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EXHIBIT 10.2
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LOAN AGREEMENT
BY AND AMONG
XXXXXXX PIANO & ORGAN COMPANY,
BORROWER,
THE FIFTH THIRD BANK,
AGENT,
AND
THE FIFTH THIRD BANK AND
NBD BANK, N.A.,
LENDERS
MAY 15, 1998
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AMENDED AND RESTATED TERM LOAN AGREEMENT
Xxxxxxx Piano & Organ Company
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TABLE OF CONTENTS
Page
ARTICLE 1. RECITALS........................................................................................1
ARTICLE 2. INTERPRETATION..................................................................................1
Section 2.1 Provisions Pertaining to Definitions...................................................1
Section 2.2 Definitions............................................................................2
ARTICLE 3. THE LOANS......................................................................................12
Section 3.1 Commitments...........................................................................12
Section 3.2 Term Loan.............................................................................12
Section 3.3 The Notes.............................................................................12
Section 3.4 Interest and Principal Payable on the Loans; Fees; Maturity...........................13
(a) Interest..............................................................................13
(b) Principal and Interest Payments.......................................................13
(c) Fees..................................................................................13
(d) Maturity..............................................................................14
Section 3.5 Billing Statement.....................................................................14
Section 3.6 Loan Proceeds.........................................................................14
Section 3.7 Increased Cost........................................................................14
(a) Increased Costs.......................................................................14
(b) Dollar Deposits Unavailable or Interest Rate Unascertainable..........................15
(c) Changes in Law Rendering LIBOR Loans Unlawful.........................................15
(d) Capital Adequacy......................................................................15
(e) Discretion as to Manner of Funding....................................................16
Section 3.8 Advancements..........................................................................16
Section 3.9 All Loans One Obligation..............................................................17
Section 3.10 Payments of Principal and Interest....................................................17
Section 3.11 Collection Days.......................................................................17
Section 3.12 Application of Funds..................................................................17
(a) No Default............................................................................17
(b) Default...............................................................................17
Section 3.13 Use of Proceeds.......................................................................18
(a) Permitted Uses of Loan Proceeds.......................................................18
(b) Prohibited Uses.......................................................................18
Section 3.14 Additional Costs, Etc.................................................................18
Section 3.15 LIBOR Break Funding Costs.............................................................18
ARTICLE 4. SECURITY FOR THE OBLIGATIONS...................................................................18
Section 4.1 Grant of Security Interest............................................................18
Section 4.2 Future Advances.......................................................................19
Section 4.3 Financing Statements..................................................................19
Section 4.4 Guaranties............................................................................19
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Section 4.5 Further Assurances....................................................................19
ARTICLE 5. CONDITIONS PRECEDENT...........................................................................20
Section 5.1 Conditions Precedent..................................................................20
(a) Real Property; Fixtures...............................................................20
(b) Agent's Counsel.......................................................................20
(c) Material Change.......................................................................20
(d) Perfected Liens.......................................................................20
(e) Insurance.............................................................................20
(f) Laws..................................................................................21
(g) Certificate of Good Standing..........................................................21
(h) Opinion of Xxxxxxx'x Counsel..........................................................21
(i) Lien Searches........................................................................21
(j) Other Documents.......................................................................21
(k) Officer's Certificate.................................................................21
(l) Secretary's Certificate of Resolution and Incumbency..................................21
(m) Guaranties...........................................................................22
(n) Payoff................................................................................22
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.................................................................22
Section 6.1 Financial Statements..................................................................22
Section 6.2 Non-Existence of Defaults.............................................................23
Section 6.3 Litigation............................................................................23
Section 6.4 Material Adverse Changes..............................................................23
Section 6.5 Title to Collateral...................................................................23
Section 6.6 Corporate Status......................................................................23
Section 6.7 Subsidiaries..........................................................................23
Section 6.8 Power and Authority...................................................................23
Section 6.9 Place of Business.....................................................................24
Section 6.10 Enforceability of the Loan Documents..................................................24
Section 6.11 Taxes.................................................................................24
Section 6.12 Compliance with Laws..................................................................24
Section 6.13 Consents..............................................................................24
Section 6.14 Purpose...............................................................................24
Section 6.15 Condition of the Business.............................................................24
Section 6.16 Capital...............................................................................24
Section 6.17 Location of Collateral................................................................25
Section 6.18 Environmental, Health and Safety Matters..............................................25
Section 6.19 Intellectual Property: Patents. Copyrights. Trademarks. Etc.........................25
Section 6.20 Employee Benefit Plans................................................................25
Section 6.21 Solvency..............................................................................26
Section 6.22 Leases................................................................................26
Section 6.23 Labor Relations.......................................................................26
Section 6.24 Business Locations; Agent for Process.................................................26
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Section 6.25 General Collateral Representation.....................................................26
Section 6.26 Survival of Representations and Warranties...........................................27
ARTICLE 7. XXXXXXX'X COVENANTS............................................................................27
Section 7.1 Affirmative Covenants.................................................................27
(a) Payment and Performance...............................................................27
(b) Insurance.............................................................................27
(c) Notice of Litigation and Proceedings..................................................28
(d) Payment of Indebtedness to Third Persons..............................................28
(e) Notice of Change of Business Location.................................................28
(f) Payment of Taxes......................................................................29
(g) Employee Benefit Plans and Guaranteed Pension Plans...................................29
(h) Further Assurances....................................................................29
(i) Maintenance of Status.................................................................30
(j) Financial Statements; Reporting Requirements; Certification as to Defaults............30
(k) Notice of Existence of Default........................................................31
(l) Compliance with Laws..................................................................31
(m) Maintenance of Collateral.............................................................31
(n) Reimbursement for Bank Charges........................................................31
Section 7.2 Negative Covenants....................................................................31
(a) Change of Name. Etc...................................................................32
(b) Sale or Transfer of Assets............................................................32
(c) Encumbrance of Assets.................................................................32
(d) Acquisition of Stock or Assets; New Subsidiaries......................................32
(e) False Certificates or Documents.......................................................32
(f) Assignment............................................................................32
(g) Transactions with Affiliates..........................................................32
(h) Loans by Xxxxxxx......................................................................32
(i) Fiscal Year...........................................................................33
(j) Total Indebtedness....................................................................33
(k) Adverse Transactions..................................................................33
(l) Guaranties............................................................................34
(m) Margin Securities.....................................................................34
(n) Leases................................................................................34
(o) Tax Consolidation.....................................................................34
(p) Stock Redemption......................................................................34
Section 7.3 Financial Covenants...................................................................34
(a) Amounts...............................................................................34
(b) Limitations on Capital Expenditures...................................................35
(c) Covenant Compliance Certificate.......................................................36
ARTICLE 8. DEFAULT/REMEDIES...............................................................................36
ARTICLE 9. SALE OF COLLATERAL.............................................................................39
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ARTICLE 10. INDEMNIFICATIONS...............................................................................39
Section 10.1 General Indemnity.....................................................................39
Section 10.2 Environmental and Safety and Health Indemnity.........................................40
ARTICLE 11. CONCERNING THE AGENT AND THE LENDERS...........................................................40
Section 11.1 Appointment of the Agent..............................................................40
Section 11.2 Authority.............................................................................40
Section 11.3 Acceptance of Appointment.............................................................41
Section 11.4 Collateral Matters....................................................................41
(a) Release of Collateral.................................................................41
(b) Confirmation of Authority; Execution of Releases......................................41
(c) Absence of Duty.......................................................................42
Section 11.5 Agency for Perfection.................................................................42
Section 11.6 Application of Moneys.................................................................42
Section 11.7 Reliance by the Agent.................................................................43
Section 11.8 Exculpatory Provisions................................................................43
Section 11.9 Action by the Agent...................................................................43
Section 11.10 Amendments, Waivers and Consents......................................................44
Section 11.11 Indemnification.......................................................................44
Section 11.12 Reimbursement of the Agent............................................................45
Section 11.13 Sharing of Funds Received.............................................................45
Section 11.14 Dealing with Lenders..................................................................45
Section 11.15 Agent as Lender.......................................................................45
Section 11.16 Duties Not to be Increased............................................................45
Section 11.17 Lender Credit Decisions...............................................................46
Section 11.18 Resignation of Agent..................................................................46
Section 11.19 Assignment of Notes; Participation....................................................46
ARTICLE 12. OTHER TERMS....................................................................................47
Section 12.1 Amendment Changes and Modification....................................................47
Section 12.2 Binding Effect........................................................................47
Section 12.3 Broker Fee............................................................................47
Section 12.4 Entire Agreement......................................................................47
Section 12.5 Headings..............................................................................48
Section 12.6 Incorporation by Reference............................................................48
Section 12.7 Interpretation........................................................................48
Section 12.8 Governing Law; Jurisdiction and Venue................................................48
Section 12.9 Waiver of Jury Trial..................................................................48
Section 12.10 Notices...............................................................................49
Section 12.11 No Third Party Beneficiary Rights and Reliance........................................50
Section 12.12 Protection or Preservation of Collateral..............................................50
Section 12.13 Relationship of the Parties...........................................................50
Section 12.14 Reversal of Payments..................................................................50
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Section 12.15 Severability..........................................................................50
Section 12.16 Maximum Interest......................................................................50
Section 12.17 Waivers by the Lenders................................................................51
Section 12.18 Survival..............................................................................51
Section 12.19 Participations; Assignments...........................................................51
Section 12.20 Counterparts..........................................................................51
Section 12.21 Information...........................................................................51
Section 12.22 Miscellaneous.........................................................................51
Section 12.23 Waivers by Xxxxxxx....................................................................52
Section 12.24 No Oral Agreements....................................................................52
Section 12.25 Supplement............................................................................52
Section 12.26 Use of Counsel and Receipt of Loan Agreement..........................................52
Section 12.27 Facsimiles, Etc.......................................................................52
Section 12.28 Power of Attorney.....................................................................52
Section 12.29 Expenses..............................................................................53
AMENDED AND RESTATED TERM LOAN AGREEMENT
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AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS AMENDED AND RESTATED TERM LOAN AGREEMENT (this "Loan Agreement" or
this "Agreement") dated as of May 15, 1998 is by and among XXXXXXX PIANO & ORGAN
COMPANY, a Delaware corporation, (hereinafter, together with its successors in
title and assigns called "Borrower" or "Xxxxxxx"), THE FIFTH THIRD BANK, an Ohio
banking corporation, as Agent (in such capacity, the "Agent"), THE FIFTH THIRD
BANK ("Fifth Third"), as a Lender, and NBD BANK, N.A., a national banking
association, ("NBD") as a Lender, (Fifth Third and NBD are hereinafter
collectively the "Lenders" and each individually a "Lender").
ARTICLE 1.
RECITALS
WHEREAS, Fifth Third and Xxxxxxx have entered into a General Loan and
Security Agreement dated as of June 15, 1989, as amended by an Amended and
Restated General Loan and Security Agreement dated as of February 24, 1994
(collectively, the "Original Loan Agreement" );
WHEREAS, Xxxxxxx has requested that Fifth Third amend and restate the
Original Loan Agreement, pursuant to the terms herein, to provide Xxxxxxx with a
loan for working capital purposes;
WHEREAS, Fifth Third has agreed to amend and restate the Original Loan
Agreement and now wishes to assign to NBD part of the rights and obligations of
Fifth Third under the Original Loan Agreement, as amended, with respect to the
Loan, as hereinafter defined, in an amount equal to Five Million and 00/100
Dollars ($5,000,000.00) on the terms and subject to the conditions set forth
herein, and NBD wishes to accept such assignment of rights and to assume such
obligations from Fifth Third on such terms and subject to the conditions set
forth herein; and
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
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ARTICLE 2.
INTERPRETATION
Section 2.1 Provisions Pertaining to Definitions. For all purposes of
this Loan Agreement (except where such interpretations would be inconsistent
with the context or the subject matter):
(a) The expression "this Loan Agreement" shall mean this Loan
Agreement, as amended and restated, (including all of the Schedules and
Exhibits annexed hereto) as originally executed, or, if supplemented,
amended or restated from time to time, as so supplemented, amended or
restated. All references to Schedules and Exhibits refer to the
Schedules and Exhibits attached hereto, unless otherwise indicated;
(b) Where appropriate, words importing the singular only shall
include the plural and vice versa, and all references to dollars shall
be United States Dollars; and
(c) Accounting terms not otherwise defined herein shall have
the meanings customarily given in accordance with GAAP (as hereinafter
defined) and all financial computations or determinations to be made
under this Loan Agreement shall, unless otherwise specifically provided
herein, be made in accordance with the financial statements delivered
pursuant to Section 7.1(j) and shall be made on a consolidated basis.
Section 2.2 Definitions.
"Accounts" shall have the meaning given to that term in the
UCC and, to the extent not included therein, shall also mean all
accounts, leases, contract rights, chattel paper, general intangibles,
chooses in action and instruments, including any Lien or other security
interest that secures or may secure any of the foregoing, plus all
books, invoices, documents and other records in any form evidencing or
relating to any of the foregoing, now owned or hereafter acquired by
Xxxxxxx; provided, however, that KAC Accounts shall not constitute
"Accounts" under this Loan Agreement or the other Loan Documents.
"Affiliates" shall mean: (i) any individual who is an officer
or director of a Person; and (ii) any Person who directly or indirectly
controls, is controlled by, or is under common control or ownership
with, a Person. For the purposes of this definition, the term "control"
shall mean the ownership of or the ability to direct or control 10% or
more of the beneficial interest in the applicable entity.
"Xxxxxxx/KAC Purchase Agreement" means the Retail Accounts
Receivable Purchase Agreement dated as of October 1, 1990 among
Xxxxxxx, The Wurlitzer Company and KAC, as amended, supplemented or
otherwise modified from time to time with the written consent of Agent.
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"Business" shall mean the manufacture and distribution of
keyboard musical instruments, contract furniture, contract music,
contract electronics and other similar business in which Borrower may
engage from time to time.
"Business Day" shall mean any day on which banks are open for
business in Cincinnati, Ohio.
"Capital Expenditure" shall mean any amount debited to the
fixed asset account on the consolidated balance sheet of Xxxxxxx and
the Subsidiaries in respect of: (a) the acquisition (including. without
limitation, acquisition by entry into a capitalized lease),
construction, improvement, replacement or betterment of land,
buildings, machinery, equipment or of any other fixed assets or
leaseholds, and (b) to the extent related to and not included in clause
(a), materials, contract labor and direct labor (excluding expenditures
properly chargeable to repairs or maintenance in accordance with GAAP).
"Capital Lease" means any lease of Property which has been or
is required to be capitalized on a Borrower's financial statements in
accordance with GAAP.
"Closing Date" means the day on which the Loans are amended
pursuant to this Agreement.
"Collateral" shall mean all items described in Section 4.1.
"Contingent Obligation" means any direct or indirect
liability, contingent or otherwise, with respect to any Indebtedness,
lease, dividend, letter of credit, banker's acceptance or other
obligation of another if the primary purpose or intent thereof in
incurring the Contingent Obligation is to provide assurance to the
obligee of such obligation of another that such obligation of another
will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof.
Contingent Obligations shall include, without limitation, (i) the
direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the obligation of
another; (ii) any liability for the obligations of another through any
agreement (contingent or otherwise) (A) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether
in the form of loans, advances, stock purchases, capital contributions
or otherwise), (B) to maintain the solvency of any balance sheet item,
level of income or financial condition of another, or (C) to make
take-or-pay, pay-or-play or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, if in the
case of any agreement described under subclauses (A), (B) or (C) of
this sentence the primary purpose or intent thereof is as described in
the preceding sentence. The amount of any Contingent Obligation shall
be equal to the amount of the
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obligation so guaranteed or otherwise supported."Debt" shall have the
meaning set forth in Section 7.3(a).
"Default" shall have the meaning set forth in Article 8.
"Default Interest Rate" means an annual rate of interest which
shall (to the extent permitted by applicable law) at all times be equal
to three percent (3%) above the Interest Rate applicable at the time of
such default.
"EBITDA" for any period shall mean without duplication, (i)
Net Income; plus (ii) for such period any Interest Expense deducted in
the determination of Net Income; plus (iii) any income and franchise
taxes paid in cash and included in the determination of Net Income;
plus (iv) amortization and depreciation deducted in determining Net
Income for such period; minus (v) the sum for such period of interest
income, extraordinary non-cash gains, gains from sales of assets (other
than sales of inventory in the ordinary course of business) and
unrealized losses from changes in currency; plus (vi) extraordinary
non-cash losses.
"Effective Date" shall mean the date set forth in the heading
on page 1 of this Loan Agreement.
"Employee Benefit Plan" means an "employee benefit plan" as
defined in Section 3(3) of ERISA.
"Environmental Laws" shall mean the Resource Conservation and Recovery
Act, as amended, the Toxic Substances Control Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Solid
Waste Disposal Act, as amended, the Water Pollution Control Act, as amended, the
Clean Air Act, as amended, the Clean Water Act, as amended, and any successor or
comparable federal or state statutes, or any regulation promulgated under any of
such federal or state statutes relating to the protection of the environment.
"Environmental Lien" shall mean a Lien in favor of any
governmental entity for: (a) any liability under any Environmental Law,
or (b) damages arising from or costs incurred by such governmental
entity in response to a spillage, disposal, or release into the
environment of any Hazardous Material or other hazardous, toxic or
dangerous waste, substance or constituent, or other substance.
"ERISA" means the Employee Retirement Income Security Act of
1974 and regulations issued thereunder, as amended from time to time
and any successor statute.
