agreements and other contractual instruments will be deemed to include subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement or any other Loan Document; the word "will" means mandatory and not permissive and has the same meaning as “shall”; references to Persons include their respective permitted successors and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations will include any amendments of same and any successor statutes and regulations.
(A) Revolving Loan . Each Lender, severally, agrees to lend to Borrower from time to time its Pro Rata Share of each advance under the Commitments. The aggregate amount of the Commitments will not exceed at any time the Commitment Cap at such time Amounts borrowed under this subsection 2.1(A) may be repaid and reborrowed at any time prior to the earlier of (1) the termination of the Commitments pursuant to subsection 8.3 or (2) the Termination Date. Except as otherwise provided herein, no Lender will have any obligation to make a Revolving Advance to the extent such Revolving Advance would cause the Revolving Loan (after giving effect to any immediate application of the proceeds thereof) to exceed the Maximum Revolving Loan Amount.
Each of the Lenders hereby unconditionally and irrevocably agrees to fund to Agent for the benefit of Swingline Lender, in lawful money of the United States and in same day funds, not later than 1:00 p.m. New York time on the Business Day immediately following the Business Day of such Lender’s receipt of such notice from Agent (provided that if any Lender will receive such notice at or prior to 11:00 a.m. New York time on a Business Day, such funding will be made by such Lender on such Business Day), such Lender’s Pro Rata Share of a Revolving Advance (which Revolving Advance will be a Base Rate Loan and will be deemed to be requested by Borrower) in the principal amount of such portion of the Swingline Loan which is required to be paid to Swingline Lender under this subsection 2.1(B) (regardless of whether the conditions precedent thereto set forth in Section 3 are then satisfied and whether or not any Default or Event of Default exists or all or any of the Loans have been accelerated, but subject to the other provisions of this subsection 2.1(B)). The proceeds of any such Revolving Advance will be immediately paid over to Agent for the benefit of Swingline Lender for application to the Swingline Loan. Notwithstanding anything to the contrary in this Agreement, if any Lender provides written notice to Swingline Lender of a Default or Event of Default together with a written directive that further Swingline Loans should not be made (a “ Swingline Suspension Notice ”), Swingline Lender will not make further Swingline Loans to Borrower until such Default or Event of Default is cured or waived in accordance with the terms hereof; provided that (i) the obligations of the Lenders under this Agreement in respect of Swingline Loans will continue in effect as to Swingline Loans made prior to Swingline Lender’s receipt of a Swingline Suspension Notice; and (ii) after a Swingline Suspension Notice is received by Swingline Lender, the Lenders may continue to make Revolving Loans, subject to Section 8.2 and the other provisions of this Agreement governing Revolving Loans. In the event that an Event of Default occurs and either (1) such Event of Default is of the type described in subsection 8.1 (G) or (H) hereof or (2) no further Revolving Advances are being made under this Agreement, so long as any such Event of Default is continuing, then, each of the Lenders (other than Swingline Lender) will be deemed to have irrevocably, unconditionally and immediately purchased a participation in the Swingline Loan from Swingline Lender in an amount equal to such Lender’s Pro Rata Share of the Commitment multiplied by the total amount of the Swingline Loan outstanding. Each Lender will effect such purchase by making available the amount of such Lender’s participation in the Swingline Loan in U.S. Dollars in immediately available funds to Agent’s Account for the benefit of Swingline Lender. In the event any Lender fails to make available to Swingline Lender when due the amount of such Lender’s participation in the Swingline Loan, Swingline Lender will be entitled to recover such amount on demand from such Lender together with interest at the Federal Funds Effective Rate. Each such purchase by a Lender will be made without recourse to Swingline Lender, without representation or warranty of any kind, and will be effected and evidenced pursuant to documents reasonably acceptable to Swingline Lender. The obligations of the Lenders under this subsection 2.1(B) will be absolute, irrevocable and unconditional, will be made under all circumstances and will not be affected, reduced or impaired for any reason whatsoever.
(1) LIBOR Loans made on any Funding Date will be in an aggregate minimum amount of $5 million and integral multiples of $100,000 in excess of such amount.
(D) N otes . If so requested by any Lender by written notice to Borrower (with a copy to Agent) at least two (2) Business Days prior to the Closing Date, or at any time thereafter, Borrower will execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to subsection 9.5) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after Borrower’s receipt of such notice) a Note or Notes to evidence such Lender ’s Swingline Loan or Revolving Loan, as the case may be. (E) A vailability of a Lender’s Pro Rata Share .
