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EXHIBIT 10.13
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made and entered into as
of this 4th day of October, 1996, by and between STAFFMARK, INC., a Delaware
corporation (the "Borrower"), the undersigned lenders and any other lenders
hereafter becoming a party to this Agreement (the "Lenders"), and MERCANTILE
BANK OF ST. LOUIS NATIONAL ASSOCIATION, a national banking association, as
agent on behalf of Lenders (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, the Borrower has applied for revolving credit loans from
Lenders in aggregate principal amounts of up to Twenty Million Dollars
($20,000,000.00); and
WHEREAS, the Borrower has further applied for a reducing revolving
credit loan facility from Lenders in the original principal amount of Thirty
Million Dollars ($30,000,000.00); and
WHEREAS, Lenders are willing to make said revolving credit loans and
to provide said reducing revolving loan facility to the Borrower upon, and
subject to, the terms, provisions and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby mutually promise and agree as follows:
SECTION 1. TERM.
The "Term" of this Agreement shall commence on the date hereof and
shall end on October 4, 2001, unless earlier terminated pursuant to Section
3.12 or by acceleration or otherwise upon the occurrence of an Event of Default
under this Agreement, in which case the Term hereof shall end on such earlier
date.
SECTION 2. DEFINITIONS.
In addition to the terms defined elsewhere in this Agreement or in any
Exhibit or Schedule hereto, when used in this Agreement, the following terms
shall have the following meanings (such meanings shall be equally applicable to
the singular and plural forms of the terms used, as the context requires):
Acceptable Acquisition shall mean any Acquisition of an ongoing
business similar to or consistent with the Borrower's current line of business
which: (a) has been: (i) in the event a corporation or its assets is the
subject of such Acquisition, either (x) approved by the Board of Directors of
the corporation which is the subject of such Acquisition or (y) recommended by
such Board of Directors to the shareholders of such corporation, (ii) in the
event a partnership is the subject of such Acquisition, approved by a majority
(by percentage of voting power) of the partners of the partnership which is the
subject of such Acquisition, (iii) in
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the event an organization or entity other than a corporation or partnership is
the subject of such Acquisition, approved by a majority (by percentage of
voting power) of the governing body, if any, or by a majority (by percentage of
ownership interest) of the owners of the organization or entity which is the
subject of such Acquisition or (iv) in the event the corporation, partnership
or other organization or entity which is the subject of such Acquisition is in
bankruptcy, approved by the bankruptcy court or another court of competent
jurisdiction; (b) Borrower has given Agent and Lenders at least fifteen (15)
Business Days prior written notice of such Acquisition and (c) if the sum of:
(1) the principal amount of any requested Reducing Revolver Loan requested in
connection with such Acquisition, plus (2) the then outstanding principal
balance of all prior Reducing Revolver Loans, exceeds $20,000,000.00, and if
the portion of the purchase price for such Acquisition payable by Borrower in
cash exceeds $5,000,000.00, then Borrower must obtain the prior written consent
of the Required Lenders and the Agent; provided, however, that no Acquisition
shall be an Acceptable Acquisition unless both as of the date of any such
Acquisition and immediately following such Acquisition the Borrower is, and on
a pro forma basis projects that it will continue to be, in compliance with the
terms, covenants and conditions contained in this Agreement and the other
Transaction Documents.
Account Debtor shall mean any Person who is and/or may become
obligated to the Borrower or any Guarantor under or on account of Accounts.
Accounts shall mean all trade accounts receivable of the Borrower or
any Guarantor which have been invoiced by the Borrower or such Guarantor.
Acquisition shall mean any transaction or series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (a) acquires any going business or all or
substantially all of the assets of any corporation, partnership or other
organization or entity, whether through purchase of assets, merger or otherwise
or (b) directly or indirectly acquires (in one transaction or as of the most
recent transaction in a series of transactions) at least (i) a majority (in
number of votes) of the stock and/or other securities of a corporation having
ordinary voting power for the election of directors (other than stock
and/or other securities having such power only by reason of the happening
of a contingency), (ii) a majority (by percentage of voting power) of the
outstanding partnership interests of a partnership or (iii) a majority of the
ownership interests in any organization or entity other than a corporation or
partnership.
Agent shall mean Mercantile Bank of St. Louis National Association.
Applicable Margin shall mean, with respect to each type of Loan, the
rate of interest shown in the applicable column below for the type of Loan
specified for each such column:
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Xxxxx X Xxxxx XX Xxxxx XXX Level IV Level V
------- -------- --------- -------- -------
IF RATIO OF CONSOLIDATED ADJUSTED TOTAL ) 3.50 ( 3.50 ( 3.00 ( 2.00 ( 1.50
FUNDED DEBT TO CONSOLIDATED PROFORMA - ) 3.00 ) 2.00 ) 1.50
OPERATING CASH FLOW IS - - -
LIBOR Loans 2.25% 1.75% 1.50% 1.25% 1.00%
Prime Loans 1.25% 0.75% 0.50% 0.25% 0.00%
Commitment Fee 0.375% 0.25% 0.25% 0.25% 0.25%
Notwithstanding the above, the Applicable Margins applicable to each Loan
during the period through March 31, 1997 shall be One Percent (1.0%) per annum
for LIBOR Loans with Interest Periods commencing on or before such date and
Zero Percent (0.0%) per annum for all Prime Loans outstanding on or before such
date, and the Commitment Fee shall be calculated at the rate of One-Fourth of
One Percent (0.25%) for all fiscal quarters or portions thereof ending on or
before such date. Commencing on April 1, 1997 and on each January 1, April 1,
July 1 and October 1 thereafter during the Term hereof, the ratio of
Consolidated Adjusted Total Funded Debt to Consolidated Proforma Operating Cash
Flow for the fiscal quarter preceding the fiscal quarter then ended shall be
computed by Agent following delivery to Agent of the Borrower's consolidated
financial statements for such fiscal quarter-end pursuant to Section 7.1(a)(ii)
herein (i.e., for the fiscal quarter beginning April 1, 1997 using the ratio
for the fiscal quarter ended December 31, 1996), and the Applicable Margins
adjusted as of such subsequent January 1, April 1, July 1 and October 1 date in
accordance with the levels set forth above. Such new Applicable Margins shall
continue in effect until the next such adjustment, if any, on the following
January 1, April 1, July 1 and October 1 in accordance with the preceding
sentence. Each determination by Agent of the Applicable Margins shall be
deemed prima facie correct. All such adjustments shall become effective as to
LIBOR Loans outstanding on the first day of any quarter upon the expiration of
the then current applicable Interest Periods for such Loans.
Attorneys' Fees shall mean the reasonable value of the services (and
costs, charges and expenses related thereto) of the attorneys (and all
paralegals, secretaries, accountants and other staff employed by such
attorneys) employed by Agent or any of the Lenders (including, without
limitation, attorneys and paralegals who are employees of Agent or any of the
Lenders or any affiliate of Agent or any of the Lenders) from time to time (i)
in connection with the documentation, negotiation, execution, delivery,
administration and enforcement of this Agreement and/or any of the other
Transaction Documents, (ii) to represent Agent or any of the Lenders in any
litigation, contest, dispute, suit or proceeding, or to commence, defend or
intervene in any litigation, contest, dispute, suit or proceeding, or to file
any petition, complaint, answer, motion or other pleading or to take any other
action in or with respect to any litigation, contest, dispute, suit or
proceeding (whether instituted by Agent, any of the Lenders, the Borrower or
any other Person and whether in bankruptcy or otherwise) in any way or respect
relating to any of the Collateral, any Third Party Collateral, this Agreement
or any of the other Transaction Documents, the Borrower, any Subsidiary of the
Borrower or any other Obligor, (iii) to protect, collect, lease, sell, take
possession of or liquidate any of the Collateral or any Third Party Collateral,
(iv) to attempt to enforce any security interest in or other Lien upon any
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of the Collateral or any Third Party Collateral or to give any advice with
respect to such enforcement and (v) to enforce any of Agent's or any Lender's
rights to collect any of the Borrower's Obligations.
Borrower's Obligations shall mean any and all indebtedness (principal,
interest, fees and other amounts), liabilities and obligations of the Borrower
to Agent or any of the Lenders evidenced by or arising under the Notes, this
Agreement, the Security Agreement, the Pledge Agreement, the Trademark
Assignment, any of the other Transaction Documents or any other agreement,
document or instrument heretofore, now or hereafter executed and delivered by
the Borrower to Agent or any of the Lenders, in each case whether now existing
or hereafter arising, absolute or contingent, joint and/or several, secured or
unsecured, direct or indirect, expressed or implied in law, contractual or
tortious, liquidated or unliquidated, at law or in equity, or otherwise, and
whether created directly or acquired by Agent or any of the Lenders by
assignment or otherwise, and any and all costs of collection and/or Attorneys'
Fees incurred or to be incurred in connection therewith.
Borrowing Base shall have the meaning ascribed thereto in Section
3.1(b).
Borrowing Base Certificate shall have the meaning ascribed thereto in
Section 3.1(c).
Borrowing Notice shall have the meaning ascribed thereto in Section
3.3.
Business Day shall mean any day except a Saturday, Sunday or legal
holiday observed by any of the Lenders or by commercial banks in St. Louis,
Missouri.
Capital Expenditure shall mean any expenditure which, in accordance
with generally accepted accounting principles consistently applied, is or
should be capitalized on the balance sheet of the Person making the same.
Capitalized Lease shall mean any lease which, in accordance with
generally accepted accounting principles consistently applied, is or should be
capitalized on the balance sheet of the lessee.
Code shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of the
Code shall be construed to also refer to any successor sections.
Collateral shall mean any Property or assets of the Borrower which now
or at any time hereafter secure the payment or performance of any of the
Borrower's Obligations.
Commitment Fee shall have the meaning ascribed thereto in Section 3.14.
Consolidated Adjusted Total Funded Debt shall mean as of any fiscal
quarter-end the sum of (a) the outstanding principal amount of all Revolving
Credit Loans on any such fiscal
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quarter-end date, plus (b) the outstanding principal amount of all Reducing
Revolver Loans on any such fiscal quarter- end date, plus (c) the undrawn face
amount of all issued and outstanding Letters of Credit or any other letters of
credit issued for the account of Borrower or its Consolidated Subsidiaries as
of any such fiscal quarter-end date, plus (d) all of the Borrower's and its
Consolidated Subsidiaries' other borrowed money Indebtedness outstanding on any
such fiscal quarter-end date, including, without limitation, amounts due under
any Capitalized Leases.
Consolidated Fixed Charges shall mean the sum of all of the Borrower's
and its Consolidated Subsidiaries' expenses under any operating leases within
the specified period of any such calculation, plus interest paid during such
specified period, including, without limitation, interest charges during such
period under any Capitalized Leases, plus all income taxes paid during the
specified period of such calculation, plus all payments of principal made on
any Subordinated Debt as permitted to be paid pursuant to the terms of the
subordination and standby agreement or intercreditor agreement made between
Agent and the holder of any such Subordinated Debt, plus Capital Expenditures
made during the specified period of any such calculation, excluding any
expenditures for capital assets acquired by Borrower and its Consolidated
Subsidiaries in an Acceptable Acquisition.
Consolidated Proforma Operating Cash Flow shall mean on any date the
Borrower's and its Consolidated Subsidiaries' net income (exclusive of any
extraordinary gains or losses) plus interest expense, plus expenses for income
taxes, plus depreciation, plus amortization, plus all expenses incurred by
Borrower or any of its Consolidated Subsidiaries under any operating leases,
all for the twelve month period included in any such calculation and ending on
the date of any such calculation, all as determined on a consolidated basis in
accordance with generally accepted accounting principles, consistently applied.
The calculation of Consolidated Proforma Operating Cash Flow of Borrower and
its Consolidated Subsidiaries shall include all net income and other such
amounts for the full twelve month period preceding the date of such calculation
earned by or incurred or accrued by any Subsidiary acquired by Borrower or its
Consolidated Subsidiaries during the preceding twelve months (and of any such
Subsidiary contemplated for acquisition by Borrower or its Consolidated
Subsidiaries with proceeds of a Reducing Revolver Loan for purposes of
determining compliance with the requirements of Section 3.2(a)), but shall
exclude from such calculation any officer compensation expenses or other
expenses which Agent determines are non-recurring expenses paid or incurred by
Borrower or a Consolidated Subsidiary in connection with any such Acquisition.
Consolidated Subsidiary shall mean with respect to any Person at any
date, any Subsidiary or other entity the assets and liabilities of which are or
should be consolidated with those of such Person in its consolidated financial
statements as of such date in accordance with generally accepted accounting
principles consistently applied.
Conversion Notice shall have the meaning ascribed thereto in Section
3.3(c).
Default shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default as defined in Section 8 hereof.
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Distribution in respect of any corporation shall mean (i) dividends or
other distributions on capital stock of the corporation; and (ii) the
redemption, repurchase or other acquisition of such stock or of warrants,
rights or other options to purchase such stock (except when solely in exchange
for such stock).
Eligible Accounts shall mean all Accounts, except: (a) Accounts which
remain unpaid for more than ninety (90) days after their invoice dates and
Accounts which are not due and payable within ninety (90) days after their
invoice dates; (b) Accounts owing by a single Account Debtor, including a
currently scheduled Account, if ten percent (10%) or more of the balance owing
by said Account Debtor upon said Accounts is ineligible pursuant to clause (a)
above; (c) Accounts with respect to which the Account Debtor is a partner of
the Borrower or any Guarantor or a Related Party of the Borrower or any
Guarantor; (d) Accounts with respect to which payment by the Account Debtor is
or may be conditional and Accounts commonly known as xxxx and hold Accounts or
Accounts of a similar or like arrangement; (e) Accounts with respect to which
the Account Debtor is not a resident or citizen of or otherwise located in the
United States of America, unless the Account is backed by a commercial letter
of credit in form and substance acceptable to Agent and issued or confirmed by
a domestic bank acceptable to Agent; (f) Accounts with respect to which the
Account Debtor is the United States of America or any department, agency or
instrumentality thereof unless such Accounts are duly assigned to Agent for the
benefit of each of the Lenders in accordance with all applicable governmental
and regulatory rules and regulations (including, without limitation, the
Federal Assignment of Claims Act of 1940, as amended, if applicable) so that
Agent is recognized by the Account Debtor to have all of the rights of an
assignee of such Accounts; (g) Accounts with respect to which the Borrower or
any Guarantor is or may become liable to the Account Debtor for goods sold or
services rendered by such Account Debtor to the Borrower or such Guarantor; (h)
Accounts with respect to which the goods giving rise thereto have not been
shipped and delivered to and accepted as satisfactory by the Account Debtor
thereof or with respect to which the services performed giving rise thereto
have not been completed and accepted as satisfactory by the Account Debtor
thereof; (i) Accounts (other than specialty medical Accounts) which are not
invoiced (and dated as of such date) and sent to the Account Debtor thereof
concurrently with or not later than ten (10) days after the shipment and
delivery to and acceptance by said Account Debtor of the goods giving rise
thereto or the performance of the services giving rise thereto; (j) Accounts
which constitute specialty medical Accounts and which are not invoiced (and
dated as of such date) and sent to the Account Debtor thereof concurrently with
or not later than thirty (30) days after the shipment and delivery to and
acceptance by said Account Debtor of the goods giving rise thereto or the
performance of the services giving rise thereto; (k) Accounts with respect to
which possession and/or control of the goods sold giving rise thereto is held,
maintained or retained by the Borrower or any Guarantor (or by any agent or
custodian of the Borrower or any Guarantor) for the account of or subject to
further and/or future direction from the Account Debtor thereof; (l) Accounts
arising from a "sale on approval" or a "sale or return;" (m) Accounts as to
which Agent or the Required Lenders, at any time or times hereafter,
determines, in good faith, by written notice to Borrower, that the prospects of
payment or performance by the Account Debtor is or will be impaired; (n)
Accounts of an Account Debtor to the extent, but only to the extent, that the
same exceed a credit limit determined by Agent or Required Lenders in their
discretion, by written notice to Borrower, at any time or times hereafter; (o)
Accounts with respect to which the Account Debtor is located
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in the State of New Jersey, State of West Virginia or the State of Minnesota;
provided, however, that such restriction shall not apply if the Borrower or
Guarantor having such Account (i) has filed and has effective (A) in respect of
Account Debtors located in the State of New Jersey, a Notice of Business
Activities Report with the New Jersey Division of Taxation for the then current
year, (B) in respect of Account Debtors located in the State of West Virginia,
a Notice of Business Activities Report with the West Virginia Division of
Taxation for the then current year, or (C) in respect of Account Debtors
located in the State of Minnesota, a Minnesota Business Activity Report with
the Minnesota Department of Revenue for the then current year, as applicable,
or (ii) is otherwise exempt from such reporting requirements under the laws of
such State(s); (p) Accounts which constitute accruals for rebates to customers;
and (q) Accounts which are not subject to a first priority perfected security
interest in favor of Agent for the benefit of each of the Lenders.
Environmental Laws shall mean the Resource Conservation and Recovery
Act of 1987, the Comprehensive Environmental Response, Compensation and
Liability Act, any so-called "Superfund" or "Superlien" law, the Toxic
Substances Control Act and any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to or
imposing liability or standards of conduct concerning any Hazardous Materials
or any other hazardous, toxic or dangerous waste, substance or constituent or
other substance, whether solid, liquid or gas, as now or at any time hereafter
in effect.
Environmental Lien shall have the meaning ascribed thereto in Section
7.1(k)(vi).
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
ERISA Affiliate shall mean any corporation, trade or business that is,
along with the Borrower, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code.
Event of Default shall have the meaning ascribed thereto in Section 8.
Facility Fee shall have the meaning ascribed thereto in Section 3.13.
Guarantee by any Person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness of any other Person or
in any manner providing for the payment of any Indebtedness of any other Person
or otherwise protecting the holder of such Indebtedness against loss (whether
by agreement to keep-well, to purchase assets, goods, securities or services,
or to take-or-pay or otherwise); provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb shall have a correlative
meaning.
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Guarantor shall mean each Subsidiary of Borrower now or hereafter
executing a Subsidiary Guaranty of all of Borrower's Obligations, and
Guarantors shall mean any or all of them.
Hazardous Materials shall mean any hazardous substance or pollutant or
contaminant defined as such in (or for the purposes of) any Environmental Law
and shall include, without limitation, petroleum, including crude oil or any
fraction thereof which is liquid at standard conditions of temperature or
pressure (60 degrees fahrenheit and 14.7 pounds per square inch absolute), any
radioactive material, including, without limitation, any source, special
nuclear or byproduct material as defined in 42 U.S.C. Section 2011 et seq., as
amended or hereafter amended, and asbestos in any form or condition.
Indebtedness of any Person shall mean and include, without duplication,
any and all indebtedness (principal, interest, fees and other amounts),
liabilities and obligations of such Person which in accordance with generally
accepted accounting principles, consistently applied are or should be
classified upon a balance sheet of such Person as liabilities of such Person,
and in any event shall include all (i) obligations of such Person for borrowed
money or which have been incurred in connection with the acquisition of
Property, (ii) obligations secured by any Lien or other charge upon any
Property owned by such Person, provided that if such Person has not assumed or
become liable for the payment of such obligations, such obligations shall still
be included in Indebtedness but the determination of the amount of Indebtedness
evidenced by such obligations shall be limited to the book value of such
Property, (iii) obligations created or arising under any conditional sale or
other title retention agreement with respect to any Property acquired by such
Person, provided that if the rights and remedies of the seller, lender or
lessor in the event of default under such agreement are limited solely to
repossession or sale of such Property, such obligations shall still be included
in Indebtedness but the determination of the amount of Indebtedness evidenced
by such obligations shall be limited to the book value of such Property, (iv)
all Guarantees and other contingent indebtedness, liabilities and obligations
of such Person whether or not reflected on the balance sheet of such Person and
(v) all obligations of such Person as lessee under any Capitalized Lease.
