LINE OF CREDIT AGREEMENT
BETWEEN
XXXXXXXXXX XXXX & CO., INCORPORATED
AND
THE NORTHERN TRUST COMPANY
AS OF DECEMBER 19, 1996
INDEX
PAGE
1. ADOPTION OF RECITALS.................................................... 1
2. DEFINITIONS............................................................. 2
a. "Associate"........................................................ 2
b. "Average Closing Price"............................................ 2
c. "Bank"............................................................. 2
d. "Borrowers"........................................................ 2
e. "Call Right"....................................................... 2
f. "Callable Loan".................................................... 2
g. "Ceiling Amount"................................................... 2
h. "Collateral"....................................................... 2
i. "Collateral Insufficiency Notice".................................. 2
j. "Company".......................................................... 2
k. "Credit Agreement.................................................. 2
l. "Fair Market Value per Share"....................................... 3
m. "First Chicago".................................................... 3
n. "Holding Corp.".................................................... 3
o. "Line"............................................................. 3
p. "Line Amount"...................................................... 3
q. "Line of Credit Program"........................................... 3
r. "Lines"............................................................ 3
s. "Loan"............................................................. 3
t. "1991 Line of Credit Agreement".................................... 3
u. "Note"............................................................. 3
v. "Notice"........................................................... 4
w. "Outstanding Amount"............................................... 4
x. "Pledge Agreement"................................................. 4
y. "Program Committee"................................................ 4
z. "Program Term"..................................................... 4
aa. "Put Right"........................................................ 4
bb. "Putable Loan"..................................................... 4
cc. "Shares"........................................................... 4
dd. "Stockholders Agreement"........................................... 4
ee. "Title 11"......................................................... 4
ff. "Vested Shares".................................................... 4
gg. "Voting Trust Agreement"........................................... 4
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INDEX
PAGE
hh. "Voting Trust Certificates"........................................ 4
3. LINES OF CREDIT......................................................... 5
a. Terms of the Lines................................................. 5
b. Note and Pledge Agreement.......................................... 6
c. Charges to Borrowers............................................... 6
4. COVENANTS AND AGREEMENT................................................. 6
a. Establishment of Lines............................................. 6
b. Acceleration of Lines.............................................. 7
c. Change in Fair Market Value per Share.............................. 7
d. Death or other Cessation of Employment of a Borrower............... 7
e. Provision of Certain Financial Data................................ 7
f. Secretary's Certificate............................................ 7
5. BANK'S RIGHT TO PUT A LOAN TO THE COMPANY............................... 7
a. Put Right.......................................................... 7
b. Survival of Put Rights............................................. 8
c. Closing............................................................ 8
d. Recovery of Deficiency by the Bank................................. 9
6. COMPANY'S RIGHT TO CALL A LOAN FROM THE BANK............................ 9
a. Call Right......................................................... 9
b. Survival of Call Rights............................................ 10
c. Closing............................................................ 10
d. Recovery of Deficiency by the Bank................................. 10
7. ASSIGNMENT BY THE COMPANY............................................... 10
8. APPLICATION OF STOCKHOLDERS AGREEMENT AND VOTING TRUST AGREEMENT;
LETTER AGREEMENT........................................................ 10
a. Application........................................................ 10
b. Letter Agreement................................................... 11
9. PROGRAM COMMITTEE....................................................... 11
10. TERMINATION............................................................. 11
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INDEX
PAGE
11. FEES.................................................................... 11
12. TERMINATION OF THE BANK'S COMMITMENT TO MAKE LOANS...................... 11
a. Any Loans.......................................................... 11
b. Putable Loan....................................................... 12
c. Regulation U....................................................... 12
d. Updated Financial Information...................................... 12
e. Defaulted Loan..................................................... 12
13. MISCELLANEOUS........................................................... 12
a. Waiver............................................................. 12
b. Further Assurances................................................. 13
c. No Representations, Warranties or Guaranty......................... 13
d. Governing Law...................................................... 13
e. Remedy............................................................. 13
f. Notice............................................................. 13
g. Entire Agreement................................................... 14
h. Severability....................................................... 14
i. Headings........................................................... 15
j. Counterparts....................................................... 15
SCHEDULE I - Schedule of Borrowers and Ceiling Amounts
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LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT (the "Agreement") is entered into as of the
19th day of December, 1996, by and between XXXXXXXXXX XXXX & CO., INCORPORATED
(the "Company") and THE NORTHERN TRUST COMPANY (the "Bank").
