EXHIBIT 10.4
CREDIT AGREEMENT
THIS CREDIT AGREEMENT made and entered into as of June 1, 2000 (the
"Effective Date"), by and among RDO FINANCIAL SERVICES CO., a North Dakota
corporation (the "Borrower"), whose address is 1500 Radisson Tower, 000 0xx
Xxxxxx, Xxxxx, Xxxxx Xxxxxx 00000, NORWEST BANK NORTH DAKOTA, N.A., a national
banking association whose address is 000 Xxxx Xxxxxx, Xxxxx, Xxxxx Xxxxxx 00000,
as a lender hereunder ("Norwest") and AG CAPITAL COMPANY, a Delaware
corporation, whose address is 1500 Radisson Tower, 000 Xxxxx 0xx Xxxxxx, Xxxxx,
Xxxxx Xxxxxx 00000, as a lender hereunder and as agent for all the lenders
hereunder (the "Agent") (Norwest and Agent are sometimes hereunder individually
referred to as a "Lender", and collectively referred to as "Lenders").
RECITALS
1. The Borrower wishes to borrow funds from the Lenders and the Lenders
wish to make loans and advances to the Borrower; and
2. The Borrower and the Lenders mutually desire to set forth the terms
under which the Lenders 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 Lenders 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
Lenders agree as follows:
1. DEFINITIONS
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:
"ACC" means Ag Capital Company, a Delaware corporation.
"Advance" means any advance by the Lenders made under the Receivable
Commitment.
"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.
"After Tax Net Income" means the after tax net income of the Borrower
and its Subsidiaries but excluding the Borrower's corporate parents (as
determined on a consolidated basis) in accordance with GAAP.
"Agent" means ACC in its capacity as agent hereunder, and any successor
agent appointed pursuant to Section 9.15(j).
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"Assignee" has the meaning set forth in Section 9.14.
"Borrower" means RDO Financial Services Company, a North Dakota
corporation.
"Business Day" means any day on which all of the Lenders are 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
(a) 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 Lenders hold 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 Lenders.
"Credit and Collection Policy" means the Borrower's policies and
procedures for the origination, servicing, collection and enforcement of its
financial assets.
"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 of 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.
"Eligible Receivables" means all Eligible Retail Receivables and all
Eligible Store Receivables.
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"Eligible Foreign Receivables" means only such loans, retail
installment contracts or other indebtedness originated by RDOE prior to the date
of this Credit Agreement and owned by the Borrower, whether constituting chattel
paper, an instrument, an account or general intangible owed by any Person
outside the United States of America as the Majority Lenders, in their sole
discretion, shall deem eligible. Without limiting the discretion of the Majority
Lenders to consider any foreign receivable not to be an Eligible Foreign
Receivable, and by way of example only of types of foreign receivables that the
Majority Lenders will consider not to be Eligible Foreign Receivables,
notwithstanding any earlier classification of eligibility, the following foreign
receivables shall not be considered Eligible Foreign Receivables: (i) any
foreign receivable which is more than 90 days past due on any installment; (ii)
any foreign receivable as to which any warranty is breached; (iii) any foreign
receivable as to which the account debtor or other obligor disputes liability or
makes any claim; (iv) any foreign receivable owed by any officer, director or
shareholder of the Borrower or any of their relatives or any partnership,
corporation, association, joint venture or other business entity wholly or
partly owned or controlled directly or indirectly by any of them or any of their
relatives; (v) any foreign receivable owed by any Person as to whom a petition
in bankruptcy or other application for relief is filed under any bankruptcy,
reorganization, receivership, moratorium, insolvency or similar law; (vi) any
foreign receivable owed by any Person who makes an assignment for the benefit of
creditors, becomes insolvent, fails, suspends business, or goes out of business;
(vii) any foreign receivable owed by any Person if 10% or more in amount of
receivables owed by such Person to the Borrower are considered ineligible;
(viii) consignment receivables; (ix) bonded receivables; (x) any foreign
receivable constituting a retainage; (xi) any foreign receivable for goods which
have not been shipped or work which has not been fully performed; (xii) any
foreign receivable which is not 100% guaranteed by RDOE in form and substance
and on terms and conditions acceptable to the Majority Lenders; (xiii) any
foreign receivable owed by any Person with whose creditworthiness the Majority
Lenders become dissatisfied; and (xiv) any foreign receivable not subject to the
lockbox agreement referred to in Section 6.14 of this Credit Agreement.
In the event the Borrower owes any amount to any Person that owed a
foreign receivable to the Borrower, such amount owed by the Borrower shall be
deducted from that portion of the foreign receivable which would otherwise
qualify as an Eligible Foreign Receivable and only the difference thereof shall
be considered an Eligible Foreign Receivable. No foreign receivable which does
not qualify as a Eligible Foreign Receivable shall be considered a Foreign
Eligible Receivable unless the Majority Lenders, upon the written request of the
Borrower, state in writing that such foreign receivable is to be considered an
Eligible Foreign Receivable.