Interest Period shall mean with respect to each LIBOR Loan:
(i) Initially, the period commencing on the date of such
Loan and ending 1, 2, 3 or 6 months thereafter (or such other period
agreed upon in writing by the Borrower and all of the Lenders), as the
Borrower may elect in the applicable Notice of Borrowing for a
Revolving Credit Loan or pursuant to Section 3.3(b) for a Reducing
Revolver Loan; and
(ii) Thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Loan and ending
1, 2, 3 or 6 months thereafter (or such other period agreed upon in
writing by the Borrower and all of the Lenders), as the Borrower may
elect pursuant to Section 3.3(c);
provided that:
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(iii) For purposes of determining an Interest Period, a
month means a period starting on one day in a calendar month and
ending on a numerically corresponding day in the next calendar month,
provided, however, if an Interest Period begins on the last day of a
month and if there is no numerically corresponding day in the month in
which an Interest Period is to end, then such Interest Period shall
end on the last Business Day of such month;
(iv) Subject to clauses (v), (vi) and (vii) below, if any
Interest Period would otherwise end on a day which is not a Business
Day, such Interest Period shall end on the immediately following
Business Day, except that if such immediately following Business Day
is in a different month, such Interest Period shall end on the
immediately preceding Business Day;
(v) No Interest Period with respect to any LIBOR Loan
shall extend beyond the last day of the Term hereof; and
(vii) Any Interest Period which includes a date on which a
payment of principal is required to be made on the applicable Loan(s)
shall end on such date.
Inventory shall mean all inventory of the Borrower and the
Guarantors.
Letter of Credit and Letters of Credit shall have the meanings
ascribed thereto in Section 3.4(a).
Letter of Credit Application shall mean an application and
agreement for irrevocable standby letter of credit in the form of Exhibit F
attached hereto and incorporated herein by reference or an application and
agreement for irrevocable commercial letter of credit in the form of Exhibit G
attached hereto and incorporated herein by reference, and in either case
executed by Borrower, as account party, and delivered to Agent pursuant to
Section 3.4(a) as the same may from time to time be amended, modified, extended
or renewed.
Letter of Credit Commitment Fee shall have the meaning ascribed
thereto in Section 3.4(d)(ii).
Letter of Credit Issuance Fee shall have the meaning ascribed
thereto in Section 3.4(d)(i).
Lien shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on common law, statute or contract, including, without
limitation, any security interest, mortgage, deed of trust, pledge,
hypothecation, judgment lien or other lien or encumbrance of any kind or nature
whatsoever, any conditional sale or trust receipt and any lease, consignment or
bailment for security purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
Property.
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LIBOR Base Rate means, for an Interest Period, (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits in U.S. dollars in immediately available funds are offered to
Agent at 11:00 a.m. (St. Louis time) two (2) Business Days before the beginning
of such Interest Period by two (2) or more major banks in the interbank
eurodollar market selected by Agent for a period equal to such Interest Period
and in an amount equal or comparable to the principal amount of the LIBOR Loan
scheduled to be made available by Lenders. As used herein, "LIBOR Index Rate"
means, for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point) for
deposits in U.S. Dollars for a period equal to such Interest Period, which
appears on the Telerate Page 3750 as of 9:00 a.m. (St. Louis time) on the day
two Business Days before the commencement of such Interest Period.
LIBOR Loan shall mean any Loan bearing interest at the LIBOR Rate.
LIBOR Rate shall mean (a) the quotient of (i) the LIBOR Base Rate
divided by (ii) one minus the LIBOR Reserve Percentage, plus (b) the Applicable
Margin.
LIBOR Reserve Percentage shall mean for any day the reserve percentage
(including any supplemental percentage applied on a marginal basis or any other
reserve requirement having a similar effect), expressed as a decimal, which is
in effect on the first day of the applicable Interest Period, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) under
Regulation D (or any other applicable regulation of the Board of Governors (or
any successor)) with respect to "Eurocurrency Liabilities." The LIBOR Rate
shall be adjusted automatically on and as of the effective date of any change
in the LIBOR Reserve Percentage.
Loan shall mean each Revolving Credit Loan and the Reducing Revolver
Loan, each whether made as a Prime Loan or a LIBOR Loan, and Loans shall mean
any or all of the foregoing.
Loan Commitments shall mean the total of the Revolving Credit
Commitments and the Reducing Revolver Commitments of each of the Lenders.
Multiemployer Plan shall mean a "multi-employer plan" as defined in
Section 4001(a) (3) of ERISA which is maintained for employees of the Borrower,
any ERISA Affiliate or any Subsidiary of the Borrower.
Notes shall mean the Revolving Credit Notes and the Reducing Revolver
Notes.
Obligor shall mean the Borrower and each other Person who is or shall
at any time hereafter become primarily or secondarily liable on any of the
Borrower's Obligations or who grants Agent or any of the Lenders a Lien upon
any of the Property or assets of such Person as security for any of the
Borrower's Obligations.
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Occupational Safety and Health Laws shall mean the Occupational Safety
and Health Act of 1970, as amended, and any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning employee
health and/or safety, as now or at any time hereafter in effect.
PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan shall mean a "pension plan," as such term is defined in
Section 3(2) of ERISA, which is established or maintained by the Borrower, any
ERISA Affiliate or any Subsidiary of the Borrower, other than a Multiemployer
Plan.
Permitted Investments shall mean any investment by Borrower or any
Subsidiary in any of the following:
(a) Direct obligations of the United States of America or
any instrumentality or agency thereof, the payment of which is unconditionally
guaranteed by the United States of America or any instrumentality or agency
thereof (all of which Investments must mature within twelve (12) months from
the time of acquisition thereof);
(b) Investments in readily marketable commercial paper
which, at the time of acquisition thereof by Borrower or any Subsidiary, is
rated A-1 or better by Standard & Poor's or P-1 or better by Xxxxx'x Investment
Service and which matures within 270 days from the date of acquisition thereof,
provided that the issuer of such commercial paper shall, at the time of
acquisition of such commercial paper, have a senior long-term debt rating of at
least A by Standard & Poor's and Xxxxx'x Investment Service;
(c) Negotiable certificates of deposit or negotiable
bankers acceptances issued by any of the Lenders or any other bank or trust
company organized under the laws of the United States of America or any state
thereof, which bank or trust company (other than the Lenders to which such
restrictions shall not apply) is a member of both the Federal Deposit Insurance
Corporation and the Federal Reserve System and is rated B or better by
Xxxxxxxx Bank Watch Service (all of which Permitted Investments must mature
within twelve (12) months from the time of acquisition thereof);
(d) Repurchase agreements, which shall be collateralized
for at least 100% of face value, issued by any of the Lenders or any other bank
or trust company organized under the laws of the United States or any state
thereof, which bank or trust company (other than the Lenders to which such
restrictions shall not apply) is a member of both the Federal Deposit Insurance
Corporation and the Federal Reserve System and is rated B or better by Xxxxxxxx
Bank Watch Service (all of which Permitted Investments must mature within
twelve (12) months from the time of acquisition thereof);
(e) Investments in mutual funds the investments of which
are limited to domestic securities; and
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12
(f) Investments in Acceptable Acquisitions.
Person shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, entity or government (whether national, federal, state, county,
city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
Pledge Agreement shall mean that certain General Pledge and Security
Agreement to be executed by Borrower and delivered to Agent for the benefit of
each of the Lenders, pledging all of the issued and outstanding capital stock
of each of Borrower's Subsidiaries, together with all collateral schedules,
stock powers, original stock certificates and other agreements to be delivered
in connection therewith pursuant to Section 5.3, all as the same may be from
time to time amended.
Prime Loan shall mean a Loan bearing interest at the Prime Rate plus
the Applicable Margin.
Prime Rate shall mean the interest rate announced from time to time by
Agent as its "prime rate" on commercial loans (which rate shall fluctuate as
and when said prime rate shall change).
Pro Rata Share shall mean, with respect to each Lender, such Lender's
percentage of the aggregate amount of Loans then outstanding, determined by
dividing the aggregate principal amount of all Loans of such Lender then
outstanding by the aggregate amount of all Loans of all Lenders then
outstanding, or, if no Loans are then outstanding, such Lender's percentage of
the total Loan Commitments of all of the Lenders, determined by dividing the
sum of such Lenders' Revolving Credit Commitment and Reducing Revolver
Commitment by the aggregate sum of all Loan Commitments of all of the Lenders.
Property shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible. Properties shall
mean the plural of Property. For purposes of this Agreement, the Borrower and
each Subsidiary of the Borrower shall be deemed to be the owner of any Property
which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property
has been retained by or vested in some other Person for security purposes.
Reducing Revolver Commitment shall mean, subject to termination or
reduction as set forth in Section 3.12 and subject to quarterly reductions
required by Section 3.2(a), for each Lender the amount set forth as the
Reducing Revolver Commitment of such Lender next to its name on the signature
pages hereof or on the signature pages of any subsequent Assignment Agreement
to which such Lender is a party.
Reducing Revolver Loan shall have the meaning ascribed thereto in
Section 3.2.
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13
Reducing Revolver Notes shall mean each of the Reducing Revolver Notes
of the Borrower to be executed and delivered to each of the Lenders pursuant to
Section 3.2, as the same may from time to time be amended, modified, extended
or renewed.
Related Party shall mean any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by or is under
common control with, the Borrower or any Subsidiary of the Borrower, (ii) which
beneficially owns or holds ten percent (10%) or more of the equity interest of
the Borrower, (iii) ten percent (10%) or more of the equity interest of which
is beneficially owned or held by the Borrower or a Subsidiary of the Borrower,
or (iv) who is a director, officer or employee of the Borrower or any
Subsidiary of the Borrower. The term "control" shall mean the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of the
capital stock of any Person or the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
Reportable Event shall have the meaning given to such term in ERISA.
Required Lenders shall mean at any time Lenders having 67% of the
aggregate amount of Loans then outstanding or, if no Loans are then
outstanding, 67% of the total Loan Commitments of all of the Lenders.
Revolving Credit Commitment shall mean, subject to termination or
reduction as set forth in Section 3.12, for each Lender the amount set forth as
the Revolving Credit Commitment of such Lender next to its name on the
signature pages hereof or on the signature pages of any subsequent Assignment
Agreement to which such Lender is a party.
Revolving Credit Loan and Revolving Credit Loans shall have the
meanings ascribed thereto in Section 3.1(a).
Revolving Credit Notes shall mean each of the Revolving Credit Notes
of the Borrower to be executed and delivered to each of the Lenders pursuant to
Section 3.1(a), as the same may from time to time be amended, modified,
extended or renewed.
Security Agreement shall mean the Security Agreement to be executed by
Borrower and delivered to Agent for the benefit of each of the Lenders pursuant
to Section 5.1, as the same may from time to time be amended.
Shareholders Equity shall mean on any date the total assets minus
total liabilities of Borrower and its Subsidiaries, all determined on a
consolidated basis in accordance with generally accepted accounting principles,
consistently applied.
Subordinated Debt shall mean any borrowed money Indebtedness of
Borrower which has been duly subordinated by the holder thereof to all of
Borrower's Obligations to the Lenders and Agent pursuant to a subordination and
standby agreement or intercreditor agreement in form and substance satisfactory
to the Agent and the Required Lenders.
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14
Subsidiary shall mean, with respect to any Person, any corporation of
which fifty percent (50%) or more of the issued and outstanding capital stock
entitled to vote for the election of directors (other than by reason of default
in the payment of dividends) is at the time owned directly or indirectly by
such Person.
Subsidiary Guaranties shall mean those certain guaranties of
Borrower's Obligations dated as of the date hereof executed respectively by
Borrower's Subsidiaries in existence as of the date hereof and the guaranties
of any subsequently created or acquired Subsidiary of Borrower executed and
delivered to Agent hereafter pursuant to Section 4.3 or Section 7.2(e), all as
the same may from time to time be amended.
Subsidiary Security Agreements shall mean those certain security
agreements dated as of the date hereof executed respectively by Borrower's
Subsidiaries in existence as of the date hereof and delivered to Agent for the
benefit of each of the Lenders and the Subsidiary Security Agreements executed
by any Subsidiary of Borrower created or acquired subsequent to the date of
this Agreement, which Subsidiary Security Agreement shall be delivered pursuant
to Section 4.3 or Section 7.2(e), all as the same may from time to time be
amended.
Term shall have the meaning ascribed thereto in Section 1.
Third Party Collateral shall mean any Property or assets of any
Obligor other than the Borrower which now or at any time hereafter secure the
payment or performance of any of the Borrower's Obligations.
Total Revolving Credit Commitment shall have the meaning ascribed
thereto in Section 3.1.
Trademark Assignment shall mean the Trademark Collateral Assignment
and Security Agreement to be executed by Borrower and delivered to Agent for
the benefit of each of the Lenders pursuant to Section 5.2, as the same may
from time to time be amended.
Transaction Documents shall mean this Agreement, the Notes, the
Security Agreement, the Trademark Assignment, the Pledge Agreement, any Letter
of Credit Application, the Subsidiary Guaranties, the Subsidiary Security
Agreements and all other agreements, documents and instruments heretofore, now
or hereafter delivered to Agent or any of the Lenders with respect to or in
connection with or pursuant to this Agreement, any Loans made or Letters of
Credit issued hereunder or any other of the Borrower's Obligations, and
executed by or on behalf of the Borrower or any of its Subsidiaries, all as the
same may from time to time be amended, modified, extended or renewed.
SECTION 3. THE REVOLVING CREDIT LOANS.
3.1 Revolving Credit Commitment of Lenders.
(a) Subject to the terms and conditions hereof, during
the Term of this Agreement, each Lender hereby severally agrees to make such
loans (individually, a "Revolving
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15
Credit Loan" and collectively, the "Revolving Credit Loans"), to the Borrower
as the Borrower may from time to time request pursuant to Section 3.3(a). The
aggregate principal amount of Revolving Credit Loans which Lenders,
cumulatively, shall be required to have outstanding hereunder at any one time,
plus the face amount of Letters of Credit issued by Agent and then outstanding
under Section 3.4, shall not exceed the lesser of (i) the Borrowing Base (as
hereinafter defined); or (ii) Twenty Million Dollars ($20,000,000.00) (the
"Total Revolving Credit Commitment"), and the amount each Lender shall be
required to have outstanding hereunder as Revolving Credit Loans plus their
undivided Pro Rata Share participation interest in each Letter of Credit issued
by Agent under Section 3.4 shall not exceed, in the aggregate at any one time
outstanding, the lesser of (x) the amount of such Lender's Revolving Credit
Commitment or (y) such Lender's Pro Rata Share of the then current Borrowing
Base. Each Revolving Credit Loan under this Section 3.1(a) shall be made from
the several Lenders ratably in proportion to their respective Revolving Credit
Commitments. The Revolving Credit Loans from Lenders to the Borrower shall be
evidenced by Revolving Credit Notes of the Borrower dated the date hereof and
payable to the order of each of the Lenders in the respective original
principal amounts of each such Lender's Revolving Credit Commitment and in the
form attached hereto as Exhibit B and incorporated herein by reference (as the
same may from time to time be amended, modified, extended or renewed, the
"Revolving Credit Notes"). Subject to the terms and conditions hereof, the
Borrower may borrow, repay and reborrow such sums from Lenders.
(b) For purposes of computing the amount of Revolving
Credit Loans and Letters of Credit available under the Total Revolving Credit
Commitment, the "Borrowing Base" shall mean Eighty-Five Percent (85%) of the
face amount of Eligible Accounts of the Borrower and the Guarantors.
(c) Borrower shall deliver to Agent on the date of
execution hereof (with respect to the month ended August 31, 1996) and
thereafter within twenty (20) days after the end of each month or more often if
requested by the Required Lenders, a borrowing base certificate in the form of
Exhibit A attached hereto and incorporated herein by reference (a "Borrowing
Base Certificate") setting forth:
(i) the Borrowing Base and its components as of the end
of the immediately preceding month;
(ii) the aggregate principal amount of all outstanding
Revolving Credit Loans and the face amount of all Letters of Credit
then outstanding;
(iii) the difference, if any, between the Borrowing Base
and the aggregate principal amount of all outstanding Revolving Credit
Loans and the face amount of all outstanding Letters of Credit.
The Borrowing Base shown in such Borrowing Base Certificate shall be and remain
the Borrowing Base hereunder until the next Borrowing Base Certificate is
delivered to Agent and each of the Lenders, at which time the Borrowing Base
shall be the amount shown in such subsequent Borrowing Base Certificate. Each
Borrowing Base Certificate shall be certified
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(subject to normal year-end adjustments) as to truth and accuracy by the
President or principal financial officer of the Borrower.
(d) If at any time the aggregate principal amount of all
outstanding Revolving Credit Loans plus the face amount of all outstanding
Letters of Credit should exceed the lesser of the then current Borrowing Base
or the Total Revolving Credit Commitment of Lenders, whether by reduction of
the maximum Total Revolving Credit Commitment amount available under Section
3.1(a) pursuant to Section 3.12, reduction of the Borrowing Base or otherwise,
the Borrower shall be automatically required (without demand or notice of any
kind by Agent or any of the Lenders, all of which are hereby expressly waived
by the Borrower) to immediately repay the Revolving Credit Loans in an amount
sufficient to reduce such aggregate principal amount of outstanding Revolving
Credit Loans to an amount equal to the lesser of the Borrowing Base or the
aggregate Revolving Credit Commitments of Lenders. If the undrawn face amount
of all Letters of Credit still exceeds the lesser of the then current Borrowing
Base or the Total Revolving Credit Commitment after repayment in full of all
Revolving Credit Loans under the preceding sentence, Borrower agrees to provide
cash collateral in form and substance acceptable to Agent in an amount
sufficient to reduce the face amount of outstanding Letters of Credit to the
lesser of the then current Borrowing Base or the Total Revolving Credit
Commitment in the manner required under Section 3.4(f).
(e) Each Lender shall record in its books and records,
and prior to any transfer of its Revolving Credit Note shall endorse on the
schedules forming a part thereof, appropriate notations to evidence the date
and amount of each Revolving Credit Loan made by it during the Term hereof,
whether such Revolving Credit Loan is then a Prime Loan or a LIBOR Loan, and
the date and amount of each payment of principal made by Borrower with respect
thereto. Each Lender is hereby irrevocably authorized by Borrower so to
endorse its Revolving Credit Note and to attach to and make a part of any such
Revolving Credit Note a continuation of any such schedule as and when required;
provided, however that the obligation of Borrower to repay each Revolving
Credit Loan made hereunder shall be absolute and unconditional, notwithstanding
any failure of any Lender to endorse or any mistake by any Lender in connection
with endorsement on the schedules attached to their respective Revolving Credit
Notes. The books and records of each Lender (including, without limitation,
the schedules attached to the Revolving Credit Notes) showing the account
between such Lender and Borrower shall be admissible in evidence in any action
or proceeding and shall constitute prima facie proof of the items therein set
forth.
3.2 Reducing Revolver Commitment of Lenders.
(a) Subject to the terms and conditions hereof, during
the Term of this Agreement, each Lender hereby severally agrees to make such
loans (individually, a "Reducing Revolver Loan," and collectively, the
"Reducing Revolver Loans"), to the Borrower as the Borrower may from time to
time request pursuant to Section 3.3(b). The aggregate principal amount of
Reducing Revolver Loans which Lenders, cumulatively, shall be required to have
outstanding hereunder at any one time shall not exceed the lesser of (i) Thirty
Million Dollars ($30,000,000.00), or (ii) three hundred fifty percent (350%) of
the amount of Borrower's Consolidated Proforma Operating Cash Flow determined
as of the most recent fiscal quarter-end,
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and the amount each Lender shall be required to have outstanding hereunder as
Reducing Revolver Loans shall not exceed the lesser of (x) amount of such
Lender's Reducing Revolver Commitment, or (y) such Lender's Pro Rata Share
multiplied times an amount equal to three hundred fifty percent (350%) of
Borrower's Consolidated Proforma Operating Cash Flow determined as of the most
recent fiscal quarter-end. Each Reducing Revolver Loan under this Section 3.2
shall be made by the Lenders ratably in proportion to their respective Reducing
Revolver Commitments. The Reducing Revolver Loan shall be evidenced by the
Reducing Revolver Notes of the Borrower, each dated the date hereof and payable
by the Borrower to the respective orders of each of the Lenders in the
aggregate original principal amount of Thirty Million Dollars ($30,000,000.00)
and otherwise in the form attached hereto as Exhibit C and incorporated herein
by reference (as the same may from time to time be amended, modified, extended
or renewed, the "Reducing Revolver Notes"). The Reducing Revolver Notes shall
mature on October 4, 2001, unless earlier terminated by acceleration or
otherwise upon the occurrence of an Event of Default under this Agreement.
