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EXHIBIT 10.3
Execution Copy
THE MONARCH MACHINE TOOL COMPANY
$15,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 29, 1998
NBD BANK, N.A.
STAR BANK, N.A.
and
NBD BANK, N.A., as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.........................................................1
1.1 Certain Definitions...................................................1
1.2 Other Definitions: Rules of Construction.............................11
ARTICLE II. THE COMMITMENTS AND THE ADVANCES..................................12
2.1 Commitments of the Banks.............................................12
(a) Revolving Credit Commitment.....................................12
(b) Term Loan Commitment............................................12
2.2 Termination and Reduction of Revolving Credit Commitments............12
2.3 Fees.................................................................13
(a) Commitment Fee..................................................13
(b) Agency Fee......................................................13
(c) Letter of Credit Fees...........................................13
2.4 Disbursement of Advances.............................................13
(a) Requests for Advances...........................................13
(b) Currencies and Interest Rates...................................14
(c) Pro Rata Shares.................................................14
(d) The Notes.......................................................15
(e) Participation in Letters of Credit..............................15
2.5 Conditions for First Disbursement....................................16
(a) Charter Documents...............................................16
(b) Code of Regulations and Corporate Authorizations................16
(c) Incumbency Certificate..........................................16
(d) Revolving Credit Notes..........................................16
(e) Legal Opinion...................................................16
(f) Consents, Approvals, Etc........................................16
(g) Other Loan Documents............................................16
2.6 Further Conditions for Disbursement..................................17
2.7 Subsequent Elections as to Loans.....................................17
2.8 Limitation of Requests and Elections.................................18
2.9 Minimum Amounts; Limitations on Advances.............................19
ARTICLE III. PAYMENTS AND PREPAYMENTS OF ADVANCES.............................19
3.1 Principal Payments...................................................19
3.2 Interest Payments....................................................20
3.3 Payment Method.......................................................20
3.4 No Setoff or Deduction...............................................21
3.5 Payment on Non-Business Day: Payment Computations....................21
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3.6 Additional Costs.....................................................21
3.7 Illegality and Impossibility.........................................22
3.8 Indemnification......................................................22
ARTICLE IV. REPRESENTATIONS AND WARRANTIES....................................25
4.1 Corporate Existence and Power........................................25
4.2 Corporate Authority..................................................25
4.3 Binding Effect.......................................................25
4.4 Subsidiaries.........................................................25
4.5 Litigation...........................................................26
4.6 Financial Condition..................................................26
4.7 Use of Advances......................................................26
4.8 Consents, Etc........................................................26
4.9 Taxes................................................................26
4.9 Taxes................................................................26
4.10 Title to Properties.................................................27
4.11 ERISA...............................................................27
4.12 Disclosure..........................................................27
4.13 Environmental Certificate...........................................27
4.14 Borrowing Base......................................................27
ARTICLE V. COVENANTS..........................................................28
5.1 Affirmative Covenants................................................28
(a) Preservation of Corporate Existence, Etc........................28
(b) Compliance with Laws, Etc.......................................28
(c) Maintenance of Properties; Insurance............................28
(d) Reporting Requirements..........................................29
(e) Accounting; Access to Records; Books, Etc.......................30
(f) Taxes...........................................................31
5.2 Negative Covenants...................................................31
(a) Current Ratio...................................................31
(b) Tangible Net Worth..............................................31
(c) Total Liabilities to Tangible Net Worth.........................31
(d) Liens...........................................................31
(e) Merger; Acquisitions; Etc.......................................32
(f) Disposition of Assets; Etc......................................32
(g) Nature of Business..............................................33
(h) Dividends and Other Restricted Payments.........................33
(i) Capital Expenditures............................................33
(j) Transactions with Affiliates....................................33
(k) Investments, Loans and Advances.................................34
(l) Contingent Liabilities..........................................34
(m) Negative Pledge Limitation......................................34
(n) Restrictions on Payments by Subsidiaries........................34
(o) Inconsistent Agreements.........................................34
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(p) Fiscal Year.....................................................34
(q) Interest Coverage Ratio.........................................35
ARTICLE VI. DEFAULT...........................................................35
6.1 Events of Default....................................................35
(a) Nonpayment......................................................35
(b) Misrepresentation...............................................35
(c) Certain Covenants...............................................35
(d) Other Defaults..................................................35
(e) Cross Default...................................................35
(f) Judgments.......................................................36
(g) ERISA...........................................................36
(h) Insolvency, Etc.................................................37
6.2 Remedies.............................................................37
ARTICLE VII. THE AGENT AND THE BANKS..........................................38
7.1 Appointment and Authorization........................................38
7.2 Agent and Affiliates.................................................38
7.3 Scope of Agent's Duties..............................................39
7.4 Reliance by Agent....................................................39
7.5 Default..............................................................39
7.6 Liability of Agent...................................................40
7.7 Nonreliance on Agent and Other Banks.................................40
7.8 Indemnification......................................................40
7.9 Successor Agent......................................................41
7.10 Sharing of Payments.................................................41
ARTICLE VIII. MISCELLANEOUS...................................................42
8.1 Amendments, Etc......................................................42
8.2 Notices..............................................................42
8.3 No Waiver By Conduct; Remedies Cumulative............................43
8.4 Reliance on and Survival of Various Provisions.......................43
8.5 Expenses and Indemnification.........................................43
8.6 Successors and Assigns...............................................44
8.7 Counterparts.........................................................45
8.8 Governing Law........................................................45
8.9 Table of Contents and Headings.......................................45
8.10 Construction of Certain Provisions..................................45
8.11 Integration and Severability........................................46
8.12 Independence of Covenants...........................................46
8.13 Interest Rate Limitation............................................46
8.14 Special Procedures for Disbursement of First Loans..................46
8.15 Year 2000 Problem...................................................47
8.16 WAIVER OF JURY TRIAL................................................47
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Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B - Request for Advance
Exhibit C - Opinion of Borrower's Counsel
Exhibit D - Request for Continuation or Conversion of Loan
Exhibit E - Borrowing Base Certificate
Exhibit F - Environmental Certificate
SCHEDULES
4.4 - Subsidiaries
4.5 - Litigation
5.2(d) - Liens
5.2(k) - Investments, Loans and Advances
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THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May
29, 1998 (this "Agreement"), is by and among THE MONARCH MACHINE TOOL COMPANY,
INC., an Ohio corporation (the "Company"), the Banks set forth on the signature
pages hereof (collectively, the "Banks" and, individually, a "Bank") and NBD
BANK, N.A., a national banking association ("NBD"), as agent for the Banks (in
such capacity, the "Agent").
INTRODUCTION
A. The Company, the Banks and the Agent (NBD, as a Bank and as the
Agent, being the successor by assignment to NBD Bank, a Michigan banking
corporation) are parties to that certain Amended and Restated Credit Agreement,
dated as of June 9, 1995, as amended or modified from time to time (the "1995
Credit Agreement"), pursuant to which the Banks provide to the Company a
revolving credit facility, including, in the Banks' sole discretion, loans in
foreign currencies, in an aggregate principal amount the Dollar Equivalent of
which does not exceed $20,000,000, in order to provide funds for the Company's
general corporate purposes, which credit facility is convertible into a
three-year term loan, all on the terms and conditions therein set forth.
B. The Company now desires to extend the expiry date of such
revolving credit facility three years, reduce the amount of such facility to
$15,000,000, eliminate foreign currency loans from the facility, add standby
letters of credit to the facility, provide for its conversion to a two-year term
loan, and modify the pricing and fees under the credit facility and certain
covenants applicable to the Company, and the Banks and the Agent are willing to
so modify the 1995 Credit Agreement, and for such purpose amend and restate the
1995 Credit Agreement in full, all the terms and condition herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereby agree, and hereby amend and restate the 1995
Credit Agreement in full, as follows:
ARTICLE I.
DEFINITIONS
1.1. Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Affiliate", when used with respect to any person, shall mean any
other person which, directly or indirectly, controls or is controlled by or is
under common control with such person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or
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otherwise.
"Applicable Commitment Fee Rate", "Applicable Eurodollar Rate
Margin", "Applicable Floating Rate Margin" and "Applicable L/C Fee Rate" shall
be, for purposes of determining the commitment fee payable under Section 2.3(a)
for any month (the "Application Month"), the Eurodollar Rate applicable to any
Eurodollar Rate Loan outstanding at any time during any Application Month, the
Floating Rate applicable to any Floating Rate Loan outstanding at any time
during any Application Month, or the fee under Section 2.3(d) for any Letter of
Credit issued during any Application Month, as the case may be, the percent set
forth under the heading "Applicable Commitment Fee Rate", "Applicable Eurodollar
Rate Margin for Revolving Credit Loans", "Applicable Eurodollar Rate Margin for
the Term Loan", "Applicable Floating Rate Margin for Revolving Credit Loans",
"Applicable Floating Rate Margin for the Term Loan" and "Applicable L/C Fee
Rate", respectively, below in the row corresponding to the range into which
falls the ratio (the "Ratio") of the Consolidated Total Liabilities of the
Company and its Subsidiaries to the Consolidated Tangible Net Worth of the
Company and its Subsidiaries as of the end of the last fiscal quarter (the
"Determination Quarter") preceding such Application Month for which financial
statements have been delivered to the Banks under Section 5.1(d)(ii):
Applicable
Applicable Floating Applicable
Applicable Eurodollar Rate Floating
Eurodollar Rate Margin for Rate Applica-
Applicable Rate Margin Margin for Revolving Margin for ble L/C
Commitment for Revolving the Term Credit the Term Fee
Ratio Fee Rate Credit Loans Loan Loans Loan Rate
----- -------- ------------ ---- ----- ---- ----
Less than
or equal to
0.75 to 1.00 0.25% 0.75% 1.00% 0% 0.25% 0.75%
Greater
than 0.75 to
1.00 but
less than or
equal to
1.15 to 1.00 0.375% 1.00% 1.25% 0% 0.25% 1.00%
Greater
than 1.15 to
1.00 0.375% 1.50% 1.75% 0% 0.25% 1.50%
Each change in the Applicable Commitment Fee Rate, Applicable Eurodollar Rate
Margin, Applicable Floating Rate Margin and Applicable L/C Fee Rate in
accordance with this definition, as finally determined upon the Banks' receipt
of the Company's financial statements for any Determination Quarter pursuant to
Section 5.1(d)(ii), shall be effective as of the first day
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of the corresponding Application Month following such Determination Quarter.
"Borrowing Base" shall mean, as of any date, the sum of (a) an
amount equal to 80% of the Eligible Accounts Receivable plus (b) an amount equal
to 50% of the Eligible Inventory minus (c) the Fifth Third Borrowings.
"Borrowing Base Certificate" or any date shall mean an appropriately
completed report as of such date in substantially the form of Exhibit E hereto,
certified as true and correct as of such date by the chief financial officer of
the Company.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which the Agent is not open to the public for carrying on
substantially all of its banking functions, and if an applicable Business Day
relates to a Eurodollar Rate Loan or Eurodollar Interest Period, a day which is
also a day on which dealings in Dollar deposits are carried out in the relevant
interbank market.
"Capital Lease" of any person shall mean any lease which, in
accordance with generally accepted accounting principles, is or should be
capitalized on the books of such person.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations thereunder.
"Commitments" shall mean the Revolving Credit Commitments and the
Term Loan Commitments; and "Commitment" shall mean any one of such Commitments.
"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or more
persons of the amounts signified by such term for all such persons determined on
a consolidated basis in accordance with generally accepted accounting
principles.
"Contingent Liabilities" of any person shall mean, as of any date,
all obligations of such person or of others for which such person is
contingently liable, as obligor, guarantor, surety or in any other capacity, or
in respect of which obligations such person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business),
including without limitation all reimbursement obligations of such person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such person to advance funds to, or to purchase assets, property
or services from, any other person in order to maintain the financial condition
of such other person; provided that "Contingent Liabilities" of any person shall
not include (a) contingent obligations of such person to the extent such
contingent obligations do not exceed related direct liabilities of such person
reflected in the financial statements of such person and permitted under the
terms of this Agreement, and such contingent obligations shall terminate upon
payment of such direct liabilities, e.g., reimbursement obligations of such
person in respect of financial letters of credit issued for the account of such
person to secure trade payables of such person or performance of contracts for
which such person has received advance payment, or (b) reimbursement obligations
of such person in respect of letters of credit issued for the account of
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such person to secure performance and warranty obligations of such person
arising in the ordinary course of business.
"Cumulative Net Income" of any person shall mean, as of any date
(the "Determination Date"), the net income of such person (after deduction for
income and other taxes of such person determined by reference to income or
profits of such person) for the period (the "Relevant Period") after the
specified date until the Determination Date (but without reduction for any net
loss incurred for any fiscal year or shorter period during the Relevant Period),
taken as one accounting period, all as determined in accordance with generally
accepted accounting principles.
"Current Assets" and "Current Liabilities" of any person shall mean,
as of any date, all assets or liabilities, respectively, of such person which,
in accordance with generally accepted accounting principles, should be
classified as current assets or current liabilities, respectively, on a balance
sheet of such person.
"Default" shall mean any of the events or conditions described in
Section 6.1 which might become an Event of Default with notice or lapse of time
or both.
"Dollars" and "$" shall mean the lawful money of the United States
of America.
"EBIT" of any person shall mean, for any period, the net income
(after deduction for income taxes and other taxes of such person determined by
reference to income or profits of such person) for such period plus, to the
extent deducted in computation of such net income, (a) the Interest Expense of
such person for such period and (b) income taxes and other taxes of such person
determined by reference to income or profits of such person.
