EXHIBIT 10.21
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CREDIT AGREEMENT
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between
CHROMCRAFT REVINGTON, INC.
and
XXXXX FARGO BANK, N.A.
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Dated as of September 20, 2005
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SECTION 1. Definitions.........................................................1
1.1. Defined Terms ...................................................1
1.2. Rules of Construction ..........................................12
1.3. Accounting Terms................................................12
SECTION 2. Credit.............................................................12
2.1. Commitments.....................................................12
2.1.1. Revolving Commitment.................................12
2.2. Interest........................................................13
2.2.1. Revolving Commitment.................................13
2.2.2. General..............................................13
2.3. Payments of Principal and Interest. ............................13
2.3.1. Revolving Commitment.................................13
2.3.2. Method of Payment....................................13
2.3.3. Banking Day .........................................13
2.4. Method of Advance...............................................14
2.4.1. Revolving Commitment.................................14
2.4.2. General..............................................14
2.5. Procedures for Electing Optional Rates..........................14
2.6. Fees............................................................16
2.6.1. Commitment Fee - Revolving Commitment................16
2.6.2. Closing Fee .........................................17
2.7. Reductions of Revolving Commitment .............................17
2.8. Issuance of Letters of Credit ..................................17
2.9. Letters of Credit Fees..........................................18
2.10. Reimbursement of Letters of Credit ............................18
2.11. Use of Proceeds................................................19
SECTION 3. Guaranty...........................................................19
SECTION 4. Representations and Warranties.....................................20
4.1. Organization; Corporate Powers..................................20
4.2. Authority.......................................................20
4.3. No Conflict.....................................................21
4.4. Financial Statements ...........................................21
4.5. No Material Adverse Change......................................21
4.6. Taxes...........................................................21
4.6.1. Tax Examinations ....................................21
4.6.2. Payment of Taxes.....................................22
4.7. Litigation; Loss Contingencies and Violations...................22
4.8. Subsidiaries....................................................22
4.9. Employee Benefits ..............................................22
4.10. Accuracy of Information........................................24
4.11. Material Agreements............................................24
4.12. Compliance with Laws ..........................................24
4.13. Assets and Properties .........................................24
4.14. Insurance......................................................24
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4.15. Environmental Matters..........................................24
4.16. Solvency.......................................................25
4.17. Indebtedness...................................................25
4.18. Contracts of Surety ...........................................25
4.19. Licenses.......................................................26
4.20. Force Majeure .................................................26
4.21. Margin Stock...................................................26
4.22. Approvals......................................................26
4.23. Regulation.....................................................26
4.24. ESOP...........................................................26
4.25. General........................................................26
4.26. Supplemental Disclosure .......................................26
SECTION 5. Covenants..........................................................27
5.1. Affirmative Covenants...........................................27
5.1.1. Financial Reporting..................................27
5.1.2. Good Standing .......................................28
5.1.3. Taxes, Etc...........................................29
5.1.4. Maintain Properties..................................29
5.1.5. Insurance ...........................................29
5.1.6. Books and Records ...................................29
5.1.7. Reports .............................................29
5.1.8. Licenses.............................................30
5.1.9. Notice of Material Adverse Change ...................30
5.1.10. Conduct of Business ................................30
5.1.11. Compliance with Laws ...............................30
5.1.12. Use of Proceeds.....................................30
5.1.13. Loan Payments.......................................30
5.1.14. Adjusted Consolidated Tangible Net Worth............30
5.1.15. Leverage Ratio .....................................30
5.1.16. Interest Coverage Ratio.............................31
5.1.17. Notice of Environmental Matters.....................31
5.1.18. Banking Accounts....................................31
5.1.19. ESOP................................................31
5.2. Negative Covenants .............................................32
5.2.1. Dispose of Property..................................32
5.2.2. Further Encumber ....................................32
5.2.3. Dividends ...........................................33
5.2.4. Purchase Stock.......................................33
5.2.5. Borrowings...........................................33
5.2.6. Loans, Etc ..........................................33
5.2.7. Guarantees...........................................33
5.2.8. Merger, Acquisitions, Etc ...........................33
5.2.9. Change Name and Place of Business....................34
5.2.10. Accounting Policies ................................34
5.2.11. Change of Business..................................34
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5.2.12. Benefit Plans ......................................34
5.2.13. ESOP................................................34
5.2.14. Transactions with Affiliates........................35
5.2.15. Sales and Leasebacks................................35
5.2.16. Corporate Documents ................................35
5.2.17. Restrictive Agreements..............................35
SECTION 6. Conditions Precedent to Loans .....................................35
6.1. Conditions to Initial Advance ..................................35
6.1.1. Authorization .......................................36
6.1.2. Loan Documents ......................................36
6.1.3. Guaranty.............................................36
6.1.4. Incumbency Certificates .............................36
6.1.5. Opinion of Counsel ..................................36
6.1.6. UCC Searches ........................................36
6.1.7. Regulation U.........................................36
6.1.8. Compliance Certificate ..............................36
6.1.9. Commitment Fees .....................................36
6.1.10. Termination of Existing Credit Agreement ...........36
6.1.11. Certificate of No Default ..........................37
6.1.12. Additional Documentation............................37
6.2. Conditions to Subsequent Advances...............................37
6.2.1. No Default...........................................37
6.2.2. Representations and Warranties.......................37
6.2.3. Legal Matters .......................................37
6.2.4. Expenses ............................................37
6.3. Special Conditions to Advances for Permitted Acquisitions.......37
6.3.1. Written Requests.....................................37
6.3.2. Acquisition Documents................................37
6.3.3. Representations of Target's Financial Statements ....38
6.3.4. Expenses ............................................38
6.4. General.........................................................38
SECTION 7. Default............................................................38
SECTION 8. Remedy ............................................................40
8.1. Acceleration ...................................................40
8.2. Deposit to Secure Reimbursement Obligations ....................41
8.3. Subrogation.....................................................41
8.4. Preservation of Rights..........................................41
8.5. Default Rate ...................................................41
SECTION 9. Benefit of Agreement; Assignment, Participations...................42
9.1. Successors and Assigns..........................................42
9.2. Participations..................................................42
9.2.1. Permitted Participants; Effect ......................42
9.2.2. Voting Rights .......................................42
9.2.3. Benefit of Setoff....................................43
9.3. Assignments.....................................................43
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9.3.1. Permitted Assignments ...............................43
9.3.2. Effect; Effective Date ..............................43
9.4. Dissemination of Information ...................................43
SECTION 10. General Provisions ...............................................44
10.1. Waivers, Amendments and Remedies ..............................44
10.2. Survival of Representations ...................................44
10.3. Governmental Regulation .......................................44
10.4. Taxes..........................................................44
10.5. Choice of Law..................................................44
10.6. Headings ......................................................44
10.7. Entire Agreement ..............................................45
10.8. Expenses ......................................................45
10.9. Indemnification ...............................................45
10.10. Confidentiality ..............................................46
10.11. Giving Notice.................................................46
10.12. Counterparts..................................................46
10.13. Incorporation by Reference....................................47
10.14. Time of Essence...............................................47
10.15. No Joint Venture..............................................47
10.16. Severability .................................................47
10.17. Waiver of Setoff..............................................47
10.18. Gender........................................................47
10.19. Right of Setoff...............................................47
10.20. Lender Not in Control.........................................47
10.21. Additional Amounts Payable ...................................48
10.22. Application of Proceeds.......................................48
10.23. Relationship of Parties; Mutual Release of Consequential
Damages.......................................................49
10.24. Waiver of Jury Trial..........................................49
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT, dated as of the 20th day of September, 2005,
between CHROMCRAFT REVINGTON, INC., a Delaware corporation (the "Borrower"), and
XXXXX FARGO BANK, N.A., a national banking association (the "Lender"). The
parties agree as follows:
SECTION 1.
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Definitions
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1.1. Defined Terms. As used in this Agreement:
"Adjusted Consolidated Tangible Net Worth" means, on any date of
determination, the amount by which (a) Consolidated Net Worth exceeds (b) the
sum of (i) all assets which would be classified as intangible assets under GAAP,
including without limitation, goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises, operating permits, unamortized debt discount and
expense, organization costs, and research and development costs, (ii) minority
interests in subsidiaries, (iii) cash set apart and held in a sinking or other
similar fund established for the purpose of redemption or other retirement of
capital stock, and (iv) any revaluation or other write-up in book value of
assets subsequent to the date hereof.
"Adjusted LIBOR" means, for each LIBOR Loan, the rate per annum
(rounded up, if necessary, to the nearest 1/16%) determined by the Lender to be
equal to the quotient of (a) the LIBOR divided by (b) 1 minus the Reserve
Requirement.
"Advance" means a disbursement of proceeds of the Loans.
"Affiliate" means, with respect to any Person, any other Person (a)
directly or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with, such Person, and (b) that directly
or indirectly owns more than Ten Percent (10%) of any class of the voting
securities or Capital Stock of or equity interests in such Person. A Person
shall be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" means this Credit Agreement, as amended from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to, at Borrower's election, (i) the Prime Rate for such day, (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum, or (iii)
the Daily LIBOR Rate plus the Applicable Margin for LIBOR Loans.
"Alternate Base Rate Loan" means any Loan when and to the extent that
the interest rate thereof is determined by reference to the Alternate Base Rate.
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"Applicable Margin" and "Applicable Fee" is determined by reference to
the following tables:
Applicable Margin
Applicable Margin for Alternate Base Rate
Leverage Ratio for LIBOR Loans Rate Loans
-------------- --------------- ----------
Greater than or equal
to 1.50 to 1.00 1.25% 0.00%
Less than 1.50 to 1.00
but greater than or equal
to 1.00 to 1.00 1.00% 0.00%
Less than 1.00 to 1.00 0.75% 0.00%
Applicable Fee Applicable Fee
for Standby Letters for Commitment
Leverage Ratio of Credit Fee
-------------- --------- ---
Greater than or equal
to 1.5 to 1.00 1.25% 0.25%
Less than 1.50 to 1.00
but greater than or equal
to 1.00 to 1.00 1.00% 0.20%
Less than 1.00 to 1.00 0.75% 0.15%
The Applicable Margin and the Applicable Fee shall initially be determined based
on a Leverage Ratio as determined by Borrower's Financial Statements as of the
fiscal quarter ended July 2, 2005. The Applicable Margin and Applicable Fee
shall be subject to adjustment quarterly commencing with Borrower's Financial
Statements as of the fiscal quarter ending October 1, 2005. Adjustments, if any,
to the Applicable Margin and the Applicable Fee shall be effective three (3)
Banking Days after the Lender has received Borrower's Financial Statements
delivered to the Lender pursuant to Section 5.1.1 hereof for the immediately
preceding fiscal quarter. In the event the Lender has not received the required
Financial Statements pursuant to Section 5.1.1 hereof within the time periods
provided therein, the maximum Leverage Ratio and the highest Applicable Margin
and Applicable Fee set forth in the foregoing tables shall be conclusively
presumed to be correct until three (3) Banking Days after the applicable
Financial Statements are so delivered. In no event shall the Applicable Margin
and the Applicable Fee be adjusted downward if there exists a Default on the
date on which such downward adjustment would otherwise become effective until
such time as the Default has been cured, waived or ceases to exist. The
provisions of this definition are not intended to, and shall not be construed
to, authorize any violation by Borrower of Section 5.1.16 hereof or to
constitute a waiver thereof or any commitment by the Lender to waive any
violation by Borrower of Section 5.1.16 hereof.
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"Authorized Officer" means any officer or employee of Borrower whose
authority to perform acts to be performed only by an Authorized Officer under
the terms of this Agreement are evidenced by (a) a certified copy of an
appropriate resolution of the Board of Directors of Borrower, or (b) a written
authorization specifying an employee of Borrower signed by an Authorized
Officer.
"Banking Day" means a day on which the principal domestic office of the
Lender is open for the purpose of conducting substantially all of its business
activities, and, if the applicable day relates to a LIBOR Loan, LIBOR Interest
Period, or notice with respect to a LIBOR Loan, a day on which dealings in U.S.
dollar deposits are carried on in the London interbank market and Lender is open
for business in London.
"Borrower" shall have the meaning ascribed in the first paragraph of
this Agreement.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interest, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Capitalized Lease" means any lease of property which would be
capitalized on a balance sheet of a Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" means the amount of the obligations of
a Person under Capitalized Leases which would be shown as liabilities on a
balance sheet of such Person prepared in accordance with GAAP.
"Change in Control" means, and shall be deemed to have occurred if, (a)
any Person or group of Persons (other than (i) Borrower, (ii) any Subsidiary of
Borrower, (iii) any employee or director benefit plan or stock plan of Borrower
[including the ESOP] or a Subsidiary of Borrower or any trustee or fiduciary
with respect to any such plan when acting in that capacity or any trust related
to any such plan) shall have acquired beneficial ownership of shares
representing more than Twenty-Five Percent (25%) of the combined voting power
represented by the outstanding voting shares of Borrower (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder), or (b) during any period of
twelve (12) consecutive months, commencing before or after the date of this
Agreement, individuals who on the first day of such period were directors of
Borrower (together with any replacement or additional directors who were
nominated or elected by a majority of directors then in office) cease to
constitute a majority of the Board of Directors of Borrower, or (c) Borrower
consolidates with or merges into another corporation or conveys, transfers or
leases all or substantially all of its property to any Person, or any
corporation consolidates with or merges into Borrower, in either event pursuant
to a transaction in which the outstanding Capital Stock of Borrower is
reclassified or changed into or exchanged for cash, securities or other
property.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and all regulations promulgated thereunder.
"Commitment Fee" means the fee required to be paid by Borrower pursuant
to Section 2.6.1 hereof.
"Compliance Certificate" means a Compliance Certificate, in the form
attached hereto as Exhibit A, duly executed by the chief executive officer or
chief financial officer of Borrower.
"Consolidated Net Worth" means the excess of Borrower's consolidated
total assets over Borrower's Consolidated Total Liabilities, each determined in
accordance with GAAP and as shown on the balance sheets furnished to the Lender
from time to time pursuant to Section 5.1.1 hereof.
"Consolidated Total Liabilities" means the consolidated total
liabilities of Borrower and its Subsidiaries, determined in accordance with GAAP
and as shown on the Financial Statements furnished to the Lender from time to
time pursuant to Section 5.1.1 hereof.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental Laws.
"Contingent Obligation", as applied to any Person, means any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise but excluding any supply contract obligations arising
in the ordinary course of business) arising through or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received.
"Contractual Obligation", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject.
