Exhibit 10.1
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CREDIT AGREEMENT
BY AND AMONG
OIL-DRI CORPORATION OF AMERICA,
THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,
AND
XXXXXX X.X.
DATED AS OF JANUARY 27, 2006
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. THE CREDITS............................................................................1
Section 1.1. Revolving Credit.......................................................................1
Section 1.2. Manner and Disbursement of Loans.......................................................2
Section 1.3. Letters of Credit......................................................................2
Section 1.4. Guaranties from Domestic Subsidiaries..................................................3
SECTION 2. INTEREST ON LOANS AND CHANGE IN CIRCUMSTANCES..........................................3
Section 2.1. Interest Rate Options on Loans.........................................................3
Section 2.2. Minimum Amounts; Computation of Interest and Fees......................................5
Section 2.3. Manner of Rate Selection...............................................................6
Section 2.4. Change of Law..........................................................................6
Section 2.5. Unavailability of Deposits or Inability to Ascertain Adjusted LIBOR....................6
Section 2.6. Taxes and Increased Costs..............................................................7
Section 2.7. Funding Indemnity......................................................................8
Section 2.8. Lending Branch.........................................................................8
Section 2.9. Discretion of Bank as to Manner of Funding.............................................8
SECTION 3. FEES, PREPAYMENTS, PORTIONS, TERMINATIONS, EXTENSIONS, APPLICATIONS AND
CAPITAL ADEQUACY.......................................................................9
Section 3.1. Fees9
Section 3.2. Voluntary Prepayments..................................................................9
Section 3.3. Mandatory Prepayment...................................................................9
Section 3.4. Terminations..........................................................................10
Section 3.5. Place and Application of Payments.....................................................10
Section 3.6. Notations.............................................................................10
Section 3.7. Change in Capital Adequacy Requirements...............................................11
SECTION 4. DEFINITIONS; INTERPRETATION...........................................................11
Section 4.1. Definitions...........................................................................11
Section 4.2. Interpretation........................................................................21
SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................22
Section 5.1. Organization and Qualification........................................................22
Section 5.2. Subsidiaries..........................................................................22
Section 5.3. Corporate Authority and Validity of Obligations.......................................22
Section 5.4. Use of Proceeds; Margin Stock.........................................................23
Section 5.5. Financial Reports.....................................................................23
Section 5.6. No Material Adverse Change............................................................24
Section 5.7. Full Disclosure.......................................................................24
Section 5.8. Good Title............................................................................24
Section 5.9. Litigation and Other Controversies....................................................24
Section 5.10. Taxes.................................................................................24
Section 5.11. Approvals.............................................................................24
Section 5.12. Affiliate Transactions................................................................25
Section 5.13. Investment Company; Public Utility Holding Company....................................25
Section 5.14. ERISA.................................................................................25
Section 5.15. Compliance with Laws..................................................................25
Section 5.16. Other Agreements......................................................................25
Section 5.17. No Default............................................................................25
SECTION 6. CONDITIONS PRECEDENT..................................................................26
Section 6.1. All Advances..........................................................................26
Section 6.2. Initial Advance.......................................................................26
SECTION 7. COVENANTS.............................................................................27
Section 7.1. Maintenance of Business...............................................................27
Section 7.2. Maintenance of Properties.............................................................27
Section 7.3. Taxes and Assessments.................................................................28
Section 7.4. Insurance.............................................................................28
Section 7.5. Financial Reports.....................................................................28
Section 7.6. Inspection............................................................................29
Section 7.7. Indebtedness for Borrowed Money.......................................................30
Section 7.8. Liens.................................................................................30
Section 7.9. Investments, Loans, Advances and Guaranties...........................................31
Section 7.10. Mergers, Consolidations and Sales.....................................................33
Section 7.11. Maintenance of Subsidiaries...........................................................33
Section 7.12. ERISA.................................................................................34
Section 7.13. Compliance with Laws..................................................................34
Section 7.14. Burdensome Contracts With Affiliates..................................................34
Section 7.15. Change in the Nature of Business......................................................34
Section 7.16. Formation of Subsidiaries.............................................................34
Section 7.17. Financial Covenants...................................................................35
SECTION 8. EVENTS OF DEFAULT AND REMEDIES........................................................35
Section 8.1. Events of Default.....................................................................35
Section 8.2. Non-Bankruptcy Defaults...............................................................37
Section 8.3. Bankruptcy Defaults...................................................................37
SECTION 9. THE GUARANTEES........................................................................38
Section 9.1. The Guarantees...............................................................................38
Section 9.2. Guarantee Unconditional......................................................................38
Section 9.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances............................................................39
Section 9.4. Subrogation...........................................................................39
Section 9.5. Waivers...............................................................................40
Section 9.6. Limit on Recovery.....................................................................40
Section 9.7. Stay of Acceleration..................................................................40
SECTION 10. MISCELLANEOUS.........................................................................40
Section 10.1. Holidays..............................................................................40
Section 10.2. No Waiver, Cumulative Remedies........................................................40
Section 10.3. Amendments, Etc.......................................................................40
Section 10.4. Costs and Expenses....................................................................40
Section 10.5. Documentary Taxes.....................................................................41
Section 10.6. Survival of Representations...........................................................41
Section 10.7. Survival of Indemnities...............................................................41
Section 10.8. Notices...............................................................................41
Section 10.9. Construction..........................................................................42
Section 10.10. Headings..............................................................................42
Section 10.11. Severability of Provisions............................................................42
Section 10.12. Counterparts..........................................................................42
Section 10.13. Binding Nature, Governing Law, Etc....................................................42
Section 10.14. Submission to Jurisdiction; Waiver of Jury Trial.....................................43
Signature........................................................................................................44
Exhibit A -- Revolving Note
Exhibit B -- Compliance Certificate
Exhibit C -- Guaranty
Schedule 5.2 -- Subsidiaries
OIL-DRI CORPORATION OF AMERICA
CREDIT AGREEMENT
Xxxxxx X.X.
Chicago, Illinois
Ladies and Gentlemen:
The undersigned, Oil-Dri Corporation of America, a Delaware corporation
(the "Company"), applies to you (the "Bank") for your commitment, subject to the
terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to make a revolving credit (the "Revolving
Credit") available to the Company, all as more fully hereinafter set forth.
SECTION 1. THE CREDITS.
Section 1.1. Revolving Credit. Subject to the terms and conditions hereof,
the Bank agrees to extend a Revolving Credit to the Company which may be availed
of by the Company from time to time during the period from and including the
date hereof to but not including the Termination Date, at which time the
commitment of the Bank to extend credit under the Revolving Credit shall expire.
The Revolving Credit may be utilized by the Company in the form of loans
(individually a "Loan" and collectively the "Loans") and Letters of Credit,
provided that the aggregate principal amount of Loans and Letters of Credit
outstanding at any one time shall not exceed $15,000,000 (the "Revolving Credit
Commitment", as such amount may be reduced pursuant to Section 3.4 hereof). Each
Loan shall be in a minimum amount of $100,000 or such greater amount which is an
integral multiple of $25,000; provided, however, that Loans which bear interest
with reference to the Adjusted LIBOR or Offered Rate shall be in such greater
amount as is required by Section 2 hereof. The Loans shall be made against and
evidenced by a single promissory note of the Company in the form (with
appropriate insertions) attached hereto as Exhibit A (the "Note") payable to the
order of the Bank in the principal amount of $15,000,000. The Note shall be
dated the date of issuance thereof and be expressed to bear interest as set
forth in Section 2 hereof. The Note, and all Loans evidenced thereby, shall
mature and be due and payable in full on the Termination Date. Without regard to
the principal amount of the Note stated on its face, the actual principal amount
at any time outstanding and owing by the Company on account of the Note shall be
the sum of all Loans made under this Section less all payments of principal
actually received by the Bank. During the period from and including the date
hereof to but not including the Termination Date, the Company may use the
Revolving Credit Commitment by borrowing, repaying and reborrowing Loans in
whole or in part, all in accordance with the terms and conditions of this
Agreement.
The Company acknowledges that it is justly and truly indebted to the Bank
on the Present Loans in the principal amount of $0.00 plus accrued and unpaid
interest thereon. Upon satisfaction of the conditions precedent to effectiveness
set forth in Section 6 hereof, the Present Loans shall automatically, and
without further action on the part of either the Bank or the Company, become
evidenced by the Note and, to that extent, the Note is issued in renewal of, and
evidences the same indebtedness formerly evidenced by, the Prior Note, as well
as
evidencing all additional Loans made pursuant hereto. All of the Present Loans
shall, for all purposes of this Agreement, be treated as though they constituted
Loans under this Agreement in an amount equal to the aggregate unpaid principal
balance of the Present Loans made on the date the conditions precedent to
effectiveness set forth in Section 6 hereof have been satisfied or duly waived
in writing by the Bank. Simultaneously with such satisfaction or waiver of such
conditions precedent, any commitment of the Bank under the Prior Credit
Agreement shall terminate and all accrued but unpaid interest on the Present
Loans and accrued but unpaid letter of credit and commitment fees shall be due
and payable.
Section 1.2. Manner and Disbursement of Loans. The Company shall give
written or telephonic notice to the Bank (which notice shall be irrevocable once
given and, if given by telephone, shall be promptly confirmed in writing) by no
later than 11:00 a.m. (Chicago time) on the date the Company requests the Bank
to make a Loan hereunder; provided, however, that telephonic notice may only be
given by a Class A Authorized Representative. Each such notice shall specify (i)
the date of the Loan requested (which must be a Business Day) and (ii) and the
amount of such Loan. The Company agrees that the Bank may rely upon any written
or telephonic notice given by any person the Bank reasonably and in good faith
believes is an Authorized Representative without the necessity of independent
investigation and, in the event any earlier telephonic notice conflicts with the
later written confirmation, such notice shall govern if the Bank has acted in
reasonable reliance thereon. Subject to the provisions of Section 6 hereof, the
proceeds of each Loan shall be made available to the Company at the principal
office of the Bank in Chicago, Illinois, in immediately available funds. Each
Loan shall initially constitute part of the Base Rate Portion except to the
extent the Company has otherwise timely elected as provided in Section 2 hereof.
Section 1.3. Letters of Credit.
(a) General Terms. Subject to the terms and conditions hereof, the
Revolving Credit Commitment may be availed of by the Company in the form of
standby letters of credit issued by the Bank for the account of the Company
(individually a "Letter of Credit" and collectively the "Letters of Credit"),
provided that the aggregate amount of Letters of Credit (including the Present
Letters of Credit) issued and outstanding hereunder shall not at any one time
exceed $5,000,000. For purposes of this Agreement, a Letter of Credit shall be
deemed outstanding as of any time in an amount equal to the maximum amount which
could be drawn thereunder under any circumstances and over any period of time
plus any unreimbursed drawings then outstanding with respect thereto. If and to
the extent any Letter of Credit expires or otherwise terminates without having
been drawn upon, the availability under the Commitment shall to such extent be
reinstated. The parties acknowledge and agree that the Present Letters of Credit
shall each constitute a "Letter of Credit" herein for all purposes of this
Agreement to the same extent, and with the same force and effect as if such
Letter of Credit had been issued at the request of the Company hereunder. The
parties further acknowledge and agree that the Blue Mountain L/C is not a Letter
of Credit hereunder.
(b) Term. Each Letter of Credit issued hereunder shall expire not later
than the earlier of (i) twelve (12) months from the date of issuance (or be
cancelable not later than twelve (12) months from the date of issuance and each
renewal) or (ii) the Termination Date.
(c) General Characteristics. Each Letter of Credit issued hereunder shall
be payable in U.S. Dollars, conform to the general requirements of the Bank for
the issuance of a standby letter of credit as to form and substance, and be a
letter of credit which the Bank may lawfully issue.
(d) Applications. At the time the Company requests each Letter of Credit to
be issued (or prior to the first issuance of a Letter of Credit in the case of a
continuing application), the Company shall execute and deliver to the Bank an
application for such Letter of Credit in the form then customarily prescribed by
the Bank (individually an "Application" and collectively the "Applications").
Subject to the other provisions of this subsection, the obligation of the
Company to reimburse the Bank for drawings under a Letter of Credit shall be
governed by the Application for such Letter of Credit. In the event a drawing is
paid on a Letter of Credit and the Company has not notified the Bank by 11:00
a.m. (Chicago time) on the date when such drawing is paid that the Company
intends to repay such reimbursement obligation with funds not borrowed under
this Agreement, the Company shall be deemed to have irrevocably requested a Loan
constituting a Base Rate Portion on such day in the amount of the reimbursement
obligation then due, in each case subject to Section 6.1 hereof (other than the
requirement that a Loan be in a certain minimum amount), which new Loan shall be
applied to pay the reimbursement obligation then due. Anything contained in the
Applications to the contrary notwithstanding, (i) in the event the Bank is not
reimbursed by the Company (whether out of the proceeds of such a Loan or
otherwise) for the amount the Bank pays on any amount drawn under a Letter of
Credit issued hereunder by 2:00 p.m. (Chicago time) on the date when such
drawing is paid, the obligation of the Company to reimburse the Bank for the
amount of such drawing paid shall bear interest (which the Company hereby
promises to pay on demand) from and after the date the drawing is paid until
payment in full thereof at the fluctuating rate per annum determined by adding
2% to the Base Rate as from time to time in effect (computed on the basis of a
year of 365 or 366 days, as the case may be, for the actual number of days
elapsed), (ii) the Company shall pay fees in connection with each Letter of
Credit as set forth in Section 3 hereof, and (iii) prior to the occurrence of an
Event of Default the Bank will not call for the funding of a Letter of Credit by
the Company prior to being presented with a drawing thereunder.
