SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 27, 2011
COOPER TIRE & RUBBER COMPANY
(Exact Name of Registrant as Specified in Charter)
(State or Other Jurisdiction
|701 Lima Avenue, Findlay, Ohio||45840|
|(Address of Principal Executive Offices)||(Zip Code)|
Registrants telephone number, including area code: (419) 423-1321
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|¨||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|¨||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|¨||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|¨||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))|
|Item 1.01.||Entry into a Material Definitive Agreement.|
On July 27, 2011, Cooper Tire & Rubber Company, a Delaware corporation (the Company ), along with Max-Trac Tire Co., Inc., a subsidiary of the Company, an Ohio corporation (d/b/a Mickey Thompson Performance Tires & Wheels) ( Max-Trac and, together with the Company, the Borrowers ), entered into an Amended and Restated Loan and Security Agreement (the Amended Loan and Security Agreement ), dated as of July 27, 2011, with Bank of America, N.A. (as Administrative Agent, Collateral Agent and a Lender), PNC Bank, National Association (as Syndication Agent and a Lender), Banc of America Securities LLC and PNC Capital Markets LLC (as Joint Book Managers and Joint Lead Arrangers), JPMorgan Chase Bank, N.A. (as Documentation Agent and a Lender) and Fifth Third Bank (as a Lender, and collectively with the other Lenders, the Lenders ).
The Amended Loan and Security Agreement provides for a $200 million revolving credit facility maturing on July 27, 2016. The Borrowers may request an additional $50 million under the Amended Loan and Security Agreement, subject to certain conditions, including the consent of the Lenders to such increase. The Amended Loan and Security Agreement is secured by the Companys U.S. inventory, certain North American accounts receivables that have not been previously pledged and general intangibles related to the foregoing. The maximum availability under the Amended Loan and Security Agreement is governed by a borrowing base derived from the lesser of (a) the aggregate amount of the commitments of all Lenders, less certain obligations under letters of credit and a minimum availability amount; or (b) the sum of a borrowing base formula of eligible accounts receivable and inventory, less certain obligations under letters of credit and a minimum availability amount.
The Amended Loan and Security Agreement has a $150 million letter of credit subline. Borrowings under the Amended Loan and Security Agreement bear a margin over the London Interbank Offered Rate of 150 basis points to 200 basis points, depending on the availability remaining under the borrowing base. As of July 31, 2011, there were no advances outstanding and $1.9 million in standby letters of credit outstanding under the Amended Loan and Security Agreement.
The Amended Loan and Security Agreement also contains certain customary events of default. If an Event of Default (as defined in the Amended Loan and Security Agreement) has occurred and is continuing, the Administrative Agent may terminate the commitments and declare the principal and any accrued and unpaid interest outstanding under the Amended Loan and Security Agreement immediately due and payable by the Borrowers, and in the case of an insolvency related event of default, such principal and any accrued and unpaid interest shall automatically become due and payable.
The Lenders and the Joint Book Managers and Joint Lead Arrangers have in the past provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, trust, leasing, foreign exchange and other advisory services to, or engage in transactions with, the Company, its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company or its subsidiaries or affiliates for such services.
In connection with the Amended Loan and Security Agreement, on July 27, 2011, the Company, Cooper Receivables LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company, Market Street Funding LLC and PNC Bank, National Association amended the Companys accounts receivable securitization facility under a Fourth Amendment to Amended and Restated Receivables Purchase Agreement (the Amended Receivables Purchase Agreement ). As reported in the Companys Current Report on Form 8-K filed on June 8, 2011, in connection with the Amended Loan and Security Agreement, the Company increased the size of its accounts receivables securitization facility from $125 million to $175 million.
The summaries of the Amended Loan and Security Agreement and the Amended Receivables Purchase Agreement described above are qualified in their entirety by reference to the Amended Loan and Security Agreement and the Amended Receivables Purchase Agreement attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.
|Item 2.03.||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The information under Item 1.01 in this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
|Item 9.01.||Financial Statements and Exhibits.|
|10.1||Loan and Security Agreement, dated as of July 27, 2011, by and among Cooper Tire & Rubber Company, Max-Trac Tire Co., Inc., certain financial institutions named therein (as Lenders), Bank of America, N.A. (as Administrative Agent and Collateral Agent), PNC Bank, National Association (as Syndication Agent), Banc of America Securities LLC and PNC Capital Markets LLC (as Joint Book Managers and Joint Lead Arrangers) and JPMorgan Chase Bank, N.A. (as Documentation Agent).|
|10.2||Fourth Amendment to Amended and Restated Receivables Purchase Agreement, dated as of July 27, 2011, by and among Cooper Tire & Rubber Company, Cooper Receivables LLC, Market Street Funding LLC and PNC Bank, National Association.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|COOPER TIRE & RUBBER COMPANY|
/s/ Jack Jay McCracken
|Name:||Jack Jay McCracken|
Date: August 2, 2011
|10.1||Loan and Security Agreement, dated as of July 27, 2011, by and among Cooper Tire & Rubber Company, Max-Trac Tire Co., Inc., certain financial institutions named therein (as Lenders), Bank of America, N.A. (as Administrative Agent and Collateral Agent), PNC Bank, National Association (as Syndication Agent), Banc of America Securities LLC and PNC Capital Markets LLC (as Joint Book Managers and Joint Lead Arrangers) and JPMorgan Chase Bank, N.A. (as Documentation Agent).|
|10.2||Fourth Amendment to Amended and Restated Receivables Purchase Agreement, dated as of July 27, 2011, by and among Cooper Tire & Rubber Company, Cooper Receivables LLC, Market Street Funding LLC and PNC Bank, National Association.|
COOPER TIRE & RUBBER COMPANY
MAX-TRAC TIRE CO., INC.,
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated as of July 27, 2011
CERTAIN FINANCIAL INSTITUTIONS,
BANK OF AMERICA, N.A.,
as Administrative Agent and Collateral Agent
PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agent,
BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arranger and Joint Book Manager,
PNC CAPITAL MARKETS LLC,
as Joint Lead Arranger and Joint Book Manager
JPMORGAN CHASE BANK, N.A.,
as Documentation Agent
TABLE OF CONTENTS
|DEFINITIONS; RULES OF CONSTRUCTION||1|
|Uniform Commercial Code||25|
|Certain Matters of Construction||25|
|Letter of Credit Facility||27|
|INTEREST, FEES AND CHARGES||31|
|Computation of Interest, Fees, Yield Protection||33|
|Inability to Determine Rates||34|
|Increased Costs; Capital Adequacy||34|
|Manner of Borrowing and Funding Loans||36|
|Number and Amount of LIBOR Loans; Determination of Rate||39|
|Effect of Termination||39|
|General Payment Provisions||40|
|Repayment of Loans||40|
|Payment of Other Obligations||40|
|Marshaling; Payments Set Aside||40|
|Post-Default Allocation of Payments||41|
|Application of Payments||42|
|Loan Account; Account Stated||42|
|Nature and Extent of Each Borrowers Liability||43|
|Conditions Precedent to Initial Loans||46|
|Conditions Precedent to All Credit Extensions||48|
|Limited Waiver of Conditions Precedent||48|
|Grant of Security Interest||48|
|Lien on Deposit Accounts; Cash Collateral||49|
|No Assumption of Liability||50|
|Borrowing Base Certificates||50|
|Administration of Accounts||51|
|Administration of Inventory||52|
|Administration of Deposit Accounts||52|
|Power of Attorney||54|
|REPRESENTATIONS AND WARRANTIES||54|
|General Representations and Warranties||54|
|COVENANTS AND CONTINUING AGREEMENTS||60|
|EVENTS OF DEFAULT; REMEDIES ON DEFAULT||67|
|Events of Default||67|
|Remedies upon Default||70|
|Limited Conditional License for Intellectual Property||71|
|Remedies Cumulative; No Waiver||72|
|Appointment, Authority and Duties of Agent||72|
|Agreements Regarding Collateral and Field Examination Reports||74|
|Reliance By Agent||74|
|Action Upon Default||75|
|Indemnification of Agent Indemnitees||75|
|Limitation on Responsibilities of Agent||76|
|Successor Agent and Co-Agents||76|
|Due Diligence and Non-Reliance||77|
|Replacement of Certain Lenders||77|
|Remittance of Payments and Collections||77|
|Agent in its Individual Capacity||78|
|Bank Product Providers||78|
|No Third Party Beneficiaries||79|
|BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS||79|
|Successors and Assigns||79|
|Consents, Amendments and Waivers||81|
|Notices and Communications||82|
|Performance of Borrowers Obligations||83|
|Cumulative Effect; Conflict of Terms||83|
|Relationship with Lenders||83|
|No Advisory or Fiduciary Responsibility||84|
|Certifications Regarding Indentures||85|
|Consent to Forum||85|
|Waivers by Borrowers||85|
|Patriot Act Notice||86|
|AMENDMENT AND RESTATEMENT||86|
|Amendment and Restatement; No Novation||86|
|Effect on Existing Loan and Security Agreement and on the Obligations||86|
|No Implied Waivers||87|
|Reaffirmation of Liens and Loan Documents||87|
|Loans Under the Existing Loan and Security Agreement||87|
LIST OF EXHIBITS AND SCHEDULES
|Assignment and Acceptance|
|Commitments of Lenders|
|Names and Capital Structure|
|Former Names and Companies|
|Existing Affiliate Transactions|
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT , dated as of July 27, 2011, among COOPER TIRE & RUBBER COMPANY , a Delaware corporation ( Cooper ), MAX-TRAC TIRE CO., INC. , an Ohio corporation ( Max-Trac and together with Cooper, collectively, Borrowers ), the financial institutions party to this Agreement from time to time as lenders (collectively, Lenders ), BANK OF AMERICA, N.A. , a national banking association, as administrative agent (in such capacity, Administrative Agent ) for the Lenders and collateral agent (in such capacity, Collateral Agent ) for the Lenders and other Secured Parties, PNC Bank, National Association, a national banking association, as syndication agent ( Syndication Agent ), Banc of America Securities LLC and PNC Capital Markets LLC, as joint book managers (in such capacity, Joint Book Managers ) and joint lead arrangers (in such capacity, Joint Lead Arrangers ) amends and restates in its entirety the Loan and Security Agreement (as amended to the date hereof, without giving effect to the amendments and restatements set forth herein, the Existing Loan and Security Agreement ), dated as of November 9, 2007, among the Borrowers party thereto, the financial institutions party thereto as lenders and Bank of America, N.A., as agent for such lenders.
R E C I T A L S:
Borrowers have requested that Lenders provide a credit facility to Borrowers to finance their mutual and collective business enterprise. Lenders are willing to provide the credit facility on the terms and conditions set forth in this Agreement.
NOW, THEREFORE , for valuable consideration hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
1.1. Definitions . As used herein, the following terms have the meanings set forth below:
Account : as applied to a Borrower, means an account as defined in the UCC, including all rights to payment for goods sold or leased, or for services rendered.
Account Debtor : a Person who is obligated under an Account, Chattel Paper or General Intangible.
Accounts Formula Amount : 85% of the Value of Eligible Accounts.
Acquisition : with respect to any Person, any transaction or series of related transactions for the direct or indirect (whether by purchase, lease, exchange, issuance of Equity Interests or other equity or debt securities, merger, reorganization or any other method) (a) acquisition by such Person of any other Person, which acquired Person shall then become consolidated with the acquiring Person in accordance with GAAP, or (b) acquisition by such Person of all or any
substantial part of the assets of any other Person or any division or line of business of any other Person.
Affiliate : with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have correlative meanings.
Agent : Administrative Agent and Collateral Agent.
Agent Indemnitees : Agent and its officers, directors, employees, Affiliates, agents and attorneys.
Agent Professionals : attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by Agent.
Allocable Amount : as defined in Section 5.10.3 .
Anti-Terrorism Laws : any laws relating to terrorism or money laundering, including the Patriot Act.
Applicable Law : all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles, and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
Applicable Margin : with respect to any Type of Loan, the margin set forth below, as determined by Average Availability (defined below) for the last Fiscal Quarter:
|> $50,000,000 < $125,000,000||0.50||%||1.75||%|
Until the end of the first full Fiscal Quarter following the Closing Date, margins shall be determined as if Level III were applicable. Thereafter, the margins shall be subject to increase or decrease upon receipt by Agent pursuant to Section 8.1 of the first Borrowing Base Certificate for each Fiscal Quarter, which change shall be effective as of the first day of such Fiscal Quarter. If, by the fifteenth day of a Fiscal Quarter, the first Borrowing Base Certificate for such Fiscal Quarter has not been received, then the margins shall be determined as if Level I were applicable, from such day until the first day of the calendar month following actual receipt.
Appraisal Trigger Date : as defined in Section 10.1.1(b) .
Approved Fund : any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in its ordinary course of activities, and is administered or managed by a Lender, an entity that administers or manages a Lender, or an Affiliate of either.
Asset Disposition : a sale, lease, license, consignment, transfer or other disposition of Property of a Borrower, including a disposition of Property in connection with a sale-leaseback transaction or synthetic lease.
Assignment and Acceptance : an assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit B .
Availability : the Borrowing Base minus the principal balance of all Loans.
Availability Block : the greater of (X) the lesser of (i) 10.00% of the aggregate amount of Revolver Commitments on such date and (ii) 10.00% of the Borrowing Base then in effect; and (Y) $17,500,000.
Availability Reserve : the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and Charges Reserve; (c) the LC Reserve; (d) the Bank Product Reserve; (e) all accrued Royalties, whether or not then due and payable by a Borrower; (f) the aggregate amount of liabilities secured by Liens upon Collateral that are senior to Agents Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (g) the Availability Block and (h) such additional reserves, in such amounts and with respect to such matters, as are customary in similar asset-based financing facilities as Agent in its Credit Judgment may elect to impose from time to time.
Availability Test : any time when (a) no Default or Event of Default exists and (b) as of the date of the proposed transaction, both immediately before and after giving effect thereto, Availability is greater than the greater of (X) 17.50% of the aggregate amount of Revolver Commitments then in effect, and (Y) $30,000,000.
Average Availability : for any period, an amount equal to the sum of the actual amount of Availability on each day during such period, as calculated by Agent, divided by the number of days in such period, a copy of which calculation in reasonable detail shall be provided by Agent as soon as practicable to Borrower Agent upon request.
Bank of America : Bank of America, N.A., a national banking association, and its successors and assigns.
Bank of America Indemnitees : Bank of America and its officers, directors, employees, Affiliates, agents and attorneys.
Bank Product : any of the following products, services or facilities extended to any Borrower by any Lender or any of its Affiliates: (a) Cash Management Services; (b) products
under Hedging Agreements; (c) commercial credit card and merchant card services; and (d) other banking products or services as may be requested by any Borrower, other than Letters of Credit.
Bank Product Debt : Debt and other obligations of a Borrower relating to Bank Products.
Bank Product Reserve : the aggregate amount of reserves established by Agent from time to time in its discretion in respect of Secured Bank Product Obligations.
Bankruptcy Code : Title 11 of the United States Code.
Base Rate : for any day, a per annum rate equal to the greatest of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; and (c) LIBOR for a 30 day interest period as determined on such day, plus 1.50%.
Base Rate Loan : any Loan that bears interest based on the Base Rate.
Board of Governors : the Board of Governors of the Federal Reserve System.
Borrowed Money : with respect to any Borrower, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Borrower, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business), or (iv) was issued or assumed as full or partial payment for Property; (b) Capital Leases; (c) reimbursement obligations with respect to letters of credit, surety bonds or similar agreements or arrangements; (d) arises from cash pooling or similar arrangements and (e) guaranties of any Debt of the foregoing types owing by another Person.
Borrower Agent : as defined in Section 4.4 .
Borrowing : a group of Loans of one Type that are made on the same day or are converted into Loans of one Type on the same day.
Borrowing Base : on any date of determination, an amount equal to the lesser of (a) the aggregate amount of Revolver Commitments, minus the LC Reserve, minus the Availability Block; or (b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount, minus the Availability Reserve.
Borrowing Base Certificate : a certificate, in the form of Exhibit D , by which Borrowers certify calculation of the Borrowing Base.
Business Day : any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, Ohio, Wisconsin, North Carolina or New York, and if such day relates to a LIBOR Loan, any such day on which dealings in Dollar deposits are conducted between banks in the London interbank Eurodollar market.
Capital Expenditures : all liabilities incurred, expenditures made or payments due (whether or not made) by a Borrower or Subsidiary for the acquisition of any fixed assets, or any
improvements, replacements, substitutions or additions thereto with a useful life of more than one year, including the principal portion of Capital Leases.
Capital Lease : any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.
Cash Collateral : cash, and any interest or other income earned thereon, that is delivered to Agent to Cash Collateralize any Obligations.
Cash Collateral Account : a demand deposit, money market or other account established by Agent at such financial institution as Agent may select in its discretion, which account shall be subject to Agents Liens for the benefit of Secured Parties.
Cash Collateralize : the delivery of cash to Agent, as security for the payment of Obligations, in an amount equal to (a) with respect to LC Obligations, 105% of the aggregate LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Secured Bank Product Obligations), Agents good faith estimate of the amount due or to become due, including all fees and other amounts relating to such Obligations. Cash Collateralization has a correlative meaning.
Cash Equivalents : (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the United States government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by Bank of America or a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moodys at the time of acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the types described in clauses (a) and (b) entered into with any bank described in clause (b); (d) commercial paper issued by Bank of America or rated A-1 (or better) by S&P or P-1 (or better) by Moodys, and maturing within nine months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moodys or S&P.
Cash Management Services : any services provided from time to time by any Lender or any of its Affiliates to any Borrower in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.
CERCLA : the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq .).
Change in Law : the occurrence, after the date hereof, of (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority; or (c) the making or issuance of any request, guideline or directive (whether or not having the force of
law) by any Governmental Authority provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted or issued.
Change of Control : (a) any person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than employee or retiree benefit plans or trusts sponsored or established by Cooper or any Borrower is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35% or more of the Equity Interests of Cooper; (b) a change in the majority of directors of Cooper, unless approved by the then majority of directors; or (c) all or substantially all of a Borrowers assets are sold or transferred, other than sale or transfer to another Borrower.
Claims : all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations, resignation or replacement of Agent, or replacement of any Lender) incurred by any Indemnitee or asserted against any Indemnitee by any Borrower or other Person in any way relating to (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or transactions relating thereto, (b) any action taken or omitted to be taken by any Indemnitee in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Borrower to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.
Closing Date : as defined in Section 6.1 .
Code : the Internal Revenue Code of 1986.
Collateral : all Property described in Section 7.1 , all Property described in any Security Documents as security for any Obligations, and all other Property that now or hereafter secures (or is intended to secure) any Obligations, excluding Accounts, General Intangibles, Chattel Paper, Payment Intangibles and Supporting Obligations relating to any of the foregoing, in each case solely to the extent sold, purportedly sold (but recharacterized as financed), transferred, assigned, contributed or otherwise conveyed to the Receivables Securitization Facility.
Commitment Termination Date : the earliest to occur of (a) the Revolver Termination Date; (b) the date on which Borrowers terminate the Revolver Commitments pursuant to Section 2.1.4 ; or (c) the date on which the Revolver Commitments are terminated pursuant to Section 11.2 .
Compliance Certificate : a certificate, in the form of Exhibit E and covering such other matters as the Agent may request.
Contingent Obligation : any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation ( primary obligations ) of another obligor ( primary obligor ) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.
Credit Judgment : Agents judgment exercised in good faith, based upon its consideration of any factor that it believes (a) could adversely affect the quantity, quality, mix or value of Collateral (including any Applicable Law that may inhibit collection of an Account), the enforceability or priority of Agents Liens, or the amount that Agent and Lenders could receive in liquidation of any Collateral; (b) suggests that any collateral report or financial information delivered by any Borrower is incomplete, inaccurate or misleading in any material respect; (c) materially increases the likelihood of any Insolvency Proceeding involving a Borrower; or (d) creates or could result in a Default or Event of Default. In exercising such judgment, Agent may consider any factors that could increase the credit risk of lending to Borrowers on the security of the Collateral.
CWA : the Clean Water Act (33 U.S.C. §§ 1251 et seq .).
Debt : as applied to any Person, without duplication, (a) all items that would be included as liabilities on a balance sheet in accordance with GAAP, including Capital Leases, but excluding trade payables incurred and being paid in the Ordinary Course of Business; (b) all Contingent Obligations; (c) all reimbursement obligations in connection with letters of credit issued for the account of such Person; (d) obligations of such Person (whether contingent or otherwise) in respect of surety bonds or similar agreements or arrangements; (e) obligations in respect of cash pooling or similar arrangements and (f) in the case of a Borrower, the Obligations. The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a general partner or joint venturer.
Default : an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.
Default Rate : for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicable thereto.
Defaulting Lender : any Lender that, as determined by Agent, (a) has failed to perform any funding obligations hereunder, and such failure is not cured within three Business Days; (b) has notified Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or has made a public statement to the effect that it does not intend to comply with its funding obligations hereunder or under any other credit facility in which such Lender commits to extend credit and Agent has determined that such Lender is a Defaulting Lender hereunder based on such Lenders public statement with respect to such other credit facility; (c) has failed, within three Business Days following request by Agent, to confirm in a manner satisfactory to Agent that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct or indirect parent company that has, become the subject of an Insolvency Proceeding or taken any action in furtherance thereof; provided, however, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authoritys ownership of an equity interest in such Lender or parent company.
Deposit Account Control Agreements : the Deposit Account control agreements to be executed by each institution maintaining a Deposit Account listed on Schedule 8.2.4, except RPA Blocked Accounts, for a Borrower, in favor of Agent, for the benefit of Secured Parties, as security for the Obligations.
Distribution : any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment-in-kind); any distribution, advance or repayment of Debt to a holder of Equity Interests; or any purchase, redemption, or other acquisition or retirement for value of any Equity Interest.
Dollars : lawful money of the United States.
Dominion Account : a special account established by Borrowers at Bank of America or another bank acceptable to Agent, over which Agent has exclusive control for withdrawal purposes.
EBITDA : determined on a consolidated basis for Borrowers and Subsidiaries, net income, calculated before interest expense, provision for income taxes, depreciation and amortization expense, gains or losses arising from the sale of capital assets, gains arising from the write-up of assets, and any extraordinary gains (in each case, to the extent included in determining net income).
Eligible Account : an Account owing to Max-Trac that arises in the Ordinary Course of Business from the sale of goods or rendition of services, is payable in Dollars and is deemed by Agent, in its discretion, to be an Eligible Account. Without limiting the foregoing, no Account shall be an Eligible Account if (a) it is unpaid for more than 60 days after the original due date, or more than 120 days after the original invoice date; (b) 50% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor or any group of affiliated Account Debtors, it exceeds 15% of the aggregate Eligible Accounts (or such higher percentage as Agent may establish for any Account Debtor or group of affiliated Account Debtors from time to time); (d) it does not conform to the representations and warranties set forth in Section 9.1.7 hereof; (e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim,
dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof) of which Max-Trac has knowledge; (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, or is not Solvent; (g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada; (h) it is owing by a Government Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the Assignment of Claims Act; (i) it is not subject to a duly perfected, first priority Lien in favor of Agent, or is subject to any other Lien; (j) the goods giving rise to it have not been delivered to and accepted by the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment has been extended, the Account Debtor has made a partial payment, or it arises from a sale on a cash-on-delivery basis; (m) it arises from a sale to an Affiliate, or from a sale on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis; (n) it represents a progress billing or retainage; (o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof; or (p) it arises from a retail sale to a Person who is purchasing for personal, family or household purposes. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 90 days old will be excluded.
Eligible Assignee : a Person that is (a) a Lender, U.S.-based Affiliate of a Lender or Approved Fund; (b) any other financial institution approved by Agent and Borrower Agent (which approval by (i) Agent shall not be unreasonably withheld or delayed and (ii) by Borrower Agent shall not be unreasonably withheld or delayed and shall be deemed given if no objection is made within two Business Days after notice of the proposed assignment; provided , that no consent of the Borrower Agent shall be required if an Event of Default has occurred and is continuing), that is organized under the laws of the United States or any state or district thereof, has total assets in excess of $5 billion, extends asset-based lending facilities in its ordinary course of business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the Code or any other Applicable Law; and (c) during any Event of Default, any Person acceptable to Agent in its discretion (approval of any such Person by Agent not to be unreasonably withheld or delayed).
Eligible Finished Goods Inventory : Eligible Inventory that is domestic finished goods.