"ERISA Affiliate" means, in relation to any Person, any trade
or business (whether or not incorporated) which is a member of a group
of which that Person is a member and
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which is under common control within the meaning of the regulations
promulgated under Section 414 of the Internal Revenue Code of 1986, as
amended.
"ERISA Liabilities" means the aggregate of all unfunded vested
benefits under any employee pension benefit plan, within the meaning of
Section 3(2) of ERISA, of Borrower or any ERISA Affiliate of Borrower
under any Plan covered by ERISA that is not a Multiemployer Plan and
all potential withdrawal liabilities of any thereof under all
Multiemployer Plans.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurocurrency Reserve Percentage" means the daily average
reserve percentage applicable during each day of such Loans under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any emergency,
supplemental or other marginal reserve requirement for a member bank of
the Federal Reserve System in New York City) with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that
includes deposits by reference to which the interest rate on Loans is
determined).
"FEMA" means the Federal Emergency Management Agency, or any
similar successor agency of the federal government.
"Fixed Charges" means, for any period, the following, each
calculated for such period, without duplication: (i) Interest Expense
paid on accrual; plus (ii) any income and franchise taxes paid in cash;
plus (iii) scheduled payments of principal with respect to all
Indebtedness for Borrowed Money of Borrower including the principal
component of any cash payments made on any Capital Lease.
"Funding Date" shall mean the date designated by Xxxxxxx for
the making of a Loan hereunder.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"GECC" means General Electric Capital Corporation, a New York
corporation.
"Guarantor" shall mean a guarantor of any of the Obligations.
"Guaranteed Pension Plan" means any pension plan maintained by
Borrower or an ERISA Affiliate of Borrower, or to which Borrower or an
ERISA Affiliate contributes, some or all of the benefits under which
are guaranteed by the United States Pension Benefit Guaranty
Corporation ("PBGC").
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"Hazardous Material" shall mean any and all hazardous or toxic
substances, materials or wastes as defined or listed under the
Environmental Laws.
"Head Office" means The Fifth Third Bank, Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000.
"Indebtedness" shall mean any sum for borrowed money owed by
Xxxxxxx or any Subsidiary (other than by KAC and other than any
guaranty of indebtedness of KAC) to a Person and shall include any debt
guaranteed by Xxxxxxx or any Subsidiary (other than KAC), any debt as
to which the Xxxxxxx has granted or permitted to exist a Lien on any
asset even if non-recourse, letter of credit reimbursement obligations,
and capitalized lease obligations.
"Indebtedness for Borrowed Money" means at any particular
time, all Indebtedness (i) in respect of any money borrowed; (ii) under
or in respect of any Contingent Obligation (whether direct or indirect)
of any money borrowed; (iii) evidenced by any loan or credit agreement,
promissory note, debenture, bond, guaranty or other similar written
obligation to pay money; or (iv) Capital Lease obligations.
"Indemnified Liabilities" shall have the meaning set forth in
Section 10.1.
"Indemnitees" shall have the meaning set forth in Section
10.1.
"Intangibles" shall have the meaning set forth in Section
7.3(a).
"Interest Expense" means, for any period, the total amount of
all charges for the use of funds (whether characterized as interest,
debt service or otherwise) payable during such period with respect to
all Indebtedness for Borrowed Money of a Borrower for such period
including the amortization of debt discounts and the amortization of
all fees payable in connection with the incurrence of such
Indebtedness.
"Interest Rate" means, with respect to the Term Loan, the rate
of interest per annum equal to the LIBOR Rate plus one-hundred
seventy-five (175) basis points.
"Inventory" means all of Xxxxxxx'x now owned and hereafter
acquired inventory, goods, merchandise, and other personal property,
wherever located, to be furnished under any contract or service or held
for sale or lease, including, without limitation, all returned goods,
finished goods and other materials and supplies of any kind, nature or
description which are or might be consumed in Xxxxxxx'x Business or
used in connection with the packing, shipping, advertising, selling or
furnishing of such goods, merchandise and such other personal property,
and all documents of title or other documents representing them;
provided, however, that returned and repossessed goods relating to any
KAC Accounts shall not constitute "Inventory" under this Loan Agreement
or the other Loan Documents unless and until such returned or
repossessed goods have been resold by GECC to
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Xxxxxxx pursuant to the Purchase and Sales Agreement and GECC or its
assignee has received the purchase price therefor provided under such
agreement.
"KAC" means Keyboard Acceptance Corporation, a Delaware
corporation and a Subsidiary of Xxxxxxx (formerly known as BPO Finance
Corporation).
"KAC Accounts" shall mean retail installment contracts which
result from the sale of inventory to consumers and which are sold or
otherwise transferred to KAC pursuant to the Xxxxxxx/KAC Purchase
Agreement, and contributed, sold or otherwise transferred by KAC under
the Purchase and Sale Agreement or which are acquired by KAC in the
normal course of its business, including accounts which result from the
sale of products to consumers which products are manufactured or
distributed by parties other than Xxxxxxx or its Subsidiaries.
"LIBOR Break Funding Costs" means an amount sufficient to
reimburse each Lender for any and all loss, cost or expense (including
without limitation, any loss incurred in obtaining, liquidating or
reemploying deposits from third parties acquired to maintain the Loan
or any part thereof as a LIBOR Rate Loan) incurred or sustained by each
of them as the consequence of the occurrence of any prepayment. Such
indemnification shall include, without limitation, an amount equal to
the excess, if any, of (i) the amount of interest that otherwise would
have accrued on the principal amount so prepaid, beginning with the
date of such prepayment until the first day of each January, April,
July and October that would have otherwise have been in effect for the
Loan, at the Interest Rate over (ii) the amount of interest (determined
by Agent) that otherwise would have accrued on such principal amount by
reemploying such amount at a rate equal to LIBOR for such period or
nearest available period for deposits bearing a rate equal to LIBOR.
"LIBOR Rate" means, for each quarter, the London Interbank
Offered Rate (LIBOR) for three-month deposits in U.S. dollars that appears on
Page 3750 of the Dow Xxxxx Telerate Service (or any other page that may replace
any such page on such service in the judgment of Agent) as of the last Business
Day of the prior calendar quarter, provided, however, for the period from the
Closing Date through June 30, 1998 such term shall mean the LIBOR Rate as of the
Business Day preceding the Closing Date.
"LIBOR Rate (Reserve Adjusted)" shall mean, the rate per annum
obtained by dividing the LIBOR Rate by a percentage equal to one
hundred percent (100%) minus the Eurocurrency Reserve percentage for
such interest period.
"Lien" shall mean any security interest, mortgage, pledge,
lien, hypothecation, judgment lien or similar legal process, charge,
encumbrance, title retention agreement or analogous instrument or
device (including, without limitation, the interest of lessors under
capitalized leases and the interest of a vendor under any conditional
sale or other title retention agreement), reservations, exceptions,
encroachments, easements, rights-of-
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way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting any of Xxxxxxx'x property.
"Liquidity Agreement" means the Liquidity Agreement dated as
of October 1, 1990 between Retail Funding Corporation and GECC, as
amended, supplemented or modified from time to time.
"Loan" shall mean the Term Loan made to or for the benefit of
Xxxxxxx pursuant to this Loan Agreement.
"Loan Documents" shall mean all documents executed by Xxxxxxx
pursuant to any financial accommodation between Xxxxxxx and the Lenders
(other than pursuant or with respect to the Previous Fifth Third
Transactions) and all documents entered into in connection with the
transaction with the Lenders herein contemplated. The term "Loan
Documents" includes, but is not limited to, this Loan Agreement, all
financing statements, all pledges, security agreements, guaranties,
assignments, subordination agreements, and any future or additional
documents or writings executed under the terms of this Loan Agreement
or any amendments or modifications hereto.
"Loan Year" means each period of twelve (12) consecutive
calendar months, commencing on the Closing Date and on each anniversary
thereof.
"Monthly Compliance Certificate" shall have the meaning set
forth in Section 7.3(c).
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is maintained for employees of
Borrower, or any ERISA Affiliate of Borrower.
"Net Income" means, for any period, the aggregate of the net
income (or net loss) of a Borrower for such period, determined in
accordance with GAAP, but excluding, without duplication: (i) the
income of any Person in which a Borrower has an ownership interest,
unless received by such Borrower in a cash distribution; (ii) any
after-tax gains or losses attributable to dispositions of assets; (iii)
the income of any Subsidiary of a Borrower to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at that time permitted by operation of
the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to
that Subsidiary; and (iv) any after-tax extraordinary non-cash gains or
extraordinary non-cash losses.
"Notes" mean, collectively, the amended and restated Term Loan
Promissory Notes, each of which are to be dated, executed and delivered
to Lenders by Borrower on the Closing Date. "Note" shall mean any one
of the Notes.
AMENDED AND RESTATED TERM LOAN AGREEMENT
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"Obligations" shall mean all liabilities and Indebtedness of
any kind and nature whatsoever now or hereafter arising, owing, due or
payable from Xxxxxxx (and/or any of its Subsidiaries and Affiliates) to
any Lender arising under the Loan Documents, whether primary or
secondary, joint or several, direct, contingent, fixed or otherwise,
secured or unsecured or whether arising under this Loan Agreement, any
other Loan Document or any other agreement now or hereafter executed by
Xxxxxxx (or any of its Subsidiaries or Affiliates) and delivered to the
Lenders in connection with the Loan or this Agreement. Obligations will
include, without limitation, any third party claims against Xxxxxxx (or
any of its Subsidiaries or Affiliates) satisfied or acquired by the
Lenders. Obligations will also include all obligations of Xxxxxxx to
pay to the Lenders: (a) any and all sums reasonably advanced by the
Lenders to preserve or protect the Collateral or the value of the
Collateral or to preserve, protect or perfect the Lenders' security
interests in the Collateral; (b) in the event of any proceeding to
enforce the collection of the Obligations after a Default, the
reasonable expenses of retaking, holding, preparing for sale, selling
or otherwise disposing of or realizing on the Collateral, or expenses
of any exercise by any Lender of its rights, together with reasonable
attorneys' fees, expenses of collection and court costs, as provided in
the Loan Documents; and (c) any other indebtedness or liability of
Xxxxxxx to the Lenders, whether direct or indirect, absolute or
contingent now or hereafter arising; provided, however, that any
liabilities and Indebtedness resulting from the Securitization and from
the Previous Fifth Third Transactions are specifically excluded from
the definition of Obligations.
"OSHA Law" shall mean the Occupational Safety and Health Act
of 1970, any successor thereto, and any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability or standards of conduct
concerning employee health and/or safety.
"Participation Percentage" for each Lender means the
percentage set forth below opposite such Lender.
================================================================
LENDER PARTICIPATION PERCENTAGE
----------------------------------------------------------------
Fifth Third 50%
----------------------------------------------------------------
NBD 50%
================================================================
"Patents" shall mean all of the following in which Borrower
now holds or hereafter acquires any interest: (i) all letters patent of
the United States or any country, all registrations and recordings
thereof, and all applications for letters patent of the United States
or any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state or territory
thereof or any other country, and (ii) all reissues, continuations,
continuations-in-part or extensions thereof.
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"Permitted Liens" shall mean: (a) Liens for taxes, assessments
or other governmental charges or levies not yet delinquent or which are
being contested in good faith by appropriate action and as to which
adequate reserves shall have been set aside in conformity with GAAP;
(b) Liens of mechanics, materialmen, landlords, warehousemen, carriers
and similar Liens arising in the future in the ordinary course of
business for sums not yet delinquent, or being contested in good faith
if a reserve or other appropriate provision in accordance with GAAP
shall have been made therefor and which are, in addition, satisfactory
to Agent in its reasonable discretion; (c) statutory Liens incurred in
the ordinary course of business in connection with workers'
compensation, unemployment insurance, social security, and similar
items for sums not yet delinquent or being contested in good faith, if
a reserve or other appropriate provision in accordance with GAAP shall
have been made therefor and which are, in addition, satisfactory to
Agent in its reasonable discretion; (d) lessor's Liens arising from
operating leases entered into in the ordinary course of business; (e)
Liens arising from legal proceedings, so long as such proceedings are
being contested in good faith by appropriate proceedings, appropriate
reserves have been established therefor in accordance with GAAP and
which are, in addition, satisfactory to Agent in its reasonable
discretion, and so long as execution is stayed and bonded on appeal on
all judgments resulting from any such proceedings; (f) Liens in favor
of Agent for the benefit of the Lenders granted hereunder; (g) Liens
arising pursuant to the Permitted Securitization Documents; and (h)
Liens arising pursuant to the Previous Fifth Third Transaction.
"Permitted Securitization Documents" shall mean: (i) the
Purchase and Sale Agreement, (ii) Liquidity Agreement, as amended,
supplemented or otherwise modified from time to time with the prior
written consent of Agent and (iii) the Xxxxxxx/KAC Purchase Agreement.
"Person" shall mean an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an
unincorporated organization, and a government or any department or
agency thereof.
"Previous Fifth Third Transaction" shall mean that certain
Credit Agreement by and among Xxxxxxx, Fifth Third and NBD dated as of
October 16, 1997, as amended by a First Amendment to Credit Agreement
dated as of October 16, 1997 and a Second Amendment to Credit Agreement
dated as of April 27, 1998.
"Prime Rate" shall mean a fluctuating interest rate per annum
equal to the prime, base or reference rates of interest announced
publicly from time to time (whether or not charged in each instance) by
Agent (or any successor thereof) as such bank's prime, base, or
reference rate. Each change in the Prime Rate shall become effective on
the day the applicable reference bank announces a change in its prime
or reference rate. Xxxxxxx acknowledges that Agent may extend credit at
rates of interest less than its announced prime, base or reference
rate.
AMENDED AND RESTATED TERM LOAN AGREEMENT
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"Prime Rate Loans" shall mean Loans bearing interest at a rate
determined by reference to the Prime Rate.
"Property" means all types of real, personal, tangible,
intangible or mixed property.
"Purchase and Sale Agreement" shall mean the Purchase and
Administration Agreement dated as of October 1, 1990 among Retailer
Funding Corporation, KAC, Xxxxxxx and GECC, as amended, supplemented or
otherwise modified from time to time.
"Rentals" shall have the meaning set forth in Section 7.2(n).
"Requisite Lenders" means the Lenders whose aggregate
Participation Percentages are greater than or equal to sixty-six and
two-thirds percent (66-2/3%).
"Securitization" shall mean the transaction whereby Xxxxxxx
sells retail installment contracts to KAC who thereupon sells such
retail installment contracts to Retail Funding Corporation which sells
an undivided pool interest in such contracts.
"Standard Flood Hazard Determination Form" means Form 81-93 or
any successor or replacement thereof developed by FEMA pursuant to
Section 528 of the National Flood Insurance Reform Act of 1994 (42
U.S.C. 1365(a)), for determining whether a building or structure is
located in an area identified as an area having special flood hazards,
whether flood insurance is required and whether flood insurance is
available under 42 U.S.C. 4001. et seq.
"Subordinated Debt" shall have the meaning set forth in
Section 7.3.
"Subsidiaries" shall mean any corporation in which a Person
owns or controls greater than fifty percent (50%) of the voting
securities, or any partnership or joint venture in which a Person owns
or controls greater than fifty percent (50%) of the aggregate equitable
interest. The term "Subsidiary" means any one of the Subsidiaries.
"Tangible Net Worth" shall have the meaning set forth in
Section 7.3.
"Term Loan" means the Loan made pursuant to Section 3.2
hereof.
"Term Loan Promissory Notes" means, collectively, the amended
and restated promissory notes of Borrower, in the face amounts of each
Lender's Participation Percentage of the Term Loan in or substantially
in the form of Exhibit A hereto. "Term Loan Promissory Note" shall mean
any one of the Term Loan Promissory Notes.
"Termination Date" means, with respect to the Term Loan, the
earlier of (i) five (5) years following the Closing Date; (ii) the date
upon which the entire principal of the Notes shall become due pursuant
to the provisions hereof (whether as a result of
AMENDED AND RESTATED TERM LOAN AGREEMENT
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acceleration by Agent or the Requisite Lenders or otherwise); or (iii)
the date upon which the Term Loan shall be paid in full.
"Termination Event" means (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder, but not
including any such event for which the thirty (30) day notice
requirement has been waived by applicable PBGC regulation; or (ii) the
withdrawal of Borrower or an ERISA Affiliate of Borrower from a
Guaranteed Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; or
(iii) the filing of a notice of intent to terminate a Guaranteed
Pension Plan or the treatment of a Guaranteed Pension Plan amendment as
a termination under Section 4041 of ERISA; or (iv) the institution of
proceedings to terminate a Guaranteed Pension Plan by the Pension
Benefit Guaranty Corporation; or (v) the withdrawal or partial
withdrawal of Borrower or an ERISA Affiliate of Borrower from a
Multiemployer Plan; or (vi) any other event or condition which might
reasonably be expected to constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any
Guaranteed Pension Plan.
"Total Commitment" shall mean Ten Million and 00/100 Dollars
($10,000,000.00).
"Trademarks" shall mean all of the following in which Borrower
now holds or hereafter acquires any interest: (i) all trademarks, trade
names, corporate names, business names, trade styles, service marks,
logos, other source or business identifiers, prints and labels on which
any of the foregoing have appeared or appear, designs and general
intangibles of like nature, all registrations and recordings thereof,
and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
state or territory thereof or any other country, and (ii) all reissues,
extensions or renewals thereof.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of Ohio and any successor statute, together with any
regulations thereunder, in each case as in effect from time to time.