Section 1.4. Guaranties from Domestic Subsidiaries . Payment of the
Obligations shall at all times be jointly and severally guaranteed by each
Domestic Subsidiary pursuant hereto or pursuant to a Guaranty issued by such
Domestic Subsidiary; provided, however, that no such guaranty shall be required
from any Domestic Subsidiary which is an Inactive Subsidiary. In the event any
Domestic Subsidiary is hereafter acquired or formed or any previously Inactive
Domestic Subsidiary ceases to be Inactive, the Company shall also cause such
Domestic Subsidiary to execute a Guaranty, together with such other instruments,
documents, certificates and opinions required by the Bank in connection
therewith.
SECTION 2. INTEREST ON LOANS AND CHANGE IN CIRCUMSTANCES.
Section 2.1. Interest Rate Options on Loans. (a) Subject to all of the
terms and conditions of this Section 2, portions of the principal indebtedness
evidenced by the Note (all of the indebtedness evidenced by the Note bearing
interest at the same rate for the same period of time being hereinafter referred
to as a "Portion") shall bear interest with reference to the Base Rate (the
"Base Rate Portion") or, at the option of the Company subject to the terms and
conditions hereof, with reference to an Adjusted LIBOR ("LIBOR Portions") or
with reference to an Offered Rate ("Offered Rate Portions"), and Portions may be
converted from time to time from one basis to the other. All of the indebtedness
evidenced by the Note which is not part of a Fixed Rate Portion shall constitute
a single Base Rate Portion. All of the indebtedness evidenced by the Note which
bears interest with reference to a particular Adjusted LIBOR for a particular
Interest Period shall constitute a single LIBOR Portion. All of the indebtedness
evidenced by the Note which bears interest with reference to a particular
Offered Rate for a particular Interest Period shall constitute a single Offered
Rate Portion. There shall not be more than ten (10) Fixed Rate Portions
applicable to the Note outstanding at any one time. Anything contained herein to
the contrary notwithstanding, the obligation of the Bank to create, continue or
effect by conversion any Fixed Rate Portion shall be conditioned upon the fact
that at the time no Default or Event of Default shall have occurred and be
continuing. The Company hereby promises to pay interest on each Portion at the
rates and times specified in this Section 2.
(b) Base Rate Portion. The Base Rate Portion shall bear interest at the
rate per annum determined by adding the Applicable Margin to the Base Rate as in
effect from time to time, provided that if the Base Rate Portion or any part
thereof is not paid when due (whether by lapse of time, acceleration or
otherwise), or at the election of the Bank upon notice to the Company during the
existence of any other Event of Default, such Portion shall bear interest,
whether before or after judgment, until payment in full thereof at the rate per
annum determined by adding 2% to the interest rate which would otherwise be
applicable thereto from time to time. Interest on the Base Rate Portion shall be
payable quarter-annually on the last day of each March, June, September and
December, in each year (commencing on the first such date occurring after the
date hereof) and at maturity of the Note and interest after maturity (whether by
lapse of time, acceleration or otherwise) shall be due and payable upon demand.
Any change in the interest rate on the Base Rate Portion resulting from a change
in the Base Rate shall be effective on the date of the relevant change in the
Base Rate.
(c) LIBOR Portions. Each LIBOR Portion shall bear interest for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable Margin to the Adjusted LIBOR for such Interest Period, provided that
if any LIBOR Portion is not paid when due (whether by lapse of time,
acceleration or otherwise), or at the election of the Bank upon notice to the
Company during the existence of any other Event of Default, such Portion shall
bear interest, whether before or after judgment, until payment in full thereof
through the end of the Interest Period then applicable thereto at the rate per
annum determined by adding 2% to the interest rate which would otherwise be
applicable thereto, and effective at the end of such Interest Period such LIBOR
Portion shall automatically be converted into and added to the Base Rate Portion
and shall thereafter bear interest at the interest rate applicable to the Base
Rate Portion after default. Interest on each LIBOR Portion shall be due and
payable on the last day of each Interest Period applicable thereto and, with
respect to any Interest Period applicable to a LIBOR Portion in excess of three
(3) months, on the date occurring every three (3) months after the date such
Interest Period began and at the end of such Interest Period, and interest after
maturity (whether by lapse of time, acceleration or otherwise) shall be due and
payable upon demand. The Company shall notify the Bank on or before 11:00 a.m.
(Chicago time) on the third Business Day preceding the end of an Interest Period
applicable to a LIBOR Portion whether such LIBOR Portion is to continue as a
LIBOR Portion, in which event the Company shall notify the Bank of
the new Interest Period selected therefor, and in the event the Company shall
fail to so notify the Bank, such LIBOR Portion shall automatically be converted
into and added to the Base Rate Portion as of and on the last day of such
Interest Period.
(d) Offered Rate Portions. Each Offered Rate Portion shall bear interest
for the Interest Period selected therefor at the Offered Rate for such Interest
Period, provided that if such Offered Rate Portion is not paid when due (whether
by lapse of time, acceleration or otherwise), or at the election of the Bank
upon notice to the Company during the existence of any other Event of Default,
such Portion shall bear interest, whether before or after judgment, until
payment in full thereof through the end of the Interest Period then applicable
thereto at the rate per annum determined by adding 2% to the interest rate which
would otherwise be applicable thereto and effective at the end of such Interest
Period such Offered Rate Portion shall automatically be converted into and added
to the Base Rate Portion and shall thereafter bear interest at the interest rate
applicable to the Base Rate Portion after default. Interest on each Offered Rate
Portion shall be due and payable on the last day of each Interest Period
applicable thereto, and interest after maturity (whether by lapse of time,
acceleration or otherwise) shall be due and payable upon demand. The Company
shall notify the Bank by 11:00 a.m. (Chicago time) on the Business Day on which
the Company requests that any Offered Rate Portion be created or that any part
of the Base Rate Portion or any part of a LIBOR Portion be converted into an
Offered Rate Portion (each such notice to specify in each instance the amount
thereof and the Interest Period selected therefor). Upon receipt of notice from
the Bank of the Company's request that an Offered Rate Portion be created or
effected by conversion, the Bank shall in its discretion quote an interest rate
to the Company at which the Bank would be willing to make the Offered Rate
Portion available to the Company for such Interest Period. The Company
understands and agrees that (i) the Bank has no obligation to quote Offered
Rates or to make any Offered Rate Portion available to the Company, (ii) that
the Bank may refuse to make any such Offered Rate Portion available to the
Company after receiving a request therefor from the Company and (iii) that any
such Offered Rate Portion made available to the Company shall be subject to such
other terms and conditions as are mutually agreed upon by the Company and the
Bank. If the Company accepts the Offered Rate so quoted by the Bank, then the
Company shall be irrevocably committed to take the Offered Rate Portion on the
date, in the amount and for the Interest Period requested by the Company and at
the Offered Rate quoted by the Bank. The Company acknowledges and agrees that
each interest rate quote is given for immediate acceptance, and if the Company
does not so immediately accept the Offered Rate quoted on the terms and
conditions specified by the Bank and in the amount and for the Interest Period
requested by the Company, the offer to make such Offered Rate Portion shall be
deemed immediately withdrawn and such Offered Rate Portion not created or
effected by conversion, as the case may be.
Section 2.2. Minimum Amounts; Computation of Interest and Fees.
(a) Minimum Amounts. Each LIBOR Portion shall be in an amount equal to
$500,000 or such greater amount which is an integral multiple of $50,000. Each
Offered Rate Portion shall be in an amount equal to $500,000 or such greater
amount which is an integral multiple of $50,000.
(b) Computation of Interest and Fees. All interest on each Fixed Rate
Portion and the Letter of Credit fees shall be computed on the basis of a year
of 360 days for the actual number of days elapsed. All interest on the Base Rate
Portion and the commitment fee shall be computed on the basis of a year of 365
or 366 days, as the case may be, for the actual number of days elapsed.
Section 2.3. Manner of Rate Selection. The Company shall notify the Bank by
(i) 11:00 a.m. (Chicago time) at least three (3) Business Days prior to the date
upon which the Company requests that any LIBOR Portion be created or that any
part of the Base Rate Portion or any part of an Offered Rate Portion be
converted into a LIBOR Portion (each such notice to specify in each instance the
amount thereof and the Interest Period selected therefor) and (ii) 11:00 a.m.
(Chicago time) at least one (1) Business Day prior to the date upon which the
Company requests that any Offered Rate Portion be created or that any part of
the Base Rate Portion or any part of a LIBOR Portion be converted into an
Offered Rate Portion (each such notice to specify in each instance the amount
thereof and the Interest Period selected therefor). If any request is made to
convert a Fixed Rate Portion into the Base Rate Portion, such conversion shall
only be made so as to become effective as of the last day of the Interest Period
applicable thereto. All requests for the creation, continuance and conversion of
Portions under this Agreement shall be irrevocable. Such requests may be written
or oral and the Bank is hereby authorized to honor telephonic requests for
creations, continuances and conversions received by it from any person the Bank
reasonably and in good faith believes to be a Class A Authorized Representative
without the need of independent investigation, the Company hereby indemnifying
the Bank from any liability or loss ensuing from so acting.
Section 2.4. Change of Law. Notwithstanding any other provisions of this
Agreement or the Note, if at any time the Bank shall determine reasonably and in
good faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for the Bank to create or continue to
maintain any Fixed Rate Portion, it shall promptly so notify the Company and the
obligation of the Bank to create, continue or maintain any such Fixed Rate
Portion under this Agreement shall be suspended until it is no longer unlawful
for the Bank to create, continue or maintain such Fixed Rate Portion. The
Company, on demand, shall, if the continued maintenance of any such Fixed Rate
Portion is unlawful, thereupon prepay the outstanding principal amount of the
affected Fixed Rate Portion, together with all interest accrued thereon and all
other amounts payable to the Bank with respect thereto under this Agreement;
provided, however, that the Company may elect to convert the principal amount of
the affected Fixed Rate Portion into the Base Rate Portion, subject to the terms
and conditions of this Agreement.
Section 2.5. Unavailability of Deposits or Inability to Ascertain Adjusted
LIBOR. Notwithstanding any other provision of this Agreement or the Note, if
prior to the commencement of any Interest Period, the Bank shall determine
reasonably and in good faith that deposits in the amount of any LIBOR Portion
scheduled to be outstanding during such Interest Period are not readily
available to the Bank in the interbank eurodollar market or, by reason of
circumstances affecting the interbank eurodollar market, adequate and reasonable
means do not exist for ascertaining Adjusted LIBOR, then the Bank shall promptly
give notice thereof to the Company and the obligations of the Bank to create,
continue or effect by conversion any such
LIBOR Portion in such amount and for such Interest Period shall be suspended
until deposits in such amount and for the Interest Period selected by the
Company shall again be readily available in the interbank eurodollar market and
adequate and reasonable means exist for ascertaining Adjusted LIBOR.
Section 2.6. Taxes and Increased Costs. With respect to any Fixed Rate
Portion, if the Bank shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending branch or the Fixed Rate Portions
contemplated by this Agreement (whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any reserve, special deposit
or similar requirement against assets held by, or deposits in or for the
account of, or loans by, or any other acquisition of funds or disbursements
by, the Bank which is not in any instance already accounted for in
computing the interest rate applicable to such Fixed Rate Portion;
(ii) subject the Bank, any Fixed Rate Portion or the Note to the
extent it evidences such a Portion to any tax (including, without
limitation, any United States interest equalization tax or similar tax
however named applicable to the acquisition or holding of debt obligations
and any interest or penalties with respect thereto), duty, charge, stamp
tax, fee, deduction or withholding in respect of this Agreement, any Fixed
Rate Portion or the Note to the extent it evidences such a Portion, except
such taxes as may be measured by the overall net income or gross receipts
of the Bank or its lending branches and imposed by the jurisdiction, or any
political subdivision or taxing authority thereof, in which the Bank's
principal executive office or its lending branch is located;
(iii) change the basis of taxation of payments of principal and
interest due from the Company to the Bank hereunder or under the Note to
the extent it evidences any Fixed Rate Portion (other than by a change in
taxation of the overall net income or gross receipts of the Bank); or
(iv) impose on the Bank any penalty with respect to the foregoing or
any other condition regarding this Agreement, its disbursement, any Fixed
Rate Portion or the Note to the extent it evidences any Fixed Rate Portion;
and the Bank shall determine reasonably and in good faith that the result of any
of the foregoing is to increase the cost (whether by incurring a cost or adding
to a cost) to the Bank of creating or maintaining any Fixed Rate Portion
hereunder or to reduce the amount of principal or interest received or
receivable by the Bank (without benefit of, or credit for, any prorations,
exemption, credits or other offsets available under any such laws, treaties,
regulations, guidelines or interpretations thereof), then the Company shall pay
on demand to the Bank from time to time as specified by the Bank such additional
amounts as are sufficient to compensate and indemnify it
for such increased cost or reduced amount. If the Bank makes such a claim for
compensation, it shall provide to the Company a certificate setting forth the
computation of the increased cost or reduced amount as a result of any event
mentioned herein in reasonable detail and such certificate shall be prima facie
correct.
