1
EXHIBIT 10.1
CREDIT AGREEMENT BY AND BETWEEN
INTEGRITY INCORPORATED AND
LASALLE BANK NATIONAL ASSOCIATION
EXCLUDING CONFIDENTIAL PORTIONS
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
2
INDEX TO THE CONFIDENTIAL PORTIONS
PAGE SECTION LINE(S)
vi Table of Contents 2
4 1.2.1. 5
4 1.2.2. 2
21 4.1.3. 4
29 5.10. 8
42 9.1. 32
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CREDIT AGREEMENT
BY AND BETWEEN
INTEGRITY INCORPORATED
AND
LASALLE BANK NATIONAL ASSOCIATION
(AS ADMINISTRATIVE AGENT AND AS A LENDER)
April 25, 2001
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TABLE OF CONTENTS
Page
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ARTICLE 1: THE CREDIT FACILITIES .........................................................................1
1.1. Line of Credit Facility .......................................................................1
1.1.1. Establishment of Line of Credit Facility .............................................1
1.1.2. Line of Credit Facility Maturity .....................................................1
1.1.3. Use of Proceeds ......................................................................1
1.1.4. Revolving Credit Notes ...............................................................1
1.1.5. Repayment and Prepayment .............................................................2
1.1.6. Letter of Credit Facility ............................................................3
1.2. Term Loan Facilities...........................................................................4
1.2.1. Establishment of Term Loan A Facility ................................................4
1.2.2. Use of Term Loan A Proceeds...........................................................4
1.2.3. Term Loan A Notes ....................................................................4
1.2.4. Establishment of Term Loan B Facility.................................................5
1.2.5. Use of Term Loan B Proceeds...........................................................5
1.2.6. Term Loan B Notes ....................................................................5
1.2.7. Term Loan Facilities Maturity.........................................................5
1.2.8. Repayment and Prepayment .............................................................4
1.2.8.1. Interest Payments..........................................................5
1.2.8.2. Term Loan A Principal Payments - Amortization .............................5
1.2.8.3. Term Loan B Principal Payments - Amortization .............................6
1.2.8.4. Payments at Maturity ......................................................6
1.2.8.5. Prepayments ...............................................................6
1.2.8.6. Availability for Reborrowing ..............................................7
1.3 Interest ......................................................................................7
1.3.1. Establishment of Portions.............................................................7
1.3.2. Interest Rate Determination...........................................................7
1.3.3. Adjusted LIBO Rate Loans - Continuation or Conversion.................................7
1.3.4. Applicable Rate Margins...............................................................7
1.3.5. Calculation of Interest and Fees .....................................................8
1.3.6. Special LI1BO Rate Provisions ........................................................8
1.3.7. Interest Periods for Adjusted LIBO Rate Advances......................................9
1.4. Advances ......................................................................................9
1.4.1. Requesting Advances ..................................................................9
1.4.2. Funding Advances ....................................................................10
1.4.3. Indemnification for Revocation or Failure to Satisfy Conditions......................10
1.4.4. Obligation to Advance ...............................................................10
1.4.5. Term Loan B Advance..................................................................10
1.5. Payments in General...........................................................................10
1.5.1. Manner and Place of Payments.........................................................10
1.5.2. Special Payment Timing Issues........................................................10
1.5.3. Application of Payments .............................................................11
5
1.5.4. LIBO Rate Payments Not at End of Interest Period ....................................11
1.5.5. Capital Adequacy, Taxes and Other Adjustments........................................11
1.5.6. Payment of Expenses, Indemnities and Protective Advances ............................11
1.5.7. Payments upon Termination............................................................12
1.5.8. Default Interest ....................................................................12
1.5.9. Usury Savings Provision .............................................................12
1.6. Fees and Other Compensation...................................................................12
1.6.1. Origination Fee .....................................................................12
1.6.2. Unused Line Fee .....................................................................12
1.6.3. Letter of Credit Fee ................................................................13
1.6.4. Letter of Credit Fronting Fee........................................................13
1.6.5. Other Letter of Credit Fees..........................................................13
ARTICLE 2: CONDITIONS PRECEDENT .........................................................................13
2.1. Closing Conditions............................................................................13
2.1.1. Compliance ..........................................................................13
2.1.2. Documents ...........................................................................14
2.2. Conditions Precedent - Advances ..............................................................15
2.2.1. Line of Credit and Term Loan A Advance Request ......................................15
2.2.2. Advances ............................................................................16
2.2.3. Other Documents......................................................................16
2.2.4. Compliance...........................................................................16
ARTICLE 3. REPRESENTATIONS AND WARRANTIES ...............................................................16
3.1. Organization and Good Standing ...............................................................16
3.2. Power and Authority...........................................................................17
3.3. Validity and Legal Effect.....................................................................17
3.4. No Violation of Laws or Agreements............................................................17
3.5. Title to Assets; Existing Encumbrances; Identification of Intellectual and
Real Property .......................................................................17
3.5.1 .....................................................................................17
3.5.2 .....................................................................................17
3.5.3 .....................................................................................17
3.6. Capital Structure and Equity Ownership........................................................18
3.7. Subsidiaries, Affiliates and Investments .....................................................18
3.8. Material Contracts ...........................................................................18
3.9. Licenses and Authorizations...................................................................18
3.10. Taxes and Assessments ........................................................................18
3.11. Litigation and Legal Proceedings .............................................................19
3.12. Accuracy of Financial Information.............................................................19
3.13. Accuracy of Other Information.................................................................19
3.14. Compliance with Laws Generally ...............................................................19
3.15. ERISA Compliance .............................................................................19
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3.16. Environmental Compliance .....................................................................19
3.17. Margin Rule Compliance .......................................................................19
3.18. Fees and Commissions .........................................................................19
3.19. Solvency .....................................................................................20
ARTICLE 4: AFFIRMATIVE COVENANTS ........................................................................20
4.1. Financial and Operating Covenants and Ratios..................................................20
4.1.1. Minimum Fixed Charge Coverage Ratio..................................................20
4.1.2. Leverage Ratio.......................................................................21
4.1.3. Minimum Net Worth....................................................................21
4.2. Periodic Financial Statements and Compliance Certificates.....................................21
4.2.1. Monthly Financial Statements.........................................................21
4.2.2. Quarterly Covenant Compliance .......................................................21
4.2.3. Annual Financial Statements..........................................................21
4.3. Other Financial and Specialized Reports.......................................................22
4.3.1. Annual Projections ..................................................................22
4.3.2. Additional Material Contracts, Licenses and Authorizations...........................22
4.3.3. Tax Returns .........................................................................22
4.3.4. SEC Filings and Press Releases ......................................................22
4.3.5. Borrowing Base Certificate ..........................................................22
4.3.6. Soundscan Rating ....................................................................22
4.3.7. Celebration Hymnal, LLP..............................................................22
4.4. Fiscal Year ..................................................................................22
4.5. Books and Records; Maintenance of Properties..................................................22
4.6. Existence and Good Standing...................................................................23
4.7. Deposit Accounts..............................................................................23
4.8. Insurance.....................................................................................23
4.9. Taxes .....................................................................................23
4.10. Management Changes............................................................................23
4.11. Litigation and Administrative Proceedings ....................................................23
4.12. Occurrence of Certain Events..................................................................23
4.13. Compliance with Laws .........................................................................24
4.14. Further Actions...............................................................................24
4.14.1. Additional Collateral ...............................................................24
4.14.2. Further Assurances ..................................................................24
4.14.3. Estoppel Certificates................................................................24
4.14.4. Waivers and Consents ................................................................25
4.14.5. Access and Audits ...................................................................25
4.14.6. Hedge Agreements ....................................................................25
4.15. Costs and Expenses ...........................................................................25
4.16. Other Information.............................................................................25
ARTICLE 5: NEGATIVE COVENANTS ...........................................................................26
5.1. Capital Expenditures .........................................................................26
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5.2. Additional Indebtedness ......................................................................26
5.3. Guaranties....................................................................................27
5.4. Loans ........................................................................................27
5.5. Liens and Encumbrances; Negative Pledge.......................................................27
5.6. Transfer of Assets............................................................................28
5.7. Acquisitions and Investments..................................................................28
5.8. New Ventures; Mergers.........................................................................29
5.9. Transactions with Affiliates..................................................................29
5.11. Integrity Music...............................................................................30
5.12. [Reserved] ...................................................................................30
5.13. Removal of Assets.............................................................................30
5.14. Modifications to Organic Documents............................................................30
5.15. Terms of and Modifications to Material Relationships..........................................30
5.16. Margin Stock Restrictions ....................................................................30
ARTICLE 6: [RESERVED] ...................................................................................30
ARTICLE 7: DEFAULT AND REMEDIES. ........................................................................30
7.1. Events of Default.............................................................................30
7.1.1. Payment Obligations................................................................30
7.1.2. Representations and Warranties ....................................................31
7.1.3. Certain Covenants .................................................................31
7.1.4. Other Covenants ...................................................................31
7.1.5. Default Under Other Agreements with Administrative Agent or Lenders ...............31
7.1.6. Default Under Material Agreements with Other Parties ..............................31
7.1.7. Security Interest..................................................................31
7.1.8. Change of Control .................................................................31
7.1.9. ERISA .............................................................................31
7.1.10. Insolvency.........................................................................32
7.1.11. Judgments..........................................................................32
7.1.12. Tax Lien...........................................................................32
7.1.13. Management ........................................................................32
7.2. Remedies .....................................................................................32
7.2.1. Acceleration, Termination and Pursuit of Collateral ...............................32
7.2.2. Other Remedies ....................................................................32
ARTICLE 8: ADMINISTRATIVE AGENT AND RELATIONSHIP AMONG LENDERS ..........................................33
8.1. Appointment, Authorization and Grant of Authority ............................................33
8.2. Acceptance of Appointment ....................................................................33
8.3. Administrative Agent's Relationship with Borrower.............................................33
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8.4. Non-Reliance on Administrative Agent and Other Lenders........................................33
8.5. Reliance by Administrative Agent..............................................................34
8.6. Delegation of Duties; Additional Reliance by Administrative Agent.............................34
8.7. Acting on Instructions of Lenders ............................................................34
8.8. Actions Upon Occurrence of Default or Event of Default .......................................35
8.9. Administrative Agent's Rights as Lender in Individual Capacity ...............................35
8.10. Advances By Administrative Agent .............................................................35
8.11. Payments to Lenders...........................................................................36
8.12. Pro-Rata Sharing of Setoff Proceeds...........................................................36
8.13. Limitation on Liability of Administrative Agent...............................................36
8.14. Indemnification...............................................................................36
8.15. Resignation; Successor Administrative Agent ..................................................37
ARTICLE 9: DEFINITIONS AND RULES OF CONSTRUCTION ........................................................37
9. 1. Definitions ....................................................................................37
"Account".....................................................................................37
"Account Debtor"..............................................................................37
"Acquiring Company"...........................................................................37
"Adjusted LIBO Rate"..........................................................................37
"Administrative Agent" .......................................................................38
"Advance".....................................................................................38
"Advance Request" ............................................................................38
"Affiliate" ..................................................................................38
"Agreement" ..................................................................................38
"Authorization" ..............................................................................38
"Authorized Officer" .........................................................................38
"Available Credit Portion" ...................................................................39
"Base Rate" ..................................................................................39
"Borrower" ...................................................................................39
"Borrowing Base" .............................................................................39
"Borrowing Base Certificate" .................................................................39
"Business Day"................................................................................39
"Capital Expenditures" .......................................................................39
"Capital Leases" .............................................................................39
"CCF".........................................................................................39
"Celebration".................................................................................39
"Change of Control" ..........................................................................39
"Closing Date"................................................................................40
"Code" .......................................................................................40
"Collateral" .................................................................................40
"Collateral Security Documents" ..............................................................40
"Commitment" .................................................................................40
"Commitment Percentage" ......................................................................40
"Default" ....................................................................................40
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"Deposit Account" ............................................................................40
"Dollar" or "$" ..............................................................................40
"EBITDA" .....................................................................................40
"Eligible Accounts" ..........................................................................41
"Eligible Inventory" .........................................................................42
"Environmental Control Statutes" .............................................................42
[**](1) ......................................................................................42
"EPA" ........................................................................................42
"ERISA" ......................................................................................42
"ERISA Affiliate" ............................................................................43
"Event of Default" ...........................................................................43
"Facility" ...................................................................................43
"Fixed Charges"...............................................................................43
"FRB".........................................................................................43
"Funded Debt".................................................................................43
"GAAP"........................................................................................44
"Hazardous Materials" ........................................................................44
"Hedge Agreement" ............................................................................44
"Indebtedness" ...............................................................................44
"Integrity Music" ............................................................................44
"Interest Expense" ...........................................................................44
"Interest Period" ............................................................................44
"Inventory" ..................................................................................44
"LaSalle" ....................................................................................45
"Lender" .....................................................................................45
"Letter of Credit Exposure" ..................................................................45
"Leverage Ratio"..............................................................................45
"LIBO Rate"...................................................................................45
"License" ....................................................................................45
"Lien"........................................................................................45
"Line of Credit Balance" .....................................................................45
"Line of Credit Commitment" ..................................................................45
"Line of Credit Commitment Percentage" .......................................................45
"Line of Credit Facility".....................................................................45
"Line of Credit Maturity Date" ...............................................................45
"Line of Credit Note" ........................................................................45
"Loan"........................................................................................46
"Loan Documents" .............................................................................46
"Local Authorities" ..........................................................................46
"Margin Regulation" ..........................................................................46
"Margin Stock" ...............................................................................46
"Material Adverse Change" ....................................................................46
"Material Adverse Effect" ....................................................................46
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
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"Material Contract" ..........................................................................46
"Mortgage Documents" .........................................................................46
"Net Income" .................................................................................46
"Net Worth" ..................................................................................46
"Notes" ......................................................................................46
"Obligations" ................................................................................47
"Official Body"...............................................................................47
"Operating Agreement" ........................................................................47
"Organic Document" ...........................................................................47
"PBGC" .......................................................................................47
"Permitted Acquisitions" .....................................................................47
"Permitted Guaranties" .......................................................................48
"Permitted Indebtedness" .....................................................................48
"Permitted Investments" ......................................................................48
"Permitted Liens" ............................................................................48
"Permitted Loans" ............................................................................48
"Permitted Transfers" ........................................................................48
"Person"......................................................................................48
"Plan"........................................................................................48
"Portion".....................................................................................48
"Pro Rata"....................................................................................49
"Rate Index"..................................................................................49
"Rate Margin" ................................................................................49
"Reportable Event" ...........................................................................49
"Reserve Percentage" .........................................................................49
"Revenue" ....................................................................................49
"Required Lenders" ...........................................................................49
"Reserve Percentage" .........................................................................49
"SEC" ........................................................................................49
"Securities Acts" ............................................................................49
"Security Agreements" ........................................................................49
"Settlement Date" ............................................................................49
"Subsidiary" .................................................................................49
"Surviving Company" ..........................................................................49
"Target Company" .............................................................................50
"Term Loan A Commitment" .....................................................................50
"Term Loan B Commitment" .....................................................................50
"Term Loan A Commitment Percentage" ..........................................................50
"Term Loan B Commitment Percentage" ..........................................................50
"Term Loan A Facility"........................................................................50
"Term Loan B Facility" .......................................................................50
"Term Loan Facilities" .......................................................................50
"Term Loan Maturity Date" ....................................................................50
"Term Loan A Note" ...........................................................................50
"Term Loan B Note" ...........................................................................50
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"UCC" ........................................................................................50
"Work"........................................................................................50
9.2. Rules of Interpretation and Construction .....................................................50
9.2.1. Plural; Gender.....................................................................50
9.2.2. Section and Schedule References....................................................50
9.2.3. Titles and Headings ...............................................................51
9.2.4. "Including" and "Among Other" References ..........................................51
9.2.5. Time of Day References ............................................................51
9.2.6. "Knowledge" of a Person ...........................................................51
9.2.7. Successors and Assigns ............................................................51
9.2.8. Modifications to Documents ........................................................51
9.2.9. References to Laws and Regulations.................................................51
9.2.10. Financial and Accounting Terms.....................................................52
9.2.11. Conflicts Among Loan Documents ....................................................52
9.2.12. Independence of Covenants and Defaults.............................................52
9.2.13. Administrative Agent ..............................................................52
ARTICLE 10: MISCELLANEOUS ................................................................................52
10.1. Indemnification, Reliance and Assumption of Risk..............................................52
10.2. Assignments and Participations................................................................53
10.3. No Waiver; Delay..............................................................................53
10.4. Modifications and Amendments..................................................................54
10.5. Disclosure of Information to Third Parties....................................................54
10.6. Binding Effect and Governing Law..............................................................55
10.7. Notices.......................................................................................55
10.8. Relationship with Prior Agreement.............................................................56
10.9. Severability..................................................................................56
10.10. Termination and Survival......................................................................56
10.11. Reinstatement ................................................................................56
10.12. Counterparts .................................................................................57
10.13. Waiver of Suretyship Defenses ................................................................57
10.14. WAIVER OF LIABILITY...........................................................................57
10.15. FORUM SELECTION; CONSENT TO JURISDICTION......................................................57
10.16. WAIVER OF JURY TRIAL .........................................................................58
10.17. STATUTORY NOTICE - INSURANCE..................................................................58
10.18. STATUTORY NOTICE - ORAL COMMITMENTS...........................................................59
SCHEDULES:
Schedule 3.1 Good Standing / Foreign Qualification Jurisdictions
Schedule 3.2 Missing Consents
Schedule 3.5A Intellectual Property
Schedule 3.513 Real Property Interests
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Schedule 3.5C Operating Names Trade Names
Schedule 3.6 Capital Structure Equity Ownership
Schedule 3.7 Subsidiaries, Affiliates & Investments
Schedule 3.8 Material Contracts
Schedule 3.9 Licenses and Authorizations
Schedule 3.10 Taxes and Assessments
Schedule 3.11 Material Litigation
Schedule 3.18 Fees and Commissions
Schedule 5.2 Permitted Additional Indebtedness
Schedule 5.3 Permitted Additional Guaranties
Schedule 5.4 Permitted Additional Loans
Schedule 5.5 Permitted Additional Liens
Schedule 5.7 Permitted Additional Investments
EXHIBITS:
Exhibit 1.4.1 Form of Advance Request
Exhibit 4.2 Form of Compliance Certificate
Exhibit 4.3 Form of Borrowing Base Certificate
Exhibit 10.2 Form of Assignment and Assumption Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made and effective as of
April 25, 2001, by and among INTEGRITY INCORPORATED, a Delaware corporation
("Integrity," or "Borrower") and each financial institution that from time to
time is a "Lender" hereunder; (collectively, the "Lenders"), and LASALLE BANK
NATIONAL ASSOCIATION ("Administrative Agent").
R E C I T A L S
WHEREAS, Borrower desires and has applied to Lenders and Administrative
Agent for a credit facility consisting of (a) a revolving line of credit
pursuant to which $6,000,000 can be borrowed from time to time on a senior
secured basis, and (b) a term loan pursuant to which $11,000,000 million can be
borrowed on a senior secured basis, and (c) a mortgage term loan pursuant to
which $3,000,000 can be borrowed on a senior secured basis; and
WHEREAS, Lenders and Administrative Agent are each willing to
accommodate the request for credit upon and subject to the terms, conditions and
provisions of the Loan Documents;
NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), and intending to be legally bound
hereby, Borrower and each Lender and Administrative Agent hereby agrees as
follows:
ARTICLE 1: THE CREDIT FACILITIES
1.1. Line of Credit Facility.
1.1.1. Establishment of Line of Credit Facility. Subject to
the terms and conditions of and in reliance upon the representations and
warranties in the Loan Documents, the Lenders (severally and on a Pro Rata
basis) will lend funds to Borrower on a senior secured basis from time to time
prior to the Line of Credit Maturity Date in an aggregate amount at any time
outstanding not to exceed the Available Credit Portion minus the Letter of
Credit Exposure.
1.1.2. Line of Credit Facility Maturity. The Line of Credit
Facility will mature on April 25, 2006 ("Line of Credit Maturity Date").
1.1.3. Use of Proceeds. The funds advanced under this Line
of Credit Facility shall be used exclusively for general working capital
requirements and to finance Permitted Acquisitions; provided, however, such
funds shall not be used, directly or indirectly, in any fashion for the benefit
of Celebration or Integrity Music.
1.1.4. Revolving Credit Notes. The indebtedness of Borrower
under the Line of Credit Facility will be evidenced by one or more Revolving
Notes (as amended, restated, replaced, supplemented, extended or renewed from
time to time, each, a "Revolving Note"; collectively, the "Revolving Notes")
payable to the order of each Lender. The Revolving Notes will be due and payable
in full on the Line of Credit Maturity Date. The aggregate stated principal
amount of the Revolving Notes will be the Line of Credit Commitment. Each Lender
is authorized to note or endorse the date and amount of each Advance and payment
under the Line of Credit Facility on a schedule annexed to and constituting a
part of the Line of Credit Notes. Such notations or endorsements, if made, will
constitute prima facie evidence of the information noted or endorsed on such
schedule, but the absence of any such
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notation or endorsement will not limit or otherwise affect the obligations and
liabilities of Borrower thereunder or hereunder.
1.1.5. Repayment and Prepayment. The Borrower hereby
promises to pay Administrative Agent the aggregate indebtedness under the Line
of Credit Facility (and other Loan Documents) in accordance with the following
provisions:
1.1.5.1. Interest Payments. Interest accrued under
the Line of Credit Facility with respect to Base Rate Loans is due and payable
quarterly in arrears on the last day of the last month of each calendar quarter.
Interest accrued under the Line of Credit Facility with respect to Adjusted LIBO
Rate Loans shall be paid on the last day of each Interest Period and, in
addition, for each such Adjusted LIBO Rate Loan with an Interest Period longer
than 90 days, Borrower shall pay interest accrued thereon on the date which is
90 days from date of commencement of such Interest Period.
1.1.5.2. Payments at Maturity. The outstanding
indebtedness under the Line of Credit Facility (including all principal,
interest, fees, expenses and indemnities) is due and payable in its entirety on
the Line of Credit Maturity Date.