Subject to any such earlier maturity by reason of acceleration or otherwise and
in addition to any voluntary reduction requested by Borrower pursuant to
Section 3.12, the aggregate Reducing Revolver Commitments of the Lenders shall
be reduced by the amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00) on the first day of each fiscal quarter commencing with the
first such reduction on January 1, 1999 and continuing on the first day of each
fiscal quarter thereafter during the Term hereof, with such reductions being
applied to the respective Reducing Revolver Commitments of the Lenders in
accordance with their Pro Rata Shares thereof. In the event any such quarterly
reduction in the aggregate Reducing Revolver Commitments shall cause the amount
of the Reducing Revolver Commitments of all of the Lenders to be decreased
below the then outstanding principal amount of all Reducing Revolver Loans to
Borrower, or in the event any reduction in Borrower's most recent quarter-end
Consolidated Proforma Operating Cash Flow shall cause the aggregate principal
amount of the Reducing Revolver Loans to exceed three hundred fifty percent
(350%) of such most recent quarter-end Consolidated Proforma Operating Cash
Flow, Borrower agrees to pay to Agent for distribution to the Lenders in
accordance with their respective Pro Rata Shares of the Reducing Revolver
Commitments, the amount by which the aggregate outstanding Reducing Revolver
Loans then exceeds the lesser of the then available aggregate Reducing Revolver
Commitments or three hundred fifty percent (350%) of Borrower's most recent
quarter-end Consolidated Proforma Operating Cash Flow. To the extent such sums
have not been previously repaid pursuant to the preceding sentence, the entire
outstanding and unpaid principal balance of the Reducing Revolver Loans shall
be due and payable on October 4, 2001. Subject to the terms and conditions of
this Agreement, the Borrower may borrow, repay and reborrow the amounts
available under this Section 3.2.
(b) Each Lender shall record in its books and records,
and prior to any transfer of its Reducing Revolver Note shall endorse on the
schedules forming a part thereof, appropriate notations to evidence the date
and amount of each Reducing Revolver Loan made by it during the Term hereof,
whether such Reducing Revolver Loan is then a Prime Loan or a LIBOR Loan, and
the date and amount of each payment of principal made by Borrower with respect
thereto. Each Lender is hereby irrevocably authorized by Borrower so to
endorse its Reducing Revolver Note and to attach to and make a part of any such
Reducing Revolver Note a continuation of any such schedule as and when
required; provided, however that the obligation of Borrower to repay each
Reducing Revolver Loan made hereunder shall be absolute and
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unconditional, notwithstanding any failure of any Lender to endorse or any
mistake by any Lender in connection with endorsement on the schedules attached
to their respective Reducing Revolver Notes. The books and records of each
Lender (including, without limitation, the schedules attached to the Reducing
Revolver Notes) showing the account between such Lender and Borrower shall be
admissible in evidence in any action or proceeding and shall constitute prima
facie proof of the items therein set forth.
3.3 Procedure for Borrowing.
(a) Revolving Credit Loan Advances. Subject to the terms
and conditions hereof, Lenders shall cause the Revolving Credit Loans to be
made to the Borrower at any time and from time to time during the Term hereof
upon timely notice ("Borrowing Notice") to Agent, in writing signed by the
authorized representative of the Borrower (including any such notice by
facsimile transmission) or, if a Prime Loan is being requested, such Borrowing
Notice may be oral provided it is promptly confirmed in writing signed by the
authorized representative of the Borrower to Agent, specifying: (1) the desired
amount of the new Revolving Credit Loan, (2) the applicable interest rate
option being selected, (3) if a LIBOR Loan is requested, the Interest Period,
which in no event shall extend beyond the last day of the Term hereof, and (4)
the date on which the Loan proceeds are to be made available to the Borrower,
which shall be a Business Day. Each Borrowing Notice must be received by Agent
not later than 11:00 a.m. (St. Louis time) on the Business Day on which a
Revolving Credit Loan being borrowed as a Prime Loan is to be made, and not
later than 11:00 a.m. (St. Louis time) on the second Business Day prior to the
Business Day on which a Revolving Credit Loan being borrowed as a LIBOR Loan is
to be made. Upon receipt of a Borrowing Notice given to it, the Agent shall
notify each Lender by 12:00 noon (St. Louis time) on the date of receipt of
such Borrowing Notice by the Agent of the contents thereof and of such Lender's
Pro Rata Share of such new Revolving Credit Loan. A Borrowing Notice, once
issued, shall not be revocable by the Borrower. Not later than 2:00 p.m. (St.
Louis time) on the date of each new Revolving Credit Loan, each Lender shall
make available its Pro Rata Share of such Revolving Credit Loan, in federal or
other funds immediately available in St. Louis, Missouri, to the Agent at its
address specified in or pursuant to Section 10.7. Agent shall not be required
to make any amount available to Borrower hereunder except to the extent it
shall have received such amounts from the Lenders as set forth herein,
provided, however, that unless the Agent shall have been notified by a Lender
prior to the date a Revolving Credit Loan is to be made hereunder that such
Lender does not intend to make its Pro Rata Share of such Revolving Credit Loan
available to the Agent, the Agent may assume that such Lender has made such Pro
Rata Share available to the Agent on such date, and the Agent may in reliance
upon such assumption make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Lender and the Agent has made such amount available to the Borrower, the Agent
shall be entitled to receive such amount from such Lender forthwith upon its
demand, together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Borrower and
ending on but excluding the date the Agent recovers such amount from the Lender
at a rate per annum equal to the effective rate charged to the Agent for
overnight federal funds transactions with member banks of the Federal Reserve
System for each day as determined by the Agent (or in the case of a day which
is not a Business Day, then for the preceding day). Subject to the terms and
conditions hereof,
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provided that Agent has received a timely Borrowing Notice, Agent shall (unless
Agent determines that any applicable condition specified in Section 4 has not
been satisfied) make the funds so received from the Lenders available to
Borrower by wiring or otherwise transferring the proceeds of such Loan not
later than 2:30 p.m. (St. Louis time) on the Business Day specified in said
Borrowing Notice in accordance with any instructions for such disbursement
received from the Borrower. The Borrower hereby authorizes Agent and Lenders
to rely on telephonic, telegraphic, telecopy, telex or written instructions of
any Person identifying himself or herself as a Person authorized to request a
Revolving Credit Loan or to make a repayment hereunder, and on any signature
which Agent or any of the Lenders believes to be genuine, and the Borrower
shall be bound thereby in the same manner as if such Person were actually
authorized or such signature were genuine. Borrower also hereby agrees to
indemnify Agent and Lenders and hold Agent and Lenders harmless from and
against any and all claims, demands, damages, liabilities, losses, costs and
expenses (including, without limitation, attorneys' fees and expenses) relating
to or arising out of or in connection with the acceptance of instructions for
making Revolving Credit Loans or making repayments hereunder unless such
acceptance results from the gross negligence or willful misconduct of the Agent
or a Lender, as determined by a court of competent jurisdiction. A Borrowing
Notice shall not be required in connection with a Prime Loan pursuant to
Section 3.4(c).
(b) Reducing Revolver Loan Advances. Subject to the
terms and conditions hereof, Lenders shall cause the Reducing Revolver Loans to
be made to the Borrower at any time and from time to time during the Term
hereof upon Borrower's application to Agent in writing signed by the authorized
representative of the Borrower and received by Agent not later than 11:00 a.m.
(St. Louis time) fifteen (15) Business Days prior to the date on which such
Reducing Revolver Loan is being borrowed, specifying: (1) the target business
to be acquired by Borrower in an Acceptable Acquisition with the proceeds of
such Reducing Revolver Loan (which business must be in a similar line of
business to Borrower and its Subsidiaries), (2) the affidavit of the President
of Borrower attesting that the Acceptable Acquisition contemplated will not
cause Borrower or any of its Subsidiaries to violate any provision of the
Transaction Documents and including Borrower's financial projections showing
that post-acquisition Borrower and its Subsidiaries will be in proforma
compliance with the financial covenants set forth in Section 7.1(i) of this
Agreement, (3) the desired amount of the new Reducing Revolver Loan, which
shall not exceed the cash purchase price for the target business, and (4) the
date on which the Loan proceeds are to be made available to the Borrower, which
shall be a Business Day, and not later than two (2) Business Days prior to the
date funding of any such requested Reducing Revolver Loan, Borrower shall
further notify Agent in writing of: (A) the applicable interest rate option
being selected, and (B) if a LIBOR Loan is requested, the Interest Period,
which in no event shall extend beyond the last day of the Term hereof. Each
application for a Reducing Revolver Loan hereunder shall include a copy of the
letter of interest, purchase agreement or other documents signed by and between
Borrower and the target business disclosing the terms of the Acceptable
Acquisition. Reducing Revolver Loans made hereunder to fund Acceptable
Acquisitions shall not require the prior written consent of the Agent or the
Required Lenders except as required in subpart (c) of the definition of
Acceptable Acquisition. A Reducing Revolver Loan requested to fund any
Acceptable Acquisition shall be funded in a single advance. Upon receipt of an
application for a Reducing Revolver Loan, the Agent shall deliver a copy of
such information to each Lender on the date of receipt and shall notify each
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Lender of such Lender's Pro Rata Share of such new Reducing Revolver Loan. An
application for a Reducing Revolver Loan, once issued, shall not be revocable
by the Borrower. Not later than 2:00 p.m. (St. Louis time) on the date of each
new Reducing Revolver Loan, each Lender shall make available its Pro Rata Share
of such Reducing Revolver Loan, in federal or other funds immediately available
in St. Louis, Missouri, to the Agent at its address specified in or pursuant to
Section 10.7. Agent shall not be required to make any amount available to
Borrower hereunder except to the extent it shall have received such amounts
from the Lenders as set forth herein, provided, however, that unless the Agent
shall have been notified by a Lender prior to the date a Reducing Revolver Loan
is to be made hereunder that such Lender does not intend to make its Pro Rata
Share of such Reducing Revolver Loan available to the Agent, the Agent may
assume that such Lender has made such Pro Rata Share available to the Agent on
such date, and the Agent may in reliance upon such assumption make available to
the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Lender and the Agent has made such
amount available to the Borrower, the Agent shall be entitled to receive such
amount from such Lender forthwith upon its demand, together with interest
thereon in respect of each day during the period commencing on the date such
amount was made available to the Borrower and ending on but excluding the date
the Agent recovers such amount from the Lender at a rate per annum equal to the
effective rate charged to the Agent for overnight federal funds transactions
with member banks of the Federal Reserve System for each day as determined by
the Agent (or in the case of a day which is not a Business Day, then for the
preceding day). Subject to the terms and conditions hereof, provided that
Agent has received a timely application from Borrower as required in this
Section 3.3(b), Agent shall (unless Agent determines that any applicable
condition specified in Sections 4.1 or 4.3 has not been satisfied) make the
funds so received from the Lenders available to Borrower by wiring or otherwise
transferring the proceeds of such Loan not later than 2:30 p.m. (St. Louis
time) on the Business Day specified by Borrower in its application in
accordance with any instructions for such disbursement received from the
Borrower. The Borrower hereby authorizes Agent and Lenders to rely on
telephonic, telegraphic, telecopy, telex or written instructions of any Person
identifying himself or herself as a Person authorized to request a Loan or to
make a repayment hereunder, and on any signature which Agent or any of the
Lenders believes to be genuine, and the Borrower shall be bound thereby in the
same manner as if such Person were actually authorized or such signature were
genuine. Borrower also hereby agrees to indemnify Agent and Lenders and hold
Agent and Lenders harmless from and against any and all claims, demands,
damages, liabilities, losses, costs and expenses (including, without
limitation, attorneys' fees and expenses) relating to or arising out of or in
connection with the acceptance of instructions for making Reducing Revolver
Loans or making repayments hereunder unless such acceptance results from the
gross negligence or willful misconduct of the Agent or a Lender as determined
by a court of competent jurisdiction.
(c) Interest Rate Conversions. Subject to the terms and
conditions hereof, Lenders shall permit the Borrower to convert outstanding
Revolving Credit Loans or outstanding Reducing Revolver Loans from a Prime Loan
to a LIBOR Loan or from a LIBOR Loan to a Prime Loan, and Lenders shall permit
the Borrower to request a new Interest Period for any existing LIBOR Loan at
the end of its then current Interest Period, upon timely notice ("Conversion
Notice") to Agent, in writing signed by the authorized representative of the
Borrower (including any such notice by facsimile transmission) specifying: (1)
the amount of
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the outstanding Revolving Credit Loan or Reducing Revolver Loan being converted
to a new interest rate basis, or the amount of the LIBOR Loan being continued
as a LIBOR Loan for a new Interest Period, (2) the applicable interest rate
option being selected, (3) if a LIBOR Loan is requested, the Interest Period,
which in no event shall extend beyond the last day of the Term hereof, and (4)
the effective date, which shall be a Business Day, and if pertaining to an
existing LIBOR Loan, shall also be the last day of the then current Interest
Period. Each Conversion Notice must be received by Agent not later than 11:00
a.m. (St. Louis time) on the Business Day on which a conversion to a Prime Loan
is to be made, and not later than 11:00 a.m. (St. Louis time) on the second
Business Day prior to the Business Day on which a conversion to a LIBOR Loan is
to be made. Each Conversion Notice for extension of an existing LIBOR Loan for
a new Interest Period must be received by Agent not later than 11:00 a.m. (St.
Louis time) on the second Business Day prior to the last day of the then
current Interest Period. Upon receipt of a Conversion Notice given to it, the
Agent shall notify each Lender by 12:00 noon (St. Louis time) on the date of
receipt of such Conversion Notice by the Agent of the contents thereof. Unless
the Borrower shall have otherwise requested Agent to notify the Lenders to
continue an existing LIBOR Loan for a new Interest Period in a timely
Conversion Notice, upon the expiration of the current Interest Period any LIBOR
Loan made in relation to such Interest Period and then outstanding shall bear
interest at the Prime Rate plus Applicable Margin from and after the expiration
of such Interest Period unless and until subsequently converted in accordance
with the terms of this Section 3.3(c). A Conversion Notice shall not be
revocable by the Borrower. Subject to the terms and conditions hereof,
provided that Agent has received the timely Conversion Notice, Lenders shall
(unless Agent determines that any applicable condition specified in Section 4
has not been satisfied) convert the interest rate on the portion of the
outstanding Revolving Credit Loans or Reducing Revolver Loan, as the case may
be, as directed by the Borrower in the Conversion Notice, or Lenders shall
extend any LIBOR Loan for a new Interest Period as directed by the Borrower in
the Conversion Notice, at 2:30 p.m. (St. Louis time) on the Business Day
specified in said Conversion Notice; provided, however, that notwithstanding
the foregoing, in addition to and without limiting the rights and remedies of
the Agent and the Lenders under Section 8 hereof, so long as any Default or
Event of Default under this Agreement has occurred and is continuing, Borrower
shall not be permitted to renew any LIBOR Loan as a LIBOR Loan or to convert
any Prime Loan into a LIBOR Loan. The Borrower hereby authorizes Agent and the
Lenders to rely on telephonic, telegraphic, telecopy, telex or written
instructions of any person identifying himself or herself as a Person
authorized to request a conversion of a Revolving Credit Loan or Reducing
Revolver Loan, as the case may be, or to continue a LIBOR Loan hereunder, and
on any signature which Agent or any of the Lenders believe to be genuine, and
the Borrower shall be bound thereby in the same manner as if such Person were
actually authorized or such signature were genuine. The Borrower also hereby
agrees to indemnify Agent and the Lenders and hold Agent and the Lenders
harmless from and against any and all claims, demands, damages, liabilities,
losses, costs and expenses (including, without limitation, attorneys' fees and
expenses) relating to or arising out of or in connection with the acceptance of
instructions for converting Revolving Credit Loans or Reducing Revolver Loans
to a new interest rate basis or continuing LIBOR Loans hereunder unless such
acceptance results from the gross negligence or willful misconduct of the Agent
or a Lender as determined by a court of competent jurisdiction. A Conversion
Notice shall not be required in connection with a Prime Loan pursuant to
Section 3.7, 3.8 or 3.9.
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3.4 Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement, during the Term of this Agreement, and so long as no Default or
Event of Default under this Agreement has occurred and is continuing (provided,
however, that Agent shall have no liability to any of the Lenders for issuing a
Letter of Credit after the occurrence of any Default or Event of Default under
this Agreement unless Agent has previously received notice in writing to Agent
by Borrower or any of the other Lenders of the occurrence of such Default or
Event of Default), Agent hereby agrees to issue irrevocable standby and
commercial letters of credit for the account of Borrower (individually, a
"Letter of Credit" and collectively, the "Letters of Credit") in an amount and
for the term specifically requested by Borrower by application in writing to
Agent in the form of Exhibit F in the case of a standby Letter of Credit or in
the form of Exhibit G in the case of a commercial Letter of Credit, each as
attached hereto and incorporated herein by reference (a "Letter of Credit
Application") at least three (3) Business Days prior to the requested issuance
thereof; provided, however, that:
(i) Borrower shall have executed and delivered to Agent a
Letter of Credit Application with respect to such Letter of Credit;
(ii) the term of any such Letter of Credit shall not
extend beyond the earlier of (A) the last day of the Term hereof, or
(B) three hundred sixty-five (365) days from the issuance thereof,
provided, however, that any such Letter of Credit may be renewable on
terms satisfactory to the Agent; and
(iii) the aggregate undrawn face amount of all outstanding
Letters of Credit shall not at any one time exceed Seven Million Five
Hundred Thousand Dollars ($7,500,000.00) and the aggregate undrawn
face amount of all outstanding Letters of Credit plus the outstanding
principal amount of all Revolving Credit Loans shall not at any one
time exceed the lesser of (a) the Borrowing Base or (b) Twenty Million
Dollars ($20,000,000.00); and
(iv) the text of any such Letter of Credit is provided to
Agent no less than three (3) Business Days prior to the requested
issuance date, which text must be acceptable to Agent in its sole and
absolute discretion.
(b) The payment of drafts under each Letter of Credit
shall be made in accordance with the terms thereof and, in that connection,
Agent shall be entitled to honor any drafts and accept any documents presented
to it by the beneficiary of such Letter of Credit in accordance with the terms
of such Letter of Credit and believed by Agent to be genuine. Agent shall not
have any duty to inquire as to the accuracy or authenticity of any draft or
other drawing document that may be presented to it other than the duties
contemplated by the applicable Letter of Credit Application. If Agent shall
have received documents that in its judgment constitute all of the documents
that are required to be presented before payment or acceptance of a draft under
a Letter of Credit, it shall be entitled to pay such draft provided such
documents conform on their face to the requirements of such Letter of Credit.
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23
(c) In the event of any payment by Agent of a draft
presented or accepted under a Letter of Credit, Borrower agrees to pay to Agent
in immediately available funds at the time of such drawing an amount equal to
the sum of such drawing plus Agent's negotiation, processing and other fees
related thereto. Borrower hereby authorizes Agent to charge or cause to be
charged Borrower's bank accounts at Agent to the extent there are balances of
immediately available funds therein, in an amount equal to the sum of such
drawing plus Agent's negotiation, processing and other fees related thereto,
and Borrower agrees to pay the amount of any such drawing (and/or Agent's
negotiation, processing and other fees related thereto) not so charged prior to
the close of business of Agent on the day of such drawing. In the event any
payment under a Letter of Credit is made by Agent prior to receipt of payment
from Borrower, such payment by Agent shall constitute a request by Borrower for
a Revolving Credit Loan as a Prime Loan under Section 3.1(a) above.
(d)(i) Borrower shall also pay to Agent, for its own
account, with respect to each a Letter of Credit, a nonrefundable
issuance fee in the amount of One Hundred Twenty-Five Dollars
($125.00) (the "Letter of Credit Issuance Fee"), which Letter of
Credit Issuance Fee shall be due and payable on the date of issuance
of each Letter of Credit, and such other fees as Agent may from time
to time customarily charge in accordance with Agent's published
schedule of fees in effect from time to time, which fees shall be due
and payable on demand by Agent; and
(ii) Borrower shall pay to Agent for the ratable account
of the Lenders with respect to each Letter of Credit for the period
during which such Letter of Credit is outstanding, a nonrefundable
Letter of Credit Commitment Fee in an amount per annum equal to the
LIBOR Margin in effect for each such fiscal quarter (calculated on an
actual day, 360-day year basis) times the face amount (taking into
account any scheduled increases or decreases therein during the fiscal
quarter in question) of each Letter of Credit issued hereunder
("Letter of Credit Commitment Fee"), which Letter of Credit Commitment
Fee shall be due and payable initially within ten (10) days of the
date hereof for all Letters of Credit outstanding on the date hereof
and on the date of issuance for each Letter of Credit issued by Agent
hereafter, in each case prorated for the remainder of the then current
quarter, and such Letter of Credit Commitment Fee shall also be
payable thereafter for all outstanding Letters of Credit quarterly in
advance on each July 1, October 1, January 1 and April 1 during the
Term hereof.