(1) Lender’s Amounts Available on a Funding Date . Unless Agent receives written notice from a Lender on or prior to any Funding Date that such Lender will not make available to Agent as and when required such Lender ’s Pro Rata Share of any requested Loan or Advance, Agent may assume that each Lender will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but will not be so required), in reliance upon such assumption, make available to Borrower on such date a corresponding amount. Agent will notify Borrower promptly if Agent receives notice from a Lender that such Lender will not make available to Agent as and when required such Lender’s Pro Rata Share of any requested Loan or Advance.
2.2 Interest.
(A) Rate of Interest . The Loans and all other Obligations will bear interest from the date such Loans are made or such other Obligations become due to the date paid at a rate per annum equal to (1) in the case of Base Rate Loans and Obligations for which no interest rate basis is specified, the Base Rate plus the Applicable Margin and (2) in the case of LIBOR Loans, LIBOR plus the Applicable Margin (each, an “ Interest Rate ”). Borrower may change the applicable Interest rate on the Loans from time to time pursuant to subsection 2.2(D). If on any day a Loan or a portion of any Loan is outstanding with respect to which notice has not been delivered to Agent in accordance with the terms of this Agreement specifying the basis for determining the rate of interest or if LIBOR has been specified and no LIBOR quote is available, then for that day that Loan or portion thereof will bear interest determined by reference to the Base Rate. After the occurrence and during the continuance of an Event of Default (1) the Loans and all other Obligations will, at the election of Agent or Requisite Lenders, bear interest at a rate per annum equal to two percent (2%) plus the applicable Interest Rate (the “ Default Rate ”), (2) each LIBOR Loan will automatically convert to a Base Rate Loan at the end of any applicable Interest Period and (3) no Loans may be converted to, or made as, LIBOR Loans.
In lieu of delivering a Notice of Borrowing with respect to any such conversion/continuation, Borrower may give Agent telephonic notice by the required time of any proposed conversion/continuation under this subsection 2.2(E) (in such telephonic notice Borrower will certify to the items set forth above with respect to the Notice of Borrowing); provided that such telephonic notice will be promptly confirmed in writing by delivery of a Notice of Borrowing (in form and substance described herein) with respect to such conversion/continuation to Agent on or before the proposed conversion/continuation date. Once given, Borrower will be bound by such telephonic notice. Upon the expiration of an Interest Period for a LIBOR Loan, in the absence of a new Notice of Borrowing or a telephonic notice submitted to Agent not less than three (3) Business Days prior to the end of such Interest Period, the LIBOR Loan then maturing will be automatically converted to a Base Rate Loan. Neither Agent nor any Lender will incur any liability to Borrower or any Loan Party in acting upon any telephonic notice or a Notice of Borrowing referred to above that Agent believes in good faith to have been given by an officer or other person authorized to act on behalf of Borrower or for otherwise acting in good faith under this subsection 2.2(E).
(A) Unused Line Fee . Borrower will pay to Agent, for the benefit of Lenders which are not Defaulting Lenders, a fee in an amount equal to (1) the Commitments of all Lenders who are not Defaulting Lenders less the sum of the average daily balance of each of the Revolving Loan and the Swingline Loan (the “ Unused Commitments ”), multiplied by (2) one percent (1.0%) per annum. Such fee will be calculated on the basis of a three hundred sixty (360) day year for the actual number of days elapsed and will be payable monthly in arrears on the first day of each month following the Closing Date. Notwithstanding anything to the contrary in this Agreement, Agent will allocate and pay unused line fees to the Lenders ratably based on each Lender’s respective Unused Commitment, with the outstanding Swingline Loans included in the calculation of Swingline Lender’s Unused Commitment.
(1) one percent (1.0%) if such prepayment occurs during the first Loan Year; provided , however , no prepayment fees will be payable in respect of the Commitment of any Lender who is a Defaulting Lender at the time of the prepayment; and
(C) Audit Fees . Borrower agrees to pay all fees and expenses of the third parties engaged by Agent to perform A udits pursuant to subsection 5.11. If, in lieu of using third parties, Agent uses its internal auditors to perform any such audit, Borrower agrees to pay to Agent, for its own account, an audit fee with respect to each such Audit equal to $1,000 per internal auditor per day or any portion thereof together with all out of pocket expenses. Notwithstanding the foregoing, unless a Default or Event of Default has occurred and is continuing, Borrower will not be obligated to pay for more than three Audits each calendar year.