1.1.5.3. Prepayments.
a. Voluntary Prepayments. The
outstanding principal balance under the Line of Credit Facility may be prepaid
in whole or in part at any time without premium or penalty.
b. Mandatory PrepayMents -- Excessive
Balance. If the outstanding indebtedness under the Line of Credit Facility at
any time exceeds the Available Credit Portion, then such excess amount
outstanding must be re-paid to Administrative Agent in its entirety immediately
upon demand by Administrative Agent for payment thereof.
c. Mandatory Prepayments - Equity
Issuances and Asset Sales. If (a) Borrower issues any equity securities or (b)
sells, leases, licenses, transfers or otherwise disposes of any assets (other
than inventory sold in the ordinary course of business, the disposition of
obsolete or worn out equipment, or the licensing of copyrights and trademarks in
the ordinary course of business), or (c) Borrower is required to pay excess
dividend income to Lenders pursuant to Section 5.10 then a prepayment in an
amount equal to the cash proceeds of any such equity issuance, asset disposition
or excess dividends (net of (1) reasonable commissions and expenses actually
paid to unrelated third parties in connection with such transactions and (2)
taxes actually due as a direct result of such transactions) must be made within
two (2) Business Days after actual receipt thereof on the outstanding
indebtedness under the Line of Credit Facility, unless a balance then exists
under the Term Loan Facilities; provided, however, that the foregoing prepayment
obligation shall not apply to an individual asset disposition which yields less
than $15,000 in cash proceeds to the extent that, when aggregated with the cash
proceeds of all previous asset dispositions (not otherwise excepted under the
first parenthetical hereunder) during the term of the Facility, equals or is
less than $30,000; provided, further, if at the time of any required prepayment
hereunder, any portion of such prepayment would by necessity require the
"breakage" of an Adjusted LIBO Rate Loan, then only to the extent necessary to
avoid such "breakage," Borrower may make such portion of such prepayment upon
termination of the relevant Interest Period(s).
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d. In General. Any prepayment under
the Line of Credit Facility must include all accrued but unpaid interest under
the Line of Credit Facility allocable to the amount prepaid through the date of
such prepayment.
1.1.5.4. Availability for Reborrowing. Principal
amounts paid under the Line of Credit Facility prior to the Line of Credit
Maturity Date will be available for re-borrowing (in the absence of a Default or
Event of Default) in accordance with the terms hereof up to the Available Credit
Portion.
1.1.5.5. Voluntary Reduction of Commitment. Upon
giving Administrative Agent prior written notice of at least five (5) Business
Days, Borrower at any time and from time to time may reduce the Line of Credit
Commitment in multiples of $500,000. Any such reduction in the Line of Credit
Commitment will be permanent, and such Commitment cannot thereafter be increased
without the written consent of Lenders.
1.1.6. Letter of Credit Facility.
1.1.6.1 Letter of Credit Issuance. Letter of Credit
Issuer commits to issue standby letters of credit and commercial (documentary)
letters of credit for the account of Borrower from time to time from the Closing
Date to the Line of Credit Maturity Date, but only if the Letter of Credit
Exposure will not as a result of such issuance exceed the lesser of (1)
$1,000,000 and (ii) any excess of the Available Credit Portion over the Line of
Credit Balance. The expiration date of any Letter of Credit will be a Business
Day that is not later than the date which is twenty-five days prior to the Line
of Credit Maturity Date; provided, however, that the expiration date for the
Letter of Credit may be later than the Line of Credit Maturity Date if Letter of
Credit Issuer consents to such issuance and Borrower provides to Letter of
Credit Issuer cash collateral satisfactory to Letter of Credit Issuer as
security for Borrower's obligation to reimburse Letter of Credit Issuer for all
draws thereunder. Immediately, upon the issuance by Letter of Credit Issuer of a
Letter of Credit in accordance with the terms and conditions of this Agreement,
Letter of Credit Issuer shall be deemed to have sold and transferred to each
other Lender, and such other Lender shall be deemed to have purchased and
received from Letter of Credit Issuer, a Pro-Rata, undivided interest and
participation in such Letter of Credit, the reimbursement obligation of Borrower
with respect thereto, and any guaranty thereof or collateral therefor. Such
other Lender's Pro-Rata undivided interest shall be the same as its Pro-Rata
share of the Line of Credit Commitment.
1.1.6.2 Interest on Draws on Letters of Credit. The
unreimbursed amount of each draw on a Letter of Credit shall bear interest at a
rate per annum equal to the Base Rate then applicable to the Line of Credit
Facility.
1.1.6.3 Reimbursement Obligations of Borrower. The
Borrower hereby unconditionally agrees to immediately pay to Letter of Credit
Issuer on demand all amounts required to pay all drafts drawn under Letters of
Credit issued for the account of the Borrower and all reasonable expenses
incurred by Letter of Credit Issuer in connection with such Letters of Credit
and in any event and without demand to remit to Letter of Credit Issuer
sufficient funds to pay all debts and liabilities arising under any Letter of
Credit issued for the account of the Borrower.
1.1.6.4 Draws on Letter of Credit. In the event that
a draw is made on a Letter of Credit and Borrower does not reimburse the amount
of such draw in full to Letter of Credit Issuer within one (1) Business Day
after demand, Letter of Credit Issuer shall promptly notify Administrative Agent
of such failure. Upon Administrative Agent's receipt of such notice from Letter
of
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Credit Issuer, Administrative Agent may notify each Lender thereof and shall
have the right to cause a Line of Credit Advance to be made, regardless of
whether such Line of Credit Advance would result in the Line of Credit Balance
exceeding the Available Credit Amount, by notifying each Lender of the draw, the
amount of the Line of Credit Advance required to fund reimbursement of such
draw, and the amount of such Lender's ratable share of such Line of Credit
Advance. The Advance Date and time for such Line of Credit Advance shall not be
later than 3:00 p.m. (Local Time) on the first Business Day following
Administrative Agent's delivery of such notice to Lenders. By no later than such
Advance Date and time, each Lender shall make immediately available to
Administrative Agent funds consisting solely of Dollars in the amount of its
Pro-Rata share of such Line of Credit Advance, rounded to the nearest ▇▇▇▇▇, in
accordance with such remittance instructions as may be given by Administrative
Agent to each Lender from time to time. Each Line of Credit Advance made by
Administrative Agent pursuant to this Section 1.1.6.4 shall be deemed to be a
Base Rate Advance.
1.1.6.5 Requirements for Every Letter of Credit
Request. Only a written request (which may be mailed, personally delivered to or
telecopied as provided in Section 10.7) from an Authorized Officer to Letter of
Credit Issuer that specifies the amount, requested issue date (which shall be a
Business Day and in no event later than thirty days before the Line of Credit
Maturity Date), and beneficiary of the requested Letter of Credit and other
information necessary for its issuance shall be treated as a request for
issuance of a Letter of Credit.
1.2. Term Loan Facilities.
1.2.1. Establishment of Term Loan A Facility. Subject to the
terms and conditions of and in reliance upon the representations and warranties
in the Loan Documents, the Lenders (severally and on a Pro Rata basis) will lend
funds to Borrower on a senior secured basis through multiple Advances of not
less than $ 1,000,000 each on or within 180 days of the Closing Date in an
aggregate principal amount advanced not to exceed the Term Loan A Commitment;
provided, however, that, [**](1) then the Term Loan A Commitment shall be
permanently reduced by such shortfall amount.
1.2.2. Use of Term Loan A Proceeds. The funds advanced under
this Term Loan A Facility shall be used exclusively for (a) the refinancing of
existing indebtedness of Borrower, (b) [**](1) an aggregate amount not to exceed
$1,500,000 may be used for Permitted Acquisitions in accordance with Section
5.7; provided, however, with respect to the purchase of Borrower's common stock,
such stock shall be immediately retired or held by the Borrower as treasury
stock.
1.2.3. Term Loan A Notes. The indebtedness of Borrower under
the Term Loan A Facility hereof will be evidenced by one or more Term Loan A
Notes (as amended, restated, replaced, supplemented, extended or renewed from
time to time, each, a "Term Loan A Note," collectively, the "Term Loan A Notes")
payable to the order of each Lender. The Term Loan A Notes will be due and
payable in full on the Term Loan Maturity Date. The aggregate stated principal
amount of the Term Loan A Notes will be the Term Loan A Commitment. Each Lender
is authorized to note or endorse the date and amount of each Advance and each
payment under the Term Loan A Facility on a schedule annexed to and constituting
a part of the Term Loan A Notes. Such notations or endorsements, if made, will
constitute prima facie evidence of the information noted or endorsed on such
schedule, but the absence of any such notation or endorsement will not limit or
otherwise affect the obligations or liabilities of Borrower thereunder and
hereunder.
----------------
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
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1.2.4. Establishment of Term Loan B Facility. Subject to the
terms and conditions of and in reliance upon the representations and warranties
in the Loan Documents, the Lenders (severally and on a Pro Rata basis) will lend
funds to Borrower on a senior secured basis through multiple Advances of not
less than $500,000 each on or within 720 days of the Closing Date in an
aggregate principal amount advanced not to exceed the Term Loan B Commitment.
1.2.5. Use of Term Loan B Proceeds. The funds advanced under
the Term Loan B Facility shall be used exclusively for the funding of capital
expenditures related to the Borrower's primary headquarters in Mobile, Alabama.
1.2.6. Term Loan B Notes. The indebtedness of Borrower under
the Term Loan B Facility will be evidenced by one or more Term Loan B Notes (as
amended, restated, replaced, supplemented, extended or renewed from time to
time, each, a "Term Loan B Note"; collectively, the "Term Loan B Notes") payable
to the order of each Lender. The Term Loan B Notes will be due and payable in
full on the Term Loan Maturity Date. The aggregate stated principal amount of
the Term Loan B Notes will be the Term Loan B Commitment. Each Lender is
authorized to note or endorse the date and amount of each Advance and each
payment under the Term Loan B Facility on a schedule annexed to and constituting
a part of the Term Loan B Notes. Such notations or endorsements, if made, will
constitute prima facie evidence of the information noted or endorsed on such
schedule, but the absence of any such notation or endorsement will not limit or
otherwise affect the obligations or liabilities of Borrower thereunder and
hereunder.
1.2.7. Term Loan Facilities Maturity. Term Loan A Facility
and the Term Loan B Facility (collectively, the "Term Loan Facilities") will
mature on April 25, 2006 (the "Term Loan Maturity Date").
1.2.8. Repayment and Prepayment. The Borrower hereby
promises to pay Administrative Agent the aggregate indebtedness under the Term
Loan Facilities (and other Loan Documents) in accordance with the following
provisions:
1.2.8.1. Interest Payments. Interest accrued under
the Term Loan Facilities with respect to Base Rate Loans is due and payable
quarterly in arrears on the last day of the last month of each calendar quarter.
Interest accrued under the Term Loan Facilities with respect to Adjusted LIBO
Rate Loans shall be paid on the last calendar day of each Interest Period and,
in addition, for each such Adjusted LIBO Rate Loan with an Interest Period
longer than 90 days, Borrower shall pay interest accrued thereon on the date
which is 90 days from date of commencement of such Interest Period.
1.2.8.2. Term Loan A Principal Payments -
Amortization. On the last Business Day of each March, June, September and
December, commencing June 30, 2001, a payment of the principal balance
outstanding under the Term Loan A Facility is due and payable according to the
following schedule:
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Required Amount
Payment Date Of Principal Payment
----------------------- --------------------
6/30/01 through 3/31/05 $500,000
6/30/05 through 3/31/06 $750,000
provided, however, that, if the Term Loan A Commitment is reduced pursuant to
Section 1.2.1, then such amortization schedule shall be revised by
Administrative Agent to provide for full and equal principal amortization on a
quarterly basis of the principal balance of Term Loan A over the five year
period commencing as of the Closing Date.
1.2.8.3. Term Loan B Principal Payments -
Amortization. On the last Business Day of each March, June, September and
December, commencing June 30, 2002, a principal payment of $50,000 under the
Term Loan B Facility shall be due and payable.
1.2.8.4. Payments at Maturity. The outstanding
indebtedness under the Term Loan Facilities (including all principal, interest,
fees, expenses and indemnities) shall be due and payable on the Term Loan
Maturity Date.
1.2.8.5. Payments.
a. Voluntary Prepayments. At anytime,
upon prior written notice to Administrative Agent of at least three (3) Business
Days, the outstanding principal balance under the Term Loan Facilities may be
prepaid in whole or in part without premium or penalty. Any voluntary partial
prepayment must be in an amount of not less than $ 100,000 or in multiples of $
10,000 in excess thereof.
b. Mandatory Prepayments - Equity
Issuances and Asset Sales. If (a) Borrower issues any equity securities or (b)
sells, leases, licenses, transfers or otherwise disposes of any assets (other
than inventory sold in the ordinary course of business, the disposition of
obsolete or worn out equipment, or the licensing of copyrights and/or trademarks
in the ordinary course of business), or (c) Borrower is required to pay excess
dividend income to Lenders pursuant to Section 5.10 then a prepayment in an
amount equal to the cash proceeds of any such equity issuance, asset disposition
or excess dividends (net of (1) reasonable commissions and expenses actually
paid to unrelated third parties in connection with such transactions and (2)
taxes actually due as a direct result of such transactions) must be made within
two (2) Business Days after actual receipt thereof on the outstanding
indebtedness under the Term Loan Facilities; provided, however, that the
foregoing prepayment obligation shall not apply to an individual asset
disposition which yields less than $15,000 in cash proceeds to the extent that,
when aggregated with the cash proceeds of all previous asset dispositions (not
otherwise excepted under the first parenthetical hereunder) during the term of
the Facility, equals or is less than $30,000; provided, further, if at the time
of any required prepayment hereunder, any portion of such prepayment would by
necessity require the "breakage" of an Adjusted LIBO Rate Loan, then only to the
extent necessary to avoid such "breakage," Borrower may make such portion of
such prepayment upon termination of the relevant Interest Period(s). Any such
prepayment shall be applied first to the then principal balance outstanding
under the Term Loan A Facility in inverse order of maturity until there are no
amounts
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19
outstanding under the Term Loan A Facility, then such prepayment shall be
applied to the then principal balance outstanding under the Term Loan B Facility
in inverse order of maturity.
c. In General. Any prepayments under
the Term Loan Facilities must include all accrued but unpaid interest under the
Term Loan Facilities allocable to the amount prepaid through the date of such
prepayment.
1.2.8.6. Availability for Reborrowing. Principal
amounts repaid or prepaid under the Term Loan Facilities prior to the Term Loan
Maturity Date will not be available for reborrowing hereunder.
1.3 Interest. Interest under the Line of Credit Facility and Term
Loan Facilities (and with respect to any other amounts advanced to or on behalf
of Borrower or otherwise outstanding under the Loan Documents) will be
determined and imposed in accordance with the following provisions:
1.3.1. Establishment of Portions. Borrower may have no more
than five (5) Portions accruing interest at an Adjusted LIBO Rate at any one
time under the Line of Credit Facility. Borrower may have no more than three (3)
portions accruing interest at an Adjusted LIBO Rate at any one time under each
of the Term Loan Facilities. No Portion under the Facility accruing interest at
an Adjusted ▇▇▇▇ Rate may be less than $100,000.
1.3.2. Interest Rate Determination. The outstanding balance
hereunder will bear interest at the applicable Rate Index plus the applicable
Rate Margin. If the Base Rate is the applicable Rate Index for a Portion, then
the interest rate on such Portion will change when and as the Base Rate or Rate
Margin changes; and if an Adjusted LIBO Rate is the applicable Rate Index for a
Portion, then the interest rate on such Portion will be established on the first
day of each Interest Period for such Portion and will not change during such
Interest Period. With respect to the proceeds of each Advance, unless Borrower
requests a particular Rate Index at the time of such Advance, then the Base Rate
shall be the applicable Rate Index.
1.3.3. Adjusted LIBO Rate Loans - Continuation or
Conversion. The applicable Rate Index for each Portion may be converted to or
continued as either a Base Rate Advance or, as an Adjusted LIBO Rate Advance by
Borrower as of the first Business Day after the end of the applicable Interest
Period for such Portion. At least three (3) Business Days before any day on
which the Rate Index may be so converted or continued, Borrower shall notify
Administrative Agent in writing of (a) the dollar amount of each Portion (if
more than one exists) and (b) the selected Rate Index for each Portion during
the subsequent rate period (including, if applicable, the selected length of the
Interest Period). If Administrative Agent does not timely receive such written
notification as to any Portion, then the then-current Rate Index will be the
applicable Rate Index for the outstanding balance of such unspecified Portion
during the subsequent Interest Period.
1.3.4. Applicable Rate Margins. The Rate Margin applicable
to the Facility will be established as of the Closing Date and as of the third
Business Day after the date that Administrative Agent receives or should have
received the most recent periodic financial statements of Borrower delivered in
accordance with Section 4.2. The Interest Rate Margin will be based upon the
Leverage Ratio as of the last day of the fiscal quarter as reflected on the most
recent quarterly financial statements
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20
delivered to Administrative Agent in accordance with Section 4.2, and will be
determined according to the following schedule:
Line of Credit Term Loan
Base Rate Adjusted LIBO Facilities Adjusted
Leverage Ratio Rate Margin Rate Margin LIBO Rate Margin
-------------- ----------- -------------- -------------------
>2.0 .50% 2.75% 3.00%
>1.5 but <2.0 .25% 2.50% 2.75%
>1.0 but <1.5 .0% 2.25% 2.50%
<1.0 .0% 2.00% 2.25%
If Administrative Agent does not timely receive acceptable quarterly financial
statements prepared and delivered in accordance with Section 4.2, then
Administrative Agent (in the sole and absolute discretion of Required Lenders)
may deem the applicable Rate Margins for each Portion to be the highest Rate
Margins for the applicable Rate Index reflected in the chart above, either
prospectively or retroactive to the first day of the then-current fiscal
quarter.
1.3.5. Calculation of Interest and Fees. Interest and, where
applicable, fees under the Facility will be calculated on the basis of a 360-day
year for the actual number of days elapsed. Interest will begin to accrue on any
amounts advanced to or on behalf of Borrower under the Loan Documents on and as
of the date such funds are advanced.
1.3.6. Special LIBO Rate Provisions. The following
provisions apply with respect to Adjusted LIBO Rates.
a. Change in Adjusted LIBO Rate. Any Adjusted
LIBO Rate may be adjusted by a particular Lender from time to time to account
for any additional or increased cost of maintaining any necessary reserves for
Eurodollar deposits (including any increase in the Reserve Percentage) or any
increased costs due to changes in the applicable law occurring subsequent to the
commencement of the then-applicable Interest Period. Such Lender will give
Administrative Agent notice of any such determination and adjustment within a
reasonable period of time thereafter. Upon receipt of such notice,
Administrative Agent will provide a copy thereof to Borrower, and (upon written
request) such Lender will furnish a statement to Administrative Agent and
Borrower setting forth the basis and the method for determining the amount of
such adjustment. A determination by any Lender hereunder will be conclusive
absent manifest error. If any Lender provides any such notice of adjustment,
then Borrower may elect to change the then-applicable Rate Index (using the same
Rate Margin category) to the Base Rate for any Portion then subject to an
Adjusted LIBO Rate. Such election to change the Rate Index must be made by
providing Administrative Agent written notice thereof at any time within 10
Business Days after receipt of such notice of adjustment subject to the
requirement to pay all associated costs therewith. Upon Administrative Agent's
receipt of any such written election, the identified Portion will thereupon
begin to accrue interest at the Base Rate plus the Rate Margin (as applicable
for the same Leverage Ratio as previously was applicable for the Adjusted LIBO
Rate) for the remainder of the then-current Interest Period for such Portion.
b. Unavailability of Eurodollar Funds. An
Adjusted LIBO Rate will not be available for the Facility if the Administrative
Agent at any time determines or reasonably believes that
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21
(1) Eurodollar deposits equal to the amount of principal under the Facility for
the applicable Interest Period are unavailable, or (2) an Adjusted LIBO Rate
will not adequately and fairly reflect the cost of maintaining balances under
the Facility, or (3) by reason of circumstances affecting Eurodollar markets,
adequate and reasonable means do not then exist for ascertaining an Adjusted
LIBO Rate. Administrative Agent will give notice of any such determination and
adjustment within a reasonable period of time thereafter to Borrower. Upon
written request of Borrower, Administrative Agent will furnish to Borrower a
statement setting forth the basis for such determination or reasonable belief A
determination or belief by Administrative Agent hereunder will be conclusive
absent manifest error.
c. Illegality. An Adjusted LIBO Rate also will
not be available under the Facility if a particular Lender at any time
determines or reasonably believes that it is unlawful or impossible to fund or
maintain sufficient Eurodollar liabilities for the Facility under an Adjusted
LIBO Rate. Such Lender will give Administrative Agent notice of any such
determination and adjustment within a reasonable period of time thereafter. Upon
receipt of such notice, Administrative Agent will provide a copy thereof to
Borrower, and (upon written request) such Lender will furnish to Administrative
Agent and Borrower a statement setting forth the basis for such determination or
reasonable belief A determination or belief by any Lender hereunder will be
conclusive absent manifest error.
d. Continuance of a Default. An Adjusted LIBO
Rate also will not be available under the Facility during the existence of any
Default or Event of Default.
e. Alternative Rate. During the occurrence of
any event described in either Clauses "b" or "c" of this Subsection, each
affected Lender's obligation hereunder to fund or maintain balances under an
Adjusted LIBO Rate will be suspended, and during such period, the outstanding
balance under the Facility will bear interest at the Base Rate plus the
appropriate Rate Margin.
1.3.7. Interest Periods for Adjusted LIBO Rate Advances. For
each Adjusted LIBO Rate Advance, Borrower shall select an Interest Period that
is either 30, 60, 90 or 180 days; provided that:
a. every such Interest Period for an Adjusted
LIBO Rate Advance shall commence on the date of the Advance or on the date of
the conversion or continuation of any Advance as an Adjusted ▇▇▇▇ Rate Advance;
b. if any Interest Period would otherwise
expire on a day of a calendar month which is not a Business Day, then such
Interest Period shall expire on the next succeeding Business Day in that
calendar month; provided, however, that if the next succeeding Business Day
would be in the following calendar month, it shall expire on the first preceding
Business Day;
c. any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and
d. no Interest Period for an Adjusted LIBO Rate
Advance that is part of the Line of Credit Facility shall extend beyond the Line
of Credit Facility Maturity Date, and no Interest Period for an Adjusted LIBO
Rate Advance that is part of the Term Loan Facilities shall extend beyond the
Term Loan Maturity Date.
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1.4. Advances.
1.4.1. Requesting Advances. To request an Advance (other
than the initial Advances on the Closing Date) (any such notice, an "Advance
Request"), Borrower must give Administrative Agent written notice (or verbal
notice by telephone with immediate written confirmation to follow) (a) at least
one (1) Business Day prior to the requested Settlement Date for any Base Rate
Advance, or (b) at least three (3) Business Days prior to the requested
Settlement Date for any Adjusted LIBO Rate Advance. Such Advance Request,
together with certain certifications, must be substantially in the form of
Exhibit 1.4.1. Unless Administrative Agent otherwise consents, Borrower may only
request up to two (2) Advances per month under the Term Loan A Facility and up
to two (2) Advances per month under the Term Loan B Facility.
