CREDIT AGREEMENT
Exhibit 10.3
THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of December 27, 2006 by and
between LINDSAY ITALIA, S.r.l. an Italian corporation (“Borrower”), and XXXXX FARGO BANK, NATIONAL
ASSOCIATION (“Bank”).
Borrower has requested that Bank extend credit to Borrower as described below, and Bank has
agreed to provide such credit to Borrower on the terms and conditions contained herein.
ARTICLE I
CREDIT TERMS
CREDIT TERMS
SECTION 1.4. GUARANTIES. The payment and performance of all indebtedness and other
obligations of Borrower to Bank shall be guaranteed by Lindsay Corporation (“Guarantor”) in the
principal amount not to exceed Thirteen Million One Hundred Ninety-five Thousand Dollars
($13,195,000.00), as evidenced by and subject to the terms of a continuing guaranty in form and
substance satisfactory to Bank.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to Bank, which representations and
warranties shall survive the execution of this Agreement and shall continue in full force and
effect until the full and final payment, and satisfaction and discharge, of all obligations of
Borrower to Bank subject to this Agreement.
of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Toxic
Substances Control Act, as in effect on the date hereof. Borrower neither has knowledge of nor has
received any written notice that its operations are the subject of any federal or state
investigation evaluating whether any remedial action involving a material expenditure is needed to
respond to a release of any toxic or hazardous waste or substance into the environment. Borrower
has no contingent liability in connection with any release of any toxic or hazardous waste or
substance into the environment that could reasonably be expected to have a material adverse effect
on the financial condition of Borrower.
ARTICLE III
CONDITIONS
CONDITIONS
(i) | This Agreement. | ||
(ii) | The Term Note. | ||
(iii) | Certificate of Incumbency. | ||
(iv) | Corporate Resolution: Borrowing. | ||
(v) | Continuing Guaranty from Guarantor. | ||
(vi) | Such other documents as Bank may require under any other Section of this Agreement. |
Borrower covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in
full of all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents
in writing:
(a) Provide to Bank not later than 90 days after the end of each fiscal year, financial
statements of the Guarantor, audited by KPMG or another certified public accountant acceptable to
Bank, to include balance sheet, income statement, statement of cash flows, management report,
auditor’s report and footnotes; provided, however, that this covenant shall be deemed to be
satisfied upon the electronic filing of the same included within the Guarantor’s Annual Report on
Form 10-K with the Securities and Exchange Commission.
(b) Provide to Bank not later than 45 days after the end of each of the first three fiscal
quarters in each fiscal year, unaudited financial statements of the Guarantor, to include balance
sheet, income statement and statement of cash flows; provided, however, that this covenant shall be
deemed to be satisfied upon the electronic filing of the same included within the Guarantor’s
Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(c) Provide to Bank all of the following:
(i) within ten (10) days of the filing by Guarantor, of any Annual Report on Form 10-K or
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, a certificate of
the President or Chief Financial Officer of Guarantor that the financial statements filed therewith
are accurate and the Guarantor is in compliance in all material respects with all covenants in this
Agreement and there exists no Event of Default nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute an Event of Default; and
(ii) within ten (10) days of the filing by Guarantor, of any Current Report on Form 8-K with
the Securities and Exchange Commission, written notice of such filing; provided, however, that this
covenant shall be deemed to be satisfied upon the electronic filing of such Current Report on Form
8-K with the Securities and Exchange Commission.
(iii) from time to time such other information as Bank may reasonably request.
(a) Consolidated Funded Debt to EBITDA not greater than 2.5 to 1.0 as of each quarter end,
determined on a rolling 4-quarter basis, with “Funded Debt” defined as the sum of all obligations
for borrowed money (including subordinated debt) plus that portion of all capital lease obligations
reported on the balance sheet of Guarantor, as a liability, and with “EBITDA” defined as net profit
before tax plus interest expense, depreciation expense and amortization expense; provided however
that, in the event that an acquisition or disposition permitted by this Agreement shall have been
consummated during such four fiscal quarter period, in computing Consolidated EBITDA, net profit
(and all other amounts specified in the definition of Consolidated EBITDA ) shall be computed on a
pro forma basis giving effect to such acquisition or disposition, as the case may be, as of the
first day of such period.