References to sections of the UCC shall be construed to also refer to
any successor sections.
"UCC Financing Statements" mean the UCC financing statements
naming the Borrower, as debtor, and Agent, for the ratable benefit of
Lenders, as creditor, which UCC financing statements describe all or
some portion of the Collateral and which together perfect Agent's
security interest in the Collateral.
"Unmatured Default" shall mean any event which, but for the
passage of time or notice, or both, would be a Default.
AMENDED AND RESTATED TERM LOAN AGREEMENT
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ARTICLE 3.
THE LOANS
Section 3.1 Commitments. Subject to the terms of this Loan Agreement,
each Lender severally and not jointly agrees, for so long as no Default or
Unmatured Default exists and upon the terms of and subject to the conditions
contained in this agreement, to make the Term Loans on the Closing Date in a
principal amount equal to such Lender's Participation Percentage of the
aggregate principal amount of such Loan.
Section 3.2 Term Loan. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, each Lender severally agrees to lend to Borrower on the
Closing Date its Participation Percentage of the Term Loan. The aggregate amount
of the Term Loan shall be Ten Million and 00/100 Dollars ($10,000,000.00). The
Term Loan shall be funded in one drawing on the Closing Date. Amounts borrowed
under this Section 3.2 and repaid or prepaid may not be reborrowed.
Section 3.3 The Notes. The absolute and unconditional obligation of
Borrower to repay to each Lender its respective Participation Percentage of the
principal of the Loan and the interest thereon shall be evidenced by separate
Term Loan Promissory Notes for each Lender in the amount of its respective
Participation Percentage of the Total Commitment dated as of the Closing Date.
All payments under the Notes shall be made to Agent at its Head Office, for the
account of Lenders, and Agent shall allocate all payments on the Loan received
from Borrower among all Lenders in accordance with each Lender's Participation
Percentage of such Loan.
Section 3.4 Interest and Principal Payable on the Loans; Fees;
Maturity.
(a) Interest.
(i) Determination of Interest Rate. Agent shall
determine the Interest Rate in effect from time to time in
accordance with the terms of this Agreement. Any change in the
Interest Rate shall, for all purposes of this Agreement and
any of the other Loan Documents, become effective on the
effective date of such change as announced by Agent in
accordance with Agent's customary practices.
(ii) Interest on Overdue Payments; Default Interest
Rate. If any amount of principal or interest or any other
Obligation is not paid when due, or upon the occurrence and
during the continuance of any Event of Default, or if the
Agent exercises its rights hereunder to accelerate any of the
Notes pursuant to Section 8.19(a), the outstanding principal
and all accrued and unpaid interest, as well as any other
Obligations due Lenders or Agent hereunder or under any Loan
Document, shall bear interest at the Default Interest Rate,
from the date on which such amount shall have first become due
and payable to Lenders or Agent or the date on which such
Event of Default shall have occurred, to the date on which
AMENDED AND RESTATED TERM LOAN AGREEMENT
Xxxxxxx Piano & Organ Company
20
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such amount shall be paid to Lenders or Agent (whether before
or after judgment) or such Event of Default shall have been
waived or cured. Interest will continue to accrue until the
Obligations in respect of the payment are discharged (whether
before or after judgment).
(iii) Interest Rate After Certain Events. If a
judgment is entered against Xxxxxxx for sums due under any of
the Obligations, as applicable, the amount of the judgment
entered (which may include principal, interest, reasonable
attorneys' fees and costs) shall bear interest at the Default
Interest Rate as of the date of entry of the judgment. All
Obligations of Xxxxxxx described in clauses (a) and (b) of the
definition thereof shall bear interest at the Default Interest
Rate.
(b) Principal and Interest Payments. Borrower shall pay to
Agent, beginning on July 1, 1998 and on each January 1, April 1, July 1
and October 1, thereafter, equal quarterly installments of principal in
the amount of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00) (or such lesser principal amount of the Term Loan as
shall then be outstanding), plus accrued and unpaid interest thereon at
the Interest Rate; provided that in any event the last installment of
principal on the Term Loan shall be due and payable on the Termination
Date (if not earlier prepaid) and shall be in an amount sufficient to
pay in full the entire unpaid principal amount of the Term Loan.
(c) Fees. Borrower shall pay to Agent the commitment fees, to
be distributed pro rata among the Lenders in accordance with their
respective Participation Percentages, equal to thirty-five basis points
or Thirty-Five Thousand and 00/100 Dollars ($35,000.00) to be paid on
the Closing Date.
(d) Maturity. The Term Loan Notes shall, if not sooner paid or
due, be in any event absolutely and unconditionally due and payable in
full by Borrower on May 1, 2003.
Section 3.5 Billing Statement Agent will send Xxxxxxx a monthly billing
statement identifying all charges due on Xxxxxxx'x account with the Lenders,
provided, however, failure of Agent to send to Borrower any such statement shall
not in any manner relieve Borrower of its obligations as set forth herein. The
charges specified on each billing statement will be: (a) due and payable in full
immediately on receipt; and (b) for an amount stated, absent manifest error.
Agent may adjust the billing statement at any time to conform to applicable law
and this Loan Agreement.
Section 3.6 Loan Proceeds. The parties intend that all indebtedness
incurred hereunder shall be governed exclusively by the terms of this Loan
Agreement and the other Loan Documents, and shall not, unless requested by the
Lenders, be evidenced by notes or other evidences of indebtedness. Upon any such
request, Xxxxxxx will immediately execute and deliver any such note or other
evidence reasonably requested by the Lenders. Any fees, charges or expenses
charged to the Lenders by any bank for payments made by the Lenders at Xxxxxxx'x
AMENDED AND RESTATED TERM LOAN AGREEMENT
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request shall be immediately payable by Xxxxxxx. All advances and other
obligations of Xxxxxxx made hereunder will constitute a single obligation.
Section 3.7 Increased Cost.
(a) Increased Costs. If, as a result of any law,
regulation, treaty or directive, or any change therein, or in the
interpretation or application thereof or compliance by the Lenders with
any request or directive (whether or not having the force of law) from
any court or governmental authority, agency or instrumentality:
(i) the basis of taxation of payments to the Lenders
(for purposes of this Section 3.7(a), a Lender shall also
refer to any affiliates of such Lender engaged in the funding
of the lending obligations hereunder) of the principal of or
interest on any Loan (other than taxes imposed on the overall
net income of such Lender by the jurisdiction in which such
Lender has its principal office) is changed;
(ii) any reserve, special deposit or similar
requirements against assets of, deposits with or for the
account of a Lender are imposed, modified or deemed
applicable; or
(iii) any other condition affecting this Loan
Agreement or the Loans is imposed on a Lender or the interbank
Eurodollar market;
and a Lender determines that, by reason thereof, the cost to such
Lender of making or maintaining any of the Loans is increased, or the
amount of any sum receivable by such Lender hereunder in respect of any
of the Loans is reduced;
then, Xxxxxxx shall pay such Lender upon thirty (30) days written
notice from such Lender (which notice shall be accompanied by a
statement setting forth the basis for the calculation thereof but only
to the extent not theretofore provided to Xxxxxxx) such additional
amount or amounts as will compensate such Lender for such additional
cost or reduction (provided such amount has not been compensated for in
the calculation of the currency Reserve Percentage). Notwithstanding
the foregoing, no Lender will be entitled to the amount of such
additional cost or reduction for any period which is more than six (6)
months prior to the date of notice by such Lender to Xxxxxxx hereunder.
Determinations by a Lender for purposes of this Section of the
additional amounts required to compensate such Lender in respect of the
foregoing shall be conclusive, absent manifest error.
(b) Dollar Deposits Unavailable or Interest Rate
Unascertainable. If Xxxxxxx has any Loan outstanding, or has notified
Agent of the intention to obtain a Loan as provided herein, then if
prior to the date that the LIBOR Rate is determined, Agent determines
(which determination shall be conclusive and binding on the parties
hereto)
AMENDED AND RESTATED TERM LOAN AGREEMENT
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22
that three-month deposits of the necessary amount are not available to
the Lenders in the interbank dollar market or that by reason of
circumstances affecting such market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate applicable to such period or
term, as the case may be, Agent shall promptly give notice of such
determination to Xxxxxxx, and any notice of new Loans previously given
by Xxxxxxx and not yet borrowed shall be deemed a notice to make a
Prime Rate Loan to the extent of the Lenders' proposed Loan.
(c) Changes in Law Rendering LIBOR Loans Unlawful. If at any
time due to any new law, treaty or regulation, or any change of any
existing law, treaty or regulation, or any interpretation thereof by
any governmental or other regulatory authority charged with the
administration thereof, or for any other reason arising subsequent to
the date hereof, it shall become unlawful for the Lenders to fund any
Loan which it is committed to make hereunder, the obligation of the
Lenders to provide Loans based on LIBOR shall, upon the happening of
such event forthwith be suspended for the duration of such illegality.
If any such change shall make it unlawful to continue Loans previously
made by it hereunder, Agent shall, upon the happening of such event
notify Xxxxxxx thereof in writing stating the reasons therefor, and
Xxxxxxx shall, if required by such law, regulation or interpretation,
on such date as shall be specified in such notice, or prepay all such
Loans, without any penalty or premium whatsoever (except as provided in
Section 3.7(e)), to the Lenders in full. Any such prepayment shall be
subject to the provisions of Section 3.7(e).
(d) Capital Adequacy. If a Lender shall determine at any time
after the Effective Date that the adoption of any law, rule, guideline
or regulation regarding capital adequacy, or compliance with any law,
rule, guideline or regulation regarding capital adequacy, or any change
therein or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by such
Lender with any request or directive or compliance with any law, rule,
guideline or regulation regarding capital adequacy (whether or not
having the force of law) from any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on a Lender's capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved
but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then Xxxxxxx shall pay to such
Lender upon demand such amount or amounts, in addition to the amounts
payable under the other provisions of this Loan Agreement, as will
compensate such Lender for such reduction. Any such demand by such
Lender hereunder shall be in writing, and shall set forth the reasons
for such demand and copies of all documentation reasonably relevant in
support thereof. Notwithstanding the foregoing, no Lender will be
entitled to receive such additional amount for any period which is more
than six (6) months prior to the date of such Lender's written demand
to Xxxxxxx as provided hereunder. Determinations by a Lender for
purposes of this Section 3.7(d) of the additional amount or amounts
required
AMENDED AND RESTATED TERM LOAN AGREEMENT
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to compensate such Lender in respect of the foregoing shall be
conclusive in the absence of manifest error. In determining such amount
or amounts, a Lender may use any reasonable averaging and attribution
methods.
(e) Discretion as to Manner of Funding. Notwithstanding any
provision of this Loan Agreement to the contrary, a Lender may fund and
maintain its funding of all or any part of its Loans in any manner it
elects, it being understood, however, that for the purposes of this
Loan Agreement all determinations hereunder shall be made as if such
Lender had actually funded and maintained each Loan through the
purchase of deposits having a maturity corresponding to the maturity of
each Loan and bearing an interest rate equal to the LIBOR Rate. A
Lender may, if it so elects fulfill any commitment to make Loans by
causing an affiliate to make or continue such Loans, provided, however,
that in such event such loans shall be deemed for the purposes of this
Loan Agreement to have been made by such Lender, and the obligation of
Xxxxxxx to repay such Loans shall nevertheless be to the Lenders and
shall be deemed held by such Lender on behalf of the Lenders, to the
extent of such Loans, for the account of such branch or affiliate.
Section 3.8 Advancements. If Xxxxxxx fails to: (a) perform any of the
affirmative covenants contained herein, (b) protect or preserve the Collateral;
or (c) protect or preserve the status and priority of the Liens and security
interest of Agent for the benefit in the Collateral, the Lenders may make
advances to perform those obligations. Agent will use reasonable efforts to
attempt to give Xxxxxxx notice prior to making such advancement. All sums so
advanced will be due and payable upon demand and will immediately upon
advancement become secured by the security interests created by this Loan
Agreement and will be subject to the terms and provisions of this Loan Agreement
and all of the Loan Documents. Agent may add all sums so advanced, plus any
expenses or costs incurred by Agent or any Lender, including reasonable
attorneys' fees, as outstanding Loans as Agent may designate in its sole
discretion. The provisions of this Section will not be construed to prevent the
institution of rights and remedies of Agent or any Lender upon the occurrence of
a Default. Any provisions in this Loan Agreement to the contrary
notwithstanding, the authorizations contained in this Section will impose no
duty or obligation on any Lender to perform any action or make any advancement
on behalf of Xxxxxxx and are for the sole benefit and protection of the Lenders.
Section 3.9 All Loans One Obligation. All Obligations of Xxxxxxx to the
Lenders under the Loan Documents shall constitute one obligation to the Lenders
secured by the security interests granted in this Loan Agreement, and by all
other Liens heretofore, now, or at any time or times hereafter granted by
Xxxxxxx. All of the rights of the Lenders set forth in this Loan Agreement shall
apply to any modification of or supplement to this Loan Agreement, or Exhibits
hereto, unless otherwise agreed in writing.
Section 3.10 Payments of Principal and Interest. All payments and
amounts due hereunder by Xxxxxxx shall be made or be payable without set-off or
counterclaim and shall be made to Agent on the date due at its Head Office or at
such other place which Agent may designate to Xxxxxxx in writing. Any payments
received after 1:00 p.m. (EST) shall be deemed
AMENDED AND RESTATED TERM LOAN AGREEMENT
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received on the next Business Day. Whenever any payment to be made hereunder
shall be stated to be due on a date other than a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall be
included in the computation of payment of interest or any fees. In order to
cause timely payment to be made to Agent of all Obligations as and when due,
Borrower hereby authorizes and directs Agent, at Agent's option to debit the
account of Borrower maintained with Agent or by increasing the principal balance
of the Loan when such Obligations become due.
Section 3.11 Collection Days. All payments and all amounts received
hereunder will be credited by Agent to Xxxxxxx'x account one (1) day after good
funds have been deposited into Agent's general operating account.
Section 3.12 Application of Funds. Notwithstanding anything herein to
the contrary, the funds received by Agent with respect to the Obligations shall
be applied as follows:
(a) No Default. If the Notes have not been accelerated
pursuant to Section 8.19(a) and if no Default or Event of Default
hereunder or under the Notes or any of the other Loan Documents shall
have occurred and be continuing at the time Agent receives such funds,
in the following manner: (a) first, to the payment of all fees,
charges, and other sums (with exception of principal and interest) due
and payable to Agent or Lenders under the Notes, this Agreement or the
other Loan Documents at such time; (b) second, to the payment of all of
the interest which shall be due and payable on the principal of the
Notes at the time of such payment in accordance with each Lender's
Participation Percentage; (c) third, to the payment of such amount of
principal of the Term Loan Notes that is then due in accordance with
each Lender's Participation Percentage; and (d) fourth, to Borrower.
(b) Default. If the Notes have been accelerated pursuant to
Section 8.19(a), or if a Default or Event of Default hereunder shall
have occurred and be continuing hereunder or under the Notes or any of
the other Loan Documents at the time Agent receives such funds, in the
following manner: (a) first, to the payment or reimbursement of Lenders
and Agent for all costs, expenses, disbursements and losses which shall
have been incurred or sustained by Lenders or Agent in or incidental to
the collection of the Obligations owed by Borrower hereunder or the
exercise, protection, or enforcement by Lenders and Agent of all or any
of the rights, remedies, powers and privileges of Lenders and Agent
under this Agreement, the Notes, or any of the other Loan Documents and
in and towards the provision of adequate indemnity to the Agent and any
of the Lenders against all taxes or Liens which by law shall have, or
may have priority over the rights of the Agent or Lenders in and to
such funds and (b) second, to the payment of all of the Obligations in
accordance with Section 3.12(a) above.
AMENDED AND RESTATED TERM LOAN AGREEMENT
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Section 3.13 Use of Proceeds.
(a) Permitted Uses of Loan Proceeds. Borrower represents,
warrants and covenants to Agent and each Lender that all proceeds of the Loans
shall be used by Borrower solely for the purpose of refinancing existing debt
and financing working capital.
(b) Prohibited Uses. Borrower represents, warrants and
covenants to Agent and each Lender that no part of the proceeds of the Loans
will be used (directly or indirectly) so as to result in a violation under
Regulations G, T, U or X of the Board of Governors of the Federal Reserve System
or for any other purpose violative of any rule or regulation of such Board.
Section 3.14 Additional Costs, Etc. If any Lender shall reasonably
determine that any future applicable law, rule or regulation, or any change in
any present law or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital, as a
consequence of its obligations hereunder, to a level below that which such
Lender could have achieved but for such adoption, change or compliance by any
amount deemed by such Lender to be material and is not otherwise reflected in
the interest and other charges payable by Borrower hereunder, then Borrower
shall pay to such Lender upon demand such amount or amounts, in addition to the
amounts payable under the other provisions of this Agreement, or the Notes, as
will compensate such Lender for such reduction. Determinations by any Lender of
the additional amount or amounts required to compensate such Lender in respect
of the foregoing shall be conclusive in the absence of manifest error. In
determining such amount or amounts, Lender may use any reasonable averaging and
attribution methods.
Section 3.15 LIBOR Break Funding Costs. Upon any prepayment of the
Loan not made on the first day of each January, April, July and October,
Borrower shall pay to Agent for the ratable benefit of the Lenders, the LIBOR
Break Funding Costs.
ARTICLE 4.