1.4.2. Funding Advances. Subject to the terms and conditions
hereof, Administrative Agent will make each Lender's Pro Rata portion of each
requested Advance (to the extent such funds are received by Administrative
Agent) available by crediting such amount to the Deposit Account with
Administrative Agent (or by such other means as Borrower may reasonably direct).
1.4.3. Indemnification for Revocation or Failure to Satisfy
Conditions. Borrower will indemnify each Lender and Administrative Agent against
all losses and costs incurred by such Lender and Administrative Agent as a
result of any revocation of any requested Advance or any failure to fulfill the
applicable conditions precedent to such Advance on or before the requested
Settlement Date specified in an Advance Request. Such indemnification will
include (among other things) all losses and costs incurred by reason of the
liquidation or reemployment of funds required by such Lender or Administrative
Agent to fund the Advance when such Advance, as a result of such failure, is not
made on the requested Settlement Date. Such Lender's or Administrative Agent's
(as applicable) calculation of such losses and costs will be conclusive absent
manifest error.
1.4.4. Obligation to Advance. No Lender will be obligated to
make any Advance under the following circumstances: (a) during the existence of
a Default or an Event of Default hereunder, or (b) if such Advance would cause a
Default or Event of Default hereunder, or (c) after the Line of Credit Maturity
Date, or (d) as regards the Term Loan A Facility, on or after 180 days from the
Closing Date, or (e) as regards the Term Loan B Facility, on or after 720 days
from the Closing Date.
1.4.5 Term Loan B Advance. The Borrower shall provide to
Administrative Agent five (5) Business Days prior to any Advance under the Term
Loan B Facility, to be approved by Administrative Agent in its own discretion,
appropriate invoices (describing in sufficient detail the improvements to be
funded with the proceeds of such Advance), lien waivers, title insurance
endorsements and such other documents as Administrative Agent may reasonably
request from time to time.
1.5. Payments in General.
1.5.1. Manner and Place of Payments. All payments of
principal, interest, fees, expenses, indemnities and other amounts due under the
Loan Documents shall be made by Administrative Agent's debit to the Deposit
Account, or otherwise must be received by Administrative Agent by wire transfer
(unless Administrative Agent otherwise consents) in immediately available funds
in U.S. dollars (and without any deduction, offset, netting, reservation of
rights or counterclaim) on or before One o'clock (1:00) p.m. St. Louis time on
the due date therefor at the principal office of Administrative Agent
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set forth in the Notice Section hereof or at such other place as Administrative
Agent may designate from time to time.
1.5.2. Special Payment Timing Issues. Whenever any payment
to be made under any Loan Document is due on a day that is not a Business Day,
then such payment may be made on the next succeeding Business Day, and such
extension of time will be included in the computation of interest under such
Loan Document. Any funds received by Administrative Agent after 1:00 p.m. St.
Louis time on any day will be deemed to be received on the next succeeding
Business Day (provided, however, no Event of Default under Section 7.1.1 hereof
shall be deemed to occur if such funds are received by Administrative Agent by
no later than 4:00 p.m. St. Louis time on such day).
1.5.3. Application of Payments. All payments and other funds
received by Administrative Agent under the Loan Documents after the Line of
Credit Maturity Date and the Term Loan Maturity Date, or during any Default,
will be applied in the following order: (a) first to the payment of any fees and
charges due under the Loan Documents, and (b) then to any obligations for the
payment of expenses, costs and indemnities due under the Loan Documents, and (c)
then to the payment of interest due and owing under the Loan Documents, and (d)
then, to the principal indebtedness due under the Term Loan A Facility in
inverse order of maturity until there are no amounts outstanding under the Term
Loan A Facility, then to the principal indebtedness due under the Term Loan B
Facility in inverse order of maturity until there are no amounts outstanding
under the Term Loan B Facility, and then to principal outstanding under the Line
of Credit Facility and (e) then to any other indebtedness of Borrower or other
Obligor to any Lender.
1.5.4. LIBO Rate Payments Not at End of Interest Period.
Subject to Sections 1.1.5.3 and 1.2.8.5, if payment of any amount accruing
interest based upon an Adjusted LIBO Rate is made on any day other than the last
day of the corresponding Interest Period (whether such payment is voluntary,
mandatory, by demand, acceleration or otherwise), then Borrower must pay
Administrative Agent all costs and losses (including funding costs and any
losses associated with the re-deployment of such funds for the balance of such
Interest Period) that may arise or be incurred as a result of or in connection
with such payment (as such costs and losses may be calculated by Lenders). Upon
written request, Lenders (through Administrative Agent) will furnish a statement
setting forth the basis for such calculation. A determination or calculation by
any Lender hereunder will be conclusive absent manifest error.
1.5.5. Capital Adequacy, Taxes and Other Adjustments. If any
Lender determines that (a) the adoption, implementation or interpretation after
the Closing Date of any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline, directive, policy or order regarding capital adequacy,
reserve requirements, taxes or similar requirements, or (b) compliance by such
Lender or any entity controlling or funding the operations of such Lender with
any request or directive regarding capital adequacy, reserve requirements, taxes
or similar requirements (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) from any central bank,
governmental agency, controlling entity, funding source or body having
jurisdiction would, in either instance, have the effect of increasing the amount
of capital, reserves, taxes (other than income taxes of Administrative Agent or
any Lender), funding costs or other funds required to be maintained or paid by
such Lender and thereby reducing the rate of return on such Lender's capital as
a consequence of its obligations under the Loan Documents, then Borrower must
pay to such Lender additional amounts sufficient to compensate such Lender for
such reduction. Such Lender will give Administrative Agent notice of any such
determination and payment amount within a reasonable period of time thereafter.
Upon receipt of such notice, Administrative Agent will provide a copy thereof to
Borrower, and (upon written request) such Lender will furnish a statement to
Administrative Agent and Borrower setting forth the basis and the
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24
method for determining the amount of such payment. A determination by any Lender
hereunder will be conclusive absent manifest error.
1.5.6. Payment of Expenses, Indemnities and Protective
Advances. If any funds are advanced or costs are incurred by Administrative
Agent or any Lender on behalf of Borrower or otherwise as permitted under the
Loan Documents (including as protective advances), then such advances or costs
must be re-paid to Administrative Agent in their entirety immediately upon
demand by Administrative Agent for payment thereof.
1.5.7. Payments upon Termination. Notwithstanding any other
provision hereof, the entire outstanding indebtedness under each Facility
(including all principal, interest, fees, expenses and indemnities) is due and
payable in its entirety upon any termination of such Facility, the corresponding
Commitment therefor, or this Agreement.
1.5.8. Default Interest. During the existence of an Event of
Default hereunder, Borrower hereby agrees (to the maximum extent not prohibited
by applicable law) to pay to Lenders interest on any indebtedness outstanding
hereunder at the rate of two percent (2%) per annum in excess of the rate then
otherwise applicable to such indebtedness. Notwithstanding the foregoing, if the
relevant Event of Default is under Section 7. 1. 10, then such rate increase (to
the maximum extent not prohibited by applicable law) will occur automatically
without any request by Administrative Agent.
1.5.9. Unused Savings Provision. Notwithstanding any
provision of any Loan Document, Borrower is not and will not be required to pay
interest at a rate or any fee or charge in an amount prohibited by applicable
law. If interest or any fee or charge payable on any date would be in a
prohibited amount, then such interest, fee or charge will be automatically
reduced to the maximum amount that is not prohibited, and any interest, fee or
charge for subsequent periods (to the extent not prohibited by applicable law)
will be increased accordingly until Administrative Agent and each Lender
receives payment of the full amount of each such reduction. To the extent that
any prohibited amount is actually received by Administrative Agent or any
Lender, then such amount will be automatically deemed to constitute a repayment
of principal indebtedness hereunder.
1.6. Fees and Other Compensation.
1.6.1. Origination Fee. On the Closing Date, Borrower will
pay Administrative Agent a nonrefundable origination fee in the amount of
$200,000, which shall be deemed earned in its entirety as of the Closing Date.
1.6.2. Unused Line Fee. Borrower shall pay to Administrative
Agent for the account of Lenders a non-refundable, recurring Line of Credit
Unused Fee calculated by applying the daily equivalent of an annual Unused Fee
Rate determined pursuant to the table below to the Unused Line of Credit
Commitment on each day during the period from the Closing Date to the Line of
Credit Maturity Date. The "Unused Line of Credit Commitment" on any day shall be
the difference between (1) the amount of the Line of Credit Commitment then in
effect and (ii) the Line of Credit Balance. The Line of Credit Unused Fee shall
be payable quarterly in arrears commencing on the last day of the first calendar
quarter ending after the Closing Date and continuing on the last day of each
calendar quarter thereafter and on the Line of Credit Maturity Date. The Unused
Fee Rate shall be determined as follows:
12
25
Unused
Line
Leverage Ratio Fee
-------------- ------
>2.0 .50%
>1.5 but <2.0 .375%
>1.0 but <1.5 .25%
<1.0 .25%
The Unused Fee Rate applicable on the Closing Date shall be .25%. Thereafter,
the Borrower's Leverage Ratio for the four fiscal quarter period of Borrower
most recently ended will be calculated and applied to determine the applicable
Unused Fee Rate in the same manner as described in Section 1.3.4.
1.6.3. Letter of Credit Fee. Borrower shall pay to
Administrative Agent for the account of Letter of Credit Issuer and each other
Lender with a Line of Credit Commitment, a non-refundable recurring Letter of
Credit Fee for each Letter of Credit Issued by Letter of Credit Issuer. The
Letter of Credit Fee for any Letter of Credit shall be an amount equal to the
aggregate undrawn amount of such Letter of Credit multiplied by a per annum rate
equal to the Adjusted LIBO Rate for Line of Credit. Advances in effect on the
date such Letter of Credit is issued. The Letter of Credit Fee for each Letter
of Credit shall be payable in advance for the remaining portion of the quarter
when issued and quarterly thereafter on the last day of each full calendar
quarter thereafter while such Letter of Credit is outstanding and upon maturity
or termination thereof pro-rata for the remaining portion of the quarter in
which such maturity or termination occurs.
1.6.4. Letter of Credit Fronting Fee. If at any time there
is more than one Lender under the Facility, Borrower shall pay to Letter of
Credit Issuer a nonrefundable, one-time Fronting Fee equal to .125% per annum of
the face amount of each Letter of Credit issued by Letter of Credit Issuer. The
Fronting Fee due for any Letter of Credit shall be payable in advance,
commencing on the issuance date of such Letter of Credit.
1.6.5. Other Letter of Credit Fees. Borrower shall pay to
Letter of Credit Issuer such Letter of Credit Issuer's other customary fees for
issuance, amendment, or renewal of a Letter of Credit and, as Letter of Credit
Issuer and Borrower may agree with respect to each Letter of Credit, for each
negotiation of a draft drawn under such Letter of Credit.
ARTICLE 2: CONDITIONS PRECEDENT
2.1. Closing Conditions. The obligation of Administrative Agent
or any Lender to execute and perform the Loan Documents, and to establish the
Facilities, and to fund the Advances are subject to the following conditions
precedent:
2.1.1. Compliance.
2.1.1.1. Fees and Expenses. Borrower must have paid
(or made acceptable arrangements with Administrative Agent to pay) all fees and
expenses due and payable hereunder, including without limitation all fees and
expenses related to real estate appraisals, field audits and environmental
reports, and the reasonable fees and expenses of Administrative Agent's
attorneys with respect to the preparation, negotiation and execution of the Loan
Documents.
2.1.1.2. Representations. Each, and all,
representations and warranties contained in this Agreement and in each other
Loan Document, certificate or other writing delivered to Administrative Agent or
any Lender pursuant hereto or thereto on or prior to the Closing Date must be
true, correct and complete in all material respects on and as of the Closing
Date.
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2.1.1.3. No Default. There must not be any Default or
Event of Default hereunder or any default under any other Loan Document on the
Closing Date, and there must not be any such Default or Event of Default
occurring as a result of executing or advancing funds under the Loan Documents.
2.1.1.4. No Material Change. There must not have been
(in Administrative Agent's reasonable opinion) any Material Adverse Change
between the date for the most recent financial statements delivered to
Administrative Agent and the Closing Date.
2.1.2. Documents. Administrative Agent must have received
the following documents, agreements and certificates (together with all exhibits
and schedules thereto), each duly executed, in form, substance and amount
satisfactory to Administrative Agent and, when applicable, recorded or filed in
the appropriate public office:
2.1.2.1. Credit Agreement. This Agreement.
2.1.2.2. Promissory Notes. The Revolving Notes, and
the Term Loan A Notes, and the Term Loan B Notes.
2.1.2.3. Security and Pledge Agreement. A master
security and pledge agreement, by Borrower in favor of Administrative Agent
granting Administrative Agent a security interest in and collaterally assigning
to Administrative Agent all of such grantor's tangible and intangible personal
property assets (including fixtures), whether now owned or hereafter acquired,
and the proceeds and products thereof, as collateral security for the
indebtedness and obligations hereunder, together with all necessary financing
statements and termination statements (each as filed), stock certificates and
powers executed in blank, waivers and consents, and evidence of any other
recordations required by applicable law or by Administrative Agent to perfect
such security interests in a manner that will be subject only to Permitted
Liens.
2.1.2.4. Intellectual Property Security Agreements.
One or more separate intellectual property security agreements by Borrower in
favor of Administrative Agent encumbering all of such grantor's copyrights,
patents, trade names, trademarks, service names, service marks and other
intellectual property (including any and all applications and licenses
therefor), all as now owned or hereafter acquired, and the proceeds and goodwill
thereof, together with all appropriate financing statements and termination
statements (each as filed), waivers and consents, and any other documents or
recordations required by applicable law or by Administrative Agent to perfect
such interests.
2.1.2.5. [Reserved]
2.1.2.6. Landlord Waivers and Bailee Letters. One or
more landlord waivers and bailee letters in favor of Administrative Agent in
form acceptable to Administrative Agent in its discretion.
2.1.2.7. Real Estate Documents. One or more deeds of
trust, mortgages and/or fixture filings by Borrower in favor of Administrative
Agent, including without limitation, the Mortgage Documents, encumbering all of
such grantor's real property and leasehold interests (including fixtures) as
collateral security for the indebtedness and obligations hereunder, together
with all necessary financing statements and termination statements, deeds of
release, estoppel certificates, waivers and consents,
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lender title insurance, disbursement agreements, surveys, environmental reports,
appraisals, flood status certifications, and any other documents or recordations
required by applicable law or by Administrative Agent to perfect such liens in a
manner that will be subject only to Permitted Liens.
2.1.2.8. Insurance. Current proof of insurance with
an indication of lender loss payee, mortgagee payee and additional insured
endorsements in favor of Administrative Agent with respect to all of the
coverages required under Section 4.8.
2.1.2.9. Compliance Certificate. A certificate from
an Authorized Officer of Borrower dated as of the Closing Date which shall
include on a pro forma basis as of the end of the most recently completed fiscal
quarter of Borrower (assuming the funding of all Closing Date Advances) (a) the
Available Credit Portion and (b) a reconciled calculation demonstrating
compliance with each financial covenant and ratio under Section 4.1.
2.1.2.10. Opinions of Counsel. One or more written
opinions from legal counsel to Borrower addressed to Administrative Agent and
each Lender and dated as of the Closing Date opining as to such matters as
Administrative Agent may request.
2.1.2.11. Payoff Instructions for Prior Indebtedness.
A letter from Borrower to Administrative Agent, consistent with the requirements
of Section 1.2.3, Section 1.4 and Section 2.1.1, instructing Administrative
Agent how to disburse the proceeds of the initial Advance, together with payoff
and release letters from each Person receiving any such proceeds.
2.1.2.12. Authorization Documents. A certificate of
an Authorized Officer of Borrower delivering true, accurate and complete
versions of (a) its Articles of Incorporation, Articles of Organization or
Certificate of Partnership (as applicable) and all amendments thereto, and (b)
its Bylaws, Operating Agreements or Partnership Agreements (as applicable) and
all amendments thereto, and (c) the resolutions authorizing its execution,
delivery and full performance of the Loan Documents and all other documents,
certificates and actions required hereunder or in connection herewith, and (d)
an incumbency certificate setting forth its officers (together with the
corresponding signatures), and (e) a long-form good standing and qualification
certificate with respect to each jurisdiction listed on Schedule 3.1.
2.1.2.13. Lien Searches. Searches satisfactory to
Administrative Agent with respect to consensual liens, tax liens, judgments and
bankruptcy, listing respectively (1) all effective UCC financing statements that
name Borrower (including any predecessor thereto and any operating or tradenames
thereof) as "debtor" that are filed in the State of Alabama or any other U.S.
jurisdiction in which such debtor currently operates or has had assets at any
time within the immediately preceding 12 calendar months (together with copies
of such financing statements), and (2) all tax liens against Borrower (or the
assets thereof), and (3) all outstanding judgments against Borrower (or the
assets thereof).
2.1.2.14. Other Documents. Received any such other
additional agreements, documents and certificates as Administrative Agent or its
counsel may reasonably request.
2.2. Conditions Precedent - Advances. The obligation of
Administrative Agent or any Lender to fund any request for an Advance under the
Facility is subject to the following conditions precedent:
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2.2.1. Line of Credit and Term Loan A Advance Request. With
respect to Advances under the Line of Credit Facility and the Term Loan
Facilities, Administrative Agent must have received an Advance Request under and
in accordance with Section 1.4.1.
2.2.2. Advances. Advances under the Line of Credit Facility,
the Term Loan A Facility, and the Term Loan B Facility will be made pursuant to
and in accordance with Sections 2.2.3 and 2.2.4 hereof.
2.2.3. Other Documents. Administrative Agent must have
received any additional documents, certificates and opinions as Administrative
Agent or its counsel may reasonably request, including UCC-1 financing
statements, fixture filings and leasehold mortgages regarding new locations for
other assets of Borrower.
2.2.4. Compliance.
2.2.4.1. Fees and Expenses. Borrower must have paid
(or made acceptable arrangements with Administrative Agent to pay) all fees and
expenses due and payable hereunder.
2.2.4.2. Representations. Each, and all,
representations and warranties contained in the Loan Documents and in each other
certificate or other writing delivered to Administrative Agent or any Lender
pursuant hereto or thereto on or prior to the Settlement Date must be true,
correct and complete in all material respects on and as of the Settlement Date,
except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date.
2.2.4.3. No Default. There must not be any Default or
Event of Default hereunder or any default under any other Loan Document on the
Settlement Date, and there must not be any such Default or Event of Default
occurring as a result of funding such Advance.
2.2.4.4. No Material Change. There must not have been
(in Administrative Agent's or Lenders' reasonable opinion) any Material Adverse
Change between the Closing Date and the Settlement Date.
ARTICLE 3: REPRESENTATIONS AND WARRANTIES
Borrower, as of the Closing Date and the Settlement Date for each
Advance hereunder, hereby represents and warrants to Administrative Agent and
each Lender as follows:
3.1. Organization and Good Standing. Borrower and each of its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of its Jurisdiction of organization, and (b) has all requisite power
and authority (corporate, partnership, LLP and otherwise) to own its properties
and to conduct its business as now conducted and as currently proposed to be
conducted, and (c) is duly qualified to conduct business as a foreign
organization and is currently in good standing in each state and jurisdiction in
which it conducts business, except where failure to be duly qualified and in
good standing could not reasonably be expected to have a Material Adverse
Effect. Each state and jurisdiction in which Borrower and each of its
Subsidiaries is organized or is qualified to conduct business under applicable
law is listed on Schedule 3.1.
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3.2. Power and Authority. Borrower and each of its Subsidiaries has
all requisite power and authority under applicable law and under its Organic
Documents, Authorizations and Licenses to execute, deliver and perform the
obligations under the Loan Documents to which it is a party. Except as disclosed
on Schedule 3.2, all actions, waivers and consents (corporate, regulatory and
otherwise) necessary or appropriate for Borrower to execute, deliver and perform
the Loan Documents to which it is a party have been taken and/or received.
3.3. Validity and Legal Effect. This Agreement constitutes, and the
other Loan Documents to which Borrower is a party constitute (or will constitute
when executed and delivered), the legal, valid and binding obligations of
Borrower enforceable against it in accordance with the terms thereof, except to
the extent that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally or by equitable principles of general application.
3.4. No Violation of Laws or Agreements. The execution, delivery
and performance of the Loan Documents (a) will not violate or contravene any
material provision of any material law, rule, regulation, administrative order
or judicial decree (federal, state or local), and (b) will not violate or
contravene any provision of the Organic Documents of Borrower, and (c) will not
result in any material breach or violation of (or constitute a material default
under) any material agreement or instrument by which Borrower or any of its
property may be bound, and (d) will not result in or require the creation of any
Lien (other than pursuant to the Loan Documents) upon or with respect to any
properties of Borrower, whether such properties are now owned or hereafter
acquired.
3.5. Title to Assets; Existing Encumbrances; Identification of
Intellectual and Real Property.
3.5.1. Borrower has good and marketable title to all of its
owned real and personal property assets and the right to possess and use all of
its leased or licensed real and personal property assets. All such property
interests are free and clear of any Liens, except for Permitted Liens. Each such
property and asset owned, leased or licensed by Borrower is titled, leased or
licensed in the current legal name of Borrower.
3.5.2. Schedule 3.5A lists each trademark, service ▇▇▇▇,
copyright and patent, owned, licensed, leased, controlled or applied for by
Borrower, whether or not such intellectual property is recorded with the
Copyright Office or the Patent and Trademark Office, together with relevant
identifying information with respect to such intellectual property describing
(among other things) the date of creation, the method of protection against
adverse claims and the registration number.
3.5.3. Schedule 3.5B lists each real property interest
owned, leased or otherwise used by Borrower, together with relevant identifying
information describing (among other things) the use of each such real property
interest, the location and mailing address for each such real property, an
indication of whether such interest is owned or leased (and, if leased, the
lessor and record owner thereof), and the estimated appraised value thereof.
Each such property and asset is in good order and repair (ordinary wear and tear
excepted) and is fully covered by the insurance required under Section 4.8.
3.5.4. Schedule 3.5C identifies each legal, operating and
trade name that Borrower has used (or permitted the filing of a UCC financing
statement under) at any time during the six (6) consecutive calendar years
immediately preceding the Closing Date.
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3.6. Capital Structure and Equity Ownership. As of the Closing
Date, Schedule 3.6 accurately and completely discloses (a) the number of shares
and classes of equity ownership rights and interests of Borrower and each of its
Subsidiaries authorized and/or outstanding (whether existing as common or
preferred stock, general or limited partnership interests, or LLP membership
interests, or warrants, options or other instruments convertible into such
equity), and (b) the existence of preferential returns or liquidation rights
with respect to any such class of equity, and (c) the existence of any enhanced
voting rights, veto rights or director designation rights with respect to any
such class of equity, and with respect to options, warrants and convertible
instruments, the price, duration and conversion factor thereof All such shares
and interests are validly existing, fully paid and non-assessable.