(b) Consolidated Fixed Charge Coverage Ratio not less than 1.25 to 1.0 as of each quarter end,
determined on a rolling 4-quarter basis, with “Fixed Charge Coverage Ratio”
defined as the aggregate of net profit after taxes plus depreciation expense, amortization expense,
cash capital equity contributions and increases in subordinated debt minus dividends, distributions
and decreases in subordinated debt, divided by the aggregate of the current portion of long term
debt and capitalized lease payments.
Borrower further covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower will not without Bank’s prior written consent:
guarantees entered into n the ordinary course of business in connection with customer financing
transactions.
ARTICLE VI
EVENTS OF DEFAULT
EVENTS OF DEFAULT
SECTION 6.1. The occurrence of any of the following shall constitute an “Event of Default”
under this Agreement:
(a) Borrower shall fail to pay when due any principal, interest, fees or other amounts payable
under any of the Loan Documents, and such default shall continue for a period of three (3) days
from its occurrence.
(b) Any representation or warranty made by Borrower under this Agreement or any other Loan
Document shall prove to be incorrect, false or misleading in any material respect when furnished or
made.
(b) (c) Any default in the performance of or compliance with any obligation, agreement or other
provision contained herein or in any other Loan Document (other than those referred to in
subsections (a) and (b) above), and with respect to any such default which by its nature can be
cured, such default shall continue for a period of twenty (20) days from its occurrence.
(d) Any default (beyond any applicable cure period) by Borrower in the payment of any
obligation, or any defined event of default, under the terms of any contract or instrument
(other than any of the Loan Documents) pursuant to which Borrower has incurred debt for
borrowed money in excess of €1,000,000.00 to any person or entity, other than Bank or an
affiliate of Bank, or in any amount to Bank or any affiliate of Bank, or any default
(beyond any applicable cure period) by Guarantor in the payment of any obligation, or any
defined event of default, under the terms of any contract or instrument (other than any of the Loan
Documents) pursuant to which Guarantor has incurred debt for borrowed money in excess of
$5,000,000.00 to any person or entity other than Bank or an affiliate of Bank, or in any
amount to Bank or any affiliate of Bank
(e) The filing of a notice of judgment lien against Borrower or Guarantor; or the recording of
any abstract of judgment against Borrower or Guarantor in any county in which Borrower or Guarantor
has an interest in real property; in each case with respect to Borrower, in an amount in excess of
€1,000,000.00 in excess of the amount of any insurance proceeds reasonably expected to be
received and with respect to Guarantor, in an amount in excess of $5,000,000.00 over the amount of
any insurance proceeds reasonably expected to be received, which remains unsatisfied without entry
of a stay of execution within 30 days after the issuance of any writ of attachment or the
execution, or other like process, against the assets of Borrower or Guarantor; or the entry of a
judgment against Borrower in excess of €1,000,000.00 over the amount of any insurance proceeds
reasonably expected to be received or Guarantor in excess of $5,000,000.00 over the amount of any
insurance proceeds reasonably expected to be received.
(f) Borrower or Guarantor shall become insolvent, or shall suffer or consent to or apply for
the appointment of a receiver, trustee, custodian or liquidator of itself or any of its property,
or shall generally fail to pay its debts as they become due, or shall make a general assignment for
the benefit of creditors; Borrower or Guarantor shall file a voluntary petition in bankruptcy, or
seeking reorganization, in order to effect a plan or other arrangement with creditors or any other
relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time (“Bankruptcy Code”), or under any state or federal law granting relief
to debtors, whether now or hereafter in effect; or any involuntary petition or proceeding pursuant
to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against Borrower or Guarantor, or
Borrower or Guarantor shall file an answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition; or Borrower or Guarantor shall be adjudicated a bankrupt,
or an order for relief shall be entered against Borrower or Guarantor by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors.