Eligible Inventory : Inventory owned by a Borrower that Agent, in its discretion, deems to be Eligible Inventory. Without limiting the foregoing, no Inventory shall be Eligible Inventory unless it (a) is finished goods, raw materials or work-in-process, and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies and is not subject to an Account (regardless of whether such Account has been or is to be sold pursuant to the Receivables Securitization Facility); (b) is not held on consignment, nor subject to any deposit or downpayment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, and does not constitute hazardous materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to
Agents duly perfected, first priority Lien, and no other Lien; (h) is within the continental United States, is not in transit except between locations of Borrowers, is not consigned to any Person and is not sold on approval; (i) is not subject to any warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts such Borrowers or Agents right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver; (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established; (l) is not subject to a third partys trademark or other proprietary right, unless Agent is satisfied that it could sell the inventory on satisfactory terms in a default; and (m) is reflected in the details of a current perpetual inventory report.
Eligible Raw Materials Inventory : Eligible Inventory that is domestic raw materials Inventory.
Eligible Work-in-Process Inventory : Eligible Inventory that is domestic work-in-process Inventory.
Enforcement Action : any action to enforce any Obligations (other than Secured Bank Product Obligations) or Loan Documents or to realize upon any Collateral (whether by judicial action, self-help, notification of Account Debtors, exercise of setoff or recoupment, exercise of any right to vote or act in a Borrowers Insolvency Proceeding, or otherwise).
Environmental Laws : all Applicable Laws (including all programs, permits and guidance promulgated by regulatory agencies), relating to public health (but excluding occupational safety and health, to the extent regulated by OSHA) or the protection or pollution of the environment, including CERCLA, RCRA and CWA.
Environmental Notice : a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.
Environmental Release : a release as defined in CERCLA or under any other Environmental Law.
Equity Interest : the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company; or (d) other Person having any other form of equity security or ownership interest.
ERISA : the Employee Retirement Income Security Act of 1974.
ERISA Affiliate : any trade or business (whether or not incorporated) under common control with a Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
ERISA Event : (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Borrower or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Borrower or ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) the failure by any Borrower or ERISA Affiliate to meet any funding obligations with respect to any Pension Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (g) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower or ERISA Affiliate.
Event of Default : as defined in Section 11 .
Exchange Act : the Securities Exchange Act of 1934.
Excluded Tax : with respect to Agent, any Lender, Issuing Bank or any other recipient of a payment to be made by or on account of any Obligation, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located; (b) in the case of a Foreign Lender, any withholding tax attributable to such Foreign Lenders failure or inability (other than as a result of a Change in Law) to comply with Section 5.9 , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax and (c) taxes imposed on it by reason of Section 1471 or 1472 of the Code.
Existing Indenture : that certain Indenture dated as of March 17, 1997 between Cooper and The Chase Manhattan Bank, as trustee.
Existing Senior Unsecured Notes : those notes evidencing Coopers obligations under the Existing Indenture.
Existing Letters of Credit means, collectively, all Letters of Credit (as defined in the Existing Loan and Security Agreement on the date hereof) under the Existing Loan and Security Agreement on the Closing Date.
Extraordinary Expenses : all costs, expenses or advances that Agent may incur during a Default or Event of Default, or during the pendency of an Insolvency Proceeding of a Borrower, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Agent, any Lender, any Borrower, any representative of creditors of a
Borrower or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of Agents Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) the exercise, protection or enforcement of any rights or remedies of Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers fees and commissions, auctioneers fees and commissions, accountants fees, environmental study fees, wages and salaries paid to employees of any Borrower or independent contractors in liquidating any Collateral, and travel expenses.
Facility : as defined in Section 2.
Facility Increase : as defined in Section 2.3.
Facility Increase Amount : as defined in Section 2.3.
Facility Increase Effective Date : as defined in Section 2.3.
Federal Funds Rate : (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by Agent.
Fee Letter : the fee letter agreement between Agent and Borrowers.
Fiscal Quarter : each period of three months, commencing on the first day of a Fiscal Year.
Fiscal Year : the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes, ending on December 31 of each year.
Fixed Charge Coverage Ratio : the ratio, determined on a consolidated basis for Borrowers and Subsidiaries for the most recent four Fiscal Quarters, of (a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Loans), to (b) Fixed Charges.
Fixed Charges : the sum of cash interest paid, cash taxes paid, principal payments made on Borrowed Money, and Distributions made.
FLSA : the Fair Labor Standards Act of 1938.
Foreign Lender : any Lender that is not a U.S. person as defined in Section 7701(a)(3) of the Code.
Foreign Plan : any employee benefit plan or arrangement (a) maintained or contributed to by any Borrower or Subsidiary that is not subject to the laws of the United States; or (b) mandated by a government other than the United States for employees of any Borrower or Subsidiary.
Foreign Subsidiary : a Subsidiary that is a controlled foreign corporation under Section 957 of the Code, such that a guaranty by such Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to secure the Obligations would result in material tax liability to Borrowers.
Fronting Exposure: a Defaulting Lenders Pro Rata share of LC Obligations or Swingline Loans, as applicable, except to the extent allocated to other Lenders under Section 4.2 .
Full Payment : with respect to any Obligations, (a) the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding); (b) if such Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to Agent in its discretion, in the amount of required Cash Collateral); and (c) a release of any Claims of the Borrowers against Agent, Lenders and Issuing Bank arising on or before the payment date. No Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated.
GAAP : generally accepted accounting principles in effect in the United States from time to time.
Governmental Approvals : all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.
Governmental Authority : any federal, state, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, or other entity or officer exercising executive, legislative, judicial, regulatory or administrative functions for or pertaining to any government or court, in each case whether associated with the United States, a state, district or territory thereof, or a foreign entity or government.
Guarantor Payment : as defined in Section 5.10.3 .
Hedging Agreement : an agreement relating to any swap, cap, floor, collar, option, forward, cross right or obligation, or combination thereof or similar transaction, with respect to interest rate, foreign exchange, currency, commodity, credit or equity risk.
Immaterial Subsidiary : each Subsidiary of a Borrower organized in a jurisdiction within the United States and that is not a Significant Subsidiary.
Indemnified Taxes : Taxes other than Excluded Taxes.
Indemnitees : Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America Indemnitees.
Insolvency Proceeding : any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
Intellectual Property : all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.
Intellectual Property Claim : any claim or assertion (whether in writing, by suit or otherwise) that a Borrowers or Subsidiarys ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Persons Intellectual Property.
Intercreditor Agreement : the Intercreditor Agreement dated as of the Original Closing Date, between PNC Bank, National Association and Agent, relating to the Receivables Securitization Facility.
Interest Period : as defined in Section 3.1.3 .
Inventory : as defined in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrowers business (but excluding Equipment).
Inventory Formula Amount : (a) Until the Appraisal Trigger Date, the sum of (i) 40% of the Value of Eligible Raw Materials Inventory; plus (ii) 55% of the Value of Eligible Work-in-Process Inventory; plus (iii) 70% of the Value of Eligible Finished Goods Inventory and (b) from and after the Appraisal Trigger Date, the sum of (i) the lesser of (A) 40% of the Value of Eligible Raw Materials Inventory or (B) 85% of the NOLV Percentage of such Inventory; plus (ii) the lesser of (A) 55% of the Value of Eligible Work-in-Process Inventory and (B) 85% of the NOLV Percentage of such Inventory; plus (iii) the lesser of (A) 70% of the Value of Eligible Finished Goods Inventory and (B) 85% of the NOLV Percentage of such Inventory.
Inventory Reserve : reserves established by Agent to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.
Investment : any acquisition of all or substantially all assets of a Person; any acquisition of record or beneficial ownership of any Equity Interests of a Person; or any loan, advance or other extension of credit, guarantee or credit support to or for the benefit of a Person; or capital contribution to or other investment in a Person. Investment shall also include any indirect loan or extension of credit to a Subsidiary through any cash pooling arrangement in which a Person Participates.
IRS : the United States Internal Revenue Service.
Issuing Bank : Bank of America or an Affiliate of Bank of America.
Issuing Bank Indemnitees : Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.
LC Application : an application by Borrower Agent to Issuing Bank for issuance of a Letter of Credit, in form and substance satisfactory to Issuing Bank.
LC Conditions : the following conditions necessary for issuance of a Letter of Credit: (a) each of the conditions set forth in Section 6 ; (b) after giving effect to such issuance, total LC Obligations do not exceed the Letter of Credit Subline, no Overadvance exists and, if no Loans are outstanding, the LC Obligations do not exceed the Borrowing Base (without giving effect to the LC Reserve for purposes of this calculation); (c) the expiration date of such Letter of Credit is (i) no more than 365 days from issuance, in the case of standby Letters of Credit, (ii) no more than 120 days from issuance, in the case of documentary Letters of Credit, and (iii) at least 20 Business Days prior to the Revolver Termination Date; (d) the Letter of Credit and payments thereunder are denominated in Dollars; and (e) the purpose and form of the proposed Letter of Credit is satisfactory to Agent and Issuing Bank in their discretion.
LC Documents : all documents, instruments and agreements (including LC Requests and LC Applications) delivered by Borrowers or any other Person to Issuing Bank or Agent in connection with issuance, amendment or renewal of, or payment under, any Letter of Credit.
LC Obligations : the sum (without duplication) of (a) all amounts owing by Borrowers for any drawings under Letters of Credit; (b) the stated amount of all outstanding Letters of Credit; and (c) all fees and other amounts owing with respect to Letters of Credit.
LC Request : a request for issuance of a Letter of Credit, to be provided by Borrower Agent to Issuing Bank, in form satisfactory to Agent and Issuing Bank.
LC Reserve : the aggregate of all LC Obligations, other than (a) those that have been Cash Collateralized; and (b) if no Default or Event of Default exists, those constituting charges owing to the Issuing Bank.
Lender Indemnitees : Lenders and their officers, directors, employees, Affiliates, agents and attorneys.
Lenders : as defined in the preamble to this Agreement, including Agent in its capacity as a provider of Swingline Loans and any other Person who hereafter becomes a Lender pursuant to an Assignment and Acceptance.
Lending Office : the office designated as such by the applicable Lender at the time it becomes party to this Agreement or thereafter by notice to Agent and Borrower Agent.
Letter of Credit : any standby or documentary letter of credit issued by Issuing Bank for the account of a Borrower, or any indemnity, guarantee, exposure transmittal memorandum or similar form of credit support issued by Agent or Issuing Bank for the benefit of a Borrower.
Letter of Credit Subline : $150,000,000.
LIBOR : for any Interest Period with respect to a LIBOR Loan, the per annum rate of interest (rounded upward, if necessary, to the nearest 1/8th of 1%), determined by Agent at approximately 11:00 a.m. (London time) two Business Days prior to commencement of such Interest Period, for a term comparable to such Interest Period, equal to (a) the British Bankers Association LIBOR Rate ( BBA LIBOR ), as published by Reuters (or other commercially available source designated by Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate at which Dollar deposits in the approximate amount of the LIBOR Loan would be offered by Bank of Americas London branch to major banks in the London interbank Eurodollar market. If the Board of Governors imposes a Reserve Percentage with respect to LIBOR deposits, then LIBOR shall be the foregoing rate, divided by 1 minus the Reserve Percentage.
LIBOR Loan : a Loan that bears interest based on LIBOR.
License : any license or agreement under which a Borrower is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.
Licensor : any Person from whom a Borrower obtains the right to use any Intellectual Property.
Lien : any Persons interest in Property securing an obligation owed to, or a claim by, such Person, whether such interest is based on common law, statute or contract, including liens, security interests, pledges, hypothecations, statutory trusts, reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Property.
Lien Waiver : an agreement, in form and substance satisfactory to Agent, by which (a) for any material Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit Agent to enter upon the premises and remove the Collateral or to use the premises to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as agent for Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges Agents Lien, waives or subordinates any Lien it may have on the Collateral, and
agrees to deliver the Collateral to Agent upon request; and (d) for any Collateral subject to a Licensors Intellectual Property rights, the Licensor grants to Agent the right, vis-à-vis such Licensor, to enforce Agents Liens with respect to the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or not a default exists under any applicable License.
Loan : a loan made pursuant to Section 2.1 , and any Swingline Loan, Overadvance Loan or Protective Advance.
Loan Account : the loan account established by each Lender on its books pursuant to Section 5.7 .
Loan Documents : this Agreement, Other Agreements and Security Documents.
Loan Year : each 12 month period commencing on the Closing Date and on each anniversary of the Closing Date.
Margin Stock : as defined in Regulation U of the Board of Governors.
Material Adverse Effect : the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, (a) has or could be reasonably expected to have a material adverse effect on the business, operations, prospects or condition (financial or otherwise) of any Borrower, on the value of any material Collateral, on the enforceability of any Loan Documents, or on the validity or priority of Agents Liens on any Collateral; (b) impairs the ability of any Borrower to perform any obligations under the Loan Documents, including repayment of any Obligations; or (c) otherwise impairs the ability of Agent or any Lender to enforce or collect any Obligations or to realize upon any Collateral.
Material Contract : any agreement or arrangement to which a Borrower or Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a material contract under any securities law applicable to such Borrower or Subsidiary, including the Securities Act of 1933; (b) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or (c) that relates to Debt in an aggregate amount of $10,000,000 or more.
Moodys : Moodys Investors Service, Inc., and its successors.
Multiemployer Plan : any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Borrower or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
Net Proceeds : with respect to an Asset Disposition, proceeds (including, when received, any deferred or escrowed payments) received by a Borrower or Subsidiary in cash from such disposition, net of (a) reasonable and customary costs and expenses actually incurred in connection therewith, including legal fees and sales commissions; (b) amounts applied to repayment of Debt secured by a Permitted Lien senior to Agents Liens on Collateral sold; (c)
transfer or similar taxes; and (d) reserves for indemnities, until such reserves are no longer needed.
NOLV Percentage : the net orderly liquidation value of Inventory, expressed as a percentage of Value, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of Borrowers Inventory after the Appraisal Trigger Date performed by an appraiser and on terms satisfactory to Agent.
Notes : each promissory note executed by Borrowers in favor of a Lender in the form of Exhibit A , which shall be in the amount of such Lenders Commitment and shall evidence the Loans made by such Lender or other promissory note executed by a Borrower to evidence any Obligations.
Notice of Borrowing : a Notice of Borrowing to be provided by Borrower Agent to request a Borrowing of Loans, in form satisfactory to Agent.
Notice of Conversion/Continuation : a Notice of Conversion/Continuation to be provided by Borrower Agent to request a conversion or continuation of any Loans as LIBOR Loans, in form satisfactory to Agent.
Notice of Facility Increase : as defined in Section 2.3.
Obligations : all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Borrowers with respect to Letters of Credit, (c) interest, expenses, fees and other sums payable by Borrowers under Loan Documents, (d) obligations of Borrowers under any indemnity for Claims, (e) Extraordinary Expenses, (f) Secured Bank Product Obligations, and (g) other Debts, obligations and liabilities of any kind owing by Borrowers pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.
Offerees : as defined in Section 2.3.
Ordinary Course of Business : the ordinary course of business of any Borrower or Subsidiary, consistent with past practices and undertaken in good faith.
Organic Documents : with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.
Original Closing Date : November 9, 2007.
OSHA : the Occupational Safety and Hazard Act of 1970.
Other Agreement : each Note; LC Document; Fee Letter; Lien Waiver; Intercreditor Agreement; Borrowing Base Certificate, Compliance Certificate, financial statement or report delivered hereunder; or other document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by a Borrower or other Person to Agent or a Lender in connection with any transactions relating hereto.
Other Taxes : all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.
Overadvance : as defined in Section 2.1.5 .
Overadvance Loan : a Base Rate Loan made when an Overadvance exists or is caused by the funding thereof.
Participant : as defined in Section 13.2 .
Patriot Act : the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
Payment Item : each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
PBGC : the Pension Benefit Guaranty Corporation.
Pension Plan : any employee pension benefit plan (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Borrower or ERISA Affiliate or to which the Borrower or ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the preceding five plan years.
Permitted Asset Disposition : as long as no Default or Event of Default exists and all Net Proceeds are remitted to Agent, an Asset Disposition that is (a) a sale of Inventory in the Ordinary Course of Business; (b) a disposition of Inventory that is obsolete, unmerchantable or otherwise unsalable in the Ordinary Course of Business; (c) termination of a lease of real or personal Property that is not necessary for the Ordinary Course of Business, could not reasonably be expected to have a Material Adverse Effect and does not result from a Borrowers default; (d) a disposition by Cooper of all of its Equity Interests in Oliver Rubber Company, a California corporation; or (e) approved in writing by Agent and Required Lenders; provided that any Asset Disposition described in clauses (b) and (d) shall be for fair market value and 80% cash consideration.
Permitted Contingent Obligations : Contingent Obligations (a) arising from indorsements of Payment Items for collection or deposit in the Ordinary Course of Business; (b) arising from Hedging Agreements permitted hereunder; (c) existing on the Original Closing Date, and any
extension or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (d) incurred in the Ordinary Course of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from customary indemnification obligations in favor of purchasers in connection with dispositions of Equipment permitted hereunder; (f) arising under the Loan Documents; (f) arising from unsecured guarantees of Debt of a foreign Subsidiary incurred to finance such foreign Subsidiarys operations; or (h) in an aggregate amount of $20,000,000 or less at any time.
Permitted Lien : as defined in Section 10.2.2 .
Permitted Purchase Money Debt : Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed $20,000,000 at any time.
Person : any individual, corporation, limited liability company, partnership, joint venture, joint stock company, land trust, business trust, unincorporated organization, Governmental Authority or other entity.
Plan : any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by a Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, an ERISA Affiliate.
Pledge Agreement : the Pledge Agreement dated the Original Closing Date, by Cooper and Collateral Agent.
Prime Rate : the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
Pro Rata : with respect to any Lender, a percentage (carried out to the ninth decimal place) determined (a) while Revolver Commitments are outstanding, by dividing the amount of such Lenders Revolver Commitment by the aggregate amount of all Revolver Commitments; and (b) at any other time, by dividing the amount of such Lenders Loans and LC Obligations by the aggregate amount of all outstanding Loans and LC Obligations.
Properly Contested : with respect to any obligation of a Borrower, (a) the obligation is subject to a bona fide dispute regarding amount or the Borrowers liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not have a Material Adverse Effect, nor result in forfeiture or sale of any assets of the Borrower; (e) no Lien is imposed on assets of the Borrower, unless bonded and stayed to the satisfaction of Agent; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.
Property : any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
Protective Advances : as defined in Section 2.1.6 .
Purchase and Sale Agreement : Purchase and Sale Agreement, dated as of August 30, 2006, between the Originators party thereto and Cooper Receivables LLC, as amended, modified, or supplemented through the Closing Date and from time to time thereafter to the extent permitted by subsection 10.1 thereof and Section 10.2.17 hereof. 1
Purchase Money Debt : (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets; (b) Debt (other than the Obligations) incurred within 30 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any renewals, extensions or refinancings (but not increases) thereof.
Purchase Money Lien : a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and the proceeds thereof and constituting a Capital Lease or a purchase money security interest under the UCC.
RCRA : the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
Real Estate : all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.
Receivables Accounts : any Accounts sold pursuant to the Receivables Securitization Facility.
Receivables Purchase Agreement : Amended and Restated Receivables Purchase Agreement, dated as of September 14, 2007, among Cooper, Cooper Receivables LLC, the various Purchasers and Purchaser Agents from time to time party thereto and PNC Bank, National Association, as amended, modified, or supplemented by a Third Amendment to Amended and Restated Receivables Purchase Agreement dated June 2, 2011 and as thereafter amended through the Closing Date and from time to time thereafter to the extent permitted by subsection 6.1 thereof and Section 10.2.17 hereof. 2
Receivables Securitization Facility : the accounts receivable securitization facility in an amount not to exceed $175,000,000 provided for by (a) the Purchase and Sale Agreement, (b) the Receivables Purchase Agreement and (c) all documents, agreements, and instruments relating to either of the foregoing, in each case, as amended, modified, or supplemented through the Closing Date and from time to time thereafter to the extent permitted by subsection 10.1 of the Purchase and Sale Agreement, Section 6.1 of the Receivables Purchase Agreement and Section 10.2.17 hereof.
Borrowers to deliver current version of this agreement along with all amendments, and to certify as true, correct and complete copies as part of the closing deliveries.
Borrowers to deliver current version of this agreement along with all amendments, and to certify as true, correct and complete copies as part of the closing deliveries.
Receivables Securitization Facility Subordinated Note : the Company Note dated August 30, 2006 executed by Cooper Receivables LLC in favor of Cooper.
Refinancing Conditions : the following conditions for Refinancing Debt: (a) it is in an aggregate principal amount that does not exceed the principal amount of the Debt being extended, renewed or refinanced; (b) it has a final maturity no sooner than, a weighted average life no less than, and an interest rate no greater than, the Debt being extended, renewed or refinanced; (c) it is subordinated to the Obligations at least to the same extent as the Debt being extended, renewed or refinanced; (d) the representations, covenants and defaults applicable to it are no less favorable to Borrowers than those applicable to the Debt being extended, renewed or refinanced; (e) no additional Lien is granted to secure it; (f) no additional Person is obligated on such Debt; and (g) upon giving effect to it, no Default or Event of Default exists.
Refinancing Debt : Borrowed Money that is the result of an extension, renewal or refinancing of Debt permitted under Section 10.2.1(c) or (e) .
Reimbursement Date : as defined in Section 2.2.2 .
Rent and Charges Reserve : the aggregate of (a) all past due rent and other amounts owing by a Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a reserve at least equal to three months rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.
Report : as defined in Section 12.2.3 .
Reportable Event : any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
Required Lenders : Lenders (subject to Section 4.2 ) having Revolver Commitments in excess of 50% of the aggregate Revolver Commitments.
Reserve Percentage : the reserve percentage (expressed as a decimal, rounded upward to the nearest 1/8th of 1%) applicable to member banks under regulations issued from time to time by the Board of Governors for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as Eurocurrency liabilities).
Restricted Investment : any Investment by a Borrower or Subsidiary, other than (a) Investments in Subsidiaries to the extent existing on the Closing Date; (b) Cash Equivalents that are subject to Agents Lien and control, pursuant to documentation in form and substance satisfactory to Agent; (c) loans and advances permitted under Section 10.2.6 ; (d) loans and advances that, when taken together with all loans and advances permitted under Section 10.2.6(d) , do not exceed $10,000,000 in the aggregate at any time outstanding; and (e) Investments in connection with the Receivables Securitization Facility.
Restrictive Agreement : an agreement (other than a Loan Document) that conditions or restricts the right of any Borrower or Subsidiary to incur or repay Borrowed Money, to grant
Liens on any assets, to declare or make Distributions, to modify, extend or renew any agreement evidencing Borrowed Money, or to repay any intercompany Debt.
Revolver Commitment : for any Lender, its obligation to make Loans and to participate in LC Obligations up to the maximum principal amount shown on Schedule 1.1 , or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party. Revolver Commitments means the aggregate amount of such commitments of all Lenders.
Revolver Credit Maximum Amount : $200,000,000, as such amount may be increased or reduced from time to time pursuant to the terms of this Agreement.
Revolver Termination Date : July 27, 2016.
Royalties : all royalties, fees, expense reimbursement and other amounts payable by a Borrower or its Subsidiaries or Affiliates under a License.
RPA Blocked Accounts : blocked accounts established in connection with the Receivables Securitization Facility.
S&P : Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.
Secured Bank Product Obligations : Bank Product Debt owing to a Secured Bank Product Provider, up to the maximum amount (in the case of any Secured Bank Product Provider other than Bank of America and its Affiliates) specified by such provider in writing to Agent, which amount may be established or increased (by further written notice to Agent from time to time) as long as no Default or Event of Default exists and no Overadvance would result from establishment of a Bank Product Reserve for such amount and all other Secured Bank Product Obligations.
Secured Bank Product Provider : (a) Bank of America or any of its Affiliates; and (b) any other Lender or Affiliate of a Lender that is providing a Bank Product, provided such provider delivers written notice to Agent, in form and substance satisfactory to Agent, by the later of the Closing Date or 10 days following creation of the Bank Product, (i) describing the Bank Product and setting forth the maximum amount to be secured by the Collateral and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 12.13 .
Secured Parties : Agent, Issuing Bank, Lenders and Secured Bank Product Providers.
Security Documents : the Pledge Agreement, Deposit Account Control Agreements, and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.
Senior Officer : the chief financial officer or treasurer of a Borrower.