3.7. Subsidiaries, Affiliates and Investments. Schedule 3.7
accurately and completely discloses (a) each Subsidiary and Affiliate of
Borrower (other than its officers and directors) and (b) each investment in or
loan to any other Person by Borrower in excess of $25,000 (other than accounts
receivable created in the ordinary course of business of Borrower.
3.8. Material Contracts. Schedule 3.8 (a) accurately and completely
discloses each Material Contract of Borrower, and (b) also indicates the
following information with respect to each such contract: (1) the contract
parties thereunder, and (2) the contract term and any options or renewals
thereto, and (3) the monthly payment required thereunder, and (4) any
restrictions on assignments, and (5) any restrictions on disclosure of the terms
thereof, and (6) the existence of any breaches or defaults thereunder. Borrower
has not committed any unwaived breach or default under any Material Contract,
and after due inquiry and investigation, Borrower has no knowledge or reason to
believe that any other party to any such Material Contract has or might have
committed any unwaived breach or default thereof For purposes of this Section
3.8, a "Material Contract" of Borrower includes the following agreements to
which Borrower is a party: (1) any contract with annual compensation,
consideration or payments in excess of $500,000 and (2) the lease of Borrower's
distribution facility located in Mobile, Alabama, and (3) any other agreement or
contract the loss or breach of which could reasonably be expected to have or
cause a Material Adverse Effect.
3.9. Licenses and Authorizations. Borrower and each of its
Subsidiaries possesses all Licenses and other Authorizations necessary or
required in the conduct of its businesses and/or the operation of its properties
of which the failure to possess could reasonably be expected to result in a
Material Adverse Effect. Each Authorization is valid, binding and enforceable
on, against and by Borrower. Each Authorization is subsisting without any
defaults thereunder or enforceable adverse limitations thereon, and no
Authorization is subject to any proceedings or claims opposing the issuance,
continuance, renewal, development or use thereof or contesting the validity or
seeking the revocation thereof. Schedule 3.9 accurately and completely lists
each License and Authorization (exclusive of copyrights) of Borrower of which
the failure to possess could reasonably result in a Material Adverse Effect,
together with relevant identifying information describing such Authorizations.
3.10. Taxes and Assessments. Except as disclosed on Schedule 3.10,
Borrower and each of its Subsidiaries has timely filed all required tax returns
and reports (federal, state and local) or has properly and timely filed for
extensions of the time for the filing thereof Borrower has no knowledge of any
deficiency, penalty or additional assessment due or appropriate in connection
with any such taxes. All taxes (federal, state and local) imposed upon Borrower
or any of its Subsidiaries or any of their respective properties, operations or
income have been paid and discharged prior to the date when any interest or
penalty would accrue for the nonpayment thereof, except for those taxes being
contested in good faith by appropriate proceedings diligently prosecuted and
with adequate reserves reflected on the financial statements in accordance with
GAAP (all as also disclosed on Schedule 3.10).
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3.11. Litigation and Legal Proceedings. Except as disclosed on
Schedule 3.11, there is no litigation, claim, investigation, administrative
proceeding, labor controversy or similar action that is pending or (to the best
of Borrower's knowledge and information after due inquiry) threatened against
Borrower or any of its Subsidiaries or any of their respective properties that
could reasonably be expected to have or cause a Material Adverse Effect.
3.12. Accuracy of Financial Information. All financial statements
previously furnished to Administrative Agent or any Lender concerning the
financial condition and operations of Borrower (a) have been prepared in
accordance with GAAP consistently applied, and (b) fairly present the financial
condition of the organization covered thereby as of the dates and for the
periods covered thereby (but, with respect to interim periodic financial
statements, subject to normal and customary year end audit adjustments), and (c)
disclose all material liabilities (contingent and otherwise) of Borrower and
each of its Subsidiaries. In addition, all written information previously
furnished to Administrative Agent or any Lender concerning the financial
condition and operations of Borrower are true, accurate and complete in all
material respects.
3.13. Accuracy of Other Information. All information contained in
any application, schedule, report, certificate, or any other document furnished
to Administrative Agent or any Lender by Borrower or any other Person (on behalf
of Borrower) in connection with the Loan Documents is in all material respects
true, accurate and complete, and no such Person (including Borrower) has omitted
to state therein (or failed to include in any such document) any material fact
or any fact necessary to make such information not misleading. All written
projections furnished to Administrative Agent or any Lender by Borrower or any
other Person on behalf of Borrower have been prepared with a reasonable basis
and in good faith, making use of such information as was available at the date
such projection was made.
3.14. Compliance with Laws Generally. Borrower and each of its
Subsidiaries is in compliance in all material respects with all material laws,
rules, regulations, administrative orders and judicial decrees (federal, state,
local and otherwise) applicable to it, its operations and its properties.
3.15. ERISA Compliance. Borrower and each of its Subsidiaries is in
compliance in all material respects with all applicable provisions of ERISA.
3.16. Environmental Compliance. Borrower and each of its
Subsidiaries has received all permits and filed all notifications necessary
under and is otherwise in compliance in all material respects with the
Environmental Control Statutes.
3.17. Margin Rule Compliance. Except for its own common stock held
as treasury stock, Borrower does not own and has no present intention of
acquiring any "Margin Stock" within the meaning of the following Margin
Regulations of the FRB: Regulation T at 12 C.F.R. Pt. 220, and Regulation U at
12 C.F.R. Pt. 221, and Regulation X at 12 C.F.R. Pt. 224. The credit extended
under this Agreement does not constitute "Purpose Credit" within the meaning of
the FRB's Margin Regulations.
3.18. Fees and Commissions. Except as disclosed on Schedule 3.18 or
as required by Section 1.7, Borrower does not owe any fees or commissions of any
kind in connection with this Agreement or the transactions contemplated hereby,
and Borrower does not know of any claim (or any basis for any claim) for any
fees or commissions in connection with this Agreement or the transactions
contemplated hereby.
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3.19. Solvency. Neither Borrower nor any of its Subsidiaries is
"insolvent," as such term is defined in Section 101(32) of the Bankruptcy Code
(11 U.S.C. ss. 101(32)). Neither Borrower nor any of its Subsidiaries, by virtue
of its obligations and actions in connection with the Loan Documents, has
engaged or is engaging in any transaction that constitutes a fraudulent transfer
or fraudulent conveyance under applicable federal or state law (including under
Section 548 of the Bankruptcy Code or under the Uniform Fraudulent Transfer Act
or the Uniform Fraudulent Conveyance Act).
ARTICLE 4: AFFIRMATIVE COVENANTS
Borrower hereby covenants and agrees that, so long as any of the
Obligations remain outstanding or any Commitment remains in effect, Borrower and
each of its Subsidiaries will comply with the following affirmative covenants:
4.1. Financial and Operating Covenants and Ratios. As of the end of
each fiscal quarter, the Borrower and its Subsidiaries on a consolidated basis,
commencing with the fiscal quarter ending June 30, 2001, will satisfy each of
the following financial measurements, each of which will be determined using
GAAP consistently applied:
4.1.1. Minimum Fixed Charge Coverage Ratio. The ratio of
EBITDA for the most recently ended four (4) fiscal quarters to Fixed Charges for
the most recently ended four (4) fiscal quarters, calculated as of the last day
of the last fiscal quarter, shall not be less than the ratio specified below:
FISCAL PERIOD RATIO
------------------------------------------------
06/30/01 1.00:1.00
------------------------------------------------
09/30/01 1.00:1.00
------------------------------------------------
12/31/01 1.00:1.00
------------------------------------------------
03/31/02 1.05:1.00
------------------------------------------------
06/30/02 1.05:1.00
------------------------------------------------
09/30/02 1.05:1.00
------------------------------------------------
12/31/02 1.05:1.00
------------------------------------------------
03/31/03 1.10:1.00
------------------------------------------------
06/30/03 1.10:100
------------------------------------------------
09/30/03 1.10:1.00
------------------------------------------------
12/31/03 1.10:1.00
------------------------------------------------
03/31/04 and thereafter 1.15:1.00
------------------------------------------------
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4.1.2. Leverage Ratio. The ratio of Funded Debt to EBITDA
(the "Leverage Ratio") for the most recently ended four (4) fiscal quarters,
calculated as of the last day of the last fiscal quarter, shall not be greater
than 2.5:1.0.
4.1.3. Minimum Net Worth. Borrower shall cause Net Worth to
at no time be less than (i) $16,000,000 plus (ii) an aggregate amount equal to
85% of quarterly Net Income (but only if a positive number, with no reduction
for losses) for each fiscal quarter of Borrower beginning with the fiscal
quarter ending June 30, 2001 minus [**](1)
4.2. Periodic Financial Statements and Compliance Certificates.
4.2.1. Monthly Financial Statements. Within 30 days after
the end of each month (including the last calendar month of each year), Borrower
must prepare and deliver to Administrative Agent a complete set of consolidated,
unaudited internal monthly financial statements for Borrower and its
Subsidiaries prepared in accordance with GAAP and otherwise in form and
substance as required by and acceptable to Administrative Agent, including
without limitation, a balance sheet, an income statement, and a statement of
cash flows. Together with the monthly financial statements, Administrative Agent
must also receive a certificate executed by the chief financial officer or such
other senior executive officer of Borrower that is acceptable to Administrative
Agent (a) stating that the financial statements fairly present in all material
respects the financial condition of Borrower and its Subsidiaries on a
consolidated basis as of the date thereof and for the periods covered thereby,
and (b) certifying that as of the date of such certificate there is not any
existing Default or Event of Default.
4.2.2. Quarterly Covenant Compliance. Within 45 days after
the end of each fiscal quarter, together with the financial statements and
certificates required under Section 4.2.1, Borrower shall provide Administrative
Agent a certificate executed by the chief financial officer or such other senior
executive officer of Borrower that is acceptable to Administrative Agent (a)
calculating as of the end of such quarterly period, the Available Credit
Portion, and (b) providing a reconciled calculation demonstrating compliance
with each financial covenant and ratio under Section 4.1 (using the form
attached as Exhibit 4.2) and (c) identifying in sufficient detail any new
intellectual property acquired by Borrower or any Subsidiary since the most
recent such certificate. In connection with the delivery of
--------------
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
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each such certificate, Borrower shall deliver to Administrative Agent an updated
Schedule 3.5A (as appropriate).
4.2.3. Annual Financial Statements. Within 120 days after
the close of each fiscal year, Borrower shall must prepare and deliver to
Administrative Agent and each Lender a complete set of audited annual
consolidated financial statements (with accompanying notes and consolidating
schedules). Such financial statements shall be prepared in accordance with GAAP
consistently applied, and shall be certified without qualification by an
independent certified public accounting firm satisfactory to Administrative
Agent. Together with the annual financial statements, Borrower shall also
provide to Administrative Agent the related management letter prepared by such
accountants and a certificate signed by such accountants stating that the
financial statements fairly present in all material respects the consolidated
financial condition of Borrower and its Subsidiaries on a consolidated basis as
of the date thereof and for the periods covered thereby.
4.3. Other Financial and Specialized Reports.
4.3.1. Annual Projections. Within 30 days after the close of
each fiscal year of Borrower, Borrower shall deliver to Administrative Agent
projected balance sheets, statements of income and expense, and statements of
cash flows for Borrower and its Subsidiaries as of the end of and for each
fiscal month of the then current fiscal year and on an annual basis for each
succeeding fiscal year all or any portion of which occurs prior to the Term Loan
Maturity Date in such detail as Administrative Agent may reasonably require.
4.3.2. Additional Material Contracts, Licenses and
Authorizations. Borrower (a) will notify Administrative Agent in writing within
90 calendar days of acquiring, executing or becoming bound by any Material
Contract, License or other Authorization that would have been listed on Schedule
3.8 or Schedule 3.9 if it had existed as of the Closing Date, and (b) will
concurrently update Schedule 3.8 or Schedule 3.9 (as appropriate).
4.3.3. Tax Returns. Upon Administrative Agent's request,
within 10 Business Days after the date that Borrower or any Subsidiary makes any
filing with the Internal Revenue Service relating to its liability for income
taxes, Borrower shall deliver a complete copy thereof to Administrative Agent
and each Lender.
4.3.4. SEC Filings and Press Releases. Within ten (10)
Business Days after the date that Borrower or any organization that owns or
controls at least 50% of any class of equity interests of Borrower makes any
filing with the Securities Exchange Commission (whether as a registration
statement or a filing on Form 8-K, Form 10-K, Form 10-Q, or otherwise, but
excluding the exhibits thereto and any registration statements on Form S-8 or
its equivalent) or issues any press release, Borrower shall deliver a complete
copy thereof to Administrative Agent and each Lender.
4.3.5. Borrowing Base Certificate. On the Closing Date and
periodically thereafter, but not less often than monthly within twenty (20)
Business Days after the end of each month, Borrower shall provide Administrative
Agent with a Borrowing Base Certificate in substantially the form of Exhibit 4.3
duly completed and signed by the chief financial officer of Integrity and all of
its subsidiaries on a
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consolidated basis. If a Default or Event of Default is then existing, Borrower
shall provide a Borrowing Base Certificate at any time requested by
Administrative Agent in its discretion.
4.3.6. Soundscan Rating. Within forty-five (45) days after
the close of each fiscal quarter, Borrower shall deliver to Administrative Agent
the most recently published Soundscan ratings as they relate to the Christian
music market.
4.3.7. Celebration Hymnal, LLP. Within thirty (30) days
after the close of the fiscal quarter during which Celebration acquires assets
of an aggregate fair market value in excess of $2,500,000, Borrower shall
provide Administrative Agent notice of same.
4.4. Fiscal Year. Borrower and each of its Subsidiaries will
maintain a fiscal year that has a December 31st year end.
4.5. Books and Records; Maintenance of Properties. Borrower and
each of its Subsidiaries will keep and maintain satisfactory and adequate books
and records of account in accordance with GAAP. Borrower and each of its
Subsidiaries will also keep, maintain and preserve all of its property and
assets in good order and repair (ordinary wear and tear excepted).
4.6. Existence and Good Standing. Borrower and each of its
Subsidiaries will preserve and maintain (a) its existence under the laws of its
jurisdiction of organization, and (b) its good standing in all jurisdictions
where it is required to be so qualified, and (c) the validity of all its
material Authorizations and Licenses required or otherwise appropriate in the
conduct of its businesses.
4.7. Deposit Accounts. Borrower will maintain a majority of its
primary commercial deposit accounts with LaSalle.
4.8. Insurance. Borrower and each of its Subsidiaries will keep all
of its property and assets fully covered by insurance with reputable and
financially sound insurance companies (reasonably acceptable to Administrative
Agent). Borrower and each of its Subsidiaries must also maintain such protection
against such hazards and liability (including casualty, liability, fire, flood,
business interruption, earthquake, workmen's compensation, and other material
risks to its property and business), in such amounts and with such deductibles
as is customary in the relevant industry and appropriate under the relevant
circumstances (and, in each 'instance, as is reasonably acceptable to
Administrative Agent). If Borrower or any of its Subsidiaries fails or refuses
to obtain or maintain any such insurance coverage, then Administrative Agent (at
its election) may (but is not obligated to) obtain and maintain such insurance
coverage, and the premiums and other costs thereof (a) will be included in the
indebtedness hereunder secured by the Collateral and (b) will be due and payable
by Borrower to Administrative Agent immediately upon demand. Each such policy
for liability insurance must name Administrative Agent as additional insured,
and each such other policy for insurance must name Administrative Agent as loss
payee and as additional insured. Each such policy must also require the insurer
to furnish Administrative Agent with written notice at least 25 days prior to
any termination, cancellation or lapse of coverage and must provide
Administrative Agent with the right (but not the obligation) to cure any
non-payment of premium. Upon Administrative Agent's request, Borrower and each
of its Subsidiaries (from time to time) will furnish Administrative Agent with
proof of such insurance (in form and substance acceptable to Administrative
Agent) and a copy of the related policy.
4.9. Taxes. Borrower and each of its Subsidiaries will pay and
discharge all taxes, assessments or other governmental charges or levies imposed
on it or any of its property or assets prior to
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the date upon which any penalty for non-payment or late payment is incurred,
unless (a) the same are then being contested in good faith by appropriate
proceedings diligently prosecuted, and (b) adequate reserves therefor acceptable
to Administrative Agent have been established, and (c) Administrative Agent has
been notified thereof in writing, and (d) the consequences of such non-payment
(in Administrative Agent's reasonable judgment) will not have a Material Adverse
Effect.
4.10. Management Changes. Borrower will notify Administrative Agent
in writing within thirty (30) days after any change (including any dismissal or
change in title or status) in the senior management personnel (which shall be
deemed to include senior vice presidents and each officer senior thereto) of
Borrower or any of its Subsidiaries.
4.11. Litigation and Administrative Proceedings. Borrower will
notify Administrative Agent in writing immediately upon the institution or
commencement of any litigation, legal or administrative proceeding, or labor
controversy affecting the Borrower or any of its Subsidiaries (a) with a
purported amount in controversy in excess of $50,000 or (b) that could
reasonably be expected to have or cause a Material Adverse Effect.
4.12. Occurrence of Certain Events. Borrower will notify
Administrative Agent in writing immediately upon (a) the occurrence of any
Default or Event of Default hereunder, or (b) the occurrence of any Default or
Event of Default under any other Loan Document, or (c) the happening of any
event or the assertion or threat of any claim that could reasonably be expected
to have or cause a Material Adverse Effect.
4.13. Compliance with Laws. Borrower and each of its Subsidiaries
will comply in all material respects (a) with all material laws, rules,
regulations and orders (federal, state, local and otherwise) applicable to its
business, and (b) with the provisions and requirements of all material
Authorizations. Borrower will notify Administrative Agent immediately in detail
of any actual or alleged material failure to comply with or violation of any
such laws, rules, regulations or orders, or under the terms of any of such
Authorizations, or of the occurrence or existence of any facts or circumstances
that with the passage of time, the giving of notice or otherwise could create
such a failure to comply or violation or could reasonably be expected to
occasion the termination of any of such Authorization. Such "material" laws,
rules, regulations and orders shall include, as applicable, (i) the
Environmental Control Statutes and (ii) ERISA.
4.14. Further Actions.
4.14.1. Additional Collateral. Borrower will execute, deliver
and record (or, as appropriate, cause the execution, delivery and recordation)
at any time upon Administrative Agent's reasonable request and in form and
substance reasonably satisfactory to Administrative Agent, any of the following
instruments in favor of Administrative Agent as additional Collateral hereunder:
(a) mortgages, deeds of trust and/or assignments on or of any real or personal
property owned, leased or licensed by it, and (b) certificates of title
encumbrances against any of its titled vehicles, and (c) any other like
assignments or agreements specifically covering any of its properties or assets
(including assignments of any patents, trademarks, copyrights, databases, trade
secrets and other forms of intellectual property and deposit account control
agreements), and (d) any financing or continuation statements requested by
Administrative Agent, and (e) if Celebration shall at any time own assets of an
aggregate fair market value in excess of $2,500,000, then such documents as
shall provide Administrative Agent for the benefit of the Lenders a first
priority pledge and security interest in Borrower's ownership interest in
Celebration,
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and (f) such documents as shall be necessary to effectively register
Administrative Agent's Lien in the intellectual property of the Borrower with
the Office of Patent and Trademark.
4.14.2. Further Assurances. From time to time, Borrower will
execute and deliver (or will cause to be executed and delivered) such
supplements, amendments, modifications to and/or replacements of the Loan
Documents and such further instruments as may be reasonably required to
effectuate the intention of the parties to (or to otherwise facilitate the
performance of) the Loan Documents.
4.14.3. Estoppel Certificates. Upon Administrative Agent's
request, Borrower will execute, acknowledge and deliver to such Persons as
Administrative Agent may request a statement in writing certifying as follows
(to the best of its knowledge, after diligent inquiry): (a) that the Loan
Documents (as amended, if applicable) are unmodified and in full force and
effect, and (b) that the payments under the Loan Documents required to be paid
by Borrower have been paid, and (c) the then unpaid principal balance of
Facilities hereunder, and (d) whether or not any Default is then occurring under
any of the Loan Documents and, if so, specifying each such Default of which the
signer may have knowledge, and (e) whether or not Borrower is then entitled to
assert any claims, defenses or causes of action that would impose any liability
upon Administrative Agent or any Lender or that would otherwise challenge the
enforceability of any Loan Document or any provision thereof. Borrower
understands and agrees that any such certificate delivered pursuant to this
Section may be relied upon by Administrative Agent and each Lender.
4.14.4. Waivers and Consents. At any time upon Administrative
Agent's request, Borrower will use commercially reasonable efforts to obtain and
deliver (in form and substance reasonably satisfactory to Administrative Agent)
a waiver or consent to the assignment to Administrative Agent of any Material
Contract.
4.14.5. Access and Audits. Administrative Agent, from time to
time and at any time at its discretion, may conduct audits of the Collateral and
of the performance and operations of the Borrower and its Subsidiaries;
provided, however, in the absence of a Default or Event of Default,
Administrative Agent shall provide not less than three (3) days prior notice
thereof to Borrower. Borrower (upon Administrative Agent's request from time to
time) will use its best efforts to provide Administrative Agent (and its
representatives) with reasonable access to the management personnel, books and
records, property and operations (including its financial records) of Borrower
and each of its Subsidiaries, whether such property, books and records are in
the possession of Borrower or are in the possession of a third party (including
the possession of Borrower's Affiliates, accountants and legal counsel). In
connection with any such audit, Administrative Agent may also make notes and
copies of (and extracts from) relevant records.
4.14.6 Hedge Agreements. Borrower shall assign its rights
under any Hedge Agreement to Administrative Agent for the benefit of Lenders as
security for the Loans pursuant to an assignment satisfactory to Administrative
Agent.
