Exhibit 10.2
AG CAPITAL COMPANY
CREDIT AGREEMENT
THIS CREDIT AGREEMENT made and entered into as of June 1, 1999 (the
"Effective Date"), by and between RDO MATERIAL HANDLING CO., a Minnesota
corporation (the "Borrower"), whose address is 0000 X. Xxxxxxxxxx Xx., Xxxxx,
Xxxxx Xxxxxx 00000, and AG CAPITAL COMPANY, a Delaware corporation (the
"Lender"), whose address is 1500 Radisson Tower, 000 Xxxxx 0xx Xxxxxx, Xxxxx,
Xxxxx Xxxxxx 00000.
RECITALS
1. The Borrower wishes to borrow funds from the Lender and the Lender
wishes to make loans and advances to the Borrower; and
2. The Borrower and the Lender mutually desire to set forth the terms
under which the Lender will extend credit to the Borrower and make such loans
and advances.
NOW, THEREFORE, for and in consideration of the loans and advances to be
made by the Lender to the Borrower hereunder, the mutual covenants, promises and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the Borrower and the
Lender agree as follows:
The following terms when used in this Credit Agreement shall, except
where the context otherwise requires, have the following meanings both in the
singular and plural forms thereof:
1. DEFINITIONS
"Acceptable Accounts Receivable" means any receivable owned by the
Borrower, less than 90 days old, which is in form and subject to documentation
acceptable to Lender.
"Advance" means any advance by the Lender made under either of the
Seasonal Loan Commitments.
"Affiliate" means any corporation, association, partnership, joint venture
or other business entity directly or indirectly controlling or controlled by, or
under direct or indirect common control of, the Borrower or any of its
Subsidiaries.
"Assignee" has the meaning set forth in Section 9.14.
"Borrower" means RDO Material Handling Co., a Minnesota corporation.
"Borrowing Base Certificate" means the certificate in the form attached
hereto which sets forth the Borrowing Base as of the date indicated thereon.
"Borrowing Base" means, at any time, the lesser of (a) $7,000,000 or (b)
the sum of (i) eighty five percent (85%) of Acceptable Accounts Receivable; (ii)
ninety percent (90%) of new wholegoods inventory, net of unpaid accounts payable
on such inventories; (iii) sixty five percent (65%) of used wholegoods and parts
inventory, net of unpaid accounts payable on such inventories, all as determined
in accordance with GAAP.
1
"Business Day" means any day on which the Lender is open for the
transaction of business of the kind contemplated by this Credit Agreement.
"Change of Control" means the occurrence of any of the following
circumstances:
(a) any person or two or more persons acting in concert acquire
beneficial ownership (within the meaning of Rule 13d-3 of the SEC
under the Securities Exchange Act of 1934), directly or indirectly,
of securities of the Borrower (or other securities convertible into
such securities) representing 25% or more of the combined voting
power of all securities of the Borrower entitled to vote in the
election of directors; or
(b) during any period, whether commencing before or after the date
hereof, the membership of the Board of Directors of the Borrower
changes for any reason (other than by reason of death, disability,
or scheduled retirement) so that the majority of the Board of
Directors is made up of persons who were not directors at the
beginning of such period.
"Collateral" means all of the assets of the Borrower or any other party in
which the Lender holds a security interest pursuant to any of the Loan
Documents.
"Credit Agreement" means this Credit Agreement, as originally executed and
as may be amended, modified, supplemented, or restated from time to time by
written agreement between the Borrower and the Lender.
"Current Assets" means, at any date, the aggregate amount of all assets of
the Borrower that are classified as current assets, on a consolidated basis, in
accordance with GAAP.
"Current Liabilities" means, at any time, the aggregate amount of all
liabilities of the Borrower that are classified as current liabilities, on a
consolidated basis, in accordance with GAAP (including taxes and other proper
accruals and the matured portion of any indebtedness).
"Debt" means (i) all items of indebtedness or liability that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet as at the date of which Debt is
to be determined; (ii) indebtedness secured by any mortgage, pledge, lien or
security interest existing on property owned by the Person whose Debt is being
determined, whether or not the indebtedness secured thereby shall have been
assumed; (iii) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's acceptances
issued for the account of such Person, and (iv) guaranties, endorsements (other
than for purposes of collection in the ordinary course of business) and other
contingent obligations in respect of, or to purchase or otherwise acquire
indebtedness of others.
"Default" means any event which if continued uncured would, with notice or
lapse of time or both, constitute an Event of Default.
"Environmental Law" has the meaning set forth in Section 5.17
"Equity Ratio" means the ratio of the total equity (including minority
interests and subordinate debt including notes payable to parent) of the
Borrower to the total assets of the Borrower, as determined on a combined basis,
in accordance with GAAP.
2
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and as may be further amended from time to time, and the rules and
regulations promulgated thereunder by any governmental agency or authority, as
from time to time in effect.
"Event of Default" means any event of default described in Section 8
hereof.
"GAAP" means the generally accepted accounting principles in the United
States in effect from time to time including, but not limited to, Financial
Accounting Standards Board (FASB) Standards and Interpretations, Accounting
Principles Board (APB) Opinions and Interpretations, Committee on Accounting
Procedure (CAP) Accounting Research Bulletins, and certain other accounting
principles which have substantial authoritative support.
"Hazardous Substance" has the meaning set forth in Section 5.17 hereof.
"Lender" means Ag Capital Company, a Delaware corporation, its successors
and assigns.
"LIBOR" for any business day during any calendar month means the quoted
rate of interest per annum determined by the British Banker's Association as the
average of interbank offered rates for dollar deposits in the London market
based on quotations at sixteen (16) major banks (rounded upward, if necessary,
to the nearest 1/100th of 1%).
"Lien" means any lien, security interest, pledge, mortgage, statutory or
tax lien, or other encumbrance of any kind whatsoever (including without
limitation, the lien or retained security title of a conditional vendor),
whether arising under a security instrument or as a matter of law, judicial
process or otherwise or by an agreement of the Borrower to grant any lien or
security interest or to pledge, mortgage or otherwise encumber any of its
assets.
"Loan" means the Seasonal Loan.