Section 2.7. Funding Indemnity. In the event the Bank shall incur any loss,
cost or expense (including, without limitation, any loss (including loss of
profit), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired or contracted to be acquired by the Bank to
fund or maintain any Fixed Rate Portion or the relending or reinvesting of such
deposits or other funds or amounts paid or prepaid to the Bank) as a result of:
(a) any payment of a Fixed Rate Portion on a date other than the last
day of the then applicable Interest Period for any reason, whether before
or after default, and whether or not such payment is required by any
provisions of this Agreement, but in any event excluding such a payment to
the extent required by Section 2.4 hereof; or
(b) any failure by the Company to create, borrow, continue or effect
by conversion a Fixed Rate Portion on the date specified in a notice given
pursuant to this Agreement unless such failure results from the Bank's
inability or unwillingness pursuant to Sections 2.4 or 2.5 hereof to
create, continue or effect by conversion such Fixed Rate Portions;
then upon the demand of the Bank, the Company shall pay to the Bank such amount
as will reimburse the Bank for such loss, cost or expense. If the Bank requests
such a reimbursement, it shall provide to the Company a certificate setting
forth the computation of the loss, cost or expense giving rise to the request
for reimbursement in reasonable detail and such certificate shall be prima facie
correct.
Section 2.8. Lending Branch. The Bank may, at its option, elect to make,
fund or maintain Portions of the Loans hereunder at such of its branches or
offices as the Bank may from time to time elect. To the extent reasonably
possible, the Bank shall designate an alternate branch or funding office with
respect to the Fixed Rate Portions to reduce any liability of the Company to the
Bank under Section 2.6 hereof or to avoid the unavailability of an interest rate
option under Section 2.5 hereof, so long as such designation is not otherwise
disadvantageous to the Bank.
Section 2.9. Discretion of Bank as to Manner of Funding. Notwithstanding
any provision of this Agreement to the contrary, the Bank shall be entitled to
fund and maintain its funding of all or any part of the Note in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder (including, without limitation, determinations
under Sections 2.5, 2.6 and 2.7 hereof) shall be made as if the Bank had
actually funded and maintained each Fixed Rate Portion during each Interest
Period applicable thereto through the purchase of deposits in the interbank
eurodollar market in the amount of such Fixed Rate Portion, having a maturity
corresponding to such Interest Period, and, in the case of any LIBOR Portion,
bearing an interest rate equal to the LIBOR for such Interest Period.
SECTION 3. FEES, PREPAYMENTS, PORTION, TERMINATIONS, EXTENSIONS, APPLICATIONS
AND CAPITAL ADEQUACY.
Section 3.1. Fees.
(a) Commitment Fees. For the period from and including the date hereof to
but not including the Termination Date, the Company shall pay to the Bank a
commitment fee at the rate per annum equal to the Applicable Margin for the
commitment fee as from time to time in effect on the average daily unused
portion of the Revolving Credit Commitment. Such commitment fee shall be payable
quarterly in arrears on the last day of each March, June, September, and
December in each year (commencing on the first such date occurring after the
date hereof) and on the Termination Date.
(b) Letter of Credit Fees. For the period from and including the date
hereof to but not including the Termination Date, the Company shall pay to the
Bank a fee at a rate per annum equal to the Applicable Margin for Letter of
Credit fees in effect as of the time such fee is payable, on the average daily
outstanding amounts during the preceding quarter of the Letters of Credit which
are standby letters of credit. Such letter of credit fee shall be payable
quarterly in arrears on the last day of each March, June, September, and
December in each year (commencing on the first such date occurring after the
date hereof) and on the Termination Date.
(c) Letter of Credit Transaction Charges. In addition to the Letter of
Credit fee called for by Section 3.1(b) hereof, the Company further agrees to
pay to the Bank such issuing, processing and transaction fees and charges as the
Bank from time to time customarily imposes in connection with any issuance,
amendment, cancellation, negotiation, and/or payment of any Letter of Credit and
the drawings made thereunder.
(d) Upfront Fee. The Company shall pay to the Bank on the date hereof an
upfront fee of $22,500, or 0.15% of the Revolving Credit Commitment.
Section 3.2. Voluntary Prepayments. The Company shall have the privilege of
prepaying the Loans in whole or in part (but, if in part, then (i) if such Loan
or Loans constitutes part of the Base Rate Portion, in an amount not less than $
50,000, (ii) if such Loan or Loans constitutes part of a Fixed Rate Portion, in
an amount not less than $ 50,000, and (iii) in each case, in an amount such that
the minimum amount required for a Loan pursuant to Sections 1.1 and 2.2(a)
hereof remain outstanding) at any time upon prior notice to the Bank (such
notice if received subsequent to 11:00 a.m. (Chicago time) on a given day to be
treated as though received at the opening of business on the next Business Day)
by paying to the Bank the principal amount to be prepaid and (i) if such a
prepayment prepays the Note in full and is accompanied by the termination of the
Revolving Credit Commitment in whole, accrued interest thereon to the date of
prepayment, and (ii) in the case of any prepayment of a Fixed Rate Portion of
the Loans, accrued interest thereon to the date of prepayment plus any amounts
due the Bank under Section 2.7 hereof.
Section 3.3. Mandatory Prepayment. If, within sixty (60) days after
receiving notice under Section 7.5(e) of a Change of Control Event, the Bank
notifies the Company that the Bank requires prepayment of the Obligations, on
the date set forth in such notice (which date shall be
no earlier than (x) thirty (30) days after such notice is given or (y) the day
on which the Company or any Subsidiary repays any other Consolidated Total Debt
for Borrowed Money aggregating $1,000,000 or more before its original scheduled
due date or (z) the occurrence of such Change of Control Event, whichever day is
earlier), the Company shall pay in full all Obligations then outstanding,
including the prepayment of the Letters of Credit in the manner contemplated by
Section 8.4 hereof, and the Revolving Credit Commitment shall terminate in full.
Section 3.4. Terminations. The Company shall have the right at any time and
from time to time, upon three (3) Business Days' prior notice to the Bank, to
terminate without premium or penalty and in whole or in part (but if in part,
then in an amount not less than $500,000) the Revolving Credit Commitment,
provided that the Revolving Credit Commitment may not be reduced to an amount
less than the aggregate principal amount of the Loans and Letters of Credit then
outstanding. Partial terminations of the Revolving Credit Commitment hereunder
shall not reduce the maximum amount of Letters of Credit permitted under Section
1.3(a) hereof unless and until the Revolving Credit Commitment has been reduced
to an amount less than $5,000,000, in which event such maximum amount of Letters
of Credit shall be equal to the Revolving Credit Commitment. Any termination of
the Revolving Credit Commitment pursuant to this Section may not be reinstated.
Section 3.5. Place and Application of Payments. All payments of principal,
interest, fees and all other Obligations payable hereunder and under the other
Loan Documents shall be made to the Bank at its office at 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx (or at such other place as the Bank may specify) no
later than 2:00 p.m. (Chicago time) on the date any such payment is due and
payable. Payments received by the Bank after 2:00 p.m. (Chicago time) shall be
deemed received as of the opening of business on the next Business Day. All such
payments shall be made in lawful money of the United States of America, in
immediately available funds at the place of payment, without setoff or
counterclaim and without reduction for, any and all present or future taxes,
levies, imposts, duties, fees, charges, deductions, withholdings, restrictions
and conditions of any nature imposed by any government or any political
subdivision or taxing authority thereof (but excluding any taxes imposed on or
measured by the net income or gross receipts of the Bank). Unless the Company
otherwise directs, except during the continuance of any Event of Default,
principal payments shall be first applied to the Base Rate Portion of the Note
until payment in full thereof, with any balance applied to the Fixed Rate
Portions of the Note in the order in which their Interest Periods expire. All
payments on any Note (whether voluntary or required) shall be accompanied by any
amount due the Bank under Section 2.7 hereof, but no acceptance of such a
payment without requiring payment of amounts due under Section 2.7 shall
preclude a later demand by the Bank for any amount due it under Section 2.7 in
respect of such payment. Any amount paid or prepaid on the Note may, subject to
all of the terms and conditions hereof, be borrowed, repaid and borrowed again.
Section 3.6. Notations. All Loans made against the Note, the status of all
amounts evidenced by the Note as constituting part of the Base Rate Portion or a
LIBOR Portion or an Offered Rate Portion, and in the case of any Fixed Rate
Portion, the rates of interest and Interest Periods applicable thereto shall be
recorded by the Bank on its books and records or, at its option in any instance,
endorsed on a schedule to the Note and the unpaid principal balance and status,
rates and Interest Periods so recorded or endorsed by the Bank shall be evidence
in any court or
other proceeding brought to enforce the Note of the principal amount remaining
unpaid thereon, the status of the Loans evidenced thereby and the interest rates
and Interest Periods applicable thereto; provided that the failure of the Bank
to record any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay the principal amount of such Note together
with accrued interest thereon. Prior to any negotiation of the Note, the Bank
shall record on a schedule thereto the status of all amounts evidenced thereby
as constituting part of the Base Rate Portion or a LIBOR Portion or an Offered
Rate Portion, and in the case of any Fixed Rate Portion, the rates of interest
and the Interest Periods applicable thereto.
Section 3.7. Change in Capital Adequacy Requirements. If the Bank shall
determine that the adoption after the date hereof of any applicable law, rule or
regulation regarding capital adequacy of banks generally, or any change in any
existing law, rule or regulation, or any change 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 the Bank (or any of its branches) with any request or directive regarding
capital adequacy of banks generally (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the Revolving Credit or on the Bank's
capital as a consequence of its obligations hereunder with respect to the
Revolving Credit to a level below that which the Bank could have achieved but
for such adoption, change or compliance (taking into consideration the Bank's
policies with respect to liquidity and capital adequacy) by an amount deemed by
the Bank to be material, then from time to time, within fifteen (15) days after
demand by the Bank, the Company shall pay to the Bank such additional amount or
amounts reasonably determined by the Bank as will compensate the Bank for such
reduction.
SECTION 4. DEFINITIONS; INTERPRETATION.
Section 4.1. Definitions. The following terms when used herein shall have
the following meanings:
"Acquisition" means (i) the acquisition of all or any substantial part of
the assets, property or business of any other Person, or (ii) any acquisition of
a majority of the common stock or other equity securities of any Person.
"Adjusted LIBOR" means a rate per annum determined by the Bank in
accordance with the following formula:
Adjusted LIBOR = LIBOR
-----------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing Adjusted LIBOR, the
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such Interest
Period, but subject to any amendments to such reserve requirement by such Board
or its successor, and taking into account any transitional adjustments thereto
becoming effective during such Interest Period. For purposes of this definition,
LIBOR Portions shall be deemed to be Eurocurrency liabilities as defined in
Regulation D without benefit of or credit for prorations, exemptions or offsets
under Regulation D. "LIBOR" means, for each Interest Period, (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of interest
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which
deposits in U.S. Dollars in immediately available funds are offered to the Bank
at 11:00 a.m. (London, England time) 2 Business Days before the beginning of
such Interest Period by 3 or more major banks in the interbank eurodollar market
selected by the Bank for a period equal to such Interest Period and in an amount
equal or comparable to the applicable LIBOR Portion scheduled to be outstanding
from the Bank during such Interest Period. "LIBOR Index Rate" means, for any
Interest Period, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period which appears on the Telerate
Page 3750 as of 11:00 a.m. (London, England time) on the date 2 Business Days
before the commencement of such Interest Period. "Telerate Page 3750" means the
display designated as "Page 3750" on the Telerate Service (or such other page as
may replace Page 3750 on that service or such other service as may be nominated
by the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits). Each determination of LIBOR made by the Bank shall be
conclusive and binding absent manifest error.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
"Aggregate Cumulative Amount" means, as of any time, (a) with respect to
Net Income, the sum of the amounts (with one separate amount to be computed for
each Defaulting Insignificant Subsidiary and such amounts then added together to
produce such sum) equal (for each such Defaulting Insignificant Subsidiary) to
the Net Income attributable to such Defaulting Insignificant Subsidiary for the
fiscal year of the Company immediately preceding the fiscal year in which such
Defaulting Insignificant Subsidiary first became a Defaulting Insignificant
Subsidiary and (b) with respect to Consolidated Total Assets, the sum of the
amounts (with one separate amount to be computed for each Defaulting
Insignificant Subsidiary and such amounts then added together to produce such
sum) equal (for each such Defaulting Insignificant Subsidiary) to the
Consolidated Total Assets attributable to such Defaulting Insignificant
Subsidiary as of the close of the fiscal year of the Company immediately
preceding the fiscal year in which such Defaulting Insignificant Subsidiary
first became a Defaulting Insignificant Subsidiary.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Applicable Margin" means, with respect to the Base Rate Portion, LIBOR
Portions, the commitment fee payable under Section 3.1(a) hereof and the letter
of credit fee payable under Section 3.1(b) hereof shall mean the rate specified
for such Obligation below, subject to quarterly adjustment as hereinafter
provided:
WHEN
FOLLOWING
STATUS EXISTS APPLICABLE APPLICABLE APPLICABLE APPLICABLE
FOR ANY MARGIN MARGIN FOR MARGIN FOR MARGIN FOR MARGIN FOR
DETERMINATION BASE RATE LIBOR PORTIONS COMMITMENT LETTER OF
DATE PORTION IS: IS: FEE IS: CREDIT FEE IS:
Level I Status 0.0% 0.375% 0.10% 0.375%
Level II Status 0.0% 0.50% 0.10% 0.50%
Level III Status 0.0% 0.625% 0.15% 0.625%
Level IV Status 0.25% 0.875% 0.20% 0.875%
Level V Status 0.25% 1.00% 0.25% 1.00%
provided, however, that all of the foregoing is subject to the following:
(i) the initial Applicable Margin in effect through the first Margin
Determination Date shall be the Applicable Margin for Level II Status;
(ii) on or before the date that is five (5) Business Days after the
latest date by which the Company is required to deliver a Compliance
Certificate to the Bank pursuant to Section 7.5 hereof for each fiscal
quarter of the Company (such date that is five (5) Business Days after the
latest date by which the Company is required to deliver a Compliance
Certificate to the Bank for the relevant fiscal quarter being herein
referred to as the "Margin Determination Date" for such fiscal quarter)
(commencing with the first fiscal quarter ending after the date hereof),
the Bank shall determine whether Level I Status, Level II Status, Level III
Status or Level IV Status exists as of the close of the applicable
quarterly accounting period, based upon the Compliance Certificate and
financial statements delivered to the Bank under Section 7.5 hereof for
such accounting period, and shall promptly notify the Company of such
determination and of any change in the Applicable Margin resulting
therefrom. Any such change in the Applicable Margin shall be effective as
of the related Margin Determination Date, with such new Applicable Margin
to continue in effect (subject to interim adjustment in the events and with
the effects set forth in the immediately following clause (iii)) until the
next Margin Determination Date;
(iii) if the Company has not delivered a Compliance Certificate by the
date such Compliance Certificate is required to be delivered under Section
7.5 hereof for a given Margin Determination Date (a "Late Compliance
Certificate"), the Applicable
Margin shall be the Applicable Margin for Level IV Status unless and until
a Compliance Certificate is delivered for the next Margin Determination
Date; provided, however, that if the Company subsequently delivers the Late
Compliance Certificate before such next Margin Determination Date, the
Applicable Margin shall be established by such Late Compliance Certificate,
shall take effect from the date of such late delivery and shall remain
effective until such next Margin Determination Date; and
(iv) if and so long as any Event of Default has occurred and is
continuing hereunder, notwithstanding anything herein to the contrary, the
Applicable Margin shall be the Applicable Margin for Level IV Status.
