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1997A AMENDED AND RESTATED LOAN AGREEMENT
By and between
BT HOLDINGS, INC.,
XXXX TECHNOLOGIES, INC.,
TUBE TURNS TECHNOLOGIES, INC.,
GROUP TECHNOLOGIES CORPORATION,
METRUM-D, INC.,
as Borrowers
GROUP FINANCIAL PARTNERS, INC.,
as Guarantor
and
BANK ONE, KENTUCKY, NA
as Agent Bank
and
BANK ONE, KENTUCKY, NA
as a Bank
dated as of November 1, 1997
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TABLE OF CONTENTS
Page
SECTION 1 - DEFINITIONS AND CROSS REFERENCE........................................... 2
SECTION 2 - REVOLVING CREDIT FACILITY................................................. 20
2.1 Revolving Loan Commitments, Revolving Credit Loans........................... 20
2.2 Interest on the Revolving Credit Loans....................................... 24
2.3 Fees......................................................................... 28
2.4 Prepayments and Payments; Reductions in Revolving Loan Commitments........... 30
2.5 Use of Proceeds.............................................................. 32
2.6 Swing Line Credit Subfacility................................................ 32
2.7 Letters of Credit............................................................ 35
SECTION 3 - TERM LOANS................................................................ 43
3.1 Principal of the Term Loans.................................................. 43
3.2 Interest on the Term Loans................................................... 44
3.3 Prepayments and Payments; Reductions in Term Loans Commitments............... 48
3.4 Use of Proceeds.............................................................. 49
SECTION 4 - SPECIAL PROVISIONS GOVERNING LIBOR LOANS................................... 50
4.1 Determination of LIBOR....................................................... 50
4.2 Inability to Determine LIBOR................................................. 50
4.3 Illegality or Impracticability of LIBOR Loans................................ 50
4.4 Compensation For Breakage or Non-Commencement of Interest Periods............ 51
4.5 Booking of LIBOR Loans....................................................... 52
4.6 Assumptions Concerning Funding of LIBOR Loans................................ 52
4.7 LIBOR Loans After Event of Default........................................... 52
SECTION 5 - CLOSING CONDITIONS......................................................... 53
5.1 Initial Closing Conditions................................................... 53
5.2 Conditions to All Revolving Credit Loans, Letters of Credit
and Swing Line Loans......................................................... 56
SECTION 6 - REPRESENTATIONS AND WARRANTIES............................................. 58
6.1 Organization, Standing, etc, of Group Financial and the Borrowers............ 58
6.2 Qualification................................................................ 58
6.3 Use of Proceeds.............................................................. 58
6.4 Intellectual Property........................................................ 58
6.5 Disclosure; Solvency......................................................... 59
6.6 Tax Returns and Payments..................................................... 59
6.7 Funded Debt, etc............................................................. 59
6.8 Title to Properties; Liens; Leases........................................... 60
6.9 Litigation, etc.............................................................. 60
6.10 Authorization; Compliance With Other Instruments, etc........................ 60
6.11 Enforceability............................................................... 61
6.12 Governmental Consent......................................................... 61
6.13 Environmental Matters........................................................ 61
SECTION 7 - AFFIRMATIVE COVENANTS..................................................... 63
7.1 Corporate Existence and Good Standing........................................ 63
7.2 Money Obligations, Payment of Taxes, ERISA, etc.............................. 63
7.3 Financial Statements and Reports............................................. 64
7.4 Financial Records; Inspection................................................ 67
7.5 Maintenance of Properties, etc............................................... 68
7.6 Permits, Certificates, Leases, Licenses...................................... 68
7.7 Notice....................................................................... 68
7.8 Payment of Obligations....................................................... 68
7.9 Environmental Matters........................................................ 69
7.10 Accounts..................................................................... 69
7.11 Insurance.................................................................... 69
7.12 Environmental Compliance..................................................... 71
7.13 Material Change in Management................................................ 72
SECTION 8 - NEGATIVE COVENANTS........................................................ 72
8.1 Mergers, Acquisitions and Other Extraordinary Events......................... 72
8.2 Indebtedness, Guaranties, etc................................................ 73
8.3 Use of Assets................................................................ 74
8.4 Mortgages, Liens, Encumbrances, Security Interests, Assignments, etc......... 74
8.5 Nature of Businesses......................................................... 75
8.6 Fixed Charge Coverage Ratio.................................................. 75
8.7 Ratio of Funded Debt to EBITDA............................................... 75
8.8 Funded Debt to Capitalization Ratio.......................................... 76
8.9 Minimum Tangible Net Worth................................................... 76
8.10 Payment of Dividends......................................................... 76
8.11 Capital Expenditures......................................................... 77
8.12 Transactions with Subsidiaries and Affiliates................................ 77
8.13 Interest Rate Agreements..................................................... 77
SECTION 9- EVENTS OF DEFAULT; ACCELERATION.............................. 78
9.1 Events of Default............................................ 78
SECTION 10- REMEDIES UPON DEFAULT, ETC................................... 81
10.1 Defaults..................................................... 81
10.2 Offset....................................................... 81
10.3 Rights Cumulative............................................ 81
10.4 Payment of Costs and Expenses................................ 81
SECTION 11- THE AGENT BANK............................................... 82
11.1 Appointment.................................................. 82
11.2 Delegation of Duties......................................... 82
11.3 Nature of Duties; Independent Credit Investigation........... 82
11.4 Actions in Discretion of the Agent Bank: Instructions
from the Banks............................................... 83
11.5 Reimbursement and Indemnification of the Agent Bank and
the Banks by the Borrowers................................... 83
11.6 Exculpatory Provisions....................................... 84
11.7 Reimbursement and Indemnification of the Agent Bank by
the Banks.................................................... 84
11.8 Reliance by the Agent Bank................................... 85
11.9 Notice of Default............................................ 85
11.10 The Banks in Their Individual Capacities..................... 85
11.11 Holders of Revolving Credit Notes and Term Notes............. 85
11.12 Equalization of the Banks.................................... 85
11.13 Successor Agent Bank......................................... 86
11.14 Calculations................................................. 86
11.15 Withholding Tax.............................................. 87
11.16 Beneficiaries................................................ 88
SECTION 12- ASSIGNMENTS AND PARTICIPATIONS............................... 88
SECTION 13- INDEMNITY.................................................... 90
SECTION 14- INCREASED COSTS; TAXES; CAPITAL ADEQUACY..................... 90
14.1 Compensation for Increased Costs and Taxes................... 90
14.2 Withholding of Taxes......................................... 91
14.3 Capital Adequacy Adjustment.................................. 92
14.4 Banks' Obligation to Mitigate................................ 93
SECTION 15- NOTICES...................................................... 94
SECTION 16- MISCELLANEOUS................................................ 95
16.1 Joint and Several Liability of Borrowers..................... 95
16.2 Ratable Sharing.............................................. 95
16.3 Waiver....................................................... 96
16.4 Survival of Representations and Warranties................... 96
16.5 Invalidity................................................... 97
16.6 Assignment................................................... 97
16.7 Governing Law................................................ 97
16.8 Section Headings............................................. 97
16.9 Entire Agreement............................................. 97
16.10 Time of the Essence.......................................... 97
16.11 Modifications................................................ 97
16.12 Submission to Jurisdiction, Etc.............................. 98
16.13 Waiver of Jury Trial......................................... 99
LIST OF SCHEDULES:
Schedule 2.1 Revolving Loan Commitments and Revolving Credit
Facility Pro Rata Shares
Schedule 2.3A Schedule of Closing Fees
Schedule 3.1 Term Loan Pro Rata Shares
Schedule 6.2 Information on Borrowers
Schedule 6.7 Schedule of Indebtedness
LIST OF EXHIBITS
Exhibit A-1: Revolving Credit Note
Exhibit B-1: Term Note
Exhibit C: Application and Agreement for Letter of Credit
Exhibit D: Notice of Conversion/Continuation
Exhibit E: Request For Revolving Credit Loan
Exhibit F: Request for Swing Line Loan
Exhibit G: Compliance Certificate
Exhibit H: Stock Pledge Agreement
Exhibit I: Form of Security Agreement
Exhibit J: UCC-1
Exhibit K: Form of Borrower Counsel Opinion
Exhibit L: Form of Borrowing Base Certificate
Exhibit M: Group Financial Partners Inc. - X
Collateral Values Consolidated
1997A AMENDED AND RESTATED LOAN AGREEMENT
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THIS 1997A AMENDED AND RESTATED LOAN AGREEMENT (this "Loan Agreement"),
is made and entered into as of the 1st day of November, 1997, by and among (i)
BANK ONE, KENTUCKY, NA, a national banking association with principal office and
place of business in Louisville, Kentucky ("the Agent Bank"), (Bank One may
hereinafter be referred to as the "Banks", and also referred to as a "Bank");
(ii) BANK ONE, KENTUCKY, NA, in its capacity as the Agent Bank hereunder (in
such capacity the "Agent Bank"); (iii) BT HOLDINGS, INC., a Kentucky corporation
with principal office and place of business and registered office in Louisville,
Jefferson County, Kentucky ("BT"); (iv) XXXX TECHNOLOGIES, INC., a Florida
corporation with principal office and place of business in Orlando, Orange
County, Florida ("Xxxx"); (v) TUBE TURNS TECHNOLOGIES, INC., a Kentucky
corporation with principal office and place of business and registered office in
Louisville, Jefferson County, Kentucky ("TT"), (vi) GROUP TECHNOLOGIES
CORPORATION, a Florida corporation with principal office and place of business
in Tampa, Hillsborough County, Florida ("GTC"), (vii) METRUM-D, INC., a Delaware
corporation with principal office and place of business in Louisville, Kentucky
("MD") (BT, Xxxx, TT, GTC, and MD each, a "Borrower," and all of the foregoing
collectively, the "Borrowers"), and (viii) GROUP FINANCIAL PARTNERS, INC., a
Kentucky corporation with principal office and place of business in Louisville,
Kentucky, solely in its capacity as guarantor (the "Guarantor").
P R E L I M I N A R Y S T A T E M E N T:
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A. BT, Xxxx and TT entered into a Loan Agreement dated as of March 21,
1997 with the Agent Bank and the Bank (the "Original Loan Agreement"), whereby
the Agent Bank has extended in favor of BT, Xxxx and TT a revolving line of
credit in the amount of $20,000,000, a term loan in the amount of $10,000,000
and a swing line of credit in the amount of $3,000,000.
B. BT, Xxxx and TT wish to amend and restate the Original Loan Agreement
to provide for a revolving line of credit in the amount of $30,000,000, a term
loan in the amount of $15,000,000 and a swing line of credit in the amount of
$3,000,000, and to add GTC and MD as new borrowers and to make certain changes
to financial covenants and interest rates and other provisions of the Original
Loan Agreement.
C. The Banks desire to amend and restate the Original Loan Agreement and
to thereby establish the Revolving Credit Facility (defined herein), the Letter
of Credit Subfacility (defined herein) and the Term Loans (defined herein) in
favor of the Borrowers, and the Agent Bank desires to establish the Swing Line
Credit Subfacility (defined herein) in favor of the Borrowers, in each case upon
the terms and conditions set forth herein, and to effect other changes to
financial covenants, interest rate provisions and other provisions, as set forth
herein.
D. The Borrowers will benefit from the extension of the Revolving Credit
Facility, the Letter of Credit Subfacility, the Swing Line Credit Subfacility
and the Term Loans because such extensions of credit will enable the Borrowers
to have available and to draw from time to time credit that would not otherwise
be available to the Borrowers.
E. Group Financial Partners, Inc. ("Group Financial") owns a controlling
interest in each of the Borrowers and the financial results of the Borrowers are
reported with the financial results of Group Financial on a consolidated basis.
The Banks have requested that Group Financial pledge its stock in the Borrowers
to the Banks as collateral for the Loans, and have required the pledge of such
stock as a condition to the extensions of credit hereunder. Group Financial
desires and agrees to pledge its stock in the Borrowers to the Banks as
collateral for the Loans because the extensions of the Loans to the Borrowers
will benefit the Borrowers and Group Financial.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the mutuality, receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS AND CROSS REFERENCE
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Certain terms used in this Loan Agreement are defined in this Section 1;
other terms are defined elsewhere in this Loan Agreement.
1.1 "Accounts Receivable" means all (a) rights to payment for any goods
sold or services performed, whether such right to payment exists on the date of
this Loan Agreement or is created thereafter, and whenever and wherever
acquired, whether or not such right to payment has been earned by performance,
and whether or not such right to payment is evidenced by any document,
instrument or chattel paper, and all claims against common carriers for goods
and Inventory lost in transit; and (b) the proceeds or products of any of the
foregoing. The term "Accounts Receivable" includes the term "account" as
defined in KRS 355.9-106. The amount of an Account Receivable shall be the
amount of the receivable net of all discounts.
1.2 "Advance" means with respect to any Borrower, each and every advance
of proceeds under the Term Loans, the Revolving Credit Facility, the Letter of
Credit Subfacility, or the Swing Line Credit Subfacility, directly or
indirectly, to such Borrower, regardless of whether such advance is accounted
for under GAAP as an extension of credit, a contribution of capital or
otherwise.
1.3 "Affiliate" means, as applied to any Person, (i) any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person, (ii) any other Person that, directly or indirectly, owns or
controls, whether beneficially or as a trustee, guardian or other fiduciary, 10%
or more of the stock having ordinary voting power in the election of directors
of such Person, or (iii) each of such Person's directors and officers appointed
by the board of directors of such Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
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1.4 "Agent Bank" has the meaning assigned to that term in the introduction
to this Loan Agreement.
1.5 "Amendment to Security Agreement" means any Amendment to Security
Agreement entered into between the Agent Bank and a Borrower.
1.6 "And/or" means one or the other or both, or any one or more or all, of
the things or persons or parties in connection with which the conjunction is
used.
1.7 "Applicable LIBOR Margin" means the applicable per annum percentage
set forth in the tables appearing in Section 2.2A and Section 3.2A hereof, with
respect to LIBOR Loans.
1.8 "Applicable Letter of Credit Percentages" means the applicable per
annum percentage set forth in the table appearing in Section 2.7F of the Loan
Agreement.
1.9 "Applicable Commitment Fee Percentages" means the applicable per annum
percentage set forth in the table appearing in Section 2.3A hereof, with respect
to the calculation of Revolving Credit Facility Commitment Fees.
1.10 "Application and Agreement for Letter of Credit" means the document
substantially in the form of Exhibit C annexed hereto, with appropriate
insertions and deletions, with respect to the proposed issuance or amendment of
a Letter of Credit.
1.11 "Assignment Agreement" means an Assignment Agreement between a
Borrower and the Agent Bank, substantially in the form of Exhibit O hereto.
1.12 "Assignment of Claims Act" means the Federal Assignment of Claims
Act, 31 U.S.C. (S) 3727.
1.13 "Authorized Officer" means the President, the Financial Officer and
any other officer of BT, for itself and as agent for the other Borrowers, who,
by the Articles of Incorporation, Bylaws or Resolutions of the Board of
Directors of such Borrower, is authorized to execute and deliver this Loan
Agreement and the other Loan Documents on behalf of such Borrower.
1.14 "Banks" has the meaning assigned to that term in the introduction to
this Loan Agreement.
1.15 "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy" as now and hereafter in effect, or any successor statute.
1.16 "Base Rate" means at any time the variable interest rate per annum
that is the higher of (i) the Agent Bank's Reference Rate as announced publicly
and changing from time to time when such Reference Rate changes or (ii) the
Federal Funds Effective Rate plus 1/2%.
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1.17 "Base Rate Loan" means Loans bearing interest at rates determined
with reference to the Base Rate, as the same may change from time to time, as
provided in Section 2.2A with respect to Revolving Credit Loans that are Base
Rate Loans, and as provided in Section 3.2A with respect to Term Loans that are
Base Rate Loans.
1.18 "Xxxx Mortgage" means the mortgage dated as of the date hereof
entered into between the Agent Bank and Xxxx, for the benefit of the Banks, with
respect to Xxxx'x fee simple interest in the Xxxx Real Property, as the same may
be hereafter amended, modified, renewed, replaced, and/or restated from time to
time, whether entered into as of the Closing Date or subsequent thereto.
1.19 "Xxxx Real Property" means the real property and improvements owned
by Xxxx and located in Orlando, Florida.
1.20 "Borrowers" means each and any of the Persons identified as
"Borrowers" in the Introduction to this Loan Agreement and any new Subsidiaries
thereof hereafter acquired or created, with the consent of the Banks, pursuant
to the provisions of Section 8.1 hereof.
1.21 "Borrowers' Loan Accounts" means the accounts respectively on the
books of the Banks in which will be recorded Loans made by the Banks to the
Borrowers, payments made on such Loans and other appropriate debits and credits
as provided by this Loan Agreement.
1.22 "Borrowing Base" means the sum of: (i) eighty percent (80%) of
Eligible Accounts Receivable; (ii) fifty percent (50%) of Eligible Government
Progress Xxxxxxxx; (iii) fifty percent (50%) of Eligible Inventory except for
the Eligible Inventory of MD; and (iv) thirty five percent (35%) of the Eligible
Inventory of MD; provided, however, that whenever the Borrowing Base limitation
is in effect, no Accounts Receivable on a contract with the United States
Government or agency and no Eligible Government Progress Billings on a contract
with the United States Government or agency shall be considered in determining
the Borrowing Base unless: (a) such contract has been assigned to the Agent Bank
on behalf of the Banks, (b) such contract does not by its terms prohibit
assignment, (c) a Notice of Assignment has been filed with the contracting
official or the head of the contracting agency, the surety on any bond on the
contract and any disbursing official for the contracts, pursuant to the
Assignment of Claims Act, and (d) a copy of the filed Notice of Assignment has
been provided to the Agent Bank. The Borrowing Base limitation shall be
applicable to the extent required by Section 7.3A hereof.
1.23 "Borrowing Base Certificate" means the Borrowing Base Certificate,
substantially in the form of Exhibit L hereto, required to be delivered to the
Banks pursuant to Section 7.3A hereof.
1.24 "Business Combination" means any acquisition or merger, whether
accounted for under GAAP as a purchase or pooling of interests and regardless of
whether the value of the consideration paid or received is comprised of cash,
assets, common stock, preferred stock, partnership interests, limited liability
company or limited liability partnership interests.
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1.25 "Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the Commonwealth of Kentucky or is a
day on which banking institutions located in the Commonwealth of Kentucky are
authorized or required by law or other governmental action to close.
1.26 "Capitalization" means the sum of shareholders' equity in the
Borrowers, determined on a Combined basis, plus Funded Debt of the Borrowers,
determined on a Combined basis.
1.27 "Change in Control" means the acquisition by any Person or "group"
(as defined in Section 13 (d) (3) of the Securities Exchange Act of 1934, as
amended) of more than 50% of the Voting Stock of Group Financial or any of the
Borrowers (or such entity as ultimately becomes the successor to Group Financial
or any of the Borrowers as a result of the Proposed Merger) by a Person or
"group" other than the shareholders of Group Financial and the Borrowers in
existence as of the Closing Date, including any such acquisition by merger or
consolidation.
1.28 "Closing Date" means November 12, 1997.
1.29 "Combined" means the sum of the respective financial statement
amounts of BT, Xxxx, TT, GTC, and MD with eliminating entries prepared as if the
combined financial statements were consolidated financial statements or, in lieu
thereof, actual consolidated financial statements.
1.30 "Companies" means the Borrowers.
1.31 "Compliance Certificate" means a certificate substantially in the
form of Exhibit G annexed hereto delivered by the Borrowers to the Agent Bank
pursuant to Section 7.3F hereof.
1.32 "Contingent Obligations" means, with respect to the Borrowers, any
direct or indirect liability, contingent or otherwise (excluding all
transactions which, on a Combined basis under GAAP, should be eliminated) of the
Borrowers, (i) with respect to any indebtedness, lease, dividend, letter of
credit or other obligation of another if the primary purpose or intent thereof
by the Borrowers is to provide assurance to the obligee of such obligation of
another that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holder of such
obligation will be protected (in whole or in part) against loss in respect
thereof, or (ii) under any letter of credit issued for the account of the
Borrowers or for which the Borrowers are otherwise liable for reimbursement
thereof, or (iii) under interest rate swap agreements, interest rate collar
agreements or other similar arrangements providing interest rate protection.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by the Borrowers of the obligation of another, and (b) any liability of
the Borrowers for the obligations of another through any agreement (contingent
or otherwise) (1) to purchase, repurchase, or otherwise acquire such obligation
or any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), (2) to maintain the solvency of any balance
sheet item, level of income or financial condition of another, or (3) to make
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take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, in the case of any agreement described
under subclauses (1), (2) or (3) of this sentence if the primary purpose or
intent thereof is as described in clause (i) of the preceding sentence. The
amount of any Contingent Obligation, as at any time of determination, shall be
equal to the amount of the obligation so guaranteed or otherwise supported at
such time of determination which amount shall be deemed to be the amount of such
obligation guaranteed, as reasonably estimated by the Borrowers, if such amount
cannot be specifically determined at the time of determination.
1.33 "Covered Tax" means any Tax that is not an Excluded Tax.
1.34 "Current Maturities of Long Term Debt" means the current principal
maturities of all indebtedness for borrowed money (including but not limited to
amortization of capitalized lease obligations) having an original term of one
year or more.
1.35 "Date of Determination" means, for purposes of determining the
applicable Pricing Level on any Pricing Level Calculation Date, the last day of
the most recently ended calendar month.
1.36 "Default Rate" means, for any Loan, the Base Rate plus two percent
(2.00%).
1.37 "Designated Interest Rate Agreement" has the meaning set forth in
Section 8.13 hereof.
1.38 "Dollars" or "$" means lawful currency of the United States of
America.
1.39 "EBIT" means, for the period in question, the sum of the amounts for
such period of the Borrowers' (i) Net Income, (ii) Interest Expense, and (iii)
provisions for taxes based on income.
1.40 "EBITDA" means, as of the end of any Fiscal Quarter, the sum of the
Borrowers' (i) Net Income, (ii) Interest Expense, (iii) provisions for taxes
based on income, (iv) depreciation, and (v) amortization for the previous four
Fiscal Quarters, determined on a Combined basis in accordance with GAAP. The
calculation of EBITDA shall exclude the following: (i) gains or losses on
dispositions of noncurrent assets, (ii) losses on writedowns of noncurrent
assets or lease obligation, (iii) the cumulative effect of change in accounting
principles and (iv) certain non-routine compensation paid to shareholders and/or
employees of Group Financial in the fourth Fiscal Quarter of 1996 and the first
Fiscal Quarter of 1997 and, for purposes of calculating the ratio of Funded Debt
to EBITDA, losses of the Mexican and Brazilian operations of GTC which were sold
June 30, 1997.
1.41 "EBITDARP" means, as of the end of any Fiscal Quarter, the sum of
the Borrowers' (i) Net Income, (ii) Interest Expense, (iii) provisions of taxes
based on income (iv) depreciation, (v) amortization, (vi) rent expense and
(vii) defined benefit pension expense for the previous four Fiscal Quarters,
determined on a Combined basis in accordance with GAAP. The calculation of
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EBITDARP shall exclude the following: (i) gains or losses on dispositions of
noncurrent assets or lease obligations, (ii) losses on writedowns of noncurrent
assets or lease obligations, (iii) the cumulative effect of changes in
accounting principles, (iv) certain non-routine compensation paid to
shareholders and/or employees of Group Financial in the fourth Fiscal Quarter of
1996 and the first Fiscal Quarter of 1997 and (v) losses of the Mexican and
Brazilian operations of GTC which were sold June 30, 1997.
1.42 "Eligible Accounts Receivable" means all of the Accounts Receivable
of the Borrower except (i) those rights to payment which are ninety (90) days
past the first date on which the invoice for such Accounts Receivable first
became due provided such due date is not more than thirty (30) days after the
date of the invoice or its issuance, whichever is earlier; (ii) those Accounts
Receivable from or against a debtor which has instituted bankruptcy, insolvency,
reorganization, liquidation, or receivership proceedings, or against which a
petition for any such proceeding has been filed and not contested within thirty
(30) days thereafter; (iii) those Accounts Receivable due from the United States
Government (or any agency or instrumentality thereof) which must be created
and/or perfected pursuant to the Assignment of Claims Act, to the extent that
the Borrowing Base is then in effect and the Borrowers have failed to comply
with the conditions set forth in the definition of "Borrowing Base" or if the
Agent Bank has requested that the Borrowers comply with such Act and Borrowers
have failed to do so; (iv) any Accounts Receivable which under applicable
federal, state and/or local law (a) may not be assigned to the Agent Bank, or
(b) whose assignment to the Agent Bank is restricted or limited in any way, or
(c) the Agent Bank may not assert or recover against its account debtor; (v) any
Account Receivable evidenced by a note or other instrument which has not been
endorsed and delivered to the Agent Bank under the Security Agreement; (vi)
Accounts Receivable originating in or subject to the laws of any jurisdiction
other than the United States of America, the fifty States of the United States
of America and the District of Columbia; (vii) Accounts Receivable payable in
any medium or currency other than U.S. Dollars; (viii) Accounts Receivable
payable by any Affiliate of the Borrowers; (ix) Accounts Receivable which do not
comply with all applicable laws, with respect to which the Agent Bank's security
interest is not perfected to the Agent Bank's satisfaction, which are subject to
defenses, set-offs or counterclaims, or are subject to liens, charges, interests
or encumbrances other than those in favor of the Agent Bank, (x) any Accounts
Receivable which the Agent Bank reasonably deems ineligible and (xi) the portion
of an Account Receivable due from the United States Government for which a
Borrower has submitted a progress billing.
1.43 "Eligible Inventory" means all Inventory of the Borrower, which is
not obsolete, spoiled, or otherwise unsalable in the ordinary course of its
business, and with respect to which where required by the Agent Bank, landlord's
lien waivers will be obtained, to the extent possible, on a best efforts basis,
if the Inventory is kept at any location which is not owned in fee by the
Borrowers.
1.44 "Eligible Equipment" means all Equipment of Borrower except fixtures
and leasehold improvements.
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1.45 "Eligible Government Progress Billings" means progress billings on
contracts with the United States Government.
1.46 "Environmental Audit" has the meaning set forth in Section 5.1Q
hereof.
1.47 "Environmental Complaint" means any complaint, order, directive,
claim, citation or notice by any governmental authority or any other Person
described in Section 6.13E hereof.
1.48 "Equipment" means, when used with respect to any Person, all of the
following, whether owned or held on the date of this Agreement or acquired
thereafter: the equipment, machinery, furniture and leasehold improvements,
owned by such Person, used or intended for use by such Person in the conduct of
such Person's business, but excluding all motor vehicles with respect to which
any jurisdiction has issued a certificate of title. Some of the Equipment in
existence on the date of this Agreement may be more particularly described on
any UCC-1 financing statement executed in favor of the Agent Bank in connection
with this Agreement or one of the other Loan Documents, and in one or more
Exhibits referenced in one or more Schedules to this Agreement or one of the
other Loan Documents.
1.49 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
1.50 "Events of Default" means the occurrence or happening of any of the
matters set forth in Section 9 hereof.
1.51 "Excluded Tax" means any of the following taxes, levies, imposts,
duties, deductions, withholdings or charges, and all liabilities with respect
thereto: (i) Taxes imposed on the net income of any Bank or a Tax Transferee
(including without limitation branch profits taxes, minimum taxes and taxes
computed under alternative methods, at least one of which is based on net
income) (collectively referred to as "net income taxes") by (A) the United
States of America, (B) the jurisdiction under the laws of which such Bank or Tax
Transferee is organized or any political subdivision thereof, or (C) the
jurisdiction of such Bank's or Tax Transferee's applicable lending office or any
political subdivision thereof, or (D) any jurisdiction in which such Bank or Tax
Transferee is doing business, (ii) any Taxes to the extent that they are in
effect and would apply to a payment to any Bank as of the Closing Date, or as of
the date such Person becomes a Bank, in the case of any assignee pursuant to
Section 12 hereof, (iii) any Taxes that are in effect and would apply to a
payment to a Tax Transferee as of the date of acquisition of any portion of the
Revolving Credit Loans by such Tax Transferee or the date of the change of
lending office of such Tax Transferee, as the case may be (provided however that
a Person shall not be considered a Tax Transferee for purposes of this clause
(iii) as a result of a change of its lending office or the taking of any other
steps pursuant to Section 14.4 hereof), (iv) any Taxes to the extent of any
credit or other Tax benefit available to any Bank or Tax Transferee, as
applicable, as a result thereof, or (v) any Taxes that would not have been
imposed but for the failure by any Bank or Tax Transferee, as applicable, to
provide and keep current any certification or other documentation required to
qualify for an exemption from or reduced rate of any Tax.
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1.52 "Existing Studies" has the meaning set forth in Section 5.1Q.
1.53 "Federal Funds Effective Rate" for any day means the rate per annum
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
1.54 "Financial Officer" means the chief financial officer of BT or other
officer who is the highest ranking officer with responsibility for the financial
affairs of BT.
1.55 "Fiscal Quarter" means a fiscal quarter of the Borrowers. The Fiscal
Quarters of the Borrowers will be reported as of on the last day of each March,
June, September and December of each calendar year.
1.56 "Fiscal Year" means a fiscal year of the Borrowers. The Borrowers'
current Fiscal Year ends on the last day of December of each calendar year.
1.57 "Fixed Charge Coverage Ratio" means, as of any Date of Determination
thereof, the ratio of (i) the sum of the Borrowers' EBITDARP to (ii) the sum of
the Borrowers' Interest Expense, Current Maturities of Long Term Debt, income
taxes, rent and defined benefit pension contribution.