"Loan Documents" means this Credit Agreement, the Seasonal Note, the
Security Agreement, and such other documents as the Lender may reasonably
require as security for, or otherwise executed in connection with, any loan
hereunder, all as originally executed and as may be amended, modified or
supplemented from time to time by written agreement between the parties thereto.
"Material Adverse Occurrence" means any occurrence which materially
adversely affects the present or prospective financial condition or operations
of the Borrower, or which impairs, or may impair, in the Lender's reasonable
judgment, the ability of the Borrower to perform its obligations under the Loan
Documents.
"Maturity" of the subject Notes means the earlier of (a) the date on which
the subject Notes becomes due and payable upon the occurrence of an Event of
Default; or (b) (i) June 1, 2000.
"Person" means any natural person, corporation, firm, association,
government, governmental agency or any other entity, whether acting in an
individual fiduciary or other capacity.
"Premises" has the meaning set forth in Section 5.17 hereof.
"Reference Rate" means for any day the rate of interest indicated as the
"prime rate" in the "Money Rates" section of the Wall Street Journal, for such
day (or if no such rate is published for such day for the earliest preceding day
for which such rate is published). If such rate ceases to be published, the
3
"Reference Rate" shall mean a comparable rate determined by the Lender as
indicated in a written notice to the Borrower."
"Regulatory Change" means any change after the date hereof in any (or the
adoption after the date hereof of any new) (a) Federal or state law or foreign
law applying to the Lender (or its successors or assigns); or (b) regulation,
interpretation, directive or request (whether or not having the force of law)
applying or in the reasonable opinion of the Lender (or its successors or
assigns) applicable to, the Lender (or its successors or assigns) of any court
or governmental authority charged with the interpretation or administration of
any law referred to in clause (a) of this definition or of any fiscal, monetary,
or other authority having jurisdiction over the Lender (or its successors or
assigns).
"Seasonal Commitment" means the Lender's obligation to extend Advances to
the Borrower under Section 2, as the context may require.
"Seasonal Loan" means, at any date, the aggregate amount of all Advances
made by the Lender to the Borrower pursuant to Section 2 hereof.
"Seasonal Note" means the note No. 33610, dated June 1, 1999, in the
original principal amount of Seven Million Dollars ($7,000,000.00) made by the
Borrower payable to the order of the Lender, together with all extensions,
renewals, modifications, substitutions and changes in form thereof effected by
written agreement between the Borrower and the Lender.
"Security Agreement" means the Security Agreements, dated September 1,
1998, executed by the Borrower in favor of the Lender, and such other previously
executed security agreements, as originally executed and as may be amended,
modified or supplemented from time to time by written agreement between the
Borrower and the Lender.
"Subject Note(s)" means the Seasonal Note.
"Subsidiary" means any corporation of which more than fifty percent (50%)
of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned by the Borrower and/or one or more
Subsidiary or Affiliate.
"Termination Date" means the earlier of (a) June 1, 2000; or (b) the date
upon which the obligation of the Lender to make Advances is terminated pursuant
to Section 2.7 and Section 3.7.
2. THE SEASONAL LOAN
2.1. Commitment for Seasonal Loan. Subject to the Conditions of Lending
set forth in Section 4 hereof, the Lender agrees to make Advances to the
Borrower from time to time from the date of this Credit Agreement through
the Termination Date, provided, however, that the Lender shall not be
obligated to make any Advance, if after giving effect to such Advance, the
aggregate outstanding principal amount of all Advances would exceed Seven
Million Dollars ($7,000,000.00). Within the limits set forth above, the
Borrower may borrow, repay and reborrow amounts under the Seasonal Note.
2.2. The Seasonal Note. All Advances shall be evidenced by, and the
Borrower shall repay such Advances to the Lender in accordance with, the
terms of the Seasonal Note; including without
4
limitation the provision of the Seasonal Note that the principal amount
payable thereunder at any time shall not exceed the then unpaid principal
amount of all Advances made by the Lender.
2.3. Records of Advances and Payments. The aggregate amount of all unpaid
Advances set forth on the records of the Lender shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on the
Seasonal Note.
2.4. Payments and Interest on the Seasonal Note.
(a) Except to the extent any part thereof is a Fixed Rate Amount, the
Borrower agrees to pay interest on the outstanding principal amount
of the Seasonal Note I from the date hereof until paid in full at a
per annum rate equal to one-month LIBOR plus 250 basis points,
determined two (2) business days prior to the first business day of
any calendar week and fixed until the first business day of the
following calendar week.
(b) After the date hereof, interest accrued on the Seasonal Note through
Maturity shall be payable for each calendar month on the first (1st)
day of the following calendar month, commencing July 1, 1999, and at
Maturity, when the entire outstanding principal amount shall be due
and payable. Interest accrued after Maturity shall be payable upon
demand.
2.5. Manner of Borrowing. The Borrower shall give the Lender written or
telephonic notice of each requested Advance by not later than 1:00 p.m.
(Minneapolis time) on the date such Advance is to be made. Each Advance
shall be deposited to an account designated by the Borrower or as
otherwise indicated in the corresponding request by the Borrower.
Any request for an Advance under the Seasonal Loan shall be deemed a
representation by the Borrower that the amount of the requested Advance,
when added to the Seasonal Loan outstanding amount, would not exceed the
Borrowing Base. If the Seasonal Loan outstanding amount shall at any time
exceed the Borrowing Base, the Borrower shall immediately repay Advances
in the amount equal to such excess, without notice or demand by the
Lender.
2.6. Payments. Any other provision of this Credit Agreement to the
contrary notwithstanding, the Borrower shall make all payments of interest
on and principal of the Seasonal Note to the Lender at its office shown on
the first page hereof (or to such other locations as may from time to time
be specified by the Lender).
2.7. Termination. The obligation of the Lender to make Advances shall
terminate:
(a) Upon receipt by the Lender of three (3) days' written notice of
termination from the Borrower given at any time when no amount is
outstanding under the Seasonal Note; or
(b) Immediately and without further action upon the occurrence of an
Event of Default of the nature referred to in Subsection 8.1(d); or
(c) Immediately when any Event of Default (other than one of the nature
specified in Subsection 8.1(d)) shall have occurred and be
continuing and either (i) the Lender shall have demanded payment of
the Seasonal Note or (ii) the Lender shall elect to terminate such
obligation by giving notice to Borrower.