"Application" is defined in Section 1.4 hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Company pursuant to Section 6.2(a) hereof and so
designated on such list, or on any update of any such list provided by the
Company to the Bank, or any further or different officer of the Company so named
and designated by any Authorized Representative of the Company in a written
notice to the Bank.
"Bank" is defined in the introductory paragraph hereof.
"Base Rate" means, for any day, the greater of (i) the rate of interest
announced by the Bank from time to time as its prime commercial rate, as in
effect on such day; and (ii) the sum of (x) the rate determined by the Bank to
be the average (rounded upwards, if necessary, to the next higher 1/100 of 1%)
of the rates per annum quoted to the Bank at approximately 10:00 a.m. (Chicago
time) (or as soon thereafter as is practicable) on such day (or, if such day is
not a Business Day, on the immediately preceding Business Day) by two or more
Federal funds brokers selected by the Bank for the sale to the Bank at face
value of Federal funds in an amount equal or comparable to the principal amount
owed to the Bank for which such rate is being determined, plus (y) 1/2 of 1%
(0.50%).
"Base Rate Portion" is defined in Section 2.1(a) hereof.
"Blue Mountain L/C" means that certain standby letter of credit issued by
the Bank to The First National Bank of Chicago dated November 11, 1988 in the
original face amount of $2,634,590, as the same may from time to time be
modified or amended.
"Business Day" means any day other than a Saturday or Sunday on which the
Bank is not authorized or required to close in Chicago, Illinois and, when used
with respect to LIBOR Portions, a day on which the Bank is also dealing in
United States Dollar deposits in London, England and Nassau, Bahamas.
"Capital Lease" means any lease of Property which in accordance with GAAP
is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown on
the balance sheet of any Person in respect of a Capital Lease as determined in
accordance with GAAP.
"Change of Control Event" means at any time:
(i) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), but in any event excluding the Xxxxxx Group and any other holders of
the Class B Common Stock of the Company as of the date of this Agreement)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under the Exchange Act) of 30% or more in voting
power of the outstanding Voting Stock of the Company; or
(ii) during any period of twenty-four consecutive months beginning
after the date of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors of the Company (the "Board") and
any new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in clause (i) of this Change of Control Event definition or a
transaction that would constitute an Event of Default under Section 7.12
hereof) whose election or nomination for election was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved cease for any reason to constitute
a majority of the Board.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Company" is defined in the introductory paragraph hereof.
"Consolidated Capital Expenditures" means, for any period, capital
expenditures (as defined and classified in accordance with GAAP) during such
period by the Company and its Subsidiaries on a consolidated basis.
"Consolidated Debt" means, at any time the same is to be determined, the
sum (but without duplication) of (a) all Indebtedness for Borrowed Money of the
Company and its Subsidiaries at such time, and (b) all Indebtedness for Borrowed
Money of any other Person which is directly or indirectly guaranteed by the
Company or any of its Subsidiaries or which the Company or any of its
Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which the Company or any of its Subsidiaries has
otherwise assured a creditor against loss.
"Consolidated EBITDA" means, with reference to any period, Net Income for
such period plus all amounts deducted in arriving at such Net Income amount in
respect of (i) Interest Expense for such period, plus (ii) federal, state and
local income taxes for such period, plus (iii) all amounts properly charged for
depreciation of fixed assets and amortization of intangible assets during such
period on the books of the Company and its Subsidiaries.
"Consolidated EBITR" means, with reference to any period, Net Income for
such period plus (A) all amounts deducted in arriving at such Net Income amount
in respect of (i) Interest Expense for such period, plus (ii) federal, state and
local income taxes for such period, plus (iii) the lease and rental expense of
the Company and its Subsidiaries for such period, minus (B) all amounts included
in arriving at such Net Income amount in respect of (i) interest income for such
period, plus (ii) gains on sales of fixed assets for such period.
"Consolidated Fixed Charges" means, with reference to any period, Interest
Expense for such period, plus lease and rental expense of the Company and its
Subsidiaries for such period, minus interest income of the Company and its
Subsidiaries for such period.
"Consolidated Net Worth" means, at any time the same is to be determined,
the total shareholders' equity (including capital stock, additional paid-in
capital and retained earnings after deducting treasury stock, but excluding
minority interests in Subsidiaries) which would appear on the balance sheet of
the Company and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Consolidated Total Assets" means, at any time the same is to be
determined, the aggregate of all assets of the Company and its Subsidiaries at
such time as computed on a consolidated basis in accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all trades and businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Current Debt Maturities" means, with reference to any period, the
aggregate amount of payments required to made by the Company and its
Subsidiaries during such period in respect of principal on all Indebtedness for
Borrowed Money (whether at maturity, as a result of mandatory sinking fund
redemption, mandatory prepayment, acceleration or otherwise), excluding any
principal payments required to be made by the Company and its Subsidiaries on
the Note.
"Debt to Earnings Ratio" means, as of any time, the ratio of (x)
Consolidated Debt at such time to (y) Consolidated EBITDA for the twelve then
most recently completed calendar months.
"Default" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"Defaulting Insignificant Subsidiary" means an Insignificant Subsidiary
which is the subject of any Subsidiary Default on or at any time after the date
hereof.
"Domestic Subsidiary" means each Subsidiary other than a Foreign
Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Event of Default" means any event or condition identified as such in
Section 8.1 hereof.
"Fixed Rate Portions" means and includes LIBOR Portions and Offered Rates
Portions, unless the context in which such term is used shall otherwise require.
"Foreign Subsidiary" means (i) each Subsidiary of the Company which is
organized under the laws of a jurisdiction other than the United States of
America or any State thereof and (ii) each Subsidiary of the Company of which a
majority of the revenues, earnings or total assets (determined on a consolidated
basis with that Subsidiary's Subsidiaries) are located or derived from
operations outside the United States of America.
"Funds Transfer and Deposit Account Liability" means the liability of the
Company or any Guarantor owing to any of the Bank arising out of (a) the
execution or processing of electronic transfers of funds by automatic clearing
house transfer, wire transfer or otherwise to or from deposit accounts of the
Company and/or any Guarantor now or hereafter maintained with the Bank, (b) the
acceptance for deposit or the honoring for payment of any check, draft or other
item with respect to any such deposit accounts, and (c) any other deposit,
disbursement, and cash management services afforded to the Company or any
Guarantor by the Bank.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Company and its Subsidiaries on a basis consistent
with the preparation of the Company's most recent financial statements furnished
to the Bank pursuant to Section 5.5 hereof.
"Guarantor" means each Domestic Subsidiary of the Company that is a
signatory hereto or that executes and delivers to the Bank a Guaranty along with
the accompanying closing documents required by Section 6.2 hereof.
"Guaranty" means a letter to the Bank in the form of Exhibit C attached
hereto executed by a Subsidiary whereby it acknowledges it is party hereto as a
Guarantor under Section 9 hereof.
"Hedging Liability" means the liability of the Company or any Guarantor to
the Bank in respect of any interest rate, foreign currency, and/or commodity
swap, exchange, cap, collar, floor, forward, future or option agreement, or any
other similar interest rate, currency or commodity hedging arrangement, as the
Company or such Guarantor, as the case may be, may from time to time enter into
with the Bank.
"Inactive Subsidiaries" means each Subsidiary of the Company which has no
operations and no assets other than the minimum amount of assets required under
applicable state law to maintain such Subsidiary's corporate existence, but in
no event more than $10,000 in assets.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services, (iii) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such
indebtedness, (iv) all Capitalized Lease Obligations of such Person and (v) all
obligations of such Person on or with respect to letters of credit, bankers'
acceptances and other extensions of credit whether or not representing
obligations for borrowed money, in each case other than trade accounts payable
arising in the ordinary course of business.
"Insignificant Subsidiary" means any Subsidiary that is not a Significant
Subsidiary.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Company and its Subsidiaries for such period determined in accordance with GAAP.
"Interest Period" means, with respect to (a) any LIBOR Portion, the period
commencing on, as the case may be, the creation, continuation or conversion date
with respect to such LIBOR Portion and ending one (1), two (2), three (3) or six
(6) months thereafter as selected by the Company in its notice as provided
herein, and (b) any Offered Rate Portion, the period commencing on, as the case
may be, the creation, continuation or conversion date with respect to such
Offered Rate Portion and ending not less than seven (7) days to not more than
thirty (30) days thereafter as selected by the Company in its notice as provided
herein; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
Business Day, unless in the case of an Interest Period for a LIBOR Portion
the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) no Interest Period may extend beyond the final maturity date of
the Note; and
(iii) the interest rate to be applicable to each Portion for each
Interest Period shall apply from and including the first day of such
Interest Period to but excluding the last day thereof.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.
"Xxxxxx Group" means the Xxxxxx Investment Partnership, L.P., and Xxxxxxx
X. Xxxxxx, members of his immediate family and trusts for the benefit of any one
or more of the foregoing.
"Letter of Credit" is defined in Section 1.3(a) hereof.
"Level I Status" means, for any Margin Determination Date, that as of the
close of the most recently completed calendar quarter with reference to which
such Margin Determination Date was set, the Debt to Earnings Ratio is less than
1.00 to 1.0.
"Level II Status" means, for any Margin Determination Date, that as of the
close of the most recently completed calendar quarter with reference to which
such Margin Determination Date was set, the Debt to Earnings Ratio is greater
than or equal to 1.00 to 1.0 but less than 1.50 to 1.0.
"Level III Status" means, for any Margin Determination Date, that as of the
close of the most recently completed calendar quarter with reference to which
such Margin Determination Date was set, the Debt to Earnings Ratio is greater
than or equal to 1.50 to 1.0 but less than 2.00 to 1.0.
"Level IV Status" means, for any Margin Determination Date, that as of the
close of the most recently completed calendar quarter with reference to which
such Margin Determination Date was set, the Debt to Earnings Ratio is greater
than or equal to 2.00 to 1.0, but less than 2.50 to 1.0.
"Level V Status" means, for any Margin Determination Date, that as of the
close of the most recently completed calendar quarter with reference to which
such Margin Determination Date was set, the Debt to Earnings Ratio is greater
than or equal to 2.50 to 1.0.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" and "Loans" each is defined in Section 1.1 hereof.
"Loan Documents" means this Agreement, the Note, the Applications, and the
Guaranties, and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.
"Margin Determination Date" is defined in the definition of Applicable
Margin.
"Material Plan" is defined in Section 8.1(g) hereof.
"Net Income" means, with reference to any period, the net income (or net
loss) of the Company and its Subsidiaries for such period as computed on a
consolidated basis in accordance with GAAP, and, without limiting the foregoing,
after deduction from gross income of all expenses and reserves, including
reserves for all taxes on or measured by income, but excluding any extraordinary
profits and also excluding any taxes on such profits.
"Note" is defined in Section 1.1 hereof.
"Obligations" means all obligations of the Company to pay principal and
interest on the Loans, all obligations of the Company to reimburse the Bank for
drawings on Letters of Credit, all fees and charges payable hereunder, all
obligations of the Company or any Guarantor with respect to any Funds Transfer
and Deposit Account Liability, all obligations of the Company or any Guarantor
with respect to any Hedging Liability, and all other payment obligations of the
Company arising under or in relation to any Loan Document, in each case whether
now existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired.
"Offered Rate" means the rate per annum quoted to the Company by the Bank
for the applicable Interest Period, such Offered Rate being subject at all times
to the provisions of Section 2.1(d) hereof.
"Offered Rate Portions" is defined in Section 2.1(a) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Portion" is defined in Section 2.1(a) hereof.
"Present Letters of Credit" means those certain letters of credit issued by
the Bank described on Schedule 1.3 attached hereto and made a part hereof.