1.58 "Funded Debt" means, with respect to the Borrowers on a Combined
basis in accordance with GAAP, (i) all indebtedness for borrowed money,
including, without limitation, all Revolving Credit Loans, all Swing Line Loans,
all reimbursement obligations in respect of all letters of credit, including the
Letters of Credit and the Term Loans, (ii) mandatorily redeemable preferred
stock of a Borrower (except any mandatorily preferred stock owned by another
Borrower or the Guarantor), (iii) that portion of obligations with respect to
capital leases which is properly classified as a liability on a balance sheet in
conformity with GAAP, (iv) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(v) any obligation owed for all or any part of the deferred purchase price of
property or services which purchase price is (y) due more than six months from
the date of the incurring of the obligation in respect thereof, or (z) evidenced
by a note or similar written instrument, but excluding trade payables incurred
in the ordinary course of business, (vi) all indebtedness secured by any lien on
any property or asset owned by the Borrowers regardless of whether the
indebtedness secured thereby shall have been assumed by the Borrowers or is non-
recourse to the credit of the Borrowers but only to the extent of the fair
market value of any such property or assets, and (vii) all other Contingent
Obligations of the Borrowers not otherwise included in clauses (i) through (vi)
of this Section. For purposes of calculating Funded Debt to be used in
financial ratios in this Agreement,
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the Borrowers, at their option, may reduce Funded Debt on a dollar-for-dollar
basis by an amount equal to cash then on deposit with the Agent Bank in excess
of $2,000,000.
1.59 "Funding Date" means the date of the funding of a Revolving Credit
Loan.
1.60 "GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, as applied in accordance with Sections 1.139 and 7.3
hereof.
1.61 "General Intangibles" means all intangible personal property
(including things in action) other than goods, accounts, chattel paper,
documents and instruments (all as defined in the Uniform Commercial Code),
whether such personal property is owned on the date of this Loan Agreement, or
is acquired thereafter, and shall include, but is not limited to, all existing
and future royalties, rights, claims, benefits and proceeds in, under or to any
franchise agreements, insurance policies, customer lists, choses in action,
books, records, patents and patents applications, copyrights, trademarks, trade
names, trade secrets, sales contracts, licenses, certificates of need, permits,
tax and any other types of refunds, returned and unearned insurance premiums,
claims, product designs, drawings, technical data, computer programs, computer
tapes and software, catalogs, blue prints, contract rights, and all rights as an
unpaid vendor or lienor, including stoppage in transit, replevin or reclamation.
The term "General Intangible" includes "general intangible" as defined in KRS
355.9-106.
1.62 "Group Financial" has the meaning assigned that term in the
introduction to this Loan Agreement.
1.63 "Guaranty Agreement" means the Guaranty Agreement between Group
Financial and the Agent Bank, whereby Group Financial has guaranteed the
Borrowers' payment of the Loans.
1.64 "Hazardous Discharge" means any event described in Section 6.13D
hereof.
1.65 "Hazardous Materials" means any and all substances, chemicals or
wastes (including, without limitation, asbestos, polychlorinated biphenyls
("PCBs") and petroleum) that are designated or defined (either by inclusion in a
list of materials or by reference to exhibited characteristics) as hazardous,
toxic or dangerous, or as a pollutant or contaminant in any of the Relevant
Environmental Laws.
1.66 "Interest Expense" means, for the period in question, total interest
expense (including that attributable to capital leases in conformity with GAAP)
of the Borrowers with respect to all outstanding Funded Debt of the Borrowers,
including, without limitation, all capitalized interest, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs and benefits under interest rate
agreements, whether
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payable in cash or accrued (including amortization of discount), net of any
interest income all as determined on a Combined basis in accordance with GAAP.
1.67 "Interest Payment Date" means, (i) with respect to each Base Rate
Loan, the last day of each calendar quarter during which such Base Rate Loan is
outstanding in whole or in part, (ii) with respect to each LIBOR Loan, the
ninetieth (90th) day of the Interest Period applicable to such LIBOR Loan,
and/or the last day of the Interest Period applicable to such LIBOR Loan,
whichever is earlier , (iii) with respect to each Swing Line Loan, the last day
of each calendar quarter during which such Swing Line Loan is outstanding in
whole or in part, and (iv) with respect to all Revolving Credit Loans, and Swing
Line Loans, and the Term Loans, the date of maturity thereof.
1.68 "Interest Period" means any interest period applicable to a LIBOR
Loan, as determined pursuant to Section 2.2B hereof with respect to the
Revolving Credit Loans that are LIBOR Loans and as determined pursuant to
Section 3.2B hereof with respect to the Term Loans that are LIBOR Loans.
1.69 "Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement.
1.70 "Interest Rate Determination Date" means each date for calculating
the LIBOR for purposes of determining the interest rate in respect of an
Interest Period. The Interest Rate Determination Date shall be the date which is
two (2) Business Days prior to the related Interest Period for a LIBOR Loan.
1.71 "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
1.72 "Inventory" means all of the following, whether owned or held on the
date of this Agreement or acquired thereafter: All goods held for sale or lease;
all goods to be furnished under contracts of service, and after so furnishing
them; all raw materials, work in process or materials used or consumed in
business, and all goods returned to or repossessed by their seller.
1.73 "Letters of Credit" means all standby letters of credit or similar
instruments issued by the Agent Bank for the account of the Borrowers pursuant
to Section 2.7 of the Loan Agreement for the purpose of securing the
performance, payment, deposit or surety obligations of a Borrower or a
Subsidiary of a Borrower.
1.74 "Letter of Credit Subfacility" means the commitment of the Agent
Bank, to issue Letters of Credit for the account of a Borrower or a Subsidiary
of a Borrower up to an aggregate amount at any one time outstanding of Five
Million Dollars ($5,000,000). The Letter of Credit Subfacility is a sublimit of
the Revolving Credit Facility.
1.75 "Letter of Credit Fee" has the meaning assigned to that term in
Section 2.7F(i) hereof.
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1.76 "Letter of Credit Fronting Fee" has the meaning assigned to that term
in Section 2.7F(v) hereof.
1.77 "Letter of Credit Usage" means, as at any date, the sum of (i) the
maximum aggregate amount which is or at any time thereafter may become available
for drawing under all Letters of Credit then outstanding, plus (ii) the
aggregate amount of all drawings under all Letters of Credit honored by the
Agent Bank and not theretofore reimbursed by the Borrowers to the Agent Bank,
whether by virtue of the Banks making a Revolving Credit Loan to the Borrowers
to enable the Borrowers to reimburse the Agent Bank for such drawing or
otherwise.
1.78 "LIBOR Loan" means any advance or any part of the principal of any
Revolving Credit Loan or Term Loan for which the Borrower has properly selected
an Interest Period and which is to bear interest at LIBOR plus the Applicable
LIBOR Margin.
1.79 "LIBOR" means, for a particular LIBOR Loan for a particular Interest
Period, the annual rate of interest determined by the Agent Bank in accordance
with its usual procedures (which determination shall be conclusive absent
manifest error) (rounded, if necessary, to the nearest 1/16 of 1%) to be the
"offered" Eurodollar rate as of 11:00 a.m. London time two Business Days
preceding the first day of the Interest Period for such LIBOR Loan for deposits
in immediately available funds in United States dollars for delivery on the
first day of such Interest Period for an amount substantially equal to the
principal amount of that LIBOR Loan and for a period approximately equal to such
Interest Period, as shown on the TeleRate Service or as published by a
comparable interest rate reporting service selected by the Agent Bank.
1.80 "Loan" means a Revolving Credit Loan, a Swing Line Loan, or the Term
Loans.
1.81 "Loan Agreement" means this Loan Agreement as further amended,
supplemented or otherwise modified from time to time.
1.82 "Loan Documents" means this Loan Agreement, the Revolving Credit
Notes, the Term Notes, each Application and Agreement for Letter of Credit, the
Stock Pledge Agreement, the Security Agreements, the Mortgages, any Interest
Rate Agreement and all other agreements, documents and instruments now or
hereafter evidencing and/or pertaining to this Loan Agreement and/or the other
Obligations, and as may be further amended, supplemented or otherwise modified
from time to time.
1.83 "Mortgaged Properties" means all the real property, personal property
and fixtures encumbered by the Mortgages.
1.84 "Mortgages" means the Xxxx Mortgage and the TT Mortgage.
1.85 "Mortgage Modification" means any amendment to a Mortgage entered
into between the Agent Bank as mortgagee and a Borrower as mortgagor.
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1.86 "Net Worth" means the sum of the Borrowers' retained earnings, profit
after tax and amount for capital stock, determined on a Combined basis in
accordance with GAAP.
1.87 "Net Income" means, for the period in question, the net income (or
loss) of the Borrowers for such period taken as a single accounting period,
determined on a Combined basis in accordance with GAAP and excluding any
extraordinary items.
1.88 "Notice of Assignment" means a notice of assignment of contract filed
with a United States Government contracting official or head of contracting
agency, the surety on a bond for the contract and any disbursing official on the
contract, pursuant to the Assignment of Claims Act. The form for the Notice of
Assignment is set forth in Exhibit N hereto.
1.89 "Notice of Conversion/Continuation" means the Notice in the form of
Exhibit D annexed hereto with respect to the conversion and/or continuation of
the interest rate(s) applicable to the Revolving Credit Loans, as set forth in
Section 2.2B hereof, and with respect to the conversion and/or continuation of
the interest rate applicable to the Term Loans, as set forth in Section 3.2B
hereof.
1.90 "Obligations" means, collectively, (i) the entire unpaid principal
balance of and all interest now accrued or hereafter to accrue on the Revolving
Credit Notes, (ii) the entire unpaid principal balance of and all interest now
accrued or hereafter to accrue on the Swing Line Credit Subfacility, (iii) the
entire unpaid principal balance of and all interest now accrued or hereafter to
accrue on the Term Notes, (iv) the obligation of the Borrowers to reimburse the
Agent Bank for all drafts honored by the Agent Bank under Letters of Credit
together with accrued interest thereon, (v) the performance of all of the
covenants, agreements and obligations of the Borrowers hereunder and under the
other Loan Documents, and (vi) all other liabilities, obligations, covenants and
duties owing by the Borrowers to any Bank arising under or pursuant to this Loan
Agreement or the other Loan Documents of any kind or nature, present or future,
and whether or not evidenced by any note, guaranty or other instrument. The term
"Obligations" includes, without limitation, all interest, charges, expenses,
reasonable attorneys' fees and any other sums chargeable to the Borrowers under
this Loan Agreement and/or any other Loan Document.
1.91 "Operating Lease/Rental Expense" means that portion of obligations
with respect to non-capital leases.
1.92 "Permitted Acquisition" means an acquisition proposed to be made by
one of the Borrowers that has been consented to by the Banks, pursuant to
Section 8.1 hereof.
1.93 "Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
other entity or group, institution, party or government, whether federal, state,
county, city, municipal or other, or any agency or division thereof.
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1.94 "Potential Default" means the occurrence of any act or event which,
with the giving of notice and/or the passage of time, or both, would become an
Event of Default.
1.95 "Pricing Level" means, for any Pricing Period, Pricing Level I,
Pricing Level II, Pricing Level III, Pricing Level IV, or Pricing Level V,
Pricing Level VI, Pricing Level VII, or Pricing Level VIII, as may be in effect
for such Pricing Period; provided that, the Default Rate shall be in effect upon
the occurrence and during the continuation of any Event of Default.
1.96 "Pricing Level I" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as at the relevant Date of Determination, the
ratio of the Borrowers' Funded Debt as measured on such Date of Determination,
to the Borrowers' EBITDA as measured on such Date of Determination, is equal to
or greater than 0 to 1.00 but is less than or equal to .99 to 1.00.
1.97 "Pricing Level II" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as at the relevant Date of Determination, the
ratio of the Borrowers' Funded Debt as measured on such Date of Determination,
to the Borrowers' EBITDA as measured on such Date of Determination, is equal to
or greater than 1.00 to 1.00 but is less than or equal to 1.49 to 1.00.
1.98 "Pricing Level III" means the Pricing Level that will be in effect
for the applicable Pricing Period if, as at the relevant Date of Determination,
the ratio of the Borrowers' Funded Debt as measured on such Date of
Determination, to the Borrowers' EBITDA as measured on such Date of
Determination, is equal to or greater than 1.50 to 1.00 but is less than or
equal to 1.74 to 1.00.
1.99 "Pricing Level IV" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as of the relevant Date of Determination, the
ratio of the Borrowers' Funded Debt as measured on such Date of Determination,
to the Borrowers' EBITDA as measured on such Date of Determination, is equal to
or greater than 1.75 to 1.00 but is less than or equal to 1.99 to 1.00.
1.100 "Pricing Level V" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as of the relevant Date of Determination, the
ratio of the Borrowers' Funded Debt as measured on such Date of Determination,
to the Borrowers' EBITDA as measured on such Date of Determination, is equal to
or greater than 2.00 to 1.00 but is less than or equal to 2.24 to 1.0.
1.101 "Pricing Level VI" means the Pricing Level that will be in effect
for the applicable Pricing Period if, as of the relevant Date of Determination,
the ratio of the Borrowers' Funded Debt as measured on such Date of
Determination, to the Borrowers' EBITDA as measured on such Date of
Determination, is equal to or greater than 2.25 to 1.00 but is less than or
equal to 2.49 to 1.00.
1.102 "Pricing Level VII" means the Pricing Level that will be in effect
for the applicable Pricing Period if, as of the relevant Date of Determination,
the ratio of the Borrowers' Funded Debt as measured on such Date of
Determination, to the Borrowers' EBITDA as measured on such Date of
Determination, is equal to or greater than 2.50 to 1.00 but is less than or
equal to 2.99 to 1.00.
1.103 "Pricing Level Calculation Date" means the date of the delivery to
the Banks of a Compliance Certificate in the form of Exhibit G hereto
demonstrating the appropriate Pricing Level,
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which delivery can occur on any date from the prior Date of Determination to the
date of delivery of the Borrowers' financial statements for the particular month
then ended as required by Section 7.3B hereof.
1.104 "Pricing Period" means, with respect to any Date of Determination,
the period commencing on the day immediately after such Date of Determination
and ending on the next Date of Determination.
1.105 "Proposed Merger" means a proposed series of transactions, whereby
(i) Group Financial will convert the preferred shares of GTC held by it and
merge into GTC, with GTC being the surviving entity and BT, Xxxx and TT becoming
subsidiaries of GTC; (ii) the creation of a new corporation known as "Xxxx
Acquisition Corporation" ("New Xxxx"), and the merger of the existing Xxxx into
New Xxxx, with New Xxxx being the surviving entity and changing its name to
"Xxxx Technologies, Inc."; (iii) the creation of a new corporation known as "New
Tube Turns Technologies, Inc." ("New TT"), and the merger of existing TT into
New TT, with New TT being the surviving entity and changing its name to "Tube
Turns Technologies, Inc."; (iv) the reincorporation of GTC in the state of
Delaware; (v) the creation of a new subsidiary of GTC to be known as "GTC
Acquisition Corporation" ("New GTC") and transfer of assets and liabilities of
the old GTC into the new GTC; (vi) a reverse stock split involving GTC; and
(vii) after all transactions have been completed, old GTC will be the parent
corporation, which shall own 100% of BT, New GTC, New Xxxx and New TT.
1.106 "Real Property" means, collectively, the Xxxx Real Property and the
TT real Property.
1.107 "Relevant Environment Laws" means any and all federal, state and
local laws, codes, ordinances, rules, regulations, reported and publicly
available orders, reported judicial determinations, and reported and publicly
available decisions of an executive body or any governmental and quasi-
governmental entity, whether in the past, the present or the future, pertaining
to health, safety or the environment in effect in any and all jurisdictions in
which the Borrower is or at any time may be doing business, or where the Real
Property is located. The Relevant Environmental Laws shall include, but shall
not be limited to, the following: (1) the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sections 9601, et seq.; the Superfund
Amendments and Reauthorization Act, Public Law 99-949, 100 Stat. 1613; the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.; the
National Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking
Water Act, 42 U.S.C. Sections 300F, et seq.; the Toxic Substances Control act,
15 U.S.C. Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251,
et seq.; the Clean Air Act, 42 U.S.C. Section 7401, et seq.; and the regulations
promulgated in connection therewith; (2) EPA regulations pertaining to asbestos
(including 29 C.F.R. Sections 1910.1001 and 1926.58); and any state and local
laws and regulations pertaining to Hazardous Materials and/or asbestos.
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1.108 "Request for Revolving Credit Loan" means the Request in the form of
Exhibit E annexed hereto with respect to a proposed Revolving Credit Loan to be
delivered by the Borrowers to the Agent Bank pursuant to Section 0.xX hereof.
1.109 "Request for Swing Line Loan" means the Request in the form of
Exhibit F annexed hereto with respect to a proposed Swing Line Loan to be
delivered by the Borrowers to the Agent Bank pursuant to Section 2.6A hereof.
1.110 "Revolving Credit Facility" means the revolving line of credit
established by the Banks in favor of the Borrowers in the principal amount of
Thirty Million Dollars ($30,000,000) pursuant to which the Borrowers may obtain
Revolving Credit Loans from the Banks and/or Letters of Credit from the Agent
Bank during the term of the Revolving Credit Facility upon the terms and
conditions set forth in this Loan Agreement. The Revolving Credit Facility
includes as a sublimit the Letter of Credit Subfacility and the Swing Line
Credit Subfacility. All references to the "aggregate principal balance of the
Revolving Credit Loans outstanding" or similar phrases in this Loan Agreement or
in the Revolving Credit Notes shall mean, as of the date of determination
thereof, the sum of (i) the entire aggregate outstanding principal balance of
all Revolving Credit Loans made by the Banks pursuant to this Loan Agreement,
(ii) the then existing Letter of Credit Usage and (iii) the then existing Swing
Line Usage.
1.111 "Revolving Credit Facility Commitment Fees" has the meaning set
forth in Section 2.3C hereof.
1.112 "Revolving Credit Facility Pro Rata Shares" means, with respect to
each Revolving Loan Commitment of each Bank, the percentage set forth opposite
that Bank's name on Schedule 2.1 annexed hereto; provided that Schedule 2.1
shall be amended and each Bank's Revolving Credit Facility Pro Rata Share shall
be adjusted from time to time to give effect to the addition or removal of any
Bank as provided herein or by assignment pursuant to Section 12 hereof.
1.113 "Revolving Credit Loans" means advances of principal of the
Revolving Credit Facility made pursuant to Section 2 hereof by the Banks to the
Borrowers from time to time pursuant to, and subject to the terms and conditions
set forth in, this Loan Agreement to support the working capital needs of the
Borrowers and for the other purposes described in Section 2.5A hereof.
1.114 "Revolving Credit Note" means that certain Amended and Restated
Revolving Credit Promissory Note dated of even date with this Loan Agreement,
made by the Borrowers, payable to the order of Bank One, and in the face
principal amount of Thirty Million Dollars ($30,000,000), a form of which is
annexed to this Loan Agreement as Exhibit A-1, as the same may hereafter be
amended, modified, renewed, replaced and/or restated from time to time and each
future Revolving Credit Promissory Note, if any, made by the Borrowers pursuant
to the Revolving Credit Facility.
1.115 "Revolving Loan Commitments" means each Bank's commitment to
maintain or make Revolving Credit Loans and Swing Line Loans and/or to issue
Letters of Credit as set forth in Section 2.1 hereof.
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1.116 "Revolving Loan Commitment Termination Date" means the Revolving
Loan Commitment Termination Date then in effect, which shall be the earliest of
(i) September 30, 2002, (ii) the date as of which the Obligations shall have
become immediately due and payable pursuant to Section 9 of the Loan Agreement
and (iii) the date on which all of the Obligations are paid in full (including,
without limitation, the repayment, expiration, termination or cash
collateralization of Letters of Credit pursuant to this Loan Agreement) and the
Revolving Loan Commitments are reduced to zero.
1.117 "S-4" means the S-4 of GTC, describing the Proposed Merger.
1.118 "Security Agreement" means any of the Security Agreements dated as
of March 21, 1997 or as of the date hereof entered into between the Agent Bank
and the Borrowers, for the benefit of the Banks, as the same may hereafter be
amended, modified, renewed, replaced and/or restated from time to time, whether
entered into as of the Closing Date, or subsequent thereto, substantially in the
form of Exhibit I annexed hereto, as well as any of the Amendments to the
Security Agreements.
1.119 "Senior Funded Debt" means, as at any date on which the amount
thereof shall be determined, all obligations and indebtedness of the Borrowers
owed to the Banks, all as determined on a Combined basis in accordance with
GAAP.
1.120 "Stock Pledge Agreement" means that certain Stock Pledge Agreement
in the form of Exhibit H hereto, dated as of the date of this Agreement, between
Group Financial and the Agent Bank, for the benefit of the Banks.
1.121 "Subsidiary" means (i) any corporation of which more than 50% of the
outstanding Voting Stock is at the time owned by a Borrower or by one or more of
its Subsidiaries, and (ii) any Person controlled by a Borrower or by one or more
of its Subsidiaries, whether by virtue of voting interest, other beneficial
interest or by voting agreement, contract, proxy or otherwise.
1.122 "Swing Line Commitment Period" means the period from the Closing
Date through the Swing Line Commitment Termination Date.
1.123 "Swing Line Credit Subfacility" means the sums advanced or to be
advanced by the Agent Bank as described in Section 2.6 hereof.
1.124 "Swing Line Loan" means advances of principal of the Swing Line
Credit Subfacility made by the Agent Bank to the Borrowers from time to time
pursuant to, and subject to the terms and conditions set forth in, this Loan
Agreement for the other purposes described in Section 2.6 hereof.
1.125 "Swing Line Commitment Termination Date" means the same date as the
Revolving Loan Commitment Termination Date.
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1.126 "Swing Line Usage" means, as at any date of determination thereof,
the sum of the maximum aggregate principal amount of all outstanding Swing Line
Loans, which amount shall never exceed Three Million Dollars ($3,000,000).
1.127 "Tangible Net Worth" means, as at any date on which the amount
thereof shall be determined, the Net Worth of the Borrowers as determined in
accordance with GAAP, minus the value of any intangible assets, including,
without limitation, organization expenses, patents, trademarks, copyrights,
goodwill, research and development, training cost and unamortized debt discount.
1.128 "Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, governmental fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net income"
of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or, in the case of any
Bank, its lending office) is located on all or part of the net income, profits
or gains of that Person (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
1.129 "Tax Transferee" means any Person who acquires any interest in the
Revolving Credit Loans (whether or not by operation of law) or the office to
which any Bank has transferred its Revolving Credit Loans for purposes of
determining where such Bank's Revolving Credit Loans are made, accounted for or
booked.
1.130 "Term Loan Maturity Date" means September 30, 2002.
1.131 "Term Loan Pro Rata Shares" means, with respect to each Bank's share
of the Term Loans, the percentage set forth opposite that Bank's name on
Schedule 3.1 annexed hereto; provided that Schedule 3.1 shall be amended and
each Bank's Term Loan Pro Rata Share shall be adjusted from time to time to give
effect to the addition or removal of any Bank as provided herein or by
assignment pursuant to Section 12 hereof.
1.132 "Term Loans" means the term loans in the principal amount of up to
Fifteen Million Dollars ($15,000,000.00) made by the Banks to the Borrowers
pursuant to this Loan Agreement.
1.133 "Term Notes" means, collectively, that certain Amended and Restated
Term Promissory Note of even date herewith, made by the Borrower, payable to the
order of Bank One, and in the face principal amount of Fifteen Million Dollars
($15,000,000.00), a form of which is annexed hereto as Exhibit B-1, as the same
may hereafter be amended, modified, renewed, replaced and/or restated from time
to time and any other term promissory note executed by the Borrowers in
connection with this Loan Agreement.
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1.134 "Total Utilization of Revolving Loan Commitments" means, as at any
date of determination thereof, the sum of (i) the aggregate principal amount of
all outstanding Revolving Credit Loans, (ii) the Letter of Credit Usage and
(iii) the Swing Line Usage.
1.135 "TT Mortgage" means the Mortgage dated as of the date hereof entered
into between the Agent Bank and TT, for the benefit of the Banks, with respect
to TT's fee simple interest in the TT Real Property, as the same may be
hereafter amended, modified, renewed, replaced, and/or restated from time to
time, whether entered into as of the Closing Date, or subsequent thereto.
1.136 "TT Real Property" means the real property and improvements owned by
TT and located in Louisville, Kentucky.
1.137 "Uniform Commercial Code" means the Uniform Commercial Code in
effect in the Commonwealth of Kentucky, currently codified as KRS 355.101 et
seq.
1.138 "Voting Stock" means the shares of capital stock or other securities
of the Borrowers entitled to vote generally in the election of the directors of
the Borrowers.
1.139 Accounting Terms and Financial Information.
A. Accounting Terms. For purposes of this Loan Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP and all financial statements and certificates
and reports as to financial matters required to be delivered to the Agent Bank
hereunder shall (unless otherwise disclosed to the Agent Bank in writing at the
time of delivery thereof in the manner described in paragraph B of this Section)
be prepared in accordance with GAAP applied on a basis consistent with GAAP as
applied in the preparation of the latest financial statements furnished to the
Agent Bank hereunder.
B. Accounting Variances. Group Financial, for itself and the other
Borrowers, shall deliver to the Agent Bank at the same time as the delivery of
any annual or quarterly financial statement under Section 7.3 hereof, (i) a
description in reasonable detail of any variation between the application of
accounting principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements (which variation materially
affects the presentation of the financial position or results of operations of
the Borrowers on a Combined basis in accordance with GAAP) and (ii) reasonable
estimates of the difference between such statements arising as a consequence
thereof.
1.140 Other Definitional Provisions. Any reference in this Loan Agreement
(i) to a Section, an Annex, a Schedule or an Exhibit is a reference to a section
hereof, an annex hereto, a schedule hereto or an exhibit hereto, respectively;
and (ii) to a subsection or a clause is, unless otherwise stated, a reference to
a subsection or a clause of the Section or subsection in which the reference
appears. In this Loan Agreement the singular includes the plural and the plural
the singular; "hereof," "herein," "hereto," "hereunder" and the like mean and
refer to this Loan
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Agreement as a whole and not merely to the specific section, paragraph or clause
in which the respective word appears; words importing any gender include the
other genders; references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute referred
to; references to "writing" include printing, typing, lithography and other
means of reproducing words in a tangible visible form; the words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments, supplements, assignments and other
modifications thereto, but only to the extent such modifications are not
prohibited by the terms of this Loan Agree ment, and references to Persons
include their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons.
SECTION 2
REVOLVING CREDIT FACILITY
-------------------------
Subject to the terms and conditions of this Loan Agreement, the Banks
hereby establish the Revolving Credit Facility in favor of the Borrowers in the
principal amount of Thirty Million Dollars ($30,000,000). Pursuant to the
Revolving Credit Facility, the Borrowers may obtain Revolving Credit Loans
and/or Letters of Credit pursuant to, and subject to the terms and conditions
set forth in, this Loan Agreement for the purposes set forth in Sections 2.5A
and 2.7 hereof. The Revolving Credit Facility is subject to the following terms
and conditions:
2.1 Revolving Loan Commitments, Revolving Credit Loans.
A. Revolving Loan Commitments. Each Bank severally agrees, subject
to the limitations set forth below with respect to the maximum amount of
Revolving Credit Loans permitted to be outstanding from time to time, to lend to
the Borrowers from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Revolving Credit Facility Pro Rata Share of the aggregate
Revolving Loan Commitments. The amount of each Bank's Revolving Loan Commitment
is set forth opposite its name on Schedule 2.1 annexed to this Loan Agreement
and the aggregate amount of the Revolving Loan Commitments is Thirty Million
Dollars ($30,000,000); provided, the amount of the Revolving Loan Commitments
shall be reduced from time to time by the amount of any voluntary reductions
that are allowed to be made pursuant to Section 2.4D hereof (it being understood
that all references to the Revolving Loan Commitments of the Banks set forth in
this Loan Agreement shall mean the initial Revolving Loan Commitments of the
Banks set forth on Schedule 2.1 annexed to this Loan Agreement, as reduced by
any voluntary reductions of the Revolving Loan Commitments effected by the
Borrowers pursuant to Section 2.4D of the Loan Agreement). Each Bank's Revolving
Loan Commitment shall expire on the Revolving Loan Commitment Termination Date
and all Revolving Credit Loans shall be paid in full no later than that date.
Amounts borrowed under this Section 0.xX may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date, subject to the
provisions of Section 2.4C hereof.
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Anything contained in this Loan Agreement to the contrary notwithstanding,
the Revolving Credit Loans and the Revolving Loan Commitments shall be subject
to the following limitations:
(i) The Letter of Credit Subfacility is a sublimit under the
Revolving Credit Facility. The amount otherwise available for borrowing under
the Revolving Loan Commitments as of the time of determination thereof (other
than to reimburse the Agent Bank for the amount of any drawings under any
Letters of Credit honored by the Agent Bank and not theretofore reimbursed by
the Borrowers) shall be reduced by an amount equal to the Letter of Credit Usage
as of such time of determination;
(ii) The Swing Line Credit Subfacility is a sublimit under the
Revolving Credit Facility. The amount otherwise available for borrowing under
the Revolving Loan Commitments as of the time of determination thereof shall be
reduced by an amount equal to the Swing Line Usage; and
(iii) The Total Utilization of Revolving Loan Commitments shall
not exceed the then-applicable aggregate Revolving Loan Commitments; and
(iv) The Borrowers shall not be entitled to obtain any
Revolving Credit Loan to the extent that the making of the Revolving Credit Loan
would cause the Total Utilization of Revolving Loan Commitments to exceed the
Borrowing Base during such periods to which the Borrowing Base applies pursuant
to Section 7.3A of this Agreement.