"Daily LIBOR Rate" means, for each applicable Alternate Base Rate Loan,
the rate per annum (rounded up, if necessary, to the nearest 1/8%) determined by
the Lender to be equal to the quotient of (a) the Base LIBOR divided by (b) 1
minus the Reserve Requirement. For purposes of this definition, "Base LIBOR"
means the rate per annum for United States dollar deposits quoted by the Lender
as of 10:00 a.m. on each Business Day as the "Inter-Bank Market Offered Rate",
with the understanding that such rate is quoted by the Lender for the purpose of
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calculating effective rates of interest for loans making reference thereto, for
the delivery of funds on such Business Day for a period of time equal to one (1)
day in an amount equal to the applicable Alternate Base Loan. Borrower
understands and agrees that the Lender may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the
Inter-Bank Market as the Lender in its sole discretion deems appropriate
including, but not limited to, the rate offered for United States dollar
deposits on the London Inter-Bank Market. The Daily LIBOR Rate shall adjust
daily pursuant to any change in the rate announced internally by the Lender.
"EBITDAE" means, with respect to Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, the sum of (a) Net
Income, plus (b) to the extent deducted in determining Net Income, income taxes
paid or accrued, plus (c) interest expense, plus (d) to the extent deducted in
determining Net Income, depreciation and amortization, plus (e) to the extent
deducted in determining Net Income, ESOP Compensation; in each instance
determined for the trailing four (4) quarter period ending on the date of
determination.
"Employee Benefit Plans" shall have the meaning ascribed in Section 4.9
hereof.
"Environmental Laws" means all provisions of laws, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by any
Governmental Authority concerning the protection of, or regulation of the
discharge of substances into, the environment or concerning the health or safety
of persons with respect to environmental hazards, and includes, without
limitation, the Hazardous Materials Transportation Act, 42 U.S.C. Section 1801
et seq., the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. Sections 9601 et seq., Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and Solid and Hazardous Waste
Amendments of 1984, 42 U.S.C. Sections 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. Sections 1251
et seq., Clean Air Act of 1966, as amended, 42 U.S.C. Sections 7401 et seq.,
Toxic Substances Control Act of 1976, 15 U.S.C. Sections 2601 et seq., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 7401 et
seq., Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Sections
651 et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Sections 11001 et seq., National Environmental Policy Act of 1975, 42
U.S.C. Sections 4321 et seq., Safe Drinking Water Act of 1974, as amended, 42
U.S.C. Sections 300(f) et seq., and any similar or implementing state law, and
all amendments, rules, and regulations promulgated thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any trade or business, whether or not
incorporated, which together with Borrower would be treated as a single employer
under ERISA.
"ESOP" means the employee stock ownership plan and trust established
pursuant to the ESOP Plan.
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"ESOP Compensation" means Borrower's compensation expense determined in
accordance with the American Institute of Certified Public Accountants Statement
of Position 93-6.
"ESOP Loan" means the Twenty Million Dollar ($20,000,000) loan from
Borrower to the ESOP to be used to acquire qualifying employer securities of
Borrower.
"ESOP Plan" means the Chromcraft Revington, Inc. Employee Stock
Ownership Plan adopted by Borrower effective January 1, 2002 and the Chromcraft
Revington, Inc. Employee Stock Ownership Trust effective January 1, 2002.
"Facilities" means the Revolving Commitment, the Letters of Credit, and
any other credit facility provided by the Lender from time to time pursuant to
this Agreement.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Banking Day, for the immediately preceding Banking Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Banking Day, the average of the quotations at approximately 10:00 A.M. (Chicago
time) on such day on such transactions received by the Lender from three (3)
Federal funds brokers of recognized standing selected by the Lender in its sole
discretion (rounded upward, if necessary, to the nearest 1/16%).
"Financial Statements" means, as the context may require, (a) the
consolidated balance sheets of Borrower and its Subsidiaries as of July 2, 2005
and their consolidated statements of income and retained earnings and
consolidated statement of cash flows for the periods then ended, and (b) the
consolidated financial statements of Borrower and its Subsidiaries furnished
from time to time pursuant to Section 5.1.1 hereof; in all cases, together with
any accompanying notes thereto, and any other documents or data furnished in
connection therewith, prepared in accordance with the terms and limitations as
set forth in Section 4.4 hereof.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time as promulgated by the Financial
Accounting Standards Board and recognized and interpreted by the American
Institute of Certified Public Accountants.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limiting the generality of the foregoing, any
agency, body, commission, court or department thereof, whether federal, state,
local or foreign.
"Gross Negligence" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence" is
used with respect to Lender or any indemnitee in any of the other Loan
Documents, it shall have the meaning set forth herein.
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"Guarantors" means, jointly and severally, Chromcraft Corporation,
Xxxxxx-Xxxxxxxxx Corporation, Silver Furniture Co., Inc., Silver Furniture
Manufacturing Co., Inc., CRI Capital Corporation, Korn Industries, Incorporated,
CRI Corporation-Sumter, Cochrane Furniture Company, Inc., CRI Realty Company,
LLC and any other Subsidiaries of Borrower from time to time.
"Guaranty" means the Subsidiary Guaranty, in substantially the form of
Exhibit C hereto, duly executed by each of the Guarantors to the Lender in
connection with the Obligations, including any modification or replacement
thereof.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but to limited to, dollar-endorsement or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Indebtedness" of any Person means, without duplication, such Person's
(a) obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade or otherwise consistent with such Person's past practices), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or products from property or assets now or hereafter owned or acquired
by such Person, (d) obligations which are evidenced by notes, acceptances or
other instruments, (e) Capitalized Lease Obligations, (f) Contingent
Obligations, (g) obligations with respect to letters of credit and (h) Hedging
Obligations. The amount of Indebtedness of any Person at any date shall be
without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"Interest Coverage Ratio" means, with respect to Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, the
ratio of (a) EBITDAE divided by (b) interest expense; in each case determined
for the trailing four (4) quarter period ending on the date of determination.
The Interest Coverage Ratio shall be determined in accordance with GAAP as shown
in the Financial Statements.
"Lender" has the meaning ascribed in the first paragraph of this
Agreement.
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"Letters of Credit" means standby and commercial letters of credit, now
or hereafter issued by the Lender, from time to time, at the request of, and for
the account of, Borrower and issued on behalf of Borrower or a Guarantor
pursuant to Section 2.8 hereof.
"Letter of Credit Applications" means, collectively, each Application
for Standby Letter of Credit and each Application and Agreement for Irrevocable
Letter of Credit, in the forms prescribed by the Lender, duly executed by
Borrower in favor of the Lender, from time to time, to govern a Letter of
Credit, as any of the same may be amended from time to time.
"Leverage Ratio" means, with respect to Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, the ratio of (a) all
interest-bearing Indebtedness (including Capitalized Lease Obligations but
excluding any letters of credit), divided by (b) EBITDAE. The Leverage Ratio
shall be determined in accordance with GAAP and as shown in the Financial
Statements.
"LIBOR" means, with respect to each LIBOR Advance for the relevant
LIBOR Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as
of 11:00 a.m. (London time) two (2) Banking Days prior to the first day of such
LIBOR Interest Period, and having a maturity equal to such LIBOR Interest
Period, provided that, (a) if Reuters Screen FRBD is not available to the Lender
for any reason, the applicable LIBOR for the relevant LIBOR Interest Period
shall instead be the applicable British Bankers' Association Interest Settlement
Rate for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two (2) Banking
Days prior to the first day of such LIBOR Interest Period, and (b) if no such
British Bankers' Association Interest Settlement Rate is available to the
Lender, the applicable LIBOR for the relevant LIBOR Interest Period shall
instead be the rate determined by the Lender to be the rate at which Lender or
one of its affiliate banks offers to place deposits in U.S. dollars with
first-class lenders in the London interbank market at approximately 11:00 a.m.
(London time) two (2) Banking Days prior to the first day of such LIBOR Interest
Period, in the appropriate amount of Lender's relevant LIBOR Advance and having
a maturity approximately equal to such LIBOR Interest Period.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one (1), two (2), three (3) or six (6) months commencing on a Banking
Day selected by Borrower pursuant to this Agreement. Such LIBOR Interest Period
shall end on the day which corresponds numerically to such date one (1), two
(2), three (3) or six (6) months thereafter, provided, however, that if there is
no such numerically corresponding day in such next, second (2nd), third (3rd) or
sixth (6th) succeeding month, such LIBOR Interest Period shall end on the last
Banking Day of such next, second (2nd), third (3rd) or sixth (6th) succeeding
month. If a LIBOR Interest Period would otherwise end on a day which is not a
Banking Day, such LIBOR Interest Period shall end on the next succeeding Banking
Day, provided, however, that if said next succeeding Banking Day falls in a new
calendar month, such LIBOR Interest Period shall end on the immediately
preceding Banking Day.
"LIBOR Loans" means any Loan when and to the extent that the interest
rate thereof is determined by reference to the Adjusted LIBOR.
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"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan Documents" means this Agreement, the Note, the Guaranty, any
Letter of Credit Applications, and any other documents or instruments now or
hereafter executed and delivered by or on behalf of Borrower to the Lender to
evidence, govern or secure the Obligations.
"Loans" means the Revolving Loans.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower, or Borrower and its Subsidiaries, taken as
a whole, (b) the ability of Borrower or any of its Subsidiaries to perform their
respective obligations under the Loan Documents in any material respect, or (c)
the ability of the Lender to enforce in any material respect the Obligations.
"Net Income" means, for any period, the consolidated net income of
Borrower after deductions for income taxes determined in accordance with GAAP,
plus any non-cash restructuring charges (net of income tax benefit) incurred by
the Borrower and its Subsidiaries in the normal course of business to the extent
that any such charges were deducted in computing the consolidated net income,
and as shown on Borrower's consolidated Financial Statements furnished to the
Lender pursuant to Section 5.1.1 hereof.
"Note" means the Revolving Note.
"Obligations" means all of the unpaid principal amount of, and accrued
interest on, the Note, actual and contingent reimbursement obligations under the
Letters of Credit, all commitment fees, Letter of Credit fees, all other
obligations and liabilities of Borrower to the Lender in connection with the
Facilities of every type and description, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, or
otherwise arising under the Loan Documents whether or not contemplated by
Borrower or the Lender as of the date hereof, including, without limitation, all
reasonable costs of collection and enforcement of any and all thereof, including
reasonable attorneys' fees.
"Optional Rate" means a rate selected by Borrower to be calculated by
reference to the Adjusted LIBOR.
"Participants" shall have the meaning ascribed thereto in Section
10.2.1 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to ERISA, or any successor entity.
"Permissible Increment" means a minimum principal amount of Ten
Thousand Dollars ($10,000) and minimum increments of One Thousand Dollars
($1,000) above Ten Thousand Dollars ($10,000).
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"Permitted Encumbrances" means (a) Liens for taxes or assessments which
are not yet due, Liens for taxes or assessments or Liens of judgments which are
being contested, appealed or reviewed in good faith by appropriate proceedings
which prevent foreclosure of any such Lien or levy of execution thereunder and
against which Liens, if any, adequate insurance or reserves have been provided;
(b) pledges or deposits to secure payment of workers' compensation obligations
and deposits or indemnities to secure public or statutory obligations or for
similar purposes; (c) any Liens and other security interests in favor of the
Lender under the Loan Documents; (d) Liens imposed by law, such as carrier's,
warehousemen's and mechanics' Liens and other similar Liens arising in the
ordinary course of business which secure payment of obligations not more than
sixty (60) days past due; (e) utility easements, building restrictions, zoning
ordinances and such other encumbrances or charges against real property as are
of a nature generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the same or
interfere with the use thereof in the business of a Person; (f) lessors'
interests under Capitalized Leases; (g) Liens encumbering only assets not
constituting current assets and securing Indebtedness of Borrower and its
Subsidiaries not exceeding in the aggregate Ten Percent (10%) of Borrower's
Adjusted Consolidated Tangible Net Worth at any one time outstanding; and (h)
those further encumbrances (if any) shown on Schedule I hereto.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a Governmental Authority.
"Prepayment Premium" means the excess, if any, determined by the Lender
of (a) the present value, at the time of prepayment, of the interest payments
which would have been payable on account of an amount prepaid from the date of
prepayment until the end of the period during which interest would have accrued
at the Optional Rate, but for prepayment, less (b) the present value at the time
of a prepayment of interest payments calculated at the Reinvestment Rate. The
discount rate used by the Lender in determining such present value calculations
shall be the Reinvestment Rate.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by the Lender as its "prime rate" (which is not
necessarily the lowest rate charged to any customer), as adjusted on the
effective date of each change in such established and quoted rate, provided that
such prime rate shall not necessarily be representative of the rate of interest
actually charged by the Lender on any loan or class of loans.
"Qualified Investments" means (a) short term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by Standard & Poor's Corporation or P-1 or better by Xxxxx'x Investors
Service, Inc., (c) demand deposit accounts maintained in the ordinary course of
business, and (d) certificates of deposit issued by commercial lenders having
capital and surplus in excess of One Hundred Million Dollars ($100,000,000).
"Reinvestment Rate" means a rate which the Lender estimates, at the
time of a prepayment, it would receive upon reinvesting the principal amount of
the prepayment in an
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obligation which presents a credit risk substantially similar (as determined in
accordance with the commercial credit rating system then used by the Lender) to
that which is then presented by the LIBOR Loans for a period approximately equal
to the balance of the period during which interest would accrue on the amount of
LIBOR Loans prepaid, but for prepayment.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"Reserve Requirement" means, for any LIBOR Loan for any LIBOR Interest
Period therefor, the daily average of the stated maximum rate (expressed as a
decimal) at which reserves, including any marginal, supplemental, or emergency
reserves, are required to be maintained during such LIBOR Interest Period under
Regulation D by member lenders of the Federal Reserve System against
"Eurocurrency liabilities" (as such term is used in Regulation D), but without
benefit or credit of proration, exemptions, or offsets that might otherwise be
available from time to time under Regulation D. Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other reserves required
to be maintained by the Lender against any category of liabilities that includes
deposits by reference to which the Adjusted LIBOR is to be determined or any
category or extension of credit or other assets that includes LIBOR Loans.
"Revolving Commitment" means $35,000,000.
"Revolving Commitment Period" means the period from the date hereof
until September 20, 2008.
"Revolving Loans" means the advances and loans made by the Lender to
Borrower under Section 2 hereof pursuant to the Revolving Commitment, including
any extensions or renewals thereof.
"Revolving Note" means the Credit Note, substantially in the form of
Exhibit B hereto, duly executed by Borrower to the Lender to evidence the
Revolving Loans, including any and all renewals, extensions, replacements and
modifications thereof.
"Solvent" means, when used with respect to any Person, that at the time
of determination:
(a) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the
total amount of its liabilities, including, without
limitation, contingent liabilities; and
(b) it is then able and expects to be able to pay its debts as
they mature; and
(c) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
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With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
mature liability.
"Subordinated Debt" means any Indebtedness of Borrower that is
subordinated to the full, final and irrevocable payment of the Obligations in
form and substance acceptable to the Lender.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Borrower.
"Target" shall have the meaning ascribed thereto in Section 6.3.1
hereof.