"Present Loans" means the indebtedness of the Company to the Bank evidenced
by the Prior Note.
"Prior Credit Agreement" means that certain Credit Agreement dated as of
January 29, 1999, by and between the Company and the Bank, as amended and
supplemented.
"Prior Note" means that certain Revolving Credit Note made by the Company
in favor of the Bank pursuant to the Prior Credit Agreement.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Revolving Credit" is defined in Section 1.1 hereof.
"Revolving Credit Commitment" is defined in Section 1.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Significant Subsidiary" means at any time any Subsidiary that would at
such time constitute a "significant subsidiary" (as such term is defined in
Regulation S-X of the SEC as in effect on the date hereof) of the Company.
"Subsidiary" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Company, by one or more of its
Subsidiaries, or by the Company and one or more of its Subsidiaries.
"Subsidiary Defaults" is defined in Section 8.5 hereof.
"Termination Date" means January 27, 2009, or such earlier date on which
the Revolving Credit Commitment is terminated in whole pursuant to Section 3.4,
8.2 or 8.3 hereof.
"Total Capitalization" means, at any time the same is to be determined, the
sum of Consolidated Debt plus Consolidated Net Worth.
"Unfunded Vested Liabilities" means, for any Plan at any time, the amount
(if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Voting Stock" of any Person means the capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or similar governing body of such Person,
other than stock or other equity interests having such power only by reason of
the happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares as
required by law) or other equity interests are owned by the Company directly or
indirectly through one or more Wholly-Owned Subsidiaries within the meaning of
this definition.
Section 4.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character
or amount of any asset or liability or item of income or expense is required to
be determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement, it shall be done in accordance
with GAAP except where such principles are inconsistent with the specific
provisions of this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Bank as follows:
Section 5.1. Organization and Qualification. The Company is duly organized,
validly existing and in good standing as a corporation under the laws of the
State of Delaware, has full and adequate corporate power to own its Property and
conduct its business as now conducted, and is duly licensed or qualified and in
good standing in each jurisdiction in which the nature of the business conducted
by it or the nature of the Property owned or leased by it requires such
licensing or qualifying, except where the failure to be so licensed or qualified
would not have a material adverse effect on the financial condition, Properties,
business or operations of the Company and its Subsidiaries, taken as a whole.
Section 5.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified would not have a material adverse effect on the financial
condition, Properties, business or operations of the Company and its
Subsidiaries, taken as a whole. Schedule 5.2 hereto identifies each Subsidiary,
the jurisdiction of its incorporation or organization, as the case may be, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by the Company and the Subsidiaries and, if such
percentage is not 100% (excluding directors' qualifying shares as required by
law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding
and whether or not such Subsidiary is a Significant Subsidiary or Inactive
Subsidiary. All of the outstanding shares of capital stock and other equity
interests of each Subsidiary are validly issued and outstanding and fully paid
and nonassessable and all such shares and other equity interests indicated on
Schedule 5.2 as owned by the Company or a Subsidiary are owned, beneficially and
of record, by the Company or such Subsidiary free and clear of all Liens. There
are no outstanding commitments or other obligations of any Subsidiary to issue,
and no options, warrants or other rights of any Person to acquire, any shares of
any class of capital stock or other equity interests of any Subsidiary.
Section 5.3. Corporate Authority and Validity of Obligations. (a) The
Company has full right and authority to enter into this Agreement and the other
Loan Documents, to make the borrowings herein provided for, to issue its Note in
evidence thereof, and to perform all of its obligations hereunder and under the
other Loan Documents. The Loan Documents delivered by the Company have been duly
authorized, executed and delivered by the Company and constitute valid and
binding obligations of the Company enforceable in accordance with their terms
except
as enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law); and this Agreement and the
other Loan Documents do not, nor does the performance or observance by the
Company of any of the matters and things herein or therein provided for,
contravene or constitute a default under any provision of law or any judgment,
injunction, order or decree binding upon the Company or any provision of the
charter, articles of incorporation or by-laws of the Company or any covenant,
indenture or agreement of or affecting the Company or any of its Properties, or
result in the creation or imposition of any Lien on any Property of the Company.
(b) Subsidiaries. Each Subsidiary executing a Loan Document has full right,
power and authority to enter into the Loan Documents executed and delivered by
it and to perform all of its obligations thereunder. The Loan Documents
delivered by each Subsidiary have been duly authorized, executed and delivered
by each Subsidiary and constitute valid and binding obligations of the each
Subsidiary enforceable in accordance with their terms except as enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and the other Loan Documents delivered by each
Subsidiary do not, nor does the performance or observance by each Subsidiary of
any of the matters and things therein provided for, contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon each Subsidiary or any provision of the organizational documents
(e.g., charter, certificate or articles of incorporation and by-laws,
certificate or articles of association and operating agreement, partnership
agreement, or other similar organizational documents) of any or any covenant,
indenture or agreement of or affecting each Subsidiary or any of its Properties,
or result in the creation or imposition of any Lien on any Property of each
Subsidiary.
Section 5.4. Use of Proceeds; Margin Stock. The Company shall use the
proceeds of the Loans solely for general corporate purposes and for such other
legal and proper purposes as are consistent with all applicable laws. Neither
the Company nor any Subsidiary is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and no
part of the proceeds of any Loan will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.
Section 5.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at July 31, 2005, and the related consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of
PricewaterhouseCoopers LLP, independent public accountants, heretofore furnished
to the Bank, fairly present the consolidated financial condition of the Company
and its Subsidiaries as at said date and the consolidated results of their
operations and cash flows for the period then ended in conformity with generally
accepted accounting principles applied on a consistent basis; subject, in the
case of an unaudited interim consolidated balance sheet, to year-end
adjustments, and provided that such unaudited interim consolidated balance sheet
was prepared without footnotes.
Section 5.6. No Material Adverse Change. Since July 31, 2005, there has
been no change in the condition (financial or otherwise) or business prospects
of the Company or any Subsidiary except those occurring in the ordinary course
of business, none of which individually or in the aggregate have been materially
adverse to the Company and its Subsidiaries, taken as a whole.
Section 5.7. Full Disclosure. The statements and information furnished to
the Bank in connection with the negotiation of this Agreement and the other Loan
Documents and the commitment by the Bank to provide all or part of the financing
contemplated hereby do not contain any untrue statements of a material fact or
omit a material fact necessary to make the material statements contained herein
or therein not misleading, the Bank acknowledging that as to any projections
furnished to the Bank, the Company only represents that the same were prepared
on the basis of information and estimates the Company believed to be reasonable.
Section 5.8. Good Title. The Company and its Subsidiaries each have good
and defensible title to their assets as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries furnished to the
Bank (except for sales of assets by the Company and its Subsidiaries in the
ordinary course of business), subject to no Liens other than such thereof as are
permitted by Section 7.8 hereof.
Section 5.9. Litigation and Other Controversies. There is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
the Company threatened, against the Company or any Subsidiary which if adversely
determined would (a) impair the validity or enforceability of, or impair the
ability of the Company to perform its obligations under, this Agreement or any
other Loan Document or (b) result in any material adverse change in the
financial condition, Properties, business or operations of the Company and its
Subsidiaries, taken as a whole.
Section 5.10. Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, except where the
failure to file such tax returns would not have a material adverse effect on the
financial condition, Properties, business or operations of the Company and its
Subsidiaries, taken as a whole, and all taxes, assessments, fees and other
governmental charges upon the Company or any Subsidiary or upon any of their
respective Properties, income or franchises, which are shown to be due and
payable in such returns, have been paid. The Company does not know of any
proposed additional tax assessment against it or its Subsidiaries for which
adequate provision in accordance with GAAP has not been made on its accounts.
Adequate provisions in accordance with GAAP for taxes on the books of the
Company and each Subsidiary have been made for all open years, and for its
current fiscal period.
Section 5.11. Approvals. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Company or any other Person, is or will be necessary to the valid execution,
delivery or performance by the Company of this Agreement or any other Loan
Document.
Section 5.12. Affiliate Transactions. Neither the Company nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-Owned Subsidiaries) on terms and conditions which are
less favorable to the Company or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.
Section 5.13. Investment Company; Public Utility Holding Company. Neither
the Company nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 5.14. ERISA. The Company and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA. Neither the Company nor any Subsidiary has any contingent
liabilities with respect to any post-retirement benefits under a Welfare Plan,
other than liability for continuation coverage described in article 6 of Title I
of ERISA.
Section 5.15. Compliance with Laws. The Company and its Subsidiaries each
are in compliance with the requirements of all federal, state and local laws,
rules and regulations applicable to or pertaining to their Properties or
business operations (including, without limitation, the Occupational Safety and
Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), non-compliance with which could have
a material adverse effect on the financial condition, Properties, business or
operations of the Company and its Subsidiaries, taken as a whole. Neither the
Company nor any Subsidiary has received notice to the effect that its operations
are not in compliance with any of the requirements of applicable federal, state
or local environmental, health and safety statutes and regulations or are the
subject of any governmental investigation evaluating whether any remedial action
is needed to respond to a release of any toxic or hazardous waste or substance
into the environment, which non-compliance or remedial action could have a
material adverse effect on the financial condition, Properties, business or
operations of the Company and its Subsidiaries, taken as a whole.
Section 5.16. Other Agreements. Neither the Company nor any Subsidiary is
in default under the terms of any covenant, indenture or agreement of or
affecting the Company, any Subsidiary or any of their Properties, which default
if uncured would have a material adverse effect on the financial condition,
Properties, business or operations of the Company and its Subsidiaries, taken as
a whole.
Section 5.17. No Default. No Default or Event of Default has occurred and
is continuing.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of the Bank to make any Loan or issue any Letter of Credit
under this Agreement is subject to the following conditions precedent:
Section 6.1. All Advances. As of the time of the making of each extension
of credit (including the initial extension of credit) hereunder:
(a) each of the representations and warranties set forth in Section 5
hereof and in the other Loan Documents shall be true and correct as of such
time, except to the extent the same expressly relate to an earlier date;
(b) the Company shall be in full compliance with all of the terms and
conditions of this Agreement and of the other Loan Documents, and no
Default or Event of Default shall have occurred and be continuing or would
occur as a result of making such Loan;
(c) after giving effect to such extension of credit, the aggregate
principal amount of all Loans and Letters of Credit outstanding under this
Agreement shall not exceed the Revolving Credit Commitment;
(d) in the case of the issuance of any Letter of Credit, the Bank
shall have received a properly completed Application therefor together with
the fees called for hereby; and
(e) such Loan shall not violate any order, judgment or decree of any
court or other authority or any provision of law or regulation applicable
to the Bank (including, without limitation, Regulation U of the Board of
Governors of the Federal Reserve System) as then in effect.
The Company's request for any Loan or Letter of Credit shall constitute its
warranty as to the foregoing effects.
Section 6.2. Initial Advance. At or prior to the making of the initial
extension of credit hereunder, the following conditions precedent shall also
have been satisfied:
(a) the Bank shall have received the following (each to be properly
executed and completed) and the same shall have been approved as to form
and substance by the Bank:
(i) this Agreement duly executed and delivered by the Company and
each Domestic Subsidiary party hereto as a guarantor;
(ii) the Note from the Company
(iii) copies (executed or certified, as may be appropriate) of
all legal documents or proceedings taken in connection with the
execution and delivery of this Agreement and the other Loan Documents
to the extent the Bank or its counsel may reasonably request;
(iv) an incumbency certificate containing the name and title of
each of the Company's Authorized Representatives;
(v) evidence of insurance required by Section 7.4 hereof; and
(b) the Bank shall have received such valuations and certifications as
it may require in order to satisfy itself as to the financial condition of
the Company and its Subsidiaries, and the lack of material contingent
liabilities of the Company and its Subsidiaries;
(c) legal matters incident to the execution and delivery of this
Agreement and the other Loan Documents and to the transactions contemplated
hereby shall be satisfactory to the Bank and its counsel; and the Bank
shall have received the favorable written opinion of counsel for the
Company and each Guarantor in form and substance satisfactory to the Bank
and its counsel;
(d) the Bank shall have received a good standing certificate for the
Company and each Guarantor (dated as of the date no earlier than December
1, 2005) from the office of the secretary of state of the state of its
incorporation; and
(e) such other agreements, instruments, documents, certificates and
opinions as the Bank may reasonably request.
SECTION 7. COVENANTS.
The Company agrees that, so long as any credit is available to or in use by
the Company hereunder, except to the extent compliance in any case or cases is
waived in writing by the Bank:
Section 7.1. Maintenance of Business. The Company shall, and shall cause
each Subsidiary to, preserve and maintain its existence. The Company shall, and
shall cause each Subsidiary to, preserve and keep in force and effect all
licenses, permits and franchises necessary to the proper conduct of its
business. The foregoing to the contrary notwithstanding, this Section 7.1 shall
not operate to prevent any merger or consolidation otherwise permitted by
Section 7.11 hereof.
Section 7.2. Maintenance of Properties. The Company shall maintain,
preserve and keep its property, plant and equipment in good repair, working
order and condition (ordinary wear and tear excepted) and shall from time to
time make all needful and proper repairs, renewals, replacements, additions and
betterments thereto so that at all times the efficiency thereof shall be fully
preserved and maintained (ordinary wear and tear excepted), and shall cause each
Subsidiary to do so in respect of Property owned or used by it.
Section 7.3. Taxes and Assessments. The Company shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against it or its
Properties, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
Section 7.4. Insurance. The Company shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Company shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including employers' and public liability
risks) with good and responsible insurance companies as and to the extent
usually insured by Persons similarly situated and conducting similar businesses.