SECURITY FOR THE OBLIGATIONS
Section 4.1 Grant of Security Interest.
(a) To secure payment of all of Xxxxxxx'x current and future
Obligations and to secure Xxxxxxx'x performance of all of the
provisions under this Loan Agreement and the other Loan Documents,
Xxxxxxx grants, and hereby pledges and collaterally assigns, to Agent,
for the benefit of the Lenders, a lien and continuing security interest
in all of
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Xxxxxxx'x fixtures and personal property, other than Accounts and
Inventory, wherever located, whether now or hereafter owned, existing
or acquired or hereafter arising, including, without limitation, the
Collateral. To secure further such liabilities and obligations,
Xxxxxxx has granted to Agent, on behalf of the Lenders, a first lien
with respect to each parcel of land and those leasehold interests of
Xxxxxxx identified on Schedule 4.1(a) attached hereto (the "Real
Estate"); has executed and delivered to Agent, on behalf of Lenders,
mortgages or deeds of trust, amendments or modifications to leasehold
mortgages and valid assignments of all other property rights
(including, without limitation, rights to receive rents and rights
with respect to judgments and claims) which now exist or which may
arise hereafter from time to time; has executed and delivered to
Agent, on behalf of Lenders, certificates of title and the like as
necessary from time to time to secure the Obligations hereunder and
shall deliver to Agent, on behalf of the Lenders, to the extent
required herein or upon Agent's request in accordance with the terms
of this Agreement, all instruments, documents and chattel paper in
which Xxxxxxx from time to time has an interest and such other
documents as Agent may request to perfect a security interest in the
Collateral.
(b) All such assets in Subsection (a) above are collectively
referred to herein as the "Collateral." All such terms for which
meanings are provided in the UCC are used herein with such meanings.
All Collateral financed by the Lenders, and all proceeds thereof, will
be held in trust by Xxxxxxx for the Lenders, with such proceeds being
payable in accordance with this Loan Agreement. Xxxxxxx covenants with
the Lenders that the Lenders may realize upon all or part of any
Collateral in any order it desires and any realization by any means
upon any Collateral will not bar realization upon any other collateral.
Xxxxxxx'x liability under this Loan Agreement is direct and
unconditional and will not be affected by the release or non-perfection
of any security interest granted hereunder.
Section 4.2 Future Advances. The Lenders' security interests shall
secure all current and all future advances to Xxxxxxx made by the Lenders under
the Loan Documents.
Section 4.3 Financing Statements. Xxxxxxx shall execute and deliver to
Agent for the benefit of the Lenders such financing statements and original
documents as may be required by the Lenders with respect to the Lenders'
security interests.
Section 4.4 Guaranties. Xxxxxxx shall cause any and all Subsidiaries
(other than KAC and any other Subsidiary of Xxxxxxx or KAC formed in connection
with the Securitization) whether now existing or hereafter acquired, to execute
and deliver guaranties of the Obligations which guaranties shall be
substantially in the form of Exhibit B and shall be secured by a perfected
security interest in all property, both real and personal, fixtures and
leasehold interests of such Subsidiaries pursuant to a Subsidiary Security
Agreement substantially in the form of Exhibit C.
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Section 4.5 Further Assurances. Xxxxxxx will execute and deliver to
Agent, at such time or times as the Lenders may request, all financing
statements, security agreements, assignments, certificates, affidavits, reports,
schedules, and other documents and instruments that the Lenders may deem
necessary to perfect and maintain perfected the Lenders' security interests in
the Collateral and to fully consummate the transactions contemplated under all
Loan Documents. Xxxxxxx will pay all filing, recording or registration fees.
ARTICLE 5.
CONDITIONS PRECEDENT
All duties and obligations of the Lenders under the Loan Documents on
the Effective Date, and at all times during the term of this Loan Agreement, are
specifically subject to the full and continued satisfaction by Xxxxxxx of the
conditions precedent set forth below.
Section 5.1 Conditions Precedent. The following conditions must be
satisfied as of the Closing Date:
(a) Real Property; Fixtures. On or prior to the Closing Date
Borrower, at Borrower's cost and expense, shall provide with respect to
the Real Estate: (i) Assignments and Amendments to Mortgages,
Assignments of Rents and Security Agreements; (ii) updated title
reports and/or updates or endorsements to title insurance policies, as
requested by Agent; (iii) UCC Fixture Filings, if required by Agent;
(iv) Owner's Affidavits substantially in the form of Exhibit D attached
hereto, if required by Agent; and (v) Standard Flood Hazard
Determination Forms issued or certified by a Person satisfactory to
Agent.
(b) Agent's Counsel. Agent's counsel must approve of all
matters pertaining to (i) title to the Collateral; (ii) the form,
substance and due execution of all Loan Documents; (iii) Xxxxxxx'x
organizational documents; and (iv) all other legal matters, including
the application of any laws relating to usury.
(c) Material Change. There must not have been any material
adverse change, between December 31, 1997 and the Closing Date, in the
condition of Xxxxxxx, the condition of the Business, the value and
condition of the Collateral, the structure of Xxxxxxx other than as
contemplated herein, or in the financial information, audits and the
like obtained by Fifth Third.
(d) Perfected Liens. Agent, for the benefit of the Lenders,
shall have a perfected Lien and security interest in the Collateral,
subject only to the Permitted Liens; and shall have received evidence
in form and substance satisfactory to Agent that all filings,
recordings, registrations and other actions, including without
limitation, the filing of duly executed UCC Financing Statements on
Form UCC-1, necessary or, in the
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opinion of Agent, desirable to perfect the Liens created by the Loan
Documents, shall have been completed.
(e) Insurance. Xxxxxxx shall provide Agent with certificates
of insurance evidencing that Xxxxxxx has obtained the insurance as
required in Section 7.1(b). Further, in the event such Standard Flood
Hazard Determination Form evidences that the subject structure or
improvement is located in a special flood hazard, as defined by FEMA,
Borrower shall deliver to Agent and Lenders evidence of appropriate
flood insurance in amounts and under such conditions as identified in
Section 7.1(b)(i).
(f) Laws. Xxxxxxx and its Subsidiaries shall be in compliance
with all applicable laws and governmental regulations, including, but
not limited to, all Environmental Laws, the failure to comply with
which would have a material adverse effect on Xxxxxxx, its Subsidiaries
or the Business.
(g) Certificate of Good Standing. A certificate of good
standing for Xxxxxxx (or other similar certificate) must be delivered
to Agent, from the appropriate governmental authority of Xxxxxxx'x
state of incorporation and other jurisdictions in which Xxxxxxx
maintains an office or factory, dated not earlier than thirty (30) days
prior to the Closing Date.
(h) Opinion of Xxxxxxx'x Counsel. Agent must receive a written
opinion from counsel for Xxxxxxx, dated the Effective Date, and
addressed to and for the benefit of the Lenders, in form and substance
of Exhibit E and reasonably satisfactory to Agent.
(i) Lien Searches. Agent shall have received the results of a
recent search by a Person satisfactory to Agent, of the UCC, judgment
and tax lien filings which may have been filed with respect to the
property, both real and personal, fixtures and leasehold interests of
Borrower or any of its Subsidiaries in the jurisdictions listed on
Schedule 5.1(i), not more than five (5) days before the Closing Date,
that pertain to the Collateral, and the results of such search shall be
satisfactory to Agent.
(j) Other Documents. Xxxxxxx shall provide Agent with such
other documents, certificates, submissions, insurance policies and
other matters as reasonably requested by Agent relating to the
transaction herein contemplated.
(k) Officer's Certificate. Agent and each Lender shall have
received from Borrower a certificate dated as of the Closing Date,
signed by a duly authorized officer and certifying that each of the
representations and warranties made by and on behalf of Borrower to
Agent and each Lender in this Loan Agreement and in the other Loan
Documents was true and correct when made, and is true and correct on
and as of the Closing Date.
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(l) Secretary's Certificate of Resolution and Incumbency.
Xxxxxxx shall provide Agent with a copy of all actions taken by
Borrower to authorize the execution by Borrower of the Loan Agreement,
the Loan Documents and all other documents required under the
provisions of the Loan Agreement, along with a certificates of the
Secretary or Assistant Secretary of Borrower, dated as of the Closing
Date, certifying:
(i) that the copies of such actions are true,
complete, are in full force and effect and have not been
amended, modified, or rescinded;
(ii) the name and bearing a specimen signature of
each individual who shall be authorized: i) to sign, in the
name and on behalf of Borrower, each of the Loan Documents to
which Borrower is or is to become a party on the Closing Date;
and ii) to give notices and to take other action on behalf of
Borrower under the Loan Documents; and
(iii) the Articles of Incorporation and By-Laws
of Xxxxxxx
(m) Guaranties. The Lenders shall
(i) have received a duly executed Guaranty from
Xxxxxxx Piano Company (Canada) Limited,
(ii) The Wurlitzer Company,
(iii) Xxxxxxx Trading Company and
(iv) Signature Leasing Company and shall have
perfected a first priority Lien and security interest in the
collateral described in such Guaranty, subject to Permitted
Liens.
(n) Payoff. A lien release and payoff letter executed by
any and all lienholders on any of the Collateral, other than with
respect to the Permitted Liens.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Loan Agreement, Xxxxxxx makes
the representations and warranties set forth below, all of which will remain
true in all material respects during the term of this Loan Agreement. Xxxxxxx
acknowledges the Lenders' justifiable right to rely upon the representations and
warranties set forth below.
AMENDED AND RESTATED TERM LOAN AGREEMENT
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Section 6.1 Financial Statements. Xxxxxxx'x audited consolidated
financial statements as of December 31, 1997 and Xxxxxxx'x unaudited
consolidated financial statement as of March 31, 1998, copies of which have been
previously submitted to Agent, have been prepared in conformity with GAAP and
present fairly the financial condition of Xxxxxxx and its consolidated
Subsidiaries as at such dates and the results of their operations for the
periods then ended. Xxxxxxx warrants and represents to the Lenders that all
financial statements and information relating to Xxxxxxx or any Guarantor which
have been or may hereafter be delivered by Xxxxxxx or any Guarantor are true and
correct and have been and will be prepared in accordance with GAAP and, with
respect to such previously delivered statements or information, there has been
no material adverse change in the financial or business condition of Xxxxxxx or
any Guarantor since the submission to the Agent, either as of the date of
delivery, or, if different, the date specified therein, and Xxxxxxx acknowledges
the Lenders' reliance thereon.
Section 6.2 Non-Existence of Defaults. Neither Xxxxxxx nor any of its
Subsidiaries is in default with respect to any material amount of its existing
Indebtedness. The making and performance of this Loan Agreement and all other
Loan Documents, will not immediately, or with the passage of time, the giving of
notice, or both: (a) violate the provisions of the bylaws or any other corporate
document of Xxxxxxx; (b) violate any laws to the best of Xxxxxxx'x knowledge
after diligent inquiry; (c) result in a material default under any contract,
agreement, or instrument to which Xxxxxxx is a party or by which Xxxxxxx or its
properties are bound; or (d) result in the creation or imposition of any
security interest in, or Lien or encumbrance upon, any of the Collateral except
the Permitted Liens.
Section 6.3 Litigation. Set forth on Schedule 6.3 is a list of all
actions, suits, investigations or proceedings pending or, to the knowledge of
Xxxxxxx, threatened against Xxxxxxx or any of its Subsidiaries, as of the date
hereof in which there is a reasonable probability of an adverse decision which
would materially and adversely affect Xxxxxxx, the Business, or the value of the
Collateral in the aggregate.
Section 6.4 Material Adverse Changes. Xxxxxxx does not know of or
expect any material adverse change in the Business, or in Xxxxxxx'x or any of
the Subsidiaries' assets, liabilities, properties, or condition, financial or
otherwise, including changes in Xxxxxxx'x financial condition from December 31,
1997 through the Closing Date.
Section 6.5 Title to Collateral. Except for the Permitted Liens,
Xxxxxxx has good and marketable title to all of the Collateral, free and clear
of any and all Liens, claims and encumbrances.
Section 6.6 Corporate Status. Xxxxxxx and each of the Subsidiaries is a
corporation duly organized and validly existing, in good standing, with
perpetual corporate existence, under the laws of their respective jurisdictions
of formation. Xxxxxxx and its Subsidiaries have the corporate power and
authority to own their properties and to transact the business in which they are
engaged and presently propose to engage. Xxxxxxx and each Subsidiary is duly
qualified as a foreign corporation and in good standing in all states where the
nature of their business or the
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ownership or use of their property requires such qualification, and where
failure to so qualify would have a material adverse effect on its business,
operations or financial condition.
Section 6.7 Subsidiaries. All of the Subsidiaries of Borrower, as of
the Effective Date., are set forth on Schedule 6.7.
Section 6.8 Power and Authority. Xxxxxxx has the corporate power to
borrow and to execute, deliver and carry out the terms and provisions of the
Loan Documents. Xxxxxxx has taken or caused to be taken all necessary corporate
action to authorize the execution, delivery and performance of this Loan
Agreement and all other Loan Documents and the borrowing thereunder.
Section 6.9 Place of Business. Xxxxxxx'x chief executive office and the
principal place of business is located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxx
00000. Xxxxxxx'x records concerning the Collateral are kept at such chief
executive office, or will be kept at such other place that Xxxxxxx informs Agent
of not less than thirty (30) days in advance of relocation
Section 6.10 Enforceability of the Loan Documents. The Loan Documents
executed by Xxxxxxx are the valid and binding obligations of Xxxxxxx and are
enforceable against Xxxxxxx in accordance with their terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
Section 6.11 Taxes. Xxxxxxx'x federal tax identification number is
00-0000000. Xxxxxxx has (a) filed all federal, state and local tax returns and
other reports that it is required by law to file, (b) paid or caused to be paid
all taxes, assessments and other governmental charges that are due and payable,
the failure of which to pay would have a material adverse effect on the
Business, except those contested in good faith and in accordance with accepted
procedures, and for which adequate reserves have been established in accordance
with GAAP, and (c) made adequate provision for the payment of such taxes,
assessments or other charges accruing but not yet payable. Xxxxxxx has no
knowledge of any deficiency or additional assessment in a material amount in
connection with any taxes, assessments or charges.
Section 6.12 Compliance with Laws. Xxxxxxx, to the best of its
knowledge, has complied, and shall cause each Subsidiary to comply, in all
material respects with all applicable laws, the failure to comply with which
would have a material adverse effect on Xxxxxxx individually, or Xxxxxxx and its
Subsidiaries on a consolidated basis.
Section 6.13 Consents. Xxxxxxx and each of the Subsidiaries have
obtained all material consents, permits, licenses, approvals or authorization
of, or effected the filing, registration or qualification with, any governmental
entity which is required to be obtained or effected by Xxxxxxx and the
Subsidiaries in connection with the Business or the execution and delivery of
this Loan Agreement and the other Loan Documents the failure of which to obtain
or effect would have a material adverse effect on Xxxxxxx individually, or on
Xxxxxxx and its Subsidiaries on a consolidated basis.
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Section 6.14 Purpose. Xxxxxxx will use the proceeds of the Term Loan
made hereunder solely for lawful purposes and as described in Article I hereof.
Section 6.15 Condition of the Business. All material assets used in the
conduct of the Business are in good operating condition and repair and are fully
usable in the ordinary course thereof, reasonable wear and tear excepted.
Section 6.16 Capital. All issued shares and all outstanding shares in
the Subsidiaries as reflected in Xxxxxxx'x financial statements are validly
issued pursuant to proper authorization of the board of directors of such
Subsidiary, and are fully paid, and non-assessable. Xxxxxxx and the Subsidiaries
shall give Agent fifteen (15) days prior written notice before entering any
agreement to register its equity or debt securities under the Securities Act of
1933, as amended, or any state securities law. All Xxxxxxx'x and Subsidiaries'
issued shares and outstanding capital stock are fully paid and non-assessable,
and each such Person's capital structure is as set forth on Schedule 6.16.
Section 6.17 Location of Collateral. Schedule 6.17 describes the
locations where any of the Collateral is located or stored as of the date
hereof.
Section 6.18 Environmental, Health and Safety Matters. Except as set
forth on Schedule 6.18, the Borrower has obtained all material permits, licenses
and other authorizations which are required under the Environmental Laws
existing on the date hereof. To the best of Borrower's knowledge, Borrower is in
material compliance with all material terms and conditions of any and all
material required permits, licenses, and authorizations, required under the
Environmental Laws existing on the date hereof. Borrower has received no notice
of any facts, events or conditions that interfere with or prevent continued
compliance by Borrower with, or give rise to any present or potential legal,
common law or statutory liability against Borrower. The Borrower's
representations and warranties set forth in this Section 6.18 are its exclusive
representations as to the matter set forth herein regarding Environmental Laws
and no other Section of this Article 6 shall be construed as a representation on
Environmental Laws and Borrower's compliance therewith.
Section 6.19 Intellectual Property: Patents. Copyrights. Trademarks.
Etc. The Borrower possesses and has made all filings with the United States
Patent and Trademark office and appropriate state agencies to evidence in it
full and complete title to all the patents, trademarks, service marks, trade
names, copyrights and licenses and rights in respect of the foregoing which are
material to the conduct of its business, without any known conflict with the
rights of others.
Section 6.20 Employee Benefit Plans.
(a) Except as described in Schedule 6.20 hereof, Borrower and
its ERISA Affiliates are in compliance in all material respects with
any applicable provisions of
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ERISA and the regulations thereunder and of the Internal Revenue Code
of 1986, as amended, with respect to all Employee Benefit Plans.