"Eligible Retail Receivables" means only such loans, retail installment
contracts or equipment leases originated by RDOE and owned by the Borrower,
whether constituting chattel paper, an instrument, an account or general
intangible owed by any Person as the Majority Lenders, in their sole discretion,
shall deem eligible. Without limiting the discretion of the Majority Lenders to
consider any retail receivable not to be an Eligible Retail Receivable, and by
way of example only of the types of retail receivables that the Majority Lenders
will not consider to be Eligible Retail Receivables, notwithstanding any earlier
classification of eligibility, the following retail receivables shall not be
considered Eligible Retail Receivables: (i) any retail
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receivable which is more than 120 days past due on any installment; (ii) any
retail receivable as to which any warranty is breached; (iii) any retail
receivable as to which the account debtor or other obligor disputes liability or
makes any claim; (iv) any retail receivable owed by any officer, director or
shareholder of the Borrower or any of their relatives or any partnership,
corporation, association, joint venture or other business entity wholly or
partly owned or controlled directly or indirectly by any of them or any of their
relatives; (v) any retail receivable owed by any Person as to whom a petition in
bankruptcy or other application for relief is filed under any bankruptcy,
reorganization, receivership, moratorium, insolvency or similar law; (vi) any
retail receivable owed by any Person who makes an assignment for the benefit of
creditors, becomes insolvent, fails, suspends business, or goes out of business;
(vii) any retail receivable owed by any Person if 10% or more in amount of
receivables owed by such Person to the Borrower are considered ineligible;
(viii) consignment receivables; (ix) any retail receivable which is the subject
matter of any suit or proceeding, or threatened suit or proceeding, before any
court or governmental department, commission, board, bureau, agency or
instrumentality; (x) any retail receivable which does not satisfy the
underwriting requirements of the Borrower as set forth in Exhibit "A" to this
Credit Agreement; (xi) any retail receivable for goods which have not been
shipped or work which has not been fully performed; (xii) any retail receivable
owed by any Person outside the United States of America, unless such receivable
is fully supported by an irrevocable letter of credit issued or confirmed by a
commercial bank in the United States of America that is acceptable to the
Majority Lenders, which letter of credit is assigned to the Lenders, all in form
and substance acceptable to the Majority Lenders; (xiii) any retail receivable
owed by any Person with whose creditworthiness the Majority Lenders become
dissatisfied; (xiv) any retail receivable in which the Lenders do not have a
perfected security interest constituting a first lien; (xv) any retail
receivable not subject to the lockbox agreement referred to in Section 6.14 of
this Credit Agreement.
In the event the Borrower owes any amount to any Person that owed a
retail receivable to the Borrower, such amount owed by the Borrower shall be
deducted from that portion of the retail receivable which would otherwise
qualify as an Eligible Retail Receivable and only the difference thereof shall
be considered an Eligible Retail Receivable. No retail receivable which does not
qualify as a Eligible Retail Receivable shall be considered a Eligible Retail
Receivable unless the Majority Lenders, upon the written request of the
Borrower, state in writing that such retail receivable is to be considered an
Eligible Retail Receivable.
"Eligible Repossessed Inventory" means all inventory and equipment
subject to an Eligible Receivable which has been repossessed by or on behalf of
the Borrower, valued at fair market value as the Majority Lenders, in their sole
discretion, shall deem eligible. Without limiting the discretion of the Majority
Lenders to consider any repossessed inventory not to be Eligible Repossessed
Inventory, and by way of example only of types of repossessed inventory that the
Majority Lenders will consider not to be Eligible Repossessed Inventory,
notwithstanding any earlier classification of eligibility, the following types
of repossessed inventory shall not be considered Eligible Repossessed Inventory:
(i) any repossessed inventory that is not in the Borrower's physical possession
or control or in the physical possession and control of RDOE, as agent for the
Borrower; (ii) any repossessed inventory which is obsolete or not useable by the
Borrower; (iii) any repossessed inventory not held for sale by the Borrower, or
by RDOE on behalf of the Borrower, in the ordinary course of business or which
is not saleable
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in the ordinary course of business; (iv) any repossessed inventory in which the
Lenders do not have a first perfected security interest; (v) any repossessed
inventory not physically located within the lower 48 states of the United States
of America; and (vi) any repossessed inventory in transit.
"Eligible Store Receivables" means only such Succe$$Link program
receivables originated by RDOE (or the Borrower) and owned by the Borrower,
whether constituting chattel paper, an instrument, an account or general
intangible owed by any Person as the Majority Lenders, in their sole discretion,
shall deem eligible. Without limiting the discretion of the Majority Lenders to
consider any store receivable not to be an Eligible Store Receivable, and by way
of example only of types of store receivables that the Majority Lenders will
consider not to be Eligible Store Receivables, notwithstanding any earlier
classification of eligibility, the following store receivables shall not be
considered eligible store receivables: (i) any store receivable which is more
than 120 days past due on any installment; (ii) any store receivable as to which
any warranty is breached; (iii) any store receivable as to which the account
debtor or other obligor disputes liability or makes any claim; (iv) any store
receivable owed by any officer, director or shareholder of the Borrower or any
of their relatives or any partnership, corporation, association, joint venture
or other business entity wholly or partly owned or controlled directly or
indirectly by any of them or any of their relatives; (v) any store receivable
owed by any Person as to whom a petition in bankruptcy or other application for
relief is filed under any bankruptcy, reorganization, receivership, moratorium,
insolvency or similar law; (vi) any store receivable owed by any Person who
makes an assignment for the benefit of creditors, becomes insolvent, fails,
suspends business, or goes out of business; (vii) any store receivable owed by
any Person if 10% or more in amount of accounts receivable owed by such Person
to the Borrower are considered ineligible; (viii) consignment receivables; (ix)
any store receivable which is the subject matter of any suit or proceeding, or
threatened suit or proceeding, before any court or governmental department,
commission, board, bureau, agency or instrumentality; (x) any store receivable
which does not satisfy the underwriting requirements of the Borrower as set
forth in Exhibit "A" to this Credit Agreement; (xi) any store receivable for
goods which have not been shipped or work which has not been fully performed;
(xii) any store receivable owed by any Person outside the United States of
America, unless such receivable is fully supported by an irrevocable letter of
credit issued or confirmed by a commercial bank in the United States of America
that is acceptable to the Majority Lenders, which letter of credit is assigned
to the Lenders, all in form and substance acceptable to the Majority Lenders;
(xiii) any store receivable owed by any Person with whose creditworthiness the
Majority Lenders become dissatisfied; and (xiv) any store receivable not subject
to the lockbox agreement referred to in Section 6.14 of this Credit Agreement.