4.15. Costs and Expenses. Borrower will pay or reimburse
Administrative Agent for all fees and costs (including all reasonable attorneys'
fees and disbursements and the reasonable fees and disbursements of in-house
counsel and documentation personnel) that Administrative Agent actually pays or
incurs in connection with (a) the preparation, negotiation and review of the
Loan Documents, any waivers, consents and amendments in connection herewith or
therewith and all other documentation related hereto or thereto, and (b) the
funding of the indebtedness or any Advance hereunder, and (c) the
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initial and continuing perfection or protection of Administrative Agent's or any
Lender's interest in any of the Collateral, and (d) the collection or
enforcement of any of the Loan Documents, and (e) the periodic examination and
auditing of the Collateral and the books, records and operations of Borrower;
provided, however, that, in the absence of a Default or an Event of Default,
Borrower shall be obligated to pay or reimburse Administrative Agent for the
costs of no more than one such audit per fiscal quarter, and (f) Administrative
Agent's release of its interests in the Collateral in accordance with the terms
of the Loan Documents. Borrower shall also pay or reimburse any Lender for all
such fees and costs actually paid or incurred in connection with the collection
or enforcement of any of the Loan Documents, and shall pay any and all
recordation or stamp taxes or other fees due upon the filing of the Mortgage
Document(s) and upon the filing of the financing statements or documents of
similar effect required to be filed under the Loan Documents, and will provide
Administrative Agent with a copy of any receipt or other evidence reflecting
such payments. All obligations provided for in this Section shall survive the
termination of this Agreement and/or the repayment of indebtedness hereunder.
4.16. Other Information. Borrower will provide Administrative Agent
with any other documents and information (financial or otherwise) reasonably
requested by Administrative Agent or its counsel from time to time.
ARTICLE 5: NEGATIVE COVENANTS
Borrower hereby covenants and agrees that, so long as any of the
Obligations remain outstanding or any Commitment remains in effect, Borrower and
each of its Subsidiaries will comply with the following negative covenants:
5.1. Capital Expenditures. Borrower and each of its Subsidiaries
on a consolidated basis will not incur Capital Expenditures (exclusive of any
such expenditures funded out of the proceeds of the Term Loan B Facility up to
an aggregate of $3,000,000) in any of the periods specified in the table below
that in the aggregate exceed the amount specified for such period:
FISCAL YEAR AMOUNT
-----------------------------------------------
2001 $5,200,000
-----------------------------------------------
2002 $5,300,000
-----------------------------------------------
2003 $5,300,000
-----------------------------------------------
2004 $5,400,000
-----------------------------------------------
2005 $6,425,000
-----------------------------------------------
2006 $1,625,000
-----------------------------------------------
5.2. Additional Indebtedness. Neither Borrower nor any of its
Subsidiaries will borrow any monies or create, incur, assume or permit to exist
any additional Indebtedness, obligations or liabilities except as follows
(collectively, the "Permitted Indebtedness"):
a. Borrowings from Lenders hereunder; and
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b. Trade indebtedness, if and to the extent (i) such
indebtedness is incurred in the normal and ordinary course of business for value
received and (ii) such indebtedness is paid on a current basis or is less than
60 days past due; and
c. Indebtedness and obligations incurred to purchase
fixed or capital assets, provided, however, that (1) the aggregate amount of
such asset acquisition indebtedness outstanding at any time (together with the
aggregate amount of Capital Lease indebtedness outstanding under Subsection
5.2.d) may not exceed $500,000, and (2) such indebtedness must be immediately
included in the calculation of Funded Debt; and
d. Indebtedness and obligations incurred under Capital
Leases, provided, however, that (1) the aggregate amount of such Capital Lease
indebtedness outstanding at any time (together with the aggregate amount of
asset acquisition indebtedness outstanding under Subsection 5.2.c) may not
exceed $500,000, and (2) such indebtedness must be immediately included in the
calculation of Funded Debt; and
e. Indebtedness in favor of another Borrower if and to
the extent permitted under Section 5.4.b); and
f. Such indebtedness listed on Schedule 5.2.
5.3. Guaranties. Neither Borrower nor any of its Subsidiaries will
guarantee, assume or otherwise be or agree to become liable in any way, either
directly or indirectly, for any additional indebtedness or liability of any
other Person, except as follows (collectively, the "Permitted Guaranties"): (a)
in favor of Lenders or Administrative Agent, or (b) to endorse checks, drafts
and negotiable instruments for collection in the ordinary course of business, or
(c) as listed on Schedule 5.3, or (d) any Subsidiary of the Borrower may
guarantee Indebtedness of the Borrower permitted under Section 5.2.
5.4. Loans. Neither Borrower nor any of its Subsidiaries will make
any loans or advances to any other Person, except as follows (collectively, the
"Permitted Loans"): (a) as listed on Schedule 5.4, and (b) demand loans to
another Borrower that are appropriately reflected on Borrower's financial
records and evidenced by a written promissory note assigned to Administrative
Agent as additional Collateral, and (c) advances by Borrower to any recording
artist, songwriter, producer, arranger, record label, or distributor in the
ordinary course of business.
5.5. Liens and Encumbrances; Negative Pledge. Neither Borrower nor
any of its Subsidiaries will create, permit or suffer the creation or existence
of any Liens on any of its property or assets (real or personal, tangible or
intangible), except as follows (collectively, the "Permitted Liens"):
a. Liens in favor of Administrative Agent as security
for the Obligations under the Loan Documents; and
b. Liens arising in favor of sellers or lessors for
indebtedness and obligations incurred to purchase or lease fixed or capital
assets as permitted under Section 5.2.c or Section 5.2.d, provided, that (1)
such Liens secure only the indebtedness and obligations created thereunder (but
not any related monetary obligations under non-compete and consulting
arrangements) and are limited to the assets purchased or leased pursuant
thereto; and
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c. Liens for taxes, assessments or other governmental
charges (federal, state or local) that are not yet delinquent or that are then
being currently contested in good faith by appropriate proceedings diligently
prosecuted, provided, however, that (1) the existence of such Liens and
challenge of such charges must have been fully disclosed to Administrative
Agent, and (2) adequate reserves therefor in accordance with GAAP have been
established, and (3) such Liens (in Administrative Agent's reasonable opinion)
could not reasonably be expected to have or cause a Material Adverse Effect; and
d. Deposits in the ordinary course of business to secure
obligations under workmen's compensation, unemployment insurance or social
security laws or similar legislation; and
e. Deposits to secure performance or payment bonds,
bids, tenders, contracts, leases, franchises or public and statutory obligations
required in the ordinary course of business; and
f. Deposits to secure surety, appeal or custom bonds
required in the ordinary course of business; and
g. Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of business for sums
not past due or for sums being currently contested in good faith by appropriate
proceedings diligently prosecuted, provided, however, that (1) the existence of
such Liens and challenge of such sums allegedly due must have been fully
disclosed to Administrative Agent, and (2) adequate reserves therefor in
accordance with GAAP must have been established, (3) upon the request of
Administrative Agent, appropriate waivers and consents have been obtained, and
(4) such Liens (in Administrative Agent's reasonable opinion) could not
reasonably be expected to have or cause a Material Adverse Effect; and
h. Easements, rights-of-way, restrictions and other
similar encumbrances on real property of Borrower that, independently and in the
aggregate, do not (1) materially interfere with the occupation, use or enjoyment
by Borrower of the property or assets encumbered thereby in the normal course of
business or (2) materially impair the value of the property subject thereto; and
i. Liens listed on Schedule 5.5.
Provided, however, the prohibition of this section shall not apply to "margin
stock" within the meaning of the FRB's Margin Regulations acquired with the
proceeds of the Term Loan A Facility.
5.6. Transfer of Assets. Neither Borrower nor any of its
Subsidiaries will sell, lease, transfer or otherwise dispose of all or
substantially all of its assets or any asset the loss of which could reasonably
be expected to have or cause a Material Adverse Effect. In addition, neither
Borrower nor any of its Subsidiaries will sell, lease, transfer or otherwise
dispose of any of its assets other than as follows (collectively, the "Permitted
Transfers"): (a) sales of inventory in the normal and ordinary course of
business for value received and otherwise in accordance with the terms hereof,
or (b) with respect to obsolete or replaced equipment no longer useful in the
operation of Borrower's business, pursuant to a reasonable and customary
transaction with an unrelated third party and otherwise in accordance with the
terms hereof subject to Sections 1.1.5.3 and 1.2.8.5, or (c) pursuant to a
reasonable and customary transaction with another Borrower that is appropriately
reflected on Borrower's financial records.
5.7. Acquisitions and Investments. Neither Borrower nor any of its
Subsidiaries will purchase or otherwise acquire (including by way of share
exchange) any part or amount of the equity ownership or assets of, or make any
investments in, any other corporation, partnership, limited liability
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company or other venture or enterprise. Notwithstanding the foregoing, Borrower
may acquire or invest in the following (collectively, the "Permitted
Investments"):
a. Government and agency securities backed by the full
faith and credit of the U.S. federal government; and
b. Commercial paper of a U.S. domestic issuer rated A-l+
or A-1 by Standard & Poor's Ratings Group or P-1 by ▇▇▇▇▇'▇ Investor Services,
Inc. and maturing not more than 90 days from the date of acquisition thereof;
and
c. Certificates of deposit (maturing within 12 calendar
months after the date of issuance), time deposits, other deposits and bankers'
acceptances issued by or established with U.S. federally insured commercial
banks rated as "well capitalized" by their primary federal regulators, and
having unimpaired capital and unimpaired surplus (collectively) of at least $250
million, and whose commercial paper (or commercial paper that is supported by
such bank's letter of credit or commitment to lend) is rated as A-1+ or A-1 by
Standard & Poor's Ratings Group or P-1 by ▇▇▇▇▇'▇ Investor Services, Inc.; and
d. Assets acquired pursuant to transactions permitted
under Section 5.1 or Section 5.2; and
e. Equity interests of the Borrower in Integrity Music
and Celebration; and
f. Assets and/or equity acquired in connection with a
Permitted Acquisition; and
g. Investments listed on Schedule 5.7.
h. Investments by Borrower in joint ventures in
substantially similar lines of business as Borrower and with respect to which
Borrower carries no general partner liability, and further with respect to which
the related ownership interest has been pledged on a first priority basis to
Administrative Agent for the benefit of the Lenders pursuant to documentation
acceptable to the Administrative Agent in its sole discretion, provided the
aggregate amount of such Investments shall not exceed $1,000,000.
Neither Borrower nor any of its Subsidiaries will establish or maintain any
"securities account" with any "securities intermediary" (as such terms are
defined in Article 8 of the UCC), unless a control agreement acceptable in form
and substance to Administrative Agent is first executed by such "securities
intermediary" securing Administrative Agent's first priority interest and rights
in and to all "financial assets" and "security entitlements" associated with
such "securities account."
5.8. New Ventures; Mergers. Neither Borrower nor any of its
Subsidiaries will (a) enter into any new business activities or ventures not
directly involved in the Christian media communications field, or (b) merge or
consolidate with or into any other corporation, partnership, limited liability
company or other organization, or (c) create or acquire (or cause or permit the
creation or acquisition of) any Subsidiary except in connection with a Permitted
Acquisition permitted under Section 5.7 hereof.
5.9. Transactions with Affiliates. Neither Borrower nor any its
Subsidiaries will enter into any transaction or agreement with any Subsidiary or
Affiliate except as follows: (a) reasonable and customary compensation
arrangements in the ordinary course of business with its officers and directors,
and (b) reasonable and customary asset transfers between Borrowers to the extent
permitted under Section 5.6, and (c) reasonable dividends and distributions (if
any) to the extent permitted by Section 5.10
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and, (d) transactions conducted by Borrower on an arms-length basis with its
foreign Affiliates upon fair and reasonable terms which are fully disclosed to
the Administrative Agent and which are no less favorable to Borrower than those
which would prevail in a comparable arms-length transaction with a Person not an
Affiliate.
5.10. Distributions or Dividends. Neither Borrower nor any of its
Subsidiaries will declare or make (directly or indirectly) any payment or
distribution with respect to, or incur any liability for the purchase,
acquisition, redemption or retirement of, any of its equity interests (including
warrants therefor) or as a dividend, return of capital or other payment or
distribution of any kind to any holder of any such equity interest.
Notwithstanding the foregoing so long as no Default or Event of Default then
exists under the Loan Documents or would otherwise be caused by the payment of
such payment, then (a) Borrower may declare and distribute reasonable and lawful
dividends to any of its owners that is also a Borrower and (b) [**](1)
Subsidiaries of the Borrower may make dividends or such other distributions to
the Borrower and any other holder of equity interests in such Subsidiary so long
as such dividends or other distributions are made to the Borrower and such other
holder(s) of such equity interest pro rata based upon the Borrower's and such
other holder(s) percentage ownership interest in such Subsidiary; provided,
however, upon or during the continuation of a Default, or if for any consecutive
twelve (12) month period such dividends received by Borrower exceed $250,000 in
the aggregate, then any such dividend income in excess of $250,000 shall be paid
to Lenders in accordance with Sections 1.1.5.3 and 1.2.8.5.
5.11. Integrity Music. Integrity Music shall not conduct any
business operations nor shall it own any assets or incur any liabilities.
5.12. [Reserved].
5.13. Removal of Assets. Neither Borrower nor any of its
Subsidiaries will remove or permit the removal of any asset or group of assets
(with a collective fair market value exceeding $ 10,000) to a jurisdiction in
which no valid and effective financing statement on Form UCC-1 has been filed
naming Administrative Agent as "secured party" with respect to such assets. In
addition, neither Borrower nor any of its Subsidiaries will move the location of
its chief executive office (or change its official mailing address) without
providing Administrative Agent with prior written notice thereof.
5.14. Modifications to Organic Documents. Neither Borrower nor any
of its Subsidiaries will (a) amend or otherwise modify any of its Organic
Documents if such amendment or modification could reasonably be expected to
adversely affect the rights of the Administrative Agent and the Lenders
hereunder, or (b) change its official name, its operating names or the names
under which it executes contracts and conducts business except upon prior
written notice to the Administrative Agent of at least thirty (30) days, or (c)
change its state of incorporation or formation.
5.15. Terms of and Modifications to Material Relationships. Neither
Borrower nor any of its Subsidiaries will (and will not permit any other party
to) cancel, terminate, amend, modify or otherwise alter any Material Contract
listed on Schedule 3.8 if such amendment or modification could reasonably be
expected to adversely affect the rights of the Administrative Agent and the
Lenders hereunder.
--------------
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
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5.16. Margin Stock Restrictions. Except for the purchase of its own
common stock which shall be immediately retired or held by the Borrower as
treasury stock, Borrower will not use any of the proceeds hereunder, directly or
indirectly, to purchase or carry, or to reduce or retire any indebtedness that
was originally incurred to purchase or carry, any Margin Stock or for any other
purpose that might constitute the transactions contemplated hereby as a
"Purpose Credit" within the meaning of the FRB's Margin Regulations.
ARTICLE 6: [RESERVED]
ARTICLE 7: DEFAULT AND REMEDIES
7.1. Events of Default. Any one or more of the following shall
constitute an event of default (an "Event of Default") under this Agreement:
7.1.1. Payment Obligations. If any payment of principal,
interest, fees, expenses, indemnities or other sums payable to Administrative
Agent or any Lender under any Loan Document (*including under any Note) is not
received by Administrative Agent in immediately available funds on the date such
payment is due and payable.
7.1.2. Representations And Warranties. If any
representation, warranty or other statement made in any Loan Document, or in any
written report, schedule, exhibit, certificate, agreement, or other document
given by or on behalf of the Borrower or any of its Subsidiaries (or otherwise
furnished in connection herewith) when made was misleading or incorrect in any
material respect.
7.1.3. Certain Covenants. If Borrower defaults in or fails
to observe at any time any of the covenants set forth in Section 4.1, 4.8, 4.12
or Article 5.
7.1.4. Other Covenants. If Borrower defaults in the full and
timely performance when due of any other covenant or agreement contained herein,
and such default remains uncured for a period of fifteen (15) Business Days
after the earlier of the date that Administrative Agent or any Lender notifies
Borrower thereof or the date that Borrower otherwise acquires knowledge thereof.
7.1.5. Default Under Other Agreements with Administrative
Agent or Lenders. If any event of default (as described or defined therein)
occurs or exists under the provisions of any other Loan Document, or a material
event of default occurs or exists under the provisions of any other credit
agreement, security agreement, mortgage, deed of trust, indenture, debenture,
cash management or account agreement, contract, lease or other agreement between
Borrower, or any Affiliate of Borrower and Administrative Agent or any Lender
(or any Affiliate of Administrative Agent or any Lender).
7.1.6. Default Under Material Agreements with Other
Parties.(a) Borrower or any Subsidiary of Borrower shall fall to pay any
principal of or premium or interest on any Indebtedness the principal amount of
which exceeds $100,000 when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace or cure period, if any,
specified in the agreement, mortgage, indenture or instrument relating to such
Indebtedness; or (b) any other event shall occur or condition shall exist under
any agreement, mortgage, indenture or instrument relating to any such
Indebtedness and shall continue after the applicable grace or cure period, if
any, specified in such agreement, mortgage,
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indenture or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or (c) any such Indebtedness shall be accelerated or otherwise declared to be
due and payable prior to the stated maturity thereof, or (d) any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such indebtedness shall be required to be
made, in each case prior to the stated maturity thereof, or (e) if any material
event of default occurs or exists under the provisions of any Material Contract
listed on Schedule 3.8.
7.1.7. Security Interest. If the Lien of Administrative
Agent in any of the Collateral, at any time does not constitute a legal, valid
and enforceable Lien in favor of Administrative Agent.
7.1.8. Change of Control. There occurs a Change of Control.
7.1.9. ERISA. The occurrence of any of the following events:
(a) the happening of a Reportable Event with respect to any Plan; (b) the
disqualification or involuntary termination of a Plan for any reason; (c) the
voluntary termination of any Plan while such Plan has a funding deficiency (as
determined under Section 412 of the Code); (d) the appointment of a trustee by
an appropriate United States District Court to administer any such Plan; (e) the
institution of any proceedings by the PBGC to terminate any such Plan or to
appoint a trustee to administer any such Plan; (f) the failure of Borrower to
notify the Administrative Agent promptly upon receipt by Borrower or any of its
ERISA Affiliates of any notice of the institution of any proceeding or other
actions which might result in the termination of any such Plan, in each case
giving rise to liability of Five Hundred Thousand Dollars ($500,000) or greater.
7.1.10. Insolvency. If Borrower or any Subsidiary of Borrower
(a) becomes insolvent, bankrupt or generally fails to pay its debts as such
debts become due; or (b) is adjudicated i solvent or bankrupt in any proceeding;
or (c) admits in writing an inability to pay it; or (d) comes under the
authority of a custodian, receiver or trustee (or one is appointed for
substantially all of its property); or (e) makes an assignment for the benefit
of creditors; or (f) has commenced against it any proceedings under any law
related to bankruptcy, insolvency, liquidation, dissolution or the
reorganization, readjustment or release of debtors that is either not contested
or if contested is not dismissed or stayed within sixty (60) days after the
commencement thereof; or (g) commences or institutes any proceedings under any
law related to bankruptcy, insolvency, liquidation, dissolution or the
reorganization, readjustment or release of debtors; or (h) calls a meeting of
creditors with a view to arranging a composition or adjustment of debt; or (i)
by any act or failure to act that indicates consent to, approval of or
acquiescence in any of the foregoing.
7.1.11. Judgments. If any judgment, writ, warrant, attachment
or execution or similar process that calls for payment or presents liability in
excess of $100,000 over applicable insurance coverage is issued or levied
against Borrower or any of its Subsidiaries or any or their respective
properties or assets and such liability is not paid, waived, stayed, vacated,
discharged, settled, satisfied or fully bonded within thirty (30) calendar days
after it is rendered, issued or levied.
7.1.12. Tax Lien. A notice of Lien, levy or assessment is
filed of record with respect to all or any assets of Borrower or any of its
Subsidiaries by the United States or any other Official Body, which adversely
affects the priority of the Liens granted to the Administrative Agent hereunder
or under any of the other Loan Documents.
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7.1.13. Management. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ceases to be the chief
executive officer of Integrity and the vacancy so created is not filled by the
Board of Directors within a reasonable period of time.
7.2. Remedies.
7.2.1. Acceleration, Termination and Pursuit of Collateral.
At any time during the existence of any Event of Default, at the election of
Required Lenders (unless an Event of Default described in Section 7.1.10 has
occurred, in which case acceleration will occur automatically with respect to
the entire indebtedness and without any notice), then Lenders (a) may terminate
any or all Commitments and/or Facilities, and/or (b) may accelerate the Term
Loan Maturity Date and/or the Line of Credit Maturity Date, and/or (c) may
declare all or any portion of the Obligations to be immediately due and payable.
At any time during the existence of any Event of Default, Lenders and
Administrative Agent will also have the immediate right to enforce and realize
upon any collateral security granted under any Loan Document in any manner or
order that Required Lenders or Administrative Agent (at the direction of
Required Lenders) deems expedient without regard to any equitable principles of
marshaling or otherwise.
7.2.2. Other Remedies. In addition to the rights and
remedies expressly granted in the Loan Documents, each Lender and Administrative
Agent also will have all other legal and equitable rights and remedies granted
by or available under all applicable law (including the "self help" and other
rights of a secured party under the UCC), and all rights and remedies will be
cumulative in nature.
ARTICLE 8: ADMINISTRATIVE AGENT AND RELATIONSHIP AMONG LENDERS
8.1. Appointment, Authorization and Grant of Authority. Each Lender
hereby irrevocably designates and appoints LaSalle as the Administrative Agent
of such Lender to act as specified in this Agreement and the other Loan
Documents, and each such Lender hereby irrevocably authorizes LaSalle (in its
capacity as Administrative Agent) to take actions on behalf of such Lender, to
exercise such powers and to perform in such other duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with all such other powers and authority as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
the Administrative Agent (on behalf of each Lender) is authorized (a) to execute
each Loan Document (other than this Agreement, but including, without
limitation, all financing statements, continuation statements and other
collateral agreements and documents) for and on behalf of each Lender, and (b)
to accept each Loan Document and all other agreements, documents, instruments,
certificates and opinions reasonably required to implement the intent of the
parties to this Agreement, and (c) to file and record all financing statements,
continuation statements and other collateral agreements and documents, and (d)
to receive and deliver communications and notifications to Lenders and to
Borrower, and (e) to receive and distribute payments and Advances between
Lenders and Borrower. The duties and responsibilities of the Administrative
Agent shall be ministerial and administrative in nature. Notwithstanding any
provision to the contrary in any Loan Document, the Administrative Agent (a)
shall not have any duties or responsibilities other than those expressly set
forth in the Loan Documents (which duties and responsibilities shall be subject
to the limitations and qualifications set forth in this Article), and (b) shall
not have any fiduciary relationship with any Lender; and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into the Loan Documents or otherwise exist against the Administrative Agent.
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8.2. Acceptance of Appointment. LaSalle hereby accepts such
appointment and agrees to act as such Administrative Agent upon the express
terms and conditions (but subject to the limitations and qualifications) set
forth in this Article.