(b) No Termination Event has occurred or is reasonably
expected to occur with respect to any Guaranteed Pension Plan.
(c) Except as described in Schedule 6.20 hereof, the actuarial
present value of all benefit commitments under each Guaranteed Pension
Plan does not exceed the assets of that Plan.
(d) Neither Borrower nor any of its ERISA Affiliates is a
party to or participates in any Multiemployer Plans.
As used in this Subsection, the terms "actuarial present value" and
"benefit commitments" shall have the meanings specified in Section 4001
of ERISA.
Section 6.21 Solvency. Xxxxxxx and its Subsidiaries now have capital
sufficient to carry on their respective business and transactions and all
business and transactions in which they are about to engage and are now solvent
and able to pay their respective debts as they mature, and Xxxxxxx and of the
Subsidiaries now owns property having a value, greater than the amount required
to pay Xxxxxxx'x or such Subsidiary's debts.
Section 6.22 Leases. Schedule 6.22(a) attached hereto is a complete
listing of all capitalized leases of Xxxxxxx and Schedule 6.22(b) attached
hereto is a complete listing of each operating lease of Xxxxxxx which requires
payments of at least Two Million and 00/100 Dollars ($2,000,000.00) over the
remaining non-cancelable terms of such lease.
Section 6.23 Labor Relations. Except as described on Schedule 6.23
attached hereto and made a part hereof, neither Xxxxxxx nor any of its
Subsidiaries is a party to any collective bargaining agreement, and there are no
material grievances, disputes or controversies with any union or any other
organization of Xxxxxxx'x employees, or threats of strikes, work stoppages or
any asserted pending demands for collective bargaining by any union or
organization.
Section 6.24 Business Locations; Agent for Process. Xxxxxxx currently
has no office or place of business located in any state or county other than as
shown Schedule 6.17.
Section 6.25 General Collateral Representation.
(a) Borrower is the sole owner of and has good and marketable
title to the Collateral, free from all Liens, in favor of any Person
other than the Agent and except Permitted Liens, and has full right and
power to grant the Agent a security interest therein. All information
furnished to the Agent concerning the Collateral is and will be
complete, accurate and correct in all respects when furnished.
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(b) No security agreement, UCC Financing Statement, equivalent
security or Lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public
office, except such as may have been filed (i) by Borrower in favor of
Agent pursuant to this Agreement, or (ii) in respect of the items of
Collateral subject to the Permitted Liens.
(c) The provisions of this Agreement are sufficient to create
in favor of the Agent, as of the Closing Date, a valid and continuing
lien on, and first security interest in, the types of the Collateral
hereunder in which a security interest may be created under Article 9
of the UCC. UCC Financing Statements have been duly executed on behalf
of Borrower and the description of such Collateral set forth therein is
sufficient to perfect first priority security interests in such
Collateral in which a security interest may be perfected by the filing
of UCC Financing Statements. When such UCC Financing Statements are
duly filed in the filing offices listed on Schedule 6.25(c), and the
requisite filing fees are paid, such filings will be sufficient to
perfect security interests in such of the Collateral described in the
UCC Financing Statements as can be perfected by filing (other than
Equipment affixed to real property so as to become fixtures), which
perfected security interests will be prior to all other Liens in favor
of others and rights of others, enforceable as such as against
creditors of and purchasers from Borrower (other than purchasers of
Inventory in the ordinary course) and as against any owner of the Real
Estate where any of the Equipment is located and as against any
purchaser of such Real Estate and any present or future creditor
obtaining a Lien on such real property; and
Section 6.26 Survival of Representations and Warranties. Xxxxxxx
covenants, warrants and represents to the Lenders that all representations and
warranties of Xxxxxxx contained in this Loan Agreement or any of the other Loan
Documents shall be true at the time of Xxxxxxx'x execution of this Loan
Agreement and the other Loan Documents, and shall survive the execution,
delivery and acceptance thereof by the Lenders and the parties thereto and the
closing of the transactions described therein or related thereto.
ARTICLE 7.
XXXXXXX'X COVENANTS
Section 7.1 Affirmative Covenants. During the term of this Loan
Agreement and thereafter for so long as any Obligations are outstanding and
unpaid, Xxxxxxx covenants that unless otherwise consented to by Agent in
writing, it shall perform all the acts and promises required by this Loan
Agreement and all the acts and promises set forth below.
(a) Payment and Performance. Xxxxxxx will pay and perform all
Obligations in full when and as due hereunder.
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(b) Insurance.
(i) Type of Insurance. At its own cost and
expense, Xxxxxxx shall obtain and maintain during the term of
this Agreement (a) insurance against loss, destruction or
damage to the Business and the Collateral with insurers of
reasonable financial soundness and having an A. M. Best rating
of A or better, with such policies, against such risks and in
such amounts as are appropriate for reasonably prudent
businesses in Xxxxxxx'x industry and of Xxxxxxx'x size and
financial strength; and (b) minimum flood insurance as
required by FEMA or any other government agency or when
required by federal, state or local law, statute, regulation
or ordinance and as may be required by Agent and Lenders.
(ii) Requirements as to Insurance Policies. The
policies of insurance which Xxxxxxx is required to carry shall
comply with the requirements listed below:
(1) Each such policy shall provide that it
may not be canceled or allowed to lapse at the end of
a policy period without at least thirty (30) days'
prior written notice to Agent;
(2) Each liability and hazard insurance
policy shall name Agent as an additional insured; and
(3) Each property insurance policy required
hereunder shall contain a standard lender's loss
payable clause in favor of Agent. Such insurance
policies shall also contain lender's loss payable
endorsements satisfactory to Agent providing, among
other things, that any loss shall be payable in
accordance with the terms of such policy
notwithstanding any act of Xxxxxxx which might
otherwise result in forfeiture of such insurance;
(iii) Collection of Claims. Xxxxxxx will promptly
advise Agent of any insured casualty in excess of Five Hundred
Thousand and 00/100 Dollars ($500,000.00) and Xxxxxxx agrees
that after Default Agent may direct all insurance proceeds
therefrom to be paid directly to the Lenders to the extent
that such loss is not adequately insured under an insurance
policy which names Agent as a loss payee, and hereby appoints
Agent its attorney-in-fact for such purpose.
(iv) Blanket Policies. Any insurance required
hereunder may be supplied by means of a blanket or umbrella
insurance policy.
(v) Delivery of Policies or Certificates of
Insurance. Xxxxxxx shall deliver to Agent certificates of
insurance issued by insurers to evidence that the insurance
maintained by Xxxxxxx complies with the requirements
hereunder.
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(c) Notice of Litigation and Proceedings. Xxxxxxx will give
prompt notice to Agent of: (a) any litigation or proceeding (including
fines and penalties of any public authority) in excess of Five Hundred
Thousand and 00/100 Dollars ($500,000.00) in which it, or any of the
Subsidiaries is a party in which there is a reasonable possibility of
an adverse decision which would require it or any of the Subsidiaries
to pay money or deliver assets, whether or not the claim is considered
to be covered by insurance; (b) any class action litigation against it,
regardless of size; and (c) the institution of any other suit or
proceeding that might materially and adversely affect its or any of its
Subsidiary's operations, financial condition, property or the Business.
(d) Payment of Indebtedness to Third Persons. Xxxxxxx will,
and will cause each Subsidiary to, pay, when due, all Indebtedness and
any other liability due third persons, except when the amount thereof
is being contested in good faith by appropriate proceedings and with
adequate reserves therefor satisfactory to Agent in accordance with
GAAP being set aside by Xxxxxxx or such Subsidiary. Agent will use
reasonable efforts to attempt to give Xxxxxxx notice before Agent
requires Xxxxxxx to set aside additional reserves.
(e) Notice of Change of Business Location. Xxxxxxx will notify
Agent thirty (30) days in advance of: (a) any change in or
discontinuation of the location of the Collateral, Xxxxxxx'x principal
place of business, or any of the Subsidiaries' existing offices or
places of business, (b) the establishment of any new places of business
relating to the Business, and (c) any change in or addition to the
locations where Xxxxxxx'x Inventory or records are kept.
(f) Payment of Taxes. Xxxxxxx will, and will cause each
Subsidiary to, pay or cause to be paid, when and as due, all taxes,
assessments and charges or levies imposed upon it or on any of its
property or that it is required to withhold and pay over to the taxing
authority or that it must pay on its income, the failure of which to
pay would have a material adverse effect on Xxxxxxx individually, or on
Xxxxxxx and the Subsidiaries on a consolidated basis, except where
contested in good faith by appropriate proceedings with adequate
reserves in accordance with GAAP, having been set aside by Xxxxxxx or
such Subsidiary. However, Xxxxxxx will, and will cause each Subsidiary
to, pay or cause to be paid all such taxes, assessments, charges or
levies immediately whenever foreclosure of any Lien that attaches on
the Collateral appears imminent.
(g) Employee Benefit Plans and Guaranteed Pension Plans.
Borrower will and will cause each of its ERISA Affiliates to (i) comply
with all requirements imposed by ERISA and the Internal Revenue Code of
1986, as amended, applicable from time to time to any of its Guaranteed
Pension Plans or Employee Benefit Plans, (ii) make full payment when
due of all amounts which, under the provisions of Employee Benefit
Plans or under applicable law, are required to be paid as contributions
thereto, (iii) not permit to exist any accumulated funding deficiency,
whether or not waived, (iv) file on a timely basis all reports, notices
and other filings required by any governmental agency with
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respect to any of its Employee Benefit Plans, (v) make any payments to
Multiemployer Plans required to be made under any agreement relating to
such Multiemployer Plans, or under any law pertaining thereto, (vi) not
amend or otherwise alter any Guaranteed Pension Plan if the effect
would be to cause the actuarial present value of all benefit
commitments under each Guaranteed Pension Plan to be less than the
current value of the assets of such Guaranteed Pension Plan allocable
to such benefit commitments, (vii) furnish to all participants,
beneficiaries and employees under any of the Employee Benefit Plans,
within the periods prescribed by law, all reports, notices and other
information to which they are entitled under applicable law, and (viii)
take no action which would cause any of the Employee Benefit Plans to
fail to meet any qualification requirement imposed by the Internal
Revenue Code of 1986, as amended. As used in this Section 7.1, the term
"accumulated funding deficiency" has the meaning specified in Section
302 of ERISA and Section 412 of the Internal Revenue Code, and the
terms "actuarial present value", "benefit commitments" and "current
value" have the meaning specified in Section 4001 of ERISA.
(h) Further Assurances. Xxxxxxx agrees to, and will cause each
Subsidiary to, execute such other and further documents, including
without limitation, deeds of trust, promissory notes, security
agreements, financing statements, continuation statements, certificates
of title, and the like as may from time to time in the reasonable
opinion of Agent be necessary to perfect, confirm, establish,
re-establish, continue, or complete the security interests, collateral
assignments and Liens in the Collateral, and the purposes and
intentions of this Loan Agreement.
(i) Maintenance of Status. Xxxxxxx will take all necessary
steps to (a) preserve its, and each Subsidiary's, existence as a
corporation, (b) preserve Xxxxxxx'x and the Subsidiaries' franchises
and permits, and (c) comply with all present and future material
agreements to which Xxxxxxx, or any of the Subsidiaries, is subject,
and (d) maintain, and cause each Subsidiary to maintain, its
qualification and good standing in all states in which such
qualification is necessary or in which the failure to be so qualified
might have a material adverse effect on the financial condition or
properties of Xxxxxxx or the Business. Xxxxxxx will not change the
nature of the Business during the term of this Loan Agreement.
(j) Financial Statements; Reporting Requirements;
Certification as to Defaults. During the term of this Loan Agreement,
Xxxxxxx will furnish a copy of the following to Agent:
(i) within one hundred twenty (120) days after the end of
each fiscal year, annual financial statements for Xxxxxxx and
its Subsidiaries as of the end of such fiscal year, consisting
of a consolidated balance sheet, consolidated statement of
earnings, consolidated statements of consolidated cash flows
and consolidated statement of stockholder's equity, in
comparative form, together with a copy of Xxxxxxx'x 10-K for
such fiscal year. The statements and balance sheet
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will be audited by an independent firm of certified public
accountants selected by Xxxxxxx and acceptable to Agent (any
Big 6 accounting firm being acceptable to Agent), and
certified by that firm of certified public accountants to have
been prepared in accordance with GAAP. The certified public
accountants will render an unqualified opinion as to such
statements and balance sheets. Agent will have the absolute
and irrevocable right, from time to time, to discuss the
affairs of Xxxxxxx directly with the independent certified
public accountant after prior notice to Xxxxxxx and the
reasonable opportunity of Xxxxxxx to be present at any such
discussions;
(ii) by the twentieth (20th) day of each month,
financial statements for Xxxxxxx and its Subsidiaries as of
the end of the immediately preceding month, consisting of
consolidated and consolidating balance sheet and statement of
operations prepared by Xxxxxxx;
(iii) by the forty-fifth (45th) day of each fiscal
quarter, a Quarterly Compliance Certificate, in the form of
Exhibit F, of Xxxxxxx'x President or Chief Financial Officer,
stating that such person has reviewed the provisions of the
Loan Documents and that a review of the activities of Xxxxxxx
during such quarter has been made by or under such person's
supervision with a view to determining whether Xxxxxxx has
observed and performed all of Xxxxxxx'x obligations under the
Loan Documents, and that, to the best of such person's
knowledge, information and belief, Xxxxxxx has observed and
performed each and every undertaking contained in the Loan
Documents and is not at the time in default in the observance
or performance of any of the terms and conditions thereof or,
if Xxxxxxx will be so in default, specifying all of such
defaults and events of which such person may have knowledge;
(iv) by the end of each fiscal year, an annual budget
and income statement with cash flow projections for the
following fiscal year;
(v) promptly upon receipt thereof, copies of all
final reports and final management letters submitted to
Xxxxxxx or any of the Xxxxxxx'x Subsidiaries by independent
accountants in connection with any annual or interim audit of
the books of Xxxxxxx or such Subsidiaries made by such
accountants;
(vi) copies of any and all reports, filings and other
documentation delivered to the Securities and Exchange
Commission by or on behalf of Xxxxxxx promptly after the
delivery thereof, if applicable; and
(vii) any other statements, reports and other
information as Agent may reasonably request concerning the
financial condition or operations of Xxxxxxx and its
properties.
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(k) Notice of Existence of Default. Xxxxxxx will, and will
cause its Subsidiaries to, promptly notify Agent of: (a) the existence
of any known condition or event, which constitutes a Default or an
Unmatured Default; and (b) the actual or threatened termination,
suspension, lapse or relinquishment of any material license,
authorization, permit or other right granted Xxxxxxx or for Xxxxxxx'x
benefit and used in the Business, or granted to any of its Subsidiaries
or for any such Subsidiaries' benefit, by any governmental agency
material to the Business.
(l) Compliance with Laws. Xxxxxxx will, and will cause its
Subsidiaries to, comply in all material respects with all applicable
laws, rules, regulations and orders.
(m) Maintenance of Collateral. Xxxxxxx will maintain all
material Collateral and every part thereof in good condition and repair
(ordinary wear and tear excepted). Xxxxxxx will not permit the
aggregate value of the Collateral to be materially impaired. Xxxxxxx
will defend the Collateral against all claims and legal proceedings by
Persons other than the Lenders and Permitted Liens. Xxxxxxx will not
permit the Collateral to be used in violation of any applicable law,
regulations, or any policy of insurance. As to Collateral consisting of
instruments and chattel paper, Xxxxxxx will preserve rights in it
against prior parties.
(n) Reimbursement for Bank Charges. Xxxxxxx will reimburse the
Lenders for all charges made by banks for collection of checks and
other items of payment and for transfer of funds to or from Xxxxxxx.
Section 7.2 Negative Covenants. During the term of this Loan Agreement
and thereafter, for so long as any Obligations are outstanding and unpaid,
Xxxxxxx covenants that unless otherwise consented to in writing by Agent,
Xxxxxxx shall not perform or cause or permit to be performed the following acts:
(a) Change of Name. Etc. Xxxxxxx and the Subsidiaries will not
change their name or begin to trade under any assumed names or trade
names without thirty (30) days prior written notice to Agent. Xxxxxxx
will not, and will not permit any Subsidiary to, change its manner of
organization, enter into any mergers, consolidations, reorganizations
or recapitalization (excluding such transactions where Xxxxxxx is the
surviving entity) without Agent's prior written consent other than as
contemplated herein.
(b) Sale or Transfer of Assets. Except in the ordinary course
of business or except as consented to in writing by Agent, or except
for sales to a Lender or any affiliate thereof or except for sales to
and by KAC as contemplated by the Permitted Securitization Documents,
Xxxxxxx and the Subsidiaries will not sell, transfer, lease (including
sale-leaseback) or otherwise dispose of all or any substantial part of
their assets; provided, however, that any sales of KAC Accounts by
Xxxxxxx to KAC under the Permitted Securitization Documentation, and
sales, contributions or other transfers of KAC Accounts under the
Permitted Securitization Documentation by KAC, shall be
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permitted. This provision will not apply to any sale if the proceeds of
such sale pay the Obligations in full.
(c) Encumbrance of Assets. Xxxxxxx will not, and will not
permit a Subsidiary other than KAC to, mortgage, pledge, grant or
permit to exist a security interest in or Lien upon any of the
Collateral, now owned or hereafter acquired except for the Permitted
Liens.