"Transferee" shall have the meaning ascribed in Section 10.4 hereof.
"Unmatured Default" means any event which with notice, or lapse of time
or both, would constitute a Default.
1.2. Rules of Construction. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the defined terms. Use of
the terms "herein", "hereof", and "hereunder" shall be deemed references to this
Agreement in its entirety and not to the Section clause in which such term
appears.
1.3. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistent with those applied
in the preparation of the Financial Statements.
SECTION 2.
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Credit
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2.1. Commitments.
2.1.1. Revolving Commitment. Subject to the terms and conditions of
this Agreement, the Lender agrees to make Revolving Loans to Borrower from time
to time during the Revolving Commitment Period in a principal amount not in
excess of the unborrowed portion of the Revolving Commitment on the borrowing
date. No requested Revolving Loan Advance shall cause the aggregate outstanding
balance of the Revolving Loan Advances plus the face amounts of outstanding
Letters of Credit and unreimbursed drawings thereunder to exceed the aggregate
Revolving Commitment. During the
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Revolving Commitment Period, Borrower may use the Revolving Commitment by
borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. The Revolving Loans made
by the Lender pursuant hereto shall be evidenced by the Revolving Note.
2.2. Interest.
2.2.1. Revolving Commitment. Prior to maturity or Default, the
principal amount of the Revolving Loans outstanding from time to time shall bear
interest at a rate per annum equal to the Alternate Base Rate, except that at
the option of Borrower, exercised as provided in Section 2.5 hereof, interest
may accrue prior to maturity on any Permissible Increment of outstanding
Advances of the Revolving Loans at a per annum rate equal to the Adjusted LIBOR
plus the Applicable Margin. At the expiration of each LIBOR Interest Period on
such Permissible Increment, unless Borrower selects an Optional Rate as provided
in Section 2.5 hereof, interest on such Permissible Increment shall again accrue
at the Alternate Base Rate.
2.2.2. General. Interest shall be due and payable for the exact number
of days principal is outstanding and shall be calculated on the basis of a three
hundred sixty (360) day year. Any change in the interest rates occasioned by a
change in the Alternate Base Rate shall be effective on the same day as the
change in the Alternate Base Rate. Notwithstanding Section 8.5 hereof, the
Lender may allow the election of an Optional Rate under Section 2.5(a) hereof
while there exists a Default, after the maturity of any Facility, whether by
acceleration or otherwise, and while and so long as there shall exist any
uncured Default under any Facility, the Facilities shall bear interest at a per
annum rate equal to Three Percent (3%) above the otherwise applicable rates.
2.3. Payments of Principal and Interest.
2.3.1. Revolving Commitment. Interest only on the outstanding Advances
of the Revolving Loans from time to time shall be due and payable throughout the
term of the Revolving Commitment (a) on the first day of each calendar month
with respect to each Alternate Base Rate Loan, and (b) on the last day of an
applicable LIBOR Interest Period with respect to each LIBOR Loan and, in the
case of a LIBOR Interest Period greater than three (3) months, at three (3)
month intervals after the first day of such LIBOR Interest Period. The entire
principal balance of the Revolving Loans, together with all accrued and unpaid
interest thereon, and all fees and charges payable in connection therewith,
shall be due and payable on September 20, 2008.
2.3.2. Method of Payment. All payments of principal and interest
hereunder shall be made by Borrower to the Lender at its offices in
Indianapolis, Indiana by 12:00 Noon (Indianapolis time) on the date when due.
2.3.3. Banking Day. If any installment of principal or interest
provided herein becomes due and payable on a date other than a Banking Day, the
maturity of the
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installment of principal or interest shall be extended to the next succeeding
Banking Day, and interest shall be payable during such extension of maturity.
2.4. Method of Advance.
2.4.1. Revolving Commitment. As Borrower desires to obtain Revolving
Loans hereunder, Borrower shall give the Lender notice of Borrower's intention
to borrow pursuant to the Revolving Commitment by not later than 11:00 a.m.
(Indianapolis time), on the proposed Banking Day of borrowing, subject to
Section 2.5 hereof with respect to Optional Rate Advances and subject to
compliance with Section 6.3 hereof. Each request once received by the Lender
shall be irrevocable, subject to Section 2.5(h) hereof. Such notice may be made
orally by an Authorized Officer, or upon a request transmitted to the Lender by
telex, facsimile machine or other form of written electronic communication and
signed by an Authorized Officer. The Lender may rely, without further inquiry,
on all such requests which shall have been received by it in good faith by
anyone reasonably believed to be an Authorized Officer. The Lender may require
telephonic or other oral requests to be followed immediately by a written
request. Each request shall in and of itself constitute a representation and
warranty on behalf of Borrower that no Default or Unmatured Default has occurred
and is continuing or would result from the making of the requested Advance and
that the requested Advance shall not cause the principal balance of the
Revolving Loans to exceed the aggregate Revolving Commitment. The aggregate
principal amount of Revolving Loans (other than Revolving Loans made by payment
of Letters of Credit) made on any borrowing date shall be in Permissible
Increments.
2.4.2. General. All Advances by the Lender and payments by Borrower
shall be recorded by the Lender on its books and records, and the principal
amount outstanding from time to time, plus interest payable thereon shall be
determined from the books and records of the Lender. The books and records of
the Lender shall be presumed prima facie correct as to such matters.
2.5. Procedures for Electing Optional Rates. Optional Rates may be
elected only in accordance with the following procedures and subject to the
other conditions contained in this Agreement:
(a) No Optional Rate may be elected at any time a Default exists and
unless the Lender otherwise agrees in writing, no Optional Rate may be elected
at any time an Unmatured Default exists.
(b) Borrower shall notify the Lender of its election or renewal of an
Optional Rate prior to 11:00 a.m. (Indianapolis time) not less than three (3)
Banking Days prior to the commencement of a LIBOR Interest Period, specifying
(i) the election or renewal date, (ii) the amount of the Loan (or Loans taken
together) elected or renewed which amount shall be in a Permissible Increment,
and (iii) the duration of the LIBOR Interest Period selected to apply thereto.
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(c) An election of an Optional Rate may be communicated by telephone or
by telex, facsimile machine or other form of written electronic communication,
or by a writing delivered to the Lender. Borrower shall confirm in writing any
election communicated by telephone. The Lender shall be entitled to rely on any
verbal communication of the election of an Optional Rate which is received by a
designated employee of the Lender from anyone reasonably believed in good faith
by such employee to be authorized.
(d) Not more than Six (6) Optional Rate Advances may be selected at any
one time to apply to outstanding Advances.
(e) Notwithstanding any other provision of this Agreement, in the event
that the Lender determines (which determination if made in good faith shall be
conclusive and binding upon Borrower) that by reason of circumstances affecting
the London interbank market, adequate and reasonable means do not exist for
ascertaining the LIBOR for any LIBOR Interest Period at a time when LIBOR Loans
are outstanding, or quotations of interest rate for the relevant deposits
referred to in definition of the Adjusted LIBOR are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest on a LIBOR Loan as provided herein, or if the Lender determines
(which determination if made in good faith shall be conclusive) that the
relevant rates of interest referred to in the definition of the Adjusted LIBOR
upon the basis of which the rate of interest for any such type of Loan is to be
determined, to not accurately cover the cost to the Lender of making or
maintaining such types of Loans, the Lender shall forthwith give notice of such
determination, confirmed in writing, to Borrower. If such notice is given, (i)
the obligation of the Lender to make LIBOR Loans shall be suspended until the
Lender notifies Borrower that the circumstances giving rise to such suspension
no longer exists, and (ii) the then outstanding principal amount of each LIBOR
Loan shall be converted, on the last day of the then current LIBOR Interest
Period applicable to such Loan, to an Alternate Base Rate Loan (subject to
selection of any other permitted Optional Rate hereunder, subject to the
provisions of Sections 2.2 and 2.5 hereof).
(f) If any law or any governmental regulation, guideline or order or
interpretation or application thereof by any Governmental Authority charged with
the interpretation or administration thereof or compliance with any request or
directive of any central bank or other Governmental Authority whether or not
having the force of law (i) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against assets held by, credit extended
by, deposits with or for the account of, or other acquisition of funds by, the
Lender (other than requirements expressly included herein in the determination
of the applicable Optional Rate hereunder), or (ii) imposes upon the Lender any
other condition or expense with respect to this Agreement, or the making,
maintenance or funding of any part of the proceeds of an Optional Rate Advance
or any security therefor; and the result of any of the foregoing is to increase
the cost to, reduce the income receivable by, or impose any expense upon the
Lender with respect to the outstanding balance of the Loans bearing interest at
an Optional Rate or the making, maintenance or funding of any part thereof by an
amount which the Lender deems to be
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material (the Lender being deemed for this purpose to have made, maintained or
funded the proceeds of an Optional Rate Advance from certificates of deposit),
the Lender shall from time to time notify Borrower of the amount determined in
good faith (using any averaging and attribution methods employed in good faith)
by the Lender (which determination if made in good faith shall be conclusive and
binding upon Borrower) to be necessary to compensate the Lender for such
increase in cost, reduction in income or additional expense. Such amount shall
be due and payable by Borrower to the Lender ten (10) Banking Days after such
notice is given. A certificate as to the amount of such increase in cost,
reduction in income or additional expense delivered by the Lender to Borrower
shall be conclusive as to such amount due and payable.
(g) Any payment of the outstanding principal balance of a LIBOR Loan on
a day other than the last day of the corresponding LIBOR Interest Period
(whether or not such payment is mandatory or automatic and whether or not such
payment is then due) shall be subject to contemporaneous payment of the
Prepayment Premium if, at the time of prepayment, the Reinvestment Rate is less
than the Adjusted LIBOR plus the Applicable Margin. If at the time of any
voluntary or mandatory prepayment of any portion of the principal of any Loan,
then any prepayment of principal will be applied first to the portion of a Loan
or Loans on which interest accrues by reference to the Alternate Base Rate and
next to the portion or portions at which interest accrues by reference to the
Adjusted LIBOR.
(h) In addition to the compensation required by Section 2.5 (f) and (g)
hereof, Borrower shall indemnify the Lender (on a net basis) against any loss or
expense (including loss of margin) which the Lender has sustained or incurred as
a consequence of any attempt by Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or in part any notice stated herein
to be irrevocable (the Lender having in its sole discretion the option (a) to
give effect to such attempted revocation and obtain indemnity under this Section
2.5(h), or (b) to treat such attempted revocation as having no force or effect,
as if never made). If the Lender sustains or incurs any such loss or expense it
shall notify Borrower of the amount determined in good faith by the Lender
(which determination shall be presumed to be correct) to be necessary to
indemnify the Lender for such loss or expense. Such amount shall be due and
payable by Borrower to the Lender ten (10) Banking Days after such notice is
given.
2.6. Fees.
2.6.1. Commitment Fee - Revolving Commitment. Borrower shall pay to the
Lender, a Commitment Fee equal to the Applicable Fee on the average daily
unborrowed portion of the Revolving Commitment from the date hereof to and
including the termination of the Revolving Commitment Period, which fee shall be
due and payable quarterly in arrears, within fifteen (15) days of receipt of an
invoice therefor. [As a point of clarification, issued Letters of Credit
pursuant to this Agreement shall be considered borrowings for calculation of the
Commitment Fee.] Such Commitment Fee shall be calculated on the basis of the
actual number of days elapsed and a Three Hundred Sixty (360) day year.
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2.6.2. Closing Fee. Borrower shall pay the Lender a fee on or before
closing in the amount set forth in the commitment letter between Borrower and
the Lender dated as of July 7, 2005.
2.7. Reductions of Revolving Commitment. Borrower may permanently
reduce the Revolving Commitment in whole, or in part in integral multiples of
One Million Dollars ($1,000,000), upon at least three (3) Banking Days' written
notice to the Lender, which notice shall specify the amount of any such
reduction, provided, however, that the amount of the Revolving Commitment may
not be reduced below the aggregate principal amount of the outstanding Revolving
Loan Advances plus the face amount of any outstanding Letters of Credit and
unreimbursed drawings thereunder.
2.8. Issuance of Letters of Credit. Subject to the terms and conditions
hereof, the Lender agrees, upon receipt of a completed and executed proper
application, to issue from time to time during the Revolving Commitment Period,
commercial and standby Letters of Credit for the account of Borrower. The
Letters of Credit shall not be payable to the beneficiary thereof less than One
(1) Banking Day after presentment for payment. The commercial Letters of Credit
shall have an expiration date not later than the earlier of six months from the
date of issuance or one day before the expiration of the Revolving Commitment
Period. The standby Letters of Credit shall have an expiration date not later
than one day before the expiration of the Revolving Commitment Period. The
aggregate of the Letters of Credit outstanding plus the aggregate amount of
unreimbursed drawings under the Letters of Credit shall not exceed Ten Million
Dollars ($10,000,000). The amount of any Letter of Credit outstanding at any
time for all purposes hereof shall be the maximum amount which could be drawn
thereunder under any circumstances from and after the date of determination.
Each Letter of Credit issued pursuant to this Agreement and each unreimbursed
drawing thereunder shall count against and reduce the Revolving Commitment by
the amount of such Letter of Credit outstanding unless and until such Letter of
Credit expires by its terms or otherwise terminates or the amount of a drawing
thereunder is reimbursed, in which event the Revolving Commitment shall be
reinstated by the amount of such Letter of Credit or the amount of such
reimbursement, as the case may be. Each such Letter of Credit shall conform to
the general requirements of the Lender for the issuance of such credits, as to
form and substance, shall be subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 and shall be a letter of credit which the Lender may
lawfully issue. Each payment of a Letter of Credit by the Lender shall be
reimbursed by Advances under the Revolving Commitment evidenced by the Revolving
Note. If and to the extent a drawing is at any time made under any Letter of
Credit, the Lender shall notify Borrower of such draw and Borrower agrees to pay
to the Lender immediately and unconditionally upon demand for reimbursement, in
lawful money of the United States, an amount equal to each amount which shall be
so drawn, together with interest from the date of such drawing to and including
the date such payment is reimbursed to the Lender or converted to Revolving
Commitment as provided herein. Until demand for reimbursement, such interest
shall be calculated at a variable rate per annum equal to the Alternate Base
Rate, and interest shall be calculated after such demand at a variable rate per
annum equal to the Alternate Base Rate plus Three Percent (3%). All such
interest shall be calculated on the basis that an entire year's interest is
earned in Three Hundred Sixty (360) days. Borrower hereby irrevocably authorizes
the Lender to refinance, without notice to Borrower, the
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reimbursement Obligation of Borrower arising out of any such drawing into
Revolving Loans, evidenced by the Revolving Note and for all purposes under, on
and subject to the terms and conditions of this Agreement, but without regard to
the conditions precedent to making an Advance under the Revolving Commitment or
to any requirement of this Agreement that each Revolving Loan be in a minimum
amount or multiple; provided, however, that an Advance under the Revolving
Commitment in spite of Borrower's failure to satisfy any conditions precedent to
making an Advance shall not constitute a waiver of any Default by the Lender.