Settlement Report : a report delivered by Agent to Lenders summarizing the Loans and participations in LC Obligations outstanding as of a given settlement date, allocated to Lenders on a Pro Rata basis in accordance with their Revolver Commitments.
Significant Subsidiary : a significant subsidiary within the meaning of Regulation S-X promulgated under the Exchange Act and organized under any state of the United States of America.
Solvent : as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not insolvent within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates. Fair salable value means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.
Subsidiary : any entity more than 50% of whose voting securities or Equity Interests is owned by a Borrower or any combination of Borrowers (including indirect ownership by a Borrower through other entities in which the Borrower directly or indirectly more than 50% of the voting securities or Equity Interests).
Swingline Loan : any Borrowing of Base Rate Loans funded with Agents funds, until such Borrowing is settled among Lenders pursuant to Section 4.1.3 .
Taxes : all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
Transferee : any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.
Trigger Period : the period (a) commencing on the day that an Event of Default occurs, or Availability is less than the greater of (X) the lesser of (i) 12.50% of the aggregate amount of Revolver Commitments on such date and (ii) 12.50% of the Borrowing Base then in effect; and (Y) $20,000,000; and (b) continuing until, during the preceding 90 consecutive days, no Event of Default has existed and Availability has been greater than the greater of (X) the lesser of (i) 12.50% of the aggregate amount of Revolver Commitments and (ii) 12.50% of the Borrowing Base and (Y) $20,000,000 at all times.
Type : any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same interest option and, in the case of LIBOR Loans, the same Interest Period.
UCC : the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
Unfunded Pension Liability : the excess of a Pension Plans benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plans assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.
Upstream Payment : a Distribution by a Subsidiary of a Borrower to such Borrower.
Value : (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person.
1.2. Accounting Terms . Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of Borrowers delivered to Agent before the Closing Date and using the same inventory valuation method as used in such financial statements, except for any change required or permitted by GAAP if Borrowers certified public accountants concur in such change and the change is disclosed to Agent.
1.3. Uniform Commercial Code . As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York from time to time: Chattel Paper, Commercial Tort Claim, Deposit Account, Document, Equipment, General Intangibles, Goods, Instrument, Investment Property, Letter-of-Credit Right, Payment Intangibles and Supporting Obligation.
1.4. Certain Matters of Construction . The terms herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, from means from and including, and to and until each mean to but excluding. The terms including and include shall mean including, without limitation and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any document, instrument or agreement include any amendments, waivers and other modifications, extensions or renewals (to the extent permitted by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person include successors and assigns; (f) time of day mean
time of day at Agents notice address under Section 14.3.1 ; or (g) discretion of Agent, Issuing Bank or any Lender mean the sole and absolute discretion of such Person. All calculations of Value, fundings of Loans, issuances of Letters of Credit and payments of Obligations shall be in Dollars and, unless the context otherwise requires, all determinations (including calculations of Borrowing Base) made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Agent (and not necessarily calculated in accordance with GAAP). Borrowers shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by Agent, Issuing Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision. Whenever the phrase to the best of Borrowers knowledge or words of similar import are used in any Loan Documents, it means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter to which such phrase relates.
SECTION 2. CREDIT FACILITIES
Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lenders agree, severally and not jointly, to make a credit facility (the Facility ) of up to the Revolving Credit Maximum Amount available upon Borrowers request therefor, as follows:
2.1. Revolver Commitment .
2.1.1. Loans . Each Lender agrees, severally on a Pro Rata basis up to its Revolver Commitment, on the terms set forth herein, to make Loans to Borrowers from time to time through the Commitment Termination Date. The Loans may be repaid and reborrowed as provided herein. In no event shall Lenders have any obligation to honor a request for a Loan if the unpaid balance of Loans outstanding at such time (including the requested Loan) would exceed the Borrowing Base.
2.1.2. Notes . The Loans made by each Lender and interest accruing thereon shall be evidenced by the records of Agent and such Lender. At the request of any Lender, Borrowers shall deliver a Note to such Lender.
2.1.3. Use of Proceeds . The proceeds of Loans shall be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the closing of this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for working capital, capital expenditures and other lawful corporate purposes of Borrowers.
2.1.4. Voluntary Reduction or Termination of Revolver Commitments .
(a) The Revolver Commitments shall terminate on the Revolver Termination Date, unless sooner terminated in accordance with this Agreement. Upon at least 90 days prior written notice to Agent, Borrowers may, at their option, terminate the Revolver Commitments
and this credit facility. Any notice of termination given by Borrowers shall be irrevocable. On the termination date, Borrowers shall make Full Payment of all Obligations.
(b) Borrowers may permanently reduce the Revolver Commitments, on a Pro Rata basis for each Lender, upon at least 90 days prior written notice to Agent, which notice shall specify the amount of the reduction and shall be irrevocable once given. Each reduction shall be in a minimum amount of $25,000,000, or an increment of $1,000,000 in excess thereof.
2.1.5. Overadvances . If the aggregate Loans exceed the Borrowing Base ( Overadvance ) or the aggregate Revolver Commitments at any time, the excess amount shall be payable by Borrowers on demand by Agent, but all such Loans shall nevertheless constitute Obligations secured by the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been revoked in writing by Required Lenders, Agent may require Lenders to honor requests for Overadvance Loans and to forbear from requiring Borrowers to cure an Overadvance, (a) when no other Event of Default is known to Agent, as long as (i) the Overadvance does not continue for more than 30 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvance Loans are required), and (ii) the Overadvance, together with any Protective Advances, is not known by Agent to exceed 10% of the Borrowing Base; and (b) regardless of whether an Event of Default exists, if Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance (i) is not increased by more than $5,000,000, and (ii) does not continue for more than 30 consecutive days. In no event shall Overadvance Loans be required that would cause the outstanding Loans and LC Obligations to exceed the aggregate Revolver Commitments. Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders of the Event of Default caused thereby. In no event shall any Borrower be deemed a beneficiary of this Section nor authorized to enforce any of its terms.
2.1.6. Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section 6 are not satisfied, to make Base Rate Loans ( Protective Advances ) (a) as long as the Overadvance, together with any Protective Advances, is not known by Agent to exceed 10% of the Borrowing Base, if Agent deems such Loans necessary or desirable to preserve or protect Collateral, or to enhance the collectibility or repayment of Obligations; or (b) to pay any other amounts chargeable to Borrowers under any Loan Documents, including costs, fees and expenses. In no event shall Protective Advances be permitted to the extent they would cause the outstanding Loans and LC Obligations to exceed the aggregate Revolver Commitments. Each Lender shall participate in each Protective Advance on a Pro Rata basis. Required Lenders may at any time revoke Agents authority to make further Protective Advances by written notice to Agent. Absent such revocation, Agents determination that funding of a Protective Advance is appropriate shall be conclusive.
2.2. Letter of Credit Facility .
2.2.1. Issuance of Letters of Credit . Issuing Bank agrees to issue Letters of Credit from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Banks willingness to issue any Letter of Credit is conditioned upon Issuing Banks receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; (ii) each LC Condition is satisfied, and (iii) if a Defaulting Lender exists, such Lender or Borrowers have entered into arrangements satisfactory to Agent and Issuing Bank to eliminate any Fronting Exposure associated with such Lender. If Issuing Bank receives written notice from a Lender at least five Business Days before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business; or (ii) otherwise approved by Agent from time to time in writing. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank.
(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any Lender, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit.
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have
been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.
2.2.2. Reimbursement; Participations .
(a) If Issuing Bank honors any request for payment under a Letter of Credit, Borrowers shall pay to Issuing Bank, on the same day ( Reimbursement Date ), the amount paid by Issuing Bank under such Letter of Credit, together with interest at the interest rate for Base Rate Loans from the Reimbursement Date until payment by Borrowers. The obligation of Borrowers to reimburse Issuing Bank for any payment made under a Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right that Borrowers may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate Loans in an amount necessary to pay all amounts due Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro Rata share of such Borrowing whether or not the Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.
(b) Upon issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased from Issuing Bank, without recourse or warranty, an undivided Pro Rata interest and participation in all LC Obligations relating to the Letter of Credit. If Issuing Bank makes any payment under a Letter of Credit and Borrowers do not reimburse such payment on the Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall promptly (within one Business Day) and unconditionally pay to Agent, for the benefit of Issuing Bank, the Lenders Pro Rata share of such payment. Upon request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit and LC Documents in its possession at such time.
(c) The obligation of each Lender to make payments to Agent for the account of Issuing Bank in connection with Issuing Banks payment under a Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a Letter of Credit having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or the existence of any setoff or defense that any Borrower may have with respect to any Obligations. Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by any Borrower or other Person of any obligations under any LC Documents. Issuing Bank does not make to Lenders any express or implied warranty, representation or guaranty with respect to the Collateral, LC Documents or any Borrower. Issuing Bank shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any LC Documents; the validity, genuineness, enforceability, collectibility, value or sufficiency of any Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Borrower.
(d) No Issuing Bank Indemnitee shall be liable to any Lender or other Person for any action taken or omitted to be taken in connection with any LC Documents except as a result of its actual gross negligence or willful misconduct. Issuing Bank shall not have any liability to any Lender if Issuing Bank refrains from any action under any Letter of Credit or LC Documents until it receives written instructions from Required Lenders.
2.2.3. Cash Collateral . If any LC Obligations, whether or not then due or payable, shall for any reason be outstanding at any time (a) that an Event of Default exists, (b) that Availability is less than zero, (c) after the Commitment Termination Date, or (d) within 20 Business Days prior to the Revolver Termination Date, then Borrowers shall, at Issuing Banks or Agents request, Cash Collateralize the stated amount of all outstanding Letters of Credit and pay to Issuing Bank the amount of all other LC Obligations. Borrowers shall, on demand by Issuing Bank or Agent from time to time, Cash Collateralize the Fronting Exposure of any Defaulting Lender. If Borrowers fail to provide Cash Collateral as required herein, Lenders may (and shall upon direction of Agent) advance, as Loans, the amount of the Cash Collateral required (whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied).
2.3. Facility Increase . Borrowers may from time to time request an increase in the Revolver Credit Maximum Amount and the aggregate Revolver Commitments by an aggregate amount of up to $50,000,000 (each such increase, a Facility Increase ). Each Facility Increase shall be made on notice given by any Borrower to Agent no later than 12:00 noon (Central time) 30 days prior to the date of the proposed Facility Increase. Each such notice (a Notice of Facility Increase ) shall (i) specify the date of such proposed Facility Increase (the Facility Increase Effective Date ), (ii) specify the aggregate amount of such proposed Facility Increase, which shall be in an amount not less than $10,000,000 (the Facility Increase Amount ), and (iii) certify that, (a) at such time, no Default or Event of Default shall have occurred and be continuing (provided that by accepting a requested Facility Increase, Borrower shall be deemed to have represented to Lenders that no Default or Event of Default shall have occurred and be continuing at the time the Facility Increase becomes effective), (b) all representations and warranties shall be true and correct in all material respects immediately prior to and immediately after giving effect to, the incurrence of the Facility Increase and (c) resolutions attached to such notice are true, correct and complete resolutions of Borrowers authorizing such Facility Increase. Agent shall give each Lender prompt notice of Agents receipt of a Notice of Facility Increase. Each Lender, in its sole and absolute discretion, may notify the Agent within ten Business Days after the Notice of Facility Increase whether or not it agrees to provide part of the Facility Increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. If the existing Lenders do not agree to the full amount of the Facility Increase, then the Agent may approach the existing Lenders to provide the Facility Increase, or, at Borrowers request, Agent shall invite such other financial institutions selected by Borrowers and reasonably acceptable to Agent to provide the Facility Increase and become
Lenders (such existing Lenders and other financial institutions, the Offerees ). Each Offeree shall have until 3:00 p.m. (Central time) on the fifth Business Day preceding the Facility Increase Effective Date to commit in writing to all or a portion of the Facility Increase. If the Offerees deliver commitments with respect to such Facility Increase in an amount in excess of the Facility Increase Amount, then Agent shall allocate the Facility Increase to the Offerees committing to the Facility Increase on any basis Agent determines appropriate in consultation with Borrower Agent. On the Facility Increase Effective Date, (A) each Offeree committing to a portion of such Facility Increase shall execute an assumption agreement satisfactory to Agent pursuant to which such Offeree agrees to be bound by the terms of this Agreement as a Lender, (B) the Revolver Credit Maximum Amount and the Revolver Commitments will be increased by the Facility Increase Amount in accordance with the allocations determined by Agent, and (C) each Lender, after giving effect to such Facility Increase, shall purchase or sell the Loans held by it from or to the other Lenders, as directed by Agent, such that after giving effect to such purchases and sales each Lender holds its ratable portion of the outstanding Loans. If the commitments of the Offerees in respect of such Facility Increase are less than the Facility Increase Amount, none of the Lenders shall have any obligation to commit to the uncommitted portion of such Facility Increase, and Borrowers may elect either to reduce the Facility Increase Amount accordingly or to terminate the request for a Facility Increase. Upon the effective date of any Facility Increase, Agent shall have received, if requested, opinion letters, promissory notes and such other agreements, documents and instruments reasonably requested by and reasonably satisfactory to Agent in its reasonable discretion evidencing and setting for the conditions of the Facility Increase. Notwithstanding the foregoing, no Facility Increase shall be effected unless the conditions set forth in Section 6.2 are satisfied on the Facility Increase Effective Date.
SECTION 3. INTEREST, FEES AND CHARGES
3.1. Interest .
3.1.1. Rates and Payment of Interest .
(a) The Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin; and (iii) if any other Obligation (including, to the extent permitted by law, interest not paid when due), at the Base Rate in effect from time to time, plus the Applicable Margin for Base Rate Loans. Interest shall accrue from the date the Loan is advanced or the Obligation is incurred or payable, until paid by Borrowers. If a Loan is repaid on the same day made, one days interest shall accrue.
(b) During an Insolvency Proceeding with respect to any Borrower, or during any other Event of Default if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment). Each Borrower acknowledges that the cost and expense to Agent and Lenders due to an Event of Default are difficult to ascertain and that the Default Rate is a fair and reasonable estimate to compensate Agent and Lenders for this.
(c) Interest accrued on the Loans shall be due and payable in arrears, (i) on the first day of each month and, for any LIBOR Loan, the last day of its Interest Period; provided , however , that if any Interest Period exceeds three month, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; (ii) on any date of prepayment, with respect to the principal amount of Loans being prepaid; and (iii) on the Commitment Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand . Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand .
3.1.2. Application of LIBOR to Outstanding Loans .
(a) Borrowers may on any Business Day, subject to delivery of a Notice of Conversion/Continuation, elect to convert any portion of the Base Rate Loans to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a LIBOR Loan.
(b) Whenever Borrowers desire to convert or continue Loans as LIBOR Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m. at least three Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be one month if not specified). If, upon the expiration of any Interest Period in respect of any LIBOR Loans, Borrowers shall have failed to deliver a Notice of Conversion/Continuation, they shall be deemed to have elected to convert such Loans into Base Rate Loans.
3.1.3. Interest Periods . In connection with the making, conversion or continuation of any LIBOR Loans, Borrowers shall select an interest period ( Interest Period ) to apply, which interest period shall be one, two, three or six months; provided , however , that:
(a) the Interest Period shall commence on the date the Loan is made or continued as, or converted into, a LIBOR Loan, and shall expire on the numerically corresponding day in the calendar month at its end;
(b) if any Interest Period commences on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of such month, then the Interest Period shall expire on the last Business Day of such month; and if any Interest Period would expire on a day that is not a Business Day, the period shall expire on the next Business Day; and
(c) no Interest Period shall extend beyond the Revolver Termination Date.
3.1.4. Interest Rate Not Ascertainable . If Agent shall determine that on any date for determining LIBOR, due to any circumstance affecting the London interbank market, adequate and fair means do not exist for ascertaining such rate on the basis provided herein, then
Agent shall immediately notify Borrowers of such determination. Until Agent notifies Borrowers that such circumstance no longer exists, the obligation of Lenders to make LIBOR Loans shall be suspended, and no further Loans may be converted into or continued as LIBOR Loans.
3.2. Fees .
3.2.1. Unused Line Fee . Borrowers shall pay to Agent, for the Pro Rata benefit of Lenders (other than any Defaulting Lender for so long as such Defaulting Lender has not funded its Pro Rata share of a Revolver Loan), a fee equal to 0.375% per annum times the amount by which the Revolver Commitments (other than Revolving Commitments of a Defaulting Lender for so long as such Defaulting Lender has not funded its Pro Rata share of a Revolver Loan) exceed the average daily balance of Loans and stated amount of Letters of Credit during any month. Such fee shall be payable in arrears, on the first day of each month for the preceding month and on the Commitment Termination Date.
3.2.2. LC Facility Fees . Borrowers shall pay (a) to Agent, for the Pro Rata benefit of Lenders, a fee equal to the Applicable Margin in effect for LIBOR Loans times the average daily stated amount of Letters of Credit, which fee shall be payable quarterly in arrears, on the first day of each Fiscal Quarter for the preceding Fiscal Quarter and on the Commitment Termination Date; (b) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the stated amount of each Letter of Credit, which fee shall be payable quarterly in arrears, on the first day of each Fiscal Quarter for the preceding Fiscal Quarter and on the Commitment Termination Date; and (c) to Issuing Bank, for its own account, all customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (a) shall be increased by 2% per annum.
3.2.3. Agent Fees . In consideration of Agents syndication of the Commitments and service as Agent hereunder, Borrowers shall pay to Agent, for its own account, the fees described in the Fee Letter.
3.3. Computation of Interest, Fees, Yield Protection . All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days. Each determination by Agent of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. A certificate as to amounts payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.9 , submitted to Borrower Agent by Agent or the affected Lender, as applicable, shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within 10 days following receipt of the certificate.
3.4. Reimbursement Obligations . Borrowers shall reimburse Agent for all Extraordinary Expenses. Borrowers shall also reimburse Agent for all legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred by it in connection with (a)
negotiation and preparation of any Loan Documents, including any amendment or other modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Agents Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b) , each inspection, audit or appraisal with respect to any Borrower or Collateral, whether prepared by Agents personnel or a third party. All legal, accounting and consulting fees shall be charged to Borrowers by Agents professionals at their billed rates. If, for any reason (including inaccurate reporting on financial statements or a Compliance Certificate), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Agent, for the Pro Rata benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under this Section shall be due on demand .
3.5. Illegality . If any Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund LIBOR Loans, or to determine or charge interest rates based upon LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to Agent, any obligation of such Lender to make or continue LIBOR Loans or to convert Base Rate Loans to LIBOR Loans shall be suspended until such Lender notifies Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, Borrowers shall prepay or, if applicable, convert all LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any such prepayment or conversion, Borrowers shall also pay accrued interest on the amount so prepaid or converted.
3.6. Inability to Determine Rates . If Required Lenders notify Agent for any reason in connection with a request for a Borrowing of, or conversion to or continuation of, a LIBOR Loan that (a) Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Loan, (b) adequate and reasonable means do not exist for determining LIBOR for the requested Interest Period, or (c) LIBOR for the requested Interest Period does not adequately and fairly reflect the cost to such Lenders of funding such Loan, then Agent will promptly so notify Borrower Agent and each Lender. Thereafter, the obligation of Lenders to make or maintain LIBOR Loans shall be suspended until Agent (upon instruction by Required Lenders) revokes such notice. Upon receipt of such notice, Borrower Agent may revoke any pending request for a Borrowing of, conversion to or continuation of a LIBOR Loan or, failing that, will be deemed to have submitted a request for a Base Rate Loan.
3.7. Increased Costs; Capital Adequacy .
3.7.1. Change in Law . If any Change in Law shall:
(a) impose modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in LIBOR) or Issuing Bank;
(b) subject any Lender or Issuing Bank to any Tax with respect to any Loan, Loan Document, Letter of Credit or participation in LC Obligations, or change the basis of taxation of payments to such Lender or Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 5.8 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or Issuing Bank); or
(c) impose on any Lender or Issuing Bank or the London interbank market any other condition, cost or expense affecting any Loan, Loan Document, Letter of Credit or participation in LC Obligations, or Commitment;
and the result thereof shall be to increase the cost to such Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan) or Commitment, or to increase the cost to such Lender or Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or Issuing Bank, Borrowers will pay to such Lender or Issuing Bank, as applicable, such additional amount or amounts as will compensate such Lender or Issuing Bank, as applicable, for such additional costs incurred or reduction suffered.
3.7.2. Capital Adequacy . If any Lender or Issuing Bank determines that any Change in Law affecting such Lender or Issuing Bank or any Lending Office of such Lender or such Lenders or Issuing Banks holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lenders, Issuing Banks or holding companys capital as a consequence of this Agreement, or such Lenders or Issuing Banks Commitments, Loans, Letters of Credit or participations in LC Obligations, to a level below that which such Lender, Issuing Bank or holding company could have achieved but for such Change in Law (taking into consideration such Lenders, Issuing Banks and holding companys policies with respect to capital adequacy), then from time to time Borrowers will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate it or its holding company for any such reduction suffered.
3.7.3. Compensation . Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand such compensation, but Borrowers shall not be required to compensate a Lender or Issuing Bank for any increased costs incurred or reductions suffered more than nine months prior to the date that the Lender or Issuing Bank notifies Borrower Agent of the Change in Law giving rise to such increased costs or reductions and of such Lenders or Issuing Banks intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
3.8. Mitigation . If any Lender gives a notice under Section 3.5 or requests compensation under Section 3.7 , or if Borrowers are required to pay additional amounts with respect to a Lender under Section 5.8 , then such Lender shall use reasonable efforts to designate a different Lending Office or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (a) would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, as applicable; and (b) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or unlawful. Borrowers agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
3.9. Funding Losses . If for any reason (other than default by a Lender) (a) any Borrowing of, or conversion to or continuation of, a LIBOR Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of a LIBOR Loan occurs on a day other than the end of its Interest Period, (c) Borrowers fail to repay a LIBOR Loan when required hereunder or (d) a Lender (other than a Defaulting Lender) is required to assign a LIBOR Loan prior to the end of its Interest Period pursuant to Section 12.10 , then Borrowers shall pay to Agent its customary administrative charge and to each Lender all losses and expenses that it sustains as a consequence thereof, including loss of anticipated profits and any loss or expense arising from liquidation or redeployment of funds or from fees payable to terminate deposits of matching funds. Lenders shall not be required to purchase Dollar deposits in the London interbank market or any other offshore Dollar market to fund any LIBOR Loan, but the provisions hereof shall be deemed to apply as if each Lender had purchased such deposits to fund its LIBOR Loans.
3.10. Maximum Interest . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law ( maximum rate ). If Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal, refunded to Borrowers. In determining whether the interest contracted for, charged or received by Agent or a Lender exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
SECTION 4. LOAN ADMINISTRATION
4.1. Manner of Borrowing and Funding Loans .
4.1.1. Notice of Borrowing .
(a) Whenever Borrowers desire funding of a Borrowing of Loans, Borrower Agent shall give Agent a Notice of Borrowing. Such notice must be received by Agent no later than 11:00 a.m. (i) on the Business Day of the requested funding date, in the case of Base Rate Loans, and (ii) at least three Business Days prior to the requested funding date, in the case of
LIBOR Loans. Notices received after 11:00 a.m. shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as Base Rate Loans or LIBOR Loans, and (D) in the case of LIBOR Loans, the duration of the applicable Interest Period (which shall be deemed to be one month if not specified).
(b) Unless payment is otherwise timely made by Borrowers, the becoming due of any Obligations (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt) shall be deemed to be a request for Base Rate Loans on the due date, in the amount of such Obligations. The proceeds of such Loans shall be disbursed as direct payment of the relevant Obligation. In addition, Agent may, at its option, charge such Obligations against any operating, investment or other account of a Borrower maintained with Agent or any of its Affiliates.
4.1.2. Fundings by Lenders . Each Lender shall timely honor its Revolver Commitment by funding its Pro Rata share of each Borrowing of Loans that is properly requested hereunder. Except for Borrowings to be made as Swingline Loans, Agent shall endeavor to notify Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 12:00 noon on the proposed funding date for Base Rate Loans or by 3:00 p.m. at least two Business Days before any proposed funding of LIBOR Loans. Each Lender shall fund to Agent such Lenders Pro Rata share of the Borrowing to the account specified by Agent in immediately available funds not later than 2:00 p.m. on the requested funding date, unless Agents notice is received after the times provided above, in which event Lender shall fund its Pro Rata share by 11:00 a.m. on the next Business Day. Subject to its receipt of such amounts from Lenders, Agent shall disburse the proceeds of the Loans as directed by Borrower Agent. Unless Agent shall have received (in sufficient time to act) written notice from a Lender that it does not intend to fund its Pro Rata share of a Borrowing, Agent may assume that such Lender has deposited or promptly will deposit its share with Agent, and Agent may disburse a corresponding amount to Borrowers. If a Lenders share of any Borrowing or of any settlement pursuant to Section 4.1.3(b) is not in fact received by Agent, then Borrowers agree to repay to Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the rate applicable to such Borrowing.