In the event the Borrower owes any amount to any Person that owed a
store receivable to the Borrower, such amount owed by the Borrower shall be
deducted from that portion of the store receivable which would otherwise qualify
as an Eligible Store Receivable and only the difference thereof shall be
considered an Eligible Store Receivable. No store receivable which does not
qualify as a Eligible Store Receivable shall be considered a Eligible Store
Receivable unless the Majority Lenders, upon the written request of the
Borrower, state in writing that such store receivable is to be considered an
Eligible Store Receivable.
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"Environmental Laws" has the meaning set forth in Section 5.17.
"Equity Ratio" means the ratio of the total equity of the Borrower and
its Subsidiaries (but excluding the Borrower's corporate parents) to the total
assets of the Borrower and its Subsidiaries (but excluding the Borrower's
corporate parent), as determined on a consolidated basis in accordance with
GAAP.
"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, and certain other
accounting principles which have substantial authoritative support.
"Hazardous Substance" has the meaning set forth in Section 5.17 hereof.
"Lenders" means Ag Capital Company, a Delaware corporation, and Norwest
Bank North Dakota, N.A., a national banking association, or their respective
successors and assigns.
"LIBOR" for any Business Day during any calendar month means the quoted
rate of interest per annum determined by the British Bankers Association as the
average of interbank offered rates for dollar deposits to be the arithmetic mean
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 Receivable Loan.
"Loan Documents" means this Credit Agreement, the Subject Notes and the
Security Agreement, lockbox agreement and such other documents as the Lenders
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.
"Majority Lenders" means Lenders with an aggregate Percentage of at
least 66-2/3%.
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"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 reasonable judgment of
the Majority Lenders, 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 30, 2001, unless extended in writing by all the
parties hereto in their sole discretion.
"Percentage" means, as to any Lender, the percentage derived by
dividing such Lender's Receivable Commitment by the sum of all Lenders'
Receivable Commitments.
"Person" means any natural person, corporation, firm, association,
government, governmental agency or any other entity, whether acting in an
individual fiduciary or other capacity.
"RDOE" means RDO Equipment Company, a Delaware corporation and its
subsidiaries.
"Receivable Borrowing Base" means at any time the lesser of (a)
$20,000,000 or (b) the sum of (i) ninety percent (90%) of the Borrower's
Eligible Retail Receivables; (ii) eighty-five percent (85%) of the Borrower's
Eligible Store Receivables; (iii) seventy-five percent (75%) of the Borrower's
Eligible Foreign Receivables; and (iv) the lesser of (A) seventy-five percent
(75%) of the Borrower' Eligible Repossessed Inventory or (B) the sum of
$500,000.
"Receivable Borrowing Base Certificate" means the certificate in the
form attached hereto which sets forth the Receivable Borrowing Base as of the
date indicated thereon.
"Receivable Commitment" means the maximum principal amount each Lender
is obligated to extend as part of the Advances up to the amount set forth next
to the signature line of each such Lender hereto.
"Receivable Loan" means, at any date, the aggregate amount of all
Advances made by the Lenders pursuant to Section 2 hereof.
"Receivable Note(s)" means, individually or collectively, the
Receivable Note(s), dated June 1, 2000, made by the Borrower payable to the
order of each of the Lenders, the aggregate original principal amount of which
is Twenty Million Dollars ($20,000,000), and the individual original principal
amount of which is the Receivable Commitment of the applicable Lender, together
with all extensions, renewals, modifications, substitutions and changes in form
thereof effected by written agreement between the Borrower and all of the
Lenders.
"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 any of the Lenders (or any such Lender's 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
Lenders (or their successors or assigns) applicable to, the Lenders (or their
successors or assigns) of any
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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 Lenders (or
their successors or assigns).
"Security Agreement" means the Security Agreement, dated May 31, 2000,
executed by the Borrower in favor of the Lenders, 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 Lenders.
"Subject Note(s)" means the Receivable Note(s).
"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.
"Succe$$Link" means the program operated by the Borrower, for the
benefit of RDOE's customers, which program consists of a revolving line of
credit/open item account used for the purchase of parts, service and short-term
rental of equipment from RDOE by its various customers.
"Termination Date" means the earlier of (a) June 30, 2001 (unless
extended in writing by the parties hereto in their sole discretion); or (b) the
date upon which the Lenders' willingness to consider making Advances is
terminated pursuant to Section 2.7.
2. THE RECEIVABLE LOAN
2.1. Committed Receivable Loans. Subject to the Conditions of Lending
set forth in Section 4 hereof and the other terms and conditions set forth in
this Credit Agreement, each Lender severally agrees to make Advances to the
Borrower up to its Receivable Commitment from time to time from the date of this
Credit Agreement through the Termination Date; provided, however, that such
Lender shall not be obligated to make any such Advance, if after giving effect
to such Advance, the aggregate outstanding principal amount of all Advances
would exceed the then current Receivable Borrowing Base. Within the limits set
forth above, the Borrower may borrow, repay and request additional Advances
under the Receivable Notes.
2.2. The Receivable Note(s). All Advances pursuant to the Receivable
Commitments shall be evidenced by, and the Borrower shall repay such Advances to
each Lender in accordance with, the terms of the Receivable Note(s).