This Agreement and the other Loan Documents shall supersede any terms of any
letter of credit applications or other documents which are irreconcilably
inconsistent with the terms hereof or thereof.
2.9. Letters of Credit Fees. Borrower agrees to pay to the Lender,
Letter of Credit fees of One-Eighth Percent (1/8%) of the face amount of each
commercial Letter of Credit (subject to a minimum fee in each case of Fifty
Dollars ($50) and the Applicable Fee per annum of the face amount of each
standby Letter of Credit at the time of issuance. Borrower shall also pay a
negotiating fee equal to One-Eighth Percent (1/8%) for drafts of commercial
Letters of Credit presented for payment (subject to a minimum fee in each case
of Fifty Dollars ($50). The Lender shall also be entitled to charge to Borrower
and retain its standard and customary fees for the issuance of standby Letters
of Credit, which fees shall be due and payable upon such issuance. Upon not less
than one (1) day prior notice from the Lender, Borrower authorizes the Lender to
collect such fees by deducting the amount thereof from the deposit account of
Borrower.
2.10. Reimbursement of Letters of Credit. The obligation of Borrower to
reimburse any drawing under any Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid and performed strictly in
accordance with the terms of this Agreement under all circumstances, whatsoever,
including, without limitation, the following:
(a) any lack of validity or enforceability of any Letter of Credit, or
any Loan Document;
(b) any amendment or waiver of or consent to departure from the terms
of any Loan Document;
(c) the existence of any claim, setoff, defense or other right which
Borrower may have at any time against the beneficiary or any Letter of Credit,
any transferee of any Letter of Credit, the Lender or any other Person, whether
in connection with the Loan Documents, such Letter of Credit, or any unrelated
transaction;
(d) any statement, draft or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever;
(e) the surrender or impairment of any security for the performance or
observance of the terms of the Loan Documents or such Letter of Credit; or
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(f) any circumstance, happening or admission whatsoever, whether or not
similar to any of the foregoing, including, without limitation, those matters
described below.
The parties benefited by any Letter of Credit shall be deemed to be the Lender,
and except as expressly set forth herein, Borrower assumes all risks for its
acts, omissions, or misrepresentations. Neither the Lender nor any of its
affiliates or correspondents shall be responsible for the validity, sufficiency,
truthfulness or genuineness of any document required to draw under any Letter of
Credit even if such document should in fact prove to be in any and all respects
invalid, insufficient, fraudulent or forged, provided only that the document
appears on its face to be in accordance with the terms of the Letter of Credit.
The Lender, its affiliates and correspondents shall not be responsible for any
failure of any draft to bear reference or adequate reference to the applicable
Letter of Credit or for the failure of any Person to note the amount of any
draft on any Letter of Credit or to surrender or take up any Letter of Credit,
each of which provisions may be waived by the Lender, or for errors, omissions,
interruptions, or delays in transmission or delivery of any messages or
documents. Without limiting the generality of the foregoing, Borrower agrees
that any action taken by the Lender or any of its affiliates or correspondents
under or in connection with any Letter of Credit shall be binding upon Borrower
and shall not put the Lender or any such affiliates or correspondents under any
such resulting liability to Borrower except in the case of gross negligence or
willful misconduct. The Lender shall not be liable for consequential damages or
for any action or failure to take action under or in connection with any Letter
of Credit except for any such action or failure to take action which constitutes
gross negligence or willful misconduct. The Lender is expressly hereby
authorized to honor any request for payment which is made under or in compliance
with the terms of any Letter of Credit without regard to and without any duty on
its part to inquire into the existence of any disputes or controversies between
Borrower and any beneficiary of any Letter of Credit or any other Person or into
respective rights, duties or liabilities of any of them or whether any facts or
occurrences represented in any of the documents presented under any Letter of
Credit are true and correct. No Person, other than the parties hereto, shall
have any rights of any nature under this Agreement or by reason hereof. In no
event shall the Lender's reliance and payment against documents presented under
a Letter of Credit appearing on its face to substantially comply with the terms
thereof be deemed to constitute gross negligence or willful misconduct.
2.11. Use of Proceeds. The proceeds of Advances under the Revolving
Commitment shall be used (i) to refinance existing indebtedness, (ii) to support
working capital needs of Borrower and its Subsidiaries, (iii) to fund capital
expenditures and needs, (iv) to purchase or repurchase the common stock of the
Borrower, and (v) for other general corporate purposes not expressly prohibited
by this Agreement.
SECTION 3.
----------
Guaranty
--------
The Obligations of Borrower shall be unconditionally, jointly and severally
guaranteed by the Guarantors pursuant to their respective Guaranty. In addition,
any Subsidiary, created or
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acquired hereafter by Borrower or a Guarantor, shall execute and deliver to the
Lender, upon the earlier of such acquisition or capitalization of such
Subsidiary but in any event not later than the date Borrower obtains an Advance
to be used in connection with, or related to, such Subsidiary, a Guaranty
substantially in the form of Exhibit C hereto.
SECTION 4.
----------
Representations and Warranties
------------------------------
In order to induce the Lender to enter into this Agreement and to make Loans in
accordance with the terms and provisions of this Agreement to its Revolving
Commitment, and to issue Letters of Credit, Borrower represents and warrants to
the Lender, which representations and warranties will survive the delivery of
the Note, the making of the Loans and the establishment of the Facilities, that:
4.1. Organization; Corporate Powers. Borrower and each of its
Subsidiaries (a) is a corporation or limited liability company duly organized,
validly existing and in existence under the laws of the jurisdiction of its
organization, (b) is duly qualified to do business as a foreign corporation or a
limited liability company and is in good standing under the laws of each
jurisdiction except where such failure to be so qualified and in good standing
could not reasonably be expected to have a Material Adverse Effect, and (c) has
all requisite corporate power and authority to own, operate and encumber its
property and to conduct its business as presently conducted and as proposed to
be conducted.
4.2. Authority.
(a) Borrower and each of its Subsidiaries has the requisite power
(corporate or otherwise) and authority to execute, deliver and perform each of
the Loan Documents.
(b) The execution, delivery and performance of each of the Loan
Documents which have been executed as required by this Agreement or otherwise on
or prior to the date hereof and to which Borrower or any of its Subsidiaries is
party, and the consummation of the transactions contemplated thereby, have been
duly approved by the respective boards of directors or managers and, if
necessary, the shareholders or members of Borrower and its Subsidiaries, and
such approvals have not been rescinded. No other corporate action or proceedings
on the part of Borrower or its Subsidiaries are necessary to consummate such
transactions.
(c) Each of the Loan Documents to which Borrower or any of its
Subsidiaries is a party has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms (except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally), is in full force and effect and no material term or condition
thereof has been amended, modified or waived from the terms and conditions
contained in the Loan Documents delivered to the Lender pursuant to Section 6.1
hereof without the prior written consent of the Lender, and Borrower and its
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Subsidiaries have performed and complied with all the terms,
provisions, agreements and conditions set forth therein and required to
be performed or complied with by such parties on or before the date
hereof, and no unmatured default, default or breach of any covenant by
any such party exists thereunder.
4.3. No Conflict. The execution, delivery and performance of each of
the Loan Documents to which Borrower or any of its Subsidiaries is a party do
not and will not (a) conflict with the certificate or articles of incorporation,
articles of organization, by-laws, or operating agreement of Borrower or any
such Subsidiary, (b) constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any law, rule
or regulation of any Governmental Authority or Contractual Obligation of
Borrower or any such Subsidiary, or require termination of any Contractual
Obligation, except such interference, breach, default or termination which
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect, (c) result in or require the creation or imposition of
any Lien whatsoever upon any of the property or assets of Borrower or any such
Subsidiary, other than Liens permitted by the Loan Documents, or (d) require any
approval of Borrower's or any such Subsidiary's shareholders or members except
such as have been obtained.
4.4. Financial Statements. The Financial Statements were prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, the Financial Statements do not
include all of the information and footnotes required by GAAP for complete
financial statement presentation; provided that all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included in the Financial Statements. Any balance sheets included within
the Financial Statements were or will be derived from the audited financial
statements at that date but do not include all information and footnotes
required by GAAP for complete financial statements. No material adverse change
in the business, operations, financial condition, properties or prospects of
Borrower has occurred since the date of the Financial Statements.
4.5. No Material Adverse Change. Since July 2, 2005, there has occurred
no material adverse change in the business, financial condition, operations or
prospects of Borrower and its Subsidiaries taken as a whole or any other event
which has had or could reasonably be expected to result in a Material Adverse
Effect.
4.6. Taxes.
4.6.1. Tax Examinations. All deficiencies which have been asserted
against Borrower or any of its Subsidiaries as a result of any federal, state,
local or foreign tax examination for each taxable year in respect of which an
examination has been conducted have been fully paid or finally settled or are
being contested in good faith, and as of the date hereof no issue has been
raised by any taxing authority in any such examination which, by application of
similar principles, reasonably can be expected to result in assertion by such
taxing authority of a material deficiency for any other year not so examined
which has not been reserved for in the Financial Statements to the extent, if
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any, required by GAAP. Neither Borrower nor any of its Subsidiaries anticipates
any material tax liability with respect to the years which have not been closed
pursuant to applicable law.
4.6.2. Payment of Taxes. Except as described on Schedule 4.6, all tax
returns and reports of Borrower and its Subsidiaries required to be filed have
been timely filed, and all taxes, assessments, fees and other governmental
charges thereupon and upon their respective property, assets, income and
franchises which are shown in such returns or reports to be due and payable have
been paid except those items which are being contested in good faith and have
been reserved for in accordance with GAAP. Borrower has no knowledge of any
proposed tax assessment against Borrower or any of its Subsidiaries that will
have or could reasonably be expected to have a Material Adverse Effect.
4.7. Litigation; Loss Contingencies and Violations. There is no action,
suit, proceeding, arbitration or investigation before or by any Governmental
Authority or private arbitrator pending or, to Borrower's knowledge, threatened
against Borrower or any of its Subsidiaries or any property of any of them which
will have or could reasonably be expected to have a Material Adverse Effect.
There is no material loss contingency within the meaning of GAAP which has not
been reflected in the Financial Statements for the fiscal period during which
such material loss contingency was incurred. Neither Borrower not any of its
Subsidiaries is (a) in violation of any applicable law, rule or regulation of
any Governmental Authority which violation will have or could reasonably be
expected to have a Material Adverse Effect, or (b) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will have or could reasonably be expected to have a Material Adverse
Effect.
4.8. Subsidiaries. Schedule 4.8 (a) contains a description of the
corporate structure of Borrower, its Subsidiaries and any other Person in which
Borrower or any of its Subsidiaries holds an equity interest (both narratively
and in chart form); and (b) accurately sets forth (i) the correct legal name,
the jurisdiction of incorporation and the jurisdictions in which each of
Borrower and the direct or indirect Subsidiaries of Borrower are qualified to
transact business as a foreign corporation, (ii) the authorized, issued and the
outstanding shares of each class of Capital Stock of Borrower and each of its
Subsidiaries and the owners of such shares (both as of the date hereof and on a
fully-diluted basis), and (iii) a summary of the direct and indirect
partnership, joint, venture, or other equity interests, if any, of Borrower and
each Subsidiary of Borrower in any Person that is not a corporation. None of the
issued and outstanding Capital Stock of Borrower or any of its Subsidiaries is
subject to any vesting, redemption, or repurchase agreement. The outstanding
Capital Stock of Borrower and each of its Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable.
4.9. Employee Benefits. With respect to pension, retirement, stock
option, stock purchase, stock appreciation rights, savings or profit sharing
plan, program, arrangement, or agreement (including trust agreements and
insurance contracts implementing plans, programs, arrangements, or agreements),
or any deferred compensation, consulting, bonus, incentive compensation, group
insurance, severance or termination pay, welfare or employee benefit plan,
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program, arrangement or agreement (the "Employee Benefit Plans"), relating to
employees or former employees of Borrower or any ERISA Affiliate:
(a) Borrower and each ERISA Affiliate have complied in all material
respects with all of the applicable reporting and disclosure requirements of
ERISA and the Code. All reports required by any governmental agency with respect
to each Employee Benefit Plan have been filed.
(b) Each Employee Benefit Plan (including, without limitation, the
ESOP) complies in all material respects in form and in operation with the
applicable requirements of Section 401(a) of the Code, the applicable provisions
of ERISA, and any other applicable laws, rules, and regulations. All
contributions to, and payments from, the Employee Benefit Plans required to be
made in accordance with the terms of the Employee Benefit Plans have been made
or have been accrued and are reflected on the Financial Statements. Borrower has
received or applied for in a timely manner current favorable determination
letters from the IRS with respect to each Employee Benefit Plan that is intended
to comply with the provisions of Section 401(a) of the Code.
(c) Neither Borrower nor any ERISA Affiliate, nor any trustee,
administrator, or fiduciary of any Employee Benefit Plan has (i) engaged in a
"prohibited transaction," as that term is defined in Section 4975 of the Code or
Section 406 of ERISA, which could directly or indirectly subject the applicable
Employee Benefit Plan, Borrower or an ERISA Affiliate to any liability for a tax
or penalty imposed by Section 4975 of the Code or Section 502(i) of ERISA, or
(ii) committed a breach of its fiduciary duties (as defined in Section 404 of
ERISA) which could directly or indirectly subject the applicable Employee
Benefit Plan, Borrower, or an ERISA Affiliate to any liability under Section 502
of ERISA. There has not occurred any complete or partial withdrawal from any
Employee Benefit Plan subject to Title IV, Subtitle E of ERISA, nor has there
occurred any event that would constitute grounds for termination of or the
appointment of a trustee to administer any Employee Benefit Plan (including any
"multi-employer plan") subject to Title IV of ERISA maintained for employees of
Borrower or any ERISA Affiliate, which withdrawal or event would have a Material
Adverse Effect.
(d) No actions, suits, or claims with respect to the assets of the
Employee Benefit Plans are pending or threatened that if resolved in a
unfavorable manner would have a Material Adverse Effect, and Borrower has no
knowledge of any facts which could give rise to or could reasonably be expected
to give rise to any actions, suits, or claims with respect to the assets of the
Employee Benefit Plans; and
(e) Neither Borrower nor any ERISA Affiliate, nor any director,
officer, employee, or any other "fiduciary," as that term is defined in Section
3(21) of ERISA, of Borrower or of any ERISA Affiliate, has any material
liability for failure to comply with ERISA or the Code for any action or failure
to act in connection with the administration or investment of any of the
Employee Benefit Plans.