R E C I T A L S
A. The Company, the Bank and The First National Bank of Chicago ("First
Chicago") have entered into a Line of Credit Agreement dated as of November 19,
1991 (the "1991 Line of Credit Agreement") providing for a line of credit
program with a term of five years under which the Bank and First Chicago agreed
to make available to certain Associates (as hereinafter defined) designated by
the Company from time to time revolving lines of credit with the Bank and First
Chicago in the aggregate amount of $10,000,000 secured by shares of Class A
common stock ("Shares") of Xxxxxxxxxx Xxxx Holding Corp. ("Holding Corp.")
pledged directly or through the pledge of Voting Trust Certificates (as
hereinafter defined) representing an Associate's beneficial ownership of Shares;
B. The Company desires to replace the expired line of credit program
under the 1991 Line of Credit Agreement with a line of credit program under
which revolving lines of credit (the "Lines") totaling an aggregate of
$614,364.18 and secured by Shares of Holding Corp. pledged directly or through
the pledge of Voting Trust Certificates are made available by the Bank to those
Associates listed on SCHEDULE I hereto ("Borrowers") in order to provide
liquidity for such Shares owned by each of the Borrowers (the "Line of Credit
Program");
C. The Bank desires to participate in the Line of Credit Program as the
lender; and
D. The Bank and the Company desire to create certain put and call options
contained herein with respect to each Loan (as hereinafter defined);
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Bank agree as
follows:
1. ADOPTION OF RECITALS. The parties hereto adopt the foregoing recitals
and agree and affirm that construction of this Agreement shall be guided
thereby.
2. DEFINITIONS. For purposes of this Agreement:
a. "ASSOCIATE" shall mean an employee of the Company or any of its
affiliates;
b. "AVERAGE CLOSING PRICE" shall have the meaning ascribed to it in
the Stockholders Agreement;
c. "BANK" shall have the meaning ascribed to it in the heading of
this Agreement;
d. "BORROWERS" shall have the meaning ascribed to it in Recital B of
this Agreement;
e. "CALL RIGHT" shall have the meaning ascribed to it in Section 6a
of this Agreement;
f. "CALLABLE LOAN" shall have the meaning ascribed to it in Section
6a of this Agreement;
g. "CEILING AMOUNT" shall mean the maximum amount available to an
Associate under his or her Line, as specified for such Associate
opposite his or her name on SCHEDULE I hereto, as such amount may be
reduced from time to time by the Program Committee; PROVIDED, HOWEVER,
that the consent of the Bank shall be required to reduce the Ceiling
Amount of any Borrower below the greater of (i) $25,001 or (ii) the
Outstanding Amount (as hereafter defined) for such Borrower; PROVIDED
FURTHER, HOWEVER, that upon a default under any Borrower's Note, the
Bank, in its sole discretion, may reduce such Borrower's Ceiling
Amount;
h. "COLLATERAL" shall mean either the Shares, or Voting Trust
Certificates (as hereinafter defined) representing a Borrower's
beneficial ownership of Shares, pledged to the Bank to secure the
obligation to repay a Loan and any other property pledged to secure
such repayment, including, without limitation, any promissory note
pledged in accordance with Section 8a of this Agreement;
i. "COLLATERAL INSUFFICIENCY NOTICE" shall have the meaning ascribed
to it in Section 6a of this Agreement;
j. "COMPANY" shall have the meaning ascribed to it in the heading of
this Agreement;
k. "CREDIT AGREEMENT" shall mean that certain Long Term Credit
Agreement dated as of September 15, 1994 among the Company, various
banks, First Chicago,
2
as Documentary Agent, The Bank of Nova Scotia, as Administrative
Agent, The Bank of New York, as Negotiated Loan Agent, and Bank of
America National Trust and Savings Association, as Advisory Agent, as
heretofore and hereafter amended, and any extensions or renewals
thereof or any agreement under which indebtedness is issued that
serves to refund or refinance the indebtedness thereunder; if
indebtedness is issued on both a term and a revolving basis to refund
or refinance such indebtedness, the agreement under which the
revolving indebtedness is issued shall constitute the Credit
Agreement, and if such indebtedness is paid in full and has not been
refunded or refinanced and the commitments with respect thereto have
been terminated, until such refunding or refinancing, for the purposes
of this Agreement, the last Credit Agreement in effect at the time of
such payment shall be deemed to constitute the Credit Agreement;
l. "FAIR MARKET VALUE PER SHARE" shall have the meaning ascribed to
it in the Stockholders Agreement, and is $17.00 as of the date of this
Agreement;
m. "FIRST CHICAGO" shall have the meaning ascribed to it in Recital
A of this Agreement;
n. "HOLDING CORP." shall have the meaning ascribed to it in Recital
A of this Agreement;
o. "LINE" shall mean a line of credit established with the Bank
pursuant to the Line of Credit Program;
p. "LINE AMOUNT" shall mean the maximum borrowings permitted under a
Line which shall not exceed the Ceiling Amount;
q. "LINE OF CREDIT PROGRAM" shall have the meaning ascribed to it in
Recital B of this Agreement;
r. "LINES" shall have the meaning ascribed to it in Recital B of
this Agreement;
s. "LOAN" shall mean the amount of money a Borrower borrows from the
Bank pursuant to his or her Line;
t. "1991 LINE OF CREDIT AGREEMENT" shall have the meaning ascribed
to it in Recital A of this Agreement.