8.3. Administrative Agent's Relationship with Borrower. The
provisions of this Article are solely for the benefit of the Administrative
Agent and Lenders, and Borrower shall not have any rights as a third party
beneficiary (or otherwise) under this Article. In performing its functions and
duties under the Loan Documents, the Administrative Agent shall act solely as an
Administrative Agent of the Lenders, and the Administrative Agent does not
assume (and shall not be deemed to have assumed) any obligation or relationship
of agency or trust with or for Borrower.
8.4. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges and agrees (a) that the Administrative Agent (and
its directors, officers, employees, Administrative Agents, attorneys-in-fact and
Affiliates) have not made any representations or warranties to such Lender and
(b) that no act by the Administrative Agent hereinafter taken (including,
without limitation, any review of the affairs of Borrower or other Obligor)
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it (independently and without any reliance upon the Administrative
Agent or any other Lender, and based upon such documents and information as it
has deemed necessary or appropriate) has made its own appraisal, investigation
and credit analysis of the business, assets, operations, properties, financial
and other condition, prospects and creditworthiness of Borrower and each other
Obligor and has made its own decision to make its Loans hereunder and to enter
into this Agreement. Each Lender also covenants and represents that it
(independently and without any reliance upon the Administrative Agent or any
other Lender, and based upon such documents and information as it shall deem
necessary or appropriate) will continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and will continue to make such investigations as it deems necessary or
appropriate to inform itself as to the business, assets, operations, properties,
financial and other condition, prospects and creditworthiness of Borrower and
each other Obligor. Except as otherwise expressly provided in the Loan
Documents, the Administrative Agent shall not have any duty or responsibility
(a) to keep any Lender informed as to the performance or observance by Borrower
or any other Obligor of its obligations under the Loan Documents, or (b) to
inspect the books or properties of Borrower or any other Obligor, or (c) to
provide any Lender with any credit or other information concerning the business,
operations, assets, properties, financial and other condition, prospects or
creditworthiness of Borrower or any other Obligor which may come into the
possession of the Administrative Agent (or any of its officers, directors,
employees, Administrative Agents, attorneys-in-fact or Affiliates). The
Administrative Agent will make reasonable efforts to furnish to the Lenders
material information concerning Borrower of which the Administrative Agent has
actual knowledge; however, in the absence of gross negligence, willful
misconduct or fraud, the Administrative Agent shall not be liable to any Lender
for any failure to relay or furnish to such Lender any such information.
8.5. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely and act (and shall be fully protected in relying and
acting) upon any note, writing, resolution, instrument, report, notice, consent,
certificate, affidavit, letter, request, electronic transmission or any other
message, statement, instruction, notice, order or other writing, conversation or
communication believed by Administrative Agent in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person. The
Administrative Agent shall not be bound to ascertain or inquire as to the
satisfaction, performance or observance of any of the terms, provisions,
covenants or conditions of or the accuracy of any statements or representations
in any Loan Document by Borrower or any other Obligor.
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The Administrative Agent may deem and treat the stated payee of any Note as the
holder thereof for all purposes under the Loan Documents unless and until
Administrative Agent has received and accepted an assignment and assumption
agreement relating thereto in form and substance acceptable to the
Administrative Agent.
8.6. Delegation of Duties; Additional Reliance by Administrative
Agent. The Administrative Agent may consult with, employ and perform any of its
duties under the Loan Document by or through Administrative Agents,
attorneys-in-fact, legal counsel, independent public accountants and other
experts. The Administrative Agent shall not be responsible for the negligence or
misconduct of any such Persons selected by Administrative Agent with reasonable
care, and the Administrative Agent shall be fully protected in any action or
inaction taken by it in good faith in reliance upon or in accordance with the
advice or statements of legal counsel (including, without limitation, counsel to
Borrower), independent accountants and other experts selected by Administrative
Agent.
8.7. Acting on Instructions of Lenders. The Administrative Agent
shall be entitled to act or refrain from acting (and shall be fully protected in
acting or refraining from acting) under the Loan Documents in accordance with a
written request of or written instructions from the Required Lenders. The
Administrative Agent shall also be entitled to refrain from acting (and shall be
fully protected in refraining from acting) under the Loan Documents unless
Administrative Agent first (a) receives such advice or concurrence of the
Required Lenders as Administrative Agent deems appropriate or (b) is indemnified
to its satisfaction by the Lenders against any and all liability and expense
which it may incur by reason of taking or continuing to take any such action.
Except as otherwise expressly stated in the Loan Documents, any requests or
instructions by the Required Lenders (and any action or inaction by
Administrative Agent pursuant thereto) shall be binding upon all the Lenders.
8.8. Actions Upon Occurrence of Default or Event of Default. Each
Lender will use its best efforts to notify the Administrative Agent immediately
in writing upon becoming aware of the occurrence of any Default or Event of
Default. The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or Borrower referring to
this Agreement, describing such Default or Event of Default, and stating that
such notice is a "notice of default". If the Administrative Agent receives any
such notice of default, then the Administrative Agent shall use its best efforts
to give notice thereof to each Lender as soon as reasonably practical. Upon the
occurrence of any Default or Event of Default, the Lenders shall promptly
consult with one another in an attempt to agree upon a mutually acceptable
course of conduct. In the absence of unanimous agreement among the Lenders as to
the appropriate course of conduct, the Administrative Agent shall exercise
rights and take such other action on behalf of all Lenders with respect to such
Default or Event of Default as directed by the Required Lenders. Unless and
until the Administrative Agent shall have received such directions from the
Lenders (or, as applicable, the Required Lenders), the Administrative Agent may
take (but shall not be obligated to take) such action (or may refrain from
taking such action) with respect to such Default or Event of Default as
Administrative Agent shall deem advisable in the best interest of the Lenders.
8.9. Administrative Agent's Rights as Lender in Individual
Capacity. The Administrative Agent (and its Affiliates) may make loans to, may
have cash management agreements with, may accept deposits from, may issue letter
of credit on behalf of, may enter into Hedge Agreements with, and may otherwise
generally engage (and continue to engage) in any kind of business with Borrower
or other Obligor as though the Administrative Agent were not the Administrative
Agent under the Loan Documents. With respect to any Loans made by Administrative
Agent as a Lender hereunder and all obligations owing to it as a Lender under
the Loan Documents, the Administrative Agent shall have the
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same rights, powers duties and obligations under the Loan Documents as any other
Lender and may exercise such rights, powers, duties and obligations as though it
were not the Administrative Agent hereunder. To the extent that the
Administrative Agent is a Lender hereunder, the terms "Lender", "Lenders" and
"Required Lenders" shall include the Administrative Agent in its individual
capacity.
8.10. Advances By Administrative Agent. Unless the Administrative
Agent has been notified in writing by a Lender prior to the Settlement Date for
any Advance or Loan that such Lender will not make the amount constituting its
Pro Rata share of such Advance or Loan available to the Administrative Agent on
or prior to such applicable Settlement Date, then the Administrative Agent may
assume (but shall not be required to assume) that such Lender will make such
amount available to the Administrative Agent in immediately available funds on
or before such Settlement Date, and in reliance upon such assumption, the
Administrative Agent may make available to Borrower a corresponding amount on
behalf of such Lender. If the amount of such Pro Rata share is not made
available to the Administrative Agent in immediately available funds by a Lender
until after the applicable Settlement Date, then such Lender shall pay to the
Administrative Agent on demand and in immediately available funds an amount
equal to the result of the following equation (which shall be in addition to the
amount of such Lender's Pro Rata share of such Advance or Loan): the product of
(a) the average (computed for the period determined under clause (c) below) of
the weighted average interest rate for Federal Funds as determined by the
Administrative Agent during each day included in such period, multiplied by (b)
the amount of such Lender's Pro Rata share of such Advance or Loan, multiplied
by (c) a fraction the numerator of which is the number of days that elapsed from
and including such Settlement Date to and including the date on which such
Lender's Pro Rata share of such Advance or Loan is actually received by the
Administrative Agent in immediately available funds and (ii) the denominator of
which is 360. A statement from the Administrative Agent submitted to any Lender
with respect to any amounts owing under this Section shall be conclusive (absent
manifest error) as to the amount owed to the Administrative Agent by such
Lender. If such Lender's Pro Rata share is not actually received by the
Administrative Agent in immediately available funds within three (3) Business
Days after the applicable Settlement Date for such Advance or Loan, then the
Administrative Agent shall be entitled to recover from such Lender, on demand,
the amount of such Pro Rata share with interest thereon for the entire such
period since such Settlement Date at the highest interest rate per annum, then
applicable under the Facilities.
8.11. Payments to Lenders. Promptly after receipt in immediately
available funds from Borrower of any payment of principal, interest or any fees
or other amounts due to any Lender under the Loan Documents, the Administrative
Agent shall distribute to each Lender that Lender's Pro Rata share of such funds
so received.
8.12. Pro-Rata Sharing of Setoff Proceeds. Any sums obtained by the
Administrative Agent or any Lender from Borrower or other Obligor by reason of
any exercise of a right of setoff or banker's lien shall be shared Pro Rata
among Lenders. Notwithstanding the foregoing, neither the Administrative Agent
nor any Lender shall be required to so share with any other Lender collections
from Borrower or other Obligor specifically relating to (or the proceeds of any
item of collateral that is not subject to the Loan Documents) any other
indebtedness (i.e. other than indebtedness under the Loan Documents) of Borrower
or other Obligor to the Administrative Agent or such Lender.
8.13. Limitation on Liability of Administrative Agent. The
Administrative Agent (and its directors, officers, employees, Administrative
Agents, attorneys-in-fact and Affiliates) shall not be liable to any Lender for
any action taken or inaction by Administrative Agent or such Person under or in
connection with any Loan Document, except to the extent of foreseeable actual
loses resulting directly
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and exclusively from Administrative Agent's own gross negligence, willful
misconduct or fraud. Without limiting the generality of the foregoing, the
Administrative Agent (and its directors, officers, employees, Administrative
Agents, attorneys-in-fact and Affiliates) shall not be liable, responsible or
have any duty with respect to any of the following: (a) the genuineness,
execution, authorization, validity, effectiveness, enforceability,
collectibility, value or sufficiency of any Loan Document, or (b) the
collectibility of any amount owed by any Obligor to any Lender, or (c) the
accuracy, completeness or truthfulness of any recital, statement, representation
or warranty made to the Administrative Agent or to any Lender in connection with
any Loan Document or other certificate, affidavit, report, opinion, financial
statement, document or instrument executed or furnished pursuant to or in
connection with any Loan Document, or (d) any failure of any Person to receive
any notice or communication due such Person under any Loan Document or
applicable law, or (e) the assets, liabilities, financial condition, results of
operations, business, prospects or creditworthiness of Borrower or any other
Obligor, or (f) ascertaining or inquiring into the satisfaction, observance or
performance of any condition, covenant or agreement in any Loan Document
(including, without limitation, the use of proceeds by Borrower), or (g) the
inspection of any books, records or properties of any Obligor, or (h) the
existence or possible existence of any Default or Event of Default.
8.14. Indemnification. To the extent that Borrower does not actually
reimburse, indemnify or hold harmless Administrative Agent (in accordance with
Section 10.1 hereof), then each Lender hereby agrees on a Pro Rata basis to
indemnify and hold harmless the Administrative Agent (and its directors,
officers, employees, Administrative Agents, attorneys-in-fact and Affiliates)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever that at any time (including, without
limitation, at any time following the payment of the Obligations of Borrower
hereunder) may be imposed upon, incurred by or asserted against the
Administrative Agent (or its directors, officers, employees, Administrative
Agents, attorneys-in-fact or Affiliates) in its capacity as such in any way
relating to or arising out of any Loan Document, or the transactions
contemplated hereby or any action or inaction taken by the Administrative Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable to the Administrative Agent (or its directors, officers, employees,
Administrative Agents, attorneys-in-fact or Affiliates) for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting directly and
exclusively from the gross negligence, willful misconduct or fraud of the
Administrative Agent. If any indemnity furnished to the Administrative Agent (or
its directors, officers, employees, Administrative Agents, attorneys-in-fact or
Affiliates) for any purpose (in the opinion of the Administrative Agent) shall
be insufficient or become impaired, then the Administrative Agent may require
additional indemnity and cease (or not commence) to do the acts indemnified
against until such additional indemnity is furnished to the satisfaction of the
Administrative Agent. The agreement in this Section shall survive the payment of
all Advances, Loans, fees and other Obligations of Borrower arising hereunder.
8.15. Resignation; Successor Administrative Agent. The
Administrative Agent at any time may resign as the Administrative Agent under
the Loan Documents by giving the Lenders and Borrower written notice thereof at
least 10 Business Days prior to the effective date of such resignation. During
such notice period, the Required Lenders shall appoint (from among the Lenders)
a successor Administrative Agent for the Lenders, subject to the consent of each
Lender (such approval or consent, as the case may be, not to be unreasonably
withheld, delayed or conditioned) and concurrent notice to the Borrower. Upon
acceptance of such appointment by such successor Administrative Agent, (a) such
successor Administrative Agent shall succeed to the rights, powers and duties of
the Administrative Agent, and (b) the term "Administrative Agent" shall include
such successor Administrative Agent effective upon its appointment, and (c) the
resigning Administrative Agent's rights, powers and duties as
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the Administrative Agent shall be terminated, all without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to the Loan Documents. Notwithstanding the foregoing, after the
effectiveness of the resigning Administrative Agent's resignation hereunder as
the Administrative Agent, the provisions of this Article shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
ARTICLE 9: DEFINITIONS AND RULES OF CONSTRUCTION
9.1. Definitions. When used in this Agreement, the following terms
shall have the respective meanings set forth below:
"Account" means as to any Person, the right of such Person to
payment for goods sold or leased or for services rendered by such Person.
"Account Debtor" means the obligor on any Account.
"Acquiring Company" means the Person obligated to pay or
provide the consideration payable in connection with a Permitted Acquisition
upon the consummation thereof.
"Adjusted LIBO Rate" means the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) determined by Administrative
Agent pursuant to the following formula.
Adjusted LIBO Rate = LIBO Rate
----------------------
1 - Reserve Percentage
For purposes of this calculation, "LIBO Rate" means the London Interbank Offered
Rate per annum determined by Administrative Agent at approximately 11:00 a.m.
London time three (3) Business Days prior to the first day of any Interest
Period for which the Adjusted ▇▇▇▇ Rate is applicable as published by Dow
▇▇▇▇▇-Telerate and displayed on page 3750 as the BBA LIBOR) (or, in any such
instance, as published by such other service or displayed on such other page as
may replace such service or page for the purpose of displaying rates or prices
comparable to the designated rate) (or, if Dow ▇▇▇▇▇-Telerate is not available,
then as published by Reuters Monitor Money Rate Service and displayed on the
LIBO page as the "Libo Rate") for the offering of dollar deposits by leading
banks in the London interbank market for a period comparable to such Interest
Period and in an amount approximately equal to the amount outstanding hereunder
to which such LIBO Rate will be applicable. If more than one such rate is
displayed on such page or its replacement, then the LIBO Rate will be the
arithmetic mean of such displayed rates. If the first day of the applicable
Interest Period is not a Business Day, then the applicable LIBO Rate will be the
rate in effect on the immediately preceding Business Day. For purposes of this
calculation, "Reserve Percentage" means that percentage (expressed as a decimal)
prescribed by the FRB (or any other governmental or administrative agency or
funding source to which Administrative Agent is subject) for determining the
reserve requirements (including any basic, supplemental, marginal or emergency
reserves) for deposits of U.S. Dollars with maturities of comparable duration in
a non-U.S. or an international banking office.
"Administrative Agent" means LaSalle or any successor,
assignee, pledgee or other transferee of Administrative Agent.
"Advance" means any advance of funds under any Facility.
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"Advance Request" has the meaning set forth in Section 1.4.1.
"Affiliate" of any Person or entity means (a) any Person
directly or indirectly owning, controlling or holding 10% or more of the
outstanding beneficial interest in such person or entity, or (b) any Person as
to which such other Person or entity directly or indirectly owns, controls or
holds 10% or more of the outstanding beneficial interest, or (c) any Person
directly or indirectly controlling, controlled by, or under common control with
such other person or entity, or (d) any officer, director, partner or member of
such Person, but such term with respect to Borrower does not include
Administrative Agent or any Lender.
"Agreement" means this Credit Agreement and all the exhibits
and schedules hereto, all as may be amended and otherwise modified from time to
time hereafter.
"Authorization" means any License or other governmental
permit, certificate and/or approval issued by any Official Body.
"Authorized Officer" means any officer, employee or
representative of such organization who is expressly designated as such or is
otherwise authorized to request the borrowing of funds hereunder or, as
appropriate, to sign loan documents and/or deliver certificates on behalf of
such organization pursuant to the provisions of such organization's most recent
resolution on file with Administrative Agent.
"Available Credit Portion" means the lesser of (a) the
Borrowing Base and (b) the Line of Credit Commitment, minus (i) the aggregate
amount of all prepayments required to have been paid pursuant to Section 1.1.5.3
(c), minus (11) the aggregate amount of all voluntary commitment reductions
pursuant to Section 1.1.5.5.
"Base Rate" means for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate (as such rate may fluctuate from time to
time as provided of herein) for such day plus .50% and (b) the Prime Rate (as
such rate may fluctuate from time to time as provided for herein) for such day.
Any change in the Base Rate due to a change in the Prime Rate or the Federal
Funds Rate shall be effective on the effective date of such change in the Prime
Rate or Federal Funds Rate. The interest rate so designated from time to time as
the Base Rate by Administrative Agent is a reference rate and does not
necessarily represent the lowest or best rate charged to any customer of
Administrative Agent or any other Lender.
"Borrower" means Integrity Incorporated, a Delaware
corporation.
"Borrowing Base" means the sum of (a) eighty percent (80%) of
the net amount of Borrower's Eligible Accounts plus (b) fifty percent (50%) of
the value, calculated at the lower of cost or market, with cost determined on an
average cost basis, of Borrower's Eligible Inventory less (c) such reserves as
the Administrative Agent in its reasonable judgment deems necessary or
appropriate from time to time.
"Borrowing Base Certificate" shall have the meaning given to
such term in Section 4.3.5 hereof.
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which banks under the laws of the State of Illinois are authorized
or required to be closed.
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"Capital Expenditures" means expenditures (a) for any fixed
assets or improvements, replacements, substitutions or additions thereto that
have a useful life of more than one (1) year, including direct or indirect
acquisition of such assets or (b) for any Capital Leases, or (c) for any product
master,
"Capital Leases" means capital leases and subleases as defined
in the Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 13 dated November 1976 (as amended and updated from time to time).
"CCF" means Bank Austria (f/k/a Creditanstalt Corporate
Finance, Inc.) and Bank Austria A.G. (Cayman Branch).
"Celebration" means Celebration Hymnal LLP, a Tennessee
limited partnership.
"Change of Control" means the occurrence of any of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), other than P.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (or any partnership, trust or other Person controlled by P.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇), is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has a right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of Voting Stock
representing more than fifty percent (50%) of the voting rights attributable to
the outstanding capital stock of Integrity; (b) Integrity consolidates with, or
merges with or into, another Person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into Integrity, in
any such event pursuant to a transaction in which the outstanding Voting Stock
of Integrity is converted into or exchanged for cash, securities or other
property; or (c) the directors of Integrity (or the executive committee thereof)
constituting that percentage necessary to approve corporate action not being
current directors of Integrity or directors designated or approved by such
directors. For purposes of this definition, "Voting Stock" shall mean any class
or classes of capital stock of Integrity pursuant to which the holders thereof
have the general voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees or any Person
(irrespective of whether or not, at the time, stock of any other class or
classes shall have, or might have, voting power by reason of the happening of
any contingency.
"Closing Date" means the date on which all conditions
precedent to the effectiveness of this Agreement under Section 2.1 have been
satisfied or waived by Lenders.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the collateral security committed to
Administrative Agent under the Collateral Security Documents executed by
Borrower or any other Obligor in favor of Administrative Agent pursuant to this
Agreement from time to time and/or pursuant to all similar or related documents
and agreements from time to time, all as amended from time to time.
"Collateral Security Documents" means, individually and
collectively, (a) the Security Agreements and the financing statements filed
pursuant thereto, and (b) the Mortgage Documents, and (c) any additional
documents guaranteeing indebtedness, assuring performance of obligations'
subordinating indebtedness, or granting security or Collateral to Administrative
Agent hereunder, all as amended from time to time.
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"Commitment" means any commitment for credit pursuant to a
Facility established hereunder.
"Commitment Percentage" means, with respect to each Lender,
that portion of the total Commitments as to which such Lender is obligated.
"Default" means any Event of Default or any event or
circumstance that with the giving of notice or the passage of time would
constitute an Event of Default.
"Deposit Account" means, at any relevant time, the designated
or principal deposit account of Borrower at Administrative Agent for purposes of
effecting transactions hereunder.
"Dollar" or "$" means U.S. dollars.
"Domestic Subsidiary" means a Subsidiary organized under the
laws of the United States or any political subdivision or instrumentality
thereof.
"EBITDA" means, with respect to any fiscal period of Borrower,
the consolidated Net Income of the Borrower and it Subsidiaries for such fiscal
period, as determined in accordance with GAAP and reported on the Borrower's
financial statements for such period, plus (i) (A) Interest Expense during such
period, (B) income tax expense accrued during such period, (C) amortization of
good will and other intangible assets and depreciation expense taken or accrued
during such period, without duplication, and (D) (i) any extraordinary loss in
such period whether incurred or accrued for, without duplication, minus (ii) any
extraordinary income/gain in such period whether incurred or accrued for,
without duplication.