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4.10. Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of Borrower and any of its Subsidiaries to the Lender
in connection with the negotiation of, or compliance with, the Loan Documents,
the representations and warranties of Borrower and its Subsidiaries contained in
the Loan Documents, and all certificates and documents delivered to the Lender
pursuant to the terms thereof, taken as a whole, do not contain as of the date
furnished any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.
4.11. Material Agreements. Neither Borrower nor any of its Subsidiaries
has received notice or has actual knowledge that (a) it is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, or (b) any
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default with respect to any such Contractual Obligation, in
each case, except where such default or defaults, if any, individually or in the
aggregate will not have or could not reasonably be expected to have a Material
Adverse Effect.
4.12. Compliance with Laws. Borrower and its Subsidiaries are in
compliance with all applicable requirements of law and of all Governmental
Authorities, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
4.13. Assets and Properties. Borrower and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets, and all such assets and property are free and clear of all
Liens, except (a) Permitted Encumbrances, (b) the liens granted to National City
Bank of Indiana, as agent, to secure repayment of Borrower's Obligations which
shall be repaid in full utilizing the proceeds of the Facilities. Substantially
all of the assets and properties owned by, leased to or used by Borrower and/or
each such Subsidiary of Borrower are in adequate operating condition and repair,
ordinary wear and tear excepted. Neither this Agreement nor any other Loan
Document, nor any transaction contemplated under any such agreement, will affect
any right, title or interest of Borrower or such Subsidiary in and to any of
such assets in a manner that would have or could reasonably be expected to have
a Material Adverse Effect.
4.14. Insurance. Borrower maintains insurance policies and programs
reasonably consistent with prudent industry practice.
4.15. Environmental Matters. Except as could not be expected to result
in material liability for Borrower or any of its subsidiaries:
(i) the operations of Borrower and its Subsidiaries comply in
all material respects with Environmental Laws; (ii) Borrower and its
Subsidiaries have all permits, licenses or other authorizations
required under Environmental Laws;
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(iii) neither Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the Borrower's
or any of its Subsidiaries' knowledge, any of their respective past
property or operations, are subject to or the subject of, any
investigation known to Borrower or any of its Subsidiaries, any
judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation of
Environmental Laws; (B) any remedial action; or (C) any material claims
or liabilities arising from the Release or threatened Release of a
Contaminant into the environment;
(iv) there is not now, nor to the Borrower's or any of its
Subsidiaries' knowledge has there ever been on or in the property of
Borrower or any of its Subsidiaries any landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material;
and
(v) neither Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
For purposes of this Section 4.15 "material" means any noncompliance or
basis for liability which could reasonably be likely to subject
Borrower to liability in excess of Two Million Dollars ($2,000,000)
4.16. Solvency. After giving effect to the (a) Loans to be made on the
date hereof or such other date as Loans requested hereunder are made and the
consummation of the other transactions contemplated by this Agreement, and (b)
the payment and accrual of all transaction costs with respect to the foregoing,
Borrower and its Subsidiaries taken as a whole is Solvent. After giving effect
to (i) any permitted transaction under Section 5.2.8 hereof, and (ii) the
payment and accrual of all transaction costs with respect thereto, Borrower and
its Subsidiaries taken as a whole is Solvent.
4.17. Indebtedness. Except as shown on the Financial Statements, except
trade debt incurred in the ordinary course of business since the date of the
Financial Statements, except for Indebtedness of Borrower owed to a Subsidiary
and Indebtedness of a Subsidiary owed to Borrower or another Subsidiary, and
except as provided by Section 5.2.5 hereof, Borrower and its Subsidiaries have
no outstanding Indebtedness.
4.18. Contracts of Surety. Except for the endorsements of Borrower and
its Subsidiaries of negotiable instruments for deposit or collection in the
ordinary course of business and except for guaranties of trade debt of
Subsidiaries and other operating obligations of Subsidiaries incurred in the
ordinary course of business, neither Borrower nor its Subsidiaries is a party to
any contract of guaranty or surety.
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4.19. Licenses. Borrower and each Subsidiary possesses such franchises,
licenses, permits, patents, copyrights, trademarks, and consents of appropriate
Governmental Authorities to own its property and as are necessary to carry on
its business as presently conducted, except for such failures as could not be
expected to result in a Material Adverse Effect.
4.20. Force Majeure. Neither the business nor the properties of
Borrower are presently affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty materially adversely affecting
the business, operations, financial condition, properties or prospects of
Borrower.
4.21. Margin Stock. Neither Borrower nor any of its Subsidiaries is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), no part of the proceeds of the
Facilities will be used, either directly or indirectly, for the purpose, whether
immediate, incidental or remote, of purchasing or carrying any margin stock or
of extending credit to others for the purpose of purchasing or carrying any
margin stock. Borrower shall furnish to the Lender, a statement in conformity
with the requirements of Federal Reserve Board Form U-1 referred to in
Regulation U. Further, no part of the proceeds of the Facilities will be used
for any purpose that violates, or which is inconsistent with, the provisions of
Regulations T, U or X of the Board of Governors.
4.22. Approvals. No authorization, consent, approval or any form of
exemption of any Governmental Authority is required in connection with the
execution and delivery by Borrower or its Subsidiaries, as applicable, of the
Loan Documents, the borrowings and performance thereunder or the issuance of the
Note.
4.23. Regulation. Neither Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company" or an "affiliate of a holding company" or a
"subsidiary of a holding company" within the meanings of the Public Utility
Holding Company Act of 1935, as amended.
4.24. ESOP. The ESOP is an "employee stock ownership plan" within the
meaning of Section 4975(e)(7) of the Code and is qualified under Section 401(a)
of the Code. The ESOP has been duly established in accordance with and under
applicable law and it is a tax-exempt trust under Section 501(a) of the Code.
4.25. General. All statements contained in any certificate or financial
statement delivered by or on behalf of Borrower to the Lender under any Loan
Document shall constitute representations and warranties made by Borrower
hereunder.
4.26. Supplemental Disclosure. At any time at the request of the Lender
and at such additional times as Borrower determines, Borrower shall supplement
each schedule or representation herein or in the other Loan Documents with
respect to any matter hereafter arising which, if existing or occurring at the
date hereof, would have been required to be set forth or
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described in such schedule or as an exception to such representation or which is
necessary to correct any information in such schedule or representation which
has been rendered inaccurate thereby. If any such supplement to such schedule or
representation discloses the existence or occurrence of events, facts or
circumstances which are restricted or prohibited by the terms of this Agreement
or any other Loan Documents, such supplement to such schedule or representation
shall not be deemed an amendment thereof unless expressly consented to in
writing by the Lender, and no such amendments, except as the same may be
consented to in a writing which expressly includes a waiver, shall be or be
deemed a waiver by the Lender of any Default disclosed therein. Any items
disclosed in any such supplemental disclosures shall be included in the
calculation of any limits, baskets or similar restrictions contained in this
Agreement or any of the other Loan Documents.
SECTION 5.
----------
Covenants
---------
5.1. Affirmative Covenants. Until the Obligations are paid in full, and
so long as any Revolving Commitment or any Letter of Credit is outstanding,
unless the Lender shall otherwise consent in writing, Borrower will:
5.1.1. Financial Reporting. Furnish to the Lender:
(a) As soon as practicable, but in any event within ninety (90) days
after the end of each fiscal year, financial statements of Borrower certified
after audit by certified public accountants selected by Borrower and reasonably
acceptable to the Lender, including a balance sheet, statement of income and
retained earnings and a statement of cash flows, with accompanying notes to
financial statements all prepared in accordance with GAAP on a consolidated
basis consistent with prior years unless specifically noted thereon, and
accompanied by an unqualified opinion of said accountants, and further
accompanied by a certificate of the chief financial officer of Borrower that
there exists no Default or Unmatured Default under the Loan Documents, or if any
Default or Unmatured Default exists, stating the nature and status thereof;
(b) As soon as practicable, but in any event within forty-five (45)
days after the end of each of Borrower's first three (3) fiscal quarters,
unaudited financial statements of Borrower and its Subsidiaries as of the end of
such quarter and the results of their operations for the portion of the fiscal
year then elapsed, including a balance sheet, statement of income and retained
earnings and a statement of cash flows, with accompanying notes to financial
statements all prepared on a consolidated basis consistent with prior years
unless specifically noted thereon, and otherwise in accordance with and subject
to the limitations as set forth in Section 4.4 hereof, and accompanied by the
certificate of the chief financial officer of Borrower that there exists no
Default or Unmatured Default under the Loan Documents or if any Default or
Unmatured Default exists, stating the nature and status thereof;
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(c) Within three (3) days of receipt by Borrower, a copy of the
auditor's management letter describing any deficiencies in the internal controls
or other matters of significance discovered by the auditor during the course of
its audit;
(d) As soon as practicable, but in any event within forty-five (45)
days after the end of each of Borrower's first three (3) fiscal quarters and
within ninety (90) days after the end of each fiscal year, a fully executed and
completed Compliance Certificate, signed by the chief executive or chief
financial officer of Borrower;
(e) As soon as practicable, but in any event within five (5) days after
Borrower becomes aware thereof, a written statement signed by the chief
executive or chief financial officer of Borrower as to the occurrence of any
Default or Unmatured Default stating the specific nature thereof, Borrower's
intended action to cure the same and the time period in which such cure is to
occur;
(f) As soon as practicable, but in any event within ten (10) days after
the commencement thereof, a written statement describing any uninsured
litigation instituted by or against Borrower which, if adversely determined, may
have a Material Adverse Effect;
(g) As soon as practicable, but in any event within ten (10) days after
Borrower becomes aware thereof, a written statement signed by the chief
executive officer or the chief financial officer of Borrower describing any
Reportable Event or Prohibited Transaction which has occurred with respect to
any Employee Benefit Plan (all within the meanings ascribed by ERISA) and the
action which Borrower proposes to take with respect thereto;
(h) As soon as practicable, but in any event within ten (10) days after
the filing any states' securities regulatory authority, copies of all
registration statements and all periodic and special reports required or
permitted to be filed under state securities laws and regulations;
(i) As soon as available but in any event within forty-five (45) days
after the end of the prior fiscal year of Borrower, a copy of Borrower's
projections for the current fiscal year; and
(j) Such other information as the Lender may from time to time
reasonably request.
Notwithstanding any contrary terms or requirements as set forth in this
Section 5.1.1 or otherwise in this Agreement, Borrower shall not be required to
furnish to Lender any Financial Statements or other information which Borrower
files with the Securities and Exchange Commission from time to time which is
otherwise required to be provided by Borrower to Lender pursuant to the terms of
this Agreement.
5.1.2. Good Standing. Maintain, and cause each Subsidiary to maintain,
its existence (corporate or otherwise), good standing (if applicable), and right
to do
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business, except for temporary circumstances caused by tax appeals allowed by
this Agreement.
5.1.3. Taxes, Etc. Pay and discharge, and cause each Subsidiary to pay
and discharge, all taxes, assessments, judgments, orders, and governmental
charges or levies imposed upon it or on its income or profits or upon its
property prior to the date on which penalties attach thereto and all lawful
claims which, if unpaid, may become a lien or charge upon the property of
Borrower or a Subsidiary, provided that Borrower and its Subsidiaries shall not
be required to pay any tax, assessment, charge, judgment, order, levy or claim,
if such payment is being contested diligently, in good faith, and by appropriate
proceedings which will prevent foreclosure or levy upon its property and
adequate reserves against such liability have been established.
5.1.4. Maintain Properties. Maintain, and cause each Subsidiary to
maintain, all properties and assets used by, or useful to, Borrower or such
Subsidiary in the ordinary course of its business in good working order and
condition and suitable for the purpose for which it is intended, and from time
to time, make any necessary repairs and replacements.
5.1.5. Insurance. Maintain, and cause each Subsidiary to maintain, in
full force and effect public liability insurance, business interruption
insurance, worker's compensation insurance and casualty insurance policies. If
requested by the Lender, a copy of each policy, accompanied by a certificate of
coverage issued by the insurance carrier, shall be delivered to the Lender.
5.1.6. Books and Records. Keep proper books of account in which full,
true and correct entries will be made of all dealings and transactions of and in
relation to the business and affairs of Borrower, and, at all reasonable times,
and as often as the Lender may reasonably request, permit authorized
representatives of the Lender to (a) have access to the premises and properties
of Borrower and to the records relating to the operations of Borrower; (b) make
copies of or excerpts from such records; (c) discuss the affairs, finances and
accounts of Borrower with and be advised as to the same by the chief executive
and financial officers of Borrower; and (d) audit and inspect such books,
records, accounts, memoranda and correspondence at all reasonable times, to make
such abstracts and copies thereof as the Lender may deem necessary, and to
furnish copies of all such information to any proposed purchaser of or
participant in the Facilities. So long as there exists no Default, the costs and
expenses associated with such audits and inspections shall be borne by the
Lender. If the Lender requests after the occurrence of a violation of a
financial covenant or the violation of any covenant contained in Section 5.2
hereof, Borrower shall furnish to the Lender consolidating financial statements
of Borrower and its Subsidiaries.
5.1.7. Reports. File, and cause each Subsidiary to file, as
appropriate, on a timely basis, annual reports, operating records and any other
reports or filings required to be made with any Governmental Authority.
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5.1.8. Licenses. Maintain, and cause each Subsidiary to maintain, in
full force and effect all operating permits, licenses, franchises, and rights
used by it in the ordinary course of business, except where the failure to
maintain would not have a Material Adverse Effect.
5.1.9. Notice of Material Adverse Change. Give prompt notice in writing
to the Lender of the occurrence of any development, financial or otherwise,
including pending or threatened litigation, which might result in a Material
Adverse Effect.
5.1.10. Conduct of Business. Carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as presently conducted, and do all things necessary to remain duly incorporated,
validly existing and in good standing (if applicable) as a corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its respective business in each jurisdiction in which conducted.
5.1.11. Compliance with Laws. Comply, and cause each Subsidiary to
comply, with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which Borrower or such Subsidiary may be
subject, except where the failure to comply would not have a Material Adverse
Effect.
5.1.12. Use of Proceeds. Use the proceeds of the Facilities solely for
the purposes herein described.
5.1.13. Loan Payments. Subject to any applicable grace or cure periods,
punctually pay or cause to be paid principal and interest on the Facilities in
lawful money of the United States at the time and places and in the manner
specified herein according to the stated terms and the true intent and meaning
hereof.
5.1.14. Adjusted Consolidated Tangible Net Worth. Maintain its Adjusted
Consolidated Tangible Net Worth at not less than $58,234,000 through September
30, 2005, and increasing as of October 1, 2005, by an amount equal to Fifty
Percent (50%) of Net Income (without reduction for any net losses) for such
fiscal quarter, and thereafter increasing on the last day of each fiscal quarter
by an amount equal to Fifty Percent (50%) of Net Income (without reduction for
any net losses) for such fiscal quarter. For purposes of calculating Adjusted
Consolidated Tangible Net Worth in this covenant on and after October 1, 2005,
"Consolidated Net Worth" shall mean the excess of Borrower's consolidated total
assets over Borrower's Consolidated Total Liabilities, each determined in
accordance with GAAP plus any non-cash restructuring charges (net of income tax
benefit) incurred by Borrower and its Subsidiaries in the normal course of
business to the extent such charges were added back in the definition of Net
Income and as shown on the balance sheets furnished to the Lender from time to
time pursuant to Section 5.1.1 hereof.