B. Term of Revolving Loan Commitments. The Revolving Loan
Commitments shall become effective immediately as of the Closing Date, and as of
the Closing Date, the Borrowers may obtain Revolving Credit Loans Credit subject
to the terms and conditions contained herein. The Revolving Loan Commitments
shall continue in effect until the Revolving Loan Commitment Termination Date,
unless sooner terminated (i) by the Banks upon the occurrence and during the
continuation of an Event of Default, or (ii) by the Borrowers upon a voluntary
reduction in all of the Revolving Loan Commitments, pursuant to Section 2.4D
hereof. The Revolving Loan Commitment Termination Date may only be extended by
the unanimous written consent of all of the Banks in their sole and absolute
discretion. If any Bank elects not to extend the Revolving Loan Commitment
Termination Date, such Bank shall notify the Borrowers and the other Banks
thereof. In the event any Bank elects not to extend the Revolving Loan
Commitment Termination Date, the Revolving Loan Commitments shall terminate, and
the entire unpaid principal balance of and all accrued and unpaid interest on
the Revolving Credit Loans, the Swing Line Loans and the Letters of Credit shall
be respectively due and payable in full to the Banks on the Revolving Loan
Commitment Termination Date, subject at all times to the Banks' absolute right
to terminate the Revolving Loan Commitments upon the occurrence and during the
continuation of an Event of Default. Upon termination of the Revolving Loan
Commitments by the Banks upon the occurrence and during the continuation of an
Event of Default, or by the Borrowers at any time in their sole and absolute
discretion, the entire unpaid principal balance of and all accrued and unpaid
interest on the Revolving Credit Loans the Swing Line Loans and the Letters of
Credit shall be respectively due and payable in full to the Banks. The
termination of the Revolving Loan Commitments, for
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whatever reason, shall not in any way release or relieve the Borrowers from
their obligations incurred hereunder or in connection herewith or under the
Revolving Credit Notes, the Applications and Agreements For Letters of Credit,
the Term Notes or the other Loan Documents and the provisions hereof and of the
Revolving Credit Notes, the Applications and Agreements For Letters of Credit,
the Term Notes and the other Loan Documents shall continue in full force and
effect until the Revolving Credit Notes, the Applications and Agreements For
Letters of Credit, the Term Notes, and all other Obligations have been
respectively paid in full to the Banks. In the event the Borrowers terminate the
Revolving Loan Commitments, pursuant to Section 2.4C hereof, the Borrowers shall
be obligated to pay the Revolving Credit Notes, the Applications and Agreements
For Letters of Credit, the Term Notes and all other Obligations in full to the
Banks, respectively.
C. Borrowing Mechanics For Revolving Credit Loans Made to the
Borrowers. Revolving Credit Loans (excluding Swing Line Loans under the Swing
Line Credit Subfacility discussed in Section 2.6 hereof) made to the Borrowers
on any Funding Date shall be in an aggregate minimum amount of (i) Five Hundred
Thousand Dollars ($500,000) and integral multiples of One Hundred Thousand
Dollars ($100,000) in excess of that amount in the case of Base Rate Loans, and
(ii) One Million Dollars ($1,000,000) and integral multiples of One Hundred
Thousand Dollars ($100,000) in excess of that amount in the case of LIBOR Loans.
Whenever the Borrowers desire that the Banks make a Revolving Credit Loan to the
Borrowers, BT, acting as agent for all of the Borrowers, shall deliver to the
Agent Bank a Request For Revolving Credit Loan no later than 12:00 noon
(Louisville, Kentucky time) at least three (3) Business Days in advance of the
proposed Funding Date in the case of a LIBOR Loan and on the proposed Funding
Date in the case of a Base Rate Loan. The Request For Revolving Credit Loan
shall be in the form of Exhibit E annexed hereto and shall specify (i) the
proposed Funding Date, (ii) the amount of the Revolving Credit Loan, (iii)
whether the Revolving Credit Loan shall be a Base Rate Loan or a LIBOR Loan,
(iv) in the case of any Revolving Credit Loan requested to be made as a LIBOR
Loan, the initial Interest Period applicable thereto, and (v) that the amount of
the proposed Revolving Credit Loan will not (a) cause the Total Utilization of
Revolving Loan Commitments to exceed the aggregate Revolving Loan Commitments.
Revolving Credit Loans made to the Borrowers may be continued as or converted
into Base Rate Loans or LIBOR Loans in the manner provided in Section 2.2D
hereof. In lieu of delivering the above described Request For Revolving Credit
Loan, BT, acting as agent for all of the Borrowers, may give the Agent Bank
telephonic notice by the required time of the requested Revolving Credit Loan
under this Section 0.xX; provided that such notice shall be promptly confirmed
in writing by delivery of a Request For Revolving Credit Loan to the Agent Bank
on or before the applicable Funding Date.
No Bank shall incur any liability to the Borrowers in acting upon any
telephonic notice referred to above which the Agent Bank believes in good faith
to have been given by a duly Authorized Officer or other Person authorized to
borrow on behalf of the Borrowers or for otherwise acting in good faith under
this Section 0.xX and, upon funding of any Revolving Credit Loan by the Banks in
accordance with this Loan Agreement pursuant to any telephonic notice, the
Borrowers shall have effected such Revolving Credit Loan hereunder. The
Borrowers agree that the Agent Bank and the Banks are entitled to rely upon any
Request for Revolving Credit Loan submitted to the Agent Bank by BT, the same as
if the Request for Revolving Credit Loan had been executed by
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each of the other Borrowers, unless and until the other Borrowers have notified
the Agent Bank and the Banks in writing pursuant to Section 15 hereof that BT is
no longer authorized to act as agent for and behalf of the other Borrowers.
Except as provided in Sections 4.2, 4.3 and 4.7 hereof, a Request For
Revolving Credit Loan for a LIBOR Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Borrowers shall be bound to obtain the LIBOR Loan in accordance
therewith.
D. Disbursement of Revolving Credit Loans to the Borrowers. All
Revolving Credit Loans made to the Borrowers under this Loan Agreement shall be
made by the Banks simultaneously and proportionately in accordance with their
respective Revolving Credit Facility Pro Rata Shares, it being understood that
no Bank shall be responsible for any default by the other Bank in funding its
Revolving Credit Facility Pro Rata Share of a Revolving Credit Loan requested
hereunder by the Borrowers, nor shall the Revolving Loan Commitment of any Bank
be increased or decreased as a result of the default by the other Bank in
funding its Revolving Credit Facility Pro Rata Share of a Revolving Credit Loan
requested hereunder by the Borrowers. Each Bank shall make its Revolving Credit
Facility Pro Rata Share of each Revolving Credit Loan to be made to the
Borrowers available to the Agent Bank, in same day funds, at the office of the
Agent Bank located at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx not later
than 1:00 P.M. (Louisville, Kentucky time) on the Funding Date. Except with
respect to the reimbursement to the Agent Bank for a drawing under a Letter of
Credit issued by the Agent Bank as provided in Section 2.7 hereof, upon
satisfaction or waiver of the conditions precedent specified in Section 5.1 in
the case of the initial Revolving Credit Loan on the initial Funding Date and
Section 5.2 in the case of a Revolving Credit Loan on any subsequent Funding
Date, the Agent Bank shall make the proceeds of each Revolving Credit Loan
requested by BT, acting as agent for all of the Borrowers, available to the
Borrowers on the Funding Date by causing an amount of same day funds equal to
the proceeds of the Banks' respective Revolving Credit Facility Pro Rata Shares
of such Revolving Credit Loan received by the Agent Bank at its office located
at the address set forth in the preceding sentence to be credited to the
Borrowers' Loan Account maintained at such office of the Agent Bank or wired to
an account designated by BT, acting as agent for all of the Borrowers. All
Revolving Credit Loans shall be respectively paid in full to the Banks on the
Revolving Loan Commitment Termination Date.
Nothing in this Section 2.1D shall be deemed to relieve any Bank from its
obligation to fulfill its Revolving Loan Commitment hereunder or to prejudice
any rights that the Borrowers may have against any Bank as a result of any
default by such Bank hereunder.
E. Records. Each Bank shall record the Revolving Credit Loans made
to the Borrowers from time to time and each repayment or prepayment in respect
of the principal amount of such Revolving Credit Loans in the Bank's electronic
records. Any such recordation in accordance with the terms of this Loan
Agreement shall be conclusive and binding on the Borrowers absent manifest
error; provided, the failure to make any such recordation, or any error in such
recordation, shall not affect the Borrowers' obligation to repay all Revolving
Credit Loans to the Banks in accordance with this Loan Agreement and the
Revolving Credit Notes.
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F. Borrowers' Loan Accounts.
(i) Each Bank shall enter all Revolving Credit Loans made to
the Borrowers as debits in the Borrowers' Loan Account maintained with such
Bank. Each Bank shall also record in the Borrowers' Loan Account maintained with
such Bank in accordance with customary accounting practice all other charges,
expenses and other items properly chargeable to the Borrowers; all payments made
by the Borrowers on account of the Revolving Credit Loans made by such Bank; and
other appropriate debits and credits. The debit balance of the Borrowers' Loan
Account maintained with such Bank shall reflect the unpaid principal balance of
the Revolving Credit Loans from time to time maintained with such Bank. At least
once each month the Agent Bank shall render a statement of account for the
Borrowers' Loan Account maintained with the Agent Bank and the other Banks,
which statement shall be considered correct and accepted by the Borrowers and
conclusively binding upon the Borrowers in the absence of manifest error unless
the Borrowers notify the Agent Bank to the contrary within thirty (30) days from
the receipt of said statement by the Borrowers.
(ii) Any and all principal, interest, charges and expenses,
attorneys' fees and taxes now or hereafter due and owing under the Revolving
Credit Notes and any of the other Loan Documents may be charged to any deposit
account of the Borrowers with a Bank or to the Borrowers' Loan Account
maintained with such Bank.
2.2 Interest on the Revolving Credit Loans.
A. Rates of Interest. Subject to the provisions of Section 2.2E,
Section 4 and Section 14 hereof, each Revolving Credit Loan shall bear interest
on the unpaid principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at the (i) Base Rate or (ii) the LIBOR
plus the Applicable LIBOR Margin, as the case may be. The applicable interest
rate mode with respect to Revolving Credit Loans shall be selected by the
Borrowers initially at the time a Request For Revolving Credit Loan is delivered
to the Agent Bank pursuant to Section 2.1C hereof. The interest rate with
respect to any Revolving Credit Loan may be changed by the Borrowers from time
to time pursuant to Section 2.2D hereof. If on any day a Revolving Credit Loan
is outstanding with respect to which notice has not been delivered to the Agent
Bank or the Banks in accordance with the terms of this Loan Agreement specifying
the applicable interest rate, then, for that day, that Revolving Credit Loan
shall bear interest at the Base Rate.
Subject to the provisions of Section 2.2E, Section 4 and Section 14 hereof,
Revolving Credit Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, at a rate equal to the Base Rate.
(ii) if a LIBOR Loan, (a) from the Closing Date through and
until the first Business Day of the month that follows the month in which the
Agent Bank has received Borrowers' financial statements for the period ending
March 31, 1998, at a rate per annum equal to the sum of
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the LIBOR plus 1.50%, and (b) thereafter at a rate per annum equal to the sum of
the LIBOR plus the Applicable LIBOR Margin; provided that, on each Date of
Determination, commencing with the first Date of Determination to occur after
the Closing Date, the Applicable LIBOR Margin in effect for the Pricing Period
commencing on such Date of Determination and continuing for the term of the
Pricing Period that begins on such Date of Determination shall be the Applicable
LIBOR Margin corresponding to the Pricing Level in effect for such Pricing
Period, as follows:
-------------------------------------------------------------------------------------------------
Funded Debt Applicable
Pricing Level to EBITDA LIBOR Margin
------------- --------- ------------
-------------------------------------------------------------------------------------------------
Pricing Level I Greater or equal 0.00, but Less than or equal .99 0.625%
-------------------------------------------------------------------------------------------------
Pricing Level II Greater or equal 1.00, but Less than or equal 1.49 0.75
-------------------------------------------------------------------------------------------------
Pricing Level III Greater or equal 1.50, but Less than or equal 1.74 1.00
-------------------------------------------------------------------------------------------------
Pricing Level IV Greater or equal 1.75, but Less than or equal 1.99 1.25
-------------------------------------------------------------------------------------------------
Pricing Level V Greater or equal 2.00, but Less than or equal 2.24 1.50
-------------------------------------------------------------------------------------------------
Pricing Level VI Greater or equal 2.25, but Less than or equal 2.49 1.75
-------------------------------------------------------------------------------------------------
Pricing Level VII Greater or equal 2.50, but Less than or equal 2.99 2.25
-------------------------------------------------------------------------------------------------
Notwithstanding anything in the foregoing to the contrary, if any
Compliance Certificate (the form of which is included as Exhibit G)
delivered by the Borrowers demonstrating the appropriate Pricing Level
shall prove to be incorrect (as determined by reference to a subsequent
Compliance Certificate, then such Compliance Certificate shall no longer be
in effect. In such event, the Agent Bank shall calculate the difference
between the amount of interest actually paid by the Borrowers on LIBOR
Loans on the basis of such incorrect Compliance Certificate and the amount
of interest which would have been due on such LIBOR Loans had such
incorrect Compliance Certificate not been delivered, and shall forward to
the Borrowers a statement setting forth the amount of the difference and
the method of calculation of such amount (which calculation, in the absence
of demonstrable error, shall be deemed correct) and the Borrowers shall pay
such amount to the Agent Bank for the benefit of the Banks within three (3)
Business Days of such notice.
B. Interest Periods for LIBOR Loans. In connection with each
LIBOR Loan, the Borrowers may, pursuant to the applicable Request For
Revolving Credit Loan, select the Interest Period to be applicable to such
LIBOR Loan, which Interest Period shall be at the Borrowers' option either
a one, two, three or six month period. The following provisions are
applicable to Interest Periods generally:
(i) the initial Interest Period for any LIBOR Loan shall commence
on the Funding Date of such LIBOR Loan, in the case of a Revolving Credit
Loan initially made as a LIBOR Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Revolving
Credit Loan converted to a LIBOR Loan;
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(ii) in the case of immediately successive Interest Periods
applicable to a LIBOR Loan continued as such pursuant to Notice of
Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period of a LIBOR Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) of this Section 2.2B, end
on the last Business Day of a calendar month;
(v) in the event the Borrowers fail to specify an Interest Period
with respect to a LIBOR Loan in the applicable Request For Revolving Credit
Loan or Notice of Conversion/Continuation, the Borrowers shall be deemed to
have selected an Interest Period of one month; and
(vi) no Interest Period shall extend beyond the Revolving Loan
Commitment Termination Date.
C. Interest Payments. Subject to the provisions of Section 2.2E
hereof, interest shall be payable on the Revolving Credit Loans as follows:
(i) interest on each Base Rate Loan shall be payable in arrears
on and to the last day of each calendar quarter, and at maturity (including
final maturity); and
(ii) interest on each LIBOR Loan shall be payable in arrears on
and to the ninetieth (90th) day during each Interest Period applicable to
that LIBOR Loan, the last day of each Interest Period applicable to that
LIBOR Loan, and upon any prepayment or repayment of that LIBOR Loan (to the
extent accrued on the amount being prepaid or repaid) and at maturity
(including final maturity).
D. Conversion or Continuation of Interest Rate Modes. Subject to
the provisions of Section 2.4 hereof, the Borrowers shall have the option
(i) at any time to convert all or any part of outstanding Revolving Credit
Loans bearing
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interest as Base Rate Loans to Revolving Credit Loans bearing interest as
LIBOR Loans; and (ii) upon the expiration of any Interest Period applicable
to a Revolving Credit Loan bearing interest as a LIBOR Loan, (a) to
continue all or any portion of such Loan as a LIBOR Loan, with the
succeeding Interest Period of such continued LIBOR Loan to commence on the
most recent Interest Payment Date thereof or (b) to convert all or any part
of such Loan to a Base Rate Loan.
BT, acting as agent for all of the Borrowers, shall deliver a Notice
of Conversion/Continuation to the Agent Bank no later than 12:00 noon
(Louisville, Kentucky time) at least three (3) Business Days in advance of
the proposed conversion/continuation date. A Notice of Conversion/
Continuation shall specify (i) the proposed conversion/continuation date
(which shall be a Business Day), (ii) the amount of the Revolving Credit
Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or
continuation of, a LIBOR Loan, the requested Interest Period, and (v) in
the case of a conversion to, or a continuation of, a LIBOR Loan or a Base
Rate Loan, that no Event of Default has occurred and is continuing. In lieu
of delivering the above-described Notice of Conversion/Continuation, BT,
acting as agent for the Borrowers, may give the Agent Bank telephonic
notice by the required time of any proposed conversion/continuation under
this section 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to the Agent
Bank on or before the proposed conversion/continuation date.
The Banks shall not incur any liability to the Borrowers in acting
upon any telephonic notice referred to above that the Agent Bank believes
in good faith to have been given by a duly Authorized Officer or other
Person authorized to act on behalf of the Borrowers or for otherwise acting
in good faith under this Section 2.2D, and upon conversion or continuation
of the applicable basis for determining the interest rate with respect to
any Revolving Credit Loans in accordance with this Loan Agreement pursuant
to any such telephonic notice, the Borrowers shall have effected a
conversion or continuation, as the case may be, hereunder. The Borrowers
agree that the Agent Bank and the Banks are entitled to rely upon any
Notice of Conversion/Continuation submitted to the Agent Bank by BT, the
same as if the Notice of Conversion/Continuation had been executed by each
of the other Borrowers, unless and until the other Borrowers have notified
the Agent Bank and the Banks in writing pursuant to Section 15 hereof that
BT is no longer authorized to act as agent for and behalf of the other
Borrowers.
Except as otherwise provided in Sections 4.2, 4.3 and 4.7 hereof, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
LIBOR Loan (or telephonic notice in lieu thereof) shall be irrevocable on
and after the related Interest Rate Determination Date and the Borrowers
shall be bound to effect a conversion or continuation in accordance
therewith.
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E. Post-Maturity Interest. Any principal payments on the
Revolving Credit Loans not paid when due and, to the extent permitted by
applicable law, any interest payments on the Revolving Credit Loans or any
fees or other amounts owed by the Borrowers hereunder not paid when due, in
each case whether at stated maturity, by notice of prepayment, by
acceleration or otherwise, shall thereafter bear interest (including post-
petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate equal to the
Default Rate. Payment or acceptance of the increased rates of interest
provided for in this Section 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of the Banks.
F. Computation of Interest. Interest on Revolving Credit Loans
bearing interest as LIBOR Loans shall be computed on the basis of a 360-day
year, and interest on Revolving Credit Loans bearing interest as Base Rate
Loans shall be computed on the basis of an actual 365 or 366-day year, as
applicable, in each case for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Revolving
Credit Loan, the date of the making of such Revolving Credit Loan or the
first day of an Interest Period applicable to such Revolving Credit Loan,
as the case may be, shall be included, and the date of payment of such
Revolving Credit Loan or the expiration date of an Interest Period
applicable to such Revolving Credit Loan or, with respect to a Revolving
Credit Loan being converted to a LIBOR Loan or a Base Rate Loan, the date
of conversion of such Revolving Credit Loan to such LIBOR Loan or a Base
Rate Loan shall be excluded; provided that if a Revolving Credit Loan is
repaid on the same day on which it is made, one day's interest shall be
paid on that Revolving Credit Loan.
G. Limitation on LIBOR Loan Tranches. At no time shall the
number of Revolving Credit Loans bearing interest as LIBOR Loans
outstanding at any time outstanding exceed ten (10) in the aggregate.
2.3 Fees.
----
A. Commitment Fees.
---------------
(i) The Borrowers agree to pay to the Agent Bank, for the
benefit of the Banks in proportion to their respective Revolving Credit
Facility Pro Rata Shares, commitment fees (the "Revolving Credit Facility
Commitment Fees") for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date, equal to the
average of the daily excess of the Revolving Loan Commitments (as they may
be reduced pursuant to Sections 2.4C hereof) over the aggregate outstanding
principal amount of Revolving Credit Loans, Swing Line Loans and the Letter
of Credit Usage multiplied by the Applicable Commitment Fee Percentage set
forth below; provided that, on each Date of
-28-
Determination, commencing with the first Date of Determination to occur
after the Closing Date, the Applicable Commitment Fee Percentage in effect
for the Pricing Period commencing on such Date of Determination and
continuing for the term of the Pricing Period that begins on such Date of
Determination shall be the Applicable Commitment Fee Percentage
corresponding to the Pricing Level in effect for such Pricing Period, as
follows:
-------------------------------------------------------------------------------------------------
Applicable
Funded Debt Commitment Fee
Pricing Level to EBITDA Percentage
------------- --------- ------------
-------------------------------------------------------------------------------------------------
Pricing Level I Greater or equal 0.00, but Less than or equal .99 0.15%
-------------------------------------------------------------------------------------------------
Pricing Level II Greater or equal 1.00, but Less than or equal 1.49 0.20
-------------------------------------------------------------------------------------------------
Pricing Level III Greater or equal 1.50, but Less than or equal 1.74 0.225
-------------------------------------------------------------------------------------------------
Pricing Level IV Greater or equal 1.75, but Less than or equal 1.99 0.25
-------------------------------------------------------------------------------------------------
Pricing Level V Greater or equal 2.00, but Less than or equal 2.24 0.30
-------------------------------------------------------------------------------------------------
Pricing Level VI Greater or equal 2.25, but Less than or equal 2.49 0.30
-------------------------------------------------------------------------------------------------
Pricing Level VII Greater or equal 2.50, but Less than or equal 2.99 0.35
-------------------------------------------------------------------------------------------------
The Revolving Credit Facility Commitment Fees shall be calculated on the
basis of a 360-day year and the actual number of days elapsed and shall be
payable quarterly in arrears on the last day of each Fiscal Quarter,
commencing on the first such date to occur after the Closing Date, and on
the Revolving Loan Commitment Termination Date. The Borrowers shall have
no liability to any Bank for any Revolving Credit Facility Commitment Fees
paid to the Agent Bank which the Agent Bank does not properly remit to such
Bank, and such Bank's sole remedy in respect thereof shall be against the
Agent Bank.
(ii) Notwithstanding anything in the foregoing to the contrary,
if any Compliance Certificate (the form of which is attached hereto as
Exhibit G) delivered by the Borrowers demonstrating the appropriate
Pricing Level shall prove to be incorrect (as determined by reference to a
subsequent Compliance Certificate), such Compliance Certificate shall no
longer be in effect, and the Agent Bank shall notify the Borrowers of such
incorrectness and shall calculate the difference between the amount of the
Revolving Credit Facility Commitment Fees actually paid by the Borrowers on
the basis of such incorrect Compliance Certificate and the amount of
Revolving Credit Facility Commitment Fees which would have been due had
such incorrect Compliance Certificate not been delivered. The Agent Bank
shall notify the Borrowers of the amount of such difference, if any, in a
statement setting forth the method of calculation of such amount (which
calculation, in the absence of demonstrable error, shall be deemed correct)
and the Borrowers shall pay such amount to the Agent Bank for the benefit
of the Banks within three (3) Business Days of such notice.
-29-
B. Other Fees and Expenses. The Borrowers agree to pay to the
Agent Bank such fees for serving as the Agent Bank hereunder in the amounts
and at the times agreed to in writing between the Borrowers and the Agent
Bank, as well as any other fees agreed to in writing between the Borrowers
and the Agent Bank. The Borrowers also agree to pay to the Agent Bank on
the Closing Date the reasonable fees and expenses of the Agent Bank's
counsel in negotiating, drafting and closing this Loan Agreement, the Loan
Documents and related documents.
2.4 Prepayments and Payments; Reductions in Revolving Loan
------------------------------------------------------
Commitments.
-----------
A. Voluntary Prepayments. The Borrowers may, upon not less
than one (1) Business Day prior written or telephonic notice confirmed in
writing to the Agent Bank, at any time and from time to time, prepay any
Revolving Credit Loans (other than Swing Line Loans, which are discussed in
Section 2.6 hereof) in whole or in part in an aggregate minimum amount of
One Hundred Thousand Dollars ($100,000) and integral multiples of Twenty
Five Thousand Dollars ($25,000) in excess of that amount; provided however
that in the event that the Borrowers prepay a LIBOR Loan pursuant to this
Section 2.4A on a date that is other than the expiration date of the
Interest Period applicable thereto, the Borrowers shall compensate the
Banks in accordance with the provisions of Section 4.4 hereof. If the
Borrowers have given notice of prepayment as aforesaid, the principal
amount of the Revolving Credit Loans specified in such notice shall become
due and payable on the prepayment date specified therein. All prepayments
of principal of the Revolving Credit Loans shall be accompanied by the
payment of accrued interest on the principal amount being prepaid and shall
be applied to the payment of interest before application to principal. All
prepayments of the Revolving Credit Loans shall be applied first to Base
Rate Loans to the full extent thereof and then shall be applied to LIBOR
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by the Borrowers pursuant to Section 4.4 hereof.
-30-
B. Mandatory Prepayments. To the extent that the Borrowers
have engaged in a sale of assets which results in the requirement of a
mandatory prepayment pursuant to Section 8.1 hereof, with the result that
all of the then outstanding principal balance of the Term Loans has been
reduced to $0 pursuant to Section 3.3B hereof, 75% of the balance (if any)
remaining from the proceeds of sale of assets after reduction of the
principal balance of the Term Loans to $0 shall be applied to reduce the
outstanding principal balance of the Revolving Credit Loans. Any such
mandatory prepayment of the Revolving Credit Loans shall not reduce the
Revolving Loan Commitments.
C. General Provisions Regarding Payments.
-------------------------------------
(i) Manner and Time of Payment. All payments of principal,
interest and fees hereunder and under the Revolving Credit Notes by the
Borrowers shall be made without defense, setoff and counterclaim and in
same day funds and delivered to the Agent Bank not later than 12:00 noon
(Louisville, Kentucky time) on the date due at its office located in
Louisville, Kentucky; funds received by the Agent Bank after that time
shall be deemed to have been paid by the Borrowers on the next succeeding
Business Day.
(ii) Payments on Business Days. Whenever any payment to be made
hereunder or under the Revolving Credit Notes shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day (unless no further Business Day occurs in such
month, in which case payment shall be made on the next preceding Business
Day) and such extension or reduction of time shall be included in the
computation of the payment of interest hereunder or under the Revolving
Credit Notes or of the Revolving Credit Facility Commitment Fees, as the
case may be.
D. Voluntary Reduction of Revolving Loan Commitments. The
Borrowers shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments. The Borrowers shall give not less
than five (5) Business Days' prior written notice to the Agent Bank
designating the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction of the Revolving Loan
Commitments. Such termination or partial reduction of the Revolving Loan
Commitments shall be effective on the date specified in the Borrowers'
notice and shall reduce the Revolving Loan Commitment of each Bank in
proportion to its Revolving Credit Facility Pro Rata Share. Any such
partial reduction of the Revolving Loan Commitments shall be in a minimum
amount of One Million Dollars ($1,000,000) and integral multiples of One
Hundred Thousand Dollars ($100,000) in excess of that amount.
-31-
2.5 Use of Proceeds.
---------------
A. Revolving Credit Loans. The proceeds of the Revolving
Credit Loans shall be used by the Borrowers to purchase the assets of the
Government Services Division of Datatape, Inc., to finance working capital
requirements and to finance general corporate purposes of the Borrowers.
B. Margin Regulations. No portion of the proceeds of any
Revolving Credit Loans under this Loan Agreement shall be used by the
Borrowers in any manner which might cause the making of the Revolving
Credit Loans or the application of the proceeds thereof to violate
Regulation G, Regulation U, Regulation T, or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such
Board or to violate the securities and Exchange Act of 1934, in each case
as in effect on the date or dates of the making of any such Revolving
Credit Loan and such use of the proceeds thereof. If requested by the
Banks, the Borrowers shall execute and deliver to the Banks a completed
Federal Reserve Form U-1.
2.6 Swing Line Credit Subfacility. Subject to the terms and
conditions of this Loan Agreement, the Agent Bank hereby agrees to make
Swing Line Loans to the Borrowers under the Swing Line Credit Subfacility.
A. Swing Line Credit Subfacility. From the date hereof
throughout the Swing Line Commitment Period, and subject to the terms,
conditions and other provisions of this Agreement, the Agent Bank agrees to
make Swing Line Loans to the Borrowers from time to time in a total amount
not exceeding Three Million Dollars ($3,000,000) in amounts of One Hundred
Thousand Dollars ($100,000) and integral multiples of Five Thousand Dollars
($5,000) in excess thereof. The Swing Line Credit Subfacility is
established for the administrative convenience of the Borrowers, the Agent
Bank and the Banks. During the Swing Line Commitment Period the Borrowers
may borrow and repay advances under the Swing Line Credit Subfacility in
whole or in part, and reborrow all in accordance with the terms, conditions
and other provisions of this Agreement. The making of each Swing Line
Loan shall be subject to the further provisions of this Section 2.6, and
shall be subject to all of the conditions of lending stated in Section 5.2
being fulfilled at the time of each Swing Line Loan, and provided further
that each Swing Line Loan shall be on the terms and subject to the
conditions hereinafter stated.