(g) There is a report filed by any person on Schedule 13D (or any successor schedule) pursuant
to the Securities Exchange Act of 1934 (the “Exchange Act”), disclosing that such person (for the
purposes of Section 6.1(h) only, “person” is as defined in Section 13(d)(3) of the Exchange Act)
has become the beneficial owner (for the purposes of Section 6.1(h) only, “beneficial owner” is as
defined under Rule 13d-3 under the Exchange Act) of 50% or more of the voting power of Borrower’s
voting stock then outstanding; provided, however, that a person shall not be deemed beneficial
owner of, or to own beneficially (1) any voting stock tendered pursuant to a tender or exchange
offer made by or on behalf of such person or its affiliates or
associates until such tendered voting stock is accepted for purchase or exchange thereunder, or (2)
any voting stock if such beneficial ownership arises solely as a result of a revocable proxy
delivered in response to a proxy or consent solicitation, and is not also then reportable on
Schedule 13D (or any successor schedule) under the Exchange Act.
ARTICLE VII
MISCELLANEOUS
MISCELLANEOUS
BORROWER:
|
LINDSAY ITALIA, S.r.l. | |
c/o LINDSAY CORPORATION (Guarantor) | ||
0000 Xxxxx 000xx Xxxxxx, Xxxxx 000 | ||
Xxxxx, XX 00000 | ||
Attn: Xxxx Xxxxxxx | ||
Fax No: (000) 000-0000 | ||
BANK:
|
XXXXX FARGO BANK, NATIONAL ASSOCIATION | |
Nebraska RCBO / MAC# N8000-01B | ||
0000 Xxxxxxx Xxxxxx (0xx xxxxx) | ||
Xxxxx, XX 00000-0000 | ||
Attention: Commercial Banking | ||
Fax No.: (000) 000-0000 |
or to such other address or facsimile number as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or made as follows:
(a) if sent by hand delivery or overnight courier service, upon signature by or on behalf of the
receiving party; (b) if sent by certified or registered mail, upon the earlier of the date of
actual receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid;
and (c) if sent by facsimile, upon actual receipt.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of Nebraska.
(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in
Nebraska selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law
provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such
other administrator as the parties shall mutually agree upon, in accordance with the AAA’s
commercial dispute resolution procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex
commercial disputes (the commercial dispute resolution procedures or the optional procedures for
large, complex commercial disputes to be referred to, as applicable, as the “Rules”). If there is
any inconsistency between the terms and procedures hereof and the Rules, the terms and procedures
set forth herein shall control. Any party who fails or refuses to submit to arbitration following
a demand by any other party shall bear all costs and expenses incurred by such other party in
compelling arbitration of any dispute. Nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C.
§91 or any similar applicable state law.
(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected
according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any
dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. Each arbitrator will be a neutral attorney licensed
in the State of Nebraska or a neutral retired judge of the state or federal judiciary of Nebraska,
in either case with a minimum of ten years experience in the substantive law applicable to the
subject matter of the dispute to be arbitrated. The arbitrator(s) will determine whether or not an
issue is arbitratable and will give effect to the statutes of limitation in determining any claim.
In any arbitration proceeding the arbitrator(s) will decide (by documents only or with a hearing at
the discretion of the arbitrator(s)) any pre-hearing motions which are similar to motions to
dismiss for failure to state a claim or motions for summary adjudication. The arbitrator(s) shall
resolve all disputes in accordance with the substantive law of Nebraska and may grant any remedy or
relief that a court of such state could order or grant within the scope hereof and such ancillary
relief as is necessary to make effective any award. The arbitrator(s) shall also have the power to
award recovery of all costs and fees, to impose sanctions and to take such other action as the
arbitrator(s) deem(s) necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the Nebraska Rules of Civil Procedure or other applicable law. Judgment upon the
award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff,
to submit the controversy or claim to arbitration if any other party contests such action for
judicial relief.
general capacity. The resolution of any dispute arising pursuant to the terms of this Agreement
shall be determined by a separate arbitration proceeding and such dispute shall not be consolidated
with other disputes or included in any class proceeding.
A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO PROTECT THE
PARTIES FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING OR OFFER
TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS
LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR
SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN
CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE
EFFECTIVE.
XXXXX FARGO BANK, | ||||||||||
LINDSAY ITALIA, S.r.l. | NATIONAL ASSOCIATION, | |||||||||
By:
|
/s/ Xxxxxxx X. Xxxxx
|
By: | /s/ Xxxxxxx X. Xxxxxxxx
|
|||||||
Title: Chairman |