2.3. Records of Advances and Payments. The aggregate amount of all
unpaid Advances made pursuant to the Receivable Commitments set forth on the
records of the Lenders shall be rebuttable presumptive evidence of the principal
amount owing and unpaid on the Receivable Note(s).
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2.4. Payments and Interest on the Receivable Note.
(a) The Borrower agrees to pay interest on the outstanding
principal amount of the Receivable Note(s) from the date
hereof until paid in full at a rate per annum equal to the one
month LIBOR plus 240 basis points, determined two (2) Business
Days prior to the first Business Day of the then current
calendar week and fixed until the first Business Day of the
following calendar week.
(a) After the date hereof, interest accrued on the Receivable
Note(s) through the end of each calendar month shall be
payable on the first (1st) day of the following calendar
month, commencing July 1, 2000, and at Maturity, when the
entire outstanding principal amount and accrued interest shall
be due and payable. Interest accrued after Maturity shall be
payable upon demand.
(a) [Intentionally omitted].
(a) The Borrower shall also be required to immediately pay such
amount of principal outstanding on the Receivable Note(s) as
is necessary to cause the aggregate amount outstanding thereon
to not exceed the amount of the Receivable Borrowing Base set
forth on the most recent Receivable Borrowing Base Certificate
dated no more than 7 days prior unless such amount outstanding
is not greater than the most recently submitted Receivable
Borrowing Base Certificate.
2.5. Manner of Borrowing.
(a) The Borrower shall give the Agent written or telephonic notice of each
requested Advance under the Receivable Commitment by not later than
12:00 p.m. (Minneapolis time) on the date such Advance is to be made.
(b) Any request for an Advance under the Receivable Loan shall be deemed a
representation by the Borrower that the amount of the requested
Advance, when added to the Receivable Loan outstanding amount, would
not exceed the Receivable Borrowing Base. If the Receivable Loan
outstanding amount shall at any time exceed the Receivable Borrowing
Base, the Borrower shall immediately prepay Advances in the amount
equal to such excess, without notice or demand by the Lenders.
(a) Upon receipt of notice of a request for an Advance described in Section
2.5(a) above, the Agent will promptly notify each Lender thereof and of
the amount of such Lender's Percentage of such Advance.
(a) Each Lender will make the amount of its Percentage of such Advance
available to the Agent for the account of the Borrower at the Agent's
office by 2:00 p.m. (Minneapolis time) on the date requested for such
Advance. The proceeds of all such requested Advances will then be made
available to the Borrower by the Agent by deposit thereof to an account
designated by the Borrower or as otherwise indicated in the Borrower's
corresponding request;
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provided, that the initial Advances hereunder shall be used to replace,
but not satisfy, those certain promissory notes given by the Borrower
to the Lender's dated July 15, 1999.
(a) Unless the Agent shall have received notice from a Lender with respect
to any Advance, prior to any proposed Advance, that such Lender will
not make available to the Agent as and when required hereunder for the
account of the Borrower the amount of that Lender's Percentage of such
Advance, the Agent may assume that each Lender has made such amount
available to the Agent in immediately available funds on the date
required and the Agent may (but shall not be so required to), in
reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent any Lender shall not
have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available
to the Borrower such amount, the Lender shall on the next Business Day
following the date of such Advance make such amount available to the
Agent, together with interest as payable under the Receivable Notes for
and determined as of each day during such period. A notice of the Agent
submitted to any Lender with respect to amounts owing under this
paragraph shall be conclusive, absent manifest error. If such amount is
not made available to the Agent on the next Business Day following the
date of the Advance, the Agent shall notify the Borrower of such
failure to fund and, upon demand by the Agent, the Borrower shall pay
such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Advance,
at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Advance.
(a) The failure of any Lender to make its Percentage of any Advance as
required shall not relieve any other Lender of any obligation hereunder
to make its Percentage of any Advance, but no Lender shall be
responsible for the failure of any other Lender to make its Percentage
of any Advance to be made by such other Lender on any date.
(a) If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of any part of any Advance made by it, any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Percentage of such Advance (or
other share contemplated hereunder) of payments on account of the
Advances obtained by all the Lenders, such Lender shall forthwith (a)
notify the Agent of such fact, and (b) purchase from the other Lenders
such participations in the Advances made by them as shall be necessary
to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and
each other Lender shall repay to the purchasing Lender the purchase
price paid therefor, together with an amount equal to such Lender's
percentage (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so
recovered from the
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purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The
Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this paragraph may, to the fullest extent
permitted by law, exercise all its rights of payment (including the
right of set-off, but subject to Section 9.16) with respect to such
participation as fully as if such Lender were the direct creditor of
the borrower in the amount of such participation. The Agent will keep
records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased pursuant to this paragraph
and will in each case notify the Lenders following any such purchases
or repayments.
(a) All Advances and repayments shall be effected so that after giving
effect thereto all Loans shall be pro rata among the Lenders according
to their Percentages.
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 Receivable Note(s) to the Agent for the ratable account of
the Lenders at the Agent's office shown on the first page hereof (or to such
other locations as may from time to time be specified by the Agent). The Agent
will promptly distribute to each Lender its percentage of such payment in like
funds received.
2.7. Termination. The obligation of the Lenders' to make Advances under
the Receivable Commitment shall terminate:
(a) Upon receipt by the Lenders of three (3) days' written notice of
termination from the Borrower given at any time when no amount is
outstanding under the Receivable Note;
(a) Immediately and without further action upon the occurrence of an Event
of Default of the nature referred to in Subsection 8.10; or
(a) Immediately when any Event of Default (other than one of the nature
specified in Subsection 8.10) shall have occurred and be continuing and
either (i) the Majority Lenders shall have demanded payment of the
Receivable Note(s) or (ii) the Majority Lenders shall elect to
terminate any such future consideration by giving notice to Borrower.