The Company shall upon request furnish to the Bank a certificate setting forth
in summary form the nature and extent of the insurance maintained pursuant to
this Section.
Section 7.5. Financial Reports. The Company shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Bank and its duly authorized representatives such
information respecting the business and financial condition of the Company and
its Subsidiaries as the Bank may reasonably request; and without any request,
shall furnish to the Bank:
(a) as soon as available, and in any event within sixty (60) days
after the last day of each fiscal quarter of the Company, a copy of the
consolidated balance sheet of the Company and its Subsidiaries as of the
last day of such fiscal quarter and the consolidated statements of income,
retained earnings and cash flows of the Company and its Subsidiaries for
such fiscal quarter and the fiscal year-to-date period then ended, each in
reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by the
Company in accordance with GAAP (subject to year-end adjustment and
provided that such balance sheet was prepared without footnotes) and
certified to by the chief financial officer of the Company;
(b) as soon as available, and in any event within one hundred twenty
(120) days after the last day of each fiscal year of the Company, a copy of
the consolidated balance sheet of the Company and its Subsidiaries as of
the last day of such fiscal year and the consolidated statements of income,
retained earnings and cash flows of the Company and its Subsidiaries for
the fiscal year then ended, and accompanying notes thereto, each in
reasonable detail showing in comparative form the figures for the previous
fiscal year, accompanied by an opinion thereon of PricewaterhouseCoopers
LLP or another firm of independent public accountants of recognized
standing, selected by the Company and satisfactory to the Bank, to the
effect that the consolidated financial statements have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Company and its Subsidiaries as of
the close of such fiscal year and the results of their operations and cash
flows for the
fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, such examination
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances;
(c) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Company sends to its
shareholders, and copies of all other regular, periodic and special reports
and all registration statements which the Company files with the Securities
and Exchange Commission of the United States or any successor thereto, or
with any national securities exchange; and
(d) promptly after knowledge thereof shall have come to the attention
of any responsible officer of the Company, written notice of (i) any
threatened or pending litigation or governmental proceeding or labor
controversy against the Company or any Subsidiary which, if adversely
determined, would adversely effect the financial condition, Properties,
business or operations of the Company and its Subsidiaries, taken as a
whole, or (ii) the occurrence of any Default or Event of Default hereunder
or (iii) any Change of Control Event.
Each of the financial statements furnished to the Bank pursuant to subsections
(a) and (b) of this Section shall be accompanied by a written certificate in the
form attached hereto as Exhibit B signed by the Company's chief financial
officer or such other officer of the Company acceptable to the Bank to the
effect that to the best of such officer's knowledge and belief no Default or
Event of Default has occurred during the period covered by such statements or,
if any such Default or Event of Default has occurred during such period, setting
forth a description of such Default or Event of Default and specifying the
action, if any, taken by the Company to remedy the same. Such certificate shall
also set forth the calculations supporting such statements in respect of Section
7.17 of this Agreement.
Section 7.6. Inspection. The Company shall, and shall cause each Subsidiary
to, permit the Bank and its duly authorized representatives and agents, at the
Bank's expense, to visit and inspect any of the Properties, corporate books and
financial records of the Company and each Subsidiary, to examine and make copies
of the books of accounts and other financial records of the Company and each
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Subsidiary with, and to be advised as to the same by, its officers and
independent public accountants (and by this provision the Company hereby
authorizes such accountants to discuss with the Bank the finances and affairs of
the Company and of each Subsidiary) at such reasonable times and reasonable
intervals as the Bank may designate; provided, however, that in the absence of
any Default or Event of Default, there shall be no more than one such inspection
per calendar year.
Section 7.7. Indebtedness for Borrowed Money. The Company shall not, nor
shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money; provided, however, that the
foregoing shall not restrict nor operate to prevent:
(a) the Obligations of the Company owing to the Bank and other
indebtedness and obligations of the Company or any Subsidiary from time to
time owing to the Bank;
(b) purchase money indebtedness and Capitalized Lease Obligations
secured by Liens permitted by Section 7.8(d) hereof in an aggregate amount
not to exceed $250,000 at any one time outstanding;
(c) intercompany indebtedness from time to time owing to the Company
by any Domestic Subsidiary which is a Guarantor hereunder in the ordinary
course of business;
(d) indebtedness from time to time owing under the Blue Mountain L/C;
(e) indebtedness from time to time owing by any Foreign Subsidiary to
any third-party financial institution in an aggregate amount not to exceed
the U.S. Dollar equivalent of $2,000,000 at any one time outstanding;
(f) unsecured indebtedness issued by the Company with respect to the
6.55% Senior Notes due April 15, 2013 issued under that certain Note
Purchase Agreement dated as of April 15, 1998, unsecured indebtedness
issued by the Company with respect to the 5.89% Senior Notes due October
15, 2015 issued under that certain Note Agreement dated as of December 16,
2005, and any other unsecured indebtedness issued by the Company from time
to time, provided that the aggregate principal amount of all indebtedness
permitted under this subsection shall not to exceed $35,500,000 at any one
time outstanding and, in connection with any such indebtedness issued after
the date hereof, no Default or Event of Default shall exist at the time of
such issuance or shall arise as a consequence thereof; and
(g) unsecured Indebtedness for Borrowed Money not otherwise permitted
by this Section aggregating not more than $250,000 at any one time
outstanding.
Section 7.8. Liens. The Company shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by the Company or any Subsidiary; provided, however, that this
Section shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's compensation,
unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges (other
than Liens arising under ERISA), good faith cash deposits in connection
with tenders, contracts or leases to which the Company or any Subsidiary is
a party or other cash deposits required to be made in the ordinary course
of business, provided in each case that the obligation is not for borrowed
money and that the obligation secured is not overdue or, if overdue, is
being contested in
good faith by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers', or
other similar Liens arising in the ordinary course of business with respect
to obligations which are not due or which are being contested in good faith
by appropriate proceedings which prevent enforcement of the matter under
contest;
(c) the pledge of assets for the purpose of securing an appeal, stay
or discharge in the course of any legal proceeding, provided that the
aggregate amount of liabilities of the Company and its Subsidiaries secured
by a pledge of assets permitted under this subsection, including interest
and penalties thereon, if any, shall not be in excess of $5,000,000 at any
one time outstanding;
(d) Liens on property of the Company or any of its Subsidiaries
created solely for the purpose of securing purchase money indebtedness and
Capitalized Lease Obligations, representing or incurred to finance,
refinance or refund the purchase price of Property, provided that no such
Lien shall extend to or cover other Property of the Company or such
Subsidiary other than the respective Property so acquired, and the
principal amount of indebtedness secured by any such Lien shall at no time
exceed the original purchase price of such Property; and
(e) Liens on certain fixed assets securing obligations of the Company
in respect of those certain Town of Blue Mountain, Mississippi
Variable/Fixed Rate $2,500,000 Industrial Development Revenue Bonds dated
October 1, 1988, which are backed by the Blue Mountain L/C referred to in
Section 7.7(d) hereof.
Section 7.9. Acquisitions, Investments, Loans, Advances and Guaranties. The
Company shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances (other
than for travel advances and other similar cash advances made to employees in
the ordinary course of business) to, any other Person, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing provisions shall not apply to nor
operate to prevent:
(a) investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided
that any such obligations shall mature within one year of the date of
issuance thereof;
(b) investments in commercial paper rated at least P-1 by Xxxxx'x
Investors Services, Inc. and at least A-1 by Standard & Poor's Corporation
maturing within 270 days of the date of issuance thereof;
(c) investments in certificates of deposit issued by any United States
commercial bank having capital and surplus of not less than $100,000,000
which have a maturity of one year or less;
(d) endorsement of items for deposit or collection of commercial paper
received in the ordinary course of business;
(e) equity investments in Subsidiaries;
(f) the Letters of Credit, the Blue Mountain L/C, the Guaranties, and
the obligations of any Guarantor under Section 9 hereof, and any guarantee
by the Company of the indebtedness of its Foreign Subsidiaries permitted
under Section 7.7(e) above;
(g) guaranties issued by Subsidiaries in support of obligations of the
Company permitted under Section 7.7 above, provided that in the case of any
Domestic Subsidiary it is also a Guarantor hereunder;
(h) Acquisitions of all or any substantial part of the assets or
business of any other Person or division thereof engaged in the same or any
related business, or of a majority of the voting stock of such a Person,
provided that (i) no Default or Event of Default exists or would exist
after giving effect to such Acquisition, (ii) the board of directors or
other governing body of such Person whose Property, or voting stock or
other interests in which, are being so acquired has approved the terms of
such Acquisition, (iii) the Company shall have delivered to the Bank prior
written notice of such Acquisition and, if a new Subsidiary results from
such Acquisition, an updated Schedule 5.2, (iv) the sum of (1) the
aggregate amount expended by the Company and its Subsidiaries as
consideration for such Acquisition (and in any event (x) including as such
consideration, any Indebtedness for Borrowed Money assumed or incurred as a
result of such acquisition, and (y) excluding as such consideration, any
equity securities issued by the Company as consideration for such
Acquisition) and (2) the aggregate amount expended as consideration
(including Indebtedness for Borrowed Money and excluding equity securities
as aforesaid) for all other Acquisitions permitted under this Section
7.9(h) after the date hereof on a cumulative basis does not exceed
$32,000,000 in the aggregate, and (v) where the aggregate amount expended
as consideration (including Indebtedness for Borrowed Money and excluding
equity securities as aforesaid) for such Acquisition equals or exceeds
$15,000,000, the Company shall have furnished to the Bank at such time
reasonable details as to such Acquisition (including sources and uses of
funds), historical financial information and pro forma financial forecasts
of the Company on a consolidated basis after giving effect to the
Acquisition and covenant compliance calculations reasonably satisfactory to
the Bank (and, within 60 days after the date of any such Acquisition where
the aggregate amount expended as consideration (including Indebtedness for
Borrowed Money and excluding equity securities as aforesaid) for such
Acquisition equals or exceeds $15,000,000, the Company shall provide the
Bank a summary integration plan for the business being acquired); and
(i) investments, loans, advances and guaranties (excluding
Acquisitions) not otherwise permitted by this Section 7.9, provided that
the aggregate amount of all such investments, loans, advances and
guaranties permitted by this subsection (i) does not then exceed an amount
equal to 15% of Tangible Net Worth as then determined and computed.
In determining the amount of investments, acquisitions, loans, advances and
guarantees permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guarantees shall be taken at
the amount of obligations guaranteed thereby.
Section 7.10. Mergers, Consolidations and Sales. The Company shall not, nor
shall it permit any Subsidiary to, be a party to any merger or consolidation, or
sell, transfer, lease or otherwise dispose of all or any substantial part of its
Property (excluding any disposition of Property as part of a sale and leaseback
transaction) or in any event sell or discount (with or without recourse) any of
its notes or accounts receivable; provided, however, that this Section shall not
apply to nor prohibit:
(a) the merger or consolidation of any Subsidiary with or into the
Company or any other Subsidiary (including any corporation which, after
giving effect to such transaction, will become a Subsidiary) so long as in
any merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation and in any merger or consolidation not
involving the Company, a Subsidiary shall be the surviving or continuing
corporation;
(b) the merger or consolidation of the Company with or into any other
corporation if the Company shall be the surviving or continuing corporation
and at the time of such consolidation or merger and after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing; and
(c) the sale, lease or other disposition by any Subsidiary of all or
any substantial part of its assets to the Company or any other Subsidiary.
The term "substantial" as used herein shall mean the sale, transfer, lease or
other disposition of 20% of the total assets of the Company.
Section 7.11. Maintenance of Subsidiaries. The Company shall not assign,
sell or transfer, or permit any Subsidiary to issue, assign, sell or transfer,
any shares of capital stock of a Subsidiary; provided that the foregoing shall
not operate to prevent the issuance, sale and transfer to any person of any
shares of capital stock of a Subsidiary solely for the purpose of qualifying,
and to the extent legally necessary to qualify, such person as a director of
such Subsidiary;
further, provided, however, that this Section 7.11 shall not operate to prevent
any transaction otherwise permitted by Section 7.10 hereof.
Section 7.12. ERISA. The Company shall, and shall cause each Subsidiary to,
promptly pay and discharge all obligations and liabilities arising under ERISA
of a character which if unpaid or unperformed might result in the imposition of
a Lien against any of its Properties. The Company shall, and shall cause each
Subsidiary to, promptly notify the Bank of (a) the occurrence of any reportable
event (as defined in ERISA) with respect to a Plan, (b) receipt of any notice
from the PBGC of its intention to seek termination of any Plan or appointment of
a trustee therefor, (c) its intention to terminate or withdraw from any Plan,
and (d) the occurrence of any event with respect to any Plan which would result
in the incurrence by the Company or any Subsidiary of any material liability,
fine or penalty, or any material increase in the contingent liability of the
Company or any Subsidiary with respect to any post-retirement Welfare Plan
benefit.
Section 7.13. Compliance with Laws. The Company shall, and shall cause each
Subsidiary to, comply in all respects with the requirements of all federal,
state and local laws, rules, regulations, ordinances and orders applicable to or
pertaining to their Properties or business operations, non-compliance with which
could have a material adverse effect on the financial condition, Properties,
business or operations of the Company and its Subsidiaries, taken as a whole, or
could result in a Lien upon any of their Property, which Lien is not otherwise
permitted by Section 7.8 hereof.