(e) Upon the issuance of a Letter of Credit by Agent, an
undivided participation interest therein (including, without limitation, an
undivided participation interest in the reimbursement risk relating to such
Letter of Credit and in all payments and Revolving Credit Loans made in
connection with such Letter of Credit) shall automatically be granted by Agent
to and accepted by each of the other Lenders in an amount based on each such
other Lender's Pro Rata Share of the face amount of such Letter of Credit,
which participation shall be evidenced by a single Letter of Credit
Participation Certificate executed by Agent in favor of such Lender in the form
attached hereto as Exhibit H and incorporated herein by reference. Agent
agrees to provide each Lender with a copy of each Letter of Credit issued
hereunder. If
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Agent shall make payment on any draft presented or accepted under a Letter of
Credit, Agent shall give notice of such payment to the other Lenders, and each
of the other Lenders hereby authorizes and requests Agent to advance for their
respective accounts, pursuant to the terms hereof, their respective shares of
any such payment based upon their respective Pro Rata Shares. If a Default has
occurred hereunder and if such drawing is not paid by Borrower in immediately
available funds prior to the close of business of Agent on the date of such
drawing, Agent shall promptly so notify the other Lenders and each of the other
Lenders agrees to immediately reimburse Agent in immediately available funds
for its Pro Rata Share of the amount of such drawing, plus interest calculated
on its Pro Rata Share of such amount at a rate per annum equal to the effective
rate charged to the Agent for overnight federal funds transactions with member
banks of the Federal Reserve System calculated from the date of such payment by
Agent to but excluding the date of reimbursement by such other Lender and on an
actual-day, 360-day year basis. Each of the other Lenders will be entitled to
its Pro Rata Share of any Letter of Credit Commitment Fees paid by Borrower,
but such other Lenders shall have no right to share in any Letter of Credit
Issuance Fees or any other fees paid by Borrower to Agent in connection with
any of the Letters of Credit.
(f) Notwithstanding any provision contained in this
Agreement or any of the Letter of Credit Applications to the contrary, upon the
occurrence of any Event of Default under this Agreement, at Agent's option and
without demand or further notice to Borrower, an amount equal to the aggregate
undrawn face amount of all Letter(s) of Credit then outstanding shall be deemed
(as between Agent and Borrower) to have been paid or disbursed by Agent
(notwithstanding that such amounts may not in fact have been so paid or
disbursed by Agent), and which amount shall be immediately due and payable. In
lieu of the foregoing, at the election of the Required Lenders upon the
occurrence of any Event of Default under this Agreement, Borrower shall, upon
the Required Lenders' demand, deliver to Agent cash, or other collateral
acceptable to the Required Lenders in their sole and absolute discretion,
having a value, as determined by the Required Lenders, at least equal to
aggregate undrawn face amount of all outstanding Letters of Credit. Any such
collateral and/or any amounts received by Agent for such Letters of Credit
shall be held by Agent in a separate account at Agent appropriately designated
as a cash collateral account in relation to this Agreement and the Letters of
Credit and retained by Agent as collateral security for the payment of
Borrower's Obligations hereunder. Cash amounts delivered to Agent pursuant to
the foregoing requirements of this Section shall be invested, at the request
and for the account of Borrower, in investments of a type and nature and with a
term acceptable to the Required Lenders. Such amounts, including in the case
of cash amounts invested in the manner set forth above, any interest realized
thereon, may be applied to reimburse Agent and/or any of the Lenders for
drawings or payments under or pursuant to the Letters of Credit which Agent has
paid, or if no such reimbursement is required to the payment of such other of
Borrower's Obligations as the Required Lenders shall determine. Any amounts
remaining in any cash collateral account established pursuant to this Section
after the payment in full of all of Borrower's Obligations and the expiration
or cancellation of all of the Letters of Credit shall be returned to Borrower
(after deduction of Agent's expenses, if any).
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3.5 Interest Rates and Payments.
(a) Each Revolving Credit Loan and Reducing Revolver Loan
shall bear interest prior to maturity at a rate per annum equal to such of the
following as the Borrower, at its option, shall select in accordance with
Section 3.3: (i) the Prime Rate plus Applicable Margin, which rate shall
fluctuate as and when said Prime Rate or said Applicable Margin shall change,
or (ii) the LIBOR Rate plus Applicable Margin, determined in the case of LIBOR
Loans as of the date of the commencement of the applicable Interest Period.
Accrued interest on all Prime Loans shall be payable quarterly in arrears on
the first day of each calendar quarter, commencing on the first such date after
such Loan is made. Accrued interest on all LIBOR Loans shall be payable in
arrears on the last day of the Interest Period applicable to each such LIBOR
Loan, and if any such Interest Period exceeds three months, all accrued and
unpaid interest shall be due and payable on the date three months following the
commencement of such Interest Period as well. In addition, all accrued
interest on all Loans shall be payable on the last day of the Term hereof,
whether by reason of acceleration or otherwise.
(b) After the occurrence of an Event of Default, the
principal balance of and, to the extent permitted by law, any overdue interest
on any Prime Loan shall bear interest, payable on demand, for each day until
paid, at a rate per annum equal to Three and One-Fourth Percent (3.25%) over
and above the Prime Rate, fluctuating as and when said Prime Rate shall change.
After the occurrence of an Event of Default, the principal balance of and, to
the extent permitted by law, any overdue interest on any LIBOR Loan shall bear
interest, payable on demand, for each day during the applicable Interest Period
until paid, at a rate per annum equal to the sum of Two Percent (2.00%) plus
the LIBOR Rate plus Applicable Margin for such LIBOR Loan, and after the
expiration of such Interest Period, such Loan shall thereafter bear interest at
the default rate applicable to Prime Loans under the preceding sentence. From
and after the maturity of the Notes, whether by reason of acceleration or
otherwise, the unpaid principal balance of each Loan shall bear interest until
paid, payable on demand, at a rate per annum equal to Three and One-Fourth
Percent (3.25%) over and above the Prime Rate, fluctuating as aforesaid.
(c) Interest shall be computed with respect to all Loans
on an actual day, 360-day year basis. Each LIBOR Loan shall be for a principal
amount of Five Hundred Thousand Dollars ($500,000.00) or any larger multiple of
Two Hundred Fifty Thousand Dollars ($250,000.00), the Borrower shall be
permitted to have no more than eight (8) LIBOR Loans outstanding at any one
time, whether such LIBOR Loans shall constitute Revolving Credit Loans or
Reducing Revolver Loans.
(d) The Agent shall determine each interest rate
applicable to the Loans hereunder as selected by Borrower pursuant to Section
3.3. The Agent shall give prompt notice to Borrower and the Lenders by
telephone, telecopy, telex or cable of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
3.6 Prepayment; Funding Losses. The Borrower shall be privileged
to prepay all at any time or any portion from time to time of the unpaid
principal balance of any Loan, provided, however, that any LIBOR Loan may be
prepaid only at the expiration of the applicable
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Interest Period. If the Borrower makes any payment with respect to any LIBOR
Loan on any day other than the last day of the Interest Period applicable
thereto (whether by reason of acceleration, a required prepayment under this
Agreement or otherwise), or if the Borrower converts any LIBOR Loan or portion
thereof to a Prime Loan on any day other than the last day of the Interest
Period applicable thereto (whether by reason of Section 3.8, 3.9 or otherwise),
or if the Borrower fails to borrow any LIBOR Loan after a request for such a
Loan has been given to Agent pursuant hereto, the Borrower shall reimburse any
of the Lenders on demand for any resulting losses and expenses incurred by any
such Lender, including, without limitation, any losses incurred in obtaining,
liquidating or employing deposits from third parties, including loss of margin
for the period after such payment or conversion, provided that such Lender
shall have delivered to the Borrower a certificate, with supporting
calculations, as to the amount of such losses and expenses, which certificate
shall be conclusive in the absence of manifest error. All prepayments shall be
applied solely to the payment of principal.
3.7 Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(a) Deposits in dollars (in the applicable amounts) are
not being offered to any Lender in the relevant market for such Interest
Period, or
(b) Any Lender determines that the LIBOR Rate as
determined pursuant to the definition thereof will not adequately and fairly
reflect the cost to such Lender of maintaining or funding the LIBOR Loans for
such Interest Period,
such Lender shall forthwith give notice thereof to the Borrower, which notice
shall set forth in detail the basis for such notice, whereupon until such
Lender notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, (a) the obligations of the such Lender to make
LIBOR Loans shall be suspended, and (b) the Borrower shall convert all of its
then outstanding LIBOR Loans from such Lender on the last day of the then
current Interest Period applicable to each such LIBOR Loan, to a Prime Loan of
the same type (i.e., as a Reducing Revolver Loan or a Revolving Credit Loan) in
an equal principal amount. Interest accrued on such LIBOR Loan prior to such
conversion shall be due and payable on the date of such conversion.
3.8 Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
or regulatory authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable agency shall
make it unlawful or impossible for such Lender to make, maintain or fund its
LIBOR Loans to the Borrower, such Lender shall forthwith give notice thereof to
the Borrower. Upon receipt of such notice, the Borrower shall convert all of
their then outstanding LIBOR Loans from such Lender on either (a) the last day
of the then current Interest Period applicable to such LIBOR Loan if such
Lender may lawfully continue to maintain and fund such LIBOR Loan to such day
or (b) immediately if such Lender may not lawfully continue to fund and
maintain such LIBOR Loan to such day, to a Prime Loan
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of the same type (i.e., as a Reducing Revolver Loan or a Revolving Credit Loan)
in an equal principal amount. Interest accrued on such LIBOR Loan prior to
such conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under Section 3.6.
3.9 Increased Cost.
(a) If (i) Regulation D of the Board of Governors of the
Federal Reserve System, as amended, or (ii) after the date hereof, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any governmental or
regulatory authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable agency (a
"Regulatory Change"):
(i) shall subject any such Lender to any tax, duty or
other charge with respect to its LIBOR Loans, the Notes or the
obligation to make LIBOR Loans, or shall change the basis of taxation
of payments to any such Lender of the principal of or interest on its
LIBOR Loans or any other amounts due under this Agreement in respect
of its LIBOR Loans or its obligation to make LIBOR Loans (except for
taxes on or changes in the rate of tax on the overall net income of
such Lender); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve System), special deposit, capital or
similar requirement against assets of, deposits with or for the
account of, or credit extended or committed to be extended by, any
such Lender or shall, with respect to such Lender impose, modify or
deem applicable any other condition affecting such Lender's LIBOR
Loans, the Notes or such Lender's obligation to make LIBOR Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D, to impose a cost on or increase the cost to) such Lender
of making or maintaining any LIBOR Loan, or to reduce the amount of any sum
received or receivable by such Lender under this Agreement or under any of the
Notes with respect thereto, by an amount deemed by such Lender to be material,
and if such Lender is not otherwise fully compensated for such increase in cost
or reduction in amount received or receivable by virtue of the inclusion of the
reference to "LIBOR Reserve Percentage" in the calculation of the LIBOR Rate,
then upon notice by such Lender to the Borrower, which notice shall set forth
such Lender's supporting calculations and the details of the Regulatory Change,
the Borrower shall pay such Lender, as additional interest, such additional
amount or amounts as will compensate Lenders for such increased cost or
reduction. The determination by any Lender under this Section of the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount or amounts, the
Lenders may use any reasonable averaging and attribution methods.
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(b) If any Lender demands compensation under this
Section, the Borrower may at any time, upon at least one (1) Business Day's
prior notice to such Lender, convert their then outstanding LIBOR Loans to
Prime Loans of the same type (i.e., as a Reducing Revolver Loan or a Revolving
Credit Loan) in an equal principal amount. Interest accrued on such LIBOR Loan
prior to such conversion shall be due and payable on the date of such
conversion together with any funding losses and other amounts due under Section
3.6.
3.10 Prime Loans Substituted for Affected LIBOR Loans. If notice
has been given by any Lender pursuant to Section 3.7 or 3.8 or by the Borrower
pursuant to Section 3.9 requiring LIBOR Loans to be repaid or converted, then,
unless and until such Lender notifies the Borrower that the circumstances
giving rise to such repayment or conversion no longer apply, all Loans which
would otherwise be made by such Lender to the Borrower as LIBOR Loans shall be
made instead as Prime Loans. Any such Lender shall notify the Borrower if and
when the circumstances giving rise to such repayment no longer apply. All
indemnities and all provisions relating to reimbursement to any Lender of
amounts sufficient to protect the yield to such Lender with respect to the
Loans, including, without limitation, Sections 3.6, 3.7, 3.8 and 3.9 hereof,
shall survive the payment of the Notes and the termination of this Agreement.
3.11 Place and Manner of Payment. Both principal and interest on
the Loans and all fees due hereunder and under any of the other Transaction
Documents payable to any Lender shall be paid in lawful currency of the United
States, in federal or other immediately available funds, at Agent's banking
office at 000 Xxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000. The Agent will
promptly distribute to each Lender in immediately available funds its ratable
share of each such payment received by the Agent pursuant to the terms of this
Agreement for the account of such Lenders. Whenever any payment of principal
of, or interest on, the Loans or of fees shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day, except as required by clauses (iii) or (iv) of the
definition of Interest Period. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.
3.12 Termination or Reduction of Revolving Credit Commitments and
Reducing Revolver Commitments. The Borrower may, upon one (1) Business Day's
prior written notice to Agent, terminate entirely at any time, or
proportionately reduce from time to time on a pro rata basis among the Lenders
based on their respective Revolving Credit Commitments or Reducing Revolver
Commitments, as the case may be, by an aggregate amount of $500,000.00 or any
larger multiple of $100,000.00, the unused portions of the Revolving Credit
Commitments and/or the Reducing Revolver Commitments as specified by Borrower
in such notice to Agent; provided, however, that (i) at no time shall the
Revolving Credit Commitments be reduced to a figure less than the total of the
outstanding principal amount of all Revolving Credit Loans plus the face amount
of all outstanding Letters of Credit, (ii) at no time shall the Revolving
Credit Commitments be reduced to a figure greater than zero but less than
$500,000.00, (iii) at no time shall the Reducing Revolver Commitments be
reduced to a figure less than the total of the outstanding principal amount of
all Reducing Revolver Loans, (iv) at no time shall the Reducing Revolver
Commitments be reduced to a figure greater than zero but less than $500,000.00,
and (v) any such termination or reduction shall be permanent and the
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29
Borrower shall have no right to thereafter reinstate or increase, as the case
may be, the Revolving Credit Commitment or the Reducing Revolver Commitment, as
the case may be, of any Lender.
3.13 Facility Fee. The Borrower shall pay to Agent on the date
hereof a nonrefundable Facility Fee (the "Facility Fee") in the amount agreed
to in that certain commitment letter from Agent to Borrower dated August 19,
1996.
3.14 Commitment Fee. From the date hereof to but excluding the
last day of the Term hereof, the Borrower shall pay to the Agent, for
distribution to the Lenders in accordance with their Pro Rata Shares, a
quarterly nonrefundable commitment fee equal to (a) One-Fourth of One Percent
(.25%) per annum for all fiscal quarters ending on or before March 31, 1997, or
(b) the percentage per annum equal to the then current Applicable Margin for
all times after March 31, 1997, multiplied by the average daily unused portion
of the Total Revolving Credit Commitment, plus (y) the average daily unused
portion of the aggregate Reducing Revolver Commitments. The unused Total
Revolving Credit Commitment shall be calculated as (i) the sum of the amounts
each day during any such fiscal quarter equal to the Total Revolving Credit
Commitment minus (x) the outstanding principal balance of all Revolving Credit
Loans, and (y) the face amount of all issued and outstanding Letters of Credit
on each such day, divided by (ii) 90, or by such lesser number of days in any
partial fiscal quarter for which such Revolving Credit Commitment was
available. The unused portion of the aggregate Reducing Revolver Commitments
shall be calculated as (i) the sum of the amounts each day during any such
fiscal quarter equal to the aggregate Reducing Revolver Commitments minus the
outstanding principal balance of all Reducing Revolver Loans on each such day,
divided by (ii) 90, or by such lesser number of days in any partial fiscal
quarter for which such Reducing Revolver Commitment was available. Such
commitment fee shall be payable quarterly in arrears on each April 1, July 1,
October 1 and January 1 during the Term hereof and on the last day of the Term
hereof, and shall be calculated on an actual day, 360-day year basis.
3.15 Maturity. All principal, interest and other amounts
outstanding with respect to the Revolving Credit Loans and the Reducing
Revolver Loans which are not paid prior thereto shall be due and payable on the
last day of the Term hereof, whether by reason of the expiration thereof,
acceleration or otherwise.
3.16 Voluntary Prepayments.
(a) Borrower may, upon notice to Agent specifying that it
is paying its Prime Loans and specifying whether it is paying a portion of its
Reducing Revolver Loans and/or its Revolving Credit Loans, pay its Prime Loans
in whole at any time, or from time to time in part in amounts aggregating
$10,000.00 or any larger multiple of $10,000.00, by paying the principal amount
to be paid together with all accrued and unpaid interest thereon to and
including the date of payment; provided, however, that in no event may the
Borrower make a partial payment of Prime Loans which results in the total
outstanding Revolving Credit Loans which are Prime Loans being greater than
zero but less than $10,000.00.
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(b) Borrower may, upon at least two (2) Business Day's
notice to Agent specifying that it is paying LIBOR Loans and specifying whether
it is paying a portion of the Reducing Revolver Loans and/or its Revolving
Credit Loans, pay on the last day of any Interest Period its LIBOR Loans to
which such Interest Period applies, in whole, or in part in amounts aggregating
$100,000.00 or any larger multiple of $50,000.00, by paying the principal
amount to be paid together with all accrued and unpaid interest thereon to and
including the date of payment; provided, however, that in no event may the
Borrower make a partial payment of LIBOR Loans which results in the total
outstanding LIBOR Loans which constitute a portion of the Reducing Revolver
Loans with respect to which a given Interest Period applies or the total
outstanding LIBOR Loans which are Revolving Credit Loans with respect to which
a given Interest Period applies being greater than zero but less than
$500,000.00.
(c) Upon receipt of a notice of payment pursuant to this
Section, the Agent shall promptly notify each Lender of the contents thereof
and of such Lender's Pro Rata Share of such payment and such notice shall not
thereafter be revocable by Borrower.
3.17 Discretion of Lender as to Manner of Funding. Notwithstanding
any provision contained in this Agreement to the contrary, each of the Lenders
shall be entitled to fund and maintain its funding of all or any part of its
LIBOR Loans in any manner it elects, it being understood, however, that for
purposes of this Agreement all determinations hereunder (including, without
limitation, the determination of each Lender's funding losses and expenses
under Section 3.6) shall be made as if such Lender had actually funded and
maintained each LIBOR Loan through the purchase of deposits having a maturity
corresponding to the maturity of the applicable Interest Period relating to the
applicable LIBOR Loan and bearing an interest rate equal to the applicable
LIBOR Rate. Each Lender may, at its option, elect to make, fund or maintain
its Loans hereunder at the branches or offices specified on the signature pages
hereof or on any Assignment Agreement executed and delivered pursuant to
Section 10.12 hereof or at such other of its branches or offices as such Lender
may from time to time elect, provided that the Borrower shall not be required
to reimburse any Lender under any of the provisions of Section 3.6 for any cost
which such Lender would not have incurred but for changing its lending or
funding branch unless Borrower consents to such change.
SECTION 4. PRECONDITIONS TO LOANS.