"Effective Date" shall mean the effective date specified in the
final paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date, those
trade accounts receivable owned by the Company which are payable in Dollars
valued at the face amount thereof less sales, excise or similar taxes and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed, but shall not include
any such account receivable (a) that is not a bona fide existing obligation
created by the sale of inventory, goods or other property or the furnishing of
services or other good and sufficient consideration to customers of the Company
in the ordinary course of business, (b) that is more than 90 days past due or
that remains outstanding more than 90 days after the earlier of the date of the
invoice or the final shipment of the related inventory, goods or other property
at project completion or the furnishing of the related services or other
consideration, (c) to the extent that such receivable is subject to any dispute,
contra-account, defense, offset or counterclaim or any Lien, or the inventory,
goods, property, services or other consideration of which such account
receivable constitutes proceeds is subject to any such Lien, (d) in respect of
which the inventory, goods, property, services or other consideration have been
rejected or the amount is in dispute, (e) that is due from any Affiliate or
Subsidiary of the Company, (f) that has been classified by the Company as
doubtful or has otherwise failed to
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meet established or customary credit standards of the Company, (g) that is
payable by any person as to which 50% or more of the aggregate amount of such
accounts receivable payable by such person to the Company do not otherwise
constitute Eligible Accounts Receivable, (h) that is payable by any person that
is the subject of any proceeding seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of
debtors or seeking the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property, or that is
not generally paying its debts as they become due or has admitted in writing its
inability to pay its debts generally or has made a general assignment for the
benefit of creditors, (i) that is evidenced by a promissory note or other
instrument, (j) that is subordinate or junior in right or priority of payment to
any other obligation or claim, or (k) that for any other reason is at any time
reasonably deemed by the Agent to be ineligible.
"Eligible Inventory" shall mean, as of any date, that inventory
owned by the Company that constitutes raw materials, work-in-process or finished
goods, valued at the lower of cost or market on a FIFO basis, but shall not
include any such inventory (a) that does not constitute finished goods or raw
materials readily salable or usable in the business of the Company or
work-in-process, (b) that is located outside the United States (which shall not
be deemed to include any territories of the United States), (c) that is subject
to, or any accounts or other proceeds resulting from the sale or other
disposition thereof will be subject to, any Lien, including any sale on approval
or sale or return transaction or any consignment, (d) that is not in the
possession of the Company, except for inventory owned by the Company that is on
consignment at independent dealer locations and the book value of which on a
FIFO basis does not exceed $2,000,000 in the aggregate, (e) that is held for
lease or is the subject of any lease, (f) that is subject to any trademark,
trade name or licensing arrangement, or any law, rule or regulation, that could
limit or impair the ability of a person holding a Lien on such inventory to
promptly exercise all rights of such lienholder, (g) if such inventory is
located on premises not owned by the Company, or (h) that for any other reason
is at any time reasonably deemed by the Agent to be ineligible.
"Environmental Certificate" shall mean an Environmental Certificate
in substantially the form annexed hereto as Exhibit F.
"Environmental Laws" at any date shall mean all provisions of law,
statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any person, any trade
or business
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(whether or not incorporated) which, together with such person or any Subsidiary
of such person, would be treated as a single employer under Section 414 of the
Code.
"Eurodollar Interest Period" shall mean, with respect to any
Eurodollar Rate Loan, the period commencing on the day such Eurodollar Rate Loan
is made or converted to a Eurodollar Rate Loan and ending on the date one, two
or three months thereafter, as the Company may elect under Article II, and, with
respect to any continuation of such Loan as a Eurodollar Rate Loan, each
subsequent period commencing on the last day of the immediately preceding
Eurodollar Interest Period and ending on the date one, two or three months
thereafter, as the Company may elect under Article II, provided, however, that
(a) any Eurodollar Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month, (b) each Eurodollar Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business Day,
and (c) no Eurodollar Interest Period which would end after the Maturity Date
(or the Termination Date with respect to any Revolving Credit Loans) shall be
permitted.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Rate
Loan and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) the Applicable Eurodollar Rate Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate
of the interest at which deposits in Dollars for such Eurodollar Interest Period
and in an aggregate amount comparable to the amount of such Eurodollar Rate Loan
are offered to the Agent by other prime banks in the London interbank market,
selected in the Agent's discretion, at approximately 11:00 a.m. London time on
the second Eurodollar Business Day prior to the first day of such Eurodollar
Interest Period by (ii) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is specified on the first day of such Eurodollar Interest Period by the
Board of Governors of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"Eurodollar Rate Loan" shall mean any Loan which bears interest at
the Eurodollar Rate.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
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"Federal Funds Rate" shall mean the per annum rate established and
announced by the Agent from time to time as the opening federal funds rate paid
by the Agent in its regional federal funds market for overnight borrowings from
other banks, which Federal Funds Rate shall change simultaneously with any
change in such announced rate.
"Fifth Third Borrowings" shall mean, as of any date, the aggregate
outstanding principal amount of Indebtedness of the Company to The Fifth Third
Bank.
"Fixed Rate Loan" shall mean any Eurodollar Rate Loan or Negotiated
Rate Loan.
"Floating Rate" shall mean the per annum rate equal to the sum of
(a) the Applicable Floating Rate Margin, plus (b) the greater of (i) the Prime
Rate in effect from time to time or (ii) the sum of one percent (1%) per annum
plus the Federal Funds Rate in effect from time to time; which Floating Rate
shall change simultaneously with any change in such Prime Rate or Federal Funds
Rate, as the case may be.
"Floating Rate Loan" shall mean any Loan which bears interest at the
Floating Rate.
"Generally accepted accounting principles" shall mean generally
accepted accounting principles applied on a basis consistent with that reflected
in the financial statements referred to in Section 4.6.
"Indebtedness" of any person shall mean, as of any date, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such person whether or not the
obligation secured thereby shall have been assumed by such person, (d) the
unpaid purchase price for goods, property or services acquired by such person,
except for trade accounts payable arising in the ordinary course of business
that are not past due, (e) all obligations of such person to purchase goods,
property or services where payment therefor is required regardless of whether
delivery of such goods or property or the performance of such services is ever
made or tendered (generally referred to as "take or pay contracts"), (f) all
liabilities of such person in respect of Unfunded Benefit Liabilities under any
plan of such person or of any member of a controlled group (as that term is
defined in the Code) of which such person is a member, (g) all obligations of
such person in respect of any interest rate or currency swap, rate cap or other
similar transaction (valued in an amount equal to the highest termination
payment, if any, that would be payable by such person upon termination for any
reason on the date of determination), and (h) all obligations of others similar
in character to those described in clauses (a) through (g) of this definition
for which such person is contingently liable, as obligor, guarantor, surety or
in any other capacity, or in respect of which obligations such person assures a
creditor against loss or agrees to take any action to prevent any such loss
(other than endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all reimbursement
obligations of such person in respect of letters of credit, surety bonds or
similar obligations and all obligations of such person to advance funds to, or
to purchase assets, property or services from, any other person in order to
maintain the financial condition of such other person.
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"Interest Expense" of any person shall mean, for any period, the
interest expense of such person for such period determined in accordance with
generally accepted accounting principles.
"Interest Payment Date" shall mean (a) with respect to any Fixed
Rate Loan, the last day of each Interest Period with respect to such Fixed Rate
Loan and, in the case of any Interest Period exceeding three months or ninety
days, as the case may be, those days that occur during such Interest Period at
intervals of three months or ninety days, as the case may be, after the first
day of such Interest Period, and (b) in all other cases, the last Business Day
of each March, June, September and December occurring after the date hereof,
commencing with the first such Business Day occurring after the date of this
Agreement.
"Interest Period" shall mean any Eurodollar Interest Period or
Negotiated Interest Period.
"Letter of Credit" shall mean a standby letter of credit issued by
the Agent on behalf of the Banks for the account of the Company under an
application and related documentation acceptable to the Agent requiring, among
other things, immediate reimbursement by the Company to the Agent in respect of
all drafts or other demand for payment honored thereunder and all expenses paid
or incurred by the Agent relative thereto.
"Letter of Credit Advance" shall mean any issuance of a Letter of
Credit under Section 2.4 made pursuant to Section 2.1(a) in which each Bank
acquires a pro rata risk participation pursuant to Section 2.4(e).
"Letter of Credit Documents" shall have the meaning ascribed thereto
in Section 3.9(b).
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any lease, subordination of any claim or
right, or any other type of lien, charge, encumbrance, preferential arrangement
or other similar claim or right.
"Loan" shall mean any Revolving Credit Loan or the Term Loan or any
portion of any Revolving Credit Loan or the Term Loan. Any such Loan may also be
denominated as a Floating Rate Loan or a Fixed Rate Loan (which may be further
denominated as a Eurodollar Rate Loan or Negotiated Rate Loan) and such Floating
Rate Loans and Fixed Rate Loans (including such Eurodollar Rate Loans and
Negotiated Rate Loans) are referred to herein as "types" of Loans.
"Maturity Date" shall mean with respect to the Term Loan, the second
anniversary of the date the Term Loan is made, which in any event shall be no
later than May 29, 2003.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined
in Section
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4001(a)(3) of ERISA or Section 414(f) of the Code.
"Negotiated Rate" shall mean, with respect to any Negotiated Rate
Loan, the rate per annum offered by the Banks in their sole discretion for such
Negotiated Rate Loan and accepted by the Company at the time such Negotiated
Rate Loan is made.
"Negotiated Interest Period" shall mean, with respect to any
Negotiated Rate Loan, the period commencing on the day such Negotiated Rate Loan
is made or converted to a Negotiated Rate Loan and ending on the date agreed
upon between the Company and the Banks at the time such Negotiated Rate Loan is
made, provided, however, that no Negotiated Interest Period which would end
after the Maturity Date (or the Termination Date with respect to any Revolving
Credit Loans) shall be permitted.
"Negotiated Rate Loan" shall mean any Loan which bears interest at
the Negotiated Rate.
"Net Income" of any person shall mean the net income of such person
(after deduction for income and other taxes of such person determined by
reference to income or profits of such person).
"Notes" shall mean the Revolving Credit Notes and the Term Notes;
and "Note" shall mean any one of the Notes.
"Overdue Rate" shall mean (a) in respect of principal of Floating
Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans, a
rate per annum that is equal to the sum of three percent (3%) per annum plus the
per annum rate in effect thereon until the end of the then current Interest
Period for such Loan and, thereafter, a rate per annum that is equal to the sum
of three percent (3%) per annum plus the Floating Rate, and (c) in respect of
other amounts payable by the Company hereunder (other than interest), a per
annum rate that is equal to the sum of three percent (3%) per annum plus the
Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean Liens permitted by Section 5.2(d)
hereof.
"Person" or person" shall include an individual, a corporation, an
association, a partnership, a trust or estate, a joint stock company, an
unincorporated organization, a joint venture, a trade or business (whether or
not incorporated), a government (foreign or domestic) and any agency or
political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any person, any pension plan
(other than a Multiemployer Plan) subject to Title IV of ERISA or to the minimum
funding standards of Section 412 of the Code which has been established or
maintained by such person, any Subsidiary of such person or any ERISA Affiliate,
or by any other person if such person, any
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Subsidiary of such person or any ERISA Affiliate could have liability with
respect to such pension plan.
"Prime Rate" shall mean the per annum rate announced by the Agent
from time to time as its "prime rate" (it being acknowledged that such announced
rate may not necessarily be the lowest rate charged by the Agent to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
"Prohibited Transaction" shall mean any transaction involving any
Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Pro Rata Share" shall mean, with respect to each Bank and any
amount, the portion of such amount that bears the same relation to the whole of
such amount as the amount of such Bank's outstanding Revolving Credit Advances
bears to the aggregate amount of the outstanding Revolving Credit Advances of
all the Banks (or, if no Revolving Credit Advances are outstanding, as the
amount of such Bank's Revolving Credit Commitment bears to the aggregate
Revolving Credit Commitment of all the Banks).
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"Required Banks" shall mean Banks holding not less than (i) one
hundred percent (100%) of the Advances then outstanding or (ii) one hundred
percent (100%) of the Revolving Credit Commitments if no Advances are then
outstanding.
"Revolving Credit Advance" shall mean any Revolving Credit Loan and
any Letter of Credit Advance.
"Revolving Credit Commitment" shall mean, with respect to each Bank,
the commitment of each such Bank to make Revolving Credit Loans and to
participate in Letter of Credit Advances made through the Agent pursuant to
Section 2.1(a) in amounts not exceeding in aggregate principal amount
outstanding at any time the respective commitment amount for each such Bank set
forth next to the name of each such Bank in the signature pages hereof, as such
amounts may be reduced from time to time pursuant to Section 2.2.
"Revolving Credit Loan" shall mean any borrowing under Section 2.4
other than the Term Loan.
"Revolving Credit Note" shall mean any promissory note of the
Company evidencing the Revolving Credit Loans, in substantially the form annexed
hereto as Exhibit A-1, as amended or modified from time to time and together
with any promissory note or notes issued in exchange or replacement therefor.
"Star Bank" shall mean Star Bank, N.A., a national banking
association.
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"Subsidiary" of any person shall mean any other person (whether now
existing or hereafter organized or acquired) in which (other than directors
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such person or by one or more of the other Subsidiaries of such
person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" shall mean a Subsidiary of the Company.