2.4 Payments and Prepayments. (A) Manner and Time of Payment . In its sole discretion, Agent may elect to honor the requests by Borrower for Revolving Advances deemed to have been made by Borrower under subsection 2.1(C)(2), for payment of all principal, interest, fees, and expenses due hereunder or under any of the other Loan Documents on their applicable due dates, and the proceeds of each such Revolving Advance, if made, will be applied as a direct payment of the relevant Obligation. To the extent such amounts exceed the Commitment of all Lenders, such amount will be immediately due and payable with interest thereon accruing from the applicable due date and will not be paid with proceeds of a Revolving Advance. All payments made by Borrower with respect to the Obligations will be made without deduction, defense, setoff or counterclaim. All payments of the Obligations will, unless otherwise directed by Agent, be made to Agent's Account. All payments remitted to Agent's Account will be credited to the Obligations on the same Business Day as such payments are received by Agent in immediately available funds; provided , however , payments received by Agent after 2:30 p.m. (EST) will be deemed received on the next Business Day. Borrower will notify Agent by Noon (EST) if it intends to make any voluntary payment or repayment of the Obligations to the Agent’s Account. Agent agrees to credit payments and Collections first to Swingline Advances; second, to Base Rate Loans; and third, to LIBOR Loans in a manner reasonably calculated to minimize Borrower's liability under subsection 2.12, except that a payment of principal, interest, fees, and expenses due hereunder made by Borrower other than with the proceeds of a Revolving Advance will be applied by Agent to the intended Obligations.
2.5 Term of this Agreement. This Agreement will be effective until the earlier of (a) two calendar years from the Closing Date, and (b) the acceleration of all Obligations pursuant to subsection 8.3 (the “ Termination Date ”). The Commitments will terminate (unless earlier terminated pursuant to the terms hereunder) upon the Termination Date and all Obligations will become immediately due and payable without notice or demand. Notwithstanding any termination, until all Obligations (other than contingent indemnification obligations) have been fully paid and satisfied, Agent, on behalf of itself and Lenders, will be entitled to retain security interests in and liens upon all Collateral, and even after payment of all Obligations hereunder and release of the Collateral, Borrower’s obligation to indemnify Agent and each Lender in accordance with the terms hereof will continue. Agent will render a monthly statement of account to Borrower within twenty (20) days after the end of each month. Such statement of account will constitute an account stated unless Borrower makes written objection thereto within ninety (90) days from the date such statement is mailed to Borrower. Agent will record in its books and records, including computer records, (a) all Loans, interest charges and payments thereof, (b) the charging and payment of all fees, costs and expenses and (c) all other debits and credits pursuant to this Agreement. The balance in the loan accounts will constitute presumptive evidence, absent manifest error, of the accuracy of the information contained therein; provided, however, that any failure by Agent to so record will not limit or affect the Borrower’s obligation to pay. 2.7 Grant of Security Interest.
2.8 Yield Protection. (A) Capital Adequacy and Other Adjustments . In the event any Lender (other than a Defaulting Lender) determines that the adoption after the date hereof of any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) from any central bank or governmental agency or body having jurisdiction does or will have the effect of increasing the amount of capital, reserves or other funds required to be maintained by such Lender or any corporation controlling such Lender and thereby reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its Commitment hereunder, then Borrower will within fifteen (15) days after notice and demand from such Lender (together with the certificate referred to in the next sentence and with a copy to Agent) pay to Agent, for the account of such Lender, additional amounts sufficient to compensate such Lender for such reduction that is attributable to its Commitment. A certificate as to the amount of such cost and showing the basis of the computation of such cost submitted by such Lender to Borrower will, absent manifest error, be final, conclusive and binding for all purposes. 2.9 Taxes. (A) No Deductions . Any and all payments or reimbursements made hereunder will be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto (all such taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto are referred to as “ Tax Liabilities ”; excluding, however, taxes imposed on the net income of any Lender or Agent by the jurisdiction under the laws of which Agent or such Lender is organized or doing business or any political subdivision thereof and taxes imposed on its net income by the jurisdiction of Agent’s or such Lender’s applicable lending office or any political subdivision). If Borrower is required by law to deduct any such Tax Liabilities from or in respect of any sum payable hereunder to Agent or any Lender, then the sum payable hereunder will be increased as may be necessary so that, after making all required deductions, Agent or such Lender receives an amount equal to the sum it would have received had no such deductions been made.