5.1.15. Leverage Ratio. Maintain a Leverage Ratio of not greater than
2.0 to 1.0 at each fiscal quarter end, measured on a rolling four-quarter basis.
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5.1.16. Interest Coverage Ratio. Maintain an Interest Coverage Ratio of
not less than 3.0 to 1.0 at each fiscal quarter end, measured on a rolling
four-quarter basis.
5.1.17. Notice of Environmental Matters. In the event: (a) any premises
which have at any time been owned or occupied by or have been under lease to
Borrower or any Subsidiary are the subject of an environmental investigation by
any Governmental Authority having jurisdiction over the regulation of hazardous
substances or Environmental Laws, the purpose of which investigation is to
quantify the levels of hazardous substances located on such premises, or (b)
Borrower or any Subsidiary have been named or are overtly threatened in writing
to be named as a party responsible for the possible contamination of any real
property or ground water with hazardous substances, including, but not limited
to the contamination of past and present waste disposal sites; then Borrower
shall make a reasonable determination of its or its Subsidiary's potential
liability, and if such liability for any such event or events described in (a)
or (b) above exceeds in the aggregate Two Million Dollars ($2,000,000), Borrower
shall then notify the Lender immediately.
After such notification to the Lender, Borrower shall, if required
pursuant to GAAP, establish appropriate reserves against such potential
liabilities and, upon the reasonable request of the Lender, engage a firm or
firms of engineers or environmental consultants appropriately qualified to
determine as quickly as practical the extent of contamination and the potential
financial liability of Borrower with respect thereto, and the Lender shall be
provided with a copy of any report prepared by such firm or by any Governmental
Authority as to such matters as soon as any such report becomes available to
Borrower. Provided, however, if Borrower determines in good faith that it would
not be in the best interest of Borrower or a Subsidiary to cause an
investigation to be made, Borrower shall report such determination to the
Lender, and if the Lender concur in such determination, which concurrence shall
not be unreasonably withheld, Borrower and/or its Subsidiary shall be excused
from obtaining such investigation and report as otherwise would be required. The
selection of any engineers or environmental consultants engaged pursuant to the
requirements of this Section shall be subject to the approval of the Lender,
which approval shall not be unreasonably withheld.
5.1.18. Banking Accounts. Maintain its primary banking accounts
(consisting generally of its collection, disbursement, concentration and
depository accounts) with the Lender.
5.1.19. ESOP. With respect to the ESOP: (i) take all necessary actions
to preserve and keep the ESOP in effect and comply in all material respects with
the terms of the ESOP Plan and the ESOP Loan; (ii) comply in all material
respects with the Code and ERISA as applicable to the ESOP and with all other
laws and regulations applicable thereto, (iii) furnish to the Lender as soon as
practicable, copies of the ERISA annual reports, IRS determination letter,
notices, financial statements and repurchase liability studies; (iv) permit the
Lender to examine the books, records and other documents relating to the
properties and affairs of the ESOP in the possession of Borrower which it has
authority to disclose and to make memoranda and extracts from such books,
records
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and other documents, and discuss with any representative of the Lender the
affairs, finances and accounts of the ESOP; (v) take all necessary actions to
cause and permit the ESOP to pay and discharge from the assets of the ESOP all
taxes, fees, assessments and governmental charges or levies imposed upon the
ESOP, or upon the ESOP's income or profits or upon any of the property of the
ESOP prior to the date on which penalties attach thereto, and pay all lawful
claims which, if unpaid, might become a Lien; (vi) promptly give notice in
writing to the Lender of any late contribution to the ESOP or of any late filing
of an annual report or other document required to be filed with a Governmental
Agency or of any litigation involving the ESOP of which Borrower has knowledge
and of any other matter of which Borrower has knowledge which has a substantial
likelihood of materially adversely affecting the financial condition, affairs or
operations of the ESOP or of Borrower, stating, to the extent of Borrower's
knowledge thereof, the nature thereof, and the course of action proposed to be
taken in connection therewith, if any; (vii) operate the ESOP to meet the
requirements of (A) Section 410(b) of the Code, relating to non-discrimination
in participation, (B) Section 401(a)(4) of the Code, relating to prohibited
discrimination in favor of officers, shareholders or highly compensated
employees, and (C) Section 401(a)(28) of the Code, relating to diversification
of investments and use of an independent appraiser; (viii) in the event that the
ESOP is amended and such amendment could affect the tax qualified status of the
ESOP or its status as an employee stock ownership plan, take all necessary
actions to apply for and obtain a favorable determination letter from the IRS
that the ESOP, as amended, is tax qualified and is an "employee stock ownership
plan" within the meaning of Section 4975(e)(7) of the Code; and (ix) Borrower
will make contributions to the ESOP sufficient to enable the trustee of the ESOP
to pay in a timely manner all scheduled principal and interest repayments due
under the ESOP Loan.
5.2. Negative Covenants. Until the Obligations are paid in full, and so
long as any Revolving Commitment or any Letter of Credit is outstanding, unless
the Lender shall otherwise consent in writing, Borrower will not and will not
permit any Subsidiary to:
5.2.1. Dispose of Property. Sell, transfer, lease or otherwise dispose
of its assets or properties, or discount, with or without recourse, any of its
accounts, except (a) sales from inventory in the ordinary course of business,
(b) the sale of obsolete equipment and machinery in the ordinary course of
business, and (c) sales of assets for cash and for fair value in any fiscal year
of Borrower in an aggregate amount for Borrower and its Subsidiaries not to
exceed Ten Percent (10%) of the book value of Borrower's consolidated total
assets (as determined in accordance with GAAP), and, provided there exists no
Default and no Default would be occasioned thereby, such additional sales of
assets above such Ten Percent (10%) limitation provided the proceeds of such
additional sales are paid to the Lender to permanently reduce the Revolving
Commitment.
5.2.2. Further Encumber. Except for Permitted Encumbrances, voluntarily
create or suffer to exist any mortgage, pledge, lien or other encumbrance upon
any of its properties or assets, real or personal, tangible or intangible,
whether now owned or hereafter acquired.
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5.2.3. Dividends. Except to the extent required to satisfy the
Borrower's covenants in Section 5.1.19, declare or pay any dividends on its
capital stock or redeem, repurchase or otherwise acquire or retire any of its
capital stock at any time outstanding if there exists a Default or if such
declaration or payment would cause the occurrence of a Default.
5.2.4. Purchase Stock. Except to the extent necessary to satisfy the
Borrower's covenants under Section 5.2.3, purchase, redeem, retire or otherwise
acquire any outstanding shares of its Capital Stock, if there exists a Default
or if a Default would be occasioned thereby.
5.2.5. Borrowings. Create, incur, assume or suffer to exist any
Indebtedness, except (a) that in existence as of the date hereof and disclosed
in the Financial Statements, (b) trade accounts and normal business accruals
payable in the ordinary course of business, (c) Indebtedness to the Lender
pursuant to the Loan Documents, (d) as permitted in Section 5.2.6 hereof, and
(e) other Indebtedness of Borrower and its Subsidiaries not exceeding in the
aggregate Fifteen Percent (15%) of Borrower's Adjusted Consolidated Tangible Net
Worth outstanding at any time.
5.2.6. Loans, Etc. Make any loan, disbursement or advance to, or
investment in, any Person except (a) trade debtors in the ordinary course of
business, (b) loans and advances to a Subsidiary that is a Guarantor, provided
there exists no Default or Unmatured Default at the time, or after giving effect
to, such loan or advance and provided the Subsidiary is not "insolvent" at the
time of such loan or advance nor rendered "insolvent" (as such terms are used in
the Federal Bankruptcy Code) by such loan or advance, and loans and advances to
Borrower by a Guarantor, (c) Qualified Investments, and (d) with respect to a
Target acquired pursuant to Section 5.2.8 hereof, notes receivable owed to the
Target as of such acquisition.
5.2.7. Guarantees. Assume, guarantee or otherwise become liable with
respect to any Contingent Obligation, except for (a) the endorsements by
Borrower or a Subsidiary of negotiable instruments for deposit or collection in
the ordinary course of business, (b) guarantees in favor of the Lender, and (c)
guarantees of the Indebtedness of Affiliates not exceeding in the aggregate for
Borrower and its Subsidiaries Fifteen Percent (15%) of Borrower's Adjusted
Consolidated Tangible Net Worth.
5.2.8. Merger, Acquisitions, Etc. Except as provided in Section 5.2.1
hereof and as provided below, merge or consolidate with or into any other
Person, or lease, sell or otherwise dispose of the stock of any Subsidiary or of
all or a substantial portion of the property, assets or business of Borrower or
a Subsidiary to any other Person. Except in the ordinary course of business,
Borrower shall not acquire and shall not permit any Subsidiary to acquire any
material part of the assets of any other business entity; provided, however,
that notwithstanding the foregoing, Borrower may, and may allow any Subsidiary
to, consummate the merger or acquisition of any material part of the assets or
the capital stock or equity of any other business entity on the conditions that:
(a) in the event of a merger, Borrower or the Subsidiary is the legal surviving
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corporation; (b) no Default or Unmatured Default has occurred and is continuing
at the time of such merger or acquisition or will result or occur after the
consummation of such merger or acquisition; (c) to the extent permissible by
applicable Governmental Authorities (including the Securities and Exchange
Commission), the Lender receives prior notice of all material details of such
merger or acquisition, and the entity or business acquired is substantially in
the same field or enterprise as presently conducted by Borrower and its
Subsidiaries; (d) Borrower provides satisfactory written evidence to the Lender
that it is in compliance with the financial covenants set forth in Section 5
hereof both immediately before and after giving effect to the consummation of
such merger or acquisition; (e) the Lender receives satisfactory evidence that
the board of directors of the Target have approved the subject merger or
acquisition or, in the event the Target is in bankruptcy, the applicable
bankruptcy court has approved Borrower's or its Subsidiary's acquisition of the
Target; and (f) a satisfactory pro forma Compliance Certificate showing
financial covenant compliance with Sections 5.1.13, 5.1.14, 5.1.15 and 5.1.16
hereof on a consolidated basis for Borrower and its Subsidiaries and the Target
for the preceding 12-month period determined in accordance with GAAP. Borrower
will not, or will not permit any of its Subsidiaries to, create or otherwise
acquire any new Subsidiary except Borrower may create Subsidiaries, having no
material assets or operations, solely for the purpose of facilitating
acquisitions permitted hereunder, and Borrower may create Subsidiaries in
substantially the same fields of enterprise as presently conducted by Borrower
and its Subsidiaries if such Subsidiary becomes a guarantor of the Obligations
as required by Section 3 hereof. Borrower will not, and will not permit any
Subsidiary, to pursue any new line of business.
5.2.9. Change Name and Place of Business. Change its corporate name or
principal place of business, except on not less than sixty (60) days' prior
written notice to the Lender.
5.2.10. Accounting Policies. Change its fiscal year or any of its
significant accounting policies, except to the extent necessary to comply with
GAAP and, with respect to a Target acquired pursuant to Section 5.2.8 hereof,
changes with respect to such Target to comply with Borrower's accounting
policies.
5.2.11. Change of Business. Except as provided in Section 5.2.8 hereof
or as otherwise provided in this Agreement, make any material change in the
nature of its business as carried on at the date of this Agreement.
5.2.12. Benefit Plans. Permit any condition to exist in connection with
any Employee Benefit Plan which might constitute grounds for the PBGC to
institute proceedings to have the Employee Benefit Plan terminated or a trustee
appointed to administer the Employee Benefit Plan; or engage in, or permit to
exist or occur any other condition, event or transaction, with respect to any
Employee Benefit Plan which could result in Borrower incurring any material
liability, fine or penalty.
5.2.13. ESOP. With respect to the ESOP: (i) enter into any "prohibited
transaction" within the meaning of Section 4975(c) that is not exempt under
Section
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4975(c)(2) or 4975(d) of the Code; and (ii) except to the extent required to
satisfy Borrower's covenants under Section 5.1.19, permit any amendment or
modification to the ESOP Plan that would affect the ability of Borrower or any
of the Subsidiaries to perform their respective obligations under the Loan
Documents or the ability of the Lender to enforce the Obligations.
5.2.14. Transactions with Affiliates. Directly or indirectly enter into
or permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of Borrower which is not its Subsidiary, on terms that are
materially less favorable to Borrower or any of its Subsidiaries, as applicable,
than those that might be obtained in an arm's length transaction at the time
from Persons who are not such a holder or Affiliate.
5.2.15. Sales and Leasebacks. Become liable, directly, by assumption or
by Contingent Obligation, with respect to any lease, whether an operating lease,
a synthetic lease or a Capitalized Lease, of any property (whether real or
personal or mixed) (i) which it or one of its Subsidiaries sold or transferred
or is to sell or transfer to any other Person, or (ii) which it or one of its
Subsidiaries intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by it or one of its
Subsidiaries to any other Person in connection with such lease, if the aggregate
lease obligation or resulting Contingent Obligation would exceed Fifteen Percent
(15%) of the Borrower's Adjusted Consolidated Tangible Net Worth.
5.2.16. Corporate Documents. Amend, modify or otherwise change any of
the terms or provisions in any of their respective organizational documents as
in effect on the date hereof in any manner adverse to the interests of the
Lender, without the prior written consent of the Lender.
5.2.17. Restrictive Agreements. Enter into any agreement (excluding any
restrictions existing under the Loan Documents) prohibiting (i) the ability of
Borrower to amend or otherwise modify this Agreement or any other Loan Document,
or (ii) the ability of any Guarantor to make any payments, directly or
indirectly, to Borrower by way of dividends, advances, repayments of loans or
advances, reimbursements of management and other intercompany charges, expenses
and accruals or other returns on investments, or any other agreement or
arrangement which restricts the ability of any such Guarantor to make any
payment, directly or indirectly, to Borrower.
SECTION 6.
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Conditions Precedent to Loans
-----------------------------
6.1. Conditions to Initial Advance. The obligation of the Lender to
make the initial advance under the Facilities is subject to each of the
following conditions precedent, as determined in the reasonable discretion of
the Lender:
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6.1.1. Authorization. Borrower shall have furnished to the Lender, and
the Lender shall have approved, certified copies of Borrower's and each
Guarantor's articles of incorporation or organization (as applicable) and
by-laws or operating agreement (as applicable), both as amended, accompanied by
recent certificates of good standing or existence issued by the Secretary of
State of their states of organization and a certified copy of resolutions
adopted by each Board of Directors (or members, as applicable) authorizing the
Facilities and the Guaranty, as applicable, and specifying the names and
capacities of those Persons authorized to execute the Loan Documents.