u. "NOTE" shall have the meaning ascribed to it in Section 3b of
this Agreement;
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v. "NOTICE" shall have the meaning ascribed to it in Section 6a of
this Agreement;
w. "OUTSTANDING AMOUNT" shall mean the outstanding principal amount
of a Loan, as the same may change from time to time;
x. "PLEDGE AGREEMENT" shall have the meaning ascribed to it in
Section 3b of this Agreement;
y. "PROGRAM COMMITTEE" shall mean the program committee as empowered
to act on behalf of the Company and Holding Corp. with respect to all
matters concerning the Line of Credit Program;
z. "PROGRAM TERM" shall mean the term commencing on the date hereof
and ending on June 21, 1998;
aa. "PUT RIGHT" shall have the meaning ascribed to it in Section 5a
of this Agreement;
bb. "PUTABLE LOAN" shall have the meaning ascribed to it in Section
5a of this Agreement;
cc. "SHARES" shall have the meaning ascribed to it in Recital A of
this Agreement and shall, unless the context otherwise requires,
include Voting Trust Certificates issued in exchange therefor;
dd. "STOCKHOLDERS AGREEMENT" shall mean that certain BFB Acquisition
Corp. Stockholders Agreement dated June 17, 1988, between Xxxxxxx X.
Xxxxxxx, General Electric Capital Corporation, and certain holders of
Shares, as heretofore and hereafter amended;
ee. "TITLE 11" shall mean Title 11 of the United States Code and any
successor provision;
ff. "VESTED SHARES" shall have the meaning ascribed to it in the
Stockholders Agreement;
gg. "VOTING TRUST AGREEMENT" shall mean that certain Voting Trust
Agreement dated June 21, 1988 between Xxxxxxx X. Xxxxxxx, as the
voting trustee, and certain holders of Shares; and
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hh. "VOTING TRUST CERTIFICATES" shall mean voting trust certificates
issued by the voting trustee pursuant to the Voting Trust Agreement.
3. LINES OF CREDIT. The Bank hereby covenants to and agrees with the
Company as follows:
a. TERMS OF THE LINES. The Bank covenants to and agrees with the
Company that, during the Program Term, the Bank shall make available
to Borrowers Lines in the aggregate amount of $614,364.18 and, in the
case of each Borrower, a Line in an amount up to such Borrower's
Ceiling Amount; PROVIDED, HOWEVER, that the Bank shall not be
obligated to establish a Line in an amount less than $25,001. The
Note and the Pledge Agreement shall establish the following
requirements with respect to each Loan made thereunder:
(1) the Collateral required for each Loan shall be a number
of Shares which are Vested Shares owned by the Borrower equal to:
(i) the Line Amount multiplied by two; and (ii) divided by the
Fair Market Value per Share in effect at the date of such Loan;
(2) at such times as the Fair Market Value per Share is
reduced below the value at the date hereof or below the value in
effect at the time of the most recent adjustment in accordance
with this Section 3a(2) or Section 3a(3), the Collateral shall be
adjusted such that the aggregate fair market value of the
Collateral shall be equal to two (2) times the Line Amount, and
the Borrower shall, within ten (10) days of such date:
(i) make a prepayment of the Outstanding Amount of his
or her Loan sufficient to effect such adjustment; or
(ii) pledge additional Shares sufficient to effect such
adjustment; PROVIDED, HOWEVER, that in making such
adjustments, no adjustment shall be made for fractional
Shares;
(3) at such times as the Fair Market Value per Share is
increased by ten percent (10%) or more over the value at the date
hereof or over the value in effect at the time of the most recent
adjustment in accordance with this Section 3a(3) or Section
3a(2), the Bank shall promptly, upon the Borrower's written
request, return Shares to the Borrower sufficient to cause the
fair market value of the Collateral to be equal to and not exceed
two (2) times the Line Amount for such Borrower; PROVIDED,
HOWEVER, that in making such adjustments, no adjustment shall be