(d) Acquisition of Stock or Assets; New Subsidiaries. Xxxxxxx
and the Subsidiaries will not, without Agent's prior written consent,
acquire, or enter into any agreement, commitment letter or letter of
intent to acquire, all or substantially all the assets of, equity
interest or stock in, another business for an amount in excess of
Twenty-five Million and 00/100 Dollars ($25,000,000.00); nor will
Xxxxxxx hereafter create any new Subsidiaries.
(e) False Certificates or Documents. Xxxxxxx has not and will
not, and will not permit any Subsidiary to, furnish Agent with any
certificate or other document that contains any untrue statement of
material fact or that omits to state a material fact necessary to make
it not misleading in light of the circumstances under which it was
furnished.
(f) Assignment. Xxxxxxx will not assign or attempt to assign
the Loan Documents or any of its interests under the Loan Documents,
except in favor of Agent for the benefit of the Lenders.
(g) Transactions with Affiliates. Xxxxxxx will not enter into
any contracts, leases, sales or other transactions with any Affiliate
(other than Subsidiaries) on terms less favorable than could be
obtained generally by Xxxxxxx from a non-Affiliate. For avoidance of
doubt, Xxxxxxx and KAC may enter into and perform any of its
obligations under the Permitted Securitization Documents.
(h) Loans by Xxxxxxx. Xxxxxxx will not, and will not permit
any Subsidiary to, make any loan to any Person in excess of the
aggregate amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00), except for loans in anticipation of reasonable and
normally reimbursable business expenses and trade credit extended in
the ordinary course of Business, and loans made by KAC under the
Permitted Securitization Documentation.
(i) Fiscal Year. Xxxxxxx will not, and will not permit any
Subsidiary to, change its fiscal year-end without sixty (60) days prior
written notice to Agent.
(j) Total Indebtedness. Xxxxxxx shall not create, incur,
assume, or suffer to exist, or permit any Subsidiary to create, incur
or suffer to exist, any Indebtedness, except:
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(i) the Obligations;
(ii) Subordinated Debt;
(iii) Capital Leases not prohibited by Section 7.3
(b) for Capital Expenditures;
(iv) Indebtedness incurred in connection with the
Previous Fifth Third Transaction;
(v) Indebtedness of any Subsidiary to Xxxxxxx;
(vi) accounts payable to trade creditors and
current operating expenses (other than for money borrowed)
incurred in the ordinary course of business which are aged not
more than thirty (30) days past due, unless actively contested
in good faith and by appropriate and lawful proceedings and
for which adequate reserves have been established in
accordance with GAAP;
(vii) obligations to pay Rentals permitted by
Section 7.2(n);
(viii) obligations by Borrower to repurchase or
otherwise pay Indebtedness of KAC;
(ix) any obligations incurred pursuant to the
Permitted Securitization Documentation; and
(x) guaranties permitted pursuant to Section 7.2
(l); and
(xi) Reimbursement Obligations incurred in
connection With Letters of Credit.
(k) Adverse Transactions. Xxxxxxx will not enter into
any transaction, or permit any Subsidiary to enter into any
transaction, which materially and adversely affects or may materially
and adversely affect the aggregate value of Collateral or Xxxxxxx'x
ability to repay the Obligations.
(l) Guaranties. Xxxxxxx will not guarantee, assume,
endorse or otherwise, in any way, become directly or contingently
liable with respect to the Indebtedness of any Person in excess of One
Hundred Thousand and 00/100 Dollars ($100,000.00) other than guarantees
of floor plan financing arrangements of Borrower or its Subsidiaries,
or of any dealer, distributor or purchaser of inventory of Borrower or
any Subsidiary.
(m) Margin Securities. Xxxxxxx will not own, purchase or
acquire, or permit any Subsidiary to own, purchase or acquire, (or
enter, or permit any Subsidiary to enter,
AMENDED AND RESTATED TERM LOAN AGREEMENT
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into any contract to purchase or acquire) any "margin security" as
defined by any regulation of the Federal Reserve Board as now in effect
or as the same may hereafter be in effect unless, prior to any such
purchase or acquisition or entering into any such contract, Agent shall
have received an opinion of counsel satisfactory to Agent to the effect
that such purchase or acquisition will not cause this Loan Agreement to
violate Regulations G or U or any other regulation of the Federal
Reserve Board then in effect.
(n) Leases. Xxxxxxx will not become a lessee under any
operating lease of property if the aggregate Rentals (defined below)
payable during any current or future period of twelve (12) consecutive
months under the lease in question and all other leases under which
Xxxxxxx is then lessee would exceed Two Million Five Hundred Thousand
and 00/100 Dollars ($2,500,000.00). The term "Rentals" means, as of the
date of determination, all payments which the lessee is required to
make by the terms of any lease.
(o) Tax Consolidation. Xxxxxxx will not file or consent
to the filing of any consolidated income tax return with any Person
other than a Subsidiary.
(p) Stock Redemption. Xxxxxxx will not redeem or purchase
any of its outstanding capital stock, warrants in favor of anyone other
than Agent, or stock options or convert or permit such stock, warrants
or options to be converted into cash, nor has or shall Xxxxxxx guaranty
to any of its shareholders any minimum stock price or valuation, but
excluding from all of the foregoing, the purchase of options and any
other such transactions of Five Million Dollars ($5,000,000.00) or less
in value.
Section 7.3 Financial Covenants.
(a) Amounts. Xxxxxxx agrees that it will at all times
maintain the following:
(i) a Tangible Net Worth in the combined amount of
not less than Forty Million and 00/100 Dollars
($40,000.000.00);
(ii) a ratio of Debt to Tangible Net Worth of not
more than Two and One-Half to One (2.5 to 1);
(iii) a ratio of Current Tangible Assets to current
liabilities of not less than One and Three Tenths to One (1.3
to 1);
(iv) a ratio of EBITDA to Fixed Charges greater than
One and One-Half to One (1.50 to 1) on a four (4) quarter
rolling basis.
For purposes of this Section 7.3(a): (a) "Tangible
Net Worth" means the book value of Xxxxxxx'x assets less liabilities
(including as liabilities all reserves for contingencies and other
potential liabilities), excluding from such assets all Intangibles;
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(b) "Intangibles" means and includes general intangibles (as that term
is defined in the UCC); accounts receivable and advances due from
officers, directors, member, owner, employees, stockholders and
affiliates; leasehold improvements net of depreciation; licenses; good
will; prepaid expenses; escrow deposits; covenants not to compete; the
excess of cost over book value of acquired assets; franchise fees;
organizational costs; finance reserves held for recourse obligations;
capitalized research and development costs; and such other similar
items as Agent may from time to time determine in Agent's sole
discretion; (c) "Debt" means all of Xxxxxxx'x liabilities and
Indebtedness For Borrowed Money of any kind or nature whatsoever other
than Subordinated Debt (as determined in accordance with GAAP), whether
direct or indirect, absolute or contingent, and including obligations
under capitalized leases, guaranties or with respect to which Xxxxxxx
has pledged assets to secure performance, whether or not direct
recourse liability has been assumed by Xxxxxxx, but specifically
excluding any liability which Xxxxxxx incurs pursuant to the Permitted
Securitization Documentation; (d) "Subordinated Debt" means all of
Xxxxxxx'x Debt which is subordinated to the payment of Xxxxxxx'x
liabilities to the Lenders by an agreement in form and substance
satisfactory to Agent; (e) "Current Tangible Assets" means Xxxxxxx'x
current assets less, to the extent otherwise included therein, all
Intangibles. The foregoing terms will be determined in accordance with
GAAP consistently applied, and, if applicable, on a consolidated basis
("Financial Covenants").
(b) Limitations on Capital Expenditures. Borrower on a
Consolidated basis shall not make, commit to make or incur any Capital
Expenditures (including, without limitation, Capital Leases) in the
aggregate during any of the periods set forth below in excess of the
maximum amount set forth below for such period:
===========================================================================
TWELVE (12) MONTH PERIOD MAXIMUM AMOUNT OF
ENDING CAPITAL EXPENDITURES
===========================================================================
December 31, 1998 $10,000,000
---------------------------------------------------------------------------
March 31, 1999 $9,375,000
---------------------------------------------------------------------------
June 30, 1999 $8,750,000
---------------------------------------------------------------------------
September 30, 1999 $8,125,000
---------------------------------------------------------------------------
December 31, 1999 and each March 31, $7,500,000
June 30, September 30 and December 31
thereafter
===========================================================================
provided, that, to the extent actual Capital Expenditures for any quarter of
1998 shall be greater than Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00) for such quarter, an amount equal to the difference shall be
added to the Capital Expenditures limitation in the
AMENDED AND RESTATED TERM LOAN AGREEMENT
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next succeeding periods which included such quarters in its calculation. In no
event shall actual Capital Expenditures for the periods ending March 31, June 30
and September 30, 1999 exceed Ten Million and 00/100 Dollars ($10,000,000.00)
for the four quarter calculation.
(c) Covenant Compliance Certificate. The President or Chief Financial
Officer of Xxxxxxx will certify to Agent by the twentieth (20th) day of each
month, or more often if requested by Agent, that Xxxxxxx is in compliance with
the Financial Covenants as set forth in a Monthly Compliance Certificate
substantially in the form of Exhibit G.
ARTICLE 8.
DEFAULT/REMEDIES
Xxxxxxx will be in default (each a "Default") under this Loan Agreement
if there occurs and is continuing any of the following:
Section 8.1 Xxxxxxx fails to pay any amount of principal or interest on
the Loans when due and payable hereunder or Xxxxxxx fails to pay any other sum
under the Loan Documents within three (3) days of the date when due and payable;
hereunder or thereunder.
Section 8.2 Xxxxxxx breaches any terms, covenants, warranties or
representations contained herein, or in any other Loan Document which is not
cured within thirty (30) days of written notice from Agent or any Lender to
Xxxxxxx;
Section 8.3 any Guarantor breaches any terms, covenants, warranties or
representations contained in any guaranty or other agreement between the
Guarantor and the Lenders which is not cured within thirty (30) days of written
notice from Agent or any Lender to Xxxxxxx;
Section 8.4 any representation, statement, report or certificate made
or delivered by Xxxxxxx or any Guarantor to the Lenders is not accurate when
made in any material respect which is not cured within thirty (30) days of
written notice from Agent or any Lender to Xxxxxxx;
Section 8.5 Xxxxxxx abandons any material Collateral;
Section 8.6 Xxxxxxx or any Guarantor is or becomes in default in the
payment or performance of any obligation owed to any third party for borrowed
money or there shall occur any Event of Default under the Previous Fifth Third
Transaction;
Section 8.7 a default or termination event shall have occurred and be
continuing under the Permitted Securitization Documentation;
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Section 8.8 an unpaid money judgment issues against Xxxxxxx or any
Guarantor in excess of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00) and such judgment remains unsatisfied for a period of thirty (30)
days or is not stayed pending appeal;
Section 8.9 an attachment, sale or seizure issues or is executed
against any assets of Xxxxxxx or against any assets of any Guarantor in an
amount in excess of Ten Million and 00/100 Dollars ($10,000,000.00) which
remains unsatisfied or unreleased for a period of thirty (30) days;
Section 8.10 Xxxxxxx ceases existence as a corporation, partnership,
trust or limited liability company;
Section 8.11 Xxxxxxx ceases or suspends business;
Section 8.12 Xxxxxxx or any Guarantor makes a general assignment for
the benefit of creditors;
Section 8.13 Xxxxxxx or any Guarantor becomes insolvent or voluntarily
or involuntarily becomes subject to the Federal Bankruptcy Code, any state
insolvency law or any similar law;
Section 8.14 any receiver is appointed for any of Xxxxxxx'x or any
Guarantor's assets;
Section 8.15 any guaranty of Xxxxxxx'x debts to the Lenders is
terminated without the prior written consent of Agent and the Lenders;
Section 8.16 Xxxxxxx or any Guarantor misrepresents Xxxxxxx'x or such
Guarantor's financial condition or organizational structure;
Section 8.17 any material item or portion of the Collateral becomes
subject to any Lien, claim, encumbrance or security interest other than a
Permitted Lien and such Lien is not released within thirty (30) days;
Section 8.18 Xxxxxxx shall be enjoined, restrained or in any way
prevented by court, governmental or administrative order from conducting all or
any material part of its Business; or any material lease or agreement pursuant
to which Xxxxxxx leases, uses or occupies any property shall be canceled or
terminated prior to the expiration of its stated term, or any part of the
Collateral shall be taken through condemnation or the value thereof shall be
impaired through condemnation; or
Section 8.19 Any event shall occur which might, in Agent's opinion,
have a material adverse effect on Xxxxxxx'x financial or business condition,
operation or prospects.
Upon the occurrence and continuation of an event of a Default:
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(a) Agent may at any time at Agent's election, without notice
or demand to Xxxxxxx, declare all or any of the Obligations immediately
due and payable, together with all costs and expenses of the Lenders'
collection activity, including, without limitation, all reasonable
attorneys fees; and exercise any or all rights under applicable law
(including, without limitation, the right to possess, transfer and
dispose of the Collateral).
(b) Xxxxxxx will segregate and keep the Collateral in trust
for the Lenders, and in good order and repair, and will not sell, rent,
lease, consign, otherwise dispose of or use any Collateral, nor further
encumber any Collateral.
(c) Upon Agent's oral or written demand, Xxxxxxx will
immediately deliver the Collateral to Agent, in good order and repair,
at a place specified by Agent, together with all related documents; or
Agent may, in Agent's sole discretion and without notice or demand to
Xxxxxxx, take immediate possession of the Collateral together with all
related documents.
(d) Agent may, without notice, apply the Default Interest Rate
as provided in Sections 3.4(a)(ii) and (iii).
(e) Agent may at its sole election and without demand enter,
with or without process of law, any premises where Collateral might be
and, without charge or liability to the Lenders therefor do one or more
of the following: (i) take possession of the Collateral and use or
store it in said premises or remove it to such other place or places as
Agent may deem convenient; (ii) take possession of all or part of such
premises and the Collateral and place a custodian in the exclusive
control thereof until completion of enforcement of the Lenders'
security interest in the Collateral or until the Lenders' removal of
the Collateral and, (iii) remain on such premises and use the same,
together with Xxxxxxx'x materials, supplies, books and records, for the
purpose of liquidating or collecting such Collateral and conducting and
preparing for disposition of such Collateral.
(f) In addition to the Remedies provided herein or otherwise
provided in law or equity, Agent may exercise any and all remedies
available with respect to any First Mortgage, Assignment of Rents and
Security Agreement executed pursuant to Section 5.1(a) herein.
(g) Upon the occurrence of a Default under Sections 8.12, 8.13
or 8.14 all Obligations shall automatically be accelerated and due and
payable and the Default Interest Rate shall automatically apply as of
the date of the first occurrence of such Default, without any prior
notice, demand or action of any type on the part of Agent.
All of the Lenders' rights and remedies are cumulative. The Lenders' failure to
exercise any of the Lenders' rights or remedies hereunder will not waive any of
the Lenders' rights or remedies as to any past, current or future Default.
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ARTICLE 9.
SALE OF COLLATERAL
Xxxxxxx agrees that if the Lenders conducts a private sale of any
Collateral by requesting bids from ten (10) or more dealers or distributors in
that type of Collateral, any sale by the Lenders of such Collateral in bulk or
in parcels within one hundred twenty (120) days of: (a) Agent's taking
possession and control of such Collateral; or (b) when Agent is otherwise
authorized to sell such Collateral; whichever occurs last, to the bidder
submitting the highest cash bid therefor, is a commercially reasonable sale of
such Collateral under the UCC. Xxxxxxx agrees that the purchase of any
Collateral by a vendor, as provided in any agreement between Agent and the
vendor, if any, is a commercially reasonable disposition and private sale of
such Collateral under the UCC, and no request for bids shall be required.
Xxxxxxx further agrees that seven (7) or more days prior written notice will be
commercially reasonable notice of any public or private sale (including any sale
to a vendor). Xxxxxxx irrevocably waives any requirement that Agent retain
possession and not dispose of any Collateral until after an arbitration hearing,
arbitration award, confirmation, trial or final judgment If Agent disposes of
any such Collateral other than as herein contemplated, the commercial
reasonableness of such disposition will be determined in accordance with the
laws of the state governing this Loan Agreement.
ARTICLE 10.
INDEMNIFICATIONS
Section 10.1 General Indemnity. In addition to the payment of expenses
and attorneys' fees, if applicable, whether or not the transactions contemplated
hereby shall be consummated, Xxxxxxx agrees to indemnify, pay and hold Agent and
the officers, directors, employees, agents, and affiliates of Agent and such
holders (collectively called the "Indemnitees") harmless from and against, any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for any of such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not any of such Indemnitees shall be designated a party thereto),
that may be imposed on, incurred by, or asserted against the Indemnitees, in any
manner relating to or arising out of the Loan Documents, the statements
contained in any commitment letters delivered by the Lenders. The Lenders'
agreement to make the Loans or any other payment hereunder, or the use or
intended use of the proceeds of any of the Loans hereunder (the "Indemnified
Liabilities"); provided, however, that Xxxxxxx shall have no obligation to an
indemnitee hereunder with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of an Indemnitee. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of
AMENDED AND RESTATED TERM LOAN AGREEMENT
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any law or public policy, Xxxxxxx shall contribute the maximum portion that it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them. The provisions of the undertakings and indemnification set out in this
Section 10.1 shall survive satisfaction and payment of the Obligations and
termination of this Loan Agreement.