"Tangible Net Worth" of any person shall mean, as of any date, (a)
the amount of any capital stock, paid in capital and similar equity accounts
plus (or minus in the case of a deficit) the capital surplus and retained
earnings of such person and the amount of any foreign currency translation
adjustment account shown as a capital account of such person, less (b) the net
book value of all items of the following character which are included in the
assets of such person: (i) goodwill, including without limitation, the excess of
cost over book value of any asset, (ii) organization expenses, (iii) unamortized
debt discount and expense, (iv) patents, trademarks, trade names and copyrights,
(v) treasury stock (to the extent not already deducted in such equity accounts),
(vi) franchises, licenses and permits, and (vii) other assets which are deemed
intangible assets under generally accepted accounting principles.
"Term Loan" shall mean the borrowing under Section 2.4 evidenced by
the Term Notes.
"Term Loan Commitment" shall mean, with respect to each Bank, the
commitment of each such Bank to make the Term Loan pursuant to Section 2.1(b).
"Term Note" shall mean any promissory note of the Company evidencing
the Term Loan, in substantially the form annexed hereto as Exhibit A-2, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"Termination Date" shall mean the earliest to occur of (a) May 29,
2001 and (b) the date on which the Commitments shall be terminated pursuant to
Section 2.2 or 6.2.
"Total Liabilities" of any person shall mean, as of any date, all
obligations which, in accordance with generally accepted accounting principles,
are or should be classified as liabilities on a balance sheet of such person and
all Contingent Liabilities of such person.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan
as of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.
1.2 Other Definitions: Rules of Construction. As used herein, the
terms "Agent", "Bank", "Banks", "Company", "NBD", "1995 Credit Agreement" and
"this Agreement" shall have the respective meanings ascribed thereto in the
introductory paragraphs of this Agreement. Such terms, together with the other
terms defined in Section 1.1, shall include both
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the singular and the plural forms thereof and shall be construed accordingly.
All computations required hereunder and all financial terms used herein shall be
made or construed in accordance with generally accepted accounting principles
unless such principles are inconsistent with the express requirements of this
Agreement. Use of the terms "herein", "hereof", and "hereunder" shall be deemed
references to this Agreement in its entirety and not to the Section or clause in
which such term appears. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
ARTICLE II.
THE COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Banks.
(a) Revolving Credit Commitment. Each Bank agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Revolving Credit
Loans to the Company under Section 2.4 and 3.9 and to participate in Letter of
Credit Advances to the Company pursuant to Section 2.4, from time to time from
the Effective Date to but excluding the Termination Date, in an aggregate
principal amount outstanding not to exceed the lesser of (i) the amount of such
Bank's Revolving Credit Commitment, as such amount may be reduced from time to
time pursuant to Section 2.2, and (ii) such Bank's Pro Rata Share of the
Borrowing Base; provided, however, that the aggregate principal amount of Letter
of Credit Advances outstanding at any time shall not exceed $[5,000,000].
(b) Term Loan Commitment. Each Bank, for itself only, further
agrees, subject to the terms and conditions of this Agreement, to make its Pro
Rata Share of a single Term Loan to the Company on the Termination Date in an
amount not exceeding the Dollar Equivalent of the aggregate principal amount of
the Revolving Credit Loans outstanding on the Termination Date.
2.2 Termination and Reduction of Revolving Credit Commitments. (a)
The Company shall have the right to terminate or reduce the Revolving Credit
Commitments at any time and from time to time at its option, provided that (i)
the Company shall give notice of such termination or reduction to the Agent
(with sufficient executed copies for each Bank) specifying the amount and
effective date thereof, (ii) each partial reduction of the Revolving Credit
Commitments shall be in a minimum amount of $1,000,000 and in an integral
multiple of $100,000 and shall reduce the Commitments of all of the Banks
proportionately in accordance with their Pro Rata Shares, (iii) no such
termination or reduction shall be permitted with respect to any portion of the
Revolving Credit Commitments as to which a request for a Revolving Credit
Advance pursuant to Section 2.4 is then pending, and (iv) the Revolving Credit
Commitments may not be terminated if any Revolving Credit Advances are then
outstanding and may not be reduced below the principal amount of the Revolving
Credit Advances then outstanding. The Revolving Credit Commitments or any
portion thereof terminated or reduced pursuant to this Section 2.2 may not be
reinstated.
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(b) For purposes of this Agreement, a Letter of Credit Advance (i)
shall be deemed outstanding in an amount equal to the sum of the maximum amount
available to be drawn under the related Letter of Credit on or after the date of
determination and on or before the stated expiry date thereof plus the amount of
any draws under such Letter of Credit that have not been reimbursed as provided
in Section 3.9 and (ii) shall be deemed outstanding at all times on and before
such stated expiry date or such earlier date on which all amounts available to
be drawn under such Letter of Credit have been fully drawn, and thereafter until
all related reimbursement obligations have been paid pursuant to Section 3.9. As
provided in Section 3.9, upon each payment made by the Agent in respect of any
draft or other demand for payment under any Letter of Credit, the amount of any
Letter of Credit Advance outstanding immediately prior to such payment shall be
automatically reduced by the amount of each Revolving Credit Loan deemed
advanced in respect of the related reimbursement obligation of the Company.
2.3 Fees.
(a) Commitment Fee. The Company agrees to pay to each Bank a
commitment fee on the daily average unused amount of such Bank's Revolving
Credit Commitment for each month or portion thereof during the period from the
Effective Date to but excluding the Termination Date, at a rate equal to the
Applicable Commitment Fee Rate for such month. Accrued commitment fees shall be
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing on the first such Business Day occurring
after the date of this Agreement, and on the Termination Date.
(b) Agency Fee. The Company further agrees to pay to the Agent a fee
for its services as Agent under this Agreement in the amount of $10,000 per
annum, payable quarterly in arrears on the last Business Day of each March,
June, September an December, commencing on the first such day occurring after
the date of this Agreement.
(c) Letter of Credit Fees. On or before the date of issuance of any
Letter of Credit, the Company agrees to pay to the Banks a fee, computed at the
Applicable L/C Fee Rate for the month during which such Letter of Credit is
issued, of the maximum amount available to be drawn form time to time under such
Letter of Credit for the period from and including the date of issuance of such
Letter of Credit to and including the stated expiry date of such Letter of
Credit. Such fees are nonrefundable and the Company shall not be entitled to any
rebate of any portion thereof if such Letter of Credit does not remain
outstanding through its stated expiry date or for any other reason. The Company
further agrees to pay to the Agent, on demand, such other customary
administrative fees, charges and expenses of the Agent in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of each such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
2.4 Disbursement of Advances.
(a) Requests for Advances. The Company shall give the Agent notice
of its request for each Loan in substantially the form of Exhibit B hereto not
later than (i) 10:00 a.m. Indianapolis time three Business Days prior to the
date such Loan is requested to be made if such
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Loan is to be made as a Eurodollar Rate Loan, (ii) 10:00 a.m. Indianapolis time
one Business Day prior to the date such Loan is requested to be made if such
Loan is to be made as a Negotiated Rate Loan, and (iii) 11:00 a.m. Indianapolis
time on the date such Loan is requested to be made if such Loan is to be made as
a Floating Rate Loan. The Company shall give the Agent notice of its request for
each Letter of Credit Advance in substantially the form of Exhibit B hereto not
later than 10:00 a.m. Indianapolis time five Business Days prior to the date any
Letter of Credit Advance is requested to be made. Each such notice shall specify
whether a Eurodollar Rate Loan, Negotiated Rate Loan or Floating Rate Loan or
Letter of Credit Advance is requested and, in the case of each requested Fixed
Rate Loan, the Interest Period to be initially applicable to such Loan and, in
the case of each Letter of Credit Advance, such information as may be necessary
for the issuance thereof by the Agent. The Agent shall promptly provide notice
of each such requested Advance to each Bank. Subject to the terms and conditions
of this Agreement, the proceeds of each such requested Loan shall be made
available to the Company by depositing the proceeds thereof, in immediately
available funds, in an account maintained and designated by the Company at the
principal office of the Agent; provided, however, that the proceeds of the Term
Loan shall be applied to the outstanding principal amount of and accrued
Interest on the Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, the Agent shall, on the date any Letter of Credit is requested
to be made, issue the related Letter of Credit on behalf of the Banks for the
account of the Company. Notwithstanding anything herein to the contrary, the
Agent may decline to issue any requested Letter of Credit on the basis that the
beneficiary, the purpose of issuance or the terms or the conditions of drawing
are unacceptable to it in its discretion.
(b) Currencies and Interest Rates. Subject to the terms and
conditions of this Agreement, the Term Loan shall be in Dollars, each Revolving
Credit Loan shall be in Dollars, and each Letter of Credit Advance shall be in
Dollars. All Loans shall bear interest at the Eurodollar Rate, Floating Rate or
Negotiated Rate.
(c) Pro Rata Shares. Each Bank, on the date any Loan is requested to
be made, shall make its Pro Rata Share of such Loan available in immediately
available funds for disbursement to the Company pursuant to the terms and
conditions of this Agreement at the principal office of the Agent. Unless the
Agent shall have received notice from any Bank prior to the date such Loan is
requested to be made under this Section 2.4 that such Bank will not make
available to the Agent such Bank's pro rata portion of such Loan, the Agent may
assume that such Bank has made such portion available to the Agent on the date
such Loan is requested to be made in accordance with this Section 2.4. If and to
the extent such Bank shall not have so made such pro rata portion available to
the Agent, the Agent may (but shall not be obligated to) make such amount
available to the Company, and such Bank and the Company severally agree to pay
to the Agent forthwith on demand such amount together with interest thereon, for
each day from the date such amount is made available to the Company by the Agent
until the date such amount is repaid to the Agent, at a rate per annum equal to
the interest rate applicable to such Loan during such period. If such Bank shall
pay such amount to the Agent together with interest, such amount so paid shall
constitute a Loan by such Bank as a part of such the related Loan for purposes
of this Agreement. The failure of any Bank to make its pro rata portion of any
such Loan available to the Agent shall not relieve any other Bank of its
obligations to make available its pro rata portion of such Loan on the date such
Loan is requested to be made, but no Bank
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shall be responsible for failure of any other Bank to make such pro rata portion
available to the Agent on the date of any such Loan.
(d) The Notes. All Revolving Credit Loans made under this Section
2.4 shall be evidenced by the Revolving Credit Notes in the aggregate nominal
amount of $15,000,000, and the Term Loan made under this Section 2.4 shall be
evidenced by the Term Notes, and all such Loans shall be due and payable and
bear interest as provided in Article III. Each Bank is hereby authorized by the
Company to record on the schedule attached to its Revolving Credit Note and Term
Note, or in its books and records, the date, and amount and type of each Loan
and the duration of the related Interest Period (if applicable), the amount of
each payment or prepayment of principal thereon, and the other information
provided for on such schedule, which schedule or books and records, as the case
may be, shall constitute prima facie evidence of the information so recorded,
provided, however, that failure of any Bank to record, or any error in
recording, any such information shall not relieve the Company of its obligation
to repay the outstanding principal amount of the Loans, all accrued interest
thereon and other amounts payable with respect thereto in accordance with the
terms of the Notes and this Agreement. Subject to the terms and conditions of
this Agreement, the Company may borrow Revolving Credit Loans under this Section
2.4, prepay Revolving Credit Loans and the Term Loan pursuant to Section 3.1 and
reborrow Revolving Credit Loans, but not the Term Loan, under this Section 2.4.
(e) Participation in Letters of Credit. Nothing in this Agreement
shall be construed to require or authorize any Bank to issue any Letter of
Credit, it being recognized that the Agent has the sole obligation under this
Agreement to issue Letters of Credit on behalf of the Banks, and the Revolving
Credit Commitment of each Bank with respect to Letter of Credit Advances is
expressly conditioned upon the Agent's performance of such obligations. Upon
such issuance by the Agent, each Bank shall automatically acquire a pro rata
risk participation interest in such Letter of Credit Advance based on the amount
of its respective Revolving Credit Commitment. If the Agent shall honor a draft
or other demand for payment presented or made under any Letter of Credit, the
Agent shall provide notice thereof to each Bank on the date such draft or demand
is honored unless the Company shall have satisfied its reimbursement obligation
under Section 3.9 by payment to the Agent on such date. Each Bank, on such date,
shall make its pro rata share of the amount paid by the Agent available in
immediately available funds at the principal office of the Agent for the account
of the Agent. If and to the extent such Bank shall not have made such pro rata
portion available to the Agent, such Bank and the Company severally agree to pay
to the Agent forthwith on demand such amount together with interest thereon, for
each day from the date such amount was paid by the Agent until such amount is so
made available to the Agent at a per annum rate equal to the Federal Funds Rate.
If such Bank shall pay such amount to the Agent together with such interest,
such amount so paid shall constitute a Revolving Credit Loan by such Bank as
part of the borrowing of Revolving Credit Loans disbursed in respect of the
reimbursement obligation of the Company under Section 3.9 for purposes of this
Agreement. The failure of any Bank to make its pro rata portion of any such
amount paid by the Agent available to the Agent shall not relieve any other Bank
of its obligation to make available its pro rata portion of such amount, but no
Bank shall be responsible for failure of any other Bank to make such pro rata
portion available to the Agent.