4.1 Initial Reducing Revolver Loan and Initial Revolving Credit
Loan or Letter of Credit. Notwithstanding any provision contained herein to
the contrary, Lenders shall have no obligation to make any Loan hereunder, and
Agent shall have no obligation to issue any Letter of Credit, unless Agent and
Lenders shall have received no later than December 31, 1996 the following:
(a) This Agreement and the Notes, each executed by a duly
authorized officer of the Borrower;
(b) The Security Agreement, financing statements, motor
vehicle title lien applications and such other documents as Agent may
reasonably require under Section 5.1, each executed by a duly authorized
officer of the Borrower;
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(c) The Subsidiary Guaranties executed and delivered by a
duly authorized officer of each of the respective Subsidiaries of Borrower in
existence on the date hereof;
(d) The Subsidiary Security Agreements, financing
statements, motor vehicle title lien applications and such other documents as
Agent may reasonably require under Section 5.4, each executed by a duly
authorized officer of each of the respective Subsidiaries of Borrower;
(e) The Trademark Assignment and such other documents as
Agent may reasonably require under Section 5.2, each executed by a duly
authorized officer of the Borrower required to execute such agreement;
(f) The Pledge Agreement, together with such collateral
schedules, Reg. U-1 affidavits, stock powers (signed in blank) and other
documents as Agent may reasonably require under Section 5.3, each executed by a
duly authorized officer of the Borrower;
(g) The policies or certificates of insurance required by
Section 7.1(d) herein;
(h) A copy of resolutions of the Board of Directors of
Borrower, duly adopted, which authorize the execution, delivery and performance
of this Agreement, the Notes, the Security Agreement, the Pledge Agreement, the
Trademark Assignment and the other Transaction Document to be executed by
Borrower, certified by the President and Secretary of Borrower;
(i) A copy of resolutions of the Boards of Directors of
each of the Subsidiaries, each duly adopted, authorizing the execution,
delivery and performance by each such Subsidiary of its Subsidiary Guaranty,
its Subsidiary Security Agreement and any other Transaction Documents to be
executed by such Subsidiary, certified by the Vice President and Assistant
Secretary, respectively, of such Subsidiary;
(j) Copies of the Articles of Incorporation of Borrower
and each of its Subsidiaries, including any amendments thereto, certified by
the Secretary of State of each of their respective states of incorporation;
(k) A copy of Borrower's Bylaws and copies of the Bylaws
of each of Borrower's Subsidiaries, including amendments thereto, certified
respectively by the corporate Secretary of Borrower and each such Subsidiary;
(l) Incumbency certificates, executed respectively by the
Secretaries of the Borrower and of each Subsidiary of the Borrower, which shall
identify by name and title and bear the signatures of all of the officers of
the Borrower or each such Subsidiary executing any of the Transaction
Documents;
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(m) A certificate of corporate good standing of Borrower
and each of its Subsidiaries issued by the Secretary of State of their
respective states of incorporation;
(n) An opinion of counsel of Xxxxxx, Xxxxxxx & Xxxxxxxx,
independent counsel to the Borrower and its Subsidiaries, in the form of
Exhibit D attached hereto and incorporated herein by reference;
(o) Evidence satisfactory to Agent and each of the
Lenders that Borrower has acquired and presently holds all of the outstanding
voting capital stock of each of the Founding Companies as that term is defined
in Borrower's Form S-1 filed with the Securities and Exchange Commission on
July 3, 1996;
(p) Evidence satisfactory to Agent and each of the
Lenders that Borrower has completed its initial public offering of its common
stock and has received net proceeds from such initial public offering of not
less than $35,000,000.00, a portion of which shall have been used to repay in
full all of the outstanding borrowed money indebtedness of each of the Founding
Companies;
(q) The initial Borrowing Base Certificate required by
Section 3.1(c);
(r) The Borrowing Notice required by Section 3.3(a)
and/or the initial application for Reducing Revolver Loan required by Section
3.3(b);
(s) Such other agreements, documents, instruments and
certificates as Agent or Lenders may reasonably request.
4.2 Subsequent Revolving Credit Loans. Notwithstanding any
provision contained herein to the contrary, Lenders shall have no obligation to
make any subsequent Revolving Credit Loan hereunder, and Agent shall have no
obligation to issue any subsequent Letter of Credit under any Letter of Credit
Application, unless:
(a) Agent and each of the Lenders shall have received a
current Borrowing Base Certificate as required by Section 3.1(c);
(b) Agent shall have received a Borrowing Notice or
Conversion Notice for such Loan as required by Section 3.3, or the Letter of
Credit Application as required by Section 3.4;
(c) On the date of and immediately after such Loan, Loan
conversion or Letter of Credit issuance, no Default or Event of Default under
this Agreement shall have occurred and be continuing; and
(d) On the date of and immediately after such Loan, Loan
conversion or Letter of Credit issuance, no material adverse change in the
business, financial position or results of operations of the Borrower or any of
its Subsidiaries shall have occurred since the date of this Agreement and be
continuing; and
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33
(e) All of the representations and warranties of the
Borrower contained in this Agreement shall be true and correct on and as of the
date of such Loan, Loan conversion or Letter of Credit issuance as if made on
the date of such Loan, the date of such Loan conversion or the issuance date of
such Letter of Credit, as the case may be.
Each request for a Loan, for conversion of a Loan or application for a
Letter of Credit by the Borrower hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Loan, Loan
conversion or Letter of Credit issuance as to the facts specified in clauses
(c), (d) and (e) of this Section 4.2.
4.3 Subsequent Reducing Revolver Loans. Notwithstanding any
provision contained herein to the contrary, Lenders shall have no obligation to
make any subsequent Reducing Revolver Loan hereunder unless:
(a) Agent and each of the Lenders shall have received the
current quarter-end financial statements and compliance certificate as required
by Sections 7.1(a)(ii) and (iii);
(b) Agent shall have received a complete application for
such Reducing Revolver Loan as required by Section 3.3(b);
(c) Any Subsidiary created or acquired by Borrower in
connection with the Acceptable Acquisition which is to be funded with the
proceeds of such Reducing Revolver Loan shall have executed and delivered:
(i) A Subsidiary Guaranty executed and delivered by a
duly authorized officer of such new Subsidiary of Borrower;
(ii) A Subsidiary Security Agreement, financing
statements, motor vehicle title lien applications and such other
documents as Agent may reasonably require, each executed by a duly
authorized officer of such new Subsidiary;
(iii) A copy of resolutions of the Board of Directors of
such new Subsidiary, duly adopted, authorizing the execution, delivery
and performance by such Subsidiary of its Subsidiary Guaranty, its
Subsidiary Security Agreement and any other Transaction Documents to
be executed by such Subsidiary, certified by the President and
Secretary of such Subsidiary;
(iv) A copy of the Articles of Incorporation of such new
Subsidiary, certified by the Secretary of State of its state of
incorporation;
(v) A copy of the Bylaws of such new Subsidiary,
certified by the corporate Secretary of such Subsidiary;
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(vi) An incumbency certificate, executed by the Secretary
of such new Subsidiary, which shall identify by name and title and
bear the signatures of all of the officers of such Subsidiary
executing any of the Transaction Documents;
(vii) A certificate of corporate good standing of such
Subsidiary, issued by the Secretary of State of its state of
incorporation; and
(viii) An opinion of counsel of Xxxxxx, Xxxxxxx & Xxxxxxxx,
independent counsel to the Borrower and such Subsidiary in form and
substance satisfactory to Agent and the Lenders.
(d) Borrower shall have delivered to Agent for the
benefit of each of the Lenders, the original stock certificate of such newly
created or acquired Subsidiary, together with such collateral schedules, stock
powers, Regulation U-1 affidavits and other documents Agent may reasonably
require;
(e) On the date of and immediately after such Reducing
Revolver Loan, no Default or Event of Default under this Agreement shall have
occurred and be continuing;
(f) On the date of and immediately after such Reducing
Revolver Loan, no material adverse change in the business, financial position
or results of operations of the Borrower or any of its Subsidiaries shall have
occurred since the date of this Agreement and be continuing;
(g) All of the representations and warranties of the
Borrower contained in this Agreement, including any pertaining to the new
Subsidiary created or acquired as a result of the Acceptable Acquisition, shall
be true and correct on and as of the date of such Reducing Revolver Loan, as if
made on the date of such Reducing Revolver Loan.
Each request for a Reducing Revolver Loan by the Borrower hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Reducing Revolver Loan as to the facts specified in clauses (e), (f)
and (g) of this Section 4.3.
SECTION 5. COLLATERAL.
5.1 Security Agreement. In order to secure the payment when due
of the Borrower's Obligations, the Borrower shall convey to Agent for the
benefit of each of the Lenders a security interest in, among other things, all
of the Property of the Borrower described on Schedule 5 attached hereto and
incorporated herein by reference, which security interest shall be a first and
prior interest in all such items except for those Uniform Commercial Code
security interests described on Schedule 6.11 attached hereto. Said security
interest shall be evidenced by a Security Agreement dated the date hereof and
executed by the Borrower in favor of Agent for the benefit of each of the
Lenders in form and substance acceptable to Agent (as the same may from time to
time be amended, the "Security Agreement"). The Borrower further covenants and
agrees to execute and deliver to Agent for the benefit of each of the Lenders
any
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35
and all financing statements, continuation statements and such other
documentation as may be requested by Agent from time to time in order to
create, perfect and continue said security interests. Upon demand, the
Borrower shall pay all legal and filing fees and expenses incurred by Agent in
the preparation of the foregoing documents and perfection of the security
interests contemplated thereby. Lenders shall have no obligation to make any
Loan or convert the interest rate on any Loan hereunder unless and until the
Borrower has fully satisfied these requirements.
5.2 Trademark Assignment. In order to further secure the payment
when due of the Borrower's Obligations, the Borrower shall convey to Agent for
the benefit of each of the Lenders a security interest in and collateral
assignment of, among other things, all of the existing and future trademarks
and trademark applications of Borrower, which security interest and collateral
assignment shall be a first and prior interest in all such items except for
those security interests described on Schedule 6.11 attached hereto. Said
security interest and collateral assignment shall be evidenced by Trademark
Collateral Assignment and Security Agreement dated the date hereof and executed
by the Borrower in favor of Agent for the benefit of each of the Lenders in
form and substance acceptable to Agent (as the same may from time to time be
amended, the "Trademark Assignment"). The Borrower further covenants and
agrees to execute and deliver to Agent for the benefit of each of the Lenders
any and all amendments and exhibits thereto for any future trademarks and
trademark applications filed by Borrower and such other documentation as may be
requested by Agent from time to time in order to create, perfect and continue
said security interests. Upon demand, the Borrower shall pay all legal and
filing fees and expenses incurred by Agent in the preparation of the foregoing
documents and perfection of the security interests contemplated thereby.
Lenders shall have no obligation to make any Loan or convert the interest rate
on any Loan hereunder unless and until the Borrower has fully satisfied these
requirements.
5.3 Pledge Agreement. In order to further secure the payment when
due of the Borrower's Obligations, the Borrower shall pledge to Agent for the
benefit of each of the Lenders all of the issued and outstanding capital stock
of each present Subsidiary of the Borrower, and if any such Subsidiary is
created or acquired subsequent to the date hereof, on the date of any such
acquisition or formation, Borrower shall pledge and deliver to Agent for the
benefit of each of the Lenders all of the issued and outstanding stock of any
such future Subsidiary. Said pledge is more fully described and evidenced by
that certain General Pledge and Security Agreement dated of even date herewith
and executed by the Borrower in favor of Agent for the benefit of each of the
Lenders (as the same may from time to time be amended, modified, extended or
renewed, the "Pledge Agreement"). The Borrower covenants and agrees to execute
any and all collateral schedules, stock powers, Reg. U-1 affidavits and such
other documents as may from time to time be requested by Agent or any Lender in
order to create, perfect and maintain the pledge created by the Pledge
Agreement and to deliver all original stock certificates for any such present
or future Subsidiaries. Upon demand, the Borrower shall pay to Agent or to any
other party designated by Agent, all filing fees or transfer fees incurred by
Agent in the perfection and administration of the pledge contemplated hereby.
Lenders shall have no obligation to make any Loan hereunder or to convert any
Loan hereunder to a new interest rate basis unless and until the Borrower has
fully satisfied these requirements.
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36
5.4 Subsidiary Security Agreement. In order to secure the payment
when due of the Borrower's Obligations as guaranteed under each of the
respective Subsidiary Guaranties, the Borrower shall cause each Subsidiary to
convey to Agent for the benefit of each of the Lenders a security interest in,
among other things, all of the Property of each such Subsidiary similar to that
described on Schedule 5 attached hereto and incorporated herein by reference,
which security interest shall be a first and prior interest in all such items
except for those Uniform Commercial Code security interests consented to by
Agent and the Required Lenders. Said security interest shall be evidenced by a
Subsidiary Security Agreement dated the date hereof and executed, respectively,
by each such Subsidiary in favor of Agent for the benefit of each of the
Lenders in form and substance acceptable to Agent (as the same may from time to
time be amended, the "Subsidiary Security Agreements"). The Borrower further
covenants and agrees to cause each of its Subsidiaries to execute and deliver
to Agent for the benefit of each of the Lenders any and all financing
statements, continuation statements and such other documentation as may be
requested by Agent from time to time in order to create, perfect and continue
said security interests. Upon demand, the Borrower shall pay all legal and
filing fees and expenses incurred by Agent in the preparation of the foregoing
documents and perfection of the security interests contemplated thereby.
Lenders shall have no obligation to make any Loan hereunder or convert the
interest rate on any Loan hereunder unless and until the Borrower and each of
its Subsidiaries have fully satisfied these requirements.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Agent and Lenders that:
6.1 Corporate Existence and Power. Borrower: (a) is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware; (b) has all requisite corporate powers and all governmental and
regulatory licenses, authorizations, consents and approvals required to carry
on its business as now conducted; and (c) is duly qualified to do business in
all jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure to so qualify would have a
material adverse effect on its business, financial condition or operations.
6.2 Authorization. The execution, delivery and performance by the
Borrower of this Agreement, the Notes, the Security Agreement, the Pledge
Agreement, the Trademark Assignment and the other Transaction Documents are
within the corporate powers of Borrower, and have been duly authorized by all
necessary action of the board of directors of said corporation.
6.3 Binding Effect. This Agreement, the Notes, the Security
Agreement, the Pledge Agreement, the Trademark Assignment and the other
Transaction Documents have been duly executed and delivered by the Borrower and
constitute the legal, valid and binding obligations of the Borrower enforceable
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting creditors'
rights in general.
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6.4 Financial Statements. The Borrower has furnished Agent and
the Lenders with the following financial statements, identified by the
principal financial officer of the Borrower: (1) the balance sheets and
corresponding statements of income, retained earnings and cash flows of each of
the Founding Companies dated as of December 31, 1995, all audited by the
respective independent certified public accountants for each such Founding
Company, which financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied, and a Borrower
prepared consolidated balance sheet and consolidated statements of income,
retained earnings and cash flows of all such Founding Companies as of December
31, 1995, which consolidated financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied;
and (2) an unaudited consolidated balance sheet and consolidated statements of
income, retained earnings and cash flows of the Founding Companies as of June
30, 1996, certified by the principal financial officer of the Borrower as being
true and correct to the best of his knowledge and as being prepared in
accordance with the Borrower's normal accounting procedures. The Borrower
further represents and warrants to Agent and each of the Lenders that: (1) said
balance sheets and their accompanying notes fairly present the condition of the
Founding Companies as of the dates thereof; (2) there has been no material
adverse change in the condition or operation, financial or otherwise, of any of
the Founding Companies since June 30, 1996; and (3) neither the Borrower nor
any Founding Company has any direct or contingent liabilities which are not
disclosed on said financial statements.
6.5 Litigation. Except as disclosed on Schedule 6.5 attached
hereto, there is no action or proceeding pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary of the
Borrower before any court, arbitrator or any governmental, regulatory or
administrative body, agency or official which could result in any material
adverse change in the condition or operation, financial or otherwise, of the
Borrower or any Subsidiary of the Borrower, and neither the Borrower nor any
Subsidiary of the Borrower is in default with respect to any order, writ,
injunction, decision or decree of any court, arbitrator or any governmental,
regulatory or administrative body, agency or official, a default under which
could have a material adverse effect on the condition or operation, financial
or otherwise, of the Borrower or any Subsidiary of the Borrower.
6.6 Pension and Welfare Plans. Each Pension Plan complies with
all applicable statutes and governmental rules and regulations; no Reportable
Event has occurred and is continuing with respect to any Pension Plan; neither
the Borrower nor any ERISA Affiliate nor any Subsidiary of the Borrower has
withdrawn from any Multiemployer Plan in a "complete withdrawal" or a "partial
withdrawal" as defined in Sections 4203 or 4205 of ERISA, respectively; no
steps have been instituted by the Borrower, any ERISA Affiliate or any
Subsidiary of the Borrower to terminate any Pension Plan; no condition exists
or event or transaction has occurred in connection with any Pension Plan or
Multiemployer Plan which could result in the incurrence by the Borrower, any
ERISA Affiliate or any Subsidiary of the Borrower of any material liability,
fine or penalty; and neither the Borrower nor any ERISA Affiliate nor any
Subsidiary of the Borrower is a "contributing sponsor" as defined in Section
4001(a)(13) of ERISA of a "single-employer plan" as defined in Section
4001(a)(15) of ERISA which has two or more contributing sponsors at least two
of whom are not under common control. Except as disclosed on Schedule 6.6
attached hereto, neither the Borrower nor any Subsidiary of the
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Borrower has any contingent liability with respect to any "employee welfare
benefit plan", as such term is defined in Section 3(a) of ERISA, which covers
retired employees and their beneficiaries.
6.7 Tax Returns and Payment. The Borrower and each Subsidiary of
the Borrower has filed all federal, state and local income tax returns and all
other tax returns which are required to be filed and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary of the Borrower, except for the filing of such returns, if
any, in respect of which an extension of time for filing is in effect and
except for such taxes, if any, as are being contested in good faith by
appropriate proceedings being diligently conducted and as to which adequate
reserves in accordance with generally accepted accounting principles
consistently applied have been provided. The charges, accruals and reserves on
the books of the Borrower and each Subsidiary of the Borrower in respect of any
taxes or other governmental charges are, in the opinion of the Borrower,
adequate.
6.8 Subsidiaries. The Borrower's Subsidiaries are as listed in
Schedule 6.8 attached hereto, which schedule sets forth each such Subsidiary's
past and present names, their current principal places of business and all
locations of any inventory or equipment owned by such Subsidiaries.
6.9 Compliance With Other Instruments; None Burdensome. Neither
the Borrower nor any Subsidiary of the Borrower is a party to any contract or
agreement or subject to any charter or other corporate restriction which
materially and adversely affects its business, Property or financial condition
and which is not disclosed on the Borrower's financial statements heretofore
submitted to Agent and the Lenders; none of the execution and delivery by the
Borrower of the Transaction Documents, the consummation of the transactions
therein contemplated or the compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower, or any of the provisions of Borrower's Articles of
Incorporation or Bylaws or any of the provisions of any indenture, agreement,
document, instrument or undertaking to which the Borrower is a party or
subject, or by which it or its Property is bound, or conflict with or
constitute a default thereunder or result in the creation or imposition of any
Lien pursuant to the terms of any such indenture, agreement, document,
instrument or undertaking (other than in favor of Agent for the benefit of
Lenders pursuant to the Transaction Documents). No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental, regulatory, administrative or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, the execution, delivery or performance of, or the
legality, validity, binding effect or enforceability of, any of the Transaction
Documents.
6.10 Other Loans and Guarantees. Except as disclosed on Schedule
6.10 attached hereto, neither the Borrower nor any Subsidiary of the Borrower
is a party to any loan transaction or Guarantee.
6.11 Title to Property. The Borrower, and each Subsidiary of the
Borrower, is the sole and absolute owner of, or has the legal right to use and
occupy, all Property it claims
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to own or which is necessary for the Borrower or such Subsidiary of the
Borrower to conduct its business. Neither the Borrower nor any Subsidiary of
the Borrower has signed any financing statements, security agreements or
chattel mortgages with respect to any of its Property, has granted or permitted
any Liens with respect to any of its Property or has any knowledge of any Liens
with respect to any of its Property, except in favor of Agent for the benefit
of Lenders or as otherwise disclosed on Schedule 6.11 attached hereto.
6.12 Multi-Employer Pension Plan Amendments Act of 1980. Neither
the Borrower nor any Subsidiary of the Borrower is a party to any Multiemployer
Plan.