4.1.3. Swingline Loans; Settlement .
(a) Agent may, but shall not be obligated to, advance Swingline Loans to Borrowers, up to an aggregate outstanding amount of $15,000,000, unless the funding is specifically required to be made by all Lenders hereunder. Each Swingline Loan shall constitute a Loan for all purposes, except that payments thereon shall be made to Agent for its own account. The obligation of Borrowers to repay Swingline Loans shall be evidenced by the records of Agent and need not be evidenced by any promissory note.
(b) To facilitate administration of the Loans, Lenders and Agent agree (which agreement is solely among them, and not for the benefit of or enforceable by any Borrower) that settlement among them with respect to Swingline Loans and other Loans may take place periodically on a date determined from time to time by Agent, which shall occur at least once
each week. On each settlement date, settlement shall be made with each Lender in accordance with the Settlement Report delivered by Agent to Lenders. Between settlement dates, Agent may in its discretion apply payments on Loans to Swingline Loans, regardless of any designation by Borrower or any provision herein to the contrary. Each Lenders obligation to make settlements with Agent is absolute and unconditional, without offset, counterclaim or other defense, and whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied. If, due to an Insolvency Proceeding with respect to a Borrower or otherwise, any Swingline Loan may not be settled among Lenders hereunder, then each Lender shall be deemed to have purchased from Agent a Pro Rata participation in each unpaid Swingline Loan and shall transfer the amount of such participation to Agent, in immediately available funds, within one Business Day after Agents request therefor.
4.1.4. Notices . Each Borrower authorizes Agent and Lenders to extend, convert or continue Loans, effect selections of interest rates, and transfer funds to or on behalf of Borrowers based on telephonic or e-mailed instructions. Borrowers shall confirm each such request by prompt delivery to Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs in any material respect from the action taken by Agent or Lenders, the records of Agent and Lenders shall govern. Neither Agent nor any Lender shall have any liability for any loss suffered by a Borrower as a result of Agent or any Lender acting upon its understanding of telephonic or e-mailed instructions from a person believed in good faith by Agent or any Lender to be a person authorized to give such instructions on a Borrowers behalf.
4.2. Defaulting Lender .
4.2.1. Reallocation of Pro Rata Share; Amendments . For purposes of determining Lenders obligations to fund or participate in Loans or Letters of Credit, Agent may exclude the Commitments and Loans of any Defaulting Lender(s) from the calculation of Pro Rata shares. A Defaulting Lender shall have no right to vote on any amendment, waiver or other modification of a Loan Document, except as provided in Section 14.1.1(c) .
4.2.2. Payments; Fees . Agent may, in its discretion, receive and retain any amounts payable to a Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have assigned to Agent such amounts until all Obligations owing to Agent, non-Defaulting Lenders and other Secured Parties have been paid in full. Agent may apply such amounts to the Defaulting Lenders defaulted obligations, use the funds to Cash Collateralize such Lenders Fronting Exposure, or readvance the amounts to Borrowers hereunder. A Lender shall not be entitled to receive any fees accruing hereunder during the period in which it is a Defaulting Lender, and the unfunded portion of its Commitment shall be disregarded for purposes of calculating the unused line fee under Section 3.2.1 . If any LC Obligations owing to a Defaulted Lender are reallocated to other Lenders, fees attributable to such LC Obligations under Section 3.2.2 shall be paid to such Lenders. Agent shall be paid all fees attributable to LC Obligations that are not reallocated.
4.2.3. Cure . Borrowers, Agent and Issuing Bank may agree in writing that a Lender is no longer a Defaulting Lender. At such time, Pro Rata shares shall be reallocated without exclusion of such Lenders Commitments and Loans, and all outstanding Revolver Loans, LC Obligations and other exposures under the Revolver Commitments shall be reallocated among Lenders and settled by Agent (with appropriate payments by the reinstated Lender) in accordance with the readjusted Pro Rata shares. Unless expressly agreed by Borrowers, Agent and Issuing Bank, no reinstatement of a Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure of any Lender to fund a Loan, to make any payment in respect of LC Obligations or to otherwise perform its obligations hereunder shall not relieve any other Lender of its obligations, and no Lender shall be responsible for default by another Lender.
4.3. Number and Amount of LIBOR Loans; Determination of Rate . No more than 5 Borrowings of LIBOR Loans may be outstanding at any time, and each Borrowing of LIBOR Loans when made shall be in a minimum amount of $5,000,000, or an increment of $1,000,000 in excess thereof. Upon determining LIBOR for any Interest Period requested by Borrowers, Agent shall promptly notify Borrowers thereof by telephone or electronically and, if requested by Borrowers, shall confirm any telephonic notice in writing.
4.4. Borrower Agent . Each Borrower hereby designates Cooper ( Borrower Agent ) as its representative and agent for all purposes under the Loan Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, preparation and delivery of Borrowing Base and financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with Agent, Issuing Bank or any Lender. Borrower Agent hereby accepts such appointment. Agent and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by Borrower Agent on behalf of any Borrower. Agent and Lenders may give any notice or communication with a Borrower hereunder to Borrower Agent on behalf of such Borrower. Each of Agent, Issuing Bank and Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for any or all purposes under the Loan Documents. Each Borrower agrees that any notice, election, communication, representation, agreement or undertaking made on its behalf by Borrower Agent shall be binding upon and enforceable against it.
4.5. One Obligation . The Loans, LC Obligations and other Obligations shall constitute one general obligation of Borrowers and (unless otherwise expressly provided in any Loan Document) shall be secured by Agents Lien upon all Collateral; provided, however, that Agent and each Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.
4.6. Effect of Termination . On the effective date of any termination of the Commitments, all Obligations shall be immediately due and payable, and any Lender may terminate its and its Affiliates Bank Products (including, only with the consent of Agent, any Cash Management Services). All undertakings of Borrowers contained in the Loan Documents shall survive any termination, and Agent shall retain its Liens in the Collateral and all of its
rights and remedies under the Loan Documents until Full Payment of the Obligations. Notwithstanding Full Payment of the Obligations, Agent shall not be required to terminate its Liens in any Collateral unless, with respect to any damages Agent may incur as a result of the dishonor or return of Payment Items applied to Obligations, Agent receives (a) a written agreement, executed by Borrowers and any Person whose advances are used in whole or in part to satisfy the Obligations, indemnifying Agent and Lenders from any such damages; or (b) such Cash Collateral as Agent, in its discretion, deems necessary to protect against any such damages. The provisions of Sections 2.3, 3.4, 3.6, 3.7, 3.9, 5.4, 5.8, 12, 14.2 and this Section, and the obligation of each Borrower and Lender with respect to each indemnity given by it in any Loan Document, shall survive Full Payment of the Obligations and any release relating to this credit facility.
SECTION 5. PAYMENTS
5.1. General Payment Provisions . All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any kind, free of (and without deduction for) any Taxes, and in immediately available funds, not later than 1:00 noon on the due date. Any payment after such time shall be deemed made on the next Business Day. If any payment under the Loan Documents shall be stated to be due on a day other than a Business Day, the due date shall be extended to the next Business Day and such extension of time shall be included in any computation of interest and fees. Any payment of a LIBOR Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Section 3.9 . Any prepayment of Loans shall be applied first to Base Rate Loans and then to LIBOR Loans; provided, however, that as long as no Event of Default exists, prepayments of LIBOR Loans may, at the option of Borrowers and Agent, be held by Agent as Cash Collateral and applied to such Loans at the end of their Interest Periods.
5.2. Repayment of Loans . Loans shall be due and payable in full on the Revolver Termination Date, unless payment is sooner required hereunder. Loans may be prepaid from time to time, without penalty or premium. If any Asset Disposition results in an Overadvance, Borrowers shall apply such portion of the Net Proceeds of such Asset Disposition to the Loans in order to eliminate the Overadvance. Upon the occurrence of a Default or Event of Default, Borrowers shall apply all Net Proceeds from Asset Dispositions to the Loans. Notwithstanding anything herein to the contrary, if an Overadvance exists, Borrowers shall, on the sooner of Agents demand or the first Business Day after any Borrower has knowledge thereof, repay the outstanding Loans in an amount sufficient to reduce the principal balance of Loans to the Borrowing Base.
5.3. Payment of Other Obligations . Obligations other than Loans, including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand .
5.4. Marshaling; Payments Set Aside . None of Agent or Lenders shall be under any obligation to marshal any assets in favor of any Borrower or against any Obligations. If any payment by or on behalf of Borrowers is made to Agent, Issuing Bank or any Lender, or Agent, Issuing Bank or any Lender exercises a right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by Agent, Issuing Bank or such Lender in its discretion) to be repaid to a trustee, receiver or any other Person, then to the extent of such recovery, the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.
5.5. Post-Default Allocation of Payments .
5.5.1. Allocation . Notwithstanding anything herein to the contrary, during an Event of Default, monies to be applied to the Obligations, whether arising from payments by Borrowers, realization on Collateral, setoff or otherwise, shall be allocated as follows:
(a) first , to all costs and expenses, including Extraordinary Expenses, owing to Agent (excluding costs and expenses relating to Secured Bank Product Obligations);
(b) second , to all amounts owing to Agent on Swingline Loans;
(c) third , to all amounts owing to Issuing Bank on LC Obligations;
(d) fourth , to all Obligations constituting fees (excluding amounts relating to Secured Bank Product Obligations);
(e) fifth , to all Obligations constituting interest (excluding amounts relating to Secured Bank Product Obligations);
(f) sixth , to provide Cash Collateral for outstanding Letters of Credit;
(g) seventh , to all other Obligations, other than Secured Bank Product Obligations; and
(h) last , to Secured Bank Product Obligations.
Amounts shall be applied to each category of Obligations set forth above until Full Payment thereof and then to the next category. If amounts are insufficient to satisfy a category, they shall be applied on a pro rata basis among the Obligations in the category. Amounts distributed with respect to any Secured Bank Product Obligations shall be the lesser of the maximum Secured Bank Product Obligations last reported to Agent or the actual Secured Bank Product Obligations as calculated by the methodology reported to Agent for determining the amount due. Agent shall have no obligation to calculate the amount to be distributed with respect to any Secured Bank Product Obligations, and may request a reasonably detailed calculation of such amount from the applicable Secured Party. If a Secured Party fails to deliver such calculation within five days following request by Agent, Agent may assume the amount to be distributed is the maximum Secured Bank Product Obligations last reported to Agent. The allocations set forth in this Section are solely to determine the rights and priorities of Agent and Secured Parties as among themselves, and may be changed by agreement among them without the consent of any Borrower. This Section is not for the benefit of or enforceable by any Borrower.
5.5.2. Erroneous Application . Agent shall not be liable for any application of amounts made by it in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been made shall be to recover the amount from the Person that actually received it (and, if such amount was received by any Lender, such Lender hereby agrees to return it).
5.6. Application of Payments . The ledger balance in the main Dominion Account as of the end of a Business Day shall be applied to the Obligations at the beginning of the next Business Day, during any Trigger Period. If, as a result of such application, a credit balance exists, the balance shall not accrue interest in favor of Borrowers and shall be made available to Borrowers as long as no Default or Event of Default exists. Each Borrower irrevocably waives the right to direct the application of any payments or Collateral proceeds, and agrees that Agent shall have the continuing, exclusive right to apply and reapply same against the Obligations, in such manner as Agent deems advisable, notwithstanding any entry by Agent in its records.
5.7. Loan Account; Account Stated .
5.7.1. Loan Account . Agent shall maintain in accordance with its usual and customary practices an account or accounts ( Loan Account ) evidencing the Debt of Borrowers resulting from each Loan or issuance of a Letter of Credit from time to time. Any failure of Agent to record anything in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder. Agent may maintain a single Loan Account in the name of Borrower Agent, and each Borrower confirms that such arrangement shall have no effect on the joint and several character of its liability for the Obligations.
5.7.2. Entries Binding . Entries made in the Loan Account shall constitute presumptive evidence of the information contained therein. If any information contained in the Loan Account is provided to or inspected by any Person, then such information shall be conclusive and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies Agent in writing within 30 days after receipt or inspection that specific information is subject to dispute.
5.8. Taxes .
5.8.1. Payments Free of Taxes . Any and all payments by any Borrower on account of any Obligations shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if a Borrower shall be required by Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) Agent, Lender or Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made; (b) the Borrower shall make such deductions; and (c) Borrowers shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law. Without limiting the foregoing, Borrowers shall timely pay all Other Taxes to the relevant Governmental Authorities.
5.8.2. Payment . Borrowers shall indemnify, hold harmless and reimburse Agent, Lenders and Issuing Bank, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by Agent, any Lender or Issuing Bank with respect to any Obligations, Letters of Credit or Loan Documents, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower Agent by a Lender or Issuing Bank (with a copy to Agent), or by Agent, shall be conclusive absent manifest error. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower, Borrower Agent shall deliver to Agent a receipt issued by the Governmental Authority evidencing such payment or other evidence of payment satisfactory to Agent.
5.9. Foreign Lenders .
5.9.1. Exemption . Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under any Loan Document shall deliver to Agent and Borrower Agent, at the time or times prescribed by Applicable Law or reasonably requested by Agent or Borrower Agent, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by Agent or Borrower Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Agent or Borrower Agent as will enable Agent and Borrower Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.
5.9.2. Documentation . Without limiting the generality of the foregoing, if a Borrower is resident for tax purposes in the United States, a Foreign Lender shall deliver to Agent and Borrower Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter upon the request of Agent or Borrower Agent, but only if such Foreign Lender is legally entitled to do so), (a) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party; (b) duly completed copies of IRS Form W-8ECI; (c) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (i) a certificate to the effect that such Foreign Lender is not (A) a bank within the meaning of section 881(c)(3)(A) of the Code, (B) a 10 percent shareholder of any Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a controlled foreign corporation described in section 881(c)(3)(C) of the Code, and (ii) duly completed copies of IRS Form W-8BEN; or (d) any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding tax, duly completed together with such supplementary documentation as may be prescribed by Applicable Law to permit Borrowers to determine the withholding or deduction required to be made.
5.10. Nature and Extent of Each Borrowers Liability .
5.10.1. Joint and Several Liability . Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Agent and Lenders the prompt payment and performance of, all Obligations and all agreements under the Loan Documents. Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Borrower is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent or any Lender with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for the Obligations or any action, or the absence of any action, by Agent or any Lender in respect thereof (including the release of any security or guaranty); (d) the insolvency of any Borrower; (e) any election by Agent or any Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any Lender against any Borrower for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except Full Payment of all Obligations.
5.10.2. Waivers .
(a) Each Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent or Lenders to marshal assets or to proceed against any Borrower, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower. Each Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of all Obligations. It is agreed among each Borrower, Agent and Lenders that the provisions of this Section 5.10 are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Agent and Lenders would decline to make Loans and issue Letters of Credit. Each Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.
(b) Agent and Lenders may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral by judicial foreclosure or non-judicial sale or enforcement, without affecting any rights and remedies under this Section 5.10 . If, in taking any action in connection with the exercise of any rights or remedies, Agent or any Lender shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Borrower or other Person, whether because of any Applicable Laws pertaining to election of remedies or otherwise, each Borrower consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Borrower might otherwise have had. Any election of remedies that results in denial or impairment of the right of Agent or any Lender to seek a deficiency judgment against any
Borrower shall not impair any other Borrowers obligation to pay the full amount of the Obligations. Each Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for the Obligations, even though that election of remedies destroys such Borrowers rights of subrogation against any other Person. Agent may bid all or a portion of the Obligations at any foreclosure or trustees sale or at any private sale, and the amount of such bid need not be paid by Agent but shall be credited against the Obligations. The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section 5.10 , notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any Lender might otherwise be entitled but for such bidding at any such sale.
5.10.3. Extent of Liability; Contribution .
(a) Notwithstanding anything herein to the contrary, each Borrowers liability under this Section 5.10 shall be limited to the greater of (i) all amounts for which such Borrower is primarily liable, as described below, and (ii) such Borrowers Allocable Amount.
(b) If any Borrower makes a payment under this Section 5.10 of any Obligations (other than amounts for which such Borrower is primarily liable) (a Guarantor Payment ) that, taking into account all other Guarantor Payments previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such Borrowers Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other Borrower for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. The Allocable Amount for any Borrower shall be the maximum amount that could then be recovered from such Borrower under this Section 5.10 without rendering such payment voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.
(c) Nothing contained in this Section 5.10 shall limit the liability of any Borrower to pay Loans made directly or indirectly to that Borrower (including Loans advanced to any other Borrower and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC Obligations relating to Letters of Credit issued to support such Borrowers business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable for all purposes hereunder. Agent and Lenders shall have the right, at any time in their discretion, to condition Loans and Letters of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of such Loans and Letters of Credit to such Borrower.
5.10.4. Joint Enterprise . Each Borrower has requested that Agent and Lenders make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers business most efficiently and economically. Borrowers business is a mutual and
collective enterprise, and Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease the administration of their relationship with Lenders, all to the mutual advantage of Borrowers. Borrowers acknowledge and agree that Agents and Lenders willingness to extend credit to Borrowers and to administer the Collateral on a combined basis, as set forth herein, is done solely as an accommodation to Borrowers and at Borrowers request.
5.10.5. Subordination . Each Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Borrower, howsoever arising, to the Full Payment of all Obligations.
SECTION 6. CONDITIONS PRECEDENT
6.1. Conditions Precedent to Initial Loans . In addition to the conditions set forth in Section 6.2 , Lenders shall not be required to fund any requested Loan, issue any Letter of Credit, or otherwise extend credit to Borrowers hereunder, until the date ( Closing Date ) that each of the following conditions has been satisfied:
(a) Notes shall have been executed by Borrowers and delivered to each Lender that requests issuance of a Note. Each other Loan Document shall have been duly executed and delivered to Agent by each of the signatories thereto, and each Borrower shall be in compliance with all terms thereof.
(b) Agent shall have received acknowledgments of all filings or recordations necessary to perfect its Liens in the Collateral, as well as UCC and Lien searches and other evidence satisfactory to Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens.
(c) Agent shall have received duly executed agreements establishing each Dominion Account and related lockbox, in form and substance, and with financial institutions, satisfactory to Agent.
(d) Agent shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of each Borrower certifying that, after giving effect to the initial Loans and transactions hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default exists; (iii) the representations and warranties set forth in Section 9 are true and correct; and (iv) such Borrower has complied with all agreements and conditions to be satisfied by it under the Loan Documents.
(e) Agent shall have received a certificate of a duly authorized officer of each Borrower, certifying as to (i) such Borrowers Organic Documents; (ii) resolutions authorizing execution and delivery of the Loan Documents; and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Borrower in writing.
(f) Agent shall have received a written opinion of Shumaker, Loop & Kendrick, LLP, as well as any local counsel to Borrowers or Agent, in form and substance
satisfactory to Agent concerning enforceability under the laws of the State of New York and other customary matters (including, without limitation, no conflicts with the Existing Indenture, the Purchase and Sale Agreement, Receivables Purchase Agreement and other contracts) as well as opinions under the laws of the State of Ohio and the State of Delaware as to organization, existence, good standing, perfection and validity of security interests, and other customary matters (including, without limitation, no conflicts with the Existing Indenture, the Purchase and Sale Agreement, Receivables Purchase Agreement and other contracts).
(g) Agent shall have received copies of the charter documents of each Borrower, certified by the Secretary of State or other appropriate official of such Borrowers jurisdiction of organization. Agent shall have received good standing certificates for each Borrower, issued by the Secretary of State or other appropriate official of such Borrowers jurisdiction of organization and each jurisdiction where such Borrowers conduct of business or ownership of Property necessitates qualification.
(h) Agent shall have received copies of policies or certificates of insurance for the insurance policies carried by Borrowers, all in compliance with the Loan Documents.
(i) Agent shall have completed its business, financial and legal due diligence of Borrowers, including a field examination, with results satisfactory to Agent and including evidence that Borrowers have received all governmental and third party consents and approvals necessary to consummate the transactions contemplated hereunder. No material adverse change in business, assets, properties, liabilities, operations, condition or prospects of any Borrower shall have occurred since December 31, 2010.
(j) Borrowers shall have paid all fees and expenses to be paid to Agent and Lenders on the Closing Date.
(k) Agent shall have received a Borrowing Base Certificate prepared as of March 31, 2011.
(l) Agent shall have received, each in form and substance satisfactory to them, (a) 2 year projections of Borrowers and Subsidiaries, dated as of the Closing Date, evidencing Borrowers ability to comply with the availability requirements set forth in the loan documentation, and (c) interim financial statements for Borrowers as of May 31, 2011.
(m) Borrowers shall have paid to the Agent all accrued and unpaid interest and fees under the Existing Loan and Security Agreement.
(n) Agent shall have received an executed copy of the reaffirmation of the Intercreditor Agreement in form and substance acceptable to Agent.
(o) The execution and delivery or satisfaction of each of the other agreements, documents or other instruments or conditions set forth in the closing checklist attached hereto as Exhibit F (the Closing Checklist ), in form, substance and manner reasonably satisfactory to Agent;
6.2. Conditions Precedent to All Credit Extensions . Agent, Issuing Bank and Lenders shall not be required to fund any Loans, arrange for issuance of any Letters of Credit or grant any other accommodation to or for the benefit of Borrowers, unless the following conditions are satisfied:
(a) No Default or event described in Section 11.1(a) (n) shall exist at the time of, or result from, such funding, issuance or grant, regardless of whether or not the existence of the event is deemed an Event of Default;
(b) The representations and warranties of each Borrower in the Loan Documents shall be true and correct on the date of, and upon giving effect to, such funding, issuance or grant (except for representations and warranties that expressly relate to an earlier date);
(c) All conditions precedent in any other Loan Document shall be satisfied;
(d) No event shall have occurred or circumstance exist that has or could reasonably be expected to have a Material Adverse Effect; and
(e) With respect to issuance of a Letter of Credit, the LC Conditions shall be satisfied.
Each request (or deemed request) by Borrowers for funding of a Loan, issuance of a Letter of Credit or grant of an accommodation shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of such funding, issuance or grant. As an additional condition to any funding, issuance or grant, Agent shall have received such other information, documents, instruments and agreements as it deems appropriate in connection therewith.
6.3. Limited Waiver of Conditions Precedent . If Agent, Issuing Bank or Lenders fund any Loans, arrange for issuance of any Letters of Credit or grant any other accommodation when any conditions precedent are not satisfied (regardless of whether the lack of satisfaction was known or unknown at the time), it shall not operate as a waiver of (a) the right of Agent, Issuing Bank and Lenders to insist upon satisfaction of all conditions precedent with respect to any subsequent funding, issuance or grant; nor (b) any Default or Event of Default due to such failure of conditions or otherwise.
SECTION 7. COLLATERAL
7.1. Grant of Security Interest . To secure the prompt payment and performance of all Obligations, each Borrower hereby grants to Agent, for the benefit of Secured Parties, a continuing security interest in and Lien upon all of the following Property of such Borrower, whether now owned or hereafter acquired, and wherever located:
(a) all Accounts, excluding Accounts sold pursuant to the Receivables Securitization Facility and excluding all Accounts owed by The Pep Boys Manny, Moe & Jack;
(b) all Inventory;
(c) all Deposit Accounts of the Borrowers;
(d) all Chattel Paper arising from the sale of Inventory, excluding Chattel Paper to the extent sold, purportedly sold (but recharacterized as financed), transferred, assigned, contributed or otherwise conveyed pursuant to the Receivables Securitization Facility;
(e) all Payment Intangibles arising from the sale of Inventory, excluding Payment Intangibles to the extent sold, purportedly sold (but recharacterized as financed), transferred, assigned, contributed or otherwise conveyed pursuant to the Receivables Securitization Facility;
(f) the Receivables Securitization Facility Subordinated Note;
(g) the membership interests of Cooper Receivables LLC;
(h) all Documents relating to any of the foregoing;
(i) all Supporting Obligations relating to any of the foregoing;
(j) all accessions to, substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing, including proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any Collateral; and
(k) all books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and computer records) pertaining to the foregoing.