(i) Interest. Swing Line Loans shall bear interest (calculated
on the basis that an entire year's interest is earned in 365 or 366 days as
the case may be) from the date of each such Swing Line Loan until repaid at
an annual rate equal to the Base Rate. After maturity, whether by
acceleration or scheduled maturity, until paid in full, or when and so long
as there shall exist any uncured Event of Default, Swing Line Loans shall
bear interest at the applicable
-32-
Default Rate. Interest shall be due and payable to the Agent Bank at the
end of each calendar quarter following receipt of a statement from the
Agent Bank and on the Swing Line Commitment Termination Date.
(ii) Principal. The Borrowers shall pay all principal of all then
outstanding Swing Line Loans in excess of $500,000 before the end of each
Friday of each week. To the extent that the Borrowers fail to repay such
amount by such date, the Agent Bank shall convert the outstanding principal
balance of such Swing Line Loans in excess of $500,000 to a Revolving
Credit Loan, to be payable on the dates and in the manner set forth in
Article II hereof and to bear interest as follows: (i) if the aggregate
outstanding balance of the Swing Line Loans being converted to a Revolving
Credit Loan is greater than $500,000 but less than $1,000,000, such
Revolving Credit Loan shall bear interest as a Base Rate Loan and (ii) if
the aggregate outstanding balance of the Swing Line Loans being converted
to a Revolving Credit Loan is greater than $1,000,000, such Revolving
Credit Loan shall bear interest as a Base Rate Loan or, at the Borrower's
option, as a LIBOR Loan. The Borrowers shall pay the Agent Bank the
outstanding principal balance of all Swing Line Loans on the Swing Line
Commitment Termination Date.
(iii) Conditions for Swing Line Loans. So long as no Event of
Default shall have occurred and be continuing, during the Swing Line
Commitment Period, the Borrowers may borrow, repay and reborrow under the
Swing Line Credit Subfacility on any Business Day, subject to the terms,
conditions and other provisions of this Agreement. The making of Swing Line
Loans will be conditioned upon receipt by the Agent Bank from the BT, as
agent for the Borrowers, of a Request for Swing Line Loan by 12:00 noon
Louisville, Kentucky, time on the Business Day of the requested Swing Line
Loan. Notwithstanding the foregoing, the Agent Bank may, in its sole
discretion, accept an oral or written request made on behalf of the
Borrowers by an Authorized Officer by telephone, telex, facsimile or some
other form of written electronic communication, in which case the Agent
Bank shall be entitled to rely on any such oral or written request received
by the Agent Bank in good faith from anyone reasonably believed by the
Agent Bank to be an Authorized Officer. BT, as agent for the Borrowers,
shall promptly confirm any such communication by delivery of a Request for
Swing Line Loan upon request of the Agent Bank. Disbursements of, and
payments of principal, with respect to Swing Line Loans may be evidenced by
notations of the Agent Bank in its electronic data processing equipment.
The aggregate amount of all disbursements of Swing Line Loans made and
shown on the Agent Bank's electronic data processing equipment, over all of
the payments of principal made by the Borrowers and recorded on the Agent
Bank's electronic data processing equipment shall be prima facie evidence
of the outstanding principal balance due under the Swing Line Credit
Subfacility.
-33-
The Borrowers agree that the Agent Bank and the Banks are entitled to
rely upon any Request for Swing Line Loan submitted to the Agent Bank by
BT, the same as if the Request for Swing Line Loan had been executed by
each of the other Borrowers, unless and until the other Borrowers have
notified the Agent Bank and the Banks in writing pursuant to Section 15
hereof that BT is no longer authorized to act as agent for and behalf of
the other Borrowers.
(v) General Provisions Regarding Payments.
-------------------------------------
(a) Manner and Time of Payment. All payments of principal,
interest and fees hereunder and under the Swing Line Credit Subfacility by
the Borrowers shall be made without defense, setoff and counterclaim and in
same day funds and delivered to the Agent Bank not later than 12:00 noon
(Louisville, Kentucky time) on the due date therefor at its office located
in Louisville, Kentucky; funds received by the Agent Bank after that time
shall be deemed to have been paid by the Borrowers on the next succeeding
Business Day.
(b) Payments on Business Days. Whenever any payment to be made
hereunder or under the Swing Line Credit Subfacility shall be stated to be
due on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day (unless no further Business Day occurs in such
month, in which case payment shall be made on the next preceding Business
Day) and such extension or reduction of time shall be included in the
computation of the payment of interest hereunder or under the Swing Line
Credit Subfacility.
(vi) Voluntary Reduction of Swing Line Loan Commitment. The
Borrowers shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part, without premium or
penalty, the Swing Line Loan Commitment. BT, on behalf of the Borrowers,
shall give not less than five (5) Business Days' prior written notice to
the Agent Bank designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction of the
Swing Line Loan Commitment. Such termination or partial reduction of the
Swing Line Loan Commitment shall be effective on the date specified in the
Borrowers' notice. Any such partial reduction of the Swing Line Loan
Commitment shall be in a minimum amount of One Hundred Thousand Dollars
($100,000).
(vii) Other Banks. Swing Line Loans will be made by the Agent
Bank, in its individual capacity. Upon a request to reduce the principal
amount outstanding Swing Line Loans from the Agent Bank, the Banks shall
make advances based on their Revolving Credit Facility Pro Rata Shares in
amounts sufficient to effect the requested reduction in Swing Line Loans.
-34-
(viii) Limitation. The Borrowers may not request that the Agent
Bank make any Swing Line Loan if, after making such Swing Line Loan, (x)
the total aggregate principal amount of outstanding Swing Line Loans would
exceed Three Million Dollars ($3,000,000), or (y) the Total Utilization of
Revolving Loan Commitments would exceed the Revolving Loan Commitments, as
the amount available under such Revolving Loan Commitments may be reduced
from time to time pursuant to Sections 2.4C or (z) the Total Utilization of
Revolving Loan Commitments would exceed the Borrowing Base to the extent
then applicable in accordance with Section 7.3A of this Loan Agreement.
B. Use of Proceeds.
---------------
(i) Swing Line Loans. The principal of the Swing Line Loans
shall be used by Borrowers for any lawful corporate purposes.
(ii) Margin Regulations. No portion of the principal of the
Swing Line Loans shall be used by the Borrowers in any manner which might
cause the making of the Swing Line Loan or the application of the proceeds
thereof to violate Regulation G, Regulation U, Regulation T, or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Securities and Exchange Act of
1934, in each case as in effect on the date or dates of each Swing Line
Loan. If requested by the Agent Bank, the Borrowers shall execute and
deliver to the Agent Bank a completed Federal Reserve Form U-1.
2.7 Letters of Credit.
-----------------
A. Letters of Credit. Subject to the terms and conditions of
this Loan Agreement and in reliance upon the representations and warranties
of the Borrowers set forth herein, the Borrowers may request, in accordance
with the provisions of this Section 2.7A, that on and after the Closing
Date, the Agent Bank issue Letters of Credit for the account of the
Borrowers denominated in Dollars. Issuances of Letters of Credit shall be
subject to the following limitations:
(i) The Borrowers may not request that the Agent Bank issue any
Letter of Credit if, after giving effect to such issuance, (x) the total
Letter of Credit Usage would exceed Five Million Dollars ($5,000,000), or
(y) the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments, as the amount available under such Revolving
Loan Commitments may be reduced from time to time pursuant to Sections
2.4C, or (z) the Total Utilization of Revolving Loan Commitments would
exceed the Borrowing Base to the extent then applicable in accordance with
the provisions of Section 7.3A of this Loan Agreement.
-35-
(ii) In no event shall the Agent Bank issue, reissue, amend or
permit the extension of: (y) any Letter of Credit having an expiration date
later than the Revolving Loan Commitment Termination Date in effect at the
time of issuance, reissuance, amendment or extension (automatic or
otherwise) thereof; or (z) subject to the foregoing clause (y), any Letter
of Credit having an expiration date more than one year after its date of
issuance; provided that subject to the foregoing clause (y), this clause
(z) shall not prevent the Agent Bank from agreeing that a Letter of Credit
will automatically be extended annually for one or more periods each not to
exceed one year if the Agent Bank does not cancel such extension, subject
to the Banks extending the Revolving Loan Commitment Termination Date.
It shall be a condition precedent to the issuance of any Letter of
Credit in accordance with the provisions of this Section 2.7 that each
condition set forth in Sections 5.1 and 5.2A and 5.2B of this Loan
Agreement shall have been satisfied.
Immediately upon the issuance of each Letter of Credit, each Bank
shall be deemed to, and hereby agrees to, have irrevocably purchased from
the Agent Bank a participation in such Letter of Credit and drawings
thereunder in an amount equal to such Bank's Revolving Credit Facility Pro
Rata Share of the maximum amount which is or at any time may become
available to be drawn thereunder.
Each Letter of Credit shall provide that it shall be subject to the
Uniform Customs and Practice of Documentary Credits (1993 Revision),
International Chamber of Commerce Brochure No. 500, or any successor
thereto. Each Letter of Credit may provide that the Agent Bank may (but
shall not be required to) pay the beneficiary thereof upon the occurrence
of an Event of Default and the acceleration of the maturity of the
Revolving Credit Loans or, if payment is not then due to the beneficiary,
provide for the deposit of funds in an account to secure payment to the
beneficiary and that any funds so deposited shall be paid to the
beneficiary of the Letter of Credit if conditions to such payment are
satisfied or returned to the Agent Bank for distribution to the Banks (or,
if all Obligations shall have been indefeasibly paid in full, to the
Borrowers) if no payment to the beneficiary has been made and thirty (30)
days after the final date available for drawings under the Letter of Credit
has passed. Each payment or deposit of funds by the Agent Bank as provided
in this paragraph shall be treated for all purposes of this Loan Agreement
as a drawing duly honored by the Agent Bank under the related Letter of
Credit.
B. Notice of Issuance. Whenever a Borrower desires the
issuance of a Letter of Credit, BT, on behalf of the Borrowers, shall
deliver to the Agent Bank an Application and Agreement for Letter of Credit
in the form of Exhibit C annexed hereto no later than 12:00 noon
(Louisville, Kentucky time) at least ten (10) Business Days, or in each
case such shorter period as may be agreed to by the Agent Bank in any
particular instance, in advance of the proposed date of issuance. The
Application and Agreement for Letter of Credit shall specify (i) the
-36-
proposed date of issuance (which shall be a Business Day under the laws of
the Commonwealth of Kentucky), (ii) the face amount of the Letter of
Credit, (iii) the expiration date of the Letter of Credit, (iv) the name
and address of the beneficiary of the Letter of Credit, and (v) a summary
of the purpose and contemplated terms of the Letter of Credit. Prior to the
date of issuance of any Letter of Credit, the Borrowers shall specify a
precise description of the documents and the proposed text of any
certificate to be presented by the beneficiary under such Letter of Credit
which, if presented by the beneficiary prior to the expiration date of the
Letter of Credit, would require the Agent Bank to make payment under the
Letter of Credit; provided that the Agent Bank, in its sole reasonable
judgment, may require changes in any such documents and certificates;
provided further that no Letter of Credit shall require payment against a
conforming draft to be made thereunder on the same Business Day (under the
laws of the Commonwealth of Kentucky) that such draft is presented if such
presentation is made after 12:00 noon (Louisville, Kentucky time) on such
Business Day. In determining whether to pay under any Letter of Credit,
the Agent Bank shall be responsible only to determine that the documents
and certificates required to be delivered under that Letter of Credit have
been delivered and that they comply on their face with the requirements of
that Letter of Credit; provided, further, nothing contained in this Section
2.7B shall be deemed to prejudice the right of the Borrowers to recover
from the Agent Bank in respect of any amounts paid by the Agent Bank under
any Letter of Credit in the event that it is determined by a court of
competent jurisdiction that the payment with respect to such Letter of
Credit by the Agent Bank constituted gross negligence or willful misconduct
on the part of the Agent Bank.
C. Delivery of Copies of Letters of Credit and Letter of Credit
Amendments. The Agent Bank shall, promptly after the issuance of each
Letter of Credit, or any amendment or cancellation thereto, furnish to the
Banks a copy of such Letter of Credit or of such amendment or cancellation,
as the case may be, together with, in the case of the issuance of any
Letter of Credit, the amount of its risk participation therein, which shall
be such Bank's Revolving Credit Facility Pro Rata Share of the stated
amount of such Letter of Credit.
D. Payment of Amounts Drawn Under Letters of Credit. In the
event of any drawing under any Letter of Credit by the beneficiary thereof,
the Agent Bank shall promptly notify the Borrowers and the Banks of such
drawing, and the Borrowers shall reimburse the Agent Bank on the date on
which such drawing is honored in an amount in same day funds equal to the
amount of such drawing. The Borrowers shall have the right to obtain a
Revolving Credit Loan (subject to the limitations set forth in Section 0.xX
hereof and in the absence of any Event of Default hereunder) in an amount
sufficient to repay in full any such drawing honored by the Agent Bank
under a Letter of Credit.
-37-
E. Payment by Banks with Respect to Letters of Credit. In the
event that the Borrowers shall fail to reimburse the Agent Bank as provided
in Section 2.7D hereof in an amount equal to the amount of any drawing
honored by the Agent Bank under a Letter of Credit issued by the Agent
Bank, the Agent Bank shall promptly notify each of the other Banks of the
unreimbursed amount of such drawing and of each Bank's participation
therein, which participation shall be equal to such Bank's Revolving Credit
Facility Pro Rata Share of the unreimbursed amount of such drawing. Each
Bank shall make available to the Agent Bank an amount equal to its
participation in same day funds, at the offices of the Agent Bank located
at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx not later than 1:00 P.M.
(Louisville, Kentucky time) on the Business Day (under the laws of
Commonwealth of Kentucky) after the date notified by the Agent Bank, and
each such amount so made available by each Bank will be deemed a Revolving
Credit Loan made by such Bank to the Borrowers under this Loan Agreement as
of the date such amount is so made available to the Agent Bank. In the
event that any Bank fails to make available to the Agent Bank the amount of
such Bank's participation in such Letter of Credit as provided in this
Section 2.7E, the Agent Bank shall be entitled to recover such amount on
demand from such Bank together with interest at the customary rate set by
the Agent Bank for the correction of errors among banks for three (3)
Business Days and thereafter at the Federal Funds Effective Rate. Nothing
in this Section 2.7 shall be deemed to prejudice the right of any Bank to
recover from the Agent Bank any amounts made available by such Bank to the
Agent Bank pursuant to this Section 2.7E in the event that it is determined
by a court of competent jurisdiction that the payment made by the Agent
Bank with respect to a Letter of Credit in respect of which reimbursement
was made by such Bank constituted gross negligence or willful misconduct on
the part of the Agent Bank. The Agent Bank shall distribute to each other
Bank, to the extent that it has paid all amounts payable by it under this
Section 2.7E with respect to any Letter of Credit issued by the Agent Bank,
such Bank's Revolving Credit Facility Pro Rata Share of all payments
received by the Agent Bank from the Borrowers in reimbursement of drawings
honored by the Agent Bank under such Letter of Credit, as the case may be,
when such payments are received. Notwithstanding anything to the contrary
herein, each Bank shall have a direct right to reimbursement of such
amounts from the Borrowers, subject to the procedures for reimbursing such
Bank set forth in this Section 2.7.
F. Compensation. The Borrowers agree to pay, without
duplication, the following amounts to the Agent Bank with respect to each
such Letter of Credit issued by the Agent Bank for the account of the
Borrowers:
(i) With respect to each Letter of Credit, a letter of credit fee
(the "Letter of Credit Fee") payable to the Agent Bank for the account of
the Banks (and to be shared by the Banks pro rata in accordance with their
respective Revolving Credit Facility Pro Rata Shares) equal to the
Applicable Letter of Credit
-38-
Percentage multiplied by the maximum amount available from time to time to
be drawn under such Letter of Credit; provided that, on each Date of
Determination, commencing with the first Date of Determination to occur
after the Closing Date, the applicable Letter of Credit Percentage in
effect for the Pricing Period commencing on such Date of Determination and
continuing for the term of the Pricing Period that begins on such Date of
Determination shall be the Applicable Letter of Credit Percentage
corresponding to the Pricing Level in effect for such Pricing Period, as
follows:
-------------------------------------------------------------------------------------------------
Funded Debt Applicable
Pricing Level to EBITDA LIBOR Margin
------------- --------- ------------
-------------------------------------------------------------------------------------------------
Pricing Level I Greater or equal 0.00, but Less than or equal .99 0.625%
-------------------------------------------------------------------------------------------------
Pricing Level II Greater or equal 1.00, but Less than or equal 1.49 0.75
-------------------------------------------------------------------------------------------------
Pricing Level III Greater or equal 1.50, but Less than or equal 1.74 1.00
-------------------------------------------------------------------------------------------------
Pricing Level IV Greater or equal 1.75, but Less than or equal 1.99 1.25
-------------------------------------------------------------------------------------------------
Pricing Level V Greater or equal 2.00, but Less than or equal 2.24 1.50
-------------------------------------------------------------------------------------------------
Pricing Level VI Greater or equal 2.25, but Less than or equal 2.49 1.75
-------------------------------------------------------------------------------------------------
Pricing Level VII Greater or equal 2.50, but Less than or equal 2.99 2.25
-------------------------------------------------------------------------------------------------
The Letter of Credit Fee, as based on the Applicable Letter of Credit
Percentage, shall be payable quarterly in advance beginning on the date of
issuance of such Letter of Credit and quarterly in advance beginning on the
date, if such should occur, of each renewal or extension of such Letter of
Credit;
(ii) with respect to drawings made under any Letter of Credit,
interest, payable in immediately available funds to the Agent Bank on
demand, on the amount paid by the Agent Bank in respect of each such
drawing from the date of the drawing through the date such amount is
reimbursed by the Borrowers at a variable rate equal to the Base Rate;
(iii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder, documentary and
processing charges payable to the Agent Bank in accordance with the Agent
Bank's standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or drawing, as the case may be;
(iv) promptly upon receipt by the Agent Bank of the amount
described in subdivisions (ii) and (iii) of this Section 2.7F, the Agent
Bank shall distribute to each Bank its Revolving Credit Facility Pro Rata
Share of such amount.
-39-
(v) With respect to each Letter of Credit, a letter of credit
fronting fee (the "Letter of Credit Fronting Fee") payable to the Agent
Bank for its own account, in the amount of one eighth of one percent
(0.125%) per annum multiplied by the aggregate face amount of Letters of
Credit outstanding during a Fiscal Quarter, plus other customary charges,
if any, payable quarterly in advance.
G. Obligations Absolute; Indemnification, Nature of the Agent
Bank's Duties. Subject to the right of the Borrowers and the Banks to seek
damages in the event that a court of competent jurisdiction determines that
the Agent Bank acted in bad faith and/or committed gross negligence or
willful misconduct in honoring any draft presented under any Letter of
Credit issued by the Agent Bank, the obligation of the Borrowers to
reimburse the Agent Bank for drawings made under such Letter of Credit and
the obligation of the Banks under Section 2.7E hereof to reimburse the
Agent Bank in accordance with their Revolving Credit Facility Pro Rata
Shares for drawings made under such Letter of Credit shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of
this Loan Agreement under all circumstances including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of such Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which the Borrowers may have at any time against a beneficiary or any
transferee of such Letter of Credit (or any Persons for whom any such
transferee may be acting), the Agent Bank, any Bank or any other Person,
whether in connection with this Loan Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between the Borrowers and the beneficiary for which such Letter
of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by the Agent Bank under such Letter of Credit
against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that an Event of Default or a Potential Event of
Default under this Loan Agreement shall have occurred and be continuing.
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In addition to amounts payable as elsewhere provided in this Section
2, the Borrower hereby agrees to protect, indemnify, pay and save the Agent
Bank harmless from and against any all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees), which the Agent Bank may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of the Letters of
Credit, other than as a result of bad faith, gross negligence or wilful
misconduct of the Agent Bank as determined by a court of competent
jurisdiction, or (ii) the failure of the Agent Bank to honor a drawing
under any Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
government or governmental authority.
As between the Borrower and the Agent Bank, the Borrower assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit
issued by the Agent Bank for the account of the Borrowers by, the
respective beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, the Agent Bank shall not be responsible:
(i) for the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of the Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of any such Letter of
Credit to comply fully with conditions required in order to draw upon such
Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof; (vii)
for the misapplication by the beneficiary of any such Letter of Credit of
the proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the Agent Bank,
including, without limitation, any act or omission, whether rightful or
wrongful, of any present or future government agency or authority. None of
the above shall affect, impair, or prevent the vesting of any of the Agent
Bank's rights or powers hereunder; provided however, that the Agent Bank
shall be responsible for any payment the Agent Bank makes under any Letter
of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit in
the event such payment constitutes bad faith, gross negligence or willful
misconduct of the Agent Bank as determined by a court of competent
jurisdiction.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Agent
Bank under or in connection with the Letters of Credit issued by it or the
related certificates, if taken
-41-
or omitted in good faith and without bad faith, gross negligence or willful
misconduct, shall not put the Agent Bank under any resulting liability to
the Borrowers or the Banks.
Notwithstanding anything to the contrary contained in this Section
2.7, the Borrowers shall have no obligation to indemnify the Agent Bank in
respect of any liability incurred by the Agent Bank arising out of the bad
faith, gross negligence or willful misconduct of the Agent Bank, as
determined by a court of competent jurisdiction, or out of the wrongful
dishonor by the Agent Bank of proper demand for payment made under the
Letters of Credit issued by it.
H. Computation of Interest. Interest payable pursuant to this
Section 2.7 shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the period during which it accrues.
I. Amendments. The Borrowers may request that the Agent Bank
enter into one or more amendments of any Letter of Credit issued by the
Agent Bank for the account of the Borrowers by delivering to the Agent Bank
an Application and Agreement For Letter of Credit specifying (i) the
proposed date of the amendment, and (ii) the requested amendment. The Agent
Bank shall be entitled to enter into amendments with respect to the Letters
of Credit issued by it; provided however that any such amendment extending
the expiry date, changing the Letter of Credit Fee, or increasing the
stated amount of any Letter of Credit shall only be permitted if the Agent
Bank would be permitted to issue a new Letter of Credit having such an
expiry date, different Letter of Credit Fee, or stated amount under this
Section 2.7 on the date of the amendment.
J. Additional Payments. If by reason of (i) any change in
applicable law, regulation, rule, decree or regulatory requirement or any
change in the interpretation or application by any judicial or regulatory
authority of any law, regulation, rule, decree or regulatory requirement or
(ii) compliance by the Agent Bank with any direction, request or
requirement (whether or not having the force of law) of any governmental or
monetary authority including, without limitation, Regulation D:
(a) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letter of Credit issued
by the Agent Bank; or
(b) there shall be imposed on the Agent Bank any other condition
regarding this Section 2.7 or any Letter of Credit;
and the result of the foregoing is to directly or indirectly increase the
cost to the Agent Bank of issuing, making or maintaining any Letter of
Credit, or to reduce the
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amount receivable in respect thereof by the Agent Bank (other than an
increase in cost or reduction in amounts receivable as consequence of any
Tax, which shall be governed by the provisions of Section 4 hereof), then
and in any such case the Agent Bank may, at any time within a reasonable
period after the additional cost is incurred or the amount received is
reduced, notify the Borrowers, and the Borrowers shall pay on demand such
amounts as the Agent Bank may specify to be necessary to compensate the
Agent Bank for such additional cost or reduced receipt, together with
interest on such amount from ten (10) days after the date of such demand
until payment in full thereof at a rate equal at all times to the Base
Rate. The determination by the Agent Bank of any amount due pursuant to
this Section 2.7J as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on the
Borrowers.
SECTION 3
TERM LOANS
----------
Subject to the terms and conditions of this Loan Agreement, the Banks
hereby agree to make the Term Loans to the Borrowers in the principal
amount of up to Fifteen Million Dollars ($15,000,000.00).
3.1 Principal of the Term Loans.
---------------------------
A. Disbursement of Principal; Term Loan Pro Rata Shares. The
principal of the Term Loans shall be disbursed by the Agent Bank to the
Borrowers on the Closing Date. The respective Term Loan Pro Rata Shares of
each Bank are set forth in Schedule 3.1 hereof.
B. Repayment. The entire unpaid principal balance of the Term
Loans shall be paid as follows: $500,000 principal and accrued interest on
December 31, 1997, and $750,000 principal and accrued interest on the last
day of each Fiscal Quarter thereafter through and including June 30, 2002,
and $1,000,000 principal and accrued interest on September 30, 2002. All
unpaid principal and interest shall be due and payable on September 30,
2002, which is the Term Loan Maturity Date. The obligation of the Borrowers
to repay the Term Loans together with accrued interest thereon is evidenced
by the Term Notes.
C. Records. Each Bank shall record its Term Loan Pro Rata Share
of the Term Loans and each repayment or prepayment in respect of the
principal amount of the Term Loans in such Bank's electronic records. Any
such recordation in accordance with the terms of this Loan Agreement shall
be conclusive and binding on the Borrowers absent manifest error; provided,
the failure to make any such recordation, or any error in such recordation,
shall not affect the Borrowers'
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obligation to repay the Term Loans to the Banks in accordance with this
Loan Agreement and the Term Notes.
3.2 Interest on the Term Loans.
--------------------------
A. Rates of Interest. Subject to the provisions of Section 3.2E,
Section 4 and Section 14 hereof, each Term Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at the (i) Base Rate or (ii) the
LIBOR plus the Applicable LIBOR Margin, as the case may be. The initial
applicable mode of interest rate with respect to Term Loans shall be
selected by the Borrowers on the Closing Date. The interest rate with
respect to any Term Loan may be changed by the Borrowers thereafter from
time to time pursuant to Section 3.2D hereof. If on any day a Term Loan is
outstanding with respect to which notice has not been delivered to the
Agent Bank or the Banks in accordance with the terms of this Loan Agreement
specifying the applicable interest rate, then, for that day, that Term Loan
shall bear interest at the Base Rate.
Subject to the provisions of Section 3.2E, Section 4 and Section 14
hereof, Term Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, at a rate equal to the Base Rate; and
(ii) if a LIBOR Loan, (a) from the Closing Date through and
until the first Business Day of the month that follows the month in which
the Agent Bank has received Borrowers' financial statements for the period
ending March 31, 1998, at a rate per annum equal to the sum of the LIBOR
plus 1.50%, and (b) thereafter at a rate per annum equal to the sum of the
LIBOR plus the Applicable LIBOR Margin; provided that, on each Date of
Determination, commencing with the first Date of Determination to occur
after the Closing Date, the Applicable LIBOR Margin in effect for the
Pricing Period commencing on such Date of Determination and continuing for
the term of the Pricing Period that begins on such Date of Determination
shall be the Applicable LIBOR Margin corresponding to the Pricing Level in
effect for such Pricing Period, as follows:
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-------------------------------------------------------------------------------------------------
Funded Debt Applicable
Pricing Level to EBITDA LIBOR Margin
------------- --------- ------------
-------------------------------------------------------------------------------------------------
Pricing Level I Greater or equal 0.00, but Less than or equal .99 0.625%
-------------------------------------------------------------------------------------------------
Pricing Level II Greater or equal 1.00, but Less than or equal 1.49 0.75
-------------------------------------------------------------------------------------------------
Pricing Level III Greater or equal 1.50, but Less than or equal 1.74 1.00
-------------------------------------------------------------------------------------------------
Pricing Level IV Greater or equal 1.75, but Less than or equal 1.99 1.25
-------------------------------------------------------------------------------------------------
Pricing Level V Greater or equal 2.00, but Less than or equal 2.24 1.50
-------------------------------------------------------------------------------------------------
Pricing Level VI Greater or equal 2.25, but Less than or equal 2.49 1.75
-------------------------------------------------------------------------------------------------
Pricing Level VII Greater or equal 2.50, but Less than or equal 2.99 2.25
-------------------------------------------------------------------------------------------------
Notwithstanding anything in the foregoing to the contrary, if any
Compliance Certificate (the form of which is included as Exhibit G)
delivered by the Borrowers demonstrating the appropriate Pricing Level
shall prove to be incorrect (as determined by reference to a subsequent
Compliance Certificate or subsequent publicly filed financial statements of
the Borrowers or otherwise), then such Compliance Certificate shall no
longer be in effect. In such event, the Agent Bank shall calculate the
difference between the amount of interest actually paid by the Borrowers on
LIBOR Loans on the basis of such incorrect Compliance Certificate and the
amount of interest which would have been due on such LIBOR Loans had such
incorrect Compliance Certificate not been delivered, and shall forward to
the Borrowers a statement setting forth the amount of the difference and
the method of calculation of such amount (which calculation, in the absence
of demonstrable error, shall be deemed correct) and the Borrowers shall pay
such amount to the Agent Bank for the benefit of the Banks within three (3)
Business Days of such notice.