6.13 Patents, Licenses, Trademarks, Etc. The Borrower, and each
Subsidiary of the Borrower, possesses all necessary patents, licenses,
trademarks, trademark rights, trade names, trade name rights and copyrights to
conduct its business without conflict with any patent, license, trademark,
trade name or copyright of any other Person.
6.14 Environmental and Safety and Health Matters. Except as
disclosed on Schedule 6.14 attached hereto: (i) the operations of the Borrower
and each Subsidiary of the Borrower comply with (A) all applicable
Environmental Laws and (B) all applicable Occupational Safety and Health Laws;
(ii) none of the operations of the Borrower or any Subsidiary of the Borrower
is subject to any judicial, governmental, regulatory or administrative
proceeding alleging the violation of any Environmental Law or Occupational
Safety and Health Law; (iii) none of the operations of the Borrower or any
Subsidiary of the Borrower is the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to (A) any
spillage, disposal or release into the environment of any Hazardous Material or
any other hazardous, toxic or dangerous waste, substance or constituent or
other substance, or (B) any unsafe or unhealthful condition at any premises of
the Borrower or such Subsidiary of the Borrower; (iv) neither the Borrower nor
any Subsidiary of the Borrower has filed any notice under any Environmental Law
or Occupational Safety and Health Law indicating or reporting (A) any past or
present spillage, disposal or release into the environment of, or treatment,
storage or disposal of, any Hazardous Material or any other hazardous, toxic or
dangerous waste, substance or constituent or other substance or (B) any unsafe
or unhealthful condition at any premises of the Borrower or such Subsidiary of
the Borrower; and (v) neither the Borrower nor any Subsidiary of the Borrower
has any known contingent liability in connection with (A) any spillage,
disposal or release into the environment of, or otherwise with respect to, any
Hazardous Material or any other hazardous, toxic or dangerous waste, substance
or constituent or other substance or (B) any unsafe or unhealthful condition at
any premises of the Borrower or such Subsidiary of the Borrower.
6.15 Other Corporate or Fictitious Names. The Borrower has not,
during the preceding five (5) years, been known by or used any corporate or
fictitious name other than "StaffMark, Inc." or "One Source Staffing, Inc.,"
and no Subsidiary of Borrower has used any such other corporate or fictitious
name during the preceding five (5) years other than those listed in Schedule
6.15 attached hereto.
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SECTION 7. COVENANTS.
7.1 Affirmative Covenants of the Borrower. The Borrower covenants
and agrees that, so long as Lenders have any obligation to make any Loan
hereunder or any of the Borrower's Obligations remain unpaid or any Letter of
Credit remains outstanding:
(a) Information. The Borrower will deliver to Agent and
each of the Lenders:
(i) As soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
Borrower, the consolidated and consolidating balance sheets of
Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated and consolidating statements
of income, retained earnings and cash flows for such fiscal year,
setting forth in each case, in comparative form, the figures for the
previous fiscal year, all such financial statements to be prepared in
accordance with generally accepted accounting principles consistently
applied and audited by independent certified public accountants
selected by the Borrower and acceptable to Agent, together with (1)
the unqualified opinion of such accountants (except with respect to
consistency qualifications arising from new accounting principles),
and (2) a letter from such accountants authorizing Agent and Lenders
to receive and rely on such audited financial statements of Borrower
as if in privity of contract with such accountants or such other
agreement of normal acceptance in the accounting profession as may be
used in the future to permit lenders to rely on financial statements
of a borrower in making credit decisions;
(ii) As soon as available and in any event within
forty-five (45) days after the end of each fiscal quarter,
consolidated and consolidating balance sheets of Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated and consolidating statements of income for such
quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in each case in comparative form,
the figures for the corresponding quarter and the corresponding
portion of the Borrower's previous fiscal year and the figures for
such quarter and such portion of Borrower's current fiscal year from
Borrower's budget for such year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the principal
financial officer of Borrower;
(iii) Simultaneously with the delivery of each set of
quarter-end and fiscal year-end financial statements referred to in
clauses (i) and (ii) above, a certificate of the principal financial
officer of Borrower in the form attached hereto as Exhibit E and
incorporated herein by reference;
(iv) Promptly upon receipt thereof, any reports submitted
to the Borrower or any Consolidated Subsidiary of the Borrower (other
than reports
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41
previously delivered pursuant to Sections 7.1(a)(i) and (ii) above) by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Borrower or any
Consolidated Subsidiary of the Borrower;
(v) On the last day of each February, April, June,
August, October and December during the Term hereof, a report of any
and all openings, closings or other changes of any places of business
of the Borrower or any Subsidiary of the Borrower or any location of
any of the Collateral which have been made since the last such report
made by Borrower to Agent under this Section 7.1(a)(v);
(vi) Promptly upon any filing thereof, and in any event
within ten (10) days after the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on form S-8 or its equivalent) and annual,
quarterly or monthly reports which Borrower shall file with the
Securities and Exchange Commission;
(vii) Promptly upon the mailing thereof to the shareholders
of Borrower generally, and in any event within ten (10) days after
such mailing, copies of all financial statements, reports, proxy
statements and other material and information so mailed;
(viii) Within ninety (90) days of the beginning of each
fiscal year of the Borrower, the Borrower's annual budget and
quarterly projections for such fiscal year; and
(ix) With reasonable promptness, such further information
regarding the business, affairs and/or financial condition of Borrower
or any Subsidiary of Borrower as Agent or any of the Lenders may from
time to time reasonably request.
Agent and each of the Lenders are hereby authorized to deliver a copy
of any financial statement or other information made available by the Borrower
to any regulatory authority having jurisdiction over Agent or any such Lender,
pursuant to any request therefor.
(b) Payment of Indebtedness. The Borrower and each
Subsidiary of the Borrower will (i) pay any and all Indebtedness payable or
Guaranteed by the Borrower or such Subsidiary of the Borrower, as the case may
be, and any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) in accordance
with the agreement, document or instrument relating to such Indebtedness or
Guarantee and (ii) faithfully perform, observe and discharge all covenants,
conditions and obligations which are imposed upon the Borrower or such
Subsidiary of the Borrower, as the case may be, by any and all agreements,
documents and instruments evidencing, securing or otherwise relating to such
Indebtedness or Guarantee.
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42
(c) Consultations and Inspections. The Borrower will
permit, and will cause each Subsidiary of the Borrower to permit, Agent and
Lenders (and any Person appointed by Agent or any of the Lenders to whom the
Borrower does not reasonably object) to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary of the Borrower with the officers
of the Borrower and each Subsidiary of the Borrower, all at such reasonable
times and as often as Agent or any of the Lenders may reasonably request. The
Borrower will also permit, and will cause each Subsidiary of the Borrower to
permit, inspection of its Properties, books and records and the Collateral by
Agent and Lenders, upon reasonable advance notice, during normal business hours
or at other reasonable times. The Borrower will also permit, and will cause
each Subsidiary of the Borrower to permit, Agent and Lenders to conduct
Accounts field inspections at such times during reasonable business hours as
Agent or any of the Lenders elects, and without the necessity of advance
warning to the Borrower or any such Subsidiary. Prior to the occurrence of an
Event of Default, Borrower shall pay all reasonable costs and expenses incurred
by Agent and the Lenders for one such inspection in each fiscal year (not to
exceed $15,000.00 in any fiscal year for inspections conducted prior to an
Event of Default), provided, that after the occurrence of an Event of Default,
Borrower shall pay all reasonable costs and expenses incurred by Agent or any
such Lender in connection with any such inspections. The Borrower further
agrees to reimburse to Agent and the Lenders the actual costs and expenses
incurred by Agent or any of the Lenders in connection with its up front
collateral inspection conducted prior to closing by Agent or any of the
Lenders, whether Agent or any such Lender shall have used its own auditors or
shall contract for such audit services through a third party.
(d) Payment of Taxes; Corporate Existence; Maintenance of
Properties; Maintenance of Collateral; Insurance. The Borrower and each
Subsidiary of the Borrower will:
(i) Duly file all federal, state and local income tax
returns and all other tax returns and reports of the Borrower and each
Subsidiary of the Borrower which are required to be filed and duly pay
and discharge promptly all taxes, assessments and other governmental
charges imposed upon it or any of its income, Property or assets;
provided, however, that neither the Borrower nor any Subsidiary of the
Borrower shall be required to pay any such tax, assessment or other
governmental charge the payment of which is being contested in good
faith and by appropriate proceedings diligently conducted and for
which adequate reserves in form and amount satisfactory to Agent in
its reasonable discretion have been provided, except that the Borrower
and each Subsidiary of the Borrower shall pay or cause to be paid all
such taxes, assessments and governmental charges forthwith upon the
commencement of proceedings to foreclose any Lien which is attached as
security therefor, unless such foreclosure is stayed by the filing of
an appropriate bond in a manner satisfactory to Agent;
(ii) Do all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchise and to
be duly qualified to do business in all jurisdictions where the nature
of its business requires such qualification;
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43
(iii) Maintain and keep its Properties as a whole in good
repair, working order and condition; provided, however, that nothing
in this subsection (iii) shall prevent any abandonment of any Property
which is not disadvantageous in any material respect to Lenders and
which, in the good faith opinion of the management of the Borrower, is
in the best interests of the Borrower or such Subsidiary of the
Borrower, as the case may be;
(iv) Keep all of the Collateral in good and merchantable
condition, and will, as applicable, shelter, store, secure,
refrigerate, process and otherwise deal with the Collateral in
accordance with the standards and practices adhered to generally by
owners, bailees or processors, as applicable, of like properties; and
(v) Insure with financially sound and reputable insurers
acceptable to Lenders, all Property of the Borrower and each
Subsidiary of the Borrower of the character usually insured by
corporations engaged in the same or similar businesses similarly
situated, against loss or damage of the kind customarily insured
against by such corporations or partnerships, unless higher limits or
coverage are reasonably required in writing by Agent, and carry
adequate liability insurance and other insurance of a kind and in an
amount generally carried by corporations engaged in the same or
similar businesses similarly situated, unless higher limits or
coverage are reasonably required in writing by Agent, and in each case
naming Agent as loss payee, as mortgagee or as an additional insured,
as appropriate, in such policies for the benefit of each of the
Lenders. All such insurance may be subject to reasonable deductible
amounts. Promptly upon any Lender's request therefor, the Borrower
shall provide such Lender with evidence that the Borrower maintains,
and that each Subsidiary of the Borrower maintains, the insurance
required under this Section 7.1(d)(v), and evidence of the payment of
all premiums therefor.
(e) Accountants. The Borrower shall give Agent and each
of the Lenders prompt notice of any change of the Borrower's independent
certified public accountants and a statement of the reasons for such change.
The Borrower shall at all times utilize independent certified public
accountants reasonably acceptable to Agent and Lenders.
(f) ERISA Compliance. If the Borrower or any Subsidiary
of the Borrower shall have any Pension Plan, the Borrower and such Subsidiary
or Subsidiaries of the Borrower shall comply with all requirements of ERISA
relating to such plan. Without limiting the generality of the foregoing,
neither the Borrower nor any Subsidiary of the Borrower shall:
(i) permit any Pension Plan maintained by it to engage in
any nonexempt "prohibited transaction, " as such term is defined in
Section 4975 of the Code;
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44
(ii) permit any Pension Plan maintained by it to incur any
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, 29 U.S.C. Section 1082, whether or not waived;
(iii) terminate any such Pension Plan in a manner which
could result in the imposition of a Lien on any Property of the
Borrower or any Subsidiary of the Borrower pursuant to Section 4068 of
ERISA, 29 U.S.C. Section 1368; or
(iv) take any action which would constitute a complete or
partial withdrawal from a Multiemployer Plan within the meaning of
Sections 4203 and 4205 of Title IV of ERISA.
Notwithstanding any provision contained in this Section 7.1(f) to
the contrary, an act by the Borrower or any Subsidiary of the Borrower shall
not be deemed to constitute a violation of subparagraphs (i) through (iv)
hereof unless Agent determines in good faith that said action, individually or
cumulatively with other acts of the Borrower and the Subsidiaries of the
Borrower, does have or is likely to cause a significant adverse financial
effect upon the Borrower or any such Subsidiary of the Borrower.
Borrower shall have the affirmative obligation hereunder to report
to Agent any of those acts identified in subparagraphs (i) through (iv) hereof,
regardless of whether said act does or is likely to cause a significant adverse
financial effect upon the Borrower or any Subsidiary of the Borrower, and
failure by the Borrower to report such act promptly upon the Borrower's
becoming aware of the existence thereof shall constitute an Event of Default
hereunder.
(g) Maintenance of Books and Records. The Borrower and
each Subsidiary of the Borrower will maintain its books and records in
accordance with generally accepted accounting principles consistently applied
and in which true, correct and complete entries will be made of all of its
dealings and transactions.
(h) Further Assurances. The Borrower will execute any
and all further agreements, documents and instruments, and take any and all
further actions which may be required under applicable law, or which Agent or
any of the Lenders may from time to time reasonably request, in order to
effectuate the transactions contemplated by this Agreement, the Notes, the
Security Agreement, the Pledge Agreement, the Trademark Assignment the Letter
of Credit Applications and the other Transaction Documents.
(i) Financial Covenants. The Borrower will:
(i) Fixed Charges Coverage Ratio. Maintain on a
consolidated basis as of each fiscal quarter-end during the Term
hereof a ratio of Consolidated Proforma Operating Cash Flow to
Consolidated Fixed Charges determined for the 12-month period ending
as of each such fiscal quarter-end of not less than (a)
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45
1.25 to 1.0 for each fiscal quarter ending on or before September 30,
1997, and (b) 1.50 to 1.0 for each fiscal quarter end thereafter
during the Term hereof.
(ii) Consolidated Adjusted Total Funded Debt to
Consolidated Proforma Operating Cash Flow. Maintain on a consolidated
basis at each fiscal quarter-end during the Term hereof, a ratio of
Consolidated Adjusted Total Funded Debt to Consolidated Proforma
Operating Cash Flow (determined for the twelve-month period ending on
the date of any such calculation) of not more than: (a) 4.00 to 1.0
for each quarter-end occurring on or before September 30, 1997, (b)
3.50 to 1.0 for quarters ending after October 1, 1997 but on or before
September 30, 1998, and (c) 3.00 to 1.0 for quarters ending after
September 30, 1998 through the remainder of the Term hereof.
(iii) Consolidated Shareholders' Equity. Maintain on a
consolidated basis determined as of each fiscal quarter-end during the
Term hereof, Consolidated Shareholders' Equity of at least the sum of
(x) $45,000,000.00, plus (y) fifty percent (50%) of the after tax net
income for each fiscal quarter of Borrower in which net income is
earned (but zero percent (0%) of any after tax net loss for any fiscal
quarter of Borrower in which a net loss is incurred) as shown on
Borrower's financial statements delivered pursuant to Section
7.1(a)(i) and (ii), commencing with the addition of any net income for
the fiscal quarter ending December 31, 1996, with such required
increases to be cumulative for each fiscal quarter thereafter during
the Term hereof, plus (z) one hundred percent (100%) of the net
proceeds received by Borrower or any of its consolidated Subsidiaries
from capital stock issued by Borrower or such Subsidiary subsequent to
the date of this Agreement.
(iv) Deliver a certificate of the principal financial
officer of the Borrower containing the financial ratio calculations
required in clauses (i), (ii) and (iii) above simultaneously with the
financial statements referred to in Sections 7.1(a)(i) and (ii).
(j) Compliance with Law. The Borrower will, and will
cause each Subsidiary of the Borrower to, comply with any and all laws,
ordinances and governmental and regulatory rules and regulations to which it is
subject and obtain any and all licenses, permits, franchises and other
governmental and regulatory authorizations necessary to the ownership of its
Properties or to the conduct of its business, which violation or failure to
obtain might materially adversely affect the condition or operation, financial
or otherwise, of the Borrower or any Subsidiary of the Borrower.
(k) Notices. The Borrower will notify Agent and the
Lenders in writing of any of the following immediately upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken by the Person(s) affected with respect thereto:
(i) Default. The occurrence of any Default or Event of
Default under this Agreement or any default or event of default by the
Borrower, any
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46
other Obligor or any Subsidiary of the Borrower under any note,
indenture, loan agreement, mortgage, deed of trust, security
agreement, lease or other similar agreement, document or instrument to
which the Borrower, any other Obligor or any Subsidiary of the
Borrower, as the case may be, is a party or by which it is bound or to
which it is subject;
(ii) Litigation. The institution of any litigation,
arbitration proceeding or governmental or regulatory proceeding
affecting the Borrower, any other Obligor, any Subsidiary of the
Borrower, any Collateral or any Third Party Collateral, whether or not
considered to be covered by insurance, provided that if such action is
an action for money damages, that the damages sought are in excess of
$100,000.00;
(iii) Judgment. The entry of any judgment or decree
against the Borrower, any other Obligor or any Subsidiary of the
Borrower in excess of $100,000.00;
(iv) Pension Plans. The occurrence of a Reportable Event
with respect to any Pension Plan; the filing of a notice of intent to
terminate a Pension Plan by the Borrower, any ERISA Affiliate or any
Subsidiary of the Borrower; the institution of proceedings to
terminate a Pension Plan by the PBGC or any other Person; the
withdrawal in a "complete withdrawal" or a "partial withdrawal" as
defined in Sections 4203 and 4205, respectively, of ERISA by the
Borrower, any ERISA Affiliate or any Subsidiary of the Borrower from
any Multiemployer Plan; or the incurrence of any material increase in
the contingent liability of the Borrower or any Subsidiary of the
Borrower with respect to any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA which covers retired employees and
their beneficiaries;
(v) Change of Name. Any change in the name of the
Borrower, any other Obligor or any Subsidiary of the Borrower;
(vi) Environmental Matters. Receipt of any notice that
the operations of the Borrower, any other Obligor or any Subsidiary of
the Borrower are not in full compliance with any of the requirements
of any applicable Environmental Law or Occupational Safety and Health
Law; receipt of notice that the Borrower, any other Obligor or any
Subsidiary of the Borrower is subject to any federal, state or local
investigation evaluating whether any remedial action is needed to
respond to the release of any Hazardous Materials or any other
hazardous or toxic waste, substance or constituent or other substance
into the environment; or receipt of notice that any of the Properties
or assets of the Borrower, any other Obligor or any Subsidiary of the
Borrower are subject to an Environmental Lien. For purposes of this
Section 7.1(k)(vi), "Environmental Lien" shall mean a Lien in favor of
any governmental or regulatory agency, entity, authority or official
for (1) any liability under Environmental Laws or (2) damages arising
from or costs incurred by any such governmental or regulatory
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47
agency, entity, authority or official in response to a release of any
Hazardous Materials or any other hazardous or toxic waste, substance
or constituent or other substance into the environment;
(vii) Material Adverse Change. The occurrence of any
material adverse change in the business, operations or condition,
financial or otherwise, of the Borrower, any other Obligor or any
Subsidiary of the Borrower;
(viii) Change in Management or Line(s) of Business. Any
material change in the directors and executive officers of the
Borrower or any Subsidiary of the Borrower as listed in Schedule
7.1(k)(viii) attached hereto, or any change in the Borrower's or any
Subsidiary of the Borrower's line(s) of business; and
(ix) Other Notices. Any notices required to be provided
pursuant to other provisions of this Agreement and notice of the
occurrence of such other events as Agent may from time to time
reasonably specify.
(l) Protection of Collateral. During the term of this
Agreement, the Borrower will (a) do all things necessary to keep unimpaired the
Borrower's rights in the Collateral; (b) cause all operating equipment included
in the Collateral to be maintained properly in good and effective operating
condition with all repairs, renewals, replacements, additions and improvements
being promptly made in accordance with generally accepted practices and
applicable federal, state and local laws, rules and regulations; (c) pay, or
cause to be paid, promptly as and when due and payable, all expenses incurred
in or arising from the maintenance, storage and care of the Collateral; and (d)
cause the Inventory and other Collateral to be properly maintained and
protected in accordance with prudent operating practice, giving consideration
to and complying with applicable federal, state and local laws, rules and
regulations.