7.2. Lien on Deposit Accounts; Cash Collateral .
7.2.1. Deposit Accounts . To further secure the prompt payment and performance of all Obligations, each Borrower hereby grants to Agent, for the benefit of Secured Parties, a continuing security interest in and Lien upon all amounts credited to any Deposit Account of such Borrower, including any sums in any blocked or lockbox accounts or in any accounts into which such sums are swept, but excluding any RPA Blocked Accounts. Each Borrower shall authorize and direct each bank or other depository to deliver to Agent (following notice to such banks and other depositories delivered by Agent of a Default or Event of Default), on a daily basis, all balances in each Deposit Account maintained by such Borrower with such depository for application to the Obligations then outstanding. Each Borrower irrevocably appoints Agent as such Borrowers attorney-in-fact to collect such balances to the extent any such delivery is not so made. Cooper shall at all times cause the collections from all RPA Blocked Accounts to be swept daily (except Canadian Accounts) to a Deposit Account of Cooper that is subject to the foregoing requirements.
7.2.2. Cash Collateral . Any Cash Collateral may be invested, at Agents discretion, in Cash Equivalents, but Agent shall have no duty to do so, regardless of any agreement or course of dealing with any Borrower, and shall have no responsibility for any
investment or loss. Each Borrower hereby grants to Agent, for the benefit of Secured Parties, a security interest in all Cash Collateral held from time to time and all proceeds thereof, as security for the Obligations, whether such Cash Collateral is held in a Cash Collateral Account or elsewhere. Agent may apply Cash Collateral to the payment of any Obligations, in such order as Agent may elect, as they become due and payable. Each Cash Collateral Account and all Cash Collateral shall be under the sole dominion and control of Agent. No Borrower or other Person claiming through or on behalf of any Borrower shall have any right to any Cash Collateral, until Full Payment of all Obligations.
7.3. Other Collateral . By the fifteenth day of each Fiscal Quarter of Borrowers, Borrowers shall notify Agent in writing if any Borrower has obtained any interest in any Collateral consisting of Deposit Accounts, Documents, or Inventory since Borrowers prior such disclosure and, upon Agents request, shall promptly take such actions as Agent deems appropriate to effect Agents duly perfected, first priority Lien upon such Collateral, including obtaining any appropriate possession, control agreement (subject to the requirements of Section 8.4 hereof) or Lien Waiver. If any Collateral is in the possession of a third party, at Agents request, Borrowers shall obtain an acknowledgment that such third party holds the Collateral for the benefit of Agent.
7.4. No Assumption of Liability . The Lien on Collateral granted hereunder is given as security only and shall not subject Agent or any Lender to, or in any way modify, any obligation or liability of Borrowers relating to any Collateral.
7.5. Further Assurances . Promptly upon request, Borrowers shall deliver such instruments, assignments, title certificates, or other documents or agreements, and shall take such actions, as Agent deems appropriate under Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise to give effect to the intent of this Agreement. Each Borrower authorizes Agent to file any financing statement that indicates the Collateral as being of an equal or lesser scope, or with greater or lesser detail, than as set forth in Section 7.1 and ratifies any action taken by Agent before the Closing Date to effect or perfect its Lien on any Collateral.
SECTION 8. COLLATERAL ADMINISTRATION
8.1. Borrowing Base Certificates . (a) By the 15th day of each Fiscal Quarter of Borrowers, and (b) from and after such time as the sum of the total principal amount of all Loans and LC Obligations exceeds $10,000,000, by the 15th day of each month, Borrowers shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base Certificate prepared as of the close of business of the previous Fiscal Quarter or month, as applicable, and at such other times as Agent may request. All calculations of Availability in any Borrowing Base Certificate shall originally be made by Borrowers and certified by a Senior Officer, provided that Agent may from time to time review and adjust any such calculation (a) to reflect its reasonable estimate of declines in value of any Collateral, due to collections received in the Dominion Account or otherwise; (b) to adjust advance rates to reflect changes in dilution, quality, mix and other factors affecting Collateral; and (c) to the extent the calculation is not made in accordance with this Agreement or does not accurately reflect the Availability Reserve. Concurrently with the delivery of each Borrowing Base Certificate pursuant to this Section, Borrowers shall deliver to Agent, in form reasonably acceptable to Agent, a reconciliation of the
Borrowing Base (including Accounts, Inventory and Loans) to the general ledger of Borrowers and of such general ledger to the financial statements most recently delivered pursuant to Section 10.1.2 .
8.2. Administration of Accounts .
8.2.1. Records and Schedules of Accounts . Each Borrower shall keep accurate and complete records of its Accounts, including all payments and collections thereon, and shall submit to Agent sales, collection, reconciliation and other reports in form satisfactory to Agent, on such periodic basis as Agent may request. Each Borrower shall also provide to Agent, on or before the 15th day of each month or quarterly as provided for in Section 8.1 , a detailed aged trial balance of all Accounts of Max-Trac, except when a Default or Event of Default exists, then all Accounts, as of the end of the preceding month, specifying each Accounts Account Debtor name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and including such proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status reports and other information as Agent may reasonably request. If Accounts in an aggregate face amount of $1,000,000 or more cease to be Eligible Accounts, Borrowers shall notify Agent of such occurrence promptly (and in any event within one Business Day) after any Borrower has knowledge thereof.
8.2.2. Taxes . If an Account of any Borrower includes a charge for any Taxes, Agent is authorized, in its discretion, to pay the amount thereof to the proper taxing authority for the account of such Borrower and to charge Borrowers therefor; provided , however , that neither Agent nor Lenders shall be liable for any Taxes that may be due from Borrowers or with respect to any Collateral.
8.2.3. Account Verification . Whether or not a Default or Event of Default exists, Agent shall have the right at any time, in the name of Agent, any designee of Agent or any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Max-Trac by mail, telephone or otherwise. Borrowers shall cooperate fully with Agent in an effort to facilitate and promptly conclude any such verification process.
8.2.4. Maintenance of Dominion Account . Borrowers shall maintain Dominion Accounts pursuant to lockbox or other arrangements acceptable to Agent as listed on Schedule 8.2.4. Borrowers shall obtain an agreement (in form and substance satisfactory to Agent) from each lockbox servicer and Dominion Account bank listed on Schedule 8.2.4, establishing Agents control over and Lien in the lockbox or Dominion Account, which may be exercised by Agent during any Trigger Period, requiring immediate deposit of all remittances received in the lockbox to a Dominion Account, and waiving offset rights of such servicer or bank, except for customary administrative charges. If a Dominion Account is not maintained with Bank of America, Agent may, during any Trigger Period, require immediate transfer of all funds in such account to a Dominion Account maintained with Bank of America. Neither Agent nor Lenders assume any responsibility to Borrowers for any lockbox arrangement or Dominion Account, including any claim of accord and satisfaction or release with respect to any Payment Items accepted by any bank.
8.2.5. Proceeds of Collateral . Borrowers shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts of Max-Trac and, when a Default or Event of Default exists, all Accounts of Cooper, and all payments otherwise relating to Collateral are made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Agent and promptly (not later than the next Business Day) deposit same into a Dominion Account. Cooper shall require Cooper Receivables LLC to transfer (on a daily basis) all collections except Canadian collections held in all RPA Blocked Accounts to a Dominion Account.
8.3. Administration of Inventory .
8.3.1. Records and Reports of Inventory . Each Borrower shall keep accurate and complete records of its Inventory, including costs and daily withdrawals and additions, and shall submit to Agent inventory and reconciliation reports in form satisfactory to Agent, on such periodic basis as Agent may request. Each Borrower shall conduct a physical inventory at least once per calendar year (and on a more frequent basis if requested by Agent when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to Agent a report based on each such inventory and count promptly upon completion thereof, together with such supporting information as Agent may request. Agent may participate in and observe each physical count.
8.3.2. Returns of Inventory . No Borrower shall return any Inventory to a supplier, vendor or other Person, whether for cash, credit or otherwise, unless (a) such return is in the Ordinary Course of Business; (b) no Default, Event of Default or Overadvance exists or would result therefrom; (c) Agent is promptly notified if the aggregate Value of all Inventory returned in any month exceeds $10,000,000; and (d) any payment received by a Borrower for a return is promptly remitted to Agent for application to the Obligations.
8.3.3. Acquisition, Sale and Maintenance . Borrower shall take all steps to assure that all Inventory is produced in accordance with Applicable Law, including the FLSA. Borrowers shall use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law, and shall make current rent payments (within applicable grace periods provided for in leases) at all locations where any Collateral is located.
8.4. Administration of Deposit Accounts . Schedule 8.4 sets forth all Deposit Accounts maintained by Borrowers, including all Dominion Accounts. Each Borrower shall take all actions necessary to establish Agent's control of each Dominion Account and, after an Event of Default, each other such Deposit Account (other than an account exclusively used for payroll, payroll taxes or employee benefits, or an account containing not more that $10,000 at any time or RPA Blocked Accounts). Each Borrower shall be the sole account holder of each Deposit Account and shall not allow any other Person (other than Agent) to have control over a Deposit Account or any Property deposited therein. Each Borrower shall promptly notify Agent of any opening or closing of a Deposit Account and, with the consent of Agent, will amend Schedule 8.4 to reflect same.
8.5. General Provisions .
8.5.1. Location of Collateral . All tangible items of Collateral, other than Inventory in transit, shall at all times be kept by Borrowers at the business locations set forth in Schedule 8.5.1 , except that Borrowers may (a) make sales or other dispositions of Collateral in accordance with Section 10.2.5 ; and (b) move Collateral to another location in the United States, upon 5 Business Days prior written notice to Agent.
8.5.2. Insurance of Collateral; Condemnation Proceeds .
(a) Each Borrower shall maintain property and casualty and third party liability insurance with respect to the Collateral in amounts, with endorsements and with insurers (with a Best Rating of at least A7, unless otherwise approved by Agent) satisfactory to Agent. All proceeds relating to or arising out of a loss or claim with respect to Collateral under each property and casualty policy shall be payable to Agent. From time to time upon request, Borrowers shall deliver to Agent the originals or certified copies of its property and casualty liability insurance policies. Unless Agent shall agree otherwise, each property and casualty policy shall include satisfactory endorsements (i) showing Agent as sole loss payee or additional insured, as appropriate; (ii) requiring 30 days prior written notice to Agent in the event of cancellation of the policy for any reason whatsoever; and (iii) specifying that the interest of Agent shall not be impaired or invalidated by any act or neglect of any Borrower or the owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy. Upon request, Borrowers shall deliver to Agent originals or certified copies of third party liability insurance policies and certificates of insurance evidencing third party liability coverage naming Agent as an additional insured and requiring 30 days prior written notice to Agent of any cancellation. If any Borrower fails to provide and pay for any required property and casualty or third party liability insurance, Agent may, at its option, but shall not be required to, procure such insurance and charge Borrowers therefor. During any period that no Event of Default exists, Borrowers may settle, adjust or compromise any insurance claim relating to or arising out of a loss or claim with respect to Collateral, as long as the proceeds are delivered to Agent. If an Event of Default exists, only Agent shall be authorized to settle, adjust and compromise such claims.
(b) Any proceeds of insurance that relate to Inventory shall be paid to Agent and applied to payment of the Loans, and then to any other Obligations (other than Bank Product Debt) outstanding. Thereafter, any excess will be returned to Borrowers.
8.5.3. Protection of Collateral . All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Agent to any Person to realize upon any Collateral, shall be borne and paid by Borrowers. Agent shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in Agents actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Borrowers sole risk.
8.5.4. Defense of Title to Collateral . Each Borrower shall at all times defend its title to Collateral and Agent's Liens therein against all Persons, claims and demands whatsoever, except Permitted Liens.
8.6. Power of Attorney . Each Borrower hereby irrevocably constitutes and appoints Agent (and all Persons designated by Agent) as such Borrower's true and lawful attorney (and agent-in-fact) for the purposes provided in this Section. Agent, or Agent's designee, may, without notice and in either its or a Borrower's name, but at the cost and expense of Borrowers:
(a) Indorse a Borrower's name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Agent's possession or control; and
(b) During an Event of Default, (i) notify any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts, by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Agent deems advisable; (iv) take control, in any manner, of any proceeds of Collateral; (v) prepare, file and sign a Borrowers name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to a Borrower, and notify postal authorities to change the address for delivery thereof to such address as Agent may designate; (vii) indorse any Chattel Paper, Document, Instrument, invoice, freight bill, bill of lading, or similar document or agreement relating to any Accounts, Inventory or other Collateral; (viii) use a Borrower's stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to any Collateral; (x) make and adjust claims under policies of insurance; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit or banker's acceptance for which a Borrower is a beneficiary; and (xii) take all other actions as Agent deems appropriate to fulfill any Borrower's obligations under the Loan Documents.
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1. General Representations and Warranties . To induce Agent and Lenders to enter into this Agreement and to make available the Commitments, Loans and Letters of Credit, each Borrower represents and warrants that:
9.1.1. Organization and Qualification . Each Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Borrower is duly qualified, authorized to do business and in good standing as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect.
9.1.2. Power and Authority . Each Borrower is duly authorized to execute, deliver and perform its Loan Documents. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action, and do not (a) require any consent
or approval of any holders of Equity Interests of any Borrower, other than those already obtained; (b) contravene the Organic Documents of any Borrower; (c) violate or cause a default under any Applicable Law or Material Contract; or (d) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Borrower.
9.1.3. Enforceability . Each Loan Document is a legal, valid and binding obligation of each Borrower party thereto, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors rights generally.
9.1.4. Capital Structure . Schedule 9.1.4 shows, for each Borrower, its name, its jurisdiction of organization, its authorized and issued Equity Interests, the holders of its Equity Interests, and all agreements binding on such holders with respect to their Equity Interests. Each Borrower has good title to its Equity Interests in its Subsidiaries, free and clear of all Liens, and all such Equity Interests are duly issued, fully paid and non-assessable. There are no outstanding options to purchase, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to any Equity Interests of any Borrower or Subsidiary.
9.1.5. Corporate Names; Locations . During the five years preceding the Closing Date, except as shown on Schedule 9.1.5 , no Borrower has been known as or used any corporate, fictitious or trade names, has been the surviving corporation of a merger or combination, or has acquired any substantial part of the assets of any Person. The chief executive offices and other places of business of Borrowers are shown on Schedule 8.5.1 . During the five years preceding the Closing Date, no Borrower has had any other office or place of business.
9.1.6. Title to Properties; Priority of Liens . Each Borrower and Subsidiary has good and marketable title to (or valid leasehold interests in) all Inventory, free of Liens except Permitted Liens. Each Borrower and Significant Subsidiary has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens. All Liens of Agent in the Collateral are duly perfected, first priority Liens, subject only to Permitted Liens that are expressly allowed to have priority over Agents Liens.
9.1.7. Accounts . Agent may rely, in determining which Accounts of Max-Trac are Eligible Accounts, on all statements and representations made by Borrowers with respect thereto. Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in a Borrowing Base Certificate, that:
(a) it is genuine and in all respects what it purports to be, and is not evidenced by a judgment;
(b) it arises out of a completed, bona fide sale and delivery of goods or rendition of services in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto;
(c) it is for a sum certain, maturing as stated in the invoice covering such sale or rendition of services, a copy of which has been furnished or is available to Agent on request;
(d) it is not subject to any offset, Lien (other than Agents Lien), deduction, defense, dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of Business and disclosed to Agent; and it is absolutely owing by the Account Debtor, without contingency in any respect;
(e) no purchase order, agreement, document or Applicable Law restricts assignment of the Account to Agent (regardless of whether, under the UCC, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the invoice;
(f) no extension, compromise, settlement, modification, credit, deduction or return has been authorized with respect to the Account, except discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Agent hereunder; and
(g) to the best of Borrowers knowledge, (i) there are no facts or circumstances that are reasonably likely to impair the enforceability or collectibility of such Account; (ii) the Account Debtor had the capacity to contract when the Account arose, continues to meet the applicable Borrowers customary credit standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably be expected to have a Material Adverse Effect on the Account Debtors financial condition.
9.1.8. Financial Statements . The consolidated and consolidating balance sheets, and related statements of income, cash flow and shareholders equity, of Borrowers and Subsidiaries that have been and are hereafter delivered to Agent and Lenders, are prepared in accordance with GAAP, and fairly present the financial positions and results of operations of Borrowers and Subsidiaries at the dates and for the periods indicated. All projections delivered from time to time to Agent and Lenders have been prepared in good faith, based on reasonable assumptions in light of the circumstances at such time. Since December 31, 2010, there has been no change in the condition, financial or otherwise, of any Borrower or Subsidiary that could reasonably be expected to have a Material Adverse Effect. No financial statement delivered to Agent or Lenders at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading. Each Borrower and Subsidiary is Solvent.
9.1.9. Taxes . Each Borrower and Subsidiary has filed all federal, state and local tax returns and other reports that it is required by law to file, and has paid, or made provision for the payment of, all Taxes upon it, its income and its Properties that are due and payable other than (a) those presently payable without penalty or interest or (b) those which are being Properly Contested or (c) those which could not, individually or not, in the aggregate, be reasonably expected to have a Material Adverse Effect. The provision for Taxes on the books of each Borrower is adequate for all years not closed by applicable statutes, and for its current Fiscal Year.
9.1.10. Brokers . There are no brokerage commissions, finders fees or investment banking fees payable in connection with any transactions contemplated by the Loan Documents.
9.1.11. Intellectual Property . Each Borrower and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without conflict with any rights of others, except where the failure to own or have such right to use or the existence of conflict with any rights of others could not reasonably be expected to have a Material Adverse Effect. There is no pending or, to any Borrowers knowledge, threatened Intellectual Property Claim with respect to any Borrower, any Subsidiary or any of their Property (including any Intellectual Property), which could be reasonably likely to have a Material Adverse Effect.
9.1.12. Governmental Approvals . Each Borrower and Significant Subsidiary has, is in compliance with, and is in good standing with respect to, all material Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties. All necessary import, export or other licenses, permits or certificates for the import or handling of any goods or other Collateral have been procured and are in effect, and Borrowers and Subsidiaries have complied with all foreign and domestic laws with respect to the shipment and importation of any goods or Collateral, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.
9.1.13. Compliance with Laws . Each Borrower and Subsidiary has duly complied, and its Properties and business operations are in compliance with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect. There have been no citations, notices or orders of noncompliance issued to any Borrower or Subsidiary under any Applicable Law that could reasonably be expected to have a Material Adverse Effect. No Inventory has been produced in violation of the FLSA.
9.1.14. Compliance with Environmental Laws . To any Borrowers knowledge, except as set forth in the Forms 10-K, 10-Q, 8-K or S-4 filed by the Borrowers with the SEC after January 1, 2011 and prior to June 30, 2011, the Borrowers and their Subsidiaries are in material compliance with all Environmental Laws.
9.1.15. Burdensome Contracts . No Borrower is a party or subject to any contract, agreement or charter restriction that could reasonably be expected to have a Material Adverse Effect. No Borrower is, and as of the Closing Date, no Subsidiary is, party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.15 , none of which prohibit the execution or delivery of any Loan Documents by a Borrower nor the performance by a Borrower of any obligations thereunder.
9.1.16. Litigation . Except as set forth in Forms 10-K, 10-Q, 8-K or S-4 filed with the SEC after January 1, 2011 and prior to June 30, 2011, there is no litigation or governmental proceedings pending or, to any Borrowers knowledge, after diligent inquiry, threatened against any Borrower or Subsidiary, that could reasonably be expected to have a Material Adverse Effect. No Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority.
9.1.17. No Defaults . No event or circumstance has occurred or exists that constitutes a Default or Event of Default. No Borrower is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute a default, under any Material Contract or in the payment of any Borrowed Money in excess of $10,000,000. There is no basis upon which any party (other than a Borrower or Subsidiary) could terminate a Material Contract prior to its scheduled termination date.
9.1.18. ERISA . Except as disclosed on Schedule 9.1.18 :
(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code, and other federal and state laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of Borrowers, nothing has occurred which would prevent, or cause the loss of, such qualification. Each Borrower and ERISA Affiliate has made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the knowledge of Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted in or could reasonably be expected to have a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Borrower or ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) no Borrower or ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) no Borrower or ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, in the case of clauses (i) (v) above, except to the extent such event could not reasonably be expected to have a Material Adverse Effect.
(d) Except to the extent that, if any such event occurred or status exists, it could not reasonably be expected to have a Material Adverse Effect, with respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms of the Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and (iii) it
has been registered as required and has been maintained in good standing with applicable regulatory authorities.
9.1.19. Trade Relations . There exists no actual or threatened termination, limitation or modification of any business relationship between any Borrower or Subsidiary and any customer or supplier, or any group of customers or suppliers, who individually or in the aggregate are material to the business of such Borrower or Subsidiary. There exists no condition or circumstance that could reasonably be expected to impair the ability of any Borrower or Significant Subsidiary to conduct its business at any time hereafter in substantially the same manner as conducted on the Closing Date.
9.1.20. Labor Relations . Each Borrower and Subsidiary is in compliance with all employee benefit plans, employment agreements, collective bargaining agreements and labor contracts and all applicable federal, state and local labor and employment laws including, but not limited to, those related to equal employment opportunity and affirmative action, labor relations, minimum wage, overtime, child labor, medical insurance continuation, worker adjustment and relocation notices, immigration controls and worker and unemployment compensation, except where the failure to comply could not be reasonably likely to have a Material Adverse effect. Except as described on Schedule 9.1.20 , no Borrower is party to or bound by any collective bargaining agreement, management agreement or consulting agreement. Schedule 9.1.20 sets forth the scheduled expiration or termination date of each such collective bargaining agreement, management agreement or casualty agreement. There are no material grievances, disputes or controversies with any union or other organization of any Borrowers employees, or, to any Borrowers knowledge, any asserted or threatened strikes, work stoppages or demands for collective bargaining.
9.1.21. Payable Practices . No Borrower or Significant Subsidiary has made any material change in its historical accounts payable practices from those in effect on the Closing Date.
9.1.22. Not a Regulated Entity . No Borrower or Significant Subsidiary is (a) an investment company or a person directly or indirectly controlled by or acting on behalf of an investment company within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code or any other Applicable Law regarding its authority to incur Debt.
9.1.23. Margin Stock . No Borrower or Significant Subsidiary is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Board of Governors.
9.1.24. Immaterial Subsidiaries . The Borrowers, Immaterial Subsidiaries, taken as a whole, do not represent more than 20% of Coopers consolidated EBITDA or 20% of Coopers consolidated assets.
9.1.25. Significant Subsidiaries . On the Closing Date, Cooper has no Significant Subsidiary that is organized under the laws of a State in the United States other than Max-Trac.
9.2. Complete Disclosure. No Loan Document contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make the statements contained therein not materially misleading. There is no fact or circumstance that any Borrower has failed to disclose to Agent in writing that could reasonably be expected to have a Material Adverse Effect.
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
10.1. Affirmative Covenants . As long as any Commitments or Obligations are outstanding, each Borrower shall:
10.1.1. Inspections; Appraisals .
(a) Permit Agent from time to time, subject (except when a Default or Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Borrower, inspect, audit and make extracts from any Borrowers books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Borrowers business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense. Neither Agent nor any Lender shall have any duty to any Borrower to make any inspection, nor to share any results of any inspection, appraisal or report with any Borrower. Borrowers acknowledge that all inspections, appraisals and reports are prepared by Agent and Lenders for their purposes, and Borrowers shall not be entitled to rely upon them.
(b) Reimburse Agent for all charges, costs and expenses of Agent in connection with (i) examinations of any Borrowers books and records or any other financial or Collateral matters as Agent deems appropriate, up to three times per Loan Year; and (ii) after the Appraisal Trigger Date, appraisals of Inventory up to two times per Loan Year; provided , however , that if an examination or appraisal is initiated during a Default or Event of Default, all charges, costs and expenses therefor shall be reimbursed by Borrowers without regard to such limits. Subject to and without limiting the foregoing, Borrowers specifically agree to pay Agents then standard charges for each day that an employee of Agent or its Affiliates is engaged in any examination activities, and shall pay the standard charges of Agents internal appraisal group. The limitations on Borrowers liability under this Section shall not be construed to limit Agents right to conduct examinations or to obtain appraisals at any time in its discretion, nor to use third parties for such purposes. In addition to the foregoing, Borrowers shall cooperate with Agent in connection with appraisals of Inventory from and after the date, if any, that the sum of the total principal amount of all Loans and LC Obligations exceeds $50,000,000 (such date, the Appraisal Trigger Date ), such appraisal to be accomplished within 45 days following the Appraisal Trigger Date.