B. Interest Periods for LIBOR Loans. In connection with each
Tranche of a Term Loan that is to be a LIBOR Loan, the Borrowers may,
pursuant to the applicable Notice of Conversion/Continuation, select the
Interest Period to be applicable to such LIBOR Loan, which Interest Period
shall be at the Borrowers' option either a one (1), two (2), three (3) or
six (6) month period. The following provisions are applicable to Interest
Periods generally:
(i) the initial Interest Period for any LIBOR Loan shall commence
on the Funding Date of such LIBOR Loan, in the case of a Term Loan
initially made as a LIBOR Loan, or on the date specified in the applicable
Notice of Conversion/Continuation, in the case of a Term Loan converted to
a LIBOR Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a LIBOR Loan continued as such pursuant to Notice of
Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
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(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day; provided
further that such extension or reduction of time shall be included in the
computation of the payment of interest hereunder or under the Term Notes;
(iv) any Interest Period of a LIBOR Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) of this Section 3.2B, end
on the last Business Day of a calendar month;
(v) in the event the Borrowers fail to specify an Interest Period
with respect to a LIBOR Loan in the applicable Notice of
Conversion/Continuation, the Borrowers shall be deemed to have selected an
Interest Period of one month; and
(vi) no Interest Period shall extend beyond the Term Loan
Maturity Date.
C. Interest Payments. Subject to the provisions of Section 3.2E
hereof, (i) to the extent a Term Loan bears interest at the Base Rate,
interest shall be payable on such Term Loan in arrears on and to the last
day of each calendar quarter and at maturity, and (ii) to the extent a Term
Loan bears interest at LIBOR plus the Applicable LIBOR Margin, interest
shall be payable on such Term Loan in arrears on and to the ninetieth
(90th) day of the Interest Period applicable to such Term Loan and/or on
the last day of such Interest Period applicable to such Term Loan.
D. Conversion or Continuation. Subject to the provisions of
Section 3.3 hereof, the Borrowers shall have the option (i) to convert at
any time all or any part of outstanding Term Loans bearing interest as Base
Rate Loans to Term Loans bearing interest as LIBOR Loans, and (ii) upon the
expiration of any Interest Period applicable to a LIBOR Loan, (a) to
continue all or any portion of such Loan as a LIBOR Loan, with the
succeeding Interest Period of such continued LIBOR Loan to commence on the
most recent Interest Payment Date thereof or (b) to convert all or part of
such Loan to a Term Loan bearing interest as a Base Rate Loan.
BT, as agent for the Borrowers, shall deliver a Notice of
Conversion/Continuation to the Agent Bank no later than 12:00 noon
(Louisville, Kentucky time) at least three (3) Business Days in advance of
the proposed conversion/continuation date. A Notice of Conversion/
Continuation shall specify
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(i) the proposed conversion/continuation date (which shall be a Business
Day), (ii) the amount of the Term Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or continuation of, a LIBOR Loan, the requested Interest
Period, and (v) in the case of a conversion to, or a continuation of, a
LIBOR Loan or a Base Rate Loan, that no Event of Default has occurred and
is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, BT, as agent for the Borrowers, may give the Agent
Bank telephonic notice by the required time of any proposed
conversion/continuation under this section 3.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Agent Bank on or before the proposed
conversion/continuation date.
The Banks shall not incur any liability to the Borrowers in acting
upon any telephonic notice referred to above that the Agent Bank believes
in good faith to have been given by a duly Authorized Officer or other
Person authorized to act on behalf of the Borrowers or for otherwise acting
in good faith under this Section 3.2D, and upon conversion or continuation
of the applicable basis for determining the interest rate with respect to
any Term Loans in accordance with this Loan Agreement pursuant to any such
telephonic notice, the Borrowers shall have effected a conversion or
continuation, as the case may be, hereunder. The Borrowers agree that the
Agent Bank and the Banks are entitled to rely upon any Notice of
Conversion/Continuation submitted to the Agent Bank by BT, the same as if
the Notice of Conversion/Continuation had been executed by each of the
other Borrowers, unless and until the other Borrowers have notified the
Agent Bank and the Banks in writing pursuant to Section 15 hereof that BT
is no longer authorized to act as agent for and behalf of the other
Borrowers.
Except as otherwise provided in Sections 4.2, 4.3 and 4.7 hereof, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
LIBOR Loan (or telephonic notice in lieu thereof) shall be irrevocable on
and after the related Interest Rate Determination Date and the Borrowers
shall be bound to effect a conversion or continuation in accordance
therewith.
E. Post-Maturity Interest. Any principal of the Term Loans not
paid when due and, to the extent permitted by applicable law, any accrued
interest on the Term Loans or any fees or other amounts owed by the
Borrowers hereunder not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate equal to the Default Rate. Payment or
acceptance of the increased rates of interest provided for in this Section
3.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of the Banks.
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F. Computation of Interest. Interest on Term Loans bearing
interest as LIBOR Loans shall be computed on the basis of a 360-day year,
and interest on Term Loans bearing interest as Base Rate Loans shall be
computed on the basis of an actual 365 or 366-day year, as applicable, in
each case for the actual number of days elapsed in the period during which
it accrues. In computing interest on any Term Loan, the date of the making
of such Term Loan or the first day of an Interest Period applicable to such
Term Loan, as the case may be, shall be included, and the date of payment
of such Term Loan or the expiration date of an Interest Period applicable
to such Term Loan or, with respect to a Term Loan being converted to a
LIBOR Loan or a Base Rate Loan, the date of conversion of such Term Loan to
such LIBOR Loan or a Base Rate Loan shall be excluded; provided that if a
Term Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Term Loan.
G. Limitation on LIBOR Loan Tranches. At no time shall the
number of Term Loans bearing interest as LIBOR Loans outstanding at any
time outstanding exceed two (2).
3.3 Prepayments and Payments; Reductions in Term Loans
--------------------------------------------------
Commitments.
-----------
A. Voluntary Prepayments. The Borrowers may, upon not less than
one (1) Business Day prior written or telephonic notice confirmed in
writing to the Agent Bank, at any time and from time to time, prepay any
Term Loans in whole or in part in an aggregate minimum amount of One
Hundred Thousand Dollars ($100,000) and integral multiples of Twenty Five
Thousand Dollars ($25,000) in excess of that amount; provided however that
in the event that the Borrowers prepay a LIBOR Loan pursuant to this
Section 3.3A on a date that is other than the expiration date of the
Interest Period applicable thereto, the Borrowers shall compensate the
Banks in accordance with the provisions of Section 4.4 hereof. If the
Borrowers have given notice of prepayment as aforesaid, the principal
amount of the Term Loans specified in such notice shall become due and
payable on the prepayment date specified therein. All prepayments of
principal of the Term Loans shall be accompanied by the payment of accrued
interest on the principal amount being prepaid and shall be applied to the
payment of interest before application to principal. All prepayments of the
Term Loans shall be applied first to Base Rate Loans to the full extent
thereof and then shall be applied to LIBOR Loans, in each case in a manner
which minimizes the amount of any payments required to be made by the
Borrowers pursuant to Section 4.4 hereof.
B. Mandatory Prepayments. To the extent that the Borrowers have
engaged in a sale of assets which causes a mandatory prepayment to be
required pursuant to Section 8.1, the Borrowers shall cause 75% of the net
proceeds of the sale of such assets to be applied to permanently reduce the
outstanding
-48-
principal balance of the Term Loans. Each mandatory prepayment of the Term
Loans shall be applied to principal installments in inverse order of
maturity as and when such proceeds are received. To the extent that net
sale proceeds still remain after reduction of the outstanding principal
balance of the Term loans to $0, such net sale proceeds shall be applied as
described in Section 2.4B hereof.
C. General Provisions Regarding Payments.
-------------------------------------
(i) Manner and Time of Payment. All payments of principal,
interest and fees hereunder and under the Term Notes by the Borrowers shall
be made without defense, setoff and counterclaim and in same day funds and
delivered to the Agent Bank not later than 12:00 noon (Louisville, Kentucky
time) on the date due at its office located in Louisville, Kentucky; funds
received by the Agent Bank after that time shall be deemed to have been
paid by the Borrowers on the next succeeding Business Day.
(ii) Payments on Business Days. Whenever any payment to be made
hereunder or under the Term Notes shall be stated to be due on a day that
is not a Business Day, such payment shall be made on the next succeeding
Business Day (unless no further Business Day occurs in such month, in which
case payment shall be made on the next preceding Business Day) and such
extension or reduction of time shall be included in the computation of the
payment of interest hereunder or under the Term Notes.
3.4 Use of Proceeds.
---------------
A. Term Loans. The principal of the Term Loans shall be used to
purchase the assets of the Government Services Division of DATATAPE, Inc.,
to finance working capital requirements and to finance general corporate
purposes of the Borrowers.
B. Margin Regulations. No portion of the principal of the Term
Loans shall be used by the Borrowers in any manner which might cause the
making of the Term Loans or the application of the proceeds thereof to
violate Regulation G, Regulation U, Regulation T, or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of
such Board or to violate the Securities and Exchange Act of 1934, in each
case as in effect on the date or dates of each Term Loan. If requested by
the Banks, the Borrowers shall execute and deliver to the Banks a completed
Federal Reserve Form U-1.
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SECTION 4
SPECIAL PROVISIONS GOVERNING LIBOR LOANS
----------------------------------------
Notwithstanding any other provision of this Loan Agreement to the
contrary, the following provisions shall govern with respect to LIBOR Loans
as to the matters covered:
4.1 Determination of LIBOR. As soon as practicable after 12:00
noon Louisville, Kentucky time on each Interest Rate Determination Date
applicable to the particular LIBOR Loan, the Agent Bank shall furnish to
the Borrowers a quote of the LIBOR to apply to the particular LIBOR Loan.
The Agent Bank will in addition confirm to the Borrowers in writing the
actual LIBOR prior to the funding of the particular LIBOR Loan, and the
determination of each LIBOR by the Agent Bank, provided that the Agent Bank
shall have determined the LIBOR in good faith, shall be final, conclusive
and binding upon both the Borrowers and the Banks in the absence of
manifest or demonstrable error and shall apply to the particular LIBOR Loan
for the applicable Interest Period.
4.2 Inability to Determine LIBOR. In the event that the Agent
Bank shall have determined in good faith (which determination shall be
final and conclusive and binding upon the Borrowers), on any Interest Rate
Determination Date or Funding Date with respect to any LIBOR Loans, that by
reason of circumstances occurring after the date of this Loan Agreement
affecting the London interbank market, adequate and fair means do not exist
for ascertaining the interest rate applicable to such LIBOR Loans on the
basis provided for in the definition of LIBOR, the Agent Bank shall on such
date give notice (by telecopy or by telephone confirmed in writing) to the
Borrowers and the Banks of such determination, whereupon (i) no Revolving
Credit Loans or Term Loans may be made as, or converted to, LIBOR Loans
until such time as the Agent Bank notifies the Borrowers and the Banks that
the circumstances giving rise to such notice no longer exist; and (ii) any
Request for Revolving Credit Loan or Notice of Conversion/ Continuation
given by the Borrowers with respect to the Revolving Credit Loans or Term
Loans in respect of which such determination was made shall be deemed to be
rescinded by the Borrowers, and any Request for Revolving Credit Loan or
Notice of Conversion/Continuation given by the Borrowers with respect to
the Revolving Credit Loans or Term Loans in respect of which such
determination was made shall be deemed to be a request to make Base Rate
Loans.
4.3 Illegality or Impracticability of LIBOR Loans. In the event
that on any date any Bank shall have determined in good faith (which
determination shall be final and conclusive and binding upon the parties
hereto but shall be made only after consultation with the Borrowers) that
the making, maintaining or continuation of its LIBOR Loans (i) has become
unlawful as a result of compliance by such Bank in good faith with any law,
treaty, governmental rule, regulation, guideline or order
-50-
(or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to
comply therewith would not be unlawful) or (ii) has become impracticable,
or would cause such Bank material hardship, as a result of contingencies
occurring after the date of this Loan Agreement which materially and
adversely affect the London interbank market or the position of such Bank
in that market, then such Bank shall on that day give notice (by telecopy
or by telephone confirmed in writing) to the Borrowers and the other Banks
of such determination. Thereafter, (a) the obligation of the Banks to make
Revolving Credit Loans and Term Loans as, or to convert Revolving Credit
Loans or Term Loans to, LIBOR Loans shall be suspended until such notice
shall be withdrawn by the particular Bank, (b) to the extent such
determination by the particular Bank relates to a LIBOR Loan then being
requested by the Borrowers pursuant to a Request for Revolving Credit Loan
or Notice of Conversion/Continuation, the Banks shall make such LIBOR Loan
as (or convert such LIBOR Loan to, as the case may be) a Base Rate Loan,
and (c) the Banks' obligation to maintain their outstanding LIBOR Loans, as
the case may be (the "Affected Loans"), shall be terminated at the earlier
to occur of the expiration of the Interest Periods then in effect with
respect to the Affected Loans or when required by law, and the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination.
4.4 Compensation For Breakage or Non-Commencement of Interest
Periods. The Borrowers shall compensate the Banks, upon written request by
the Banks (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by the Banks to lenders of funds
borrowed by them to make or carry the LIBOR Loans and any reasonable loss,
expense or liability sustained by the Banks in connection with the
liquidation or re-employment of such funds) which the Banks may sustain:
(i) if for any reason (other than a default by the Banks or the conversion
of the Borrowers' Request for Revolving Credit Loan or Notice of
Conversion/Continuation with respect to Revolving Credit Loans or Term
Loans from a request to make LIBOR Loans into a request to make Base Rate
Loans pursuant to Sections 4.2 or 4.3 hereof) a borrowing of any LIBOR Loan
does not occur on a date specified therefor in a Request for Revolving
Credit Loan or Notice of Conversion/Continuation with respect to Revolving
Credit Loans or Term Loans or a telephonic request for borrowing, or a
conversion to or continuation of any LIBOR Loan does not occur on a date
specified therefor in a Request for Revolving Credit Loan or Notice of
Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment or conversion of any of the LIBOR
Loans occurs on a date that is not the last day of the Interest Period
applicable to that LIBOR Loan, (iii) if any prepayment of any of the LIBOR
Loans is not made on any date specified in a notice of prepayment given by
the Borrowers, or (iv) as a consequence of any other default by the
Borrowers to repay the LIBOR Loans when required by the terms of this Loan
Agreement. The Banks shall deliver
-51-
to the Borrowers a certificate setting forth the calculation of the
compensation claimed to be due to the Banks within thirty (30) days after
the occurrence of the event giving rise to such claim for compensation,
which calculations shall be binding upon the Borrowers in the absence of
manifest or demonstrable error.
4.5 Booking of LIBOR Loans. Each Bank may make, carry or
transfer its Revolving Credit Facility Pro Rata Share and Term Loan Pro
Rata Share of LIBOR Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Bank; provided however that
if any transfer of a Bank's Revolving Credit Pro Rata Share or Term Loan
Pro Rata Share of LIBOR Loans from the office where such Bank's Revolving
Credit Facility Pro Rata Share and Term Loan Pro Rata Share of LIBOR Loans
originated shall increase the cost to the Borrowers of such LIBOR Loans,
such transfer may occur only if required (i) by the introduction of or any
change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (ii) to comply with any guideline or request from any
central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not such guideline or request shall have the force of law).
4.6 Assumptions Concerning Funding of LIBOR Loans. The
calculation of all amounts payable to the Banks under this Section 4 and
under Section 14.1 hereof shall be made as though each Bank had actually
funded each LIBOR Loan through the purchase of a deposit bearing interest
at the rate obtained pursuant to the definition of LIBOR in an amount equal
to such Bank's Revolving Credit Facility Pro Rata Share (or Term Loan Pro
Rata Share in the case of Term Loans bearing interest as LIBOR Loans) of
the amount of such LIBOR Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such deposit from an
offshore office of such Bank to a domestic office of such Bank in the
United States of America; provided however that each Bank may fund its
Revolving Credit Facility Pro Rata Share or Term Loan Pro Rata Share of the
LIBOR Loans in any manner it sees fit and the foregoing assumptions shall
be utilized only for the purposes of calculating amounts payable under this
Section 4 and under Section 14.1 hereof.
4.7 LIBOR Loans After Event of Default. After the occurrence and
during the continuation of an Event of Default, (i) the Borrowers may not
elect to have Revolving Credit Loans or Term Loans made or maintained as,
or converted to, LIBOR Loans after the expiration of any Interest Period
then in effect for such Loans, (ii) any Request for Revolving Credit Loan
or Notice of Conversion/Continuation given by the Borrowers with respect to
a requested borrowing or conversion/ continuation, as applicable, that has
not yet occurred shall be deemed to be rescinded by the Borrowers, and
(iii) all LIBOR Loans shall thereupon bear interest at the Default Rate
until the Event of Default is cured or the Revolving
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Credit Loans and Term Loans are paid in full to the Banks and the Revolving
Loan Commitments have expired or have been terminated by the Borrowers or
the Banks.
SECTION 5
CLOSING CONDITIONS
------------------
The establishment of the Revolving Credit Facility by the Banks
in favor of the Borrowers, the obtaining of Revolving Credit Loans, Swing
Line Loans and/or Letters of Credit by the Borrowers thereunder, and the
obtaining of the Term Loans by the Borrowers are subject to the
satisfaction of all of the following conditions:
5.1 Initial Closing Conditions. The obligation of the Banks to
make the initial Revolving Credit Loans, the Swing Line Loans and the Term
Loans to the Borrowers are subject to the condition that, in addition to
the satisfaction of the conditions precedent specified in Section 5.2
hereof and, with respect to the Swing Line Loans, the conditions precedent
specified in Section 2.6A(iii) hereof, as of the Closing Date, the Banks
shall have received the following from the Borrowers, dated the Closing
Date or such other date as shall be acceptable to the Banks:
A. Loan Agreement. This Loan Agreement, duly executed and
delivered by the Borrowers.
B. Revolving Credit Note. The Revolving Credit Note, duly
executed and delivered by the Borrowers.
C. Term Note. The Term Note, duly executed and delivered by the
Borrowers.
D. Security Agreements. The Security Agreements, duly and
respectively executed and delivered by each of the Borrowers, granting to
the Banks a security interest in all of the business assets of the
Borrowers.
E. UCC-1 Financing Statements. UCC-1 financing statements, duly
and respectively executed and delivered by each of the Borrowers, which,
upon filing in the proper UCC filing offices, will perfect the Banks'
security interest in all of the business assets of the Borrowers which can
be perfected through filing of a UCC-1 statement.
F. Guaranty Agreement. The Guaranty Agreement, duly executed
and delivered by Group Financial, guarantying the Borrower's payment of the
Loans.
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G. Stock Pledge Agreement. The Stock Pledge Agreement, duly
executed and delivered by Group Financial, together with the stock
certificates evidencing all of the issued and outstanding shares of common
stock of the Borrowers owned by Group Financial and executed blank stock
powers appended thereto. The Borrowers have requested that the Agent Bank
agree to temporarily release the pledged stock certificates for Old GTC,
Old Xxxx and Old TT in trust to the Borrowers to enable the Borrowers to
consummate the Proposed Merger and to redeliver to the Agent Bank stock
certificates of successor corporations that are to survive the Proposed
Merger (e.g. New GTC, New Xxxx, New TT). The Borrowers have represented
that the released stock certificates will be held in trust for the benefit
of the Agent Bank and that the Agent Bank's security interest will continue
to remain perfected in such stock certificates and in the replacement stock
certificates issued in the Proposed Merger. Based on these agreements and
representations, the Agent Bank has agreed to temporarily release the
described stock certificates for the purposes described above even if, at
the time of the Proposed Merger, an Event of Default exists under this
Agreement.
H. Mortgages. The Mortgages, duly and respectively executed and
delivered by the appropriate Borrowers, granting to the Banks a mortgage on
the real property, personal property and fixtures described therein.
I. Opinion of Counsel. A written opinion of counsel on behalf
of Group Financial and the Borrowers, in form and substance satisfactory to
the Banks.
J. Certificate of Secretary of Group Financial. A Certificate
of the Secretary or Assistant Secretary of Group Financial (i) certifying
as to the authenticity, completeness and accuracy of, and attaching copies
of, (a) the Articles of Incorporation and By-Laws of Group Financial, and
(b) Resolutions of the Board of Directors of Group Financial authorizing
Group Financial's execution, delivery and performance of the Loan Documents
to which Group Financial is a party, and (ii) certifying the names and true
signatures of the officers of Group Financial authorized to execute and
deliver the Loan Documents to which Group Financial is party, on behalf of
Group Financial.
K. Certificate of Secretary of Each Borrower. A Certificate of
the Secretary or Assistant Secretary of each Borrower (i) certifying as to
the authenticity, completeness and accuracy of, and attaching copies of,
(a) the Articles of Incorporation and By-Laws of such Borrower, and (b)
Resolutions of the Board of Directors of such Borrower authorizing the
execution, delivery and performance of the Loan Documents to which the
Borrower is a party by such Borrower, and (ii) certifying the names and
true signatures of the officers of such Borrower authorized to execute and
deliver the Loan Documents to which such Borrower is a party on behalf of
such Borrower.
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L. Compliance Certificate. A Compliance Certificate in the form
of Exhibit G hereto, completed by BT, on behalf of itself and the
Borrowers, and executed by the President or Chief Financial Officer of BT,
for itself and as agent for the Borrowers, certifying as to the accuracy of
the representations and warranties of BT and the Borrowers set forth in
this Loan Agreement as of the date hereof.
M. Insurance Certificates. The certificates of insurance
required by Section 7.11 of this Agreement.
N. Title Insurance Policies. Title insurance policies with
respect to each of the Xxxx Real Property and the TT Real Property, in
standard ATLA form, in favor of the Agent Bank as mortgagee, issued by
title insurance companies acceptable to the Agent Bank. Each policy of
title insurance shall (i) be in an amount not less than the appraised value
of the real property and improvements which the respective Mortgage
secures, and (ii) insure that the Mortgage on such property is valid and
(iii) insure that such property is free from all liens and encumbrances,
other than liens and encumbrances acceptable to the Agent Bank.
O. Surveys. Surveys with respect to each of the Xxxx Real
Property and the TT Real Property, prepared by a registered land surveyor,
showing the perimeter boundaries of such property, including any
improvements thereon, any easements, building limits or other encumbrances
of record related to such property, all as satisfactory to the Agent Bank.
The surveys must each bear the land surveyor's original signature seal,
registration number and bear a statement indicating whether any of the
property is located in a flood hazard area as designated by HUD. If
improvements are located in a flood hazard area, the Borrowers shall
provide a flood insurance policy in an amount equal to the appraised value
of the property.
P. Appraisals. Appraisals with respect to each of the Xxxx Real
Property and the TT Real Property, dated no earlier than June 30, 1996, in
form satisfactory to the Agent Bank.
Q. Environmental Audits. Copies of any and all environmental
reports, studies, audits and similar documentation with respect to the
condition of the Mortgaged Properties which is in the possession or the
constructive possession of the Borrowers (the "Existing Studies"). The
Agent Bank shall have an opportunity to review the Existing Studies, and if
in the Agent Bank's discretion it is in any manner unsatisfied with the
form or content of the Existing Studies, the Agent Bank shall have the
right to require an environmental site assessment(s) and/or audit(s)
(singularly or collectively, as appropriate, the "Environmental Audit") of
the Mortgaged Property or properties in question. With respect to the
Environmental Audit, the Borrowers shall select an appropriate
environmental professional from the Agent Bank's approved list (the
"Auditor") to perform the Environmental Audit. The
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Borrowers shall be responsible for arranging the Environmental Audit with
the Auditor, and the Environmental Audit shall be performed at the sole
cost and expense of the Borrowers.
R. Other Documents. Such other documents as the Banks may
reasonably request.
5.2 Conditions to All Revolving Credit Loans, Letters of Credit
and Swing Line Loans. The obligation of the Banks to make each Revolving
Credit Loan on each Funding Date and to issue, through the Agent Bank, each
Letter of Credit, and the obligation of the Agent Bank to make each Swing
Line Loan pursuant to the Swing Line Credit Subfacility, is in each case
subject to the following additional conditions precedent:
A. Request for Revolving Credit Loan. The Agent Bank shall have
received with respect to each Revolving Credit Loan, in accordance with the
provisions of Section 0.xX of this Loan Agreement, an originally executed
Request For Revolving Credit Loan, in the form of Exhibit E hereto, in each
case signed by an Authorized Officer of BT, as agent for the Borrowers.
B. Letters of Credit. The Agent Bank shall have received with
respect to each Letter of Credit, in accordance with the provisions of
Section 2.7B of this Loan Agreement, an originally executed Application and
Agreement For Letter of Credit relating to such Letter of Credit, in each
case signed by an Authorized Officer of BT, as agent for the Borrowers.
C. Request for Swing Line Loan. The Agent Bank shall have
received with respect to each Swing Line Loan, in accordance with the
provisions of Section 2.6A(iii) of this Loan Agreement, an originally
executed Request For Swing Line Loan, in each case signed by an Authorized
Officer of BT, as agent for the Borrowers.
D. General Conditions. As of the Funding Date of any Revolving
Credit Loan, the date of issuance or extension of the stated expiration
date of any Letter of Credit, or the date of any Swing Line Loan:
(i) The representations and warranties contained herein
shall be true and correct in all material respects on and as of that date
to the same extent as though made on and as of that date;
(ii) No event shall have occurred and be continuing or
would result from the funding of the Revolving Credit Loan contemplated by
such Request For Revolving Credit Loan, the issuance or extension of the
stated expiration date of such Letter of Credit contemplated by such
Application and
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Agreement For Letter of Credit, or the funding of the Swing Line Loan
contemplated by such Request for Swing Line Loan which would constitute an
Event of Default;
(iii) The Borrowers shall have performed in all material
respects all agreements and satisfied all conditions which this Loan
Agreement and the other Loan Documents provide shall be performed by them
on or before such date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Banks from
making that Revolving Credit Loan or issuing, through the Agent Bank, that
Letter of Credit or the Agent Bank from making such Swing Line Loan; and
(v) There shall not be pending or, to the knowledge of the
Borrowers threatened, any action, suit, proceeding or arbitration or, to
the knowledge of the Borrowers, any governmental investigation pending or
threatened, against or affecting the Borrowers or any property of the
Borrowers seeking damages in excess of $1,000,000, which has not been
disclosed by the Borrowers pursuant to Section 6.9 hereof or which prior to
(a) the making of the last preceding Revolving Credit Loan (or, in the case
of the initial Revolving Credit Loan made hereunder, prior to the execution
of this Loan Agreement), (b) the issuing of the most recent Letter of
Credit (or in the case of the initial Letter of Credit issued hereunder,
prior to the execution of this Loan Agreement) or the most recent extension
of the stated maturity date of any Letter of Credit, or (c) the making of
the last Swing Line Loan (or in the case of the initial Swing Line Loan
hereunder, prior to the execution of this Loan Agreement) if determined
adversely, would have a material adverse effect. Further, there shall have
occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, which,
in either event, in the opinion of the Banks, could reasonably be expected
to have a material adverse effect on the financial condition of the
Borrowers. No injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of this
Loan Agreement or the making of the Revolving Credit Loans, the making of
the Term Loans, the issuing or extension of the respective stated
expiration dates of the Letters of Credit, and/or the making of the Swing
Line Loans hereunder.
E. General Conditions. As of the Funding Date of any Revolving
Credit Loan, the date of issuance or extension of the stated expiration
date of any Letter of Credit, or the date of any Swing Line Loan, the Agent
Bank shall have received such other documentation as it may reasonably
request.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrowers represent and warrant to the Banks as follows, which
representations and warranties shall be deemed to be continuing
representations and warranties until the Revolving Credit Notes, the Term
Notes and the other obligations have been respectively paid in full to the
Banks, and which representations and warranties shall survive the execution
and delivery of this Loan Agreement:
6.1 Organization, Standing, etc, of Group Financial and the
Borrowers. Group Financial is a corporation duly organized and validly
existing under the laws of the Commonwealth of Kentucky. BT is a
corporation duly organized and validly existing under the laws of the
Commonwealth of Kentucky. Xxxx is a corporation duly organized and validly
existing under the laws of the State of Florida. TT is a corporation duly
organized and validly existing under the laws of the Commonwealth of
Kentucky. Each of the Borrowers has all requisite power and authority to
own and operate its properties, to carry on its businesses as now conducted
and proposed to be conducted, and to execute and deliver this Loan
Agreement and the other Loan Documents to which it is a party and to carry
out the terms hereof and thereof. The Borrowers have delivered to the
Agent Bank a true and complete copy of their Articles of Incorporation and
Certificates of Incorporation (as applicable) and By-Laws as in effect on
the date hereof.
6.2 Qualification. Schedule 6.2 hereto sets forth a list of the
Borrowers and locations in which they are qualified to do business. No
Borrower is presently required to be qualified to transact business as a
foreign corporation in any jurisdiction other than the states identified in
Schedule 6.2 hereto, and except where failure to so qualify would not have
a material adverse effect upon the business or operations of such Borrower.
6.3 Use of Proceeds. The Borrowers' uses of the proceeds of the
Term Loans, the Revolving Credit Loans, the Swing Line Loans and the uses
of the Letters of Credit are and will continue to be legal and proper
corporate uses duly authorized by the Board of Directors of each of the
Borrowers, and such uses are consistent with all applicable laws and
statutes as in effect as of the date hereof.
6.4 Intellectual Property. To the best of the Borrowers'
knowledge, the Borrowers own or possess adequate assets, licenses, patents,
patent applications, copyrights, trademarks, trademark applications, trade
names, franchises, consents, authorizations and service marks and rights
with respect to the foregoing necessary for the conduct of their businesses
as presently conducted and as proposed to be conducted, without any known
conflict with the rights of others.