7.2 Negative Covenants of the Borrower. The Borrower covenants
and agrees that, so long as Lenders have any obligation to make any Loan
hereunder or any of the Borrower's Obligations remain unpaid or any Letter of
Credit remains outstanding, unless the prior written consent of the Required
Lenders is obtained:
(a) Limitation on Indebtedness. Neither the Borrower nor
any Subsidiary of the Borrower will incur or be obligated on any Indebtedness,
either directly or indirectly, by way of Guarantee, suretyship or otherwise,
other than:
(i) Indebtedness evidenced by the Notes;
(ii) Unsecured trade accounts payable and normal accruals
incurred in the ordinary course of business which are not yet due and
payable;
(iii) Indebtedness incurred in the ordinary course of
business in connection with the acquisition of Property by Borrower
(excluding Indebtedness
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48
assumed on any capital assets acquired pursuant to an Acceptable
Acquisition), provided that such Indebtedness shall not exceed the
value of the Property so acquired, and in any event, such purchase
money Indebtedness shall not exceed Four Million Dollars
($4,000,000.00) in the aggregate;
(iv) Secured or unsecured Indebtedness assumed by Borrower
or a Subsidiary in connection with an Acceptable Acquisition or any
other unsecured Indebtedness incurred in the ordinary course of
business, all of which, in the aggregate, shall not exceed One Million
Dollars ($1,000,000.00); and
(v) Subordinated Debt incurred in connection with an
Acceptable Acquisition not to exceed Five Million Dollars
($5,000,000.00) in the aggregate, provided that such Subordinated Debt
is unsecured, and the holder of such Subordinated Debt has executed a
Subordination and Standby Agreement in favor of Agent and the Lenders
substantially in the form of Exhibit J. attached hereto, which
Subordination and Standby Agreement shall, among other things: (A)
allow for permitted payments of accrued interest and scheduled
principal (but no prepayments or accelerated payments) on such
Subordinated Debt prior to notice from Agent of the occurrence of an
Event of Default on a schedule no faster than a three year, straight
line amortization of principal of the Subordinated Debt, and (B) after
notice from Agent of the occurrence of an Event of Default, terminate
all payments of principal and interest on the Subordinated Debt until
Borrower's Obligations are paid in full and shall otherwise prohibit
the holder of such Subordinated Debt from taking any action to enforce
the Subordinated Debt obligations against Borrower or any other
Obligor for a one year period following such notice.
(b) Limitations on Liens. The Borrower will not create,
incur, assume or suffer to exist, and will not cause or permit any Subsidiary
of the Borrower to create, incur, assume or suffer to exist, any Lien on any of
its Property, assets or revenues other than:
(i) Liens presently in existence which are described on
Schedule 6.11 attached hereto;
(ii) Pledges or deposits in connection with or to secure
workmen's compensation, unemployment insurance, pension or other
employee benefits;
(iii) Purchase money Liens incurred to secure Indebtedness
permitted under Section 7.2(a)(iii), provided that such Lien shall
attach only to the Property acquired in connection with such
Indebtedness;
(iv) Any Lien renewing, extending or refunding any Lien
permitted hereunder, provided that the principal amount of
Indebtedness secured by such Lien is not increased and such Lien is
not extended to cover any other Property or assets of the Borrower or
any Subsidiary of the Borrower;
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49
(v) Subject to Section 7.1(d)(i), Liens for taxes,
assessments or governmental charges or levies on the income, Property
or assets of the Borrower or any Subsidiary of the Borrower if the
same are not yet due and payable or are being contested in good faith
and by appropriate proceedings diligently conducted and for which
adequate reserves in form and amount satisfactory to Agent and the
Lenders are provided; and
(vi) Statutory liens for amounts not yet due and payable
or which are being contested in good faith and by appropriate
proceedings diligently conducted and for which adequate reserves in
form and amount satisfactory to Agent and the Lenders are provided.
(c) Sale of Property. Neither the Borrower nor any
Subsidiary of the Borrower will sell, lease, transfer or otherwise dispose of
any Property or assets of the Borrower or such Subsidiary of the Borrower, as
the case may be, except in the ordinary course of business.
(d) Mergers and Consolidations. Neither the Borrower nor
any Subsidiary of the Borrower will merge or consolidate with any other Person
or sell, transfer or convey all or a substantial part of its Property or assets
to any Person, except for Acquisitions permitted under Section 7.2(e).
(e) Acquisitions; Subsidiaries. The Borrower will not,
and will not cause or permit any Subsidiary to, make or suffer to exist any
Acquisition of any Person, except Acceptable Acquisitions. If at any time
after the date hereof Borrower shall create any new Subsidiary, whether in
connection with an Acceptable Acquisition or otherwise, Borrower shall give
Lender fifteen (15) Business Days' prior written notice thereof, and Borrower
shall (x) cause such Subsidiary to execute and deliver to Agent for the benefit
of each of the Lenders a Subsidiary Guaranty of all of Borrower's Obligations,
(y) cause such Subsidiary to grant a security interest pursuant to a Subsidiary
Security Agreement in all of its assets of a type listed in Schedule 5 hereto,
and (z) pledge all of the issued and outstanding stock of such Subsidiary to
Agent for the benefit of each of the Lenders pursuant to a Pledge Agreement,
collateral schedules, stock powers and other pledge documents in form and
substance satisfactory to Agent and the Required Lenders. Borrower further
agrees to execute or cause any such Subsidiary to execute such amendments to
this Agreement and to the other Transaction Documents or such additional
agreements as may be required by Agent and the Lenders to satisfy such
obligations.
(f) Fiscal Year. Neither Borrower nor any Subsidiary of
the Borrower will change its fiscal year.
(g) Stock Redemptions and Distributions. The Borrower
will not make or declare or incur any liability to make any Distribution in
respect of the capital stock of the Borrower.
(h) Transactions with Related Parties. Except as
disclosed in Schedule 7.2(h) attached hereto, neither Borrower nor any
Subsidiary of the Borrower will, directly or
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50
indirectly, engage in any material transaction, in the ordinary course of
business or otherwise, with any Related Party unless such transaction is upon
fair market terms, is not disadvantageous in any material respect to the
Lenders and has been approved by a majority of the disinterested directors of
the Borrower or such Subsidiary of the Borrower, as the case may be (or, if
none of such directors are disinterested, by a majority of the directors), as
being in the best interests of the Borrower or such Subsidiary of the Borrower,
as the case may be. In addition, neither the Borrower nor any Subsidiary of
the Borrower shall (i) transfer any Property or assets to any Related Party for
other than its fair market value or (ii) purchase or sign any agreement to
purchase any stock or other securities of any Related Party (whether debt,
equity or otherwise), underwrite or Guarantee the same, or otherwise become
obligated with respect thereto.
(i) Capital Expenditures. Neither Borrower nor any
Subsidiary of the Borrower will make any capital expenditures or enter into any
Capitalized Leases which in the aggregate (for the Borrower and all
Subsidiaries of the Borrower) exceeds $3,500,000.00 during any fiscal year
without the prior written consent of the Required Lenders.
(j) Advancing or Guaranteeing Credit. Neither Borrower
nor any Subsidiary of the Borrower will become or be a guarantor or surety of,
or otherwise become or be responsible in any manner with respect to, any
undertaking of another except for the Subsidiary Guaranties of Borrower's
Obligations.
(k) Loans and Investments. Neither Borrower nor any
Subsidiary of the Borrower will make any loans or advances or extensions of
credit to purchase any stocks, bonds, notes, debentures or other securities of,
make any expenditures on behalf of, or in any manner assume liability (direct,
contingent or otherwise) for the Indebtedness of any Person, except for
Permitted Investments, and except for loans to employees of Borrower and its
Subsidiaries not to exceed $200,000.00 in the aggregate to enable such
employees to make investments in Borrower's stock option plan.
(l) Dissolution or Liquidation. Borrower will not seek
or permit the dissolution or liquidation of the Borrower in whole or in part.
(m) Operating Leases. Neither Borrower nor any
Subsidiary of the Borrower will enter into or permit to remain in effect any
agreements to rent or lease (as lessee) any real or personal property (other
than Capitalized Leases) for initial terms (including options to renew or
extend any term, whether or not exercised) of more than one (1) year which in
the aggregate (for the Borrower and all Subsidiaries of the Borrower) provide
for payments in excess of $3,500,000.00 during any consecutive twelve-month
(12-month) period.
(n) Change in Nature of Business. Neither Borrower nor
any Subsidiary of the Borrower will make any material change in the nature of
its business.
(o) Pension Plans. Neither Borrower nor any Subsidiary
of Borrower shall (a) permit any condition to exist in connection with any
Pension Plan which might constitute grounds for the PBGC to institute
proceedings to have such Pension Plan terminated or a trustee appointed to
administer such Pension Plan or (b) engage in, or permit to exist or
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51
occur, any other condition, event or transaction with respect to any Pension
Plan which could result in the incurrence by Borrower or any Subsidiary of the
Borrower of any material liability, fine or penalty. Neither Borrower nor any
Subsidiary of the Borrower shall become obligated to contribute to any Pension
Plan or Multiemployer Plan other than any such plan or plans in existence on
the date hereof.
(p) Management Fees. Neither Borrower nor any Subsidiary
of Borrower will pay any management fees, consulting fees or similar fees to
any Related Parties without the prior written consent of the Required Lenders,
except that Borrower or its Subsidiaries may pay consulting fees or other
similar fees incurred in connection with Acceptable Acquisitions provided no
Default or Event of Default is then existing or would occur on a pro forma
basis as the result of Borrower's or any such Subsidiary's payment or agreement
to pay such amounts and further provided that such fees shall not exceed the
lesser of $250,000.00 in the aggregate for any single Acceptable Acquisition or
$750,000.00 in the aggregate for all Acceptable Acquisitions in any fiscal
year.
7.3 Use of Proceeds.
(a) The Borrower agrees that the proceeds of the
Revolving Credit Loans hereunder will be used solely for the Borrower's working
capital and general corporate purposes and the proceeds of the Reducing
Revolver Loans hereunder will be used solely for financing Acceptable
Acquisitions;
(b) None of such proceeds will be used in violation of
any applicable law or regulation; and
(c) The Borrower will not engage principally, or as one
of its important activities, in the business of extending credit for the
purpose of purchasing or carrying "margin stock" within the meaning of
Regulation U of The Board of Governors of the Federal Reserve System, as
amended.
SECTION 8. EVENTS OF DEFAULT.
If any of the following (each of the following herein sometimes called
an "Event of Default") shall occur and be continuing:
8.1 Borrower shall fail to pay any of the Borrower's Obligations
when the same shall become due and payable, whether by reason of demand,
acceleration, mandatory prepayment or otherwise;
8.2 Any representation or warranty of the Borrower made in this
Agreement, in any other Transaction Document or in any certificate, agreement,
instrument or statement furnished or made or delivered pursuant hereto or
thereto or in connection herewith or therewith, shall prove to have been untrue
or incorrect in any material respect when made or effected;
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8.3 Borrower shall fail to perform or observe any term, covenant
or provision contained in Section 7.1(a), Section 7.1(c), Section 7.1(i),
Section 7.2 or Section 7.3;
8.4 Borrower shall fail to perform or observe any term or
provision contained in Section 7.1(l) and such failure shall remain unremedied
for five (5) days after written notice thereof shall have been given to the
Borrower by Agent or any of the Lenders;
8.5 Borrower shall fail to perform or observe any other term,
covenant or provision contained in this Agreement and any such failure shall
remain unremedied for thirty (30) days after written notice thereof shall have
been given to the Borrower by Agent or any of the Lenders;
8.6 This Agreement or any of the other Transaction Documents shall
at any time for any reason cease to be in full force and effect or shall be
declared to be null and void by a court of competent jurisdiction, or if the
validity or enforceability thereof shall be contested or denied by the
Borrower, or if the transactions completed hereunder or thereunder shall be
contested by the Borrower or if the Borrower shall deny that it has any or
further liability or obligation hereunder or thereunder;
8.7 Borrower, any Subsidiary of the Borrower or any other Obligor
shall (i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other federal, state or
foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii)
consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such petition,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official of itself, himself or herself or of
a substantial part of its, his or her Property or assets, (iv) file an answer
admitting the material allegations of a petition filed against itself, himself
or herself in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its, his or her
inability or fail generally to pay its, his or her debts as they become due or
(vii) take any corporate or other action for the purpose of effecting any of
the foregoing;
8.8 An involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower, any Subsidiary of the Borrower or any other
Obligor, or of a substantial part of the Property or assets of the Borrower,
any Subsidiary of the Borrower or any other Obligor, under Title 11 of the
United States Code or any other federal, state or foreign bankruptcy,
insolvency, receivership, liquidation or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator or similar official of the Borrower,
any Subsidiary of the Borrower or any other Obligor or of a substantial part of
the Property or assets of the Borrower, any Subsidiary of the Borrower or any
other Obligor or (iii) the winding-up or liquidation of the Borrower, any
Subsidiary of the Borrower or any other Obligor; and such proceeding or
petition shall continue undismissed for sixty (60) consecutive days or an order
or decree approving or ordering any of the foregoing shall continue unstayed
and in effect for sixty (60) consecutive days;
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8.9 Any "Event of Default" (as defined therein) shall occur under
or within the meaning of the Security Agreement;
8.10 Any "Event of Default" (as defined therein) shall occur under
or within the meaning of the Pledge Agreement;
8.11 Any event of default shall occur under the terms of any Letter
of Credit Application;
8.12 Any event of default shall occur under the terms of the
Trademark Assignment;
8.13 Any of the Subsidiary Guaranties shall at any time for any
reason cease to be in full force and effect or shall be declared to be null and
void by a court of competent jurisdiction, or if the validity or enforceability
thereof shall be contested by or denied by the Subsidiary executing any such
Subsidiary Guaranty, or if any such Subsidiary shall deny that it has any
further liability or obligation thereunder;
8.14 Any "Event of Default" (as defined therein) shall occur under
or within the meaning of any of the Subsidiary Security Agreements;
8.15 Borrower, any Subsidiary of the Borrower or any other Obligor
shall be declared by Agent or any of the Lenders to be in default (beyond any
applicable cure or grace period, if any) on, or pursuant to the terms of, (1)
any other present or future obligation to Agent or any of the Lenders,
including, without limitation, any other loan, line of credit, revolving
credit, guaranty or letter of credit reimbursement obligation, or (2) any other
present or future agreement purporting to convey to any such Lender or to Agent
a Lien upon any Property or assets of the Borrower, such Subsidiary of the
Borrower or such other Obligor, as the case may be;
8.16 Borrower, any Subsidiary of the Borrower or any other Obligor
shall fail (and such failure shall not have been cured or waived) to perform or
observe any term, provision or condition of, or any other default or event of
default shall occur under, any agreement, document or instrument evidencing,
securing or otherwise relating to any outstanding Indebtedness of the Borrower,
such Subsidiary of the Borrower or such other Obligor, as the case may be, for
borrowed money (other than the Borrower's Obligations) in a principal amount in
excess of One Hundred Thousand Dollars ($100,000.00), if the effect of such
failure or default is to cause or permit such Indebtedness to be declared to be
due and payable or otherwise accelerated, or to be required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof;
8.17 A default or event of default shall occur and be continuing
under any of the terms of any agreement, whether executed now or hereafter, to
provide the Borrower with any interest rate swap, interest rate cap or other
interest hedge, including, but not limited to, any such agreements to finance
any such arrangement;
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8.18 Borrower, any Subsidiary of the Borrower or any other Obligor
shall have a judgment entered against it, him or her by a court having
jurisdiction in the premises in an amount of One Hundred Thousand Dollars
($100,000.00) or more and such judgment shall not be appealed in good faith or
satisfied by the Borrower, such Subsidiary of the Borrower or such other
Obligor, as the case may be, within thirty (30) days after the entry of such
judgment;
THEN, and in each such event (other than an event described in
Sections 8.7 or 8.8), Agent may, or if requested in writing by the Required
Lenders shall, declare that the obligations of the Lenders to make Loans and of
the Agent to issue Letters of Credit under this Agreement have terminated,
whereupon such obligations of Agent and Lenders shall be immediately and
forthwith terminated, and Agent may further, or if requested in writing by the
Required Lenders shall further, declare on behalf of each of the Lenders that
the entire outstanding principal balance of and all accrued and unpaid interest
on the Notes and all of the other Borrower's Obligations are forthwith due and
payable, whereupon all of the unpaid principal balance of and all accrued and
unpaid interest on the Notes and all such other Borrower's Obligations shall
become and be immediately due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower, and Agent and the Lenders may exercise any and all other rights and
remedies which any of them may have under any of the other Transaction
Documents or under applicable law; provided, however, that upon the occurrence
of any event described in Sections 8.7 or 8.8, Lenders' obligations to make
Loans and Agent's obligation to issue Letters of Credit under this Agreement
shall automatically terminate and the entire outstanding principal balance of
and all accrued and unpaid interest on the Notes issued under this Agreement
and all other Borrower's Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower, and Agent and
the Lenders may exercise any and all other rights and remedies which any of
them may have under any of the other Transaction Documents or under applicable
law. Following acceleration of Borrower's Obligations hereunder as set forth
above, Agent may, or if requested in writing by the Required Lenders and
provided with the indemnity required under Section 9.6 shall, proceed to
enforce any remedy then available to Agent or any of the Lenders under any
applicable law, including, without limitation, all rights granted to Agent
hereunder, under the Subsidiary Guaranties, the Security Agreement, the
Trademark Assignment, the Pledge Agreement, any of the Subsidiary Security
Agreements, or any Letter of Credit Application, and the rights and remedies
available to a secured party under the Uniform Commercial Code as in effect in
the State of Missouri.
Upon the occurrence of any Event of Default, Agent will have the
right, in addition to all other rights and remedies available to Agent and the
Lenders under this Agreement or under the other Loan Documents, after oral or
written notice is sent to the Borrower, to take possession of, preserve and
care for the Collateral, to execute and/or endorse as the Borrower's agent any
bills of sale or documents, instruments or chattel paper in or pertaining to
the Collateral, to notify Account Debtors and obligors on documents, Accounts
and instruments included in the Collateral to make payment directly to Agent,
to take control of all of the Borrower's cash, to collect and receive funds
generated by the Collateral, including proceeds or refunds from insurance, or
as a result of claims for the damage, loss, or destruction of the Collateral,
and use the same to reduce any part of the obligations.
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The Agent shall give notice of a Default to Borrower promptly upon
being requested to do so by any Lender and shall thereupon notify all of the
Lenders thereof.
Following any Default or Event of Default, all payments and other
amounts received by Agent and/or any of the Lenders, whether voluntary or
involuntary, including but not limited to any proceeds of any collateral, any
right of offset or otherwise, shall be shared among the Lenders in accordance
with their Pro Rata Shares of the outstanding principal indebtedness under all
of the Reducing Revolver Loans, Revolving Credit Loans and Letter of Credit
obligations then outstanding of Borrower. Such application shall be made
first, to any costs or expenses of Agent or any of the Lenders incurred in
connection with the collection of such proceeds, second, to any accrued and
unpaid fees due hereunder or under any of the other Transaction Documents,
third, to any and all accrued and unpaid interest on any of the Loans, fourth,
to collateralize any outstanding Letters of Credit pursuant to Section 3.4(f)
herein, and fifth, to the unpaid principal amounts of any of the Loans
outstanding hereunder and under the other Transaction Documents.
SECTION 9. THE AGENT
9.1 Appointment and Authorization. Each Lender irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement, the Notes and the other
Transaction Documents as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as may be reasonably incidental thereto.
9.2 Agent and Affiliates. The Agent shall have the same rights
and powers under this Agreement as any other Lender and may exercise or refrain
from exercising the same as though it were not the Agent, and the Agent and its
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with Borrower or any of its Subsidiaries or Affiliates as if
it were not the Agent hereunder.
9.3 Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default or Event of Default, except as expressly provided in Section 8.
9.4 Consultation with Experts. The Agent may consult with legal
counsel, independent certified public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or other
experts.
9.5 Liability of Agent. Neither the Agent nor any of its
directors, officers, employees, agents or advisors shall be liable for any
action taken or not taken by it in connection herewith (i) with the consent or
at the request of the requisite percentage in interest of the Lenders set forth
herein or (ii) in the absence of its own gross negligence or willful misconduct
as determined by a court of competent jurisdiction. Neither the Agent nor any
of its directors, officers, employees, agents or advisors shall be responsible
for or have any duty to ascertain,
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inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any Loan hereunder; (ii) the performance or
observance of any of the covenants or agreements of Borrower; (iii) the
satisfaction of any condition specified in Section 4, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any of the other Transaction
Documents. The Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement or other writing (which may be a
bank wire, telex, telecopy or similar writing) believed by it to be genuine or
to be signed by the proper party or parties.