"Eligible Accounts" means and includes only such Accounts
consisting of trade accounts receivable arising in the ordinary course of
Borrower's business pursuant to contracts between Borrower and the Account
Debtors providing for the bona fide sale or delivery of goods to or performance
of services to the Account Debtors which Administrative Agent, in its reasonable
discretion deems to be Eligible Accounts. Unless Lender specifically consents
otherwise, no Accounts shall be an Eligible Account if:
a. the Administrative Agent does not have a
first priority perfected Lien in such Account and the copyright registration
with respect to the Work which gave rise to the Account on file in the Copyright
Office; or
b. it arises out of a sale made or services
rendered by Borrower to an Affiliate of Borrower; or
c. the Account remains due and unpaid more than
sixty (60) days after the due date thereof or more than ninety (90) days after
the date of the invoice in respect of such Account; or
d. twenty-five percent (25%) or more of the
Accounts from the Account Debtor are not deemed Eligible Accounts hereunder
(exclusive of Accounts arising from direct to consumer sales); or
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e. any covenant, representation or warranty
contained in this Agreement with respect to such Account has been breached; or
f. the Account Debtor is also a creditor or
supplier to Borrower, or the Account Debtor has disputed liability in writing,
or the Account Debtor has made any claim in writing with respect to any other
Account due from such Account Debtor to Borrower, or the Account otherwise is
subject to any right of setoff by the Account Debtor, whether by virtue of the
terms of the contract between Borrower and the Account Debtor, or by virtue of
any other defense or claim of the Account Debtor against Borrower (including,
without limitation, by virtue of guaranties by such Account Debtor of the trade
obligations of Borrower or otherwise); provided, however, that the Accounts of
such Account Debtor shall only be ineligible to the extent of such offset or
potential offset; or
g. the Account Debtor has commenced a voluntary
case under the Bankruptcy Code, as now constituted or hereafter amended, or made
an assignment for the benefit of creditors, or if a decree or order for relief
has been entered by a court having jurisdiction in the premises in respect of
the Account Debtor in an involuntary case under the Bankruptcy Code, as now
constituted or hereafter amended, or if any other petition or other application
for relief under the Bankruptcy Code has been filed or the Account Debtor has
failed, suspended business, ceased to be solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or for all or
a significant portion of its assets or affairs; or
h. the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by Borrower with
respect thereto and accepted by the Account Debtor or the Account otherwise does
not represent a final sale; or
i. the Account Debtor is the United States of
America or any department, agency or instrumentality thereof, unless Borrower
assigns its right to payment of such Account to Lender pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727); or
j. the Accounts of any Account Debtor to the
extent such Accounts exceed a credit limit determined by Administrative Agent,
in its reasonable discretion based on its customary credit and collateral
considerations; or
k. Administrative Agent believes, in its
reasonable discretion, that collection of such Account is insecure or that such
Account may not be paid by reason of the Account Debtor's financial inability to
pay.
"Eligible Inventory" shall mean and include only such
Inventory owned by Borrower (a) in which Administrative Agent has a perfected
first priority security interest; (b) which, in Administrative Agent's
reasonable opinion, is in good and saleable condition and is not obsolete or
unmerchantable; (c) in respect of which no covenant, representation or warranty
hereunder has been breached; (d) which, if located on a leased premises, the
Administrative Agent shall have received a properly executed landlord's waiver
in respect of such leased premises in form and substance acceptable to
Administrative Agent, (e) which, if in the possession of a third party, the
Administrative Agent shall have received a properly executed bailee or processor
letter in form and substance acceptable to Administrative Agent, and (f) which
is not Inventory which Lender, in its reasonable discretion, deems not to be
Eligible Inventory.
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"Environmental Control Statutes" means all federal, state and
local laws, rules, ordinances and regulations (as implemented and as
interpreted) governing the control, removal, storage, transportation, spill,
release or discharge of hazardous or toxic wastes, substances and petroleum
products, including as provided in the provisions of (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendment and Reauthorization Act of 1986, and (b) the Solid Waste
Disposal Act, and (c) the Clean Water Act, and (d) the Clean Air Act, and (e)
the Hazardous Materials Transportation Act, and (f) the Resource Conservation
and Recovery Act of 1976, and (g) the Federal Water Pollution Control Act
Amendments of 1972, and (h) the rules, regulations and ordinances of the EPA,
and any departments of health services, regional water quality control boards,
state water resources control boards, and/or cities in which any assets of
Borrower or any of its Subsidiaries are located.
[**](1)
"EPA" means the United States Environmental Protection Agency
or any other entity that succeeds to its responsibilities and powers.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and as implemented and interpreted.
"ERISA Affiliate" means any company, whether or not
incorporated, which is considered a single employer with Borrower under Titles
1, II and IV of ERISA.
"Event of Default" means each of the events described in
Section 7.1.
"Facility" means, collectively, the Line of Credit Facility
and the Term Loan Facilities.
"Fixed Charges" means, at the time of any determination, the
sum of the following items (without duplication) for Borrower during the
relevant four consecutive fiscal quarter period:
a. The amount of principal otherwise required
to be paid under this Agreement during such period, and
b. Plus the amount of principal paid or
required to be paid on other Funded Debt (i.e., Funded Debt other than under
this Agreement) during such period, and
c. Plus Interest Expense during such period,
and
d. Plus the amount of cash Capital Expenditures
during such period.
e. Plus cash taxes.
--------
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
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For purposes of this calculation, interest includes interest accrued under
Capital Leases, and principal includes principal obligations under Capital
Leases.
"FRB" means the Board of Governors of the Federal Reserve
System or any other entity or agency that succeeds to its responsibilities and
powers.
"Funded Debt" means, at the time of any determination, the
aggregate principal amount of indebtedness of Borrower and its Subsidiaries on a
consolidated basis for the following (without duplication):
a. Borrowed money (including the indebtedness
under the Loan Documents, but not including trade indebtedness permitted under
Section 5.2.b); and
b. Capital Leases; and
c. Deferred purchase price or installment
purchases of real property, personal property, and/or services (including any
deferred purchase price and/or non-compete obligations in connection with
acquisitions); and
d. Reimbursement obligations under letters of
credit; and
e. Any indebtedness or contractual payment
obligation that is not paid within 60 calendar days of the due date therefor;
and
f. Any indebtedness evidenced by a promissory
note; and
g. Guaranties of indebtedness and obligations
that would constitute Funded Debt hereunder if the primary obligor thereof was
Borrower; and
h. Indebtedness otherwise required to be
included as part of"Funded Debt" under Section 5.2.
"GAAP" means generally accepted accounting principles applied
on a consistent basis set forth in the Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or in such other
statements by such other entity as Administrative Agent may reasonably approve,
which are applicable in the circumstances as of the date in question, and the
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles observed in a current period are comparable in
all material respects to those applied in preceding periods.
"Hazardous Materials" includes (a) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. ss.
6901 et seq.), as amended from time to time, and regulations promulgated
thereunder; or (b) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. ss.
9601 et seq.), as amended from time to time, and regulations promulgated
thereunder; or (c) any other substance the use or presence of which on, in,
under or above any real property ever owned, controlled or used by Borrower is
similarly regulated or prohibited by any federal, state or local law, rule,
ordinance, regulation or decree of any court or governmental authority as a
hazardous material.
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"Hedge Agreement" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements.
"Indebtedness" means, as to any Person at any particular date,
any contractual obligation enforceable against such Person (i) to repay borrowed
money; (ii) to pay the deferred purchase price of property or services; (iii) to
make payments or reimbursements with respect to bank acceptances or to a factor;
(iv) to make payments or reimbursements with respect to letters of credit
whether or not there have been drawings thereunder; (v) with respect to which
there is any Lien in any property of such Person; (vi) to make any payment or
contribution to a Plan; (vii) that is evidenced by a note, bond, debenture or
similar instrument; (viii) under any conditional sale agreement or title
retention agreement; or (1x) to pay interest or fees with respect to any of the
foregoing.
"Integrity Music" means Integrity Music, Inc., a Delaware
corporation.
"Interest Expense" means, at the time of any determination,
the amount of interest and other finance charges of Borrower (on a consolidated
basis) required to be charged as an expense under GAAP during the immediately
preceding four consecutive fiscal quarter period. For purposes of this
calculation, interest includes interest accrued under Capital Leases.
"Interest Period" means the period during which a particular
Adjusted LIBO Rate applies to an Adjusted LIBO Rate Advance as provided in
Section 1.3.7.
"Inventory" means goods owned by a Person for sale, lease or
resale or furnished or to be furnished under contracts for services, and raw
materials, goods in process, materials, component parts and supplies used or
consumed, or held for use or consumption in such Person's business.
"LaSalle" means LaSalle Bank National Association or any
successor or assignee thereof.
"Lender" means, individually and collectively, the following:
a. LaSalle Bank National Association or any
successor, assignee, participant, pledgee or other transferee of such Lender
hereunder, and
b. Any other entity subsequently added hereto
as a Lender hereunder, or any successor, assignee, participant or other
transferee thereof.
"Letter of Credit" means any standby or commercial
(documentary) letter of credit issued by Letter of Credit Issuer pursuant to the
Line of Credit Commitment.
"Letter of Credit Exposure" means the undrawn amount of all
outstanding Letters of Credit issued under the Line of Credit Commitment plus
all amounts drawn on such Letters of Credit and not yet reimbursed by Borrower.
"Letter of Credit Issuer" means LaSalle, or any other Lender
succeeding to LaSalle's commitment to issue Letters of Credit pursuant to the
terms hereof.
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"Leverage Ratio" has the meaning set forth in Section 4.1.2.
"LIBO Rate" has the meaning set forth in the definition
of "Adjusted LIBO Rate".
"License" means any authorization, construction or other
permit, consent, franchise, ordinance, registration, certificate, license, call
sign, frequency designation, agreement or other right filed with, granted by,
issued by or entered into with any Official Body.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), reversionary or reclamation interest, charge against or interest in
property to secure payment of a debt or performance of an obligation or other
priority or preferential arrangement of any kind or nature whatsoever.
"Line of Credit Balance" means, as of the date of measurement,
the outstanding principal amount of all Advances under the Line of Credit
Facility plus the Letter of Credit Exposure.
"Line of Credit Commitment" means $6,000,000.
"Line of Credit Commitment Percentage" means, with respect to
each Lender, that portion of the total Line of Credit Commitment as to which
such Lender is obligated.
"Line of Credit Facility" means the Line of Credit Facility as
described in Article 1.
"Line of Credit Maturity Date" has the meaning set forth in
Section 1.1.2.
"Line of Credit Note" means any Note payable to the order of
Lender prepared in accordance with Section 1.1.4, as may be amended, modified,
restated, replaced, supplemented, extended or renewed from time to time
hereafter.
"Loan" means any loan or Advance of funds under any Facility
as well as any other credit extended by Administrative Agent or any Lender to
Borrower under this Agreement.
"Loan Documents" means this Agreement, any Notes, the Hedge
Agreements, the Collateral Security Documents and any other documents,
agreements and certificates entered into or delivered in connection herewith or
therewith or pursuant hereto or thereto, all as may be amended, modified and
supplemented from time to time.
"Local Authorities" means, individually and collectively, the
state and local governmental authorities that govern the activities of Borrower.
"Margin Regulation" has the meaning set forth in Section 3.17.
"Margin Stock" has the meaning set forth in Section 3.17.
"Material Adverse Change" means any change that has or causes
or could reasonably be expected to have or cause a Material Adverse Effect.
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"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), a material adverse
change to, or, as the case may be, a materially adverse effect on:
a. The business, assets, revenues, financial
condition, operations, Collateral or prospects of the Borrower and its
wholly-owned Subsidiaries taken as a whole; or
b. The ability of Borrower to perform any of
its payment obligations when due or to perform any other material obligations
under any Loan Document; or
c. Any material right, remedy or benefit of
Administrative Agent or any Lender under any Loan Document.
"Material Contract" has the meaning set forth in Section 3.8.
"Mortgage Documents" means that certain Mortgage with
Assignment of Rents, Security Agreement and Fixture Filing of even date
herewith, and any other documents, agreements, and certificates entered into or
delivered in connection herewith, all as may be amended, modified and
supplemented from time to time.
"Net Income" means for any period, on a consolidated basis,
the net income of the Borrower and its Subsidiaries as determined by GAAP
consistently applied.
"Net Worth" means, on a consolidated basis, the net worth of
the Borrower and its Subsidiaries as determined by GAAP consistently applied.
"Notes" means, individually and collectively, each promissory
note delivered to each Lender pursuant to any Loan Document and evidencing any
indebtedness to such Lender under the Loan Documents (each as may be amended,
modified, supplemented, restated, extended, renewed or replaced from time to
time).
"Obligation" means all of the indebtedness and obligations
(monetary or otherwise) of Borrower arising under or in connection with any Loan
Document.
"Official Body" means any federal, state, local, or other
government (or any political subdivision, agency, authority, bureau, commission,
department or instrumentality thereof) and any court, tribunal, grand jury or
arbitrator, in each instance whether foreign or domestic.
"Operating Agreement" means any consulting agreement,
management agreement, employment agreement, cost allocation agreement, or other
similar agreement relating to the operations of Borrower.
"Organic Document" means, relative to any entity, its
certificate and articles of incorporation or organization, its by-laws or
operating agreements, and all equity lien holder agreements, voting agreements
and similar arrangements applicable to any of its authorized shares of capital
stock, its partnership interests or its member interests, and any other
arrangements relating to the control or management of any such entity.
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"PBGC" means the Pension Benefits Guaranty Corporation or any
other entity that succeeds to its responsibilities and powers under ERISA.
"Permitted Acquisitions" means an acquisition by Integrity of
the stock, membership interest, or any other equity interest in a Person
organized under the laws of the United States or any political subdivision or
instrumentality thereof, or the acquisition of all or substantially all of the
assets of any such Person (including without limitation assets comprising all or
substantially all of an unincorporated business unit or division of any Person),
which satisfies each of the following conditions: (i) Integrity, or a Person
which shall become a Borrower upon consummation of such acquisition and shall be
a direct or indirect wholly-owned Domestic Subsidiary of Integrity, is the
Acquiring Company, (ii) if the acquisition is structured as a merger, and
Borrower is the Surviving Company, (iii) Target Company is in a substantially
similar line of business as Borrower, (iv) Target Company has an EBITDA
(provided, however, that with respect to the purchase of assets of less than an
entire Target Company, EBITDA will be calculated on a proforma basis prepared
in good faith based on reasonable assumptions) in excess of zero for the twelve
month period ended on the date such acquisition is consummated, (v) no Default
or Event of Default has occurred during the 60 day period preceding the date on
which such acquisition is consummated, and no Default or Event of Default will
occur or is reasonably likely to occur as a result of or due to such
acquisition, (vi) the purchase price (including without limitation any deferred
purchase price, seller notes, assumed indebtedness, or similar items) together
with all expenses incurred in connection with such acquisition does not exceed
$2,000,000 for any single acquisition, (vii) simultaneously with the closing of
such acquisition, the Target Company (if such Permitted Acquisition is
structured as a purchase of equity) or the Surviving Company (if such Permitted
Acquisition is structured as a purchase of assets or a merger) executes and
delivers to Administrative Agent (a) such documents necessary to grant to
Administrative Agent for the benefit of the Lenders a first priority Lien in all
of the assets of such Target Company or Surviving Company, each in form and
substance satisfactory to Administrative Agent (and if the Target Company
becomes a Subsidiary of Borrower, Borrower executes and delivers to
Administrative Agent a Security Agreement granting to Administrative Agent for
the benefit of the Lenders a first priority security interest in 100% of the
capital stock or other equity interest of such Target Company, along with the
original stock certificates, if any, and stock powers executed in blank, each in
form and substance satisfactory to Administrative Agent), and (b) a joinder
agreement satisfactory to Administrative Agent in which such Target Company or
Surviving Company becomes the Borrower under this Agreement and assumes primary,
joint and several liability of the Obligations, (viii) prior to the closing of
such acquisition, an Authorized Officer of Borrower delivers to Administrative
Agent a certificate on behalf of Borrower certifying that such acquisition is a
Permitted Acquisition, (ix) such acquisition is friendly, rather than hostile,
in nature, and (x) Borrower has, no less than thirty (30) days prior to making
such acquisition, prepared and furnished to Administrative Agent the proforma
financial statements described below for the Target Company (if such acquisition
is structured as a purchase of equity) or the Surviving Company (if such
acquisition is structured as a purchase of assets or a merger), demonstrating to
the satisfaction of Administrative Agent that the Target Company, all Surviving
Companies, and Borrower, as the case may be, will be solvent upon consummation
of such acquisitions and upon the passage of time thereafter, and that none of
the covenants under this Agreement will be violated as a consequence of such
acquisition or with the passage of time thereafter, and a Borrowing Base
Certificate demonstrating that the Available Credit Portion will be great enough
to allow a Line of Credit Advance to be made in the amount Borrower will request
in connection with the closing of such Permitted Acquisition and Borrower has
also provided to Administrative Agent, no less than thirty (30) days prior to
making such acquisition, copies of the audited financial statements (if
available, or unaudited financial statements if no audited financial statements
exist) for the Target Company for the three fiscal years most recently ended and
for each of the completed fiscal quarters in the then current fiscal year. The
proforma financial statements referred to in clause (x) shall contain
consolidated and
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consolidating balance sheets, income statements, statements of cash flows and
such other reports and disclosures of Borrower as well as the Target Company (if
such Permitted Acquisition is structured as a purchase of equity) or the
Surviving Company (if such Permitted Acquisition is structured as a purchase of
assets or a merger) and shall cover such forecast periods, as Administrative
Agent may in its reasonable discretion require.
"Permitted Guaranties" has the meaning set forth in Section
5.3.
"Permitted Indebtedness" has the meaning set forth in Section
5.2.
"Permitted Investments" has the meaning set forth in Section
5.7.
"Permitted Liens" has the meaning set forth in Section 5.5.
"Permitted Loans" has the meaning set forth in Section 5.4.
"Permitted Transfers" has the meaning set forth in Section
5.6.
"Person" means any natural person, corporation, limited
liability company, partnership, firm, association, trust, government,
governmental agency or any other entity, whether acting in an individual,
fiduciary or other capacity.
"Plan" means any pension benefit or welfare benefit plan as
defined in Sections 3(l), (2) or (3) of ERISA covering employees of Borrower or
any ERISA Affiliate of Borrower.
"Portion" means a designated portion of the indebtedness
hereunder as to which a specified Rate Index (and a corresponding Rate Margin)
has been selected or deemed to be applicable.
"Prime Rate" means on any day, the rate of interest per annum
then most recently established by Administrative Agent as its Prime Rate. Such
rate is a general reference rate of interest, may not be related to any other
rate, and may not be the lowest or best rate actually charged by Administrative
Agent to any customer or a favored rate and may not correspond with future
increases or decreases in interest rates charged by other lenders or market
interest rates in general.
"Pro Rata" means from or to each Lender in proportion to its
Commitment Percentage.
"Rate Index" has the meaning set forth in Section 1.3.4.
"Rate Margin" has the meaning set forth in Section 1.3.4.
"Reportable Event" means a reportable event as defined in
Title IV of ERISA or the regulations thereunder.
"Reserve Percentage" has the meaning set forth in the
definition of "Adjusted LIBO Rate".
"Revenue" means revenue of Borrower (on a consolidated basis)
as determined in accordance with GAAP.
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"Required Lenders" means Lenders holding at least 51% of the
aggregate outstanding principal amount of the Loans (or, if no Loans at the time
of such determination are outstanding, then Lenders obligated with respect to at
least 51% of the Commitments).
"Reserve Percentage" has the meaning set forth in the
definition of "Adjusted LIBO Rate".
"SEC" means the Securities and Exchange Commission or any
other entity that succeeds to its responsibilities and powers.
"Securities Acts" means, collectively, the Securities Act of
1933 and the Securities Exchange Act of 1934, each as amended, and as
implemented by the SEC and interpreted by the SEC or any court of competent
jurisdiction.
"Security Agreements" means, collectively, each security
agreement (as may be amended, modified and supplemented from time to time)
required to be executed and delivered in favor of Lender pursuant to Article 2,
and any other security agreement required or delivered in connection with the
Loan Documents, including any intellectual property assignments or security
agreements required to be delivered pursuant to Article 2.
"Settlement Date" means, with respect to any Advance
hereunder, the date on which funds are advanced by Lender.
"Subsidiary" of any Person or entity means any Person as to
which such other Person or entity (a) directly or indirectly owns, controls or
holds 50% or more of the outstanding beneficial interest or (b) directly or
indirectly owns, controls or holds 25% or more of the outstanding beneficial
interest and effectively controls management of such Person or (c) is otherwise
required in accordance with GAAP to be considered as part of a consolidated
organization. For purposes of this definition, Integrity Music and Celebration
shall each be deemed to be a "Subsidiary".
"Surviving Company" means as applicable, either (i) the Person
that will own the assets to be acquired from a Target Company in a Permitted
Acquisition upon the consummation thereof, or (ii) the survivor of the merger of
an Acquiring Company with the Target Company in a Permitted Acquisition upon the
consummation thereof.
"Target Company" means the Person whose assets or stock,
membership interests, or other equity interest will be acquired in a Permitted
Acquisition upon the consummation thereof, or if applicable, with which an
Acquiring Company will merge in a Permitted Acquisition upon the consummation
thereof, which in either case shall be an entity organized under the laws of the
United States or any political subdivision or instrumentality thereof.
"Term Loan A Commitment" means $11,000,000, subject to
reduction pursuant to Section 1.2.1.
"Term Loan B Commitment" means $3,000,000.
"Term Loan A Commitment Percentage" means, with respect to
each Lender, that portion of the total Tenn Loan A Commitment as to which such
Lender is obligated.
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"Term Loan B Commitment Percentage" means, with respect to
each Lender, that portion of the total Term Loan B Commitment as to which such
Lender is obligated.
"Term Loan A Facility" means the Term Loan A Facility as
described in Article 1.
"Term Loan B Facility" means the Term Loan B Facility as
described in Article 1.
"Term Loan Facilities" means, collectively, the Tenn Loan A
Facility and the Term Loan B Facility.
"Term Loan Maturity Date" has the meaning set forth in Section
1.2.7.
"Term Loan A Note" means any Note payable to the order of
Lender prepared in accordance with Section 1.2.3, as may be amended, modified,
restated, replaced, supplemented, extended or renewed from time to time
hereafter.
"Term Loan B Note" means any Note payable to the order of
Lender prepared in accordance with Section 1.2.6, as may be amended, modified,
restated, replaced, supplemented, extended or renewed from time to time
hereafter.
"UCC" means the Uniform Commercial Code as in effect in the
applicable jurisdiction.
"Work" means each music composition, including all lyrics,
music, and titles thereof.
9.2. Rules of Interpretation and Construction.
9.2.1. Plural; Gender. Unless otherwise expressly stated or
the context clearly indicates a different intention, then (as may be appropriate
in the particular context) (a) a singular number or noun used in any Loan
Document includes the plural, and a plural number or noun includes the singular,
and (b) the use of the masculine, feminine or neuter gender pronouns in any Loan
Document includes each and all genders.
9.2.2. Section and Schedule References. Unless otherwise
expressly stated or the context clearly indicates a different intention, then
all references to sections, paragraphs, clauses, schedules and exhibits in any
Loan Document are to be interpreted as references to sections, paragraphs,
clauses, schedules and exhibits of such Loan Document (rather than of some other
Loan Document). In addition, the words "herein", "hereof", "hereunder", "hereto"
and other words of similar import in any Loan Document refer to such Loan
Document as a whole, and not to any particular section, paragraph or clause in
such Loan Document.
9.2.3. Titles and Headings. Unless otherwise expressly
stated or the context clearly indicates a different intention, then the various
titles and headings in the Loan Documents are inserted for convenience only and
do not affect the meaning or interpretation of such Loan Document or any
provision thereof.