made for fractional Shares;
5
(4) the principal amount of each Loan, together with all
accrued and unpaid interest, shall be payable at the end of the
Program Term, except as otherwise provided in Sections 4a and
12b-e of this Agreement; PROVIDED, HOWEVER, that a Borrower shall
be required to make prepayments on his or her Loan in accordance
with Section 8a of this Agreement in the event that Collateral is
purchased pursuant to exercise of options under the Stockholders
Agreement;
(5) the Outstanding Amount shall accrue interest at the
Bank's prime rate, as the same may change from time to time;
(6) accrued interest shall be payable monthly in arrears,
except as otherwise provided in Sections 5a and 6a of this
Agreement;
(7) each Borrower shall be permitted to prepay his or her
Loan in whole or in part at any time without premium or penalty;
and
(8) the Bank may not exercise any rights to foreclose on
the Collateral or take any Collateral in lieu of foreclosure with
respect to any Loan unless the Bank has exercised a Put Right (as
hereinafter defined) with respect thereto and the Company has
failed to perform its obligations with respect to closing the
sale and purchase of such Loan in accordance with the terms of
Section 5c of this Agreement.
b. NOTE AND PLEDGE AGREEMENT. The Bank covenants to and agrees with
the Company that, in connection with each Loan it initiates under the
Line of Credit Program, a Borrower will be required to execute (i) a
promissory note ("Note") in substantially the form attached hereto as
EXHIBIT A and hereby made a part hereof, and (ii) a pledge agreement
("Pledge Agreement") in substantially the form attached hereto as
EXHIBIT B and hereby made a part hereof, which Pledge Agreement shall
(x) require each Borrower to agree that the Shares pledged thereunder
constitute Vested Shares and (y) provide that such Pledge Agreement
and all rights and obligations thereunder are subject to the terms and
significant restrictions contained in each of this Agreement, the
Voting Trust Agreement and the Stockholders Agreement;
c. CHARGES TO BORROWERS. The Bank covenants to and agrees with the
Company that the Bank shall not assess any charges against a Borrower
in connection with a Loan except for the payment of principal and
interest thereon in accordance with the terms of such Borrower's Note;
PROVIDED, HOWEVER, that the Bank shall be permitted to provide in each
Borrower's Note that costs of collection are borne by such Borrower.
6
4. COVENANTS AND AGREEMENTS.
a. ACCELERATION OF LINES. The Bank covenants to and agrees with the
Company that, without the express written consent of the Company, it
shall not, prior to exercise of the Put Right with respect to a
Borrower's Loan and breach by the Company of its obligation to
purchase the Loan under Section 5c, accelerate such Borrower's Note or
Pledge Agreement for any default thereunder; PROVIDED, HOWEVER, that
this shall in no way limit the Bank's ability to exercise any Put
Right; and PROVIDED FURTHER, HOWEVER, that the Company shall reimburse
the Bank for any accrued interest in excess of one (1) year's interest
on such Borrower's Loan if such excess arose as a result of the
Company's failure to consent to acceleration thereof as a result of
the death of the Borrower after request by the Bank for such consent.
b. CHANGE IN FAIR MARKET VALUE PER SHARE. The Company covenants to
and agrees with the Bank that it will notify the Bank of the Fair
Market Value per Share within ten (10) business days of any change in
the Fair Market Value per Share or, until such notice, as of the date
of this Agreement; PROVIDED, HOWEVER, that the Company's obligation to
notify the Bank of such change in Fair Market Value per Share shall
terminate on the date a public market for the Shares exists, and the
Fair Market Value per Share shall thereafter be the Average Closing
Price. The notice required under this Section 4b shall be certified
as complete and correct by the Chief Financial Officer on behalf of
the Company.