(1) does or will subject Agent or any Lender to any tax of any kind whatsoever with respect to this Agreement, the other Loan Documents or any Loans made hereunder, or change the basis of taxation of payments to Agent or such Lender of principal, fees, interest or any other amount payable hereunder (except for net income taxes, or franchise taxes imposed in lieu of net income taxes, imposed generally by federal, state or local taxing authorities with respect to interest or commitment or other fees payable hereunder or changes in the rate of tax on the overall net income of Agent or such Lender); or
and all such changes, taken as a whole, increase the costs to the Agent or any Lender, then, in any such case, Borrower will promptly pay to Agent or such Lender, upon its notice and demand, any additional amounts necessary to compensate Agent or such Lender, on an after-tax basis, for such additional cost or reduced amount receivable, as determined by Agent or such Lender with respect to this Agreement or the other Loan Documents. If Agent or any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it will promptly notify Borrower of the event by reason of which Agent or such Lender has become so entitled (with any such Lender concurrently notifying Agent). A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender to Borrower will, absent manifest error, be final, conclusive and binding for all purposes. Each Lender organized under the laws of a jurisdiction outside the United States (a “ Foreign Lender ”) as to which payments to be made under this Agreement are exempt from United States withholding tax or are subject to United States withholding tax at a reduced rate under an applicable statute or tax treaty will provide to Borrower and Agent a properly completed and executed Internal Revenue Service Form W-8BEN or Form W-8ECI or other applicable form, certificate or document prescribed by the Internal Revenue Service of the United States of America certifying as to such Foreign Lender’s entitlement to such exemption or reduced rate of withholding with respect to payments to be made to such Foreign Lender under this Agreement, (a “ Certificate of Exemption ”). Each other Foreign Lender must provide to Borrower and Agent a letter stating that it is not entitled to any such exemption or reduced rate of withholding (a “ Letter of Non-Exemption ”). Prior to becoming a Lender under this Agreement and within fifteen (15) days after a reasonable written request of Borrower or Agent from time to time thereafter, each Foreign Lender that becomes a Lender under this Agreement will provide a Certificate of Exemption or a Letter of Non-Exemption to Borrower and Agent. If a Foreign Lender is entitled to an exemption with respect to payments to be made to such Foreign Lender under this Agreement (or to a reduced rate of withholding) and does not provide a Certificate of Exemption to Borrower and Agent within the time periods set forth in the preceding paragraph, Borrower will withhold taxes from payments to such Foreign Lender at the applicable statutory rates and Borrower will not be required to pay any additional amounts as a result of such withholding; provided, however, that all such withholding will cease upon delivery by such Foreign Lender of a Certificate of Exemption to Borrower and Agent. 2.10 Required Termination and Prepayment. If any Lender reasonably determines (which determination will be final and conclusive and binding upon all parties) that the making or continuation of its LIBOR Loans has become unlawful or impossible by compliance by such Lender in good faith with any law, governmental rule, regulation or order imposed by a Governmental Authority (whether or not having the force of law and whether or not failure to comply therewith would be unlawful), then, and in any such event, that Lender will promptly give notice (by telephone confirmed in writing) to Borrower and Agent of that determination. Subject to prior withdrawal of a Notice of Borrowing or prepayment of LIBOR Loans as contemplated by subsection 2.12, the obligation of such Lender to make or maintain its LIBOR Loans during any such period will be terminated at the earlier of the termination of the Interest Period then in effect or when required by law and Borrower will no later than the termination of the Interest Period in effect at the time any such determination pursuant to this subsection 2.10 is made or, earlier when required by law, repay or prepay LIBOR Loans together with all interest accrued thereon or convert LIBOR Loans to Base Rate Loans. 