10.1.2. Financial and Other Information . Keep, and cause each Subsidiary to keep, adequate records and books of account with respect to its business activities, in which
proper entries, which, for Borrowers and Domestic Subsidiaries, are made in accordance with GAAP reflecting all financial transactions; and furnish to Agent and Lenders:
(a) as soon as available, and in any event within 90 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders equity for such Fiscal Year, on a consolidated basis for Borrowers and Subsidiaries, which consolidated statements shall be audited and certified (without qualification as to scope, going concern or similar items) by a firm of independent certified public accountants of recognized standing selected by Borrowers and acceptable to Agent, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to Agent;
(b) as soon as available, and in any event within 45 days after the end of each Fiscal Quarter, unaudited balance sheets as of the end of such quarter and the related statements of income and cash flow for such quarter and for the portion of the Fiscal Year then elapsed, on consolidated basis for Borrowers and Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such quarter and period, subject to normal year-end adjustments and the absence of footnotes;
(c) with each of the financial statements delivered under clauses (a) and (b) above, internally prepared consolidating statements by business segment;
(d) concurrently with delivery of financial statements under clauses (a) and (b) above, or more frequently if requested by Agent while a Default or Event of Default exists, a Compliance Certificate executed by the chief financial officer of Borrower Agent;
(e) concurrently with delivery of financial statements under clause (a) above, copies of all management letters and other material reports submitted to Borrowers by their accountants in connection with such financial statements;
(f) no later than 60 days after the end of each Fiscal Year, projections of Borrowers and Subsidiaries consolidated balance sheets, results of operations, cash flow and Availability for the next Fiscal Year, month by month;
(g) at Agents request, a listing of each Borrowers trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form satisfactory to Agent;
(h) promptly after the sending or filing thereof, copies of any proxy statements, financial statements or reports that any Borrower has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses that any Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange; and copies of any press releases or other statements made available by a Borrower to the public concerning material changes to or developments in the business of such Borrower;
(i) at Agents request, promptly after the sending or filing thereof, copies of any annual report to be filed in connection with each Plan or Foreign Plan; and
(j) such other reports and information (financial or otherwise) as Agent may request from time to time in connection with any Collateral or any Borrowers or Subsidiarys financial condition or business.
10.1.3. Notices . Notify Agent and Lenders in writing, promptly after a Borrowers obtaining knowledge thereof, of any of the following that affects a Borrower: (a) the threat or commencement of any proceeding or investigation, whether or not covered by insurance, if an adverse determination could have a Material Adverse Effect; (b) any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract; (c) any default under or termination of a Material Contract; (d) the existence of any Default or Event of Default; (e) any judgment in an amount exceeding $10,000,000; (f) the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect; (g) any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect; (h) any Environmental Release by a Borrower or on any Property owned, leased or occupied by a Borrower; or receipt of any Environmental Notice regarding a noncompliance or violation which, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; (i) the occurrence of any ERISA Event in an amount exceeding $10,000,000; (j) an Immaterial Subsidiary is now a Significant Subsidiary; or (k) the discharge of or any withdrawal or resignation by Borrowers independent accountants.
10.1.4. Landlord and Storage Agreements . Upon request, provide Agent with copies of all existing agreements, and promptly after execution thereof provide Agent with copies of all future agreements, between a Borrower and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.
10.1.5. Compliance with Laws . Comply, and cause each Subsidiary to comply, with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Anti-Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Borrower or any Significant Subsidiary, it shall act promptly and diligently to investigate and report to Agent and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, whether or not directed to do so by any Governmental Authority.
10.1.6. Taxes . Pay and discharge all Taxes prior to the date on which they become delinquent or penalties attach, unless such Taxes are being Properly Contested.
10.1.7. Insurance . Maintain casualty and third party liability insurance as required by Section 8.5.2 .
10.1.8. Licenses . Keep, and cause each Subsidiary to keep, each License affecting any Collateral (including the manufacture, distribution or disposition of Inventory) or any other material Property of Borrowers and Subsidiaries in full force and effect; promptly notify Agent of any proposed modification to any such License, or entry into any new License, in each case at least 30 days prior to its effective date; pay, and cause each Subsidiary to pay, all Royalties when due; and notify Agent of any default or breach asserted by any Person to have occurred under any License.
10.1.9. Post Closing Matters . Notwithstanding any provision of the Agreement to the contrary, Borrower Agent agrees that it shall deliver to the Agent within 45 days after the Closing Date (unless such time period is extended by the Agent in its sole discretion), the executed Deposit Account Control Agreement with PNC Bank in form and substance satisfactory to the Agent.
10.2. Negative Covenants . As long as any Commitments or Obligations are outstanding, each Borrower shall not:
10.2.1. Permitted Debt . Create, incur, guarantee or suffer to exist any Debt, except:
(a) the Obligations;
(b) Permitted Purchase Money Debt;
(c) Borrowed Money (other than the Obligations and Permitted Purchase Money Debt), but only to the extent such Debt is listed on Schedule 10.2.1 , outstanding on the Closing Date and not satisfied with proceeds of the initial Loans;
(d) Bank Product Debt;
(e) Debt that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by a Borrower or Subsidiary, as long as such Debt was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition;
(f) Permitted Contingent Obligations;
(g) Refinancing Debt as long as each Refinancing Condition is satisfied;
(h) Debt under the Receivables Securitization Facility;
(i) Debt secured by a Lien permitted under Section 10.2.2(l) hereof to the extent reasonably satisfactory to the Agent;
(j) Unsecured Contingent Obligations of a Borrower for debts of its Subsidiaries to the extent such incurrence is customary in the conduct of the Borrowers business;
(k) Debt that is not included in any of the preceding clauses of this Section, is not secured by a Lien and has a maturity date at least 6 months after the Revolver Termination Date; and
(l) letters of credit that are not Letters of Credit hereunder or that are not letters of credit extended under the Receivables Securitization Facility in an aggregate amount not to exceed $50,000,000 at any time outstanding.
10.2.2. Permitted Liens . Create or suffer to exist any Lien upon any of its Property, except the following (collectively, Permitted Liens ):
(a) Liens in favor of Agent;
(b) Purchase Money Liens securing Permitted Purchase Money Debt;
(c) Liens for Taxes not yet due or being Properly Contested;
(d) statutory Liens (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of any Borrower or Subsidiary;
(e) Liens incurred or deposits made in the Ordinary Course of Business to secure the performance of tenders, bids, leases, contracts (except those relating to Borrowed Money), stay or appeal bonds, statutory obligations and other similar obligations, or arising as a result of progress payments under government contracts, as long as such Liens are at all times junior to Agents Liens;
(f) Liens arising in the Ordinary Course of Business that are subject to Lien Waivers;
(g) Liens arising by virtue of a judgment or judicial order against any Borrower or Subsidiary, or any Property of a Borrower or Subsidiary, as long as such Liens are (i) in existence for less than 20 consecutive days or being Properly Contested, and (ii) at all times junior to Agents Liens;
(h) easements, rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business;
(i) normal and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection;
(j) existing Liens shown on Schedule 10.2.2 ;
(k) Liens arising in connection with the Receivables Securitization Facility;
(l) Liens on assets that constitute Principal Property (as defined in the Existing Indenture) and sale and leaseback transactions (as defined in the Existing Indenture) of Cooper and its Subsidiaries, in each case to the extent permitted by the terms of the Existing Indenture (assuming that, at the time of incurrence, such Existing Indenture are in full force and effect); and
(m) Liens on cash or Cash Equivalents in an aggregate amount not to exceed at any time $ 50,000,000 securing Debt permitted pursuant to Section 10.2.1(l) .
10.2.3. Distributions; Upstream Payments . Declare or make any Distributions, except Upstream Payments; or create or suffer to exist any encumbrance or restriction on the ability of Max-Trac or any other domestic Subsidiary of any Borrower to make any Upstream Payment, except for restrictions under the Loan Documents, under Applicable Law or in effect on the Closing Date as shown on Schedule 9.1.15 ; provided that such limitations on Distributions shall not apply if at the time of the declaration of such Distribution, the Availability Test is met and the most recently delivered Projections indicate that the Availability Test will also be met.
10.2.4. Restricted Investments and Acquisitions . Make any Restricted Investment; provided that limitations on Restricted Investments (other than restrictions on Acquisitions) shall not apply if the Availability Test is met as of both the date the applicable Borrower commits to make such Restricted Investment and the date the Borrower funds such Restricted Investment; make, directly or indirectly through any Subsidiary or Affiliate, any Acquisitions unless (i) no Default or Event of Default has occurred and is continuing; (ii) the acquired business is primarily in the same or a substantially similar line of business as the Borrowers or a reasonable extension of such line of businesses; (iii) such Acquisition is approved by the Board of Directors and shareholders of the acquired business; and (iv) the consideration paid in such Acquisition does not exceed $30,000,000 for any individual Acquisition or $100,000,000 for all Acquisitions since the Closing Date; provided that limitations on the amount of consideration that may be paid in connection with Acquisitions shall not apply if the Availability Test is met and the Fixed Charge Coverage Ratio a pro forma basis after giving effect to such Acquisition is greater than 1.0:1.0 in each case at the time the Borrower commits to such Acquisition and at the time the Borrower funds such Acquisition.
10.2.5. Disposition of Assets . Make any Asset Disposition, except the following
(a) Permitted Asset Dispositions; and
(b) intercompany transfers among the Borrowers and any other intercompany transfers (excluding transfers and liens under the Receivables Securitization Facility) so long as on an arms-length basis and in the Ordinary Course of Business;
(c) all other Asset Dispositions so long as, both immediately before and after such Asset Disposition (and the accompanying prepayment, if applicable), Borrowers are in compliance with the Availability Test;
(d) Dispositions of Accounts, General Intangibles, Chattel Paper, Payment Intangibles and Supporting Obligations, in each case solely to the extent sold, purportedly sold
(but recharacterized as financed), transferred, assigned, contributed or otherwise conveyed to the Receivables Securitization Facility; and
(e) so long as no Default is continuing, sales of Accounts owned by Cooper that are owed by foreign account debtors.
10.2.6. Loans . Make any loans or other advances (or distributions) of money to any Person, except (a) advances to an officer or employee for salary, travel expenses, commissions and similar items in the Ordinary Course of Business; (b) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business; (c) any Investments permitted under Section 10.2.4 and (d) loans and advances that, when taken together with all loans and advances permitted under clause (d) of the definition of Restricted Investments , do not exceed $10,000,000 in the aggregate at any time outstanding.
10.2.7. Restrictions on Payment of Certain Debt . Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any Borrowed Money (other than the Obligations) prior to its due date under the agreements evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of Agent); provided the restrictions on voluntary payments shall not apply so long as the Availability Test is met at the time of such prepayment.
10.2.8. Fundamental Changes . Merge, combine or consolidate with any Person, or liquidate, wind up its affairs or dissolve itself, in each case whether in a single transaction or in a series of related transactions, except for mergers or consolidations of a wholly-owned Subsidiary with or into a Borrower (so long as a Borrower is the surviving entity of such merger or consolidation); change its name or conduct business under any fictitious name; change its tax, charter or other organizational identification number; or change its form or state of organization.
10.2.9. Organic Documents . Amend, modify or otherwise change any of its Organic Documents as in effect on the Closing Date in a manner adverse to the Lenders.
10.2.10. Tax Consolidation . File or consent to the filing of any consolidated income tax return with any Person other than Borrowers and Subsidiaries.
10.2.11. Accounting Changes . Make any material change in accounting treatment or reporting practices, except as required by GAAP and in accordance with Section 1.2 ; or change its Fiscal Year.
10.2.12. Restrictive Agreements . Become, or permit any domestic Significant Subsidiary (other than Cooper Receivables LLC) to become, a party to any Restrictive Agreement, except (a) a Restrictive Agreement as in effect on the Closing Date and shown on Schedule 9.1.15 ; (b) a Restrictive Agreement relating to secured Debt permitted hereunder, if such restrictions apply only to the collateral for such Debt; and (c) customary provisions in leases and other contracts restricting assignment thereof.
10.2.13. Hedging Agreements . Enter into any Hedging Agreement, except to hedge risks arising in the Ordinary Course of Business (including interest rate swaps) and not for speculative purposes.
10.2.14. Conduct of Business . Engage in any business, other than its business as conducted on the Closing Date and any activities incidental thereto.
10.2.15. Affiliate Transactions . Enter into or be party to any transaction with an Affiliate, except (a) transactions contemplated by the Loan Documents; (b) payment of reasonable compensation to officers and employees for services actually rendered, and loans and advances permitted by Section 10.2.6 ; (c) payment of customary directors fees and indemnities; (d) transactions solely among Borrowers; (e) transactions with Affiliates that were consummated prior to the Closing Date, as shown on Schedule 10.2.17 ; (f) transactions with Affiliates in the Ordinary Course of Business, upon fair and reasonable terms (if requested by Agent, fully disclosed to Agent) and no less favorable than would be obtained in a comparable arms-length transaction with a non-Affiliate; (g) sales of accounts receivable, payment intangibles and related assets or participations therein, in connection with the Receivables Securitization Facility; and (h) Restricted Investments permitted under Section 10.2.4 hereof.
10.2.16. Plans . Become party to any Multiemployer Plan or Foreign Plan, other than any in existence on the Closing Date.
10.2.17. Amendments and Notices of Amendments to Receivables Purchase Agreement or Purchase and Sale Agreement . Except for extensions and renewals, Cooper shall (a) provide Agent with written notice of any proposed amendment, modification or other change to, and each consent to a departure from, the terms or provisions of the Receivables Securitization Facility and (b) promptly following the effectiveness thereof, provide Agent with a copy of each such amendment, modification or other change to, and each such consent to a departure from, the terms or provisions of the Receivable Securitization Facility. Prior to a Facility Termination Date (as defined under the Receivables Securitization Facility), Cooper shall not, without the prior written consent of Agent, amend, modify or otherwise change or obtain a consent to a departure from Section 1.4, the definition of Termination Day, or any changes to Section 2 of Exhibit II thereof, in each case under and as defined in the Receivables Purchase Agreement that (i) would be adverse in any way (as determined by Agent in its commercially reasonable discretion) to the Agent or Lenders or (ii) could in any way impair the Lien of Agent or Lenders in the Collateral (including, without limitation, by impairing the creation, attachment, perfection, or priority of such Lien).
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
11.1. Events of Default . Each of the following shall be an Event of Default hereunder, if the same shall occur for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:
(a) A Borrower fails to pay (i) any Obligations (except Bank Product Debt in an aggregate amount less than $1,000,000) when due or (ii) Bank Product Debt in an aggregate amount equal to or greater than $1,000,000 within three (3) days following the date due, (in each case, whether at stated maturity, on demand , upon acceleration or otherwise);
(b) Any representation, warranty or other written statement of a Borrower made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect when given;
(c) A Borrower breaches or fail to perform any covenant contained in Section 7.2, 7.3, 7.5, 8.1 (unless the Borrowing Base Certificate is delivered within 3 days following the date due), 8.2.4, 8.2.5, 8.5.2, 10.1.1, 10.1.2 (unless the required deliveries are made within 10 days following the date due) or 10.2 ;
(d) A Borrower breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured within 30 days after a Senior Officer of such Borrower has knowledge thereof or receives notice thereof from Agent, whichever is sooner; provided , however , that such notice and opportunity to cure shall not apply if the breach or failure to perform is not capable of being cured within such period or is a willful breach by a Borrower;
(e) A Borrower denies or contests the validity or enforceability of any Loan Documents or Obligations, or the perfection or priority of any Lien granted to Agent; or any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release by Agent and Lenders);
(f) Any breach or default of a Borrower occurs under any document, instrument or agreement to which it is a party or by which it or any of its Properties is bound, relating to any Debt (other than the Obligations) in excess of $10,000,000 if the maturity of or any payment with respect to such Debt may be accelerated or demanded due to such breach; or any termination event or unmatured termination event, however named, occurs under the Receivables Securitization Facility (or any other securitization facility) to which Borrower or any special purpose entity established by either Borrower is a party, relating to any debt, interests in either Borrowers Accounts (including, without limitation, Receivables Accounts) or similar investment in excess of $10,000,000, if such event allows such securitization facility to be accelerated or terminated or causes the reinvestment of collections in new Accounts (including, without limitation, Receivables Accounts) to terminate or be suspended.
(g) Any judgment or order for the payment of money is entered against a Borrower in an amount that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Borrowers, $10,000,000 (net of any insurance coverage, cash reserve or self-insurance coverage therefor acknowledged in writing by the insurer), unless a stay of enforcement of such judgment or order is obtained within sixty (60) days of the date of such judgment or order;
(h) A loss, theft, damage or destruction occurs with respect to any Collateral in excess of $3,000,000 if the such Collateral is not covered by insurance;
(i) A Borrower or any Significant Subsidiary is enjoined, restrained or in any way prevented by any Governmental Authority from conducting any material part of its business; a Borrower or any Significant Subsidiary suffers the loss, revocation or termination of any material license, permit, lease or agreement necessary to its business; there is a cessation of
any material part of a Borrowers or any Significant Subsidiarys business for a material period of time; any material Collateral or Property of a Borrower is taken or impaired through condemnation; a Borrower or any Significant Subsidiary agrees to or commences any liquidation, dissolution or winding up of its affairs; or a Borrower or any Significant Subsidiary ceases to be Solvent;
(j) An Insolvency Proceeding is commenced by a Borrower or any Significant Subsidiary; a Borrower or any Significant Subsidiary makes an offer of settlement, extension or composition to its unsecured creditors generally; a trustee is appointed to take possession of any substantial Property of or to operate any of the business of a Borrower or any Significant Subsidiary; or an Insolvency Proceeding is commenced against a Borrower or any Significant Subsidiary and: the Borrower or any Significant Subsidiary consents to institution of the proceeding, the petition commencing the proceeding is not timely controverted by the Borrower or the applicable Significant Subsidiary, the petition is not dismissed within 30 days after filing, or an order for relief is entered in the proceeding;
(k) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result in liability of a Borrower to a Pension Plan, Multiemployer Plan or PBGC in excess of $10,000,000, or that constitutes grounds for appointment of a trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; a Borrower or ERISA Affiliate fails to pay when due any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan;
(l) A Borrower or any Significant Subsidiary or any of their respective Senior Officers is criminally indicted or convicted for (i) a felony committed in the conduct of the Borrowers or a Significant Subsidiarys business, or (ii) violating any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property or any Collateral;
(m) A Change of Control occurs; or any event occurs or condition exists that has a Material Adverse Effect; or
(n) The Existing Senior Unsecured Notes are not refinanced, defeased or reserved for under the Borrowing Base at least 90 days prior to the maturity date of such Existing Senior Unsecured Notes.
Notwithstanding any other provision in this Section 11.1, no Event of Default under Sections 11.1(a) (h) and (k) (n) shall be deemed to occur if, at the time of the occurrence of an event under any of Sections 11.1(a) (h) or (k) (n):
(i) (a) no Loans and LC Obligations are outstanding and (b) within five (5) Business Days, all fees and expenses then due under this Agreement have been paid in full in cash and all other Obligations have been cash collateralized in an amount equal to 100% of the outstanding amount of such Obligations and otherwise to Administrative Agents reasonable satisfaction; or
(ii) (a) the aggregate outstanding principal balance of all Loans and LC Obligations is less than $50,000,000, (b) both immediately before and during the immediately succeeding five (5) Business Day period following such event, Availability is greater than $100,000,000 and (c) within five (5) Business Days , (I) all Loans, drawings under Letters of Credit, fees and expenses have been paid in full in cash, (II) all other LC Obligations have been cash collateralized in an amount equal to 105% of the stated amount of such LC Obligations and otherwise to Administrative Agents reasonable satisfaction and (III) all other Obligations have been cash collateralized in an amount equal to 100% of the outstanding amount of such LC Obligations and otherwise to Administrative Agents reasonable satisfaction.
11.2. Remedies upon Default . If an Event of Default described in Section 11.1(j) occurs with respect to any Borrower, then to the extent permitted by Applicable Law, all Obligations (other than Secured Bank Product Obligations) shall become automatically due and payable and all Commitments shall terminate, without any action by Agent or notice of any kind. In addition, or if any other Event of Default exists, Agent may in its discretion (and shall upon written direction of Required Lenders) do any one or more of the following from time to time:
(a) declare any Obligations (other than Secured Bank Product Obligations) immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrowers to the fullest extent permitted by law;
(b) terminate, reduce or condition any Commitment, or make any adjustment to the Borrowing Base;
(c) require Borrowers to Cash Collateralize LC Obligations, Bank Product Debt and other Obligations that are contingent or not yet due and payable, and, if Borrowers fail promptly to deposit such Cash Collateral, Agent may (and shall upon the direction of Required Lenders) advance the required Cash Collateral as Loans (whether or not an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied);
(d) exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers expense, and make it available to Agent at a place designated by Agent; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by a Borrower, Borrowers agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Agent, in its discretion, deems advisable. Each Borrower agrees that 10 days notice of any proposed sale or other disposition of Collateral by Agent shall be reasonable. Agent shall have the right to conduct such sales on any Borrowers premises, without charge, and such sales may be adjourned from time to time in accordance with Applicable Law. Agent shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Agent may purchase any Collateral at public or, if permitted by law,
private sale and, in lieu of actual payment of the purchase price, may credit bid and set off the amount of such price against the Obligations; and
(e) direct Account Debtors of the Borrowers (or require Borrowers to direct such Account Debtors) to pay all amounts owing to Borrowers to a Dominion Account (or other depository account identified by Agent).
Upon the occurrence of any event described in Section 11.1(a)(n), Agent may, in its discretion, (or, at the request of Requisite Lenders, shall) terminate, reduce or condition any Commitment or make any adjustment to the Borrowing Base.
11.3. Limited Conditional License for Intellectual Property . In addition to, and not by way of limitation of, the granting of a security interest in the Collateral pursuant hereto, each of the Borrowers hereby assigns, transfers and conveys to the Agent, for use upon the occurrence and during the continuation of an Event of Default, the irrevocable, nonexclusive right and license to use all present and future trademarks, trade names, trade dress and copyrights owned or used by such Borrower that relate to the Collateral, together with any goodwill associated therewith, all to the extent necessary to enable the Agent to realize on, and exercise all rights of the Agent and the Lenders in relation to, the Collateral in accordance with this Agreement (including without limitation advertising in all media as the Agent deems appropriate in connection with marketing and sales of the Collateral) and to enable any transferee or assignee of the Collateral to enjoy the benefits of the Collateral, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof; provided , however, the license granted under this Section 11.3 shall not be construed to limit such Borrowers ability to take reasonable steps, in accordance with its then current business practices, to protect and preserve its trademarks, trade names, trade dress and copyrights. This right shall inure to the benefit of all successors, assigns and transferees of the Agent and its successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and license shall be granted free of charge, without requirement that any monetary payment whatsoever be made to such Borrower. In addition, each Borrower hereby grants to the Agent and its employees, representatives and agents the right to visit such Borrowers and any of its Affiliates or subcontractors plants, facilities and other places of business that are utilized in connection with the manufacture, production, inspection, storage or sale of Collateral (or which were so utilized during the prior six month period), and to inspect the quality control and all other records relating thereto upon reasonable advance written notice to such Borrower and at reasonable dates and times and as often as may be reasonably requested. Notwithstanding the fact that the foregoing license does not extend to or cover patents, patent applications and technical processes The Borrowers acknowledge and agree that following the occurrence and continuance of an Event of Default, Agent shall be permitted to sell the Collateral without liability for intellectual property infringement.
11.4. Setoff . At any time during an Event of Default, Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the account of
a Borrower against any Obligations, irrespective of whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Agent, Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Agent, Issuing Bank, each Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.
11.5. Remedies Cumulative; No Waiver .
11.5.1. Cumulative Rights . All covenants, conditions, provisions, warranties, guaranties, indemnities and other undertakings of Borrowers contained in the Loan Documents are cumulative and not in derogation or substitution of each other. In particular, the rights and remedies of Agent and Lenders are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and shall not be exclusive of any other rights or remedies that Agent and Lenders may have, whether under any agreement, by law, at equity or otherwise.