c. DEATH OR OTHER CESSATION OF EMPLOYMENT OF A BORROWER. The
Company covenants to and agrees with the Bank that it will notify the
Bank of the death or cessation of employment with the Company and its
affiliates of any Borrower promptly after its knowledge of such death
or cessation of employment.
d. PROVISION OF CERTAIN FINANCIAL DATA. The Company acknowledges
and agrees with the Bank that, as a condition to establishing a Line
for any Borrower, such Borrower may be required to deliver to the Bank
a recently prepared balance sheet and a copy of such Borrower's
federal and state income tax returns as filed for the latest tax year.
e. SECRETARY'S CERTIFICATE. The Company covenants to and agrees
with the Bank that, as a condition to establishing the Line of Credit
Program, the Company shall deliver to the Bank a certificate of the
secretary or any assistant secretary of the Company certifying as to
the adoption of resolutions of the Company authorizing the Company to
enter into and deliver this Agreement and all other documents
contemplated thereby.
7
5. BANK'S RIGHT TO PUT A LOAN TO THE COMPANY.
a. PUT RIGHT. The Bank shall have the option to sell and require
the Company to purchase (the "Put Right") a Borrower's Loan in whole
or in part to the Company upon the occurrence of any of the following
events: (i) nonpayment of interest on such Borrower's Loan which is
uncured for ninety (90) days; (ii) the filing by such Borrower of a
voluntary petition under Title 11; (iii) the commencement of a case
against such Borrower under Title 11 (x) resulting in an order for
relief which shall not have been stayed or dismissed within sixty (60)
days or (y) in which an order for relief shall not have been entered
and which shall not have been stayed or dismissed within sixty (60)
days after the commencement thereof; (iv) failure by such Borrower to
pay the Outstanding Amount at maturity or within thirty (30) days of
acceleration in accordance with this Agreement; (v) the Company's
breach of performance of its obligations in connection with a Put
Right on any Loan, together with its failure to cure within ten (10)
days of written notice of such default received by the Company from
the Bank; (vi) failure by such Borrower to pledge additional Shares as
Collateral when required to do so as a result of a decrease in the
Fair Market Value per Share and failure to cure such default within
ten (10) days of written notice of such default received by the
Borrower from the Bank; or (vii) a default and acceleration of the
indebtedness under the Credit Agreement or, at such time as the Credit
Agreement indebtedness shall have been paid in full and not refunded
or refinanced and the commitments with respect thereto have been
terminated, an event shall have occurred which would have been a
default under the deemed Credit Agreement and the expiration of all
applicable periods of grace shall have occurred such that the lenders
thereunder would have be permitted to accelerate the indebtedness
thereunder (in the case of each of (i) - (vii), a "Putable Loan"). At
the closing of a Put Right, subject to the provisions of Section 4a of
this Agreement, the Company shall purchase the Putable Loan from the
Bank for an amount equal to (i) the Outstanding Amount of the Putable
Loan, plus (ii) interest accrued, through the date of purchase, on
such Putable Loan not to exceed one year's interest; PROVIDED,
HOWEVER, that if the principal amount of the Putable Loan exceeds the
Ceiling Amount, the Company shall purchase the Putable Loan from the
Bank for an amount equal to (i) the Ceiling Amount, plus (ii) interest
accrued, through the date of purchase, on the Ceiling Amount not to
exceed one year's interest.
b. SURVIVAL OF PUT RIGHTS. The Company acknowledges that the Put
Right with respect to a Borrower's Loan, and the Company's obligation
to purchase thereunder, shall survive such Borrower's death or other
termination of such Borrower's employment with the Company and its
affiliates. The Company further acknowledges and agrees that no
waiver or failure to exercise any right granted by this Agreement or
any Note or Pledge Agreement or extension of the times set
8
forth herein for performance or amendment or modification in any
respect with or without the consent of the Company of any provision of
any of those agreements nor any forbearance by the Bank whatsoever
with respect to any of those agreements shall release, discharge,
modify or change the obligation of the Company hereunder.
c. CLOSING. The Company shall purchase the Putable Loan within
thirty (30) days of receipt by the Company of a written notice from
the Bank which identifies the Putable Loan and states the Bank's
intent to exercise the Put Right with respect thereto. At the
closing, against delivery of the purchase price, the Bank shall
deliver the Note, the Pledge Agreement and the Collateral to the
Company and transfer to the Company all of its rights with respect to
the Putable Loan, including, without limitation, an assignment of the
applicable Note and Pledge Agreement and all rights thereunder, free
and clear of any liens, claims or encumbrances created by or through
the Bank, including, without limitation, under the Line of Credit
Program, other than those assigned to the Company pursuant to this
Agreement. The transfer of the Putable Loan by the Bank shall be
without recourse or warranty except warranty of title to the Note.
d. RECOVERY OF DEFICIENCY BY THE BANK. To the extent that the
Company receives from a Borrower on account of his or her Note an
amount in excess of the purchase price paid by the Company for such
Borrower's Putable Loan under Section 5c of this Agreement, the
Company shall promptly remit such amounts to the Bank.