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2.5 Conditions for First Disbursement. The obligation of the Banks
to make the first Advance hereunder is subject to receipt by each Bank and the
Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Bank and the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the Company's state of incorporation
listing all charter documents of the Company on file in that office and
certifying as to the good standing and corporate existence of the Company,
together with copies of such charter documents of the Company, certified as of a
recent date by such authority or official and certified as true and correct as
of the Effective Date by a duly authorized officer of the Company; or bring-down
certifications by such an officer with respect to such items previously
delivered by the Company to NBD;
(b) Code of Regulations and Corporate Authorizations. Copies of the
code of regulations of the Company together with all authorizing resolutions and
evidence of other corporate action taken by the Company to authorize the
execution, delivery and performance by the Company of this Agreement and the
Notes and the consummation by the Company of the transactions contemplated
hereby, certified as true and correct as of the Effective Date by a duly
authorized officer of the Company; or bring-down certifications by such officer
with respect to such items previously delivered by the Company to NBD;
(c) Incumbency Certificate. A certificate of incumbency of the
Company containing, and attesting to the genuineness of, the signatures of those
officers authorized to act on behalf of the Company in connection with this
Agreement and the Notes and the consummation by the Company of the transactions
contemplated hereby, certified as true and correct as of the Effective Date by a
duly authorized officer of the Company:
(d) Revolving Credit Notes. A Revolving Credit Note duly completed
and executed on behalf of the Company for each Bank:
(e) Legal Opinion. The favorable written opinion of Xxxxxxxx, Xxxx
and Xxxxx, counsel for the Company, in substantially the form of Exhibit C
hereto;
(f) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of the Company in connection with the
execution, delivery and performance of this Agreement, the Notes, or the
transactions contemplated hereby or as a condition to the legality, validity or
enforceability of this Agreement or the Notes, certified as true and correct and
in full force and effect as of the Effective Date by a duly authorized officer
of the Company, or, if none is required, a certificate of such officer to that
effect; and
(g) Other Loan Documents. The Environmental Certificate and such
other instruments and documents, duly executed by the Company, deemed necessary,
customary or appropriate by the Agent in its sole discretion, to properly
document any Loans or other obligations hereunder.
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2.6 Further Conditions for Disbursement. The obligation of the Banks
to make any Advance (including the first Advance), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof shall be true and correct on and as of the date such Advance is made or
the date of such continuation or conversion (both before and after such Advance
is made or such continuation or conversion is done) as if such representations
and warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Advance is made or the date of such
continuation or conversion (whether before or after such Advance is made or such
continuation or conversion is done);
(c) In the case of the Term Loan, the Company shall have delivered
to each Bank a Term Note in the principal amount of such Bank's Pro Rata Share
of the Term Loan, appropriately completed and duly executed on behalf of the
Company;
(d) The Agent shall have received the most recent Borrowing Base
Certificate required pursuant to Section 5.1(d)(iv); and
(e) In the case of any Letter of Credit Advance, the Company shall
have delivered to the Agent an application for the related Letter of Credit and
other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of the Company.
The Company shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Advance to the effects set forth in clauses (a) and (b) of this Section 2.6. For
purposes of this Section 2.6, the representations and warranties contained in
Section 4.6 hereof shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
delivered pursuant to Section 5.1.
2.7 Subsequent Elections as to Loans. Notwithstanding any provision
of this Agreement to the contrary, the Company may elect to continue or convert
any Negotiated Rate Loan only with the prior consent of each Bank. Subject to
the foregoing, the Company may elect (a) to continue a Fixed Rate Loan of one
type, or a portion thereof, as a Fixed Rate Loan of the then existing type or
(b) to convert a Fixed Rate Loan of one type, or a portion thereof, to a Loan of
another type or (c) to convert a Floating Rate Loan, or a portion thereof, to a
Fixed Rate Loan, in each case by giving notice thereof to the Agent (with
sufficient executed copies for each Bank) in substantially the form of Exhibit D
hereto not later than (i) 10:00 a.m. Indianapolis time three Business Days prior
to the date any such continuation of or conversion to a Eurodollar Rate Loan is
to be effective, (ii) 10:00 a.m. Indianapolis time one Business Day prior to the
date any such continuation of or conversion to a Negotiated Rate Loan is to be
effective and (iii) 2:00 p.m. Indianapolis time on the date any such
continuation or conversion is to be effective in all other cases; provided that
an outstanding Fixed Rate Loan may only be converted on the last day of the then
current Interest Period with respect to such Loan, and provided, further, if a
continuation of
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a Loan as, or a conversion of a Loan to, a Eurodollar Rate Loan is requested,
such notice shall also specify the Interest Period to be applicable thereto upon
such continuation or conversion. The Agent shall promptly provide notice of such
election to the Banks. If the Company shall not timely deliver such a notice
with respect to any outstanding Fixed Rate Loan, the Company shall be deemed to
have elected to convert such Fixed Rate Loan to a Floating Rate Loan on the last
day of the then current Interest Period with respect to such Loan.
2.8 Limitation of Requests and Elections. (a) Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a request
for a Fixed Rate Loan pursuant to Section 2.4, or a request for a continuation
of a Fixed Rate Loan as a Fixed Rate Loan of the then existing type, or a
request for conversion of a Fixed Rate Loan of one type to a Fixed Rate Loan of
another type, or a request for a conversion of a Floating Rate Loan to a Fixed
Rate Loan pursuant to Section 2.7, (i) in the case of any Eurodollar Rate Loan,
deposits in Dollars for periods comparable to the Interest Period elected by the
Company are not available to any Bank in the relevant interbank market, or (ii)
the Eurodollar Rate will not adequately and fairly reflect the cost to any Bank
of making, funding or maintaining the related Eurodollar Rate Loan, or (iii) by
reason of national or international financial, political or economic conditions
or by reason of any applicable law, treaty, rule or regulation (whether domestic
or foreign) now or hereafter in effect, or the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank with any guideline, request or
directive of such authority (whether or not having the force of law), including
without limitation exchange controls, it is impracticable, unlawful or
impossible for any Bank (A) to make or fund the relevant Fixed Rate Loan or (B)
to continue such Fixed Rate Loan as a Fixed Rate Loan of the then existing type
or (C) to convert a Loan to such a Fixed Rate Loan, then the Company shall not
be entitled, so long as such circumstances continue, to request a Fixed Rate
Loan of the affected type pursuant to Section 2.4 or a continuation of or
conversion to a Fixed Rate Loan of the affected type pursuant to Section 2.7. In
the event that such circumstances no longer exist, the Banks shall again
consider requests or Fixed Rate Loans of the affected type pursuant to Section
2.4, and requests for continuations of and conversions to Fixed Rate Loans of
the affected type pursuant to Section 2.7.
(b) Notwithstanding any other provision of this Agreement to the
contrary and in order to give effect to the provisions of Section 3.1(b), the
Company shall make requests for Fixed Rate Loans pursuant to Section 2.4, and
requests for continuations of and conversions to Fixed Rate Loans pursuant to
Section 2.7, such that, on each date that any scheduled principal payment is due
with respect to the Term Loan pursuant to Section 3.1(a), either Floating Rate
Loans, or Fixed Rate Loans having an Interest Period ending on such date, or any
combination thereof, are outstanding on such date in an aggregate outstanding
principal amount not less than the amount of such principal payment.
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2.9 Minimum Amounts; Limitations on Advances. Except for conversions
or payments required pursuant to Section 3.1(c) or 3.7, each Fixed Rate Loan and
each continuation of or conversion to a Fixed Rate Loan pursuant to Section 2.7
and each prepayment thereof shall be in a minimum amount of $1,000,000 and in an
integral multiple of $100,000 (or, in the case of the Term Loan, in integral
multiples of the quarterly installments of, principal thereon). Each Letter of
Credit Advance shall be in a minimum amount of $100,000. No Letter of Credit
shall have a stated expiry date earlier than 90 days after the date of issuance
or later than the fifth Business Day before the Termination Date.
Notwithstanding anything in this Agreement to contrary, the Company shall not be
permitted to request that any Letter of Credit Advance be denominated in a
currency other than Dollars.
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement (i) the
Company shall pay to the Banks on the Termination Date the entire outstanding
principal amount of all Revolving Credit Loans, and (ii) the Company shall pay
to the Banks the outstanding principal amount of the Term Loan in eight (8)
equal quarterly installments, each in the amount of one eighth (1/8) of the
original principal amount of the Term Loan, payable on the last day of each
March, June, September and December, commencing on the first such day occurring
after the date the Term Loan is made, to and including the Maturity Date, when
the entire outstanding principal amount of the Term Loan shall be due and
payable.
(b) The Company may at any time and from time to time prepay all or
a portion of the Loans, without premium or penalty in the case of the Revolving
Credit Loans, provided that (i) the Company may not prepay any portion of any
Loan as to which an election for a continuation of or a conversion to a Fixed
Rate Loan is pending pursuant to Section 2.7, (ii) unless earlier payment is
required under this Agreement, any Fixed Rate Loan may only be prepaid on the
last day of the then current Interest Period with respect to such Loan, and
(iii) such prepayment of the Term Loan shall only be permitted if the Company
shall have given not less than two Business Days' notice thereof specifying the
Term Loan or portion thereof to be so prepaid and shall have paid to the Banks,
together with such prepayment of principal, all accrued interest to the date of
payment on the Term Loan or portion thereof so prepaid and all amounts owing, to
the Banks under Section 3.8 in connection with such prepayment. Upon the giving
of such notice, the aggregate principal amount of the Term Loan or portion
thereof so specified in such notice, together with such accrued interest and
other amounts, shall become due and payable on the specified prepayment date.
(c) If at any time the aggregate outstanding principal amount of the
Advances shall exceed the then Borrowing Base, the Company shall forthwith pay
to the Banks the amount of such excess for application to the outstanding
principal amount of the Loans, as selected by
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the Banks in their sole discretion (if practicable, to Loans that are Floating
Rate Loans or Fixed Rate Loans whose Interest Periods are then ending), or
provide to the Banks cash collateral in respect of outstanding Letters of Credit
in an amount, such that the aggregate amount of such payments and such cash
collateral is not less than the amount of such excess.
(d) All prepayments of the Term Loan, whether optional or mandatory,
shall be applied to installments of principal of the Term Loan in the inverse
order of their maturities and no partial prepayment of the Term Loan shall
reduce the amount or defer the date of the scheduled installments of principal
required to be paid thereon.
3.2 Interest Payments. The Company shall pay interest to the Banks
on the unpaid principal amount of each Loan, for the period commencing on the
date such Loan is made until such Loan is paid in full, on each Interest Payment
Date and at maturity (whether at stated maturity, by acceleration or otherwise),
and thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is a Floating Rate Loan, the
Floating Rate.
(b) During such periods that such Loan is a Eurodollar Rate Loan,
the Eurodollar Rate applicable to such Loan for each related Eurodollar Interest
Period.
(c) During such periods that such Loan is a Negotiated Rate Loan,
the Negotiated Rate applicable to such Loan for each related Negotiated Interest
Period.
Notwithstanding the foregoing paragraphs (a) through (c), the Company shall pay
interest on demand by the Agent at the Overdue Rate on the outstanding principal
amount of any Loan and any other amount payable by the Company hereunder (other
than interest) which is not paid in full when due (whether at stated maturity,
by acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full,
3.3 Payment Method. (a) All payments to be made by the Company
hereunder will be made in Dollars and in immediately available funds to the
Agent for the account of the Banks at its address set forth on the signature
pages hereof not later than 1:00 p.m. Indianapolis time on the date on which
such payment shall become due. Payments received after 1:00 p.m. Indianapolis
time shall be deemed to be payments made prior to 1:00 p.m. Indianapolis time on
the next succeeding Business Day. The Company hereby authorizes the Agent to
charge its account with the Agent in order to cause timely payment of amounts
due hereunder to be made (subject to sufficient funds being available in such
account for that purpose).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Advance or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion to obligations of the Company to the Banks arising under this
Agreement or otherwise.
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(c) On the date such payments are deemed received, the Agent shall
remit to the Banks their Pro Rata Shares of such payments in immediately
available funds at their respective address in the United States specified for
notices on the signature pages hereof.
3.4 No Setoff or Deduction. All payments of principal of and
interest on the Advances and other amounts payable by the Company hereunder
shall be made by the Company without setoff or counterclaim, and free and clear
of, and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority.
3.5 Payment on Non-Business Day: Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Advance or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement, including
without limitation the commitment fee under Section 2.3, shall be made on the
basis of a year of 360 days for the actual number of days elapsed, including the
first day but excluding the last day of the relevant period.