5
3. GENERAL PROVISIONS
3.1. Computation of Interest.
(a) All computations of interest on the outstanding principal amount of
the Subject Note shall be computed on the basis of a year comprised
of 360 days to the extent such interest is computed based on LIBOR
and 360 days to the extent such interest is computed based on the
Reference Rate. Each change in the interest rate payable on the
Seasonal Note due to a change in the Reference Rate shall take place
simultaneously with the corresponding change in the Reference Rate.
Whenever any payment to be made by or to the Lender or other
holder(s) of the Seasonal Note shall otherwise be due on a day which
is not a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be
included in computing the fees or interest payable on such next
succeeding Business Day.
(b) No provision of this Credit Agreement or the Subject Note shall
require the payment or permit the collection of interest in excess
of the rate permitted by applicable law.
3.2. Default Rate; Late Payment. Notwithstanding anything to the contrary
herein, upon the occurrence and during the continuation of an Event of
Default, the Borrower shall pay interest on the outstanding principal
amount of the Subject Notes at a rate per annum equal to the greater of
(i) two percent (2%) in excess of the rate applicable to the unpaid
principal amount of the Subject Note immediately before the occurrence of
such Event of Default or (ii) two percent (2%) in excess of the Reference
Rate in effect from time to time. In addition, the Borrower shall be
obligated to pay $25.00 with respect to any installment on the Subject
Note paid after the date it is due, to compensate Lender for the
administrative expenses associated with such past-due payments, subject to
the maximum allowable late payment under North Dakota law.
3.3. Security. The indebtedness, liabilities and other obligations of the
Borrower to the Lender under the Subject Note and this Credit Agreement
are secured by, inter alia, security interests granted pursuant to all
security interests, liens and mortgages heretofore or hereafter granted by
the Borrower to the Lender as security for the obligations to the Lender.
3.4. Manner of Payments. Any other provision of this Credit Agreement to
the contrary notwithstanding, the Borrower shall make all payments of
interest on and principal of the Subject Note to the Lender at its office
shown on the first page hereof.
3.5. Increased Costs. If any Regulatory Change or other change in any
existing law, rule or regulation or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency shall subject the Lender or one or more of its sources
of financing to increased costs, the Borrower shall pay to the Lender
within fifteen (15) days of demand therefor, Borrower's pro rata share
(based on the amount of all loans outstanding from the Lender) of any such
amount required to compensate the Lender or such other Persons for such
costs.
3.6. Collateral Allocation. To the extent the Lender receives proceeds of
any Collateral after the exercise of remedies provided for in Section 8.2:
(a) proceeds of Collateral which is includible in the Borrowing Base
certificate shall be applied first to any obligations of the Borrower
relating to or arising under the Seasonal Note and Loan, and then to all
the other obligations to the Lender under the Loan Documents; (b) proceeds
of all other Collateral, if any, shall be applied to all
6
obligations to the Lender under the Loan Documents, pro rata in accordance
with the respective principal amounts thereof.
3.7. Loan Agreement Reference. Any reference in the Subject Note to any
Loan Agreement or Credit Agreement shall be deemed to be a reference to
this Credit Agreement, as it may from time to time be amended, modified or
restated. Any conflict between the terms of the Subject Note, and the
terms of this Credit Agreement shall be resolved in favor of the terms of
this Credit Agreement.
4. CONDITIONS OF LENDING
4.1. Conditions Precedent. This Credit Agreement and the Lender's
obligations hereunder are subject to receipt, on or prior to the date
hereof, by the Lender of the following, each to be in form and substance
satisfactory to the Lender, unless the Lender waives receipt of any of the
following in writing:
(a) This Credit Agreement and the Subject Notes each appropriately
completed and duly executed by the Borrower;
(b) The Security Agreement and corresponding financing statement(s)
appropriately completed and duly executed by the Borrower;
(c) A current UCC financing statement search, federal and state tax lien
search, judgment and bankruptcy search, reflecting results
satisfactory to the Lender, on the Borrower from the appropriate
filing offices as required by the Lender;
(d) A Certificate of Good Standing for the Borrower issued by the
Secretary of State in all states where the Borrower is qualified to
do business;
(e) A copy of the Borrower's Bylaws, together with all amendments,
certified by the Secretary of the Borrower to be a true and correct
copy thereof;
(f) A copy of the Articles of Incorporation of the Borrower, together
with all amendments, certified by the Secretary of State of the
state of the Borrower's incorporation to be a true and correct copy
thereof;
(g) A certified copy of the resolutions of the Board of Directors of the
Borrower authorizing or ratifying the transactions contemplated
hereby, and the execution, delivery and performance of the Loan
Documents, and designating the officers authorized to execute the
Loan Documents to which the Borrower is a party and to perform the
obligations of the Borrower thereunder;
(h) A certificate of the Secretary of the Borrower certifying the names
of the officers authorized to execute the Loan Documents, together
with a sample of the true signature of each such officer;
(i) A favorable opinion of counsel for the Borrower, satisfactory to the
Lender, as to the matters set forth in Subsections 5.1, 5.2, 5.3,
5.5, 5.7 and 5.9, and other matters as requested by the Lender,
satisfactory to the Lender and its counsel;
(j) Policies or certificates of insurance evidencing insurance coverage
required under this Credit Agreement and any other of the Loan
Documents;
7
(k) A completed Borrowing Base certificate dated as of the last day of
the month most recently ended prior to the date hereof.
(l) Such other documents, information and actions as the Lender may
reasonably request.
4.2. Conditions Precedent to all Loans and Advances. The obligation of the
Lender to make any Advance hereunder, including the initial Advance, is
subject to the satisfaction of each of the following, unless waived in
writing by the Lender:
(a) The representations and warranties set forth in Section 5 are true
and correct in all material respects on the date hereof and on the
date of any Advance (as if made on the date of such Advance, except
to the extent that such representations and warranties expressly
relate solely to an earlier date).
(b) No Default or Event of Default shall have occurred and be
continuing.
(c) No litigation, arbitration or governmental investigation or
proceeding shall be pending, or, to the knowledge of the Borrower,
threatened, against the Borrower or affecting the business or
operations of the Borrower which was not previously disclosed to the
Lender and which, if determined adversely to the Borrower, would
have a material adverse effect on the operation or financial
condition of the Borrower.