6. COMPANY'S RIGHT TO CALL A LOAN FROM THE BANK.
a. CALL RIGHT. The Bank shall promptly notify the Company in
writing (the "Notice") in the event that a Borrower is ninety (90)
days past due with respect to his or her interest payments under a
Loan. The Bank shall also promptly notify the Company in writing (a
"Collateral Insufficiency Notice") in the event that a Borrower fails
to pledge additional Collateral when required to do so as a result of
a decrease in the Fair Market Value per Share. The Company shall have
the option to purchase and require the Bank to sell (the "Call Right")
a Borrower's Loan in whole or in part from the Bank upon any of the
following events: (i) receipt of a Notice with respect to such
Borrower; (ii) failure of a Borrower to make the required reduction in
his or her Outstanding Amount or to provide required additional
Collateral within sixty (60) days of the date of a Collateral
Insufficiency Notice; (iii) the filing by such Borrower of a voluntary
petition under Title 11; (iv) the commencement of a case against such
Borrower under Title 11; (v) death, Permanent Disability (as defined
in the Stockholders Agreement), termination of employment for any
reason or substantial reduction in the corporate responsibilities
9
of such Borrower; or (vi) delivery of written notice with respect
thereto to the Bank by the Company (in the case of each of (i) - (vi),
a "Callable Loan"). At the closing of a Call Right, the Company shall
purchase such Borrower's Loan from the Bank for an amount equal to (i)
the Outstanding Amount of such Callable Loan, plus (ii) interest
accrued, through the date of purchase, on such Callable Loan not to
exceed one year's interest; PROVIDED, HOWEVER, that if the principal
amount of such Callable Loan exceeds the Borrower's Ceiling Amount,
the Company shall purchase the Callable Loan from the Bank for an
amount equal to (i) the Ceiling Amount, plus (ii) interest accrued,
through the date of purchase, on the Ceiling Amount not to exceed one
year's interest.
b. SURVIVAL OF CALL RIGHTS. The Bank acknowledges that the Call
Right with respect to a Borrower's Loan, and the Company's right to
purchase thereunder, in addition to such rights created under Section
6a(v), shall survive the termination of such Borrower's employment
with the Company and its affiliates.
c. CLOSING. The Bank shall sell the Callable Loan to the Company
within thirty (30) days of receipt by the Bank of a written notice
from the Company which identifies the Callable Loan and states the
Company's intent to exercise the Call Right with respect thereto. At
the closing, against delivery of the purchase price, the Bank shall
deliver the Note, the Pledge Agreement and the Collateral to the
Company and transfer to the Company all of its rights with respect to
the Callable Loan, including, without limitation, an assignment of the
applicable Note and Pledge Agreement and all rights thereunder, free
and clear of any liens, claims or encumbrances created by or through
the Bank, including, without limitation, under the Line of Credit
Program, other than those assigned to the Company pursuant to this
Agreement. The transfer of the Callable Loan by the Bank shall be
without recourse or warranty except warranty of title to the Note.
d. RECOVERY OF DEFICIENCY BY THE BANK. To the extent that the
Company receives from a Borrower on account of his or her Note an
amount in excess of the purchase price paid by the Company for such
Borrower's Callable Loan under Section 6c of this Agreement, the
Company shall promptly remit such amounts to the Bank.
7. ASSIGNMENT BY THE COMPANY. The Company may from time to time assign
any of its rights and obligations hereunder to Holding Corp.; PROVIDED, HOWEVER,
that in the event of such assignment, the Company shall remain primarily liable
to perform all of such obligations.
8. APPLICATION OF STOCKHOLDERS AGREEMENT AND VOTING TRUST AGREEMENT;
LETTER AGREEMENT.