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6.5 Disclosure; Solvency. Neither this Loan Agreement nor any
other document furnished to the Banks by or on behalf of the Borrowers in
connection with the Term Loans, the Revolving Credit Facility and/or the
Swing Line Loans and/or the other Obligations taken as a whole contains any
statement of any material fact which is untrue or omits to state a material
fact necessary in order to make the statements contained herein or therein
not misleading. There is no fact known to the Borrowers which materially
adversely affects or in the future will (so far as the Borrowers can now
foresee) materially adversely affect the business, operations, affairs or
condition of the Borrowers or any of their properties which has not been
set forth in this Loan Agreement or in the other documents furnished to the
Banks by or on behalf of the Borrowers in connection with the Term Loans,
the Revolving Credit Facility, the Swing Line Loans and the other
Obligations. The Borrower, on a Combined basis in accordance with GAAP,
are currently solvent; and neither the issuance and delivery of the Term
Notes and the Revolving Credit Notes to the Banks, nor the obtaining of the
Letters of Credit, nor the performance of the transactions contemplated
hereunder or thereunder, will render the Borrowers, on a Combined basis in
accordance with GAAP, insolvent, inadequately capitalized to undertake the
transactions contemplated hereunder or to undertake the businesses in which
they are presently engaged or about to engage or render any of the
Borrowers unable to pay their debts as they become due; the Borrowers are
not contemplating either the filing of a petition by them or the
commencement of a case by them under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of their
property; and the Borrowers have no knowledge of any Person contemplating
the filing of any such petition or commencement of any such case against
the Borrowers.
6.6 Tax Returns and Payments. To the best of the Borrowers'
knowledge after due inquiry, the Borrowers have filed all tax returns
required by law to be filed by them and have paid all taxes, assessments
and other governmental charges levied upon their properties, assets, income
and franchises, other than those not yet delinquent and those, not
substantial in aggregate amount, being or about to be contested as provided
in Section 6.6 hereof. The charges, accruals and reserves on the books of
the Borrowers in respect of their taxes are adequate in the opinion of the
Borrowers. The Borrowers know of no material unpaid assessment for
additional taxes or of any basis therefor.
6.7 Funded Debt, etc. As of the date of this Loan Agreement, and
without regard to the transactions contemplated hereunder, there is no
outstanding Funded Debt of the Borrowers in respect of borrowed money,
capital leases or the deferred purchase price of property, existing
guaranties issued by the Borrowers or existing liens and security interests
encumbering the assets of the Borrowers other than as disclosed in the most
recent annual and monthly financial statements of the Borrowers delivered
to the Banks or on Schedule 6.7 attached hereto and made a part hereof.
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6.8 Title to Properties; Liens; Leases. The Borrowers have good and
marketable title to all of their properties and assets and none of such
properties or assets is subject to any mortgage, pledge, or security
interest, or any material lien, charge or encumbrance other than as
described in Section 8.4 hereof and other than statutory landlord liens.
The Borrowers enjoy quiet possession under all leases to which they are
party as lessee, and all of such leases are to the best knowledge of the
Borrowers, after due inquiry, validly existing and in full force and
effect, and, to the best knowledge of the Borrowers, after due inquiry,
neither the lessor nor the Borrowers as lessee is in default under any of
such leases.
6.9 Litigation, etc. Except as previously disclosed to the Agent
Bank, there is no action, proceeding or investigation pending or, to the
best knowledge of the Borrowers, threatened (or any basis therefor known to
the Borrowers) (i) which questions the validity of this Loan Agreement, the
Revolving Credit Notes, the Term Notes, the Mortgages, the Stock Pledge
Agreement or the other Loan Documents or any action taken or to be taken
pursuant hereto or thereto, (ii) which is not fully covered by insurance
other than any applicable deductible, or (iii) which might result, either
in any case or in the aggregate, in any material adverse change in the
businesses, operations, affairs or condition of the Borrowers or in any of
their material properties or assets or in any material liability on the
part of the Borrowers. The Borrowers have provided the Agent Bank with a
list of all pending actions, proceedings and investigations involving (y)
claims against the Borrowers seeking damages in excess of $1,000,000 in any
individual case or in excess of $2,500,000 in the aggregate which is not
fully covered by insurance other than any applicable deductible, and (z)
claims of the Borrowers for payment, reimbursement or under contracts in
excess of $1,000,000 or in excess of $2,500,000 in the aggregate.
6.10 Authorization; Compliance With Other Instruments, etc. The
execution, delivery and performance of this Loan Agreement, the Revolving
Credit Notes, the Mortgages and the other Loan Documents to which the
Borrowers are party have been duly authorized by all necessary corporate
action on the part of the Borrowers, will not result in any violation of or
be in conflict with or constitute a default under any term of the Articles
of Incorporation or Certificate of Incorporation, as applicable, or By-Laws
of the Borrowers or of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to the Borrowers, or
result in the creation of any mortgage, lien, charge or encumbrance upon
any of the properties or assets of the Borrowers pursuant to any such term,
except as provided in the Loan Documents. The Borrowers are not in
violation of any term of their Articles of Incorporation or Certificate of
Incorporation, as applicable, or By-Laws, or of any material term of any
agreement or instrument to which they are party, or, to the Borrowers' best
knowledge, of any judgment, decree, order, statute, rule or governmental
regulation applicable to the Borrowers. Without limiting the generality of
the foregoing, to the best knowledge of the Borrowers, the Borrowers are in
compliance in all material respects with all
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federal and state laws and all rules, regulations and administrative orders
of all state and local commissions or authorities which are applicable to
the Borrowers or to the operation of their businesses.
6.11 Enforceability. This Loan Agreement, the Revolving Credit
Notes, the Term Notes, the Mortgages, the Stock Pledge Agreement, and the
other Loan Documents to which the Borrowers are party constitute legal,
valid and binding obligations of the Borrowers, enforceable against the
Borrowers in accordance with their respective terms, except to the extent
the enforceability hereof and thereof may be limited by applicable laws
affecting creditors, rights generally and by equitable principles.
6.12 Governmental Consent. To the best knowledge of the
Borrowers, the Borrowers are not required to obtain any order, consent,
approval or authorization of, and are not required to make any declaration
or filing with, any governmental authority in connection with the execution
and delivery of this Loan Agreement, the Revolving Credit Notes, the Term
Notes, the Mortgages, the Stock Pledge Agreement, or the other Loan
Documents to which the Borrowers are party.
6.13 Environmental Matters. Except as disclosed in the Existing
Studies delivered to the Agent Bank:
A. The Borrowers have duly complied in all material respects
with, and their businesses, operations, assets, equipment, leaseholds and
facilities, including, without limitation, the Real Property, are in
material compliance with, the provisions of all federal, state and local
environmental, health and safety laws, codes and ordinances, and all rules
and regulations promulgated thereunder, including, without limitation, all
the Relevant Environmental Laws and all other laws and regulations with
respect to reporting releases of Hazardous Materials and the registration
and maintenance of underground storage tanks.
B. The Borrowers have been issued, and will maintain, all
required federal, state and local permits, licenses, certificates and
approvals relating to (1) air emissions; (2) discharges to surface water or
ground water; (3) noise emissions; (4) solid or liquid waste disposal; (5)
the use, generation, storage, transportation or disposal of Hazardous
Materials; and (6) other environmental, health or safety matters.
C. The Borrowers have not received notice of violations of any
federal, state or local environmental, health or safety laws, codes or
ordinances, or any rules or regulations promulgated thereunder, including,
without limitation, any of the Relevant Environmental Laws, which relate to
the use, ownership or occupancy of any of the Real Property and the
Borrowers are not in violation in any
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material respect of any covenants, conditions, easements, rights of way or
restrictions affecting any of the Real Property or any rights appurtenant
thereto.
D. Except in accordance with a valid governmental permit,
license, certificate or approval, to our knowledge there has been no
emission, spill, release, discharge or threatened release into or upon (1)
the air; (2) the soils or any improvements located thereon; (3) the surface
water or ground water; or (4) the sewer, septic system or waste treatment,
storage or disposal system servicing any of the Real Property, of any
Hazardous Material at, upon, under, in or from any of the Real Property
(any of which is hereafter referred to as a "Hazardous Discharge").
E. There has been no complaint, order, directive, claim,
citation or notice by any governmental authority or any other Person
concerning any violation of Relevant Environmental Laws with respect to (1)
air emissions; (2) spills, releases or discharges to soils or any
improvements located thereon, surface water, ground water or the sewer,
septic system or waste treatment, storage or disposal systems servicing the
Real Property; (3) noise emissions; (4) solid or liquid waste disposal; (5)
the use, generation, storage, transportation or disposal of Hazardous
Materials; or (6) other environmental, health or safety matters, affecting
any of the Borrowers, any of the Real Property, any improvements located
thereon or the business conducted thereon (any of which is hereafter
referred to as an "Environmental Complaint").
F. Hazardous Materials disposed of, treated or stored on or off-
site of any Real Property owned, leased or operated at any time by the
Borrowers have been disposed of, treated and stored in compliance in all
material respects with all applicable laws, codes and ordinances and all
rules and regulations promulgated thereunder, including, without
limitation, all Relevant Environmental Laws.
G. Except as set forth in the Existing Studies and for supplies
that are to be used or sold in the ordinary course of the Borrowers'
respective businesses and in full compliance with all applicable laws,
codes and ordinances, to our knowledge all of the Real Property are free of
all (1) Hazardous Materials; (2) underground storage tanks; and (3)
underground pipelines. Except for materials used in the ordinary course of
business, the Borrowers have not stored, treated or disposed of any
Hazardous Materials on, in or under any of the Real Property, or any part
thereof, nor permitted the Real Property, or any part thereof, to be used
for the storage, treatment or disposal of Hazardous Materials. Except for
the material used in the ordinary course of business, to our knowledge
there has been no storage, treatment, disposal or release of Hazardous
Materials on, in or under the Real Property at any time by any Person.
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H. Except in accordance with a valid required governmental
permit, license, certificate or approval, the Borrowers have not
transported or accepted for transport any Hazardous Materials.
I. To their knowledge, the Borrowers have provided the Agent
Bank with true, accurate and complete information pertaining to the
environmental history of all of the Real Property. The Borrowers shall
furnish promptly to the Agent Bank true, accurate and complete copies of
all sampling and test results obtained from all environmental and/or health
samples and tests taken at and around any of the Real Property.
J. The Borrowers are not aware of any claims or litigation, and
none of them have received any communication from any Person (including,
without limitation, any governmental authority), concerning the presence of
Hazardous Materials or concerning any violation or alleged violation of the
Relevant Environmental Laws. The Borrowers agree promptly to notify the
Agent Bank of any such claims and to furnish the Agent Bank of any such
claims and to furnish the Agent Bank with a copy of any such communications
received after the date hereof.
SECTION 7
AFFIRMATIVE COVENANTS
---------------------
The Borrowers hereby covenant and agree that until the Revolving
Credit Notes, the Term Notes and the other Obligations have been
respectively paid in full to the Banks, the Swing Line Credit Subfacility
and the Letter of Credit Subfacility have been terminated, the Borrowers
will perform and observe all of the following provisions:
7.1 Corporate Existence and Good Standing. Each Company shall
preserve its corporate existence in good standing and shall be and remain
qualified to do business and in good standing in all states and countries
in which it is required to be so qualified and where the failure to be so
qualified would have a material adverse effect upon the business of such
entity.
7.2 Money Obligations, Payment of Taxes, ERISA, etc.
A. Governmental Obligations. The Borrowers will pay promptly as
they become due and payable all taxes, assessments and other governmental
charges levied upon them or their income or upon any of their properties or
assets or in respect of their franchises, businesses, income or profits, or
upon any part thereof, as well as all lawful claims of any kind (including
claims for labor, materials and supplies) which, if unpaid, might by law
become a lien or a charge upon their property before any of the same become
delinquent; provided that no such tax,
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assessment or charge need be paid if being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted by the
Borrowers and if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor. The Borrowers will
satisfy or cause to be satisfied the minimum annual funding standard within
the meaning of ERISA for any employee benefit plan established or
maintained by the Borrowers which is subject to ERISA, and the Borrowers
will not permit any tax or penalty to be incurred by it as a result of any
failure to satisfy any such minimum funding requirement or as a result of
any violation of the provisions of Section 4975 of the Code, or of any
regulation issued thereunder.
B. Other Obligations. The Borrowers will pay in full all their
other debts, obligations and liabilities allowed hereunder before the same
become delinquent, unless the same are being contested in good faith by the
Borrowers, the Borrowers have established adequate reserves for the payment
of the same in accordance with GAAP, and the contesting thereof does not
involve the risk of forfeiture or loss of any of the Borrowers' assets.
7.3 Financial Statements and Reports. The Borrowers will furnish to
the Agent Bank the information required below at the times set forth below:
A. Borrowing Base. There will be no Borrowing Base in effect
from the Closing Date through and until March 31, 1998. Beginning on April
1, 1998 and thereafter, if (i) the ratio of Funded Debt to EBITDA (measured
on a rolling four Fiscal Quarter basis) as of the end of a Fiscal Quarter
exceeds 2.50 to 1.0 or (ii) accumulated losses at GTC following the Closing
Date exceed $3,650,000 (or an amount equivalent to the actual depreciation
and amortization recorded in the fourth Fiscal Quarter of 1997 and all of
1998 with respect to GTC) as determined on a stand-alone basis with respect
to GTC for income tax purposes, then the Borrowing Base shall be in effect.
The events described in section (ii) of the preceding sentence shall
permanently cease to be a trigger for the Borrowing Base if accumulated
losses at GTC following the Closing Date have not exceeded $3,650,000 (or
an amount equivalent to the actual depreciation and amortization recorded
in the fourth Fiscal Quarter of 1997 and all of 1998 with respect to GTC)
as determined on a stand-alone basis with respect to GTC for income tax
purposes by December 31, 1998. Alternatively, if accumulated losses at GTC
following the Closing Date have exceeded $3,650,000 (or an amount
equivalent to the actual depreciation and amortization recorded in the
fourth Fiscal Quarter of 1997 and all of 1998 with respect to GTC) as
determined on a stand-alone basis with respect to GTC for income tax
purposes, by December 31, 1998, with the result that the Borrowing Base has
taken effect, then accumulated losses at GTC following the Closing Date
shall permanently cease to be a trigger for the Borrowing Base if
accumulated losses at
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GTC following the Closing Date subsequently decline below $3,650,000 (or an
amount equivalent to the actual depreciation and amortization recorded in
the fourth Fiscal Quarter of 1997 and all of 1998 with respect to GTC) as
determined on a stand-alone basis with respect to GTC for income tax
purposes, for four consecutive Fiscal Quarters.
If the Borrowing Base has come into effect because the ratio of
Funded Debt to EBITDA (measured on a rolling four Fiscal Quarter basis) as
of the end of a Fiscal Quarter has exceeded 2.50 to 1.0, the Borrowing Base
shall cease to be in effect as soon as the ratio of Funded Debt to EBITDA
(measured on a rolling four Fiscal Quarter basis) as of the end of two
consecutive Fiscal Quarters has been equal to or less than 2.50 to 1.0.
Whenever the Borrowing Base is in effect BT, for itself and as agent
for the other Borrowers, shall furnish to the Agent Bank within ten (10)
days after the end of each month, a Borrowing Base Certificate,
substantially in the form of Exhibit L hereto, with all blanks completed
showing end-of-month balances of all components of the Borrowing Base,
prepared internally and certified as true, accurate and complete by the
President or Chief Financial Officer of BT;
B. Quarterly Statements. BT, for itself and as agent for the
other Borrowers, shall furnish to the Agent Bank, as soon as available, and
within forty five (45) days after the end of each Fiscal Quarter, an
unaudited Combined balance sheet of the Borrowers as at the end of such
month or quarter, and related unaudited divisional and Combined statements
of income, retained earnings and cash flows of the Borrowers on a Combined
basis in accordance with GAAP for such month or Fiscal Quarter, compared to
budget, all in reasonable detail, prepared in accordance with GAAP
consistently applied and certified to be true, accurate and complete in all
material respects by the President or Chief Financial Officer of BT, for
itself and as agent for the other Borrowers. In the event the ratio of the
Borrowers' Funded Debt to EBITDA (measured on a rolling four Fiscal
Quarter basis) is equal to or falls below 2.50 to 1.00 as of the end of a
Fiscal Quarter, then the monthly reporting requirement shall no longer be
applicable.
C. Annual Statements. BT, for itself and as agent for the other
Borrowers, shall furnish to the Agent Bank, as soon as available, and in
any event within ninety (90) days after the end of each Fiscal Year of
Group Financial and the Borrowers, a copy of the annual audited financial
statements for the immediately preceding Fiscal Year accompanied with the
Auditor's Management Letter in addition to any other financial statements
and reports that the Banks may, in their sole discretion, reasonably
request from time to time.
D. 10-Q. BT, for itself and as agent for the other Borrowers,
shall furnish to the Agent Bank, as soon as available, and in any event
within forty-
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five (45) days after the end of each Fiscal Quarter of GTC, a copy of GTC's
Form 10-Q.
E. 10-K. BT, for itself and as agent for the other Borrowers,
shall furnish to the Agent Bank, as soon as available, and in any event
within ninety (90) days after the end of the Fiscal Year of GTC, a copy of
GTC's Form 10-K.
F. Compliance Certificate. Together with the delivery to the
Agent Bank of the financial statements referred to in subparts (B), (C) and
(D) above, BT, for itself and as agent for the other Borrowers, shall
deliver to the Agent Bank a Compliance Certificate in substantially the
form of Exhibit G hereto with all blanks completed and (x) stating that the
Authorized Officer of BT, for itself and as agent for the Borrowers,
signing the Compliance Certificate has reviewed the relevant terms of this
Loan Agreement, the Revolving Credit Notes, the Term Notes, the Mortgages,
the Stock Pledge Agreement and the other Loan Documents to which the
Borrowers are party, and such Authorized Officer has no actual knowledge
(after making such inquiry as is consistent with the scope of his or her
duties) of any event or condition which constitutes an Event of Default
hereunder, or, if any such condition or event existed or exists, specifying
the nature and period of existence thereof and what action the Borrowers
have taken or are taking or propose to take with respect thereto, and (y)
demonstrating in reasonable detail compliance at the end of such accounting
period with Sections 8.6 through 8.10 of this Loan Agreement to the extent
applicable to such period.
G. Events of Default. Forthwith upon any Authorized Officer of
BT obtaining knowledge of, or receiving notice of any claim of or action
taken with respect to, any condition or event which constitutes a Potential
Default or an Event of Default hereunder, BT, for itself and as agent for
the other Borrowers, shall furnish to the Agent Bank a certificate
specifying the nature and period of existence thereof and what action the
Borrowers have taken or are taking or propose to take with respect thereto.
H. Reports to CPAs. Promptly upon receipt thereof, BT, for
itself and as agent for the other Borrowers, shall furnish to the Agent
Bank copies of any reports (including management letters, if any)
submitted to the Borrowers by independent certified public accountants in
connection with the examination of the financial statements of the
Borrowers made by such accountants.
I. Other Information. With reasonable promptness, the Borrowers
shall furnish to the Agent Bank such other information and data with
respect to the Borrowers as from time to time may be reasonably requested
by the Banks.
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J. Use of Financial Results of Datatape in Calculating Financial
Ratios of Borrowers. The financial results of Datatape prior to the
acquisition of Datatape assets by the Borrowers shall be excluded from the
calculation of financial ratios. As of March 31, 1998, the financial
results of the Datatape division of MD from its acquisition date for the
Fiscal Quarters ending December 31, 1997 and March 31, 1998 shall be
annualized for covenant and pricing calculations. As of June 30, 1998, the
financial results of the Datatape division of MD for the Fiscal Quarters
ending December 31, 1997, March 31, 1998 and June 30, 1998 shall be
annualized for covenant and pricing calculations. As of September 30, 1998
and thereafter, the historical financial results of the Datatape division
of MD shall be used for covenant and pricing calculations.
The Banks shall keep confidential all of the financial statements and
other information furnished to the Banks pursuant to this Loan Agreement,
except that each Bank shall have the right to furnish copies of such
financial statements and other information furnished to such Bank to
financial institutions which purchase interests in the Revolving Credit
Facility pursuant to Section 12 hereof and governmental agencies having
jurisdiction over such Bank and which request copies of such financial
statements and/or other information. Such Bank will promptly inform the
Borrowers each time such Bank is obligated or required to deliver any such
financial statements and other information to any such governmental agency
having jurisdiction over such Bank.
7.4 Financial Records; Inspection.
A. System of Accountants. The Borrowers will maintain a
standard, modern system of accounting established and administered in
accordance with GAAP consistently applied, in which full, true and correct
entries shall be made of all dealings and transactions in relation to the
Borrowers' businesses and affairs, and will set aside on their books all
such proper reserves as shall be required by GAAP. The Banks acknowledge
disclosure of and consent to the matters set forth on Schedule 7.4.
B. Access to Books and Records. The Borrowers will permit any
authorized representative designated by any Bank to inspect any of the
properties of the Borrowers, including their books of account (and to make
copies thereof and to take extracts therefrom), and to discuss their
affairs, finances and accounts with their officers and with their
independent accountants, all at such reasonable times and as often as may
be reasonably requested. Discussions with independent accountants shall be
requested in writing. Such inspection shall be for the information and
benefit of the Banks and, unless otherwise publicly available, any
information obtained thereby or otherwise pursuant thereto shall not be
divulged to others except in connection with the enforcement of the rights
of the Banks upon the occurrence
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of an Event of Default hereunder or to financial institutions which
purchase interests in the Revolving Credit Facility pursuant to Section 12
hereof and except as may be required by law or by any governmental agency
having jurisdiction over any Bank. Each Bank will promptly inform the
Borrowers each time such Bank is obligated or required to deliver any such
information to any governmental agency having jurisdiction over such Bank.
7.5 Maintenance of Properties, etc. The Borrowers will, insofar as
they are not prevented by causes beyond their control, maintain or cause to
be maintained in good repair, working order and condition, ordinary wear
and tear excepted, all properties used or useful in the businesses of the
Borrowers. The Borrowers will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to their
properties and businesses against loss or damage of the kinds customarily
insured against by corporations of established reputation engaged in the
same or a similar business and similarly situated, in such types and
amounts as are customarily carried under similar circumstances by such
other corporations. The Banks have no basis to conclude that the Borrowers'
current insurance, including their current worker compensation insurance,
is deficient in any material respect.
7.6 Permits, Certificates, Leases, Licenses. The Borrowers will
obtain, maintain and comply at all times, in all material respects, with
all permits, certificates, licenses, approvals, authorizations, leases and
other instruments necessary or appropriate for the conduct of their
businesses as presently conducted or as contemplated to be conducted in the
future.
7.7 Notice. The Borrowers will notify the Banks in writing, within
no more than ten (10) calendar days (and without the benefit of any grace
period afforded in any provision of this Loan Agreement or the other Loan
Documents) after any Authorized Officer of the Borrowers learns of any of
the following: (i) the existence or occurrence of any Event of Default
under this Loan Agreement, (ii) that any representation or warranty made
herein or in any other Loan Document shall, for any reason, not be or shall
cease in any material respect to be true and complete and not misleading,
(iii) the institution of, or adverse determination in, any material
arbitration proceeding, including, without limitation, an audit or
examination by the Internal Revenue Service, involving the Borrowers and
describing the nature and result thereof, and what steps are being taken by
the Borrowers with respect thereto, or (iv) the institution of, or adverse
determination in, any litigation involving a claim against the Borrowers in
excess of the sum of Five Hundred Thousand Dollars ($500,000) not covered
by applicable insurance, describing the nature and result thereof, and what
steps are being taken by the Borrowers with respect thereto.
7.8 Payment of Obligations. The Borrowers will pay the Revolving
Credit Notes, the Term Notes and the other Obligations timely in
accordance with
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their respective terms in legal tender of the United States of America. All
payments on the Revolving Credit Notes, the Term Notes and the other
Obligations shall be made to the Banks, respectively, in "good and
collected funds," at the principal office of the Agent Bank not later than
12:00 noon (Louisville, Kentucky time) on the date due; funds received by
the Agent Bank after that hour shall be deemed to have been received on the
next following Business Day.
7.9 Environmental Matters. The Borrowers hereby warrant that, to the
best of their knowledge, the Borrowers' assets are now and so long as the
Revolving Credit Facility, the Swing Line Loans, the Term Loans and the
Letters of Credit continue in effect will remain materially free of
contamination by hazardous, dangerous, contaminating, noxious or unsafe
materials except as such materials are stored, handled, used and disposed
of in the ordinary course and in compliance with the Relevant Laws. Subject
to the right of the Borrowers to contest any alleged violation of any
environmental law, regulation and requirement in good faith and with due
diligence, and provided that no such contesting will result in the loss or
forfeiture of any assets of the Borrowers or otherwise have a material
adverse effect on the financial condition of the Borrowers, the Borrowers
further covenant to comply in all material respects with all applicable
environmental laws, regulations and requirements, and the Borrowers
covenant and agree to remedy any violation of any environmental law,
regulation and requirement, promptly upon the Borrowers' learning of such
violation. The Borrowers further hereby agree to indemnify and hold the
Banks harmless from any expense, loss, claim, suit or fee arising out of
any such contamination or noncompliance or the Borrowers' breach of the
provisions of this Section 7.9.
7.10 Accounts. In order to further secure the Borrowers'
obligations to the Agent Bank and the Banks, the Borrowers will maintain
their primary depository account and their primary cash management account
with the Agent Bank. Further, in order to further secure their obligations
to the Agent Bank and the Banks, MD and GTC shall maintain lockbox accounts
with the Agent Bank into which all Accounts Receivables of such Borrowers
shall be deposited. MD and GTC shall each enter into a lockbox agreement
with the Agent Bank.
7.11 Insurance. The Borrowers shall maintain insurance as follows:
A. Liability Insurance. The Borrowers at their own cost and
expense, shall procure, maintain and carry in full force and effect general
liability, public liability, workers' compensation liability and property
damage insurance with respect to the actions and operations of the
Borrowers to such extent, in such amounts and with such deductibles as are
carried by prudent businesses similarly situated, but in any event not less
than the amounts of coverage per person and per occurrence, and with the
deductibles, as are provided in the Borrowers' insurance in effect on the
date of this Agreement. Without limiting the foregoing, such insurance
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shall insure against any liability for loss, injury, damage or claims
caused by or arising out of or in connection with the operation of the
Borrowers' respective businesses including injury to or death of any of the
Borrowers' employees, agents or any other persons and damage to or
destruction of public or private property.
B. Physical Damage Insurance. The Borrowers at their own cost
and expense, shall insure all of their insurable properties to such extent,
against such hazards (excluding, without limitation, environmental
hazards), in the amount of coverage and with such deductibles as are
carried by prudent businesses similarly situated, but in any event insuring
against such hazards and with such coverages and deductibles as are
provided in the Borrowers' insurance in effect on the date of this
Agreement, and in any event in amounts of coverage not less than the
insurable value of the property insured. Without limiting the foregoing,
such insurance shall name the Agent Bank as an additional insured and
shall provide for payment of the proceeds thereof to the Borrowers and to
the Agent Bank as their interests may appear.
C. General Insurance Requirements.
(1) All insurance which the Borrowers are required to
maintain shall be satisfactory to the Agent Bank in form, amount and
insurer. Such insurance shall provide that any loss thereunder shall be
payable notwithstanding any action, inaction, breach of warranty or
condition, breach of declarations, misrepresentation or negligence of the
Borrowers. Each policy shall contain an agreement by the insurer that,
notwithstanding lapse of a policy for any reason, or right of cancellation
by the insurer or any cancellation by the Borrowers, such policy shall
continue in full force for the benefit of the Agent Bank for at least
thirty (30) days after written notice thereof to the Agent Bank and the
Borrowers, and no alteration in any such policy shall be made except upon
thirty (30) days written notice of such proposed alteration to the Agent
Bank and the Borrowers and written approval by the Agent Bank. At or before
the making of the first Loan, the Borrowers shall provide the Agent Bank
with certificates evidencing their due compliance with the requirements of
this section.
(2) Prior to the expiration date of any policy of insurance
maintained pursuant to this Agreement, the Borrowers shall provide the
Agent Bank with a certificate of insurance evidencing the acquisition of a
new policy, or an extension or renewal of an existing policy, evidencing
the Borrowers' due compliance with this section.
(3) If the Borrowers fail to acquire any policy of insurance
required to be maintained pursuant to this section, or fail to renew or
replace any such policy at least ten (10) days prior to the expiration
thereof, or fail to keep any such policy in full force and effect, the
Agent Bank shall have the option (but not
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the obligation) to pay the premiums on any such policy of insurance or to
take out new insurance in amount, type, coverage and terms satisfactory to
the Agent Bank, after first notifying the Borrowers of the Agent Bank's
intent to pay it. Any amounts paid therefor by the Agent Bank shall be
immediately due and payable to the Agent Bank by the Borrowers upon demand.
No exercise by the Agent Bank of such option shall in any way affect the
provisions of this Agreement, including the provision that failure by the
Borrowers to maintain the prescribed insurance shall constitute an Event of
Default.
(4) In the event that the Agent Bank receives any insurance
proceeds if there exists no Event of Default and no event which with notice
or the passing of time shall become an Event of Default, the Agent Bank
agrees to return the insurance proceeds to the Borrowers.
7.12 Environmental Compliance.
A. Any Borrower shall, notify the Agent Bank promptly and in
reasonable detail in the event that such Borrower becomes aware of the
presence of Hazardous Materials (other than as used in ordinary course of
business) or a violation of the Relevant Environmental Laws resulting from
or in connection, directly or indirectly, with the business or operations
of a Borrower.