(d) No Default or Event of Default shall result from the making of any
Advance.
(e) No Material Adverse Occurrence shall have occurred and be
continuing.
(f) Each request for an Advance and each acceptance of the proceeds of
such request by the Borrower shall constitute a representation and
warranty by the Borrower that on the date of acceptance of such
proceeds (both immediately before and after giving effect to such
acceptance) the statements made in Section 5 are true and correct
with the same effect as if then made, except to the extent such
statements expressly relate solely to an earlier date.
5. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
5.1. Organization, etc. The Borrower is a corporation validly organized
and existing and in good standing under the laws of the State of
Minnesota, has full power and authority to own its property and conduct
its business substantially as presently conducted by it and is duly
qualified and licensed to do business and is in good standing as a foreign
corporation in each other jurisdiction where the nature of its business
makes such qualification or licensing necessary. The Borrower has full
power and authority to enter into and perform its obligations under the
Loan Documents and to obtain the Loans and Advances hereunder.
5.2. Due Authorization. The execution, delivery and performance by the
Borrower of the Loan Documents have been duly authorized by all necessary
corporate action, do not require any approval or consent of, or any
registration, qualification or filing with, any governmental agency or
authority or any approval or consent of any other Person (including,
without limitation, any stockholder, do not and will not conflict with,
result in any violation of or constitute any default under, any provision
of the Borrower's Articles of Incorporation or Bylaws, any agreement
binding on or applicable to the Borrower or any of its property, or any
law or governmental regulation or
8
court decree or order, binding upon or applicable to the Borrower or of
any of its property and will not result in the creation or imposition of
any Lien on any of its property pursuant to the provisions of any
agreement binding on or applicable to the Borrower or any of its property
except pursuant to the Loan Documents.
5.3. Validity of the Loan Documents. The Loan Documents to which the
Borrower is a party are the legal, valid and binding obligations of the
Borrower and are enforceable in accordance with their terms, subject only
to bankruptcy, insolvency, reorganization, moratorium or similar laws,
rulings or decisions at the time in effect affecting the enforceability of
rights of creditors generally and to general equitable principles which
may limit the right to obtain equitable remedies.
5.4. Financial Information. The financial statements of the Borrower
furnished to the Lender have been and will be prepared in accordance with
GAAP consistently applied by the Borrower and present fairly the financial
condition of the Borrower as of the dates thereof and for the periods
covered thereby. The Borrower is not aware of any contingent liabilities
or obligations which would, upon becoming non-contingent liabilities or
obligations, be a Material Adverse Occurrence. Since the date of the most
recent such statements, neither the condition (financial or otherwise),
the business nor the properties of the Borrower have been materially and
adversely affected in any way.
5.5. Litigation, Other Proceedings. Except as previously disclosed to and
approved of in writing by the Lender, there is no action, suit or
proceeding at law or equity, or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
pending or, to the knowledge of the Borrower, threatened, against the
Borrower or any of its property, which is reasonably likely to result in a
Material Adverse Occurrence; and the Borrower is not in default with
respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, where such default
would be a Material Adverse Occurrence.
5.6. Title to Assets. Except for Liens permitted by Section 7.2, the
Borrower has good and marketable title to all of its assets, real and
personal.
5.7. Lien Priority. The Liens created by the Security Agreement are
attached and first, perfected Liens on the Collateral.
5.8. Guarantees and Indebtedness. Except as disclosed on financial
statements of the Borrower furnished to the Lender, the Borrower is not a
party to any material contract of guaranty or suretyship and none of its
assets is subject to any contract of that nature and the Borrower is not
indebted to any other party, except the Lender.
5.9. Margin Stock. No part of any Loan or Advance hereunder shall be used
at any time by the Borrower to purchase or carry margin stock (within the
meaning of Regulation G, T, U or X promulgated by the Board of Governors
of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any margin stock. The Borrower is not
engaged principally, or as one of its important activities, in the
business of extending credit for the purposes of purchasing or carrying
any such margin stock. No part of the proceeds of any Loan or Advance
hereunder will be used by the Borrower for any purpose which violates, or
which is inconsistent with, any regulations promulgated by the Board of
Governors of the Federal Reserve System.
9
5.10. Taxes. The Borrower has filed all federal, state and other income
tax returns which are required to be filed through the date of this Credit
Agreement and has paid all taxes as shown on said returns, and all taxes
due or payable without returns and all assessments received to the extent
such taxes and assessments have become due. All tax liabilities of the
Borrower are adequately provided for on its books, including interest and
penalties. No income tax liability of a material nature has been asserted
by taxing authorities for taxes in excess of those already paid. The
Borrower has made all required withholding deposits.
5.11. Accuracy of Information. All factual information furnished by or on
behalf of the Borrower to the Lender for purposes of or in connection with
this Credit Agreement or any transaction contemplated by this Credit
Agreement is, and all other such factual information furnished by or on
behalf of the Borrower to the Lender in the future, will be true and
accurate in every material respect on the date as of which such
information is dated or certified. No such information contains any
material misstatement of fact or omits any material fact or any fact
necessary to prevent such information from being misleading.
5.12. Material Agreements. The Borrower is not a party to any agreement or
instrument or subject to any restriction that materially and adversely
affects its business, property or assets, operations or condition
(financial or otherwise).
5.13. Defaults. The Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any: (a) agreement to which such entity is a
party, which default might have a material adverse effect on the business,
properties or assets, operations, or condition (financial or otherwise) of
the Borrower; or (b) instrument evidencing any indebtedness or under any
agreement relating to such indebtedness.
5.14. ERISA. (a) No Reportable Event has occurred and is continuing with
respect to any Plan; (b) the Pension Benefit Guaranty Corporation or any
successor entity has not instituted proceedings to terminate any Plan; and
(c) each Plan of the Borrower has been maintained and funded in all
material respects in accordance with its terms and with ERISA. All
undefined capitalized terms used in this Section shall have the meanings
ascribed to them in ERISA.