11.5.2. Waivers . The failure or delay of Agent or any Lender to require strict performance by Borrowers with any terms of the Loan Documents, or to exercise any rights or remedies with respect to Collateral or otherwise, shall not operate as a waiver thereof nor as establishment of a course of dealing. All rights and remedies shall continue in full force and effect until Full Payment of all Obligations. No modification of any terms of any Loan Documents (including any waiver thereof) shall be effective, unless such modification is specifically provided in a writing directed to Borrowers and executed by Agent or the requisite Lenders, and such modification shall be applicable only to the matter specified. No waiver of any Default or Event of Default shall constitute a waiver of any other Default or Event of Default that may exist at such time, unless expressly stated. If Agent or any Lender accepts performance by any Borrower or any Significant Subsidiary under any Loan Documents in a manner other than that specified therein, or during any Default or Event of Default, or if Agent or any Lender shall delay or exercise any right or remedy under any Loan Documents, such acceptance, delay or exercise shall not operate to waive any Default or Event of Default nor to preclude exercise of any other right or remedy.
SECTION 12. AGENT
12.1. Appointment, Authority and Duties of Agent .
12.1.1. Appointment and Authority . Each Secured Party appoints and designates Bank of America as Agent under all Loan Documents. Agent may, and each Secured Party authorizes Agent to, enter into all Loan Documents to which Agent is intended to be a party and accept all Security Documents, for Agents benefit and the benefit of Secured Parties. Each Secured Party agrees that any action taken by Agent or Required Lenders in accordance with the provisions of the Loan Documents, and the exercise by Agent or Required Lenders of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto, shall be authorized by and binding upon all Secured Parties. Without limiting the generality of the foregoing, Agent shall have the sole and exclusive authority to (a) act as the disbursing and collecting agent for Lenders with respect to all payments and collections arising in connection
with the Loan Documents; (b) execute and deliver as Agent each Loan Document, including any intercreditor or subordination agreement, and accept delivery of each Loan Document from any Borrower or other Person; (c) act as collateral agent for Secured Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take any Enforcement Action or otherwise exercise any rights or remedies with respect to any Collateral under the Loan Documents, Applicable Law or otherwise. The duties of Agent shall be ministerial and administrative in nature, and Agent shall not have a fiduciary relationship with any Lender, Secured Party, Participant or other Person, by reason of any Loan Document or any transaction relating thereto. Agent alone shall be authorized to determine whether any Accounts or Inventory constitute Eligible Accounts or Eligible Inventory, or whether to impose or release any reserve, and to exercise its Credit Judgment in connection therewith or whether any conditions to funding or to issuance of a Letter of Credit have been satisfied, which determinations and judgments, if exercised in good faith, shall exonerate Agent from liability to any Lender or other Person for any error in judgment.
12.1.2. Duties . Agent shall not have any duties except those expressly set forth in the Loan Documents. The conferral upon Agent of any right shall not imply a duty on Agents part to exercise such right, unless instructed to do so by Required Lenders in accordance with this Agreement.
12.1.3. Agent Professionals . Agent may perform its duties through agents and employees. Agent may consult with and employ Agent Professionals, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by an Agent Professional. Agent shall not be responsible for the negligence or misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.
12.1.4. Instructions of Required Lenders . The rights and remedies conferred upon Agent under the Loan Documents may be exercised without the necessity of joinder of any other party, unless required by Applicable Law. Agent may request instructions from Required Lenders or other Secured Parties with respect to any act (including the failure to act) in connection with any Loan Documents, and may seek assurances to its satisfaction from Secured Parties of their indemnification obligations under Section 12.6 against all Claims that could be incurred by Agent in connection with any act. Agent shall be entitled to refrain from any act until it has received such instructions or assurances, and Agent shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall be binding upon all Secured Parties, and no Secured Party shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting in accordance with the instructions of Required Lenders. Notwithstanding the foregoing, instructions by and consent of all Lenders shall be required in the circumstances described in Section 14.1.1 , and in no event shall Required Lenders, without the prior written consent of each Lender, direct Agent to accelerate and demand payment of Loans held by one Lender without accelerating and demanding payment of all other Loans, nor to terminate the Commitments of one Lender without terminating the Commitments of all Lenders. In no event shall Agent be required to take any action that, in its opinion, is contrary to Applicable Law or any Loan Documents or could subject any Agent Indemnitee to personal liability.
12.2. Agreements Regarding Collateral and Field Examination Reports .
12.2.1. Lien Releases; Care of Collateral . Secured Parties authorize Agent to release any Lien with respect to any Collateral (a) upon Full Payment of the Obligations; (b) that is the subject of an Asset Disposition which Borrowers certify in writing to Agent is a Permitted Asset Disposition , an Asset Disposition permitted by Section 10.2.5 or a Lien which Borrowers certify is a Permitted Lien entitled to priority over Agents Liens (and Agent may rely conclusively on any such certificate without further inquiry); (c) that does not constitute a material part of the Collateral; or (d) with the written consent of all Lenders. Secured Parties authorize Agent to subordinate its Liens to any Purchase Money Lien permitted hereunder. Agent shall have no obligation to assure that any Collateral exists or is owned by a Borrower, or is cared for, protected, insured or encumbered, nor to assure that Agents Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral.
12.2.2. Possession of Collateral . Agent and Secured Parties appoint each Lender as agent (for the benefit of Secured Parties) for the purpose of perfecting Liens in any Collateral held or controlled by such Lender, to the extent such Liens are perfected by possession or control. If any Lender obtains possession or control of any Collateral, it shall notify Agent thereof and, promptly upon Agents request, deliver such Collateral to Agent or otherwise deal with it in accordance with Agents instructions.
12.2.3. Reports . Agent shall promptly, upon receipt thereof, forward to each Lender copies of the results of any field audit, examination or appraisal prepared by or on behalf of Agent with respect to any Borrower or Collateral ( Report ). Each Lender agrees (a) that neither Bank of America nor Agent makes any representation or warranty as to the accuracy or completeness of any Report, and shall not be liable for any information contained in or omitted from any Report; (b) that the Reports are not intended to be comprehensive audits or examinations, and that Agent or any other Person performing any audit or examination will inspect only specific information regarding Obligations or the Collateral and will rely significantly upon Borrowers books and records as well as upon representations of Borrowers officers and employees; and (c) to keep all Reports confidential and strictly for such Lenders internal use, and not to distribute any Report (or the contents thereof) to any Person (except to such Lenders Participants, attorneys and accountants or to the extent required by Applicable Law or applicable Governmental Authorities) or use any Report in any manner other than administration of the Loans and other Obligations. Each Lender agrees to indemnify and hold harmless Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Report, as well as any Claims arising in connection with any third parties that obtain any part or contents of a Report through such Lender.
12.3. Reliance By Agent . Agent shall be entitled to rely, and shall be fully protected in relying, upon any certification, notice or other communication (including those by telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person, and upon the advice and statements of Agent Professionals. Agent shall have a reasonable and practicable amount of time to act upon any
instruction, notice or other communication under any Loan Document, and shall not be liable for any delay in acting.
12.4. Action Upon Default . Agent shall not be deemed to have knowledge of any Default or Event of Default unless it has received written notice from a Borrower or Required Lenders specifying the occurrence and nature thereof. If any Lender acquires knowledge of a Default, Event of Default or failure of such conditions, it shall promptly notify Agent and the other Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any Loan Documents or with the written consent of Agent and Required Lenders, it will not take any Enforcement Action, accelerate Obligations under any Loan Documents (other than Secured Bank Product Obligations), or exercise any right that it might otherwise have under Applicable Law to credit bid at foreclosure sales, UCC sales or other similar dispositions of Collateral. Notwithstanding the foregoing, however, a Lender may take action to preserve or enforce its rights against a Borrower where a deadline or limitation period is applicable that would, absent such action, bar enforcement of Obligations held by such Lender, including the filing of proofs of claim in an Insolvency Proceeding.
12.5. Ratable Sharing . If any Lender shall obtain any payment or reduction of any Obligation, whether through set-off or otherwise, in excess of its share of such Obligation, determined on a Pro Rata basis or in accordance with Section 5.5.1 , as applicable, such Lender shall forthwith purchase from Agent, Issuing Bank and the other Lenders such participations in the affected Obligation as are necessary to cause the purchasing Lender to share the excess payment or reduction on a Pro Rata basis or in accordance with Section 5.5.1 , as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Notwithstanding the foregoing, if a Defaulting Lender obtains a payment or reduction of any Obligation, it shall immediately turn over the amount thereof to Agent for application under Section 4.2.2 and it shall provide a written statement to Agent describing the Obligation affected by such payment or reduction. No Lender shall set off against any Dominion Account without the prior consent of Agent.
12.6. Indemnification of Agent Indemnitees . EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES AND ISSUING BANK INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY BORROWERS (BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF BORROWERS UNDER ANY LOAN DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR ARISES FROM AN AGENT INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY AS AGENT) PROVIDED , HOWEVER , THAT NO LENDER SHALL BE LIABLE TO ANY AGENT INDEMNITEE OR ISSUING BANK INDEMNITEE TO THE EXTENT SUCH LIABILITY HAS RESULTED PRIMARILY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH AGENT INDEMNITEE OR SUCH ISSUING BANK INDEMNITEE, AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL NON-APPEALABLE JUDGMENT OR ORDER. In Agents discretion, it may reserve for any such Claims made against an Agent Indemnitee or Issuing Bank Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from
proceeds of Collateral prior to making any distribution of Collateral proceeds to Secured Parties. If Agent is sued by any receiver, bankruptcy trustee, debtor-in-possession or other Person for any alleged preference or fraudulent transfer, then any monies paid by Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys fees) incurred in the defense of same, shall be promptly reimbursed to Agent by each Lender to the extent of its Pro Rata share.
12.7. Limitation on Responsibilities of Agent . Agent shall not be liable to any Secured Party for any action taken or omitted to be taken under the Loan Documents, except for losses directly and solely caused by Agents gross negligence or willful misconduct. Agent does not assume any responsibility for any failure or delay in performance or any breach by any Borrower, Lender or other Secured Party of any obligations under the Loan Documents. Agent does not make any express or implied warranty, representation or guarantee to Secured Parties with respect to any Obligations, Collateral, Loan Documents or Borrower. No Agent Indemnitee shall be responsible to Secured Parties for any recitals, statements, information, representations or warranties contained in any Loan Documents; the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectibility, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; the validity, enforceability or collectibility of any Obligations; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Borrower or Account Debtor. No Agent Indemnitee shall have any obligation to any Secured Party to ascertain or inquire into the existence of any Default or Event of Default, the observance or performance by any Borrower of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.
12.8. Successor Agent and Co-Agents .
12.8.1. Resignation; Successor Agent . Subject to the appointment and acceptance of a successor Agent as provided below, Agent may resign at any time by giving at least 30 days written notice thereof to Lenders and Borrowers. Upon receipt of such notice, Required Lenders shall have the right to appoint a successor Agent which shall be (a) a Lender or an Affiliate of a Lender; or (b) a commercial bank that is organized under the laws of the United States or any state or district thereof, has a combined capital surplus of at least $200,000,000 and (provided no Event of Default exists) is reasonably acceptable to Borrowers. If no successor agent is appointed prior to the effective date of the resignation of Agent, then Agent may appoint a successor agent from among Lenders or, if no Lender accepts such role, Agent may appoint Required Lenders as successor Agent. Upon acceptance by a successor Agent of an appointment to serve as Agent hereunder or upon appointment of Required Lenders as successor Agent, such successor Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Agent without further act, and the retiring Agent shall be discharged from its duties and obligations hereunder but shall continue to have the benefits of the indemnification set forth in Sections 12.6 and 14.2 . Notwithstanding any Agents resignation, the provisions of this Section 12 shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while Agent. Any successor to Bank of America by merger or acquisition of stock or this loan shall continue to be Agent hereunder without further act on the part of the parties hereto, unless such successor resigns as provided above.
12.8.2. Separate Collateral Agent . It is the intent of the parties that there shall be no violation of any Applicable Law denying or restricting the right of financial institutions to transact business in any jurisdiction. If Agent believes that it may be limited in the exercise of any rights or remedies under the Loan Documents due to any Applicable Law, Agent may appoint an additional Person who is not so limited, as a separate collateral agent or co-collateral agent. If Agent so appoints a collateral agent or co-collateral agent, each right and remedy intended to be available to Agent under the Loan Documents shall also be vested in such separate agent. Every covenant and obligation necessary to the exercise thereof by such agent shall run to and be enforceable by it as well as Agent. Secured Parties shall execute and deliver such documents as Agent deems appropriate to vest any rights or remedies in such agent. If any collateral agent or co-collateral agent shall die or dissolve, become incapable of acting, resign or be removed, then all the rights and remedies of such agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Agent until appointment of a new agent.
12.9. Due Diligence and Non-Reliance . Each Lender acknowledges and agrees that it has, independently and without reliance upon Agent or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Borrower and its own decision to enter into this Agreement and to fund Loans and participate in LC Obligations hereunder. Each Secured Party has made such inquiries concerning the Loan Documents, the Collateral and each Borrower as such Secured Party feels necessary. Each Lender further acknowledges and agrees that the other Secured Parties have made no representations or warranties concerning any Borrower, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each Secured Party will, independently and without reliance upon any other Secured Party, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making Loans and participating in LC Obligations, and in taking or refraining from any action under any Loan Documents. Except for notices, reports and other information expressly requested by a Lender, Agent shall have no duty or responsibility to provide any Secured Party with any notices, reports or certificates furnished to Agent by any Borrower or any credit or other information concerning the affairs, financial condition, business or Properties of any Borrower (or any of its Affiliates) which may come into possession of Agent or any of Agents Affiliates.
12.10. Replacement of Certain Lenders . If a Lender (a) is a Defaulting Lender, or (b) fails to give its consent to any amendment, waiver or action for which consent of all Lenders was required and Required Lenders consented, then, in addition to any other rights and remedies that any Person may have, Agent may, by notice to such Lender within 120 days after such event, require such Lender to assign all of its rights and obligations under the Loan Documents to Eligible Assignee(s) specified by Agent after consultation with the Borrower Agent, pursuant to appropriate Assignment and Acceptance(s) and within 20 days after Agents notice. Agent is irrevocably appointed as attorney-in-fact to execute any such Assignment and Acceptance if the Lender fails to execute same. Such Lender shall be entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the Loan Documents, including all principal, interest and fees through the date of assignment (but excluding any prepayment charge).
12.11. Remittance of Payments and Collections .
12.11.1. Remittances Generally . All payments by any Lender to Agent shall be made by the time and on the day set forth in this Agreement, in immediately available funds. If no time for payment is specified or if payment is due on demand by Agent and request for payment is made by Agent by 11:00 a.m. on a Business Day, payment shall be made by Lender not later than 2:00 p.m. on such day, and if request is made after 11:00 a.m., then payment shall be made by 11:00 a.m. on the next Business Day. Payment by Agent to any Secured Party shall be made by wire transfer, in the type of funds received by Agent. Any such payment shall be subject to Agents right of offset for any amounts due from such payee under the Loan Documents.
12.11.2. Failure to Pay . If any Secured Party fails to pay any amount when due by it to Agent pursuant to the terms hereof, such amount shall bear interest from the due date until paid at the rate determined by Agent as customary in the banking industry for interbank compensation. In no event shall Borrowers be entitled to receive credit for any interest paid by a Secured Party to Agent, nor shall any Defaulting Lender be entitled to interest on any amounts held by Agent pursuant to Section 4.2 .
12.11.3. Recovery of Payments . If Agent pays any amount to a Secured Party in the expectation that a related payment will be received by Agent from a Borrower and such related payment is not received, then Agent may recover such amount from each Secured Party that received it. If Agent determines at any time that an amount received under any Loan Document must be returned to a Borrower or paid to any other Person pursuant to Applicable Law or otherwise, then, notwithstanding any other term of any Loan Document, Agent shall not be required to distribute such amount to any Lender. If any amounts received and applied by Agent to any Obligations are later required to be returned by Agent pursuant to Applicable Law, each Lender shall pay to Agent, on demand , such Lenders Pro Rata share of the amounts required to be returned.
12.12. Agent in its Individual Capacity . As a Lender, Bank of America shall have the same rights and remedies under the other Loan Documents as any other Lender, and the terms Lenders, Required Lenders or any similar term shall include Bank of America in its capacity as a Lender. Each of Bank of America and its Affiliates may accept deposits from, maintain deposits or credit balances for, invest in, lend money to, provide Bank Products to, act as trustee under indentures of, serve as financial or other advisor to, and generally engage in any kind of business with, Borrowers and their Affiliates, as if Bank of America were not Agent hereunder, without any duty to account therefor (including any fees or other consideration received in connection therewith) to the other Lenders. In their individual capacities, Bank of America and its Affiliates may receive information regarding Borrowers, their Affiliates and their Account Debtors (including information subject to confidentiality obligations), and each Secured Party agrees that Bank of America and its Affiliates shall be under no obligation to provide such information to any Secured Party, if acquired in such individual capacity.
12.13. Bank Product Providers . Each Secured Bank Product Provider, by delivery of a notice to Agent of a Bank Product, agrees to be bound by Section 5.6 and this Section 12 . Each Secured Bank Product Provider shall indemnify and hold harmless Agent Indemnitees, to the extent not reimbursed by Borrowers, against all Claims that may be incurred by or asserted
against any Agent Indemnitee in connection with such providers Secured Bank Product Obligations.
12.14. Agent Titles . Each Lender, other than Bank of America, that is designated (on the cover page of this Agreement or otherwise) by Bank of America as an Agent or Arranger of any type shall not have any right, power, responsibility or duty under any Loan Documents other than those applicable to all Lenders, and shall in no event be deemed to have any fiduciary relationship with any other Lender.
12.15. No Third Party Beneficiaries . This Section 12 is an agreement solely among Lenders and Agent, and shall survive Full Payment of the Obligations. This Section 12 does not confer any rights or benefits upon Borrowers or any other Person. As between Borrowers and Agent, any action that Agent may take under any Loan Documents or with respect to any Obligations shall be conclusively presumed to have been authorized and directed by Lenders.
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
13.1. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Borrowers, Agent, Lenders, Secured Parties and their respective successors and assigns, except that (a) no Borrower shall have the right to assign its rights or delegate its obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section 13.3 . Agent may treat the Person which made any Loan as the owner thereof for all purposes until such Person makes an assignment in accordance with Section 13.3 . Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of such Lender.
13.2. Participations .
13.2.1. Permitted Participants; Effect . Any Lender may, in the ordinary course of its business and in accordance with Applicable Law, at any time sell to a financial institution ( Participant ) a participating interest in the rights and obligations of such Lender under any Loan Documents. Despite any sale by a Lender of participating interests to a Participant, such Lenders obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for performance of such obligations, such Lender shall remain the holder of its Loans and Commitments for all purposes, all amounts payable by Borrowers shall be determined as if such Lender had not sold such participating interests, and Borrowers and Agent shall continue to deal solely and directly with such Lender in connection with the Loan Documents. Each Lender shall be solely responsible for notifying its Participants of any matters under the Loan Documents, and Agent and the other Lenders shall not have any obligation or liability to any such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.8 unless Borrowers agree otherwise in writing.
13.2.2. Voting Rights . Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, waiver or other modification of any Loan Documents other than that which forgives principal, interest or fees, reduces the stated interest
rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, postpones the Commitment Termination Date or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan or Commitment, or releases any Borrower or substantial portion of the Collateral.
13.2.3. Benefit of Set-Off . Borrowers agree that each Participant shall have a right of set-off in respect of its participating interest to the same extent as if such interest were owing directly to a Lender, and each Lender shall also retain the right of set-off with respect to any participating interests sold by it. By exercising any right of set-off, a Participant agrees to share with Lenders all amounts received through its set-off, in accordance with Section 12.5 as if such Participant were a Lender.
13.3. Assignments .
13.3.1. Permitted Assignments . A Lender may assign to an Eligible Assignee any of its rights and obligations under the Loan Documents, as long as (a) each assignment is of a constant, and not a varying, percentage of the transferor Lenders rights and obligations under the Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of $10,000,000 (unless otherwise agreed by Agent in its discretion) and integral multiples of $1,000,000 in excess of that amount; (b) except in the case of an assignment in whole of a Lenders rights and obligations, the aggregate amount of the Commitments retained by the transferor Lender is at least $10,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the parties to each such assignment shall execute and deliver to Agent, for its acceptance and recording, an Assignment and Acceptance. Nothing herein shall limit the right of a Lender to pledge or assign any rights under the Loan Documents to (i) any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors and any Operating Circular issued by such Federal Reserve Bank, or (ii) counterparties to swap agreements relating to any Loans; provided , however , that any payment by Borrowers to the assigning Lender in respect of any Obligations assigned as described in this sentence shall satisfy Borrowers obligations hereunder to the extent of such payment, and no such assignment shall release the assigning Lender from its obligations hereunder.
13.3.2. Effect; Effective Date . Upon delivery to Agent of an assignment notice in the form of Exhibit C and a processing fee of $3,500 (unless otherwise agreed by Agent in its discretion), the assignment shall become effective as specified in the notice, if it complies with this Section 13.3 . From such effective date, the Eligible Assignee shall for all purposes be a Lender under the Loan Documents, and shall have all rights and obligations of a Lender thereunder. Upon consummation of an assignment, the transferor Lender, Agent and Borrowers shall make appropriate arrangements for issuance of replacement and/or new Notes, as applicable. The transferee Lender shall comply with Section 5.9 and deliver, upon request, an administrative questionnaire satisfactory to Agent.
13.3.3. Certain Assignees . No assignment or participation may be made to a Borrower, Affiliate of a Borrower, Defaulting Lender or natural person. In connection with any assignment by a Defaulting Lender, such assignment shall be effective only upon payment by the Eligible Assignee or Defaulting Lender to Agent of an aggregate amount sufficient, upon distribution (through direct payment, purchases of participations or other compensating actions as Agent deems appropriate), (a) to satisfy all funding and payment liabilities then owing by the Defaulting Lender hereunder, and (b) to acquire its Pro
Rata share of all Loans and LC Obligations. If an assignment by a Defaulting Lender shall become effective under Applicable Law for any reason without compliance with the foregoing sentence, then the assignee shall be deemed a Defaulting Lender for all purposes until such compliance occurs.
SECTION 14. MISCELLANEOUS
14.1. Consents, Amendments and Waivers .
14.1.1. Amendment . No modification of any Loan Document, including any extension or amendment of a Loan Document or any waiver of a Default or Event of Default, shall be effective without the prior written agreement of Agent (with the consent of Required Lenders) and each Borrower party to such Loan Document; provided , however , that
(a) without the prior written consent of Agent, no modification shall be effective with respect to any provision in a Loan Document that relates to any rights, duties or discretion of Agent;
(b) without the prior written consent of Issuing Bank, no modification shall be effective with respect to any LC Obligations or Section 2.2 ;
(c) without the prior written consent of each affected Lender, no modification shall be effective that would (i) increase the Commitment of such Lender; or (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender; and
(d) without the prior written consent of all Lenders (except a defaulting Lender as provided in Section 4.2 ), no modification shall be effective that would (i) extend the Revolver Termination Date; (ii) alter Section 5.5, 7.1 (except to add Collateral) or 14.1.1 ; (iii) amend the definitions of Borrowing Base (and the defined terms used in such definition), Pro Rata or Required Lenders; (iv) increase any advance rate, decrease the Availability Block or increase total Commitments; (vi) release all or substantially all of the Collateral; or (vii) release any Borrower from liability for any Obligations.
14.1.2. Limitations . The agreement of Borrowers shall not be necessary to the effectiveness of any modification of a Loan Document that deals solely with the rights and duties of Lenders, Agent and/or Issuing Bank as among themselves. Only the consent of the parties to the Fee Letter or any agreement relating to a Bank Product shall be required for any modification of such agreement, and no Affiliate of a Lender that is party to a Bank Product agreement shall have any other right to consent to or participate in any manner in modification of any other Loan Document. The making of any Loans during the existence of a Default or Event of Default shall not be deemed to constitute a waiver of such Default or Event of Default, nor to establish a course of dealing. Any waiver or consent granted by Lenders hereunder shall be effective only if in writing, and then only in the specific instance and for the specific purpose for which it is given.
14.1.3. Payment for Consents . No Borrower will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such
Lender with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.
14.2. Indemnity . EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY BORROWER OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.
14.3. Notices and Communications .
14.3.1. Notice Address . Subject to Section 4.1.4 , all notices and other communications by or to a party hereto shall be in writing and shall be given to any Borrower, at Borrower Agents address shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender after the Closing Date, at the address shown on its Assignment and Acceptance), or at such other address as a party may hereafter specify by notice in accordance with this Section 14.3 . Each such notice or other communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the U.S. mail, with first-class postage pre-paid, addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to Agent pursuant to Section 2.1.4, 2.3, 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at Agent such notice is required to be sent. Any written notice or other communication that is not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Borrower Agent shall be deemed received by all Borrowers. Each Person who becomes a Lender after the Closing Date shall give Agent and Borrowers an Assignment Notice in the form of Exhibit C, and until the Person provides Borrowers the Assignment Notice of the Persons address, no Borrower is required to give the Person notice hereunder.