3.6 Additional Costs. In the event that any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Bank or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank or
the Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), including any risk based capital
guidelines, (a) affects or would affect the amount of capital required or
expected to be maintained by such Bank or the Agent (or any corporation
controlling such Bank or the Agent) and such Bank or the Agent determines that
the amount of such capital is increased by or based upon the existence of such
Bank's or the Agent's obligations hereunder and such increase has the effect of
reducing the rate of return on such Bank's or the Agent's (or such controlling
corporation's) capital as a consequence of such obligations hereunder to a level
below that which such Bank or the Agent (or such controlling corporation) could
have achieved but for such circumstances (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Bank or the Agent
to be material, or (b) shall affect the basis of taxation of payments to such
Bank or the Agent of any amounts payable by the Company under this Agreement
(other than taxes imposed on the overall net income of such Bank or the Agent,
by the jurisdiction, or by such political subdivision or taxing authority of any
such jurisdiction, in which such Bank or the Agent has its principal office), or
(c) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by such Bank or the Agent, or (d) shall impose any other
condition with respect to this Agreement, the Commitments, the Notes or the
Advances and, with respect to any of the foregoing clauses (b), (c) and (d), the
result is to increase the cost to such Bank or the Agent, as the case may be, of
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making, funding or maintaining any Fixed Rate Loan or Letter or Credit Advance
or to reduce the amount of any sum receivable by such Bank or the Agent, as the
case may be, thereon, then the Company shall pay to such Bank or the Agent, as
the case may be, from time to time, upon request by such Bank (with a copy of
such request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Bank or the Agent, as the case may be, (or such
controlling corporation) for any increase in the amount of capital and reduced
rate of return which such Bank or the Agent reasonably determines to be
allocable to the existence of such Bank's or the Agent's obligations hereunder
or for such increased cost or reduced sum receivable to the extent, in the case
of any Fixed Rate Loan, such Bank or the Agent is not compensated therefor in
the computation of the interest rate applicable to such Fixed Rate Loan. A
statement as to the amount of such compensation or increased cost or reduced sum
receivable, as the case may be, prepared in good faith and in reasonable detail
by such Bank or the Agent, as the case may be, and submitted by such Bank or the
Agent, as the case may be, to the Company, shall be, conclusive and binding for
all purposes absent manifest error in computation.
3.7 Illegality and Impossibility. In the event that any applicable
law, treaty, rule or regulation (whether domestic or foreign) now or hereafter
in effect and whether or not presently applicable to any Bank, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, shall
make it unlawful or impossible for any Bank to maintain any Fixed Rate Loan
under this Agreement, the Company shall upon receipt of notice thereof from such
Bank, repay in full the then outstanding principal amount of each Fixed Rate
Loan so affected, together with all accrued interest thereon to the date of
payment and all amounts owing to such Bank under Section 3.8, (a) on the last
day of the then current Interest Period applicable to such Loan if such Bank may
lawfully continue to maintain such Loan to such day, or (b) immediately if such
Bank may not continue to maintain such Loan to such day.
3.8 Indemnification. If the Company makes any payment of principal
with respect to any Fixed Rate Loan on any other date than the last day of an
Interest Period applicable thereto (whether pursuant to Section 3.1(b), Section
3.1(c), Section 3.7, Section 6.2 or otherwise), or if the Company fails to
borrow any Fixed Rate Loan after notice has been given to the Banks in
accordance with Section 2.4, or if the Company fails to make any payment of
principal or interest in respect of a Fixed Rate Loan when due, the Company
shall reimburse each Bank on demand for any resulting loss or expense incurred
by each such Bank, including without limitation any loss incurred in obtaining,
liquidating or employing deposits from third parties, whether or not such Bank
shall have funded or committed to fund such Loan. A statement as to the amount
of such loss or expense, prepared in good faith and in reasonable detail by such
Bank and submitted by such Bank to the Company, shall be conclusive and binding
for all purposes absent manifest error in computation. Calculation of all
amounts payable to such Bank under this Section 3.8 shall be made as though such
Bank shall have actually funded or committed to fund the relevant Fixed Rate
Loan through the purchase of an underlying deposit in an amount equal to the
amount of such Loan and having a maturity comparable to the related Interest
Period and, in the case of any Eurodollar Rate Loan, through the transfer of
such deposit from an off shore office of such Bank to a domestic office of such
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Bank in the United States of America; provided, however, that such Bank may fund
any Fixed Rate Loan in any manner it sees fit and the foregoing assumption shall
be utilized only for the purpose of calculation of amounts payable under this
Section 3.8.
3.9 Letter of Credit Reimbursement Payments. (a) (i) The Company
agrees to pay to the Banks, on the day on which the Agent shall honor a draft or
other demand for payment presented or made under any Letter of Credit, an amount
equal to the amount paid by the Agent in respect of such draft or other demand
under such Letter of Credit and all expenses paid or incurred by the Agent
relative thereto. Unless the Company shall have made such payment to the Banks
on such day, upon each such payment by the Agent, the Agent shall be deemed to
have disbursed to the Company, and the Company shall be deemed to have elected
to satisfy its reimbursement obligation by, a borrowing of Revolving Credit
Loans bearing interest at the Floating Rate for the account of the Banks in an
amount equal to the amount so paid by the Agent in respect of such draft or
other demand under such Letter of Credit. Such Revolving Credits Loans shall be
disbursed notwithstanding any failure to satisfy any conditions for disbursement
of any Loan set forth in Article II hereof and, to the extent of the Revolving
Credit Loans so disbursed, the reimbursement obligation of the Company under
this Section 3.9 shall be deemed satisfied; provided, however, that nothing in
this Section 3.9 shall be deemed to constitute a waiver of any Default or Event
of Default caused by the failure to satisfy the conditions for disbursement or
otherwise.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to the Company
pursuant to Section 6.1(h)), Floating Rate Loans may not be made by the Banks as
described in Section 3.9(a)(i), then (A) the Company agrees that each
reimbursement amount not paid pursuant to the first sentence of Section
3.9(a)(i) shall bear interest, payable on demand by the Agent, at the interest
rate then applicable to Floating Rate Loans, and (B) effective on the date each
such Floating Rate Loan would otherwise have been made, each Bank severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement of
loans, to the extent of such Bank's Revolving Credit Commitment, purchase a
participating interest in each reimbursement amount. Each Bank will immediately
transfer to the Agent, in same day funds, the amount of its participation. Each
Bank shall share on a pro rata basis (calculated by reference to its Revolving
Credit Commitment) in any interest which accrues thereon and in all repayments
thereof. If and to the extent that any Bank shall not have so made the amount of
such participating interest available to the Agent, such Bank and the Company
severally agree to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date of demand by the Agent until
the date such amount is paid to the Agent, at (1) in the case of the Company,
the interest rate then applicable to Floating Rate Loans and (2) in the case of
such Bank, the Federal Funds Rate.
(b) The reimbursement obligation of the Company under this Section
3.9 shall be absolute, unconditional and irrevocable and shall remain in full
force and effect until all obligations of the Company to the Banks hereunder
shall have been satisfied, and such obligations of the Company shall not be
affected, modified or impaired upon the happening of any event, including,
without limitation, any of the following, whether or not with notice to, or the
consent of, the Company:
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(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other
right which the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any persons or entities for whom any such
beneficiary or any such transferee may be acting), the Agent or any Bank or any
other person or entity, whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or therein or any unrelated
transactions;
(iv) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(v) Payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply with the terms
of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of the
Agent or any Bank or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Bank or any such party under this Agreement or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent, any Bank or
any such party;
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of law
or otherwise of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.9.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Bank. Nothing in this Section 3.9 shall limit the
liability, if any, of the Banks to the Company pursuant to Section 8.5.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks and the Agent that:
4.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio and is duly qualified to do business, and is in good standing, in all
additional jurisdictions where such qualification is necessary under applicable
law, except those jurisdictions in which the failure to qualify would not have a
material adverse effect on its business. The Company has all requisite corporate
power to own or lease the properties used in its business and to carry on its
business as now being conducted and as proposed to be conducted, and to execute
and deliver this Agreement and the Notes and to engage in the transactions
contemplated by this Agreement.
4.2 Corporate Authority. The execution, delivery and performance by
the Company of this Agreement and the Notes have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or code of regulations, or of any contract or undertaking to which the
Company is a party or by which the Company or its property may be bound or
affected and will not result in the imposition of any Lien except for Permitted
Liens.
4.3 Binding Effect. This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Subsidiary
of the Company. Each such Subsidiary and each corporation becoming a Subsidiary
of the Company after the date hereof is and will be a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is and will be duly qualified to do business
in each additional jurisdiction where such qualification is or may be necessary
under applicable law, except those jurisdictions in which the failure to qualify
would not have a material adverse effect on its business. Each Subsidiary of the
Company has and will have all requisite corporate power to own or lease the
properties used in its business and to carry on its business as now being
conducted and as proposed to be conducted. All outstanding shares of capital
stock of each class of each Subsidiary of the Company have been and will be
validly issued and are and will be fully paid and nonassessable and, except as
otherwise indicated in Schedule 4.4 hereto or disclosed in writing to the Agent
and the Banks from time to time, are and will be owned, beneficially and of
record, by the Company or another Subsidiary of the Company free and clear of
any Liens. The corporations described in Schedule 4.4 hereto constitute all
persons in which the Company or any of its Subsidiaries has an ownership
interest.
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4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator, which
if adversely decided might result in any material adverse change in the
business, properties, operations or condition, financial or otherwise, of the
Company or of, in the aggregate, any of its Subsidiaries or in any material
adverse effect on the legality, validity or enforceability of this Agreement or
the Notes.
4.6 Financial Condition. The consolidated balance sheet of the
Company and its Subsidiaries and the consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for the fiscal year
ended December 31, 1997 and reported on by Coopers & Xxxxxxx, independent
certified public accountants, copies of which have been furnished to the Banks,
fairly present, and the financial statements of the Company and its Subsidiaries
delivered pursuant to Section 5.1(d) will fairly present, the consolidated
financial position of the Company and its Subsidiaries as at the respective
dates thereof, and the consolidated results of operations of the Company and its
Subsidiaries for the respective periods indicated, all in accordance with
generally accepted accounting principles consistently applied (subject, in the
case of said interim statements, to year-end audit adjustments). There has been
no material adverse change in the business, properties, operations or condition,
financial or otherwise, of the Company or any of its Subsidiaries since December
31, 1997. There is no material Contingent Liability of the Company that is not
reflected in such financial statements or in the notes thereto.
4.7 Use of Advances. The Company will use the proceeds of the
Advances for its general corporate purposes. Neither the Company nor any of its
Subsidiaries extends or maintains, in the ordinary course of business, credit
for the purpose, whether immediate, incidental, or ultimate, of buying 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
Advance will be used for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any such margin stock or maintaining or
extending credit to others for such purpose. After applying the proceeds of each
Advance, such margin stock will not constitute more than 25% of the value of the
assets (either of the Company alone or of the Company and its Subsidiaries on a
consolidated basis) that are subject to any provisions of this Agreement that
may cause the Advances to be deemed secured, directly or indirectly, by margin
stock.
4.8 Consents, Etc. No consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental person or entity, including without limitation any creditor,
lessor or stockholder of the Company or any of its Subsidiaries, is required on
the part of the Company in connection with the execution, delivery and
performance of this Agreement, the Notes or the transactions contemplated hereby
or as a condition to the legality, validity or enforceability of this Agreement
or the Notes.
4.9 Taxes. The Company and its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and have paid all taxes
shown thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof, Neither the Company nor any of its
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Subsidiaries knows of any actual or proposed tax assessment or any basis
therefor, and no extension of time for the assessment of deficiencies in any
federal or state tax has been granted by the Company or any Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the
latest balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this
Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets,
reflected in said balance sheet or subsequently acquired by the Company or any
Subsidiary. All of such properties and assets are free and clear of any Lien,
except for Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, their ERISA Affiliates
and their respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any such Plan. None of the Company, any of its Subsidiaries or any of
their ERISA Affiliates is an employer with respect to any Multiemployer Plan.
The Company, its Subsidiaries and their ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC or any
Plan. The execution, delivery and performance of this Agreement and the Notes
does not constitute a Prohibited Transaction. There is no material unfunded
benefit liability, determined in accordance with Section 4001(a)(18) of ERISA,
with respect to any Plan of the Company, its subsidiaries or their ERISA
Affiliates.
4.12 Disclosure. No report or other information furnished in writing
or on behalf of the Company to the Bank in connection with the negotiation or
administration of this Agreement contains any material misstatement of fact or
omits to state any material fact or any fact necessary to make the statements
contained therein not misleading. Neither this Agreement or the Notes, nor any
other document, certificate, or report or statement or other information
furnished to the Bank by or on behalf of the Company in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact known to the
Company which materially and adversely affects, or which in the future may (so
far as the Company can now foresee) materially and adversely affect, the
business, properties, operations or condition, financial or otherwise, of the
Company or any Subsidiary, which has not been set forth in this Agreement or in
the other documents, certificates, statements, reports and other information
furnished in writing to the Bank by or on behalf of the Company in connection
with the transactions contemplated hereby.
4.13 Environmental Certificate. The representations and warranties
contained in the Environmental Certificate are true and correct.
4.14 Borrowing Base. All trade accounts receivable and inventory of
the Company represented or reported by the Company to be, or are otherwise
included in, Eligible Accounts Receivable and Eligible Inventory comply in all
respects with the requirements therefor set forth in the definition thereof, and
the computation of the Borrowing Base set forth in each
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Borrowing Base Certificate is true and correct.
ARTICLE V.
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that,
until the Termination Date and thereafter until payment in full of the principal
of and accrued interest on the Notes and the performance of all other
obligations, of the Company under this Agreement, unless the Required Banks
shall otherwise consent in writing, it shall, and shall cause each of its
Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence and its qualification as a foreign corporation in good standing
in each jurisdiction in which such qualification is necessary under applicable
law, except those jurisdictions in which the failure to qualify would not have a
material adverse effect on its business, and the rights, licenses, permits
(including those required under Environmental Laws), franchises, patents,
copyrights, trademarks and trade names material to the conduct of its
businesses; and defend all of the foregoing against all claims, actions,
demands, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority.