5.15. Financial Status. The Borrower is not insolvent (as such term is
defined in Section 101(32) of the United States Bankruptcy Code of 1978,
as amended or Minnesota Statutes Section 513.42, as amended) and will not
be rendered insolvent (as such term is defined in Section 101(32) of the
United States Bankruptcy Code of 1978, as amended or Minnesota Statutes
Section 513.42, as amended) by execution of this Credit Agreement or any
other of the Loan Documents, or consummation of the transactions
contemplated thereby.
5.16. Survival of Representations. All representations and warranties
contained in this Section 5 shall survive the delivery of the Seasonal
Note and the making of the Loans and Advances evidenced thereby and any
investigation at any time made by or on behalf of Lender shall not
diminish its rights to rely thereon.
5.17. Environmental Matters.
(a) Definitions. As used in this Credit Agreement, the following terms
shall have the following meanings:
10
(i) "Environmental Law" means any federal, state, local or other
governmental statute, regulation, law or ordinance dealing
with the protection of human health and the environment.
(ii) "Hazardous Substances" means pollutants, contaminants,
hazardous substances, hazardous wastes, petroleum and
fractions thereof, and all other chemicals, wastes, substances
and materials listed in, regulated by or identified in any
Environmental Law.
(iii) "Premises" means all premises where the Borrower conducts its
business and has any rights of possession.
(b) To the Borrower's best knowledge, there are not present in, on or
under the Premises any Hazardous Substances in such form or quantity
as to create any liability or obligation for either the Borrower or
the Lender under common law of any jurisdiction or under any
Environmental Law, and no Hazardous Substances have ever been
stored, buried, spilled, leaked, discharged, emitted or released in,
on or under the Premises in such a way as to create any such
liability.
(c) There are not and there never have been any requests, claims,
notices, investigations, demands, administrative proceedings,
hearings or litigation, relating in any way to the Premises or the
Borrower, alleging liability under, violation of, or noncompliance
with any Environmental Law or any license, permit or other
authorization issued pursuant thereto. To the Borrower's best
knowledge, no such matter is threatened or impending.
(d) To the Borrower's best knowledge, the Premises are not and never
have been listed on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information
System or any similar federal, state or local list, schedule, log,
inventory or database.
5.18. Subsidiaries. The Borrower has the Subsidiaries listed on the
financial statements previously delivered to the Lender.
6. AFFIRMATIVE COVENANTS
As long as there remains any amount outstanding under the Subject Notes or
the Lender has any obligation to make Advances, the Borrower shall, unless
waived in writing by the Lender:
6.1. Financial Statements and Reports. Furnish to the Lender, at the times
set forth below, the following financial statements, reports and
information:
(a) As soon as available, but in any event within one hundred twenty
five (125) days after each fiscal year end, annual audited financial
statements of the Borrower, and Subsidiaries prepared on a
consolidated basis, certified by certified public accountants
satisfactory to the Lender to have been prepared in accordance with
GAAP consistently applied;
(b) As soon as available, but in any event within thirty (30) days after
the last day of each monthly fiscal period unaudited financial
statements of the Borrower consisting of a balance sheet and the
related statements of income, retained earnings and cash flows
prepared on a consolidated basis dated as of the last Business Day
of such quarterly fiscal period in form and detail as reasonably
required by the Lender certified by the chief financial officer of
the
11
Borrower to have been prepared from the records of the Borrower on
the basis of accounting principles consistently applied by the
Borrower;
(c) As soon as available, but in any event within ninety (90) days
following each fiscal year-end, an operating budget and cash flow
forecast for the fiscal year immediately following such fiscal
year-end.
(d) Promptly upon obtaining knowledge thereof, notice of the occurrence
of any Default or Event of Default and of the violation by the
Borrower of any law, rule or regulation, the non-compliance with
which could be reasonably expected to be a Material Adverse
Occurrence;
(e) To the extent applicable, promptly after the sending or filing
thereof, copies of all regular and periodic financial reports which
the Borrower shall file with the U.S. Securities and Exchange
Commission, or any national securities exchange;
(a) Such other information concerning the business, operations and
condition (financial or otherwise) of the Borrower as the Lender may
reasonably request.
6.2. Maintenance of Corporate Existence. Maintain and preserve its
corporate existence.
6.3. Taxes. Pay and discharge as the same shall become due and payable,
all taxes, assessments and other governmental charges and levies against
or on any of its property, as well as claims of any kind which, if unpaid,
might become a Lien upon any of its properties, unless such tax, levy,
charge assessment or Lien is being contested in good faith by the Borrower
and is supported by an adequate book reserve. The Borrower shall make all
required withholding deposits.
6.4. Notices. As soon as practicable, give notice to the Lender of:
(a) The commencement of any litigation relating to the Borrower which
might reasonably result in a Material Adverse Occurrence or relating
to the transactions contemplated by this Credit Agreement;
(b) The commencement of any material arbitration or governmental
proceeding or investigation not previously disclosed to the Lender
which has been instituted or, to the knowledge of the Borrower, is
threatened against the Borrower or its property which might
reasonably result in a Material Adverse Occurrence;
(c) Any Reportable Event or "prohibited transaction" or the imposition
of a Withdrawal Liability, within the meaning of ERISA, in
connection with any Plan and, when known, any action taken by the
Internal Revenue Service, Department of Labor or Pension Benefit
Guaranty Corporation with respect thereto, and any adverse
development which occurs in any litigation, arbitration or
governmental investigation or proceeding previously disclosed to the
Lender which if determined adversely to the Borrower would
constitute a Material Adverse Occurrence; and
(d) Any Default or Event of Default under this Credit Agreement.
6.5. Compliance with Laws. Carry on its business activities in substantial
compliance with all applicable federal or state laws and all applicable
rules, regulations and orders of all governmental bodies and offices
having power to regulate or supervise its business activities. The
Borrower
12
shall maintain all material rights, liens, franchises, permits,
certificates of compliance or grants of authority required in the conduct
of its business. Without limiting the foregoing undertakings, the Borrower
specifically agrees that it will comply with all applicable Environmental
Laws and obtain and comply with all permits, licenses and similar
approvals required by any Environmental laws, and will not generate, use,
transport, treat, store or dispose of any Hazardous Substances in such a
manner as to create any liability or obligation under the common law of
any jurisdiction or any Environmental Law.