B. Each Borrower shall ensure that its business and operations
comply and continue to comply in all material respects with the Relevant
Environmental Laws.
C. Should a Borrower conduct any business or operations in such
a way as to subject any of the Borrowers or the Agent Bank to a claim or
violation of the Relevant Environmental Laws (unless contested in good
faith), such Borrower shall prudently and appropriately remedy and fully
cure any conditions arising therefrom, at its own cost and expense.
D. At their sole cost and expense, the Borrowers shall
(1) Pay or cause to be paid immediately when due the cost of
compliance with the Relevant Environmental Laws; and
(2) Keep the Borrowers's business, assets and operations
free of any lien imposed pursuant to the Relevant Environmental Laws.
E. The Agent Bank shall not be liable for, and the Borrowers
shall immediately pay to the Agent Bank when incurred and shall indemnify,
defend and hold the Agent Bank harmless from and against, all loss, cost,
liability, damage and expense (including, without limitation, reasonable
attorneys' fees and costs
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incurred in the investigation, defense and settlement of claims) that the
Agent Bank may suffer or incur as mortgagee (as holder of or assignee in
possession or as successor in interest to the Borrowers as owner of a
lease, by virtue of exercising the Agent Bank's right pursuant to a
security interest thereof) as a result of or in connection in any way with
any of the Relevant Environmental Laws (including, without limitation, the
assertion that any lien existing pursuant to the Relevant Environmental
Laws takes priority over the lien or security interest of the Agent
Bank's), or any environmental assessment or study from time to time
reasonably undertaken or requested by Agent Bank or breach of any covenant
or undertaking by the Borrowers concerning Relevant Environmental Laws.
F. There shall not occur any unpermitted Hazardous Discharge or
material Environmental Complaint.
7.13 Material Change in Management. Each Company shall notify the
Agent Bank of any material change in its management from that existing on
the date of this Agreement.
SECTION 8
NEGATIVE COVENANTS
------------------
The Borrowers hereby covenant and agree that until the Revolving
Credit Notes, the Term Notes, and the other Obligations have been
respectively paid in full to the Banks, and the Swing Line Credit
Subfacility and Letter of Credit Subfacility have been terminated, the
Borrowers will perform and observe all of the following provisions:
8.1 Mergers, Acquisitions and Other Extraordinary Events. Without
the prior written consent of the Agent Bank which shall not be unreasonably
withheld or delayed, and except for the Proposed Merger, the Borrowers
shall not:
(i) Be a party to any consolidation, reorganization (including
without limitation those types referred to in Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Internal Revenue Code of 1986, as amended), recapitalization,
"stock-swap" or merger;
(ii) Sell or otherwise transfer any material part of their
assets;
(iii) Purchase all or a substantial part of the capital stock or
assets of any corporation or other business enterprise;
(iv) Allow a Change in Control to occur with respect to Group
Financial; or
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(v) Liquidate or dissolve or take any action with a view toward
liquidation or dissolution.
An acquisition that has been consented to in writing by the Banks pursuant
to this Section 8.1 shall be known as a "Permitted Acquisition."
To the extent that any Borrower receives proceeds from a sale of
assets in excess of Three Hundred Thousand Dollars ($300,000) that is not
prohibited by this Section 8.1 or that has been consented to by the Banks
in writing, 75% of all such proceeds shall be used (i) first to pay down
the principal amount of the Term Loans pursuant to Section 3.3B hereof and
(ii) second, to pay down the principal amount of Revolving Credit Loans
pursuant to Section 2.4B hereof.
8.2 Indebtedness, Guaranties, etc. The Borrowers will not, without
the prior written consent of the Agent Bank, directly or indirectly,
create, incur, assume, guarantee, agree to purchase or repurchase or
provide funds in respect of, or otherwise become liable with respect to any
Funded Debt other than:
A. The Revolving Credit Facility;
B. The Swing Line Credit Subfacility;
C. The Letter of Credit Subfacility;
D. The Term Loans;
E. Funded Debt in an aggregate amount not exceeding Nine Hundred
Million Four Hundred Thousand Dollars ($9,400,000) that falls into one of
the following two categories:
(i) Purchase money indebtedness incurred or assumed by the
Borrowers in connection with acquisition of tangible and intangible
personal and real property, to the extent such tangible and intangible
personal and real property are to be used by the Borrowers in businesses
permitted under Section 8.4 hereof;
(ii) Capital lease obligations;
F. Any guaranty by a Borrower of Funded Debt incurred by
another Borrower or Subsidiary of a Borrower that is allowable under and
included within Section 8.2E;
G. Funded Debt incurred in connection with a Permitted
Acquisition; and
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H. Inter-Borrower Notes.
8.3 Use of Assets. The Borrowers will not use, or cause or permit
the use of, any of their assets in any manner prohibited by law,
governmental regulations or applicable insurance policies.
8.4 Mortgages, Liens, Encumbrances, Security Interests, Assignments,
etc. The Borrowers will not, without the prior written consent of the Agent
Bank, directly or indirectly create, incur, assume or permit to continue in
existence any mortgage, lien, charge or encumbrance on, or security
interest in, or pledge or deposit of, or conditional sale or other title
retention agreement (including any lease which in accordance with GAAP
would constitute Funded Debt), or assignment of, with respect to, any
property or asset now owned or hereafter acquired by the Borrowers,
provided that the restrictions in this Section 8.4 shall not prohibit:
(i) Liens and security interests granted to the Banks pursuant to
the Security Agreements and Mortgages;
(ii) Liens for taxes, assessments or governmental charges not yet
due and payable or the payment of which is not at the time required for the
reasons set forth by the proviso to the first sentence of Section 7.2A;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance
and other types of social security or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, performance
and return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money) for sums not yet due or
being contested in good faith and by appropriate proceedings promptly
initiated and diligently conducted, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor;
(iv) Liens and security interests in an amount not to exceed Nine
Million Four Hundred Thousand Dollars ($9,400,000) granted in connection
with capital leases and purchase money obligations;
(v) The liens and encumbrances listed on the title insurance
policies delivered to the Agent Bank and determined by the Agent Bank to be
acceptable to it, pursuant to Section 5.10 hereof; and
(vi) Assignment to the Agent Bank on behalf of the Banks of
contract rights with respect to contracts with the United States Government
and agencies and instrumentalities thereof, pursuant to an Assignment
Agreement.
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8.5 Nature of Businesses. The Borrowers will not, without the prior
written consent of the Agent Bank in every specified instance, engage in
any businesses other than the businesses conducted as of the Closing Date
and all businesses incidental thereto.
8.6 Fixed Charge Coverage Ratio. The Borrowers, on a Combined basis,
shall not permit the Fixed Charge Coverage Ratio for any period of four
consecutive Fiscal Quarters, to fall below the following applicable ratio,
calculated as of the end of each Fiscal Quarter:
------------------------------------
Fiscal Quarters
Ending Before
Or on: Ratio
------ -----
------------------------------------
3/31/98 1.15 to 1.00
------------------------------------
9/30/98 1.25 to 1.00
------------------------------------
9/30/99 1.35 to 1.00
------------------------------------
9/30/2000 1.35 to 1.00
------------------------------------
9/30/2001 1.50 to 1.00
------------------------------------
9/30/2002 1.50 to 1.00
------------------------------------
8.7 Ratio of Funded Debt to EBITDA. The Borrowers, on a Combined
basis, shall not permit the ratio of Funded Debt to EBITDA for any period
of four consecutive Fiscal Quarters, to exceed the following applicable
ratio, calculated as of the end of each Fiscal Quarter:
------------------------------------
Fiscal Quarters
Ending Before
Or on: Ratio
------ -----
------------------------------------
9/30/1998 3.00 to 1.00
------------------------------------
9/30/1999 2.50 to 1.00
------------------------------------
9/30/2000 2.00 to 1.00
------------------------------------
9/30/2001 2.00 to 1.00
------------------------------------
9/30/2002 2.00 to 1.00
------------------------------------
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8.8 Funded Debt to Capitalization Ratio. The Borrowers, on a
Combined basis, shall not permit the ratio of Funded Debt to Capitalization
for any period of four consecutive Fiscal Quarters, to exceed the following
applicable ratio, calculated as of the end of each Fiscal Quarter:
------------------------------------
Fiscal Quarters
Ending Before
Or on: Ratio
------ -----
------------------------------------
9/30/1998 0.75 to 1.00
------------------------------------
9/30/1999 0.65 to 1.00
------------------------------------
9/30/2000 0.55 to 1.00
------------------------------------
9/30/2001 0.50 to 1.00
------------------------------------
9/30/2002 0.50 to 1.00
------------------------------------
8.9 Minimum Tangible Net Worth. The Borrowers, on a Combined basis,
shall not permit their Tangible Net Worth for any period of four
consecutive Fiscal Quarters, calculated as of the end of each Fiscal
Quarter during the term of this Agreement, to be less than the sum of (i)
95% of the minimum tangible net worth amount on the consolidated financial
statements of Group Financial Partners, Inc. as of October 31, 1997, plus
(ii) the amounts recorded to reflect the merger transactions contemplated
by the S-4, net of any non-routine distributions made in connection
therewith, plus (iii) the tangible net worth of the Government Services
Division of Datatape, Inc. following its acquisition, plus (iv) 75% of Net
Income earned in each Fiscal Quarter ended subsequent to the Closing Date,
plus (v) 100% of equity raised or contributed, less (in the event the
merger transactions contemplated by the S-4 do not occur) any decreases to
Tangible Net Worth arising from the redemption of common stock from the
employee shareholders of the Borrowers pursuant to the respective Stock
Purchase Plans, Stock Option Plans and Stock Restriction Agreements. For
purposes of calculating Tangible Net Worth under this Section 8.9, any net
losses hereafter incurred by the Borrowers as of the end of a Fiscal
Quarter will be treated as $0 earnings for purposes of calculating the
Minimum Tangible Net Worth requirement.
8.10 Payment of Dividends. Without the Agent Bank's prior written
consent, the Borrowers shall not declare or pay cash or stock dividends
upon any class of the Borrowers' capital stock or make any distributions of
any of the Borrowers' property or assets.
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8.11 Capital Expenditures. Without the Agent Bank's prior written
consent, the Borrowers shall not make any expenditures for fixed or capital
assets (including without limitation capital lease obligations) which would
cause the aggregate of all such expenditures to exceed any of the following
limits for all Borrowers in the aggregate for any period of four
consecutive Fiscal Quarters, calculated as of the end of each Fiscal
Quarter:
---------------------------------------
Fiscal Quarters Capital
Ending Before Expenditure
Or On: Limit
------ -----
---------------------------------------
9/30/1998 $11,400,000
---------------------------------------
9/30/1999 13,700,000
---------------------------------------
9/30/2000 15,000,000
---------------------------------------
9/30/2001 15,000,000
---------------------------------------
9/30/2002 15,000,000
---------------------------------------
8.12 Transactions with Subsidiaries and Affiliates. The Borrowers
shall not enter into, or be a party to, any transaction with any of
Borrowers' Subsidiaries, Affiliates or stockholders (including, without
limitation, transactions involving the purchase, sale or exchange of
property, the rendering of services or the sale of stock) except in the
ordinary course of business pursuant to the reasonable requirements of
Borrowers and upon fair and reasonable terms which are fully disclosed to
the Agent Bank and which are no less favorable to Borrowers than Borrowers
would obtain in a comparable arms-length transaction with a legal entity
not a Subsidiary, Affiliate or stockholder of the Borrowers.
Notwithstanding the foregoing, BT shall be permitted to pay the
ordinary monthly operating expenses of Group Financial. Each of Xxxx, TT,
GTC and MD are parties to certain Consolidated Tax Sharing Agreements with
Group Financial and BT shall establish a similar agreement with Group
Financial. These Tax Sharing Agreements shall be permitted to continue to
operate.
8.13 Interest Rate Agreements. The Borrowers will not enter into
any Interest Rate Agreement unless (i) such Interest Rate Agreement is
intended to fix or establish a maximum interest rate in respect of
Indebtedness with a notional amount not in excess of the Revolving Loan
Commitments and is embodied in a standard ISDA form of agreement which is
acceptable to the Banks with respect to any intercreditor issues, (ii) the
counterparty is the Agent Bank, a Bank or an affiliate of the Agent Bank or
a Bank, and (iii) the Borrowers promptly provide a
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true and complete copy of such Interest Rate Agreement to the Agent Bank,
on behalf of itself and the Banks. At or following the effective date of
any such Interest Rate Agreement, the Agent Bank may, upon written
notification to the Borrowers and the Banks and such counterparty,
designate (which designations shall be made only upon the instructions or
with the consent of the Majority Banks) the credit exposure of such
counterparty under such Interest Rate Agreement as an obligation entitled
to share, pari passu with the Obligations, in respect to the benefits
provided by the collateral under the Loan Documents, in accordance with the
applicable provisions of the Loan Documents, and if the Agent Bank so
designates such credit exposure, the applicable Interest Rate Agreement of
such counterparty shall be considered a "Designated Interest Rate
Agreement".
SECTION 9
EVENTS OF DEFAULT; ACCELERATION
-------------------------------
9.1 Events of Default. The following events shall constitute Events
of Default under this Loan Agreement:
(i) The failure by the Borrowers to pay any principal of any
Revolving Credit Note or the Term Notes when the same becomes due and
payable or the failure of the Borrowers to pay any interest thereon within
five (5) days of the date when the same becomes due and payable; or
(ii) The failure by the Borrowers to reimburse the Agent Bank
upon demand for any draft honored by the Agent Bank under any Letter of
Credit now or hereafter issued by the Agent Bank for the account of the
Borrowers; or
(iii) The failure by the Borrowers to perform or observe any of
the provisions of Sections 8.1, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11 or 8.13; or
(iv) The failure by the Borrowers to perform or observe any of
the provisions of Sections 7.11, 8.2, 8.3, 8.4, 8.5, or 8.12 hereof, and
such default continues for twenty (20) days after a Financial Officer has
knowledge of such failure; or
(v) The Borrowers shall default in the performance of or
compliance with any covenant, obligation or provision contained in this
Loan Agreement (other than those referred to above in this Section 9.1(i)),
and any such default shall not have been remedied within thirty (30) days
after written notice of such default shall have been delivered to the
Borrowers; or
(vi) If any material representation or warranty made in writing
by or on behalf of the Borrowers herein or pursuant hereto or otherwise in
connection
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with the Revolving Credit Facility, the Swing Line Credit Subfacility, the
Letter of Credit Subfacility and/or the Term Loans shall have been
materially false or misleading or incorrect when made and the Authorized
Officer on behalf of the Borrowers knew or should have known of the
falsity, misleading nature of or incorrectness of such representation or
warranty when it was made; or
(vii) The failure of the Borrowers to pay any of their other
Funded Debt, not otherwise referred to in this Section 9, which in the
aggregate exceeds Three Million Dollars ($3,000,000), when due or within
any grace period afforded the Borrowers for paying the same, or the
acceleration of the maturity of any such Funded Debt by the holder thereof,
other than any such Funded Debt with respect to which the Borrowers are
contesting in good faith the validity, amount and/or the Borrowers'
liability therefor and for which adequate reserves have been established on
the books of the Borrowers in accordance with GAAP; or
(viii) If any of the Borrowers shall (1) file a petition for an
order of relief under the federal bankruptcy laws (as in effect on the date
of this Agreement or as they may be amended from time to time); (2) admit
its inability to pay its debts generally as they become due; (3) become
insolvent in that its total assets are in the aggregate worth less than all
of its liabilities or it is unable to pay its debts generally as they
become due; (4) make a general assignment for the benefit of creditors; (5)
file a petition, or admit (by answer, default or otherwise) the material
allegations of any petition filed against it, in bankruptcy under the
federal bankruptcy laws (as in effect on the date of this Agreement or as
they may be amended from time to time), or under any other law for the
relief of debtors, or for the discharge, arrangement or compromise of its
debts; or (6) consent to the appointment of a receiver, conservator,
trustee or liquidator of all or part of its assets; or
(ix) If a petition shall have been filed against any Borrower in
proceedings under the federal bankruptcy laws (as in effect on the date of
this Agreement, or as they may be amended from time to time), or under any
other laws for the relief of debtors, or for the discharge, arrangement or
compromise of its debts, or an order shall be entered by any court of
competent jurisdiction appointing a receiver, conservator, trustee or
liquidator of all or part of the Borrower's assets, and such petition or
order is not dismissed or stayed within sixty (60) consecutive days after
entry thereof; or
(x) If a final uninsured judgment or judgments shall be rendered
against any of the Borrowers in an aggregate amount exceeding One Million
Dollars ($1,000,000) and (i) if, prior to the availability of any
execution thereon, such judgment(s) shall not have been discharged or
execution thereof shall not have been stayed pending appeal, or if, after
the expiration of any such stay, such judgment(s) shall not have been
discharged, or (ii) the Borrowers shall not have established
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adequate reserves on their books in respect of such final uninsurable
judgment or judgments; or
(xi) In the event Group Financial experiences a Change in Control
without the prior written consent of the Banks; or
(xii) If the Borrowers shall fail to deliver within 60 days
after the Closing Date, the Collateral Assignments of Patents, Trademarks
and Copyrights duly and respectively executed by each of the Borrowers
granting to the Banks a security interest in all of the patents, trademarks
and copyrights of the Borrowers; or
(xiii) If the Borrowers shall fail to make best efforts to
deliver to the Banks within 90 days of the Closing Date written waivers of
claims and/or liens, in form and substance satisfactory to the Banks, from
each landlord at any facility at which the Borrowers keep, maintain, or
store any Eligible Inventory at a location which is not owned in fee by the
Borrowers, if any, or to deliver to the Banks information, in such form and
with such detail as is satisfactory to the Banks, regarding the type,
nature and value of Inventory located at such sites with respect to which
no landlord's lien waiver is provided; or
(xiv) The occurrence of any event of default or default under
any of the Loan Documents; or
(xv) The occurrence of any event of default or default under any
note, loan agreement, security agreement, mortgage or instrument (other
than the Loan Documents) evidencing or securing indebtedness of the
Borrowers which in the aggregate exceeds Three Million Dollars
($3,000,000).
Upon the occurrence of any Event of Default described in clauses (viii) or
(ix) of this Section 9 with respect to the Borrowers, the unpaid principal
balance of each of the Revolving Credit Notes, the Term Notes, and the
other Obligations, together with all accrued interest thereon, shall
automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by the Borrowers. Upon the occurrence of any other Event
of Default referred to in this Section 9, the Agent Bank, on behalf of the
Banks, may at any time at its option, by written notice to the Borrowers,
declare the unpaid principal balance of and all accrued and unpaid interest
on each of the Revolving Credit Notes, the Term Notes and the other
Obligations to be immediately due and payable in full to the Banks, as
applicable, without presentment, demand, protest or other requirements of
any kind, all of which are hereby waived by the Borrowers.
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SECTION 10
REMEDIES UPON DEFAULT, ETC.
--------------------------
10.1 Defaults. Upon the occurrence and during the continuation of
any Event of Default, the Banks may proceed to protect and enforce their
rights by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or
in the Revolving Credit Notes or the Term Notes or for an injunction
against a violation of any of the terms hereof or thereof, or in aid of the
exercise of any right, power or remedy granted hereby or thereby or by law
or pursuant to the other Loan Documents. In case of a default in the
payment of any principal of or interest on the Revolving Credit Notes, the
Term Notes and/or the other obligations, or upon acceleration thereof, the
Borrowers will pay to the Banks such further amount as shall be sufficient
to cover the reasonable costs and expenses of collection thereof, including
(to the extent permitted by law), without limitation, reasonable attorneys'
fees, expenses and disbursements.
10.2 Offset. If any Event of Default shall occur and be continuing
and regardless of whether or not the Banks have accelerated the maturity
date of the Revolving Credit Notes, the Term Notes, and/or the other
Obligations, each Bank shall have the right then, or at any time
thereafter, to set off against any and all deposit balances and other sums
and Funded Debt and other property then held or owned by such Bank to or
for the credit or account of the Borrowers, all without notice to or demand
upon the Borrowers or any other Person, all such notices and demands being
hereby expressly waived by the Borrowers.
10.3 Rights Cumulative. All of the rights and remedies of the Banks
upon the occurrence of an Event of Default hereunder shall be cumulative to
the greatest extent permitted by law, and shall be in addition to all those
rights and remedies afforded the Banks at law or in equity.
10.4 Payment of Costs and Expenses. All of the reasonable costs,
expenses, damages and liabilities, including, without limitation, all
reasonable attorneys' fees, incurred by and imposed upon any Bank with
respect to, in connection with the enforcement of this Loan Agreement or
any other Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this
Loan Agreement or any other Loan Document, whether in bankruptcy or
receivership proceedings or otherwise, and in any workout or restructuring
or in connection with the protection, preservation, exercise or enforcement
of any of the terms hereof or of any rights hereunder or under any other
Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, in connection with or as a result of any action
taken or omitted to be taken pursuant to this Loan Agreement, the Revolving
Credit Notes, the Term Notes, or the other Loan Documents shall be paid by,
and shall be the sole responsibility of, the Borrowers.
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SECTION 11
THE AGENT BANK
--------------
11.1 Appointment. Each Bank hereby irrevocably designates, appoints
and authorizes the Agent Bank to act as the Agent Bank under this Loan
Agreement and to execute and deliver or accept on behalf of each of the
Banks the other Loan Documents. Each Bank hereby irrevocably authorizes,
and each holder of any Revolving Credit Note and/or Term Note by the
acceptance of such Revolving Credit Note or Term Note shall be deemed
irrevocably to authorize, the Agent Bank to take such action on behalf of
such Bank and such holder under the provisions of this Loan Agreement and
the other Loan Documents and any other instruments and agreements referred
to herein, and to exercise such powers and to perform such duties hereunder
as are specifically delegated to or required of the Agent Bank by the terms
hereof, together with such powers as are reasonably incidental thereto. The
Agent Bank agrees to act as the Agent Bank to the extent provided in this
Loan Agreement.
11.2 Delegation of Duties. The Agent Bank may perform any of its
duties hereunder by or through agents or employees (provided such
delegation is exercised with reasonable care and does not constitute a
relinquishment of its duties as Agent Bank) and, subject to Sections 11.5,
11.6 and 11.7 hereof, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all
matters pertaining to its duties hereunder and to rely upon any advice so
obtained, provided reasonable care is used in the selection of the
foregoing experts.
11.3 Nature of Duties; Independent Credit Investigation. The Agent
Bank shall have no duties or responsibilities except those expressly set
forth in this Loan Agreement and the other Loan Documents and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Loan Agreement or shall otherwise exist. The duties
of the Agent Bank shall be mechanical and administrative in nature and
shall include the duty to provide to each Bank an executed original of such
Bank's Revolving Credit Note and an executed original of this Loan
Agreement and a copy of the other Loan Documents; the Agent Bank shall not
have by reason of this Loan Agreement a fiduciary or trust relationship in
respect of any Bank; and nothing in this Loan Agreement, expressed or
implied, is intended to or shall be so construed as to impose upon the
Agent Bank any obligations in respect of this Loan Agreement except as
expressly set forth herein. Each Bank expressly acknowledges (i) that the
Agent Bank has not made any representations or warranties to it and that no
act which the Agent Bank hereafter takes, including any review of the
affairs of the Borrowers, shall be deemed to constitute any representation
or warranty by the Agent Bank to any Bank; (ii) that it has made and will
continue to make, without reliance upon the Agent Bank, its
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own independent investigation of the financial condition and affairs and
its own appraisal of the creditworthiness of the Borrowers in connection
with this Loan Agreement and the making and continuance of the Loans
hereunder; and (iii) except as expressly provided herein, that the Agent
Bank shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information
with respect thereto, whether coming into its possession before the making
of any Loan or at any time or times thereafter.
11.4 Actions in Discretion of the Agent Bank: Instructions from the
Banks. The Agent Bank agrees, upon the written request of the Banks, to
take or refrain from taking any action of the type specified as being
within the Agent Bank's rights, powers or discretion herein; provided that
the Agent Bank shall not be required to take any action which exposes the
Agent Bank to legal liability or which is contrary to this Loan Agreement
or any other Loan Document or applicable law. In the absence of a request
by the Banks, the Agent Bank shall have authority, in its sole discretion,
to take or not to take any such action, unless this Loan Agreement
specifically requires the consent of the Banks. Any action taken or failure
to act pursuant to such instructions or discretion shall be binding on the
Banks, subject to the provisions of Section 11.6 hereof. Subject to the
provisions of Section 11.6 hereof, no Bank shall have any right of action
whatsoever against the Agent Bank as a result of the Agent Bank acting or
refraining from acting hereunder in accordance with the instructions of the
Banks or, in the absence of such instructions, in the absolute discretion
of the Agent Bank.
11.5 Reimbursement and Indemnification of the Agent Bank and the
Banks by the Borrowers. The Borrowers unconditionally agree to pay or
reimburse the Agent Bank and hold the Agent Bank harmless against liability
for the payment of all reasonable and necessary out-of-pocket costs,
expenses and disbursements for which reimbursement is customarily obtained,
including reasonable fees and expenses of counsel and consultants incurred
by the Agent Bank (a) in connection with the preparation, negotiation,
printing, execution, administration, interpretation and performance of this
Loan Agreement and the other Loan Documents and (b) relating to any
requested amendments, waivers or consents pursuant to the provisions
hereof. The Borrowers unconditionally agree to pay or reimburse the Agent
Bank and hold each Bank harmless against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent Bank and/or any Bank, in its
capacity as such, in any way relating to or arising out of this Loan
Agreement or any other Loan Document or any action taken or omitted by the
Agent Bank and/or any Bank hereunder or thereunder; provided that the
Borrowers shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from the bad faith, gross
negligence or willful misconduct of the Agent Bank or any Bank, or (B) if
the Borrowers were not given
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notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense, or (C) if the same results from a
compromise or settlement agreement entered into without the consent of the
Borrowers, which consent shall not be unreasonably withheld.
11.6 Exculpatory Provisions. Neither the Agent Bank nor any of its
directors, officers, employees, agents or affiliates shall (i) be liable to
any Bank for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith including pursuant to any other Loan
Documents, unless caused by its or their own gross negligence or willful
misconduct, (ii) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution
of this Loan Agreement or any other Loan Document or for any recital,
representation, warranty, document, certificate, report or statement herein
or made or furnished under or in connection with this Loan Agreement or any
other Loan Document, or (iii) be under any obligation to any of the Banks
to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions hereof or thereof on the part of the
Borrowers, or the financial condition of the Borrowers, or the existence or
possible existence of any Event of Default or Potential Default under the
Loan Documents. Neither the Agent Bank nor any Bank nor any of their
respective directors, officers, employees, agents, attorneys or affiliates
shall be liable to the Borrowers or any other Person for consequential
damages resulting from any breach of contract, tort or other wrong in
connection with the negotiation, documentation or administration of the
Loan Documents or the collection of the obligations.
11.7 Reimbursement and Indemnification of the Agent Bank by the
Banks. Each Bank agrees to reimburse and indemnify the Agent Bank (to the
extent not reimbursed by the Borrowers and without limiting the obligation
of the Borrowers to do so) in proportion to its Revolving Credit Facility
Pro Rata Share from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent Bank, in its capacity as such, in
any way relating to or arising out of this Loan Agreement or any other Loan
Document or any action taken or omitted by the Agent Bank hereunder or
thereunder, provided that no such reimbursement shall be required with
respect to expenses incurred by the Agent Bank during the time period
through the Closing Date and no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (i) if the same relates
to or arises out of the Agent Bank's gross negligence or willful
misconduct, or (ii) if such Bank was not given notice of the subject claim
and the opportunity to participate in the defense thereof, at its expense,
or (iii) if the same results from a compromise and settlement agreement
entered into without the consent of the Bank, which consent shall not be
unreasonably withheld.
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11.8 Reliance by the Agent Bank. The Agent Bank shall be entitled
to rely upon any writing, telegram, telex or teletype message, facsimile,
resolution, notice, consent, certificate, letter, cablegram, statement,
order or other document or conversation by telephone or otherwise believed
by it to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons, and upon the advice and opinions of counsel
and other professional advisers selected by the Agent Bank. The Agent Bank
shall be fully justified in failing or refusing to take any action
hereunder unless it shall first be indemnified to its satisfaction by the
Banks in accordance with their respective Revolving Credit Facility Pro
Rata Shares against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
11.9 Notice of Default. The Agent Bank shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the Agent Bank has received written notice from a Bank or
the Borrowers referring to this Loan Agreement, specifically describing
such Potential Default or Event of Default and stating that such notice is
a "notice of default."
11.10 The Banks in Their Individual Capacities. With respect to its
Revolving Loan Commitment and its Term Loan Pro Rata Share, the Agent
Bank shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not the Agent Bank, and the term
"Banks" shall, unless the context otherwise indicates, include the Agent
Bank in its individual capacity. Each Bank and its Affiliates may, without
liability to account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures of, and
generally engage in any kind of banking or trust business with, BT and its
Affiliates, in the case of the Agent Bank, as though it were not acting as
Agent Bank hereunder and in the case of each Bank, as though such Bank were
not a Bank hereunder.
11.11 Holders of Revolving Credit Notes and Term Notes. The Agent
Bank may deem and treat any payee of any Revolving Credit Note or Term Note
as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Agent Bank. Any request, authority or consent of any Person who at the time
of making such request or giving such authority or consent is the holder of
any Revolving Credit Note or Term Note shall be conclusive and binding on
any subsequent holder, transferee or assignee of such Revolving Credit Note
or Term Note or of any Revolving Credit Note or Term Note issued in
exchange therefor.