Section 10.2 Environmental and Safety and Health Indemnity. Xxxxxxx
hereby indemnifies the Indemnitees and agrees to hold the Indemnitees harmless
from and against any and all losses, liabilities, damages, injuries, costs,
expenses and claims of any and every kind whatsoever (including, without
limitation, court costs and attorneys' fees) which at any time or from time to
time may be paid, incurred or suffered by, or asserted against, an Indemnitee
for, with respect to, or as a direct or indirect result of the violation by
Xxxxxxx or any Subsidiary, of any Environmental Law; or with respect to, or as a
direct or indirect result of the escape, seepage, leakage, spillage, disposal,
discharge, emission or release from, properties utilized by Xxxxxxx and/or any
Subsidiary in the conduct of its business into or upon any land, the atmosphere,
or any watercourse, body of water or wetland, of any Hazardous Material
(including, without limitation, any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under the Environmental Laws). The
provision of and undertakings and indemnification set out in this Section 10.2
shall survive satisfaction and payment of the Obligations and termination of
this Loan Agreement.
ARTICLE 11.
CONCERNING THE AGENT AND THE LENDERS
The Agent and the Lenders agree as follows:
Section 11.1 Appointment of the Agent. Each of the Lenders hereby
appoints Fifth Third to serve as Agent, under this Loan Agreement and the other
Loan Documents, and in such capacity, to administer this Loan Agreement, and the
other Loan Documents.
Section 11.2 Authority. Each of the Lenders hereby irrevocably
authorizes the Agent (i) to take such action on such Lender's behalf under this
Loan Agreement and the other Loan Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are delegated to or required of
the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (ii) to take such action on such Lender's
behalf as the Agent shall consider necessary or advisable for the protection,
collection or enforcement of any of the Obligations. The Agent will promptly
notify each of the Lenders as soon as it becomes aware of any Default or Event
of Default or any failure by Borrower to make any payment in respect of any of
the Notes, provided, however, that Agent shall not be deemed to have knowledge
of any item until such time as Agent's officers responsible for administration
of the Loans shall receive written notice thereof or have actual knowledge of
such event. If any Lender becomes aware of any Default or Event of Default by
Borrower, it shall promptly notify
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Agent thereof provided, however, that Lenders shall not be deemed to have
knowledge of any item until such time as Lenders' officers responsible for
administration of the Loans shall receive written notice thereof or have actual
knowledge of such event.
Section 11.3 Acceptance of Appointment. The Agent hereby accepts its
appointment as Agent for each of the Lenders under this Loan Agreement and the
other Loan Documents, but only on the terms set forth in this Loan Agreement,
including the following:
(a) Agent makes no representation as to the value, validity or
enforceability of this Loan Agreement or of any of the other Loan
Documents or as to the correctness of any statement contained in this
Loan Agreement or in any of the other Loan Documents;
(b) Agent may exercise its powers and perform its duties under
this Loan Agreement and the other Loan Documents either directly or
through its agents or attorneys;
(c) Agent shall be entitled to obtain from counsel selected by
it with reasonable care advice with respect to legal matters pertaining
to this Loan Agreement, or any of the other Loan Documents and shall
not be liable for any action taken, omitted to be taken or suffered in
good faith in accordance with the advice of such counsel;
(d) Agent shall not be required to use its own funds in the
performance of any of its duties or in the exercise of any of its
rights or powers, and Agent shall not be obligated to take any action
which, in its reasonable judgment, would involve it in any expense or
liability unless it shall have been furnished security or indemnity in
an amount and in form and substance satisfactory to it; and
(e) Agent, in performing its duties and functions under this
Loan Agreement and the other Loan Documents on behalf of the Lenders,
will exercise the same care which it normally exercises in making and
handling loans in which it alone is interested, but does not assume
further responsibility.
Section 11.4 Collateral Matters.
(a) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any
Lien granted to or held by Agent upon any property covered by the Loan
Documents (i) upon termination of the Total Commitments and payment and
satisfaction of all Obligations; or (ii) constituting property being
sold or disposed of if Borrower certifies to Agent that the sale or
disposition is made in compliance with the provisions of this Loan
Agreement (and Agent may rely in good faith conclusively on any such
certificate, without further inquiry); or (iii) constituting property
leased to Borrower under a lease which has expired or been terminated
in a transaction permitted under this Loan Agreement or is about to
expire and which has not been, and is not intended by Borrower to be,
renewed or extended. Upon request by
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Agent at any time, any Lender will confirm in writing Agent's
authority to release particular types or items of property covered by
the Loan Documents pursuant to this Subsection 11.4(a).
(b) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Agent's authority to act without any specific or
further authorization or consent by Requisite Lenders (as set forth in
Subsection 11.4(a)), each Lender agrees to confirm in writing, upon
request by Borrower, the authority to release any property covered by
the Loan Documents conferred upon Agent under clauses (i) through (iii)
of Subsection 11.4(a). So long as no Event of Default is then
continuing, upon receipt by Agent of confirmation from the Requisite
Lenders of its authority to release any particular item or types of
property covered by the Loan Documents, and upon at least five (5)
Business Days prior written request by Borrower, Agent shall (and is
hereby irrevocably authorized by Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to Agent
for the benefit of Lenders herein or pursuant hereto upon such
Collateral; provided, however, that (i) Agent shall not be required to
execute any such document on terms which, in Agent's opinion, would
expose Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge,
affect or impair the Obligations or any Liens upon (or obligations of
Borrower, in respect of), all interests retained by Borrower, including
(without limitation) the proceeds of any sale, all of which shall
continue to constitute part of the property covered by the Loan
Documents.
(c) Absence of Duty. Agent shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered
by the Loan Documents exists or is owned by Borrower or is cared for,
protected or insured or has been encumbered or that the Liens granted
to Agent herein or pursuant hereto have been properly or sufficiently
or lawfully created, perfected, protected or enforced or are entitled
to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted
or available to Agent in this Section 11.4 or in any of the Loan
Documents, it being understood and agreed that in respect of the
property covered by the Loan Documents or any act, omission or event
related thereto, Agent may act in any manner it may deem appropriate,
it its discretion, given Agent's own interest in property covered by
the Loan Documents as one of the Lenders and that Agent shall have no
duty or liability whatsoever to any of the other Lenders; provided that
Agent shall exercise the same care which it would in dealing with loans
for its own account.
Section 11.5 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting Lenders' security interest
in assets which, in accordance with Article 6 of the Uniform Commercial Code in
any applicable jurisdiction, can be perfected only by possession. Should any
Lender (other than Agent) obtain possession of any such Collateral, such Lender
shall notify Agent thereof, and, promptly upon Agent's request therefor, shall
deliver
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such Collateral to Agent or in accordance with Agent's instructions.
Each Lender agrees that it will not have any right individually to enforce or
seek to enforce any Loan Document or to realize upon any collateral security for
the Loans, it being understood and agreed that such rights and remedies may be
exercised only by Agent.
Section 11.6 Application of Moneys. All moneys realized by the Agent
under the Loan Documents shall be held by Agent to apply in accordance with the
provisions of this Loan Agreement.
Section 11.7 Reliance by the Agent. Agent shall be entitled to rely on
any notice, consent, certificate, affidavit, letter, telegram, telecopy,
facsimile or teletype message, statement, order, instrument or other document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons. Agent shall deem and treat the payee of any Note as
the absolute owner thereof for all purposes hereof until such time as it
receives actual notice of an assignment permitted hereunder of such payee's
interest, together with the written agreement of the assignee in form and
substance satisfactory to Agent that such assignee is bound by this Loan
Agreement as a "Lender" hereunder.
Section 11.8 Exculpatory Provisions. Neither Agent nor any of its
shareholders, directors, officers, employees or agents shall be liable in any
manner to any of the Lenders for any action taken, omitted to be taken or
suffered in good faith by it or them under any of the Loan Documents or in
connection therewith, or be responsible for the consequences of any oversight or
error of judgment, except for losses due to gross negligence or willful
misconduct of such Agent, shareholder, director, officer, employee or agent.
Without limiting the generality of the foregoing sentence of this Section 11.8,
under no circumstances shall the Agent be subject to any liability to any Lender
on account of any action taken or omitted to be taken by such Agent in
compliance with the direction of the Requisite Lenders or all of the Lenders, as
the case may be as provided for hereunder.
Agent shall not be responsible in any manner to any of the
Lenders for the due execution, effectiveness, genuineness, validity or
enforceability, perfection or recording of this Loan Agreement, any of the
Notes, any of the other Loan Documents or for any certificate, report or other
document used under or in connection with this Loan Agreement or any of the
other Loan Documents, or for the truth or accuracy of any recitals, statements,
warranties or representations contained herein or in any certificate, report or
other document at any time hereafter furnished or purporting to have been
furnished to it by or on behalf of Borrower, or any other Person, or be under
any obligation to any of the Lenders to ascertain or inquire as to the
performance or observance by Borrower, or any other Person of any of the
covenants, agreements or conditions set forth in this Loan Agreement, the Notes
or any of the other Loan Documents or as to the use of any moneys lent hereunder
or thereunder.
Agent shall not be obligated to take any action or refrain
from taking any action under any Loan Document that might, in its judgment,
involve it in any expense or liability until it shall have been indemnified to
its satisfaction by or received an agreement to indemnify from
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each Person which such Agent reasonably believes may be an intended recipient of
such distribution. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court.
Section 11.9 Action by the Agent. Except as otherwise expressly
provided under this Loan Agreement or in any other of the Loan Documents, Agent
will take such action, assert such rights and pursue such remedies under this
Loan Agreement and the other Loan Documents as the Requisite Lenders or all of
the Lenders, as the case may be as provided for hereunder shall direct. Except
as otherwise expressly provided in any of the Loan Documents, Agent will not
(and will not be obligated to) take any action, assert any rights or pursue any
remedies under this Loan Agreement or any of the other Loan Documents in
violation or contravention of any express direction or instruction of the
Requisite Lenders or all of the Lenders, as the case may be as provided for
hereunder. Agent may refuse (and will not be obligated) to take any action,
assert any rights or pursue any remedies under this Loan Agreement or any of the
other Loan Documents without the express written direction and instruction of
the Requisite Lenders or all of the Lenders, as the case may be as provided for
hereunder. In the event Agent fails, within a commercially reasonable time, to
take such action, assert such rights, or pursue such remedies as the Requisite
Lenders or all of the Lenders, as the case may be as provided for hereunder,
direct, the Requisite Lenders or all of the Lenders, as the case may be as
provided for hereunder, shall have the right to take such action, to assert such
rights, or pursue such remedies on behalf of all of the Lenders unless the terms
hereof otherwise require the consent of all the Lenders to the taking of such
actions. All notices and other material information required to be delivered by
Borrower to Agent hereunder shall be delivered within a reasonable time (and in
any event not more than five (5) days) after Agent's receipt of same by Agent to
each Lender. No Lender (other than the Agent, acting in its capacity as Agent)
shall be entitled to take any enforcement action of any kind under any of the
Loan Documents, except as expressly provided in this Loan Agreement. Action that
may be taken by Requisite Lenders or all of the Lenders, as the case may be as
provided for hereunder may be taken pursuant to a vote at a meeting (which may
be held by telephone conference call) of all of the Lenders, or pursuant to the
written consent of such Lenders.
Section 11.10 Amendments, Waivers and Consents. Any provision of this
Loan Agreement, the Notes or the other Loan Documents may be amended or waived
upon the consent of the Requisite Lenders, and after such consent, Agent, on
behalf of the Lenders, may execute and deliver to Borrower a written instrument
waiving or amending such provision; provided, however, that neither this Loan
Agreement, the Notes, nor any of the other Loan Documents may be amended, waived
or a variation therefrom or forbearance with respect to such variation consented
to without the written consent of the Agent and all of Lenders which effect (i)
a change in the Total Commitment; (ii) a change in any Lender's Participation
Percentage; (iii) a reduction in the interest rates or reduction of the
principal set forth in the Notes; (iv) the extension of the maturity date on the
Notes; (v) a change in the payment schedule or scheduled
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date for the payment of or amount of any interest or principal; (vi) any change
in Section 7.3(a) ; (vii) a change in this Section, the definition of Requisite
Lender or any provision of this Loan Agreement which requires consent or action
of all the Lenders for action thereunder; (viii) a change in the obligations and
liabilities of Agent; (ix) a change which increases the obligations of any
Lender; or (x) a change in any fees or charges hereunder or in Sections 12.29 or
Article 10 hereof.
Section 11.11 Indemnification. Each Lender agrees to indemnify Agent
(to the extent Agent is not promptly reimbursed by Borrower), in accordance with
its Participation Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, interests, actions, judgments and suits
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent relating to or arising out of this Loan Agreement or any
of the other Loan Documents or relating to any action taken or omitted by such
Agent under this Loan Agreement or any of the other Loan Documents, provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, interest, actions, judgments or suits resulting from
Agent's own gross negligence or willful misconduct.
Section 11.12 Reimbursement of the Agent. Each Lender further agrees to
reimburse Agent, in accordance with its Participation Percentage, for any
reasonable out-of-pocket costs or expenses incurred by Agent in connection with
its duties under this Loan Agreement (including, but not limited to, reasonable
fees and disbursements of counsel, travel and living expenses away from home of
employees or agents of the Agent and compensation of agents or of experts
employed by the Agent to render services for the Lenders hereunder), but only to
the extent such fees, disbursements, expenses and compensation have not been
promptly reimbursed to the Agent by Borrower. If any such sums are reimbursed to
the Agent by Borrower after one or more of the Lenders have reimbursed the Agent
for such sums, the Agent will refund such sums ratably to the Lenders who
contributed such sums.
Section 11.13 Sharing of Funds Received. Each Lender and Agent agrees
with Agent and each of the other Lenders that if such Lender shall receive from
Borrower or any other Person or Persons, whether by payment received otherwise
than in accordance with the terms of the Loan Documents, exercise of the right
of set-off, counterclaim, cross-claim, enforcement of any claim, or proceedings
against Borrower or any other Person or Persons, proof of claim in bankruptcy,
reorganization, liquidation, receivership or other similar proceedings, or
otherwise, and shall retain and apply to the payment of any of the Obligations
owing to such Lender any amount in excess of its Pro Rata Share of the payments
received by all of the Lenders and the Agent in respect of all of the
Obligations, such Lender will promptly make such dispositions and arrangements
with the other Lenders and the Agent with respect to such excess, either by way
of distribution, pro tanto assignment of claim, subrogation or otherwise, as
shall result in each of the Lenders receiving in respect of the Obligations
owing to it, its Pro Rata Share of such payments.
Section 11.14 Dealing with Lenders. Agent may at all times deal solely
with the several Lenders for all purposes of this Loan Agreement and the
protection, enforcement and collection of the Notes, including without
limitation the acceptance and reliance upon any
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certificate, consent or other document executed on behalf of one or more of the
Lenders and the division of payments pursuant to the provisions of this Loan
Agreement. The Agent shall not have a fiduciary relationship in respect of any
Lender by reason of this Loan Agreement. The Agent shall have no implied duties
to the Lenders, or any obligation to the Lenders to take any action hereunder
except any action specifically provided by this Loan Agreement to be taken by
the Agent.
Section 11.15 Agent as Lender. Fifth Third shall have, in its capacity
as a Lender under the Loan Documents, the same obligations and the same rights,
remedies, powers and privileges under this Loan Agreement and the other Loan
Documents as it would have were it not also an Agent.
Section 11.16 Duties Not to be Increased. The duties and liabilities of
Agent under this Loan Agreement and the other Loan Documents shall not be
increased or otherwise changed without its express prior written consent. The
Agent shall have no duty to provide information to the Lenders except as
expressly set forth herein.
Section 11.17 Lender Credit Decisions. Each Lender acknowledges that it
has, independently of and without reliance upon Agent or any of the other
Lenders, made its own credit analysis and decision to enter into this Loan
Agreement and the other Loan Documents to which it is a party. Each Lender also
acknowledges that it will, independently of and without reliance upon Agent or
any of the other Lenders, continue to make its own credit decisions in taking or
not taking action under this Loan Agreement or any of the other Loan Documents
and in determining the compliance or lack thereof by Borrower and any other
Person with any provision of any Loan Document or other document or agreement.
Section 11.18 Resignation of Agent. Fifth Third and any successor Agent
may resign as such at any time by giving thirty (30) days' prior written notice
of resignation to each Lender and Borrower, such resignation to be effective on
the date which is specified in such notice. Upon any such resignation by Fifth
Third as Agent, or in the event the office of Agent shall thereafter become
vacant for any other reason, the Requisite Lenders shall appoint a successor
Agent, by an instrument in writing signed by such Lenders and delivered to such
successor Agent and Borrower whereupon, such successor Agent shall succeed to
all of the rights and obligations of the retiring Agent as if originally named.
The retiring Agent shall duly assign, transfer and deliver to such successor
Agent all moneys at the time held by the retiring Agent hereunder after
deducting therefrom its expenses for which it is entitled to be reimbursed. Upon
such succession of any such successor Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder, except for its gross
negligence or willful misconduct arising prior to its retirement or removal
hereunder. After any Agent's resignation, the provisions of this Section 11
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
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Section 11.19 Assignment of Notes; Participation.