6.6. Books and Records. Keep books and records reflecting all of its
business affairs and transactions in accordance with GAAP consistently
applied and permit the Lender, and its representatives, at reasonable
times and intervals, to visit all of its offices, discuss its financial
matters with officers of the Borrower and its independent public
accountants (and by this provision the Borrower authorizes its independent
public accountants to participate in such discussions) and examine any of
its books and other corporate records.
6.7. Insurance. Procure and maintain insurance with financially sound and
reputable insurers, insurance with respect to the Collateral and its other
property against damage and loss by theft, fire, collision (in the case of
motor vehicles) and such other risks as are required by the Lender in an
amount equal to the fair market value thereof and, in any event, in an
amount sufficient to avoid the application of any coinsurance provisions
and naming the Lender loss payee. The Borrower shall also procure and
maintain other such insurance including workers compensation insurance,
liability and business interruption insurance, and other insurance as the
Lender may require and/or that may be required under any of the Loan
Documents, all in such amounts as may be required by the Lender. Policies
of all such insurance shall contain an agreement by the insurer to provide
the Lender thirty (30) days prior written notice of cancellation and an
agreement that the Lender's interest shall not be impaired or invalidated
by any act or neglect of the Borrower nor by the occupation of properties
owned or leased by the Borrower or other properties wherein the Collateral
is located for purposes more hazardous than those permitted by such
policies. The Borrower shall provide evidence of such insurance and the
policies of insurance or copies thereof to the Lender upon request.
6.8. Maintain Property. Maintain and keep its assets, property and
equipment in good repair, working order and condition and from time to
time make or cause to be made all needed renewals, replacements and
repairs.
6.9. Conduct of Business. Continue to engage primarily in the business
being conducted on the date of this Credit Agreement.
6.10. Equity Ratio. Maintain as of each calendar month an Equity to Asset
Ratio of not less than .20:1.0.
6.11. Further Assurances. The Borrower agrees upon reasonable request by
the Lender to execute and deliver such further instruments, deeds and
assurances, including financing statements under the Uniform Commercial
Code of Minnesota and/or any other relevant states, and to do such further
acts as may be necessary or proper to carry out more effectively the
purposes of this Credit Agreement and the Loan Documents and, without
limiting the foregoing, to make subject to the liens and security
interests of the Security Agreement and any other of the Loan Documents
any property agreed to be subjected, or intended to be subject, or covered
by the granting clauses of the Security Agreement or such other of the
Loan Documents.
13
6.12. ERISA Compliance. Comply in all material respects at all times with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder.
7. NEGATIVE COVENANTS
As long as there remains any amount outstanding under the Seasonal Notes
or the Lender has any obligation to make Advancesunder the Seasonal Loan
Commitment, the Borrower shall not, unless waived in writing by the Lender:
7.1. Consolidation; Merger; Sale of Assets; Acquisitions. Consolidate with
or merge into or with any other entity; or sell (other than sales of
inventory in the ordinary course of business), transfer, lease or
otherwise dispose of all or a substantial part of its assets; or acquire a
substantial interest in another Person either through the purchase of all
or substantially all of the assets of that Person or the purchase of a
controlling equity interest in that Person.
7.2. Liens. Create, incur, assume or suffer to exist any Lien or any of
its property, real or personal, except (a) Liens in favor of the Lender;
(b) Liens disclosed to and approved of in writing by the Lender; (c) Liens
for current taxes and assessments which are not yet due and payable; and
(d) purchase money security interests to secure the indebtedness permitted
under Section 7.3 below.
7.3. Additional Indebtedness. Create, incur, assume or suffer to exist any
indebtedness except: (a) indebtedness in favor of the Lender; (b) current
liabilities incurred in the ordinary course of business; (c) indebtedness
existing on the date of this Credit Agreement and disclosed to and
approved of in writing by the Lender; and (d) purchase money indebtedness
incurred in connection with the acquisition of fixed assets not to exceed
$500,000 in the aggregate during any fiscal year of the Borrower.
7.4. Guaranties. Assume, guarantee, endorse or otherwise become liable in
connection with the indebtedness of any other person or entity except
endorsements of negotiable instruments for deposit or collection in the
ordinary course of business.
7.5. Change in Ownership or Business. Permit a material change in (a) the
ownership or management of the Borrower as in effect on the date of this
Credit Agreement, or (b) the line of business presently engaged in by the
Borrower.
7.6. Dividends. Declare or pay any dividends, purchase, redeem, retire or
otherwise acquire for value any of its capital stock now or hereafter
outstanding, return any capital to its stockholders as such, or make any
distribution of assets to its stockholders as such, at any time any
Default or Event of Default has occurred and is continuing.
7.7. Investments; Subsidiaries. The Borrower will not purchase or hold
beneficially any stock or other securities or evidences of indebtedness
of, make or permit to exist any loans or advances to, or create or acquire
any Subsidiary or make any investment or acquire any interest whatsoever
in, any other Person, except:
(a) Investments in direct obligations of the United States of America or
any agency or instrumentality thereof whose obligations constitute
the full faith and credit obligations of the United States of
America having a maturity of one (1) year or less, commercial paper
issued by a U.S. corporation rated "A-1" or "A-2" by Standard &
Poor's Ratings Services or "P-1" or "P-2" by Xxxxx'x Investors
Service, investments in money market mutual funds whose underlying
assets are exclusively investments which would otherwise be
permitted
14
investments under this Section 7.6(a), or repurchase agreements,
certificates of deposit or bankers' acceptances having a maturity of
one (1) year or less issued by members of the Federal Reserve System
having deposits in excess of $500,000,000 (which certificates of
deposit or bankers' acceptances are fully insured by the Federal
Deposit Insurance Corporation);
(b) Travel advances or loans to officers and employees of the Borrower
(not including contracts made in the ordinary course of business
with any such officers or employees) not exceeding at any one time
an aggregate of $25,000;
(c) Advances in the form of progress payments, prepaid rent or security
deposits;
(d) Existing investments as described in the financial statements
previously delivered to the Lender;
(e) Investments constituting transactions made in the ordinary course of
business of the Borrower;
(f) Investments in wholly-owned subsidiaries of the Borrower existing as
of the date hereof; and
(g) Investments not otherwise permitted in this Section 7.7 not to
exceed $500,000 in the aggregate (on a book value basis) at any time
outstanding.