3. GENERAL PROVISIONS
3.1. Computation of Interest.
(a) All computations of interest on the outstanding principal amount of
each
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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. Each
change in the interest rate payable on each Subject Note due to a
change in LIBOR shall take place simultaneously with the corresponding
change in LIBOR. Whenever any payment to be made by or to the Lenders
or other holder(s) of any Subject 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.
(a) No provision of this Credit Agreement or any Subject Note shall require
the payment or permit the collection of interest in excess of the rate
permitted by applicable law.
3.2. Late Payment. Notwithstanding anything to the contrary herein, the
Borrower shall be obligated to pay the greater of 1% of the past due amount or
$25.00 with respect to any installment on any Subject Note paid after the date
it is due, to compensate Lenders 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 Lenders under each 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 Lenders as security for the obligations to the Lenders.
3.4. [Intentionally omitted]
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 Lenders within fifteen (15) days of demand
therefor, Borrower's pro rata share (based on the amount of all loans
outstanding from the Lenders) of any such amount required to compensate the
Lenders or such other Persons for such costs.
3.6. Collateral Allocation. To the extent the Lenders receive proceeds
of any Collateral after the exercise of remedies provided for in Section 8.2 it
shall be applied first to any obligations of the Borrower relating to or arising
under the Receivable Note(s) and Loan, and then to all the other obligations to
the Lenders under the Loan Documents.
3.7. Loan Agreement Reference. Any reference in any 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, supplemented
or restated. Any conflict between the terms of any Subject Note, and the terms
of this Credit Agreement shall be resolved in favor of the terms of this Credit
Agreement.
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4. CONDITIONS OF LENDING
4.1. Conditions Precedent. This Credit Agreement and the Lenders'
obligations hereunder are subject to receipt, on or prior to the date hereof, by
the Lenders of the following, each to be in form and substance satisfactory to
all the Lenders, unless all the Lenders waive 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;
(a) The Security Agreement and corresponding financing statement(s)
appropriately completed and duly executed by the Borrower;
(a) A current UCC financing statement search, federal and state tax lien
search, judgment and bankruptcy search, reflecting results satisfactory
to the Lenders, on the Borrower from the appropriate filing offices as
required by the Lenders;
(a) 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;
(a) 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;
(a) 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;
(b) 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;
(a) 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;
(a) A favorable opinion of counsel for the Borrower, satisfactory to the
Lenders, as to the matters set forth in Subsections 5.1, 5.2, 5.3, 5.5,
5.7 and 5.9 together with an opinion that the Eligible Store
Receivables do not constitute chattel paper, as defined by the Uniform
Commercial Code, except for obligations under rental or credit purchase
agreements for goods.
(a) Policies or certificates of insurance evidencing insurance coverage
required under this Credit Agreement and any other of the Loan
Documents;
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(a) A completed Receivable Borrowing Base Certificate dated as of the last
Business Day of the last day of the week most recently ended prior to
the date hereof and a completed Receivable Borrowing Base Certificate
dated as of the last day of the month most recently ended prior to the
date hereof;
(a) An intercreditor agreement among the Lenders and Associates Leasing,
Inc., and Associates Commercial Corporation, all on terms and
conditions satisfactory to the Lenders;
(a) Evidence that RDOE (but not RDOE's subsidiaries) has guaranteed all
Eligible Foreign Receivables, whether now owned by Borrower or
hereafter acquired, in form and substance and on terms and conditions
acceptable to the Lenders; and
(a) Such other documents, information and actions as any Lender may
reasonably request.
4.2. Conditions Precedent to all Loans and Advances. The obligation of
the Lenders to make any Loan or Advance hereunder, including the initial Loans
or Advances, is subject to the satisfaction of each of the following, unless
waived in writing by the Majority Lenders:
(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 Loan or Advance (as if made on the date of such Loan or Advance,
except to the extent that such representations and warranties expressly
relate solely to an earlier date).
(a) No Default or Event of Default shall have occurred and be continuing.
(a) 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 Lenders and which,
if determined adversely to the Borrower, would have a material adverse
effect on the operation or financial condition of the Borrower.
(a) No Default or Event of Default shall result from the making of any such
Loan or Advance.
(a) No Material Adverse Occurrence shall have occurred and be continuing.
(a) Each request for a Loan or 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
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such statements expressly relate solely to an earlier date.
5. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders 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 North Dakota,
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 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 Lenders 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 Lenders, 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
15
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 Lenders, 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 Lenders under this Credit Agreement and as permitted
under Section 7.3.
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.
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 Lenders 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 Lenders 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
16
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 or other relevant state
statutes) 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 or other relevant state statutes) 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 Notes and the
making of the Loans and Advances evidenced thereby and any investigation at any
time made by or on behalf of Lenders 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:
(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.
(i) "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.
(i) "Premises" means all premises where the Borrower conducts its business
and has any rights of possession.
17
(a) 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
Lenders 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.
(a) 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.
(b) 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 Lenders. Borrower has informed
the Lenders of any Subsidiaries acquired after the date hereof as permitted by
this Credit Agreement.