11.12 Equalization of the Banks. The Banks and the holders of any
participations in any Revolving Credit Notes agree among themselves that,
with respect to all amounts received by any Bank or any such holder for
application to any Revolving Credit Note or Term Note or under any such
participation, whether
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received by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or by any
other non-pro rata source, equitable adjustment will be made in the manner
stated in the following sentence so that, in effect, all such excess
amounts will be shared ratably among the Banks and such holders in
proportion to their interests in payments under the Revolving Credit Notes
and the Term Notes. The Banks or any such holder receiving any such amount
shall purchase for cash from each of the other Banks an interest in such
Bank's Revolving Credit Loans and Term Loans in such amount as shall result
in a ratable participation by the Banks and each holder in the aggregate
unpaid amount under the Revolving Credit Notes and the Term Notes, provided
that if all or any portion of such excess amount is thereafter recovered
from the Bank or the holder making such purchase, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by law (including
court order) to be paid by the Bank or the holder making such purchase.
11.13 Successor Agent Bank. The Agent Bank, with the consent of the
Borrowers which shall not be unreasonably withheld, may resign as Agent
Bank upon not less than thirty (30) days prior written notice given to the
Borrowers and the other Bank(s). If the Agent Bank shall resign under this
Loan Agreement, then either (i) the Banks shall appoint a successor Agent
Bank, subject to the consent to such successor Agent Bank by the Borrowers,
such consent not to be unreasonably withheld, or (ii) if a successor Agent
Bank shall not be so appointed and approved within the thirty (30) day
period following the Agent Bank's notice to the Banks of its resignation,
then the Agent Bank shall appoint, with the consent of the Borrowers, such
consent not to be unreasonably withheld, a successor Agent Bank who shall
serve as Agent Bank until such time as the Banks appoint, and the Borrowers
consent, which consent shall not be unreasonably withheld, to the
appointment of a successor Agent Bank. Upon its appointment pursuant to
either clause (i) or (ii) above, such successor Agent Bank shall succeed to
the rights, powers and duties of the Agent Bank and the term "Agent Bank"
shall mean such successor Agent Bank, effective upon its appointment, and
the former Agent Bank's rights, powers and duties as Agent Bank shall be
terminated without any other or further act or deed on the part of such
former Agent Bank or any of the other parties to this Loan Agreement.
After the resignation of any Agent Bank hereunder, the provisions of this
Section 11 shall not by reason of such resignation be deemed to release the
Agent Bank from liability for any actions taken or not taken by it while it
was the Agent Bank under this Loan Agreement.
11.14 Calculations. In the absence of gross negligence or willful
misconduct, the Agent Bank shall not be liable for any error in computing
the amount payable to any Bank whether in respect of the Revolving Credit
Loans or Term Loans or the fees or other amounts due to the Banks under
this Loan Agreement. In the event an error in computing any amount payable
to any Bank is
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made, the Agent Bank, the Borrowers and each affected Bank shall, forthwith
upon discovery of such error, make such adjustments as shall be required to
correct such error, and any compensation therefor will be calculated at
the Federal Funds Effective Rate.
11.15 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Internal Revenue Code and
such Bank claims exemption from, or a reduction of, U.S. withholding tax
under Sections 1441 or 1442 of the Internal Revenue Code, such Bank agrees
with and in favor of the Agent Bank, to deliver to the Agent Bank:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed
and executed copies of IRS Form 1001 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid
under this Agreement; and
(iii) such other form or forms as may be required under the
Internal Revenue Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent Bank of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such
Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Borrowers to such Bank, such Bank agrees
to notify the Agent Bank of the percentage amount in which it is no longer
the beneficial owner of Obligations of the Borrowers to such Bank. To the
extent of such percentage amount, the Agent Bank will treat such Bank's IRS
Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent Bank sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
the Borrowers to such Bank, such Bank agrees to undertake sole
responsibility for complying with the
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withholding tax requirements imposed by Section 1441 and 1442 of the
Internal Revenue Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent Bank may withhold from any interest payment to
such Bank an amount equivalent to the applicable withholding tax after
taking into account such reduction. However, if the forms or other
documentation required by subsection (a) of this Section are not delivered
to the Agent Bank, then the Agent Bank may withhold from any interest
payment to such Bank not providing such forms or other documentation an
amount equivalent to the applicable withholding tax imposed by Sections
1441 and 1442 of the Internal Revenue Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent Bank did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent Bank of a change
in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent Bank fully for all amounts paid, directly or
indirectly, by the Agent Bank as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent Bank under this Section, together with all
costs and expenses (including Attorney Costs). The obligation of the Banks
under this subsection shall survive the payment of all Obligations and the
resignation or replacement of the Agent Bank.
11.16 Beneficiaries. Except as set forth in Sections 11.5 and 11.13
hereof, the provisions of this section 11 are solely for the benefit of the
Agent Bank and the Banks, and the Borrowers shall not have any right to
rely on or enforce any of the provisions hereof. In performing its
functions and duties under this Loan Agreement, the Agent Bank shall act
solely as agent of the Banks and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with
or for the Borrowers or any other Person.
SECTION 12
ASSIGNMENTS AND PARTICIPATIONS
------------------------------
A. Assignments to Eligible Assignees. Each Bank shall have the
right at any time, with the prior consent of the Borrowers and the Agent
Bank, which shall not be unreasonably withheld, to sell, assign, transfer
or negotiate all or any part of its Revolving Loan Commitment, Revolving
Credit Loans and Term Loans in a minimum amount of Five Million Dollars
($5,000,000) to one or more commercial banks, insurance companies, savings
and loan associations, savings
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banks or other financial institutions, pension funds or mutual funds or
other accredited investors ("Eligible Assignees"). In the case of any sale,
assignment, transfer or negotiation of all or part of the Revolving Loan
Commitment, Revolving Credit Loans or Term Loans authorized under this
Section 12, the assignee, transferee or recipient shall have, to the extent
of such sale, assignment, transfer or negotiation, the same rights,
benefits and obligations as it would if it were a Bank hereunder,
including, without limitation (x) the right to approve or disapprove
actions which, in accordance with the terms hereof, require the approval of
the Banks, and (y) the obligation to fund Revolving Credit Loans pursuant
to Section 2 hereof. The Bank assigning a portion or all of its Revolving
Loan Commitment, Revolving Credit Loans and Term Loans pursuant to this
Section 12, or the bank purchasing the interest of the Assigning Bank,
shall pay a fee to the Agent Bank in an amount to be negotiated by the
Agent Bank and the new bank.
B. Participations. Notwithstanding Section 12A hereof, each
Bank may grant participations in all or any part of its Revolving Loan
Commitment, Revolving Credit Loans and Term Loans to one or more Eligible
Assignees; provided that (i) any such disposition shall not, without the
consent of the Borrowers, require the Borrowers to file a registration
statement with the Securities and Exchange Commission or apply to qualify
the Revolving Credit Loans, the Revolving Credit Notes, the Term Loans or
Term Notes under the blue sky law of any state; and (ii) the holder of any
such participation, other than an Affiliate of such Bank, shall not be
entitled to require the Banks to take or omit to take any action hereunder
except action directly extending the final maturity of any portion of the
principal amount of or interest on a Revolving Credit Loan allocated to
such participation or a reduction of the principal amount of or the rate of
interest payable on the Revolving Credit Loans allocated to such
participation.
C. Assignments to Affiliates. Notwithstanding the foregoing
provisions of this Section 12, each Bank may at any time sell, assign,
transfer, or negotiate all or any part of its Revolving Loan Commitment,
Revolving Credit Loans and Term Loans to any Affiliate of such Bank;
provided that an Affiliate to whom such disposition has been made shall not
be considered a "Bank" for purposes of this Loan Agreement other than for
purposes of Section 10.2 hereof; provided further that the Borrowers shall
not incur any additional expenses solely as a result of such sale,
assignment, transfer or negotiation.
D. No Release of Obligations. No Bank shall, as between the
Borrowers and such Bank, be relieved of any of its obligations hereunder as
a result of any granting of participations in all or any part of its
Revolving Loan Commitment, Revolving Credit Loans or Term Loans. Each Bank
shall, as between the Borrowers and such Bank, be relieved of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of all or any part of its Revolving Loan
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Commitment, Revolving Credit Loans and Term Loans made in accordance with
Section 12.A hereof.
SECTION 13
INDEMNITY
---------
The Borrowers shall indemnify and hold harmless each Bank and its
successors, assigns, agents and employees from and against any and all
claims, actions, suits, proceedings, costs, expenses, damages, fines,
penalties and liabilities, including, without limitation, reasonable
attorneys' fees and costs, arising out of, connected with or resulting
from the operation of the business of the Borrowers.
SECTION 14
INCREASED COSTS; TAXES; CAPITAL ADEQUACY
----------------------------------------
14.1 Compensation for Increased Costs and Taxes. In the event that
the Banks shall determine in good faith (which determination shall, absent
manifest or demonstrable error, be final and conclusive and binding upon
both the Borrowers and the Banks) that any law, treaty or governmental
rule, regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any
new law, treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each case that
becomes effective after the Closing Date, or compliance by the Banks with
any guideline, request or directive issued or made after the date hereof by
any central bank or other governmental or quasi-governmental authority, and
which has the force of law and first becomes effective after the Closing
Date in all cases of general applicability to the banking industry:
(i) subjects any Bank (or its applicable lending office) to any
additional Covered Tax with respect to this Loan Agreement or any of the
Revolving Credit Loans, the Swing Line Loans or the Term Loans or any of
its other obligations hereunder, or changes the basis of taxation of
payments to such Bank (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder (but not changes in
Excluded Taxes);
(ii) imposes, modifies or holds applicable any additional reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance
or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any Bank (or its
applicable lending office) (other than any
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such reserve or other requirements with respect to LIBOR Loans that are
reflected in the definition of LIBOR); or
(iii) imposes any other condition on or affecting any Bank (or
its applicable lending office) or its obligations hereunder or the London
interbank market, other than with respect to Taxes;
and the result of any of the foregoing is to increase the cost to any Bank
of agreeing to make, making or maintaining Revolving Credit Loans, Swing
Line Loans and Term Loans hereunder or to reduce any amount received or
receivable by any Bank (or its applicable lending office) with respect
thereto, then, in any such case, the Borrowers shall promptly pay to such
Bank, upon demand, such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest as such
Bank in its reasonable discretion shall determine) as may be necessary to
compensate such Bank on an after-tax basis for any such increased cost or
reduction in amounts received or receivable hereunder; provided that any
increased cost arising as a result of any of the foregoing other than in
respect of Taxes shall apply only to LIBOR Loans to the extent the same
bear interest by reference to the LIBOR. The Bank seeking reimbursement
for such amounts from the Borrowers shall deliver to the Borrowers a
written statement setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Bank under this Section
14.1, which statement shall be conclusive and binding upon both parties
hereto absent manifest or demonstrable error.
14.2 Withholding of Taxes.
A. Payments to Be Free and Clear. All sums payable by the
Borrowers under this Loan Agreement and the other Loan Documents to or for
the benefit of any Bank or any Person who acquires any interest in the
Revolving Credit Loans and Term Loans pursuant to the provisions hereof
shall be paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Covered Tax imposed,
levied, collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of America
or any other jurisdiction from or to which a payment is made by or on
behalf of the Borrowers or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time
of payment.
B. Grossing-up of Payments. If the Borrowers or any other
Person is required by law to make any deduction or withholding on account
of any Covered Tax from any sum paid or payable by the Borrowers to any
Bank under any of the Loan Documents:
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(i) The Borrowers shall notify such Bank of any such requirement
or any change in any such requirement as soon as the Borrowers becomes
aware of it;
(ii) The Borrowers shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the liability
to pay is imposed on the Borrowers) for their own account or (if that
liability is imposed on such Bank) on behalf of and in the name of such
Bank;
(iii) The sum payable by the Borrowers in respect of which the
relevant deduction, withholding or payment is required shall be increased
to the extent necessary to ensure that, after the making of that deduction,
withholding or payment, such Bank receives on the due date and retains
(free from any liability in respect of any such deduction, withholding or
payment) a net sum equal to what it would have received and so retained had
no such deduction, withholding or payment in respect of Covered Taxes been
required or made,
(iv) Within thirty (30) days after paying any sum from which it
is required by law to make any deduction or withholding, and within thirty
(30) days after the due date of payment of any Tax which it is required to
pay by clause (ii) above, the Borrowers shall deliver to such Bank evidence
satisfactory to such Bank of such deduction, withholding or payment and of
the remit thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Bank under clause (iii) above except to the extent that any change after
the date hereof in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate of
such deduction, withholding or payment from that in effect at the date of
this Loan Agreement in respect of payments to such Bank.
C. Tax Refund. If the Borrowers determine in good faith that a
reasonable basis exists for contesting a Covered Tax, the relevant Bank or
Tax Transferee, as applicable, shall cooperate with the Borrowers in
challenging such Tax at the Borrowers' expense if requested by the
Borrowers (it being understood and agreed that no Bank shall have any
obligation to contest, or any responsibility for contesting, any Tax). If
any Tax Transferee or any Bank, as applicable, receives a refund (whether
by way of a direct payment or by offset of any Covered Tax for which a
payment has been made pursuant to this Section 14) the amount of such
refund (together with any interest received thereon) shall be paid to the
Borrowers to the extent payment has been made in full pursuant to this
Section 14.
14.3 Capital Adequacy Adjustment. If any Bank shall have
determined in good faith that the adoption, effectiveness, phase-in or
applicability of any law, rule
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or regulation (or any provision thereof) regarding capital adequacy, or any
change therein or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
applicable lending office) with any guideline, request or directive
regarding capital adequacy of any such governmental authority, central bank
or comparable agency in all cases of general applicability to the banking
industry, and which has the force of law and first becomes effective after
the Closing Date, has or will have the effect of reducing the rate of
return on the capital of such Bank or any corporation controlling such Bank
as a consequence of, or with reference to, such Bank's Revolving Credit
Loans or Term Loans or other obligations hereunder to a level below that
which such Bank or such controlling corporation would have achieved but for
such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Bank or such controlling
corporation with regard to capital adequacy), then from time to time,
within ten (10) Business Days after demand by such Bank, the Borrowers
shall pay to such Bank such additional amount or amounts as will compensate
such Bank or such controlling corporation on an after-tax basis for such
reduction as and when incurred. Each Bank, upon determining in good faith
that any additional amounts will be payable pursuant to this Section 14.3,
will give prompt written notice thereof to the Borrowers, which notice
shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish
any of the Borrowers' obligations to pay additional amounts under this
Section 14.3.
14.4 Banks' Obligation to Mitigate. Each Bank agrees that, as
promptly as practicable after the officer of such Bank responsible for
administering the Revolving Credit Loans and Term Loans under this Loan
Agreement becomes aware of the occurrence of an event or the existence of a
condition that would entitle such Bank to receive payments under Section 14
hereof, it will, to the extent not inconsistent with its internal policies,
use reasonable efforts (i) to make, fund or maintain its Revolving Credit
Loans and Term Loans through another lending office of such Bank, or (ii)
take such other reasonable measures if as a result thereof the additional
amounts which would otherwise be required to be paid to such Bank pursuant
to Section 14 hereof would be materially reduced and if, as determined by
such Bank in its sole discretion, the making, funding or maintaining of
such Revolving Credit Loans and Term Loans through such other lending
office or in accordance with such other measures, as the case may be, would
not otherwise materially adversely affect such Revolving Credit Loans or
Term Loans or the interests of such Bank; provided that such Bank will not
be obligated to utilize such other lending office pursuant to this Section
14.4 unless the Borrowers agree to pay all expenses incurred by such Bank
in utilizing such other lending office. A certificate as to the amount of
any such expenses payable by the Borrowers pursuant to this Section 14.4
(setting forth in reasonable detail the basis for requesting such
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amount) submitted by any Bank to the Borrowers shall be conclusive absent
manifest or demonstrable error.
SECTION 15
NOTICES
-------
All notices required or permitted to be given hereunder shall be
given in writing and shall be personally delivered or sent by facsimile
transmission or by registered or certified United States mail, return
receipt requested, postage prepaid, addressed as follows (or to such other
address as to which any party hereto shall have given the other parties
written notice):
If to Group
Financial: Group Financial Partners, Inc.
Xxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: President
If to BT: Group Financial Partners, Inc.
Xxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: President
If to TT: Tube Turns Technologies, Inc.
0000 Xxxx Xxxxxxxx
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxx X. Xxxxxx
If to Xxxx: Xxxx Technologies, Inc.
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxxxx
If to GTC: Group Technologies Corporation
00000 Xxxxxxx XxXxxxxx Xxxxx
Xxxxx, Xxxxxxx
Attn: President
If to MD: Group Financial Partners, Inc.
000 Xxxxx 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: President
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If to Group
Financial: Group Financial Partners, Inc.
000 Xxxxx 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: President
If to the Banks: BANK ONE, KENTUCKY, NA
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxx
If to the
Agent Bank: BANK ONE, KENTUCKY, NA
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxx
All notices hereunder shall be deemed given upon the earlier of (i)
actual delivery in person or by facsimile transmission, or (ii) two (2)
Business Days after having been deposited in the United States mails, in
accordance with the foregoing.
SECTION 16
MISCELLANEOUS
-------------
16.1 Joint and Several Liability of Borrowers. The obligation of
each of the Borrowers for repayment of all unpaid principal of and interest
on Revolving Credit Loans, the Swing Line Loans, the Term Loans, and all
other Obligations to the Banks and for repayment of all unpaid principal of
and interest and all other Obligations to the Agent Bank shall be joint and
several.
16.2 Ratable Sharing. Each Bank agrees with the other Bank that (i)
with respect to all amounts received by it which are applicable to the
payment of principal of or interest on the Term Loans or the Revolving
Credit Loans and the Revolving Credit Facility Commitment Fees, including,
without limitation, all amounts received by such Bank pursuant to the
exercise of the right of setoff pursuant to Section 10.2 hereof, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among the Banks proportionately in accordance with their respective Term
Loan Pro Rata Shares, Revolving Credit Facility Pro Rata Shares, whether
received by voluntary payment, by the exercise of the right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
or all of the Obligations, and (ii) if any of them shall exercise any right
of counterclaim, set-off, banker's lien
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or similar right with respect to amounts owed by the Borrowers hereunder,
that Bank shall apportion the amount recovered as a result of the exercise
of such right pro rata in accordance with (a) all amounts outstanding at
such time owed by the Borrowers to it hereunder with respect to the Term
Loans and Revolving Credit Loans, and (b) all amounts otherwise owed by the
Borrowers to it, and (iii) if any of them shall thereby through the
exercise of any right of counterclaim, set-off, banker's lien or otherwise,
or as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal and interest due with respect to the
Revolving Credit Loans and Term Loans made by that Bank or any
participation therein, or any other amount payable hereunder (collectively,
the "Aggregate Amount Due" to such Bank), which is greater than the
proportion received by any other Bank in respect of the Aggregate Amount
Due to such other Bank, then the Bank receiving such proportionately
greater payment shall (y) notify each other Bank and the Agent Bank of such
receipt and (z) purchase participations (which it shall be deemed to have
done simultaneously upon the receipt of such payment) in the Aggregate
Amounts Due to the other Banks so that all recoveries of Aggregate Amounts
Due shall be shared by the Banks in proportion to their respective Term
Loan Pro Rata Shares and their respective Revolving Credit Facility Pro
Rata Shares; provided that if all or part of such proportionately greater
payment received by such purchasing Bank is thereafter recovered from such
Bank, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to that Bank to the extent of such
recovery, but without interest. The Borrowers expressly consent to the
foregoing arrangements and agree that any participant in respect of any
Term Loan or any Revolving Credit Loan may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all rights
of banker's lien, set-off or counterclaim with respect to any and all
monies owing by the Borrowers to that participant as fully as if that
participant were a Bank in the amount of such participation held by that
participant.
16.3 Waiver. No course of dealing in respect of, nor any omission
or delay in the exercise of, any right, power, remedy or privilege by the
Banks shall operate as a wavier thereof, nor shall any right, power, remedy
or privilege of the Banks be exclusive of any other right, power, remedy or
privilege referred to herein or in any related document or now or hereafter
available at law, in equity, in bankruptcy, by statute or otherwise. Each
such right, power, remedy or privilege may be exercised by the Banks,
either independently or concurrently with others, and as often and in such
order as the Banks may deem expedient. No waiver or consent granted by the
Banks in respect of this Loan Agreement or the other Loan Documents shall
be binding upon the Banks unless specifically granted in writing by a duly
authorized officer of the Agent Bank, which writing shall be strictly
construed.
16.4 Survival of Representations and Warranties. All
representations, warranties and covenants of the Borrowers and each Bank
contained herein or made
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pursuant hereto shall survive the execution and delivery of this Loan
Agreement and shall continue throughout the term hereof. Further, the
indemnities set forth in Section 13 hereof shall survive the payment of the
Revolving Credit Notes, the Term Notes and the other Obligations to the
Banks, as applicable.
16.5 Invalidity. If any part of this Loan Agreement shall be
adjudged invalid or unenforceable, whether in general or in any particular
circumstance, then such partial invalidity or enforceability shall not
cause the remainder of this Loan Agreement to be or to become invalid or
unenforceable, and if a provision hereof is held invalid or unenforceable
in one or more of its applications, the parties hereto agree that said
provision shall remain in effect in all valid applications that are
severable from the invalid or unenforceable application or applications.
16.6 Assignment. This Loan Agreement may not be assigned by the
Borrowers without the prior written consent of the Banks. This Loan
Agreement may be assigned by the Banks as provided in Section 12 hereof.
All rights of the Banks hereunder shall inure to the benefit of their
respective successors and assigns, and all obligations, covenants and
agreements of the Borrowers shall bind their permitted successors and
assigns, if any.
16.7 Governing Law. This Loan Agreement and the rights and
obligations of the parties hereunder shall, in all respects, be governed by
and construed in accordance with the laws of the Commonwealth of Kentucky.
16.8 Section Headings. The section headings of this Loan Agreement
are inserted herein solely for convenience of reference and shall not
affect the construction or interpretation of the provisions hereof.
16.9 Entire Agreement. This Loan Agreement and the other Loan
Documents constitute the entire agreement between the Borrowers and the
Banks with respect to the subject matter hereof.
16.10 Time of the Essence. Time shall be of the essence in the
payment and performance of all of the Borrowers' obligations under this
Loan Agreement, the Revolving Credit Note and the other Loan Documents to
which the Borrowers are party.
16.11 Modifications. This Loan Agreement may be modified only in
writing executed by the Borrowers and the Banks. Neither this Loan
Agreement nor the other Loan Documents nor any terms hereof or thereof may
be changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by Banks holding at least
sixty six and 66/100 percent (66 2/3%) of the aggregate of the Revolving
Credit Facility Pro Rata Shares and the Term Loan Pro Rata Shares (the
"Majority Banks"); provided, however, that no such change,
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waiver, discharge or termination, shall, without the consent of each Bank,
(i) extend the Revolving Loan Commitment Termination Date or the final
maturity of the Revolving Credit Note or the Term Note of such Bank, or
change the rate or extend the time of payment of interest, principal or
fees, or reduce the principal amount thereof, or increase the aggregate
amount of the Revolving Loan Commitments above the maximum amount provided
for in Section 2.1 hereof, or increase any Bank's commitment to disburse
its Revolving Loan Pro Rata Share of Revolving Credit Loans requested by
the Borrowers as set forth in Section 2.1 hereof, or (ii) release any
Collateral except as it shall otherwise be provided in any Loan Document,
or (iii) amend, modify or waive any provisions of this Section 16.11
(Modifications), Section 2 (Revolving Credit Facility), Section 2.6 (Swing
Line Credit Subfacility), Section 2.7 (Letter of Credit Subfacility),
Section 3 (Term Loans), Section 9 (Events of Default; Acceleration),
Section 10 (Remedies Upon Default, Etc.), Section 11 (The Agent Bank),
Section 16.2 (Ratable Sharing), or (iv) amend, modify or waive any
provision requiring consent of all Banks, or (v) reduce the percentages
specified in this Section 16.11 or (vi) consent to the assignment or
transfer by the Borrowers of any of their rights and obligations under this
Agreement.
16.12 Submission to Jurisdiction, Etc. The Borrowers hereby
irrevocably agree that any legal action, suit or proceeding against the
Borrowers with respect to the obligations and liabilities of the Borrowers
hereunder or any other matter under or arising out of or in connection with
this Loan Agreement, the Revolving Credit Notes, the Term Notes, the
Mortgages, or any other Loan Document or for recognition or enforcement of
any judgment rendered in any such action, suit or proceeding may be brought
in the United States District Court of the Western District of Kentucky at
Louisville, Kentucky or in the Jefferson County, Kentucky Circuit Court, as
the Banks may elect, and, by execution and delivery of this Loan Agreement,
the Borrowers hereby irrevocably accept and submit to the non-exclusive
jurisdiction of each of the aforesaid courts in personam generally and
unconditionally with respect to any such action, suit or proceeding
involving the Borrowers and in respect of the Borrowers' property. The
Borrowers further agree that final judgment against the Borrowers in any
action, suit or proceeding referred to herein shall be conclusive after all
appeals have been exhausted or waived by the Borrowers, and may thereafter
be enforced in any other jurisdiction, within or outside the United States
of America, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
Borrowers' obligations and liabilities. The Borrowers further irrevocably
consent and agree to the service of any and all legal process, summons,
notices and documents out of any of the aforesaid courts in any such
action, suit or proceeding by mailing copies thereof by serving copies
thereof upon any statutory agent for service of process of the Borrowers.
The Borrowers agree that service upon the Borrowers as provided for herein
shall constitute valid and effective personal service upon the Borrowers
and that the failure of any statutory agent to
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give any notice of such service to the Borrowers shall not impair or affect
in any way the validity of such service or any judgment rendered in any
action or proceeding based thereon. Nothing herein shall, or shall be
construed so as to, limit the right of the Banks to bring actions, suits or
proceedings with respect to the obligations and liabilities of the
Borrowers under, or any other matter arising out of or in connection with,
this Loan Agreement, the Revolving Credit Notes, the Term Notes, the
Security Agreements, the Mortgages and/or the other Loan Documents, or for
recognition or enforcement of any judgment rendered in any such action,
suit or proceeding, in the courts of whatever jurisdiction in which
property of the Borrowers may be found or as otherwise shall to the Banks
seem appropriate, or to affect the right to service of process in any
jurisdiction in any manner permitted by law. In addition, the Borrowers
hereby irrevocably and unconditionally waive any objection which the
Borrowers may now or hereafter have to the laying of venue of any of the
aforesaid actions, suits or proceedings arising out of or in connection
with this Loan Agreement, the Revolving Credit Notes, the Term Notes, the
Security Agreements, the Mortgages and/or the other Loan Documents brought
in the Circuit Court of Jefferson County, Kentucky or in the United States
District Court for the Western District of Kentucky at Louisville,
Kentucky, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim that any such action, suit or proceeding
brought in either such court has been brought in an inconvenient forum.
16.13 WAIVER OF JURY TRIAL. EACH BORROWER, EACH BANK AND THE AGENT
BANK EACH HEREBY AGREES TO WAIVE ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LOAN AGREEMENT, THE
REVOLVING CREDIT NOTES, THE MORTGAGES OR THE OTHER LOAN DOCUMENTS. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT THAT RELATE TO THE SUBJECT MATTER
OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THE BORROWER, EACH BANK AND THE AGENT BANK EACH ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH SUCH PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, AND THAT EACH BORROWER, EACH BANK AND THE AGENT BANK
HAVE ALREADY RELIED ON THE WAIVER IN ITS RELATED FUTURE DEALINGS WITH THE
OTHERS. THE BORROWER, EACH BANK AND THE AGENT BANK EACH FURTHER WARRANTS
AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
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MODIFICATIONS TO THIS LOAN AGREEMENT, THE REVOLVING CREDIT NOTES, THE
MORTGAGES OR THE OTHER LOAN DOCUMENTS. IN THE EVENT OF LITIGATION, THIS
LOAN AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the Agent Bank, the Banks, Group Financial
and the Borrowers have caused this Loan Agreement to be duly executed as of
the day and year first above written.
BANK ONE, KENTUCKY, NA, as a Bank
("the Agent Bank")
/s/ Xxxx X. Xxxxxx
-----------------------------------------
By: Xxxx X. Xxxxxx, Senior Vice President
BANK ONE, KENTUCKY, NA, as Agent
Bank (the "Agent Bank")
/s/ Xxxx X. Xxxxxx
-----------------------------------------
By: Xxxx X. Xxxxxx, Senior Vice President
BT HOLDINGS, INC.
(a "Borrower")
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
By: Xxxxxxx X. Xxxxx, Treasurer
XXXX TECHNOLOGIES, Inc.
("Xxxx")
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
By: Xxxxxxx X. Xxxxx, Assistant Treasurer
-100-
TUBE TURNS TECHNOLOGIES, INC.
("TT")
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
By: Xxxxxxx X. Xxxxx, Treasurer
GROUP TECHNOLOGIES CORPORATION
("GTC")
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------
By: Xxxxx X. Xxxxxxx, Vice President
METRUM-D, INC.
("MD")
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
By: Xxxxxxx X. Xxxxx, Vice President
GROUP FINANCIAL PARTNERS, INC.
as Guarantor
("Group Financial")
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
By: Xxxxxxx X. Xxxxx, Senior Vice President
-101-