9.6 Indemnification. Notwithstanding any other provision
contained in this Agreement to the contrary, to the extent Borrower fails to
reimburse the Agent pursuant to Section 10.3, Section 10.4 or Section 10.5, or
if any Default or Event of Default shall occur under this Agreement, the
Lenders shall ratably in accordance with their respective Pro Rata Shares,
indemnify the Agent and hold it harmless from and against any and all
liabilities, losses, costs and/or expenses, including, without limitation, any
liabilities, losses, costs and/or expenses arising from the failure of any
Lender to perform its obligations hereunder or in respect of this Agreement,
and also including, without limitation, reasonable attorneys' fees and
expenses, which the Agent may incur, directly or indirectly, in connection with
this Agreement, the Notes or any of the other Transaction Documents, or any
action or transaction related hereto or thereto; provided only that the Agent
shall not be entitled to such indemnification for any losses, liabilities,
costs and/or expenses directly and solely resulting from its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction. This indemnity shall be a continuing indemnity, contemplates all
liabilities, losses, costs and expenses related to the execution, delivery and
performance of this Agreement, the Notes and the other Transaction Documents,
and shall survive the satisfaction and payment of the Loans and the termination
of this Agreement.
9.7 Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
9.8 Resignation of Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and Borrower. Upon any such
resignation, Lenders shall have the right to appoint a successor Agent with the
prior consent of Borrower, which consent shall not be unreasonably withheld,
and which successor Agent shall be a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $100,000,000.00. If no successor Agent shall
have been so appointed by Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the Agent shall, on behalf of all of the Lenders, appoint a
successor Agent with the prior consent of Borrower, which consent shall not be
unreasonably withheld, and which successor Agent shall be a commercial bank
organized under the laws of the United States of America or of any State
thereof and having a combined
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capital and surplus of at least $100,000,000.00. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from all of its duties and obligations under this Agreement. After
any retiring Agent's resignation as Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
9.9 Removal of Agent. The Agent may be removed at any time, for
or without cause, by an instrument or instruments in writing executed by the
Required Lenders and delivered to the Agent with a copy to Borrower, specifying
the removal and the date when it shall take effect. Upon any such removal,
Lenders shall have the right to appoint a successor Agent with the prior
consent of Borrower, which consent shall not be unreasonably withheld, and
which successor Agent shall be a commercial bank organized under the laws of
the United States of America or of any State thereof and having a combined
capital and surplus of at least $100,000,000.00. If no successor Agent shall
have been so appointed by Lenders, and shall have accepted such appointment,
within thirty (30) days after the date of removal of the Agent, then the
Required Lenders shall, on behalf of all of the Lenders, appoint a successor
Agent with the prior consent of Borrower, which consent shall not be
unreasonably withheld, and which successor Agent shall be a commercial bank
organized under the laws of the United States of America or of any state
thereof and having a combined capital and surplus of at least $100,000,000.00.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the removed Agent, and the removed
Agent shall be discharged from all of its duties and obligations under this
Agreement. After any such removal, the provisions of this Section 9 shall
inure to such former Agent's benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
9.10 Agent's Fee. Borrower will pay to Agent for its own account
on the date hereof and on each anniversary of the date hereof during the Term,
an Agent's Fee in the amount agreed to between Borrower and Agent.
SECTION 10. GENERAL.
10.1 No Waiver. No failure or delay by Agent or any of the Lenders
in exercising any right, remedy, power or privilege hereunder or under any
other Transaction Document shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
remedies provided herein and in the other Transaction Documents are cumulative
and not exclusive of any remedies provided by law. Nothing herein contained
shall in any way affect the right of Agent or any of the Lenders to exercise
any statutory or common law right of banker's lien or setoff.
10.2 Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each of the Lenders is hereby authorized
at any time and from time to time, without notice to the Borrower (any such
notice being expressly waived by the Borrower) and
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to the fullest extent permitted by law, to setoff and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by any such Lender and any and all other indebtedness at any time owing by
any such Lender to or for the credit or account of the Borrower against any and
all of the Borrower's Obligations irrespective of whether or not Agent or any
such Lender shall have made any demand hereunder or under any of the other
Transaction Documents and although such obligations may be contingent or
unmatured. Such Lender agrees to promptly notify Borrower after any such
setoff and application made by such Lender, provided, however, that the failure
to give such notice shall not affect the validity of such setoff and
application. The rights of Lenders under this Section 10.2 are in addition to
any other rights and remedies (including, without limitation, other rights of
setoff) which Lenders may have. Nothing contained in this Agreement or any
other Transaction Document shall impair the right of each of the Lenders to
exercise any right of setoff or counterclaim they may have against the Borrower
and to apply the amount subject to such exercise to the payment of indebtedness
of the Borrower unrelated to this Agreement or the other Transaction Documents.
10.3 Cost and Expenses. Borrower agrees, whether or not any Loan
is made hereunder, to pay Agent upon demand (i) all reasonable out-of-pocket
costs and expenses and all Attorneys' Fees of Agent in connection with the
preparation, documentation, negotiation, execution and administration of this
Agreement, the Notes and the other Transaction Documents, (ii) all reasonable
recording, filing and search fees incurred in connection with this Agreement
and the other Transaction Documents, (iii) all reasonable out-of-pocket costs
and expenses and all Attorneys' Fees of Agent and each of the Lenders in
connection with the preparation of any waiver or consent hereunder or any
amendment hereof or any Event of Default or alleged Event of Default hereunder,
(iv) if an Event of Default occurs, all out-of-pocket costs and expenses and
all Attorneys' Fees incurred by Agent and each of the Lenders in connection
with such Event of Default and collection and other enforcement proceedings
resulting therefrom and (v) all other Attorneys' Fees incurred by Agent and
each of the Lenders relating to or arising out of or in connection with this
Agreement or any of the other Transaction Documents subsequent to the date
hereof. The Borrower further agrees to pay or reimburse Agent and each of the
Lenders for any stamp or other taxes which may be payable with respect to the
execution, delivery, recording and/or filing of this Agreement, the Notes, the
Security Agreement, the Pledge Agreement, the Trademark Assignment, the
Subsidiary Guaranties, the Subsidiary Security Agreements, or any of the other
Transaction Documents. All of the obligations of the Borrower under this
Section 10.3 shall survive the satisfaction and payment of the Borrower's
Obligations and the termination of this Agreement. In the event Agent or any
Lender claims any amounts pursuant to this Section 10.3, Agent or such Lender,
as the case may be, shall provide to Borrower an itemized statement of amounts
claimed.
10.4 Environmental Indemnity. The Borrower hereby agrees to
indemnify Agent and each of the Lenders and hold Agent and each of the Lenders
harmless from and against any and all losses, liabilities, damages, injuries,
costs, expenses and claims of any and every kind whatsoever (including, without
limitation, court costs and attorneys' fees and expenses) which at any time or
from time to time may be paid, incurred or suffered by, or asserted against,
Agent or any of the Lenders for, with respect to or as a direct or indirect
result of the violation by the Borrower or any Subsidiary of the Borrower of
any Environmental Laws; or with respect to, or as a direct or indirect result
of the presence on or under, or the escape,
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seepage, leakage, spillage, discharge, emission or release from, properties
utilized by the Borrower and/or any Subsidiary of the Borrower in the conduct
of its businesses into or upon any land, the atmosphere or any watercourse,
body of water or wetland, of any Hazardous Materials or any other hazardous or
toxic waste, substance or constituent or other substance (including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under the Environmental Laws); and the provisions of
and undertakings and indemnification set out in this Section 10.4 shall survive
the satisfaction and payment of the Borrower's Obligations and the termination
of this Agreement.
10.5 General Indemnity. In addition to the payment of expenses
pursuant to Section 10.3, whether or not the transactions contemplated hereby
shall be consummated, the Borrower hereby agrees to indemnify, pay and hold
Agent, each of the Lenders and any other holder(s) of the Notes, and the
officers, directors, employees, agents and affiliates of any of them
(collectively, the "Indemnitees") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitees shall be designated a party thereto), that may
be imposed on, incurred by or asserted against the Indemnitees, in any manner
relating to or arising out of this Agreement, any of the other Transaction
Documents or any other agreement, document or instrument executed and delivered
by the Borrower or any other Obligor in connection herewith or therewith, the
statements contained in any commitment letters delivered by Agent or any of the
Lenders, the Lenders' agreements to make the Loans hereunder or the use or
intended use of the proceeds of any Loan hereunder (collectively, the
"indemnified liabilities"); provided that the Borrower shall have no obligation
to an Indemnitee hereunder with respect to indemnified liabilities arising from
the gross negligence or willful misconduct of that Indemnitee as determined by
a court of competent jurisdiction. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them. The provisions of the
undertakings and indemnification set out in this Section 10.5 shall survive
satisfaction and payment of the Borrower's Obligations and the termination of
this Agreement.
10.6 Authority to Act. Agent and the Lenders shall be entitled to
act on any notices and instructions (telephonic or written) believed by Agent
or any such Lender to have been delivered by any Person authorized to act on
behalf of the Borrower pursuant hereto, regardless of whether such notice or
instruction was in fact delivered by a Person authorized to act on behalf of
the Borrower, and the Borrower hereby agrees to indemnify Agent and each of the
Lenders and hold Agent and each of the Lenders harmless from and against any
and all losses and expenses, if any, ensuing from any such action, other than
for such losses or expenses directly caused by the gross negligence or willful
misconduct of the Agent or such Lender, as determined by a court of competent
jurisdiction.
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10.7 Notices. Any notice, request, demand, consent, confirmation or
other communication hereunder shall be in writing and delivered in person or
sent by telegram, telex, telecopy or registered or certified mail, return
receipt requested and postage prepaid, if to the Borrower, in care of
StaffMark, Inc. at 000 Xxxx Xxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxx, Chief Financial Officer, if to Agent, at 000
Xxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxx, Vice
President, or if to Lenders, at their respective addresses or telecopy numbers
set forth on the signature pages of this Agreement, or at such other address as
any party may designate as its address for communications hereunder by notice
so given. Such notices shall be deemed effective on the day on which delivered
or sent if delivered in person or sent by telegram, telex or telecopy, or on
the third (3rd) Business Day after the day on which mailed, if sent by
registered or certified mail.
10.8 CONSENT TO JURISDICTION. BORROWER IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT OR ANY UNITED STATES OF
AMERICA COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, AS AGENT MAY ELECT,
IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT TO THE EXTENT SUBJECT MATTER JURISDICTION
EXISTS. THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT TO
SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN ANY OF SUCH
COURTS. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND
THE BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
THE BORROWER HEREBY EXPRESSLY WAIVES ALL RIGHTS OF ANY OTHER JURISDICTION WHICH
THE BORROWER MAY NOW OR HEREAFTER HAVE BY REASON OF ITS PRESENT OR SUBSEQUENT
DOMICILE. THE BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON THE BORROWER BY
REGISTERED MAIL SENT TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 10.7.
10.9 Agent's and Lenders' Books and Records. Agent's and Lenders'
books and records showing the account between the Borrower and Agent or any of
the Lenders shall be admissible in evidence in any action or proceeding and
shall constitute prima facie proof thereof.
10.10 Governing Law; Amendments and Waivers. This Agreement, the
Notes, the Security Agreement, the Pledge Agreement, the Trademark Assignment,
the Subsidiary Guaranties, the Subsidiary Security Agreements, and all of the
other Transaction Documents shall be governed by and construed in accordance
with the internal laws of the State of Missouri. Any provision of this
Agreement, the Notes, the Security Agreement, the Pledge Agreement, the
Trademark Assignment, the Subsidiary Guaranties, the Subsidiary Security
Agreements, or any of the other Transaction Documents may be amended or waived
if, but only if, such
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amendment or waiver is in writing and is signed by Borrower and the Required
Lenders (and, if the rights or duties of the Agent in its capacity as Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all of the Lenders, (i) increase the Reducing Revolver
Commitment or Revolving Credit Commitment of any Lender, (ii) reduce the
principal amount of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on
any Loan or any fees hereunder or any scheduled reduction in the Reducing
Revolver Commitment of the several Lenders as set forth in Section 3.2(a), (iv)
release any collateral security or any guaranty for any Loan hereunder, (v)
increase any of the percentage advance rates against Eligible Accounts set
forth in Section 3.1(b) or increase the multiple against Borrower's
Consolidated Proforma Operating Cash Flow above three hundred fifty percent
(350%) as set forth in Section 3.2(a) herein, (vi) amend or waive any Event of
Default, or (vii) change the percentage in the definition of Required Lenders,
or (v) amend this Section 10.10.
10.11 Successors and Assigns; Participations.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrower may not assign or otherwise
transfer any of its rights or delegate any of its obligations under this
Agreement. Any of the Lenders may sell participations in its Notes and its
rights under this Agreement, the other Transaction Documents and in the
Collateral in whole or in part to any commercial bank organized under the laws
of the United States or any state thereof without the prior consent of Borrower
so long as each agreement pursuant to which any such participation is granted
provides that no such participant shall have any rights under this Agreement or
any other Transaction Document (the participants' rights against the Lender
granting its participation to be those set forth in the Participation Agreement
between the participant and such Lender), and such selling Lender shall retain
the sole right to approve or disapprove any amendment, modification or waiver
of any provision of this Agreement or any of the other Transaction Documents.
Each such participant shall be entitled to the benefits of the yield protection
provisions hereof to the extent any Lender would have been so entitled had not
such participation been sold or assignment made.
(b) Any Lender which, in accordance with Section
10.11(a), grants a participation in any of its rights under this Agreement or
its Notes shall give prompt notice describing the details thereof to the Agent
and Borrower.
(c) Unless otherwise agreed to by Borrower in writing, no
Lender shall, as between Borrower and that Lender, be relieved of any of its
obligations under this Agreement as a result of such Lender's granting of a
participation in all or any part of such Lender's Notes or all or any part of
such Lender's rights under this Agreement.
10.12 Assignment Agreements. Each Lender may, upon prior notice to
and consent of Borrower and Agent, which consent shall not be unreasonably
withheld, from time to time sell or assign to other banking institutions rated
"B" or better by Xxxxxxxx Agent Watch Service a pro rata part of all of the
indebtedness evidenced by the Notes then owed by it together
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with an equivalent proportion of its obligation to make Loans hereunder and the
credit risk incidental to the Letters of Credit pursuant to an Assignment
Agreement substantially in the form of Exhibit I attached hereto, executed by
the assignor, the assignee and the Borrower, which agreements shall specify in
each instance the portion of the indebtedness evidenced by the Notes which is
to be assigned to each such assignor and the portion of the Loan Commitments of
the assignor and the credit risk incidental to the Letters of Credit (which
portions shall be equivalent) to be assumed by it (the "Assignment
Agreements"), provided that nothing herein contained shall restrict, or be
deemed to require any consent as a condition to, or require payment of any fee
in connection with, any sale, discount or pledge by any Lender of any Note or
other obligation hereunder to a federal reserve bank. Any such portion of the
indebtedness assigned by any Lender pursuant to this Section 10.12 shall not be
less than $5,000,000.00. Upon the execution of each Assignment Agreement by
the assignor, the assignee and the Borrower and consent thereto by the Agent
(i) such assignee shall thereupon become a "Lender" for all purposes of this
Agreement with Loan Commitments in the amount set forth in such Assignment
Agreement and with all the rights, powers and obligations afforded a Lender
hereunder, (ii) the assignor shall have no further liability for funding the
portion of its Loan Commitments assumed by such other Lender and (iii) the
address for notices to such Lender shall be as specified in the Assignment
Agreement, and the Borrower shall, in exchange for the cancellation of the
Notes held by the assignor Lender, execute and deliver Notes to the assignee
Lender in the amount of its Loan Commitments and new Notes to the assignor
Lender in the amount of its Loan Commitments after giving effect to the
reduction occasioned by such assignment, all such Notes to constitute "Notes"
for all purposes of this Agreement, and there shall be paid to the Agent, as a
condition to such assignment, an administration fee of $2,000.00 plus any
out-of-pocket costs and expenses incurred by it in effecting such assignment,
such fee to be paid by the assignor or the assignee as they may mutually agree,
but under no circumstances shall any portion of such fee be payable by or
charged to the Borrower.
10.13 References; Headings for Convenience. Unless otherwise
specified herein, all references herein to Section numbers refer to Section
numbers of this Agreement, all references herein to Exhibits X, X, X, X, X, X,
X, X, X and J refer to annexed Exhibits X, X, X, X, X, X, X, X, X and J which
are hereby incorporated herein by reference and all references herein to
Schedules 5, 6.5, 6.6, 6.8, 6.10, 6.11, 6.14, 6.15, 7.1(k)(viii) and 7.2(h)
refer to annexed Schedules 5, 6.5, 6.6, 6.8, 6.10, 6.11, 6.14, 6.15,
7.1(k)(viii) and 7.2(h) which are hereby incorporated herein by reference. The
Section headings are furnished for the convenience of the parties and are not
to be considered in the construction or interpretation of this Agreement.
10.14 Subsidiary Reference. Any reference herein to a Subsidiary or
Consolidated Subsidiary of the Borrower, and any financial definition, ratio,
restriction or other provision of this Agreement which is stated to be
applicable to the Borrower and its Subsidiaries or Consolidated Subsidiaries or
which is to be determined on a "consolidated" or "consolidating" basis, shall
apply only to the extent the Borrower has any Subsidiaries or Consolidated
Subsidiaries and, where applicable, to the extent any such Subsidiaries are
consolidated with the Borrower for financial reporting purposes.
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63
10.15 Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower and its successors and Agent and each of
the Lenders and their respective successors and assigns. The Borrower may not
assign or delegate any of its rights or obligations under this Agreement.
10.16 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. ORAL AGREEMENTS OR
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT
ENFORCEABLE. TO PROTECT THE BORROWER, AGENT AND LENDERS FROM MISUNDERSTANDING
OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY THE BORROWER, AGENT AND LENDERS
COVERING SUCH MATTERS ARE CONTAINED IN THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS, WHICH AGREEMENT AND OTHER TRANSACTION DOCUMENTS ARE A COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENTS BETWEEN THE BORROWER, AGENT AND LENDERS,
EXCEPT AS THE BORROWER, AGENT AND LENDERS MAY LATER AGREE IN WRITING TO MODIFY
THEM. THIS AGREEMENT EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN
THE PARTIES HERETO AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL
OR WRITTEN) RELATING TO THE SUBJECT MATTER HEREOF.
10.17 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein that may be given effect without the invalid, illegal or
unenforceable provision shall not in any way be affected or impaired thereby.
10.18 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.19 Resurrection of the Borrower's Obligations. To the extent
that Agent or any of the Lenders receives any payment on account of any of the
Borrower's Obligations, and any such payment(s) or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
subordinated and/or required to be repaid to a trustee, receiver or any other
Person under any bankruptcy act, state or federal law, common law or equitable
cause, then, to the extent of such payment(s) received, the Borrower's
Obligations or part thereof intended to be satisfied and any and all Liens upon
or pertaining to any Property or assets of the Borrower and theretofore created
and/or existing in favor of Agent for the benefit of the Lenders as security
for the payment of the Borrower's Obligations shall be revived and continue in
full force and effect, as if such payment(s) had not been received by Agent or
any such Lender and applied on account of the Borrower's Obligations.
10.20 U. S. Dollars. All currency references set forth herein, in
any other Transaction Documents and in any transactions referenced herein or
therein shall be denominated in Dollars of the United States of America.
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IN WITNESS WHEREOF, the parties have executed this Credit Agreement
this 4th day of October, 1996.
STAFFMARK, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Title: Chairman
--------------------------------
Revolving Credit Commitment: MERCANTILE BANK OF ST. LOUIS
$20,000,000.00 NATIONAL ASSOCIATION
Reducing Revolver Commitment:
$30,000,000.00
By: /s/ XXXX X. XXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxx
-----------------------------------
Title: Vice President
--------------------------------
Address: 000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mid America Group
Telecopy No: 000-000-0000
MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION, as Agent
By: /s/ XXXX X. XXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
--------------------------------
Address: 000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Mid America Group
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