(b) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to time;
and pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income, revenues or property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
give rise to Liens upon such properties or any portion thereof, except to the
extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the Company
or such Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in working order and
from time to time make, or cause to be made all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times in accordance with customary and prudent business practices for
similar businesses; and maintain in full force and effect insurance with
responsible and reputable insurance companies or associations in such amounts,
on such terms and covering such risks, including fire and other risks insured
against by extended coverage, as is usually carried by companies engaged in
similar businesses and owning similar properties similarly situated and maintain
in full force and effect public liability insurance, insurance against claims
for personal injury or death or property damage occurring in connection with any
of its activities or any of any properties owned, occupied or controlled by it,
in such amount as it shall reasonably deem
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necessary, and maintain such other insurance as may be required by law or as may
be reasonably requested by the Required Banks for purposes of assuring
compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Banks and the Agent the
following:
(i) Promptly and in any event within three Business Days after
becoming aware of the occurrence of (A) any Event of Default or any event or
condition which, with notice or lapse of time, or both, would constitute an
Event of Default, (B) the commencement of any material litigation against, by or
affecting the Company or any of its Subsidiaries, and any material developments
therein, (C) entering into any material contract or undertaking that is not
entered into in the ordinary course of business or (D) any development in the
business or affairs of the Company or any of its Subsidiaries which has resulted
in or which is likely in the reasonable judgment of the Company, to result in a
material adverse change in the business, properties, operations or condition,
financial or otherwise of the Company or any of its Subsidiaries, a statement of
the chief financial officer of the Company setting forth details of such Event
of Default or such event or condition or such litigation and the action which
the Company or such Subsidiary, as the case may be, has taken and proposes to
take with respect thereto;
(ii) As soon as available and in any event within 60 days
after the end of each fiscal quarter of the Company, the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such quarter, and the
related period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Company as having been
prepared in accordance with generally accepted accounting principles, together
with a certificate of the chief financial officer of the Company stating (A)
that no Event of Default or event or condition which, with notice or lapse of
time, or both, would constitute an Event of Default, has occurred and is
continuing or, if an Event of Default or such an event or condition has occurred
and is continuing, a statement setting forth the details thereof and the action
which the Company has taken and proposes to take with respect thereto, and (B)
that a computation (which computation shall accompany such certificate and shall
be in reasonable detail) showing compliance with Section 5.2(a), (b), (c) and
(q) hereof is in conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 120 days
after the end of each fiscal year of the Company, a copy of the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated and consolidating statements of
income, retained earnings and cash flows of the Company and its Subsidiaries for
such fiscal year, with a customary audit report of Coopers & Xxxxxxx or other
independent certified public accountants selected by the Company and acceptable
to the Required Banks (which acceptance will not unreasonably be withheld),
without qualifications unacceptable to the Required Banks, together with a
certificate of such accountants stating (A) that they have reviewed this
Agreement and stating further whether, in the course of their review of such
financial statements, they have become aware of any Event of Default or any
event or condition
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which, with notice or lapse of time, or both, would constitute an Event of
Default, and, if such an Event of Default or such an event or condition then
exists and is continuing, a statement setting forth the nature and status
thereof, and (B) that a computation by the Company (which computation shall
accompany such certificate and shall be in reasonable detail) showing compliance
with Section 5.2 (a), (b), (c) and (q) hereof is in conformity with the terms of
this Agreement;
(iv) No later than the 30th calendar day following the end of
each month, a Borrowing Base Certificate prepared as of the close of business on
the last day of such month, together with supporting schedules, in form and
detail satisfactory to the Agent, setting forth such information as the Agent
may request with respect to the aging, value, location and other information
relating to the computation of the Borrowing Base and the eligibility of any
property or assets included in such computation, certified as true and correct
by the chief financial officer of the Company;
(v) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements which the Company or any
of its Subsidiaries sends to or files with any of their respective security
holders or any securities exchange or the Securities and Exchange Commission or
any successor agency thereof;
(vi) On the same day, telephonic notice, followed immediately
by written confirmation, of all borrowings from time to time by the Company from
The Fifth Third Bank and all repayments thereof from time to time;
(vii) As soon as available and in any event within 30 days
after the end of each month (other than those months which correspond to fiscal
quarter ends of the Company, which are covered by subpart (ii) above), the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such month, and the related consolidated statements of income, retained earnings
and cash flow of the Company and its Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such month,
setting forth in each case in comparative form the corresponding figures for the
corresponding date or period of the preceding fiscal year, all in reasonable
detail; and
(viii) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of its Subsidiaries as the Agent or any Bank may from time to
time reasonably request.
(e) Accounting; Access to Records; Books, Etc. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
generally accepted accounting principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time, (i) permit any
Bank or the Agent or any agents or representatives thereof to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with their respective
directors, officers, employees and independent auditors, and by this provision
the Company does hereby authorize such persons to
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discuss such affairs, finances and accounts with any Bank or the Agent, and (ii)
permit any Bank or the Agent or any of its agents or representatives to conduct
a comprehensive field audit of its books, records, properties and assets.
(f) Taxes. Pay in full, except to the extent being contested in good
faith by appropriate proceedings and as to which adequate financial reserves
have been established on the Company's or such Subsidiary's, as the case may be,
books and records, (i) in each case prior to the date when penalties for the
nonpayment thereof would attach, all taxes, assessments and governmental charges
and levies for which it may be or become subject and all lawful claims which, if
unpaid, might become a lien or charge upon its property, and (ii) all stamp
taxes and similar taxes, if any, including interest and penalties, if any,
payable in respect of any Loans or the Notes. The efficacy of this subsection
5.1(f) shall survive the payment in full of the Notes.
5.2 Negative Covenants. Until the Termination Date and thereafter
until payment in full of the principal of and accrued interest on the Notes and
the performance of all other obligations of the Company under this Agreement,
the Company agrees that, unless the Required Banks shall otherwise consent in
writing it shall not, and shall not permit any of its Subsidiaries to:
(a) Current Ratio. Permit or suffer the ratio of Consolidated
Current Assets of the Company and its Subsidiaries to Consolidated Current
Liabilities of the Company and its Subsidiaries to be less than 1.25 to 1.00 at
any time.
(b) Tangible Net Worth. Permit or suffer (i) Consolidated Tangible
Net Worth of the Company and its Subsidiaries to be less than (ii) the sum of
(A) $40,000,000 plus (B) 50% of Consolidated Cumulative Net Income of the
Company and its Subsidiaries after December 31, 1997 plus (C) for each fiscal
year end of the Company, the amount, if any, by which $500,000 exceeds the
aggregate amount added pursuant to the foregoing clause (B) attributable to each
such fiscal year; such covenant to be tested as of the end of each fiscal
quarter of the Company.
(c) Total Liabilities to Tangible Net Worth. Permit or suffer the
ratio of Consolidated Total Liabilities of the Company and its Subsidiaries to
Consolidated Tangible Net Worth of the Company and its Subsidiaries to be
greater than 1.25 to 1.00 at any time.
(d) Liens. Create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA) created and
maintained in the ordinary course of business which are not material in the
aggregate, and which would not have a material adverse effect on the business or
operations of the Company or any of
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its Subsidiaries and which constitute (A) pledges or deposits under worker's
compensation laws, unemployment insurance laws or similar legislation, (B) good
faith deposits in connection with bids, tenders, contracts or leases to which
the Company or any of its Subsidiaries is a party for a purpose other than
borrowing money or obtaining credit, including rent security deposits, (C) liens
imposed by law, such as those of carriers, warehousemen and mechanics, if
payment of the obligation secured thereby is not yet due, (D) Liens securing
taxes, assessments or other governmental charges or levies not yet subject to
penalties for nonpayment, and (E) pledges or deposits to secure public or
statutory obligations of the Company or any of its Subsidiaries, or surety,
customs or appeal bonds to which the Company or any of its Subsidiaries is a
party;
(iii) Each Lien described in Schedule 5.2(d) hereto, which may
be suffered to exist upon the same terms as those existing on the date hereof,
but no extension or renewal thereof shall be permitted;
(iv) Any Lien created to secure payment of a portion of the
purchase price of any tangible fixed asset acquired by the Company or any of its
Subsidiaries may be created or suffered to exist upon such fixed asset if the
outstanding principal amount of the indebtedness secured by such Lien does not
at any time exceed ninety percent of the purchase price paid by the Company or
such Subsidiary for such fixed asset and the aggregate principal amount of all
indebtedness secured by all such Liens does not exceed $5,000,000, provided that
such Lien does not encumber any other asset at any time owned by the Company or
such Subsidiary, and provided, further, that not more than one such Lien shall
encumber such fixed asset at any one time; and
(v) The interest or title of a lessor under any lease
otherwise permitted under this Agreement with respect to the property subject to
such lease to the extent performance of the obligations of the Company or its
Subsidiary thereunder are not delinquent.
(e) Merger; Acquisitions; Etc. Purchase or otherwise acquire,
whether in one or a series of transactions, all or a substantial portion of the
business assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, of any person, or all or a substantial portion of the capital
stock of or other ownership interest in any other person, provided that this
Section 5.2(e) shall not prohibit any such purchase or acquisition (the "Subject
Transaction") if the aggregate consideration paid by the Company for all such
purchases and acquisitions after December 31, 1997, including, without
limitation, the Subject Transaction, is less than the amount equal to 20% of the
Consolidated Tangible Net Worth of the Company its Subsidiaries as of the date
the Subject Transaction is consummated; nor merge or consolidate or amalgamate
with any other person or take any other action having a similar effect, nor
enter into any joint venture or similar arrangement with any other person in
which the Company is required to make an equity contribution having a similar
effect.
(f) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or a substantial portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales of
scrap or obsolete material or equipment, provided, however, that this Section
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5.2(f) shall not prohibit any such sale, lease, license, transfer, assignment or
other disposition if the aggregate book value (disregarding any write downs of
such book value other than ordinary depreciation and amortization) of all of the
business, assets, rights, revenues and property disposed of after the date of
this Agreement is not greater than $1,000,000 in the aggregate during any
12-month period and if, immediately after such transaction, no Default or Event
of Default shall exist or shall have occurred and be continuing.
(g) Nature of Business. Make any material change in the nature of
its business from that engaged in on the date of this Agreement or engage in any
other businesses other than those in which it is engaged on the date of this
Agreement.
(h) Dividends and Other Restricted Payments. Make, pay, declare or
authorize any dividend, payment or other distribution in respect of any class of
its capital stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of its capital stock other than such dividends,
payments or other distributions to the extent payable solely in shares of the
capital stock of the Company, provided, however, that, if no Default or Event of
Default shall exist or shall have occurred and be continuing, (i) any Subsidiary
of the Company may make, pay, declare or authorize dividends, payments and other
such distributions collectively, "Distributions") to the Company, and (ii) the
Company may make Distributions during each fiscal year ending after the
Effective Date which, together with all other Distributions made during any such
fiscal year, in the aggregate do not exceed the sum of (A) Net Income of the
Company for such fiscal year plus (B) the difference of (1) $3,750,000 minus (2)
the aggregate amount of Excess Distributions for all previous fiscal years since
December 31, 1994. For purposes of this Section 5.2(h), (i) "capital stock"
shall include capital stock and any securities exchangeable for or convertible
into capital stock and any warrants, rights or other options to purchase or
otherwise acquire capital stock or such securities, and (ii) "Excess
Distributions" shall mean, with respect to any fiscal year of the Company, the
portion of the aggregate amount of Distributions made by the Company during such
fiscal year that exceeds the Net Income of the Company for such fiscal year.
(i) Capital Expenditures. Acquire any fixed asset or make any other
capital expenditure (collectively, "Capital Expenditures") if the aggregate
purchase price and other acquisition costs of all such Capital Expenditures made
by the Company or any of its Subsidiaries during any fiscal year of the Company
ending after the Effective Date would exceed, on a consolidated basis, an amount
equal to the sum of (i) the consolidated depreciation expense relating to fixed
assets ("Depreciation Expense") of the Company and its Subsidiaries for such
fiscal year plus (ii) the difference of (A) $7,500,000 minus (B) the aggregate
amount of Excess Capital Expenditures for all previous fiscal years after
December 31, 1997. For purposes of this Section 5.2(i), "Excess Capital
Expenditures" shall mean, with respect to any fiscal year of the Company, the
portion of the aggregate amount of consolidated Capital Expenditures of the
Company and its Subsidiaries made during such fiscal year that exceeds the
consolidated Depreciation Expense of the Company and its Subsidiaries for such
fiscal year.
(j) Transactions with Affiliates. Enter into, become a party to, or
become liable in respect of, any contract or undertaking with any Affiliate
except in the ordinary course
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of business and on terms not less favorable to the Company or such Subsidiary
than those which could be obtained if such contract or undertaking were an arms
length transaction with a person other than an Affiliate.
(k) Investments, Loans and Advances. Purchase or otherwise acquire
any capital stock of or other ownership interest in, or debt securities of or
other evidences of indebtedness of, any other person; nor make any loan or
advance of any of its funds or property or make any other extension of credit
to, or make any investment or acquire any interest whatsoever in, any other
person; other than (i) extensions of trade credit made in the ordinary course of
business on customary credit terms and commission, travel and similar advances
made to officers and employees in the ordinary course of business, and (ii)
commercial paper of any United States issuer having the highest rating then
given by Xxxxx'x Investors Service, Inc., or Standard & Poor's Corporation,
direct obligations of and obligations fully guaranteed by the United States of
America or certificates of deposit of any commercial bank which is a member of
the Federal Reserve System and which has capital, surplus and undivided profit
(as shown on its most recently published statement of condition) aggregating not
less than $100,000,000, provided, however, that each of the foregoing
investments has a maturity date not later than 180 days after the acquisition
thereof by the Company or any of its Subsidiaries, (iii) investments permitted
by Section 5.2(e), and (iv) those investments, loans, advances and other
transactions described in Schedule 5.2(k) hereto, having the same terms as
existing on the date of this Agreement, but no extension or renewal thereof
shall be permitted.