9.2.4. "Including" and "Among Other" References. Unless
otherwise expressly stated or the context clearly indicates a different
intention, then all references in the Loan Documents to phrases containing or
list preceded by the words "include", "includes", "including", "among other",
"among other things" or other words or phrases of similar import are to be
interpreted to mean such "without limitation"
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(whether or not such additional phrase is actually added). In other words, such
words and phrases connote an illustrative example or list rather than an
exclusive example or list.
9.2.5. Time of Day References. Unless otherwise expressly
stated or the context clearly indicates a different intention, then all time of
day references in and restrictions imposed under the Loan Documents are to be
calculated using Central Time.
9.2.6. "Knowledge" of a Person. Unless otherwise expressly
stated or the context clearly indicates a different intention, then (a) all
references to the "knowledge," "awareness" or "belief" of any Person that is not
a natural person are to be interpreted to mean the knowledge, awareness or
belief of senior and executive management of such Person (and including the
knowledge or awareness of managers of limited liability companies and general
partners of partnerships), and (b) all representations qualified by
the "knowledge", "awareness" or "belief" of a Person are to be interpreted to
mean (unless a different standard is specified) that such Person has conducted a
commercially reasonable inquiry and investigation prior to making such
representation.
9.2.7. Successors and Assigns. Unless otherwise expressly
stated or the context clearly indicates a different intention, then all
references to any Person (including any Official Body) in any Loan Document are
to be interpreted as including (as applicable) such Person's successors,
assigns, estate, heirs, executors, administrators and personal representatives.
Notwithstanding the foregoing, neither Borrower nor other Obligor may assign or
delegate any Loan Document (or any right or obligation thereunder) except to the
extent expressly permitted hereunder or under such other Loan Document.
9.2.8. Modifications to Documents. Unless otherwise expressly
stated or the context clearly indicates a different intention, then all
references to any Loan Document or other agreement or instrument in any Loan
Document are to be interpreted as including all extensions, renewals,
amendments, supplements, substitutions, replacements and waivers thereto and
thereof from time to time.
9.2.9. References to Laws and Regulations. Unless otherwise
expressly stated or the context clearly indicates a different intention, then
all references to any law, regulation, rule, order or policy in any Loan
Document are to be interpreted as references to such law, regulation, rule or
policy (a) as implemented and interpreted from time to time by Official Bodies
with appropriate jurisdiction therefor, and (b) as amended, modified,
supplemented, replaced and repealed from time to time.
9.2.10. Financial and Accounting Terms. Unless otherwise
expressly stated or the context clearly indicates a different intention,
financial and accounting terms used in the foregoing definitions or elsewhere in
the Loan Documents shall be defined and determined in accordance with GAAP.
9.2.11. Conflicts Among Loan Documents. Unless otherwise
expressly stated or the context clearly indicates a different intention, then
any irreconcilable conflict between the terms and conditions of this Agreement
and the terms and conditions of any other Loan Document (other than a Note) are
to be resolved by having the terms and conditions of this Agreement govern.
9.2.12. Independence of Covenants and Defaults. All covenants
and defaults contained in the Loan Documents shall be given independent effect.
If a particular action or condition is not permitted by any covenant in the Loan
Documents, then the fact that such action or condition would be permitted by an
exception to (or would otherwise be within the limitations of) another covenant
in the
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Loan Documents shall not avoid the occurrence or existence of a Default if
such action is taken or if such condition exists.
9.2.13. Administrative Agent. References in this Agreement and
the other Loan Documents to Administrative Agent shall mean either to
Administrative Agent in such capacity or (where appropriate) to Administrative
Agent for the benefit of Lenders. Unless otherwise indicated in this Agreement
or another Loan Document, all Collateral held and all payments received by
Administrative Agent are deemed to be held and received, respectively, for the
benefit of Lenders.
ARTICLE 10: MISCELLANEOUS
10.1. Indemnification, Reliance and Assumption of Risk. Without
limiting any other indemnification in any Loan Document, Borrower hereby agrees
to defend Administrative Agent and each Lender (and their directors, officers,
employees, Administrative Agents, counsels and Affiliates) from, and hold each
of them harmless against, any and all losses, liabilities, claims, damages,
interests, judgments, or costs (including fees and disbursements of counsel)
incurred by any of them arising out of or in any way connected with any Loan
Document, except for losses resulting directly and exclusively from such
Person's own gross negligence, willful misconduct or fraud. In addition,
Borrower will reimburse and indemnify Administrative Agent and each Lender for
all costs and losses resulting from the following: (1) any failure or refusal by
Borrower or by any Affiliate of Borrower to provide any requested assistance or
cooperation in connection with any attempt by Administrative Agent or any Lender
to liquidate any Collateral in the event of any Event of Default and/or any
attempt by Administrative Agent or any Lender to otherwise exercise its rights
hereunder, and (2) any misrepresentation, gross negligence, fraud or willful
misconduct by Borrower (or any of its employees or officers), or any other
person or entity pledging Collateral hereunder. Moreover, with respect to any
Advance Request or other communication between Borrower and Administrative Agent
and/or Lenders hereunder and all other matters and transactions in connection
therewith, Borrower hereby irrevocably authorizes Administrative Agent and each
Lender to accept, rely upon, act upon and comply with any verbal or written
instructions, requests, confirmations and orders of any Authorized Officer of
Borrower. Borrower acknowledges that the transmissions of any such instruction,
request, confirmation, order or other communication involves the possibility of
errors, omissions, mistakes and discrepancies, and Borrower agrees to adopt such
internal measures and operational procedures to protect its interest. By reason
thereof, Borrower hereby assumes all risk of loss and responsibility for - and
hereby releases and discharges Administrative Agent and each Lender from any and
all risk of loss and responsibility for, and agrees to indemnify, reimburse on
demand and hold Administrative Agent and each Lender harmless from - any and all
claims, actions, damages, losses, liability and costs by reason of or in any way
related to (a) Administrative Agent's or any Lender's accepting, relying and
acting upon, complying with or observing any such instructions, requests,
confirmations or orders from or on behalf of any such Authorized Officer, and
(b) any such errors, omissions, mistakes and discrepancies by (or otherwise
resulting from or attributable to the actions or inactions of) any Authorized
Officer or Borrower; provided, however, Borrower does not assume hereby the risk
of any foreseeable actual loss resulting directly and exclusively from
Administrative Agent's or any Lender's own gross negligence, fraud or willful
misconduct. Borrower's obligations provided for in this Section will survive any
termination of this Agreement, and the repayment of the outstanding balances
hereunder.
10.2. Assignments and Participations. No Loan Document may be
assigned (in whole or in part) by Borrower without the prior written consent of
each Lender. Notwithstanding any other provision of any Loan Document, without
receiving the consent of the Borrower, each Lender at any time and from time to
time may syndicate, participate or otherwise transfer, pledge or assign all (or
any
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proportionate part of) its rights and obligations under any of the Loan
Documents (or any indebtedness evidenced thereby) to any Person; provided,
however, in the absence of a Default or Event of Default, any assignments by
Lenders (which for purposes of this Section 10.2 shall not be construed to
include participations) shall (a) be in minimum increments of $1,000,000 and
(b) shall require the prior written request of Borrower, which consent shall
not be unreasonably withheld; provided, further, that any Lender may at any time
without the consent of the Borrower assign and pledge all or any portion of its
rights under the Loan Documents to any Federal Reserve Bank. Lenders (through
Administrative Agent) will make reasonable efforts to notify Borrower of any
such absolute transfer or assignment within twenty (20) Business Days
thereafter; however, a failure to so notify will in no way impair any rights of
Administrative Agent or Lenders or any participant, transferee or assignee. Upon
execution and delivery of an appropriate instrument between any such
participant, transferee or assignee and an assigning Lender, then (at
Administrative Agent's request) such participant, transferee or assignee will
become a Lender party to this Agreement and will have all the rights and
obligations of a Lender as set forth in such instrument. At Administrative
Agent's request, Borrower will execute (or re-execute) and deliver (or otherwise
obtain) any documents necessary to reflect or implement any such participation,
transfer or assignment (including replacement promissory notes and any requested
letters authorizing such participant, transferee or assignee to rely on existing
certificates and opinions) and will otherwise fully cooperate in any such
syndication process. Attached as Exhibit 10.2 is a form of Assignment and
Assumption Agreement, a substantially similar version of which is to be used in
connection with assignment of Lenders hereunder.
10.3. No Waiver; Delay. To be effective, any waiver by Lenders must be
expressed in a writing executed by Administrative Agent (with the approval of
Required Lenders). Once a Default occurs under the Loan Documents, then such
Default will continue to exist until it either is cured (to the extent
specifically permitted) in accordance with the Loan Documents or is otherwise
expressly waived by Lenders (in their sole and absolute discretion) in writing;
and once an Event of Default occurs under the Loan Documents, then such Event of
Default will continue to exist until it is expressly waived by Lenders (in their
sole and absolute discretion) in writing. If Administrative Agent or any Lender
waives any power, right or remedy arising hereunder or under any applicable law,
then such waiver will not be deemed to be a waiver upon the later occurrence or
recurrence of any events giving rise to the earlier waiver. No failure or delay
by Administrative Agent or any Lender to insist upon the strict performance of
any term, condition, covenant or agreement of any of the Loan Documents, or to
exercise any right, power or remedy hereunder, will constitute a waiver of
compliance with any such term, condition, covenant or agreement, or preclude
Administrative Agent or any Lender from exercising any such right, power, or
remedy at any later time or times. By accepting payment after the due date of
any amount payable under this Agreement or any other Loan Document, neither
Administrative Agent nor any Lender will be deemed to waive the right either to
require prompt payment when due of all other amounts payable under this
Agreement or any other Loan Document or to declare an Event of Default for
failure to effect such prompt payment of any such other amount. The remedies
provided herein are cumulative and not exclusive of each other, the remedies
provided by law, and the remedies provided by the other Loan Documents.
10.4. Modifications and Amendments. Except as otherwise expressly
provided in this Agreement, no modification or amendment to any Loan Document
will be effective unless made in a writing signed by appropriate officers of
Administrative Agent (with the consent of the Required Lenders) and Borrower;
provided, however, that no such consents shall be required in connection with
the updating of Schedules pursuant to Sections 4.2.2 and 4.3.2 (b).
Notwithstanding the foregoing, to the extent that any such modification or
amendment attempts to implement any of the following, then such amendment or
modification must be approved by all Lenders:
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a. Increase the Commitment Percentage of any Lender, or
b. Alter any provision that reduces the interest rate
applicable to the Loans, or
c. Reduce the amount of any fees due to Lenders under
any Loan Document (other than fees payable to the Administrative Agent for its
own account), or
d. Reduce the amount of any payment (whether for
principal, interest or any fee, other than a fee payable to the Administrative
Agent for its own account), or
e. Postpone or extend the Maturity Date for any Facility
or any scheduled payment date (whether for principal, interest or any fee, other
than a fee payable to the Administrative Agent for its own account), or
f. Change the definition of "Pro Rata" or "Required
Lenders" or otherwise change the number or percentage of Lenders that are
required to take or approve (or direct the Administrative Agent to take) any
action under the Loan Documents, or
g. Release or discharge Borrower as a "Borrower" under
the Loan Documents or permit Borrower to assign to another Person any of its
rights or obligations under the Loan Documents, or
h. Release all or any part of any guaranty of any part
of the Indebtedness under the Loan Documents or any security interest in or
pledge of any Collateral (except as otherwise already expressly authorized under
the Loan Documents), or
i. Amend this Section.
In addition, no provision of any Loan Document relating to the rights or
obligations of the Administrative Agent may be modified or amended without the
consent of the Administrative Agent.
10.5. Disclosure of Information to Third Parties. Administrative Agent
and each Lender will employ reasonable procedures to treat as confidential all
written, non-public information delivered to Administrative Agent or such Lender
pursuant to this Agreement concerning the performance, operations, assets,
structure and business plans of Borrower that Administrative Agent or such
Lender reasonably understands to be non-public information. While other or
different confidentiality procedures may be employed by Administrative Agent or
any Lender, the actual procedures employed by Administrative Agent and each
Lender for this purpose will be conclusively deemed to be reasonable if they are
at least as protective of such information as the procedures generally employed
by Administrative Agent and such Lender to safeguard the confidentiality of
Administrative Agent's and Lenders' own confidential information.
Notwithstanding the foregoing, Administrative Agent and each Lender may disclose
any information concerning Borrower in Administrative Agent's or such Lender's
possession from time to time (a) to permitted participants, transferees,
assignees, pledgees and investors (including prospective participants,
transferees, assignees, pledgees and investors), and (b) in response to credit
inquiries consistent with general banking practices, and (c) to any federal or
state regulator of Administrative Agent or such Lender, and (d) to
Administrative Agent's or such Lender's Affiliates, employees, legal counsel,
appraisers, accountants, Administrative Agents and investors, and (e) to any
Person pursuant to compulsory judicial process, and (f) to any judicial or
arbitration forum in connection with enforcing the Loan Documents or defending
any action-based upon the Loan Documents or the relationship between
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Administrative Agent, Lenders, and Borrower. In addition, from time to time,
Administrative Agent and each Lender (and their respective Affiliates) may
disclose and publish in marketing presentations and marketing materials that
they have extended credit to Borrower and the general nature and structure of
the Facilities (exclusive of the pricing terms).
10.6. Binding Effect and Governing Law. This Agreement and the other
Loan Documents have been delivered by Borrower and the other Obligors and have
been received by Administrative Agent in the State of Illinois. This Agreement
and all documents executed hereunder are binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. This
Agreement and all documents executed hereunder are governed as to their
validity, interpretation, construction and effect by the laws of the State of
Illinois (without giving effect to the conflicts of law rules of Illinois).
10.7. Notices. Any notice, request, consent, waiver or other
communication required or permitted under or in connection with the Loan
Documents will be deemed satisfactorily given if it is in writing and is
delivered either personally to the addressee thereof, or by prepaid registered
or certified U.S. mail (return receipt requested), or by a nationally recognized
commercial courier service with next-day delivery charges prepaid, or by
telegraph, or by facsimile (voice confirmed), or by any other reasonable means
of personal delivery to the party entitled thereto at its respective address set
forth below:
If to Borrower:
Integrity Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Administrative Agent:
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any party to a Loan Document may change its address or facsimile number for
notice purposes by giving notice thereof to the other parties to such Loan
Document in accordance with this Section, provided that such change shall not be
effective until 2 days after notice of such change. All such notices and other
communications will be deemed given and effective (a) if by mail, then upon
actual receipt or 5 days after mailing as provided above (whichever is earlier),
or (b) if by facsimile, then upon successful transmittal to such party's
designated number, or (c) if by telegraph, then upon actual receipt or 2
Business Days after delivery to the telegraph company (whichever is earlier), or
(d) if by nationally recognized commercial courier service, then upon actual
receipt or 2 Business Days after delivery to the courier service (whichever is
earlier), or (e) if otherwise delivered, then upon actual receipt. For any and
all purposes related to giving and receiving notices and communications between
Borrower and Administrative Agent and Lenders under any Loan Document, Borrower
hereby irrevocably appoints Integrity (and each other Authorized Officer) as its
Administrative Agent to whom Administrative Agent
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and each Lender may give and from whom Administrative Agent and each Lender may
receive all such notices and communications, and Administrative Agent and each
Lender is entitled to rely upon (and treat as being properly authorized by
Borrower) any verbal or written notices or communications purportedly received
from (or that Administrative Agent or such Lender believes in good faith to be
received from) such Authorized Officer.
10.8. Relationship with Prior Agreement. This Agreement completely and
fully supersedes all oral agreements and all other and prior written agreements
by and among Borrower and Administrative Agent and any Lender concerning the
terms and conditions of this credit arrangement.
10.9. Severability. If fulfillment of any provision of or any
transaction related to any Loan Document at the time performance is due involves
transcending the limit of validity prescribed by applicable law, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity. If any clause or provision of this Agreement operates or would
prospectively operate to invalidate this Agreement or any other Loan Document in
whole or in part, then such clause or provision only shall be void (as though
not contained herein or therein), and the remainder of this Agreement or such
other Loan Document shall remain operative and in full force and effect.
10.10. Termination and Survival. All representations, warranties,
covenants and other agreements of any Obligor contained in any Loan Document or
any other documentation required thereunder will survive the execution and
delivery of the Loan Documents and the funding of the Advances hereunder and
will continue in full force and effect until terminated in accordance with this
Agreement.
10.11. Reinstatement. To the maximum extent not prohibited by
applicable law, this Agreement and the other Loan Documents (and the
indebtedness hereunder and Collateral therefor) will be reinstated and the
indebtedness correspondingly increased (as though such payment(s) had not been
made) if at any time any amount received by Administrative Agent or any Lender
in respect of any Loan Document is rescinded or must otherwise be restored,
refunded or returned by Administrative Agent or such Lender to Borrower or any
other Person (a) upon or as a result of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Borrower or any other Person, or
(b) upon or as a result of the appointment of any receiver, intervenor,
conservator, trustee or similar official for Borrower or any other Person or for
any substantial part of the assets of Borrower or any other Person, or (c) for
any other reason.
10.12. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all the signatures on such counterparts
appeared on one document. Each such counterpart will be deemed to be an original
but all counterparts together will constitute one and the same instrument.
10.13. Waiver of Suretyship Defenses. Borrower hereby waives any and
all defenses and rights of discharge based upon suretyship or impairment of
collateral (including lack of attachment or perfection with respect thereto)
that it may now have or may hereafter acquire with respect to Administrative
Agent or any Lender or any of its obligations hereunder, under any Loan Document
or under any other agreement that it may have or may hereafter enter into with
Administrative Agent or any Lender.
10.14. WAIVER OF LIABILITY. BORROWER (A) AGREES THAT NEITHER
ADMINISTRATIVE AGENT NOR ANY LENDER (NOR ANY OF THEIR DIRECTORS,
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OFFICERS, EMPLOYEES OR ADMINISTRATIVE AGENTS) SHALL HAVE ANY LIABILITY TO
BORROWER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES OR COSTS
SUFFERED OR INCURRED BY BORROWER IN CONNECTION WITH OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED OR THE RELATIONSHIP ESTABLISHED BY ANY LOAN DOCUMENT,
OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH,
EXCEPT FOR FORESEEABLE ACTUAL LOSSES RESULTING DIRECTLY AND EXCLUSIVELY FROM
ADMINISTRATIVE AGENT'S OR SUCH LENDER'S OWN GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR FRAUD AND (B) WAIVES, RELEASES AND AGREES NOT TO ▇▇▇ UPON ANY CLAIM AGAINST
ADMINISTRATIVE AGENT OR ANY LENDER (OR THEIR DIRECTORS, OFFICERS, EMPLOYEES OR
ADMINISTRATIVE AGENTS) WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE, EXCEPT
FOR CLAIMS FOR FORESEEABLE ACTUAL LOSSES RESULTING DIRECTLY AND EXCLUSIVELY FROM
ADMINISTRATIVE AGENT'S OR SUCH LENDER'S OWN GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR FRAUD. MOREOVER, WHETHER OR NOT SUCH DAMAGES ARE RELATED TO A CLAIM THAT IS
SUBJECT TO THE WAIVER EFFECTED ABOVE AND WHETHER OR NOT SUCH WAIVER IS
EFFECTIVE, NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER (NOR THEIR DIRECTORS,
OFFICERS, EMPLOYEES OR ADMINISTRATIVE AGENTS) SHALL HAVE ANY LIABILITY WITH
RESPECT TO (AND BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO ▇▇▇ UPON ANY
CLAIM FOR) ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR NONFORESEEABLE
DAMAGES SUFFERED BY BORROWER IN CONNECTION WITH OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED OR THE RELATIONSHIP ESTABLISHED BY ANY LOAN DOCUMENT,
OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH.
10.15. FORUM SELECTION; CONSENT TO JURISDICTION. ANY LITIGATION IN
CONNECTION WITH OR IN ANY WAY RELATED TO ANY LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OR
INACTIONS OF ADMINISTRATIVE AGENT, ANY LENDER OR BORROWER WILL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE FEDERAL COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS AND THE STATE COURTS OF ILLINOIS LOCATED IN ▇▇▇▇ COUNTY; PROVIDED,
HOWEVER THAT ANY SUIT SEEKING ENFORCEMENT AGAINST BORROWER, ANY COLLATERAL OR
ANY OTHER PROPERTY MAY ALSO BE BROUGHT (AT ADMINISTRATIVE AGENT'S AND LENDERS'
OPTION) IN THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND OR WHERE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE
OBTAIN PERSONAL JURISDICTION OVER BORROWER. BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND THE FEDERAL COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
FINAL AND NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
OUTSIDE THE COMMONWEALTH OF VIRGINIA. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF
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VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, WITHIN OR OUTSIDE THE STATE OF ILLINOIS. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
AN OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIMS
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
10.16. WAIVER OF JURY TRIAL. ADMINISTRATIVE AGENT, EACH LENDER AND
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (WHETHER AS CLAIM,
COUNTER-CLAIM, AFFIRMATIVE DEFENSE OR OTHERWISE) IN CONNECTION WITH OR IN ANY
WAY RELATED TO ANY OF THE LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OR INACTIONS OF
ADMINISTRATIVE AGENT, ANY LENDER OR BORROWER. BORROWER ACKNOWLEDGES AND AGREES
(A) THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY),
AND (B) THAT IT HAS BEEN ADVISED BY LEGAL COUNSEL IN CONNECTION HEREWITH, AND
(C) THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND
EACH LENDER ENTERING INTO THE LOAN DOCUMENTS AND FUNDING ADVANCES THEREUNDER.
10.17. STATUTORY NOTICE - INSURANCE. The following notice is given
pursuant to Section 10 of the Collateral Protection Act set forth in Chapter 815
Section 180/1 of the Illinois Compiled Statutes (1996); nothing contained in
such notice shall be deemed to limit or modify the terms of the Loan Documents:
UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT
WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN
YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS. THE
COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT
IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL. YOU MAY LATER CANCEL ANY
INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE
OBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR
THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN
CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE
ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON
YOUR OWN.
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10.18 STATUTORY NOTICE - ORAL COMMITMENTS. Nothing contained in the
following notice shall be deemed to limit or modify the terms of the Loan
Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FORM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
Borrower acknowledges that there are not other agreements between Administrative
Agent, Lenders, and Borrower, oral or written, concerning the subject mater of
the Loan Documents, and that all prior agreements concerning the same subject
matter, including any proposal or commitment letter, are merged into the Loan
Documents and thereby extinguished.
[BALANCE OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the undersigned, by their duly authorized officers, have
executed this Credit Agreement, as of the day and year first above written.
INTEGRITY INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
LASALLE BANK NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
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