Section 7.14. Burdensome Contracts With Affiliates. The Company shall not,
nor shall it permit any Subsidiary to, enter into any contract, agreement or
business arrangement with any of its Affiliates (other than with Wholly-Owned
Subsidiaries) on terms and conditions which are less favorable to the Company or
such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.
Section 7.15. Change in the Nature of Business. The Company shall not, and
shall not permit any Subsidiary to, engage in any business or activity if, as a
result, the general nature of the business of the Company and its Subsidiaries,
taken as a whole, would be changed in any material respect from the general
nature of the business engaged in by the Company and its Subsidiaries on the
date of this Agreement.
Section 7.16. Formation of Subsidiaries. In the event any Subsidiary is
formed or acquired after the date hereof, the Company shall within thirty (30)
Business Days thereof (x) furnish an update to Schedule 5.2 hereof to reflect
such new Subsidiary and (y) cause, if such newly-formed or acquired Subsidiary
is a Domestic Subsidiary, such Domestic Subsidiary to execute a Guaranty as the
Bank may require, together with documentation (including a legal opinion)
similar to that described in Section 6.2(c) hereof relating to the authorization
for, execution and delivery of, and validity of such Subsidiary's obligations as
a Guarantor hereunder and under its Guaranty in form and substance satisfactory
to the Bank other instruments, documents, certificates and opinions as are
reasonably required by the Bank in connection therewith.
Section 7.17. Financial Covenants. (a) Consolidated Net Worth. The Company
will, as of the last day of each fiscal quarter of the Company, maintain
Consolidated Net Worth at not less than the Minimum Required Amount. For
purposes of this Section 7.7, the term "Minimum Required Amount" shall mean
$56,759,047 and shall increase (but never decrease) as of January 31, 2006, and
as of the last day of each fiscal quarter ending thereafter (i.e., the last day
of each April, July, October, and January) by an amount equal to 25% of Net
Income (but only if positive) for the fiscal quarter then ended.
(b) Consolidated Debt Ratio. The Company will, as of the last day of each
fiscal quarter of the Company, maintain a ratio of Consolidated Debt to Total
Capitalization of less than 0.55 to 1.0.
(c) Fixed Charge Coverage Ratio. The Company will, as of the last day of
each fiscal quarter of the Company, maintain a ratio of (a) Consolidated EBITR
for the four fiscal quarters then ended to (b) Consolidated Fixed Charges for
the same period of four fiscal quarters then ended of greater than 1.50 to 1.0.
(d) Consolidated Capital Expenditures. The Company shall not permit
Consolidated Capital Expenditures to be incurred (whether by the Company or any
Subsidiary) in excess of $12,000,000 in the aggregate during any fiscal year of
the Company.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default for a period of five days in the payment when due of all
or any part of the principal of or interest on any Note (whether at the
stated maturity thereof or at any other time provided for in this
Agreement) or of any fee or other Obligation payable by the Company
hereunder; or
(b) default in the observance or performance of any covenant set forth
in Sections 7.7, 7.8, 7.9, 7.10, or 7.11 hereof, or
(c) default in the observance or performance of any covenant set forth
in Sections 7.5, 7.6, 7.16, or 7.17 hereof which is not remedied within
five days after the earlier of (i) the date on which such failure shall
first become known to any officer of the Company or (ii) written notice
thereof is given to the Company by the Bank; or
(d) default in the observance or performance of any other provision
hereof which is not remedied within thirty (30) days after the earlier of
(i) the date on which such failure shall first become known to any officer
of the Company or (ii) written notice thereof is given to the Company by
the Bank; or
(e) any representation or warranty made by the Company herein or in
any statement or certificate furnished by it pursuant hereto, or in
connection with any Loan
made hereunder, proves untrue in any material respect as of the date of the
issuance or making thereof; or
(f) default shall occur under any evidence of Indebtedness for
Borrowed Money issued, assumed or guaranteed by the Company or (subject to
Section 8.5 hereof) any Subsidiary aggregating in excess of $1,000,000 or
under any indenture, agreement or other instrument under which the same may
be issued, and such default shall continue unwaived for a period of time
sufficient to permit the acceleration of the maturity of any such
Indebtedness for Borrowed Money (whether or not such maturity is in fact
accelerated) or any such Indebtedness for Borrowed Money shall not be paid
when due (whether by lapse of time, acceleration or otherwise); or
(g) any judgment or judgments, writ or writs, or warrant or warrants
of attachment, or any similar process or processes in an aggregate amount
in excess of $1,000,000 shall be entered or filed against the Company or
(subject to Section 8.5 hereof) any Subsidiary or against any of their
Property and which remains unvacated, unbonded, unstayed or unsatisfied for
a period of thirty (30) days; or
(h) the Company or any member of its Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess $5,000,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $5,000,000 (collectively, a
"Material Plan") shall be filed under Title IV of ERISA by the Company or
any other member of its Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against the Company or any member of its
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within thirty (30) days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or
(i) dissolution or termination of the existence of (i) the Company or
(ii) to the extent not otherwise permitted by Section 7.9 hereof and in any
event subject to Section 8.5 hereof, any Subsidiary; or
(j) the Company or (subject to Section 8.5 hereof) any Subsidiary
shall (i) have entered involuntarily against it an order for relief under
the United States Bankruptcy Code, as amended, (ii) not pay, or admit in
writing its inability to pay, its debts generally as they become due, (iii)
make an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any substantial
part of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code, as
amended, to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fail to file an answer
or other pleading denying the material allegations of any such proceeding
filed against it, or (vi) fail to contest in good faith any appointment or
proceeding described in Section 8.1(k) hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Company or (subject to Section 8.5
hereof) any Subsidiary or any substantial part of any of their Property, or
a proceeding described in Section 8.1(j)(v) shall be instituted against the
Company or (subject to Section 8.5 hereof) any Subsidiary, and such
appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of sixty (60) days.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default described
in subsection (a) through (i), both inclusive, of Section 8.1 has occurred and
is continuing, the Bank may, by notice to the Company, take one or more of the
following actions:
(a) terminate the obligation of the Bank to extend any further credit
hereunder on the date (which may be the date thereof) stated in such
notice;
(b) declare the principal of and the accrued interest on the Note to
be forthwith due and payable and thereupon the Note, including both
principal and interest and all fees, charges and other Obligations payable
hereunder, shall be and become immediately due and payable without further
demand, presentment, protest or notice of any kind; and
(c) enforce any and all rights and remedies available to it under the
Loan Documents or applicable law.
Section 8.3. Bankruptcy Defaults. When any Event of Default described in
subsection (j) or (k) of Section 8.1 has occurred and is continuing, then the
Note, including both principal and interest, and all fees, charges and other
Obligations payable hereunder, shall immediately become due and payable without
presentment, demand, protest or notice of any kind, and the obligation of the
Bank to extend further credit pursuant to any of the terms hereof shall
immediately terminate. In addition, the Bank may exercise any and all remedies
available to it under the Loan Documents or applicable law.
Section 8.4. Collateral for Undrawn Letters of Credit. When any Event of
Default, other than an Event of Default described in subsection (j) or (k) of
Section 8.1, has occurred and is continuing, the Company shall, upon demand of
the Bank, and when any Event of Default described in subsection (j) or (k) of
Section 8.1 has occurred the Company shall, without notice or demand from the
Bank, immediately pay to the Bank the full amount of each Letter of Credit then
outstanding, the Company agreeing to immediately make such payment and
acknowledging and agreeing that the Bank would not have an adequate remedy at
law for failure of the Company to honor any such demand and that the Bank shall
have the right to require the Company to specifically perform such undertaking
whether or not any draws have been made under any such Letters of Credits.
Section 8.5. Defaults of Insignificant Subsidiaries. Notwithstanding
anything in this Agreement to the contrary, any event or occurrence of a type
described in subsections (f), (g), (i), (j) or (k) of Section 8.1 hereof which
occurs with respect to any Insignificant Subsidiary (collectively, "Subsidiary
Defaults") shall not constitute an Event of Default under Section 8.1 hereof
unless and until either (x) the Aggregate Cumulative Amount of Net Income
attributable to Insignificant Subsidiaries which were the subject of Subsidiary
Defaults on or at any time after the date hereof exceeds 15% of Net Income for
the most recently completed fiscal year of the Company or (y) the Aggregate
Cumulative Amount of Consolidated Total Assets attributable to such
Insignificant Subsidiaries exceeds 15% of Consolidated Total Assets as of the
close of the most recently completed fiscal year of the Company.
SECTION 9. THE GUARANTEES.
Section 9.1. The Guarantees. To induce the Bank to provide the credits
described herein and in consideration of benefits expected to accrue to each
Guarantor by reason of the commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Guarantor hereby
unconditionally and irrevocably guarantees jointly and severally to the Bank,
and each other holder of any Obligations, the due and punctual payment of all
present and future Obligations, including, but not limited to, the due and
punctual payment of principal of and interest on the Note, the due and punctual
payment of all obligations owing under the Applications, and the due and
punctual payment of all other Obligations now or hereafter owed by the Company
under the Loan Documents as and when the same shall become due and payable,
whether at stated maturity, by acceleration or otherwise, according to the terms
hereof and thereof. In case of failure by the Company punctually to pay any
indebtedness or other Obligations guaranteed hereby, each Guarantor hereby
unconditionally agrees jointly and severally to make such payment or to cause
such payment to be made punctually as and when the same shall become due and
payable, whether at stated maturity, by acceleration or otherwise, and as if
such payment were made by the Company.
Section 9.2. Guarantee Unconditional. The obligations of each Guarantor as
a guarantor under this Section 9 shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Company or of any other Guarantor under
this Agreement or any other Loan Document or by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any other Loan Document;
(c) any change in the corporate existence, structure or ownership of,
or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting, the Company, any other Guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of the
Company or of any other Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Bank or any other Person,
whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or demand or
any exercise of, or failure to exercise, any rights or remedies against the
Company, any other Guarantor or any other Person or Property;
(f) any application of any sums by whomsoever paid or howsoever
realized to any obligation of the Company, regardless of what obligations
of the Company remain unpaid;
(g) any invalidity or unenforceability relating to or against the
Company or any other Guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by the Company or any other Guarantor of
the principal of or interest on the Note or any other amount payable by it
under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by the Bank
or any other Person or any other circumstance whatsoever that might, but
for the provisions of this paragraph, constitute a legal or equitable
discharge of the obligations of the Guarantor under this Section 9.
Section 9.3. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations under this Section 9 shall remain in
full force and effect until the commitments are terminated and the principal of
and interest on the Note and all other amounts payable by the Company under this
Agreement and all other Loan Documents shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other amount
payable by the Company under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Company or of a Guarantor, or otherwise, each Guarantor's obligations
under this Section 9 with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been made at such time.
Section 9.4. Subrogation. Each Guarantor agrees it will not exercise any
rights which it may acquire by way of subrogation by any payment made hereunder,
or otherwise, until all the Obligations shall have been paid in full subsequent
to the termination of the Revolving Credit Commitment and expiration of all
Letters of Credit. If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time prior to the later of (x) the payment in full of
the Obligations and all other amounts payable by the Company hereunder and the
other Loan Documents and (y) the termination of the Revolving Credit Commitment
and expiration of all Letters of Credit, such amount shall be held in trust for
the benefit of the Bank (and their Affiliates) and shall forthwith be paid to
the Bank (and their Affiliates) or be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of this Agreement.
Section 9.5. Waivers. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Bank or any other
Person against the Company, another Guarantor or any other Person.
Section 9.6. Limit on Recovery. Notwithstanding any other provision hereof,
the right to recovery of the holders of the Obligations against each Guarantor
under this Section 9 shall not exceed $1.00 less than the lowest amount which
would render such Guarantor's obligations hereunder void or voidable under
applicable law, including without limitation fraudulent conveyance law.
Section 9.7. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Company under this Agreement or any other Loan
Document is stayed upon the insolvency, bankruptcy or reorganization of the
Company, all such amounts otherwise subject to acceleration under the terms of
this Agreement or the other Loan Documents shall nonetheless be payable jointly
and severally by the Guarantors hereunder forthwith on demand by the Bank.
SECTION 10. MISCELLANEOUS.
Section 10.1. Holidays. If any payment hereunder becomes due and payable on
a day which is not a Business Day, the due date of such payment shall be
extended to the next succeeding Business Day on which date such payment shall be
due and payable. In the case of any payment of principal falling due on a day
which is not a Business Day, interest on such principal amount shall continue to
accrue during such extension at the rate per annum then in effect, which accrued
amount shall be due and payable on the next scheduled date for the payment of
interest.
Section 10.2. No Waiver, Cumulative Remedies. No delay or failure on the
part of the Bank or on the part of the holder of the Obligations in the exercise
of any power or right shall operate as a waiver thereof or as an acquiescence in
any default, nor shall any single or partial exercise of any power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. The rights and remedies hereunder of the Bank and of the holder
of the Obligations are cumulative to, and not exclusive of, any rights or
remedies which any of them would otherwise have.
Section 10.3. Amendments, Etc. No amendment, modification, termination or
waiver of any provision of this Agreement or of any other Loan Document, nor
consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Bank. No notice
to or demand on the Company in any case shall entitle the Company to any other
or further notice or demand in similar or other circumstances.