6. AFFIRMATIVE COVENANTS
As long as there remains any amount outstanding under the Subject Notes
or if later, until the Termination Date, the Borrower shall, unless waived in
writing by the Majority Lenders:
6.1. Financial Statements and Reports. Furnish to the Lenders, at the
times set forth below, the following financial statements, reports and
information all in form and content satisfactory to the Lenders:
(a) As soon as available, but in any event within one hundred twenty (120)
days after each fiscal year end, audited financial statements of RDOE
with appropriate detail of the Borrower prepared on a consolidating and
consolidated basis, certified by certified public accountants
satisfactory to the Majority Lenders to have been prepared in
accordance with GAAP consistently applied;
(a) As soon as available, but in any event within ninety (90) days after
each fiscal year end, an annual operating budget and cash flow forecast
for the Borrower and its Subsidiaries for the fiscal year immediately
following such fiscal year end;
(a) As soon as available, but in any event within thirty (30) days after
the last day of each monthly fiscal period (i) unaudited financial
statements of the Borrower and its Subsidiaries consisting of a balance
sheet and the related
18
statements of income, retained earnings and cash flows prepared on a
consolidated basis dated as of the last Business Day of such monthly
fiscal period in form and detail as reasonably required by the Majority
Lenders certified by the chief financial officer of the Borrower to
have been prepared from the records of the Borrower on the basis of
accounting principles consistently applied by the Borrower; (ii) a
credit operations report prepared by the Borrower that includes, but is
not limited to, portfolio delinquency trends and analysis, repossessed
assets and inventory, delinquency roll-ups and charge back information;
(iii) a report detailing the top 50 Succe$$Link preferred accounts and
the top 100 Succe$$Link balance forward accounts indicating the
percentage as a number of total accounts and the percentage of total
outstanding dollars; (iv) a report detailing the top 50 Persons having
more than one account with the Borrower indicating the percentages or
number of total accounts and the percentage of total outstanding
dollars; and (v) a portfolio delinquency report to include a separate
schedule of the categories of notes, loans, leases and receivables
pledged to the Lenders which report shall include, but not be limited
to, a breakdown of 30, 60 and 90 day delinquencies.
(a) Within 30 days of each calendar month a completed Receivable Borrowing
Base Certificate, in the form of Exhibit B attached hereto, dated as of
the last day of such calendar month.
(a) Within 7 days of the last Business Day each week, a completed
Receivable Borrowing Base Certificate, in the form of attached Exhibit
C attached hereto, dated as of the last Business Day of such week.
(a) 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;
(a) 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 any 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
19
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 Lenders 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;
(a) The commencement of any material arbitration or governmental proceeding
or investigation not previously disclosed to the Lenders 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;
(a) 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 Lenders which if determined adversely to
the Borrower would constitute a Material Adverse Occurrence; and
(a) 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
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; Investigation.
(a) Keep books and records reflecting all of its business affairs and
transactions in accordance with GAAP consistently applied and permit
the Lenders, and their 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
20
any of its books and other corporate records.
(a) Borrower agrees to permit Xxxxx Fargo Business Credit to review and
analyze the Collateral semi-annually (at the Borrower's expense not to
exceed $7,500 annually) and acknowledges and agrees that Norwest may,
based thereon, and upon thirty (30) Business Days prior notice to the
Borrower, thereafter unilaterally amend the definition of Receivable
Borrowing Base.
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 Lenders 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 Agent 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 Majority Lenders may require and/or that
may be required under any of the Loan Documents, all in such amounts as may be
required by the Majority Lenders. Policies of all such insurance shall contain
an agreement by the insurer to provide the Agent thirty (30) days prior written
notice of cancellation and an agreement that the Agent'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 any 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. Custodial Agreement. Within twenty-five (25) days of the date of
this Credit Agreement, the Borrower shall have entered into a custodial
agreement with the Agent and RDOE, on terms and conditions satisfactory to the
Lenders, whereby RDOE shall agree to maintain custody and control of chattel
paper constituting Collateral for the benefit of the Lenders.
6.11. Further Assurances. The Borrower agrees upon reasonable request
by any Lender to execute and deliver such further instruments, deeds and
assurances, including financing statements under the Uniform Commercial Code of
North Dakota 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.
21
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.
6.13. Credit and Collection Policy. Borrower will maintain, perform and
comply with all material provisions of the Credit and Collection Policy, will
make no change thereto without the prior written consent of the Lenders and will
implement all changes thereto reasonably proposed by Lenders.
6.14. Lockbox Agreement. Within 120 days of the date of this Credit
Agreement, the Borrower shall have entered into a lockbox agreement with the
Bank, and its related entities, whereby all receivables of the Borrower,
including all Eligible Retail Receivables, are subject to such lockbox agreement
all on terms and conditions satisfactory to the Lenders. The Borrower shall
maintain and remain in compliance with the lockbox agreement until all of the
obligations of the Borrower owing the Lenders are paid in full.
7. NEGATIVE COVENANTS
As long as there remains any amount outstanding under the Subject Notes
or if later, until the Termination Date, the Borrower shall not, unless waived
in writing by the Majority Lenders:
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 or in connection with the Purchase
and Contribution Agreement), 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 Lenders
pursuant to this Credit Agreement; (b) Liens set forth on Schedule 7.2; (c)
Liens for current taxes and assessments which are not yet due and payable; (d)
sales of assets in connection with the Contract Purchase Program Agreement and
(e) Liens contemplated under Section 7.3(d).
7.3. Additional Indebtedness. Create, incur, assume or suffer to exist
any indebtedness except: (a) indebtedness in favor of the Lenders under this
Credit Agreement; (b) current liabilities incurred in the ordinary course of
business; (c) indebtedness existing on the date of this Credit Agreement and set
forth in Schedule 7.3; and (d) unsecured intercompany loans from RDOE.
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
22
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 without the prior written
approval of all the Lenders, except that provided no Default or Event of Default
has occurred or is occurring under this Credit Agreement, Borrower may allocate
earnings to RDOE.