14.3.2. Electronic Communications; Voice Mail . Electronic mail and internet websites may be used only for routine communications, such as financial statements, Borrowing Base Certificates and other information required by Section 10.1.2 , administrative matters, distribution of Loan Documents for execution, and matters permitted under Section 4.1.4 . Agent and Lenders make no assurances as to the privacy and security of electronic communications. Electronic and voice mail may not be used as effective notice under the Loan Documents.
14.3.3. Non-Conforming Communications . Agent and Lenders may rely upon any notices purportedly given by or on behalf of any Borrower even if such notices were not made in a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by the recipient, varied from a later confirmation. Each Borrower shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any telephonic communication purportedly given by or on behalf of a Borrower.
14.4. Performance of Borrowers Obligations . Agent may, in its discretion at any time and from time to time, at Borrowers expense, pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by Agent to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Agents Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers, on demand , with interest from the date incurred to the date of payment thereof at the Default Rate applicable to Base Rate Loans. Any payment made or action taken by Agent under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.
14.5. Credit Inquiries . Each Borrower hereby authorizes Agent and Lenders (but they shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Borrower or Subsidiary.
14.6. Severability . Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.
14.7. Cumulative Effect; Conflict of Terms . The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several limitations, tests or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided. Except as otherwise provided in another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.
14.8. Counterparts . Any Loan Document may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when Agent has received counterparts bearing the signatures of all parties hereto. Delivery of a signature page of any Loan Document by telecopy shall be effective as delivery of a manually executed counterpart of such agreement.
14.9. Entire Agreement . Time is of the essence of the Loan Documents. The Loan Documents constitute the entire contract among the parties relating to the subject matter hereof, and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
14.10. Relationship with Lenders . The obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations or Commitments of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled, to the extent not otherwise restricted hereunder, to protect and enforce its rights arising out of the Loan Documents. It shall not be necessary for Agent or any other Lender to be joined as an additional party in any proceeding for such purposes. Nothing in
this Agreement and no action of Agent or Lenders pursuant to the Loan Documents shall be deemed to constitute Agent and Lenders to be a partnership, association, joint venture or any other kind of entity, nor to constitute control of any Borrower.
14.11. No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated by any Loan Document, Borrowers acknowledge and agree that (a)(i) this credit facility and any related arranging or other services by Agent, any Lender, any of their Affiliates or any arranger are arms-length commercial transactions between Borrowers and such Person; (ii) Borrowers have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate; and (iii) Borrowers are capable of evaluating and understanding, and do understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and has been acting solely as a principal in connection with this credit facility, is not the financial advisor, agent or fiduciary for Borrowers, any of their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates and any arranger may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and their Affiliates, and have no obligation to disclose any of such interests to Borrowers or their Affiliates. To the fullest extent permitted by Applicable Law, each Borrower hereby waives and releases any claims that it may have against Agent, Lenders, their Affiliates and any arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated by a Loan Document.
14.12. Confidentiality . Each of Agent, Lenders and Issuing Bank agrees to maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by Applicable Law or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies, the enforcement of any rights, or any action or proceeding relating to any Loan Documents; (f) subject to an agreement containing provisions substantially the same as those of this Section, to any Transferee or any actual or prospective party (or its advisors) to any Bank Product; (g) with the consent of the Borrower Agent; or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to Agent, any Lender, Issuing Bank or any of their Affiliates on a nonconfidential basis from a source other than Borrowers. Agent, Lenders and Issuing Bank shall use reasonable efforts to provide Borrowers notice of all requests for information described in item (c) above to the extent not prohibited by law or judicial process. Notwithstanding the foregoing, Agent and Lenders may issue and disseminate to the public general information describing this credit facility, including the names and addresses of Borrowers and a general description of Borrowers businesses, and may use Borrowers names in advertising and other promotional materials. For purposes of this Section, Information means all information received from a Borrower or Subsidiary relating to it or its business, other than any information
that is available to Agent, any Lender or Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or Subsidiary, provided that, in the case of information received from a Borrower or Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information pursuant to this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each of Agent, Lenders and Issuing Bank acknowledges that (i) Information may include material non-public information concerning a Borrower or Subsidiary; (ii) it has developed compliance procedures regarding the use of material non-public information; and (iii) it will handle such material non-public information in accordance with Applicable Law, including federal and state securities laws.
14.13. Certifications Regarding Indentures . Borrowers certify to Agent and Lenders that neither the execution or performance of the Loan Documents nor the incurrence of any Obligations by Borrowers violates the Indenture, dated as of March 17, 1997, between Cooper and The Chase Manhattan Bank. Agent may condition Borrowings, Letters of Credit and other credit accommodations under the Loan Documents from time to time upon Agents receipt of evidence that the Commitments and Obligations continue to constitute permitted debt at such time.
14.14. GOVERNING LAW . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
14.15. Consent to Forum .
14.15.1. Forum . EACH BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURTS PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Borrower in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law. Nothing in this Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction.
14.16. Waivers by Borrowers . To the fullest extent permitted by Applicable Law, each Borrower waives (a) the right to trial by jury (which Agent, Issuing Bank and each Lender hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice
of presentment, default (except as set forth in Section 11.1(d) with respect to knowledge of such default), non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Agent on which a Borrower may in any way be liable, and hereby ratifies anything Agent may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agent to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against Agent, Issuing Bank or any Secured Party, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Borrower acknowledges that the foregoing waivers are a material inducement to Agent and Lenders entering into this Agreement and that Agent and Lenders are relying upon the foregoing in their dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
14.17. Patriot Act Notice . Agent and Lenders hereby notify Borrowers that pursuant to the requirements of the Patriot Act, Agent and Lenders are required to obtain, verify and record information that identifies each Borrower, including its legal name, address, tax ID number and other information that will allow Agent and Lenders to identify it in accordance with the Patriot Act. Agent and Lenders will also require information regarding each personal guarantor, if any, and may require information regarding Borrowers management and owners, such as legal name, address, social security number and date of birth.
SECTION 15. AMENDMENT AND RESTATEMENT
15.1. Amendment and Restatement; No Novation . On the Closing Date, the Existing Loan and Security Agreement shall be amended and restated in its entirety by this Agreement and (i) all references to the Existing Loan and Security Agreement in any Loan Document other than this Agreement (including in any amendment, waiver or consent) shall be deemed to refer to the Existing Loan and Security Agreement as amended and restated hereby, (ii) all references to any section (or subsection) of the Existing Loan and Security Agreement in any Loan Document (but not herein) shall be amended to be, mutatis mutandis, references to the corresponding provisions of this Agreement and (iii) except as the context otherwise provides, all references to this Agreement herein (including for purposes of indemnification and reimbursement of fees) shall be deemed to be references to the Existing Loan and Security Agreement as amended and restated hereby. This Agreement is not intended to constitute, and does not constitute, a novation of the obligations and liabilities under the Existing Loan and Security Agreement (including the Obligations) or to evidence payment of all or any portion of such obligations and liabilities.
15.2. Effect on Existing Loan and Security Agreement and on the Obligations . On and after the Closing Date, (i) the Existing Loan and Security Agreement shall be of no further force and effect except as amended and restated hereby and except to evidence (A) the incurrence by any Borrower of the Obligations under and as defined therein (whether or not such Obligations are contingent as of the Closing Date), (B) the representations and warranties
made by any Borrower prior to the Closing Date and (C) any action or omission performed or required to be performed pursuant to the Existing Loan and Security Agreement prior to the Closing Date (including any failure, prior to the Closing Date, to comply with the covenants contained in such Existing Loan and Security Agreement) and (ii) the terms and conditions of this Agreement and the Secured Parties rights and remedies under the Loan Documents, shall apply to all Obligations incurred under the Existing Loan and Security Agreement, the Notes issued thereunder and the Existing Letters of Credit.
15.3. No Implied Waivers . Except as expressly provided in any Loan Document, this Agreement (x) shall not cure any breach of the Existing Loan and Security Agreement or any Default or Event of Default thereunder existing prior to the date hereof and (y) is limited as written and is not a consent to any other modification of any term or condition of any Loan Document, each of which shall remain in full force and effect.
15.4. Reaffirmation of Liens and Loan Documents . Each Borrower reaffirms the Liens granted pursuant to the Existing Loan and Security Agreement and the Security Documents to Agent, on behalf of itself and Secured Parties, which Liens shall continue in full force and effect during the term of this Agreement and any renewals or extensions thereof and shall continue to secure the Obligations and the Security Documents, including the Liens created thereunder and under the Existing Loan and Security Agreement, and all other Loan Documents executed in connection with the Existing Loan and Security Agreement that are not superseded by corresponding Loan Documents executed and delivered in connection with this Agreement, shall remain in full force and effect with respect to the Obligations and are hereby reaffirmed and ratified.
15.5. Loans Under the Existing Loan and Security Agreement . Each of the Borrowers acknowledges and agrees that as of the Closing Date (i) the outstanding principal amount of Revolver Loans under (and as defined in) the Existing Loan and Security Agreement equals $0; and (iii) Existing Letters of Credit are outstanding under (and as defined in) the Existing Loan and Security Agreement having an aggregate stated amount of $1,905,000 and are continued as Letters of Credit hereunder.
[Remainder of page intentionally left blank; signatures begin on following page]
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.
|COOPER TIRE & RUBBER COMPANY|
/s/ Bradley E. Hughes
|Name:||Bradley E. Hughes|
|Title:||Vice President and Chief Financial Officer|
/s/ Stephen O. Schroeder
|Name:||Stephen O. Schroeder|
|Title:||Vice President and Treasurer|
701 Lima Avenue
Findlay, Ohio 45840
Attn: Bradley Hughes
|MAX-TRAC TIRE CO., INC.|
/s/ Charles F. Nagy
|Name:||Charles F. Nagy|
/s/ Donald P. Ingols
|Name:||Donald P. Ingols|
4600 Prosper Drive
Stow, Ohio 44224
Attn: Joe Kohut
[Signature Page to Amended and Restated Loan and Security Agreement]
|AGENT AND LENDERS :|
BANK OF AMERICA, N.A. ,
as Agent and Lender
/s/ Charles Fairchild
|Title:||Assistant Vice President|
135 S. LaSalle Street
Chicago, Illinois 60603
Attn: Charles Fairchild
[Signature Page to Amended and Restated Loan and Security Agreement]
PNC Bank, National Association,
as a Lender
/s/ Joseph G. Moran
|Name:||Joseph G. Moran|
|Title:||Senior Vice President|
1900 East Ninth Street
Cleveland, Ohio 44114
Attn: Joseph G. Moran
[Signature Page to Amended and Restated Loan and Security Agreement]
FIFTH THIRD BANK, An Ohio Banking Corporation
as a Lender
/s/ Brian Jelinski
1000 Town Center
Southfield, Michigan 48075
Attn: Brian Jelinski
[Signature Page to Amended and Restated Loan and Security Agreement]
JPMORGAN CHASE BANK, N.A.,
as Documentation Agent and Lender
/s/ Randy J. Abrams
|Name:||Randy J. Abrams|
1300 East Ninth Street, 13 th Floor
Cleveland, Ohio 44114-1573
Attn: Randy J. Abrams
Facsimile No.: 216-781-2071
[Signature Page to Amended and Restated Loan and Security Agreement]
Amended and Restated Loan and Security Agreement
|[Date]||$||[City, State of Governing Law]|
COOPER TIRE & RUBBER COMPANY, a Delaware corporation ( Cooper ), MAX-TRAC TIRE CO., INC., an Ohio corporation ( Max-Trac , and together with Cooper, collectively, Borrowers ), for value received, hereby unconditionally promise to pay, on a joint and several basis, to the order of ( Lender ), the principal sum of DOLLARS ($ ), or such lesser amount as may be advanced by Lender as Loans and owing as LC Obligations from time to time under the Loan Agreement described below, together with all accrued and unpaid interest thereon. Terms are used herein as defined in the Amended and Restated Loan and Security Agreement dated as of July 27, 2011, among Borrowers, Bank of America, N.A., as Agent, Lender, and certain other financial institutions, as such agreement may be amended, modified, renewed or extended from time to time ( Loan Agreement ).
Principal of and interest on this Note from time to time outstanding shall be due and payable as provided in the Loan Agreement. This Note is issued pursuant to and evidences Loans and LC Obligations under the Loan Agreement, to which reference is made for a statement of the rights and obligations of Lender and the duties and obligations of Borrowers. The Loan Agreement contains provisions for acceleration of the maturity of this Note upon the happening of certain stated events, and for the borrowing, prepayment and reborrowing of amounts upon specified terms and conditions.
The holder of this Note is hereby authorized by Borrowers to record on a schedule annexed to this Note (or on a supplemental schedule) the amounts owing with respect to Loans and LC Obligations, and the payment thereof. Failure to make any notation, however, shall not affect the rights of the holder of this Note or any obligations of Borrowers hereunder or under any other Loan Documents.
Time is of the essence of this Note. Each Borrower and all endorsers, sureties and guarantors of this Note hereby severally waive demand, presentment for payment, protest, notice of protest, notice of intention to accelerate the maturity of this Note, diligence in collecting, the bringing of any suit against any party, and any notice of or defense on account of any extensions, renewals, partial payments, or changes in any manner of or in this Note or in any of its terms, provisions and covenants, or any releases or substitutions of any security, or any delay, indulgence or other act of any trustee or any holder hereof, whether before or after maturity. Borrowers jointly and severally agree to pay, and to save the holder of this Note harmless against, any liability for the payment of all costs and expenses (including without limitation reasonable attorneys fees) if this Note is collected by or through an attorney-at-law.
In no contingency or event whatsoever shall the amount paid or agreed to be paid to the holder of this Note for the use, forbearance or detention of money advanced hereunder exceed the highest lawful rate permitted under Applicable Law. If any such excess amount is inadvertently paid by Borrowers or inadvertently received by the holder of this Note, such excess shall be returned to Borrowers or credited as a payment of principal, in accordance with the Loan Agreement. It is the intent hereof that Borrowers not pay or contract to pay, and that holder of this Note not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Borrowers under Applicable Law.
This Note shall be governed by the laws of the State of New York, without giving effect to any conflict of law principles (but giving effect to federal laws relating to national banks).
IN WITNESS WHEREOF , this Note is executed as of the date set forth above.
Amended and Restated Loan and Security Agreement
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Loan and Security Agreement dated as of July 27, 2011, as amended ( Loan Agreement ), among COOPER TIRE & RUBBER COMPANY ( Cooper ), MAX-TRAC TIRE CO., INC. ( Max-Trac , and together with Cooper, collectively, Borrowers ), BANK OF AMERICA, N.A. , as agent ( Agent ) for the financial institutions from time to time party to the Loan Agreement ( Lenders ), and such Lenders. Terms are used herein as defined in the Loan Agreement.
( Assignor ) and ( Assignee ) agree as follows:
1. Assignor hereby assigns to Assignee and Assignee hereby purchases and assumes from Assignor (a) a principal amount of $ of Assignors outstanding Loans and $ of Assignors participations in LC Obligations and (b) the amount of $ of Assignors Revolver Commitment (which represents % of the total Revolver Commitments) (the foregoing items being, collectively, the Assigned Interest ), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of the date ( Effective Date ) indicated in the corresponding Assignment Notice delivered to Agent, provided such Assignment Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if applicable. From and after the Effective Date, Assignee hereby expressly assumes, and undertakes to perform, all of Assignors obligations in respect of the Assigned Interest, and all principal, interest, fees and other amounts which would otherwise be payable to or for Assignors account in respect of the Assigned Interest shall be payable to or for Assignees account, to the extent such amounts accrue on or after the Effective Date.
2. Assignor (a) represents that as of the date hereof, prior to giving effect to this assignment, its Revolver Commitment is $ and the outstanding balance of its Loans and participations in LC Obligations is $ ; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto, other than that Assignor is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance by Borrowers of their obligations under the Loan Documents. [Assignor is attaching the Note[s] held by it and requests that Agent exchange such Note[s] for new Notes payable to Assignee [and Assignor].]
3. Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received copies of the Loan Agreement and
such other Loan Documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it shall, independently and without reliance upon Assignor and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (d) confirms that it is an Eligible Assignee; (e) appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Loan Agreement as are delegated to Agent by the terms thereof, together with such powers as are incidental thereto; (f) agrees that it will observe and perform all obligations that are required to be performed by it as a Lender under the Loan Documents; and (g) represents and warrants that the assignment evidenced hereby will not result in a non-exempt prohibited transaction under Section 406 of ERISA.
4. This Agreement shall be governed by the laws of the State of New York. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Agreement shall remain in full force and effect.
5. Each notice or other communication hereunder shall be in writing, shall be sent by messenger, by telecopy or facsimile transmission, or by first-class mail, shall be deemed given when sent and shall be sent as follows:
|(a)||If to Assignee, to the following address (or to such other address as Assignee may designate from time to time):|
|(b)||If to Assignor, to the following address (or to such other address as Assignor may designate from time to time):|
Payments hereunder shall be made by wire transfer of immediately available Dollars as follows:
If to Assignee, to the following account (or to such other account as Assignee may designate from time to time):
If to Assignor, to the following account (or to such other account as Assignor may designate from time to time):
IN WITNESS WHEREOF , this Assignment and Acceptance is executed as of .
Amended and Restated Loan and Security Agreement
Reference is made to (1) the Amended and Restated Loan and Security Agreement dated as of July 27, 2011, as amended ( Loan Agreement ), among COOPER TIRE & RUBBER COMPANY ( Cooper ), MAX-TRAC TIRE CO., INC. ( Max-Trac , and together with Cooper, collectively, Borrowers ), BANK OF AMERICA, N.A. , as agent ( Agent ) for the financial institutions from time to time party to the Loan Agreement ( Lenders ), and such Lenders; and (2) the Assignment and Acceptance dated as of , 20 ( Assignment Agreement ), between ( Assignor ) and ( Assignee ). Terms are used herein as defined in the Loan Agreement.
Assignor hereby notifies Borrowers and Agent of Assignors intent to assign to Assignee pursuant to the Assignment Agreement (a) a principal amount of $ of Assignors outstanding Loans and $ of Assignors participations in LC Obligations and (b) the amount of $ of Assignors Revolver Commitment (which represents % of the total Revolver Commitments) (the foregoing items being, collectively, the Assigned Interest ), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of the date ( Effective Date ) indicated below, provided this Assignment Notice is executed by Assignor, Assignee, Agent and Borrowers, if applicable. Pursuant to the Assignment Agreement, Assignee has expressly assumed all of Assignors obligations under the Loan Agreement to the extent of the Assigned Interest, as of the Effective Date.
For purposes of the Loan Agreement, Agent shall deem Assignors Revolver Commitment to be reduced by $ , and Assignees Revolver Commitment to be increased by $ .
The address of Assignee to which notices and information are to be sent under the terms of the Loan Agreement is:
The address of Assignee to which payments are to be sent under the terms of the Loan Agreement is shown in the Assignment and Acceptance.
This Notice is being delivered to Borrowers and Agent pursuant to Section 13.3 of the Loan Agreement. Please acknowledge your acceptance of this Notice by executing and returning to Assignee and Assignor a copy of this Notice.
IN WITNESS WHEREOF , this Assignment Notice is executed as of .
ACKNOWLEDGED AND AGREED,
AS OF THE DATE SET FORTH ABOVE:
|*||No signature required if Assignee is a Lender, U.S.-based Affiliate of a Lender or Approved Fund, or if an Event of Default exists.|
|BANK OF AMERICA, N.A.,|
FOURTH AMENDMENT TO
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this Amendment ), dated as of July 27, 2011, is entered into among COOPER RECEIVABLES LLC (the Seller), COOPER TIRE & RUBBER COMPANY (the Servicer ), MARKET STREET FUNDING LLC ( Market Street ), as Related Committed Purchaser and as Conduit Purchaser and PNC BANK, NATIONAL ASSOCIATION ( PNC ), as Administrator, as LC Participant, as LC Bank and as Purchaser Agent.
1. The parties hereto are parties to the Amended and Restated Receivables Purchase Agreement, dated as of September 14, 2007 (as amended, restated, supplemented or otherwise modified through the date hereof, the Agreement ); and
2. The parties hereto desire to amend the Agreement as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. Certain Defined Terms . Capitalized terms that are used but not defined herein shall have the meanings set forth in the Agreement.
SECTION 2. Amendments to the Agreement . As contemplated by Section 3 of that certain Third Amendment to the Agreement, dated as of June 2, 2011 (the 3 rd RPA Amendment ), the Agreement is hereby amended by (i) deleting the amount $125,000,000 from where it appears in the definitions of (A) the Group Commitment of Market Streets Purchasers Group, (B) Market Streets Commitment as a Related Committed Purchaser, (C) PNCs Commitment as the LC Bank and as an LC Participant and (D) the Purchase Limit, in each case, as set forth in Exhibit I to the Agreement, and (ii) replacing such amount with $175,000,000 in each such definition.
SECTION 3. Representations and Warranties . Each of the Seller and the Servicer hereby represents and warrants to the Administrator, each Purchaser and the Purchaser Agent as follows:
(a) Representations and Warranties . The representations and warranties made by it in the Transaction Documents are true and correct as of the date hereof (unless stated to relate solely to an earlier date, in which case such representations or warranties were true and correct as of such earlier date).
(b) Enforceability . The execution and delivery by such Person of this Amendment, and the performance of each of its obligations under this Amendment and
the Agreement, as amended hereby, are within each of its organizational powers and have been duly authorized by all necessary organizational action on its part. This Amendment and the Agreement, as amended hereby, are such Persons valid and legally binding obligations, enforceable in accordance with its terms.
(c) No Termination Event . Both before and immediately after giving effect to this Amendment and the transactions contemplated hereby, no Termination Event or Unmatured Termination Event exists or shall exist.
(d) Conditions Precedent . On the date hereof, each of the conditions precedent set forth in Section 3 of the 3 rd RPA Amendment has been satisfied.
SECTION 4. Effect of Amendment . All provisions of the Agreement, as expressly amended and modified by this Amendment, shall remain in full force and effect. After this Amendment becomes effective, all references in the Agreement (or in any other Transaction Document) to this Agreement, hereof, herein or words of similar effect referring to the Agreement shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Agreement other than as set forth herein.
SECTION 5. Effectiveness . This Amendment shall become effective as of the date hereof upon receipt by the Administrator of each of the following, each in form and substance satisfactory to the Administrator:
(a) duly executed counterparts of this Amendment; and
(b) confirmation that the Additional Structuring Fee payable under the Fee Letter in connection with this Amendment has been paid in full.
SECTION 6. Counterparts . This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. Delivery by facsimile or email of an executed signature page of this Amendment shall be effective as delivery of an originally executed counterpart hereof.
SECTION 7. Governing Law . This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York.
SECTION 8. Section Headings . The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Agreement or any provision hereof or thereof.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
|COOPER RECEIVABLES LLC, as Seller|
/s/ Charles F. Nagy
|Name:||Charles F. Nagy|
/s/ Stephen O. Schroeder
|Name:||Stephen O. Schroeder|
|Title:||President and Treasurer|
|COOPER TIRE & RUBBER COMPANY, as Servicer|
/s/ Bradley E. Hughes
|Name:||Bradley E. Hughes|
|Title:||Vice President and Chief Financial Officer|
/s/ Stephen O. Schroeder
|Name:||Stephen O. Schroeder|
|Title:||Vice President and Treasurer|
|S-1||Fourth Amendment to A&R RPA (Cooper)|
|PNC BANK, NATIONAL ASSOCIATION,|
/s/ William P. Falcon
|Name:||William P. Falcon|
PNC BANK, NATIONAL ASSOCIATION,
as Purchaser Agent
/s/ William P. Falcon
|Name:||William P. Falcon|
PNC BANK, NATIONAL ASSOCIATION,
as the LC Bank and as an LC Participant
/s/ Joseph G. Moran
|Name:||Joseph G. Moran|
|Title:||Senior Vice President|
|S-2||Fourth Amendment to A&R RPA (Cooper)|
|MARKET STREET FUNDING LLC,|
as a Related Committed Purchaser and as Conduit Purchaser
/s/ Karla L. Boyd
|Name:||Karla L. Boyd|
|S-3||Fourth Amendment to A&R RPA (Cooper)|