2.11 Optional Prepayment/Replacement of Lenders. At any time following receipt by Borrower of: (a) written notice and demand from any Lender for payment of additional costs as provided in subsection 2.8 or subsection 2.9, or (b) written notice of any Lender’s inability to make LIBOR Loans as provided in subsection 2.10, (any such Lender demanding such payment or having such inability being referred to herein as an “ Affected Lender ”), Borrower may, at its option notify Agent and such Affected Lender of its intention to take one of the actions set forth herein in subparagraphs (A) or (B) below. (A) Replacement of an Affected Lender or Defaulting Lender . Borrower may obtain, at Borrower’s expense, a replacement Lender (“ Replacement Lender ”) for any Defaulting Lender or an Affected Lender, which Replacement Lender (if not already a Lender) must be reasonably satisfactory to Agent. Agent will reasonably cooperate with Borrower in Borrower’s efforts to obtain a Replacement Lender(s). In the event Borrower obtains a Replacement Lender that will purchase all outstanding Obligations owed to such Affected Lender or Defaulting Lender and assume its Commitments hereunder within ninety (90) days following notice of Borrower’s intention to do so, the Affected Lender or Defaulting Lender will sell and assign its Loans and Commitments to such Replacement Lender in accordance with the provisions of subsection 9.5; provided, however, Borrower has (1) reimbursed such Affected Lender for any administrative fee payable by such Affected Lender to Agent pursuant to subsection 9.5 and, (2) in any case where such replacement occurs as the result of a demand for payment of certain costs pursuant to subsection 2.8 or subsection 2.9, paid all increased costs for which such Affected Lender is entitled to under subsection 2.8 or subsection 2.9 through the date of such sale and assignment; or
The rights granted to Borrower in this subsection 2.11 are in addition to, and not in lieu of, all other rights and remedies Borrower may have at law or in equity against any Defaulting Lender, and replacement of a Defaulting Lender will not relieve the Defaulting Lender from any liability to Borrower arising under the Loan Documents prior to the effective date of such replacement. Borrower will compensate Agent for the benefit of Lenders (Agent’s and each Lender’s, as applicable, calculation of such amounts will, absent manifest error, be conclusive and binding upon all parties hereto), for any losses, expenses and liabilities including, without limitation, any loss (including interest paid) sustained by such Lender in connection with the re-employment of funds: (a) if for any reason (other than a default by any Lender) a borrowing of any LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing or a telephonic request of borrowing by Borrower; (b) if any prepayment of any of its LIBOR Loans occurs on a date that is not the last day of an Interest Period applicable to that Loan (regardless of the source of such prepayment and whether voluntary, by acceleration or otherwise); (c) if any prepayment of any of its LIBOR Loans is not made on any date specified in a notice of prepayment given by Borrower; or (d) as a consequence of any other default by Borrower to repay its LIBOR Loans when required by the terms of this Agreement. Upon Borrower's request, Agent will provide Borrower with a written statement of the compensation due under this subsection 2.12, which will include a detailed explanation of the calculation thereof, and the amount of compensation claimed will be due and payable ten (10) Business Days after receipt thereof. If the amount due by Borrower under this subsection 2.12 is not paid when due, Agent may, in its sole discretion, (i) in accordance with subsection 2.4(A), elect to honor the automatic request by Borrower for a Revolving Advance for such amount pursuant to subsection 2.1(C)(2) or (ii) reserve an equal amount from amounts otherwise available to be borrowed under the Revolving Loan. Each Lender may make, carry or transfer LIBOR Loans at, to, or for the account of, any of its branch offices or the office of an affiliate of such Lender. 2.14 Assumptions Concerning Funding of LIBOR Loans. Calculation of all amounts payable to each Lender under subsection 2.12 will be made as though each Lender had actually funded its relevant LIBOR Loan through the purchase of a LIBOR deposit bearing interest at LIBOR in an amount equal to the amount of that LIBOR Loan and having maturity comparable to the relevant Interest Period and through the transfer of such LIBOR deposit from an offshore office to a domestic office in the United States of America; provided, however, each Lender may fund each of its LIBOR Loans in any manner it sees fit and the foregoing assumption will be utilized only for the calculation of amounts payable under subsection 2.12. Borrower hereby constitutes and appoints Agent and all Persons designated by Agent for that purpose as Borrower’s true and lawful attorney-in-fact, with power in the place and stead of Borrower and in the name of Borrower to endorse Borrower’s name to any of the items of payment or proceeds of Collateral that come into Agent’s possession or under Agent’s control, including without limitation, Proceeds consisting of drafts, Instruments, Documents and Chattel Paper. Borrower hereby ratifies and approves all acts of Agent made or taken pursuant to this subsection 2.15. Both the appointment of Agent as Borrower’s attorney and Agent’s rights and powers are coupled with an interest and are irrevocable, so long as an |
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