8. EVENTS OF DEFAULT AND REMEDIES
8.1. Events of Default. The term "Event of Default" shall mean any of the
following events:
(a) The Borrower shall default in the payment when due, or if payable on
demand, upon demand, of any principal or interest on the Subject
Notes; or
(b) The Borrower shall default (other than a default in payment under
subsection (a) above) in the due performance and observance of any
of the covenants contained in any of the Loan Documents and such
default shall continue unremedied for a period of thirty (30) days
after notice from the Lender to the Borrower thereof; or
(c) An event has occurred which would, at such time or with the passage
of time, constitute an "event of default" (however legally styled)
under any other loan obligation, lease, bond, debenture, security
agreement, note, or instrument or agreement evidencing Debt and any
applicable grace period specified in such agreement or evidence of
Debt has expired; or
(d) The Borrower shall become insolvent or generally fail to pay or
admit in writing its inability to pay its debts as they become due;
or the Borrower shall apply for, consent to, or acquiesce in the
appointment of a trustee, receiver or other custodian for itself or
any of its property, or make a general assignment for the benefit of
its creditors; or trustee, receiver or other custodian shall
otherwise be appointed for the Borrower or any of its assets; or any
bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding shall be commenced by or
against the Borrower; or the Borrower shall take any action to
authorize, or in furtherance of, any of the foregoing; or
15
(e) Any representation or warranty set forth in this Credit Agreement or
any other Loan Document shall be untrue in any material respect on
the date as of which the facts set forth are stated or certified; or
(f) The occurrence of any Material Adverse Occurrence; or
(g) A Reportable Event (as defined under ERISA) shall have occurred; or
(h) The rendering against the Borrower of a final judgment, decree or
order for the payment of money in excess of $250,000 (unless the
payment of such judgment in the amount of such excess is insured),
and the continuance of such judgment, decree or order unsatisfied
for any 30 consecutive day period without a stay of execution.
(i) The occurrence of a Change of Control; or
(j) The Lender shall in good xxxxx xxxx itself insecure.
8.2. Remedies; Cumulative. If an Event of Default described in Section
8.1(d) shall occur, the full unpaid balance of the Seasonal Notes
(outstanding balances plus accrued interest) and all other obligations of
the Borrower to the Lender shall automatically be due and payable without
declaration, notice, presentment, protest or demand of any kind (all of
which are hereby expressly waived) and the obligation of the Lender to
make additional Advances shall automatically terminate. If any other Event
of Default shall occur and be continuing, the Lender may terminate its
obligation to make additional Advances and may declare the outstanding
balance of the Seasonal Note and all other obligations of the Borrower to
the Lender to be due and payable without further notice, presentment,
protest or demand of any kind (all of which are hereby expressly waived),
whereupon the full unpaid amount of the Subject Notes and all other
obligations of the Borrower to the Lender shall become immediately due and
payable. Upon any Event of Default, the Lender shall be entitled to
exercise any and all rights and remedies available under any of the Loan
Documents or otherwise available at law or in equity to collect the
Subject Notes and all other obligations of the Borrower to the Lender, to
realize upon or otherwise pursue any and all Collateral and other security
(including without limitation any and all guarantees) for the loans under
this Credit Agreement and to, without notice to the Borrower, and without
further action, apply any and all monies owing by Lender to the Borrower
to the payment of the Subject Notes, and all other obligations of the
Borrower hereunder, in such order as the Lender elects (subject to Section
3.6).
9. MISCELLANEOUS
9.1. Waivers, Amendments. The provisions of the Loan Documents may from
time to time be amended, modified, or waived, if such amendment,
modification or waiver is in writing and signed by the Lender. No failure
or delay on the part of the Lender or the holder(s) of the Seasonal Note
in exercising any power or right under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or
the exercise of any other power or right. No notice to or demand on the
Borrower in any case shall entitle it to any notice or demand in similar
or other circumstances.
9.2. Notices. All communications and notices provided under this Credit
Agreement shall be in writing and addressed or delivered to the Borrower
or the Lender at their respective addresses shown on the first page
hereof, or to any party at such other address as may be designated by such
party in a written notice to the other parties. Such notices shall be
delivered by any of the
16
following means: (i) mailing through the United States Postal Service,
postage prepaid, by registered or certified mail, return receipt
requested; (ii) delivery by reputable overnight delivery service including
without limitation, and by way of example only: Federal Express, DHL,
Airborne Express and Express Mail; or (iii) delivery by reputable private
personal delivery service. Notices delivered in accordance with (i) above
shall be deemed delivered the second Business Day after deposit in the
mail; notices delivered in accordance with (ii) above shall be deemed
delivered the first Business Day after delivery to the delivery service;
and notices delivered in accordance with (iii) above shall be deemed
delivered the same Business Day as that specified by the notifying party
to the delivery service.
9.3. Costs and Expenses. The Borrower agrees to pay all expenses for the
preparation of this Credit Agreement, including exhibits, and any
amendments to this Credit Agreement as may from time to time hereafter be
required, and the reasonable attorneys fees and legal expenses of counsel
for the Lender, from time to time incurred in connection with the
preparation and execution of this Credit Agreement and any document
relevant to this Credit Agreement, any amendments hereto or thereto, and
the consideration of legal questions relevant hereto and thereto. The
Borrower agrees to reimburse Lender upon demand for, all out-of-pocket
expenses (including reasonable attorneys fees and legal expenses) in
connection with the Lender's enforcement of the obligations of the
Borrower hereunder or under the Note or any other of the Loan Documents,
whether or not suit is commenced including, without limitation, attorneys
fees, and legal expenses in connection with any appeal of a lower court's
order or judgment. The obligations of the Borrower under this Section 9.3
shall survive any termination of this Credit Agreement.