6.1.2. Loan Documents. Each of the Loan Documents shall have been
executed and delivered by Borrower to the Lender.
6.1.3. Guaranty. The Guaranty shall have been executed and delivered by
the Guarantors to the Lender.
6.1.4. Incumbency Certificates. The Lender shall have received
Incumbency Certificates, executed by the respective Secretary or Assistant
Secretary of Borrower and each Guarantor which shall identify the name and title
and bear the signature of the officers of Borrower and such Guarantor authorized
to sign the Loan Documents, and the Lender shall be entitled to rely upon such
certificates until informed of any change in writing by Borrower.
6.1.5. Opinion of Counsel. The Lender shall have received a favorable
written opinion of counsel to Borrower and the Guarantors, dated of even date
herewith, in form and substance acceptable to the Lender.
6.1.6. UCC Searches. The Lender shall have received satisfactory return
after search in accordance with the Uniform Commercial Code or other applicable
law in such governmental offices as the Lender shall have deemed appropriate.
6.1.7. Regulation U. The Lender shall have received such certificates
and other documents as it shall have deemed reasonably appropriate as to
compliance with Regulations T, U and X of the Board of Governors of the Federal
Reserve System.
6.1.8. Compliance Certificate. A fully executed and completed
Compliance Certificate.
6.1.9. Commitment Fees. The fees described in Section 2.6 shall have
been paid by Borrower to the Lender.
6.1.10. Termination of Existing Credit Agreement. The Lender shall have
received evidenced satisfactory to it that the commitments under the Borrower's
existing credit agreement among National City Bank of Indiana, as agent and
lender, the other lender parties thereto and Borrower have been terminated, all
loans thereunder have been repaid in full, all accrued fees and other amounts
payable thereunder have been paid in full (utilizing the proceeds of the
Facilities) and a commitment by National City Bank of
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Indiana to promptly release all Liens previously granted by the Borrower or the
Guarantors.
6.1.11. Certificate of No Default. The Lender shall have received a
certificate signed by an Authorized Officer of Borrower, stating that on the
date of closing, no Default or Unmatured Default has occurred or is continuing.
6.1.12. Additional Documentation. The Lender shall have received such
other documents as the Lender may reasonably request
6.2. Conditions to Subsequent Advances. Prior to each subsequent
Advance under the Facilities:
6.2.1. No Default. No Default or Unmatured Default shall have occurred
and be continuing.
6.2.2. Representations and Warranties. Each representation and warranty
contained in Section 4 shall be true and correct as of the date of such advance,
except to the extent any such representation or warranty relates solely to an
earlier date and except changes reflecting transactions permitted by this
Agreement.
6.2.3. Legal Matters. All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lender and its counsel.
6.2.4. Expenses. Borrower shall have reimbursed the Lender for all
legal fees and other reasonable expenses incurred by the Lender after the date
hereof in connection with the Facilities for which Borrower, pursuant to this
Agreement, is responsible.
6.3. Special Conditions to Advances for Permitted Acquisitions. Prior
to any Advance to be used for the purpose of funding a permitted acquisition or
merger:
6.3.1. Written Requests. At least five (5) Banking Days prior to
Borrower's request for an Advance to be used for the purpose of funding a
permitted acquisition or merger pursuant to Section 5.2.8 hereof, Borrower shall
submit to the Lender a written request signed by an Authorized Officer setting
forth the estimated total amount of the requested Advance and the proposed uses
thereof. Borrower shall also submit with its request (a) a written memorandum in
summary form describing the extent and material results of its due diligence
with respect to the Person to be acquired (the "Target"), (b) copies of all
annual financial statements for the last three (3) years of the Target, or, to
the extent all such annual financial statements are not available, such other
financial statements reasonably acceptable in form to the Lender, (c) a pro
forma consolidated balance sheet of Borrower giving effect to consummation of
the proposed transaction, and (d) a duly completed pro forma Compliance
Certificate required by Section 5.2.8 hereof and such other information and
materials as required by Section 5.2.8 hereof. 6.3.2. Acquisition Documents. As
soon as practicable, but in any event at least five (5) Banking Days prior to
Borrower's request for an Advance to be used for the
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purpose of funding a permitted acquisition or merger pursuant to Section 5.2.8
hereof, Borrower shall provide the Lender with a copy of the letter of intent or
term sheet of the proposed acquisition or merger. As soon as practicable, but in
any event at least One (1) Banking Day prior to the proposed date of funding of
such Advance, the Lender shall have received the definitive purchase agreement
and such other material acquisition documents governing the proposed acquisition
of the Target.
6.3.3. Representations of Target's Financial Statements. Borrower's
submission of the items in Section 6.3.1 hereof shall constitute a
representation by Borrower, to its actual knowledge, that (a) the information
provided to the Lender with respect to the proposed acquisition remains true and
correct in all material respects as of the date of funding, (b) no material
adverse change in the business of the Target (including the financial condition
and/or assets to be acquired), has occurred since the date of the last financial
statements furnished to the Lender, and (c) the Target and Borrower (and its
Subsidiaries, if applicable) have fully and timely complied with any applicable
laws in connection with the contemplated acquisition.
6.3.4. Expenses. Subject to Section 11.8 hereof, Borrower shall have
reimbursed the Lender for all reasonable legal fees and other reasonable
expenses incurred by the Lender after the date hereof in connection with the
Facilities.
6.4. General. Each request for an Advance under the Facilities shall
constitute a representation and warranty by Borrower that the applicable
conditions contained in this Section 6 have been satisfied.
SECTION 7.
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Default
-------
The occurrence of any of the following events shall be deemed a Default
hereunder:
(a) any representation or warranty made by or on behalf of Borrower,
any Guarantor or any Affiliate to the Lender under or in connection with any
Loan Document, any Guaranty, or any subordination agreement shall be false in
any material respect as of the date on which made;
(b) Borrower or any Guarantor fails to make any payment of principal of
or interest on the Note, or any fee or other payment Obligation within five (5)
days after the same is due;
(c) the breach by Borrower of any of the covenants contained in
Sections 5.1.2 through 5.1.11 which breach remains uncured for a period which is
the earlier of thirty (30) days after the occurrence thereof or twenty (20) days
after written notice to Borrower from the Lender; or the breach by Borrower of
any other covenant contained in Section 5 hereof;
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(d) the breach by Borrower or any Guarantor of any other terms or
provisions of the Loan Documents (other than a breach which constitutes a
Default under Section 7(a), (b) or (c) above) not cured within thirty (30) days
after written notice to Borrower specifying such breach;
(e) the failure of Borrower or any Guarantor to pay any Indebtedness
having an outstanding principal balance, singly or in the aggregate, in excess
of One Million Dollars ($1,000,000.00) when due or within any applicable grace
or cure period, or the default by Borrower or any Guarantor in the performance
of any other term, provision or condition contained in any agreement under which
any such Indebtedness was created or is governed, the effect of which is to
permit the holder or holders of such Indebtedness to cause such Indebtedness to
become due prior to its stated maturity, unless such default is waived in
writing by the holder or holders of such Indebtedness; or any such Indebtedness
shall be validly declared to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the stated maturity thereof;
(f) Borrower or any Guarantor shall (i) have an order for relief
entered with respect to it under the Federal Bankruptcy Code, (ii) not pay, or
admit in writing its inability to pay, its debts generally as they become due,
(iii) make an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of its
property, (v) institute any proceeding seeking an order for relief under the
Federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, or (vi) suspend operations as presently conducted or
discontinue doing business as an ongoing concern;
(g) without the application, approval or consent of Borrower or any
Guarantor, a receiver, trustee, examiner, liquidator or similar official shall
be appointed for Borrower or such Guarantor or any substantial part of its
property, or a proceeding described in item (f) shall be instituted against
Borrower or such Guarantor and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of sixty (60)
consecutive days;
(h) any Guaranty or any material provision thereof shall cease to be in
full force or effect, or any Guarantor fails to promptly perform under its
Guaranty, or any Guarantor terminates or revokes or attempts to terminate or
revoke its Guaranty;
(i) any Governmental Authority shall condemn, seize or otherwise
appropriate, or take custody or control of all or any substantial portion of the
property of Borrower;
(j) Borrower or any Subsidiary shall fail within thirty (30) days to
pay, bond or otherwise discharge any judgment or order for the payment of money
in an amount
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equal to or greater than Three Hundred Thousand Dollars ($300,000) which is not
stayed on appeal or otherwise appropriately contested in good faith, or any
attachment, levy or garnishment is issued against any property of Borrower or
any Subsidiary;
(k) Any Change in Control shall occur which is not otherwise permitted
under this Agreement;
(l) there occurs a "reportable event" or a "prohibited transaction"
under, or any complete or partial withdrawal from, or any other event which
would constitute grounds for termination of or the appointment of a trustee to
administer, any "plan" maintained by Borrower or any ERISA Affiliate for the
benefit of its "employees" (as such terms are defined in ERISA) which will have
a Material Adverse Effect.
(m) Borrower or any of its Subsidiaries shall be the subject of any
proceeding or investigation pertaining to (i) the Release by Borrower or any of
its Subsidiaries of any Contaminant into the environment, (ii) the liability of
Borrower or any of its Subsidiaries arising from the Release by any other Person
of any Contaminant into the environment, or (iii) any violation of any
Environmental Law which by Borrower or any of its Subsidiaries, which, in any
case, has or is reasonably likely to subject Borrower to liability in excess of
Two Million Dollars ($2,000,000);
(n) if (i) the ESOP is at any time terminated or otherwise ceases to be
in full force and effect, or (ii) the ESOP permits any Lien on any of its
property in favor of any entity or person other than Borrower or shall guarantee
any indebtedness of any other entity or person or permit to remain outstanding
any unreimbursed indebtedness, except obligations for benefit payments to the
participants or beneficiaries of the ESOP, or (iii) the ESOP enters into, or
permits or suffers to exist, any "prohibited transaction" within the meaning of
Section 4975(c) of the Code which is not exempted by Section 4975(c)(2) or
4975(d) of the Code and as defined in Section 406 of ERISA which is not exempted
by Section 408 of ERISA relating to the ESOP Plan which is not cured or
eliminated before the occurrence of any material adverse effect on the ESOP or
the Borrower, or (iv) the ESOP shall fail to make any other payment of any other
legal obligation when due;
(o) Any change in the law concerning the method or timing of ESOP
distributions or relating to diversification of investments under the ESOP if
such change creates a Material Adverse Effect.
SECTION 8.
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Remedy
------
8.1. Acceleration. If any Default described in Section 7, item (f) or
(g) occurs, the commitment of the Lender to make, renew or convert Advances of
the Facilities and to issue Letters of Credit hereunder shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Lender. If any other Default occurs,
then upon the declaration of the Lender, the obligations of the Lender to make,
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renew or convert Advances of the Facilities, to issue Letters of Credit under
this Agreement shall terminate and the Obligations shall immediately become due
and payable. In either event, the Obligations shall become immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
Borrower hereby expressly waives. The remedies of the Lender specified in this
Agreement and the other Loan Documents shall not be exclusive and the Lender may
avail itself of any of the remedies provided by law as well as any equitable
remedies available to the Lender, and each and every remedy shall be cumulative
and concurrent and shall be in addition to every other remedy now or hereafter
existing at law or in equity.
8.2. Deposit to Secure Reimbursement Obligations. When any Default
under Section 7(b) hereof has occurred and is continuing, or the Lender has
declared any acceleration of the Obligations after the occurrence of any other
Default, the Lender may demand that Borrower immediately pay to the Lender an
amount equal to the aggregate outstanding amount of the Letters of Credit and
Borrower shall immediately upon any such demand make such payment. Borrower
hereby irrevocably grants to the Lender a security interest in all funds
deposited to the credit of or in transit to any deposit account or fund
established pursuant to this Section 8.2, including, without limitation, any
investment of such fund. Borrower hereby acknowledges and agrees that the Lender
would not have an adequate remedy at law for failure by Borrower to honor any
demand made under this Section 8.2 and that the Lender shall have the right to
require Borrower specifically to perform its undertakings in this Section 8.2
whether or not any draws have been made under any Letter of Credit. In the event
the Lender makes a demand pursuant to this Section 8.2, and Borrower makes the
payment demanded, the Lender agrees to invest the amount of such payment for the
account of Borrower and at Borrower's risk and direction in short-term
investments acceptable to the Lender.
8.3. Subrogation. The Lender shall, to the extent of any payments made
by the Lender under any Letter of Credit, be subrogated to all rights of the
beneficiary of such Letter of Credit as to all obligations of Borrower and its
Subsidiaries with respect to which such payment shall have been made by the
Lender.
8.4. Preservation of Rights. No delay or omission of the Lender to
exercise any power or right under the Loan Documents shall impair such power or
right or be construed to be a waiver of any Default or an acquiescence therein,
and any single or partial exercise of any power or right shall not preclude
other or further exercise thereof or the exercise of any other power or right.
No Advance hereunder shall constitute a waiver of any of the conditions of the
Lender's obligation to make further Advances, nor, in the event Borrower is
unable to satisfy any such condition, shall a waiver of such condition in any
one instance have the effect of precluding the Lender from thereafter declaring
such inability to be a Default hereunder. No course of dealings shall be binding
upon the Lender.
8.5. Default Rate. The Lender shall take such action or refrain from
taking such action with respect to a Default or an Unmatured Default as it shall
deem advisable in its best interests. The Lender shall have no obligation to
impose or collect the Default rate of interest as provided in Section 2.2.2
hereof
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SECTION 9.
----------
Benefit of Agreement; Assignment, Participations
------------------------------------------------
9.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and the
Lender and their respective successors and assigns, except that (a) Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents, and (b) any assignment by the Lender must be made in compliance with
Section 9.3 hereof. Notwithstanding clause (b) of this Section, the Lender may
at any time, without the consent of Borrower, assign all or any portion of its
rights under this Agreement and any Note to a Federal Reserve Bank; provided,
however, that no such assignment to a Federal Reserve Bank shall release the
Lender from its obligations hereunder. Any assignee or transferee of the rights
to any Loan or any Note agrees by acceptance of such transfer or assignment to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder, transferee or assignee of the rights to such
Loan.
9.2. Participations.
9.2.1. Permitted Participants; Effect. The Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating interests
in any Loan owing to the Lender, any Note held by the Lender, any Revolving
Commitment of the Lender or any other interest of the Lender under the Loan
Documents. In the event of any such sale by the Lender of participating
interests to a Participant, the Lender's obligations under the Loan Documents
shall remain unchanged, the Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, the Lender shall remain
the owner of its Loans and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable by
Borrower under this Agreement shall be determined as if the Lender had not sold
such participating interests, and Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under the Loan Documents.