10
a. APPLICATION. The Collateral shall at all times remain subject to
the terms and significant restrictions of each of the Stockholders
Agreement and the Voting Trust Agreement as the same may be amended
from time to time, including, without limitation, the right of
Designated Management Optionees, as defined in the Stockholders
Agreement, and Holding Corp. to purchase Shares subject thereto
pursuant to the terms of such Stockholders Agreement, free and clear
of all claims, liens and encumbrances created under or in connection
with the Line of Credit Program and rights of refusal with respect to
any transfer, including a transfer upon foreclosure on the Shares or
taking the Shares in lieu of foreclosure. One-half (1/2) of all cash
proceeds of any purchase of Shares included in the Collateral,
including payments of principal of any promissory note issued to pay
the purchase price for such purchase, up to the full amount of the
applicable Loan, plus accrued interest, shall be applied to payment of
the Loan by or on behalf of the applicable Borrower, with any excess
being held by or returned to the Borrower, and any such promissory
note shall be pledged as Collateral to secure the repayment of the
Loan. The Company shall remain subject to Put Rights and retain Call
Rights hereunder to the extent such proceeds are insufficient to repay
the Loan.
b. LETTER AGREEMENT. Concurrently with the execution of this
Agreement, the Bank shall execute a letter agreement regarding the
Stockholders Agreement in substantially the form contained in EXHIBIT
C attached hereto and hereby made a part hereof.
9. PROGRAM COMMITTEE. The Bank shall be entitled to rely on the
authority of the Program Committee with respect to all matters concerning the
Line of Credit Program. The Program Committee presently consists of Xxxxxxx X.
Xxxxxxx and Xxxxx Xxxxxxxxx, and the Bank shall be entitled to rely on their
constituting the Program Committee until such time as the Company provides
notice to the contrary.
10. TERMINATION. This Agreement shall terminate on the later of the end
of the Program Term or at such time as there are no outstanding Lines or Loans.
It is understood that all Loans are required to be paid on or before June 21,
1998.
11. FEES. The Company shall pay fees, in an amount mutually agreeable to
the parties hereto, to the Bank in connection with the Line of Credit Program.
12. TERMINATION OF THE BANK'S COMMITMENT TO MAKE LOANS.
a. ANY LOANS. The Bank's commitment to advance any additional funds
pursuant to the Line of Credit Program shall terminate upon the
occurrence of any of the following events:
11
(1) the filing by the Company or Holding Corp. of any voluntary
petition under Title 11 or the commencement of a similar proceeding by
the Company or Holding Corp. under any similar state or federal
statute;
(2) the commencement of a case against the Company or Holding
Corp. under Title 11 by a third party:
(i) resulting in an order for relief which shall not have
been stayed or dismissed within sixty (60) days; or
(ii) in which an order for relief shall not have been
entered and which shall not have been stayed or dismissed within
sixty (60) days after the commencement thereof;
(3) any breach of the Stockholders Agreement, provided such
breach has a material adverse effect on the Bank;
(4) occurrence of a default and the expiration of all applicable
periods of grace permitting the lenders thereunder to accelerate the
indebtedness under the Credit Agreement; or
(5) failure, as a result of breach by the Company, to close when
required under Section 5c of this Agreement.
b. PUTABLE LOAN. If a Borrower's Loan shall become a Putable Loan
pursuant to Section 5a of this Agreement, the Bank shall not be under
any obligation thereafter to make a Loan to such Borrower, and shall
be permitted to terminate such Borrower's Line.
c. REGULATION U. If the Shares shall become margin securities under
Regulation U promulgated by the Federal Reserve Board, the Bank shall
not be under any obligation thereafter to make a Loan to such
Borrower, and shall be permitted to terminate such Borrower's Line if
such Borrower does not provide the customary undertaking as to the use
of such Borrower's Line within ten (10) days of the written request
therefor by the Bank.
d. UPDATED FINANCIAL INFORMATION. If a Borrower does not provide
the Bank with annual updates to the financial information requested by
the Bank pursuant to Section 4d of this Agreement, the Bank shall not
be under any obligation thereafter to make a Loan to such Borrower,
and shall be permitted to terminate such Borrower's Line.
12
e. DEFAULTED LOAN. If a Borrower defaults under the terms of the
Note, the Bank shall not be under any obligation thereafter to make a
Loan to such Borrower, and shall be permitted to terminate such
Borrower's Line.