(l) Contingent Liabilities. Create, incur, assume, or in any manner
become liable in respect of, or suffer to exist, Contingent Liabilities in
excess of $5,000,000 for the Company and its Subsidiaries on a consolidated
basis.
(m) Negative Pledge Limitation. Enter into any agreement, with any
person other than the Banks pursuant hereto, which prohibits or limits the
ability of the Company or any Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, whether now owned or hereafter
acquired; provided that this Section 5.2(m) shall not prohibit the Company from
entering into such an agreement with The Fifth Third Bank, so long as the
aggregate principal amount of Indebtedness of the Company to The Fifth Third
Bank does not at any time exceed $7,500,000.
(n) Restrictions on Payments by Subsidiaries. Enter into any
agreement, contract or arrangement restricting the ability of any Subsidiary of
the Company to pay dividends or make cash advances or other payments of any
nature to the Company or to any Subsidiary of the Company of which such
Subsidiary is also a Subsidiary.
(o) Inconsistent Agreements. Enter into any agreement containing any
provision which would be violated or breached by this Agreement or any of the
transactions contemplated hereby or by performance by the Company or any of its
Subsidiaries of its obligations in connection therewith.
(p) Fiscal Year. Change its fiscal year from beginning January 1 and
ending
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December 31.
(q) Interest Coverage Ratio. Permit or suffer the ratio of (i)
Consolidated EBIT of the Company and its Subsidiaries to (ii) Consolidated
Interest Expense of the Company and its Subsidiaries to be less than 3.00 to
1.00; such ratio to be determined as of the end of each fiscal quarter of the
Company for the period of four fiscal quarters of the Company then ending or, if
less, the number of fiscal quarters of the Company from January 1, 1998 through
the date of determination.
ARTICLE VI.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived by the Required Banks pursuant to Section 7.1:
(a) Nonpayment. The Company shall fail to pay when due any principal
of the Notes or any reimbursement obligation under Section 3.9 (whether by
deemed disbursement of Revolving Credit Loans or otherwise), or the Company
shall fail to pay within 10 days of the due date thereof any interest on the
Notes or any fees or any other amount (other than principal of the Notes or such
reimbursement obligations) payable hereunder; or
(b) Misrepresentation. Any representation or warranty made by the
Company in Article IV hereof or in any other certificate, report, financial
statement or other document furnished by or on behalf of the Company in
connection with this Agreement, shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) Certain Covenants. The Company shall fail to perform or observe
any term, covenant or agreement contained in Article V hereof; or
(d) Other Defaults. The Company shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement, and any such
failure shall remain unremedied for 30 calendar days after notice thereof shall
have been given to the Company by the Agent; or
(e) Cross Default. (i) Any default or event of default shall occur
under any other agreement, instrument or document evidencing or otherwise
relating to any indebtedness (other than indebtedness hereunder) of the Company
or any of its Subsidiaries to any Bank; or (ii) the Company or any of its
Subsidiaries shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
indebtedness (other than indebtedness hereunder or described in clause (i)
above), beyond any period of grace provided with respect thereto, which
individually or together with other such indebtedness as to which any such
failure exists has an aggregate outstanding principal amount in excess of
$100,000; or (iii) the Company or any of its Subsidiaries shall fail to perform
or
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observe any other term, covenant or agreement contained in any agreement,
document or instrument evidencing or securing any indebtedness (other than
indebtedness hereunder or described in clause (i) above) having such aggregate
outstanding principal amount, or under which any such indebtedness was issued or
created, beyond any period of grace, if any, provided with respect thereto if
the effect of such failure is either (A) to cause, or permit the holders of such
Indebtedness (or a trustee on behalf of such holders) to cause, any payment in
respect of such Indebtedness to become due prior to its due date or (ii) to
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to elect a majority of the board of directors of the Company; or
(f) Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $1,000,000 or more shall be rendered against the
Company or any of its Subsidiaries, or any other judgment or order (whether or
not for the payment of money) shall be rendered against or shall affect the
Company or any of its Subsidiaries which causes or could cause a material
adverse change in the business, properties, operations or condition, financial
or otherwise, of the Company or any of its Subsidiaries or which does or could
have a material adverse effect on the legality, validity or enforceability of
this Agreement or the Notes, and either (i) such judgment or order shall have
remained unsatisfied and the Company or such Subsidiary shall not have taken
action necessary to stay enforcement thereof, by reason of pending appeal or
otherwise, prior to the expiration of the applicable period of limitations for
taking such action or, if such action shall have been taken, a final order
denying such stay shall have been rendered, or (ii) enforcement proceedings
shall have been commenced by any creditor upon any such judgment or order; or
(g) ERISA. The occurrence of a Reportable Event that results in or
there is a reasonable possibility that it could result in material liability of
the Company, any Subsidiary of the Company or their ERISA Affiliates to the PBGC
or to any Plan and such Reportable Event is not corrected within thirty (30)
days after the occurrence thereof; or the occurrence of any Reportable Event
which there is a reasonable possibility could constitute grounds for termination
of any Plan of the Company, its Subsidiaries or their ERISA Affiliates by the
PBGC or for the appointment by the appropriate United States District Court of a
trustee to administer any such Plan and such Reportable Event is not corrected
within thirty (30) days after the occurrence thereof; or the filing by the
Company, any Subsidiary of the Company or any of their ERISA Affiliates of a
notice of intent to terminate a Plan or the institution of other proceedings to
terminate a Plan; or the Company, any Subsidiary of the Company or any of their
ERISA Affiliates shall fail to pay when due any material liability to the PBGC
or to a Plan; or the PBGC shall have instituted proceedings to terminate, or to
cause a trustee to be appointed to administer, any Plan of the Company, its
Subsidiaries or their ERISA Affiliates; or any person engages in a Prohibited
Transaction with respect to any Plan which results in or there is a reasonable
possibility could result in material liability of the Company, any Subsidiary of
the Company, any of their ERISA Affiliates, any Plan of the Company, its
Subsidiaries or their ERISA Affiliates or fiduciary of any such Plan; or failure
by the Company, any Subsidiary of the Company or any of their ERISA Affiliates
to make a required installment or other payment to any Plan within the meaning
of Section 302(f) of ERISA or Section 412(n) of the Code that results in or
there is a reasonable possibility could result in liability of the Company, any
Subsidiary of the Company or any of their ERISA Affiliates to the PBGC or any
Plan; or the withdrawal of the Company, any
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of its Subsidiaries or any of their ERISA Affiliates from a Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001 (9a)
(2) of ERISA; or the Company, any of its Subsidiaries or any of their ERISA
Affiliates becomes an employer with respect to any Multiemployer Plan without
the prior written consent of the Bank; or
(h) Insolvency, Etc. The Company or any of its Subsidiaries shall be
dissolved or liquidated (or any judgment, order or decree therefor shall be
entered), or shall generally not pay its debts as they become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against the Company or any of its Subsidiaries, any
proceeding or case seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
entry of an order for relief, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
assets, rights, revenues or property, and, if such proceeding is instituted
against the Company or such Subsidiary and is being contested by the Company or
such Subsidiary, as the case may be, in good faith by appropriate proceedings,
such proceeding shall remain undismissed or unstayed for a period of 60 days; or
the Company or such Subsidiary shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Agent may and, upon being directed to do so by the Required Banks,
shall by notice to the Company (i) terminate the Commitments, or (ii) declare
the outstanding principal of, and accrued interest on, the Notes, all unpaid
reimbursement obligations in respect of drawings under Letters of Credit and all
other amounts owing under this Agreement to be immediately due and payable, or
(iii) demand immediate delivery of cash collateral, and the Company agrees to
deliver such cash collateral upon demand, in an amount equal to the maximum
amount that may be available to be drawn at any time prior to the stated expiry
of all outstanding Letter of Credit, or any one or more of the foregoing,
whereupon the Commitments shall terminate forthwith and all such amounts,
including such cash collateral, shall become immediately due and payable,
provided that in the case of any event or condition described in Section 6.1(h)
with respect to the Company, the Commitments shall automatically terminate
forthwith and all such amounts, including such cash collateral, shall
automatically become immediately due and payable without notice; in all cases
without demand, presentment, protest, diligence, notice of dishonor or other
formality, all of which are hereby expressly waived. Such cash collateral
delivered in respect of outstanding Letters of Credit shall be deposited in a
special cash collateral account to be held by the Agent as collateral security
for the payment and performance of the Company's obligation under this Agreement
to the Banks and the Agent.
(b) The Agent may and, upon being directed to do so by the Required
Banks, shall, in addition to the remedies provided in Section 6.2(a), exercise
and enforce any and all other rights and remedies available to it or the Banks,
whether arising under this Agreement, the Notes or under applicable law, in any
manner deemed appropriate by the Agent, including suit in
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equity, action at law, or other appropriate proceedings, whether for the
specific performance (to the extent permitted by law) of any covenant or
agreement contained in this Agreement or in the Notes or in aid of the exercise
of any power granted in this Agreement or the Notes.
(c) Upon the occurrence and during the continuance of any Event of
Default, each Bank may at any time and from time to time, without notice to the
Company (any requirement for such notice being expressly waived by the Company)
set off and apply against any and all of the obligations of the Company now or
hereafter existing under this Agreement, whether owing to such Bank or any other
Bank or the Agent, any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Bank to or for the credit or the account of the Company and any property
of the Company from time to time in possession of such Bank, irrespective of
whether or not such Bank shall have made any demand hereunder and although such
obligations may be contingent and unmatured. The Company hereby grants to such
Bank a lien on and security interest in all such deposits, indebtedness and
property as collateral security for the payment and performance of the
obligations of the Company under this Agreement. The rights of each Bank under
this Section 6.2(c) are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Banks may have.
(d) In addition to other amounts payable pursuant to this Agreement,
the Company confirms that it shall further pay, together with any payment of the
Term Loan hereunder after the occurrence and during the continuance of any Event
of Default, all amounts required to be paid pursuant to Section 3.8.
ARTICLE VII.
THE AGENT AND THE BANKS
7.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. The provisions of this Article VII are solely for
the benefit of the Agent and the Banks, and the Company shall not have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
the Company.
7.2 Agent and Affiliates. NBD Bank, N.A. in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent, NBD Bank, N.A. and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Company or
any of its Subsidiaries as if it were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Banks.
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7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actioned under the Notes), the Agent
shall not be required to exercise any discretion or take any action, but the
Agent shall take such action or omit to take any action pursuant to the
reasonable written instructions of the Required Banks and may request
instructions from the Required Banks. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, pursuant to the written
instructions of the Required Banks, which instructions and any action or
omission pursuant thereto shall be binding upon all of the Banks; provided,
however, that the Agent shall not be required to act or omit to act if, in the
judgment of the Agent, such action or omission may expose the Agent to personal
liability or is contrary to this Agreement or the Notes or applicable law.
7.4 Reliance by Agent. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto, The Agent
may employ agents (including without limitation collateral agents) and may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable to
the Banks, except as to money or property received by it or its authorized
agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.5 Default. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or the Company specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice, the Agent shall give written notice thereof to
the Banks.
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7.6 Liability of Agent. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Banks for any action taken
or not taken by it or them in connection herewith with the consent or at the
request of the Required Banks or in the absence of its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any recital, statement, warranty or
representation contained in this Agreement or any Note, or in any certificate,
report, financial statement or other document furnished in connection with this
Agreement, (ii) the performance or observance of any of the covenants or
agreements of the Company, (iii) the satisfaction of any condition specified in
Article II hereof, or (iv) the validity, effectiveness, legal enforceability,
value or genuineness of this Agreement, the Notes or any other instrument or
document furnished in connection herewith.
7.7 Nonreliance on Agent and Other Banks. Each Bank acknowledges and
agrees that it has, independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Company and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decision in
taking or not taking action under this Agreement. The Agent shall not be
required to keep itself informed as to the performance or observance by the
Company of this Agreement, the Notes or any other documents referred to or
provided for herein or to inspect the properties or books of the Company and,
except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any information
concerning the affairs, financial condition or business of the Company or any of
its Subsidiaries which may come into the possession of the Agent or any of its
Affiliates.
7.8 Indemnification. The Banks agree to indemnify the Agent (to the
extent not reimbursed by the Company, but without limiting any obligation of the
Company to make such reimbursement), ratably according to their Pro Rata Shares,
from and against any and all claims, damages, losses, liabilities, costs or
expenses of any kind or nature whatsoever (including, without limitation, fees
and disbursements of counsel) which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or the
transactions contemplated hereby or any action taken or omitted by the Agent
under this Agreement, provided, however, that no Bank shall be liable for any
portion of such claims, damages, losses, liabilities, costs or expenses
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including,
without limitation, fees and expenses of counsel) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Company, but without limiting the obligation
of the Company to make such reimbursement. Each Bank agrees to reimburse the
Agent promptly upon demand for its ratable share of any amounts owing to the
Agent by the Banks pursuant to this Section. If the indemnity furnished to the
Agent under this Section shall, in the judgment of the Agent, be insufficient or
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become impaired, the Agent may call for additional indemnity from the Banks and
cease, or not commence to take, any action until such additional indemnity is
furnished.