Section 10.4. Costs and Expenses. The Company agrees to pay on demand the
costs and expenses of the Bank incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other Loan
Documents and the other instruments and documents to be delivered thereunder,
and in connection with the transactions contemplated hereby or thereby, and in
connection with any consents hereunder and any waivers or
amendments hereto or thereto, including the fees and expenses of counsel for the
Bank, with respect to all of the foregoing (whether or not the transactions
contemplated hereby are consummated). The Company further agrees to pay to the
Bank or any other holder of the Obligations all costs and expenses (including
court costs and attorneys' fees), if any, incurred or paid by the Bank or any
other holder of the Obligations in connection with any Default or Event of
Default or in connection with the enforcement of this Agreement or any other
Loan Document or any other instrument or document delivered thereunder
(including, without limitation, all such costs and expenses incurred in
connection with any proceeding under the United States Bankruptcy Code involving
the Company or any Guarantor). The Company further agrees to indemnify the Bank,
and any security trustee, and their respective directors, officers and
employees, against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor, whether or not the indemnified person is a
party thereto) which any of them may pay or incur arising out of or relating to
any Loan Document or any of the transactions contemplated thereby or the direct
or indirect application or proposed application of the proceeds of any extension
of credit made available hereunder, other than those which arise from a material
breach of this Agreement by the party claiming indemnification or the gross
negligence or willful misconduct of the party claiming indemnification. The
Company, upon demand by the Bank at any time, shall reimburse the Bank for any
legal or other expenses incurred in connection with investigating or defending
against any of the foregoing except if the same is directly due to a material
breach of this Agreement by the party to be indemnified or the gross negligence
or willful misconduct of the party to be indemnified. The obligations of the
Company under this Section shall survive the termination of this Agreement.
Section 10.5. Documentary Taxes. The Company agrees to pay on demand any
documentary, stamp or similar taxes payable in respect of this Agreement or any
other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.
Section 10.6. Survival of Representations. All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
Section 10.7. Survival of Indemnities. All indemnities and other provisions
relative to reimbursement to the Bank of amounts sufficient to protect the yield
of the Bank with respect to the Loans, including, but not limited to, Sections
2.6 and 2.7 hereof, shall survive the termination of this Agreement and the
payment of the Note.
Section 10.8. Notices. Except as otherwise specified herein, all notices
hereunder shall be in writing (including cable, telecopy or telex) and shall be
given to the relevant party at its address, telecopier number or telex number
set forth below, or such other address, telecopier number or telex number as
such party may hereafter specify by notice to the other given by courier, by
United States certified or registered mail, by telecopy or by other
telecommunication
device capable of creating a written record of such notice and its receipt.
Notices hereunder shall be addressed:
to the Company at: to the Bank at:
Oil-Dri Corporation of America Xxxxxx X.X.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Attention: Xxxxxxx Xxxxx
Vice President of Finance Telephone: (000) 000-0000
Telephone: (000) 000-0000 Telecopy: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by telex, when such telex is transmitted to the
telex number specified in this Section and the answer back is received by
sender, (iii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant
to Section 1 or Section 2 hereof shall be effective only upon receipt.
Section 10.9. Construction. The parties hereto acknowledge and agree that
this Agreement and the other Loan Documents shall not be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation of this Agreement and the other Loan Documents.
Section 10.10. Headings. Section headings used in this Agreement are for
convenience of reference only and are not a part of this Agreement for any other
purpose.
Section 10.11. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 10.12. Counterparts. This Agreement may be executed in any number
of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 10.13. Binding Nature, Governing Law, Etc. This Agreement shall be
binding upon the Company and the Guarantors, and their successors and assigns,
and shall inure to the benefit of the Bank and the benefit of its successors and
assigns, including any subsequent holder of the Obligations. The Company may not
assign its rights hereunder without the written consent of the Bank. This
Agreement constitutes the entire understanding of the parties with respect to
the subject matter hereof and any prior agreements, whether written or oral,
with respect thereto
are superseded hereby. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES
HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 10.14. Submission to Jurisdiction; Waiver of Jury Trial. The
Company and the Guarantors each hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby. The Company and
the Guarantors each irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
THE COMPANY, THE GUARANTORS, AND THE BANK HEREBY IRREVOCABLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGE TO FOLLOW]
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 27th day of January, 2006.
"COMPANY"
OIL-DRI CORPORATION OF AMERICA
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name Xxxxxxx X. Xxxxxx
--------------------------
Title VP, Finance & Treasurer
--------------------------
"GUARANTORS"
OIL-DRI CORPORATION OF GEORGIA
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
OIL-DRI PRODUCTION COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
OIL-DRI CORPORATION OF NEVADA
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
MOUNDS PRODUCTION COMPANY, LLC
BY MOUNDS MANAGEMENT, INC., ITS
MANAGING MEMBER
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
MOUNDS MANAGEMENT, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
BLUE MOUNTAIN PRODUCTION COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
XXXX PRODUCTION COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name Xxxxxxx X.Xxxxxxxx
--------------------------
Title Vice President
--------------------------
Accepted and agreed to at Chicago, Illinois, as of the day and year last
above written.
XXXXXX X.X.
By /s/ Xxxxxx Xxxxx, Director
--------------------------------
Name Xxxxxx Xxxxx
--------------------------
Title Director
--------------------------
EXHIBIT A
OIL-DRI CORPORATION OF AMERICA
REVOLVING NOTE
Chicago, Illinois
$15,000,000 January 27, 2006
On the Termination Date, for value received, the undersigned, Oil-Dri
Corporation of America, a Delaware corporation (the "Company"), hereby promises
to pay to the order of Xxxxxx X.X. (the "Bank") at its main office at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, the principal sum of Fifteen Million and
no/100 Dollars ($15,000,000), or (ii) such lesser amount as may at the time of
the maturity hereof, whether by acceleration or otherwise, be the aggregate
unpaid principal amount of all Loans owing from the Company to the Bank under
the Revolving Credit provided for in the Credit Agreement hereinafter mentioned.
This Note evidences Loans made or to be made to the Company by the Bank
under the Revolving Credit provided for under that certain Credit Agreement
dated as of January 27, 2006, between the Company and the Bank (said Credit
Agreement, as the same may be amended, modified or restated from time to time,
being referred to herein as the "Credit Agreement"); and the Company hereby
promises to pay interest at the office described above on such Loans evidenced
hereby at the rates and at the times and in the manner specified therefor in the
Credit Agreement.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement, and this Note and the holder hereof are entitled to all of the
benefits provided for thereby or referred to therein, to which reference is
hereby made for a statement thereof. This Note may be declared to be, or be and
become, due prior to its expressed maturity and voluntary prepayments may be
made hereon, all in the events, on the terms and with the effects provided in
the Credit Agreement. All capitalized terms used herein without definition shall
have the same meanings herein as such terms are defined in the Credit Agreement.
The Company hereby promises to pay all costs and expenses (including
reasonable attorneys' fees) suffered or incurred by the holder hereof in
collecting this Note or enforcing any rights in any collateral therefor. The
Company hereby waives presentment for payment and demand. THIS NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
OIL-DRI CORPORATION OF AMERICA
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name Xxxxxxx X. Xxxxxx
--------------------------
Title VP, Finance & Treasurer
--------------------------
EXHIBIT B
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to Xxxxxx X.X. (the "Bank")
pursuant to that certain Credit Agreement dated as of January 27, 2006, by and
between Oil-Dri Corporation of America (the "Company") and the Bank (the "Credit
Agreement"). Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the
Company; -------------------------------------
2. I have reviewed the terms of the Credit Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Company and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or the occurrence of
any event which constitutes a Default or Event of Default during or at the
end of the accounting period covered by the attached financial statements
or as of the date of this Certificate, except as set forth below;
4. The financial statements required by Section 7.5 of the Credit
Agreement and being furnished to you concurrently with this certificate
are, to the best of my knowledge, true, correct and complete as of the
dates and for the periods covered thereby; and
5. The Attachment hereto sets forth financial data and computations
evidencing the Company's compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my
knowledge, true, complete and correct and have been made in accordance with
the relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certifications, together with the computations set forth in
the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of
20 . ---------
------------------ ---
-----------------------------------------
-------------------------, --------------
(Type or Print Name) (Title)
ATTACHMENT TO COMPLIANCE CERTIFICATE
OIL-DRI CORPORATION OF AMERICA
Compliance Calculations for Credit Agreement
Dated as of January 27, 2006
Calculations as of , 20
------------- ---
================================================================================
A. CONSOLIDATED NET WORTH (SECTION 7.17(A))
1. Consolidated Net Worth
--------------
2. Positive Net Income for each fiscal quarter
ending 1/31/06 or later
--------------
3. 25% of Line 2
--------------
4. As listed in Section 7.17(a), for the date of
this Certificate, Consolidated Net Worth
must not be less than $
----------
($56,759,047 plus Line 3)
--------------
5. Company is in compliance? (Circle yes or no) Yes/No
--------------
B. CONSOLIDATED DEBT RATIO (SECTION 7.17(B))
1. Consolidated Debt as defined
--------------
2. Net Worth
--------------
3. Ratio of Line B1 to B2
("Consolidated Debt Ratio") to 1.0
------
4. As listed in Section 7.17(b), for the date of
this Certificate, the Consolidated Debt Ratio
shall be less than 0.55 to 1.0
==============
5. Company is in compliance?
(Circle yes or no) Yes/No
==============
C. FIXED CHARGE COVERAGE RATIO (SECTION 7.17(C))
1. Net Income
--------------
2.
(a) Interest Expense
(b) Federal, state, ---------------
and local taxes
(c) Lease and rental ---------------
expense
---------------
3. Sum of Lines 1, 2(a), (b) and (c)
--------------
4. Interest Income
--------------
5. Gains on sales of fixed assets
--------------
6. Sum of Lines 4 and 5
--------------
7. Line 3 minus Line 6
("Consolidated EBITR")
--------------
8. Sum of Line 2(a) and 2(c)
--------------
9. Line 8 minus line 4
("Consolidated Fixed Charges")
--------------
10. Ratio of Line 7 to Line 9
--------------
11. As listed in Section 7.17(c), for the date of
this Certificate, the Line 10 ratio shall not
be greater than 1.50:1
12. Company is in compliance?
(Circle Yes or No) Yes/No
--------------
D. CAPITAL EXPENDITURES (SECTION 7.17(D)
1. Year-to-Date Capital Expenditures $
-----------
2. Line F1 must be less than or equal to $
-----------
3. The Company is in compliance (circle yes or no) yes/no
EXHIBIT C
GUARANTY AGREEMENT
, 20
---------- ---
Xxxxxx X.X.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of January 27, 2006
(the "Credit Agreement") between Oil-Dri Corporation of America and Xxxxxx X.X.
Capitalized terms used and not defined herein have the meanings assigned to them
in the Credit Agreement.
The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of
incorporation or organization] hereby elects to be a "Guarantor" for all
purposes of the Credit Agreement, effective from the date hereof. The
undersigned confirms that the representations and warranties set forth in
Section 5 of the Credit Agreement are true and correct as to the undersigned as
of the date hereof and the undersigned shall comply with each of the covenants
set forth in Section 7 of the Credit Agreement applicable to it.
Without limiting the generality of the foregoing, the undersigned hereby
agrees to perform all the obligations of a Guarantor under, and to be bound as a
Guarantor in all respects by the terms of, the Credit Agreement, including
without limitation Section 9 thereof, to the same extent and with the same force
and effect as if the undersigned were a signatory party thereto.
The undersigned acknowledges that this Agreement shall be effective upon
its execution and delivery by the undersigned to the Bank, and it shall not be
necessary for the Bank, or any of its Affiliates entitled to the benefits
hereof, to execute this Agreement or any other acceptance hereof. This Agreement
shall be construed in accordance with and governed by the internal laws of the
State of Illinois.
Very truly yours,
[NAME OF GUARANTOR]
By
Name
--------------------------
Title
--------------------------
SCHEDULE 1.3
PRESENT LETTERS OF CREDIT
L/C FACE
ISSUE DATE NUMBER TYPE AMOUNT BENEFICIARY
November 30, 1988 HACH19572OS Special Purpose $2,500,000.00 JPMorgan Chase
August 1, 2003 HACH19762OS Special Purpose $ 790,000.00 Federal Ins. Co (Chubb)
August 31, 2005 HACH109891OS Standby $ 2,700.00 National Bank of Egypt
January 13, 2016 XXXX000000XX Xxxxxxx $ 3,197.25 Egyptian National Bank
January 13, 2006 XXXX00000XX Xxxxxxx $ 4,110.75 Bank of Alexandria
January 13, 2006 XXXX000000XX Xxxxxxx $ 2,283.75 Commercial International Bank
January 13, 2006 HACH117723OS Standby $ 913.50 National Bank of Egypt
January 19, 2006 XXXX000000XX Xxxxxxx $ 913.50 Banque Misr
SCHEDULE 5.2
SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME ORGANIZATION OWNERSHIP TYPE
Oil-Dri Corporation of Georgia Georgia 100% Significant
Oil-Dri Production Company Mississippi 100% Significant
Mounds Management, Inc. (formerly known Delaware 100% Insignificant
as Oil-Dri Transportation Co.)
Oil-Dri (U.K.) Limited United Kingdom 100% Insignificant
Oil-Dri Corporation of Nevada Nevada 100% Insignificant
ODC Acquisition Corp. Illinois 100% Insignificant; Inactive
Oil-Dri S.A. Switzerland 100% Insignificant
Favorite Products Company, Ltd. Canada 100% Insignificant
(by Oil-Dri S.A.)
Blue Mountain Production Company Mississippi 100% Insignificant
(by Favorite
Products)
Mounds Production Company, LLC Illinois 75% (by Mounds Insignificant
Management, Inc.)
and 25% (by Blue
Mountain
Production Company)
Xxxx Production Company Delaware 100% Insignificant