(a) Each Lender may, with concurrent notice to Agent and, so
long as no Event of Default has occurred nor is continuing, with the
consent of Borrower, which shall not be unreasonably withheld or
delayed, assign all or a portion of its rights and obligations under
this Loan Agreement and the Notes; provided that (i) for each such
assignment, the parties thereto shall execute and deliver an assignment
and assumption agreement, in form and substance acceptable to Agent,
together with any Notes subject to such assignment, (ii) no such
assignment shall reduce the assigning Lender's Credit Commitment to
less that Fifty-One Percent (51%) of such Lender's original Credit
Commitment without the consent of Agent, and (iii) no such assignment
shall be for less than Five Million and 00/100 Dollars ($5,000,000.00)
of the aggregate of the Lender's Credit Commitment, unless such
assignment is to a then-current holder of a Note. Upon such execution
and delivery of such assignment and assumption agreement to Agent, from
and after the date specified as the effective date in such Agreement
(the "Acceptance Date"), (x) the assignee thereunder shall be a party
hereto, and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such agreement, such assignee shall
have the rights and obligations of a Lender hereunder and (y) the
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such agreement,
relinquish its rights (other than any rights it may have pursuant to
Section 12.29 which will survive) and be released from its obligations
under this Loan Agreement (and, in the case of an assignment covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Loan Agreement, such Lender shall cease to be a
party hereto).
(b) Each Lender may sell participations of up to forty-nine
percent (49%) of its rights and obligations under the Loan Documents
(including, without limitation, up to such portion of its Participation
Percentage with respect to the Total Commitment, the Loans owing to it,
and the Note held by it); provided, however, that (i) such Lenders'
obligations under the Loan Documents (including, without limitation,
its Participation Percentage with respect to the Total Commitment
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of the Loan Documents, (iv) the participating banks or
other entities shall be entitled to the cost protection provisions of
Sections 3.7 and 12.29 hereof, but a participant shall not be entitled
to receive pursuant to such provisions an amount larger than its share
of the amount to which the Lender granting such participation would
have been entitled, (v) Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such selling Lender in
connection with such Lender's rights and obligations under the Loan
Documents, and (vi) no such transfer shall include the transfer of any
of such Lender's rights to grant consents or approve amendments or
modifications to the Loan Documents except with respect to those items
requiring the action of or consent by all of the Lenders or affecting
the rights and obligations of Agent. It is understood and agreed that
each Lender may share any and all information received by it
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from or on behalf of Borrower pursuant to this Loan Agreement or any
of the other Loan Documents with any participant or prospective
participant of such Lender.
ARTICLE 12.
OTHER TERMS
Section 12.1 Amendment Changes and Modification. The Loan Documents may
be amended, changed or modified only as may be agreed upon in writing by Xxxxxxx
and all Lenders from time to time.
Section 12.2 Binding Effect. The Loan Documents will be binding upon
the parties, their successors and assigns, provided, however, that Xxxxxxx shall
not assign or attempt to assign this Loan Agreement, any other Loan Document or
any of its interests under the Loan Documents, without the prior written consent
of the Lenders.
Section 12.3 Broker Fee. Neither party is obligated to pay any premium
or other charge, brokerage fee or commission in connection with the agreements
set forth herein. Each party will indemnify the other and hold it harmless from
any such claim arising out of such party's acts or those of its representatives.
Section 12.4 Entire Agreement. The Loan Documents embody the entire
agreement of the parties relating to the Loan. There are no promises, terms,
conditions, obligations or warranties other than those contained in the Loan
Documents. The Loan Documents supersede all prior communications,
representations or agreements, verbal or written, between the parties relating
to the Loan.
Section 12.5 Headings. The headings to the sections of this Loan
Agreement are included only for the convenience of the parties and will not have
the effect of defining, diminishing or enlarging the rights of the parties or
affecting the construction or interpretation of any portion of this Loan
Agreement.
Section 12.6 Incorporation by Reference. All other Loan Documents are
incorporated herein by this reference and are made a part of this Loan Agreement
as if fully set forth herein. This Loan Agreement, prior to such incorporation,
controls in the event of any conflict with the terms of any other Loan
Documents.
Section 12.7 Interpretation. For the purpose of construing this Loan
Agreement, unless the context otherwise requires, words in the singular will be
deemed to include words in the plural, and vice versa.
Section 12.8 Governing Law; Jurisdiction and Venue. The undersigned
agree that inasmuch as this Loan Agreement, the Notes and the Loan Documents are
to be executed by Borrower and accepted by Agent and Lenders in Cincinnati, Ohio
and the funds to be disbursed
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under the Loans are to be disbursed in Ohio, this instrument and the rights and
obligations of all parties hereunder shall be governed by and construed under
the substantive laws of the State of Ohio, without reference to the conflict of
laws principles of such state.
The Agent, each Lender and Borrower hereby designate all courts of
record sitting in Cincinnati, Ohio, both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of this Loan Agreement,
the Notes, Loan Documents, or the transactions contemplated by this Loan
Agreement may be prosecuted as to all parties, their successors and assigns, and
by the foregoing designations the Agent, each Lender, and Borrower consents to
the jurisdiction and venue of such courts. BORROWER WAIVES ANY AND ALL PERSONAL
RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN THE
STATE OF OHIO FOR THE PURPOSES OF LITIGATION TO ENFORCE SUCH OBLIGATIONS OF
BORROWER. In the event such litigation is commenced, Borrower agrees that
service of process may be made and personal jurisdiction over Borrower obtained
by service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon Borrower's appointed Agent for Service of Process
in the State of Ohio, which the undersigned hereof designates to be: CT
Corporation Systems, Cincinnati, Ohio. Borrower recognizes and agrees that the
agency has been created for the benefit of Borrower, and Agent and each Lender
and agree that this agency shall not be revoked, withdrawn, or modified without
the consent of the Agent.
Section 12.9 Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR THE LENDERS TO EXTEND CREDIT TO BORROWER, AND AFTER HAVING THE
OPPORTUNITY TO CONSULT COUNSEL, BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO
TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS LOAN AGREEMENT OR
ARISING IN ANY WAY FROM THE OBLIGATIONS.
Section 12.10 Notices. Any notice under the Loan Documents, will be in
writing. Any notice to be given or document to be delivered under the Loan
Documents will be deemed to have been duly given upon delivery, if delivered in
person or by any expedited delivery service which provides proof of delivery,
upon tested telex or facsimile transmission, or on the fifth Business Day after
mailing, if mailed by certified mail, return receipt requested, postage prepaid
mail, addressed to the Lenders or Xxxxxxx at the appropriate addresses. The
Lenders will use reasonable efforts to deliver any notice the Lenders or Agent
are required to give to Xxxxxxx; provided, however, that failure by the Lenders
to actually give any such notice will not be deemed to be a waiver of any rights
or remedies of the Lenders and will not give rise to any claims, defenses or
damages by Xxxxxxx. The addresses for notices are those set forth below or such
other addresses as may be hereafter specified by written notice by the parties:
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to the Lenders The Fifth Third Bank
Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxx, Vice President
Facsimile: 513/744-7711
and
NBD Bank, N.A.
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, First Vice President
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
to Xxxxxxx: Xxxxxxx Piano & Organ Company
000 Xxxxx Xxxxxx Xxxx.
Xxxxxxxx, Xxxx 00000
Attn: Treasurer
Facsimile (000) 000-0000
with a copy to: Xxxxxxx, Head & Xxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
Section 12.11 No Third Party Beneficiary Rights and Reliance. No Person
not a party to this Loan Agreement will have any benefit under this Loan
Agreement nor have third-party beneficiary rights as a result of any of the Loan
Documents, nor will any party be entitled to rely on any actions or inactions of
the Lenders or their agents, all of which are done for the sole benefit and
protection of the Lenders.
Section 12.12 Protection or Preservation of Collateral. The Lenders
will not have any contractual duty to protect, insure, collect or realize upon
the Collateral or preserve rights in it against prior parties. The Lenders will
not be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral regardless of the cause (excluding
actions of the Lenders).
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Section 12.13 Relationship of the Parties. Neither the Lenders on the
one hand nor Xxxxxxx on the other hand will be deemed a partner, joint venturer
or related entity of the other by reason of the Loan Documents.
Section 12.14 Reversal of Payments. To the extent that Xxxxxxx makes a
payment or payments to the Lenders, which payment or payments or proceeds or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law, or
equitable cause, then to the extent of such payment or proceeds received, the
Obligations will be revived and continue in full force and effect, as if such
payment or proceeds had not been received by the Lenders.
Section 12.15 Severability. If any provision of this Loan Agreement
(either generally, or as to a specific application to a set of facts) will be
held to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability will not affect any other provision of this Loan Agreement
(either in its entirety, or as to or the application of such provision to any
other set of facts), but this Loan Agreement will be construed as if such
invalid, illegal or unenforceable provision never had been included in this Loan
Agreement.
Section 12.16 Maximum Interest. Xxxxxxx acknowledges that the Lenders
intend to strictly conform to the applicable usury laws governing this Loan
Agreement. Regardless of any provision contained herein or in any other document
executed or delivered in connection herewith or therewith, the Lenders shall
never be deemed to have contracted for, charged or be entitled to receive,
collect or apply as interest on this Loan Agreement (whether termed interest
herein or deemed to be interest by judicial determination or operation of law),
any amount in excess of the maximum amount allowed by applicable law, and, if
the Lenders ever receive, collect or apply as interest any such excess, such
amount which would be excessive interest will be applied first to the reduction
of the unpaid principal balances of advances under this Loan Agreement, and,
second, any remaining excess will be paid to Xxxxxxx. In determining whether or
not the interest paid or payable under any specific contingency exceeds the
highest lawful rate, Xxxxxxx and the Lenders shall, to the maximum extent
permitted under applicable law: (a) characterize any non-principal payment
(other than payments which are expressly designated as interest payments
hereunder) as an expense or fee rather than as interest; (b) exclude voluntary
pre-payments and the effect thereof; and (c) spread the total amount of interest
throughout the entire term of this Loan Agreement so that the interest rate is
uniform throughout such term.
Section 12.17 Waivers by the Lenders. The Lenders may at any time or
from time to time waive all or any rights under any of the Loan Documents, but
any waiver or indulgence at any time or from time to time will not constitute,
unless specifically so expressed by the Lenders in writing, a future waiver by
the Lenders of performance by Xxxxxxx.
Section 12.18 Survival. The grant of security interest herein to secure
all Obligations, and all provisions relating to the Collateral will survive
termination of this Loan Agreement and
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will remain in full force and effect until all Obligations have been paid in
full and this Loan Agreement has been terminated.
Section 12.19 Participations; Assignments. The Lenders may with sixty
(60) days prior notice to Xxxxxxx, xxxxx participations in or assign, at any
time and from time to time hereafter, its interest in this Loan Agreement or any
Loan Document, or of any portion thereof.
Section 12.20 Counterparts. This Loan Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and either of the parties hereto may execute this Loan
Agreement by signing any such counterpart.
Section 12.21 Information. The Lenders may provide to any third party
any credit, financial or other information on Xxxxxxx that the Lenders may from
time to time possess.
Section 12.22 Miscellaneous. Time is of the essence regarding Xxxxxxx'x
performance of its obligations to the Lenders notwithstanding any course of
dealing or custom on the Lenders' part to grant extensions of time. Xxxxxxx'x
liability under this Loan Agreement is direct and unconditional and will not be
affected by the release or non-perfection of any security interest granted
hereunder. The Lenders will have the right to refrain from or postpone
enforcement of this Loan Agreement or any other Loan Documents without prejudice
and the failure to strictly enforce the Loan Documents will not be construed as
having created a course of dealing between the Lenders and Xxxxxxx contrary to
the specific terms of the Loan Documents or as having modified, released or
waived the same. The express terms of this Loan Agreement and the other Loan
Documents will not be modified by any course of dealing, usage of trade, or
custom of trade which may deviate from the terms hereof If Xxxxxxx falls to pay
any taxes, fees or other obligations which may impair the Lenders' interest in
the Collateral, or fails to keep the Collateral insured, the Lenders may, but
shall not be required to, pay such taxes, fees or obligations and pay the cost
to insure the Collateral, and the amounts paid will be: (a) an additional debt
owed by Xxxxxxx to the Lenders, which shall be subject to finance charges as
provided herein; and (b) due and payable immediately in full. Xxxxxxx agrees to
pay all of the Lenders' reasonable attorneys' fees and expenses incurred by the
Lenders in enforcing the Lenders' rights hereunder.
Section 12.23 Waivers by Xxxxxxx. Xxxxxxx irrevocably waives notice of:
the Lenders' acceptance of this Loan Agreement, presentment, demand, protest,
nonpayment, nonperformance, and dishonor. Xxxxxxx and the Lenders irrevocably
waive all rights to claim any punitive and/or exemplary damages in excess of Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00). Xxxxxxx waives all
rights of offset and counter claims Xxxxxxx may have against the Lenders.
Xxxxxxx waives all notices of default and non-payment at maturity of any or all
of the Accounts.
Section 12.24 No Oral Agreements. ORAL AGREEMENTS OR COMMITMENTS TO
LEND MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT
YOU, (XXXXXXX) AND US (THE
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LENDERS) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
Section 12.25 Supplement. If Xxxxxxx and the Lenders have heretofore
executed other agreements in connection with all or any part of the Collateral,
this Loan Agreement shall supplement each and every other agreement previously
executed by and between Xxxxxxx and the Lenders, and in that event, this Loan
Agreement shall neither be deemed a novation nor a termination of such
previously executed agreement nor shall execution of this Loan Agreement be
deemed a satisfaction of any obligation secured by such previously executed
agreement.
Section 12.26 Use of Counsel and Receipt of Loan Agreement. Xxxxxxx
acknowledges that it has received a true and complete copy of this Loan
Agreement. Xxxxxxx acknowledges that it has (a) had representation of counsel
during negotiation of this Loan Agreement, and (b) read and understood this Loan
Agreement.
Section 12.27 Facsimiles, Etc. Notwithstanding anything herein to the
contrary: (a) Xxxxxxx and the Lenders may rely on any facsimile copy, electronic
data transmission or electronic data storage of any statement, financial
statements or other reports, and (b) such facsimile copy, electronic data
transmission or electronic data storage will be deemed an original, and the best
evidence thereof for all purposes, including, without limitation, under this
Loan Agreement or any other Loan Document, and for all evidentiary purposes
before any arbitrator, court or other adjudicatory authority.
Section 12.28 Power of Attorney. Xxxxxxx irrevocably appoints Agent
(and any person designated by it) as Xxxxxxx'x true and lawful Attorney with
full power to at any time, in the discretion of Agent (whether or not Default
has occurred) to: (a) endorse the name of Xxxxxxx upon any of the items of
payment of proceeds of the Collateral and deposit the same in the account of
Agent for application to the Obligations; (b) sign the name of Xxxxxxx on any
document or instrument that Agent shall deem necessary or appropriate to perfect
and maintain perfected the security interests in the Collateral under this Loan
Agreement and other Loan Documents; (c) initiate and settle any insurance claim
and endorse Xxxxxxx'x name on any check, instrument or other item of payment;
(d) endorse the name of Xxxxxxx upon financing statements, instruments,
Certificates of Title and Statements of Origin pertaining to the Collateral; and
(e) do anything to preserve and protect the Collateral and Agent's rights and
interest therein. This power of attorney is for value and coupled with an
interest and is irrevocable so long as any Obligations remain outstanding and by
Agent exercising such right, Agent shall not waive any right against Xxxxxxx
until the Obligations are paid in full.
Section 12.29 Expenses. Xxxxxxx agrees, whether or not any Loan is made
hereunder, to pay Agent or the Lenders upon demand for all reasonable expenses,
including reasonable fees of attorneys for Agent or the Lenders (who may be
employees of the Lenders), incurred by (a)
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Agent or the Lenders in connection with the preparation, negotiation, and
execution of this Loan Agreement and any other Loan Document, (b) Agent or the
Lenders in connection with the preparation of any and all amendments to this
Loan Agreement and any other Loan Document, and all search, recording, filing,
and registration expenses, and (c) Agent or the Lenders in connection with the
enforcement of the Xxxxxxx'x obligations hereunder or under any other Loan
Document. Xxxxxxx also agrees (i) to indemnify and hold Agent or the Lenders
harmless from any loss or expense which may arise or be created by the
acceptance of telephonic or other instructions for making Loans, except for any
loss & expense arising from Agent's or a Lender's gross negligence or willful
misconduct (provided, however, that reliance alone upon telephonic or other
instructions shall not itself be deemed to constitute gross negligence or
willful misconduct), (ii) to pay and save Agent and each Lender harmless from
all liability for, any stamp or other taxes which may be payable with respect to
the execution or delivery of this Loan Agreement or any of the other Loan
Documents. Xxxxxxx'x obligations under this Section 12.29 shall survive any
termination of this Loan Agreement, and (iii) upon failure of Borrower to
provide the insurance required under Section 7.1(b)(i), Agent, on behalf of the
Lenders, shall have the option to procure and maintain such insurance without
notice to Borrower.
[Remainder of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by or on behalf of each of the parties as of the day and in the year first above
written in Cincinnati, Ohio.
BORROWER
XXXXXXX PIANO & ORGAN COMPANY
By: /s/ XXXXX X. XXXXXXXX
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Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
AGENT
THE FIFTH THIRD BANK, As Agent
By: /s/ XXXXXX X. XXXX
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Name: Xxxxxx X. Xxxx
Title: Vice President
LENDERS
THE FIFTH THIRD BANK
By: /s/ XXXXXX X. XXXX
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Name: Xxxxxx X. Xxxx
Title: Vice President
NBD BANK, N.A.
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: First Vice President
AMENDED AND RESTATED TERM LOAN AGREEMENT
Xxxxxxx Piano & Organ Company