7.9 Successor Agent. The Agent may resign as such at any time upon
ten days' prior written notice to the Company and the Banks. In the event of any
such resignation, the Required Banks shall, by an instrument in writing
delivered to the Company and the Agent, appoint a successor, which shall be a
commercial bank organized under the laws of the United States or any State
thereof and having a combined capital and surplus of at least $500,000,000. If a
successor is not so appointed or does not accept such appointment before the
Agent's resignation becomes effective, the retiring Agent may appoint a
temporary successor to act until such appointment by the Required Banks is made
and accepted or if no such temporary successor is appointed as provided above by
the retiring Agent, the Required Banks shall thereafter perform all the duties
of the Agent hereunder until such appointment by the Required Banks is made and
accepted. Any successor to the Agent shall execute and deliver to the Company
and the Banks an instrument accepting such appointment and thereupon such
successor Agent, without further act, deed, conveyance or transfer shall become
vested with all of the properties, rights, interests, powers, authorities and
obligations of its predecessor hereunder with like effect as if originally named
as Agent hereunder. Upon request of such successor Agent, the Company and the
retiring Agent shall execute and deliver such instruments of conveyance,
assignment and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Agent all such properties, rights, interest, powers, authorities and
obligations, The provisions of this Article VII shall thereafter remain
effective for such retiring Agent with respect to any actions taken or omitted
to be taken by such Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Banks agree among themselves that, in
the event that any Bank shall obtain payment in respect of any Advance or any
other obligation owing to the Banks under this Agreement through the exercise of
a right of set-off, banker's lien, counterclaim or otherwise in excess of its
Pro Rata Share of payments received by all of the Banks on account of the
Advances and other obligations, such Bank shall promptly purchase from the other
Banks participation in such Advances and other obligations in such amounts, and
make such other adjustments from time to time, as shall be equitable to the end
that all of the Banks share such payment in accordance with their Pro Rata
Shares. The Banks further agree among themselves that if payment to a Bank
obtained by such Bank through the exercise of a right of set-off, banker's lien,
counterclaim or otherwise as aforesaid shall be rescinded or must otherwise be
restored, each Bank which shall have shared the benefit of such payment shall,
by repurchase of participation theretofore sold, return its share of that
benefit to each Bank whose payment shall have been rescinded or otherwise
restored, The Company agrees that any Bank so purchasing such a participation
may, to the fullest extent permitted by law, exercise all rights of payment,
including set-off, banker's lien or counterclaim with respect to such Advance or
other obligation in the amount of such participation. The Banks further agree
among themselves that, in the event that amounts received by the Banks and the
Agent hereunder are insufficient to pay all such obligations or insufficient to
pay all such obligations when due, the fees and other amounts owing to the Agent
in such capacity shall be paid therefrom before payment of obligations owing to
the Banks under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Bank or the Agent shall fail to remit to the Agent or any
other Bank an
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amount payable by such Bank or the Agent to the Agent or such other Bank
pursuant to this Agreement on the date when such amount is due, such payment
shall be made together with interest thereon for each date from the date such
amount is due until the date such amount is paid to the Agent or such other Bank
at a rate per annum equal to the rate at which borrowings are available to the
payee in its overnight federal funds market. It is further understood and agreed
among the Banks and the Agent that if the Agent shall engage in any other
transactions with the Company and shall have the benefit of any collateral or
security therefor which does not expressly secure the obligations arising under
this Agreement except by virtue of a so-called dragnet clause or comparable
provision, the Agent shall be entitled to apply any proceeds of such collateral
or security first in respect of the obligations arising in connection with such
other transaction before application to the obligations arising under this
Agreement.
ARTICLE VIII.
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or
waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Required Banks and, to the extent any rights or duties of the Agent may be
affected thereby, the Agent. Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) Notwithstanding anything herein to the contrary, no Bank that is
in default of any of its obligations, covenants or agreements under this
Agreement shall be entitled to vote (whether to consent or to withhold its
consent) with respect to any amendment, modification, termination or waiver of
any provision of this Agreement or any departure therefrom or any direction from
the Banks to the Agent, and, for purposes of determining the Required Banks at
any time when any Bank is in default under this Agreement, the Commitments and
Advances of such defaulting Banks shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Company at 0000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx,
00000. Attention: Xx. Xxxx X. Xxxxxxx, Chief Financial Officer, Facsimile No.
(000) 000-0000, and to the Agent and the Banks at their respective addresses for
notices set forth on the signature pages hereof, or to such other address as may
be designated by the Company, the Agent or any Bank by notice to the other
parties hereto. All notices and other communications shall be deemed to have
been given at the time of actual delivery thereof to such address, or if sent by
certified or registered mail, postage prepaid, to such address, on the third day
after the date of mailing, or in the case of telex notice, upon receipt of the
appropriate answerback, provided, however, that notices to the Agent shall not
be effective until received.
(b) Notices by the Company to the Agent with respect to terminations
or reductions of the Revolving Credit Commitments pursuant to Section 2.2,
requests for Advances
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pursuant to Section 2.4, requests for continuations or conversions of Loans
pursuant to Section 2.7 and notices of prepayment pursuant to Section 3.1 shall
be irrevocable and binding on the Company.
(c) Any notice to be given by the Company to the Agent pursuant to
Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Bank
hereunder, may be given by telephone, and all such notices given by the Company
must be immediately confirmed in writing in the manner provided in Section
8.2(a). Any such notice given by telephone shall be deemed effective upon
receipt thereof by the party to whom such notice is to be given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing
on the part of the Agent or any Bank, nor any delay or failure on the part of
the Agent or any Bank in exercising any right, power or privilege hereunder
shall operate as a waiver of such right, power or privilege or otherwise
prejudice the Agent's or any Bank's rights and remedies hereunder; nor shall any
single or partial exercise thereof preclude any further exercise thereof or the
exercise of any other right, power or privilege. No right or remedy conferred
upon or reserved to the Agent or any Bank under this Agreement or the Notes is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy
granted thereunder or now or hereafter existing under any applicable law. Every
right and remedy granted by this Agreement or the Notes or by applicable law to
the Agent or any Bank may be exercised from time to time and as often as may be
deemed expedient by the Agent or any Bank and, unless contrary to the express
provisions of this Agreement or the Notes, irrespective of the occurrence or
continuance of any Default or Event of Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company made herein
or in any certificate, report, financial statement or other document furnished
by or on behalf of the Company in connection with this Agreement shall be deemed
to be material and to have been relied upon by the Banks, notwithstanding any
investigation heretofore or hereafter made by any Bank or on such Bank's behalf,
and those covenants and agreements of the Company set forth in Section 3.6, 3.7,
3.8, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and
the termination of the Commitments.
8.5 Expenses and Indemnification. (a) The Company agrees to pay, or
reimburse the Agent for the payment of, on demand, (i) the reasonable fees and
expenses of counsel to the Agent, including without limitation the fees and
expenses of Xxxxxxxxx Xxxxxx PLLC in connection with the preparation, execution,
delivery and administration of this Agreement and the Notes and the consummation
of the transactions contemplated hereby, and in connection with advising the
Agent as to its rights and responsibilities with respect thereto, and in
connection with any amendments, waivers or consents in connection therewith, and
(ii) all reasonable costs and expenses of the Agent and the Banks (including
reasonable fees and expenses of counsel and whether incurred through
negotiations, legal proceedings or otherwise) in connection with any Default or
Event of Default or the enforcement of, or the exercise or preservation of any
rights under, this Agreement or the Notes or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement.
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(b) The Company agrees to indemnify and hold harmless the Banks and
the Agent, and their respective officers, directors, employees and agents, and
each person who controls any of them, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
which the Banks or the Agent or any such person may incur or which may be
claimed against any of them with respect to or in connection with the execution,
delivery, enforcement, performance and administration of this Agreement or the
Notes or the Company's use or proposed use of the proceeds of any Advance.
(c) Without limiting the foregoing, the Company hereby indemnifies
and agrees to hold harmless the Banks and the Agent, and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
which the Banks or the Agent or any such person may incur or which may be
claimed against any of them by reason of or in connection with any Letter of
Credit, and neither any Bank nor the Agent or any of their respective officers,
directors, employees or agents shall be liable or responsible for: (i) the use
which may be made of any Letter of Credit or for any acts or omissions of any
beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of any Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; (iv) any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit;
or (v) any other event or circumstance whatsoever arising in connection with any
Letter of Credit; provided, however, that the Company shall not be required to
indemnify the Banks and the Agent and such other persons, and the Banks shall be
liable to the Company to the extent, but only to the extent, of any direct, as
opposed to consequential or incidental, damages suffered by the Company which
were caused by (A) the Agent's wrongful dishonor of any Letter of Credit after
the presentation to it by the beneficiary thereunder of a draft or other demand
for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit, or (B) the Agent's payment to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of Credit to the extent, but only to
the extent, that such payment constitutes gross negligence or willful misconduct
of the Agent. It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further investigation
and regardless of any notice or information to the contrary, and such reliance
and payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or willful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which the
Banks are alleged to be liable and it shall be a precondition of the assertion
of any liability of the Banks under this Section that the Company shall first
have exhausted all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in connection with such
Letter of Credit and any related transactions.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon
and
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inure to the benefit of the parties hereto and their respective successors and
assigns, provided that the Company may not, without the prior written consent of
the Banks, assign its rights or obligations hereunder or under the Notes and the
Banks shall not be obligated to make any Advance hereunder to any entity other
than the Company.
(b) The Agent from time to time in its sole discretion may appoint
agents for the purpose of servicing and administering this Agreement and the
transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under this Agreement, the Notes or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Company provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. The Company hereby consents to
the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself. No Bank may assign or sell any of its rights or obligations under this
Agreement or the Notes without the prior written consent of the Company and each
of the other Banks.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the State of
Indiana applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. Each
of the Company and the Banks further agrees that any legal action or proceeding
with respect to this Agreement, the Notes or the transactions contemplated
hereby may be brought in any court of the State of Indiana, or in any court of
the United States of America sitting in Indiana, and each of the Company and the
Banks hereby submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its person and property, and
irrevocably consents to the service of process in connection with any such
action or proceeding by personal delivery to the Company or by the mailing
thereof by registered or certified mail, postage prepaid to the Company at its
address set forth in Section 8.2 or in the signature pages hereof. Nothing in
this paragraph shall affect the right of the Banks and the Agent to serve
process in any other manner permitted by law or limit the right of the Banks or
the Agent to bring any such action or proceeding against the Company or property
in the courts of any other jurisdiction. Each of the Company and the Banks
hereby irrevocably waives any objection to the laying of venue of any such suit
or proceeding in the above described courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
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8.11 Integration and Severability. This Agreement embodies the
entire agreement and understanding between the Company and the Agent and the
Banks, and supersedes all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of the Company
under this Agreement or the Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations of the
Company under this Agreement or the Notes in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or could be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default or any event
or condition which with notice or lapse of time, or both, could become such a
Default or an Event of Default if such action is taken or such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of
this Agreement or the Notes, in no event shall the amount of interest paid or
agreed to be paid by the Company exceed an amount computed at the highest rate
of interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or the Notes, at the
time performance of such provision shall be due, shall involve exceeding the
interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be
fulfilled shall be reduced to an amount computed at the highest rate of interest
permissible under applicable law, and if for any reason whatsoever any Bank
shall ever receive as interest an amount which would be deemed unlawful under
such applicable law such interest shall be automatically applied to the payment
of principal of the Loans outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to the Banks have
been paid in full
8.14 Special Procedures for Disbursement of First Loans. The
Revolving Credit Notes of the Banks are being issued in substitution and
replacement for the revolving credit notes previously issued by the Company to
the Banks under the 1995 Credit Agreement (the "Replaced Revolving Credit
Notes"). On the Effective Date, the principal balance of the Replaced Revolving
Credit Notes, as well as all other information which has been endorsed on the
schedules attached to the Replaced Revolving Credit Notes or elsewhere on the
books and records of the Banks with respect to the Replaced Revolving Credit
Notes, shall be endorsed on the schedules attached to the Revolving Credit Notes
or elsewhere on the books and records of the Banks with respect to the Revolving
Credit Notes, in accordance with the Banks' Pro Rata Shares. The execution and
delivery by the Company of the Revolving Credit Notes shall not in any
circumstances be deemed a novation or to have terminated, extinguished or
discharged the Company's indebtedness evidenced by the Replaced Revolving Credit
Notes, all of which indebtedness shall continue under and be evidenced and
governed by the Revolving Credit Notes and this Agreement.
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8.15 Year 2000 Problem. The Company and its Subsidiaries have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999). Based on such review and program, the
Company reasonably believes that the "Year 2000 Problem" will not have a
material adverse effect on the business, properties, operations or condition,
financial or otherwise, of the Company or any of its Subsidiaries.
8.16 WAIVER OF JURY TRIAL. THE BANKS AND THE AGENT AND THE COMPANY,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER THE BANKS, THE AGENT NOR THE COMPANY
SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY EITHER THE BANKS, THE AGENT OR
THE COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
[The rest of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
THE MONARCH MACHINE TOOL COMPANY
By:______________________________________
Its:__________________________________
Address for Notices: NBD BANK, N.A., as a Bank and as the Agent
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx By:______________________________________
Facsimile: 317/266-6042
Commitment Amount: $9,750,000 Its:__________________________________
Address for Notices: STAR BANK, N.A.
000 Xxxxxx Xxxxxx, X.X. 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Commercial Lending By:______________________________________
Facsimile: 513/632-2068
Commitment Amount: $5,250,000 Its:_________________________________
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