13. MISCELLANEOUS.
a. WAIVER. The failure in any one or more instances of a party to
insist upon performance of the terms, covenants or conditions of this
Agreement, to exercise any right or privilege in this Agreement
conferred, or the waiver by said party of any breach of any of the
terms, covenants or conditions of this Agreement, shall not be
construed as a subsequent waiver of any such terms, covenants,
conditions, rights or privileges, but shall continue and remain in
full force as if no such forbearance or waiver had occurred. No
waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.
b. FURTHER ASSURANCES. The Bank and the Company agree that they
shall execute such further documents and do such other acts and things
as may be necessary or proper to effectuate any transaction
contemplated by this Agreement.
c. NO REPRESENTATIONS, WARRANTIES OR GUARANTY. The Company shall
not at any time be deemed to have made any representation or warranty,
express or implied, with respect to the validity, enforceability or
collectibility of any Loan or the creditworthiness of any Borrower.
Under no circumstances shall the Company be deemed to be the guarantor
of payment for any Loan.
d. GOVERNING LAW. The validity, interpretation and performance of
this Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois applicable to contracts
made in that state, without giving effect to the conflict of laws
principles thereof.
e. REMEDY. Each of the parties hereto acknowledges and agrees that,
in the event of a breach of this Agreement, the nonbreaching party
will not have an adequate remedy in money or damages. Each party
hereto agrees that in the event of a breach hereunder, the
nonbreaching party shall be entitled to obtain an injunction, without
notice or bond, against such breach from a court of competent
jurisdiction, immediately upon request.
f. NOTICE. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be delivered in person, sent
by registered or certified mail, and addressed as specified below or
to such other address as may be substituted by written notice from one
party to the others, delivered by an air courier who guarantees next
day delivery and so addressed or sent by telecopy to
13
the number specified below or to such other number as may be
substituted by written notice from one party to the others with a copy
of such telecopy to follow by United States mail, postage prepaid:
(a) If to the Bank The Northern Trust Company
as follows: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx,
Vice President
Telecopy No. (000) 000-0000
Telephone No. (000) 000-0000
with a copy to: Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No. (000) 000-0000
Telephone No. (000) 000-0000
(b) If to the Company Xxxxxxxxxx Xxxx & Co., Incorporated
as follows: Xxx Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Senior Vice President - Finance
Telecopy No. (000) 000-0000
Telephone No. (000) 000-0000
with a copy to: Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxx, Esq.
Telecopy No. (000) 000-0000
Telephone No. (000) 000-0000
and such notice shall be conclusively deemed given when delivered in
person, five (5) days after mailing same, one (1) day after delivery
to the air courier for next day delivery, or if sent by telecopy, on
the next business day after it was sent.
14
g. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and supersedes all previous agreements
and understandings, if any (whether written or oral, express or
implied), between the parties hereto with respect to the subject
matter hereof. No terms, conditions, understanding or agreement
purporting to modify or amend the terms of this Agreement shall be
binding unless such modification or amendment is made in writing,
executed by the parties hereto, expressly refers to this Agreement and
recites its intention to modify or amend this Agreement.
h. SEVERABILITY. The invalidity of any provision of this Agreement
or a portion of the provisions shall not affect the validity of any
other provision of this Agreement or the remaining portion of the
applicable provision. In the event any one or more of the provisions
of this Agreement shall for any reason be held to be invalid, illegal
or unenforceable, the parties consent that a court of competent
jurisdiction may modify it so as to create the valid, legal and
enforceable commitment which comes closest to the intention of the
parties underlying the provision so modified.
i. HEADINGS. The Section and subsection headings as to the content
of particular Sections and subsections are for the convenience of the
parties and are in no way to be construed as part of this Agreement or
as a limitation of the scope of the particular Sections or subsections
to which they refer.
j. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
THE NORTHERN TRUST COMPANY
By:________________________________________
Its:____________________________________
XXXXXXXXXX XXXX & CO., INCORPORATED
By:_________________________________________
Its:________________________________________
15
SCHEDULE I
BORROWER CEILING AMOUNT
-------- --------------
Xxxxxx X. Xxxxxx $ 75,000.00
Xxxxx X. Xxxxx $ 29,837.42
Xxxxxx X. Xxxxxxxx $297,035.42
G. Xxx Xxxxxx $ 75,000.00
Xxxxxx X. Xxxxxxxx, Xx. $ 74,439.91
Xxxxx X. Xxxxx $ 63,051.43