9.4. Interest Limitation. All agreements between the Borrower and the
Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced or secured thereby or otherwise, shall the rate of
interest charged or agreed to be paid to the Lender for the use,
forbearance, loaning or detention of such indebtedness exceed the maximum
permissible interest rate under applicable law ("Maximum Rate"). If for
any reason or in any circumstance whatsoever fulfillment of any provision
of this Credit Agreement and/or the Seasonal Note, any document securing
or executed in connection herewith or therewith, or any other agreement
between the Borrower and the Lender, at any time shall require or permit
the interest rate applied thereunder to exceed the Maximum Rate, then the
interest rate shall automatically be reduced to the Maximum Rate, and if
the Lender should ever receive interest at a rate that would exceed the
Maximum Rate, the amount of interest received which would be in excess of
the amount receivable after applying the Maximum Rate to the balance of
the outstanding obligation shall be applied to the reduction of the
principal balance of the outstanding obligation for which the amount was
paid and not to the payment of interest thereunder. This provision shall
control every other provision of any and all agreements between the
Borrower and the Lender and shall also be binding upon and applicable to
any subsequent holder of the Subject Notes.
9.5. Severability. Any provision of this Credit Agreement or any other of
the Loan Documents executed pursuant hereto which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such portion or unenforceability without
invalidating the remaining provisions of this Credit Agreement or such
Loan Document or affecting the validity or enforceability of such
provisions in any other jurisdiction.
9.6. Cross-References. References in this Credit Agreement or in any other
of the Loan Documents executed pursuant hereto to any Section are, unless
otherwise specified, to such Section of this Credit Agreement or such Loan
Document, as the case may be.
17
9.7. Headings. The various headings of this Credit Agreement or of any
other of the Loan Documents executed pursuant hereto are inserted for
convenience only and shall not affect the meaning or interpretation of
this Credit Agreement or such Loan Document or any provisions hereof or
thereof.
9.8. Governing Law; Venue; Waiver of Jury Trial. Each of the Loan
Documents shall be deemed to be a contract made under and governed by the
laws of the State of North Dakota (without regard to the laws of conflict
of any jurisdiction) as to all matters, including without limitation,
matters of validity, interpretation, construction, effect, performance and
remedies. The Borrower hereby consents to the personal jurisdiction of the
state and federal courts located in the State of North Dakota in
connection with any controversy related to this Credit Agreement and any
other of the Loan Documents, waives any argument that venue in such forums
is not convenient and agrees that any litigation instigated by the
Borrower against the Lender in connection herewith or therewith shall be
venued in the federal or state court that has jurisdiction over matters
arising in Fargo, North Dakota. THE BORROWER AND LENDER IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR ANY INSTRUMENT OR
DOCUMENT DELIVERED THEREUNDER.
9.9. Successors and Assigns. This Credit Agreement shall be binding upon
and shall inure to the benefit of the parities hereto and their respective
successors and assigns, except that Borrower may not assign or transfer
its rights hereunder without the prior written consent of Lender.
9.10. Recitals Incorporated. The recitals to this Credit Agreement are
incorporated into and constitute an integral part of this Credit
Agreement.
9.11. Multiple Counterparts. This Credit Agreement may be executed in one
or more counterparts and by the different parties on separate
counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same instrument.
9.12. Indemnity. In addition to the payment of expenses pursuant to
Section 9.3, the Borrower agrees to indemnify, defend and hold harmless
the Lender, and any of its participants, assignees, parent corporations,
subsidiary corporations, affiliated corporations and successor
corporations, and all present and future officers, directors, employees,
attorneys and agents of the foregoing (the "Indemnitees"), from and
against any of the following (collectively, "Indemnified Liabilities"):
(a) any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of the Loan Documents or the making of the
Advances or the Loans;
(b) any claims, loss or damage to which any Indemnitee may be subjected
if any representation or warranty contained in this Agreement proves
to be incorrect in any respect or as a result of any violation of
the covenant contained in this Agreement; and
(c) any and all other liabilities, losses, damages, penalties,
judgments, suits, claims, costs and expenses of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel) in connection with the foregoing and any
other investigative, administrative or judicial proceedings, whether
or not such Indemnitee shall be designated a party thereto, which
may be imposed on, incurred by or asserted against any such
Indemnitee, in any manner related to or arising out of or in
connection with the making of the
18
Advances or the Loans and the Loan Documents or the use or intended
use of the proceeds of the Advances or the Loans.
If any investigative, judicial or administrative proceeding arising from
any of the foregoing is brought against any Indemnitee, upon such
Indemnitee's request, the Borrower, or counsel designated by the Borrower
and satisfactory to the Indemnitee, will resist and defend such action,
suit or proceeding to the extent and in the manner directed by the
Indemnitee, at the Borrower's sole costs and expense. Each Indemnitee will
use its best efforts to cooperate in the defense of any such action, suit
or proceeding. If the foregoing undertaking to indemnify, defend and hold
harmless may be held to be unenforceable because it violates any law or
public policy, the Borrower shall nevertheless make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Borrower's
obligation under this Section 9.12 shall survive the termination of this
Credit Agreement and the discharge of the Borrower's other obligations
hereunder.
9.13. Complete Agreement. This Credit Agreement, together with the Loan
Documents, comprises the complete and integrated agreement of the parties
on the subject matter hereof and supersedes all prior agreements, written
or oral, on the subject matter hereof.
9.14. Assignments; Participants; Waiver of Claims. The Lender may sell,
assign or grant a participation in the Subject Notes, in whole or in part
and may disclose information relating to the Borrower or otherwise
relevant to this Agreement, to such Persons and their financing sources
("Assignees"). No Assignee shall be deemed a partner or agent of the
Lender. The Borrower irrevocably agrees that any claims it may have or may
assert against the Lender for breach of contract (or related tort claims)
shall be personal to the Lender and shall not be asserted by way of direct
claim or offset against any Assignee or against any Loan sold or assigned
to any Assignee and the Assignee hereby irrevocably waives any right it
otherwise may have, now or hereafter, to assert any such claim). The
Borrower acknowledges that the Assignees shall rely on the foregoing
waiver and agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
19
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
RDO MATERIAL HANDLING CO.,
a Minnesota corporation
By: /s/Xxxx X. Xxxx
-------------------------------
Its: President
-------------------------------
By: /s/Xxxxx X. Xxxxx
-------------------------------
Its: Secretary
-------------------------------
AG CAPITAL COMPANY,
a Delaware Corporation
By: /s/Xxx Xxxxx
-------------------------------
Its: President and General Manager
-------------------------------
20