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 investments under this
Section 7.7(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);
(a) 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;
(a) Advances in the form of progress payments, prepaid rent or security
deposits;
(a) Existing investments as described in the financial statements
previously delivered to the Lenders and investments described in
Section 7.3(d);
(a) Investments constituting transactions made in the ordinary course of
business of the Borrower.
(a) Investments in wholly-owned subsidiaries of the Borrower existing as of
the date hereof; and
(a) Investments not otherwise permitted in this Section 7.7 not to exceed
$250,000 in the aggregate (on a book value basis) at any time
outstanding.
7.8. Equity Ratio. Not permit its Equity Ratio to be less than 0.15 to
1.00 as measured
23
at the end of each fiscal quarter of the Borrower.
7.9. After Tax Net Income. Not permit its After Tax Net Income to be
less than One Dollar ($1) as measured at the end of each fiscal year of the
Borrower.
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 any of the Subject
Notes; or
(a) 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
(other than a default of the covenants in Section 7.8 or 7.9, as to
which no notice or additional time shall be required to constitute an
Event of Default) shall continue unremedied for a period of thirty (30)
days after notice from the Majority Lenders to the Borrower thereof; or
(a) 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 of the Borrower evidencing Debt and
any applicable grace period specified in such agreement or evidence of
Debt has expired; or
(a) 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
(a) 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
(a) The occurrence of any Material Adverse Occurrence; or
(a) A Reportable Event (as defined under ERISA) shall have occurred; or
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(a) The rendering against the Borrower of a final judgment, decree or order
for the payment of money in excess of $500,000 (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.
(a) The occurrence of a Change of Control; or
(a) The Majority Lenders shall in good xxxxx xxxx themselves insecure. 8.2.
Remedies; Cumulative. If an Event of Default described in Section 8.1
(d) shall occur, the full unpaid balance of each of the Subject Notes
(outstanding balance plus accrued interest) and all other obligations
of the Borrower to the Lenders shall automatically be due and payable
without declaration, notice, presentment, protest or demand of any kind
(all of which are hereby expressly waived). If any other Event of
Default shall occur and be continuing, the Agent shall, at the request
of the Majority Lenders, or may, with the consent of the Majority
Lenders declare the outstanding balance of the each of the Subject
Notes and all other obligations of the Borrower to the Lenders 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 each of the Subject Notes and all other
obligations of the Borrower to the Lenders shall become immediately due
and payable. Upon any Event of Default, the Agent shall, at the request
of, or with the consent of the Majority Lenders 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 Lenders,
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
the Lenders to the Borrower to the payment of the Subject Notes, and
all other obligations of the Borrower hereunder, in such order as the
Majority Lenders elect (subject to Section 3.6).
9. MISCELLANEOUS
9.1. Waivers, Amendments. Except as otherwise specifically provided for
herein, no amendment or waiver of any provision of this Credit Agreement or any
other Loan Document, and no consent with respect to any departure therefrom by
the Borrower, shall be effective unless the same shall be in writing and signed
by the Majority Lenders (or by the Agent at the written request of the Majority
Lenders) and the Borrower, and then such waiver shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Lenders, the Borrower and acknowledged by the Agent, do any of
the following:
(a) increase or extend the Commitment of any Lender;
(a) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any Loan Document;
25
(a) reduce the principal of, or the rate of interest specified herein on
any Loan, or of any fees or other amounts payable hereunder or under
any Loan Document;
(a) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Lenders
or any of them to take any action under any Loan Document;
(b) amend this Section 9.1 or Section 2.5(g); or
(a) release any Collateral or otherwise amend the Security Agreement;
and, provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
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
Lenders 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
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 Lenders, 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 Lenders upon demand for,
all out-of-pocket expenses (including reasonable attorneys fees and legal
expenses) in connection with the Lenders' enforcement of the obligations of the
Borrower hereunder or under any Subject 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
Lenders 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 Lenders for the use, forbearance, loaning or
26
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
Subject Notes, any document securing or executed in connection herewith or
therewith, or any other agreement between the Borrower and the Lenders, 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 Lenders 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 Lenders and
shall also be binding upon and applicable to any subsequent holder of any 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.
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 Lenders 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 LENDERS
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 parties hereto and their respective
successors and assigns, except that
27
Borrower may not assign or transfer its rights hereunder without the prior
written consent of all the Lenders.
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
Lenders, and any of their 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;
(a) 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
(a) 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 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.
28
9.13. Prior Agreement Superseded; Complete Agreement. This Credit
Agreement amends, restates, and supersedes the credit agreement dated as of July
15, 1999, between the Borrower and the Lenders. The Borrower shall be bound by
and shall continue to comply with all documents previously executed and
delivered to the Bank in connection with the credit agreement dated July 15,
1999, including, but not limited to, security agreements and financing
statements, except to the extent that this Credit Agreement and the Loan
Documents are inconsistent or conflicting with any such previous agreements or
documents.
9.14. Assignments; Participants; Waiver of Claims. Each 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 such Lender. The Borrower
irrevocably agrees that any claims it may have or may assert against either of
the Lenders for breach of contract (or related tort claims) shall be personal to
such Lender and shall not be asserted by way of direct claim or offset against
any Assignee or 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.
9.15. The Agent.
(a) Each Lender hereby irrevocably (subject to Section 9.15(j)) appoints,
designates and authorizes the Agent to take such action on its behalf
under the provisions of this Credit Agreement and each other Loan
Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Credit Agreement or any
other Loan Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Credit Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be
deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" in
this agreement with reference to the Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent
contracting parties.