9.2.2. Voting Rights. The Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Revolving Commitment in which
such Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable with respect to any such Loan or
Revolving Commitment, extends the Revolving Commitment Period, postpones any
date fixed for any regularly-scheduled payment of principal of, or interest or
fees on, any such Loan or Revolving Commitment, releases any Guarantor of any
such Loan or releases all or substantially all of the collateral, if any,
securing any such Loan.
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9.2.3. Benefit of Setoff. Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in Section 10.19 hereof in
respect of its participating interest in amounts owing under the Loan Documents
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 10.19 hereof with respect
to the amount of participating interests sold to each Participant. The Lender
agrees to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 10.19 hereof, agrees to share with the
Lender, any amount received pursuant to the exercise of its right of setoff,
such amounts to be shared in accordance with Section 10.19 hereof as if each
Participant were a Lender.
9.3. Assignments.
9.3.1. Permitted Assignments. The Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be in such form as
may be agreed to by the parties thereto. The consent of Borrower shall be
required prior to an assignment becoming effective with respect to a Purchaser;
provided, however, that if a Default has occurred and is continuing, the consent
of Borrower shall not be required. Such consents shall not be unreasonably
withheld or delayed.
9.3.2. Effect; Effective Date. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lender and
shall have all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by Borrower or the Lender shall be required to release the
transferor Lender with respect to the percentage of the aggregate Revolving
Commitment and Loans assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 9.3.2, the transferor Lender,
the Lender and Borrower shall, if the transferor Lender or the Purchaser desires
that its Loans be evidenced by a Note, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting its Revolving
Commitment, as adjusted pursuant to such assignment.
9.4. Dissemination of Information. Borrower authorizes the Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in the Lender's possession
concerning the creditworthiness of Borrower and its Subsidiaries; provided that
each Transferee and prospective Transferee agrees to be bound by Section 10.10
of this Agreement.
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SECTION 10.
-----------
General Provisions
------------------
10.1. Waivers, Amendments and Remedies. No delay or omission of the
Lender to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right. No waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lender. Any such
waiver, amendment, modification or consent shall be effective only in the
specific instance and for the specific purpose for which given. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Lender until the Obligations have been paid in full.
10.2. Survival of Representations. All representations and warranties
of Borrower contained in the Loan Documents shall survive delivery of the Note
and the making of the Facilities.
10.3. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, the Lender shall not be obligated to extend credit
to Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.4. Taxes. Any taxes (excluding taxation of the overall net income of
the Lender) payable or ruled payable by any Governmental Authority in respect of
the Loan Documents shall be paid by Borrower, together with interest and
penalties, if any.
10.5. Choice of Law. The Loan Documents (other than those containing a
contrary express choice of law provision) and the rights and obligations of the
parties thereunder and hereunder shall be governed by, and construed and
interpreted in accordance with the laws of the State of Indiana (but giving
effect to federal laws applicable to national lenders), notwithstanding the fact
that Indiana conflict of law rules might otherwise require the substantive rules
of law of another jurisdiction to apply. Borrower hereby consents to the
jurisdiction of any state or federal court located within Xxxxxx County,
Indiana. All service of process may be made by messenger, certified mail, return
receipt requested or by registered mail directed to Borrower at the addresses
indicated aside its signature to this Agreement, and Borrower otherwise waives
personal service of any and all process made upon Borrower. Borrower waives any
objection which Borrower may have to any proceeding commenced in a federal or
state court located within Xxxxxx County, Indiana, based upon improper venue or
forum non conveniens. Nothing contained in this Section shall affect the right
of the Lender to serve legal process in any other manner permitted by law or to
bring any action or proceeding against Borrower or its property in the courts of
any other jurisdiction.
10.6. Headings. Section headings in the Loan Documents are for
convenience of reference only and shall not govern the interpretation of any of
the provisions of the Loan Documents.
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10.7. Entire Agreement. The Loan Documents embody the entire agreement
and understanding between Borrower and the Lender and supersede all prior
agreements and understandings between Borrower and the Lender relating to the
subject matter thereof.
10.8. Expenses. Borrower shall reimburse the Lender for any and all
reasonable out-ofpocket expenses (including reasonable attorneys' fees), paid or
incurred by the Lender in connection with the preparation, negotiation, review,
execution, delivery, amendment, modification and administration of the
Facilities and/or the Loan Documents. Borrower shall reimburse the Lender for
reasonable out-of-pocket expenses paid or incurred by the Lender in connection
with charges incurred pursuant to Section 5.1.6 hereof after a Default as
provided therein. The Lender shall use its best efforts to provide advance
notice to Borrower prior to the incurrence of such expenses. Borrower shall
reimburse the Lender for any and all reasonable costs, charges and out-of-pocket
expenses (including attorneys' fees), paid or incurred by the Lender in
connection with the collection and enforcement of the Facilities and/or the Loan
Documents. The Lender may pay or deduct from the loan proceeds any of such
expenses, and any proceeds so applied shall be deemed to be advances under this
Agreement evidenced by the Note and secured by the Loan Documents, and shall
bear interest at the rate of interest provided in the Note.
10.9. Indemnification. The Borrower further agrees to defend, protect,
indemnify, and hold harmless Lender and its successors and assigns, and Lender's
and its successors and assigns respective officers, directors, employees,
Affiliates, attorneys and agents (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall be
designated a party thereto), imposed on, incurred by, or asserted against such
Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents, or any act, event or
transaction related or attendant thereto or to the making of the Loans, and the
issuance of and participation in Letters of Credit hereunder, the management of
such Loans or Letters of Credit, the use or intended use of the proceeds of the
Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Loan Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, intentional, willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare, costs and expenses
(including, without limitation, reasonable attorney, expert and consulting fees
and costs of investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present or future relating to violation
of any Environmental Law arising from or in connection with the past, present or
future operations of the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future environmental, health
or safety condition of any respective property of
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the Borrower or its Subsidiaries, the presence of asbestos-containing materials
at any respective property of the Borrower or its Subsidiaries or the Release or
threatened Release of any Contaminant into the environment (collectively, the
"Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from the
willful misconduct or Gross Negligence of such Indemnitee or breach of contract
by such Indemnitee with respect to the Loan Documents, in each case, as
determined by the final non-appealed judgment of a court of competent
jurisdiction. If the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. The
indemnity set forth herein shall be in addition to any other Obligations of
Borrower to the Lender hereunder or at common law or otherwise, and shall
survive any termination of this Agreement, the expiration of the obligation of
the Lender to make the Facilities and the payment of all Obligations.
10.10. Confidentiality. The Lender agrees to treat all information
received by them in connection with the Loan Documents (except such information
which is generally available or has been made available to the public) as
confidential, provided, however, that nothing in this Section shall prohibit the
Lender from, or subject the Lender to liability for, disclosing any such
information to any Governmental Authority to whose jurisdiction the Lender may
be subject, and provided further that the Lender may provide such information to
proposed Participants in the Facilities.
10.11. Giving Notice. Any notice required or permitted to be given
under this Agreement may be, and shall be deemed effective if made in writing
and delivered to the recipient's address, telex number of facsimile number
addressed to Borrower or the Lender at the address specified opposite its
signature below, by any of the following means: (a) hand delivery, (b) United
States first class mail, postage prepaid, (c) registered or certified mail,
postage prepaid, with return receipt requested, (d) by a reputable rapid
delivery service, or (e) by telegraph or telex when delivered to the appropriate
office for transmission, charges prepaid, with request for assurance of receipt
in a manner typical with respect to communication of that type. Notice made in
accordance with this Section shall be deemed given upon receipt if delivered by
hand or wire transmission, three (3) Banking Days after mailing if mailed by
first class, registered or certified mail, or one (1) Banking Day after deposit
with an overnight courier service if delivered by overnight courier. Borrower
and the Lender may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.
10.12. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by
Borrower and the Lender.
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10.13. Incorporation by Reference. All Exhibits and Schedules hereto
are incorporated herein by this reference. Each of the other Loan Documents
shall be made subject to all of the terms, covenants, conditions, obligations,
stipulations and agreements contained in this Agreement to the same extent and
effect as if fully set forth therein, and this Agreement is made subject to all
of the terms, covenants, conditions, obligations, stipulations and agreements
contained in the other Loan Documents to the same extent and effect as if fully
set forth therein. The provisions of this Agreement, including, without
limitation, provisions relating to maintenance of insurance, are in addition to,
and not a limitation upon, the requirements of any other Loan Document, any
guaranty or any subordination agreement.
10.14. Time of Essence. Time is of the essence under the Loan
Documents.
10.15. No Joint Venture. Notwithstanding anything to the contrary
herein contained or implied, the Lender, by this Agreement, or by any action
pursuant hereto, shall not be deemed to be a partner of, or a joint venturer
with, Borrower, and Borrower hereby indemnifies and agrees to defend and hold
the Lender harmless, including the payment of reasonable attorneys' fees, from
any Loss resulting from any judicial construction of the parties' relationship
as such.
10.16. Severability. In the event any provision of this Agreement or
any of the Loan Documents shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not affect the validity,
enforceability or legality of the remaining provisions hereof or thereof, all of
which shall continue unaffected and unimpaired thereby.
10.17. Waiver of Setoff. Borrower agrees that it will not exercise any
right of setoff on the Note or assert any claim for reduction or credit against
the Note except when actual payment has been made.
10.18. Gender. As used herein, the masculine gender shall be deemed to
include the feminine and the neuter and the singular number shall also include
the plural.
10.19. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of a Default, the Lender is hereby authorized
at any time or from time to time, without presentment, demand, protest or other
notice of any kind to Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by the Lender or any affiliate of the Lender (including, without
limitation, by branches and agencies of the Lender or any affiliate of the
Lender wherever located) to or for the credit or the account of Borrower against
and on account of the Obligations and liabilities of Borrower to the Lender
under this Agreement or under any of the other Loan Documents, and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Loan, irrespective of whether or not the Lender shall
have made any demand hereunder and although said Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured.
10.20. Lender Not in Control. None of the covenants or other provisions
contained in the Loan Documents shall, or shall be deemed to, give the Lender
the rights or power to exercise
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control over the affairs and/or management of Borrower, the power of the Lender
being limited to the right to exercise the remedies provided in the Loan
Documents, provided, however, that if the Lender becomes the owner of any stock
or other equity interest in any Person, whether through foreclosure or
otherwise, the Lender shall be entitled (subject to requirements of law) to
exercise such legal rights as it may have by virtue of being the owner of such
stock or other equity interest in such Person.
10.21. Additional Amounts Payable. If any change or the enactment,
adoption or judicial or administrative interpretation of any law, regulation,
treaty, guideline or directive (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) either (a) subjects the
Lender or any applicable Lending Installation to any additional tax, duty,
charge, deduction or withholding with respect to any of the Facilities (other
than a tax measured by the net or gross income of the Lender), or (b) imposes or
increases any reserve, special deposit or similar requirement on account of any
of the Facilities not otherwise provided in this Agreement or (c) imposes
increased minimum capital requirements on the Lender or any applicable Lending
Installation on account of its issuing or maintaining any of the Facilities; and
if any of the foregoing (i) results in an increase to the Lender or the
applicable Lending Installation in the cost of issuing or maintaining any of the
Facilities, or making any payment on account of any of the Facilities, (ii)
reduces the amount of any payment receivable by the Lender or the applicable
Lending Installation under this Agreement with respect to any of the Facilities,
(iii) requires the Lender or the applicable Lending Installation to make any
payment calculated by reference to the gross amount of any sum received or paid
by the Lender or the applicable Lending Installation pursuant to any of the
Facilities, or (iv) reduces the rate of return on the Lender's or the applicable
Lending Installation's capital to a level below that which the Lender or the
applicable Lending Installation could otherwise have achieved (taking into
consideration such party's policies with respect to Capital Adequacy), then
Borrower shall pay to the Lender or the applicable Lending Installation, as
additional compensation for the Facilities, such amounts as will compensate the
Lender or the applicable Lending Installation for such increased cost, payment
or reduction. Within twenty (20) days after (a) the initial demand therefor and
(b) presentation by the Lender of a certificate to Borrower containing a
statement of the cause of such increased cost, payment or reduction and a
calculation of the amount thereof (which statement and calculation shall be
presumed prima facie to be correct), Borrower shall pay the additional amount
payable measured from the date such change, enactment, adoption or
interpretation first affects the Lender or the applicable Lending Installation.
10.22. Application of Proceeds. Notwithstanding any contrary provision
of any other Loan Document, after the occurrence of a Default and acceleration
of the Obligations, including, without limitation, any proceeds of collateral
and recoveries under the Guaranty, shall be applied by the Lender to payment of
the Obligations in the following order:
(a) First, to payment of all reasonable costs and reasonable expenses
of the Lender incurred in connection with the preservation, collection and
enforcement of the Obligations;
(b) Second, to the payment of that portion of the Obligations
constituting accrued and unpaid interest and fees;
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(c) Third, to the payment of the principal amount of the Obligations;
(d) Fourth, to the payment of any other Obligations not referred to
above to the Lender as may be properly payable; and
(e) Fifth, the balance, if any, after all the Obligations have been
satisfied, shall be returned to the Borrower.
10.23. Relationship of Parties; Mutual Release of Consequential
Damages. The relationship between Borrower and the Lender shall be solely that
of borrower and lender. The Lender shall have no fiduciary responsibilities to
Borrower. The Lender undertakes no responsibility to Borrower to review or
inform Borrower of any matter in connection with any phase of Borrower's
business or operations. Neither the Lender nor Borrower shall have any liability
with respect to, and Borrower and the Lender hereby waives, releases and agrees
not to xxx for, any special or consequential damages suffered by it in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.
10.24. Waiver of Jury Trial. THE LENDER AND BORROWER, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT ANY OF THEM MAY
HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN), OR ACTIONS OF ANY OF THEM. NEITHER THE LENDER NOR BORROWER SHALL SEEK
TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY EITHER THE LENDER OR BORROWER EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY THE LENDER AND BORROWER. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE LENDER TO PROVIDE THE FINANCING GOVERNED BY THIS AGREEMENT.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-49-
SIGNATURE PAGE OF
CHROMCRAFT REVINGTON, INC.
TO CREDIT AGREEMENT
"BORROWER"
CHROMCRAFT REVINGTON, INC.
By
------------------------------------
Xxxxx X. Xxxx, Vice President - Finance
Address:
0000 Xxxxx Xxxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000-0000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
-50-
SIGNATURE PAGE OF
XXXXX FARGO BANK, N.A.
TO CREDIT AGREEMENT
"LENDER"
XXXXX FARGO BANK, .N.A.
By:
------------------------------------
K. Xxxxxxxxx Xxxxx, Senior Vice President
Address:
Indiana Regional Commercial Banking
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
Attention: K. Xxxxxxxxx Xxxxx,
Senior Vice President
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