(a) The Agent may execute any of its duties under this Credit Agreement or
any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
29
(b) None of the Indemnitees of the Agent, nor the Agent shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Credit Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence
or willful misconduct), or (ii) be responsible in any manner to any of
the Lenders for any recital, statement, representation or warranty made
by the Borrower or any Subsidiary or Affiliate of the Borrower, or any
officer thereof, contained in this Credit Agreement or in any other
Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under
or in connection with, this Credit Agreement or any other Loan
Document, or for the value of any collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Loan Document, or for any failure of the
Company or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Indemnitees of the Agent, nor
the Agent shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Credit Agreement or any other Loan
Document, or to inspect the properties, books or records of the
Borrower or any of the Borrower's Subsidiaries or Affiliates.
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement or
any other Loan Document unless it shall first receive such advice or
concurrence of the Majority Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Credit Agreement or any other Loan Document in
accordance with a request or consent of the Majority Lenders and such
request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders.
(a) For purposes of determining compliance with the conditions specified in
Sections 5.1 and 5.2, each Lender that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender, unless an officer of the Agent responsible
for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial Advance
specifying its objection thereto and either such objection shall not
have been withdrawn by
30
notice to the Agent to that effect or such Lender shall not have made
available to the Agent such Lender's ratable portion of such Advance.
(a) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be
paid to the Agent for the account of the Lenders, unless the Agent
shall have received written notice from a Lender or the Borrower
referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall give
notice thereof to the Lenders. The Agent shall take such action with
respect to such Default or Event of Default as shall be requested by
the Majority Lenders in accordance with Section 8.2; provided, however,
that unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event
of Default as it shall deem advisable or in the best interest of the
Lenders.
(a) Each Lender expressly acknowledges that none of the Indemnitees of the
Agent, nor the Agent has made any representation or warranty to it that
any act by the Agent hereinafter taken, including any review of the
affairs of the Borrower and its Subsidiaries shall be deemed to
constitute any representation or warranty by any such party to any
Lender. Each Lender represents to the Agent that it has, independently
and without reliance upon any Indemnitee of the Agent or the Agent and
based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions
contemplated thereby, and made its own decision to enter into this
Credit Agreement and extend credit to the Borrower hereunder. Each
Lender also represents that it will, independently and without reliance
upon the Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Credit Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower which
may come into the possession of any Indemnitee of the Agent or the
Agent.
(b) Whether or not the transactions contemplated hereby shall be
consummated, the Lenders shall indemnify upon demand the Indemnitees of
the Agent and the Agent (to the extent not reimbursed by or on behalf
of the
31
Borrower and without limiting the obligation of the Borrower to do so),
ratably from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever which may at any time (including
at any time following the repayment of the Loans and the termination or
resignation of the related Agent) be imposed on, incurred by or
asserted against any such Person any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with
any of the foregoing; provided, however, that no Lender shall be liable
for the payment to the Indemnitees of the Agent or the Agent of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting
solely from such Person's gross negligence or willful misconduct.
Without limitations of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including reasonable fees and costs of attorneys) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein to
the extent that the Agent is not reimbursed for such expenses by or on
behalf of the Borrower. Without limiting the generality of the
foregoing, if the Internal Revenue Service or any other governmental
authority of the United States or other jurisdiction asserts a claim
that the Agent did not properly withhold tax from amounts paid to or
for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to
notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for
any other reason) such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this
Section, together with all costs and expenses (including reasonable
fees and costs of attorneys). The obligation of the Lenders in this
Section shall survive the payment of all obligations hereunder and the
resignation or replacement of the Agent.
(a) Subject to the limitations in Sections 7.2 and 7.3 hereof, ACC and its
Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Borrower and its Subsidiaries and Affiliates
as though ACC were not the Agent hereunder and without notice to or
consent of the Lenders, except as otherwise limited by this Credit
Agreement. The Lenders acknowledge that, pursuant to such activities,
ACC or its Affiliates may receive information regarding the Borrower or
its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such
Affiliates) and
32
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, ACC shall have the same
rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include ACC in its individual capacity.
(a) The Agent may, and at the request of the Majority Lenders shall, resign
as Agent upon 30 days' notice to the Lenders. If the Agent shall resign
as Agent under this Agreement, the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders. If no successor
agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Lenders and
the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of
the retiring Agent and the term "Agent" shall mean such successor agent
and the retiring Agent's appointment, powers and duties as Agent shall
be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 9.15 and Sections 9.3 and 9.12
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. If no successor
agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of the Agent hereunder
until such time, if any, as the Majority Lenders appoint a successor
agent as provided for above.
9.16. Set-off. Subject to Section 2.5(g) hereof, in addition to any
rights and remedies of the Lenders provided by law, if an Event of Default
exists, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower, any such notice being waived by the Borrower to
the fullest extent permitted by law, to set off and apply any and all Borrower
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the Borrower against any and all Obligations owing to
such Lender, now or hereafter existing, irrespective of whether or not the Agent
or such Lender shall have made demand under this Credit Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 9.16 are in addition
to the other rights and remedies (including other rights of set-off) which the
Lender may have.
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.
33
RDO FINANCIAL SERVICES CO.,
a North Dakota corporation
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Its: Senior Vice President
----------------------------------
AG CAPITAL COMPANY,
a Delaware corporation
Receivable Commitment = $5,000,000 By: /s/ Xxxx X. Xxxxx
----------------------------------
Its: Loan Officer
----------------------------------
NORWEST BANK NORTH DAKOTA, N.A.
a national banking association
Receivable Commitment = $15,000,000 By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Its: Assistant Vice President
----------------------------------
34
